"The artificial intelligence explosion has sparked an intensity of competition in Silicon Valley not seen since the smartphone boom, as tech companies spend billions of dollars to sprint ahead with the most advanced models, access to the most compute power, and the best researchers. The AI race has also brought some of these rivals closer together than ever. In some cases, uncomfortably close."
"OpenAI signed a $300 billion deal to access Oracle's compute power - despite being majority-backed by Oracle rival Microsoft - while Meta signed a $10 billion deal for Google Cloud, per a person familiar. Microsoft, meanwhile, announced that it's giving its customers access to Anthropic's AI models, which run on Amazon and Google's cloud services. For all we fixate on the AI "war," right now there's also a lot of AI lovemaking, as many of these companies need each other more than ever."
The AI explosion has triggered intense competition in Silicon Valley comparable to the smartphone boom, with companies spending billions to develop advanced models, secure compute power, and hire top researchers. Competing firms are simultaneously forming large cross-company deals for cloud and compute capacity, creating complex dependencies despite rivalries. Notable deals include OpenAI's $300 billion Oracle compute agreement, Meta's $10 billion Google Cloud pact, and Microsoft's distribution of Anthropic models across Amazon and Google clouds. Nvidia's $100 billion investment in OpenAI and plans for 10 gigawatts of Nvidia chip datacenters highlight vendor-financed dependencies, raising concerns about systemic risk if a major partner falters.
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