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Jon Keegan

WSJ: OpenAI is hitting a wall with GPT-5 training

After 18 months’ work and hundreds of millions of dollars’ worth of computing time training its next major foundational model, GPT-5, OpenAI seems to have hit a wall.

New reporting from The Wall Street Journal said that the company is not seeing the exponential leap in its next-gen model (known internally as “Orion”) that OpenAI researchers — and OpenAI investors — had expected.

The AI “scaling law” that has until now consistently delivered more powerful, more capable AI models by just feeding more into more expensive GPUs is showing signs of reaching a plateau. Researchers are scrambling to find reserves of fresh data to train the models, as most of the internet has already been harvested.

Much of the AI industry has followed this pattern of model development, so if the current approach is reaching its theoretical limits, it could shake up the power structure of the industry.

Companies like Meta, Amazon, xAI, Google, and others are spending billions of dollars on data centers powered by hundreds of thousands of specialized training GPUs, like Nvidia’s popular Hopper series. Investors have been promised continued leaps in AI technology in exchange for huge capital expenditures investing in computing infrastructure.

OpenAI just announced its new o3 “reasoning” models, which the company is hoping will help break through the current barriers.

The AI “scaling law” that has until now consistently delivered more powerful, more capable AI models by just feeding more into more expensive GPUs is showing signs of reaching a plateau. Researchers are scrambling to find reserves of fresh data to train the models, as most of the internet has already been harvested.

Much of the AI industry has followed this pattern of model development, so if the current approach is reaching its theoretical limits, it could shake up the power structure of the industry.

Companies like Meta, Amazon, xAI, Google, and others are spending billions of dollars on data centers powered by hundreds of thousands of specialized training GPUs, like Nvidia’s popular Hopper series. Investors have been promised continued leaps in AI technology in exchange for huge capital expenditures investing in computing infrastructure.

OpenAI just announced its new o3 “reasoning” models, which the company is hoping will help break through the current barriers.

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Netflix creates new made-up metric for advertisers

It’s not quite WeWork’s community-adjusted EBITDA but it’s also not quite a real number: Netflix announced today that it has 190 million “monthly active viewers” for its lower-cost advertising tiers. The company came up with MAVs by measuring the number of subscribers who’ve watched “at least 1 minute of ads on Netflix per month” and multiplies that by what its research assumes is the number of people in that household.

The metric builds on Netflix’s previous attempt at measuring ad viewership, monthly active users, which is the number of profiles that have watched ads (94 million as of May). The MAV measurement, of course, is a lot bigger and bigger numbers are more attractive to advertisers, who are spending more and more on streaming platforms.

“After speaking to our partners, we know that what they want most is an accurate, clear, and transparent representation of who their ads are reaching,” Netflix President of Advertising Amy Reinhard explained in a press release. “Our move to viewers means we can give a more comprehensive count of how many people are actually on the couch, enjoying our can’t-miss series, films, games and live events with friends and family.”

Netflix last reported its long-followed and more easily understood paid membership numbers at the beginning of the year, when it crossed 300 million.

The metric builds on Netflix’s previous attempt at measuring ad viewership, monthly active users, which is the number of profiles that have watched ads (94 million as of May). The MAV measurement, of course, is a lot bigger and bigger numbers are more attractive to advertisers, who are spending more and more on streaming platforms.

“After speaking to our partners, we know that what they want most is an accurate, clear, and transparent representation of who their ads are reaching,” Netflix President of Advertising Amy Reinhard explained in a press release. “Our move to viewers means we can give a more comprehensive count of how many people are actually on the couch, enjoying our can’t-miss series, films, games and live events with friends and family.”

Netflix last reported its long-followed and more easily understood paid membership numbers at the beginning of the year, when it crossed 300 million.

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Ahead of Musk’s pay package vote, Tesla’s board says they can’t make him work there full time

Ahead of Tesla’s CEO compensation vote at its annual shareholder meeting tomorrow, The Wall Street Journal did a deep dive into how Elon Musk, who stands to gain $1 trillion if he stays at Tesla and hits a number of milestones, spends his time.

Like a similar piece from The New York Times in September, this one has a lot of fun details. Read it all, but here are some to tide you over:

  • Musk spent so much time at xAI this summer that he held meetings there with Tesla employees.

  • He personally oversaw the design of a sexy chatbot named Ani, who sports pigtails and skimpy clothes and for whom “employees were compelled to turn over their biometric data” to train.

  • The chatbot, which users can ask to “change into lingerie or fantasize about a romantic encounter with them,” has helped boost user numbers, which are still way lower than ChatGPT’s.

  • Executives and board members have told top investors in the past few weeks that they can’t make Musk work at Tesla full time. Board Chair Robyn Denholm explained that in his free time, Musk “likes to create companies, and they’re not necessarily Tesla companies.”

Like a similar piece from The New York Times in September, this one has a lot of fun details. Read it all, but here are some to tide you over:

  • Musk spent so much time at xAI this summer that he held meetings there with Tesla employees.

  • He personally oversaw the design of a sexy chatbot named Ani, who sports pigtails and skimpy clothes and for whom “employees were compelled to turn over their biometric data” to train.

  • The chatbot, which users can ask to “change into lingerie or fantasize about a romantic encounter with them,” has helped boost user numbers, which are still way lower than ChatGPT’s.

  • Executives and board members have told top investors in the past few weeks that they can’t make Musk work at Tesla full time. Board Chair Robyn Denholm explained that in his free time, Musk “likes to create companies, and they’re not necessarily Tesla companies.”

tech

Motion Picture Association to Meta: Stop saying Instagram teen content is “PG-13”

In October, Meta announced that its updated Instagram Teen Accounts would by default limit content to the “PG-13” rating.

The Motion Picture Association, which created the film rating standard, was not happy about Meta’s use of the rating, and sent the company a cease and desist letter, according to a report from The Wall Street Journal.

The letter from MPA’s law firm reportedly said the organization worked for decades to earn the public’s trust in the rating system, and it does not want Meta’s AI-powered content moderation failures to blow back on its work:

“Any dissatisfaction with Meta’s automated classification will inevitably cause the public to question the integrity of the MPA’s rating system.”

Meta told the WSJ that it never claimed or implied the content on Instagram Teen Accounts would be certified by the MPA.

The letter from MPA’s law firm reportedly said the organization worked for decades to earn the public’s trust in the rating system, and it does not want Meta’s AI-powered content moderation failures to blow back on its work:

“Any dissatisfaction with Meta’s automated classification will inevitably cause the public to question the integrity of the MPA’s rating system.”

Meta told the WSJ that it never claimed or implied the content on Instagram Teen Accounts would be certified by the MPA.

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Dan Ives expects “overwhelming shareholder approval” of Tesla CEO pay package

Wedbush Securities analyst Dan Ives, like prediction markets, thinks Tesla CEO Elon Musk’s $1 trillion pay package will receive “overwhelming shareholder approval” at the company’s annual shareholder meeting Thursday afternoon. The Tesla bull, like the Tesla board, has maintained that approval of the performance-based pay package is integral to keeping Musk at the helm of the company, which in turn is integral to the success of the company. Ives is also confident that investors will back the proposal allowing Tesla to invest in another of Musk’s companies, xAI.

“We expect shareholders to show overwhelming support tomorrow for Musk and the xAI stake further turning Tesla into an AI juggernaut with the autonomous and robotics future on the horizon,” Ives wrote in a note this morning.

The compensation package has received pushback, including from Tesla’s sixth-biggest institutional investor, Norway’s Norges Bank Investment Management, and from proxy adviser Institutional Shareholder Services.

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Tesla has a new EV, robotaxi, humanoid robot, AI chip, and flying car competitor

An electric vehicle maker is not content to merely manufacture cars, but has far greater ambitions that involve robotaxis, humanoid robots, and even flying cars.

Sound familiar? It’s not Tesla.

Rather, Nasdaq-listed Chinese EV maker XPeng announced that next year it will launch three robotaxis made with in-house AI chips and begin mass production of its humanoid robots. It’s also developing a flying car — a concept Tesla CEO Elon Musk has only hinted at.

Tesla has been facing increased competition from Chinese automakers like XPeng and BYD, though neither can sell in the US — and neither has a Musk. Still, XPeng Co-President Brian Gu seems to share some of his gumption. “We didn’t want to be a traditional automaker or EV maker from the very beginning,” Gu said. “The future of cars is not electrification, but intelligence.”

Tesla has been facing increased competition from Chinese automakers like XPeng and BYD, though neither can sell in the US — and neither has a Musk. Still, XPeng Co-President Brian Gu seems to share some of his gumption. “We didn’t want to be a traditional automaker or EV maker from the very beginning,” Gu said. “The future of cars is not electrification, but intelligence.”

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