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OpenAI Under Fire: For-Profit Shift Triggers Legal, Rival Backlash

PLUS: DARPA Taps Google Quantum AI for 2033 Benchmark Project, UAE Unveils K2 Think — Small Open-Source Model With Big Reasoning Power and more.

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Today:

  • OpenAI Under Fire: For-Profit Shift Triggers Legal, Rival Backlash

  • Microsoft Taps Anthropic’s Claude to Power Office Apps

  • Google’s Veo 3 Now Makes Vertical AI Videos for TikTok & Shorts

  • Claude Can Now Create & Edit Real Files — Docs, Sheets, PDFs & More

  • DARPA Taps Google Quantum AI for 2033 Benchmark Project

  • UAE Unveils K2 Think — Small Open-Source Model With Big Reasoning Power

OpenAI is RATTLED by this…

OpenAI’s shift to a for-profit structure is drawing heat. Critics, including Elon Musk and Meta, oppose the move, and California’s attorney general is pushing back hard. OpenAI may even leave the state—but that won’t avoid legal hurdles. 

Meanwhile, Microsoft is eyeing Anthropic as a backup. Online, bot-like hype surrounds OpenAI’s tools, and the company now projects $115 billion in costs—up $80 billion from earlier estimates. Trouble may be brewing.

Microsoft is now buying AI services from Anthropic to power parts of Word, Excel, Outlook, and PowerPoint marking a shift from its sole reliance on OpenAI. Microsoft still partners with OpenAI but sees Anthropic’s Claude Sonnet 4 as better in some tasks. This move comes amid rising tensions. OpenAI is building its own chips and launching a LinkedIn rival. Microsoft, meanwhile, is developing in-house AI models for future independence.

Why This Matters

  1. AI Power Shifts
    Microsoft diversifying from OpenAI signals changing alliances and competition in the race for top AI tools.

  2. Model Quality Matters
    Claude Sonnet 4 outperforming GPT in specific areas highlights growing specialization among leading AI models.

  3. Strategic Independence
    Both Microsoft and OpenAI are building their own infrastructure, showing a shift toward less mutual dependence—and a more fragmented AI ecosystem.

Google’s Veo 3 now supports vertical video (9:16) and 1080p resolution, making it ideal for mobile-first platforms like TikTok and YouTube Shorts. Developers can use the updated API with lower costs—Veo 3 now costs $0.40/second (down from $0.75), and Veo 3 Fast is $0.15/second. The update signals Google’s push to scale AI video generation via the Gemini API and paves the way for broader use in creative, mobile-focused apps.

Why This Matters

  1. Mobile-First AI Creation
    Vertical format support aligns AI-generated video with the dominant trend in content consumption—mobile and short-form video.

  2. Cost Drops Enable Scale
    Cheaper pricing makes advanced AI video more accessible to startups and solo developers, not just big-budget teams.

  3. AI in Social Video Ecosystems
    With Veo 3 headed for YouTube Shorts and possibly TikTok, this move pushes AI video generation deeper into mainstream content platforms.

Claude can now create and edit real files—like spreadsheets, Word docs, PDFs, and slide decks—directly within Claude.ai and its desktop app. Users on Max, Team, and Enterprise plans can use this feature now; Pro users will get access soon. Claude takes your instructions or data and turns them into working files, running code behind the scenes. This shift makes Claude a hands-on assistant, bridging the gap between ideas and polished deliverables.

Why This Matters

  1. From Advisor to Executor
    Claude moves beyond giving answers—it now builds actual files, enabling AI to directly execute complex tasks like modeling, analysis, and formatting.

  2. No-Code Productivity Boost
    Non-technical users can now generate advanced outputs like dashboards, forecasts, or formatted reports without learning spreadsheets or programming.

  3. Workflow Automation Leap
    Claude’s file creation expands AI’s role in daily work—automating multi-step processes that usually require different tools or expertise.

🧠RESEARCH

Researchers introduced REER, a new method that teaches AI to reason by working backward from good answers instead of trial-and-error. This reverse approach avoids the problems of current training methods. They also built a dataset and model that outperform top open-source tools and even rival GPT-4o and Claude 3.5.

WebExplorer is a new AI agent trained to search the web better than other models its size. It learns using smart data creation and reverse query methods. The 8B model solves long, multi-step tasks, beating much larger systems like WebSailor-72B on tough benchmarks in English, Chinese, and complex question answering.

Language models often make up facts when unsure—like students guessing on hard questions—because training and testing reward confidence over honesty. These “hallucinations” are not mysterious but stem from flawed scoring systems. Fixing this issue requires changing how AI answers are graded, not just adding more hallucination tests.

🛠️TOP TOOLS

Each listing includes a hands-on tutorial so you can get started right away, whether you’re a beginner or a pro.

Adobe Speech Enhancer - Adobe Speech Enhancer is Adobe’s AI cleanup filter that removes background noise/echo and boosts dialogue clarity so it sounds like a studio recording.

Lets Enhance io - Lets Enhance.io is an AI photo enhancer/upscaler.

Pico AI - Pico is a text-to-app platform that allows entrepreneurs, consultants, and small business owners to build web apps that harness the power of ChatGPT and other AI models.

Illusion Diffusion - Generate stunning high quality illusion artwork with Stable Diffusion

VisualizeAI - Build Prototypes, Visualize your designs, Generate Inspirations & Re-imagine ideas within seconds

📲SOCIAL MEDIA

🗞️MORE NEWS

  • Google Quantum AI was chosen for DARPA’s Quantum Benchmarking Initiative, which will evaluate if any quantum tech can deliver a powerful, reliable computer by 2033. Google aims to solve tough problems using quantum systems.

  • The UAE released K2 Think, a small but powerful open-source AI model that rivals much larger U.S. and Chinese systems in reasoning. Built in Abu Dhabi, it shows the nation’s rising global AI influence.

  • OpenAI will keep ChatGPT’s Standard Voice Mode beyond the planned removal date after user backlash. Head of ChatGPT Nick Turley said it’s “special to many” and promised further improvements to Advanced Voice Mode.

  • Reflection AI, backed by Nvidia and Sequoia Capital, nears a funding round valuing the company at $5.5bn. Focused on AI tools for coding, Reflection plans to raise $1bn, with Nvidia's venture arm investing $250mn.

  • A judge paused Anthropic’s $1.5B book piracy settlement, citing concerns that authors may be pressured into unfair terms. The deal offers $3,000 per book, but the judge wants clearer details before approving it.

  • Broadcom secured $10B in custom AI chip orders, led by OpenAI and followed by ByteDance, Apple, and xAI. Mass production starts in 2026, boosting Broadcom’s challenge to NVIDIA in the AI chip market.

  • ChatGPT Developer Mode gives Pro and Plus users full read/write access to external tools via MCP connectors. It supports custom servers, but requires careful use to avoid prompt injection, data loss, or misuse.

  • MIT research finds AI is now used in 80% of ransomware attacks, powering deepfakes, phishing, and malware. Experts call for layered defenses: automated security hygiene, AI-driven systems, and real-time executive oversight.

  • Eli Lilly has launched TuneLab, an AI platform offering biotech firms access to its $1B drug discovery models. Partners like Circle Pharma and insitro will use it to develop cancer and small-molecule therapies.

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