Microsoft's $17 billion bet on AI compute

PLUS: Mistral's $14B chipmaker partnership, OpenAI's corporate struggle, and how AI is writing most new code

Author

Jelani Abdus-Salaam
September 09, 2025

In partnership with

Welcome back, AI’ers!

Here’s What’s On The Menu For Today

  • Microsoft's $17B bet on AI infrastructure

  • Mistral's $14B chipmaker alliance

  • OpenAI's for-profit conversion hurdles

  • How AI is writing most new code

AI ON MY MIND

Happy Tuesday,

Alibaba has officially entered the top tier of AI development with a new model boasting over one trillion parameters. The release of Qwen-3-Max-Preview puts the company in direct competition with the largest models from industry leaders like OpenAI and Google.

With claims of outperforming competitors like Anthropic's Claude Opus 4 on key benchmarks, Alibaba is signaling a serious ambition to be a top contender. The question is whether this new massive model will be enough to lure developers away from the established players.

By the way, I've been getting questions about how AI works in practice, so I'm launching a separate newsletter that dives deeper into real business applications and practical advice. [Click here if you're interested].

-Jelani Fuel (Co-founder of Best of AI)

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TODAY’S TOP STORIES

Microsoft's $17B Compute Bet

The Recap: Microsoft is spending up to $19.4 billion to secure AI cloud infrastructure from provider Nebius. The massive deal highlights the insatiable demand for computing power needed to run advanced AI models.

Unpacked:

  • The deal underscores a critical bottleneck even for tech giants, as Microsoft turns to third-party providers to bridge a significant shortage of AI cloud infrastructure for its clients.

  • This multi-year agreement, valued at $17.4 billion, sent Nebius Group's shares soaring nearly 55%, signaling immense investor confidence in specialized AI infrastructure partners.

  • Amsterdam-based Nebius, a spinoff from Russian tech giant Yandex, provides full-stack AI cloud services built on Nvidia GPUs, making it a key supplier in the hardware-hungry AI ecosystem.

Bottom line: This massive investment confirms that access to raw computing power is the primary bottleneck shaping the pace of AI progress. It also signals a huge opportunity for companies that can build, manage, and supply the specialized data centers the industry desperately needs.

Mistral's $14B Chipmaker Alliance

The Recap: European AI leader Mistral secured a €1.7 billion funding round led by chip equipment giant ASML. The deal boosts its valuation to $14 billion and forges a strategic partnership to embed AI deeper into the semiconductor industry.

Unpacked:

  • This partnership aims to integrate Mistral's AI models across ASML's portfolio, helping customers get higher-performance lithography systems to market faster.

  • ASML's investment of €1.3 billion makes it a lead investor, securing an 11% stake in the two-year-old French company.

  • The deal strengthens Mistral's independence from Silicon Valley and gives ASML influence, with its CFO joining Mistral's strategic committee board.

Bottom line: This move represents a powerful fusion of cutting-edge AI software with the foundational hardware that powers the entire tech industry. The alliance firmly establishes Mistral as a critical player in the global AI value chain, backed by Europe's most valuable tech company.

MY FAVORITE AI TOOLS

Relevance is my favorite AI tool right now (even more so than N8N).

Here’s why:

It’s an AI agent building tool that doesn’t require you to build out the logic using nodes. Instead, you use natural language to build out these agents. But the best thing imo is that you can build AI Agent teams.

Like agents talking to each other completing a goal until its done. It’s nuts. No other tool on the market is doing this. You have to check it out.

(Try it out →Link)

👾 AI Tools We Use Everyday

➡️ N8N for AI Agents - Literally use this everyday to write this newsletter (link)

➡️ Axiom AI - AI Browser automation to scrape anything on the web (link)

➡️ GummySearch - AI Reddit research (link)

Tools are sourced from our database and are not sponsored or affiliated.

THE LEARNING CENTER

The step-by-step way you can become a highly paid AI Consultant. Get in touch to learn more.

MORE NEWS

OpenAI's Non-Profit Problem

The Recap: OpenAI's high-stakes plan to become a fully for-profit company is facing serious political and regulatory hurdles. The move is jeopardizing billions in funding and forcing the company to consider drastic measures.

Unpacked:

  • The company's future growth is on the line, with investors conditioning nearly $19 billion in funding on the successful conversion to a traditional for-profit structure.

  • A coalition of nonprofits and labor groups is pushing back, prompting investigations by California and Delaware attorneys general into whether the plan is violating charitable trust law.

  • Internal discussions have surfaced a last-ditch option for the company: relocating out of California if state regulators significantly complicate the restructuring process.

Bottom line: This corporate battle highlights the fundamental tension between the immense capital required for AI development and a founding mission to benefit the public. The outcome will likely set a significant precedent for the governance and accountability of other major AI labs.

The AI Code Wave

The Recap: A new survey reveals senior developers are rapidly adopting AI for coding, a trend exemplified by Robinhood's CEO, who stated the majority of the company's new code is now AI-generated.

Unpacked:

  • Nearly a third of senior developers now report that over half of the code they ship is created by AI, more than double the rate of their junior counterparts.

  • This trend is playing out at major companies like Robinhood, where CEO Vlad Tenev said "a minority" of new code is written by humans, with nearly 100% of engineers using an AI editor.

  • Despite developers spending significant time fixing AI-generated bugs, the tools are having a positive impact on morale, with 80% of developers saying coding is more enjoyable with AI assistance.

Bottom line: AI is quickly shifting from a coding assistant to a primary author, especially under the guidance of experienced engineers. This transition elevates the developer's role from writing code to reviewing, directing, and ensuring the quality of AI-generated output

OTHER NEWS YOU MAY LIKE

 Authors sued Apple in a new class-action lawsuit, alleging the company illegally used their copyrighted books to train its generative AI models.

Microsoft released a free, open-source "Generative AI for Beginners" course on GitHub, featuring a 12-lesson curriculum on building GenAI applications.

A study found that AI voice agents helped older adults accurately report blood pressure readings at home, resulting in high patient satisfaction and significant cost reductions.

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AI ON SOCIAL

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THAT’S IT FOR TODAY

Until next time, stay safe.

-Best of AI Team

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