Scott Caravello: Yep, not me, I'm bucking the trend. That's always the case.
Katherine Forrest: All right. Well, you're going to have to be pretty careful to make sure that our listeners continue to trust you if you're going to be talking about going to sleep earlier than you really did, you know.
Scott Caravello: Playing fast and loose.
Katherine Forrest: Yeah. Well, you know, I have one funny story about Christmas, which is that, you know, packages come all the time in New York City and they get delivered to the doorman. We happen to have a doorman building and it's like a madhouse of packages. So you just take like this luggage cart and you bring all these packages upstairs. And so I'm always admonished by Amy, which our listeners know is my wife's name, not to open anything that has her name on it, which makes a lot of sense. But, you know, every once in a while there's too many packages. So I opened it, I slit one open, I opened it up, I was certain that these were sweaters for my daughter. And I then proceeded to give them to her, my daughter. And Amy was like, oh my God, one of your packages didn't arrive, one of your main presents didn't arrive, these beautiful sweaters I bought you, I have no idea where they are. And I was like, do do do do do do. And she sees my daughter Jane pull out this sweater and be like, wow, I love it. And she's like, my God, come in the other room. That was MY sweater to YOU! And I had a whole story on how it was like a stripe theme Christmas. Anyway, so we had to take care of it. So now I have matching sweaters with my daughter. She's, you know, we won't wear them on the same day.
Scott Caravello: That's good, that's good. The only one I have, I gifted Waking Up With AI mugs to my in-laws who are big fans of the podcast. Shout out to Vicki and Mark. And that went over very well. So thanks for those, by the way.
Katherine Forrest: Oh! Good, good, good. Yeah, we gotta get some more swag to them.
Scott Caravello: Totally.
Katherine Forrest: You know, it's Vicki and Mark, that's their name?
Scott Caravello: Yeah.
Katherine Forrest: You have to ask Scott for the jacket. They're like these Patagonia and Marmot jackets that also say Waking Up With AI. So...
Scott Caravello: And they're in Patagonia right now. It's a shame. There was a real cross-branding opportunity lost
Katherine Forrest: There was. So we are in 2026. And before we get to the rest of the episode where we're going to be talking about the AI deal roundup for the year, I wanted to do some predictions so that we could sort of—we did this last year. I did it with Anna—and I want to see sort of what you've got for 2026. I'll start by saying, I've got two things. And one thing is, and people have heard me talk about this a little bit in episodes, as I mentioned it, which is humanoid robotics. I think that 2026 is the year of the coming of age of humanoid robotics, and we're going to see a lot of activity. The kind of movement and intelligence that these robotics are taking on and able to work with these days is just incredible. And there are a lot of companies doing really interesting things. So 2026, the year of humanoid robotics and some associated legal issues that we'll be talking about. And I also predict we're going to have some challenges to some of the state laws by virtue of the December and July—but the December 2025—White House executive order. So I think we'll see some of that coming down the pike. I don't know which laws will be challenged first. I don't have that prediction, but I think we'll start to see some of that.
Scott Caravello: Yeah, and on my end, I don't know, maybe it's a little boring, but, you know, 2025 was billed as, quote unquote, the year of agents. Even though that's behind us, we've really just scratched the surface on agentic AI. So I think that the integration into our work and personal lives by the end of the year is just going to look so different. And, you know, talking about the sort of scenarios where maybe we don't even realize that there are agents running and doing some of the things that we're doing online. And then another prediction that I'd share, which I'll say up front is not mine, but which I think is very cool and is from the president and CEO of the American Arbitration Association. And that's that companies will begin to choose AI as their decision maker for certain categories of dispute. And so that's, you know, some really futuristic stuff that we're talking about now.
Katherine Forrest: Right, that's Bridget McCormick. And she's president of that association. And so you think that's gonna happen?
Scott Caravello: I do not know. No, no, I—I said it's not mine, but it's very cool. But it's very cool. Yeah, yeah, yeah.
Katherine Forrest: Wait, hold on! That's your prediction; you then can't back off and say it's not...
Scott Caravello: No, no, I—I said it's not mine, but it's very cool. But it's very cool.
Katherine Forrest: Okay, I see. It's not a prediction. It's a cool statement and a prediction by somebody else.
Scott Caravello: Yeah, exactly, exactly.
Katherine Forrest: Okay. We're talking trust here, Scott. Right? All right. Let's talk about some of the AI deals, some of the really big deals that occurred in 2025 and highlight where the industry is now in the new year. I think that would be an appropriate topic for today.
Scott Caravello: Yeah, I agree. And, you know, things just did not slow down at all at the end of the year. And so there's so much news for us to break down and we should just get right into it.
Katherine Forrest: Right, and so we'll talk, I think, with two big themes, both of which relate to AI infrastructure. And the audience has heard us talk about infrastructure before. It's all of the guts of what make AI models what they are. It allows them to be trained. It's all of the ways in which we're able to, you know, compute is put into a particular place and the facilities and the energy and the water and... You know, there's a lot of investment right now in data centers and compute deals. And, you know, our listeners know that data centers are purpose-built facilities. That means that they're built for the purpose of actually training, usually, and then testing these AI models. And they house, usually, a very large number of networked servers with really specialized chips that we've talked about on some prior episodes, such as those GPUs or graphics processing units needed for AI training. And then the compute, as the processing power, then is taken from some form of energy, which can be fossil fuels or solar or water or wind. And that then is used to provide the power for training and for inference, which is sort of the Q&A-ing of the model. And then all of that is put into these large infrastructure… it really compounds.
Scott Caravello: Yeah, and then to expand further on the folks who are providing that compute power, there are the hyperscalers, which are the largest global cloud providers who offer that compute. And then there are what are called neoclouds, which are newer specialized cloud providers that are focused on high-performance AI compute, rather than the full spectrum cloud services that those hyperscalers offer. As the demand for compute continues to grow, those physical data centers to house the chips and provide the compute has led to a series of investments and deals over the past year.
Katherine Forrest: Right, you know, and let's do a little bit of background, which was an early 2025 event, which was Stargate, because it actually highlights how data center investment is tied up with federal priorities. And Stargate, as people may remember, is a joint venture between OpenAI, SoftBank, Oracle, and others that was announced in the White House with President Trump's backing.
Scott Caravello: Yeah, and their new company, Stargate LLC, intends to invest $500 billion over four years—with one year down—to build data center infrastructure for OpenAI. And that construction is underway with the flagship site in Abilene, Texas, already opened and a number of new data centers announced in September of last year.
Katherine Forrest: Right. And so then we turn to the AI Action Plan, which we have mentioned before in prior episodes. And that does feature data center investment and AI infrastructure as one of its core pillars, because you've really got to have that infrastructure in place in order to accomplish the goals of the AI Action Plan, which is in the executive orders from both July and December from the White House. And then just two weeks after the release of the AI Action Plan, which is the July 2025 plan, President Trump issued an executive order designed to accelerate permitting for data center infrastructure. So there's really some government muscle behind this trend.
Reports from mid-December 2025 put the figure of total data center investment for the year at approximately $61 billion across 104 deals. And it's really an eye-popping number when you think back about only a couple of years ago, that number was zero or close to zero. But so is an amount of debt that developers have issued to support that. There's also an eye-popping number there,
Scott Caravello: Oh, totally. And so the debt issuance just about doubled from $92 billion in 2024 to $182 billion in 2025, which really emphasizes the scale and the pace of the push to build out this infrastructure.
Katherine Forrest: Right. And, so, shifting to focus a bit to the compute deals that have been grabbing headlines. In September, OpenAI and Oracle signed a $300 billion, five-year deal for compute power. And while we should talk about some of the quote, “acquisitions,” end quote, and you can see where I'm putting acquisitions in quotes, because as we'll explain in a moment, that's not always what it technically is, but we should just close this discussion with a note that there were some other similar deals, but we just don't have time to recount all of them. So we're going to sort of move away from those and talk about these quote, “acquisitions.” And we're going to start, I think, with what is called acqui-hire, which is A-C-Q-U-I, hyphen hire, H-I-R-E. And for those who haven't heard of this term before, that phrase, acqui-hire, covers a range of transactions. Sort of put in its most basic terms, it's often used to refer to a company hiring away key employees, or even all employees of another firm, and then also licensing or obtaining the rights to their technology so that in substance, it's close to an acquisition of a company.
Scott Caravello: Yeah, and we've seen this happen a lot over the last year or two years in the AI race.
Katherine Forrest: Right, and that term is again making front-page news with a blockbluster—blockbuster. You know, it reminds me of that game Block Blaster. Is that the name of that game? Block Blaster?
Scott Caravello: I'm not familiar with that.
Katherine Forrest: Amy's obsessed with it anyway. Okay. So, but the term is again, you know, making front-page news with the really big—I'll say, as opposed to blockbuster—the really big acqui-hire at the end of 2025 involving Nvidia. The chip maker and inference technology provider Groq. That's G-R-O-Q, not to be confused with Grok, G-R-O-K, the xAI model. So, Nvidia entered into a $20 billion non-exclusive license for Groq—for their inference technology. And it also hired most of the team, including its co-founder and CEO. And so, when I say most of the team, the number that went over or is going over is in excess of 80 or 90%.
Scott Caravello: Yeah, and so that really drives home why it's called an acqui-hire, right? And according to The Information, Nvidia's CEO Jensen Huang explained that the deal is going to help them move into providing inference for AI-powered devices and other services that its own chips aren't right for. And that's because Groq was working on chips designed to run smaller AI models that didn't need the Nvidia chips and which Nvidia chips aren't intended for.
Should we hit one more of these deals in our last few minutes? Maybe the OpenAI–Disney licensing deal?
Katherine Forrest: Yeah, yeah, yeah, yeah, that's a fun one. So OpenAI and Walt Disney agreed to a three-year licensing deal to bring certain Disney characters to Sora. And so we've talked at length about Sora and, you know, Scott, by the way, are you still looking at those Sora videos on TikTok about the historical figures like, you know, George Washington playing basketball games?
Scott Caravello: Oh my gosh, no, no more George Washington. But I am seeing these AI-generated behind-the-scenes videos where the AI supposedly shows an iconic movie scene being filmed. And so the best one by far, if I can get into it, is of Titanic, which is showing scenes of the ship sinking with actors falling off the boat and onto crash pads and water blowing open doors with Leonardo DiCaprio and Kate Winslet running around. It is actually really cool.
Katherine Forrest: All right, so there are legal issues involved with that that we will just flag and spot. And we might actually come back to—I think that'd be a really interesting topic to talk about—those kinds of issues that really are involved when you take the likeness of a movie actor and you put them into an AI short video, it's really a deepfake, and without having the rights. So if you've got the rights, you can do a whole variety of things, but if you don't have the rights then you're running into some legal issues. So let's let's talk about that during a future episode, shall we?
Scott Caravello: Oh, that sounds great.
Katherine Forrest: All right. Okay, okay, now—it is true that folks are going to be able to create videos with the license between OpenAI and Walt Disney that will include, like, Marvel and Pixar and Star Wars, and Disney, and those are going to be licensed access to some of those characters. And there's also going to be access to OpenAI's API for development purposes. So it's a big deal, and it's going to be, I think, fun for people to play around with. Plus, you know, it's going to be exclusive, I think, to OpenAI for at least just one year. So, Scott, that's a lot that we packed in there. That's all we've got for today.
Scott Caravello: Well, I'm Scott Caravello. Thanks so much for listening.
Katherine Forrest: Are you Scott Caravello?
Scott Caravello: I am, it's not a deepfake yet, still me, still me.
Katherine Forrest: It's still you! All right, folks, we'll talk to you next week. And if you have been enjoying this, please don't forget to like and subscribe.
