• Facial recognition company Clearview AI cofounder and former CEO Hoan Ton-That has resigned.
• The company's new co-CEOs are early investor Hal Lambert and cofounder Richard Schwartz.
• The leadership shake-up comes as the Clearview eyes new contracts under the Trump administration.

The former CEO of Clearview AI, Hoan Ton-That, has resigned. Clearview is a facial recognition startup used by law enforcement or federal agencies to identify suspects. It's known for scraping billions of images from the internet without users or platforms' consent.

Clearview appointed early investor Hal Lambert and cofounder Richard Schwartz as co-CEOs in December after Ton-That shifted roles from CEO to president.

Ton-That, who has now left the company but will remain a board member, said in an email to Business Insider that he was "leaving on a high note." He added revenue and growth in 2024 were at their highest since the company was founded.

Ton-That's departure occurs as Clearview appears to be positioning itself to benefit from the Trump administration and its renewed focus on biometric surveillance, particularly at the border.

Lambert is an active Republican supporter who, according to the biography page on his investment firm Point Bridge Captial, served on President Donald Trump's inauguration committee. Schwartz was an advisor to Ruby Giuliani, the former Republican mayor of NYC who defended Trump's claims of election fraud in 2020.

A company spokesperson told Business Insider that Lambert and Schwartz will "lead the charge to capitalize on emerging opportunities to enhance national security and public safety under the new Administration."

In an interview with Forbes, Lambert said Clearview is already in discussions with the Pentagon, Homeland Security, and other federal agencies. "We want to keep America safe, and technology is a way to do it," he told the outlet.

Ton-That's departure follows years of controversy for Clearview

After Clearview's debut in 2020, the company faced lawsuits from civil rights groups, US state and federal courts, and overseas governments. Critics said it violated privacy rights by scraping facial images from platforms like Facebook, Instagram, and LinkedIn without the platforms or users' constent.

While Clearview settled some US cases, it was hit with significant fines across Europe, including a 30.5 million euro penalty from Dutch authorities last year. Clearview disputed the ruling, writing in an email sent to TechCrunch last year that the decision was "unlawful, devoid of due process and is unenforceable."

Despite legal hurdles, Clearview's technology is being used by law enforcement in the States. Last week, the El Cerrito Police Department in California confirmed that it is using the tool to identify suspects and solve crimes. "Ultimately, this technology will help us pursue justice for crime victims and improve the quality of life for our residents," the department said.

A Clearview spokesperson told BI the company has been "instrumental in solving innumerable cases involving terrorism, homicide, theft, financial fraud, human trafficking, and child predation," without providing more details about where these cases were being solved or processed.

Lambert told Forbes the company had generated $16 million in annual recurring revenue last year, largely from contracts with local law enforcement agencies.

Although Clearview is still unprofitable, Lambert told the outlet they are aiming to triple revenue in 2025, pointing to new federal partnerships as a key driver.

Clearview raised its last funding round in 2021, securing a $30 million Series B round that valued the company at $130 million.

• OpenAI's CFO said Thursday $11 billion in revenue is "definitely in the realm of possibility" for 2025.
• Sarah Friar told CNBC that OpenAI's weekly active users have jumped 33% since December.
• Friar said the AI industry is "far from being a commodity" due to its frequent product launches.

OpenAI may be burning through cash, but its chief financial officer has said hitting $11 billion in revenue this year is "definitely in the realm of possibility."

Reaching $11 billion in sales this year would mean around a threefold increase of OpenAI's 2024 revenue.

CFO Sarah Friar told CNBC Thursday that OpenAI hit $1 billion in revenue in 2023, then "over 3X-ed" the following year. That's in line with the $3.7 billion revenue that OpenAI had projected for 2024, per previous media reports.

Despite increasing competition from the likes of China's DeepSeek, OpenAI's weekly active users have jumped 33% since December to reach 400 million, about 5% of the world's population, Friar told CNBC.

The growth metrics come as OpenAI is in talks with SoftBank for a $40 billion investment that would value the ChatGPT maker at around $300 billion.

"Investors look not just at your growth rate when you're young like us, but they say, 'what could this company look like over the next five years?'" Friar said. "And that's allowing us, as we talk to investors, to be able to achieve valuations that are, I think, on par with the growth rate and the scale that we're achieving."

When asked about rising competition and increasingly similar outputs from rival AI models, Friar dismissed concerns about the industry becoming commoditized.

"We are so far from being a commodity industry," Friar said. She added that OpenAI's "numbers kind of prove that there is a reinforcement cycle here as we get better and better at innovating," pointing to its recent releases like Deep Research and Operator.

The company announced on Friday a wider international rollout of its Operator AI agent to ChatGPT Pro subscribers. The tool, which performs tasks autonomously like booking tickets and making reservations, will be available in most regions where ChatGPT operates.

While OpenAI has grown its revenues over consecutive years, its losses have also mounted. In September, the New York Times reported that OpenAI was on track to lose $5 billion in 2024.

The company is also facing an unsolicited takeover bid from Elon Musk, a cofounder who left the company in 2018. Last week, OpenAI's board rejected the $97.4 billion offer.

OpenAI did not immediately respond to a Business Insider request for comment.

• Elon Musk's xAI has rolled out Grok 3, claiming it outperforms OpenAI's GPT-4o in key benchmarks.
• Grok 3 introduced DeepSearch, a tool for improving research and reasoning.
• Some AI experts said Grok 3 is a solid contender but remains behind OpenAI in key areas.

Elon Musk on Monday introduced Grok 3, the latest version of xAI's chatbot, calling it "an order of magnitude more capable" than its predecessor.

Some AI researchers and experts put Grok 3 through early tests — and their initial reactions have been mixed.

Musk claimed the new model surpasses OpenAI's flagship GPT-4o and competing AI systems from Google, DeepSeek, and Anthropic on key benchmarks in math, science, and coding.

"We're continually improving the models every day, and literally within 24 hours, you'll see improvements," Musk said during a livestream presentation on his social media platform X alongside three xAI engineers.

Andrej Karpathy, the computer scientist who cofounded OpenAI and previously led Tesla's AI operations, said in a Monday X post that Grok 3 successfully completed tasks such as looking up complex information from a training paper. However, like OpenAI's o1-pro, it struggled to solve "tricky" tic-tac-toe boards, he said.

"The impression overall I got here is that this is somewhere around o1-pro capability, and ahead of DeepSeek-R1, though of course we need actual, real evaluations to look at," added Karpathy, who had early access to Grok 3.

xAI also introduced a new tool for Grok 3 called DeepSearch, which aims to improve research, brainstorming, and data analysis while explaining how it processes queries and formulates responses. The startup had been working on the tool since at least late last year, Business Insider first reported.

Karpathy said DeepSearch is "approximately around Perplexity's DeepResearch offering, which is great, but not yet at the level of OpenAI's recently released 'Deep Research,' which still feels more thorough and reliable."

Ethan Mollick, a professor at the University of Pennsylvania's Wharton School who researches AI, said that while xAI has scaled rapidly, Grok 3 is not a clear leader.

"A very solid frontier model, but not one you would stop using your current frontier model for," Mollick wrote in a Monday LinkedIn post.

He added that while Grok 3 outperforms some OpenAI models in select benchmarks, it does not clearly surpass OpenAI's o3.

Gary Marcus, the founder of Geometric Intelligence and a longtime critic of AI hype, was more skeptical.

"Elon Musk promised that Grok 3 would be the smartest AI ever. Spoiler alert: it wasn't," Marcus wrote on Substack.

He called the launch event a "carbon copy" of previous demos, adding that while Grok 3 shows progress, there was "no game changer" in its performance compared to OpenAI models.

Karpathy was more positive, calling Grok 3's reasoning capabilities "state of the art" and highlighting its ability to solve complex coding problems.

Musk vs. Altman

Grok 3's launch comes amid heightened tensions between Musk and Sam Altman, the CEO of OpenAI.

Their rivalry escalated this month when Musk led an unsolicited $97.4 billion bid to take control of OpenAI, the company he cofounded with Altman in 2015 before walking away three years later due to differences. Last week, OpenAI's board rejected Musk's bid.

Mollick said that while Grok 3 is a solid model, OpenAI maintains a strong advantage in industry partnerships and enterprise adoption.

"I don't know if Grok has a big opening," he wrote.

Marcus said that OpenAI doesn't need to worry just yet.

"Sam Altman can breathe easy for now. No major leap forward here," he wrote, adding that OpenAI's dominance in compute access and research scale remains a major moat.

Musk said that Grok 3 has "more than 10 times" the compute power of its predecessor and completed pre-training in early January.

Grok 3 is rolling out immediately to X's Premium+ subscribers, with xAI also launching a new subscription service called SuperGrok for users accessing the bot via mobile or Grok.com.

Musk said xAI plans to open source previous versions of its models once the latest one reaches maturity, estimating that Grok 3 will meet that threshold "in a few months."

• OpenAI appears to have removed a page from its website about its commitment to DEI.
• The URL now redirects to a page called "Building dynamic teams," which does not mention DEI.
• It comes amid a trend of Big Tech companies, like Google and Meta, scaling back DEI initiatives.

OpenAI appears to have removed a page from its website outlining its commitment to diversity, equity, and inclusion — and now redirects the URL to a page titled "Building dynamic teams."

An archived version of the old DEI commitment page, seen by Business Insider, referenced OpenAI's pledge to "continuously improve" its diversity efforts and acknowledged the importance of addressing bias in AI systems.

The new page does not mention diversity, equity, or inclusion. Instead, it refers to fostering collaboration among people with "different backgrounds, experiences, and ways of thinking."

It is not clear exactly when OpenAI made the change. The last available version of the previous DEI commitment page on the Wayback Machine — a tool for accessing archived web pages — is dated September 7.

TechCrunch, which first reported the change, pointed to the diversity commitment page being cited as available in an ABC News story published on January 22.

"Our investment in diversity, equity, and inclusion is ongoing, executed through a wide range of initiatives, owned by everyone across the company, and championed and supported by leadership," the DEI commitment page, archived on September 7, states. "We take this work seriously and are committed to continuously improving our work in creating a diverse, equitable, and inclusive organization."

OpenAI did not immediately respond to a Business Insider request for comment.

Tech's DEI shift

Corporate America, including tech companies, has been rolling back DEI initiatives.

Earlier this month, Google ended its hiring targets tied to diversity, according to an internal memo obtained by Business Insider. The company also announced a review of its DEI programs.

In January, Meta dissolved its DEI team, while Target scaled back multiple diversity-focused initiatives.

The shift away from DEI efforts began before President Donald Trump's reelection, with companies like Walmart, Ford, and Lowe's scaling back similar programs last year.

• Elon Musk said Wednesday he'll drop his bid for OpenAI if it stops its move to a for-profit entity.
• On Monday, a Musk-led group made an unsolicited $97.4 billion bid for OpenAI's nonprofit arm.
• OpenAI boss Sam Altman has said the company is "not for sale."

Elon Musk has said he'll drop his $97.4 billion bid for OpenAI if the company halts its transition into a for-profit entity, according to court filings.

"If OpenAI, Inc.'s Board is prepared to preserve the charity's mission and stipulate to take the 'for sale' sign off its assets by halting its conversion, Musk will withdraw the bid," lawyers for Musk wrote in a Wednesday filing in a California federal court.

"Otherwise, the charity must be compensated by what an arms-length buyer will pay for its assets."

On Monday, a Musk-led group of investors made an unsolicited bid for "all assets" of OpenAI, Inc. Sam Altman, the CEO of OpenAI, has dismissed the move and said the company is "not for sale."

According to the Wednesday filing, Altman rejected Musk's offer before OpenAI's board had even reviewed it.

Musk's lawyers said that OpenAI's leadership is acting against the nonprofit's best interests by pushing forward with a for-profit conversion. They said this would ultimately benefit Altman and a select group of investors rather than the organization's original mission of developing AI for the public good.

Altman hit back at Musk on Tuesday at a Paris AI summit, describing the bid as an effort to stifle a competitor, adding he doesn't think the Tesla boss is a "happy person."

An OpenAI spokesperson pointed Business Insider to Altman's Tuesday comments to Bloomberg, in which he said, "We are not moving to a for-profit model," and the nonprofit will "continue to exist."

Altman added, "The Board is looking at lots of options about how to best structure for this next phase, but the nonprofit is not changing or going anywhere."

In December, OpenAI shared details about its plans to convert into a for-profit business, and plans on giving the nonprofit part of OpenAI a stake in the for-profit business.

Representatives for Musk did not immediately respond to a Business Insider request for comment.

• Sam Altman said a $97.4 billion Elon Musk-led bid for OpenAI is an attempt to stall competition.
• Altman told Bloomberg TV that he doesn't think Musk is a "happy person" in an escalation of their feud.
• The OpenAI CEO told multiple outlets at a Paris AI summit that the company is "not for sale."

Sam Altman has hit back at Elon Musk over his surprise bid for OpenAI, calling the move an effort to stifle a competitor and stating that he doesn't think the Tesla boss is a "happy person."

"Probably his whole life is from a position of insecurity," Altman said of Musk in a Tuesday interview with Bloomberg TV on the sidelines of the Paris AI Action Summit. "I feel for the guy. I really do. Actually, I don't think he's a happy person. I do feel for him."

Altman's remarks came after Musk on Monday led an unsolicited $97.4 billion bid with other investment firms to acquire OpenAI's nonprofit arm, a proposal Altman has dismissed outright.

Musk said in a Monday statement that the bid is about returning OpenAI to an "open-source, safety-focused force for good."

Altman suggested that Musk's bid is less about OpenAI and more about stalling a competitor.

"I think he's probably just trying to slow us down," Altman told Bloomberg. "He obviously is a competitor. He's working hard, and he's raised a lot of money for xAI. They're trying to compete with us from a technological perspective, from, you know, getting the product into the market."

Musk's xAI is building rival AI models, positioning itself as a direct competitor to OpenAI.

"I wish he would just compete by building better products," Altman said. "But I think there have been a lot of tactics — many, many lawsuits, all sorts of other crazy stuff coming out of this. And we'll try to just put our head down and keep working."

Altman told multiple media outlets at the Paris AI summit that OpenAI is "not for sale." When asked by CNBC how seriously he is taking Musk's bid, the OpenAI chief said: "Not particularly."

Altman's comments in Paris follow an exchange between him and Musk on X shortly after news of the bid broke.

Altman appeared to respond in a post on X, writing: "no thank you but we will buy twitter for $9.74 billion if you want."

Musk replied: "Swindler."

OpenAI, X, and xAI did not immediately respond to a Business Insider request for comment.

Musk vs. Altman

Tensions between Musk and Altman have been escalating for years. Musk was a cofounder of OpenAI with Altman but cut ties with the company in 2018.

In March 2024, Musk sued Altman and OpenAI, accusing the company of betraying its founding principles, before dropping the lawsuit months later. In August 2024, he filed another lawsuit against Altman and OpenAI, accusing them of "manipulating" him into co-founding the company as a nonprofit.

Altman has repeatedly downplayed Musk's legal moves, suggesting they're part of a broader attempt to undermine OpenAI's progress.

Musk, meanwhile, has publicly criticized Altman and OpenAI's close ties to Microsoft, one of its largest backers, arguing the company that created ChatGPT is no longer acting in the public interest.

Now, Musk's close ties to President Donald Trump add a new undercurrent to the tech CEOs' long-running feud.

When Bloomberg asked Altman if he was worried about Musk's political influence, he said, "Maybe I should. But not particularly. I try to just wake up and think about how we're going to make our technology better."

• OpenAI CEO Sam Altman dismissed Elon Musk's unsolicited $97.4 billion takeover bid.
• Altman told media at an AI summit in Paris that OpenAI and its mission are "not for sale."
• Musk, who co-founded OpenAI, has long criticized its for-profit transition.

Sam Altman has reiterated that OpenAI is "not for sale" following an unsolicited $97.4 billion bid to buy it from an Elon Musk-led investor group.

Altman doubled down on his stance to multiple media outlets at an AI summit in Paris, telling Sky News, "The company is not for sale, neither is the mission."

Asked whether OpenAI could afford to resist Musk's bid to buy it, he responded, "The board will decide what to do there."

Speaking to Axios at the same event, Altman said, "There's been like versions of Elon trying to, you know, somehow take control of OpenAI for a long time, so, it's like, okay, here's this week's episode."

It follows Monday's back-and-forth on X between Altman and Musk over the latter's $97.4 billion bid for control of the company behind ChatGPT.

Musk and a group of investors, including his AI company X.AI, submitted the offer to the OpenAI board on Monday. Marc Toberoff, a lawyer representing the group, confirmed the offer in a statement provided to Business Insider. The statement said the offer was for "all assets" of OpenAI, Inc.

"At x.AI, we live by the values I was promised OpenAI would follow. We've made Grok open source, and we respect the rights of content creators," Musk said in the statement. "It's time for OpenAI to return to the open-source, safety-focused force for good it once was. We will make sure that happens."

In October OpenAI was valued at $157 billion during a funding round that raised $6.6 billion. BI reported in January that SoftBank, a Japanese investment holding company, was preparing to make an investment in OpenAI in a deal that would value the company at around $300 billion.

Backers of the bid — which was first reported by The Wall Street Journal — include Baron Capital Group, Inc., Valor Management LLC, Atreides Management, LP, Vy Fund III, L.P., Emanuel Capital Management, LLC, and Eight Partners VC, LLC.

The Journal reported that the investor group bid to acquire the OpenAI nonprofit, which controls the rest of OpenAI. Altman wants to convert the startup to a for-profit company, but to do so, the charitable arm must be compensated for its assets. Settling on a fair value for these assets is complex.

The Musk investor group said in a statement on Monday that their bid for OpenAI is designed to ensure that the charitable arm's assets are fairly valued and that it gets paid appropriately before any conversion to a for-profit business. "As we understand the OpenAI, Inc. Board's present intentions, they will give up majority ownership and control over OpenAI's entire for-profit business in exchange for some minority share of a new, consolidated for-profit entity. Who on Earth would make that trade?" Toberoff, the lawyer representing the investors, said in a statement.

"If the Board is determined to relinquish OpenAI, Inc.'s assets, it is in the public's interest to ensure that OpenAI, Inc. is compensated at fair market value. That value cannot be determined by insiders negotiating on both sides of the same table," he continued.

Shortly after news of the bid broke, Altman appeared to respond in a post on X, writing: "no thank you but we will buy twitter for $9.74 billion if you want."

Musk replied: "Swindler."

In another post on X, Musk wrote, "Scam Altman" in reference to the OpenAI CEO.

Representatives for OpenAI did not respond to a request for comment from BI.

Altman and Musk co-founded OpenAI as a non-profit in 2015, but Musk left the company in 2018 and has been publicly critical of it and Altman since. Musk has especially criticized OpenAI's decision to transition to a for-profit structure.

The change, announced by OpenAI in September last year, would move its business out from under the control of its nonprofit board. OpenAI has said the move would help it attract more funding and help it become an "enduring company."

It's unclear how the Musk-led offer would impact that structural change, but the Tesla billionaire has been highly critical of OpenAI's move to for-profit status.

In March 2024 Musk sued Altman and OpenAI, accusing the company of betraying its founding principles, before dropping the lawsuit months later. In August 2024 he filed another lawsuit against Altman and OpenAI, accusing them of "manipulating" him into co-founding the company as a nonprofit.

OpenAI has dismissed Musk's accusations. In response to the criticism last year, OpenAI published emails in March 2024 that it said showed the SpaceX CEO was previously interested in moving the company to a for-profit model and wanted it to merge with Tesla.

• Reid Hoffman said tech platforms embracing freedom of speech shouldn't mean more misinformation.
• The LinkedIn founder said on Monday that his platform "reflects my point of view on these things."
• Hoffman said it's "extremely important" for tech leaders to be working with the Trump adminstration.

As tech companies like Meta move away from fact-checking, LinkedIn's cofounder Reid Hoffman doesn't want it to come at the expense of more misinformation.

At the Paris AI Action Summit, Hoffman said having a space for "civil dialogue" is "incredibly important" but shouldn't mean more posts around topics like "anti-vax misinformation."

While Meta and X have loosened their content moderation policies — with Mark Zuckerberg and Elon Musk arguing that they can stifle free expression — Hoffman suggested his own platform, LinkedIn, better "reflects my point of view on these things."

"I think that it's important to get to the equivalent of fact-checking," he said on Monday, adding, "We're innovating in that direction."

"What I would like to see more from the tech industry is less of a rollback where freedom of speech might mean anti-vax misinformation or other kinds of things, and more of a learning dialogue," Hoffman said in response to a question about Zuckerberg's recent policy changes.

Hoffman's stance places him at odds with some of Silicon Valley's most powerful figures, including longtime ally Zuckerberg.

While he defended the Meta CEO from criticism for attending Trump's 2025 inauguration, Hoffman has previously warned that social media companies have an obligation to uphold fact-checking standards.

"Social networks should, in fact, take a certain social responsibility," Hoffman told NPR last month.

Unlike Zuckerberg, Musk, and other top tech executives, Hoffman was notably absent from Trump's 2025 inauguration. Several billionaires stood onstage, but Hoffman wasn't invited — a reflection, he said, of his political differences and his position as an outspoken critic of Trump's policies.

"I assumed it's partly that I'm not a current CEO of a giant company, but the political difference with my fellow tech founders is hard to overlook," Hoffman, who backed Kamala Harris, told NPR.

Despite Hoffman's exclusion from Trump's inauguration, when asked at the Paris AI Action Summit about the relationship between tech CEOs and Trump, he said he thought the "Trump administration staffing people who understand technology" was a good thing, adding, "It is extremely important for all governments to be in dialogue with the technology industry."

He went on to compare AI to previous industrial revolutions, saying it will bring a "huge increase in productivity" but also challenges, "namely the transition that goes into how society fits, and so I think those organizations being in dialogue with governments is great."

Hoffman said that tech companies "now, more than ever," need to be able to articulate their beliefs "about what society needs" and how they are building their technology.

• OpenAI made its Super Bowl debut with a $14 million ad.
• The ad draws a direct line between ChatGPT and some of history's most transformative inventions.
• OpenAI said it used a text-to-video model for brainstorming, but human artists made the final version.

OpenAI aired its first-ever Super Bowl ad on Sunday, making a $14 million statement that artificial intelligence belongs in the same category as fire, the wheel, and the internet.

The 60-second spot, titled "The Intelligence Age," aired during the second quarter and used animation to journey through humanity's greatest technological breakthroughs. Viewers saw a montage of defining innovations — from agriculture to space exploration — before culminating in the final moment: ChatGPT on a screen.

"This really is the dawn of a new era," OpenAI CEO Sam Altman posted on X after the ad aired.

Visually, the ad leans into OpenAI's brand identity, using a pointillism-inspired animation style, mirroring ChatGPT's signature blinking cursor. The company said its creative team used Sora, OpenAI's text-to-video model, during early brainstorming but confirmed that human artists created the final animation.

OpenAI has largely relied on word-of-mouth and partnerships to grow ChatGPT, which has attracted over 300 million weekly active users since launching in 2022. The Super Bowl ad marks the company's first big swing at mainstream consumer marketing.

Kate Rouch, who became OpenAI's chief marketing officer in December after joining from Coinbase, said the goal was to introduce ChatGPT to millions of viewers who had never used it before.

"Our goal was to pique people's curiosity and help us all realize how AI can open up new possibilities for us, create more fulfillment in our lives, and make us more productive, just as all the tools that came before AI did for those who came before us," OpenAI wrote in an accompanying blog post.

The timing of the ad also comes as tech companies ramp up their AI branding efforts. Google and Meta both aired AI-focused Super Bowl commercials, with Google promoting its Gemini chatbot and Meta showcasing its Ray-Ban smart glasses.

Since its launch, ChatGPT has become one of the fastest-growing consumer applications ever. The company is in talks to raise additional funding from SoftBank, which could see it valued at $300 billion. While OpenAI has been rolling out new models and exploring new revenue streams, it remains loss-making.

By putting ChatGPT in front of 130 million Super Bowl viewers, OpenAI hopes to make AI as familiar as the smartphone.

"We're at the dawn of the intelligence age, and you can participate today," Rouch said.

• Amazon, Google, Microsoft, and Meta are ramping up AI-related capital expenditure.
• Combined spending from the tech giants is set to surpass $320 billion in 2025.
• Some investors are concerned about the timeline for these bets to provide a return on investment.

Amazon, Microsoft, Google, and Meta have signaled that their AI investment spree is far from over.

According to recent earnings reports, their combined capital expenditures are set to exceed $320 billion in 2025, even as investors question if the spending is justified following the launch of a seemingly more efficient model from China's DeepSeek.

It's a sharp increase from the $246 billion the four companies spent in 2024 as they race to build data centers, acquire AI chips, and expand cloud computing capacity to power large language models and enterprise AI tools.

Stocks of Google and Microsoft dropped after their earnings reports, reflecting investor anxiety over whether large AI infrastructure spending will translate into returns.

Tech executives have been responding with a similar message to these concerns: cheaper AI will lead to higher demand for AI products.

Amazon is leading the capex charge, planning to allocate over $100 billion in capital expenditures this year, up from $77 billion in 2024. The vast majority will go toward expanding Amazon Web Services and scaling AI infrastructure, the company said.

CEO Andy Jassy defended the spending during the company's earnings call on Thursday, pointing to "significant signals of demand" for AI-powered services.

"When AWS is expanding its capex, particularly for a once-in-a-lifetime type of business opportunity like AI, I think it's actually quite a good sign, medium to long term for the AWS business," Jassy said.

CFO Brian Olsavsky echoed this sentiment and said Amazon is not worried about DeepSeek undermining its AI bets.

"Customers will keep spending on the technology," Olsavsky said.

Despite the optimism, Amazon's stock fell more than 5% after the company announced its spending plans.

Meta's AI spending is also ramping up.

Meta expects $60 billion to $65 billion in capital expenditure this year, up from $39 billion in 2024. CEO Mark Zuckerberg told investors in an earnings call last month that AI will be central to the company's revenue growth strategy.

He said the company is "investing aggressively in initiatives that use these advances to increase revenue growth," referring to its AI investments.

Meta is also pushing to establish an "American standard" for open-source AI models, a move that could distinguish its approach from rivals.

Meta's AI investments have been more positively received by investors, with shares rising following its earnings call. Analysts have attributed this to Meta's ability to monetize AI through ad targeting, demonstrating real-time returns on investment.

Google parent company Alphabet has doubled down on AI, planning about $75 billion in capital expenditures for 2025 — above analyst expectations of $58 billion.

But despite its ambitious AI push, Google's stock fell more than 8% after its Tuesday earnings, as investors reacted to slowing cloud growth and concerns over its AI strategy.

CEO Sundar Pichai defended the spending, pointing to Google's leadership in AI and the need to build infrastructure for future applications.

"The company is in a great rhythm and cadence — building, testing, and launching products faster than ever before," Pichai said during an earnings call on Tuesday. "This is translating into product usage, revenue growth, and results."

However, some analysts worry that Google's AI offerings, like the Gemini chatbot, have yet to prove their ability to generate meaningful revenue.

Microsoft plans to spend $80 billion on AI-related infrastructure in 2025, positioning itself as a major player in the AI cloud race.

CEO Satya Nadella emphasized that demand for AI services is exceeding expectations.

"Already, our AI business has surpassed an annual revenue run rate of $13 billion, up 175% year-over-year," Nadella said in an earnings release.

Last month, Nadella referred to the Jevons paradox, the idea that as the cost of using a resource falls, demand will go up — not down.

"As AI gets more efficient and accessible, we will see its use skyrocket, turning it into a commodity we just can't get enough of," Nadella said in a post on X.

However, despite strong AI revenue growth, Microsoft's stock still dipped after earnings. Some analysts argue that while Microsoft has a head start thanks to its OpenAI partnership, it has yet to convert AI hype into sustained long-term revenue.

AI spending gamble?

Not everyone is buying into Big Tech's AI spending spree.

Some investors worry that the race to dominate AI could turn into an expensive gamble — especially if it turns out that cheaper methods for training and running models mean companies have overstretched with their capex spend.

"Investors are demanding clearer timelines on when AI spending translates to earnings and sales growth, not just promises," said Jesse Cohen, senior analyst at Investing.com.

Others, like Dan Ives, managing director at Wedbush Securities, don't see DeepSeek as a threat to Big Tech capex spending.

"Huge week for Big Tech earnings as Zuckerberg, Nadella, Cook, and Musk doubled down on their AI visions and what this means for each of these tech stalwarts looking ahead," he said in an X post last month. "This is an AI arms race and the Temu of AI DeepSeek not changing that…AI Revolution just starting."

• ByteDance has demoed an AI model that generates lifelike deepfake videos from a single image.
• ByteDance released test videos, including deepfakes of TED Talks and a talking Albert Einstein.
• Tech firms, including Google and Meta, are working on tools to better detect deepfakes.

Researchers at ByteDance, TikTok's parent company, have showcased an AI model that generates full-body deepfake videos from just one image — and the results are scarily impressive.

Unlike some deepfake models that can only animate faces or upper bodies, Bytedance's OmniHuman-1 generates realistic full-body animations that sync gestures and facial expressions with speech or music, the company said.

ByteDance published several dozen test videos, including AI-generated TED Talks and a talking Albert Einstein, to its OmniHuman-lab project page.

The model supports different body proportions and aspect ratios, making the output look more natural, Bytedance researchers said in a paper published Monday that has since caught the attention of the AI community.

"The realism of deepfakes just reached a whole new level with Bytedance's release of OmniHuman-1," said Matt Groh, an assistant professor who specializes in computational social science, in an X post on Tuesday.

OmniHuman-1 is the latest AI model from a Chinese tech company to grab the attention of researchers following the release of DeepSeek's market-shaking R1 model last month.

Venky Balasubramanian, the founder and CEO of tech company Plivo, said in a Tuesday X post, "Another week another Chinese AI model. OmniHuman-1 by Bytedance can create highly realistic human videos using only a single image and an audio track."

ByteDance said its new model, trained on roughly 19,000 hours of human motion data, can create video clips of any length within memory limits and adapt to different input signals.

OmniHuman-1 outperforms previous animation tools in realism and accuracy benchmarks, the researchers said.

Deepfake detection

Deepfakes have become harder to detect as the technology becomes more sophisticated. Google, Meta, and OpenAI have introduced AI watermarking tools, such as SynthID and Meta's Video Seal, to flag synthetic content.

While these tools offer some safeguards, tools are still playing catch-up with the misuse of deepfake technology.

AI-generated videos and voice clones are fueling harassment, fraud, and cyberattacks, with criminals using AI-generated voices to scam victims. US regulators have issued alerts, while US legislation like the TAKE IT DOWN Act aims to tackle deepfake porn.

The World Economic Forum said last month that deepfakes are exposing security flaws and are expected to "create a misinformation and disinformation apocalypse."

• OpenAI has filed a trademark application for tech such as humanoid robots and AI-powered VR headsets.
• Sam Altman has hinted at OpenAI's hardware ambitions but says a prototype could still be years away.
• The move could put OpenAI in competition with Meta, Apple, and other AI-driven hardware players.

OpenAI has given more signs that it may be gearing up for a big hardware push.

The ChatGPT maker has filed a new trademark application with the United States Patent and Trademark Office that could hint at plans to develop humanoid robots, smart wearables, and AI-powered virtual and augmented reality headsets.

The application also mentions smartwatches and smart jewelry.

While companies often file wide-ranging trademarks for ideas that never come to fruition, OpenAI's application comes as its CEO, Sam Altman, has been talking up the company's hardware plans.

On Monday, he told Nikkei Asia that OpenAI wants to develop AI-powered consumer tech "through partnerships with multiple companies." However, he cautioned that even a prototype could take "several years" to materialize.

Altman added, "AI is a big enough shift in how we interact with computers that there ought to be a new kind of hardware."

Hardware push

OpenAI's trademark application, submitted on January 31, lists "user-programmable humanoid robots" and "humanoid robots with communication and learning functions."

It comes as OpenAI rebuilds its robotics team, which it previously shut down in 2020. In November, OpenAI hired Caitlin Kalinowski, Meta's former hardware lead, to lead the company's robotics and consumer hardware efforts. Kalinowski, who oversaw the development of Orion, Meta's prototype AR glasses, has previously said she will focus on "bringing AI into the physical world" through robotics and hardware partnerships.

In September, former Apple design chief Jony Ive confirmed that he's working with Altman on an AI-first consumer device as part of a new venture.

Altman hasn't provided specifics on how OpenAI plans to integrate its AI models with its own hardware, but the company's filing suggests it is laying the legal groundwork for future developments.

A move into VR hardware would put OpenAI in competition with Meta's Quest and Apple's Vision Pro, both of which are investing in AI-powered immersive experiences.

OpenAI, which has so far been focused on software, has also been linked to custom AI chip development, which could help it reduce its reliance on Nvidia's GPUs.

OpenAI did not immediately respond to a Business Insider request for comment.

• OpenAI has launched Deep Research, a new ChatGPT tool that automates multi-step internet research.
• The agentic AI tool generates "expert-level" reports and is available to Pro users.
• The launch comes as competition heats up for OpenAI from China's DeepSeek and domestic AI rivals.

OpenAI has launched Deep Research, a tool for automating complex multi-step internet research, as the company continues rolling out new products in the face of competition from Chinese startup DeepSeek.

In a Sunday blog post, OpenAI said Deep Research can operate independently to gather information from the internet to meet a user's research needs, completing tasks in "tens of minutes that would take a human many hours."

The AI agent, which is available for Pro users paying $200 a month, is aimed at professionals in finance, science, policy, and engineering.

Unlike other ChatGPT tools, Deep Research operates independently for five to 30 minutes, adjusting its approach in real time as it gathers information.

Deep Research is powered by a fine-tuned version of OpenAI's o3 reasoning model. The tool autonomously browses the internet, pulls data from multiple sources, and produces fully cited reports, OpenAI said. Mark Chen, OpenAI's chief research officer, called it "something that an analyst or an expert in a field might produce."

According to OpenAI, Deep Research has already achieved a new high score of 26.6% on "Humanity's Last Exam," an AI benchmark of expert-level questions, beating GPT-4's 3.3% score. However, OpenAI cautions the model can still "hallucinate" incorrect facts and can struggle to distinguish between rumor and fact.

In an X post on Sunday, OpenAI CEO Sam Altman encouraged users to "try it on your hardest work task that can be solved just by using the internet and see what happens."

On Friday, OpenAI launched o3-mini, a cost-efficient reasoning AI model. The two OpenAI launches come just days after Altman said his company would deliver "much better models" and move more quickly in response to the release of DeepSeek's R1 model.

DeepSeek shook the tech industry and Wall Street last month with a model that appears to match the capabilities of those from OpenAI but seemingly at a lower cost.

Last month, OpenAI rolled out its Operator AI agent, while in December it launched the text-to-video model Sora to the public.

• Many companies have pulled back or ended DEI programs amid pressure from conservative activists and a new administration.
• Those that have withdrawn or toned down DEI initiatives include Google, Amazon, Meta, and McDonald's.
• President Trump moved to end DEI initiatives at federal agencies shortly after his return to the White House.

The number of companies ending their diversity, equity, and inclusion programs continues to grow.

Google and consulting giant Accenture are some of the most recent examples, joining companies including Meta and Amazon in announcing the rollback of DEI initiatives.

In January, President Donald Trump signed an executive order to end diversity programs across the federal government and ordered all federal DEI staffers be placed on leave while their departments are disbanded.

The move away from DEI policies is part of an ongoing wave of backlash against diversity programs at American companies.

Tech companies such as Microsoft, Meta, and Zoom cut DEI programs last year, and law firms, including Winston & Strawn, faced lawsuits for affirmative action.

Some DEI initiatives have faced backlash from conservatives and activist groups, including mounting social media campaigns, many led by Robby Starbuck. Starbuck, a prominent conservative activist with a sizable social media following, has argued that these initiatives don't align with the values of companies' largely conservative consumer bases.

That said, 59% of Americans oppose Trump's move to end federal efforts to promote the hiring of women and members of racial minority groups, according to a Reuters-Ipsos poll in January. Some companies, including Costco and JPMorgan, have publicly defended their diversity initiatives.

The Human Rights Campaign slammed companies' DEI rollbacks in an August statement to BI.

"Decisions to cut DEI initiatives send a clear signal to employees that their employers simply don't care about equality in the workplace. Putting politics ahead of workers and consumers only hurts the same folks that these businesses rely on," wrote Eric Bloem, the nonprofit group's vice president of programs and corporate advocacy.

Here are how some companies have cut their DEI programs.

Amazon

Amazon has changed its DEI language on some of its website pages and discontinued some programs.

The company removed all mentions of diversity and inclusion from its 2024 annual report. As recently as January 24, Amazon's DEI page was titled "Diversity, Equity, and Inclusion," according to an archived page viewed by BI. That page is now called "Inclusive Experiences and Technology."

"We update this page from time to time to ensure it reflects updates we've made to various programs and positions," an Amazon spokesperson told BI.

In December, Candi Castleberry, Amazon's vice president of inclusive experiences and technology, said in a memo that the company was shutting down several "outdated" DEI programs to focus on initiatives with "proven outcomes," Bloomberg reported.

Mai-Lan Tomsen Bukovec, the vice president of technology at Amazon Web Services, told employees in late January that the company was "not pulling back on DEI initiatives," adding, "there's no change to the commitment, but we didn't roll it out that well," according to a transcript obtained by BI.

Accenture

Global consulting firm Accenture has updated its diversity and inclusion goals, according to an internal memo sent by CEO Julie Sweet in February and seen by BI.

The company is "sunsetting" its 2017 employee representation goals and career development programs for people of specific demographic groups.

Accenture will also pause submissions to external diversity benchmarking surveys while it evaluates whether to continue participating in those surveys, the memo said.

Sweet said the changes come as a result of the "evolving landscape in the United States, including recent Executive Orders with which we must comply," as well as the company's continual evaluation of internal policies.

Sweet noted in the memo that Accenture had largely achieved its 2017 representation goals. She also wrote that the company would invest more in core career development programs and "put a greater focus on inclusion and a sense of belonging for all."

Google

Google told employees in February that it will no longer have hiring goals tied to representation.

It's also evaluating its DEI programs and initiatives, including "those that raise risk, or that aren't as impactful as we'd hoped," Google's chief people officer, Fiona Cicconi, wrote in a memo to staff.

"We're committed to creating a workplace where all our employees can succeed and have equal opportunities, and over the last year we've been reviewing our programs designed to help us get there," a Google spokesperson told BI.

The spokesperson said Google updated language in its annual 10-K report to reflect the change.

"As a federal contractor, our teams are also evaluating changes required following recent court decisions and executive orders on this topic," the spokesperson added.

Target

Target sent a memo to its employees in January announcing the end of its three-year DEI goals.

Written by Kiera Fernandez, Target's chief community impact and equity officer, the memo characterized the change as a way to remain "in step with the evolving external landscape."

The memo also announced that Target would no longer participate in surveys that monitored diversity within the company, and would end a program to carry more products from minority-owned businesses.

Target will also be changing the name of its "Supplier Diversity" team to "Supplier Engagement."

Meta

Meta announced it was rolling back many of its DEI initiatives in January.

In an internal memo, the company's vice president of human resources, Janelle Gale, said there would no longer be a team focused on DEI, adding that the term had become charged and that it suggested, to some, "preferential treatment of some groups over others."

"The legal and policy landscape surrounding diversity, equity and inclusion efforts in the United States is changing," she wrote. "The Supreme Court of the United States has recently made decisions signaling a shift in how courts will approach DEI."

The changes affect diversity efforts across hiring, choosing suppliers, and training, the memo said.

McDonald's

Fast food giant McDonald's joined the ranks of large American companies rolling back some DEI initiatives.

The company announced in a press release on January 6 that it would stop setting representation goals, pause participating in external surveys related to DEI, and end a requirement for supply chain partners to adhere to DEI targets.

McDonald's diversity team will also get a new name. It'll be called the "Global Inclusion Team" instead, the company said in its January announcement.

Despite these changes, McDonald's says inclusion remains one of its "core values."

Representatives of McDonald's did not respond to a request for comment from BI sent outside regular working hours.

Harley-Davidson

In August, Harley-Davidson said on X that it would drop diversity-based spending goals from suppliers, halt socially motivated employee training, and withdraw from an annual LGBTQ acceptance rating by the Human Rights Campaign, Bloomberg reported.

Harley told Bloomberg that the company was "saddened by the negativity on social media over the last few weeks, designed to divide the Harley-Davidson community," following Starbuck's calls on X for the company to apologize and change its policies.

Bloem, from the Human Rights Campaign, said in the statement to BI that retreating from DEI hurts employees and customers.

"Harley-Davidson's choice to back away from the Corporate Equality Index is an impulsive decision fueled by fringe right-wing actors and MAGA extremists who believe they can bully their way into dismantling initiatives that help everyone thrive in the workplace," Bloem wrote.

John Deere

John Deere has pulled back on its DEI commitments, including no longer participating in cultural awareness events and abolishing the company's pronoun policy, BI reported in July.

While John Deere did not publicly announce the reason for its decision, the shift came following online criticism from Starbuck in a video from X, which garnered over 5 million views in July.

Tractor Supply Company

Tractor Supply significantly scaled back its DEI programs, including eliminating diversity roles and withdrawing from Pride event sponsorship. The company also announced that it would no longer provide data to the Human Rights Campaign, and it would end its carbon emission goals. This came after Starbuck's criticized the company for promoting what he labeled as "woke" policies, NPR reported in June.

Polaris

While Starbuck did not specifically target Polaris, the Harley competitor has reduced its DEI efforts, including removing any mention of the term from its web pages. In a statement to Bloomberg, the company emphasized its intention to abstain from political discussion.

Lowe's

Home improvement retailer Lowe's said that it would scale back its DEI programs in an internal note viewed by Bloomberg.

Per the memo, the company will stop participating in surveys run by the Human Rights Campaign, and it will merge resource groups for minority employees into one umbrella organization, Bloomberg reported on August 27.

Starbuck said on X that he caused Lowe's policy shift. However, a Lowe's spokesperson told Bloomberg that they had already begun making changes prior to Starbuck's involvement.

Lowe's has a consumer base largely consisting of rural baby boomers, according to data from the consumer analytics firm Numerator.. The company was labeled "best place to work for LGBTQ equality" by the Human Rights Campaign in Lowe's 2021 culture, diversity, and inclusion report.

Orlando Gonzales, the senior vice president of programs of research and training at the Human Rights Campaign, told BI in a statement that scaling back from DEI policies would have negative consequences for companies in the long run.

"Companies should not cower to a random guy with zero business experience," Gonzales said, citing Starbuck's removal from the Tennessee GOP ballot in 2022.

Ford

In an internal email shared with Bloomberg by Starbuck, the carmaker said that it would pull out of certain diversity rankings, such as the Human Rights Campaign's Corporate Equality Index.

The company also said that it would reorient its employee resource groups to make them accessible to all staff. Ford also pledged to be less involved in political matters and changed some corporate sponsorships.

Ford faced backlash last month after it saw quality issues and vehicle recalls.

Starbuck wrote in a post on X that Ford's withdrawal from DEI initiatives came just as he was investigating Ford's "woke policies."

Meanwhile, the HRC said that Ford "cowered" to Starbuck and that the company had "decades of commitment to inclusion and top ratings on the HRC Corporate Equality Index."

"The Human Rights Campaign could not be more disappointed to see the company shirking its responsibility to its employees, consumers, and shareholders," said HRC president Kelley Robinson in a statement.

Molson Coors

Beverage company Molson Coors is scrapping many of its DEI policies and initiatives, CNBC reported in September.

In an internal memo obtained by BI, Molson Coors said it would remove quotas for supplier diversity. These quotas, which encourage sourcing supplies from minority or women-owned businesses, can be "complicated and influenced by factors outside" the company's control.

Additionally, the brewer stated that it will shift company training away from DEI-based programs to focus more on key business objectives.

The company said the decision to scale back, which was in the works since March, was made to ensure that executive compensation is solely based on business performance and does not include "aspirational representation goals," according to the memo.

Molson Coors will also no longer participate in the HRC Equality Index or any other third-party company rankings, reported CNBC. The company has previously received a perfect 100-point score for 19 consecutive years.

The memo added that the driving force behind the change was "the understanding that when all our people know they are welcome, they are more engaged, motivated, and committed to our company's collective success."

Survey results published by the HRC in September found that more than 75% of adults from the LGBTQ+ community unfavorably view companies that rolled back DEI initiatives.

The HRC's Gonzales said that the LGBTQ+ community holds over $1.4 trillion in spending power in the US and wants to "work for and support companies who support us."

The companies did not respond to BI's requests for comment.

Walmart

Walmart will end some of its DEI initiatives, including winding down its nonprofit Center for Racial Equity, which Walmart funded with $100 million in 2020 for five years, and discontinuing programs that assist minority-owned suppliers.

The company will also stop using the phrase DEI in company documents, stop sharing the details of its LGBTQ+ corporate policies with the Human Rights Campaign and stop allowing third-party sellers to list items marketed toward the LGBTQ+ community.

"We are willing to change alongside our associates and customers who represent all of America. We've been on a journey and know we aren't perfect," Walmart said in a statement to BI.

In a post on the social media platform X, conservative activist Robby Starbuck claimed credit for Walmart's policy change, calling it "the biggest win yet for our movement to end wokeness in corporate America."

Nissan

Nissan is rolling back some of its diversity initiatives, Starbuck announced on social media in December.

In a statement provided to BI when asked about Starbuck's post, Nissan said, "Whether with employees, customers, business partners, or the communities we serve, we believe that Nissan is a company for everyone. For nearly four decades, our commitment to respect and inclusion has been rooted in our values, shaped an environment where each of our team members can contribute at work, and ultimately contributed to the success of our business."

Starbuck said when he reached out to Nissan about their "woke policies" the company was receptive. He shared a letter that he said was sent to Nissan employees from company exec Jeremie Papin.

The letter said the company would stop participating in third-party surveys with organizations "heavily focused on political activism." Starbuck said that meant the company would not participate in the Corporate Equality Index from the Human Rights Campaign, an LGBTQ advocacy group.

The letter also said the company would align employee training with "core business objectives" that support "personal job performance and career advancement."

Nissan told BI it was already working on its communications with employees due to questions received internally but acknowledged it had also spoken with Starbuck ahead of the announcement.

Goldman Sachs

Goldman Sachs is ditching a policy that required IPO clients to have a minimum of two diverse board members. The change comes after a December court ruling over a similar policy at the Nasdaq stock exchange.

The investment bank first implemented a board diversity initiative in 2020, which mandated that IPO clients must have at least one diverse board member. A year later, Goldman raised the requirement to two members and stipulated that one must be a woman.

Goldman initiated a legal review of its policy after the December court decision, according to a company spokesperson.

"As a result of legal developments related to board diversity requirements, we ended our formal board diversity policy," said Goldman spokesman Tony Fratto. "We continue to believe that successful boards benefit from diverse backgrounds and perspectives, and we will encourage them to take this approach."

Disney

Disney told employees in a memo that it's refocusing its DEI efforts to business goals and company values. The changes will also affect content advisory notices that Disney started adding to movies in 2020, BI previously confirmed.

The memo, which BI has verified, said that DEI will be less important in determining executive compensation and that Disney is ditching Reimagine Tomorrow, a digital hub it launched to focus on underrepresented voices.

Disney also said in the memo that its Business Employee Resource Groups will rebrand as Belonging Employee Resource Groups.

The company is no stranger to political controversy over social issues. CEO Bob Iger has criticized Trump in the past, but taken a more muted approach in the beginning of his second term.

Citigroup

Citigroup's CEO Jane Fraser sent a memo to staff in late February saying that the bank would rename its diversity, equity, and inclusion team to "talent management and engagement."

The bank will also get rid of "aspirational representation goals except as required by local law," the memo said. Job candidates and interview panels don't need to be diverse anymore, either, it continued.