AI Daily: OpenAI working with Arm on AI chip effort

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:

OPENAI WORKING WITH ARM: OpenAI is working with SoftBank’s (SFTBY) Arm (ARM) to develop a CPU designed to work with the AI chip OpenAI is developing with Broadcom (AVGO), The Information’s Qianer Liu and Anissa Gardizy report. According to the publication, TSMC (TSM) will manufacture the AI chip.

AI HUB IN INDIA: Google (GOOGL) announced an artificial intelligence hub in Visakhapatnam, Andhra Pradesh, enabling Google to deploy its full AI stack with the aim of helping accelerate AI-driven transformation across India. This investment of approximately $15B over five years is Google’s largest investment in India to date, and is aligned to the Indian Government’s Viksit Bharat 2047 vision to accelerate the expansion of AI-driven services.

SAFETY PROTOCOLS: California Governor Gavin Newsom on Monday signed new landmark legislation to further strengthen the state’s protections for children online and create safeguards for new and emerging technology, such as artificial intelligence. The legislation adds required features for platforms and products such as age verification, protocols to address suicide and self-harm, warnings regarding social media and companion chatbots, and stronger penalties for those who profit from illegal deepfakes, helping to ensure children’s safety remains front and center, Newsom said in a statement. Newsom said: “Emerging technology like chatbots and social media can inspire, educate, and connect – but without real guardrails, technology can also exploit, mislead, and endanger our kids. We’ve seen some truly horrific and tragic examples of young people harmed by unregulated tech, and we won’t stand by while companies continue without necessary limits and accountability. We can continue to lead in AI and technology, but we must do it responsibly – protecting our children every step of the way. Our children’s safety is not for sale.” The bills will help protect children online by creating: New safeguards on AI chatbots; Required age verifications; Social media warning labels; Stronger penalties for deepfake pornography; Clear accountability for harm caused by AI technology.

AMD AI CHIPS: Oracle (ORCL) and AMD (AMD) announced a major expansion of their long-standing, multi-generation collaboration to help customers significantly scale their AI capabilities and initiatives. Building on years of co-innovation, Oracle Cloud Infrastructure will be a launch partner for the first publicly available AI supercluster powered by AMD Instinct MI450 Series GPUs-with an initial deployment of 50,000 GPUs starting in calendar Q3 2026 and expanding in 2027 and beyond. This announcement builds upon the joint work of Oracle and AMD to deliver AMD Instinct GPU platforms on OCI to end customers, beginning with the launch of AMD Instinct MI300X powered shapes in 2024 and extending to the general availability of OCI Compute with AMD Instinct MI355X GPUs. These will be available in the zettascale OCI Supercluster.

AI SUPERCOMPUTER: Oracle announced Oracle Cloud Infrastructure Zettascale10, the largest AI supercomputer in the cloud. OCI Zettascale10 connects hundreds of thousands of Nvidia (NVDA) GPUs across multiple data centers to form multi-gigawatt clusters that deliver up to an unprecedented 16 zettaFLOPS of peak performance. OCI Zettascale10 is the fabric underpinning the flagship supercluster built in collaboration with OpenAI in Abilene, Texas, as part of Stargate. Built on next-generation Oracle Acceleron RoCE networking architecture, OCI Zettascale10 is powered by Nvidia AI infrastructure that delivers breakthrough scale, extremely low GPU-GPU latency across the cluster, industry-leading price-performance, improved cluster utilization, and the reliability required for large scale AI workloads.

BUY AMD: Wolfe Research upgraded AMD to Outperform from Peer Perform with a $300 price target as part of a Q3 preview for the semiconductor group. Following the company’s OpenAI win, Wolfe sees $10-plus in earnings per share power for AMD. The company “now simply needs to execute,” and estimates have upside if AMD finds traction beyond OpenAI, the firm tells investors in a research note. Wolfe also thinks estimates can go up in the near term due to traditional server strength.

AI DATA CENTER: Microsoft (MSFT) intends to rent capacity from AI hyperscaler Nscale at a data center in Portugal, as the software and technology giant expands is computing resources to meet exploding AI demand, Bloomberg’s Sofia Horta e Costa reports. The project, which will utilize Nvidia’s newest AI chips, will be hosted at the Start Campus data center park south of Lisbon and is scheduled to be operational early next year, the author says, citing people familiar with the matter.