Welcome back to Daily Zaps, your regularly-scheduled dose of AI news ⚡️ 

Here’s what we got for ya today:

• Anthropic CEO warns about massive AI spending

• Mistral 3 released

• OpenAI “Garlic” model to take on Gemini 3

• AWS on-prem AI factories

Let’s get right into it!

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STARTUPS

Anthropic CEO warns about massive A.I. spending

Anthropic CEO Dario Amodei’s core critique of the capital-intensive AI arms race, especially as it relates to rivals like OpenAI. Amodei warns that some companies are “YOLO-ing” capital by pouring billions into massive, multi-year infrastructure bets, gigawatt-scale data centers, huge GPU orders, and long-term commitments, on the assumption that AI progress will continue scaling smoothly.

His concern is that if the industry hits a “scaling wall,” where more compute no longer produces dramatically better models, these investments could become stranded, leaving companies with enormous financial losses. He argues that while individual AI models can be profitable at the model level, the astronomical R&D and capex needed for the next generation keep most labs deeply unprofitable overall.

Anthropic positions itself as the “capital-efficient” alternative by trying to extract more performance per dollar, relying on TPU-based efficiency, and pursuing “responsible scaling” rather than brute-force spending. Amodei frames this as both a financial and philosophical contrast to more aggressive competitors, noting that unsustainable spending could haunt companies if the underlying technology fails to deliver proportional economic value.

STARTUPS

Mistral 3 released

Mistral, the fast-growing French AI startup valued at nearly €12 billion, released a new suite of models Tuesday as it races to keep pace with Google, OpenAI, and DeepSeek. The launch includes a flagship large model Mistral claims is the world’s best open-weight multimodal and multilingual system, designed for advanced agentic tasks, RAG, scientific workloads, and enterprise automation, as well as a compact “Ministral 3” model that can run on a single GPU and power drones, robots, vehicles, and on-device applications with low latency and low cost.

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OpenAI “Garlic” model to take on Gemini 3

OpenAI is pushing back against Google’s recent AI lead with a new large language model called Garlic. Early internal tests show Garlic performing strongly and often better than Google’s Gemini 3 and Anthropic’s Opus 4.5 in coding and reasoning tasks. After CEO Sam Altman declared a “code red” to improve ChatGPT, Garlic appears to be the main part of OpenAI’s strategy, with a possible launch as GPT-5.2 or GPT-5.5 early next year. Garlic is separate from another model under development named Shallotpeat but it uses improved pretraining methods and bug fixes discovered during that work.

This website, which doesn't appear to be connected to OpenAI, has more information.

BIG TECH

AWS on-prem AI factories

Amazon unveiled “AI Factories,” an on-premises offering that lets corporations and governments run AWS-managed AI systems inside their own data centers, giving them full data sovereignty by keeping both data and hardware on site. Built in collaboration with Nvidia, the systems combine AWS infrastructure services with Nvidia’s Blackwell GPUs or Amazon’s Trainium3 chips, and integrate with tools like Bedrock and SageMaker.

The move mirrors similar efforts by Microsoft, which is rolling out Nvidia-powered “AI Factories” and country-specific data centers to address sovereignty concerns. The trend highlights an ironic shift: the rise of AI is pushing major cloud providers back toward building and supporting private, hybrid data centers reminiscent of the pre-cloud era.