Every week NAND Research puts out a newsletter for our industry customers. Below is a excerpt from this week’s:
Driving the Week
Tech earnings season kicks off with a bang, with AT&T announcing Monday; SAP, F5, and Commvault each release on Tuesday; Wednesday sees Microsoft, Meta, ASML, ServiceNow, IBM, and Western Digital announcing; Thursday wraps up the week with earnings from Apple, Atlassian, Check Point, Dynatrace, Intel, Mobileye, NetScout, and ST Micro.
Apart from a consumer-focused Microsoft Surface media event, there are no major technology happenings scheduled for this week.
Overheard
Is Trump brokering a TikTok Deal with Oracle? NPR thinks it might be happening, reporting that “under the deal now being negotiated by the White House, TikTok’s China-based owner ByteDance would retain a minority stake in the company, but the app’s algorithm, data collection and software updates will be overseen by Oracle, which already provides the foundation of TikTok’s web infrastructure.”
Trump doesn’t clarify things with his reaction, saying only that “I have spoken to many people about TikTok and there is great interest in TikTok.”
Whatever’s happening, congress is confused about Trump’s partial-US ownership plans, with multiple law makers reacting similarly to Senator Rand Paul, who said “I don’t know what he means by that.” Politico has a round-up of reactions.
Opening the Stargate
Part Manhattan Project, part Apollo Program — with a dash of Silicon Valley intrigue: AI innovator OpenAI, along with some powerful friends, announced the Stargate Project, a joint venture to create a network of cutting-edge AI data centers across the United States. OpenAI CEO Sam Altman, SoftBank’s Masayoshi Son, and Oracle’s Larry Ellison took to the White House this week alongside President Donald Trump to announce the venture.
The price tag is $500 BILLION. Yes, you read that right. OpenAI, SoftBank, Oracle, and Abu Dhabi’s MGX fund are spearheading the project. The initial investment is $100 billion, with plans to scale up to half a trillion dollars over the next four years.
Who got left out in the cold? Noticeably absent from the spotlight was Microsoft. Once OpenAI’s exclusive cloud partner, the tech giant has been relegated to the sidelines. According to some reporting, Sam Altman grew frustrated with Microsoft’s inability to meet his company’s insatiable demand for server capacity.
Enter Oracle, whose Abilene, Texas, data center is already under construction as the first phase of Stargate.
Microsoft CEO Satya Nadella is spinning this as a win, telling CNBC that the partnership’s “evolution” relieves Microsoft of massive capital burdens. Translation: Microsoft’s exclusivity with OpenAI is over, but they’re still holding onto rights to OpenAI’s intellectual property and a share of its future revenues.
Not everyone’s cheering: Elon Musk, Altman’s estranged former ally turned legal adversary. Musk’s xAI has been racing to build its own supercomputers, and he’s been taking shots at Stargate on his social network, X/Twitter. “They don’t actually have the money,” Musk sniped, claiming SoftBank’s coffers aren’t as full as they seem. Altman fired back: “Wrong, as you surely know.”
Musk isn’t just posting. His lawsuit against OpenAI for alleged breach of contract remains a thorn in Altman’s side, and Musk’s alignment with Trump makes this rivalry all the more politically charged.
Trump weighed in on Musk’s grumbling, saying, “He hates one of the people in the deal. But I have certain hatreds of people too.” Even so, Politico reports that Trump’s staff is ‘furious’ about Musk’s criticisms.
Stargate dominated the discussions at Davos, where AI pioneers like Deepmind’s Demis Hassabis, Yoshua Bengio, and Dario Amodei used the forum to highlight concerns about the risks of runaway AI, particularly with projects as massive as Stargate. Bengio warned, “If we don’t figure out how to control AGI, the consequences could be catastrophic.”
Meta’s Yann LeCun countered these critiques, calling them hypocritical. He argued that efforts like Stargate could democratize AI infrastructure rather than consolidate power in a few hands. The philosophical divide between centralized and open AI models was laid bare, with Stargate embodying the former.
Business leaders, meanwhile, couldn’t contain their enthusiasm. “This is transformational,” said Prosus President Ervin Tu. “If you understand what AI can do, you know this will disrupt every industry.”
AI Watch
There’s more happening in enterprise AI than just Stargate. Last week Google announced that it’s investing an additional $1 billion in OpenAI competitor Anthropic. This follows a $2 billion investment round announced just two weeks ago that saw the company valued at about $60 billion. Google’s investment is reportedly independent of the earlier round.
Meanwhile, Meta CEO Mark Zuckerburg last week said that that he expects Meta’s CapEx spend to be between $60 and $65 million, with “much of that amount” going to AI data centers. The spend is an increase over the approximately $40 billion the company spent on CapEx in 2024.
Bringing AI and Cloud together for government buyers, top cloud provider AWS and top government contractor Booz Allen Hamilton are expanding their current collaboration to provide “ready-made and reusable enterprise-level digital solutions for agencies at scale…”
There’s more than the usual amount of marketing speak in the announcement, but the net appears to be that Booz Allen can now sell turn-key solutions hosted on AWS to its government customers, with those customers also being able to leverage AWS credits and migration programs. Cloud is complicated.
Deal Watch
Acquisition fever arrived with the new year, with deals across multiple segments.
ServiceNow, who seems to be following the 1990’s Cisco strategy of growth through aggressive acquisition, announced its plan to acquire Cuein, “a leader in AI native conversation data analysis and insights.”
IBM, strategically focused on growing its consulting business, is acquiring AST, a leading specialist in Oracle applications in the public sector space. This is IBM’s second Oracle-focused acquisition in a relatively short time, recently closing its deal to buy Oracle consulting company Accelalpha. .
The most impactful acquisition, and a bit of a surprise, is Lenovo’s bid to buy high-end storage vendor Infinidat. Lenovo has rapidly grown its low-end and mid-range storage businesses, leading (according to IDC) in the sub-$100K storage segment. It’s long worked with NetApp on mid-range systems, but hasn’t had a play for the high-end of the market – until now.
Israeli-based Infinidat has some of the best technology in the industry (outside of IBM and Hitachi) for multi-petabyte enterprise storage, along with a compelling data protection and cyber-resilience story. If Lenovo can successfully integrate two very different cultures, it promises to be a powerhouse in the space. The deal doesn’t close until sometime 2H, so we won’t be able to gauge the full impact until sometime next year.
It’s not all acquisitions, as red-hot data analytics platform Databricks confirms that it’s closed a $10 billion Series J at an impressive $62 billion valuation, bringing its total funding to about $19 billion over the past dozen years. There’s a long list of investors in this one, but the stand-out is Meta, which Databricks singles out as a “strategic investor.” We’re not quite sure what that means in this case, but we’ll keep digging.
Transitions
It’s been a big month for leadership changes in the cyber business: Cybersecurity company Trellix brings on Vishal Rao as its new CEO, replacing Bryan Palma, who remains as “advisor.” Rao came into Trellix as part of its acquisition of Skyhigh Security and will lead both organizations.
ExtraHop, specialist in cloud-native network detection and response solutions, hired Rob Greeras CEO. Greer arrives most recently from Broadcom where oversaw the merger of Carbon Black and Symantec. As part of the leadership shuffle, current CEO Greg Clark transitions into an Executive Chairman role.
Fazal Merchant, previously co-CEO of Tanium, is taking over as President and CFO of cloud security company Wiz.
Finally, there’s a new CMO at managed security platform provider Deepwatch, where Sammie Walkercomes over from Zimperium, where she was also CMO. The company also announced that Anand Ramanathan is its new chief product officer, leaving the same role at AirMDR.
CFO Wanted: Disk-drive maker Western Digital CFO Wissam Jabre is leaving the company after it finalizes its split into separate SSD and spinning-disk businesses. Jabre was set to be CFO of the hard-drive business. There’s no work on his replacement.
What We’re Reading
It’s short attention-span week at NAND Research, where we’ve only skimmed a number of quick-but-interesting reads:
The inimitable Timothy Prickett Morgan over at The Next Platform offers a broad set of rumors and speculation about the data center compute industry in “It’s January: Datacenter Compute Rumors and Moves.”
Raconteur tackles the age-old question: “Will AI free employees or crush meaningful work?”
Staying on that theme, the Financial Times details “The fight over robots threatening American jobs.”
Finally, if robots are your thing (and one didn’t take your job!), then you might be interested in the convergence of Quantum Computing and Robotics in Quantum Insider’s long-titled piece, “What is Quantum Robotics? Researchers Report The Convergence of Quantum Computing And AI Could Lead To Qubots.”
Companies mentioned: AWS, Anthropic, Booz Allen Hamilton, Broadcom, Cuein, Databricks, Deepwatch, Extrahop, Google, Hitachi, IBM, Infinidat, Lenovo, Meta, MGX, Microsoft, Open AI, Oracle, ServiceNow, Softbank, Stargate Project, Tanium, Trellix, Western Digital, Wiz
