Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly:
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$1B AI REVENUE RUN-RATE: Databricks, the Data and AI company, announced it has crossed a $4B revenue run-rate during Q2, growing greater than 50% year over year. Databricks’ AI products also recently crossed a $1B revenue run-rate. Finally, the company is closing its Series K funding, raising $1B of capital. This investment values the company at over $100B and is co-led by Andreessen Horowitz, Insight Partners, MGX, Thrive Capital, and WCM Investment Management. Other signals of “strong momentum” for Databricks that the company highlighted include its net retention rate sustaining greater than 140%; 650-plus customers consuming at over $1M annual revenue run-rate; and achieving positive free cash flow over the last 12 months. Databricks will use the new capital to accelerate its AI strategy. During the two prior quarters, Databricks notes it launched or expanded partnerships with Microsoft (MSFT), Google Cloud (GOOGL), Anthropic, SAP, and Palantir (PLTR).
SETTLEMENT: Amazon (AMZN)– and Alphabet (GOOGL)-backed Anthropic has agreed to pay $1.5B to settle a class-action lawsuit from a group of authors who accused the AI company of using their books to train its AI chatbot Claude without permission, Reuters’ Blake Brittain and Mike Scarcella report. The proposed deal marks the first settlement in a string of lawsuits against tech companies including OpenAI, Microsoft (MSFT), and Meta Platforms (META) over their use of copyrighted material to train generative AI systems.
TOP SHAREHOLDER: ASML (ASML) is set to become the top shareholder of AI startup Mistral AI, Milana Vinn and Max Cherney of Reuters report, citing people familiar with the matter. ASML is committing EUR 1.3B for Mistral’s EUR 1.7B fundraise and is expected to get a board seat at Mistral, the sources added.
Commenting on the news, BofA notes that although it may seem counterintuitive for a Semicap company like ASML to take a stake in an LLM startup, this potential transaction could help ASML on multiple fronts, namely better understand the roadmap of AI companies both in terms of logic and memory, provide optionality for ASML shareholders in the medium to long term, and offer a seat at the table of negotiations when it comes to regulating AI but also AI export control regulations. BofA has a Buy rating on ASML with a price target of EUR 724.
NEW MOBILE WORK AI AGENT: Cerence (CRNC) announced that it will bring to market a new mobile work AI agent in close collaboration with Microsoft (MSFT). The AI agent will run on Cerence xUI, the company’s agentic AI assistant platform, and will integrate Microsoft 365 Copilot, allowing people who choose to work in the car to do so more safely and securely through voice-first access to Microsoft 365 Copilot, Teams, Outlook and OneNote. Since early 2024, Cerence AI has collaborated with Microsoft to deliver an automotive-grade implementation to millions of vehicles, enabling users to access ChatGPT through Microsoft Azure OpenAI in AI Foundry Models. Through the companies’ collaboration, automotive OEMs and their customers have benefitted from Cerence AI’s deep vertical expertise combined with Microsoft cloud and AI capabilities. In addition, Cerence AI has developed and optimized CaLLM Edge, its automotive-grade, embedded small language model in collaboration with Microsoft, leveraging Microsoft’s Phi-3 family of SLMs and Cerence’s automotive dataset to deliver AI that can handle a variety of automotive use cases.
SPENDING: OpenAI believes its spending through 2029 may rise to $115B, which is $80B more than previously expected, Yi Wei Wong of Bloomberg reports. The company is in the process of developing its data center server chips and facilities, as well as working to control cloud server rental expenses.
GAIN AI ACT: Nvidia (NVDA) on Friday said via X, formerly Twitter, that the the AI GAIN Act would restrict global competition for advanced chips. “While it may have good intentions, this bill is just another variation of the AI Diffusion Rule and would have similar effects on American leadership and the U.S. economy,” Nvidia said.
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