Morning edition — Tuesday 20 October 2026

Inception announced Mercury 3 on 19 October and called it the most capable diffusion-based language model released to date. Diffusion models generate many tokens in parallel through repeated denoising, rather than one token at a time.

The company says Mercury 3 is more than 40 times larger than Mercury 1, runs at 1,068 tokens per second on Nvidia GPUs and has a one-million-token context window, up from 260,000 for Mercury 2.5. It claims quality on par with or better than speed-optimised models such as GPT-6 Luna and Claude Haiku 5.5, while running four to eight times faster.

List prices are $0.20 per million input tokens and $0.70 per million output tokens, with a 50% launch discount to $0.10 and $0.35. The model is available through Inception's own API, OpenRouter, Baseten and Vercel, and the API is compatible with OpenAI's.

Bloomberg News reported on 19 October, citing people familiar with the negotiations, that the Nvidia-backed data-centre developer Nscale is in talks to sell Anthropic computing power in a deal that could be worth about $45 billion. The deal would cover a second facility at Nscale's Monarch campus in West Virginia.

According to Nscale's IPO filing, Anthropic already has agreements with Nscale worth as much as about $44.6 billion. As relayed by Reuters, Bloomberg said a second Monarch building would deliver 460 megawatts using Nvidia's Vera Rubin chips, and that Anthropic holds a right of first refusal on a third building. The sources said talks are continuing and the details could change.

Reuters said it could not independently verify the report, and neither company had commented when TechCrunch and Reuters published. The talks follow Microsoft's withdrawal from a separate Nscale data-centre deal, reported in this journal's 19 October morning edition.

Reuters reported late on 19 October, citing two people familiar with the matter, that OpenAI is trying to secure investor commitments before Anthropic's expected stock-market debut in mid-November. The round could value OpenAI at more than $1.4 trillion. According to one source, SoftBank, Abu Dhabi's MGX and other existing backers are in talks to join a round of about $30 billion.

One source said OpenAI is telling investors it reached $50 billion in annualised revenue after launching GPT-6 Astra, and that it expects $70 billion by the end of the year. OpenAI was last valued at $852 billion in March, after a $122 billion round.

According to Reuters, OpenAI and SoftBank declined to comment, and Anthropic and MGX did not immediately respond.

Nvidia said that on 19 October, at the Invest in Germany Summit in Berlin, Chancellor Friedrich Merz, the Federal Ministry for Economic Affairs and Energy and the Federal Ministry for Research, Technology and Space signed a Joint Declaration of Intent with the company. It covers a joint initiative to advance AI models for physical AI and formalises Nvidia's work with the government's Industry 4.0 Platform.

Nvidia chief executive Jensen Huang also announced planned investments in four German startups: Agile Robots, Avelios Medical, Mirelo and Reflex Aerospace. Nvidia said these are part of a commitment of nearly $10 billion across Europe.

Merz urged small and medium-sized companies to adopt AI: "Please open your doors for AI to make use of your data," he said, according to Nvidia's account of the event.

At a detention hearing on Monday 19 October, Judge Alex Tse of the federal court in San Francisco ordered Abdulrahman Alfozan, 35, held without bail pending trial, saying "there is a risk of non-appearance that is significant". Alfozan, a Saudi national and former OpenAI engineer, is charged with trying to intercept oral communications. Prosecutors say that on or about 28 September he hid a recording device in a television in an executive conference room.

In a detention memorandum, prosecutors said Alfozan was charged on 8 October, arrested on 9 October and fired by OpenAI. They said he had been in frequent WhatsApp contact with a member of the Saudi royal family, and that a Saudi military official paid for one-way business-class tickets for his wife and son, who left the United States the day after his arrest. They called the case a national-security concern and said more serious charges may follow.

CNBC reported that the judge called an offer by the Saudi consulate to pay the full bail "problematic". Alfozan's lawyer argued that prosecutors had not shown he was a serious flight risk. The charge carries a maximum of five years in prison, and Alfozan is due back in court on 6 November.