Microsoft was once the exclusive provider of data center infrastructure for OpenAI to train and run its AI models. No longer.
Coinciding with the announcement of Stargate, OpenAI’s massive new AI infrastructure deal with SoftBank, Oracle, and others, Microsoft says it has signed a new agreement with OpenAI that gives it “right of first refusal” on new OpenAI cloud computing capacity. That means that, going forward, Microsoft gets first choice over whether to host OpenAI’s AI workloads in the cloud — but if Microsoft can’t meet its needs, OpenAI can go to a rival cloud provider.
“OpenAI recently made a new, large Azure commitment that will continue to support all OpenAI products as well as training,” Microsoft said in a blog post. “To further support OpenAI, Microsoft has approved OpenAI’s ability to build additional capacity, primarily for research and training of models.”
OpenAI has blamed a lack of available compute for delaying its products, and compute capacity has reportedly become a source of tension between the AI company and Microsoft, its close collaborator and major investor. In June, Microsoft, under shareholder pressure, permitted OpenAI to ink a deal with Oracle for additional capacity.
In the blost post, Microsoft reiterated that “key elements” of its longstanding partnership with OpenAI remain in place through 2030, including its access to OpenAI’s IP, revenue sharing arrangements, and exclusivity on OpenAI’s APIs.
That assumes, of course, that OpenAI doesn’t achieve artificial general intelligence (AGI) under the two companies’ agreed-upon definition before then. When OpenAI develops AI systems that can generate at least $100 billion in profits, Microsoft will lose access to the company’s technology, according to a reported agreement between the firms.
OpenAI is said to be considering nullifying the agreement in a possible bid to secure more Microsoft funding.
“The OpenAI API is exclusive to Azure, runs on Azure and is also available through the Azure OpenAI Service,” the blog post reads. “This agreement means customers benefit from having access to leading models on Microsoft platforms and direct from OpenAI.”
We’ve reached out to OpenAI and Microsoft for more information and will update this post if we hear back.
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OpenAI says that it will team up with Japanese conglomerate SoftBank and with Oracle, along with others, to build multiple data centers for AI in the U.S.
The joint venture, called The Stargate Project, will begin with a large data center project in Texas and eventually expand to other states. The companies expect to commit $100 billion to Stargate initially and pour up to $500 billion into the venture over the next four years.
They promise it will create “hundreds of thousands” of jobs and “secure American leadership in AI.”
“The Stargate Project is a new company which intends to [build] new AI infrastructure for OpenAI in the United States,” OpenAI, Oracle, and SoftBank said in a joint statement. “This project will not only support the re-industrialization of the United States but also provide a strategic capability to protect the national security of America and its allies.”
The companies made the announcement during a press conference at the White House on Tuesday, where President Donald Trump spoke about plans for investment in U.S. infrastructure. SoftBank chief Masayoshi Son, OpenAI CEO Sam Altman, and Oracle co-founder Larry Ellison were in attendance.
Microsoft is also involved in Stargate as a tech partner. So are Arm and Nvidia. Middle East AI fund MGX will join SoftBank in its investment; MGX’s first public deal was an investment in OpenAI.
SoftBank, OpenAI, and Oracle are also listed as “initial equity investors” in Stargate.
“SoftBank and OpenAI are the lead partners for Stargate, with SoftBank having financial responsibility and OpenAI having operational responsibility,” the statement continued. “Masayoshi Son will be the chairman [of Stargate] […] As part of Stargate, Oracle, Nvidia, and OpenAI will closely collaborate to build and operate this computing system.”
The data centers could house chips designed by OpenAI someday. The company is said to be aggressively building out a team of chip designers and engineers, and working with semiconductor firms Broadcom and TSMC to create an AI chip for running models that could arrive as soon as 2026.
SoftBank is already an investor in OpenAI, having reportedly committed $500 million toward the AI startup’s last funding round and an additional $1.5 billion to allow OpenAI staff to sell shares in a tender offer. Oracle, meanwhile, has an ongoing deal with OpenAI to supply AI computing resources.
Softbank also earlier pledged to invest $100 billion in the U.S. over the next four years. Son and Trump have had a close working relationship since 2016, during Trump’s first term, when Son announced that SoftBank would invest $50 billion in U.S. startups and create 50,000 jobs.
The Information previously reported that OpenAI was negotiating with Oracle to lease an entire data center in Abilene, Texas — a data center that could could reach nearly a gigawatt of electricity by mid-2026. (A gigawatt is enough to power roughly 750,000 small homes.) Data center startup Crusoe Energy was said to be involved in the project, which was estimated to cost around $3.4 billion.
That Abilene site will be Stargate’s first site, and OpenAI says that Stargate is “evaluating potential sites across the country for more campuses as [it finalizes] definitive agreements.”
It’s unclear what connection, if any, Stargate has to a rumored partnership between Microsoft and OpenAI to spin up a $100 billion supercomputer. TechCrunch has reached out to OpenAI for additional information.
Last year, The Information reported that Microsoft and OpenAI would build a series of data centers for AI beginning in five stages over the next several years, culminating in Stargate: a 5-gigawatt facility spanning several hundred acres of land. Stargate was expected to take between five and six years to complete, according to The Information. In the lead-up to its completion, Microsoft had reportedly planned to launch a smaller-scope data center for OpenAI around 2026.
A number of tech leaders have called for the U.S. to up its investment in data centers, particularly as the AI industry continues to grow at an explosive pace. AI systems require enormous server banks to develop and run at scale.
Goldman Sachs estimates that AI will represent about 19% of data center power demand by 2028. OpenAI has blamed a lack of available compute for delaying its products, and compute capacity has reportedly become a source of tension between the AI company and Microsoft, its close collaborator and major investor.
Microsoft, which recently announced it is on track to spend $80 billion on AI data centers, said in a recent blog post that the company’s success depends on “new partnerships founded on large-scale infrastructure investments.” In an interview with Bloomberg, Altman said that he believes it is urgent that what he perceives as barriers to building additional data center infrastructure in the U.S. be cleared.
“The thing I really deeply agree with [President Trump] on is, it is wild how difficult it has become to build things in the United States,” Altman said in that interview. “Power plants, data centers, any of that kind of stuff. I understand how bureaucratic cruft builds up, but it’s not helpful to the country in general.”
Massive data center projects have vocal critics who say that data centers often create fewer jobs than promised and tend to have severe environmental impacts. Data centers are typically water hungry, placing a strain on regions with insufficient water resources, and their high power requirements have forced some utilities to lean heavily on fossil fuels.
Those concerns don’t appear to be slowing investments any. Per a McKinsey report, capital spending on procurement and installation of mechanical and electrical systems for data centers could eclipse $250 billion in the next five years.
In January, Trump announced that Hussain Sajwani, an Emirati billionaire businessman who founded the property development giant DAMAC Properties, will invest $20 billion in new data centers across the U.S. Industry insiders have expressed skepticism of the deal’s concreteness, however.
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Alexandr Wang, the CEO of Scale AI, has taken out a full-page ad in The Washington Post asking the Trump administration to invest more in AI.
Wang, who attended Trump’s inauguration on Monday like many other tech CEOs, posted a copy of the ad on X, which reads “Dear President Trump, America must win the AI War.”
In the full letter published online, Wang explains that the U.S. should take five broad steps to win what he considers an “AI war” against China.
Scale, whose core business is data labeling and processing for AI projects at large organizations, was valued at $13.8 billion last year.
Wang wants the U.S. government to emulate tech giants by spending more on data and compute. He also recommends the U.S. review its own regulations to ensure there’s plenty of AI-related jobs in the future.
Wang further calls for making federal agencies “AI-ready” by 2027, launching an “aggressive” plan for cheap electricity that can be consumed by AI-centric data centers, and offered ideas on how to implement some AI safety measures.
Scale could benefit from at least some of these recommendations, like a surge in U.S. government spending on data. Scale already counts the U.S. government as a customer and is reportedly part of plans for a U.S. defense startup consortium.
More friendly regulations and encouraging AI-related jobs could help Scale as well, as it relies heavily on contract workers, a few of whom have recently filed lawsuits alleging they are misclassified.
Wang, however, has framed the recommendations as part of an effort to keep the U.S. ahead of China in AI. “We are in a new kind of technological arms race,” his letter states. “The Chinese government is investing in AI at an unprecedented pace.”
Chinese models like DeepSeek have been getting attention for their strong performance on certain industry benchmarks. Wang’s letter says China is now catching up to the U.S. after being at least a year behind, comments echoed by other AI leaders.
But Wang’s framing of U.S.-China AI competition as a “war” has raised concern from some.
“This is a horrible framing – we are not at war. We are all in this together and if we make AI development into a war we are likely to all die,” posted Emmett Shear, the ex-Twitch CEO who was briefly OpenAI’s CEO in 2023.
How the Trump administration responds remains to be seen. So far, President Trump’s main action on AI has been to revoke his predecessor’s executive order on AI, which created guidance for companies to help correct flaws and biases in their models.
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Perplexity on Tuesday launched an API service called Sonar, allowing enterprises and developers to build the startup’s generative AI search tools into their own applications.
“While most generative AI features today have answers informed only by training data, this limits their capabilities,” Perplexity wrote in a blog post. “To optimize for factuality and authority, APIs require a real-time connection to the Internet, with answers informed by trusted sources.”
To start, Perplexity is offering two tiers that developers can choose from: a base version that’s cheaper and faster, Sonar, and a pricier version that’s better for tough questions, Sonar Pro. Perplexity says the Sonar API also gives enterprises and developers the ability to customize the sources its AI search engine pulls from.
With the launch of its API, Perplexity is making its AI search engine available in more places than just its app and website. Perplexity says that Zoom, among other companies, is already using Sonar to power an AI assistant for its video conferencing platform. Sonar is allowing Zoom’s AI chatbot to give real-time answers, informed by web searches with citations, without requiring users to leave the video chat window.
Sonar could also give Perplexity another source of revenue, which could be particularly important to the startup’s investors. Perplexity only offers a subscription service for unlimited access to its AI search engine and some additional features. However, the tech industry has slashed prices to access AI tools via APIs in the last year, and Perplexity claims to be offering the cheapest AI search API on the market via Sonar.
The base version of Sonar offers a cheaper and quicker version of the company’s AI search tools. Sonar’s base version has flat pricing and uses a lightweight model. It costs $5 for every 1,000 searches, plus $1 for every 750,000 words you type into the AI model (roughly 1 million input tokens), and another $1 for every 750,000 words the model spits out (roughly 1 million output tokens).
The pricier Sonar Pro gives more-detailed answers and is capable of handling more-complex questions. This version will run multiple searches on top of a user prompt, meaning the pricing could be more unpredictable. Perplexity also says this version offers twice as many citations as the base version of Sonar. Sonar Pro costs $5 for every 1,000 searches, plus $3 for every 750,000 words you type into the AI model (roughly 1 million input tokens), and $15 for every 750,000 words the model spits out (roughly 1 million output tokens).
Perplexity claims Sonar Pro outperformed leading models from Google, OpenAI, and Anthropic on a benchmark that measures factual correctness in AI chatbot answers, SimpleQA.
As we recently reported, Perplexity’s annual recurring revenue is somewhere between $5 million and $10 million. This seems fairly healthy for a startup of Perplexity’s size and age, but the startup is certainly looking for new ways to grow its revenue. The startup raised an additional $73.6 million in a funding round earlier this month, valuing the company around $520 million.
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Typesetting popular manga like Dandadan, Kaiju No. 8, and Gokurakugai can be crushing for its pool of mostly freelance workers.
Anthropic CEO Dario Amodei says that the company plans to release a “two-way” voice mode for its chatbot, Claude, as well as a memory feature that lets Claude remember more about users and past conversations.
Speaking to The Wall Street Journal at the World Economic Forum at Davos, Amodei also revealed that Anthropic expects to release “smarter” AI models in the coming months, and that the company has been “overwhelmed” by the “surge in demand” in the last year.
“The surge in demand we’ve seen over the last year, and particularly in the last three months, has overwhelmed our ability to provide the needed compute,” Amodei said.
Anthropic is racing to keep pace with its chief AI rival, OpenAI, in an extremely capital-intensive sector. Despite having raised $13.7 billion in capital to date, Anthropic reportedly lost billions of dollars last year. Anthropic is said to be in talks to raise another ~$2 billion at a $60 billion valuation.
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