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Jerome Powell and Sam Altman Speak At Federal Reserve's Regulatory Capital Framework Conference
(Andrew Harnik/Getty Images)

OpenAI’s Altman: Our rushed deal with the Pentagon “looked opportunistic and sloppy”

OpenAI CEO Sam Altman shared an internal memo in which he expressed some regrets for the bad optics of the company’s hasty deal with the Pentagon, and outlined new additions that were made to the agreement.

Jon Keegan

The fallout from Anthropic’s messy breakup with the US government, and OpenAI’s hasty deal to take its place, is still settling across the AI industry.

Last night, OpenAI CEO Sam Altman shared an internal post on X in which he expressed some regrets about how the deal came to be as well as some new additions to the agreement.

The new conditions centered around the mass surveillance of Americans, one of the key issues that blew up Anthropic’s deal with the Pentagon.

Altman said they added language to clarify that, in accordance with the Fourth Amendment and laws already on the books, “the AI system shall not be intentionally used for domestic surveillance of U.S. persons and nationals.” The rub is that the scale and reach of data collection today, in pretty much every corner of our life, lets anyone — including the government — buy massive amounts of sensitive data that can be used for surveillance without getting a warrant.

Altman acknowledges this gaping loophole in personal privacy protections, and also included this language:

“For the avoidance of doubt, the Department understands this limitation to prohibit deliberate tracking, surveillance, or monitoring of U.S. persons or nationals, including through the procurement or use of commercially acquired personal or identifiable information.”

This exact issue is one that Anthropic CEO Dario Amodei flagged in a post last week as he outlined the company’s red lines surrounding the government’s use of its AI tools.

Altman also acknowledged the bad optics surrounding the last-minute deal as the Trump administration attacked Anthropic. Altman said they shouldn’t have rushed to do the deal, saying, “It just looked opportunistic and sloppy.”

But where does this leave things? It seems that Altman was able to get the same deal that Anthropic was fighting for. Meanwhile, Anthropic faces a potential catastrophic blacklisting that could cripple countless partnerships and investments.

In the post, Altman said he told the Pentagon that Anthropic should not be designated as a “supply chain risk,” and hoped that it would be offered the same deal that OpenAI ended up with.

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Microsoft loses exclusive access to OpenAI’s models and tools while ending revenue-sharing deal with ChatGPT maker

Microsoft shares dropped as it announced a revised agreement with OpenAI.

The amended agreement ends revenue-sharing payments from Microsoft to OpenAI, and also ends Microsoft’s exclusive access to OpenAI’s intellectual property (i.e. models and products).

OpenAI’s revenue sharing with Microsoft will end in 2030, is subject to a total cap, and is no longer dependent on its achieving artificial general intelligence.

Amazon, a likely beneficiary of this lack of exclusivity, initially popped on the news but erased those gains.

This is a developing story.

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China just blew up one of Meta’s key AI bets

China has ordered Meta to unwind its $2 billion acquisition of Manus, a Chinese startup (since relocated to Singapore) that makes AI agents and was central to Meta’s push to turn its massive AI investments into a real business. The move is part of the Chinese government’s effort to stop US firms from gaining access to Chinese talent and intellectual property, as Washington continues to restrict sales of advanced AI chips to Chinese companies.

Unlike its tech peers, which can sell AI through cloud services, Meta mainly uses AI to improve its existing ad business rather than as a stand-alone revenue driver. The decision strips away one of Meta’s clearest paths to monetizing AI — leaving it spending like a hyperscaler, without a hyperscaler business model.

Unlike its tech peers, which can sell AI through cloud services, Meta mainly uses AI to improve its existing ad business rather than as a stand-alone revenue driver. The decision strips away one of Meta’s clearest paths to monetizing AI — leaving it spending like a hyperscaler, without a hyperscaler business model.

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Jon Keegan

DeepSeek releases new V4 series models highlighting efficiency and long context

Chinese AI lab DeepSeek has released a major new version of its eponymous open-source AI models that are nipping at the heels of leading frontier models in some areas.

The most significant DeepSeek-V4 Pro and DeepSeek-V4 Flash both have a 1 million-token context — the amount of information the model can actively work with in a single session — which is a crucial feature for complex, long-running coding tasks.

DeepSeek rebuilt how the models process information under the hood, making them substantially more efficient — and that efficiency is what makes the large context window actually usable.

Also, the new models’ coding skills have closed the gap with the major frontier models from Anthropic, OpenAI, and Google.

The authors of the model acknowledge some of V4’s shortcomings, such as its lower scores on reasoning benchmarks, saying that V4 “trails state-of-the-art frontier models by approximately 3 to 6 months.”

As open-weight models, V4 can be run on any user’s own hardware, making the V4 models among the top-performing open-source models out there. V4’s large context and token efficiency are especially significant among open-source models.

But like with earlier DeepSeek models, don’t ask it about Tiananmen Square.

DeepSeek rebuilt how the models process information under the hood, making them substantially more efficient — and that efficiency is what makes the large context window actually usable.

Also, the new models’ coding skills have closed the gap with the major frontier models from Anthropic, OpenAI, and Google.

The authors of the model acknowledge some of V4’s shortcomings, such as its lower scores on reasoning benchmarks, saying that V4 “trails state-of-the-art frontier models by approximately 3 to 6 months.”

As open-weight models, V4 can be run on any user’s own hardware, making the V4 models among the top-performing open-source models out there. V4’s large context and token efficiency are especially significant among open-source models.

But like with earlier DeepSeek models, don’t ask it about Tiananmen Square.

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