The Morning Download: Anthropic’s Google Deal Anticipates Enterprise AI Surge

What's up: Intel surges on PC sales; Meta charged by EU over handling of illegal content; Alaska Airlines works to restore operations after tech outage grounds flights

Good morning. Anthropic and Google Cloud’s partnership announced yesterday gives the AI startup access to as many as 1 million chips. The deal anticipates growing corporate demand for Anthropic’s family of Claude models, which are particularly geared for business use.

Anthropic will have access to additional Google Cloud services, as well as the Tensor Processing Unit chips, designed to speed up AI.

Anthropic said in 2023 that it would work with Google Cloud to train models, which are also available to businesses through Google Cloud’s Vertex AI platform and its Marketplace, the WSJ said.

There’s an investment dimension to the relationship as well, Bloomberg reports:

Google has already invested about $3 billion in Anthropic, including $2 billion in 2023 and another $1 billion early this year. Amazon, meanwhile, has pledged up to $8 billion and provides the AI startup with its own custom chips through Amazon Web Services.

The underlying assumption behind the investments pouring into Anthropic, OpenAI and other model developers is that business demand for accelerated and highly efficient AI computing is just getting started.

Tech leaders, including Nvidia Chief Executive Jensen Huang and Salesforce Chief Executive Marc Benioff, helped convince President Trump not to send federal troops to San Francisco, WSJ reports. Secretary of Homeland Security Kristi Noem confirmed the postponement Thursday morning, according to the Mayor Daniel Lurie, a moderate Democrat.

Earlier this month, Benioff briefly called on Trump to send the National Guard to San Francisco. He apologized for the comments in the wake of fierce community backlash.

The rush by businesses to refresh office computers with the latest version of the Windows operating system, gave further momentum to Intel's turnaround effort, WSJ reports. The company reported on Thursday income of $4.1 billion for the third quarter compared with a year-earlier loss of $16.6 billion.

The company’s shares have risen more than 85% so far this year, with nearly all the gains coming since August, fueled by interventions both by the U.S. government and Nvidia, which in September said it would invest $5 billion in Intel and for the first time buy Intel’s X86 CPUs.

Looking ahead. Intel Chief Executive Lip-Bu Tan has said his priority is revamping Intel’s product lines, cutting costs and attracting more customers for the company’s foundry business. Intel also faces stiff competition in both the PC and data center spaces, especially from AMD.

While AI chips are booming, orders for less sophisticated chips have been more subdued.

European chipmaker STMicroelectronics projected lower sales this year, a sign that a recovery in demand for semiconductors used in cars and electric vehicles is taking longer than many had expected.

And earlier this week, Texas Instruments said market recovery was progressing at a slower pace than in previous downturns, citing the likely effects of broader macroeconomic dynamics and overall uncertainty.

Citing “automation, digitalization and geographic shifts," Applied Materials is cutting about 4% of its global workforce, WSJ reports. The semiconductor company had 36,100 regular full-time employees as of July 27, according to its latest earnings release from August.

The European Commission, the EU’s executive arm, on Friday said Meta Platforms fails to give users a simple way to flag illegal content, WSJ reports. It also accused the company of not giving its users adequate tools to appeal content-moderation decisions when their posts are removed or their accounts are suspended.

It is the first allegation against a social-media platform under the bloc’s flagship Digital Services Act.

The charges risk provoking the ire of the Trump administration, which has complained in the past that the EU’s digital regulations unfairly target American companies and that the bloc is trying to censor Americans.

OpenAI acquired Software Applications, a startup founded by former Apple employees that’s building an AI interface for Mac desktops. Bloomberg reports that OpenAI plans to integrate their work into ChatGPT. Financial terms were not disclosed.

We’ll spare everyone the Clippy jokes, but Microsoft is rolling out a new animated helper for its Copilot chatbot, a blob named Mico, which the company described as a “warm” thing-y that “listens, reacts, and even changes colors to reflect your interactions.”

But with or without Mico, Copilot has its limits.

CNBC reports that Microsoft AI CEO Mustafa Suleyman is drawing the line on providing erotica AI services. “Other companies will build that," he said Thursday, a week after OpenAI's Sam Altman said ChatGPT would allow for erotica for "verified adults."