One chip to rule them all?

After its big fundraise last week, OpenAI was worth more than these twelve major companies combined. We (real humans) whipped up a special edition on the business of artificial intelligence, from chip competition to copyright battles and more. 

Stocks inched up for the week and rallied on Friday after a blockbuster jobs report calmed economic concerns. The US added around 100K more jobs than expected last month and unemployment ticked down, boosting soft landing optimism. 

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Crunch time… AI chips are still the hottest tech in town, powering everything from Big Tech chatbots to autonomous cars and delivery robots. AI processors are critical for training the large language models that fuel tools like ChatGPT, which OpenAI said has 200M+ weekly users. Nvidia’s been selling shovels to the gold rush: Alphabet, Microsoft, Amazon, and Meta have spent tens of billions to get their hands on its powerful AI chips (FYI: Big Techies account for ~40% of Nvidia’s sales). Global AI chip revenue is expected to top $70B this year and could reach $400B/year by 2030.

Connecting the circuits… Nvidia’s estimated to control between 70 and 95% of the AI-chip market, but its sales growth is cooling and competition’s revving up. Intel and AMD have announced their own genAI chips. Meta, OpenAI, and Microsoft said they’d use AMD’s chip, which CEO Lisa Su said could notch $4.5B in sales this year. Last month, Intel scored a multiyear deal to make a custom AI chip for Amazon. Microsoft, Meta, and Google (aka Nvidia’s biggest customers) have also whipped up their own AI training chips to start weaning off Nvidia’s pricey GPUs. Last month, California-based startup Cerebras Systems filed for a US IPO after debuting what it calls the “the fastest AI chip in the world.” 

The silicone future… Chip demand is expected to power up as companies lean on AI-infused phones and laptops to boost sagging hardware sales. Last month Apple unveiled the first iPhone designed for generative AI (#AiPhone). Rival Samsung debuted its AI-powered Galaxy phone this year, and Dell and Microsoft have rolled AI PCs. While AI hardware has yet to go mainstream, experts say the smart device surge could spark another chip shortage.

May AI approach the bench?.… AI models are trained on massive amounts of data, from billions of web articles to books and images. That’s led to quite a few copyright infringement lawsuits, with high-profile names launching legal battles that could set a precedent. Last year, The New York Times sued OpenAI and Microsoft, alleging they trained their bots on millions of Times articles. There are also several suits from authors including George R.R. Martin, John Grisham, and Jodi Picoult. In August, artists cleared a big hurdle in their case against AI art generator Stable Diffusion. Even open-source coders are going to court against AI companies. 

Got my AI license last week… About 90% of top news outlets block AI crawlers from companies including OpenAI, Anthropic, and Nvidia to prevent their content from getting scraped (it’s not always effective). But as copyright-infringement claims intensify, AI companies are starting to strike major content licensing deals. This year OpenAI announced a partnership with Wall Street Journal owner News Corp that would let it use the publisher’s articles to answer queries and in training (it’s said to be a $250M deal). OpenAI made a similar deal last year with Axel Springer (Business Insider, Politico) to use its content in ChatGPT. In May, OpenAI announced that it’ll license data from Reddit. And last month “John Wick” studio Lionsgate gave AI-video startup Runway access to its movie library.

The next chapter… Licensing deals may become common as AI companies try to avoid legal fallout before lawsuits set a precedent. And while the cases are moving through court, media companies may be trying to get ahead of the AI shift before it gets ahead of them.

Bots clock in… AI’s effect on labor is still TBD (theories range from a huge increase in productivity to mass job losses), but it’s already arrived at the workplace. A February survey suggested that one in five US workers have used ChatGPT for their jobs. Last month OpenAI said it hit 1M+ paying users across its biz subscriptions, like ChatGPT Enterprise. Communication seems to be a top use case, with many customer service hours being filled by chatbots. In finance, analysts are using AI to save time on pitch decks and data entry.

With a little help from my bots… For those who work desk jobs, AI adoption is as high as 75% — and most of those employees are using their personal CGPT accounts (whether or not their bosses realize) to manage workloads. Still, 77% of workers in a survey said AI has lowered their productivity and boosted their workload, partly since the output needs to be reviewed. AI has also led to an uproar in creative industries, with video game actors on strike over the tech and authors suing genAI companies.

AIs on the future… McKinsey once estimated that AI could displace 400M workers by 2030, but others are more skeptical. An MIT economist believes just 5% of jobs are at risk of being replaced over the next decade. If companies continue pouring billions into AI and don’t see the massive productivity ROI they’re expecting, that could lead to financial troubles. 

Regulators, mount up… there’s AI to wrangle. The EU’s AI Act, which went into effect in August, applies new rules to so-called high-risk artificial intelligence (like: education, law enforcement) and bans AI for social-scoring and predictive policing. Still, most of its provisions won’t hit until 2026 — leaving room for tech titans to feel things out. Microsoft and Google signed a pledge saying they’d get a head start on following the regs, but Meta — whose open-source Llama model is intended to be used freely by developers — kicked the can. 

Instructions unclear… The US has made its own efforts to rein in AI. Last year President Biden issued an executive order that sought to study AI’s effect on the labor market and require AI safety assessments. Still, there’s been no federal AI legislation, leaving it up to the states. That’s had mixed results: California’s Gov. Gavin Newsom vetoed an AI-regulation bill last month, while states like Colorado and Illinois have passed limited regs. At least 26 states have passed rules around genAI in election communications.  

AI on the polls… As federal legislators work to pass AI laws — Senate Majority Leader Chuck Schumer said he hoped it could happen by the end of the year — both former President Trump and VP Harris have promised to promote some form of AI policy if elected president. 

Well, they can help experts plan biological threats and they’re really good at tricking people… Read more.

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The largest AI computer chip is the size of a dinner plate

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