openai, nvidia and $50 billion Updates

The artificial intelligence sector is experiencing a significant surge in investment, alongside growing concerns about a potential financial bubble. SoftBank, for instance, is actively expanding its AI footprint, reportedly in talks to acquire data center company Switch, which owners value at $50 billion, or potentially $60 billion for an IPO next year. This move follows SoftBank's other substantial AI commitments, including the $500 billion Stargate project with OpenAI and its $64 billion acquisition of Arm Holdings Plc. However, this rapid growth in AI data centers is also sparking worries among experts, with some, like Howard Marks of Oaktree Capital, cautioning that a glut of data centers and a lending frenzy could lead to unprofitability for some ventures. OpenAI itself is seeking massive investments, with overall AI infrastructure costs potentially soaring to $10 trillion. Amidst this investment climate, the dynamics of AI chip exports are shifting. Donald Trump recently lifted export controls on Nvidia's H20 chip, its second-best offering, to China. While some argue this supports American jobs, others fear it could diminish the US lead in AI. Experts like Chris McGuire suggest China remains years away from producing comparable chips. In response, Beijing plans to encourage its state-owned AI data centers to prioritize domestic chips, aiming for a self-reliant supply chain, a move expected to benefit companies like Huawei Technologies. Meanwhile, enterprises are rapidly integrating AI, with BNY collaborating with OpenAI to launch an internal platform called Eliza, enabling 20,000 employees to create AI tools for over 125 tasks, demonstrating a commitment to "AI for everyone, everywhere." Looking ahead, a survey by RBC Capital indicates that 90% of businesses plan to increase their AI budgets for 2026, with Chief Information Officers prioritizing generative AI investments. This signals a clear shift from AI testing to its strategic use for cost savings and revenue generation. Despite the enthusiasm, investor Michael Burry, known from "The Big Short," warns that the timing of an AI bubble burst is unpredictable, and its realization might only come a year or two later. Beyond financial risks, AI also presents new challenges, such as sophisticated refund scams where customers use AI to generate fake images of damaged products. Additionally, there's a need to clarify misconceptions surrounding AI's water usage, as experts explain that data center water consumption for cooling is complex and varies significantly by location, unlike carbon emissions. White House official David Sacks also discussed President Trump's new executive order regarding a national artificial intelligence standard.

Key Takeaways

  • SoftBank is pursuing significant AI expansion, including potential acquisition talks for data center company Switch, valued at $50 billion or $60 billion for an IPO, and its $500 billion Stargate project with OpenAI, alongside its $64 billion acquisition of Arm Holdings Plc.
  • Concerns are rising about a financial bubble in the rapidly growing AI data center sector, with some experts warning of potential unprofitability and overall infrastructure costs possibly reaching $10 trillion.
  • Donald Trump lifted export controls on Nvidia's H20 chip to China, a decision sparking debate over its impact on America's lead in artificial intelligence.
  • China is encouraging its state-owned AI data centers to use domestically produced chips, aiming for a self-reliant supply chain, a policy expected to benefit companies like Huawei Technologies.
  • BNY launched an internal AI platform, Eliza, in collaboration with OpenAI, empowering 20,000 employees to create AI tools for over 125 different tasks.
  • A survey by RBC Capital indicates that 90% of businesses plan to increase their AI budgets for 2026, with generative AI being a top priority for Chief Information Officers.
  • Investor Michael Burry stated that the timing of an AI bubble burst is unpredictable, and its realization might not be apparent for a year or two after it occurs.
  • Small online businesses are increasingly targeted by AI-driven refund scams, where customers use AI to generate fake images of damaged products for fraudulent claims.
  • Misconceptions about AI and data center water usage are being clarified, with experts explaining that consumption is complex, varies by location, and is primarily for cooling systems.
  • White House official David Sacks discussed President Trump's new executive order concerning a national artificial intelligence standard.

SoftBank eyes Switch data centers for AI expansion

SoftBank is in talks to buy data center company Switch and investment firm DigitalBridge Group Inc. SoftBank CEO Masayoshi Son wants to expand SoftBank's role in the artificial intelligence industry. Switch owners are looking for a $50 billion valuation for a sale or $60 billion for a possible IPO next year. SoftBank has also made other big AI investments this year, including the $500 billion Stargate project with OpenAI and buying Arm Holdings Plc for $64 billion.

AI data center boom raises bubble fears

The rapid growth in AI data centers is causing worries about a financial bubble, according to experts. Some fear a glut of data centers and a lending frenzy could lead to problems for investors. Howard Marks of Oaktree Capital Management warned that some data centers might become unprofitable. Companies like OpenAI are seeking huge investments, with overall infrastructure costs possibly reaching $10 trillion. Lenders are also slicing debt, making it more opaque and spreading risk through the system.

Trump lifts chip export ban to China

Donald Trump recently removed export controls on Nvidia's H20 chip, which is its second-best. This decision could hurt America's lead in artificial intelligence over China. The US currently has an advantage because it controls advanced computer chips, like those made by Nvidia. While some argue this move supports American jobs and keeps China reliant on US tech, experts like Chris McGuire say China is still years away from making comparable chips. Beijing reportedly plans to limit access to these foreign chips, encouraging domestic use instead.

US can keep AI lead despite China chip sales

The United States should not panic about selling AI chips to China, even though China's demand is strong. While some worry these sales could hurt national security, a complete ban might harm US companies like Nvidia and push China to develop its own chips faster. The article suggests that President Trump has several ways to keep the US ahead in AI. These include using targeted sanctions, working with other countries, and investing more in US research and development.

China urges state AI centers to use local chips

China will encourage its state-owned artificial intelligence data centers to use chips made within the country. This move aims to build a self-reliant supply chain for China's technology. The government is pushing for domestic semiconductors even as the US eases some export rules on Nvidia AI chips. Huawei Technologies is expected to benefit greatly from this new policy.

BNY empowers employees with OpenAI for AI tools

BNY, a major financial institution, is working with OpenAI to bring artificial intelligence to all its employees. They launched an internal platform called Eliza, which helps 20,000 employees create AI tools for over 125 different tasks. BNY's Chief Data and AI Officer, Sarthak Pattanaik, says their goal is "AI for everyone, everywhere." The company has also built strong governance into Eliza to ensure safe and responsible AI use, maintaining trust in its operations.

Michael Burry says AI bubble timing is unknown

Famous investor Michael Burry, known from "The Big Short," stated that no one can predict when the artificial intelligence bubble will burst. He wrote on his Substack that even if the bubble does pop, people likely will not realize it until a year or two later. Burry also advised against shorting stocks or buying puts at this time. He believes the stock market could reach an extremely high peak or a generational top very soon.

Businesses boost AI spending for 2026

Companies are now spending much more on artificial intelligence, according to a new survey by RBC Capital. The survey found that 90% of businesses plan to increase their AI budgets for 2026. Most Chief Information Officers are prioritizing investments in generative AI over other technology spending. Many companies are also creating new budgets just for AI projects and are already using AI initiatives in their daily work. This shows a big shift from just testing AI to using it to save money and make more revenue.

White House official discusses Trump AI standard

White House official David Sacks, who is the "AI and crypto czar," spoke about President Donald Trump's new executive order. He discussed the national artificial intelligence standard on the show "Mornings with Maria."

Understanding AI water use is more complex

Many people misunderstand how much water artificial intelligence and data centers actually use. Journalist Karen Hao corrected a previous report, showing that some estimates of AI's water consumption were greatly exaggerated. Andy Masley and other experts explain that water use is complex and varies by location, unlike carbon emissions. Data centers primarily use water for cooling, and the amount depends on how much electricity they use for cooling systems. The AI industry is now working to clarify these common misconceptions.

AI scams target online stores for refunds

Small online businesses are facing a new threat from AI-driven refund scams. Customers are using artificial intelligence to create fake images of damaged products, like rotten fruit or worn toys, to claim refunds. Online platforms often struggle to detect these AI-altered images, leaving store owners without protection. Chen Xiaowei's father, a fruit seller, lost money because of these scams. A law expert, Zhao Jingwu, says using AI to falsify evidence for refunds is fraud and calls for stronger platform security.

Sources

NOTE:

This news brief was generated using AI technology (including, but not limited to, Google Gemini API, Llama, Grok, and Mistral) from aggregated news articles, with minimal to no human editing/review. It is provided for informational purposes only and may contain inaccuracies or biases. This is not financial, investment, or professional advice. If you have any questions or concerns, please verify all information with the linked original articles in the Sources section below.

AI Data Centers Investments OpenAI Nvidia China US-China Relations AI Chips Technology Policy Financial Bubble SoftBank Trump Administration National Security Enterprise AI Generative AI AI Spending Responsible AI Environmental Impact AI Scams Supply Chain Stock Market Huawei Arm Holdings E-commerce Digital Security Infrastructure R&D AI Water Use Chip Export Ban National AI Standard

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