Alibaba’s AI Push Hits Profits, Meta’s Circular Fin…

Meta’s AI Spending Raises Circular Financing Concerns

Brody Ford reported on Meta Platforms Inc. () quietly becoming one of Microsoft’s () largest AI customers, spending hundreds of millions annually on Azure cloud services. This business relationship has revived concerns about circular financing, where tech giants are simultaneously customers and competitors. Ford pointed out that for AI to achieve its hyped ROI, it needs broad economic dissemination, yet usage and revenue remain concentrated within a small pool of large, digital-native AI companies. The report suggests that Meta’s substantial spending on Microsoft’s AI capabilities might be a precursor to Meta spinning up its own API business, potentially monetizing its AI advancements.

Defense Tech Startup Castelion Valued at $13 Billion

The program also spotlighted Castelion, a defense tech startup that secured $1 billion in its Series C funding round, achieving a $13 billion valuation. This round, comprising $800 million in equity and a $250 million revolving credit facility, will fuel the company’s plans to scale production of its “Black Beard” hypersonic missile system. Andrew Kreitz, Castelion’s co-founder and CFO, highlighted the competitive fundraising process and the significant investor interest. He emphasized that the company’s focus on manufacturing and production at scale, rather than just technological development, is key to its strategy. Castelion’s products include Black Beard, a longer-range strike system, and defensive interception systems, addressing a dire need for scaled, low-cost solutions.