MARKETS

Nscale scores Microsoft deal, hints at IPO

Neoclouds, or specialized computing infrastructure focused on AI, are soaring sky-high. 

On Wednesday, Nscale, an AI infrastructure firm, announced plans to go public towards the end of 2026, according to CNBC. The company also announced an expanded partnership with Microsoft worth $14 billion to supply the company with 200,000 Nvidia chips. 

“The pace with which we have expanded our capacity demonstrates both our readiness and our commitment to efficiency, sustainability and providing our customers with the most advanced technology available,” Josh Payne, founder and CEO of Nscale, said in the company’s announcement. 

The deal comes just weeks after Nscale announced two funding rounds in one week: $1.1 billion Series B and an additional $433 million pre-Series C agreement. 

The news adds to the growing buzz around so-called neoclouds.

• CoreWeave went public earlier this year, with its share price now sitting more than 230% higher than when it debuted. The company has also inked multi-billion-dollar infrastructure deals with Meta and OpenAI. 

• In September, Nebius scored a $19.4 billion partnership with Microsoft, and Lambda inked a deal with Nvidia worth $1.5 billion.

The popularity of this AI-specific infrastructure is only projected to grow. According to Synergy Research Group, neocloud revenues are on track to exceed $23 billion this year and could reach almost $180 billion by 2030. 

It makes sense why neoclouds are getting so much attention. It’s why AI giants are investing hundreds of billions in developing data centers through partnerships and projects like Stargate. The demand for AI infrastructure is surging, and traditional cloud offerings simply might not be cutting it anymore. The popularity of neoclouds, however, allows for the compute to not be centralized solely in the hands of the biggest names in AI.

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CONSUMER

Consumers still don’t trust AI

Despite tech leaders' AI frenzy, the public isn’t nearly as zealous. 

A Pew Research Center study published Wednesday reported that public concern about AI generally outweighs excitement for the tech. 

The survey, which included more than 36,000 people across 25 countries, found that 34% reported being more concerned than excited, 16% reported being more excited than concerned, and 42% reported being equally concerned and excited. U.S. respondents in particular reported higher levels of concern than other countries, with 50% reporting concern over excitement. 

Pew’s survey also found that regulatory trust of the regions leading the AI push – the U.S., China and the European Union – isn’t equal. 

• While a median of 53% of adults surveyed trust the EU to regulate AI, only 37% trust the U.S. and 27% trust China. 

• People also generally trust their own countries to regulate AI effectively, with 55% trusting their own country’s regulatory capabilities. 

• Trust was split in the U.S., with 47% reporting a lack of trust in the government’s AI regulations. Italy and Greece similarly reported less trust. The opposite rang true for India, with 89% reporting trust in the country’s ability to regulate AI effectively.

AI firms are confident that these models, as they become more powerful (and less expensive) will become ubiquitous, leading to an uptick in adoption across the board. But Pew’s survey reveals that public confidence in both the technology itself and the government’s ability to regulate it is still wary. That lack of trust may stifle the waterfall of adoption that these firms are counting on. 

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HARDWARE

Meta joins AI infrastructure frenzy

Meta is adding to the AI infrastructure boom. 

On Wednesday, the social media giant announced plans to construct a gigawatt-sized data center in El Paso, Texas, as part of its AI push, marking Meta’s 29th data center. 

Meta said in a blog post that this “powerhouse data center” will be specifically designed to handle AI workloads, aiming to help “deliver top-tier AI models as we work to fulfill the possibilities of AI and build toward superintelligence.” 

Meta will invest $1.5 billion in the effort, adding another expense to its growing AI spending spree. The company is projected to spend up to $72 billion in capital expenditures this year, largely on building out AI infrastructure. 

Though Meta is putting a concerted effort towards building out its own infrastructure, it still needs help from friends: On Wednesday, Meta announced a partnership with chip provider Arm to use its data center platforms to power its personalization algorithms, including the ones behind Facebook and Instagram. 

The partnership adds to a growing ecosystem of massive AI deals that have cropped up in recent months as tech giants seek to shore up their compute power. 

Though OpenAI is often at the center of these deals, such as with Stargate, Broadcom and Nvidia, partnership announcements between Oracle and AMD. for example, also highlight that the current AI infrastructure buildout is a cross-industry effort. These tech powerhouses may see their alliances as key in succeeding in their lofty AI goals. 

LINKS

• Nvidia, xAI, Microsoft team up with BlackRock on $40 billion data center deal

• Waymo to launch robotaxis in London in 2026

• Chinese phonemaker Honor launches on-device AI shopping tool

• OpenAI develops a five year plan to meet its massive spending pledges

• Salesforce said it expects over $60 billion in revenue by 2030

• AI digital twin startup Viven raises $35 million

• VSCO AI Lab: Editing app VSCO has launched a suite of AI tools, including precise object detection and removal.

• Hyperspell: An API that gives agents memory and context from tools like Slack, Gmail and Drive.

• Claude Haiku: Anthropic has released a new version of its smallest model, Haiku 4.5, now with similar performance to Claude Sonnet at a third of the cost. 

• KaneAI: A new product by LambdaTest, this is an AI agent for fast-paced quality testing. 

• Riverside Co-Creator: A platform for creating and editing videos and podcasts, now with a personalized agent that allows users to edit by chatting.

• Mode Mobile: Fastest-growing software company (per Deloitte). 56K+ investors in. Accredited investors buy at $0.50/share. (sponsored)

• ByteDance: Research Scientist, LLM Model Evaluation

• Meta: AI Research Scientist, Language - Generative AI

• Mercor: Security Engineer

• Canva: Senior Research Engineer - Video & Audio Generative AI / ML

GAMES

A QUICK POLL BEFORE YOU GO