#OpenAI

SoftBank Group shares tumbled over 8% amid a broader AI stock sell-off, reflecting investor concern over inflated sector valuations. This follows volatile trading for SoftBank, potentially erasing $53 billion in market cap this week, its worst performance since March 2020. Analysts attribute the decline to SoftBank being seen as an OpenAI proxy, vulnerable to shifting AI sentiment. Uncertainty around OpenAI’s partnerships and potential reliance on government funding are contributing factors. The downturn affected other Asian and U.S. tech companies, raising bubble concerns, though some experts see it as valuation fatigue rather than a collapse.

OpenAI’s AI browser debut raises questions about the AI investment boom, tied to ad tech giants like Google, Meta, and Amazon who are heavily investing in AI infrastructure. They aim to enhance existing advertising models, though AI could disrupt these models. While pushing for AGI is a long-term goal, the immediate urgency is to protect ad-driven revenue streams from competitors like OpenAI and Microsoft, which rely less on advertising. The sustainability of this AI investment, crucial to the tech ecosystem, hinges on its impact on the established advertising-centric economy.

Amazon secured a $38 billion cloud services deal with OpenAI, indicating a shift towards a dual-cloud strategy for the AI company and potentially paving the way for an IPO. Despite Amazon and Nvidia’s positive market performance, concerns arise over the concentration of market gains within a few tech giants. Separately, governments are increasingly considering tapping into citizens’ retirement savings to alleviate fiscal pressures, raising concerns about long-term risks to pension systems.

Amazon secured a $38 billion deal with OpenAI for AWS infrastructure access, diversifying OpenAI’s cloud services beyond Microsoft. This fueled Amazon’s stock to a record high close. Microsoft also benefited from a US license to export Nvidia AI chips to the UAE, boosting Nvidia’s shares. While tech stocks lifted indices, many S&P 500 stocks closed lower, signaling narrow market participation. Palantir’s positive results were overshadowed by a stock decline. Markets predominantly advanced, but risks to global equities are mounting.

OpenAI has signed a $38 billion deal with Amazon Web Services (AWS) for cloud capacity, marking its first major agreement with AWS and a move towards independence from Microsoft. The deal involves deploying workloads across AWS infrastructure, leveraging Nvidia GPUs, and expanding capacity. This collaboration boosted Amazon’s stock. OpenAI’s CEO, Sam Altman, emphasizes the need for massive compute power. While committed to Microsoft Azure, OpenAI’s AWS partnership signifies a strategic diversification. Amazon is also heavily invested in Anthropic, highlighting its commitment to AI. The agreement supports both AI model training and inference.

Amazon has rebounded strongly, outperforming other “Magnificent Seven” stocks. A strong earnings report and a $38 billion cloud deal with OpenAI fueled a significant stock surge. OpenAI will leverage AWS cloud infrastructure, reducing reliance on Microsoft Azure. This partnership highlights AWS’s resurgence, with cloud growth accelerating to 20%. Amazon’s investments in Nvidia GPUs and custom silicon position them well for the growing AI demand, despite OpenAI adopting a multi-cloud approach including renewed commitments from Microsoft, Google and Oracle.

OpenAI is diversifying its AI compute supply chain with a multi-year, $38 billion agreement with AWS, moving away from its previous exclusive cloud partnership with Microsoft. This strategic shift to a multi-cloud architecture signifies the rising importance and scarcity of high-performance GPUs. AWS will provide OpenAI access to NVIDIA GPUs and CPUs to support training and inference. This move highlights the end of single-cloud strategies and the escalation of AI budgeting to corporate capital planning, emphasizing risk diversification and long-term financial commitments for AI infrastructure.

OpenAI released two reasoning models, gpt-oss-safeguard-120b and gpt-oss-safeguard-20b, designed to help developers classify and mitigate online harms. These “open-weight” models allow organizations to tailor them to specific policies and understand their decision-making, enhancing online safety. Developed in collaboration with ROOST, Discord, and SafetyKit, the models aim to address ethical concerns surrounding rapidly scaling AI and promote responsible AI development. They are available for download via Hugging Face.

Nvidia’s AI dominance highlights strategic alliances with Nokia and Eli Lilly, alongside domestic Blackwell GPU production in Arizona. The Fed is expected to cut rates. OpenAI completed its transition into a nonprofit and affirmed Microsoft’s stake. The government shutdown continues, causing legal challenges and impacting federal employees. Boeing faces a slight dip due to a $4.9B charge on the 777X delays, despite improved deliveries.

Microsoft’s Q1 net income was impacted by a $3.1 billion investment in OpenAI. Despite this, Microsoft reported overall net income growth, driven by strong Azure cloud performance. Microsoft has invested $13 billion in OpenAI since 2019, holding a significant equity stake now valued at $135 billion. OpenAI completed a recapitalization, with the OpenAI Foundation holding a substantial equity stake. The companies’ partnership is described as highly successful, fostering collaboration while also sparking competition in the AI market.