Nvidia’s GPU Crunch Hits Microsoft, ChatGPT-5.5 Review, Meta’s AWS Chip Deal

**Akash Pasricha** (0:13)
Welcome, everyone, to The Information's TITV. My name is Akash Pasricha. It is Friday, April 24th. First up today, The Information published exclusive reporting about the current state of the GPU crunch with some inside reporting on how Microsoft and General Catalyst are responding. We'll then dig into Gpt 5.5 with a top researcher at Harvey who has used the model. We're also digging into Meta's 10% layoffs and why our co-executive editor, Martin Peers, thinks this time could be different than previous rounds of cuts that big tech companies have made. We'll also get into Meta's new chip deal with Amazon. We'll talk briefly about Intel earnings. We'll then wrap the show with an exclusive look behind the scenes of Cursor's deal with SpaceX. It's going to be a fun show, so let's get right on into it.
GPUs are still hard to come by and the supply crunch has caused reverberations throughout Silicon Valley. My colleagues, Aaron Holmes, Anissa Gardizy and Stephanie Palazzolo published a deep dive on that dynamic this morning with inside reporting on Microsoft, general catalyst and fast growing startups. I want to bring on Aaron and Anissa to share more. Welcome to the both of you.
Anissa, I want to start with you. What is going on in Chip Land?

**Anissa Gardizy** (1:28)
In Chip Land, things are very reminiscent of 2023 when we were constantly hearing from startups and their investors that it was extremely difficult for companies to find access to Nvidia GPUs. The reason, much like 2023, is that some of the large cloud providers are hoarding some of these GPUs for their own internal teams and their largest customers such as Anthropic and OpenAI.
It's not that great out there for startups who are looking for GPUs. The people that we talked to said that this is their biggest bottleneck that they're facing this year.

**Akash Pasricha** (2:06)
Oh, this year, okay. So, it's not quite as bad as 2023, but it's as bad as it's been lately.

**Anissa Gardizy** (2:12)
I mean, I'd love to hear what Aaron thinks, but from what I can tell, it sounds a little bit worse than 2023 because the business model around AI is a little bit more clear and OpenAI and Anthropic are spending even more money than they were spending back in 2023 So, it seems worse to me.

**Akash Pasricha** (2:31)
Aaron, what do you think?

**Aaron Holmes** (2:32)
Yeah, I think to me what stands out is, 2023 was this moment right after ChatGpt came out, where every company wanted to experiment with AI and see where it would fit in to their business. And I think what's different now is that there's a lot of companies that know they need to use GPUs, especially the mega customers like Anthropic and OpenAI who are seeing this huge AI coding demand boom.
But as a result, that is leading to this almost bidding war where prices of GPUs are going up. And I'm hearing that at Microsoft's Azure Cloud, for example, you actually can't even reserve a small number of newer GPUs. You have to commit to reserving in most cases, a thousand cores or more of the Nvidia Blackwell chips. And that costs tens of millions of dollars over the time period that you have to reserve it, which is like one to three years. So that's a bolder sell from the cloud providers than I think we've ever seen before when it comes to GPUs.

**Akash Pasricha** (3:35)
So, Anissa, Aaron is talking about prices going up. If you're a startup, do you have any bargaining power here? Do you just accept that the price of renting these chips is higher than it would have been? How are you coping?

**Anissa Gardizy** (3:50)
If you're looking for maybe a thousand to a couple thousand GPUs, you really don't have any bargaining power right now.
Maybe you did a year ago, but these days, it's going to be really tough for you to try to get a good price from your cloud provider. We talked to one startup in particular who was able to get a good contract last fall for six months, renting GPUs for just under $3 per GPU per hour. And earlier this year, when they went back on the market looking for GPUs, some of the same people who were competing for their business weren't even giving them a call back. So that's just a really good example of how quickly things changed and we also learned that portfolio companies of some of the largest VC firms, General Catalyst, Founders Fund, Sequoia, their startups are struggling to get GPUs. And so recently, General Catalyst sent out a note to all of their founders, asking them, what is your ability to get GPUs? Sort of in the vein of saying, we might end up helping you guys all get GPUs and negotiate on your behalf so that you guys can be basically a larger customer trying to get a better price. So if you're looking for a couple thousand GPUs, right now it's pretty tough and that's different from just a couple months ago.