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Tech Giants Escalate AI Spending in Race to Stay Competitive

by admin July 23, 2025
July 23, 2025
Tech Giants Escalate AI Spending in Race to Stay Competitive

The artificial intelligence arms race is entering a new phase as major industry players ramp up investments to keep up with their rivals.

In the span of just a few weeks, the world’s biggest tech firms have unveiled a flurry of moves aimed at shoring up their positions, ranging from massive chip and data center deals to fresh funding rounds.

Oracle bets big on OpenAI’s Stargate vision

OpenAI has expanded its partnership with Oracle (NYSE:ORCL) to deliver an additional 4.5 gigawatts of data center capacity in the US, pushing the total capacity of its Stargate AI infrastructure platform to over 5 gigawatts.

According to the company, the development will run on more than 2 million chips and is poised to play a central role in OpenAI’s push to reindustrialize American tech infrastructure while delivering what it describes as the ‘benefits of AI to everyone.’

The agreement with Oracle alone will also generate over 100,000 jobs in the US, spanning construction, operations, and manufacturing roles. Much of the current work is already underway at the Stargate I site in Abilene, Texas, where Oracle began delivering racks of Nvidia’s new GB200 chips last month.

“We now expect to exceed our initial commitment thanks to strong momentum with partners including Oracle and SoftBank,” OpenAI said in the statement.

The original commitment, announced at the White House earlier this year, involved a pledge to invest US$500 billion into 10 gigawatts of AI infrastructure in the US over four years.

Google moves to repair media ties with AI licensing push

Alphabet’s (NASDAQ:GOOGL) Google announced that it is in the early stages of negotiating licensing deals with roughly 20 national news outlets as part of a pilot program aimed at securing content for AI training and product integration.

“We’ve said that we’re exploring and experimenting with new types of partnerships and product experiences, but we aren’t sharing details about specific plans or conversations at this time,” a Google spokesperson said in a statement as reported by Bloomberg.

The company representative declined to confirm which media outlets had been approached.

The outreach follows growing pressure on major AI companies to compensate publishers whose content is increasingly used to train chatbots and generative search tools.

Tensions between Silicon Valley and news publishers have escalated over the past year. In December 2023, the New York Times filed a copyright lawsuit against OpenAI and Microsoft (NASDAQ:MSFT), alleging that their AI models were trained on millions of Times articles without permission.

At the same time, platforms like Google Search and its Gemini-powered “AI Overviews” have continued to draw content from publishers without offering direct compensation, prompting fears that generative AI could further erode traffic to original news sources.

Reka AI hits US$1 billion valuation in Nvidia-led funding round

While OpenAI and Google scale infrastructure and broker content deals, venture capital continues to flow into AI startups aiming to disrupt the model development space.

On Tuesday (July 22), Reka AI—a lesser-known player developing efficient large language models—announced a US$110 million Series B round that vaulted its valuation above US$1 billion.

The round was backed by NVIDIA Corporation (NASDAQ:NVDA) and Snowflake (NYSE:SNOW), among others.

Founded in 2022 by former researchers from Google and Meta, Reka claims it can build powerful foundation models with greater efficiency than its larger peers. The startup has also expanded its product offerings to include enterprise tools for application logic and interface development.

Snowflake, which previously held acquisition talks with Reka, now plans to integrate Reka’s models into its customer offerings.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

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