AI's Battle for Your Context

**Nathaniel Whittemore** (0:00)
Today on the AI Daily Brief, why the biggest battle in AI is the battle for your personal context. Before that in the headlines, could this be the biggest year for IPOs in history? The AI Daily Brief is a daily podcast and video about the most important news and discussions in AI.
Welcome back to the AI Daily Brief Headlines Edition, all the daily AI news you need in around five minutes. We kick off today with two stories that I discussed in my 2026 predictions, one where it looks like I might be wrong, one where it looks like I might be right. The one where I might be wrong is that, contrary to my base case, that neither OpenAI or Anthropic ultimately go public in 2026, the New York Times finds a lot of evidence that they are getting ready. They wrote, Anthropic and OpenAI have taken early steps to go public, people familiar with the company's said, and SpaceX, Elon Musk's rocket company, has interviewed banks to lead an IPO, according to two people with knowledge of the situation. Now, these three companies are already valued between $350 and $800 billion each. Add in a premium for the public offering, and we could easily see multiple trillion dollar IPOs this year. That is extraordinarily rare. The only real comparison at those levels are the $1.7 trillion valuation for the Saudi Aramco IPO in 2019 No tech startup has ever come close. Morgan Stanley's Eddie Malloy said, We're going to get into a period of potentially unprecedented IPO deal sizes, but we are confident they're executable given the scale of these companies and the investor interest. Now Malloy in this case is referring to concerns that the public markets can't handle deals of this size. As part of all of the AI bubble chatter, there's been talk that investment banks might force existing shareholders into a rolling unlock rather than the more usual six-month cliff to stagger the selling. Others expect demand to be so hot that selling won't be an issue. Certainly it is the case that despite claims that the current stock market is starting to resemble the dot-com boom, we haven't seen anything comparable to the thousands of IPOs for emerging tech companies that mark that era. What that means is that for most investors, this would be the first time that they got access to pure play companies developing AI. Jeremy Abelson, a VC at Irving Investors said, In two decades, I haven't seen private companies that are this meaningful and are this impactful. Not only are they bigger and more relevant, but they're incredible companies with numbers that we've never seen before. You can expect analysis of these big three to dominate finance discussions over the coming year, with very loud opinions on both sides of the argument. Some compared this moment to the record-breaking Facebook IPO in 2012 That listing both solidified social media as a major category, and was also seen as an utter catastrophe in the market, with the Wall Street Journal calling it a fiasco. The stock was down 15% after a week and took 14 months to trade above its IPO price. At the time, it was the third largest IPO in history. Although in the current frame of reference, its $90 billion valuation was exceedingly modest. Jeff Thomas, the head of listings at Nasdaq, said, When these mega-deals happen, it takes some of the air out of the room. You want to try to get ahead of it. Others noted that transparent information on the leading AI companies could defuse the bubble chatter. Said notable capital's Jeff Richards, There is such a big information gap right now. The biggest positive for this entire market would be if a bunch of these companies went public and people could actually see the numbers.
Now, my argument for why I didn't think that OpenAI and Anthropic would ultimately go public this year is A. Public market reporting is a total pain in the butt, especially when they're in the category that is already the most under scrutiny. And B. I think there is plenty of capital still available in private markets for their financing needs. Now B might be more dubious that I'm giving a credit for, not because there isn't private capital but just because the scale of the need might be so huge. And there is also, of course, a competitive dynamic thing. There are lots of good reasons, for example, for Anthropic to want to scoot in ahead of OpenAI and lots of good reasons for OpenAI to not want to let that happen. For that reason alone, we may be headed into a very big year when it comes to public markets. Now the prediction I did a little bit better on then is one where I said that Anthropic was going to continue to be hard to displace when it came to its lead in coding and that I thought that Microsoft was likely to get much closer to Anthropic over the course of the year. According to the information, Microsoft has indeed quietly become one of Anthropic's largest customers over recent months. As of July last year, Microsoft began using Anthropic to power coding agents and GitHub Copilot. But the big shift began in September when OpenAI and Microsoft agreed to the amicable end of their exclusive partnership. Microsoft quickly announced they would add support for Anthropic's models within their Copilot products. The new multi-model version of Copilot routes each task to the most appropriate model. And for many of the tasks in Microsoft's productivity suite, the right choice seems to be an Anthropic model. The report stated that Claude Sonnet 4.5 has a 15% performance advantage over GPT-40 in agent mode for complex Excel tasks. Although, why the hell anyone's using 4 is beyond me. While the super long context window of Claude Opus 4.1 is being used for mass summarization and analysis tasks. Haiku 4.5 is also seeing heavy use due to its cost and speed advantage for smaller tasks. Business customers didn't have to upgrade or change anything in their plans, but as of last week, they're now receiving access to Anthropic models by default. The information reports that Microsoft has spent more than 40 million per month with Anthropic starting in July, a $500 million annualized pace that is likely a lot higher now given that the models are seeing more use. In addition, the report states that Microsoft Cloud staff have been incentivized to sell Anthropic products. And finally, deepening the new ties, Anthropic will reportedly work with Microsoft to develop new Claude Power features for Copilot over the coming months. A liquid on Twitter said what I think a lot of people feel, Anthropic and Microsoft was the partnership that made sense all along. Speaking of partnerships and OpenAI, chip startup Cerebris has landed a $10 billion compute deal with the company. The three-year deal will see Cerebris provide OpenAI with 750 megawatts worth of AI inference compute. A press release said that OpenAI planned to integrate Cerebris' chips into their broader computing network to provide faster response time. Cerebris CEO Andrew Feldman posted, This has been a decade in the making. Deployment begins in early 2026 and when fully rolled out, it will be the largest high-speed AI inference deployment in the world. He claimed that Cerebris' uniquely designed chips are now able to deliver 15x faster inference without sacrificing model size or accuracy. He added, As models grow more capable, speed becomes the bottleneck. Slow systems limit what users can do, how often they engage, and whether AI becomes infrastructure or remains a novelty. Matthew Berman wrote, I've always wondered why OpenAI didn't use Grok or Cerebris. They're so fast. Now we know why Grok was bought by NVIDIA. Everything is moving to specialized chips. Revenue is made at inference. ChatGPT is about to be 100x faster. Now lastly today, we stay on OpenAI but move to some serious industry psychodrama. A trio of leading AI researchers are returning to OpenAI amid allegations of corporate espionage. On Wednesday night, we had dueling tweets. Former OpenAI CTO and now CEO of Thinking Machines Labs, Miramurati wrote, We have parted ways with Barrett Zouf. Sumith Chintala will be the new CTO of Thinking Machines. He's a brilliant and seasoned leader who has made important contributions to the field of AI for over a decade. And he's been a major contributor to our team. We could not be more excited to have him take on this new responsibility. Meanwhile, about an hour later, OpenAI CEO of Applications Fiji Simo tweeted, Excited to welcome Barrett Zoff, Luke Metz and Sam Schoenholz back to OpenAI. This has been in the works for several weeks and we're thrilled to have them join the team. Barrett will report to me, Luke and Sam will report into Barrett. More to come on what they'll focus on soon. Now, by way of background, these three left OpenAI in late 2024 alongside CTO Mir Amirati as part of a mass exodus of talent. They were pivotal in the subsequent founding of Mirati's Thinking Machines Lab. Zoff and Metz were in fact listed as co-founders of TML, with Zoff also receiving the CTO title. This is a significant personnel move that could have implications for the course of both companies. Zoff first joined OpenAI in 2022 to serve as their VP of Research. Prior to that, he was at Google DeepMind for six years. At OpenAI, he built the post-training team from scratch with John Schulman, who also left to co-found TML. That team yielded the O1 model and helped kickstart the new reasoning paradigm. Metz and Schoenholz are also leading experts on post-training and reinforcement learning. Now, for TML, it's very difficult to know how bad a sign this is. The departure of two co-founders and another senior researcher obviously isn't a great indication of how things are going. Anonymous Twitter poster Signal wrote, So like, Thinking Machines completely imploded today? Someone DM me the tea please. And yet at the same time, adding to the intrigue, Kylie Robison of Core Memory reported the story with a different twist, writing, Thinking Machines has terminated its CTO, Barrett Zouf, due to unethical conduct, according to two sources familiar with the matter. CEO Mira Moradi announced the news at an all-hands with employees today. Max Zeff followed up with this angle for Wired, writing that his sources at TML said that Zouf had shared confidential company information with competitors. The timeline was laid out in a memo written by Fiji Simo on Wednesday and shared with Wired. Zeff wrote, According to the memo from Simo, Zouf told Thinking Machines CEO Mira Moradi on Monday he was considering leaving. He was then fired on Wednesday. Simo went on to write that OpenAI doesn't share the same concerns about Zouf as Moradi. I don't know man, obviously from outside it's hard to tell exactly what's going on, but from a sheer talent perspective you got to think it was a good day for OpenAI. That however is going to do it for today's headlines. Next up, the main episode.