Good morning. For those of us in North America and Europe, it seemed like DeepSeek came out of nowhere this year to radically rearrange the AI power structure.
But as a new Fortune article attests, it was no overnight success. A number of factors were in play to help DeepSeek mount its challenge to the dominant powers of AI, including a vibrant startup scene, university talent, government support, and—it must be said—western indifference.
Our man in Hong Kong, Nick Gordon, reports on China’s six formidable Hangzhou dragons in the latest edition of our magazine. Give it a read. —Andrew Nusca
P.S. ICYMI: This is the Fortune newsletter formerly known as Data Sheet. Yes, we’ve got a new name. No, we don’t know when AGI is actually coming.
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OpenAI raises a truly staggering amount of money
OpenAI on Monday announced that it had finally closed its latest, long-gestating fundraising effort.
The totals are eye-watering: $40 billion raised, $300 billion post-money valuation. That makes the fundraising round the largest ever recorded by a private company, and the valuation the second- or third-highest for a private company (behind SpaceX at $350 billion and TikTok-owner ByteDance at $312 billion).
Who would lend—and that is an important point here, lend—OpenAI all that money? Masayoshi Son’s SoftBank, for one, which kicked in $30 billion; previous investor Microsoft; and investment firms Coatue, Altimeter, and Thrive.
The funding “enables us to push the frontiers of AI research even further, scale our compute infrastructure, and deliver increasingly powerful tools for the 500 million people who use ChatGPT every week,” the company said in a statement.
CNBC notes that about $18 billion of the funds is earmarked for OpenAI’s commitment to the Stargate project to invest $500 billion in U.S. AI infrastructure over the next four years. OpenAI and SoftBank are co-lead partners for the project; OpenAI is its operational partner, and SoftBank is its financial one.
Like any loan, this money comes with strings attached: SoftBank revealed in a Monday disclosure that its total investment could be reduced to $20 billion if OpenAI doesn’t restructure into a for-profit entity by Dec. 31—something that requires signoff by both Microsoft and the Attorney General of California, where OpenAI is headquartered. —AN
Intel CEO: We will spin off non-core businesses
Intel’s new CEO, Lip-Bu Tan, isn’t wasting time outlining a strategy for the embattled American chipmaker.
Making his first public appearance as CEO at the company’s Intel Vision customer conference in Las Vegas, Tan said Intel would spin off assets that weren’t core to its mission—but didn’t specify which parts those were.
That’s not all. Tan also said Intel would replace lost engineering talent, improve its balance sheet, and make more changes—such as ushering in new products and processes—to align with customer demand.
“We have a lot of hard work ahead,” he said. “There are areas where we’ve fallen short of your expectations.”
A burning question for Intel has been whether the diversified chipmaker should remain whole or break apart.
Tan hasn’t tipped his hand since he was named CEO on March 18, but in remarks he has echoed many of the leading complaints about the company—that it’s lagging the competition, that its AI products are also-rans, that Intel has held on for too long to a “our way or the highway” approach to chipmaking.
“It won’t happen overnight,” he said, “but I know we can get there.”
Intel shares closed yesterday at $22.71, even with their price six months ago and about four dollars more than their low for the trailing year. —AN
Amazon resumes drone deliveries
For about two months, Amazon drone deliveries in Arizona and Texas were on hiatus.
Now they’re back in action.
Amazon’s Prime Air division had been testing drone deliveries in Tolleson, Ariz. and College Station, Texas for some time before the company “discovered an abnormality with the drone’s altitude sensor,” according to a CNBC report.
It appears dust in the air was creating inaccurate position readings—a potential safety hazard.
Two months and one software update later, the MK30 drones have been reapproved by the Federal Aviation Administration.
Amazon has promised delivery drones for more than a decade with the idea that they could get products to people’s homes faster and cheaper than conventional services.
But it has taken a long time to materialize, for myriad reasons: technology (inclement weather and drones have not historically mixed), resources (Prime Air saw layoffs in 2023), and regulatory approval (the FAA only allowed Amazon to fly drones out of sight of a ground spotter last year).
Things are now beginning to move. Amazon hopes to deliver 500 million packages by drone per year by 2030—a substantial sum, though a miniscule fraction of the roughly six billion packages it moves per year in the U.S. —AN
More tech
—SoftBank needs money. Masa Son’s firm seeks a bridge loan of some $16.5 billion to help fund U.S. AI.
—U.S. to withhold CHIPS Act grants. Commerce Secretary Howard Lutnick pushes recipients to make their projects bigger.
—Microsoft expands Copilot+ PC features. Live Captions and Cocreator now work on AMD and Intel chips, and not just Qualcomm iron.
—Amazon’s Alexa+ begins rollout. Like Apple’s rival AI, some previewed features won’t come for several months.
—Apple Intelligence adds languages. French, German, Italian, Portuguese (Brazil), Spanish, Japanese, Korean, and Chinese (simplified), plus localized English for India and Singapore.
—Meta pushes back on EU fine—with U.S. help. CEO Zuckerberg pushes Trump administration to pressure the EC to dilute a penalty that could undercut its business.
—Cerebras moves toward IPO. Chipmaker resolves “all open issues” with U.S. Committee on Foreign Investment.
—GlobalFoundries, UMC mull tie-up. The idea: Make a bigger, U.S.-based company that gives that country access to mature chips as tensions flare between China and Taiwan.
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