USA – CALIFORNIA Trends and Developments Contributed by: Derek Liu, Aarthi Belani and Lawrence Lee, Baker McKenzie
ServiceNow acquisition of Moveworks ServiceNow announced its intention to acquire Moveworks, a developer of AI-driven assistants, for USD2.85 billion. The deal is poised to improve Ser- viceNow’s AI capabilities, enhancing its competitive standing among established market players. Circular investments Over the past year, many AI companies have been investing and taking investment from customers and suppliers along the entire AI supply chain. A recent example of such “circular investing” is Nvid- ia’s planned investment in OpenAI. Nvidia also made an investment in CoreWeave, which provides OpenAI with AI infrastructure. OpenAI purchases cloud com- puting from Oracle, and Oracle purchases graphics processing units (GPUs) from Nvidia. The fear sur- rounding this circular investment is that it has created an illusion of growth and demand. While some have raised concerns about how such circular revenue could dilute a company’s valuation multiple, others have observed that such investments are not unusual at the initial stages for technological innovations. Another example is the investments among three of the largest players in the AI space: Anthropic, Micro- soft and Nvidia. With a focus on scaling its Claude AI model, Anthropic announced that it will spend USD30 billion on purchasing computing capacity from Micro- soft Azure, which in turn is powered by Nvidia chips. Anthropic also announced its commitment to contract for additional computing capacity up to 1 gigawatt. However, Anthropic also has a commitment to initially use up to 1 gigawatt of compute capacity with Nvidia’s chips. As part of the deal, Nvidia and Microsoft would invest USD10 billion and USD5 billion respectively in Anthropic, which has increased Anthropic’s valuation from USD183 billion to USD350 billion. Acquihires The rise of AI has also given rise to technology com- panies increasingly foregoing the traditional M&A deal structure to acquire talent and know-how through acquihires. Acquihiring refers to the practice of recruit- ing top talent from a company without acquiring the company as a whole. Acquihiring was formerly the province of finding soft landings for tech founders and
engineering teams with failing products, though this is no longer the case. It has evolved into a competitive structure for companies to acquire AI talent. In addi- tion to what analysts have characterised as Meta’s acquihire of Alexandr Wang and the Scale AI senior team through its investment in Scale AI, Google paid USD2.4 billion for Windsurf in the form of a licensing deal while also hiring its co-founder, CEO and R&D team members. Similarly, Microsoft paid USD650 mil- lion to Inflection, an AI start-up, in a licensing fee while also hiring its founder to serve as CEO of Microsoft AI, and his team. Valuations and venture capital/valuations of large language models (LLMs) Investment in LLM companies has also seen a sharp increase in 2025. Total funding for LLM vendors exceeded USD60 billion. LLM vendors have seen some of the highest valuations in tech and trade at revenue multiples that are much higher than traditional technology companies. The premium on their valua- tion is a result of strong growth expectations as well as their capacity to power businesses and applications. OpenAI raised USD8.3 billion at a USD300 billion valu- ation. In September, Anthropic raised USD13 billion in Series F fundraising and is now valued at USD350 billion. Data centre activity boom As AI deals rise, tech firms are investing more in sup- porting infrastructure. As a result, 2025 has seen a rise in data centre expansions and energy upgrades to support AI infrastructure. In 2025, Google committed USD25 billion to support US data centres, and has also committed to spending USD3 billion to upgrade hydropower plants located in Pennsylvania to support the increasing demand for power capacity required to support AI computing. Notable deals include the following. CoreWeave/Core Scientific Earlier in 2025, CoreWeave announced its intention to acquire Core Scientific in a USD9 billion all-stock transaction. The deal was aimed at helping Core- Weave strengthen its operational efficiency and data centre footprint. This would equip CoreWeave with the capacity to support the growth of AI and high-perfor-
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