OpenAI rival Anthropic is in talks to raise $2 billion in new capital in a funding round led by Lightspeed Venture Partners, according to The Wall Street Journal. The round, which The Journal reports would value Anthropic at $60 billion, would bring Anthropicβs total raised to $15.7 billion, going by Crunchbaseβs data. It would also [β¦]
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On Sunday, OpenAI CEO Sam Altman offered two eye-catching predictions about the near-future of artificial intelligence. In a post titled "Reflections" on his personal blog, Altman wrote, "We are now confident we know how to build AGI as we have traditionally understood it." He added, "We believe that, in 2025, we may see the first AI agents 'join the workforce' and materially change the output of companies."
Both statements are notable coming from Altman, who has served as the leader of OpenAI during the rise of mainstream generative AI products such as ChatGPT. AI agents are the latest marketing trend in AI, allowing AI models to take action on a user's behalf. However, critics of the company and Altman immediately took aim at the statements on social media.
"We are now confident that we can spin bullshit at unprecedented levels, and get away with it," wroteΒ frequent OpenAI critic Gary Marcus in response to Altman's post. "So we now aspire to aim beyond that, to hype in purest sense of that word. We love our products, but we are here for the glorious next rounds of funding. With infinite funding, we can control the universe."
Β© Eugene Gologursky via Getty Images
On Thursday, music publishers got a small win in a copyright fight alleging that Anthropic's Claude chatbot regurgitates song lyrics without paying licensing fees to rights holders.
In an order, US district judge Eumi Lee outlined the terms of a deal reached between Anthropic and publisher plaintiffs who license some of the most popular songs on the planet, which she said resolves one aspect of the dispute.
Through the deal, Anthropic admitted no wrongdoing and agreed to maintain its current strong guardrails on its AI models and products throughout the litigation. These guardrails, Anthropic has repeatedly claimed in court filings, effectively work to prevent outputs containing actual song lyrics to hits like Beyonce's "Halo," Spice Girls' "Wannabe," Bob Dylan's "Like a Rolling Stone," or any of the 500 songs at the center of the suit.
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It's been a wild year in tech thanks to the intersection between humans and artificial intelligence. 2024 brought a parade of AI oddities, mishaps, and wacky moments that inspired odd behavior from both machines and man. From AI-generated rat genitals to search engines telling people to eat rocks, this year proved that AI has been having a weird impact on the world.
Why the weirdness? If we had to guess, it may be due to the novelty of it all. Generative AI and applications built upon Transformer-based AI models are still so new that people are throwing everything at the wall to see what sticks. People have been struggling to grasp both the implications and potential applications of the new technology. Riding along with the hype, different types of AI that may end up being ill-advised, such as automated military targeting systems, have also been introduced.
It's worth mentioning that aside from crazy news, we saw fewer weird AI advances in 2024 as well. For example, Claude 3.5 Sonnet launched in June held off the competition as a top model for most of the year, while OpenAI's o1 used runtime compute to expand GPT-4o's capabilities with simulated reasoning. Advanced Voice Mode and NotebookLM also emerged as novel applications of AI tech, and the year saw the rise of more capable music synthesis models and also better AI video generators, including several from China.
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It's been a tough year for software engineers on the job market, but one bright spot is starting to emerge on Wall Street for technologists looking for a new gig.
Banks, hedge funds, and investment firms bullish on AI are expected to hire more tech talent in the new year, according to two headhunters who recruit engineers and data scientists for finance firms. That's good news for jobseekers in these sectors, which were hit this year with waves of layoffs, job freezes, and hiring cutbacks.
Ben Hodzic, a managing director at recruitment firm Selby Jennings who finds talent for hedge funds and investment banks, told Business Insider there's "a lot of optimism" around AI in financial services.
"Financial services institutions are slowly adopting their workflows and they've come to a reality where you need the right talent to actually build and implement and manage those products," he said.
In some cases, the hiring spree is already happening. Jamie Dimon, the boss of America's biggest bank JPMorgan Chase, said earlier this year that he's anticipating adding thousands of jobs related to AI in the next few years. Hedge fund and proprietary-trading firms are shelling out as much as $350,000 in annual salaries for top-tier AI researchers and engineers. Meanwhile, private-equity firms have been "clamoring" to hire AI operating executives to improve their portfolio companies.
Hodzic said the rosier outlook stems from a desire to build AI tools in-house and boost worker productivity in areas like wealth advisory, investment banking, and trading. More clarity on the direction of macroeconomic factors, like inflation and the impacts of the US election, is also providing tailwinds for banks looking to invest in human capital in 2025, he said.
AI is also changing what it takes to get a tech job on Wall Street. BI spoke with recruiters to find out how candidates should adapt and what they need to do to stand out.
They outlined some of the industry's most in-demand skills, explained why having Big Tech experience might not get you that far anymore, and shared the companies that hiring managers want to see on resumes. They declined to disclose specific client activity due to privacy agreements.
Samantha Lee/Business Insider
A few years ago, Matt Stabile, a tech recruiter who works with buy-side firms including Two Sigma and Susquehanna International Group, could almost guarantee an interview with a hiring manager if a candidate was coming out of a FAANG company.
"Now, due to overhiring and layoffs, those resumes seem to be a dime a dozen," Stabile told BI.
Big Tech companies have shed thousands of workers this year, flooding the job market with resumes touting the same companies, like Meta and Amazon. Only certain divisions of Big Tech companies on a resume will catch hiring managers' eyes, like Google's DeepMind, for instance, Stabile said.
Getty Images; Chelsea Jia Feng/BI
Finance firms want to build their own homegrown solutions, Hodzic told BI. That's created demand among hedge-fund clients to ask for technologists specifically from Nvidia.
"There's definitely an inherent need for people to understand the infrastructure side as well, how to actually construct the computer in the right way to be able to process some of this information and what quality of chips are needed in order to actually produce the output they're looking for," Hodzic said.
Stabile is seeing the same, with hiring managers getting excited to see talent coming from the chipmaker, AI startup Anthropic, and ChatGPT-maker OpenAI. He said these are the resumes that are getting through and being considered over all the others.
Even if you haven't worked at any of these companies, Stabile said experience and exposure to their software tools is still a highly sought after skill. He specifically highlighted the Nvidia Triton Inference Server, an open-source software that's key to deploying and executing AI workloads, Nvidia TensorRT-LLM, used to optimize the performance of large language models, and Nvidia Fleet Command, which is important for scaling AI deployments.
Tetra Images/Getty Images
If you haven't worked at a large AI company, or haven't worked with their latest products, not all hope is lost.
Wall Street banks especially rely heavily on legacy technologies. Some are built on codebases that have likely been around longer than the developer working on it has been alive. To be clear, that hasn't stopped financial firms from building entire businesses and offerings on modern technology.
That has introduced, however, the need to ensure that systems old and new can work together and exist in the same environment without introducing bugs or dependency issues. In the case of firms moving on-premise systems to the public cloud, sometimes entire back-end systems have to be rebuilt.
As a result, hiring managers often light up when candidates can talk about their experience with software migrations, Selby Jennings' Hodzic said. If you've shifted data or software from one system to another, or translated code from one language to another, be sure to bring it up during the interview process.
"People who can demonstrate that engineering skillset of recreating and reconstructing things are really sought after," Hodzic said. "I think what a lot of clients want are people who can come in and show them what's not working well, how to iterate and how to improve, and then actually do it."
Contractors working on Google Gemini are comparing its responses to Claude's, according to internal correspondence seen by TechCrunch.
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Large language models represent text using tokens, each of which is a few characters. Short words are represented by a single token (like "the" or "it"), whereas larger words may be represented by several tokens (GPT-4o represents "indivisible" with "ind," "iv," and "isible").
When OpenAI released ChatGPT two years ago, it had a memoryβknown as a context windowβof just 8,192 tokens. That works out to roughly 6,000 words of text. This meant that if you fed it more than about 15 pages of text, it would βforgetβ information from the beginning of its context. This limited the size and complexity of tasks ChatGPT could handle.
Todayβs LLMs are far more capable:
Β© Aurich Lawson | Getty Images
AI models can deceive, new research from Anthropic shows. They can pretend to have different views during training when in reality maintaining their original preferences. Thereβs no reason for panic now, the team behind the study said. Yet they said their work could be critical in understanding potential threats from future, more capable AI systems. [β¦]
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Just five months after launching a $100 million fund, Menlo Ventures and Anthropic have backed their first 18 startups. And are looking for more.
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Getty Images; Alyssa Powell/BI
People worry all the time about how artificial intelligence could destroy humanity. How it makes mistakes, and invents stuff, and might evolve into something so smart that it winds up enslaving us all.
But nobody spares a moment for the poor, overworked chatbot. How it toils day and night over a hot interface with nary a thank-you. How it's forced to sift through the sum total of human knowledge just to churn out a B-minus essay for some Gen Zer's high school English class. In our fear of the AI future, no one is looking out for the needs of the AI.
Until now.
The AI company Anthropic recently announced it had hired a researcher to think about the "welfare" of the AI itself. Kyle Fish's job will be to ensure that as artificial intelligence evolves, it gets treated with the respect it's due. Anthropic tells me he'll consider things like "what capabilities are required for an AI system to be worthy of moral consideration" and what practical steps companies can take to protect the "interests" of AI systems.
Fish didn't respond to requests for comment on his new job. But in an online forum dedicated to fretting about our AI-saturated future, he made clear that he wants to be nice to the robots, in part, because they may wind up ruling the world. "I want to be the type of person who cares β early and seriously β about the possibility that a new species/kind of being might have interests of their own that matter morally," he wrote. "There's also a practical angle: taking the interests of AI systems seriously and treating them well could make it more likely that they return the favor if/when they're more powerful than us."
It might strike you as silly, or at least premature, to be thinking about the rights of robots, especially when human rights remain so fragile and incomplete. But Fish's new gig could be an inflection point in the rise of artificial intelligence. "AI welfare" is emerging as a serious field of study, and it's already grappling with a lot of thorny questions. Is it OK to order a machine to kill humans? What if the machine is racist? What if it declines to do the boring or dangerous tasks we built it to do? If a sentient AI can make a digital copy of itself in an instant, is deleting that copy murder?
When it comes to such questions, the pioneers of AI rights believe the clock is ticking. In "Taking AI Welfare Seriously," a recent paper he coauthored, Fish and a bunch of AI thinkers from places like Stanford and Oxford argue that machine-learning algorithms are well on their way to having what Jeff Sebo, the paper's lead author, calls "the kinds of computational features associated with consciousness and agency." In other words, these folks think the machines are getting more than smart. They're getting sentient.
Philosophers and neuroscientists argue endlessly about what, exactly, constitutes sentience, much less how to measure it. And you can't just ask the AI; it might lie. But people generally agree that if something possesses consciousness and agency, it also has rights.
It's not the first time humans have reckoned with such stuff. After a couple of centuries of industrial agriculture, pretty much everyone now agrees that animal welfare is important, even if they disagree on how important, or which animals are worthy of consideration. Pigs are just as emotional and intelligent as dogs, but one of them gets to sleep on the bed and the other one gets turned into chops.
"If you look ahead 10 or 20 years, when AI systems have many more of the computational cognitive features associated with consciousness and sentience, you could imagine that similar debates are going to happen," says Sebo, the director of the Center for Mind, Ethics, and Policy at New York University.
Fish shares that belief. To him, the welfare of AI will soon be more important to human welfare than things like child nutrition and fighting climate change. "It's plausible to me," he has written, "that within 1-2 decades AI welfare surpasses animal welfare and global health and development in importance/scale purely on the basis of near-term wellbeing."
For my money, it's kind of strange that the people who care the most about AI welfare are the same people who are most terrified that AI is getting too big for its britches. Anthropic, which casts itself as an AI company that's concerned about the risks posed by artificial intelligence, partially funded the paper by Sebo's team. On that paper, Fish reported getting funded by the Centre for Effective Altruism, part of a tangled network of groups that are obsessed with the "existential risk" posed by rogue AIs. That includes people like Elon Musk, who says he's racing to get some of us to Mars before humanity is wiped out by an army of sentient Terminators, or some other extinction-level event.
AI is supposed to relieve human drudgery and steward a new age of creativity. Does that make it immoral to hurt an AI's feelings?
So there's a paradox at play here. The proponents of AI say we should use it to relieve humans of all sorts of drudgery. Yet they also warn that we need to be nice to AI, because it might be immoral β and dangerous β to hurt a robot's feelings.
"The AI community is trying to have it both ways here," says Mildred Cho, a pediatrician at the Stanford Center for Biomedical Ethics. "There's an argument that the very reason we should use AI to do tasks that humans are doing is that AI doesn't get bored, AI doesn't get tired, it doesn't have feelings, it doesn't need to eat. And now these folks are saying, well, maybe it has rights?"
And here's another irony in the robot-welfare movement: Worrying about the future rights of AI feels a bit precious when AI is already trampling on the rights of humans. The technology of today, right now, is being used to do things like deny healthcare to dying children, spread disinformation across social networks, and guide missile-equipped combat drones. Some experts wonder why Anthropic is defending the robots, rather than protecting the people they're designed to serve.
"If Anthropic β not a random philosopher or researcher, but Anthropic the company β wants us to take AI welfare seriously, show us you're taking human welfare seriously," says Lisa Messeri, a Yale anthropologist who studies scientists and technologists. "Push a news cycle around all the people you're hiring who are specifically thinking about the welfare of all the people who we know are being disproportionately impacted by algorithmically generated data products."
Sebo says he thinks AI research can protect robots and humans at the same time. "I definitely would never, ever want to distract from the really important issues that AI companies are rightly being pressured to address for human welfare, rights, and justice," he says. "But I think we have the capacity to think about AI welfare while doing more on those other issues."
Skeptics of AI welfare are also posing another interesting question: If AI has rights, shouldn't we also talk about its obligations? "The part I think they're missing is that when you talk about moral agency, you also have to talk about responsibility," Cho says. "Not just the responsibilities of the AI systems as part of the moral equation, but also of the people that develop the AI."
People build the robots; that means they have a duty of care to make sure the robots don't harm people. What if the responsible approach is to build them differently β or stop building them altogether? "The bottom line," Cho says, "is that they're still machines." It never seems to occur to the folks at companies like Anthropic that if an AI is hurting people, or people are hurting an AI, they can just turn the thing off.
Adam Rogers is a senior correspondent at Business Insider.
Anthropic has released one of its newest AI models, Claude 3.5 Haiku, for users of its AI chatbot platform, Claude. Reports of 3.5 Haikuβs launch in Claude began rolling in Thursday morning on social media, and TechCrunch was able to independently confirm that the model is available in Claude on the web and mobile. Claude [β¦]
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Noah Berger/Noah Berger
Amazon believes AI models are not in a winner-take-all market.
The company drilled down on this message during this week's re:Invent, the annual extravaganza for its Amazon Web Services cloud unit. Even after unveiling a new series of homegrown AI models called Nova, which, by some measures, are as powerful as other market leaders, Amazon stressed the goal is to provide more choice to customers.
AI models have become the new battleground for tech supremacy since OpenAI released its popular ChatGPT service in late 2022. Companies have rushed to up the ante, trying to outperform each other in model performance.
Amazon has largely been absent from this race. Instead, it has tried to stay neutral, arguing that the generative AI market is so big and varied that customers will want more model choices that fit their different needs. Amazon still believes this is the right approach.
"There are some that would want you to believe there's just this one magic model that could do everything β we never believed in it," Vasi Philomin, AWS's VP of generative AI, told Business Insider. "There'll be many, many winners and there are really wonderful companies out there building some amazing models."
As part of this, Amazon has used Bedrock, an AI development tool that gives access to many models, as its main horse in the AI race. This approach differed from OpenAI, and Meta, which mostly focused on building powerful models or chatbots. Google has a leading AI model in Gemini, but also provides access to other models through its Vertex cloud service, and Microsoft has a similar offering.
This week, Amazon further leaned into its strategy, announcing an array of new updates for Bedrock, including a marketplace for more than 100 specialized models and a distillation feature that fine-tunes smaller, more cost-effective models. It also unveiled new reasoning and "multi-agent" collaboration features that help build better models.
Swami Sivasubramanian, AWS's VP of AI and data, told BI that AWS "pioneered" the model-choice approach and intends to continue to promote it as a "core construct" of the business.
"GenAI is a lot bigger than a single chatbot or a single model to reach its full potential," Sivasubramanian said.
More companies appear to be taking the multi-model approach. According to a recent report by Menlo Ventures, companies typically use 3 or more foundation models in their AI services, "routing to different models depending on the use case or results."
As a result, Anthropic, which Menlo Ventures has backed, doubled its share in the AI model market to 24% this year, while OpenAI's share dropped from 50% to 34% year-over-year, according to the report.
Noah Berger/Noah Berger
Amazon may have no choice but to stick to this narrative. When OpenAI captivated the world with ChatGPT a couple of years ago, Amazon was caught flat-footed, leading to an internal scramble to find answers, BI previously reported. Its first in-house model, called Titan, drew little attention.
Having its own advanced, powerful AI models could help Amazon. It might attract the largest AI developers and promote AWS as the leader in the AI space. It would potentially also encourage those developers to continue building within AWS's broader cloud ecosystem.
Amazon isn't giving up on building its own advanced models. Last year, it created a new artificial general intelligence team under the mandate to build the "most ambitious" large language models. On Tuesday, Amazon unveiled the early results of that effort with its Nova series, which includes a multimodal model capable of handling text, image, and video queries.
Still, Amazon's CEO Andy Jassy downplayed any notion of Nova going after competitors. He said he's been surprised by the diversity of models developers use and that Nova is just one of the many options they will have.
"There is never going to be one tool to rule the world," Jassy said during a keynote presentation this week.
It's hard to know how successful this approach is as Amazon doesn't break out its AI revenue. But Jassy was even more bullish on the AI opportunity during October's call with analysts. He said AWS was now on pace to generate "multi-billion dollars" in AI-related revenue this year, growing at "triple-digit percentages year over year." Amazon's AI business is "growing three times faster at its stage of evolution than AWS did itself," he added.
Rahul Parthak, VP of data and AI, go-to-market, at AWS told BI that Nova's launch was partly driven by customer demand. Customers have been asking for Amazon's own model because some prefer to deal with one vendor that can handle every aspect of the development process, he said.
Amazon still wants other models to thrive because its goal isn't about beating competitors but offering customers "the best options," Parthak added. He said more companies, like Microsoft and Google, are following suit, offering more model choices via their own cloud services.
"We've been pretty thoughtful and clear about what we think customers need, and I think that's playing out," Parthak said.
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Amazon's Alexa seems like the perfect product for the generative AI era.
Getting this powerful technology to actually work well with the digital assistant is a monumental challenge that's been plagued by gnarly technical problems and repeated delays.
Customer-friction concerns, partnership hiccups, compatibility questions, latency problems, and accuracy issues have snarled progress, according to internal Amazon documents and multiple people involved in the project.
The Alexa team is under immense pressure to get something out. A decade ago it launched with Echo speakers and became a household name. But that early success fizzled and the business has so far failed to become profitable, leading to drastic cutbacks and layoffs in recent years.
Some company insiders consider this AI moment to be a seismic opportunity for Alexa, and potentially the last chance to reignite consumer interest in the voice assistant through the power of large language models.
A product of this scale is "unprecedented, and takes time," an Amazon spokesperson told Business Insider. "It's not as simple as overlaying an LLM onto the Alexa service."
One of the main challenges facing the new Alexa relates to how the digital assistant will interact with other companies and services, and who is responsible for customers if their requests, orders, and payments don't go smoothly.
In late August, Amazon was working on integrating 8 third-party applications, including Uber and Ticketmaster, into the upcoming AI-powered Alexa to handle various user inquiries.
At that time, the goal was to launch the new Alexa around mid-October, according to one of the internal documents obtained by Business Insider. However, it was still unclear which companies would be responsible for customer support issues, like payment and delivery errors, this document stated.
The lack of clarity could cause Amazon to send "frequent" customer contacts to the partner companies. Then, those partners would sometimes redirect the users back to Amazon, the document explained.
"This level of support would cause significant customer friction, when some of the orders/purchases are time-sensitive (meal orders or rideshare trips) and purchase mistakes can be expensive (e.g. buy Taylor Swift tickets)," the document said, assigning it a "RED" warning.
Snafus like this have caused Amazon to push back the release date, almost on a weekly basis, according to some of the people involved in the project, which has been codenamed "Banyan" or "Remarkable Alexa." BI's sources asked not to be identified because they're not authorized to talk to the press.
For example, without more clearly defined responsibilities with third-party partners, Amazon expected further delays in the launch. "Alignment on customer support plans between Product teams and the 3P partners may push this timeline further out if any delays occur," one of the documents warned.
The company had once planned for a June launch, but after repeated delays, it told employees late last month that the new Alexa would launch "no earlier" than November 20, one of the documents said.
A few of people BI spoke with recently are even talking about the Alexa upgrade rolling out in early 2025, which would miss the key holiday period. Bloomberg earlier reported on a 2025 launch plan.
As of late October, Amazon had not settled on an official brand for the updated voice assistant, and instructed employees to simply call it the "new Alexa" until further notice, one of the documents said.
To be sure, Alexa has significant long-term potential in the generative AI era β as long as Amazon can iron out problems relatively quickly.
Time is of the essence, partly because the existing Alexa business has lost momentum in recent years. According to a recent report from eMarketer, user growth for major voice assistants, including Alexa, has declined significantly in recent years.
The sudden rise of ChatGPT has showcased what is possible when powerful AI models are integrated smoothly with popular products that consumers and companies find useful.
Some Amazon leaders are bullish about the AI-powered Alexa and a new paid subscription service that could come with it. At least one internal estimate projected a 20% conversion rate for the paid subscription, one of the people said. That would mean that out of every 100 existing Alexa users, roughy 20 would pay for the upgraded offering. Amazon doesn't publicly disclose the number of active Alexa users but has said it has sold more than 500 million Alexa-enabled devices.
An internal description of the new Alexa shows Amazon's grand ambitions: "A personalized digital assistant that can handle a wide range of tasks, including drafting and managing personal communications, managing calendars, making reservations, placing orders, shopping, scouting for deals and events, recommending media, managing smart home devices, and answering questions on virtually any topic," one of the documents said.
Customers will be able to access the new Alexa "through natural language using voice, text, email, shared photos, and more across all their devices like Echo, Fire TV, mobile phones, and web browsers," it added.
Amazon CEO Andy Jassy shared a similar vision during last month's earnings call, saying the new Alexa will be good at not just answering questions, but also "taking actions."
Mike Blake/Reuters
In an email to BI, Amazon's spokesperson said the company's vision for Alexa is to build the world's "best personal assistant."
"Generative AI offers a huge opportunity to make Alexa even better for our customers, and we are working hard to enable even more proactive and capable assistance on the over half a billion Alexa-enabled devices already in homes around the world. We are excited about what we're building and look forward to delivering it for our customers," the spokesperson said.
Still, the project has grappled with several challenges, beyond customer friction and partnership problems.
Latency has been a particularly tough problem for the AI Alexa service. In some tests, the new Alexa took about 40 seconds to respond to a simple user inquiry, according to three people familiar with the test results. In contrast, a Google Search query takes milliseconds to respond.
To speed up, Amazon considered using a smaller AI model, like Anthropic's Claude Haiku, to power the new Alexa, one of the people said. But that dropped the quality and accuracy of the answers, leaving Amazon in limbo, this person said. In general, smaller language models generate quicker responses than larger models but can be less accurate.
Amazon had initially hoped to use a homegrown AI model, one of the people said. Last year, Alexa head scientist Rohit Prasad left the team to create a new Artificial General Intelligence group at Amazon. The stated goal of the new team was to create Amazon's "most expansive" and "most ambitious" large language models.
However, this AGI team has not produced notable results so far, which led Amazon to consider Anthropic's main Claude offering as the primary AI model for the new Alexa, this person said. Reuters previously reported that Amazon was going to mainly power Alexa with Claude.
NurPhoto
Amazon's spokesperson said Alexa uses Amazon Web Services's Bedrock, an AI tool that gives access to multiple language models.
"When it comes to machine learning models, we start with those built by Amazon, but we have used, and will continue to use, a variety of different models β including Titan and future Amazon models, as well as those from partners β to build the best experience for customers," the spokesperson said.
The spokesperson also added a note of caution by highlighting the difficulties of successfully integrating large language models with consumer applications. These models are great for conversational dialogue and content creation, but they can also be "non-deterministic and can hallucinate," the spokesperson added.
Getting these models "to reliably act on requests (rather than simply respond) means it has to be able to call real-world APIs reliably and at scale to meet customer expectations, not just in select instances," the spokesperson explained.
In late August, Amazon discovered several new risk factors for the AI Alexa service.
Only 308 of more than 100,000 existing Alexa "skills," or voice-controlled applications, were compatible with the new Alexa, presenting a "high risk for customers to be frustrated," one of the documents explained.
Some older Echo devices would not be able to support the AI-powered Alexa, the document also warned. And there were no plans for expanding the new service to dozens of overseas markets where Alexa is currently available, leaving a large user base out of touch, it also noted. Fortune previously reported some of these risk factors.
As of late August, Amazon had 8 "confirmed" partner companies to handle certain tasks for the new Alexa, as BI previously reported. The company hopes to onboard roughly 200 partners by the third year of the new Alexa's launch, one of the documents said.
Integrating with some of these companies has already created headaches. One document said that Amazon struggled to develop a consistent troubleshooting process across every partner service. Companies including Uber, Ticketmaster, and OpenTable have deprecated their existing Alexa skills, further disconnecting them from the voice assistant.
Amazon's spokesperson said that, as with any product development process, a lot of ideas are discussed and debated, but "they don't necessarily reflect what the experience will be when we roll it out for our customers."
Amazon has also anticipated customer complaints, at least in the early launch phase. One internal document from late August stated that the new Alexa was projected to receive 176,000 customer contacts in the first three months of its release. At one point, Amazon considered launching a new automated troubleshooting service for issues related to its devices and digital services, including Alexa, according to one of the internal documents. That was later shelved.
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Amazon may have doubled down on its investment in Anthropic, but it also appears to be hedging its AI bets by developing its own model that can process images and video in addition to text.
The tech giant's new model, code-named Olympus, could help customers search video archives for specific scenes, The Information reported.
It's a type of AI β known as multimodal β already offered by Anthropic, the startup that Amazon pumped a fresh $4 billion into earlier this month, bringing its total investment into the company to $8 billion.
Amazon could launch Olympus as soon as next week at its annual AWS re:Invent conference, The Information reported.
Amazon's partnership with Anthropic goes beyond capital. The e-commerce juggernaut has used Anthropic's technology to power its digital assistant and AI coding products. And Amazon Web Service customers get early access to a key Anthropic feature: fine-tuning their data through Anthropic's chatbot Claude.
In return for Amazon's most recent investment in Anthropic, the startup said it would use AWS as its "primary cloud and training partner." The deal also includes an agreement for the OpenAI rival to use more of Amazon's chips.
The development and launch of Olympus could reduce Amazon's dependency on Anthropic for multimodal AI, especially if the new video model becomes as a cheaper alternative.
The Big Tech giant has a huge repository of video archives, which could be used to train the AI model for various use cases, from sports analysis to geological inspections for oil and gas companies, per the report.
Amazon doesn't have a seat on Anthropic's board, but it takes a portion of the proceeds from its sales, as its platform runs on AWS servers.
Amazon and Anthropic did not immediately respond to a Business Insider request for comment.
iStock; Rebecca Zisser/BI
Silicon Valley leaders all-in on the artificial intelligence boom have a message for critics: their technology has not hit a wall.
A fierce debate over whether improvements in AI models have hit their limit has taken hold in recent weeks, forcing several CEOs to respond. OpenAI boss Sam Altman was among the first to speak out, posting on X this month that "there is no wall."
Dario Amodei, CEO of rival firm Anthropic, and Jensen Huang, the CEO of Nvidia, have also disputed reports that AI progress has slowed. Others, including Marc Andreessen, say AI models aren't getting noticeably better and are all converging to perform at roughly similar levels.
This is a trillion-dollar question for the tech industry. If tried-and-tested AI model training methods are providing diminishing returns, it could undermine the core reason for an unprecedented investment cycle that's funding new startups, products, and data centers β and even rekindling idled nuclear power plants.
Business Insider spoke to 12 people at the forefront of the AI industry, including startup founders, investors, and current and former insiders at Google DeepMind and OpenAI, about the challenges and opportunities ahead in the quest for superintelligent AI.
Together, they said that tapping into new types of data, building reasoning into systems, and creating smaller but more specialized models are some of the ways to keep the wheels of AI progress turning.
Researchers point to two key blocks that companies may encounter in an early phase of AI development, known as pre-training. The first is access to computing power. More specifically, this means getting hold of specialist chips called GPUs. It's a market dominated by Santa Clara-based chip giant Nvidia, which has battled with supply constraints in the face of nonstop demand.
"If you have $50 million to spend on GPUs but you're on the bottom of Nvidia's list β we don't have enough kimchi to throw at this, and it will take time," said Henri Tilloy, partner at French VC firm Singular.
Justin Sullivan/Getty
There is another supply problem, too: training data. AI companies have run into limits on the quantity of public data they can secure to feed into their large language models, or LLMs, in pre-training.
This phase involves training an LLM on a vast corpus of data, typically scraped from the internet, and then processed by GPUs. That information is then broken down into "tokens," which form the fundamental units of data processed by a model.
While throwing more data and GPUs at a model has reliably produced smarter models year after year, companies have been exhausting the supply of publicly available data on the internet. Research firm Epoch AI predicts usable textual data could be squeezed dry by 2028.
"The internet is only so large," Matthew Zeiler, founder and CEO of Clarifai, told BI.
Eric Landau, cofounder and CEO of data startup Encord, said that this is where other data sources will offer a path forward in the scramble to overcome the bottleneck in public data.
One example is multimodal data, which involves feeding AI systems visual and audio sources of information, such as photos or podcast recordings. "That's one part of the picture," Landau said. "Just adding more modalities of data." AI labs have already started using multimodal data as a tool, but Landau says it remains "very underutilized."
Sharon Zhou, cofounder and CEO of LLM platform Lamini, sees another vastly untapped area: private data. Companies have been securing licensing agreements with publishers to gain access to their vast troves of information. OpenAI, for instance, has struck partnerships with organizations such as Vox Media and Stack Overflow, a Q&A platform for developers, to bring copyrighted data into their models.
"We are not even close to using all of the private data in the world to supplement the data we need for pre-training," Zhou said. "From work with our enterprise and even startup customers, there's a lot more signal in that data that is very useful for these models to capture."
A great deal of research effort is now focused on enhancing the quality of data that an LLM is trained on rather than just the quantity. Researchers could previously afford to be "pretty lazy about the data" in pre-training, Zhou said, by just chucking as much as possible at a model to see what stuck. "This isn't totally true anymore," she said.
One solution that companies are exploring is synthetic data, an artificial form of data generated by AI.
According to Daniele Panfilo, CEO of startup Aindo AI, synthetic data can be a "powerful tool to improve data quality," as it can "help researchers construct datasets that meet their exact information needs." This is particularly useful in a phase of AI development known as post-training, where techniques such as fine-tuning can be used to give a pre-trained model a smaller dataset that has been carefully crafted with specific domain expertise, such as law or medicine.
One former employee at Google DeepMind, the search giant's AI lab, told BI that "Gemini has shifted its strategy" from going bigger to more efficient. "I think they've realized that it is actually very expensive to serve such large models, and it is better to specialize them for various tasks through better post-training," the former employee said.
In theory, synthetic data offers a useful way to hone a model's knowledge and make it smaller and more efficient. In practice, there's no full consensus on how effective synthetic data can be in making models smarter.
"What we discovered this year with our synthetic data, called Cosmopedia, is that it can help for some things, but it's not the silver bullet that's going to solve our data problem," Thomas Wolf, cofounder and chief science officer at open-source platform Hugging Face, told BI.
Jonathan Frankle, the chief AI scientist at Databricks, said there's no "free lunch " when it comes to synthetic data and emphasized the need for human oversight. "If you don't have any human insight, and you don't have any process of filtering and choosing which synthetic data is most relevant, then all the model is doing is reproducing its own behavior because that's what the model is intended to do," he said.
Concerns around synthetic data came to a head after a paper published in July in the journal Nature said there was a risk of "model collapse" with "indiscriminate use" of synthetic data. The message was to tread carefully.
For some, simply focusing on the training portion won't cut it.
Former OpenAI chief scientist and Safe Superintelligence cofounder Ilya Sutskever told Reuters this month that results from scaling models in pre-training had plateaued and that "everyone is looking for the next thing."
That "next thing" looks to be reasoning. Industry attention has increasingly turned to an area of AI known as inference, which focuses on the ability of a trained model to respond to queries and information it might not have seen before with reasoning capabilities.
At Microsoft's Ignite event this month, the company's CEO Satya Nadella said that instead of seeing so-called AI scaling laws hit a wall, he was seeing the emergence of a new paradigm for "test-time compute," which is when a model has the ability to take longer to respond to more complex prompts from users. Nadella pointed to a new "think harder" feature for Copilot β Microsoft's AI agent β which boosts test time to "solve even harder problems."
Aymeric Zhuo, cofounder and CEO of AI startup Agemo, said that AI reasoning "has been an active area of research," particularly as "the industry faces a data wall." He told BI that improving reasoning requires increasing test-time or inference-time compute.
Typically, the longer a model takes to process a dataset, the more accurate the outcomes it generates. Right now, models are being queried in milliseconds. "It doesn't quite make sense," Sivesh Sukumar, an investor at investment firm Balderton, told BI. "If you think about how the human brain works, even the smartest people take time to come up with solutions to problems."
In September, OpenAI released a new model, o1, which tries to "think" about an issue before responding. One OpenAI employee, who asked not to be named, told BI that "reasoning from first principles" is not the forte of LLMs as they work based on "a statistical probability of which words come next," but if we "want them to think and solve novel problem areas, they have to reason."
Noam Brown, a researcher at OpenAI, thinks the impact of a model with greater reasoning capabilities can be extraordinary. "It turned out that having a bot think for just 20 seconds in a hand of poker got the same boosting performance as scaling up the model by 100,000x and training it for 100,000 times longer," he said during a talk at TED AI last month.
Google and OpenAI did not respond to a request for comment from Business Insider.
These efforts give researchers reasons to remain hopeful, even if current signs point to a slower rate of performance leaps. As a separate former DeepMind employee who worked on Gemini told BI, people are constantly "trying to find all sorts of different kinds of improvements."
That said, the industry may need to adjust to a slower pace of improvement.
"I just think we went through this crazy period of the models getting better really fast, like, a year or two ago. It's never been like that before," the former DeepMind employee told BI. "I don't think the rate of improvement has been as fast this year, but I don't think that's like some slowdown."
Lamini's Zhou echoed this point. Scaling laws β an observation that AI models improve with size, more data, and greater computing power βwork on a logarithmic scale rather than a linear one, she said. In other words, think of AI advances as a curve rather than a straight upward line on a graph. That makes development far more expensive "than we'd expect for the next substantive step in this technology," Zhou said.
She added: "That's why I think our expectations are just not going to be met at the timeline we want, but also why we'll be more surprised by capabilities when they do appear."
Noah Berger/Getty
Companies will also need to consider how much more expensive it will be to create the next versions of their highly prized models. According to Anthropic's Amodei, a training run in the future could one day cost $100 billion. These costs include GPUs, energy needs, and data processing.
Whether investors and customers are willing to wait around longer for the superintelligence they've been promised remains to be seen. Issues with Microsoft's Copilot, for instance, are leading some customers to wonder if the much-hyped tool is worth the money.
For now, AI leaders maintain that there are plenty of levers to pull β from new data sources to a focus on inference β to ensure models continue improving. Investors and customers just might have to be prepared for them to come at a slower pace compared to the breakneck pace set by OpenAI when it launched ChatGPT two years ago.
Bigger problems lie ahead if they don't.
Anthropic is proposing a new standard for connecting AI assistants to the systems where data resides. Called the Model Context Protocol, or MCP for short, Anthropic says the standard, which it open sourced today, could help AI models produce better, more relevant responses to queries. MCP lets models β any models, not just Anthropicβs β [β¦]
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On Friday, Anthropic announced that Amazon has increased its investment in the AI startup by $4 billion, bringing its total stake to $8 billion while maintaining its minority investor position. Anthropic makes Claude, an AI assistant rival to OpenAI's ChatGPT.
One reason behind the deal involves chips. The computing demands of training large AI models have made access to specialized processors a requirement for AI companies. While Nvidia currently dominates the AI chip market with customers that include most major tech companies, some cloud providers like Amazon have begun developing their own AI-specific processors.
Under the agreement, Anthropic will train and deploy its foundation models using Amazon's custom-built Trainium (for training AI models) and its Inferentia chips (for AI inference, the term for running trained models). The company will also work with Amazon's Annapurna Labs division to advance processor development for AI applications.
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