OpenAI will pay Amazon $38 billion for computing power in a seven-year deal that marks the companies' first partnership. Amazon expects all of the computing capacity negotiated as part of the agreement will be available to OpenAI by the end of next year. The ChatGPT maker will train new AI models using Amazon's data centers and use them to process user queries.

The deal is small compared with OpenAI's $300 billion agreement with Oracle and its $250 billion commitment to Microsoft. OpenAI ended its exclusive cloud-computing partnership with Microsoft last month and has since signed almost $600 billion in new cloud commitments. Amazon Web Services is the industry's largest cloud provider, but Microsoft and Google have reported faster cloud-revenue growth in recent years after capturing new demand from AI customers.

TechCrunch reports: OpenAI CEO Sam Altman recently said that the company is doing "well more" than $13 billion in annual revenue — and he sounded a little testy when pressed on how it will pay for its massive spending commitments.

His comments came up during a joint interview on the Bg2 podcast between Altman and Microsoft CEO Satya Nadella about the partnership between their companies. Host Brad Gerstner (who's also founder and CEO of Altimeter Capital) brought upreports that OpenAI is currently bringing in around $13 billion in revenue — a sizable amount, but one that's dwarfed by more than $1 trillion in spending commitments for computing infrastructure that OpenAI has made for the next decade.

"First of all, we're doing well more revenue than that. Second of all, Brad, if you want to sell your shares, I'll find you a buyer," Altman said, prompting laughs from Nadella. "I just — enough. I think there are a lot of people who would love to buy OpenAI shares."
Altman's answer continued, making the case for OpenAI's business model. "We do plan for revenue to grow steeply. Revenue is growing steeply. We are taking a forward bet that it's going to continue to grow and that not only will ChatGPT keep growing, but we will be able to become one of the important AI clouds, that our consumer device business will be a significant and important thing. That AI that can automate science will create huge value...

"We carefully plan, we understand where the technology — where the capability — is going to go, and the products we can build around that and the revenue we can generate. We might screw it up — like, this is the bet that we're making, and we're taking a risk along with that." (That bet-with-risks seems to be the $1.4 trillion in spending commitments — but Altman suggests it's offset by another absolutely certain risk: "If we don't have the compute, we will not be able to generate the revenue or make the models at this kind of scale.")

Satya Nadella, Microsoft's CEO, added his own defense, "as both a partner and an investor. There has not been a single business plan that I've seen from OpenAI that they have put in and not beaten it. So in some sense, this is the one place where in terms of their growth — and just even the business — it's been unbelievable execution, quite frankly..."

The FCC plans to repeal a Biden-era ruling that required ISPs to secure their networks under the Communications Assistance for Law Enforcement Act, instead relying on voluntary cybersecurity commitments from telecom providers. FCC Chairman Brendan Carr said the ruling "exceeded the agency's authority and did not present an effective or agile response to the relevant cybersecurity threats." Carr said the vote scheduled for November 20 comes after "extensive FCC engagement with carriers" who have taken "substantial steps... to strengthen their cybersecurity defenses." Ars Technica reports: The FCC's January 2025 declaratory ruling came in response to attacks by China, including the Salt Typhoon infiltration of major telecom providers such as Verizon and AT&T. The Biden-era FCC found that the Communications Assistance for Law Enforcement Act (CALEA), a 1994 law, "affirmatively requires telecommunications carriers to secure their networks from unlawful access or interception of communications."

"The Commission has previously found that section 105 of CALEA creates an affirmative obligation for a telecommunications carrier to avoid the risk that suppliers of untrusted equipment will "illegally activate interceptions or other forms of surveillance within the carrier's switching premises without its knowledge,'" the January order said. "With this Declaratory Ruling, we clarify that telecommunications carriers' duties under section 105 of CALEA extend not only to the equipment they choose to use in their networks, but also to how they manage their networks." A draft of the order that will be voted on in November can be found here (PDF).

Amazon Web Services basically invented the cloud computing business and once held nearly half the market. That dominance is slipping. AWS captured 38% of corporate spending on cloud infrastructure services last year, down from almost 50% in 2018, according to Gartner. Microsoft now grows its backlog of corporate sales faster than Amazon. The company that brushed aside incumbents and transformed an internal startup into Amazon's profit engine now faces internal bureaucracy that has slowed it down.

Bloomberg interviewed 23 current and former AWS employees who described management layers that proliferated after a pandemic hiring binge. One sales engineer who was six managers from Jeff Bezos before the pandemic found himself fifteen rungs from CEO Andy Jassy earlier this year. AWS hesitated to invest in Anthropic when the AI startup was spending most of its cash on Amazon servers.

Executives doubted the Anthropic AI could be monetized and were culturally reluctant to pay for external technology they believed could be built in-house. Google invested in early 2023. Amazon followed that September with $4 billion in commitments. On Thursday, Google said it will supply up to 1 million AI chips to Anthropic.

"Nvidia is investing billions in and selling chips to OpenAI, which is also buying chips from and earning stock in AMD," writes SFGate. "AMD sells processors to Oracle, which is building data centers with OpenAI — which also gets data center work from CoreWeave. And that company is partially owned by, yes, Nvidia.

"Taken together, it's a doozy." There are other collaborations and rivalries and many other factors at play, but OpenAI is the many-tentacled octopus in the middle, spinning its achievement of ChatGPT into a blitz of speculative investments. "We are in a phase of the build-out where the entire industry's got to come together and everybody's going to do super well," OpenAI CEO Sam Altman told the Wall Street Journal on Monday. "You'll see this on chips. You'll see this on data centers. You'll see this lower down the supply chain...."

Some worry that the more closely companies intertwine, the more susceptible they are to creating a bubble, or a market not actually supported by real consumer demand. "You don't have to be a skeptic about AI technology's promise in general to see this announcement as a troubling signal about how self-referential the entire space has become," Bespoke Investment Group wrote in a note to clients, per CNBC. "If NVDA has to provide the capital that becomes its revenues in order to maintain growth, the whole ecosystem may be unsustainable..."

Also, even with Nvidia's investment, AMD's shares and OpenAI's repeated fundraises, the ChatGPT-maker doesn't have the cash to meet all of these vast commitments. And if OpenAI's soaring projections about demand for AI computing don't bear out, there will be a lot of committed money — and a large share of the stock market — that would see its foundations topple.
Thanks to long-time Slashdot reader mspohr for sharing the news.

OpenAI has signed about $1 trillion in deals this year for computing power to run its AI models, commitments that dwarf its revenue and raise questions about how it can fund them. From a report: Monday's deal with chipmaker AMD follows similar agreements with Nvidia, Oracle and CoreWeave, as OpenAI races to find the computing power it thinks it will need to run services such as ChatGPT.

The deals would give OpenAI access to more than 20 gigawatts of computing capacity, roughly equivalent to the power from 20 nuclear reactors, over the next decade. Each 1GW of AI computing capacity costs about $50bn to deploy in today's prices, according to estimates by OpenAI executives, making the total cost about $1tn. The deals have bound some of the world's biggest tech groups to OpenAI's ability to become a profitable business that can meet its increasingly steep financial obligations.

Fast Company ran a contrarian take about AI from entrepreneur/thought leader Faisal Hoque, who argues there's three AI bubbles.

The first is a classic speculative bubble, with asset prices soaring above their fundamental values (like the 17th century's Dutch "tulip mania"). "The chances of this not being a bubble are between slim and none..." Second, AI is also arguably in what we might call an infrastructure bubble, with huge amounts being invested in infrastructure without any certainty that it will be used at full capacity in the future. This happened multiple times in the later 1800s, as railroad investors built thousands of miles of unneeded track to serve future demand that never materialized. More recently, it happened in the late '90s with the rollout of huge amount of fiber optic cable in anticipation of internet traffic demand that didn't turn up until decades later. Companies are pouring billions into GPUs, power systems, and cooling infrastructure, betting that demand will eventually justify the capacity. McKinsey analysts talk of a $7 trillion "race to scale data centers" for AI, and just eight projects in 2025 already represent commitments of over $1 trillion in AI infrastructure investment. Will this be like the railroad booms and busts of the late 1800s? It is impossible to say with any kind of certainty, but it is not unreasonable to think so.

Third, AI is certainly in a hype bubble, which is where the promise claimed for a new technology exceeds reality, and the discussion around that technology becomes increasingly detached from likely future outcomes. Remember the hype around NFTs? That was a classic hype bubble. And AI has been in a similar moment for a while. All kinds of media — social, print, and web — are filled with AI-related content, while AI boosterism has been the mood music of the corporate world for the last few years. Meanwhile, a recent MIT study reported that 95% of AI pilot projects fail to generate any returns at all.
But the article ultimately argues there's lessons in the 1990s dotcom boom: that "a thing can be hyped beyond its actual capabilities while still being important... When valuations correct — and they will — the same pattern will emerge: companies that focus on solving real problems with available technology will extract value before, during, and after the crash." The winners will be companies with systematic approaches to extracting value — adopting mixed portfolios with different time horizons and risk levels, while recognizing organizational friction points for a purposeful (and holistic) integration.

"The louder the bubble talk, the more space opens for those willing to take a methodical approach to building value."

Thanks to Slashdot reader Tony Isaac for sharing the article.

An anonymous reader quotes a report from Reuters: On the outskirts of this city of 21 million, a showroom in a shopping mall offers extraordinary deals on new cars. Visitors can choose from some 5,000 vehicles. Locally made Audis are 50% off. A seven-seater SUV from China's FAW is about $22,300, more than 60% below its sticker price. These deals -- offered by a company called Zcar, which says it buys in bulk from automakers and dealerships -- are only possible because China has too many cars. Years of subsidies and other government policies have aimed to make China a global automotive power and the world's electric-vehicle leader. Domestic automakers have achieved those goals and more -- and that's the problem.

China has more domestic brands making more cars than the world's biggest car market can absorb because the industry is striving to hit production targets influenced by government policy, instead of consumer demand, a Reuters examination has found. That makes turning a profit nearly impossible for almost all automakers here, industry executives say. Chinese electric vehicles start at less than $10,000; in the U.S., automakers offer just a few under $35,000. Most Chinese dealers can't make money, either, according to an industry survey published last month, because their lots are jammed with excess inventory. Dealers have responded by slashing prices. Some retailers register and insure unsold cars in bulk, a maneuver that allows automakers to record them as sold while helping dealers to qualify for factory rebates and bonuses from manufacturers.

Unwanted vehicles get dumped onto gray-market traders like Zcar. Some surface on TikTok-style social-media sites in fire sales. Others are rebranded as "used" -- even though their odometers show no mileage -- and shipped overseas. Some wind up abandoned in weedy car graveyards. These unusual practices are symptoms of a vastly oversupplied market -- and point to a potential shakeout mirroring turmoil in China's property market and solar industry, according to many industry figures and analysts. They stem from government policies that prioritize boosting sales and market share -- in service of larger goals for employment and economic growth -- over profitability and sustainable competition. Local governments offer cheap land and subsidies to automakers in exchange for production and tax-revenue commitments, multiplying overcapacity across the country.

Nature's editorial board urged governments on Tuesday to reverse decades of rail disinvestment as railways mark their 200th anniversary September 27, citing transport sector emissions that grew 1.7% annually from 1990-2022 and now generate one-quarter of global CO2. Rail produces one-fifth the emissions of cars per passenger kilometer yet carries just 8.4% of EU passenger traffic versus 73% for automobiles.

The journal called for broader investment criteria beyond narrow profitability metrics and noted only one-third of countries have incorporated transport into their Paris Agreement commitments. Global rail freight fell from 38% to 24% between 1980-2017 while US networks shrank from 400,000 to 200,000 kilometers since 1914. Africa operates 87,000 rail kilometers continent-wide compared to India's 65,000 kilometers in one-tenth the area. Transport emissions must decline 3% yearly to meet net-zero targets.

Negotiations on a global treaty to end plastic pollution are drawing to a close Thursday, as nations remain deadlocked over whether to tackle the exponential growth of plastic production. From a report: A draft of the treaty released Wednesday wouldn't limit plastic production or address chemicals used in plastic products. Instead, it's centered on proposals where there's broad agreement -- such as reducing the number of problematic plastic products that often enter the environment and are difficult to recycle, promoting the redesign of plastic products so they can be recycled and reused, and improving waste management.

It asks nations to make commitments to ending plastic pollution, rather than imposing global, legally-binding rules. French President Emmanuel Macron said the "lack of ambition" in the draft treaty was unacceptable, and that agreeing to a global treaty against plastic pollution "is our opportunity to make a difference."

Earlier this month, Hewlett-Packard Enterprise settled its antitrust case with the U.S. Justice Department, "paving the way for its acquisition of rival kit maker Juniper Networks" for $14 billion. According to Axios, the deal was heavily influenced by national security concerns and a desire to bolster American competition against China's Huawei. The outlet reports that the U.S. intelligence community "intervened to persuade the Justice Department that allowing the merger to proceed was essential to helping U.S. business compete with China's Huawei Technologies, among other national-security issues." From the report: "In light of significant national security concerns, a settlement ... serves the interests of the United States by strengthening domestic capabilities and is critical to countering Huawei and China." The official said blocking the deal would have "hindered American companies and empowered" Chinese competitors. A Justice Department spokesman added that DOJ "works very closely with our partners in the IC [intelligence community] and always considers their views when deciding how best to proceed with a case."

The merger was back in the news this week with reports that two senior enforcers in the DOJ's antitrust division were fired Monday amid infighting over the department's settlement greenlighting HPE's $14 billion acquisition of Juniper. Attorney General Pam Bondi had conversations with top intelligence officials that convinced her there was a strong national interest in not driving allies to Chinese technology, a senior administration official tells us.

The U.N. Human Rights Council passed a motion on climate change and human rights by consensus Tuesday after the Marshall Islands withdrew a divisive amendment calling for states to recommit to a fossil fuel phase-out. The motion calls on countries "to contribute to the global efforts" against climate change and follows the council's 2021 recognition of access to a clean and healthy environment as a fundamental right.

Oil-producing countries including Saudi Arabia and Kuwait had voiced opposition to the original fossil fuel phrasing during negotiations. Instead, the final motion referenced "the imperative of defossilizing our economies" in a footnote, allowing passage without a vote where the outcome had been uncertain.

Intel is shutting down its small automotive division and laying off most of its staff in that group as part of broader cost -cutting efforts to refocus on core businesses like client computing and data centers. Oregon Live reports: "Intel plans to wind down the Intel architecture automotive business," the company told employees Tuesday morning in a message viewed by The Oregonian/OregonLive. The company said it will fulfill existing commitments to customers but will lay off "most" employees working in Intel's automotive group. "As we have said previously, we are refocusing on our core client and data center portfolio to strengthen our product offerings and meet the needs of our customers," Intel said in a written statement to The Oregonian/OregonLive. "As part of this work, we have decided to wind down the automotive business within our client computing group. We are committed to ensuring a smooth transition for our customers."

Automotive technology isn't one of Intel's major businesses and the company doesn't report the segment's revenue or employment. But online, the company boasts that 50 million vehicles use Intel processors. Intel says its chips can help enable electric vehicles, provide information to drivers and optimize vehicles' performance. Intel also owns a majority stake in the Israeli company Mobileye, which develops technology for self-driving cars. It doesn't appear the closure of Intel's automotive group will directly affect Mobileye's operations.

Longtime Slashdot reader walterbyrd shares news that Texas Instruments has announced plans to invest more than $60 billion to expand its U.S. manufacturing operations in the United States. From a report: The funds will be used to build or expand seven chip-making facilities in Texas as well as Utah, and will create 60,000 jobs, TI said on Wednesday, calling it the "largest investment in foundational semiconductor manufacturing in U.S. history." The company did not give a timeline for the investment.

Unlike AI chip firms Nvidia and AMD, TI makes analog or foundational chips used in everyday devices such as smartphones, cars and medical devices, giving it a large client base that includes Apple, SpaceX and Ford Motor. The spending pledge follows similar announcements from others in the semiconductor industry, including Micron, which said last week that it would expand its U.S. investment by $30 billion, taking its planned spending to $200 billion. [...]

Like other companies unveiling such spending commitments, TI's announcement includes funds already allocated to facilities that are either under construction or ramping up. It will build two additional plants in Sherman, Texas, based on future demand. "TI is building dependable, low-cost 300 millimeter capacity at scale to deliver the analog and embedded processing chips that are vital for nearly every type of electronic system," said CEO Haviv Ilan.

Britain is moving toward major nuclear power commitments after years of delays, as government officials acknowledge they can no longer postpone critical energy infrastructure decisions. The U.K. Treasury has exhausted options for delaying nuclear power choices, Politico reported this week, citing sources within Whitehall and the nuclear industry.

The urgency stems from Britain's aging nuclear infrastructure, where five power plants currently supply 15% of the country's total energy needs but face shutdown by 2030. This timeline has created significant pressure on policymakers to secure replacement capacity or risk substantial gaps in the nation's electricity supply.

It's a nonprofit that's provide hosting for the Linux Foundation, the Apache Software Foundation, Drupal, Firefox, and 160 other projects — delivering nearly 430 terabytes of information every month. (It's currently hosting Debian, Fedora, and Gentoo Linux.) But hosting only provides about 20% of its income, with the rest coming from individual and corporate donors (including Google and IBM). "Over the past several years, we have been operating at a deficit due to a decline in corporate donations," the Open Source Lab's director announced in late April.

It's part of the CS/electrical engineering department at Oregon State University, and while the department "has generously filled this gap, recent changes in university funding makes our current funding model no longer sustainable. Unless we secure $250,000 in committed funds, the OSL will shut down later this year."

But "Thankfully, the call for support worked, paving the way for the OSU Open Source Lab to look ahead, into what the future holds for them," reports the blog It's FOSS.

"Following our OSL Future post, the community response has been incredible!" posted director Lance Albertson. "Thanks to your amazing support, our team is funded for the next year. This is a huge relief and lets us focus on building a truly self-sustaining OSL." To get there, we're tackling two big interconnected goals:

1. Finding a new, cost-effective physical home for our core infrastructure, ideally with more modern hardware.
2. Securing multi-year funding commitments to cover all our operations, including potential new infrastructure costs and hardware refreshes.


Our current data center is over 20 years old and needs to be replaced soon. With Oregon State University evaluating the future of this facility, it's very likely we'll need to relocate in the near future. While migrating to the State of Oregon's data center is one option, it comes with significant new costs. This makes finding free or very low-cost hosting (ideally between Eugene and Portland for ~13-20 racks) a huge opportunity for our long-term sustainability. More power-efficient hardware would also help us shrink our footprint.

Speaking of hardware, refreshing some of our older gear during a move would be a game-changer. We don't need brand new, but even a few-generations-old refurbished systems would boost performance and efficiency. (Huge thanks to the Yocto Project and Intel for a recent hardware donation that showed just how impactful this is!) The dream? A data center partner donating space and cycled-out hardware. Our overall infrastructure strategy is flexible. We're enhancing our OpenStack/Ceph platforms and exploring public cloud credits and other donated compute capacity. But whatever the resource, it needs to fit our goals and come with multi-year commitments for stability. And, a physical space still offers unique value, especially the invaluable hands-on data center experience for our students....

[O]ur big focus this next year is locking in ongoing support — think annualized pledges, different kinds of regular income, and other recurring help. This is vital, especially with potential new data center costs and hardware needs. Getting this right means we can stop worrying about short-term funding and plan for the future: investing in our tech and people, growing our awesome student programs, and serving the FOSS community. We're looking for partners, big and small, who get why foundational open source infrastructure matters and want to help us build this sustainable future together.
The It's FOSS blog adds that "With these prerequisites in place, the OSUOSL intends to expand their student program, strengthen their managed services portfolio for open source projects, introduce modern tooling like Kubernetes and Terraform, and encourage more community volunteers to actively contribute."

Thanks to long-time Slashdot reader I'm just joshin for suggesting the story.

The U.S. government is seeking to break up Google's advertising technology business after a judge ruled the company holds an illegal monopoly over ad tools for publishers, marking the second such antitrust case following a similar request to divest Chrome. The Guardian reports: "We have a defendant who has found ways to defy" the law, US government lawyer Julia Tarver Wood told a federal court in Virginia, as she urged the judge to dismiss Google's assurance that it would change its behavior. "Leaving a recidivist monopolist" intact was not appropriate to solve the issue, she added. [...] The US government specifically alleged that Google controls the market for publishing banner ads on websites, including those of many creators and small news providers.

The hearing in a Virginia courtroom was scheduled to plan out the second phase of the trial, set for September, in which the parties will argue over how to fix the ad market to satisfy the judge's ruling. The plaintiffs argued in the first phase of the trial last year that the vast majority of websites use Google ad software products which, combined, leave no way for publishers to escape Google's advertising technology and pricing.

The district court judge Leonie Brinkema agreed with most of that reasoning, ruling last month that Google built an illegal monopoly over ad software and tools used by publishers, but partially dismissed the argument related to tools used by advertisers. The US government said it would use the trial to recommend that Google should spin off its ad publisher and exchange operations, as Google could not be trusted to change its ways. "Behavioral remedies are not sufficient because you can't prevent Google from finding a new way to dominate," Tarver Wood said.

Google countered that it would recommend that it agree to a binding commitment that it would share information with advertisers and publishers on its ad tech platforms. Google lawyer Karen Dunn did, however, acknowledge the "trust issues" raised in the case and said the company would accept monitoring to guarantee any commitments made to satisfy the judge. Google is also arguing that calls for divestment are not appropriate in this case, which Brinkema swiftly refused as an argument. The judge urged both sides to mediate, stressing that coming to a compromise solution would be cost-effective and more efficient than running a weeks-long trial.

New submitter LDA6502 writes: The Republican chairman of the House Transportation and Infrastructure Committee is proposing a new annual federal vehicle registration fee of $200 for full EVs, $100 for hybrid EVs, and $20 for combustion vehicles. The tax would be tied to inflation, would be collected by the states, and would expire in 2035. Critics of the proposal note that it could result in low mileage EVs paying a far higher tax rate than heavy ICE trucks and SUVs. Ars Technica notes that the bill "exempts commercial vehicles, which should see a rush from tax avoiders to register their vehicles under their businesses [...]." Farm vehicles will also be exempt from the tax.

"The Eno Center for Transportation calculates that this new tax will contribute an extra $110 billion to the highway Trust Fund by 2035 but that cuts to other taxes and more spending mean that the fund will still be $222 billion short of its commitments -- assuming that this added fee doesn't further dampen EV adoption in the U.S., that is."

Microsoft has pledged to take the US government to court if necessary [alternative source] to protect European customers' access to its cloud services, as concerns mount over potential technology disruptions under President Donald Trump. Brad Smith, Microsoft's president and vice-chair, announced five "digital commitments" to Europe on Wednesday, responding to regional anxieties following Trump's temporary suspension of military support to Ukraine.

"We as a company need to be a source of digital stability during a period of geopolitical volatility," Smith said. The commitments include contesting any government order to cease European cloud services through legal channels and establishing European oversight of its continental operations. Microsoft will increase its European data center capacity by 40% over the next two years, expanding in 16 countries with investments of "tens of billions of dollars" annually. The Seattle-based company, which derives more than a quarter of its business from Europe, becomes the first major American tech firm to proactively address European concerns amid escalating trade tensions.

IBM announced plans to invest $150 billion in the United States over the next five years, with more than $30 billion earmarked specifically for research and development of mainframes and quantum computing technology. The investment follows similar commitments from tech giants including Apple and Nvidia -- each pledging approximately $500 billion -- in the wake of President Trump's election and tariff threats.

"We have been focused on American jobs and manufacturing since our founding 114 years ago," said IBM CEO Arvind Krishna in a statement. The company currently manufactures its mainframe systems in upstate New York and plans to continue designing and assembling quantum computers domestically. The announcement comes amid challenging circumstances for IBM, which recently saw 15 government contracts shelved under the Trump administration's cost-cutting initiatives.

Further reading: IBM US Cuts May Run Deeper Than Feared - and the Jobs Are Heading To India;
IBM Now Has More Employees In India Than In the US (2017).