AI Weekly Digest - August 12 2024

All the key points you need to know about recent events in the artificial intelligence sector. LinkedIn newsletter readers can also sign up to an enhanced email edition of the AI Weekly Digest - published every Friday. You can subscribe for free.

Investors warned AI tech 'overhyped' and 'not ready for prime time'

US-based hedge fund Elliott Management is reported to have told investors that AI technology is “overhyped" and many applications are "not ready for prime time”. The FT said it had seen a letter from Elliott to clients saying that some of the largest US tech stocks, particularly Nvidia, are in “bubble land”. The letter also said it was “sceptical” that Big Tech companies would keep buying Nvidia’s graphics processing units in such high volumes, the FT reports. The letter is understood to say that many of the uses for AI are “never going to be cost-efficient, are never going to actually work right, will take up too much energy, or will prove to be untrustworthy”.

CMA launches formal merger probe into Amazon’s $4bn Anthropic investment

UK watchdog the Competition and Markets Authority has launched a formal merger probe into Amazon’s $4bn investment in Anthropic. The CMA said it has “sufficient information” about Amazon’s partnership with the AI start-up to begin an investigation and will decide whether to escalate the inquiry into a more in-depth Phase 2 probe by October 4. Amazon said it was “disappointed” by the decision and that its work with Anthropic “does not raise any competition concerns or meet the CMA’s own threshold for review”. It added: “By investing in Anthropic, Amazon, along with other companies, is helping Anthropic expand choice and competition in this important technology." The announcement comes a week after the CMA said it was launching an invitation to comment into Google’s ties with US-based Anthropic.

UK creatives' demand for 'transparency' from Big Tech over AI development

A letter demanding “transparency about the works that have been used to develop” AI systems has been sent by a UK creatives coalition to major technology firms including Apple, Google, Meta, Microsoft and OpenAI. The letter says “members of the Creators’ Rights Alliance and the 500,000 creators they represent do not authorise the use of any of their works protected by copyright and/or related rights (including performers rights) for the training, development, or operation of AI models.” The letter concludes by calling for developers “to agree terms on a commercial basis with respective rightsholders and where those rightsholders are not the creators themselves, to satisfy themselves that creators have given specific consent.”

Musk revives US lawsuit against OpenAI and CEO Altman

Elon Musk has revived his lawsuit against OpenAI and CEO Sam Altman, claiming he was manipulated into believing that the AI group he helped launch was a non-profit. The lawsuit, filed in US District Court in Northern California, alleges Altman courted and deceived the X and Tesla owner into investing tens of millions of dollars and helping recruit leading scientists, pledging it would pursue a non-profit venture. The renewed complaint, which Musk initially halted in June, states: “Altman assured Musk that the non-profit structure guaranteed neutrality and a focus on safety and openness for the benefit of humanity, not shareholder value... But as it turns out, this was all hot-air philanthropy - the hook for Altman’s long con.” Musk's lawsuit also accuses OpenAI and Altman of a breach of contract by breaking their founding agreement. Musk also asked the US court to cancel OpenAI’s licensing agreement with Microsoft, claiming it breaches the deal he made with OpenAI and Altman. Open AI denies all claims. A spokesperson said: “As we said about Elon’s initial legal filing, which was subsequently withdrawn, Elon’s prior emails continue to speak for themselves."

AI spending spree probe notes 'trust us' environment

An FT article looking at the AI spending spree by Big Tech groups heard from Jim Tierney, head of US growth at AllianceBernstein, who said: “Investors are still unclear what all the business models and pay-offs are. This is creating a  ‘trust us’ environment which is not overly comforting given the aggregate spending.” Meanwhile, Morningstar analyst Michael Hodel said: “I think the natural comparable that jumps to mind for many investors is the telecom bubble of the late 1990s and early 2000s. Most of the companies involved in that buildout went bust. This buildout seems similar in some ways . . . The main difference, though, is that the firms doing most of the building have massively profitable existing businesses and fortress-like balance sheets."

Microsoft 'competitors list' now includes OpenAI

A list of competitors flagged up in Microsoft's annual report now includes OpenAI. The US tech giant is the biggest investor in OpenAI and has a long-term partnership with the ChatGPT creator. However, the SEC filing identifies OpenAI as a competitor in AI offerings and in search and news advertising.

Striking voice actors picket outside Warner Bros. Games over AI threat

Striking US video game voice actors and motion-capture performers picketed outside Warner Bros. Games and said the rise of artificial intelligence posed a threat to their professions. Voice actor Leeanna Albanese told reporters: “The models that they’re using have been trained on our voices without our consent at all, with no compensation.” Call Of Duty: Modern Warfare & Warzone actor Jeff Leach added: "I think when you remove the human element from any interactive project, whether it be a video game or TV show, an animated series, a movie, and you put AI in replacement for the human element, we can tell! I'm a gamer, I'm a digester of this content."

Talks with celebrities over using their voices for Meta AI

Facebook and Instagram owner Meta is understood to be in discussions with celebrities including Dame Judi Dench and Awkwafina for the right to use their voices in its Meta AI digital assistant product. Reports suggest millions of dollars would be paid in fees if a deal was reached to secure the right to use the voices across Meta's platforms, including the Ray-Ban Meta glasses.

OpenAI co-founder Schulman joins rival Anthropic

One of OpenAI’s co-founders and a key architect of its ChatGPT chatbot has departed the AI company to join main rival Anthropic. John Schulman becomes the latest among senior figures to leave the company in recent months. Schulman said: “This choice stems from my desire to deepen my focus on AI alignment, and to start a new chapter of my career where I can return to hands-on technical work, alongside people deeply engaged with the topics I’m most interested in." He added: “To be clear, I’m not leaving due to lack of support for alignment research at OpenAI. On the contrary, company leaders have been very committed to investing in this area."

Buzzfeed 'cease and desist' letter to news aggregator

Buzzfeed has issued a “cease and desist” letter to AI news aggregator Trending Now, claiming that the start-up’s logo is an infringement of its copyright. Trending Now MD Joe Newton told Press Gazette the company had not been aware of the “very similar” logos until the letter arrived and it is “looking into this issue and will be replying to them in due course”.

Tim Cook: Apple has redeployed a lot of people on to AI

Apple CEO Tim Cook used the post-Q3 results call to announce that increased spending had been to get the Apple Intelligence service ready, ahead of it being shipped to customers this autumn: “What we’ve done is we’ve redeployed a lot of people on to AI that were working on other things. From a data centre point of view, as you know, we have a hybrid approach. So, we both have our own and we partner with people. And so that capex would be in the partners’ financials, and we would be paying expenses.”

OpenAI president to take rest of the year off

OpenAI president Greg Brockman announced on X that he would take the rest of the year off. Brockman said: “First time to relax since co-founding OpenAI nine years ago.  The mission is far from complete; we still have a safe AGI to build."

Warning over AI boom in US tech stocks

A warning over the AI boom in US tech stocks has been issued by influential investor Cathie Wood. She said the six largest tech stocks in the US – Nvidia, Apple, Microsoft, Amazon, Alphabet and Meta  – were “taking up so much oxygen from the investment room” that the market “knows that the increased concentration is developing into a risk”. Wood, who runs Ark Invest, added: “Investors are concerned about this concentration and the risk that the concentration is introducing into their own system.”

OpenAI to give US AI Safety Institute early access to next model

OpenAI CEO Sam Altman has pledged that the ChatGPT creator will give the US AI Safety Institute early access to its next model as part of the company's safety efforts. He said OpenAI has been working with the consortium "to push forward the science of AI evaluations".

Government awards £32m funding to nearly 100 AI tools groups

The government has handed out a share of £32m in funding to nearly 100 firms working on AI tools to help boost productivity. Feryal Clark, the minister for digital government and AI, said: “AI will deliver real change for working people across the UK – not only growing our economy but improving our public services."

Report: TikTok spending $20m a month on OpenAI models through Microsoft

TikTok is understood to be spending $20m a month to purchase OpenAI models through Microsoft. Reports suggest the ByteDance-owned company is responsible for close to 25% of Microsoft's AI revenue.

Reports: Nvidia delays Blackwell B200 AI chips

Nvidia is reported to have told Microsoft and other customers that its “Blackwell” B200 AI chips will take at least three months longer to produce than was planned. Sources told The Information that the delay is the result of a design flaw found “unusually late in the production process". Nvidia's Blackwell chip series was unveiled in March as a successor to its Grace Hopper Superchip. An Nvidia spokesperson said: "As we've stated before, Hopper demand is very strong, broad Blackwell sampling has started, and production is on track to ramp in the second half."

Zuckerberg: Years until monetisation of AI assistant

Despite Mark Zuckerberg saying that the Meta AI chatbot was on track to be the world's most-used AI assistant by the end of the year, the Meta CEO added that it would take “years” for the “monetisation of any of those things by themselves”.

Qualcomm Snapdragon chips 'necessary for AI smartphones'

US chipmaker Qualcomm is framing its most advanced Snapdragon chips as necessary for “AI smartphones", including recent Samsung models, which can run some gen AI tasks such as creating images. CEO Cristiano Amon said: “AI has expanded the size of the premium tier... So even in a market which is kind of flattish to low single digits in growth, the premium tier is actually growing faster, and we’ve seen that.” He hailed the Snapdragon X launch as a “milestone” in Qualcomm’s efforts to diversify. However, the group posted IoT revenue down 8% year-on-year at $1.4bn.