Hello world, it’s Tuesday, October 20th.
Anthropic posted $16.8 billion in Q3 revenue, up 45% from the prior quarter, and turned profitable for the first time, which has OpenAI speeding up its own fundraising ahead of a possible Anthropic IPO. Elsewhere, Tenstorrent closed a $1.5 billion Series E at a $6.2 billion valuation, Japan is lining up another 400 billion yen for Rapidus, and Nvidia-backed Nscale is in talks with Anthropic for a $45 billion compute contract after losing Microsoft as its anchor tenant.
Let’s get into it. — Austin & Vik
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Anthropic Posts Record Quarter, Profitable; OpenAI Scrambles to Fundraise
Anthropic reported $16.8 billion in third-quarter revenue, a 45% jump from the prior quarter, and turned profitable for the first time, according to Reuters and Bloomberg citing an investor who attended the company’s private Investor Day on October 14. The milestone has rattled OpenAI enough that it is moving to accelerate its own fundraising ahead of a potential Anthropic IPO, per Reuters sources. Anthropic’s valuation now sits around $965 billion, and former Google CEO Eric Schmidt holds a 1% stake that Bloomberg says is set to generate a substantial windfall. The two frontier-model rivals are now in a straightforward race for capital, compute contracts, and the infrastructure commitments that come with them.
Vik: Anthropic turning its first profit is the eye-catcher, but of course as a semis guy I see $16.8B in quarterly revenue (!!!) as good news for the infra layer. Continued demand for accelerators, interconnects, memory.
Tenstorrent Raises $1.5B Series E, Valuation Doubles to $6.2B
Toronto-based Tenstorrent has closed a $1.5 billion Series E round at a $6.2 billion valuation, more than doubling the figure from its previous financing. The round drew a notably broad investor base, with stablecoin giant Tether participating alongside other strategic and financial backers. Jim Keller’s company builds AI accelerators on open RISC-V CPU architecture, positioning itself as an alternative to Nvidia’s proprietary stack. Separately from the fundraise, Preferred Networks and Tenstorrent were selected for a NEDO project on xPU design incorporating photonics-electronics integration technology, adding a Japanese government-backed research dimension to the company’s hardware ambitions. Proceeds are expected to fund production-scale chip development and expanded manufacturing partnerships.
Austin: I struggle to understand Tenstorrent’s business. Japan loves them though; the Rapidus 2nm partnership in 2023, the Ascalon CPU chiplet for LSTC’s edge accelerator in 2024, and now NEDO with PFN. And the latter is technically interesting, PFN doing 3D stacked memory for bandwidth plus photonics-electronics integration on the interconnect. But still, cool tech doesn’t equate to a solid business plan.
Japan Set to Pour Up to 400 Billion Yen More Into Rapidus 2nm Push
Japan’s Ministry of Economy, Trade and Industry is moving toward a fresh injection of up to 400 billion yen into Rapidus, the domestic chipmaker targeting 2nm mass production, adding to the roughly 920 billion yen the government has already committed. METI’s push comes as Rapidus races to stand up advanced logic manufacturing in Hokkaido, but the effort carries a geopolitical complication: the United States has been pressing Japan to site some Rapidus capacity on American soil, a demand that sits awkwardly alongside Tokyo’s goal of anchoring cutting-edge chip production at home. Whether both ambitions can be satisfied on a single funding program remains an open question in the room.
Austin: Note the mechanism here: this is equity, and per Jiji the point is to raise Rapidus’s equity ratio so commercial banks are willing to lend. Public money first to unlock bank money. Same idea as the SK Hynix supplier fund below, where K-SURE guarantees the loans.
ASML Develops Hybrid Bonding Tool, Threatening Besi’s Dominant Position
Besi shares were trading pre-market at EUR 157.35, just below the UBS price target of EUR 159, as reports circulated that ASML is building its own hybrid bonding equipment to compete directly in chip-stacking technology. ASML’s move targets a market where Besi has long held a near-monopoly position, supplying the advanced die-bonding tools that leading-edge fabs use to assemble high-bandwidth memory and 3D-IC packages. Hybrid bonding has become one of the more consequential processes in advanced packaging, stacking chips with copper-to-copper interconnects at densities that older solder-bump methods can’t approach. Whether ASML’s tool gains adoption at major customers remains the open question pressing on Besi’s valuation right now.
Vik: Market’s hammering Besi on a patent-count story - ASML filed bonding patents, no product and no date announced. Meanwhile Besi’s orders more than doubled year on year. Die-to-wafer HBM bonding reportedly slips to 2029 anyway. Q3 prints Oct 22.
Nscale Seeks Anthropic as Anchor Tenant After Microsoft Exit
Nvidia-backed Nscale is in talks with Anthropic for a $45 billion cloud compute contract, a deal that would more than replace the Microsoft anchor tenancy the Norwegian data center firm recently lost. Microsoft’s exit traced back to UK grid-power delays, a problem Data Center Knowledge calls endemic to mature markets where connection queues can stretch years. Losing Microsoft hurt: some investors are already pushing back on Nscale’s $30 billion IPO target, with Bloomberg reporting that certain investors peg a fair valuation closer to $16 to $19 billion. The Anthropic talks cover what sources describe as a second $45 billion arrangement, following an earlier compute agreement between the two companies.
Austin: Power killed the Loughton site, not demand. Wise of Anthropic to step in and take that compute even if it comes online a lot later. But it surely impacts Nscale’s revenue roadmap if the power comes online later than expected.
SK Hynix and Korean Banks Commit 2 Trillion Won to Bolster Semiconductor Suppliers
SK Hynix CEO Kwak Noh-jung attended a signing ceremony on Oct. 19 to formalize an Export Supply Chain Strengthening Guarantee agreement, through which SK Hynix and commercial banks will pool 2 trillion won to support domestic materials, components, and equipment suppliers. The fund channels capital to tier-2 and tier-3 vendors that typically can’t self-finance through a demand surge. SK Hynix’s direct participation, rather than a government-only backstop, puts the chipmaker’s own balance sheet into the equation. The timing fits: substrate and packaging suppliers are already stretching capacity. Samsung Electro-Mechanics separately secured a 360.5 billion won chip substrate supply deal, a contract scale that illustrates exactly the kind of order load these smaller vendors will need to absorb as HBM4 production ramps.
Schneider Electric and ABB Post Record Results as Data-Center Orders Surge
Schneider Electric reported record-high Q3 revenue driven by surging global data-center demand, then lifted its full-year 2026 targets, though the upgraded guidance landed oddly: the stock dropped 2.22% on the announcement. ABB’s orders jumped 40% past analyst expectations, with data-center electrical infrastructure cited as the primary driver, marking one of the Swiss industrial group’s strongest order quarters in recent memory. Together the two results confirm that hyperscaler and AI facility construction is converting into shipped hardware, not just signed contracts. Both companies supply the transformers, switchgear, and power distribution equipment that every large data center requires, and neither is showing signs of demand cooling through their respective order books.
Sector Watch
Memory
Micron union in Taiwan announces strike over bonus dispute, the first labour action at a major US chipmaker’s Taiwan facility and a potential supply-continuity risk. (Reuters)
Kioxia is targeting higher-value AI storage segments through a deepened partnership with Nvidia, leveraging its advanced NAND technology roadmap. (digitimes)
CXMT plans to double DRAM production capacity by 2028 while rolling out LPDDR6, accelerating China’s push to close the memory technology gap. (Chosunbiz)
Foundry & Packaging
NAURA targets hybrid bonding equipment with a RMB 405 million deal, accelerating China’s domestic advanced packaging push. (TrendForce)
Compute & Edge
Amazon launches TorchNeuron, enabling PyTorch-native development on Trainium chips, its most direct software-layer challenge to Nvidia’s CUDA ecosystem yet. (Reuters)
MediaTek‘s Google TPU v9 shipments reportedly slip to Q1 2028, with TrendForce noting the delay heats up the broader custom ASIC race among Taiwan chip designers. (TrendForce)
Alibaba DAMO Academy’s XuanTie RISC-V architecture surpasses 6 billion cumulative chip shipments, as the firm expands into AI and automotive applications. (SCMP)
Power & Data Centers
Amazon and AEP sign agreement to explore deployment of up to 960 MW of X-energy small modular reactors in Indiana to power AWS data centers. (Bloomberg)
LS Electric wins a 170 billion won contract to supply switchgear for AI data centers operated by a major US hyperscaler. (The Elec)
Amazon announces a plan to invest €16 billion in Germany through 2027, its largest-ever European cloud infrastructure commitment. (The Tech Buzz)
Optics & Networking
Wiwynn unveils an optical compute interconnect system as part of its AI infrastructure expansion, targeting next-generation data center architectures. (Wiwynn)
Nokia and SoftBank Corp. agree to conduct a commercial AI-RAN field trial in Japan in 2027, one of the first live deployments of AI-native radio access network technology. (Nokia)
Ericsson CEO Per Narvinger positions the company’s in-house ASICs as superior to Nvidia GPUs for RAN workloads, sharpening its differentiation in AI-RAN. (Light Reading)
Policy & Trade
US government sanctions China’s Y Combinator in a Google AI trade secrets case, escalating enforcement of semiconductor and AI IP controls. (Bloomberg.com)
US government moves to bar China’s DeepSeek from all federal agency systems, citing national security concerns over the AI model’s origins. (Bloomberg.com)
Huawei-linked SiCarrier reports its semiconductor equipment has been adopted by multiple fabs and adds photomask and wafer inspection tools, advancing China’s domestic equipment ecosystem. (TrendForce)
Power & Industrials
Infineon secures long-term silicon carbide wafer supply deal with Wolfspeed, diversifying its SiC substrate sourcing as AI power and EV demand accelerates. (Infineon)
Infineon expands its PSOC Control C3 MCU family with the PSC3M/P6, adding advanced security features for multi-motor control and power conversion systems. (ELE Times)
Foxconn and Mitsubishi Electric’s joint EV-parts unit targets 1 trillion yen in annual sales by fiscal 2030, setting a formal revenue milestone for the partnership. (毎日新聞)
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