Jaeden Schafer

private company or a for profit company, sorry, because now that Microsoft doesn't have kind of this controlling edge in the past, Microsoft was because the Microsoft's original deal where they gave them $10 billion way back in the day that kicked off this whole AI boom was, you know, they're buying a huge chunk of the company.

And they said, we have to approve all future investments and where you're putting your money when it comes to compute and all of that kind of stuff.

because Microsoft wanted to sort of be their exclusive with Microsoft Azure.

Now, as it turns out, there wasn't enough compute and they needed a lot more resources.

They needed to spread things out and to, you know, put all their eggs in one basket with Microsoft.

So they've kind of broken away from that.

And now they're able to, you know, we see them training with a lot of different platforms, AWS being one of those.

And Amazon investment right now, I think, is probably the latest example of this circular deal that we're seeing in the AI sector.

Essentially, in all of these arrangements, the huge cloud and hardware providers, they back the latest AI firms, and then those startups essentially commit to using their investors' data centers and chips to train their models.

So this is what I think is going to be standard in this deal, although we don't have those specific details.

You can imagine this is why it's happening.

Back in March, OpenAI invested $350 million into CoreWeave.

They used the capital to purchase NVIDIA chips that are now, you know, helping to power OpenAI's workload.

That, of course, boosted CoreWeave's revenue, right, by $350 million.

And in turn, the value of OpenAI's stake also increased because they were invested in the company.

And then in October, OpenAI agreed to acquire a 10% stake in AMD and they committed to using its AI GPUs.

But they also signed a chip agreement with Broadcom.

Then a month later, OpenAI announced a $38 billion cloud compute deal with Amazon.

And would you know it, all of a sudden, Amazon is now doing a $10 billion investment into OpenAI.

So all of these companies are just cycling money back and forth.