Cracks in the AI Supply Chain: Architects Weigh In
At the Milken Global Conference in Beverly Hills, five individuals involved across multiple layers of the AI supply chain sat down with TechCrunch to discuss emerging challenges facing the industry. Topics ranged from ongoing chip shortages and the feasibility of orbital data centers to more fundamental questions about whether the current underlying architecture of AI systems is the right long-term approach. TechCrunch reports that the conversation surfaced concerns about where structural weaknesses in the AI economy are beginning to show. The full discussion offers a rare, candid look at the operational and engineering pressures mounting across the AI stack.
Is xAI Becoming a Neocloud?
According to a TechCrunch report, Elon Musk's AI company xAI may be shifting its primary business focus toward data center construction and operation rather than AI model development. The piece raises the question of whether xAI is evolving into a so-called "neocloud" — a newer category of cloud infrastructure provider built around AI workloads. If accurate, this would position xAI alongside other infrastructure-heavy players in the AI space, competing on compute capacity rather than solely on model performance. TechCrunch notes that xAI's real business may center more on building and operating large-scale data centers than on training frontier AI models.
Snap and Perplexity Part Ways on $400M AI Search Deal
Snap has confirmed that its previously announced $400 million deal with AI search company Perplexity has come to an end. According to TechCrunch, Snap described the conclusion of the agreement as having "amicably ended." The deal, which was originally announced in November 2025, would have integrated Perplexity's AI-powered search engine directly into the Snapchat platform. No additional details regarding the reasons for the dissolution have been disclosed by either company at this time.
These developments reflect the fast-moving and sometimes unpredictable nature of the AI industry, from infrastructure pivots to partnership dissolutions and growing scrutiny of the technology's foundational assumptions.