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May 07, 2025
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Good morning! OpenAI plans to reduce the percentage of revenue it shares with Microsoft. The Department of Justice argues that Google should sell two of its advertising technology businesses. Periodic Labs, a startup founded by a former OpenAI executive, seeks funding.
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As OpenAI seeks to overhaul its corporate structure, it also expects to slash the revenue share Microsoft receives by at least half by decade’s end, The Information reported. Microsoft, whose servers power OpenAI products, hasn’t yet agreed to the changes, according to a person who spoke with a senior Microsoft executive involved in the negotiations. Under its current deal, OpenAI agreed to give Microsoft 20% of its revenue through 2030—a year it expects to make $174 billion. But in recent financial projections shared with investors, OpenAI projected sharing just 10%
with commercial partners, including Microsoft, by then. It’s unclear if OpenAI’s current deal with Microsoft applies to future products. Some OpenAI leaders want those to be exempt, said an OpenAI employee. This would keep the overall revenue share OpenAI gives to partners to around 20% by decade’s end, according to the report.
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The government wants Google to sell two of its advertising technology businesses as a remedy to a Virginia court’s April ruling that Google operates a monopoly in the buying and selling of advertising on independent websites. In a court filing late Monday night, the Department of Justice argued that Google should be forced to immediately sell its advertising exchange business, which helps run auctions that decide which ad appears when someone loads a webpage. The DOJ also argued that Google should sell its ad server, a technology that helps publishers manage the sales of ads on their websites, in a three-step process. Before selling it, the DOJ wants Google to make the ad server’s code available on an open source basis. Aside from divestitures, the DOJ recommended a variety of other behavioral remedies, including
forcing Google to share data signals gleaned from the advertising technology businesses. In a separate anti-trust case around Google’s search business, the government is also arguing Google needs to share search data. Google filed its own set of proposed remedies on May 5, arguing that a divestiture was not legally necessary nor technically feasible. Instead, Google suggested it would unlink the exclusive relationship between the server and the exchange, which the judge said was illegal tying. A judge will adjudicate on the remedies after a trial in September.
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Periodic Labs, a startup founded by Liam Fedus, a former vice president of post-training research at OpenAI, has told potential investors it wants to raise hundreds of millions of dollars at a valuation of at least $1 billion, according to two people who spoke to company leaders. That’s a steep valuation for a startup only founded two months ago. Likely emboldening the lofty fundraising target is that Fedus was one of the top contributors to ChatGPT. He started Periodic Labs with Ekin Dogus Cubuk, who previously headed the chemistry and material science team at Google’s Deepmind. Periodic Labs is starting by building a “ChatGPT for material science” that uses AI to discover and analyze novel compounds and manufacture them, according to materials reviewed by The Information. The startup is looking at magnetic and ceramic materials that could work as superconductors for
semiconductors or space technology, say by aiming to increase the temperature of materials to transmit energy more efficiently. The company plans to use the new capital on chips to train models for discovery, it told one of the people. It’s planning to start a San Francisco-area research lab, according to the same materials.
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Coatue Management is launching a new investment fund to back growing public and private technology companies including artificial intelligence and enterprise software. The twist? It’s courting individual investors to back the fund with a lower investment minimum than its other funds, according to the New York firm, which operates hedge funds and venture funds. The fund is starting with $1 billion in initial investment from Jeff Bezos’ family investment office Bezos Expeditions and Michael Dell’s family office, DFO Management, the firm said. Coatue usually requires a minimum investment of $5 million in its funds. For the new fund, which Coatue is calling CTEK, there is a minimum investment of $50,000, reported the Wall Street Journal. The fund will offer investors liquidity through conducting quarterly tender offers.
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Microsoft on Tuesday unveiled new PCs from its Surface line that it says can run its AI “Copilot” features without an internet connection. The models are up to 20% cheaper than the last iteration of the AI-specialized Surface devices that Microsoft released last year, in part because they rely on smaller chips to run the models. The new devices, called Copilot+ PCs, can run some AI features without an internet connection, including Windows’ “Recall” feature that takes periodic screenshots of a user’s screen so they can use an AI chatbot to search through their past activity. Microsoft also announced new AI features that run locally on the PCs on Tuesday, including AI agents that can carry out actions like changing the device’s settings or draft and send messages in Teams in response to a user’s written prompts. The newly announced Surface Laptop starts at $899, $100 less than the previous edition, while the new Surface Pro costs $799, or $200 less than last year’s. The price reductions come even as Microsoft has raised the prices of other hardware, including its Xbox consoles, in recent weeks amid the potential impact of President Donald Trump’s tariffs on manufacturing. Surface hardware sales make up a much smaller share of Microsoft’s revenue than Xbox sales, although Microsoft doesn’t break out exact Surface revenue.
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Shares in Advanced Micro Devices rose slightly in after-hours trading after the firm reported quarterly revenue at the high end of its earlier guidance for the quarter that ended in March. AMD’s revenue in the quarter was $7.4 billion, up 36% from the same period a year earlier. The company projected $7.4 billion in revenue for the quarter that ends in June, plus or minus $300 million, which would be up around 28% from the year prior. AMD generated $3.7 billion in revenue from its data center unit, which includes sales of its MI300 chip that competes with Nvidia’s artificial intelligence server chips. AMD is still a much smaller competitor to Nvidia, which generated $35.6 billion in data center revenue in the three months ended in January. AMD CEO Lisa Su told
analysts in the quarterly earnings call that one of the “largest frontier [AI] model developers” is using its chips for its “daily inference traffic.”
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DoorDash finalized a deal to buy British restaurant meal and grocery delivery firm Deliveroo for 2.9 billion pounds, or $3.8 billion at current exchange rates, deepening the delivery firm’s European presence. At the same time, DoorDash announced a $1.2 billion purchase of software firm SevenRooms, which makes software for the hospitality industry. Both acquisitions are in cash. The Deliveroo purchase expands DoorDash’s international presence, building on top of the purchase of the Finland-based Wolt in 2022. Deliveroo’s markets include Britain and Ireland, France, Italy and the United Arab Emirates. SevenRooms expands DoorDash’s existing software business, which serves restaurants, giving DoorDash both more software revenue and a way to sign up more restaurants. DoorDash meanwhile reported first quarter
earnings, showing 21% higher revenue of $3.03 billion. The company reported an operating profit of $155 million, compared with an operating loss a year earlier, and free cash flow of just under $500 million. DoorDash turns more of its revenue into free cas | | | |
