AI Daily: OpenAI to spend $100B on backup servers for AI breakthroughs

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:

BACKUP SERVERS: Microsoft (MSFT)-backed OpenAI plans to spend $100B on backup servers for AI breakthroughs, The Information’s Sri Muppidi reports.

AI MODEL: In a peer-reviewed Nature article update, DeepSeek says it spent $294,000 on training its reasoning–focused R1 model and used 512 Nvidia (NVDA) H800 chips for 80 hours, Reuters’ Eduardo Baptista reports. DeepSeek is a Chinese-built large-language open-source model that claims to rival offerings from Microsoft (MSFT)-backed OpenAI’s ChatGPT and Meta Platforms (META) but using a much smaller budget.

CAPITAL RAISE: Elon Musk’s private company xAI raised $10B from investors that puts the company’s post-money valuation at $200B, sources told CNBC‘s David Faber.

INVESTMENT: Nvidia announced an investment of GBP2B in the U.K. market to catalyze the nation’s AI startup ecosystem and scale the next generation of globally transformative AI businesses. The new capital will be used to foster economic growth, develop more innovative AI technologies, create new companies and jobs, and empower the U.K. to compete in the AI market globally. Scaling AI companies in the U.K. has been challenging due to limited access to supercomputing, constrained venture capital outside London, rising energy costs and difficulty for VCs to access leading academic institutions, where many researchers are also entrepreneurs, the company said. Nvidia, in collaboration with Accel, Air Street Capital, Balderton Capital, Hoxton Ventures and Phoenix Court, will accelerate the U.K. AI ecosystem by providing new capital for AI startups. The investment will expand access to capital in key U.K. economic centers, AI growth zones and deep technology ecosystems like London, Oxford, Cambridge and Manchester. Nvidia’s investment, combined with new, world-class AI infrastructure, will empower researchers and developers nationwide, fueling the launch and growth of AI startups. Following Nvidia’s recent commitment to manufacturing up to a half-trillion dollars’ worth of AI supercomputers in America, the investment will be domiciled in the United States and activated in the United Kingdom, celebrating the transatlantic partnership between the two countries.

BUY COREWEAVE: Loop Capital initiated coverage of CoreWeave (CRWV) with a Buy rating and $165 price target. The firm sees ongoing potential for material profitability upside relative to the Street and ultimately an enterprise value to expected EBITDA multiple expansion, the firm tells investors in a research note. CoreWeave is the largest of a handful of “Neoclouds” that are in real-time being invited into a “Cool Kids Club” by Nvidia (NVDA), the Hyperscalers, and major AI Labs, Loop Capital added.