SoftBank closed to finalizing a $40 billion investment in Open AI that would value the startup at an eye-popping $260 billion.

That's according to sources telling our own David Faber.

Just the latest in a flurry of signals from tech that AI spending is not slowing down after DeepSeek.

Adre DuBos watching that in today's tech check.

Happy Friday, Dee.

Happy Friday, Carl.

So South Bank's massive investment, along with more KAPEX spending by big tech, that

might seem at a place in a new AI paradigm where the best performing models are cheaper

and they're more efficient.

But think of it as an AGI at all cost strategy.

Maseasan and OpenAI's priority is to push the technological frontier relentlessly. The idea that reaching it first is worth any investment, rather than relying on incremental improvements

that deep seek proof can be reached through a process called distillation.

That's where a large complex model is distilled into a smaller, more efficient one.

Distillation yields more cost-effective performance gains,

but it doesn't drive the revolutionary breakthroughs needed to reach AGI or ASI,

as artificial superintelligence is known.

Masassan, we know this, he only thinks big.

So this is a long-term vision over Open AI's short-term challenges.

Those challenges, though, they are growing quickly and really eroding that moat that Open

AI has held for the last two years.

Not only did DeepSeaks R1 model match OpenAI's O1 model on performance, but it revealed chain of thought reasoning,

something that really delighted users propelling it to the top of the app store.

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