The circle jerk continues…

Microsoft woke up yesterday morning, checked its phone, and saw OpenAI posting thirst traps again… so naturally it did what any insecure billionaire empire would do: immediately start “diversifying its portfolio of relationships.” Translation: Translation: Satya Nadella just dropped $5 billion on Anthropic because he’s come to the realization that OpenAI ain’t the only honest woman in town anymore.

(Source: Imgflip) 

And because this AI soap opera never sleeps, Nvidia slid in right behind him with $10 billion, giving Anthropic a sudden, explosive valuation glow-up: $350 billion. Which, if you’re wondering, is a bigly 2x jump from September’s $183B. However, that’s not the real plot twist of this soap opera. 

(Source: CNBC) 

You see, Microsoft didn’t just invest… it locked Anthropic into a compute marriage contract. For context, they didn’t hand over $5B out of the kindness of their heart. Instead, they did it to force Antrhopic to agree to #1. Buy $30 BILLION of Azure compute capacity and #2. Sign up for up to 1 gigawatt of total compute capacity on Microsoft + Nvidia systems. Let me say that again for the people in the back. That’s one gigawatt (read: Back to the future type time-travel energy). Meaning, this is the most aggressive “you’re staying with me, right?” contract since the WWE.

Additionally, Nvidia is getting their claws in too. In fact, Jensen Huang, popped into the announcement video acting like this deal is his personal Super Bowl. “This is a dream come true.” — Jensen, who has netted $50B in wealth off everyone’s GPU addiction. And he’s not wrong. Anthropic will buy Nvidia's Grace Blackwell and Vera Rubin systems like they’re Costco bulk paper towels. Translation: If you ever wondered what it looks like when the entire AI sector becomes a three-way situationship between trillion-dollar companies, this is it. Meanwhile, OpenAI is presumably watching this and punching air as we speak. Microsoft’s stake in OpenAI’s for-profit arm is already valued at $135 billion… about 27% of the company. And now, Microsoft is still involved with OpenAI, casually courting Anthropic, and buying rounds of tequila for Nvidia. Spoiler: This man is hedged.

(Source: Giphy) 

As for Anthropic, founded by ex-OpenAI execs after a philosophical meltdown in 2021, this is a yuuuge win. Sure, Claude is still the company’s main attraction… a.k.a., the polite, neurotic sibling of ChatGPT… but the real business model is compute. Billions and billions of dollars of compute. Of course, AWS is still their primary cloud and training partner. But now Microsoft and Nvidia are also locked in… which also makes Anthropic basically polyamorous in the cloud.

With that said, Wall Street on the other hand… well, it barely moved. Because of course. Microsoft dropped slightly, but the real players are doing what they always do when the market pretends not to care: They’re front-running the future. Microsoft is ensuring it owns every path to AGI, Nvidia is ensuring nobody can stop buying their GPUs, and Anthropic is ensuring they never run out of compute again. 

(Source: Giphy)

Aaaaand suddenly, Satya Nadella is well on his path to quietly building the most powerful AI empire the world has ever seen… AI bubble be damned. Meaning, keep your eyes on this story and place your bets accordingly. Until next time, friends… 

At the time of publishing, Stocks.News holds positions in Microsoft as mentioned in the article.