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Welcome back to The Prompt.
OpenAI is making a foray into the defense world by partnering with Carahsoft, a little-known billionaire-owned government contractor that said it made $16 billion in revenue last year. Carahsoft is also fighting accusations of allegedly price fixing on Department of Defense contracts. Beyond helping OpenAI brandish its technology to the U.S. military, Carahsoft has sold hundreds of thousands of dollars worth of ChatGPT licenses to other federal agencies like NASA, the National Gallery of Art and the Department of Agriculture.
Smaller startups like AI voice generation Resemble AI and coding automation company Codeium are also using Carahsoft as a step in the door to the public sector.
Now let’s get into the headlines.
BIG PLAYS
ChatGPT creator OpenAI is trying to build ties with social media creators as the AI giant faces backlash from some creators over its alleged use of YouTube transcriptions and copyrighted materials to train models. The company is currently hiring a “Head of Internet Creators” to foster relationships with influencers, according to a new job listing. The company has also partnered with artists and creatives to give feedback on its AI tools such as video generation model Sora and to create content that it has jointly posted on its channels.
Don Allen Stevenson told Forbes that content creators like him play a vital role in communicating OpenAI’s technology to a wider audience. The company also collaborates with Nice Aunties, a popular account on Instagram run by a Singaporean architectural designer who uses AI image and video generators to create quirky illustrations of women inspired by “auntie culture” in Asian communities.
ETHICS + LAW
The National Archives plans to launch a public-facing generative AI tool called “Archie,” 404 Media reported. The federal agency is also pushing its employees to use an internal software built on Google’s Gemini model. But those employees raised an array of concerns about whether the model would provide reliable information, pull from copyrighted data sources or would leak confidential records. As I reported last month, the Library of Congress (the world’s largest library) is becoming a training playground for AI companies and is planning to roll out AI tools for its librarians.
Elsewhere, the New York Times sent AI search startup Perplexity a cease and desist letter, asking the company to stop accessing and using its content, the Wall Street Journal first reported. CEO Aravind Srinivas responded by saying “we have no interest in being anyone’s antagonist here.” I reported with my colleague Sarah Emerson in June that the company was republishing entire sentences of news articles from multiple news outlets, including Forbes, through its Pages features.
AI DEAL OF THE WEEK
Decagon, which is building AI-based software to handle customer service for companies like Eventbrite, Slack and Duolingo, announced today that it raised $65 million in a round led by Bain Capital Ventures, valuing the startup at $650 million. CEO Jesse Zhang tells me that his company’s AI agents had to participate in what’s called “bake offs” in which one software tool is pitted against another to secure contracts.
Also notable: AI evaluation startup Galileo has raised $45 million in funding, my colleague Richard Nieva reported.
DEEP DIVE
Musk Muzzles Memphis government employees
Nearly six months ago in Memphis, before residents or even city councilors knew that Elon Musk was building “the world’s largest supercomputer” in their backyard, the billionaire’s team met secretly with a host of local and national law enforcement agencies including the sheriff’s office, Memphis Police Department, U.S. Department of Homeland Security and Federal Bureau of Investigations.
The covert meeting concerned Musk’s growing AI startup xAI, according to the Greater Memphis Chamber, an economic development group that had been steering the deal behind closed doors since March.
“I truly appreciate everyone’s time and commitment on this project. We are on the cusp of an amazing moment in Memphis history,” Chamber chief economic development officer Gwyn Fisher wrote to the group in an email. She offered them a tour of Musk’s new facility on one condition: that they sign non-disclosure agreements with an entity called CTC Property, a mysterious shell company controlled by Musk’s fixer and personal banker, Jared Birchall.
In the bones of an empty factory along the Mississippi River, xAI’s supercomputer came together in just four months. Nicknamed “Colossus,” as Forbes first revealed, the Chamber publicly announced in June that xAI would be making its “new home” in Memphis, boasting about the speed at which the “multibillion dollar” deal was closed. However, council members have said that was the first they’d heard about the project, and appealed for more time and information to understand the venture that stands to make xAI one of the largest power and water consumers in the city. One month later, the data center was officially online.
Read the full story on Forbes.
AI INDEX
$700,000
That’s how much enterprise focused generative AI company Writer spent to train its latest frontier model called Palmyra X004. That’s a tiny fraction of the roughly $7 billion in costs that OpenAI incurs on training its models, per The Information.
CEO May Habib told Forbes in an interview “we have to be scrappier and have invented a host of techniques around synthetic data and how we better structure the data that the LLM processes.”
QUIZ
This company, which helps enterprises like Toyato and Nestle roll out AI tools and has $350 million in revenue, is eyeing a 2025 IPO.
- Cerebras
- AI/R
- Databricks
- OpenAI
Check if you got it right here.
MODEL BEHAVIOR
Earlier this month, workout tracking app Strava rolled out an AI feature dubbed Athlete Intelligence, which spun up AI-generated summaries of people’s stats on running, swimming and cycling. But users are far from impressed. Some told my colleague Cyrus Farivar that the feature offers them bland and generic pep talks and “bullshit word salads.” The feature tends to tell everyone that they’re “crushing it,” regardless of whether they’ve run a marathon or done a chill cool-down jog.
