Any negotiations coincide with concerns about the trajectory of an industry that’s setting aside potentially trillions on data centres and development, without yet a mainstream application or established route to profits.
This week, news surfaced that Peter Thiel’s hedge fund Thiel Macro LLC sold its stake in Nvidia Corp during the third quarter — yet another retreat from investments in the chipmaker at the heart of the post-ChatGPT AI development boom. SoftBank Group Corp disclosed its exit from Nvidia just last week.
Hedge fund manager Michael Burry has emerged as perhaps the highest-profile critic, disclosing bearish wagers against both Nvidia and software developer Palantir Technologies Inc. A series of circular, multibillion-dollar deals between AI chipmakers, start-ups, data centre operators and others across the tech ecosystem have further stoked concerns this year that the industry is propping up itself.
Yet investors continue to vie for a slice of start-ups from the US to Japan, seeking to make early bets on potential future industry leaders.
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San Francisco-based Databricks is one of the larger players in the area of cloud and data software — an industry dominated by more established firms such as Oracle Corp and Snowflake Inc. The start-up helps clients analyse and build AI apps with complicated data from a variety of sources. Databricks has said it’s targeting the newer arena of transactional databases, which store and process information produced by ongoing business operations.
The start-up’s software runs on top of other cloud platforms, such as Microsoft Corp’s Azure and Amazon.com Inc’s AWS. As Databricks has expanded, it’s begun to more directly compete with companies including Snowflake and cloud infrastructure vendors like Microsoft.
