What We Learned This Week

Landmark Deal in the AI Space: Nvidia is investing $100 billion into OpenAI, the creator of ChatGPT. The deal, starting with $10 billion upfront and followed by successive tranches, is aimed at funding OpenAI’s next wave of data centers - an effort that will require over 10 gigawatts of power, enough to theoretically power 10 million homes. That kind of demand translates into 4-5 million GPUs, roughly double Nvidia’s total shipments last year. The sheer scale underscores the arms race for computing power as the industry pushes toward ever larger AI models and the long-term pursuit of artificial general intelligence.

The move also sets up fascinating dynamics across big tech. Microsoft remains a major OpenAI backer, Oracle is contracted for storage, and Nvidia has recently invested in Intel - illustrating how the sector’s leading players are increasingly both partners and competitors. Building even a 1-gigawatt data center can run $50–60 billion; at 10 gigawatts, OpenAI will likely need massive additional financing soon. Meanwhile, ChatGPT already counts more than 700 million weekly active users, showing that the scale of investment is matched only by the scale of demand.

Struggle for Survival: Spirit Airlines is back in bankruptcy protection (its second filing in less than a year after just emerging in March) and is now warning of layoffs and furloughs for pilots and flight attendants. The discount carrier has been battered by a series of setbacks: its blocked merger with JetBlue, jet engine recalls that disrupted operations, and a post-COVID travel landscape where larger legacy airlines aggressively expanded into low-fare offerings. Once the industry’s model for ultra-low-cost efficiency, Spirit’s stripped-down service and heavy reliance on ancillary fees worked when it was the only game in town, but scale has since shifted to the bigger players who can undercut prices while offering more route options.

The failed JetBlue merger was critical because Spirit has effectively lost its differentiator and now faces a scale disadvantage in an already unforgiving, low-margin business. Its first restructuring focused narrowly on debt; this round will force tougher cuts - routes, fleet size, and staff reductions. Even so, the moves may only buy time. The U.S. airline industry is an oligopoly dominated by a handful of giants, and even they struggle with profitability. For smaller carriers, survival increasingly looks less like a turnaround story and more like a fight against inevitability.