Casey Newton

I think the interesting subtext to me is that Amazon for a number of years now has been pretty closely tethered to Anthropic as its primary sort of frontier model developer.

And so OpenAI is kind of taking advantage of its newfound freedom by trying to elbow into Amazon and maybe displace Anthropic as their favorite model provider.

That's great analysis.

Thank you.

Yeah, and I think that's a good point, and it's really a profound shift in the way that skeptics have been talking about this AI boom.

I remember just even a couple of months ago, the leading sort of strain of criticism was that

These AI companies would never be able to generate the demand to pay for all of the expensive data centers and infrastructure projects they wanted to do.

And now that's shifted to, well, there's so much demand.

What if they can't build enough to support the demand they have?

Yes, this was another story that hit this week.

The Financial Times reported that Stargate, OpenAI's joint $500 billion infrastructure project, is also undergoing a bit of a shift.

The FT reported that in recent weeks, OpenAI has halted planned data centers in the UK and Norway, declined to expand its flagship site in Abilene, Texas, and seen several senior figures tied to Stargate leave for rival Meta.

The FT further notes that OpenAI has shifted to leasing capacity from third parties instead of building out all of their own facilities.

Casey, what did you make of this?

I don't think this signals that they are retreating from their compute ambitions.

I think it's more about they are realizing that if they want to go public, which they do, they need to get their house in order.

One way to get your house in order is to move some of this data center and infrastructure building off of your balance sheet and onto third parties.

Yeah, I mean, I think there are competing forces within all of the big AI companies right now.

One side is sort of the indefinite optimists, the people who think that demand for AI is just going to be essentially infinite and that as much compute and as much money as they need to spend acquiring compute, it will all be paid back many times over because the world is about to change into something different.

most of us barely recognize.