Anthropic's CEO shared his thoughts on the economics of AI and the risk-taking of competitors, saying some were "YOLO-ing" with regard to spending.

Analysts will be watching to see if Thrive-owned firms actually succeed in building long-term profitable businesses using OpenAI’s tech, or if the result is really just pumped up valuations based on speculative market potential. 

Hugging Face co-founder and CEO Clem Delangue says all the attention is on LLMs, but smaller, specialized models will make sense in many use cases going forward.

On Tuesday, Microsoft and Nvidia announced plans to invest in Anthropic under a new partnership that includes a $30 billion commitment by the Claude maker to use Microsoft’s cloud services. Nvidia will commit up to $10 billion to Anthropic and Microsoft up to $5 billion, with both companies investing in Anthropic’s next funding round.

The deal brings together two companies that have backed OpenAI and connects them more closely to one of the ChatGPT maker’s main competitors. Microsoft CEO Satya Nadella said in a video that OpenAI “remains a critical partner,” while adding that the companies will increasingly be customers of each other.

“We will use Anthropic models, they will use our infrastructure, and we’ll go to market together,” Nadella said.

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On Tuesday, Alphabet CEO Sundar Pichai warned of “irrationality” in the AI market, telling the BBC in an interview, “I think no company is going to be immune, including us.” His comments arrive as scrutiny over the state of the AI market has reached new heights, with Alphabet shares doubling in value over seven months to reach a $3.5 trillion market capitalization.

Speaking exclusively to the BBC at Google’s California headquarters, Pichai acknowledged that while AI investment growth is at an “extraordinary moment,” the industry can “overshoot” in investment cycles, as we’re seeing now. He drew comparisons to the late 1990s Internet boom, which saw early Internet company valuations surge before collapsing in 2000, leading to bankruptcies and job losses.

“We can look back at the Internet right now. There was clearly a lot of excess investment, but none of us would question whether the Internet was profound,” Pichai said. “I expect AI to be the same. So I think it’s both rational and there are elements of irrationality through a moment like this.”

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This week on the GeekWire Podcast: Why is Amazon laying off 14,000 people in the middle of an AI boom — and is it really a boom at all? We dig into the contradiction at the heart of Seattle’s tech scene, discussing Amazon CEO Andy Jassy’s “world’s largest startup” rationale and what it says about the company’s culture and strategy. And we debate whether AI progress represents true transformation or the familiar signs of a tech bubble in the making.

Then we examine the vision of Cascadia high-speed rail — the ambitious plan to connect Portland, Seattle, and Vancouver, B.C., by bullet train. Is it the regional infrastructure needed to power the Pacific Northwest’s next chapter, or an expensive dream looking for a purpose?

With GeekWire co-founders John Cook and Todd Bishop

Related headlines from the week

Amazon layoffs

• Amazon confirms 14,000 job cuts, says push for ‘efficiency gains’ will continue into 2026
• A tale of two Seattles in the age of AI: Harsh realities and new hope for the tech community
• Filing: Amazon cuts more than 2,300 jobs in Washington state as part of broader layoffs
• Amazon layoffs hit software engineers hardest in Washington
• Amazon layoffs reaction: ‘Thought I was a top performer but guess I’m expendable’
• Amazon CEO says massive corporate layoffs were about agility — not AI or cost-cutting

Amazon earnings

• Amazon stock soars 11% after topping Q3 estimates with $180B in revenue, $21B in profits
• Amazon’s Anthropic investment boosts its quarterly profits by $9.5B
• ‘Big Beautiful’ tax benefit: Amazon and other tech giants reap the rewards of new law, for now

Microsoft Azure, earnings and OpenAI

• Microsoft’s Azure reports cloud outage, disrupting global customers including Alaska Airlines
• Microsoft beats expectations, reports nearly $35B in Q1 capital spending amid Azure outage
• Microsoft gets 27% stake in OpenAI, and a $250B Azure commitment

Seattle-Portland-Vancouver

• Slowly but surely, high-speed rail backers believe Cascadia mega-project will become a reality
• Cascadia’s AI paradox: A world-leading opportunity threatened by rising costs and a talent crunch
• The ‘enormous barrier’ that threatens economic growth in the Pacific Northwest
• Beta’s unique electric airplane flies into Seattle to wow state officials and aviation experts

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