The Information · Tech & AI
TIER 4 Fri, 12 Sep 2025 22:05:27 +0000 (UTC)
As we wrap up what has been a busy week in artificial intelligence-cloud land—one dominated by Oracle—we want to circle back to the striking announcement on Thursday night from Microsoft and OpenAI.͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ | | | | Sep 12, 2025 ---|--- | # The Briefing --- | | By Amir Efrati ---|--- | | | | Supported by | ---|--- | | _Thanks for reading The Briefing, our nightly column where we break down the day’s news. If you like what you see, I encourage you tosubscribe to our reporting here._ * * * Greetings!As we wrap up what has been a busy week in artificial intelligence-cloud land—one dominated by Oracle—we want to circle back to the striking announcement on Thursday night from Microsoft and OpenAI. Anytime two companies, worth at least $4.5 trillion combined, issue a three-sentence press release with no concrete information about a highly important subject, it makes you think.Their 49-word joint statement said they had a “non-binding memorandum of understanding about the next phase of our partnership” and were “actively working to finalize contractual terms.” It’s a good bet that negotiating an actual agreement could take another few weeks, or longer, in which case you have to wonder why they put out the press release now.As a reminder, Microsoft and OpenAI are in the midst of a year-long negotiation about OpenAI’s plan to restructure its for-profit arm to prepare it for going public. Microsoft effectively has veto power on that, and you can read all the reasons the companies have been stuck here. Yet both of them have an incentive to agree to a deal. So why put out this announcement this week? Both companies have their reasons. Microsoft has been doing well in AI, thanks largely to OpenAI’s fast-rising spending on Microsoft cloud servers to power ChatGPT and develop new artificial intelligence. But this week, Oracle stole the show with its roughly $300 billion deal to rent out the same kind of servers to OpenAI through the early part of next decade. That news sent Oracle’s shares rocketing 35% in one day, although it has since fallen back 11%. As we reported, OpenAI has projected to spend $135 billion to rent Microsoft servers through 2030. But OpenAI’s contractually-obligated spending on Oracle seems likely to dwarf that amount. In short, Microsoft is suddenly under pressure to reassure investors that it will continue to benefit from its OpenAI relationship more than other companies. And it didn’t help that Aaron Holmes reported this week Microsoft would start to pay for Anthropic models to power some Copilot AI features because leaders felt OpenAI tech wasn’t good enough.For its part, OpenAI has reasons of its own for Thursday’s PR. The company is locked in a separate negotiation with the California attorney general about its conversion plan. And as part of that, unaffiliated advocacy groups have argued to the AG that OpenAI’s nonprofit, which controls the for-profit arm, should get a stake worth at least $100 billion in the for-profit arm after the restructuring. An OpenAI blog post on this subject—which went live at the same time as its joint statement with Microsoft—said OpenAI agrees with the $100 billion idea, and that’s precisely the only new information in its post. That makes it seem like the announcement is just another leg of its negotiation with the AG.Lastly, OpenAI is in the midst of raising enough money to cover the $115 billion cash burn it projects from this year through 2029. So the press releases work to reassure potential investors and debt providers that things are moving along.There may be other factors at play behind these strange press releases, but what I’ve outlined are almost certainly at the top of the list. (For OpenAI-watchers, Tucker Carlson’s interview with OpenAI CEO Sam Altman is worth listening to). ### The Information’s Stories of the Week Three companies dominated tech news this week: OpenAI, Oracle and Microsoft. OpenAI, of course, connects both. And as we noted, the money flows between OpenAI and Oracle indirectly extend out to the entertainment industry via Oracle founder Larry Ellison’s backing of his son’s potential bid for Warner Bros. Discovery.But it is OpenAI that dominates. We reported late last Friday night on new financial projections the company has given investors, showing how much money it will burn in the next few years. In this analysis, we detailed the implications of OpenAI’s high costs for investors contemplating buying into the company. In this piece, we pointed out how OpenAI’s spending spree is shaking up the cloud market. Oracle, so far, is the big winner. What about Microsoft, OpenAI’s main backer and supposedly its primary cloud partner? Well, our story this week on Microsoft’s adoption of Anthropic models shows how Microsoft is hedging its bets just as much as OpenAI is. But on Thursday night, the two companies tried to calm speculation about their relations with a peace announcement.Meanwhile, on the chips front, Nvidia’s prospects of maintaining its dominance in China are dimming. Alibaba and Baidu are starting to use their own chips for training AI models.And Nvidia is pulling back from efforts to build its own cloud service, we scooped.Outside of AI, we delved into where things stand for small search firms hoping to get a leg up from a judge’s ruling that Google has to share some search data to make up for its illegal search monopoly.On the augmented reality front, Amazon is developing its own AR glasses to compete with those coming from Meta.Crypto is all the rage on Wall Street, where crypto-related IPOs are flooding the market. This week we got Figure and Gemini. Meanwhile, a stablecoin price war has broken out, we revealed here. On another side of the crypto world, we reported on Andreessen Horowitz’s solid crypto returns. In dealmaking, robotics startup Physical Intelligence is raising money, as is Supabase. Polymarket is considering a funding offer valuing the firm as high as $9 billion. And investors contemplating either Brex or Ramp should look at our analysis of their valuations.Start the weekend off with our Big Read looking at Anthropic, which in its dealing with President Trump has zigged while other tech firms have zagged. ### In Other News **•** Amazon Web Services vice president Jon Jones, who led global startups and venture capital business, has left the company, a spokesperson confirmed on Friday.• China and the U.S. will discuss the future of TikTok during trade negotiations between the two countries in Spain scheduled for next week, a spokesperson for the Chinese Ministry of Commerce confirmed.• Apple has delayed the launch of its new iPhone Air in China, various news outlets reported, due to regulatory issues relating to its eSIM-only arrangement. The delay confirms The Information’s reporting from last November that the lack of a physical SIM card tray—which is required in China—could be a problem for the device in the Chinese market.• Apple’s former Siri head Robby Walker is leaving the company, Bloomberg reported.• Gemini, the crypto exchange founded by Cameron and Tyler Winklevoss, jumped 32% in its opening trade after raising $425 million in an initial public offering, giving it a market value of more than $4 billion. ### Today in The Information’s TITV Check out today's episode of TITV in which we dive into how AI is changing Wall Street, along with analysis on Microsoft and OpenAI and this week in IPOs. ### Recommended Newsletter Dealmaker was named the “Best in Business” newsletter for its insightful coverage of private technology and the AI hype cycle. Start receiving the newsletter here. | | A message from Warp --- ### Welcome to Code Country Ride with Warp, the world’s #1 coding agent. 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