welcome everyone to the information's ti tv my name is akash pasprecha it is friday may 8th before we get into the show the information has has published exclusive reporting that deep seek plans to raise more than $7 billion in what would amount to the largest ever funding round by a Chinese AI company. According to the information's reporting, the funding round is prompting DeepSeek to expedite both its model releases and also some of its plans to start generating revenue. The story also has details on when the next model is expected to be released. I encourage you to check it out on our website. First up on the show today, the information has exclusive reporting about OpenAI's AI chip deal with Broadcom and how it could hit a snag to the tune of $18 billion. We'll then turn to our Microsoft reporter about the company's shifting co-pilot strategy. We also have a recap of ServiceNow's big conference this week and what it tells us about enterprise software buyers at large. We'll get our daily update from Rocket Drew, who has been at the courthouse for the Elon Musk OpenAI trial. And we'll end the show by bringing on our editors for a broader discussion on that trial, discussing the implications of that courtroom saga on the AI story at large. It's going to be a fun show, so let's get right on into it. OpenAI and Broadcom are working on a chip together, and financing is one of the most important parts of this story. My colleague Anissa Gardese has some reporting on a possible hurdle that the project could hit in that respect. I want to bring her on to share with us what she knows. Anissa, welcome back to the show. It's great to have you here. Tell us a little bit about what you found with respect to how financing is going for this OpenAI Broadcom chip. OpenAI and Broadcom are in the middle of pretty tense negotiations right now as OpenAI hopes to send its first custom chip to production at TSMC. they're at a little bit of a roadblock right now because they're trying to agree on vendor financing terms for this initial $18 billion deal. And that hasn't been figured out yet. So even though these two companies announced their partnership last October, they did not have the financing figured out. And they're both going back and forth, you know, kind of running at a deadline to when Broadcom needs to alert TSMC to save capacity for OpenAI's chip so that it's ready next year. Okay, so let's unpack each of those elements here. First, just remind us, what is this chip supposed to do exactly? OpenAI is designing a custom chip to help it run inference of OpenAI models. And the idea is that if OpenAI designs a chip that is specifically modeled to how OpenAI runs ChatGVT and other products, it could be more efficient than a general purpose GPU from NVIDIA. So this is, I mean, we know that Broadcom is in the business of custom ASICs. They do this for many companies, including Meta. This would be a custom chip for OpenAI's workload, and it's called the jalapeno chip. Is that right? Yes. The first one is called the jalapeno chip, and then Serrano is the next chip. So they're following an interesting naming convention. Right, as is the case with all companies in AI. Okay, so that's what the chip is supposed to do. Now tell us a little bit about what the vendor financing agreement in place was actually looking like. I mean, how would this have actually worked? So here's what the companies have been discussing over the past couple weeks. Broadcom had been asking OpenAI to put up a dollar for every dollar Broadcom was going to to finance the chip with. So they were looking for a one-to-one ratio of investment. But OpenAI actually wanted Broadcom to invest more upfront than itself. And so OpenAI and Broadcom were able to agree that Broadcom would put up more capital upfront, which OpenAI executives said in an internal memo that we got that that was a huge win for them. But there is a caveat there because you know, to get this deal done, Broadcom is asking OpenAI to ensure that Microsoft actually will buy 40% of the chips that are going to be produced. And OpenAI, as we reported, was being very careful in its wording internally. And they're basically saying, look, we haven't confirmed that Microsoft is going to buy 40% of the chip, but let's just tell Broadcom that Microsoft intends to do that. But behind the scenes, OpenAI executives know that they can't require Microsoft to buy the chip and that if Microsoft does not follow through, they're going to be stuck scrambling for another buyer or another person, a party to finance the chip because they might not be able to rely on Broadcom. So there's a huge tension with whether Microsoft is going to buy the chip or not. So I want to get to the Microsoft piece in a minute here, but let's go back to the one-to-one ratio here. So OpenAI initially said, we'll put in a dollar if Broadcom, you put in a dollar. Then Broadcom, well, the revised agreement is that Broadcom actually puts more than that one-to-one ratio in. And just to clarify here, is the idea that OpenAI would then pay back Broadcom over time for its investment? Exactly, exactly. It's vendor financing and Broadcom would earn interest on the loan. So that's how that would work. Okay, so then let's go to this possible deal, I guess, with Microsoft. So Broadcom says, you've got to make sure that 40% of these chips get bought by Microsoft. And so according to your reporting, that agreement is what? It's a handshake agreement and Microsoft hasn't really committed to that so far? Microsoft has not committed to buy 40% of the chip. And privately, OpenAI executives have discussed the risk involved in signing such an agreement without anything from Microsoft. And they're saying behind the scenes that Broadcom does not fully appreciate the risk involved in this deal. The risk being that Microsoft doesn't fall through, Microsoft falls through and OpenAI has to come up with a plan B. How likely does it seem, you know, if we're, it's hard to put a number on it, but I guess, I mean, the fact that they're acknowledging the possibility here suggests that it is a very real risk. I mean, let's move it forward a bit. What would happen then to this deal if Microsoft didn't come to the table. I mean, is this whole chip deal in jeopardy then? Is that what we're saying? 40% of it would be because OpenAI wants Broadcom to finance the entire initial phase. That's $18 billion and around 1.3 gigawatts of capacity. And OpenAI wants it to be financed. And so it probably wouldn't move forward with that portion of the deal without financing from Broadcom. And if it doesn't get the financing from Broadcom, it's going to need to find someone else to finance it. But it's unclear who exactly would really want to do that. Okay, now what about the TSMC angle here? How is OpenAI getting capacity at TSMC? So all of the companies that work with Broadcom on custom chips rely on Broadcom's relationship with TSMC to get that capacity to actually manufacture the chip. And so right now, OpenAI and Broadcom are trying to reach a conditional agreement so that Broadcom can feel confident that the program is going to move forward and it can place that order at TSMC. So that is the deadline that the companies are racing to reach right now so that the chip can be ready in 2027 and not face a further delay because Broadcom couldn't secure the right capacity with TSMC. But Broadcom is not going to do that without a solid agreement in place. So that is what they're trying to figure out. Right, because that capacity is very scarce right now. and if Broadcom is going to allocate any of its capacity to anything, I mean, they have to know that it's going to be worth it. Otherwise, they'd allocate it for another part of its business. The last question I have for you, Anissa, is so let's just take a step back and look at this chip deal at large. I mean, OpenAI, as we've talked about, it's pursuing a vast ambition across many different product vectors, right? There's the software, there's the data centers, now there's the chip. I mean, why does OpenAI think that it needs its own chip? Does this feel core to the strategy here and core to the ambition to eventually start generating cash? Or is it just a nice to have? I think every large consumer of cloud capacity, once they start consuming, once they're like one of the top 10 companies spending on cloud capacity, they start to think, should we develop our own hardware? Because a lot of our money is going to our hardware vendors. So Amazon has done this. Google has done this. Apple has done this. And so OpenAI wants to make sure it has an in-house strategy to potentially lower its cost and give it negotiating leverage as it's signing deals with NVIDIA. AMD, AWS, Cerebris, and all of the other companies. And they've been working on this chip effort for quite a while, dating back more than two years. And so this chip is central to their overall compute strategy. Does it have to happen next year? I don't think so. But it would be a major blow if they had to curtail this in a major way because they already announced a 10 gigawatt deal with Broadcom. And so we'll be closely tracking if they rise to that level or if this is one of the many announcements OpenAI makes that it doesn't actually end up following through on. Right. Well, Anissa, I want to thank you for coming on. That is Anissa Gardizi, our cloud and compute reporter here at The Information. Microsoft is reassessing its strategy on its co-pilot AI products. My colleague Aaron Holmes had some inside reporting on that story. I want to bring him on to share with us what he knows. Aaron, welcome to the show. It's great to have you back. Happy to be here. Okay what going on in Microsoft and Copilot land So what we seeing is across the board basically you know as soon as Microsoft got its hands on OpenAI models in 2023 the company started basically putting copilots everywhere it could. You know, there was suddenly copilots in Office and Windows, but also in its security software and in Azure. And essentially every single piece of software that Microsoft was selling, it started adding, you know, a copilot chatbot sidebar. More recently, you know, there's been pretty heavy feedback from customers who find the number of co-pilots sometimes annoying or unnecessary. And I think Microsoft has shown that it's sensitive to that feedback because, you know, in the last couple of months, we've seen it roll back some of the co-pilots that show up in Windows. And just last week, or this week, sorry, Ashra Sharma, the CEO of Xbox, said that they were going to remove the gaming co-pilot that lived in the Xbox PC app. And I think the general idea is that, you know, Microsoft is kind of aware that there's this AI fatigue and wants to focus on actual products that people want to use AI for, rather than simply adding it to everything and hoping it, you know, lifts all ships. Right. And you had this quote from a customer in your story. You said, some customers find these co-pilots to be functionally useless, meaning like, literally like we don't use any of it. Yeah, I spoke to one, you know, CIO who was in charge of buying Microsoft software for his company. And he said that, you know, they were testing Copilot and some of their tests showed that, you know, they would ask it to summarize a one page document and it would return a two page summary. Somebody else was complaining that, you know, they were trying to use Copilot to analyze security data and it would just make stuff up with confidence. And then, you know, he would say, like, where did you get this data from? And Copilot would say, you're right, I made it up. So, I mean, those are just a few specific examples. And I think Microsoft is actively working on improving Copilot in especially the sort of enterprise use cases. We've heard it's gotten a lot better. But I think at the same time, they're kind of pulling back on unnecessary use cases for Copilot while they try to make it more useful. so if they're pulling back some of the co-pilot tools that they had rolled out i mean we've talked about pricing you and i and and how they're they're handling that part of the product are they changing the pricing you know i mean conceivably you're taking some parts of the product away i know it was never used but you know from the customers and i imagine you could say well if there were 10 co-pilot features and four are gone why am i paying the same price Yeah, I think what we're seeing across the entire Microsoft portfolio is that the company is starting to think more carefully about how much it costs to run copilots. And specifically the ones that were rolled back in the last couple of weeks were all essentially free copilots that showed up in Windows or Xbox or these consumer applications where people were not paying extra for copilot. At the same time, we have seen them start to increase prices for the more sophisticated co-pilots. You know, GitHub co-pilot, for example, was basically costing a lot to run because it uses advanced models from Anthropic and OpenAI. And Microsoft was forced to hike the prices of that specifically for, you know, the software developers whose employers are paying for seats. So we are starting to see sort of across the board, I think Microsoft get a little bit more careful about how it manages the gross margins of running all of these AI tools. Well, and that's what I was going to say, is that if they weren't incurring any additional revenue for those bloated co-pilot features, then they're still spending on compute. And so this would have beneficial repercussions then for its bottom line. Yeah, and I think there's kind of two things happening. They're also figuring out more ways to use cheaper AI models for especially the kind of more rudimentary Copilot use cases. And I'm hearing that they're going to continue to move the free versions of Copilot onto these smaller models that don't take up as much compute. But at the same time, you know how Microsoft disclosed actually last week in earnings that specifically GitHub Copilot was so expensive to run that it was dragging down gross margins in their cloud unit. And that, I think, is why they had to basically rejigger the prices there and make it a little bit more expensive for customers to use. Great. Well, Aaron, I want to thank you for coming on. That is Aaron Holmes, our Microsoft reporter, here at The Information. ServiceNow hosted its flagship conference in Las Vegas this week. The company has become a proxy for the pressure against enterprise software stocks at large. I want to bring on Adam Mansfield, a practice lead at software contract negotiation firm Upper Edge, to give us a view from the ground on what he learned from the event this week. Adam, welcome back to the show. It's great to have you here. Great to be here. Certainly enjoy these kind of conversations for sure. Okay, so Knowledge 2026. This was the big ServiceNow conference in Vegas. You were there this year. You were also there last year. Tell me about how the message this year differed from last year from the company. Yeah, I mean, it's a great question. I would tell you it differed in the sense that there was maybe all AI, where last time it was most AI, right? So there's a little distinction there. But there was definitely some commonality. I think the thing that really jumped off, and if you were maybe half asleep, you would still have noticed this, which is AI control tower was pretty much the first 45 minutes, and maybe I'm exaggerating, of the keynote. And it was prevalent, and it was all over the place, right? So what about security? What about security? Was that a focus for them? Yeah, security was a big part of that, and that ties to control tower as well. I think they have to obviously focus there because their customer base is obviously paying attention to that. And they're pushing back on ServiceNow as well as other vendors as well. It's not like just the ServiceNow. And when you think AI, you think security, you think about these entities that are considering the jump in. Cost profile, how it works, things that always are going to be important. But security always comes to the top, right? And so how does ServiceNow get ahead of that? How do they sell themselves? That was throughout the conference. So, okay, so that was the pitch. Now let's talk about your conversations with customers. How do they react to the pitch? And the big question I have for you, Adam, is, I mean, look, you look at the stock price, investors have concerns about ServiceNow, despite the financial profile still being pretty strong, certainly compared to where it was last year. Are customers feeling the same way or what's their read? Yeah, so here's the thing. So the fortunate thing for me is I get to have candid conversations with these customers, right? I've built relationships there, right? And so here's the deal. I think there's genuine interest. I think they understand the big picture and the story where ServiceNow is trying to bring these customers. But here's the problem. Most of these customers that I talk to lead with this. I really still need to understand what this actually is. So AI control tower or analysis, doesn't matter what it is. I need to understand it better. And the problem they're having is when they try to get into those deep dive discussions, what they're telling me is, it feels like ServiceNow in a lot of ways is still figuring this out. They're still, and that's not a negative comment. Think about how early we are in this game. And so that creates pause. It creates a little bit of friction on their interest, right? The second thing I will tell you is that when they think about their AI offerings, that's all well and good, but here's what always happens. What about the products I've already adopted? What about the, or should be using, spending millions of dollars on? What about my core ITSM, my core CSM? What about my core HRSD? What about getting more value out of those without needing to add on or be pushed into some new packaging that is AI embedded, right? The AI component, I get it, to a degree, but I'm so focused on getting more out of what I already have. Like, where is your time? Where are you spending my money on the R&D to that? And where is that in this conference? What session do you have? Where was it on the keynote? And that's the thing I'm – literally, that's what I'm being asked all the time is if I have the answer. I don't. But it's a great question. Well, and the other thing that comes to mind is, look, because of the pace of innovation and the new products that you can offer to customers, I mean, look, the focus from all these businesses is here's what's new, here's what's new. you know it's customers don't even have time to you just came out with this other thing three months ago i i wonder if that's the lag is that just because you're offering the latest and greatest i'm still focused on understanding the thing that you put out to market two and a half months ago 100 so it's it's really interesting right i think and it's not just service now it's a lot of other vendors as you know i was just listening in the co-pilot piece i could talk a lot about that too certainly but so as these vendors all of them enhance their ai offerings they're doing that because they ultimately have to and there's interest in it the problem is is that there's many within the same service now has many so when you sit and listen to the keynote in a session they say things autumn autonomous workflow employee works now assist ai control tower, AI, AI, work fabric, all this stuff. It's a lot. Then the customers asked, can we talk about how it would work for them? And they're like, whoa, how is that all going to come together? And not to mention, I have other AIs on my initiative, co-pilot, anthropic, pick your favorite one. And so you're asking me to look through all of this noise. So ServiceNow, how are you going to distinguish yourselves from it? Then the problem becomes when they give the opportunity And again it not just them But when they given that opportunity and then the people come in the product teams the sales teams and they not really crisp that a problem And on top of it the licensing component is also confusing And so it creates this cycle, which then creates anguish, which then says, but I'm spending millions on other things too. So they're almost hurting themselves by putting so much out there that hasn't been fully vetted to catch innovation. but that's also disrupting customers in the sense that it's creating friction in these customers to actually go do what ServiceNow wants. So last time we had you on, you talked about how you needed more transparency from these companies insofar as what they can achieve in the first six months. That was something you asked for. Look, that wasn't six months ago. That was more like two months ago. But have you seen, I'm not talking about ServiceNow, I'm talking about all these companies, are they any more transparent now with respect to what customers can achieve in the first six months? More is relative, right? So when you start at zero and you get to two, I guess it's more. But yes, the answer is yes. But what I would tell you is, are they where they need to be? No. Okay. So I'll give you an example. Most of the customers that I talk to, whether it's ServiceNow or others, and they are very specific. I need you, ServiceNow, to come in. Here are the five things I need to understand how it's gotten better, what I need to know and to make decisions. Are they coming in with a little bit more clarity? Sure. But it still feels very much being figured out general, not specific to them. How is it going to impact me? What are my ROIs and how soon? You say a hundred days to roll out and McDermott's excited and throwing those numbers out there. But the point is really, like how does that actually happen? What if it doesn't? What commitments are you going to give me? So they're very light on the actual meat of the matter. And they're maybe enhanced on the, and I hate to say this, the fluff for marketing piece. I think they've gotten that elevated. And so what's happening again, and I keep saying this, it's almost as if, as they've tried to push themselves in the room to get these meetings, they're forgetting about when you're in the meetings, you actually have to say something that resonates with the customer. You actually have to present a product. You have to show a roadmap. You have to show how it's going to be valuable. And that's the disconnect. It'd be better off to slow down, focus on what they already have, build as you do it, and then push. And there's, I think that's a big program. So let me ask you this. Based on your conversations with customers, you look at the stock price, ServiceNow. It's down, I don't know what it is, 50% in the last year or something like that. No. Do you think it's oversold based on what you're hearing? here's what i can tell you right from my lens the thing that service now i can definitively tell you is that all these customers that i work with i have no customers that are coming to me and saying hey i'm taking it out i'm moving off it's not on my roadmap i'm not considering doing more i yes ai control tower now assist pro plus yes not now maybe later like if that exists whereas with other vendors that i cover and you and i've talked about this i am having conversations of I think I'm going to move off of marketing cloud. I think I might move from Tableau to Power BI. Like that's happening. And you could probably know what vendor I'm talking about. But with ServiceNow, I don't have that. So they generally get the platform. They see the value. They understand it. There's always issues. But it's not to the point where it's like, I'm out. It's more like, give me more of what I already have because I like it. Stop pushing more too fast. So the reason I tell you that is I think it's an inflection point where they need the market probably wants more from them. They're figuring out what they need, what they're actually going to use. Exactly. And I think, you know, listen, I think part of this is customers are still there with them and they're going to keep going with ServiceNow. It's just a matter of how wide they're going to go as fast as Salesforce and ServiceNow rather wants them to. Let me ask you one last question before you go. So the other thing that we've been covering here is, you know, the the tolls that these these some of these enterprise software companies are now putting on agents accessing the data that they are sitting on storing. Again, it's customer data is a big debate around, you know, customers. Well, we own the data. Right. But we we covered this this week in our Applied AI newsletter about ServiceNow is one of the companies that is putting those tools up now. And look, the argument the company makes is that you're using the product more, so we're going to charge more. That's what it is. What are your clients telling you about those tools? What's their reaction? So here's the really good question. So I'll take an answer as crisply as I can, but there's two pieces to it. The first is I think customers have become more informed about what the model actually is, right? So ServiceNow is predominantly hybrid-based, and they'll say this on the earnings calls themselves. So you think it's unit, but then you get a number of assists or you get a number of tokens, a number right you draw down on. So that's what you're getting at, the consumption-based component of this. The problem is that customers look at this and go, I don't really know or I'm concerned about future spend that's just going to be based on a meter, which again, I don't really know the foundations of the meter itself. So I'm worried about the structure. So forget what I just said about AI itself, productivity, how I'm going to get the benefits from it. Now their problem is the model itself is exposed high exposure for future costs. Now the investment community, and they themselves say this on the earnings call, that's how they're going to accelerate revenue, right? So unit-based, flywheel effect, right? Spins, the hockey stick, whatever word they want to use. And so that's creating pause and concern from customers. I spend the majority, myself and my firm, we spend the majority of our time helping customers get that aspect of their deal right. the problem is is that these vendors service now specifically i think have thought it would be accepted there wouldn't be as much scrutiny it would be a i love the product let's go don't necessarily love the product yet and i'm concerned about the licensing model which is creating that slowdown that friction but it's a massive massive massive massive problem if these customers do not do this right if they do not have transparency the meters they don't understand how it works and they don't know future growth what that does to cost it's it's the way in which your cost profile becomes out of hand and if you want to talk about old world sass vendor lock-in this is a whole different beast this is vendor lock-in but locked in cost increases so if i'm hearing you correctly are you are you saying that that customers are they're not necessarily pushing i mean their initial reaction is we're not pushing back against the idea that we're going to pay more. We haven't even considered that yet. The question is, we don't even know how much more we are going to pay based on that. Right. So there's the front side forecasting, right? So it's like anything else, right? You want to understand what this, I actually, how much do I need? How did your model work and how much do I need? That's problem one that these vendors service now can't really give them answers to. That creates a problem. Then it's, okay, let's forecast to the best of our ability. I'm on board. Let's go. Then when they see, well, I only get this much. Well, that doesn't make sense because what if I go over, which would be a good thing that means I'm getting the use out of it. What does that look like? And then there's this hesitation to give the answer. Well, the price will be this, or you have to buy this amount of packs or this amount of bundle. And then it's like, well, that doesn't feel right. And then when you get into the granularity of it, the truth of the matter is, and I say this all the time, the volume, It's like anything else in life. You start giving them more, shouldn't your per unit go down? So there should be a volume discounting structure, which they don't also want to give because that's not what the market, the investors, which are pushing back, stock price going down. They need to say, no, no, no, no. The cost profile is not going to go down on a per unit base. It'll stay flat. There'll just be more of it. And so when you push on that, these vendors get problematic and they get concerned too. So it's a really, really tricky time. and I will just tell you this, customers are really paying attention. I think it's because there's enough out there, but it's all about you can pay attention, but now you got to do it right. Right, right. Well, Adam, I want to thank you for coming on as always. That is Adam Mansfield on the leadership team and a practice lead at Upper Edge here on TI TV. Awesome. The Informations Rocket Drew is covering the Elon Musk OpenAI trial from the courtroom all week long. here is his latest update for you. that precipitated it, including their sense that important products were not getting the required safety processes or safety review that they required, and also their sense that Sam was not consistently candid with the board. Both sides also had the opportunity to question Rosie Campbell, who is a former employee at OpenAI. She left a couple years ago, and she spoke to her impression that by the time she left, OpenAI was neglecting a couple issues of long-term safety, in part by disbanding OpenAI's super alignment team, which was focused on some issues of long-term safety. But maybe the star of the show in the day's proceedings was David Schisser, who's the former dean of Columbia Law School. He's a law professor and an expert in tax law and non-profit governance. Musk's lawyers are paying him $1,500 an hour for his testimony and for his expertise, and they went over the litany of concerns that the board had with Sam and with OpenAI leading up to that firing and for many of them Schisser agreed with the board assessment that these things are not consistent with sort of the best practices and norms for how nonprofits should be structured and governed So that ended up being some of the strongest testimony that we heard in Musk side of the case. Schisser also introduced a new argument that we haven't heard so far. He says that part of the ways that OpenAI has neglected its nonprofit obligations or has kind of strayed from nonprofit norms is that by the time it started taking investment in Microsoft. They did their first deal in 2019. I think he says sometimes around 2020, OpenAI stops seeking out philanthropy as aggressively. And he says when a non-profit has fewer philanthropic donors backing it up, it has less negotiating leverage when it comes to the table with for-profit partners. That puts it in a weaker position and also means potentially that it has to take on more investment, which leads to the non-profit OpenAI, in this case, accepting terms from Microsoft that involve sharing a lot of its intellectual property. So Schizzer went so far as to suggest that if OpenAI had prioritized more non-profit donations in addition, then perhaps OpenAI's foundation would have considerably more assets than it does today. OpenAI's lawyers throughout the case have drawn attention to the fact that OpenAI's non-profit foundation, which still exists today, has somewhere in the neighborhood of $200 billion in assets, including some cash on hand that it's gotten from selling equity that it has in OpenAI. But Shizzer's the first person to come along and say, hey, I think it could have done even better than that. There was a path that maybe would have been even preferable from the nonprofit's point of view. So that was a new argument that he introduced. It made for some interesting testimony. There's a lot still coming up in the Musk v. Altman case, including testimony from Microsoft CEO Satya Nadella and also OpenAI co-founder Ilya Sutskevar. So that's more to look forward to next week in the Musk v. Altman trial. That trial has very much been the story of the week. So for a bit more of a broader look on how that is affecting the narratives around both parties and around the narrative around AI at large, I want to bring on Martin Pierce and Nick Wingfield for this week's edition of the editor's cut. Good morning to you both. Martin, what has been your assessment of the trial so far? I think the assessment is, I mean, it depends on the audience that you are thinking about, but I actually think that for most people who would actually, who either of the companies would care about, which is really investors, I don't think it actually has much of an impact. I think that what we've learned is more details about how Sam Altman maybe is not as honest as we would prefer, but I think we already were aware of that. Musk, I don't think, has done, I don't think Musk's arguments have been borne out by the testimony, at least that's according to our correspondent who was at the trial. But, you know what, I think this is, I mean, Musk in particular is a bit like, you know, he's the Teflon guy. Everyone knows that he's kind of a, he exaggerates and spins tall tales and all that sort of thing. It doesn't really affect his standing among the investors who really are the ones who back him. And as far as Altman is concerned, everybody was aware of his reputation. I don't think this is actually making it any worse. Nick, what do you think? Well, Rockets, our correspondence reporting from the courtroom this week, has also shown that Musk was receptive to putting OpenAI into a for-profit structure, specifically Tesla, which to me seemed pretty meaningful and is going to really undermine his case. I mean, that's kind of what we've reported. I agree with Martin, however, that ultimately this case is not going to make a huge difference. And I think Musk, you could argue, is winning outside the courtroom for a variety of reasons, if only because he's distracted two of OpenAI's most senior leaders, Greg Brockman and Sam Altman, at a pretty critical moment in the company's development, where they're allegedly thinking about an IPO and also facing a real onslaught of competition from Google and Anthropoc. But hang on. Nick, am I? Go ahead. Surely, you could say the same in reverse. I mean, Elon, in fact, has the IPO coming up next month. So you can make the same argument that the trial has distracted Elon from the SpaceX IPO at a really critical moment. There's a big difference, though. Elon Musk does not run SpaceX. SpaceX is run by Gwynne Shotwell. He's got a really strong, effectively CEO. I don't know her exact title. I think it's president. But she's the one who really is out there keeping things together, the business and the IPO. In the case of OpenAI, it's a little harder to tell. Sam Altman is, of course, the CEO. So, you know, Brotman is the president. Fiji Simo is one of their most senior leaders. She's been out on medical leave. I think there it's a little less clear who is the sort of singular leader running the company right now. Could make the argument that by keeping Altman away from OpenAI, that company will actually run more smoothly because he is such an agent of chaos. So there is that argument. Elon, if you're watching, it backfired. Okay, so yeah, that's interesting. I mean, you know, the idea doesn't really matter who wins, who gets distracted more, who's running all these companies. You know who wins the most from this? We do. The media. Journalists. You know, this rules our... I thought you were going to say Google. I mean, yeah. No, no. This is just great for us. It's not so great for the companies, but it's great for us and it's great for the attorney. I actually, I have an alternative theory. I think Anthropic wins the most from it. Anthropic fits from OpenAI's distraction. And we also, by the way, had this really fascinating alliance formed between Elon Musk and XAI and Anthropic this week, which we can talk about. But it seems like they have really sort of, in some ways, painted OpenAI into a corner. So, Martin, I mean, you are the first person to point out what is just a press release and what is actually meaningful. So that deal that Nick is pointing to, the Anthropic, SpaceX AI, there was a line in there. Anthropic has expressed interest, I think, in looking at orbital data centers. Did it feel like a press release to you or did it feel meaningful? Well, I think the overall announcement was meaningful in that it showed that XAI is now a cloud firm. And, you know, I was thinking the other day, is there clouds in space? I'm not sure that there are. So, you know, I think it's meaningful that it seems that Elon has given up his hopes of being a really leading AI model developer. and he's just going to rent out capacity, whether it's on the ground or in space. The point about the space stuff, that's a completely meaningless thing. That's like, as I said in the briefing the other night, that's like if you run into an old friend you haven't seen in years and you say, let's get together for a drink and you walk away and you never call that person again. I mean, it's completely meaningless. Okay, the last topic I want to ask you guys about is- No, but I would never do that, just to be clear. If I run into a cousin and say, let's get together, I mean it. Is there anyone you want to remind today on the show you want to get back together with? Okay, so Nick, the last topic I want to ask you about, though, is so the trial is happening in the background. We've got these two billionaires head-to-head against each other. We've got these texts coming out. We're sort of reliving the chaos of the Sam Altman ouster. does this have any implications on the perception of AI at all in the technology or is it really just a billionaire feud there are so many things having an impact on perception of AI I think this rates pretty low I mean I you know the the the kind of you know perception of AI as a job killer, for example, I think, is one that may weigh on the entire AI sector in all sorts of ways. But this case, I think it's being followed by a relatively small number of people in the industry. But AI companies have much bigger issues to deal with. Martin, closing thoughts? I actually don't have any other closing thoughts other than are there clouds in space this is rare this is rare okay well I want to thank you both for coming on and Martin make sure you call your friends back whoever you were meaning to not me I'm talking about everybody yeah call your friends back if you were meaning to get drinks with them I want to thank you both for coming on that is Martin Peers and Nick Wingfield from our newsroom here at The Information. That does it for today's show. A reminder, we are on this stream Monday through Friday at 10 a.m. Pacific, 1 p.m. Eastern. If you can't make it then, episodes are available on theinformation.com, our YouTube channel, or wherever you get your podcasts. Make sure to follow us on social media on X, Instagram, TikTok. I'm already excited for our next show on Monday. Have a great rest of your Friday and have a great weekend. Bye-bye for now. Thank you.
