China has significantly ramped up energy subsidies for major data centers as part of a strategy to solidify its competitive edge in the global artificial intelligence landscape. According to a report in the Financial Times, these subsidies could reduce electricity costs for firms like Alibaba, ByteDance, and Tencent by as much as 50%. The initiative aims to mitigate the financial impact of rising electricity expenses associated with the use of domestically produced chips from companies such as Huawei and Cambricon, which are reportedly less efficient compared to Nvidia’s offerings from California. Notably, data centers utilizing foreign chips are not eligible for these subsidies.
In response to the competitive dynamics, the U.S. is also making moves to support its tech giants. Different states have extended tax incentives to encourage Big Tech to establish new data centers. Moreover, operators of these facilities are advocating for the retention of clean energy tax credits from the Biden administration to maintain their global competitiveness.
There remains uncertainty as to whether similar substantial energy subsidies will be extended to U.S. companies.
In other major tech news, OpenAI and Amazon Web Services (AWS) have reached a monumental agreement worth $38 billion over seven years, further propelling OpenAI’s ambitions in artificial intelligence. Under this arrangement, OpenAI will leverage AWS’s vast computing resources to train AI models and handle ChatGPT requests. This deal follows substantial agreements OpenAI previously secured with Microsoft and Oracle. Amazon’s cloud division, while accounting for less than 20% of the company’s total revenue, is largely seen as the key growth driver for investors, as it currently dominates nearly a third of the global cloud computing market.
In a notable competition, Amazon is also developing a significant cloud computing campus for Anthropic, considered a formidable rival to OpenAI.
Palantir Technologies has reported exceptional third-quarter earnings that exceeded analysts’ expectations, causing a surge of enthusiasm from CEO Alex Karp. With reported revenues of $1.2 billion—up 63% year-over-year—Palantir not only exceeded a revenue forecast of $1.09 billion but also achieved a net income of $476 million, marking a 40% increase. While the government sector continues to provide a steady income, the growth in revenue from U.S. commercial clients, which rose by 121% to $397 million, has been crucial for the company’s expansion. However, skepticism persists among some investors regarding its high market valuation amid fears of an AI bubble, and notable short seller Michael Burry has taken positions against both Palantir and Nvidia.
In France, Shein, the fast-fashion retailer, faces legal scrutiny as authorities announced an investigation into the sale of inappropriate products, particularly “childlike” sex dolls. Following the revelation, the company has imposed a total ban on such items and initiated an internal review to address the issue. This comes just as Shein was set to open its first physical store in Paris.
The tech world continues to buzz with developments, including Microsoft and IREN signing a $9.7 billion AI computing deal, MongoDB’s CEO stepping down with a successor from Cloudflare lined up, and Apple introducing a new “tinted” liquid glass option across its operating systems. Additionally, quantum computing company Xanadu plans to go public via SPAC at a valuation of approximately $3.6 billion, and the Japanese trade association CODA is urging OpenAI to stop using copyrighted content from its members.
