Benedict's Newsletter: No. 642

Benedict Evans··10 min read
AI/MLTechnologyBusiness
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AI Summary

Benedict Evans' newsletter No. 642 covers major AI industry developments including Anthropic's $1tr valuation and compute scramble, PE firms partnering with AI labs for enterprise deployment, and the White House shifting toward AI regulation caution. Additional stories cover Apple partnering with Intel's foundry, Amazon opening its logistics network to third parties, and GameStop's unsolicited $56bn bid for eBay.

Key Facts

✓Anthropic is leasing xAI's 300MW Colossus datacenter and raising at a $1tr valuation after hitting 80x annual growth driven by Claude Code demand.
✓OpenAI and Anthropic are both forming PE-backed deployment ventures ($10bn and $1bn+ respectively) to accelerate enterprise AI adoption.
✓Apple signed a preliminary foundry agreement with Intel, and Amazon opened its full logistics stack to third-party shippers, competing directly with FedEx and UPS.

Author Takes

BearishBenedict Evans

OpenAI's competitive position

OpenAI lacks unique tech, has limited engagement and stickiness, no network effect, and incumbents have matched its technology while leveraging superior product and distribution.

NeutralBenedict Evans

White House AI regulation shift

The shift toward AI caution is partly genuine (cyber threats, energy, privacy) and partly cynical—data centres are becoming a local political issue with votes to be won by attacking them.

SkepticalBenedict Evans

xAI's Colossus datacenter sale to Anthropic

The more cynical read is that xAI is loading revenue into the SpaceX IPO filing to present itself as a cloud AI company, not just a rocket company.

BearishBenedict Evans

Boston Dynamics

Boston Dynamics never found an actual business, and despite the 'physical AI' boom being their moment, most of the leadership is bailing.

SkepticalBenedict Evans

GameStop bid for eBay

No one can really see why the GameStop–eBay deal would make sense, though that may not be the point.

BearishBenedict Evans

Enterprise AI deployment

Giving everyone Microsoft CoPilot and waiting for productivity gains is 'the dumb answer'—equivalent to handing everyone a web browser in 1997 and calling it done.

Contrarian Angle

PE Firms as AI Go-To-Market Layer

AI labs are partnering with PE firms not just for capital but as a distribution channel—PE's portfolio companies need AI efficiency gains, making PE an intermediate GTM layer for enterprise AI deployment.

PE firms are typically viewed as financial investors, not distribution partners—framing them as GTM infrastructure for AI is a non-obvious strategic move.

xAI Monetizing Flawed Infrastructure via Lease

xAI's Colossus datacenter, built with construction shortcuts making it unsuitable for training, was leased to Anthropic for inference workloads—turning a liability into revenue ahead of SpaceX's IPO.

Monetizing a structurally deficient datacenter by finding a buyer whose workload (inference vs. training) aligns with the asset's limitations is an unconventional exit from a failed build.

Intel Foundry replacing TSMC (sole source)

Apple is adding Intel as a second foundry source for SoCs after relying solely on TSMC, per a preliminary WSJ-reported agreement.

Engineers switching from TSMC (sole source) to Intel Foundry

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