The story begins with Elon Musk in the early 2010s, when he recognized AI's potential to become the most powerful technology ever. Concerned about profit-driven control harming humanity, Musk, an early DeepMind investor, severed ties after Google acquired it in 2014. He then co-founded OpenAI to ensure AI development prioritized human benefit over profits. In 2015, Musk and Sam Altman emphasized OpenAI's commitment to avoid shareholder profit motives. Today, OpenAI is valued around $500 to $750 billion, its for-profit arm operating as a public benefit corporation, while Musk leads his own for-profit AI company, xAI. Contrary to initial nonprofit ambitions, advanced AI now lies largely in the hands of intertwined, profit-oriented giants, backed partly by foreign investors and the U. S. government, which prioritizes competitive dominance over safety. This complex, intertwined network of partnerships, mergers, investments, and government initiatives is dubbed “the Blob. ” The Blob is an opaque, convoluted entity. Mapping its connections requires AI itself; the author enlisted GPT-5 to unravel the intricate ties among cloud providers, investors, and governments. GPT-5 described it as a vast, circular money-and-compute machine, exemplified by deals like the Stargate initiative, linking OpenAI, Oracle, Nvidia, Softbank, Abu Dhabi investors, and U. S. government support. A recent deal involving Nvidia, Microsoft, and Anthropic illustrates the Blob’s workings. Microsoft announced a trio of arrangements: Anthropic will run its Claude AI model on Microsoft’s Azure cloud; Anthropic will adopt Nvidia’s hardware architecture; and Nvidia and Microsoft will invest in Anthropic. This circular arrangement channels billions of dollars: Microsoft invested at least $5 billion in Anthropic, which pledged $30 billion in compute services from Microsoft; Nvidia invests in Anthropic, which commits to Nvidia chips, strengthening Nvidia’s market position. Anthropic’s valuation soared from $183 billion to $350 billion in two months.

These muscled partnerships manifest a tangled web where companies become each other’s customers and investors, as Microsoft CEO Satya Nadella put it: “We are increasingly going to be customers of each other. ” Anthropic, lacking its own cloud or diversified revenue, now has deals with Microsoft, Amazon, and Google. Nvidia’s CEO Jensen Huang praised the deal as a “dream come true, ” expecting the partnership to globalize AI access across industries. Meanwhile, regulators and governments cheer these collaborations rather than scrutinize their impact on public welfare. Nvidia, for instance, now sells chips to China, with some profits returning to the U. S. government. Saudi investors support AI initiatives in the U. S. but aim to create their own competing AI “Blob. ” The Blob’s fate ties all players together—if the AI financial bubble bursts, everyone suffers. Google’s CEO Sundar Pichai acknowledged no company, including Google, is immune. However, these companies are somewhat trapped by the immense costs of scaling AI infrastructure, requiring partnerships and cloud dependencies. One executive noted that none anticipated how demanding compute power would become, turning AI firms into “infrastructure and construction companies, ” necessitating polyamorous relationships with cloud providers. Despite its interconnectedness, the Blob isn’t a classic cartel; there’s no evident collusion or price-fixing, and competition among large language model creators remains intense. Google recently launched an improved Gemini model aiming to surpass rivals like OpenAI’s ChatGPT or Anthropic’s Claude. Nvidia seeks to avoid commoditization by securing customers through these alliances. The spectacle culminated at White House events honoring Saudi Crown Prince Mohammed bin Salman, a significant AI funder nicknamed the industry’s “Daddy Warbucks. ” AI leaders attend such shows to represent their companies and their membership in the Blob. This analysis stems from Steven Levy’s Backchannel newsletter, examining the vast, interlinked, and money-driven ecosystem now dominating AI development.