SAP's data double-down; Glean stretches out
Today on Product Saturday: SAP strikes a big partnership with Databricks, Glean introduces its agent builder, and the quote of the week.
How DeepSeek's new AI model upended industry assumptions about the price of building leading-edge AI models, the U.K. will consider remedies to address cloud competition involving AWS and Microsoft, and the latest funding rounds in enterprise tech.
Welcome to Runtime! Today: How DeepSeek's new AI model upended industry assumptions about the price of building leading-edge AI models, the U.K. will consider remedies to address cloud competition involving AWS and Microsoft, and the latest funding rounds in enterprise tech.
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When software engineers ran into roadblocks over the last few decades, they often resorted to a simple and time-honored solution: throwing more computing resources at the problem. That's how the first two years of the generative AI frenzy unfolded, with frequent chip shortages and Jensen Huang's evolution into the Elvis of AI, but DeepSeek just showed that there's another way to make progress.
DeepSeek's release of its R1 "reasoning" model last week forced everyone spending billions on AI infrastructure — under the premise that deploying massive amounts of computing power was the only way to improve AI model performance — to take a deep breath. The R1 model is on par with OpenAI and Anthropic's leading models despite using underpowered, much cheaper GPUs thanks to some novel engineering techniques, showing that "AI’s economics are being rewritten faster than anyone predicted," as Tomasz Tunguz of Theory Ventures put it.
The R1 model was also released under the MIT license, which will allow other AI companies to replicate its approach and determine just how much the economics of AI actually did change. Hugging Face announced plans to do just that on Tuesday on a cluster of H100 chips, noting that it will face some challenges because DeepSeek didn't release any of the training data or assumptions behind its model.
Nvidia's stock rebounded by nearly 9% Tuesday as the market started to realize that the techniques used to develop R1 could actually boost demand for AI in the long run by making it more accessible and affordable. Until just a few weeks ago, if you wanted to build cutting-edge AI models you needed huge amounts of capital and a close relationship with Nvidia, and when a wider group of people can start to experiment with new technologies interesting things tend to happen.
After more than a year of deliberation, UK competition authorities have concluded that AWS and Microsoft exert too much power over cloud spending. Their "significant unilateral market power … harms competition in cloud services in the UK because it is harder for alternative cloud suppliers to enter and grow in these markets and customers face a limited choice of suppliers," the Competition and Markets Authority said in a statement, as reported by The Register.
The CMA board will now consider whether or not to implement remedies to address the situation, which could include forcing the Tenacious Two to interconnect their data centers or open up certain APIs. "Interventions to address some of these issues would allow UK businesses [to] get better deals from cloud providers, enabling them to contribute to economic growth," the CMA said, and a final decision is expected later this year.
Helion raised $425 million in Series F funding to build the world's first fusion energy plant, and cloud infrastructure providers desperate for new energy sources are closely watching its progress.
StackBlitz raised $105.5 million in new funding as it continues work on Bolt, an AI coding tool that also lets you deploy your apps from a browser interface.
Alice & Bob landed €100 million in Series B funding for its quantum-computing company, which was named after a key component in the original public-key cryptography paper.
Atomicwork scored $25 million in Series A funding to build a ServiceNow competitor in the IT service-management software market using AI agents.
Lanai launched with $10 million in seed funding for its AI management software, which is being built by enterprise software veterans Lexi Reese, Dr. Stephen Herrod, and Rajesh Raman.
Grepr launched with $9 million in seed funding to build an observability platform designed for engineers using, what else, AI.
SAP beat forecasts for revenue and profit and raised its guidance for the full year, citing good progress among customers shifting from on-premises software to its cloud services.
NinjaOne announced plans to acquire Dropsuite for $252 million, hoping to add Dropsuite's data-protection software to its endpoint management and security platform.
Thanks for reading — see you Thursday!