Oracle drops a bomb We all knew that OpenAI wants to build its own infrastructure separate from Microsoft (remember the $100bn 'Project Stargate?'), and we also knew that Oracle wants to do AI infra. But this week OpenAI signed a deal worth $300bn over five years, and Oracle's market cap jumped by $230bn to $930bn (partly because there aren't many leveraged AI stocks for the public markets to buy). Last week we saw some reports that OpenAI plans to burn $115bn by 2029 ($8bn this year), and deals like this are how. Sam Altman clearly wants to make OpenAI the next (or only) trillion-dollar platform company, and it's growing fast, but this feels very bubbly. The question, though: is this 1997 bubbly or 1999 bubbly? LINK, BURN The slow-motion Microsoft/OpenAI break-up The other half of this story is the slow separation of OpenAI from Microsoft. I always wonder how much context to give when I write up this story, given that versions of it repeat every couple of weeks: OpenAI has a weird ownership structure, Microsoft has a weird investment that's supposed to give it access to tech but kind of doesn't, and they're both looking over each other's shoulders for a better option. This week: Microsoft will buy AI tools from Anthropic as well as from OpenAI. LINK Meanwhile, the new capital structure is slowly emerging. LINK App rankings Google's Gemini app is at the top of the US iPhone App Store chart, after ChatGPT had been at number one since some time in 2023. Perplexity, meanwhile, has climbed to 28 (Grok is at 62). Technology versus product versus distribution. LINK Penske sues over AI Overviews Penske Media (Rolling Stone, Billboard) is suing Google over AI overviews. This is a live topic, we'll hear a lot more about this, and there are lots of different numbers floating around, so I downloaded the complaint to see what's happened to Penske's traffic. Oddly, the only specific number that Penske gives is that their search traffic to pages with affiliate links fell by a third in 2024. I wonder if the real issue is that Google cracked down on spammy affiliate pages last year? LINK ASML does Mistral ASML, the Dutch company with a monopoly on cutting-edge semiconductor manufacturing equipment, took a €1.3bn, 11% stake in Mistral, the French second-tier model lab. That seems very down-stream for a straightforward corporate investment: I wonder how much this is about industrial policy and politics. There are rumours that Apple is looking at buying Mistral, which prompts the question of whether France would allow that: is it more important to hold onto a European model (geopolitics), or build the European tech ecosystem with a great exit? (Remember how it blocked the DailyMotion deal.) LINK The week in AI Microsoft did a six-year $19bn deal with Nebius, a cloud GPUs-for-AI company that was spun out of Yandex. LINK Anthropic added memory and file creation. LINK After a couple of horror stories about some people getting much too attached to AI chatbot 'companions', and those conversations becoming mutually reinforcing spirals into delusion (including several suicides), Meta is changing its rules and the FTC is opening an investigation. LINK Glasses are still on the way Meta and Anduril have a joint project to work on AR glasses for the US military. Lots of history here. LINK Amazon is also working on glasses. Most people in tech think that glasses might be the next device after phones, so you want at least to have the option to be ready to dive in. Plus, Amazon has a use case right now in its delivery drivers. LINK Adland value-capture Amazon sold $60bn of ads in the last 12 months and is becoming a full-spectrum ad platform; Netflix wants some of that scale, so now you'll be able to buy Netflix ads through Amazon's broader platform. And Amazon already has Disney, Roku, NBCU, and a bunch of others. LINK Starlink buys more spectrum Starlink paid $17bn in cash and stock for a block of 1900MHz US spectrum from the struggling US satellite operator Echostar, to boost its direct-to-cell project. People get a bit over-excited by this, and talk about replacing cellular operators - Starlink's service struggles to work indoors, and is many orders of magnitude away from having enough capacity to compete directly in dense urban areas (for reference, Starlink today has about 8k satellites, roughly half as many as there are cellular base stations in New York City alone, which is not a direct comparison but a relevant one). However, this is a great story for lower density rural, remote areas, boats, airlines and a bunch of other niches, including of course the military. LINK iPhone day Apple did its annual iPhone updates, iterating a very mature product category with the usual better cameras and faster chips. There's also a new, much thinner 'iPhone Air', compressing all the chips into a thin bar at the top, which seems very obviously a precursor to Apple entering the folding phone segment next year (as usual, Apple has waited until it thinks the tech is ready). Perhaps more notably, AirPods will now be able to do live simultaneous translation - Apple can do AI too, sometimes. Stepping back, these new phones are a reminder that even if a large chunk of our computing really does move to AI, we'll still need a device to use that AI, and AI doesn't necessarily change very many of the reasons why so many people chose Apple devices. This is also the problem for any new form factor (c.f. the OpenAI/Jonny Ive tie-up). A chatbot might be an essential new kind of computing, but does it have all the other reasons you use your phone? No - 'agentic' won't do all of them. LINK | 
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