AI Daily: OpenAI to share 8% of revenue with partners by decade-end

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:

REVENUE SHARING: OpenAI now projects that it will share about 8% of its revenue with commercial partners, such as Microsoft (MSFT), by the end of the decade, down from the current 20%, Reuters reports. The difference would amount to more than $50B in additional revenue OpenAI would be keeping for itself.

SHORT COREWEAVE: Kerrisdale announced a short position in CoreWeave (CRWV), saying the company is the “poster child of the AI infrastructure bubble.” The stock’s recent rally “rests more on hype, not substance,” the short selling firm contends in a report posted on its website. Kerrisdale says CoreWeave is a “debt fueled” graphics processing unit rental business “with no moat, dressed up as innovation.” It sees fair value for the stock at $10, or 90% downside from current levels.

SHORT-TERM BUY IDEA: Deutsche Bank placed a “Catalyst Call: Buy” on shares of CoreWeave as a short-term investment idea. The firm believes “positive factors coming together” to support upward revenue estimates over the next quarter or two for CoreWeave. Demand for artificial intelligence infrastructure “appear almost insatiable” and demand will significantly outstrip supply in the near- to medium-term, the analyst tells investors in a research note. Deutsche believes CoreWeave has “meaningful powered shell capacity” expected to come online over the next 12-18 months which it has yet to sign customer contracts against. It views the company’s Q3 report, potential new customer contracts, and incremental datacenter capacity as catalysts for the shares.

ON THE SIDELINES: Seaport Research initiated coverage of CoreWeave with a Neutral rating. In the near-term, the neocloud space will benefit from strong demand from hyperscalers for extra GPU and electricity capacity, but business models will matter as the space consolidates over the longer term, the analyst tells investors.

NEW DEALS: CoreWeave disclosed that it and Nvidia (NVDA) entered into a new order form under the existing master services agreement dated as of April 10, 2023, which has an initial value of $6.3B, that establishes an arrangement with respect to the sale by the company of reserved cloud computing capacity to its customers and provides Nvidia access to any residual unsold cloud computing capacity. Under the terms of agreement, in instances where CoreWeave’s datacenter capacity is not fully utilized by its own customers, Nvidia is obligated to purchase the residual unsold capacity through April 13, 2032.

CrowdStrike, in partnership with Meta (META), also introduced a new suite of benchmarks – CyberSOCEval – for evaluating how AI systems perform in real-world security operations. Built on Meta’s CyberSecEval framework and CrowdStrike’s leading threat intelligence and cybersecurity AI data expertise, this suite of open source benchmarks helps establish a new framework for testing, selecting, and leveraging large language models in the security operations center.

U.K. INVESTMENT: Sam Altman of Microsoft-backed OpenAI and Jensen Huang of Nvidia plan to travel with President Trump to the United Kingsom next week and pledge support for billions of dollars in U.K. datacenter investments, Shirin Ghaffary, Dinesh Nair, Ian King and Dina Bass of Bloomberg report, citing people with knowledge of the matter. OpenAI and Nvidia are teaming up with Nscale Global n the project, sources told Bloomberg. CoreWeave is going on the trip to make an announcement of a U.K. investment next week as well, a person familiar with the matter told Bloomberg.

AI SUMMARIES: Penske Media, the publisher of Rolling Stone and The Hollywood Reporter, has sued Google (GOOGL), alleging its AI summaries that appear on search results are illegally using its reporting and lowering online traffic, Ben Fritz of The Wall Street Journal reports. Penske filed the antitrust suit in federal district court in the District of Columbia.

AI CATALYSTS: National Bank upgraded OpenText (OTEX) to Outperform from Sector Perform with a price target of $45, up from $34, after hosting investor meetings with management. The firm sees a “renewed investment opportunity in what had been an orphaned name.” OpenText’s next six months will be rush in catalysts, bringing renewed attention to the shares while making it a “compelling and easier to understand, developing growth story,” National Bank tells investors in a research note. The firm says OpenText is a “quietly developing” artificial intelligence play.

LAY OFFS: Elon Musk’s xAI laid off at least 500 workers on its data annotation team, the company’s largest team, Grace Kay of Business Insider reports, citing several emails reviewed by the journal. “After a thorough review of our Human Data efforts, we’ve decided to accelerate the expansion and prioritization of our specialist AI tutors, while scaling back our focus on general AI tutor roles. This strategic pivot will take effect immediately,” the email read, according to BI. “As part of this shift in focus, we no longer need most generalist AI tutor positions and your employment with xAI will conclude.”

AI RESEARCHER: Tencent (TCEHY) has hired a prominent AI researcher from Microsoft-backed OpenAI in a notable defection from the U.S. AI industry to China, Bloomberg’s Haze Fan and Pei Li report, citing people familiar with the matter. The Chinese conglomerate hired Yao Shunyu to work on integrating AI into its services, the authors say, noting people familiar with the matter.