Brian McCullough (0:04)

Welcome to the Techmeme ride home for Tuesday, April 1st, 2025. I'm Brian McCullough. Today Masasan came through for OpenAI, a $40 billion round at a $300 billion post money valuation. Sam Altman says OpenAI is going back to open weights, a new encryption model for Gmail, a new movie strategy for Amazon, and why the Switch 2 represents a new revenue strategy for Nintendo. Here's what you missed today in the world of tech. OpenAI has closed a new $40 billion round, the most ever raised by a private tech company, at a $300 billion post money valuation. SoftBank led the round with $30 billion, but according to a source, around 18 billion of that is for Stargate. Quoting CNBC, OpenAI said it plans to use the fresh capital to push the frontiers of AI research even further and scale its compute infrastructure, according to a blog post. About 18 billion DO of the funding is expected to be used for OpenAI's commitment to Stargate, according to a person familiar with the matter who spoke anonymously due to the confidential nature of the terms of the deal. The joint venture between SoftBank, OpenAI and Oracle was announced by President Donald Trump in January. The initial funding will be $10 billion, followed by the remaining 30 billion by the end of 2025, the person said. But the round comes with a caveat. SoftBank said in an updated disclosure on Monday that its total investment could be slashed to as low as $20 billion if OpenAI doesn restructure into a for profit entity by December 31. The provision ramps up pressure on OpenAI to pull off the for profit conversion, a plan that will need the blessing of Microsoft and the California attorney general and has been challenged in court by Elon Musk, who was one of the co founders of OpenAI in 2015 when it started as a nonprofit research lab. The largest private deal before OpenAI's round was Ant Group's $14 billion capital raise in 2018. After that was Juul Labs $12.8 billion raise in 2018 and Didi Global's $10.8 billion round the following year, according to PitchBook. Then comes Databricks $10 billion round in December and OpenAI's own $10 billion round in 2023. SoftBank and other investors are betting that ChatGPT's explosive growth can continue. OpenAI said Monday that ChatGPT now has 500 million weekly users, up from 400 million last month. OpenAI also expects revenue will triple to $12.7 billion by the end of this year CEO Sam Altman wrote Monday in a post on X that though the ch one of the craziest viral moments I'd ever seen and we added 1 million users in five days. The company added 1 million users in the last hour, end quote. More from Bloomberg on the timeline of all this SoftBank, which is leading the latest funding round, will initially invest $7.5 billion in the company, along with $2.5 billion from an investor syndicate, a person familiar with the agreement told Bloomberg. Additional investors in the group include Microsoft CO2 management, Altimeter Capital Management and Thrive Capital. There will be a second tranche of $30 billion invested by the end of 2025, including $22.5 billion from SoftBank and $7.5 billion from a syndicate, Bloomberg reported. As part of the new deal, OpenAI has an incentive to complete the process of restructuring quickly. If its restructuring isn't completed by the end of the year, SoftBank would have the option to reduce its total contribution to $20 billion from $30 billion, and OpenAI could seek additional investors to add to that sum, according to the person with knowledge of the situation. Chairman Masayoshi Sohn called AI a defining force shaping humanity's future in a statement about the deal. Our expected partnership with OpenAI accelerates our shared vision to unlock its full potential, he said. Other investors, including Magnetar Capital and Founders Fund, have also been in talks to participate in the round. Magnetar Capital and Evanston, Illinois based hedge fund could contribute as much as $1 billion, according to multiple people, all of whom asked not to be identified because the information is private. And one more detail, SoftBank is reportedly seeking a bridge loan of as much as $16.5 billion to help fund AI investments in the U.S. its largest ever borrowing denominated solely in U.S. dollars. Sam Altman also said yesterday that OpenAI plans to release a powerful new open weight language model with reasoning in the coming months, which would be its first open weight model Since G, quoting TechCrunch. That's according to a feedback form the company published on its website Monday. The forum, which OpenAI is inviting developers, researchers and members of the broader community to fill out, includes questions like what would you like to see in an open weight model from OpenAI? And what open models have you used in the past? We're excited to collaborate with developers, researchers and the broader community to gather inputs and make this model as useful as possible, OpenAI wrote on its website. If you're interested in joining a feedback session with the OpenAI team, please let us know in the forum below. OpenAI plans to host developer events to gather feedback and, in the future, demo prototypes of the model. The first developer event will take place in San Francisco within a few weeks, followed by sessions in Europe and Asia Pacific regions. OpenAI is facing increasing pressure from rivals such as Chinese AI lab Deepseek that have adopted an open approach to launching models. In contrast to OpenAI's strategy, these Open competitors make their models available to the AI community for experimentation and, in some cases, commercialization. It has proven to be a wildly successful strategy for some outfits. Meta, which has invested heavily in its llama family of OpenAI models, said earlier in March that LLAMA had racked up over 1 billion downloads. Meanwhile, DeepSeek has quickly amassed a large worldwide user base and attracted the attention of domestic investors. In a recent Reddit Q&A, OpenAI CEO Sam Altman said that he thinks OpenAI has been on the wrong side of history when it comes to open sourcing its technologies. I personally think we need to figure out a different open source strategy, altman said. Not everyone at OpenAI shares this view, and it's also not our current highest priority. We will produce better models going forward, but we will maintain less of a lead than we did in previous years. End quote Altman expanded on OpenAI's open model plans in a post on X on Monday afternoon, saying that OpenAI's upcoming Open model will have reasoning capabilities along the lines of OpenAI's O3 mini. End Quote Google is rolling out a new Gmail encryption model that doesn't require senders or recipients to use custom software or exchange certificates. Quoting the Verge, the feature is rolling out in beta starting today, and will initially be available for Google Enterprise users to send encrypted emails to other Gmail users within the same organization. Google says this will expand to emails sent to any Gmail inbox in the coming weeks and to inboxes from any third party email provider later this year. Gmail's current encryption feature, based on the Secure Multipurpose Internet Mail Extensions protocol, can already be used to send external emails, but doing so requires the recipient to have SMIME configured and complete multiple steps with the sender before emails can be securely exchanged. However, the new process will allow Gmail users to simply toggle on additional encryption in the email draft window to send an encrypted message. Non Gmail recipients without S mime will then be provided a link to sign into a guest Google workspace account to securely view and reply to the email in a restricted version of Gmail. If the recipient already has S MIME configured, then Gmail will send the message via the S MIME process it currently uses. Emails to both business and personal Gmail accounts will be automatically decrypted in the recipient's inbox. The encryption provided using this new system is higher than the standard transport layer security Gmail uses by default on all emails. But we should note that this isn't technically end to end encryption, even if that's what Google is calling it. The updated capability is powered by client side encryption, which gives workspace administrators control over encryption keys, allowing them to revoke user access and monitor users encrypted files, according to Google's help page. End Quote don't you just love accounting? Working on your books can bring up fun questions like what numbers go in what column, what reports should I run, or should I take a master's level accounting class just to understand how to use this accounting software? Well, FreshBooks is easy to use accounting and invoicing software that makes something complicated as simple as it could be. With FreshBooks, you can streamline your invoicing and payment processes, saving you valuable time on data entry while keeping your finances organized. No accounting classes required. With FreshBooks, you'll save time and get peace of mind. 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Post your job for free at LinkedIn.com ride that's LinkedIn.com ride to post your job for free. Terms and conditions apply. I guess that James Bond deal was a tell because in a new strategy, Amazon apparently plans to release 14 to 16 movies per year in theaters, basically doing what the other major studios do, with Most running for 45 days in theaters before heading to streaming. Quoting the Times After a decade long dalliance with big screen theatrical releases, the giant tech company will take center stage this week at the annual convention for theater owners spending several millions of dollars to parade a stream of a list stars including Ryan Gosling, Ben Affleck and Chris Hemsworth. It's the first time the company has ever taken on such a role. The point to prove that its movie arm Amazon, MGM Studios, is serious about releasing around 14 big broad commercial films a year to theaters nationwide and around the world. The appearance is the culmination of a strategic change for Amazon that began when it bought MGM with the venerable studios impressive library in 2022 for $8.5 billion. For years the company has released five to eight films theatrically, but it was never clear how long they would stay in theaters before going to Prime Video. Amazon's streaming service Air, starring Mr. Affleck and Mr. Damon, received a 37 day exclusive theatrical release. Red One with Dwayne Johnson and Chris Evans hit prime just weeks after it debuted in theaters. Now, with 14 movies a year, Amazon's will rival those from the big studios in both size and scope, and Most will spend 45 days in theaters before hitting pay per view. And then Prime. Amazon is making the change in the middle of its own corporate shuffle. Jennifer Selke, who had overseen the film and television operations at Amazon Studios for seven years, abruptly left her job last week, surprising many people inside the company. So when the lights dim at the Cinemacon conference on Wednesday, all eyes will be on Courtney Valenti, Amazon, MGM's head of film who will lay out the vision for the company's theatrical future. We have been talking about the theatrical slate and the commitment this company has to theatrical for about two years now, Ms. Valenti, 61, said in an interview. Finally we get to show, not tell. Will Ms. Salke's departure upend any of that? It won't, Ms. Valenti said. Amazon is pushing into theaters even as the movie business appears to be shrinking and audiences are more fickle than ever. Box office sales are down 11% from a year ago and remain far below pre pandemic levels. It is one of the few out of home entertainment businesses that have yet to recover from COVID Theater owners say they hope Amazon will help fix one of the major problems plaguing their business, a scarcity of wide release movies. Attendance is still down 35%, and that's not because moviegoers are somehow afraid to go to theaters, said Adam Aron, chairman and chief executive of AMC Entertainment. The wide release movie count is down 30%. So it's extremely good news for us that a major, deep pocketed company like Amazon is about to increase the number of movies. In addition to the 14 to 16 films that Amazon now expects to release in theaters each year, another dozen will be produced directly for Prime Video. The company is also forming its own international distribution arm. Amazon is not doing this for us because they want to feel good, they're doing it because it should be good for their business, said Greg Marcus, chief executive of the company that operates Marcus Theaters, the fourth largest chain in the country. Amazon is saying if we're going to be in the streaming business, then we need to be in the theatrical business too if we want to maximize the impact of these movies. Tomorrow morning we're getting a big Nintendo event where they will share all the details of the upcoming Switch 2 console. This is really kind of a big deal because with the Switch 2, Nintendo is trying to do what it is rarely done before follow one hit console with another. Every time they have a hit console generation, they tend to misfire with the next one. See the Nintendo Wii followed by the Wii basically just making this the Switch to largely the same form factor. Largely just a spec bump is a bit of a tell here. It's part of Nintendo's larger strategy of late, branching out to use its characters in cinema theme parks and merch in a very Disney like way to create more consistent revenue and avoid the boom bust cycle that can often bedevil the console business. Quoting Bloomberg, Nintendo said last week that a live action Legend of Zelda movie will hit theaters in March 2027. The team in charge of films at the company is headed by Rever creator Shigeru Miyamoto. While it's still a small group, it is gaining influence within the firm after the massive success of the Super Mario bros. Movie in 2023. More similar works are ahead, with the goal of exploiting the company's wealth of intellectual property assets in more ways now well over a century old. Nintendo's goal is to increase touchpoints with consumers who otherwise wouldn't spend time on its consoles. In the ideal cycle, loyal game fans would flock to movie theaters and stores, generate buzz, entice more people to try playing its games and and create more fans. It's a strategy shift at a company that's long taken pride in releasing unique products and combining technologies that other people wouldn't contemplate. Remember the Ring Fit Hula Hoop accessory? It was another winner Nintendo has never been afraid of resetting successful product lines and starting from zero. It just appears to have decided that 2017 switch was such a success that it's better to iterate and build on it rather than taking more risk to wow any lingering doubters. The Switch 2 is about carrying over hundreds of millions of users to the new platform through online membership programs and the huge library of original Switch games. That has many parallels with Cupertino, California based Apple, which long ago outgrew the phase of reinventing its core products. Apple's primary work now is iterating on the iPhone, iPad and Apple Watch, drawing on network effects to keep users ensconced in its product ecosystem. The US Company aims to generate more revenue per user, which means more in the way of software and services rather than groundbreaking hardware. Nintendo likewise appears to be making a bigger push to grow its ecosystem rather than building the most cutting edge gadget, Making the business outlook more predictable and sustainable by turning itself into a more iterative and conventional business has felt almost inevitable for Nintendo for quite a while. The company now has the largest pool of investors ever, with its shares soaring to new heights on anticipation about the new console. Its recent crop of hires also comes from top tier institutions and might expect a somewhat more cautious approach than the buccaneering spirit of the early era of video game development. In short, Nintendo likes surprises, but investors don't. The company may yet retain the joy of springing total novelties by churning out more peripheral products like its popular Alarmo alarm clock, but its communication style has already changed. In October last year, Nintendo opened its first official museum in the Uji area of Kyoto for many years. On the wall in the company's headquarters hung a framed work of calligraphy depicting the brush strokes for Ninten, which roughly translates to leaving luck to the heavens. This embodiment, the company's founding philosophy, has been consigned to the museum, an artifact from the company's 135 year history. That perhaps is the clearest sign yet that Nintendo is ready to move on. Nothing more for you today. Talk to you tomorrow.