Daily AI Newsletter: Microsoft and OpenAI's partnership is beginning to show cracks

In today’s email:

🔥 Google’s NotebookLM now lets you guide AI-generated audio conversations
😍 New Canvas update allows you to see diffs
🚓 From Elon Musk to cop car chases, how a software engineer launched a police AI startup
🧰 10 new AI-powered tools and resources. Make sure to check the online version for the full list of tools.

Microsoft and OpenAI’s Close Partnership Shows Signs of Fraying

Microsoft and OpenAI's once-close partnership is beginning to show cracks, as both companies are navigating shifting priorities and increasing tensions. The collaboration, which initially seemed like the "best bromance in tech," has faced challenges, especially after OpenAI's board briefly ousted CEO Sam Altman last year. Following the turmoil, Microsoft hesitated on further investment, despite previously injecting $13 billion into OpenAI. Financial pressures, disagreements between employees, and the struggle over computing resources have tested the partnership.

OpenAI, which expects to lose $5 billion this year, has been seeking additional computing power while trying to renegotiate its exclusive agreement with Microsoft. Microsoft, meanwhile, appears to be hedging its bets, paying $650 million to hire staff from Inflection, an AI competitor. This move reflects Microsoft’s concern about its growing dependence on OpenAI. Mustafa Suleyman, the co-founder of Inflection, now leads a new Microsoft team focused on developing AI technologies similar to OpenAI's offerings, which has caused friction between employees of the two companies.

As OpenAI looked for alternatives, it secured a roughly $10 billion computing deal with Oracle, while Microsoft agreed to reduce the computing costs it charged. Meanwhile, OpenAI also expanded its investor base, recently raising $6.6 billion from multiple sources, including Nvidia, MGX, and Microsoft. However, Apple, with whom OpenAI had ongoing partnership discussions, did not invest in this round. Despite these efforts, tensions remain, with OpenAI employees expressing dissatisfaction over insufficient computing resources and concerns that Microsoft may hinder their goal of developing artificial general intelligence (AGI).

Microsoft's relationship with OpenAI is at a critical juncture, balancing their intertwined ambitions with the need for independence. While both companies continue to benefit from the partnership, Microsoft's increasing investments in competitors and OpenAI's push for more control reveal underlying uncertainties about the future of their collaboration.

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From Elon Musk to cop car chases, how a software engineer launched a police AI startup

Earlier this year, Abel founder Daniel Francis found himself in a high-speed police chase down a highway in Oakland, California. During a research ride-along for his AI startup, the officer Francis was accompanying pursued a driver fleeing from a search stop. Between the near-misses and adrenaline rush, Francis's mind wandered to the challenges AI faces in writing up police reports for such incidents. It’s precisely these real-world moments that have driven his company, Abel, which aims to use AI to streamline police paperwork. Abel's software leverages body cam footage and dispatch data to automate the time-consuming police report process.

On Thursday, Francis announced Abel had raised $5 million in a seed round led by Day One Ventures, with additional support from Long Journey Ventures and Y Combinator's summer 2024 cohort. Francis plans to use the funding to expand his team and improve Abel's technology. His passion for this field began after helping a close friend escape an abusive relationship, witnessing firsthand the delays and resource challenges faced by local police departments in Oakland. Inspired by the knowledge that officers spend roughly a third of their time on documentation, he became determined to find a solution.

The Abel AI system is already being used by the Richmond, California police department, where it has significantly reduced the time officers spend on paperwork. Instead of drafting reports on the spot, they now let Abel create a first draft that they simply edit later. Francis sees this as a crucial way to reduce officer burnout and enable police to focus more on the core duties of their jobs—being out in the community rather than stuck writing reports.

Francis's journey into AI for policing began after a surprising stint at Twitter, where he landed a job by pretending to be a laid-off engineer during the Elon Musk restructuring saga. Reflecting on his path, he has noted that working under Musk was even more nerve-racking than that high-speed chase. But it's his current pursuit—helping police departments become more efficient—that he hopes will have a lasting impact on public safety.

Deepfake romance scam raked in $46 million from men across Asia, police say

A sophisticated deepfake romance scam, targeting men across Asia, has led to losses of over $46 million, Hong Kong police revealed in a recent news conference. The scam used AI-generated deepfake videos to deceive victims into believing they were in romantic relationships, eventually manipulating them into investing in a fraudulent cryptocurrency platform. Authorities arrested 27 individuals, including 21 men and six women, following a raid on an operating center in Hong Kong. The suspects, aged 21 to 34, were reportedly well-educated, with backgrounds in digital media and technology, and were recruited by the scam ring after attending local universities.

The scam typically began with an innocent text message, in which the sender pretended to have mistakenly contacted the victim. Posing as attractive women, the scammers cultivated online romances, building a sense of intimacy and trust. Once the victim was sufficiently "groomed," the scammers convinced them to invest in a fake cryptocurrency platform, promising a bright future together. The group was highly organized, with departments dedicated to different stages of the scam, and even utilized a training manual on how to exploit victims' emotions to carry out the con.

This romance scam is part of a broader trend of "pig-butchering" scams, a type of fraud where scammers invest significant time in building trust before taking everything from their victims. Deepfake technology has become an alarming new tool in these scams, raising concerns among authorities. Earlier this year, another high-profile case in Hong Kong saw a British multinational company defrauded of $25 million after scammers used deepfake technology to impersonate its chief financial officer. Hong Kong police continue to emphasize the need for vigilance, particularly as technology makes it increasingly challenging to distinguish between genuine and fraudulent interactions.

Other stuff

A data bottleneck is holding AI science back, says new Nobel winner
Sam Altman’s Worldcoin becomes World and shows new iris-scanning Orb to prove your humanity
Google’s NotebookLM now lets you guide AI-generated audio conversations
Meta’s AI chief says world models are key to ‘human-level AI’ — but it might be 10 years out
Mistral releases new AI models optimized for laptops and phones
When using Canvas, you can now see what's changed in your writing and code by selecting the "Show changes" icon.

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