OpenAI Is Leaving Microsoft?

Ok. This is crazy! It turns out that we still haven’t explored all the moons in our solar system. Astronomers have found another 128 new moons (yes, 128!) around Saturn. How many moons does Saturn have now? 274 🤣 Read more here 

In Today’s (17th) Edition of “Element“ -

• OpenAI signs a new deal with a new partner (CoreWeave)…

• The Lifecycle of countries and tariffs…

• Inflation slows!

AI

OpenAI Signs A $12 Billion Infrastructure Deal

The Need For Computing. For those who might be unaware, Microsoft was an early investor in OpenAI, and for almost the whole life of OpenAI, the company has been dependent on Microsoft and its cloud computing business (Azure) for their computational needs. A few weeks ago, Microsoft and OpenAI announced that they will be ending their exclusive partnership allowing OpenAI to choose other providers.

Why Computing? You may have heard about “training“ an AI model. The training, in this case, simply refers to giving MASSIVE amounts of data to a computer so that the computer can “learn“ from that data and give you a result. This is also called Machine Learning, and this process is essentially just doing a lot of math. To do a lot of math, the computer needs a lot of energy and capacity. So, as OpenAI continues to train bigger and bigger models, the need for computing will remain (and will likely grow)

Why the Break In Partnership? Both companies, Microsoft and OpenAI, have said that they are still essentially best friends and will continue to be for the time being. And while I cannot know exactly why they decided to part ways, it is my understanding that the massive new models OpenAI is training do not show the same kind of big jumps in result quality. The difference from GPT-2 to GPT-3 & 4 was massive and visible. We don’t know just how exemplary or “different” the newer models will be. This slowing of growth in performance is not ideal for a computation provider like Microsoft, which now gets a smaller benefit for the computational capacity they are providing OpenAI with.

Why The New Partnership? Great question! Naturally, OpenAI still believes that there is so much more they can do with their newer GPTs and the products they are building. They needed someone to help them build their own AI Infrastructure (Data Centers) so that they can continue to train newer models to give better results. That is where CoreWeave comes in. In business, there is always a person in the market who is happy to fill the void (for the right price). In OpenAI’s case, the void was computational power, and the person filling the void became CoreWeave. For $12 billion over 5 years!

There is a lot more to this story that you can learn from. Use the link below to explore more. And email me if you think I can help with something :)

TARIFFS

The Month of Tariffs! What’s happening?

Tariffs! For some reason, everyone has been talking about tariffs for the past few weeks, and for good reason! While tariffs may feel like this random thing that countries use depending on their needs, it eventually does affect the general public. Whether that effect on everyday people is good or bad overall completely depends on the execution.

Why do countries use tariffs? To my understanding, there are two major times in a country’s lifecycle when it uses tariffs - to protect local businesses or show its dominance. When a country is in its early stages of growth, there is often no viable industrial setup to fulfill the countrymen’s needs and wants. This is when countries levy tariffs on products coming in from other countries to ensure that the local public can build industries and the circulation of currency stays inside the country, building wealth for the countrymen.

When a country starts to mature and is in its “youth“ years, tariffs are often lifted slightly, allowing local businesses to explore the international markets and bring in money from other countries, which would help enrich the local public again! This is how most industrialists in the US, India, and China have grown.

If all of this works, the company is often on a very good trajectory and becomes a “developed economy“ where the citizens have enough money to spend on exotic items. But, this is also the phase in the country’s lifecycle where productivity starts to decrease since the working class grows old and retires. But, since there is still a need for money to run the country, the governments often decide to start increasing tariffs again, hoping that their local market is so amazing that people from outside the country want to sell their products, and the people inside the country can buy those products at elevated costs.

Obviously, there is a lot more to the story of tariffs currently (like Inflation, Cost of Living, etc.) and its history. Use the link below to chat with Perplexity and learn more about it.

INFLATION

US’s Headline Inflation Slows To 2.8% YoY

Inflation Is Slowing Down! It was a good day when we got the inflation report for February 2025 because it showed that inflation was now down to 2.8% YoY in the US, which was below the expectations of 2.9% YoY. This shows that the Federal Reserve’s decision to keep interest rates high has seemingly worked. But there is still a fear that inflation might start going back up.

Why? Great Question! I have one word for you - Tariffs. It seems all anyone has been talking about is tariffs. However, while it is not certain, increased tariffs can increase inflation in the process. This happens because when tariffs are levied on countries, the product from the country continues to come in, but at a higher price. If there are no industries set up to “take care“ of the demands of the local public, people would have to buy the expensive products coming in from outside the country, and we know what happens when we start paying too much for the same product - inflation rises.

It will be interesting to see how tariffs affect inflation in the coming months. Let me know your thoughts.