This week's theme: tough decisions. AI labs can't decide who to disrupt first—SaaS vendors or their users. SaaS companies are racing to lock in AI partnerships before they become irrelevant. And U.S. businesses may soon have to choose sides: keep working with Anthropic, or keep working with the Pentagon. Oh, and valuations keep climbing: OpenAI ($840B), ByteDance ($550B), Stripe ($159B), Revolut ($100B).
AI Labs Take Aim at Enterprise: Partners or Predators?
This week opened with AI labs rolling out enterprise solutions and announcing new partnerships—raising fresh questions about who's really in the crosshairs.
OpenAI Courts the Consultants
OpenAI unveiled long-term partnerships with McKinsey & Company, Accenture, Boston Consulting Group, and Capgemini to promote its "Frontier" software for managing AI agents. It's OpenAI's latest move into enterprise territory, putting it in direct competition with similar tools from Microsoft, Salesforce, ServiceNow, and Snowflake—each of which, ironically, has previously announced partnerships with OpenAI.
At this point, consulting firms are starting to look like a marketing channel available to the highest bidder. They already have AI partnerships with Snowflake, Anthropic, Microsoft, and Google. McKinsey, in its announcement, noted it works "with an array of leading technology providers…to bring clients the best innovation across all dimensions of AI." Translation: we'll partner with everyone.
Anthropic Targets the Non-Technical User
Meanwhile, Anthropic rolled out new plugins for non-coders (we tested several) and shared new details on Claude Cowork, its AI software designed to access and use data stored in enterprise apps like DocuSign, LegalZoom, and Salesforce.
So Who's Really in the Crosshairs—SaaS or Staff?
It's increasingly unclear whether AI labs are gunning for their SaaS "frenemies" or the employees who use them.
In a presentation to investors last week, OpenAI leaders reportedly said they expect future products and agents to replace software from Salesforce, Workday, Adobe, Slack, and Atlassian.
Anthropic's approach looks different—Claude Cowork appears positioned as a potential replacement for employees rather than the software itself. These AI tools will still run on existing SaaS platforms, meaning businesses keep paying for subscriptions even as headcount shrinks.
The SaaS Dilemma
For SaaS companies, partnering with AI labs is becoming as essential as building their own AI features. Many are pursuing both strategies to innovate fast enough to stay relevant—but neither guarantees survival. We've compiled a breakdown of SaaS companies' AI initiatives and their partnership strategies with the major labs.
On a positive note, SaaS companies in the LBX 25 index are showing positive year-over-year growth.
And Then Came the Pentagon
The Defense Department has given Anthropic a Friday evening deadline: grant unfettered access to its technology—or be cut off from working with military contractors.
Anthropic CEO Dario Amodei continues to refuse. "Threats do not change our position," he wrote in a blog post published Thursday.
Secretary of Defense Pete Hegseth has threatened to declare Anthropic a supply chain risk—a measure typically reserved for foreign companies suspected of spying on the U.S. Such a designation wouldn't just ban government agencies from using Claude; it could force numerous defense contractors to drop Anthropic's models entirely.
But This Sword Cuts Both Ways
In his analysis for Understanding AI, Timothy B. Lee explains why the Pentagon might come to regret this move:
"This would be a double-edged sword. Companies that do most of their business in the private sector might decide they'd rather drop the Pentagon as a customer than cut themselves off from a leading AI provider. The ultimate result might be that the Pentagon loses access to some of Silicon Valley's best technology."
OpenAI Lands $110 Billion Mega-Round
OpenAI announced $110 billion in new investment from three corporate giants: SoftBank and Nvidia are each putting in $30 billion, while Amazon leads with $50 billion. Including the capital raised, the post-money valuation reaches approximately $840 billion.
Amazon's investment will come in stages—$15 billion now, with the remaining $35 billion contingent on hitting performance targets. The company is also extending its AWS agreement with OpenAI to $100 billion over eight years and will expand OpenAI's usage of its custom Trainium chips.
Nvidia's $30 billion contribution includes "next-generation inference compute," with OpenAI purchasing 3 gigawatts worth of chips. It's a notable arrangement: Nvidia is essentially both investor and supplier, deepening its already central role in the AI infrastructure stack.
Stripe Flexes—And Eyes a Wounded Rival
Payments giant Stripe released its annual letter this week, reporting $1.9 trillion in total payment volume—up 34% year-over-year.
The company also just got a major valuation bump: Stripe is now worth $159 billion, a 74% increase, following an employee tender offer that let staff cash out shares. Investors in the round include Thrive Capital, Coatue, a16z, and Stripe itself.
PayPal in the Crosshairs?
Perhaps more notable: Stripe is reportedly considering a full or partial acquisition of struggling rival PayPal. The publicly traded payments company has a market cap north of $40 billion—but its share price has cratered more than 80% since its 2021 peak.
If Stripe moves on PayPal, it would be one of the most significant consolidation plays in fintech history.
Starlink Slashes Prices as Competition Looms
SpaceX has been aggressively cutting Starlink prices in the U.S. The company introduced a $50/month low-cost tier last year and in some cases is giving away terminals that cost up to $600 each to manufacture. In Europe, price cuts came even earlier after demand fell short of expectations.
The timing isn't coincidental. Project Kuiper, Amazon's LEO satellite service, is gearing up to launch in the U.S. and select international markets later this year—marking the first serious potential rival to Starlink's dominance.
Starlink's cash-generating potential is a critical question ahead of a potential SpaceX IPO this summer.
In a 2024 report widely circulated among SpaceX investors, Morgan Stanley analysts projected that SpaceX would bring in over $2,000 per Starlink user annually—more than $170/month—in 2024 and 2025, excluding hardware and activation fees. The bank also forecast SpaceX's overall revenue would hit $19 billion in 2025, driven by subscriber growth to 6 million.
Reality has been mixed: Starlink ended 2024 with 9.2 million subscribers—well above projections—and announced it crossed 10 million this month. But SpaceX's revenue came in around $16 billion, falling short of the $19 billion forecast. More users, less revenue per user.
Amazon hasn't announced Kuiper pricing for hardware or subscriptions yet. But the company has a long history of subsidizing hardware—see: every Alexa device ever sold. Amazon has framed its satellite ambitions as a way to expand global connectivity, which conveniently would also boost its e-commerce and Prime Video businesses.
The price war may just be getting started.
Cerebras Takes Another Shot at Going Public
AI chip designer Cerebras Systems has filed confidentially for a U.S. IPO—again. The company is meeting with prospective investors ahead of a potential listing as soon as April.
Cerebras originally aimed to go public last year but withdrew its IPO paperwork in December. Instead, it raised about $1 billion in a private round in early February, valuing the company at $23 billion.
The bigger news: Cerebras announced that OpenAI has agreed to purchase 750 megawatts of computing power from the startup through 2028—a deal worth approximately $10 billion.
The OpenAI contract could ease a major concern that spooked investors the first time around. In its original September 2024 prospectus, Cerebras disclosed that Group 42 Holding—the parent of UAE conglomerate G42 and a Cerebras investor—accounted for the majority of its revenue.
A $10 billion commitment from OpenAI significantly diversifies that customer base, at least on paper.
Funding & Valuations Roundup
Anthropic launched a share sale for current and former employees with at least twelve months of tenure. Based on the company's latest $380 billion valuation, employees will be able to sell up to $6 billion in total.
ByteDance is reportedly targeting a $550 billion valuation in a proposed secondary sale—a roughly 15% uplift over the TikTok parent's November share auction.
Saronic, a startup building autonomous warships, is raising up to $1.5 billion at a pre-money valuation of approximately $7.5 billion.
Revolut is weighing a share sale for the second half of 2025, with reports suggesting the fintech could reach a $100 billion valuation.
Taalas, a custom AI chip designer, raised $169 million from Quiet Capital, Fidelity, and veteran chip investor Pierre Lamond. The company also unveiled custom hardware optimized for Meta's Llama 3.1 8B model.
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