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If you’re tired of the seemingly endless parade of AI cloud deals, better get comfortable with them: They’re not going away anytime soon. On Monday, for instance, Microsoft struck deals with two little-known cloud firms, Lambda and Australia’s Iren, for additional computing capacity. Another firm, Cipher Mining Inc. announced a similar deal to provide capacity to Amazon’s cloud unit Amazon Web Services. More significantly, AWS announced a deal to run OpenAI’s “core artificial intelligence workloads starting immediately.” OpenAI now has arrangements with all three of the big cloud firms—including Microsoft and Google—as well as Oracle and newer cloud firm CoreWeave. And the company is planning to build its own data centers! Yes, OpenAI is the wave that lifts all boats in cloud.
The AWS-OpenAI deal is worth at least $38 billion over several years, with the potential to grow. That’s not a lot: Microsoft, OpenAI’s original partner, last week said it had won a $250 billion incremental commitment to whatever OpenAI was already committed to spending. OpenAI has agreed to spend around $300 billion on Oracle over the next few years. But having a smaller exposure to the ChatGPT creator, at least for now, might prove a blessing in disguise for AWS.
After all, there’s a risk for any business in relying too much on one customer. In this case, what happens if OpenAI runs into problems raising the money to pay for the $1.4 trillion in data center–related commitments it has now struck? OpenAI CEO Sam Altman got irritated when venture capitalist Brad Gerstner mentioned this issue on his podcast a couple of days ago. But it’s a legitimate concern, particularly for a company like Oracle, a relatively small player in the cloud that is now borrowing heavily to build new data centers to serve OpenAI and others. It would be better for every cloud firm to have a wide array of customers using AI servers, preferably across different industries. (For another take on this issue, see this story we ran on Sunday. And check out The Information’s TITV today, where our reporter Aaron Holmes discussed the OpenAI-AWS deal.)
Microsoft clearly is very exposed to OpenAI, but it is handling that risk smartly. While it is investing aggressively in expanding its data center footprint, it’s also laying off risk by striking deals like the sort it unveiled on Monday. Those arrangements allow Microsoft to serve demand from outside customers—or perhaps its own needs—more quickly. And it also means it won’t be so exposed if there’s a sudden pullback in demand for AI. Right now, investors only see upside—Iren stock, for instance, jumped 13% on Monday. But one day, Microsoft shareholders may be glad CEO Satya Nadella and Chief Financial Officer Amy Hood hedged their bets.
Are Steering Wheels Obsolete?
Should Tesla’s next car have a steering wheel? It depends who you ask.
When CEO Elon Musk unveiled the original design of the Cybercab last year, the demo version didn’t have a steering wheel or pedals because Tesla was planning for the vehicle to rely completely on self-driving software. But as part of a press tour to drum up support for a vote on Elon Musk’s $1 trillion compensation plan that concludes this Thursday, Tesla board chair Robyn Denholm seemed to open the door to adding a steering wheel and pedals to the Cybercab, which may help the car win approval more quickly from regulators and may even give Tesla the option of selling it as a consumer vehicle. “If we have to have a steering wheel, it can have a steering wheel and pedals,” Denholm told Bloomberg in an interview published last Tuesday.
Then, in an “All-In” podcast episode published Friday, Musk flatly shut down that idea. When Jason Calacanis asked him about adding a steering wheel to the Cybercab, Musk responded: “The reality is people may think they want to drive their car, but the reality is that they don’t.…How many times have you been in an Uber or Lyft and you said, ‘You know what—I wish I could take over from the driver’?” (The rhetorical answer: never.)
As Tesla prepares to scale up Cybercab production—Musk says the company will start producing the vehicle at its Texas factory in the second quarter of 2026—you’d think its CEO and board would be on the same page about such a fundamental design choice.—Theo Wayt
In Other News
• Palantir reported 63% higher revenue of $1.18 billion for the September quarter, a marked acceleration from its second-quarter growth rate. The company also forecast a similar growth rate for the fourth quarter. For the full year, Palantir is projecting 54% growth, nearly double last year’s growth rate.
• Tesla expects to deploy at least 1,000 Robotaxi vehicles in the San Francisco Bay Area and 500 or more in Austin, Texas, before the end of the year, according to CEO Elon Musk (more here).
• White House officials discouraged President Donald Trump from raising the topic of exporting Nvidia’s advanced AI chips to China during a recent meeting with Chinese leader Xi Jinping, The Wall Street Journal reported Monday.
Today on The Information’s TITV
Check out our latest episode of TITV in which we speak with ServiceNow, Google Cloud and Tubi executives.
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