# Microsoft, I owe you an apology, I wasn’t familiar with your game > Source: > Published: 2026-06-03 16:20:18+00:00 # Microsoft, I owe you an apology, I wasn’t familiar with your game ## Microsoft is trying to show the world it doesn't need OpenAI to win its slice of our AI future. * Welcome to *. [Cautious Optimism](https://www.cautiousoptimism.news/), a newsletter on tech, business, and power. Modestly upbeat **Wednesday. **Building a startup and want to make your users feel appreciated? I recently [kicked the tires](https://x.com/alex/status/2059357714174640134) on ** Zo Computer** (cloud-based personal agent and AI workspace), and several of its team members reached out to ask how I was faring. Well, after kindness like that, I am going *right back into the product*. Today, we’re covering cybersecurity and developer tools earnings, peeking at how companies are trying to avoid mortgaging their children to Dario Amodei, SpaceX’s valuation, and Microsoft’s staggering set of AI releases. To work!** — Alex** ## 📈 Trending Up [Ragequitting](https://www.wsj.com/business/media/60-minutes-correspondent-scott-pelley-out-at-cbs-news-8c1ee2ea)…[Mythos, now coming to a country near you](https://www.ft.com/content/19ea9ed4-3dd0-43aa-9877-729d44e620e8?syn-25a6b1a6=1)…[AI nation states](https://www.cnbc.com/2026/06/03/openai-sam-altman-g7-macron-france-big-tech.html)…[everything AI apps](https://openai.com/index/codex-for-every-role-tool-workflow/)…[Polymarket limbo](https://polymarket.com/event/microstrategy-sell-any-bitcoin-in-2025)…[domestic robotic and drone supply chains](https://x.com/boxcardavid/status/2061825303715123234)…[open-source French AI](https://x.com/TeksEdge/status/2061825310669332818)…[European technology sovereignty](https://www.politico.eu/article/eu-plots-long-game-against-us-digital-supremacy/)…[Boston startups](https://techcrunch.com/2026/06/03/coralogix-raises-200m-in-race-to-build-the-monitoring-layer-for-ai-agents/)? …[science fiction](https://pathfounders.com/p/apoha-emerges-from-stealth-with-36m-to-teach-ai)…[the Iran War](https://www.cbsnews.com/live-updates/trump-iran-war-attacks-kuwait-airport-israel-hezbollah-ceasefire/) **Cybersecurity demand:** Cybersecurity heavyweight **Palo Alto Networks** reported blockbuster results for its April quarter ([Q3 FY26](https://paloaltonetworks.gcs-web.com/news-releases/news-release-details/palo-alto-networks-reports-fiscal-third-quarter-2026-financial)). The company, [per CEO Nikesh Arora](https://www.investing.com/news/transcripts/earnings-call-transcript-palo-alto-networks-q3-2026-beats-expectations-but-stock-drops-93CH-4723135), “surpassed every guided metric” in the quarter, thanks to “organic bookings momentum” and “surging cybersecurity needs as AI transitions from experimental stages to enterprise-wide production.” Wall Street was initially tickled that the company raised its “full-year fiscal 2026 guidance across all metrics for both [its] core and acquired businesses,” including its revenue growth target, which went up by a full percentage point to 24%. It also improved its performance obligations forecast for the full year, with its backlog improving by 32% to 33% by the end of the third quarter, up from 28% at the end of the previous quarter. The company’s shares have shed most of their early gains by now, but as the market comes to grips with both AI-generated code and cyberattacks, the companies that help secure software are going to do just fine. On the subject of code, developer platform **GitLab** [beat estimates for Q1 and explained](https://www.businesswire.com/news/home/20260602438182/en/GitLab-Reports-First-Quarter-Fiscal-Year-2027-Financial-Results) why it’s cutting a large chunk of its staff. The company had several insightful comments: Its software-as-a-service revenue “continues to grow as a share of our revenue mix,” which is a very counter-narrative data point. And, it’s now started sharing a new data point: Consumption run rate, or CRR. CRR at GitLab measures how much customers spend on Credits, its “standardized consumption currency for usage-based billing.” So how is CRR growth at GitLab? Will customer AI credit purchases prove to be a big driver of growth at the company? All signs indicate [yes](https://www.investing.com/news/transcripts/earnings-call-transcript-gitlab-q1-2027-beats-expectations-stock-dips-93CH-4723072): [O]ur consumption business is off to a really solid start. Consumption run rate is an internal metric we track to gauge uptake of GitLab credits. We’re sharing CRR this quarter as an early signal. [..] At the end of our first full quarter of consumption, Duo Agent Platform paid consumption run rate was nearly $20 million. […] paid CRR will likely become a more meaningful forward indicator of where our commercial model is heading. Run-rate revenue of $20 million for a new business at a company with a run-rate of roughly $1 billion is not much, but the figure could grow quickly. [Figma cited](https://www.fool.com/earnings/call-transcripts/2026/05/15/figma-fig-q1-2026-earnings-call-transcript/) its own AI credit sale business in its recent quarterly report, saying it was “very encouraged by the usage trends we’ve seen” in selling more AI capacity to customers. GitLab and Palo Alto Networks are surfing the accelerating pace at which new code is written. Palo Alto Networks gets to focus on the security side (though GitLab competes there, too), while GitLab directly benefits from rising code production volumes. None of those are cheap, which brings us to: **Limiting AI spend:** Uber, which said earlier this year it may be able to [slow hiring](https://www.businessinsider.com/uber-slowing-hiring-fund-ai-investment-2026-5) thanks to AI (per its CEO), in April [blew out its AI budget](https://finance.yahoo.com/sectors/technology/articles/ubers-anthropic-ai-push-hits-223109852.html) (per the CTO) and is finding it [hard to measure AI ROI](https://www.businessinsider.com/uber-coo-andrew-macdonald-ai-token-spending-harder-justify-2026-5) (its COO says). Yes, the current market is full of moving parts that different business roles see rather differently. What matters for our purposes is that [Uber seems to have found a middle ground](https://www.bloomberg.com/news/articles/2026-06-02/uber-caps-usage-of-ai-tools-like-claude-code-to-cut-costs): [Uber] set usage caps on some artificial intelligence-powered tools used by its staff, a move meant to manage costs after the company blew through its AI budget earlier this year […] The rideshare giant is limiting all employees to $1,500 in monthly token spending per AI coding tool […] “We think this is all a pretty straightforward way to responsibly encourage agentic AI adoption and experimentation at scale across the company,” the spokesperson said. Uber employs thousands of developers. The Pragmatic Engineer [pegs](https://newsletter.pragmaticengineer.com/p/how-uber-uses-ai-for-development) the number at “almost 3,000,” and other estimates put the figure closer to 5,000. No matter, we can do a little math: For every 1,000 developers Uber employs, at $1,500 per month, AI costs work out to $1.5 million per month, and $18 million over a year. Assuming 3,000 devs, the figures rise to $4.5 million per month and $54 million per year. Is that a lot? No. If we conservatively estimate that a developer costs $200,000 per year at Uber all-in, then the company is spending about 270 developer salaries to give all its existing engineers $1,500 worth of monthly AI budgets. If we raise the cost of a developer at Uber to $300,000, the number falls to 180 human employees. I think Uber can wring that much out of its AI budget. - All this math is rough and *directional at best*. Don’t take anything we tinker up as gospel when we’re riffing. [📉](https://finance.yahoo.com/news/servicenow-pledges-1-5bn-investment-110000403.html) Trending Down [📉](https://finance.yahoo.com/news/servicenow-pledges-1-5bn-investment-110000403.html) [Tariff rationale believability](https://finance.yahoo.com/economy/policy/articles/trump-proposes-levies-least-10-044418121.html)…[no unions in tech](https://x.com/TheStalwart/status/2061871810694529231)…[US-EU relations](https://www.politico.eu/article/european-commission-slams-donald-trump-forced-labor-tariffs-as-unjustified/)…[spying on employees](https://www.theinformation.com/articles/meta-rolls-back-parts-employee-tracking-tool-staff-backlash)…[search opt-in](https://www.engadget.com/2186257/google-will-allow-websites-to-exclude-themselves-from-ai-search-results/)…[cybersecurity](https://www.nytimes.com/2026/06/02/technology/scientists-find-way-to-supercharge-dangerous-computer-worms-with-ai.html?unlocked_article_code=1.nVA.0wTZ.RA9uX3etLVHk&smid=nytcore-ios-share)…[Saudi growth](https://www.reuters.com/world/middle-east/imf-says-saudi-economy-holding-up-during-iran-war-growth-could-slow-2-2026-2026-06-03/)…[capital deficiency in the Chinese AI market](https://www.reuters.com/business/retail-consumer/deepseek-slated-draw-7-billion-maiden-fundraising-sources-say-2026-06-03/)…[the value of bitcoin](https://www.bloomberg.com/news/articles/2026-06-02/bitcoin-tumbles-below-70-000-for-first-time-in-two-months)…[learning to play the guitar](https://www.bloomberg.com/news/articles/2026-06-03/ai-music-startup-suno-raises-capital-at-5-4-billion-valuation)…[Hungary’s hunger for cash](https://www.ft.com/content/7db5e02b-4181-47e5-a3aa-5e94c3159d8e?syn-25a6b1a6=1) **SpaceX’s valuation? **Want to buy SpaceX shares at a $2 trillion valuation? As [we wrote yesterday](https://www.cautiousoptimism.news/five-questions-for-ais-biggest-ipo/), the company’s rumored IPO valuation has fallen to $1.8 trillion ([now more durably confirmed](https://www.reuters.com/business/media-telecom/spacex-plans-raise-75-billion-ipo-135-per-share-source-says-2026-06-03/)), and it may fall further. Morningstar, a well-known Wall Street analysis shop, had lots of nice things to say about the company’s space launch and space connectivity businesses, and assigned them a $611 billion valuation. The research and brokerage firm was [less sanguine](https://www.morningstar.com.au/stocks/spacex-what-investors-need-know-about-its-enormous-upcoming-ipo) about SpaceX’s AI and social media arms, tagging them with a price of $170 billion. That adds up to $781 billion, which is a huge sum, but far less than what some investors expect. “With talk of an IPO that would peg SpaceX’s market capitalization at north of $1.5 trillion, we are likely to view the shares as overvalued in almost any scenario, at least in the near term,” Morningstar wrote. There’s a lot of hope riding on the SpaceX IPO. Alongside returning an avalanche of capital to long-term shareholders and investors, a strong debut could set the stage for IPOs from Anthropic and OpenAI. SpaceX has landed several multi-billion-dollar contracts since it filed to list, which are no doubt bolstering its growth prospects. The first range that SpaceX sets for its shares is going to be one of the most important data points of the year. Set up a page watcher for [this link](https://www.sec.gov/edgar/browse/?CIK=1181412&owner=exclude). **Avoiding AI regulation:** Scooting along, POTUS yesterday [signed an AI-focused executive order](https://www.whitehouse.gov/presidential-actions/2026/06/promoting-advanced-artificial-intelligence-innovation-and-security/), after a previous edition of the document was floated and killed in record time. What’s changed? AI labs can voluntarily submit their models for the government to review “up to 30 days before they plan to release such models to other trusted partners,” instead of the previously proposed 90 days. Former White House AI boss David Sacks, who helped ice the previous version, gave the document a thumbs-up. What about mission creep? There is a [fear in the Valley](https://www.cautiousoptimism.news/ai-regulation-dies-again-as-the-market-prepares-for-ipo-season/) that any movement towards policies that tech abhors, even if they’re modest and reasonable, will one day mutate into their worst-case forms. The one-time billionaire tax in California? The tech elites expect it to become recurring. That sort of thing. Sacks [took the point on](https://x.com/DavidSacks/status/2061882659266261274), saying he “understand[s] the concerns of many that this could morph into an ‘FDA for AI,'” but because the EO is strictly voluntary for AI labs, all is well. Let’s see if the Valley’s traditional distrust of regulations or Sacks’s optimism around this EO end up being right. ## Microsoft floods the AI zone Microsoft emptied its clip at its annual Build developer conference yesterday. The company released a slew of new AI models, new agentic capabilities, new developer tools, new hardware… The list goes on and on. It’s interesting to see Microsoft trying hard to avoid being, or viewed as, the former chariot of a [third-party AI lab](https://blogs.microsoft.com/blog/2025/10/28/the-next-chapter-of-the-microsoft-openai-partnership/). The company was heralded for its early and continued investment in OpenAI, and the partnership brought significant AI compute demand to its data centers, and IP sharing didn’t hurt either. Things have changed, however. ### Subscribe to Cautious Optimism to unlock the rest. Become a paying subscriber of Cautious Optimism to get access to this post and other subscriber-only content. [Subscribe](https://www.cautiousoptimism.news/subscribe/?utm_source=Cautious+Optimism&utm_medium=website&utm_campaign=article-paywall)