2025-12-26 02:49:06
Twas the night before Christmas and all through the house, not a creature was stirring, not even a... wait. What's that? Is that Jensen Huang scurrying around doing deals over the holidays?!
It sure is!
Well, presumably he had been working on the deal with the specialized AI chip startup Groq before the holidays started. But I also wouldn't rule out that this deal came together in a hurry given what we know about how he's operated in the past with some mega deals, such as the um, (up to) $100B investment in OpenAI. A deal which came together quickly, perhaps on a trip with a certain President, and perhaps right after the rumors of OpenAI potentially looking at a deal with Google to use their TPUs – we'll come back to that. It was also a deal which was announced three months ago but apparently still has not been finalized, by the way, so there's that.
Anyway, you can't help but wonder if the real key for the timing here may have been to bury it under the spirit of Christmas. Because boy is it a doozy.
CNBC first broke the news with the headline: "Nvidia buying AI chip startup Groq for about $20 billion in its largest acquisition on record". But as it turns out, that wasn't quite right. And actually, it was NVIDIA that wanted to make that clear. They weren't buying Groq, they were merely paying Groq that $20B for a "non-exclusive licensing agreement".
Oh, you've heard that terminology before? Of course you have. It's the magical incantation one must cite in order to summon the spirits of the "hackquisition".
With this deal, NVIDIA is following their Big Tech brethren down this now well-trodden path. Microsoft, Amazon, Google, Meta, and NVIDIA have done deals which aren't technically acquisitions, but effectively are. Because they allow the acquiring – sorry, non-acquiring – company to sort of pick and choose what they want from the acquired – sorry, non-acquired – company in exchange for considerations that can go to... well, sort of anyone they choose. Certainly the investors to get them to sign off on such deals, and often the key employees at those companies. Sometimes the other employees of the companies too, but that's mainly so they don't feel bad and/or raise a stink about the faux-deal. Because when they do that, all hell tends to break loose, at least from a PR-perspective.
Anyway, the first wave of "hackquisitions" were almost more like "hackquihires" because they were simply a way to get access to key talent at those companies and any licensing agreements were seemingly an excuse to make it all a little less blatant. But as such deals have grown in size, they've grown to look even more like actual acquisitions. For example, Meta's nearly-$15B deal with Scale.ai bought them 49% of that company alongside their key talent, namely CEO Alexandr Wang. Why? Presumably Meta wanted more for that amount of money and they thought Scale, a hot company at the time, might still give them some upside. Of course, they were also effectively gutting said company and it seems decidedly less hot now – especially since many of their customers were Meta competitors who no longer wanted to send their data to Scale – shocking, I know. Still, Meta also likely believed they could use Scale's service to help with their future model training – efforts which were rebooting alongside bringing Wang on board.
NVIDIA's Groq deal seemingly has similarities. Namely, the key was clearly to bring CEO Jonathan Ross on board. And every story also points to company president Sunny Madra being crucial as well. But beyond that, it sounds like NVIDIA may actually care about some of the IP rights here (which they're presumably getting a license to with their "non-exclusive licensing agreement"), to be able to leverage Groq's techniques in would-be future chips.
In that way, "non-exclusive" feels less important here – that's another framing to make it seem less like an acquisition, but is anyone else really getting access to this IP now? Regardless, NVIDIA probably feels confident that with Ross and Madra – not to mention their own in-house prowess – they'll be able to implement it and execute upon it far better than anyone else. And they're undoubtedly not wrong.
And that points to another layer to this as well. Ross is not just a co-founder of Groq, he's also the creator of the TPU – something which he cites in his own bio. You may recall the TPU was last a part of a major news cycle when Jensen Huang was "delighted" about Google's success with their AI chips. How do I know that NVIDIA is actually not so "delighted" about Google's success here and is in fact sweating the rise of the TPU? Well, this deal, for one!
NVIDIA is paying $20B to grab some talent and license some tech. Twenty billion dollars. It's one of the largest deals of any sort in the history of deals. And they're technically acquiring nothing.
Granted, Groq's technology and first batch of chips have been divisive in the industry. Some seem certain they're the future of inference, others aren't sure they're the future of anything. Maybe NVIDIA is fully bought in on the former, or maybe they simply want access to key talent that created the TPU – and, importantly, to keep them away from anyone else who might try to make their own XPUs.
Many are trying, of course. But only Google has really found some level of success thus far. But that level of success has seen them not only train their own state-of-the-art models to rival any of those trained on NVIDIA chips, but also now growing talk about how much more efficient the TPU is versus the GPU. In an era of growing energy fears, this is... potentially a real problem for NVIDIA. To the point where they probably need to have their own TPU option – even if they remain fully committed to their GPUs as being the bigger and better option.
Certainly they need to counter this narrative on the inference side. And again, that's where Groq was focused. Maybe their chips were legit, maybe they weren't, or maybe they weren't yet, but even $20B is a relatively small price to pay to effectively lock this team and tech up. NVIDIA made $32B in profit last quarter. This potentially helps them protect those profits.
Speaking of... one can't help but wonder if this isn't the "hackquisition" that breaks the regulators' back, as it were. They've looked into these deals before and largely haven't pursued them. But this is a situation where a "regular" acquisition between NVIDIA and Groq almost certainly would have been blocked simply because NVIDIA controls over 90% of the AI chip market.
So what will regulators do here? Certainly it seems smart of Jensen to try this under the current administration versus any other. It's a group that keeps trying to help him out with China – for a fee, naturally – even if China continues to be a problem on their end.
Regardless – and this remains a key to these "hackqusitions" – NVIDIA will get access to Groq and their team fast with this structure. Will anyone even remember the $20B deal after the holidays? Nothing like some last-minute Christmas shopping!
2025-12-20 01:53:19
Twas the week before Christmas... and I'm emptying my notebook below before I'm back on the road for a couple weeks. Writing here and there, as always. Including looking back at last year's predictions – trying to give Apple a few more days to pull off #1! For now, there's a lot below. Happy Holidays. 🍻
M.G. Siegler
M.G. Siegler
M.G. Siegler
📹 TikTok Signs Away US Entity – Technically, the deal still isn't done. It's set to close on January 22, 2026 and presumably China (or the Trump administration) could still kill it in some way. But presumably TikTok wouldn't have signed without China's blessing – or assurances China would give the final sign-off? I mean, who knows, this whole situation has been such a farce. Including the "around $14B" valuation – I often joke about big deals being less than AI seed rounds these days, but this one truly is! It's also a little odd that an Abu Dhabi-based fund is one of the key backers to ensure American control of the entity? It's also still not clear which "new investors" own the mysterious other 5% – is it the Murdochs? The US Government? Oracle is clearly the lead here, so it will be interesting if that in some way gets roped into the Netflix/Warner Bros/Paramount love triangle – does the ownership of the father mean anything for the ownership of the son? What if the father is backstopping said ownership? With shares in said buyer of TikTok? It's yet another wrinkle that could be in Netflix's favor here... But the main question remains: is TikTok really still going to remain the hot consumer product when owned by a nearly 50 year old tech company (one in turbulent waters given their AI reinvention efforts, no less) and private equity funds? Where's 'TikTok 2'? [Axios]
🚙 Waymo Worth Way More Than $100B – I mean, at least in my own estimation, just based on our current market environment (Tesla, Uber, etc) and not to mention that AI startups are closing in on such valuations with little to show for it – certainly not traction and/or revenue like Waymo has! Then again, Alphabet is getting others to validate the valuation, which is undoubtedly part of the very reason for the raise (as Google could clearly just fund this themselves). And they sort of have the burden of showing actual revenue – $350M ARR – versus even Tesla, which still has a very much in beta self-driving taxi program. Still, there's a whole future-of-transportation/magical experience narrative that they could spin here (and would, were Elon Musk running the company, you imagine – though he would also say, as he often does, that Waymo's approach isn't scalable in the way Tesla's will be) where $100B is an absolute steal. For now, maybe they're just fine to fly relatively low-key under the lidar. [Bloomberg 🔒]
💰 OpenAI Worth Way More Than $800B – By which I mean they're apparently targeting an $830B valuation in a new would-be fundraise. That's a curiously precise number for a famously imprecise business, unless you consider that they really perhaps just want that number to be higher than $800B – the number at which SpaceX is now valued, of course. And when earlier reports suggested the valuation could be a mere $750B – the old pre versus post switcheroo? – that simply couldn't stand. So who is investing? I mean, who is left? Amazon, for one, it seems. Undoubtedly more sovereign wealth funds for another. Would Apple revisit? Would Google dare?! Nothing can be ruled out. Good on Disney for squeezing into the old $500B valuation – with warrants for more, no less. 🎶When you wish upon a paper gain...🎶 Speaking of, all of the SoftBank money from the last fundraise isn't even in the bank yet. This is true perpetual fundraising. And clearly necessary! But it will also undoubtedly push up the targeted IPO valuation (as I predicted a whole month ago). Maybe OpenAI could buy Waymo with this fresh $100B?[WSJ 🔒]
⚽️ FIFA's New Netflix Game – There's been a bunch of Netflix gaming news in the past several weeks that's now completely buried under the weight of Warner Bros. But the initiative will clearly be key if Netflix wants to become the "everything app" for entertainment – and the first $1T media company – which is why they keep trying to pivot their way into the right model/experience in gaming. FIFA is an interesting play here because it was a beloved franchise (though not exactly the best brand!) that vanished over a licensing dispute with EA (which obviously kept going with new 'EA Sports FC' branding). The timing of the return, of course, is good with the World Cup next year. But can an unproven developer (that Netflix is partnering with) really nail this on the first shot? (They're also co-developing the first new James Bond game in forever due in March.) If nothing else, the price is right (free, for Netflix members). [BBC]
💰 Yann LeCun is Raising Money – Two key tidbits: 1) the company is called Advanced Machine Intelligence Labs (AMI Labs) – doesn't get more generic than that – 2) they're targeting raising €500M at a €3B valuation. That almost seems quaint and shows some restraint in this day and age! Still, it presumably will make LeCun a billionaire, or close to it, on paper. Sort of interesting/fun to think about in the context of what Zuck has been dishing out to AI talent and what he clearly wasn't dishing out to LeCun. This report reiterates (as LeCun has stated) that Meta won't be invested in the lab but there is still some sort of "partnership", which continues to sound like PR for both sides post-breakup. Also, LeCun has brought on a CEO named LeBrun, that's just LeFun. [FT 🔒]
🎬 Warner Bros Discovery Rejects Paramount's Takeover Bid – No surprise, but the two most interesting tidbits are how WBD felt misled by Paramount as their bids kept morphing to make them more attractive, and how they don't believe Paramount is actually good for the money – even though it's being backstopped by Larry Ellison. They don't trust the revocable trust (where Ellison's Oracle shares reside) element. It can't help that those shares are in a free-fall as investor concerns mount over Oracle's AI spend and the debt required... Paramount hasn't raised the offer thus far and instead seems intent on taking it to the shareholders for a vote. And while some of those investors are open to Paramount's offer, it feels like there are an increasing number of things starting to work against it – beyond the Oracle concerns, the YouTube/Oscars deal may oddly help Netflix's regulatory case, the fact that hedge funds are now circling the WBD TV networks (so there's clearly outside interest in those), Jared Kushner oddly dropping out of the consortium may not matter monetarily but seems like it will optically for you-know-who, etc. It's worth listening to RedBird Capital's Gerry Cardinale for the counter-arguments on Matt Belloni's podcast The Town. He truly believes it will come down to how those TV networks are valued, and that the WBD/Netflix would be implicitly wildly overvaluing them (versus their offer). It is interesting that no one is talking about the potential Netflix stock upside in this deal...Feels like they should? All eyes turn to January 8, the deadline for investor tenders... [NYT]
"The bull case is that they’ll scale into it, and that a lot of companies have low margins to start, but this is a company at scale. There is no scaling going on here."
– Gil Luria, an analyst with D.A. Davidson, giving his thoughts on CoreWeave – a company which he says has the "ugliest balance sheet in technology, by far."
M.G. Siegler
M.G. Siegler
M.G. Siegler
Yeah, it's getting harder to see, quite literally, how Paramount Skydance is getting this deal. Certainly neither Netflix or Warner Bros Discovery think that right now!
2025-12-19 06:32:26
"Chaos isn't a pit. Chaos is a ladder." For some reason, my mind always drifts to this Petyr Baelish quote when thinking about the current state of AI. And in particular, the constant turmoil inside of the companies making it happen. In building the future, chaos is the only constant, it seems.
And yet it's relative. As we sprint towards the end of 2025, with so much in flux, I thought I'd layout where it seems like the major companies building the AI stand right now – not necessarily in terms of output, but in terms of the situations producing those outputs. At least in terms of outside perception.
Let's count them down from least chaotic to total chaos, shall we?
2025-12-18 05:25:05
Say 'UGC' again. Say. 'UGC'. Again! I dare you! I double-dare you!
It sure looks like Google may have just handed Warner Bros to Netflix on a silver platter. Yes, Google. Why? Because YouTube just stole The Oscars from ABC.1
On the surface, this may not seem like a big deal. Award shows are silly and famously in decline. That includes the biggest and most famous of them in The Academy Awards. Viewership peaked at 57M in 1998, and while it has bounced back a bit from the pandemic lows, last year saw 20M viewers watch the show. Top creators on YouTube get more viewership than that on a regular basis.
And that's sort of the point. The world has changed. And there's no going back. It's not just that streaming won, it's that the internet won.
And that is especially top of mind at the moment because Netflix has a deal to buy Warner Bros for $83B. But many people, most notably David Ellison, are sure that the deal won't be approved by regulators because Netflix is the top streaming service. And they'd be buying not only the top movie studio (this year), but also the third largest streaming service in HBO Max. It's the stuff antitrust dreams are made of, right?
Well, no. It's far more complicated than that because again, the internet. Yes, Netflix may be the winner in "streaming" but what does that even mean? A service that streams television and movie content I guess. But why exactly aren't we including YouTube – or Instagram, or TikTok, for that matter – in that bucket? Because it's user-generated content? The three scarlet letters of Hollywood. UGC.
Please.
What matters should be the same thing that mattered in the Meta antitrust trial, which saw the "social network" wipe the floor with the FTC's arguments. Why? Because it's 2025 and the legal system isn't stupid. Meta doesn't just compete with MeWe – in fact, I'm not entirely sure they compete with MeWe at all, because I still haven't met anyone who knows what MeWe is (besides clearly the FTC) – they compete with Snap, and TikTok, and yes, YouTube.
It's all about attention. Eyeballs. It's true with Meta, it's true with Netflix. And this YouTube/Oscars deal just drove that home. Just in case the Justice Department needs a data point, The New York Times has a good one in their story on the deal:
YouTube has long been a dominant force on mobile devices and laptops, but it was only in the last few years that it began dominating actual television sets, too. YouTube commands 13 percent of all television viewing time in the United States, the biggest share of any streaming service, according to Nielsen, the ratings firm. (To compare, Netflix stands at 8 percent.)
Wait, YouTube is a streaming service? What?!
There is a war out there. But it's not between the "streamers". Or even the movie studios. Those wars are over. Netflix and Disney won, respectively. The new war is for the next phase of entertainment. Right now, YouTube is winning. And this deal for the Oscars, while small relatively speaking, points to their clear intentions – as does this recent profile of CEO Neal Mohan by The Hollywood Reporter. You know, the one entitled, "YouTube Just Ate TV. It’s Only Getting Started."
That cover story hit a couple months before this deal, quoting YouTube's intent to become "the most powerful platform on earth". So yeah, I think Netflix is going to be allowed to buy Warner Bros. In fact, it feels like they might need to in order to have any shot against YouTube.
As I wrote back in October on the news that Netflix was trying to take video podcasts away from YouTube:
This is a competition for literal eyeballs. And YouTube dominates them in all these verticals. Oddly not in "premium" content where Netflix dominates, but it only feels like a matter of time until they're back competing in that world too, especially as they keep expanding YouTube Premium. Remember when Cobra Kai launched as a YouTube original only to be handed on a silver platter to Netflix? Yeah, they're gonna want another shot at this at some point. It's Google! Initiatives are cancelled only to be rebooted only to be cancelled only to be rebooted...
The fact that as a part of this deal, Netflix is requiring that the videos not be posted to YouTube in full – i.e. only clips for promotional purposes – says all you need to know here. While Spotify can't compete with YouTube in video, Netflix can and will.
UGC, movies, television, it's all going to be thrown into a blender in the next decade. What comes out will terrify Hollywood. But they were terrified when "talkies" came about. Then color. Then television. Then videotape. The plot is always the same, as is the ending. It's not the death of movies, or television, it's the expansion of it. An opening of the aperture to a far larger audience. Hollywood is scared because it's not the same captured audience watching via the same controlled means of distribution. But again, that's not new. The same thing keeps happening over and over and over again.
You're scared of Netflix? Netflix is your guide through this! Just wait until AI really matures as a technology. It has only been three years since OpenAI's DALL-E was released. Look at where we are now with image generation. Look at Sora or Veo. Now close your eyes and think about where we'll be in three years.
Disney gets it – or at least is trying to. Everyone else is dreaming about a return to 1950. Or at the very least, 1998, when Titanic and DVDs ruled supreme. Wake up, Hollywood. And get ready for a five-hour Oscar stream. Because guess what, on the internet, no one can hear you scream about how long a telecast may be. No one cares. The next bit is just a click away. So you better be entertaining. Or else.
Iceberg! Right ahead!
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
M.G. Siegler
1 A move which wasn't entirely out of the blue, by the way. Lucas Shaw of Bloomberg reported on this possibility back in August. Still, surprising! And who else was in the running for the rights? Netflix, naturally. ↩
2025-12-18 03:16:01
What started as a DALL-E obsession for me way back in the day eventually morphed into a Midjourney addiction. But in recent months, Gemini became my go-to AI image generator. Why? 'Nano Banana' of course. Just exceptional work out of Google – including going with the correct stupid name for maximum virality.1 OpenAI, deep in the throes of a "Code Red", wants their crown back:
OpenAI is rolling out an update to ChatGPT that’s intended to generate images better and faster, the latest move by the artificial intelligence developer to bolster its flagship chatbot amid heated competition from Alphabet Inc.’s Google.
The new version of ChatGPT Images, announced on Thursday, is designed to make and edit images more precisely, as well as to spit out pictures as much as four times faster than its previous AI image-generation model. The company is also creating a new section within ChatGPT’s mobile app and website meant for people to make images, rather than just doing so in an interaction with the chatbot.
I'm happy to report that it's good. Very good, even. I'm only a day or so into using it, but I'm finding myself preferring it over Nano Banana right now in my early side-by-side tests. Most importantly, it's fast. Still not quite as fast as Gemini in my usage, but the biggest issue that ChatGPT had previously with images was just how sloooow it was to generate them. It was tedious. This new version is not.
But the bigger change may actually be the UI tweak to ChatGPT itself alongside this new image model. I always found it a little odd that image creation was a part of the chat interface. On one hand, that's good for simplicity. But we're to the point now where ChatGPT is a pretty robust product, with multiple features and functions. While media you created was sorted into its own area, now image creation has a native home there too. You can still do it all from the main text prompt, but for most users, this area will probably make more sense.
Fidji Simo's post on the matter explains the company's rationale:
Over the past few months, I’ve talked about how ChatGPT is evolving from a reactive, text-based product into something more intuitive and connected to any of the tasks you want to accomplish. The shift from text to multimedia and dynamic UI is an important part of that transformation, and I’m excited about the progress we’re making.
|Many people’s first experience with ChatGPT involves turning a text prompt into a picture. It’s a magical way to see what this technology can do, but the chat interface wasn’t originally designed for this. Creating and editing images is a different kind of task and deserves a space built for visuals. Today we launched a new image gen model and a dedicated entrypoint in ChatGPT for images that works more like a creative studio. The new image viewing and editing screens make it easier to create images that match your vision or get inspiration from trending prompts and preset filters.
And yes, this does seem to be just the start of reworking the ChatGPT UI to better accommodate the job being done, rather than just, you know, chat.
Again, there are risks to that move away from simplicity, but it also feels like the right time to evolve. Especially when Gemini's own product has evolved to look... a lot like ChatGPT. One of OpenAI's key strength has been their ability to productize AI, and Google, it seems to me, is starting to catch up. So you gotta keep moving.2
1 Sort of ironic given OpenAI's use of fruit nicknames-that-should-have-been-product-names as well... ↩
2 Especially if one end-goal is to create new kinds of devices that lives far beyond a text prompt... ↩
2025-12-17 20:51:01
Wikipedia defines the concept of "conflict of interest" thusly: "A situation in which a person or organization is involved in multiple interests, financial or otherwise, and serving one interest could involve working against another."
It has always been a bit of a gray area with investors. In fact, one of the most famous VC quotes of all time turns the notion on its head: "No conflict, no interest," is often attributed to Kleiner Perkins' John Doerr back in the day – it may be apocryphal, it doesn't matter, because it's accurate. Increasingly so.
Whereas investors used to still at least try to adhere, or appear to adhere, to avoiding conflicts in their investments, in walked AI and turn the gray area clear. As in invisible. As in, it no longer matters. I mean, it still does because people and egos are involved. But the reality of our current situation is that all of these AI companies need to raise the maximum amount of money possible, because they're burning the maximum amount of money possible.
Today brings the latest in a long line of recent examples. As Anissa Gardizy, Sri Muppidi, Cory Weinberg, and Amir Efrati report for The Information:
Amazon is in talks to invest $10 billion or more in OpenAI, according to three people familiar with the discussions. The valuation would be higher than $500 billion, one of the people said.
This is big news and yet entirely predictable. Because, well, I predicted it:
It also sure feels like with this latest news we're mere weeks away from Google and/or Amazon investing in OpenAI, completing the ouroboros. Apple? All totally cool, right? Since this isn't "zero sum" per Nadella...
Honestly, I'm mainly impressed by my timing prediction here – that was, in fact, just a few weeks ago – because the investment itself was inevitable. And that's because it follows the news that Microsoft and NVIDIA were investing in Anthropic.
