Nvidia’s $20B Groq Deal, Waymo’s $100B Valuation & Prediction Markets' Risk | Dec 29, 2025

0:13Welcome everyone to the information's TITB. My name is Akash Pasritch. It is Monday, December 29th. Hope you all had a wonderful holiday and are excited for 2026 which is just three days away. but we have got a few more shows for you before then. Today, we are breaking down the$20 billion NVIDIA Grok deal announced late on Christmas Eve. We'll then dig into some new analysis on autonomous vehicles and how Waymo is positioning itself as it explores a funding round valuing the company at$100 billion. And we will wrap with a look at the breakout year that prediction markets have had and the challenges that the sector could now face going into the new year.

0:56It's going to be a fun show, so let's get right on into things. We are still piecing together what NVIDIA's$20 billion licensing deal with chip startup Grok means for the broader chip industry at large. In case you missed it, this was a deal that was announced late on Christmas Eve, right before the holiday. And to break it all down, I want to bring on Corey Weinberg, our Deputy Bureau Chief of Finance. Corey, welcome back to the show. It's great to have you here. Hey, good morning, Akash. Matching colors. We are still in the holiday spirit, my friend. I think we're looking good. We got to keep up this look going into 2026.

1:32I like it. I like it. Well, so look, Jensen Huang was clearly working right up until the holiday. There was this deal with Grok that was announced right on Christmas Eve. I want to get your analysis of it, but just remind us a little bit about the story of Grok, you know, the company's history, how much traction the business was getting. Yeah, well, first of all, Akash, this deal was, I think we put it in our story on Christmas Eve, it was a stunner. No one really saw this coming. I did not have this on my 2025 bingo card. The question around Grok, and yes, to take us back, this company's been around since 2016.

2:14Among its co-founders were Jonathan Ross, who started Grok after being part of the team at Google to create the TPU, the Tensor Processing Unit. And the idea with Grok, even back before the Gen AI craze and before the advent of ChatGPT, was they were going to build a chip that was going to be super fast and was going to beat NVIDIA eventually at its own game. And once ChatGPT took hold, the company really was sort of taking to the world this message that its chip was really good at inference compute. It was really good at running the AI models. If NVIDIA's GPU was good at both training and inference, well, Grok was going to be specialized for just inference.

3:07And so it raised a bunch of venture capital for this vision. But this deal was a stunner because no one really thought that Grok was really gaining that much traction against NVIDIA. Like, it was always this sort of upstart competitor off to the side, giving it a good go. None of us saw a$20 billion deal coming towards it. But they did have a chip out in the market that was getting at least some business from – I mean, I remember we were writing stories about the revenue it was generating in the Middle East and stuff like that from customers there. Yeah, its biggest deal came back at the start of 2025.

3:47It started this year. It booked a$1.5 billion commitment from the kingdom of Saudi Arabia to essentially—this was when, and it's still going, you know, the sovereign AI was like the hottest—one of the hottest phrases. Countries are going to be building their own clusters to run AI models. And Grok really got, you know, a toehold there. This was its biggest deal by far. um but when you're talking about going against a giant like nvidia i mean this is what i mean this is a tiny minnow in an ocean compared to nvidia right right so okay let's get to it then why do you think nvidia did the deal that's what everyone's still trying to keep together i mean some things that have come up on in our reporting um so far as well as some others uh you know is I'm learning more about on-chip memory than I really ever have in the past.

4:44The idea with these Grok chips are they're supposed to be faster in part because they're handling both memory and compute on the same chip. Memory is often a commodity that NVIDIA has seen spiking prices for, and so is the rest of the market. And so the idea here is that if it puts the GROP TPU next to the GPU, it can have, you know, sort of a memory advantage as it looks to expand, particularly the inference market. That's kind of the broader takeaway here is that we've heard a lot over the past year about how the market for SAMIs and chips are going to go from, you know, this is all about training.

5:29This is all about building these clusters to train these LLMs to now we got to spend a lot to run this AI as more and more people use it. And so, you know, at the end of the day, people are talking about this deal as NVIDIA wants to strengthen its toehold in sort of the inference market and improve its technology there. And also it's seeing the spike in memory prices that Grok could help with. So the structure of this deal is one that we've seen before. It's kind of this funny acqui-hire structure that has come up time and time again. Although this is, I think, the biggest by, you know, I don't know how many factors.

6:09But, you know, those deals, from what I recall, I mean, the character AI deal, these were all a few billion dollars. You know, I wonder if you think there's a chance that regulators at all start to look at this anymore now that they're becoming so big. or is it just the way that regulators are right now that it's like, whatever, you know, we'll just let them keep happening? I personally don't expect it. I mean, I haven't done a ton of extra reporting on the antitrust side as of yet. But I mean, I think if regulators had wanted to look more closely at this structure, they would have had plenty of examples to do so thus far.

6:51And we really haven't gotten much of a whiff of it, especially in the Trump administration. There were some rumblings about the kind of deal that Microsoft had done under the Biden administration where you saw some rumblings about this. But look, I think NVIDIA, Jensen Huang, and we should note some of Grok's own investors have often gotten what they wanted out of the Trump administration, particularly around this idea of there is a sovereign interest in the U.S.'s AI advantage, and NVIDIA is a huge part of that. So, you know, I'm sure their lawyers structured this deal in a way that would at least give regulators pause before taking action.

7:38Let me ask you a question about these AI chip startups broadly. I mean, we have an entire database dedicated to these AI chip startups here at The Information, and we track, I think it's nearly two dozen of them. And, you know, we've seen rumblings of, you know, Intel looking at another chip company, Samba Nova. We obviously, you have reported very closely on Cerebrus' or Cerebrus. I never know what the right way to pronounce it. No, that's the mystery. Cerebra, Cerebra. I mean, you know, their journey to the public markets. I mean, the broader question I have for you, Corey, is as these chip startups appear to start to get acquired or aqua-hired, I mean, is this the end or the beginning of the end of these AI chip startups broadly and competing with the AMDs and the NVIDIAs and the Googles with the TPUs?

8:31I mean, they never really were a... It was just a hope. It's just a hope. But, I mean, if you're a venture capitalist, you don't need this company to become the next NVIDIA. It's almost better, or at least it's faster money to get paid out pretty quickly in an acquisition by an NVIDIA or an AMD or an Alphabet. And let's not forget OpenAI trying to build their own chip, ARM and SoftBank trying to build it. There are a lot of people trying to get in the game of, we want to reduce our reliance on NVIDIA by either building our own chip or coming up with another partnership where we can offset that dominance.

9:20And so in some ways, I would want to be in the AI infrastructure business. It's still. like it's a good place to be the other you know sort of biggest of these license you know sort of big aqua hire type deals with scale ai that's also ai infrastructure and data labeling um you know it's a good place to be people are still spending a ton of money on this and um whether it's you know samba nova or etched or you know cerebris like you know these guys are probably going to have, at least in the short term, pretty good outcomes. Long term, who's to say? Great. Well, Corey, I want to thank you for coming on.

10:02That is Corey Weinberg, our Deputy Bureau Chief of Finance here at The Information. Okay. For more coverage on all things NVIDIA and Grok and also Waymo, I want to bring on Paul Meeks, who follows this space very closely. Paul is the Head of Technology Research at Freedom Capital markets. Paul, good morning to you. It's great to see you. Happy holidays, my friend. So this NVIDIA Grok deal, I mean, I want to get your thoughts on it. And the broader question I want to ask you to start with is, is this Grok throwing in the towel and saying, hey, there was no way that we were ever going to compete with NVIDIA in a large part.

10:41Let's just join them. Is that how you see this deal? I actually think that they really have some game because the folks at NVIDIA, no offense to you, but they're smarter than both of us put together. Super savvy, good operators. And if they're going to pay$20 billion for a non-exclusive license, not an exclusive license, and some personnel, not all personnel, I think that they really thought that Grock could be a threat in inference to their franchise. Yes. Brent, you put out this note this morning, is NVIDIA being opportunistic or just desperate? What do you think the answer is to that question?

11:23I think they're being opportunistic. They have the flexibility, right? This is a company that in the last nine months of this fiscal year has generated$60 billion in free cash flow. And that's on top of$50 billion that they already have on their balance sheet. And so if they believe, and I do believe that this is true, that we have a pretty rapid transition at this point from training to inference, and we also, of course, have a real bottleneck with power, and if these LPUs from Grok can actually increase speed, which I think is the smaller part of it, but if they can really bring 10 times the power efficiency in this market, That solves some real important questions as we go into 2026.

12:10So I like it. Right. I want to talk to you a little bit about the question that we ended the last segment with, which is the broader AI chip startup landscape at large. I mean, these companies have popped up in the dozens in terms of the ones that are getting a lot of funding. They will continue to get a lot of funding. What do you think is the fate of these startups ultimately? Do you think they are all destined for acquisition? Do you think they will carve out a small part of this market for themselves? I mean, how do you see that playing out? Excellent question. The way I look at this, and I think I'm a bit of a contrarian, I expect AI infrastructure spending to be hot and heavy, not just through 2026.

12:53I think that's pretty much assured. And when our companies, particularly the hyperscalers that spend 90 % of this cumulative of infrastructure build, when they announce their next quarter and give us guidance for 26, I think they're going to increase their CapEx budgets again. So I think the entire infrastructure space, particularly the supporters, the select semiconductor companies, have very bright outlook for 26. And I don't expect the spending to fall off a cliff in 27. Maybe it plateaus, maybe it stabilizes, but I don't think it drops much. And so I think these companies, the least the next two years, have a nice runway, but over time, of course, there's always a bubble, just like there was in the internet bubble when it popped.

13:44That will happen, I guarantee it, it always does. And some of these companies will be wiped out. But I think that the skating is clear for at least the next two years. Some people thinking it's close to the end. I don't see that. So the market is going to continue to grow fast enough that even if these companies don't have significant market share, you think they will be able to be successful even on their own? I think that the most viable ones will be swept up, like you saw with Grok,$20 billion from NVIDIA. And some will fail, for sure. But I do think for select companies, there will continue to be a nice, strong growing, and maybe not profitable now, but profitable down the road niche for select companies.

14:36I want to ask you about another class of companies that we have been thinking a lot about, these neoclouds. And a lot of the founders or executives of these companies, if you call them a neocloud, they'll put up their hands and say, well, we don't call ourselves a neocloud. We call ourselves an AI specialized cloud. This is another segment of the AI infrastructure story that has fascinated me. What do you think ultimately happens to those cloud providers that are competing in some ways with the hyperscalers? And you've got data center companies like Crusoe, for example. I mean, they're looking to build out their cloud businesses.

15:14Is it the same as the chip story where the market is growing fast enough or do we see consolidation? Maybe consolidation down the road and some of these Neo clouds might actually be acquired by traditional hyperscalers or even NVIDIA. Like, for example, I have a buy rating on CoreWeave. CoreWeave is the most emblematic of these companies. I have a$100 price target. The key here is supply, not demand. I think demand, echoing my previous comments, is going to be robust for these players. for the next couple of years maybe even beyond and in the meantime their issue their gating factor is supply not demand and so i like it i think they're misperceived uh one of the problems with core weave it does have a weak balance sheet and it is going to have to continue to raise capital and it's already pretty heavily levered and it's going to have to drive down its weighted average cost of capital over time.

16:20I think that they will. But then there's other companies that are not necessarily as levered like Nebius and maybe Applied Digital, which actually has CoreWeave as a big customer. I think that they have pretty good prospects. And right now, the market is not valuing them like they have pretty good prospects. And again, it's a supply issue, so they have to execute. It's not a demand issue. I think we're going to be clean on that for quite a while. Let me ask you one more question before you go about Waymo. Waymo is a company that we have reported is seeking to raise money at$100 billion valuation, which is a whopping price tag.

17:03Although, I mean, autonomous vehicles, they seem to be here, at least in many of the major cities that our audience is in. What do you think of the price tag? You know, I hope they get it because I'm a shareholder, of course, on the other side of the house, you know, with their TPUs. They also have a very nice driver in addition to the core digital advertising business. I have always felt that despite Elon Musk's bluster, that Waymo was significantly ahead. And even though Waymo has had some well-chronicled slip-ups recently, their cars get stuck in the street in San Francisco when the power went out, that's a black eye.

17:45But I think they can get the$100 billion because Tesla is further down the pike. I don't think they have as bright of prospects. And with Elon Musk talking up the space, they'll get their valuation. So I think Waymo will get its twos. So I think it's great. I hope they get it. That would be a nice feather in the cap for autonomous vehicles if they could do a deal with a$100 billion valuation. Paul, I want to thank you for coming on. That is Paul Meeks, head of technology research at Freedom Capital Markets here on TI TV. Okay. One of the biggest stories of 2026 is going to be autonomous vehicles, as we just talked about.

18:27And one of the big points is going to be how much traction and funding they can continue getting. Here at The Information, we have, of course, been following that story. We reported a few weeks ago that Waymo is in discussions to raise money at a$100 billion valuation. Our financial analysis columnist, Anita Ramaswamy, has been talking a ton to her sources over the past few weeks to understand how we should be thinking about that price tag. She has a good piece on that out today, and I want her to bring on to tell us more about what she found. Anita, welcome back to the show. It's great to have you here.

18:58Great to be back, Akash. everyone's wearing red today on the show everyone is still in the holiday spirit and i'm this is red for the record okay i know it's looking like purple but i'm choosing to call it red um okay walk us through the numbers that you crunched on the hundred billion dollar figure that waymo is going after and i want you to put it into context with all the other ride-hailing companies autonomous vehicles, franchises that are out there. Yeah, of course. So we don't have full financials for Waymo. It's a part of Alphabet. They don't break out results separately. But based on what we know and what we've reported here at The Information, Waymo is in talks to raise around at$100 billion valuation.

19:40That is a little over double what they last raised at. And their annualized revenue, as of recently, is around$350 million. So that amounts to a multiple on their annualized revenue of over 200 times. Now, in comparison to other ride-hailing startups, that's really high. Okay. So 200 times revenue is a big multiple. Uber and Lyft, what are they trading at around now? Uber and Lyft are trading at around three times or below three times their forward revenue. Okay. So do we think that Waymo can grow into this value? It's a different business. I get it. Okay, different technology. We're early. But I mean, you put a chart out this morning in our year-end charts that showed the traction that Waymo has been getting.

20:28It was a map of all the different locations. Do you think it can grow into that 200x valuation? I think the answer is yes, Akash, but I think the answer is yes over a really long period of time. And I think investors are looking to that longer-term future. If you forecast out a couple of years, and you think about 2030, we saw some estimates earlier this year from Morgan Stanley analysts who are projecting that Waymo could make about$2.5 billion in revenue. And if they were to be making that level of revenue, their multiple would be a little closer to 40 times. That's still high, but compared to other high growth software companies, AI companies in the public markets, it's not as egregious.

21:05And I think the key thing here is Waymo is growing really fast and we haven't seen a full year where they've really, really expanded. 2025 was the first year that they broke out of their three initial cities. They added two more. They're really starting to scale now. And I think it's also important to remember that unlike Uber and Lyft, Waymo actually has a couple of different revenue streams that they've been talking about that they could leverage besides just ride hailing. So there's the robo-taxis, but they're also testing out food delivery in certain markets, which Uber does, of course. But they're also thinking about licensing their software to other automotive makers.

21:40And that could potentially be a high margin, high growth source of revenue, depending on how this technology actually matures. So I didn't realize this. Waymo is delivering food right now or they're building out that business? They're building it out and they're starting. In October, they had an announcement with DoorDash to debut that in Phoenix. So they're kind of starting it out in a limited way in Phoenix. And if it works, presumably they'll scale to other cities. Right. Now, part of scaling to the other cities is obviously getting the permits and the regulatory angle to all this. You talked a little bit in your piece about how Waymo is actually further ahead than other companies on that regulatory story.

22:19Yeah, that's right. I think that's going to be the huge advantage for Waymo going forward. And I think the first mover advantage here will be strong. If you take New York, for example, that's a hugely lucrative market and a place where it's pretty hard to build autonomous vehicle technology. And Waymo is the first company that has secured the permits to actually test over there for their robotaxis. We have other competitors like Tesla, Amazon, Zooks, but they're both far behind. I mean, even just Zooks, if you look at it, doesn't have the capability yet or permits from any city to be able to charge passengers for their rides.

22:49So they're operating in a limited capacity in certain places in California, but they're not even able to take paid passengers, whereas Waymo has been doing that all of 2025. What about the threats to Waymo's business? Is there anything that Tesla is better at right now? Yes, and the big thing is the costs. Yes. So Waymo's vehicles have a bunch of LiDAR sensors on them, and it's a really sophisticated technology that they use to try and map the routes that they're going to take. Whereas Tesla and Elon Musk has taken an approach that they say is a lot cheaper. And so they are using just regular cameras instead of LiDAR sensors, which are super expensive.

23:23So Tesla is able to manufacture these vehicles for a lot less than Waymo is. But the key here is that we still have yet to see whether the Teslas can actually drive fully autonomously. I mean, we have Elon Musk calling it full self-driving, but it's full self-driving with a human behind the wheel. It kind of feels to me, Anita, like given that we've seen, especially in 2025, we've seen so many of these cities go ahead with autonomous vehicles and there's more cities coming. It feels a little bit to me like the cat is out of the bag and they are coming and it's $100 billion right now that we're seeing as a price tag.

23:59I mean, I sort of feel like, I mean, this number is going to get bigger in my view in the next two, three years even. That's my thought on it. What do you think? Yeah, I would agree with that. I think we're going to see pretty rapid growth of these kinds of services. And I think the interesting question here is like, what's going to happen to ride hailing? Like the traditional Uber is the traditional Lyfts of the world. And some of the projections around that are interesting too. Like I was looking at, you know, projections from analysts that said Uber will grow 14 % for the next seven years. But if Waymo rides end up cannibalizing some of the revenue from Uber, then its growth rate will actually be closer to the single digits.

24:38So I think the big multibillion-dollar question that analysts, investors, and observers of the autonomous vehicle space are asking themselves right now is, really, will autonomous create new opportunities of like passengers that wouldn't have otherwise taken a ride-hailing ride? Or is it going to be entirely redundant to the ride-hailing demand that already exists? Great. Well, Anita, I want to thank you for coming on. That is Anita Ramaswamy, our financial analysis columnist here at The Information. Thanks, Akash. Okay. Prediction markets have had a big year. Today in our year in chart story, we have a chart showing exactly that And it also shows how fierce a rivalry Calci and Polymarket are waging against each other.

25:21But our finance editor, Ken Brown, has a column out suggesting that he thinks 2026 could bring some regulatory challenges and some challenges, broadly speaking, for the sector. I want to bring on Ken to tell us more about why he thinks that's the case. Ken, welcome back to the show. It's great to see you. Hi, Akash. How are you? Doing well. I'm excited to talk about prediction markets. and why do you think it's going to be such a hard... I mean, look, isn't there a way that prediction markets could just keep surging and, you know, we could have another 2025, but even more? Sure, of course, that could be the case.

25:57Predictions are often wrong, right? Well, so here's the thing. They've moved the growth in prediction markets to come from sports betting, and it's boomed. It's now billions of dollars in sports betting. The problem is sports betting is regulated by the states. um and this and the and the states make a lot of money from sports betting and so they are losing money potentially uh as the money as the betting moves to uh the prediction markets and so that's one challenge um because you know like new york state gets a billion dollars in tax revenue so they are not gonna uh you know sit quietly while these guys uh you know take the business the other thing is it's such it's growing so fast there's a whole bunch of new competition coinbase robin hood, all these folks, crypto.com are all going to start prediction markets.

26:46The Trump family is going to start a prediction market. So, you know, it is kind of a commodity business, right? I mean, I bet against you over an election or a sports bet, whatever, anyone can offer it. And so that's another problem that they face. Now, let me ask you about how this issue intersects with, you know, the different parties. I mean, you know, is this a political issue? Is it partisan? Do both sides kind of feel the same way? How do people think about it? Well, so prediction markets and sports betting, sports betting in general, it's a rare area of bipartisan agreement in which they basically don't like it.

27:27About 47 % of Americans don't like sports betting. They don't think it adds anything. Only about 7 % like it. And Democrats and Republicans actually completely agree. They all they both say about 47 percent of them say sports betting is no good. And so that's just the sports betting companies like DraftKings and such that they were really talking about. This is a whole new realm of sports betting. And so, you know, why why are people going to change their tune on that? The other thing is there's a whole bunch of states where sports betting is illegal, like California and Utah. Well, the prediction markets are offering sports betting in those states.

28:04So, like, how well is that going to end? Right. What about the president himself? has he i mean you mentioned that the trump family could get into this business has he said anything about prediction markets himself uh well the trump family and the president have really liked prediction markets because they predicted a big win for him lat in the last election right and they feel like you know this was more accurate than the polls and such whatever but he uh but his son uh donald trump jr is an advisor to both calci and polymarket the two biggest prediction markets and a private equity firm that the Trumps are invested in is supporting one of them.