Alex Karp, Open Source AI and a Neocloud Heyday
Welcome, Weekenders! In this newsletter:
• The Big Read: Pickleball is the past—the tech elite is obsessed with padel.
• Plus, an Americana-themed batch of Recommendations—our weekly pop culture picks: “The Americans,” “East of Eden,” “High Desert Daydream,” “Lonesome Dove,” USA vs. Belgium, and “The Twilight Zone.”
The year’s midpoint is an apt moment for some studied reflection, and I’ve been thinking about how much has changed in the last six months. In January, the Reflecting Pool was blue. Lately, it’s been the same color as Frog. In January, the Strait of Hormuz was a distant body of water on the other side of the world. Now it seems as familiar as the San Francisco Bay. And in January, if someone had mentioned the proper noun Clavicular to me, I might’ve assumed they were talking about some little-known dinosaur. Sadly, I’m better informed these days.
Within tech, we’ve welcomed the first trillionaire, gotten a glimpse of what might actually be usable AI made by Apple (well, partially made by Apple) and seen an absolute, unrepentant enthusiasm for AI maximalism shift in tone. We’re not quite approaching anything like AI minimalism, but I think a good amount of the energy in tech during the second half of the year will go toward companies selling products that can lower the costs for AI. Likewise, the real stars of AI in the coming months may not be the cutting-edge researchers—or the product whizzes—but rather the more sober-minded set who find ways to cut down on the costs associated with the technology. (I bet the Tesla executive behind this policy gets a pay raise.)
I could come up with any number of signal points to support those thoughts from throughout the last few months, but there were quite a few just from this week. For example, our Stephanie Palazzolo had a scoop about a group of OpenAI engineers who’ve devised a method for wringing more efficiency from Nvidia GPUs and significantly lowering the number of chips the startup needed to power a group of ChatGPT users who haven’t signed up for a free or paid account. That’s a small number of people, so the immediate cost savings haven’t been enormous, but it raises the prospect that OpenAI could pull off similar maneuvers to improve its profitability as it trundles toward an IPO.
On CNBC, Palantir CEO Alex Karp caused a stir by discussing what he says is growing unhappiness among U.S. businesses about the costs to access models from the biggest AI companies, like OpenAI and Anthropic. And he asserted that those customers are getting “no value” from the technology. If the frustration is as fraught as Karp says, he won’t be the last person to talk openly about the situation, and I can picture his televised appearance inspiring some related comments and grumbling in the upcoming round of earnings reports, which begin later this month.
Karp’s comments amount to a rallying cry for open-source AI. But the hotbed of open-source and open-weight AI is China, not America; those models closely rival the capabilities of ones made by OpenAI, Anthropic and others and cost far less. The biggest Chinese player is, of course, DeepSeek, and another major contender is Zhipu, an outfit that recently released an open-weight model with capabilities similar to those of OpenAI’s GPT 5.5 and Anthropic’s Claude Opus 4.8. According to a new report from our team in Asia, DeepSeek has thrown itself into overdrive, hoping to further narrow the gap between itself and its U.S. rivals: The startup wants to at least double its staff and has been furiously trying to adapt and juice up Huawei chips, since it cannot readily access the better ones made by Nvidia.
Amid this focus on lowering costs, we’re entering halcyon days for neoclouds, startups that offer cloud computing services and compete with the major hyperscalers. I expect we’ll see a growing interest among venture capitalists everywhere to fund neoclouds, which could pull dollars away from other previously hot areas of AI, like consumer AI apps. In the last month, three neoclouds—Together AI, TensorWave and Upscale AI—all announced major funding, totaling more than $1.3 billion.
A week ago, Together AI CEO Vipul Ved Prakash told us his startup has needed to revise its revenue forecast three times in nearly as many months. We previously reported that in March, Together AI was generating $1 billion in annualized revenue. (Relatedly, there is an enormous opportunity for someone to come up with a product that could actually rival SemiAnalysis’ InferenceX and ClusterMax databases, which offer insight on the performance—and thus the costs—of GPUs and cloud computing, respectively. For now, SemiAnalysis enjoys an enviable position with scant competition. No wonder CEO Dylan Patel thinks his revenue will more than quadruple this year to $100 million.)
Not to be left out, SoftBank on Thursday said it too was joining the neocloud boom and reportedly hopes the unit will add as much as $25 billion in profit. (One SoftBank executive described the neocloud as “a second founding for this company.”) Here’s something as true in July 2026 as it will be in July 2027: When SoftBank jumps in, you know things are getting frothy.—Abram Brown ([email protected])
Weekend’s Latest Stories
Pickleball Is the Past. The Tech Elite Is Obsessed With Padel
The likes of Uber’s Dara Khosrowshahi and Coatue’s Philippe Laffont have embraced the racket sport. The pro teams are trophy assets. And court access can cost nearly $50,000.
Watching: “The Americans”
I often talk up “The Americans,” the FX espionage thriller headlined by Matthew Rhys and Keri Russell, and discover that a surprising number of people have never seen it. I think it’s because it initially aired during the crowded peak years of prestige TV—from 2013 to 2018. And if someone missed it then, they likely haven’t thought much about it lately: “The Americans” has been locked up on Hulu for years, which means it never had the viral second life on a bigger streamer that “Breaking Bad” found on Netflix and “Mad Men” recently enjoyed on HBO Max.
What a shame! The series is twistily plotted and immaculately cast, with Rhys and Russell as Philip and Elizabeth Jennings, married Russian spies posing as ordinary Americans in the Washington suburbs. Reagan-era America beguiles Philip, who is a real waffler as far as covert agents go, while Elizabeth, a far more committed operative, considers it a grave threat. They have no direct contact with their homeland, instead receiving orders from a pair of grizzled Russian handlers also posing as Americans (Margo Martindale and Frank Langella, who steal nearly every scene they enter). Their lives are made more complicated when a new family arrives in their neighborhood, a clan led by father Stan (Noah Emmerich). He’s an FBI agent, who works within the division tasked with combating the Soviets.
Yes, what a narrative contrivance: Russian spies residing next to a Russian spy catcher. But before you dismiss “The Americans” as utter borscht, consider how that plotline is really no different from the one in “Breaking Bad”—you know, the show about Walter White, a drug kingpin, and his brother-in-law Hank, a DEA agent. And while I’m comparing the two shows, here’s another thought: In a battle of wits between Walt and the Jennings, I’d bet dollars to rubles on the Ruskies.—Abram Brown
Reading: “East of Eden” by John Steinbeck
In 1952, Time magazine described “East of Eden,” John Steinbeck’s recently released 250,000-word tome set in Northern California, as “ill defined and blunderous.” In the New Yorker, Anthony West, the publication’s longtime literary critic, likened it to the simpleminded melodramas of the previous century when “the villains could always be recognized because they waxed their mustaches and in which the conflict between good and evil operated like a well-run series of professional tennis matches.” West especially disliked how Steinbeck used unwedded sex and family strife for his major plot devices. Perhaps he was, as we might say now, telling on himself a bit: West was the illegitimate son of novelist H.G. Wells, and he was then laboring to pen a novel loosely based on his own fractured, miserable family. (When he published it a few years later, it perished, little read.)
Well, I’ll express a sentiment here that will resound with many of you: As happens, those East Coast elitist critics were dead wrong. “East of Eden” is a baroque magnum opus, a bestseller in its day and a bestseller again in the 2000s when Oprah resurrected interest in it by making it a book club pick. It stretches from the Civil War past World War I, concerning itself with a pair of farming families, the Hamiltons and the Trasks—particularly the Trasks: Adam; his beautiful, mysterious wife, Cathy; and their sons, Caleb and Aron. It contains biblical overtones as obvious as frogs falling from the sky, with a Cain-and-Abel metaphor powering much of its story, and it devotes more attention to illicit sex and sex workers than the Bible paid to Sodom and Gomorrah, with Cathy, a murderess and former prostitute, at the center of its ensemble.
Hollywood has tried several times to adapt “East of Eden” and found its efforts fruitless. A 1955 film version starring James Dean has been reduced in memory to tumbleweeds. Ron Howard considered doing a remake in the 2000s, and so did Jennifer Lawrence a decade later. This fall, Netflix will debut its attempt, with Florence Pugh as Cathy. If it flops, too, I have a suggestion for the streamer about its next project: Perhaps it is finally time to give the great light of day to the story of a very famous novelist father and his very unhappy literary critic son.—A.B.
Listening: “High Desert Daydream”
Across the bay from San Francisco, if you drive north on Highway 80 long enough, you’ll see the East Bay’s bungalows and urban corridors turn into a series of golden hills. Take a wrong turn, and you might end up on a ranch under an open sky. Stay on the road, and you’ll end up in Crockett, a historic sugar factory town on the Carquinez Strait, where a small country music scene has been percolating the last few years.
Noelle Fiore and her band The Deserters are among the luminaries here. Their 2024 release “High Desert Daydream” is a dreamy road trip of a record with just the right balance of heartache and high notes, harkening back to country’s golden years. The band is layered and locked in—you can really hear it—and Fiore’s voice has range and a timeless sense that never veers into pantomime. (The album does especially well on vinyl.) And yes, they put on a killer live show, too.—Eli Rosenberg
Reading: “Lonesome Dove” by Larry McMurtry
When we first meet Woodrow Call and Augustus McCrae, a pair of retired Texas rangers and the principal protagonists of “Lonesome Dove,” their adventuring days seem solidly behind them. Their lives have grown mundane as operators of the Hat Creek Cattle Co., which mostly involves knocking around a small ranch, drinking whiskey and occasionally going over to the Dry Bean Saloon to gamble.
But adventure shows up on their doorstep in the fictional Texas town of Lonesome Dove in the form of Jake Spoon, another former Ranger, and it doesn’t take much for him to talk Gus and Call into setting off on a cattle drive for Montana. Their 2,500-mile trek turns into a 960-page epic, and it’s an absolute page-turner, one that won the Pulitzer Prize when it came out in 1986.
“Lonesome Dove” rejects the usual conventions of a Western and the glamorization of cowboy life. The Hat Creek crew’s journey is a painstaking one, involving a lot of brutality and heartbreak, with storms, kidnappings, stampedes and killings. Throughout it, you grow to appreciate the depth of McMurtry’s characters: Gus is a drunkard, but he’s also a philosopher on horseback full of wisdom and bravery. Call is a steady-headed workhorse, but he’s entirely walled off from his emotions. Jake has charm and good looks, and he’s a coward. There is Lorena, too, a “sporting woman” from the Dry Bean Saloon who follows along with them, hoping for nothing more than a chance to get someplace more temperate than Lonesome Dove, Texas. She’s as tough as any cowboy.
After McMurtry’s novel won the Pulitzer and became a bestseller, “Lonesome Dove” was turned into an Emmy-winning miniseries co-starring Tommy Lee Jones, and McMurtry went on to write three more books involving characters he introduced in “Lonesome Dove.” I’ve never been able to bring myself to read any of them. “Lonesome Dove” is perfect, and I’ve never wanted to risk anything that might ruin my feelings for it.—Jemima McEvoy
Watching: USA vs. Belgium
This year’s World Cup has made me—the ultimate bandwagon soccer fan—almost unrecognizable to myself. After U.S. striker Folarin Balogun received a red card on Wednesday in a match with Bosnia and Herzegovina, I very quickly slipped into the conspiratorial online discourse about the referee, Raphael Claus, who issued it to him. Monday’s matchup (5 p.m. Pacific) between the U.S. and Belgium in Seattle will give many of us another opportunity to lose our collective minds. (Fox will broadcast the game; a free trial of YouTube TV will get you through the rest of the tournament.) There will, of course, be the excitement that happens on the pitch. But as a Seattle resident, I will also happily partake in the combination of national and local pride that comes from showing the world that Americans, too, can provide a top-notch atmosphere for an international soccer event. Here’s to a happy Sixth of July!—Nick Wingfield
Watching: “The Twilight Zone”
When Rod Serling, creator, writer and host of “The Twilight Zone,” described his show’s netherworld setting as the mysterious fifth dimension, he was, of course, speaking metaphorically. His stories took place in an eerie reflection of an unsettled America, and six decades after the anthology series concluded its five-season, 156-episode run, the anxieties, obsessions and foibles that Serling saw beneath our country’s surface are very much the same ones that underpin our lives today. Take “The Monsters Are Due on Maple Street,” which underscored America’s unease with outsiders—or I could say immigrants. (“Will the Real Martian Please Stand Up?” and “The Invaders” did the same.) “The Masks” looks at the ugliness of wealth and status and will make you see the value in generation-skipping trusts. “Time Enough at Last” is a cry to log off from work before it’s too late, and the underlying warning of “Beauty Is in the Eye of the Beholder” resonates just as powerfully in the looksmaxxing era as it did in the time of careful lipstick and beehive hairdos. Certainly, “The Twilight Zone” has seeped deep into broader pop culture to have long ago reached the point of much-parodied original, but Serling’s ability to conjure fabulist timelessness has lost none of its initial potency.
The show is available in its entirety on Paramount+, and the Syfy Channel does an annual multiday marathon around July Fourth: The most classic episodes, like the ones I mentioned above, air in the evenings, but I particularly enjoy the lesser-seen ones Syfy puts on during the day. These are such installments as “The Howling Man,” which dwells on the unending inevitability of armed conflict; “The Hunt,” a heartwarmer for dog lovers; and “A World of His Own,” a tidy little narrative about a jovial writer who’d totally run amok in a world of AI slop.—A.B.
Watching: “Toy Story 5”
Pixar’s “Toy Story” franchise remains a commercial juggernaut, having accumulated more than $1.6 billion in ticket sales alone since 1995. Except for the most recent movie, “Toy Story 5,” I’ve seen each of the films with my kids—who, yes, aren’t really kids anymore—so I get why it has proven to be one of the more durable properties in Hollywood. Evoking warm memories of a specific kind of suburban American childhood can be a lucrative endeavor. The first “Toy Story” (still my favorite) was essentially an animated rivals-to-buddies movie, and the rest have mainly stuck to the same formula. The cowboy, Sheriff Woody (voiced by Tom Hanks), always ready to ride to the rescue, and the astronaut, Buzz Lightyear (Tim Allen), unafraid of exploring uncharted terrain, represent two classic American male archetypes and heroes. Their ability to put aside their differences and work together toward the common good is one of our essential national myths, a story we like to tell ourselves as much as our children.
In “Toy Story 5,” Buzz, with his shiny plastic shell, has more or less withstood the ravages of time. Woody is a little worse for the wear, sporting a paunch and a bald spot. The other adults in the theater laughed when Woody showed up, perhaps in recognition of their own aging physiques.
Every good film franchise understands the importance of introducing compelling new villains, and “Toy Story 5” suggests, at least at first, that our new common enemy is tech. There is a montage of glassy-eyed children indoors zoned out on screens, and they cyberbully Bonnie (child actress Scarlett Spears), a little girl who still wants to play with toys. Or at least she does until her parents give in and buy Bonnie a frog-shaped smart tablet named Lilypad (Greta Lee). Bonnie soon has eyes only for Lily. With Woody and Buzz in tow, Bonnie’s once-favorite toy, Jessie the Cowgirl (Joan Cusack), leads the charge to help Bonnie make an IRL friend who loves toys too. Lily is devious and uses her superior tech intelligence to outmaneuver the old toys. Of course, Jessie, Woody and Buzz eventually prevail—with the help of old pals like Slinky Dog (Blake Clark) and Rex (Wallace Shawn), a neurotic dinosaur toy—and a happy ending ensues.
As much as I liked the movie, a key message left me skeptical. At one point, Lily repents over the harm she has caused Bonnie and puts herself in a donation box to be given away. Lily’s absence doesn’t last long, though. For one thing, it turns out that cowgirl Jessie cannot connect Bonnie with a promising new friend without embracing tech. When Lily eventually returns, Woody silences the other toys’ criticism of Lily’s actions by telling them, “She’s one of us, guys—deal with it.” The idea that there’s no further debate to be had over how tech is changing childhood strikes me as one of the biggest American myths of them all.—Amy Dockser Marcus