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Sam Altman’s Financial Engineering
00:19:52
The Dutch government has taken control of a Dutch chipmaker that had Chinese owners. Yet another big OpenAI deal, this time with Broadcom. The first AI desktop workstations are arriving. And we check in with Matt Levine to get his take on what he says is Sam Altman’s genius for financial engineering.
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Welcome to the Tech Brew Ride Home for Tuesday, October 14, 2025. I'm Brian McCullough. Today the Dutch government has taken control of a Dutch chip maker that had Chinese owners. Yet another big OpenAI deal, this time with Broadcom. The first AI desktop workstations are arriving and we check in with Matt Levine to get his take on what he says is Sam Altman's genius for financial engineering. Here's what you missed today in the world of tech. Here's something you don't see every day. In fact, I don't think I've seen this in my 25 years in the tech industry. The Dutch government has taken control of Chinese owned Dutch chip maker Nexperia using its Goods Availability act to, according to the Dutch government, safeguard chip supply for Europe. Quoting the FT in a statement on Sunday, the Dutch Ministry of Economic affairs said it acted because of a threat to the continuity and safeguarding on Dutch and European soil of crucial technological knowledge and capabilities. The move escalates frictions between Western countries and China over access to high end technologies such as advanced semiconductors and critical raw materials. On Thursday, China placed sweeping restrictions on the exports of rare earths used in products from cars to wind turbines. The Dutch ministry said it invoked the country's Goods Availability act because of recent and acute serious governance shortcomings and actions at Nexperia, which is based in the Netherlands and has been majority owned by Chinese technology group Wingtech since 2019. The decision aims to prevent a situation in which the goods produced by Nexperia finished and semi finished products would become unavailable in an emergency, its statement added. Nextperia produces chips used in the European automotive industry and in consumer electronics. Vincent Karamens, the Dutch economy minister, can now block or reverse decisions taken by Nextperia's board. His department acted on September 30, but only made its move public on October 12. A state backed Chinese investment consortium acquired Nexperia for $2.75 billion in 2017 after it was carved out of NXP Semiconductors, a Dutch chip manufacturer. The following year, the consortium began selling its shares to to Wingtech. Wingtech, which started as a contract manufacturer for smartphones, said in a statement that the decision constitutes an act of excessive interference driven by geopolitical bias, not by fact based risk assessment, end quote. According to filings, the Dutch government seized next barrier after the US Warned it would not be removed from its export control list if Chinese CEO Zhang Zhu Heng remained quote. The Amsterdam Court of Appeals published the proceedings between the Dutch Economy Ministry and Wingtech on Tuesday. It revealed that U.S. officials told the Dutch in June that a plan to ring fence its European operations from Chinese ones was moving too slowly. Last month, the U.S. commerce Department in effect gave Nexperia an ultimatum when it said curbs on Wingtech under the US Entity list designation would also apply to its Dutch subsidiary. End quote Got another one of these to tell you about. OpenAI and Broadcom agreed yesterday to co develop and deploy 10 gigawatts worth of custom AI chips to run OpenAI's models over four years. Sources say the deal is worth multiple billions. Quoting the Journal Broadcom specializes in designing custom AI chips that are specifically tailored to certain artificial intelligence applications. It began working with OpenAI on creating a custom chip 18 months ago, and the company's broadened their partnership to include work on related components, including server racks and networking equipment. The new racks will rely on Ethernet technology and other connectivity from Broadcom. The two companies said they will be deployed in data centers OpenAI owns as well as those operated by third parties. The people familiar with the matter said. The massive deal brings the total scale of computing capacity OpenAI has agreed to buy from chip giants Broadcom and Advanced micro devices to 26 gigawatts, enough to meet the summer electricity needs of New York City more than two times over. Broadcom has been bolstered by its work helping tech companies manufacture custom chips that speed up artificial intelligence computations. Shares are up more than 80% in the past six months and its market capitalization has increased to more than 1.5 trillion. Yeah, Broadcom closed up 9.88% following the announcement of this deal yesterday. So you know it's just another deal where just the announcement of an OpenAI tie up sends a company stock up, I don't know, a cool $100 billion or so. We used to call him Santa Sam when he was announcing new AI features every day on December of last year. But this is truly Santa Sam, right? He doles out deals, your stock rockets. What's next? An announcement of some sort of a deal to manufacture AI toilets sends Kohler's stock through the roof, though I do think Kohler is a private company, and I'm joking about that, except as I was writing this, Walmart announced a partnership with OpenAI to let shoppers browse and purchase its products on ChatGPT, including apparel, entertainment, packaged food and third party goods. That's obviously part of OpenAI's push into commerce and apps inside of ChatGPT itself. Still, Walmart stock is up 2.5% at the time of this writing, and at Walmart's market cap, that ain't chicken feed. Thinking Machines Lab co founder Andrew Tullock has reportedly left to join Meta. He's the dude who reportedly declined Mark Zuckerberg's previous offer of a more than one and a half billion dollar pay package back in August. Guess he changed his mind, quoting the Journal. Andrew has decided to pursue a different path for personal reasons, a spokeswoman for Thinking Machines Lab said in a statement. Talik is a leading researcher in the field of artificial intelligence and previously worked for Meta for 11 years. He left in 2023 to join OpenAI for a stint before co founding Thinking Machines Lab alongside Mira Muradi at the start of this year. The hire is the latest recruiting coup for Meta, which has wound down its hiring spree from its headiest days as it shifts focus to organizing its new talent dense AI teams and pursuing the INV of what it calls superintelligence. The Thinking Machine's spokeswoman said Talik's contributions have been foundational in getting the company to where it is today. We're grateful for what he helped build here and are committed to finishing what we started together, she said. The Wall Street Journal previously reported that Talik was offered a pay package from Meta that could have been worth as much as $1.5 billion with top bonuses and extraordinary stock performance, but declined it. A Meta spokesman previously called the description of the offer inaccurate and ridiculous, and said that the size of any compensation package is predicated on a stock rising. The terms of the offer he accepted couldn't be learned. Talek didn't respond to a request for comment. Talik was one of more than a dozen Thinking Machines employees approached by Meta Chief Executive Mark Zuckerberg over the summer. It is unclear which team he will be on at Meta. End quote. Nvidia says it will begin selling the DGX Spark mini PC with DGX OS for AI developers on October 15th on Nvidia.com and select third party retailers for 4000 bucks, quoting PCMag the 2.6 pound product looks an awful lot like a mini PC, but it's more of an AI training workhorse than a general purpose computer. Instead of Windows, the product runs Nvidia's DGX os, the company's custom version of Ubuntu Linux, which has been configured configured with AI software At Computex, we saw other vendors including Asus, Dell, Gigabyte, hp, Lenovo and MSI showing off their own takes on the DGX Spark, so expect to see various implementations using Nvidia's GB10 superchip like Acer's Veriton GN100AI mini workstation, which arrives in December. Nvidia created the DGX Spark so developers, research scientists and even students can locally harness the computing power necessary to run cutting edge AI models. Previously known as project digits, the product boasts hosts a GB10 Superchip, which combines a 20 core arm based grace CPU with a Blackwell GPU that has the same number of CUDA cores as an RTX 5070 graphics card. The Spark has also been outfitted with 128GB of LPDDR5.x system memory shared between the CPU and GPU, along with 4 TB of NVMe storage. The product's relatively small package is causing Nvidia to hype it as the world's smallest AI supercomputer, delivering data center class performance in a compact desktop form factor. Other specs include four USB C ports, Wi Fi 7 and an HDMI connector. The mini PC can be powered from a standard electrical outlet. However, the product isn't cheap. DGX Spark pricing is $3,999, not including any local taxes or tariffs, Nvidia tells us. While not meant for consumers, the DGX Spark is notable since Nvidia has long been rumored to also be working on a Windows PC that'll feature the company's GPU tech along with an ARM chip from Mediatek. In addition to the DGX Spark, Nvidia is preparing the larger DGX Station, a full desktop tower that'll boast a more powerful GB300 Grace Blackwell Ultra chip pricing hasn't been announced, but Nvidia plans on selling it later this year with the help of partners including Asus, Box, Dell, HP and Supermicron.
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In generating helpful contextual and beautiful illustrations based on the sources you upload, Google wants to help you understand and remember them. Select the pencil icon in the Video overview tile of the Studio panel. These two new options join Language customization and the prompt box that lets you focus the AI hosts on specific sources, use cases and structure. These two updates are rolling out first to Notebook LM Pro users. Google AI Pro this week. It will be available to all free users in the coming weeks. Finally today it's been a while, but you know who we like to turn to to explain stuff. Good old Matt Levine in his newsletter Yesterday, Matt said OpenAI's massive deal after massive deal basically shows Sam Altman is selling a vision of a world changing product and achieving it via world changing financial engineering to hit his goal of eventually raising a trillion dollars. Quoting Matt the essence of finance is time travel. In the future, your factory will make widgets and you will sell them profitably. So you can borrow money today to build the factory, to make the widgets, to sell, to repay the money. If you go to a bank with an architect's plans for the widget factory and a business plan for making and selling the widgets, and a good track record of profitability, manufacturing and selling widgets, the bank will be happy to lend you the money to build the factory. The bank has people who understand widgets. It can model up a widget factory pretty easily. It will figure out an appropriate leverage level for the factory and lend you that amount of money at like 8% interest. Tech startups are an extreme version of this. In the future, human life will be utterly transformed by your invention. We will live on Mars, or socialize in the Metaverse, or commute in self driving flying cars, or have omniscient robots in our pockets that can fulfill every human desire. Presumably also you can turn that into money so you can raise money today to build the Metaverse or cars or robots. How much money will they give you? Well, if you are very, very, very, very good at pitching your vision, and they might give you tens of billions of dollars. Global venture capital investment is something like $368 billion per year. Getting 10% of that would be an astonishing feat. But what if you want, say a trillion dollars? That is harder. You can go to Masayoshi San with your vision and you can put your arm around his shoulder and gesture sweepingly into the distance and whisper, omniscient robots. And he might say, yes, here is all the money I have, but that's still not $1 trillion. To raise a trillion dollars, you need more than a compelling science fiction vision of your world changing product. You need a compelling science fiction vision of world changing financial engineering. By this metric, Sam Altman is surely the greatest tech founder in history. His financing tool is you go to Broadcom and you put your arm around their shoulder and you gesture sweepingly in the distance and whisper, omniscient robots. And they whisper, yes. And you say, we'll need a few hundred billions dollars of chips and equipment from you. And they say, of course. And you say good. And they say, do you have hundreds of billions of dollars. And you whisper, omniscient robots again. And they are enlightened. And then you announce the deal, and broadcom stock adds $150 billion of market capitalization. And you're like, see? And they're like, yes. And you're like, omniscient robots. And they're like, I know, right? That is the financing tool in some loose postmodern sense. OpenAI has borrowed hundreds of billions of dollars from Broadcom. You can buy hundreds of billions of dollars of equipment to build the robots, to sell for money to pay for the equipment, because you've gotten everyone to believe. If you owe the bank $100, that's your problem. If you owe Broadcom $500 billion, that's Broadcom's problem. If you owe every big tech company hundreds of billions of dollars, that's their problem. Surely they'll find a solution. Or you will. The money will figure itself out. How? Well, in a world with insatiable demand for AI inference, probably you can raise quite a lot of money in debt to pay for the data centers. The bet here is something like, by the time we are actually building these data centers, they will be less like science fiction speculation and more like widget factories. And people will be comfortable financing them based on cash flow models. But for now, backstopping that theory is another theory. Something like OpenAI has a $500 billion equity value, so surely it could raise more money to pay its bills. I have previously written that nobody in history has ever been better at, like, business negging than Sam Altman. When Sam Altman, the chief executive officer of OpenAI, goes around publicly worrying that AI might kill us all, what he is really saying is, I am building a technology that is unimaginably powerful and will transform every aspect of human life. So it sure must be worth a lot of money. If he just said that, you might be skeptical. It is obviously in his self interest to talk about how powerful his technology is, but instead he goes around worrying about it, which makes him seem more credible. It is not obviously in his self interest to talk about how dangerous his technology is and how carefully he needs to be checked. It's more subtly in his self interest to do that. Same with the computing costs. The deals have surprised some competitors who have far more modest projections of their computing costs because he is better at this than they are. If you go around saying, I'm going to build transformative AI efficiently, how transformative can it be? But if you go around saying, I'm going to need 1,000 new nuclear plants to build my product. Everyone knows that. It will be a big deal. End quote. Got nothing more for you today. Talk to you tomorrow.