Recursive Superintelligence signs $410 compute deal with Amazon; plus, PayPal leaves the door open to a higher takeover
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What is the main topic discussed in this episode?
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What is Recursive Superintelligence’s $410M compute deal with AWS and why does it matter?
On Tuesday, the AI company Recursive Superintelligence announced a $400 million compute deal with Amazon Web Services. The company, which emerged from stealth back in May with $650 million in funding, is focused on building open-ended self-improving systems, a potentially compute-intensive approach to AI research. Now, this multi-year deal suggests is meant to provide flexibility as the company looks to scale up those systems. Recursive's $410 million outlay represents the bulk of the company's fundraising to date, but on a call with TechCrunch, CEO Richard Socher emphasized that he expected it to be the first of many such deals. The announcement on Tuesday is likely going to be one of the smallest compute deals we're ever going to sign in the next few years, Socher said.
Recursive's emphasis on self-improving AI systems means much of the budget that would traditionally go towards headcount and operations is put straight into compute, as the company seeks to automate its own product development process.
How does Recursive plan to use compute for self-improving AI instead of hiring more staff?
Socher said, for us, it's less about headcount and more about agent count. There's no investment component to Amazon's involvement, in contrast to major labs' habit of hybrid investment arrangements, but the sheer scale of the commitment allows AWS to commit significant resources to supporting Recursive's unique needs, which may help to draw in other foundation-level AI companies going forward.
What infrastructure and partnership commitments did AWS make for foundation-level AI companies?
Jason Bennett, VP for Startups and Venture Capital at AWS, said part of the agreement is that we're going to co-develop infrastructure purpose-built for these types of companies. Recursive self-improvement, or RSI, has long been seen as an inflection point for AI, with some expecting an explosion of progress once AI can be improved without human involvement. But as more labs and companies pursue the idea, the specific requirements have become ambiguous, with some predicting an imminent breakthrough while others characterize self-improvement as more of a continuum. But in Recursive's case, the goal is to use the powers of RSI to develop actual products, and Socher expects to be releasing the earliest examples before the end of the year.
He said, We are excited to build, like, really amazing products that people can use, and you will see those within a few months, not within a few quarters or years. In October or so, you'll see some actually tangible, useful things that you will be able to play around with. PayPal is seemingly still open to Stripe's $53.4 billion takeover bid, just not at the price that Stripe offered.
Why is PayPal keeping options open on Stripe’s $53.4B takeover after strong Q2 results?
On the company's Q2 2026 earnings call on Tuesday, PayPal CEO Enrique Lores did not fully shut down the idea of a deal, saying the company would consider a path that created superior value for its shareholders. While that's not the same as saying PayPal's not for sale, it still suggests the company does not believe Stripe and Advent International's current offer of $60.50 per share values it correctly, especially after the company reported better than expected profit and revenue. and said it had made progress on its turnaround strategy. An analysis from financial services firm Cantor valued PayPal at closer to $70 per share. The company's shares are currently trading at around $58. PayPal reported adjusted profit of $1.38 per share, beating expectations of $1.28 per share.
Revenue was up 5% year-over-year to $8.68 billion, above estimates of $8.47 billion. An adjusted free cash flow of $1.8 billion gives the company room to continue investing in its products and strategy. that does not mean PayPal would walk away from a takeover bid. While Loris did not directly address Stripe's offer, saying PayPal does not comment on potential mergers or market speculation, he did acknowledge that a viable M&A bid would not be dismissed outright.
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Chapters
6 chapters
1
What is the main topic discussed in this episode?
0:02–0:43
2
What is Recursive Superintelligence’s $410M compute deal with AWS and why does it matter?
0:43–1:55
3
How does Recursive plan to use compute for self-improving AI instead of hiring more staff?
1:55–2:24
4
What infrastructure and partnership commitments did AWS make for foundation-level AI companies?
2:24–3:49
5
Why is PayPal keeping options open on Stripe’s $53.4B takeover after strong Q2 results?
3:49–5:44
6
How is PayPal’s AI-driven turnaround structured and what savings and tech moves are planned?
5:44–6:57
Speakers
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