Big Tech’s AI Arms Race Heats Up

Hey Superheroes,

No rate cut just yet. The RBA kept the cash rate at 3.85% this week, surprising markets that had priced in a chance of a trim. The board held firm, citing a need for more inflation data before making any moves.

Over in the U.S., Nvidia topped a US$4 trillion (A$6 trillion) market cap, retaking its title as the most valuable company in the world. The rally’s been fuelled by its new Blackwell chips and the world’s insatiable demand for AI infrastructure.

Bitcoin smashed through another all-time high, hitting US$118,000 off the back of a Trump-fuelled crypto policy push and growing institutional demand. Copper prices also surged on Trump’s proposed 50% tariffs.

Let’s dive into the stories making waves.

Big Tech’s AI Battle Plan

The AI wars are escalating. This week, they hit three key battlegrounds: cloud dominance, search disruption and browser control.

Amazon is locking in Anthropic as a long-term partner to protect AWS from Microsoft’s OpenAI advantage. Apple, under pressure to catch up, may be eyeing Perplexity to fast-track its AI roadmap. And OpenAI? It’s gearing up to launch its own browser.

Here’s a breakdown of each.

💰 Amazon backs Anthropic

Amazon is weighing a new multibillion-dollar investment in Anthropic, adding to the US$8 billion already committed to the creator of Claude. 

The two are closely aligned: Anthropic uses Amazon’s Trainium chips, AWS powers its infrastructure and both are building out one of the world’s largest data centre networks under “Project Rainier.”

The strategy is aimed at outflanking Microsoft’s alliance with OpenAI and positioning Claude as the preferred enterprise AI model on AWS. Amazon also sells Claude more aggressively than Google, who despite also backing Anthropic, prioritises its own Gemini model.

🧠 Apple may need Perplexity

With its in-house AI development lagging and key AI talent poached by Meta, Apple is now under pressure to keep up. 

There are talks of Apple looking to acquire Perplexity AI – valued at around US$14 billion – to remain competitive, especially after its recent conference lacked hints of any deeper AI builds.

The move could help supercharge Siri and give Apple a privacy-centric search alternative to Google. But any deal would challenge Apple’s build-not-buy culture and raise questions around data handling and architecture.

🔍 Google’s new headache?

OpenAI is reportedly launching an AI-powered browser. 

The browser would embed ChatGPT into search and navigation, bypassing the need for external links and keeping user activity within a closed ecosystem.

This poses a direct threat to Google’s advertising model, which depends heavily on Chrome and Search. With ChatGPT already reaching 800 million weekly users and OpenAI testing ad-supported tiers, even a small shift in user behaviour could rattle Alphabet’s dominance.

🤔 Why it matters for investors

AI is reshaping the platform wars. From chip infrastructure and enterprise software to search and browser dominance, the biggest tech companies are racing to lock in users, data and distribution. We’ll have to see who builds the stickiest ecosystem and whether Google can defend its crown.

🔦  Some other things we’re shining the Spotlight on:

FERRERO CRUNCHES INTO KELLOGG: Italy’s Ferrero is buying Kellogg for US$3.1 billion (A$4.7 billion), snapping up the Frosted Flakes maker in a bold U.S. expansion. The 31% premium deal gives Ferrero a cash-generating cereal portfolio to balance out rising cocoa costs and adds another iconic brand to its growing North American empire.

BANKING ON SMALL BIZ: MYOB is moving into the ring with the Big Four. The accounting software company is launching business bank accounts and debit cards under the brand Solo Money, targeting the 1.2 million sole traders who still mix business with personal banking. 

ELLISON BACK IN FOCUS: Mineral Resources has confirmed a probe by ASIC into trading of shares in Kali Metals, admitting founder Chris Ellison may have been involved. The news comes after he announced plans to step down from his position – plans the board is now reconsidering.

PHARMA DIPLOMACY: CSL is lobbying the White House to exempt Australia from proposed drug tariffs of up to 200%, arguing the levies should target hostile nations, not key allies. With over A$2 billion in exports to the U.S. at risk, CSL warns the tariffs could hike healthcare costs and damage America’s own pharmaceutical supply chain.

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