FT : Microsoft acquires twice as many Nvidia AI chips as tech rivals

Microsoft acquires twice as many Nvidia AI chips as tech rivals
OpenAI’s biggest backer buys nearly half a million GPUs this year in global race to build artificial intelligence systems

Microsoft bought twice as many of Nvidia’s flagship chips as any of its largest rivals in the US and China this year, as OpenAI’s biggest investor accelerated its investment in artificial intelligence infrastructure.

Analysts at Omdia, a technology consultancy, estimate that Microsoft bought 485,000 of Nvidia’s “Hopper” chips this year. That put Microsoft far ahead of Nvidia’s next biggest US customer Meta, which bought 224,000 Hopper chips, as well as its cloud computing rivals Amazon and Google.

With demand outstripping supply of Nvidia’s most advanced graphics processing units for much of the past two years, Microsoft’s chip hoard has given it an edge in the race to build the next generation of AI systems.

This year, Big Tech companies have spent tens of billions of dollars on data centres running Nvidia’s latest chips, which have become the hottest commodity in Silicon Valley since the debut of ChatGPT two years ago kick-started an unprecedented surge of investment in AI.

Microsoft’s Azure cloud infrastructure was used to train OpenAI’s latest o1 model, as they race against a resurgent Google, start-ups such as Anthropic and Elon Musk’s xAI, and rivals in China for dominance of the next generation of computing.

Omdia estimates ByteDance and Tencent each ordered about 230,000 of Nvidia’s chips this year, including the H20 model, a less powerful version of Hopper that was modified to meet US export controls for Chinese customers.

Amazon and Google, which along with Meta are stepping up deployment of their own custom AI chips as an alternative to Nvidia’s, bought 196,000 and 169,000 Hopper chips respectively, the analysts said.

Omdia analyses companies’ publicly disclosed capital spending, server shipments and supply chain intelligence to calculate its estimates.


The value of Nvidia, which is now starting to roll out Hopper’s successor Blackwell, has soared to more than $3tn this year as Big Tech companies rush to assemble increasingly large clusters of its GPUs.

However, the stock’s extraordinary surge has waned in recent months amid concerns about slower growth, competition from Big Tech companies’ own custom AI chips and potential disruption to its business in China from Donald Trump’s incoming administration in the US.

ByteDance and Tencent have emerged as two of Nvidia’s biggest customers this year, despite US government restrictions on the capabilities of American AI chips that can be sold in China.

Microsoft, which has invested $13bn in OpenAI, has been the most aggressive of the US Big Tech companies in building out data centre infrastructure, both to run its own AI services such as its Copilot assistant and to rent out to customers through its Azure division.

Microsoft’s Nvidia chip orders are more than triple the number of the same generation of Nvidia’s AI processors that it purchased in 2023, when Nvidia was racing to scale up production of Hopper following ChatGPT’s breakout success.

“Good data centre infrastructure, they’re very complex, capital intensive projects,” Alistair Speirs, Microsoft’s senior director of Azure Global Infrastructure, told the Financial Times. “They take multi-years of planning. And so forecasting where our growth will be with a little bit of buffer is important.”

Tech companies around the world will spend an estimated $229bn on servers in 2024, according to Omdia, led by Microsoft’s $31bn in capital expenditure and Amazon’s $26bn. The top 10 buyers of data centre infrastructure — which now include relative newcomers xAI and CoreWeave — make up 60 per cent of global investment in computing power.

Vlad Galabov, director of cloud and data centre research at Omdia, said some 43 per cent of spending on servers went to Nvidia in 2024.

“Nvidia GPUs claimed a tremendously high share of the server capex,” he said. “We’re close to the peak.”


While Nvidia still dominates the AI chip market, its Silicon Valley rival AMD has been making inroads. Meta bought 173,000 of AMD’s MI300 chips this year, while Microsoft bought 96,000, according to Omdia.

Big Tech companies have also stepped up usage of their own AI chips this year, as they try to reduce their reliance on Nvidia. Google, which has for a decade been developing its “tensor processing units”, or TPUs, and Meta, which debuted the first generation of its Meta Training and Inference Accelerator chip last year, each deployed about 1.5mn of their own chips.

Amazon, which is investing heavily in its Trainium and Inferentia chips for cloud computing customers, deployed about 1.3mn of those chips this year. Amazon said this month that it plans to build a new cluster using hundreds of thousands of its latest Trainium chips for Anthropic, an OpenAI rival in which Amazon has invested $8bn, to train the next generation of its AI models.

Microsoft, however, is far earlier in its effort to build an AI accelerator to rival Nvidia’s, with only about 200,000 of its Maia chips installed this year.

Speirs said that using Nvidia’s chips still required Microsoft to make significant investments in its own technology to offer a “unique” service to customers. 

“To build the AI infrastructure, in our experience, is not just about having the best chip, it’s also about having the right storage components, the right infrastructure, the right software layer, the right host management layer, error correction and all these other components to build that system,” he said.

FT : Ineos Energy chief warns ‘punitive’ UK taxes make North Sea uninvestable

Ineos Energy chief warns ‘punitive’ UK taxes make North Sea uninvestable
Industry veteran Brian Gilvary says government policies force oil and gas explorers to seek opportunities in other markets

Oil and gas explorers in the UK are operating with “hands tied behind” their backs, according to the chair of Ineos Energy, with “punitive” government tax policies forcing them to seek opportunities in other markets.

Ineos Energy, the four-year-old oil and gas arm of chemicals group Ineos, said it had bought $3bn of US assets rather than investing in the North Sea and would continue to look for deals abroad. 

“In our initial strategy we wanted to expand in the UK, particularly gas. And what has happened is that the tax regime makes that impossible,” said Brian Gilvary, Ineos Energy chair and a former chief financial officer of oil major BP. 

The industry veteran described the current taxes on North Sea oil and gas, brought in by the then Conservative government and increased by Labour in its most recent budget, as “the most unstable fiscal regime in the world”.

Gilvary said Ineos Energy shelved a “series of transactions” in the UK after the Energy Profits Levy was introduced in 2022 in response to the jump in oil and gas prices that followed Russia’s full invasion of Ukraine.  

The current government raised the levy from 35 per cent to 38 per cent in October, creating a headline tax rate for North Sea oil and gas companies of 78 per cent, and removed a 29 per cent investment allowance. 

“We’ve done three deals in the US, and those came in pretty quick succession off the back of the EPL,” said Gilvary. “We’ve looked at two potential transactions in the past 15 months in the UK and both of them were precluded going forward because of the EPL. The economics don’t stack up when you have the alternative to move that money to the Gulf of Mexico.” 

He continued: “If you speak to anyone in the industry, everyone is looking for a partner right now, but there’s nothing we looked at that we thought we could move forward on, simply because of the prohibitive tax.” 

US-based Apache last month announced plans to wind up its North Sea operations by 2029, blaming the UK tax regime. Shell and Equinor have merged several of their UK assets into a new company to be more tax-efficient. 

“Every oil and gas producer in the UK will be looking at opportunities outside the UK right now,” said Gilvary, whose company has negotiated a deal to buy a share of a Gulf of Mexico deepwater field operated by Shell from China’s Cnooc International for an undisclosed sum.

“The frustration for those players in the North Sea in the UK is we’ve sort of got our hands tied behind our backs because [we cannot get] new licences. So we cannot extend the life of what we have, even at these punitive tax rates. And so you end up in a run-off position.”

“Basically we’ll try to harvest the assets as best we can and focus elsewhere,” he said. 

Gilvary said the government did not “appear to wish to engage” on the North Sea’s fiscal regime, although he expected that the taxes would eventually be cut, but that companies may be unwilling when that time comes.

The market value of the UK’s top 25 independent oil and gas companies has fallen from £27.8bn in 2011, when oil prices averaged $110 a barrel, to £9.8bn at the end of last year, when oil prices averaged $80 a barrel, according to Deloitte, as the sector steadily lost its appeal to UK investors. 

Kosmos Energy, a New York-listed independent oil explorer, this week said it would not proceed with a proposed deal to buy Tullow, the West Africa-focused UK producer. Tullow, which was worth as much as £14.5bn in 2012, is currently worth £342mn, with a net debt of $1.7bn.  

The Information : Nvidia Says It Could Build a Cloud Business Rivaling AWS. Is T

Nvidia Says It Could Build a Cloud Business Rivaling AWS. Is That Possible?

The Takeaway
• Nvidia is already on pace to generate $2 billion annually from selling software
• It doesn’t have a single leader for the software business but is expanding the group
• Nvidia’s software and cloud business faces challenges including making businesses aware of products

In the past two years, Nvidia has quietly gone into competition with its biggest customers: cloud providers such as Amazon Web Services and Microsoft. Nvidia now rents out servers powered by its artificial intelligence chips to businesses directly, and also provides software to help them develop AI applications.

Nvidia says it is already among the biggest sellers of AI cloud services. And in a little-noticed disclosure, it told investors that in the long run it could generate $150 billion in revenue from software and cloud services—more than either Nvidia or AWS currently generates annually.

“If you actually step back and you look at how much is spent on data center infrastructure versus enterprise software, the lion’s share of ongoing expenditure in enterprise is on the software side,” said Justin Boitano, Nvidia’s vice president of enterprise AI. “I think we realize that we have a really important role to play there.”

The Nvidia cloud software business faces numerous challenges and pales in comparison with Nvidia’s chip division, which was recently on pace to generate $120 billion annually. But last month, Nvidia Chief Financial Officer Colette Kress said the firm’s software, service and support business would surpass $2 billion in annualized revenue by the end of 2024. (Company spokespeople declined to say whether those figures included its cloud server rental business.)

That means Nvidia already has one of the top AI cloud businesses. Around June, Microsoft hit $1 billion in annualized revenue from selling OpenAI technology to cloud customers. Google Cloud has set a goal to generate $1 billion in revenue from selling AI services in North America this year. And CoreWeave, which runs a cloud service that primarily rents out Nvidia-powered chips, has projected it would generate $2 billion in revenue this year.

Nvidia’s move into cloud software has privately irked the cloud providers. Not only is Nvidia competing with them, but its offerings could change the way businesses access the specialized hardware and software for developing AI apps, such as chatbots and agents that automate research, analysis and other tasks.

Nvidia CEO Jensen Huang hasn’t been afraid to publicly imply he could muscle into cloud providers’ territory by ramping up his company’s own cloud and AI software businesses, known as DGX Cloud and Nvidia AI Enterprise, respectively. He wants to make Nvidia a one-stop shop for businesses looking to develop and run AI applications, from customer service chatbots to tools that might help researchers discover new drugs.

“This is going to likely be a very significant business over time,” Huang said in a quarterly earnings conference call in February, adding that he envisioned “every enterprise in the world” would buy Nvidia’s software, not just its vaunted chips.

The move could start to pay off as Nvidia’s chip sales growth slows and investors become more concerned about chip competition.

Huang’s ambition in the cloud is also understandable: Amazon and other big Nvidia chip customers such as Microsoft and Google are simultaneously developing quasi competitors to Nvidia’s dominant AI chips. So while those cloud providers have been buying tens of billions of dollars of Nvidia chips to rent them out to companies developing AI, they’re also trying to lure those companies to use the alternative chips, which are less expensive than Nvidia’s.

In some cases, Nvidia’s would-be rivals are developing their AI chips with the help of chip designer Broadcom, whose shares have soared in recent days after CEO Hock Tan said the market for Nvidia alternatives was going to boom.

But there’s a twist: Nvidia operates DGX Cloud in the data centers of the rival cloud providers—and its expansion promises to bring those rivals extra business, at least for now. Nvidia has said it will increase its own purchases of cloud services from major providers such as AWS to more than $1 billion per year, in part to support DGX Cloud. Nvidia has considered setting up its own data centers and cutting out the cloud providers. It isn’t clear if Huang intends to move in that direction.

A Placeholder Business

Nvidia hasn’t yet created a big organization to expand its AI cloud and software business. For instance, there isn’t one single leader who oversees Nvidia AI Enterprise, according to a person with direct knowledge of the situation. Last year, Nvidia hired Alexis Black Bjorlin from Meta Platforms to run DGX Cloud, but a search on LinkedIn shows only around 200 employees are working on the cloud or enterprise software businesses. Nvidia employs around 30,000 people.

According to job listings, Nvidia is hiring 39 “solutions architects,” salespeople who will focus on specific industries, including the financial services, automotive, healthcare and retail sectors—a common position at cloud providers such as AWS. An Nvidia spokesperson declined to comment on the employee tally but said the company employs “more software engineers than hardware engineers.”

Nvidia has said early customers of its cloud software include enterprise software firms ServiceNow, SAP and Amdocs, all of which declined to comment on their deal terms and how much they are paying for the software. Nvidia has also said consulting firms Accenture and Deloitte are helping it sell the software, adding that Accenture launched a “new business group” to do so.

Started three years ago, Nvidia AI Enterprise provides customers with a hodgepodge of software for managing clusters of AI chips known as graphics processing units, preparing data for developing AI models and training the AI models themselves. Customers can also use models Nvidia has developed for automating tasks such as coding, generating text or imagery. OpenAI and others make similar models. Nvidia guarantees the security and reliability of its software.

Cloud providers also sell such products, but Nvidia argues that because it also designs the underlying hardware, its software for managing AI is more efficient.

Amdocs, for instance, says it has used the Nvidia software to help some of its telecommunications customers automate their call centers, and ServiceNow has used Nvidia software for an AI product that helps customers automatically write emails, create presentations or write computer code.

Intimate Knowledge

Anthony Goonetilleke, chief strategy officer for Amdocs, which sells software to telecom companies, said Nvidia could rival cloud providers because of its intimate knowledge of GPUs.

“I think Nvidia has a slight edge here because they’re so focused.…They know their next line of chips, they know how you need to optimize their GPUs,” he said.

Nvidia sells the enterprise software packages on a subscription basis and based on the number of GPUs customers need. One consultant for companies that use GPUs for AI and buy the Nvidia app development software package says the subscription is competitively priced, compared to what other providers of cloud-based GPUs and software for developing apps charge.

Nvidia is still miles behind its cloud competitors, of course. It has fewer direct relationships with businesses, and its cloud and software products aren’t well known in the industry. One of Nvidia’s biggest challenges is making businesses aware of its products, said S. Somasegar, a managing director at venture capital firm Madrona.

Nvidia may also need to play a waiting game because some enterprises are pinching pennies in adopting AI or are taking a slower approach to the technology.

For instance, employees at two large companies whom Nvidia recently pitched to buy its enterprise software said they weren’t interested because they don’t yet need a large number of GPUs or Nvidia’s software to implement AI in their businesses.

>>> US After Hours Summary: WOR +14.2% pops on Q2 earnings beat; HEI -6.2% falls

After Hours Summary: WOR +14.2% pops on Q2 earnings beat; HEI -6.2% falls following quarterly results

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: WOR +14.2%, ENS +4.9% (guidance)

Companies trading higher in after hours in reaction to news: CRVS +16.2% (to announce interim data), COMM +11.9% (closes refinancing), SDRL +2.9% (awarded contract in Brazil by Petrobras), APLD +1.3% (milestone in developing HPC data center), FULT +1% (increases dividend; new $125 repurchase plan), RIG +0.8% ($111 mln drillship contract), ALK +0.8% (new nonstop service between San Diego and Washington D.C.), CLSK +0.5% (closes $650 mln convertible senior notes offering), VST +0.4% (connects utility-scale solar facilities), NVDA +0.3% (unveils affordable Gen AI supercomputer), LPLA +0.1% (November activity), ST +0.1% (appoints new CEO)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: HEI -6.2%

Companies trading lower in after hours in reaction to news: NOTV -11.2% (stock offering), PESI -6.4% (stock offering), PPIH -6.3% (to delay 10-Q filing), LW -2.2% (slipping following POST acquisition news), AAOI -0.3% (patent infringement against Accelight Technologies), AMZN -0.1% (Teamsters in Southern CA authorize strike)

>>> US Close Dow -0.61% S&P -0.39% Nasdaq -0.32% Russell -1.18%

Closing Stock Market Summary
The stock market closed lower at the index level. The Russell 2000 underperformed, dropping 1.2%, while the S&P 500 (-0.4%), Nasdaq Composite (-0.3%), and Dow Jones Industrial Average (-0.6%). Many names participated in a broad retreat, leading the equal-weighted S&P 500 to decline 0.8%.

NVIDIA (NVDA 130.39, -1.61, -1.2%) underperformed again along with other chipmakers. Broadcom (AVGO 240.23, -9.77, -3.9%) logged a 4% decline and the PHLX Semiconductor Index (SOX) closed 1.6% lower. Gains in Apple (AAPL 253.48, +2.44, +1.0%), Microsoft (MSFT 454.46, +2.87, +0.6%), and Tesla (TSLA 479.86, +16.84, +3.6%), which constitute 16% of the S&P 500, provided some offsetting support to the broader market.

UnitedHealth (UNH 485.52, -12.98, -2.6%) was another influential laggard, along with managed care stocks with pharmacy benefit manager divisions like CVS (CVS 44.04, -2.56, -5.5%). This selling followed comments from President-elect Trump yesterday that he wants to "knock out the drug industry middle man" contributing to higher drug prices.

The 10-yr note yield, which was at 4.44% in front of this morning's data, settled two basis points lower than yesterday at 4.38%. The 2-yr yield, which was at 4.28% before 8:30 ET, settled unchanged from yesterday at 4.24%.

This price action followed the November retail sales report, which showed a soft 0.2% increase in sales, excluding autos. That line item was viewed as a sign of softening in consumer spending activity since the report is not adjusted for price changes, meaning there wasn't any real pickup in volume/demand driving the increase.

Also, the $13 billion 20-yr bond reopening was met with relatively weak demand.
  • Nasdaq Composite: +34.0% YTD
  • S&P 500: +26.9% YTD
  • S&P Midcap 400: +16.4% YTD
  • Russell 2000: +15.2% YTD
  • Dow Jones Industrial Average: +15.3% YTD

Reviewing today's economic data:
  • November Retail Sales 0.7% (consensus 0.5%); Prior was revised to 0.5% from 0.4%, November Retail Sales ex-auto 0.2% consensus 0.4%); Prior was revised to 0.2% from 0.1%
    • The key takeaway from the report is in the ex-auto number, which was up modestly and a reflection of some softening spending activity given that it is not adjusted for price changes. In other words, the overall sales increase, excluding autos, appears to be more price driven than volume driven.
  • November Industrial Production -0.1% (consensus 0.3%); Prior was revised to -0.4% from -0.3%, November Capacity Utilization 76.8% consensus 77.3%); Prior was revised to 77.0% from 77.1%
    • The key takeaway from the report is that industrial production didn't show any strong rebound from the prior two months that were adversely impacted by the hurricanes. There was some modest strength in manufacturing output, but total industrial production is still lagging.
  • October Business Inventories 0.1% (Briefing.com consensus 0.2%); Prior was revised to 0.0% from 0.1%
  • December NAHB Housing Market Index 46 (consensus 47); Prior 46
Looking ahead, market participants receive the following data tomorrow:
  • 07:00 ET: MBA Mortgage Applications Index (prior 5.4%)
  • 08:30 ET: November Housing Starts (consensus 1347K; prior 1311K) and Building Permits ( consensus 1430K; prior 1416K)
  • 08:30 ET: Q3 Current Account Balance (consensus -$283.0B; prior -$266.8B)
  • 10:30 ET: EIA Crude Oil Inventories (prior -1.43M)

>>> Nanobiotix announces a virtual event titled "Accelerating the Future of Nano

Nanobiotix announces a virtual event titled "Accelerating the Future of Nanotherapeutics," scheduled to take place at 9:00 AM ET on Thursday, December 19, 2024 (3.54 +0.20)
  • Co announces a virtual event titled "Accelerating the Future of Nanotherapeutics," scheduled to take place at 9:00 AM ET / 3:00 PM CET on Thursday, December 19, 2024. Nanobiotix remains focused on advancing its lead program which is proceeding as planned. To enable further growth, Nanobiotix will leverage new nanotherapeutic technologies with the potential to improve treatment outcomes for millions of patients.
  • The event will feature a presentation by Laurent Lévy, PhD, Chief Executive Officer of Nanobiotix, and Matthieu Germain, PhD, Head of Curadigm at Nanobiotix. Together, they will outline the future potential of the Curadigm Nanoprimer Platform, an innovative nanotherapeutic technology designed to transform the development of intravenously-administered therapeutics.

FT : LNG export boost would increase prices and hurt climate, US says

LNG export boost would increase prices and hurt climate, US says
Energy secretary says household gas bills could rise by $100 a year if pause on permits is lifted


The future of America’s natural gas export boom was thrown into doubt after a federal government report found that unbridled expansion would drive up costs for Americans and undermine climate goals.

A long-awaited Department of Energy study released on Wednesday found that the rapid growth of the country’s liquefied natural gas sector might not be in the national interest, setting the stage for sweeping legal challenges that would hinder expansion just as Donald Trump takes office with a pledge to boost exports in pursuit of US energy dominance.

“The main takeaway is that a business as usual approach is neither sustainable nor advisable,” energy secretary Jennifer Granholm said. “Increasing exports unconstrained would surely generate more wealth for the LNG industry. But American consumers and communities, and our climate, would pay the price.”

The report forecast wholesale domestic natural gas prices would surge by as much as 30 per cent and the average American household would pay more than $100 extra annually on their gas bills, said Granholm.

The US LNG industry has grown exponentially since its establishment less than a decade ago, turbocharged in recent years by European demand for American molecules following Russia’s full-scale invasion of Ukraine. 

Last year, the US overtook Australia to become the world’s biggest LNG exporter, shipping 11.9bn cubic feet a day — enough to satisfy the combined gas needs of Germany and France. The industry has ambitious plans to double exports by the end of the decade.

But President Joe Biden halted licensing new export terminals in January of this year as his administration carried out a review of the costs and benefits of the boom, prompting a backlash from the oil and gas industry. 

The study is likely to be disregarded by Trump, who has vowed to restart licensing on the first day of his second administration. The oil and gas industry has long argued that LNG exports would benefit the climate by weaning the world off coal, the dirtiest fossil fuel.

The American Petroleum Institute, an oil and gas industry lobby group, disputed many of the report’s findings, saying Americans enjoyed among the lowest natural gas prices in the world and the “politically motivated pause” on LNG permits should now be lifted.

But the energy department’s report found direct emissions from the US LNG industry would reach 1.5 gigatonnes annually by 2050 — about a quarter of total current US emissions, according to Granholm. Additional US LNG exports would also displace more renewables than coal globally, she said.

It also said expanding American LNG exports could undermine, rather than boost, domestic energy security, according to Granholm.  

Granholm said expanding LNG supply in the years ahead would no longer support close allies such as Europe and Japan, as it has until now, but rather could aid China, a rival.

“Looking ahead, China’s LNG exports are expected to nearly double between now and 2030, and China’s LNG imports are expected to be the highest of any country through 2050,” she said. 

FT : Databricks raises $10bn in the biggest US venture deal this year

Databricks raises $10bn in the biggest US venture deal this year
Investors in the AI and data analytics group include Thrive Capital, Andreessen Horowitz and Insight Partners

Databricks has raised $10bn in the biggest venture capital deal of the year, giving the US data analytics and artificial intelligence company a valuation of $62bn.

The company raised the cash from some of the largest and most active technology investors in the US, including Thrive Capital, Andreessen Horowitz, Insight Partners and Iconiq Growth.

The funding round for the 11-year-old company is exceptionally large by the standards of venture capitalists, who historically have funded early- stage start-ups at much lower valuations. The deal is a reflection of how VCs are shifting tack as private markets balloon.

The new capital will help Databricks compete with AI start-ups such as OpenAI and Anthropic for talent, said Ali Ghodsi, co-founder and chief executive of Databricks.

“The talent war for AI is like no other time before. Already it was pretty insane levels of compensation for software engineers in Silicon Valley, and it’s gone up from there,” he said.

Thrive alone invested “at least” $1bn into the round, according to Vince Hankes, a partner at the firm, which recently raised a $5bn fund. Thrive, founded by Josh Kushner, has made a series of massive bets in companies including Stripe and OpenAI. Databricks “are in this to build the next $1tn infrastructure company”, said Hankes. 

The “vast majority” of the $10bn will go towards helping employees at the start-up cash out lucrative stock options and to pay the taxes they incur when those options vest, according to Hankes. He compared the deal to Stripe’s $6.5bn raise last year, which allowed the payments company to meet billions of dollars of tax liabilities associated with employees’ stock units.

Many start-ups that have remained private for a decade or more are facing a similar issue: many stock units are taxed as income when they vest, while others cannot be realised until a company has a liquidity event, leaving employees with either large tax bills or the bulk of their wealth effectively tied up.

Finding ways to “release the pressure” for employees would help start-ups such as Databricks compete for talent with public companies such as Alphabet, where employees can sell their shares at any time, said Hankes.

Providing early employees a way to sell their stock has been a motivating factor behind many of the largest deals for venture-backed companies over the past year, including at AI company OpenAI and Elon Musk’s SpaceX.

The remainder of Databricks’ new capital will be invested into “new AI products, acquisitions, and significant expansion of its international go-to-market operations”, the company said on Tuesday.

Other investors in the round include Singaporean sovereign wealth fund GIC; early Twitter and Facebook investor Yuri Milner’s DST Global; and MGX, a recently launched UAE fund focused on AI and chaired by the country’s powerful national security adviser, Sheikh Tahnoon bin Zayed al-Nahyan.

Databricks has grown rapidly in the past year and was expecting annualised revenue to hit $3bn by the end of next month, the company said on Tuesday. Databricks also expects to record positive free cash flow for the first time at the end of January.

That has pushed Databricks’ valuation up from $43bn in September last year.

The new capital and growing revenue meant Databricks is not in a rush to go public, said Ghodsi. “The absolute earliest we would go public is next year, but we have flexibility now.”