DeepSeek raises $7.4B, Anthropic hit by US export controls

Kevin Warsh takes the helm of the Federal Reserve today, inheriting an economy where inflation sits at roughly double the central bank's 2% target ahead of his first Federal Open Market Committee meeting on June 17. The CME's FedWatch tool prices in virtually zero probability of a rate cut at this gathering, reflecting the stark reality that price pressures remain stubbornly embedded across services and shelter costs. Warsh, a former Fed governor who served during the 2008 financial crisis, now must navigate a tightening cycle that his predecessor Jerome Powell paused prematurely, with core PCE running at 3.9% year-over-year and wage growth accelerating to 5.1%. The new chair's first policy decision will set the tone for the next phase of monetary tightening, with markets watching for any signal that the Fed is prepared to hold rates higher for longer. This matters now because the outcome of this meeting will directly impact borrowing costs for the AI infrastructure buildout that has driven corporate capex to record levels, with hyperscalers like Google and SpaceX committing billions to compute capacity.

The $920 Million Monthly Payment and Its Impact on SpaceX

The SpaceX-Google AI infrastructure deal represents one of the most consequential financial arrangements in the cloud computing industry, with SpaceX leasing AI compute capacity to Google at $920 million per month for 32 months. This structure, reported by CNBC, creates a $30 billion revenue opportunity for SpaceX's AI business over the contract term, fundamentally reshaping the economics of cloud infrastructure provision. Google's investment in SpaceX dates back to 2015, when it poured $900 million into the rocket company for approximately a 4.9% stake; that position is now worth over $100 billion following SpaceX's record-breaking IPO. The monthly payment effectively converts Google's equity gains into recurring revenue for SpaceX, creating a symbiotic relationship where the search giant funds its own cloud competitor's expansion. For Alphabet, the deal provides guaranteed access to SpaceX's Colossus supercomputer cluster, which Elon Musk's company has rapidly deployed to meet surging demand for large language model training. The $920 million monthly figure dwarfs typical enterprise cloud contracts, signaling that SpaceX has successfully positioned itself as a premium compute provider to the world's largest AI companies. This revenue stream gives SpaceX the financial firepower to accelerate its Starlink constellation and Starship development programs, creating a virtuous cycle between space infrastructure and AI compute. The contract also provides SpaceX with a predictable cash flow that reduces its reliance on external debt markets, insulating it somewhat from the interest rate environment Warsh now controls.

Cohere Captures Anthropic's Lost Market Share

The Trump administration's export controls on Anthropic's latest AI models, Mythos and Fable, have created an immediate competitive vacuum that Cohere is moving aggressively to fill. Cohere CEO Aidan Gomez confirmed to Bloomberg that his company is seeing "huge inbound" interest from international customers who can no longer access Anthropic's frontier models due to the restrictions. This regulatory intervention effectively hands Cohere a market share opportunity worth hundreds of millions in annual recurring revenue, as enterprises in Europe, the Middle East, and Asia scramble for alternative providers. Cohere's models, which compete directly with Anthropic's offerings on benchmark performance, now benefit from a de facto trade barrier that shields them from their US-based rival in key export markets. The timing works in Cohere's favor: the Canadian company recently closed a major funding round and has been investing heavily in its enterprise sales team. Anthropic, meanwhile, scrambles to restructure its model distribution channels and explore licensing arrangements that might circumvent the export freeze. The FT reported that the AI boom has turned what was once a buyout deal into one of history's most lucrative opportunities, but Anthropic now faces the real risk of losing its international customer base permanently to competitors like Cohere that can offer unrestricted access. Each enterprise that migrates to Cohere during this regulatory window is a renewal contract Anthropic will not recover. Switching costs in enterprise AI deployments are substantial, and incumbency effects strongly favor whoever the customer onboards first. Once a legal, compliance, and security review clears Cohere's stack, enterprises have little incentive to revisit that approval process for a competitor whose export status remains uncertain under the current administration.

DeepSeek's $7.4 Billion War Chest Reshapes AI Funding

DeepSeek closed the largest funding round in AI history, raising over 50 billion yuan ($7.4 billion) in a deal that The Information described as having an unusual structure. The Chinese AI lab's record-breaking raise demonstrates that despite US export controls on advanced chips and AI models, capital continues to flow aggressively into China's AI ecosystem. The funding gives DeepSeek the resources to build out its own compute infrastructure, reducing its dependence on Nvidia's restricted hardware by accelerating investment in domestic alternatives from Huawei and other Chinese chipmakers. The unusual deal structure, which sources say involves multiple tranches tied to specific milestones, signals that investors are demanding accountability for how the capital gets deployed in an environment where hardware access remains constrained. DeepSeek's raise dwarfs the previous record held by Anthropic and signals that Chinese AI companies are not retreating from the frontier model race despite Washington's export controls. The $7.4 billion war chest positions DeepSeek to poach top talent from US AI labs and fund the massive compute clusters needed to train models approaching GPT-5-level capability. This funding round also pressures other Chinese AI labs to match DeepSeek's scale, triggering a capital arms race that analysts at The Information project will push total AI investment in China above $50 billion within the next twelve months. The scale of this raise also underscores the degree to which export controls have failed to starve China's AI ecosystem of capital — if anything, they have accelerated domestic investment by making self-reliance a financial imperative for every major Chinese AI lab.

SpaceX Becomes Google's Cloud Provider in Role Reversal

The SpaceX-Google partnership has evolved into a complete role reversal, with Elon Musk's rocket company now serving as a cloud provider to one of the world's largest technology firms. Google, which once invested $900 million in SpaceX as a strategic bet on satellite internet, now relies on SpaceX's Colossus supercomputer cluster to power its Gemini Enterprise AI workloads. This arrangement inverts the typical cloud computing hierarchy, where hyperscalers like Google Cloud, AWS, and Azure provide infrastructure to everyone else. SpaceX's entry into the cloud compute market creates a new competitive dynamic, leveraging its access to massive power capacity and specialized cooling infrastructure that traditional data center operators struggle to replicate. The $920 million monthly payment from Google effectively subsidizes SpaceX's broader AI infrastructure buildout, allowing the company to amortize its capital expenditure across a guaranteed revenue stream. For Google, the deal provides access to compute capacity that it cannot build fast enough internally, given the global GPU shortage and power constraints in key data center markets. This partnership also strengthens the personal ties between Musk and Larry Page, whose relationship drifted over a decade ago but whose companies are now closer than ever through this commercial arrangement. The role reversal signals that the AI infrastructure market is fragmenting away from the traditional cloud oligopoly, with specialized compute providers emerging to capture the most demanding workloads.

The Fed Rate Decision Cascades Into AI Infrastructure Economics

The FOMC's rate decision under new Chair Kevin Warsh will directly impact the economics of the AI infrastructure buildout that has driven record corporate capital expenditure. With inflation running at double the 2% target and the FedWatch tool showing zero probability of a cut, borrowing costs for the massive data center and compute cluster projects will remain elevated. SpaceX's $30 billion AI infrastructure deal with Google was structured at current interest rate levels, meaning any further tightening will compress the margin on that contract and force the parties to renegotiate terms on future expansions. The hyperscalers (Google, Microsoft, Amazon, and now SpaceX) have been financing their AI infrastructure through a combination of operating cash flow and debt issuance, with the latter becoming significantly more expensive as the Fed holds rates higher. Warsh's first policy statement will be scrutinized for any indication that the Fed sees inflation as persistent enough to warrant additional hikes, which would further increase the cost of capital for AI investments. The new chair's hawkish record from his 2006-2011 Fed tenure establishes that he will prioritize inflation fighting over supporting growth, slowing the pace of AI infrastructure deployment in the process. This creates a tension between the Fed's mandate to control prices and the administration's desire to maintain US leadership in AI, a conflict that will define Warsh's early tenure. The rate decision will also affect the valuation of AI companies like Anthropic and DeepSeek, whose funding rounds depend on the availability of cheap capital that higher rates make scarce.

The Warsh Fed faces a defining test in its first meeting, with inflation persistence threatening to derail the AI investment boom that has become the primary engine of US economic growth. The new chair's decision to hold rates steady or hike further will ripple through every layer of the AI stack, from the hyperscalers building compute clusters to the startups training frontier models. SpaceX's $30 billion deal with Google, Cohere's market share gains from Anthropic's export restrictions, and DeepSeek's record funding round all depend on a macroeconomic environment where capital remains accessible and the cost of debt stays manageable. If Warsh signals a more aggressive tightening path, the AI infrastructure buildout could slow, giving Chinese competitors time to close the capability gap. The market will parse every word of his post-meeting press conference for clues about the Fed's tolerance for above-target inflation in the name of technological leadership. This first decision sets the monetary policy framework for the remainder of Warsh's term, with implications that extend far beyond the usual rate-sensitive sectors into the very fabric of the AI economy.