AI Daily: Nvidia asks some suppliers to stop H20 AI chip production

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:

NVIDIA H20: Nvidia (NVDA) asked some of its component suppliers, including Samsung (SSNLF) and Amkor (AMKR), to stop production related to its H20 AI chip after Chinese officials urged local firms to avoid using it, The Information’s Qianer Liu reported. The order comes weeks after the Chinese government told companies to stop buying the chips due to alleged security concerns, the report noted. Additionally, Reuters (HNHPF) to stop working on the chip.

Meanwhile, the New York Times reported that Nvidia CEO Jensen Huang is having discussions with China to quell their concerns about potential security risks associated with the company’s AI chips. The company was recently granted permission by the U.S. to sell its H20 semiconductors in China, but China’s internet regulator, Cyberspace Administration of China, said U.S. AI experts told them of “backdoor” functions that would track chips or shut them down remotely. “There are no such things,” Huang said, according to the Times. “There never has been. And so hopefully, the response that we’ve given to the Chinese government will be sufficient. We are in discussions with them.”

META: Following a Wall Street Journal (META) has frozen its AI hiring spree, the company’s chief AI officer Alexandr Wang said via X, formerly Twitter, “We are truly only investing more and more into Meta Superintelligence Labs as a company. Any reporting to the contrary of that is clearly mistaken.” The Wall Street Journal previously reported that Meta froze its hiring spree for its AI division after hiring over 50 AI researchers and engineers, which also prohibits employees from moving between teams inside the division.”

Meanwhile, Meta is hiring Frank Chu, an Apple (AAPL) AI executive, who will join Meta Superintelligence Labs, Bloomberg’s Mark Gurman reported, citing people familiar with the matter. Chu is the latest Apple employee working on AI models to join Meta, following several colleagues, including the head of Apple’s AI models team. Meta is slowing its recruitment, with a memo stating that the company is “temporarily pausing hiring across all MSL teams, with the exception of business critical roles,” according to a memo seen by Bloomberg.

MUSK: According to a court filing, Microsoft-backed (MSFT) OpenAI said Tesla (TSLA) founder Elon Musk tried to enlist Meta CEO Mark Zuckerberg for the $97.4B bid that his consortium made for OpenAI earlier this year, but Zuckerberg did not come on board, Reuters reported. OpenAI requested a judge to order Meta to produce documents and communications related to any bid for the company. “Meta’s communications with other bidders, or internal communications, including those reflecting discussions with Musk or other bidders, would also shed light on the motivations for the bid,” OpenAI said.

OPENAI: OpenAI is in talks to sell $6B in shares owned by its current and former employees in a deal that would value the company at about $500B, making it the world’s most valuable privately held company, according to The New York Times’ Cade Metz and Natallie Rocha, citing two people with knowledge of the matter. OpenAI has seen its valuation jump from $157B in October to $300B in March to potentially $500B in this latest secondary market sale, the report noted.

CRUSOE: Meanwhile, Crusoe, the developer behind OpenAI’s first Stargate data center, is in talks about raising funds at a $10B valuation, which would represent a value more than three times where it was pegged less than a year ago, two people with knowledge of the talks told The Information’s Anissa Gardizy and Natasha Mascarenhas. The company, which wants to raise at least $1B to help become a more formidable player in cloud computing, has bought a Tel Aviv-based cloud computing startup, Atero, which develops software to improve the utilization and efficiency of graphics processing units, the report also noted.

ANTHROPIC: AI startup Anthropic is close to an agreement to raise as much as $10B in a new funding round, a higher-than-anticipated amount and one of the biggest megarounds to date for an AI startup, Bloomberg’s Ryan Gould and Shirin Ghaffary reported, citing people familiar with the matter. Talks are ongoing and the final sum could change, the authors say, noting that Bloomberg previously reported Anthropic was in talks for a $5B fundraise at a $170B valuation, but the amount increased due to strong investor demand.