PLUS: The new OpenAI-Microsoft deal, Amazon's AI shakeup, and the data center construction boom
Good morning
NVIDIA just shattered market records, becoming the first company in history to reach a $5 trillion valuation. The milestone comes on the heels of major announcements at its GTC conference, highlighting the relentless demand for its AI chips.
The company revealed a massive $500 billion in pre-orders for its next-generation chips, securing its pipeline through 2026. With its technology now foundational to science, industry, and infrastructure, is NVIDIA building an economic moat that competitors simply can't cross?
In today’s Next in AI:
NVIDIA’s $500B backlog and record valuation
The new OpenAI-Microsoft for-profit deal
Amazon’s major AI-driven restructuring
The data center construction boom
NVIDIA's $5 Trillion Moment
Next in AI: NVIDIA shattered market records, becoming the world's first company to surpass a $5 trillion market capitalization. The historic surge reflects insatiable demand for its AI chips, fueled by a slew of major announcements at its GTC conference.
Decoded:
CEO Jensen Huang revealed the company has already booked a staggering $500 billion in orders for its next-generation Blackwell and Rubin AI chips through 2026.
The company's expansion goes far beyond big tech, with new deals to help build seven new supercomputers with the U.S. Department of Energy and power initiatives in drug discovery, robotics, and 6G networking.
This digital boom is driving a physical one, as industrial giants like Caterpillar report soaring demand for heavy machinery needed for the massive global data center construction effort.
Why It Matters: NVIDIA is rapidly evolving from the premier supplier of AI chips to the foundational architect of the next technological era. The company’s influence now directly fuels transformations in heavy industry, science, and global infrastructure, marking a new phase of economic change.
The New OpenAI Deal
Next in AI: Microsoft and OpenAI have finalized a landmark deal that completes OpenAI's transition to a for-profit company, valuing Microsoft's 27% stake at $135 billion and clearing the path for massive new investments.
Decoded:
What started as a risky bet is now a colossal success, with Microsoft CEO Satya Nadella recalling that Bill Gates initially warned his $1 billion investment would be like "setting money on fire."
The new structure removes previous fundraising caps, empowering OpenAI to raise the capital needed for its ambitious plans, including a reported $1.4 trillion infrastructure spend and a potential public offering.
A key change involves AGI verification; OpenAI can no longer self-declare it has achieved artificial general intelligence and must now have it confirmed by an independent expert panel, a major concession to Microsoft.
Why It Matters: This deal solidifies the Microsoft-OpenAI partnership as the most dominant force in the AI industry, giving OpenAI the corporate structure it needs to scale its AGI ambitions. It also ensures Microsoft's Azure cloud remains the essential platform for the world's leading AI models, tightening its strategic control.
Amazon's AI Shake-up
Next in AI: Amazon announced it is cutting 14,000 corporate jobs as part of a major AI-driven restructuring. The move signals a new era of AI's direct impact on the white-collar workforce at major tech companies.
Decoded:
This may just be the beginning, as reports suggest the total number of cuts could reach as high as 30,000 corporate roles over the coming weeks.
The official rationale is to become “leaner” and move faster, with one internal memo telling remaining staff to “lean in on AI” to enhance their effectiveness.
This move helps free up billions in capital, allowing Amazon to accelerate spending on data centers and talent to better compete in the escalating AI race with Microsoft and Google.
Why It Matters: This restructuring is a massive, real-world stress test of AI's capacity to streamline complex corporate operations. The outcome will set a powerful precedent for how quickly other enterprises integrate AI and automate professional roles.
AI Builds a New Foundation
Next in AI: The AI boom’s ripple effect is hitting the physical world, with construction giant Caterpillar reporting surging sales and a record stock price. The driver is massive demand for its equipment to build new AI data centers.
Decoded:
The demand is concrete: Caterpillar’s power generation segment saw sales soar by 33%, driven by supplying reciprocating engines for new data centers.
This isn't a temporary blip, as the company’s order backlog grew to a record $39.8 billion, signaling sustained momentum for long-term growth.
Experts see this trend as part of a massive reindustrialization of the U.S., where the digital needs of AI directly fuel a boom in physical manufacturing and construction.
Why It Matters: This surge demonstrates that AI’s economic impact extends far beyond code and into the physical world of steel and concrete. Building the massive infrastructure required for AI is proving to be just as critical as the algorithms themselves.
AI Pulse
Character.AI announced it will remove open-ended chat for users under 18 following multiple lawsuits, shifting teen users to a more restricted content creation experience.
Alphabet reported quarterly revenue of $102.4B, surpassing expectations with its Google Cloud segment's revenue rising 34% to $15.2B, driven by major enterprise AI deals.
Grammarly rebranded to 'Superhuman' following its acquisition of the email client and launched Superhuman Go, a new AI assistant integrated into its browser extension.
NVIDIA released updates to its Cosmos open world foundation models, designed to generate physically based synthetic data for training and validating physical AI in robots and autonomous vehicles.
Cursor introduced Composer, a new mixture-of-experts agent model for software engineering that it claims achieves frontier coding results at four times the speed of similar models.