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New Indian Express
14 hours ago
- Business
- New Indian Express
Silicon Valley VCs navigate uncertain AI future
CANADA: For Silicon Valley venture capitalists, the world has split into two camps: those with deep enough pockets to invest in artificial intelligence behemoths, and everyone else waiting to see where the AI revolution leads. The generative AI frenzy unleashed by ChatGPT in 2022 has propelled a handful of venture-backed companies to eye-watering valuations. Leading the pack is OpenAI, which raised USD 40 billion in its latest funding round at a USD 300 billion valuation -- unprecedented largesse in Silicon Valley's history. Other AI giants are following suit. Anthropic now commands a USD 61.5 billion valuation, while Elon Musk's xAI is reportedly in talks to raise USD 20 billion at a USD 120 billion price tag. The stakes have grown so high that even major venture capital firms -- the same ones that helped birth the internet revolution -- can no longer compete. Mostly, only the deepest pockets remain in the game: big tech companies, Japan's SoftBank, and Middle Eastern investment funds betting big on a post-fossil fuel future. "There's a really clear split between the haves and the have-nots," says Emily Zheng, senior analyst at PitchBook, told AFP at the Web Summit in Vancouver. "Even though the top-line figures are very high, it's not necessarily representative of venture overall, because there's just a few elite startups and a lot of them happen to be AI."
Yahoo
21 hours ago
- Business
- Yahoo
Is Nvidia's Deal With OpenAI a Game Changer?
OpenAI is breaking ground on new data centers as part of the $500 billion Stargate project. Oracle is reported to be purchasing $40 billion worth of Nvidia Blackwell chips and will be leasing them to OpenAI. Considering OpenAI is hoping to build more data centers across the U.S. and abroad, Nvidia's involvement in these infrastructure projects could be a game changer for long-term growth. 10 stocks we like better than Nvidia › A number of companies have made commitments to invest in domestic infrastructure over the next several years. Chief among these initiatives is a joint venture among Oracle, SoftBank, and OpenAI. Known as Stargate, this consortium of technology leaders plans to invest $500 billion into artificial intelligence (AI) infrastructure in the U.S. Just last week, investors finally got an update on how Stargate is progressing. In perhaps a shock to absolutely no one, semiconductor powerhouse Nvidia (NASDAQ: NVDA) is involved with a new data center for OpenAI. Let's dig into this deal and assess why it could be a game changer for Nvidia. As a refresher, OpenAI burst onto the AI scene a few years ago following a multibillion-dollar investment from Microsoft. While OpenAI's services, chief among them ChatGPT, have become heavily integrated throughout Microsoft's ecosystem, both companies have been seeking opportunities to branch out over the last year or so. For OpenAI, the company has reached a point whereby striking partnerships with other technology companies is essential -- hence the creation of Stargate. The reason for this is that as demand for ChatGPT grows, so does the need for compute power (i.e., more data center infrastructure). However, Microsoft simply cannot be the sole bridge to finance OpenAI's needs. Per recent reports, Oracle is planning to purchase an estimated 400,000 graphics processing units (GPU) from Nvidia for OpenAI's new data center in Texas. Of note, the GPUs are Nvidia's new Blackwell architecture and could cost Oracle up to $40 billion. Oracle will subsequently be leasing these chips to OpenAI as part of the deal structure, adding even more tailwinds to its fast-growing infrastructure-as-a-service (IaaS) division. I see two primary reasons why this deal is a game changer for Nvidia. First, global management consulting firm McKinsey & Company recently published a report in which it estimates nearly $7 trillion will be spent on AI infrastructure over the next five years. Within this grand total, McKinsey believes that hardware providers will be the biggest beneficiaries of rising AI capital expenditure (capex). Even though Stargate is still in its infancy, there are signs that hardware suppliers such as Nvidia are already benefiting from increased AI infrastructure budgets. Reports suggest that OpenAI is considering building more data centers beyond Texas. Given Nvidia's selection to lead this initial buildout, I'm optimistic the company could continue winning more contracts from the Stargate project -- hence, this could be the beginning of a long-term relationship between OpenAI and Nvidia. On top of that, it was reported earlier this year that OpenAI was collaborating with Taiwan Semiconductor Manufacturing to develop its own custom chipsets. While OpenAI may indeed eventually pursue custom silicon, it appears for now that the company's compute power relies heavily on data centers outfitted with Nvidia's GPUs. To me, this signals that demand for Blackwell continues to remain robust. Moreover, Nvidia's selection as a primary chip supplier for one of Stargate's initial projects underscores just how critical the company's hardware is for ongoing AI development. For the first time in almost three years, Nvidia stock has actually taken a breather -- and a prolonged one at that. Investors have been selling Nvidia stock throughout most of 2025, thanks in large part to uncertainty around new tariff policies and how they may impact Nvidia's ability to conduct business in China. Nevertheless, the company's forward price to earnings (P/E) multiple of 32.6 shows some clear valuation compression in the red-hot chip stock. I see the deal with OpenAI as a potential proxy for what's to come for Nvidia as Stargate and other AI infrastructure deals come to fruition. To me, the company's long-run prospects look as strong as ever -- despite some headwinds in key Asian markets for now. Investors with a long-run time horizon may want to consider scooping up shares of Nvidia right now, as the stock could witness a sharp rebound if it continues to win over more high-profile deals with AI's biggest developers. Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Adam Spatacco has positions in Microsoft and Nvidia. The Motley Fool has positions in and recommends Microsoft, Nvidia, Oracle, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Is Nvidia's Deal With OpenAI a Game Changer? was originally published by The Motley Fool Sign in to access your portfolio
Time of India
a day ago
- Business
- Time of India
Silicon Valley VCs navigate uncertain AI future
The stakes have grown so high that even major venture capital firms -- the same ones that helped birth the internet revolution -- can no longer compete. Mostly, only the deepest pockets remain in the game: big tech companies, Japan's SoftBank, and Middle Eastern investment funds betting big on a post-fossil fuel future. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads For Silicon Valley venture capitalists , the world has split into two camps: those with deep enough pockets to invest in artificial intelligence behemoths, and everyone else waiting to see where the AI revolution generative AI frenzy unleashed by ChatGPT in 2022 has propelled a handful of venture-backed companies to eye-watering the pack is OpenAI, which raised $40 billion in its latest funding round at a $300 billion valuation -- unprecedented largesse in Silicon Valley's AI giants are following suit. Anthropic now commands a $61.5 billion valuation, while Elon Musk's xAI is reportedly in talks to raise $20 billion at a $120 billion price stakes have grown so high that even major venture capital firms -- the same ones that helped birth the internet revolution -- can no longer only the deepest pockets remain in the game: big tech companies, Japan's SoftBank, and Middle Eastern investment funds betting big on a post-fossil fuel future."There's a really clear split between the haves and the have-nots," says Emily Zheng, senior analyst at PitchBook, told AFP at the Web Summit in Vancouver."Even though the top-line figures are very high, it's not necessarily representative of venture overall, because there's just a few elite startups and a lot of them happen to be AI."Given Silicon Valley's confidence that AI represents an era-defining shift, venture capitalists face a crucial challenge: finding viable opportunities in an excruciatingly expensive market that is rife with Wu of Cathay Innovation sees clear customer demand for AI improvements, even if most spending flows to the biggest players."AI across the board, if you're selling a product that makes you more efficient, that's flying off the shelves," Wu explained. "People will find money to spend on OpenAI" and the big real challenge, according to Andy McLoughlin, managing partner at San Francisco-based Uncork Capital, is determining "where the opportunities are against the mega platforms.""If you're OpenAI or Anthropic, the amount that you can do is huge. So where are the places that those companies cannot play?"Finding that answer isn't easy. In an industry where large language models behind ChatGPT, Claude and Google's Gemini seem to have limitless potential, everything moves at breakneck giants including Google, Microsoft , and Amazon are releasing tools and products at a furious and its rivals now handle search, translation, and coding all within one chatbot -- raising doubts among investors about what new ideas could possibly survive the AI has also democratized software development, allowing non-professionals to code new applications from simple prompts. This completely disrupts traditional startup organization models."Every day I think, what am I going to wake up to today in terms of something that has changed or (was) announced geopolitically or within our world as tech investors," reflected Christine Tsai, founding partner and CEO at 500 Silicon Valley parlance, companies are struggling to find a "moat" -- that unique feature or breakthrough like Microsoft Windows in the 1990s or Google Search in the 2000s that's so successful it takes competitors years to catch up, if it comes to business software, AI is "shaking up the topology of what makes sense and what's investable," noted Brett Gibson, managing partner at Initialized risks seem particularly acute given that generative AI's economics remain unproven. Even the biggest players see a very uncertain path to profitability given the massive sums huge valuations for OpenAI and others are causing "a lot of squinting of the eyes, with people wondering 'is this really going to replace labor costs'" at the levels needed to justify the investments, Wu AI's importance, "I think everyone's starting to see how this might fall short of the magical" even if its early days, he only the rare contrarians believe generative AI isn't here to five years, "we won't be talking about AI the same way we're talking about it now, the same way we don't talk about mobile or cloud," predicted McLoughlin."It'll become a fabric of how everything gets built."But who will be building remains an open question.
Express Tribune
a day ago
- Business
- Express Tribune
Gary Marcus proposes an alternative to AI models
Two and a half years since ChatGPT rocked the world, scientist and writer Gary Marcus still remains generative artificial intelligence's great skeptic, playing a counter-narrative to Silicon Valley's AI true believers. Marcus became a prominent figure of the AI revolution in 2023, when he sat beside OpenAI chief Sam Altman at a Senate hearing in Washington as both men urged politicians to take the technology seriously and consider regulation. Much has changed since then. Altman has abandoned his calls for caution, instead teaming up with Japan's SoftBank and funds in the Middle East to propel his company to sky-high valuations as he tries to make ChatGPT the next era-defining tech behemoth. "Sam's not getting money anymore from the Silicon Valley establishment," and his seeking funding from abroad is a sign of "desperation," Marcus told AFP on the sidelines of the Web Summit in Vancouver, Canada. Marcus's criticism centers on a fundamental belief: generative AI, the predictive technology that churns out seemingly human-level content, is simply too flawed to be transformative. The large language models (LLMs) that power these capabilities are inherently broken, he argues, and will never deliver on Silicon Valley's grand promises. "I'm skeptical of AI as it is currently practiced," he said. "I think AI could have tremendous value, but LLMs are not the way there. And I think the companies running it are not mostly the best people in the world." The optimism that humanity stands on the cusp of achieving super intelligence or artificial general intelligence (AGI) technology that could match and even surpass human capability, has driven OpenAI's valuation to $300 billion, unprecedented levels for a startup, with Elon Musk's xAI racing to keep pace. Yet for all the hype, the practical gains remain limited. The technology excels mainly at coding assistance and text generation. AI-created images, while often entertaining, serve primarily as memes or deepfakes, offering little obvious benefit to society or business. Marcus, a longtime New York University professor, champions a fundamentally different approach to building AI - one he believes might actually achieve human-level intelligence in ways that current generative AI never will. "One consequence of going all-in on LLMs is that any alternative approach that might be better gets starved out," he explained, pointing out the tunnel vision of the LLMs. 'Right answers matter' Instead, Marcus advocates for neurosymbolic AI, an approach that attempts to rebuild human logic artificially rather than simply training computer models on vast datasets, as is done with ChatGPT and similar products like Google's Gemini or Anthropic's Claude. He dismisses fears that generative AI will eliminate white-collar jobs, citing a simple reality: "There are too many white-collar jobs where getting the right answer actually matters." This points to AI's most persistent problem: hallucinations, the technology's well-documented tendency to produce confident-sounding mistakes. Even AI's strongest advocates acknowledge this flaw may be impossible to eliminate. Marcus recalls a telling exchange from 2023 with LinkedIn founder Reid Hoffman, a Silicon Valley heavyweight: "He bet me any amount of money that hallucinations would go away in three months. I offered him $100,000 and he wouldn't take the bet." Looking ahead, Marcus warns of a darker consequence once investors realize generative AI's limitations. Companies like OpenAI will inevitably monetize their most valuable asset: user data. "The people who put in all this money will want their returns, and I think that's leading them toward surveillance," he said, pointing to Orwellian risks for society. "They have all this private data, so they can sell that as a consolation prize." Marcus acknowledges that generative AI will find useful applications in areas where occasional errors don't matter much. "They're very useful for auto-complete on steroids: coding, brainstorming, and stuff like that," he said. "But nobody's going to make much money off it because they're expensive to run, and everybody has the same product."
Geeky Gadgets
2 days ago
- Business
- Geeky Gadgets
Inside OpenAI's $500 Billion Stargate AI Megafactory with Sam Altman
What does it take to build the future of artificial intelligence? Imagine a sprawling 1,200-acre facility in Abilene, Texas, humming with the power of 400,000 GPUs, each working tirelessly to train the next generation of AI models. This is Stargate, OpenAI's audacious $500 billion project, a megafactory designed to meet the insatiable computational demands of artificial general intelligence (AGI). Backed by tech giants like Oracle and SoftBank, Stargate is more than just a data center—it's a bold statement in the global race to dominate AI innovation. But as the world marvels at its scale and ambition, questions loom: Can such a colossal endeavor balance technological progress with environmental and economic responsibility? Bloomberg steps inside a Stargate AI Megafactory to uncover its new infrastructure, its potential to transform industries, and the controversies it stirs. From its innovative cooling systems aimed at reducing resource strain to its role in reshaping Abilene's economy, Stargate offers a microcosm of the promises and perils of large-scale AI development. Along the way, you'll discover how OpenAI is positioning itself against rivals like Google and Microsoft, and why this project has become a flashpoint in the global AI arms race. As we peel back the layers of this megafactory, one question persists: Will Stargate be remembered as a triumph of human ingenuity or a cautionary tale of unchecked ambition? OpenAI's Stargate Overview What is Stargate? Stargate is a new initiative designed to meet the growing needs of AI infrastructure. Spanning an impressive 1,200 acres in Abilene, Texas, the project's first phase will feature eight colossal buildings equipped with 400,000 GPUs. These GPUs, primarily sourced from Nvidia, will serve as the foundation for training and deploying advanced AI models, including those aimed at achieving AGI—a milestone where AI systems can reason, learn, and solve problems with human-like proficiency. This ambitious project places OpenAI in direct competition with major technology companies like Microsoft, Google, Meta, and Amazon, all of whom are striving to lead the AI revolution. The scale of Stargate underscores the increasing reliance on computational power as AI becomes integral to industries ranging from healthcare to finance. By investing in such a massive infrastructure, OpenAI is positioning itself at the forefront of AI innovation, but it also faces scrutiny over the sustainability and efficiency of this approach. Competitors like DeepSeek are exploring alternative methods to achieve similar results with more efficient AI models, challenging the necessity of projects on Stargate's scale. Economic Impact on Abilene The Stargate project is poised to bring significant economic changes to Abilene, Texas. Local authorities have offered substantial tax incentives, including an 85% property tax abatement, to attract this massive investment. These incentives are expected to stimulate economic activity, create jobs, and potentially transform the region into a hub for technological innovation. However, the exact number of permanent jobs the project will generate remains uncertain, raising questions about the long-term benefits for the local community. For residents, Stargate represents a mix of opportunities and challenges. On one hand, the project could drive economic growth, increase property values, and attract ancillary businesses to the area. On the other hand, concerns about environmental costs, equitable distribution of benefits, and the potential strain on local resources have sparked debates. The project's success in fostering sustainable economic development will depend on how these trade-offs are managed. OpenAI Stargate Megafactory Tour with Sam Altman Watch this video on YouTube. Here is a selection of other guides from our extensive library of content you may find of interest on AI infrastructure. Environmental Challenges and Sustainability AI data centers like Stargate are notorious for their high resource consumption, particularly in terms of energy and water. To address these concerns, Stargate plans to implement a closed-loop water cooling system designed to minimize water usage while maintaining optimal GPU performance. This system reflects an effort to mitigate the environmental impact of the project, but it does not eliminate broader concerns about the sustainability of large-scale AI infrastructure. The energy demands of Stargate are another critical issue. While efforts are being made to incorporate renewable energy sources, much of the power required for such facilities still comes from fossil fuels. This reliance raises questions about the environmental footprint of AI growth, especially as global climate goals become increasingly urgent. The project highlights the tension between technological advancement and environmental responsibility, emphasizing the need for innovative solutions to balance these priorities. Global Competition and Geopolitical Implications Stargate is not just a technological endeavor; it is also a strategic move in the global race to dominate AI infrastructure. Countries like China are making significant investments in similar projects, intensifying competition and raising the stakes for technological leadership. This race is further complicated by supply chain dependencies on critical materials and semiconductors, many of which are sourced from regions like Taiwan and China. To address these challenges, the United States has introduced initiatives such as the CHIPS Act, aimed at boosting domestic semiconductor manufacturing and reducing reliance on foreign suppliers. These measures are designed to secure the supply chain while fostering collaboration with allied nations. Stargate, as part of this broader strategy, underscores the geopolitical dimensions of AI development and the importance of maintaining a competitive edge in this rapidly evolving field. Risks, Challenges, and Future Prospects The construction and operation of a project as vast as Stargate come with inherent risks and challenges. OpenAI has already reported significant financial losses, raising concerns about the long-term profitability and sustainability of such large-scale investments. Additionally, the rapid pace of AI development brings ethical dilemmas, including the potential for job displacement, misuse of advanced AI technologies, and the societal implications of AGI. Despite these challenges, Stargate holds the potential to reshape industries, accelerate scientific discovery, and create entirely new categories of employment. Comparisons have been drawn to fantastic infrastructure projects like the interstate highway system, which transformed economies and societies. Similarly, Stargate could drive global economic transformation, provided its benefits are distributed equitably and its risks are effectively managed. The project also raises important questions about regulation and governance. As AI continues to evolve, making sure that its development aligns with societal values and ethical standards will be crucial. Stargate's success will depend not only on its technological achievements but also on its ability to address these broader concerns. The Significance of Stargate in the AI Landscape Stargate represents a pivotal moment in the evolution of AI infrastructure. It embodies the intersection of technological ambition, economic development, and environmental sustainability, offering a glimpse into the future of innovation. As the global race for AI supremacy intensifies, projects like Stargate will play a critical role in shaping the trajectory of technology and its impact on society. Whether Stargate achieves its ambitious goals or becomes a cautionary tale of overreach remains to be seen. However, its significance in the AI landscape is undeniable. By addressing the challenges of scalability, sustainability, and ethical responsibility, Stargate has the potential to set a new standard for AI infrastructure and redefine what is possible in the era of artificial intelligence. Media Credit: Bloomberg Originals Filed Under: AI, Top News Latest Geeky Gadgets Deals Disclosure: Some of our articles include affiliate links. If you buy something through one of these links, Geeky Gadgets may earn an affiliate commission. 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