The Month AI Woke Up

**Nathaniel Whittemore** (0:00)
Today on the AI Daily Brief, the month AI woke up. Before that in the headlines, the latest on Anthropic versus the US government. The AI Daily Brief is a daily podcast and video about the most important news and discussions in AI.
All right, friends, quick announcements before we dive in. First of all, thank you to today's sponsors, KPMG, AIUC, Blitzi and Scrunch. To get an ad-free version of the show, go to patreon.com/aidailybrief, or you can subscribe on Apple Podcasts. To learn about sponsoring the show, or really anything else about the show, check out aidealybrief.ai. One of the things, of course, we've been talking about a lot is our Claw Camp and our Enterprise Claw programs. Claw Camp is an always free self-directed program. Enterprise Claw is an upcoming paid training program led by Newfar Gaspar. Registration is open for that right now and we'll close at the end of the week. You can find out more at enterpriseclaw.ai or again just from aidealybrief.ai. Now with that out of the way, let's catch up with Anthropic. Welcome back to the AI Daily Brief Headlines Edition, all the daily AI news you need in around five minutes. I said over the weekend as we were covering the Anthropic Pentagon story that we were probably going to have quite a few updates on this one in the weeks to come. And indeed that is certainly the case. The conflict between Anthropic and the Pentagon slash White House slash Trump slash Hegseth took on a new light over the weekend as the US and Israel launched preemptive strikes on Iran. Now while some thought that maybe this made that 5:01 p.m. deadline on Friday not arbitrary and instead driven by the Pentagon's need for an approved and operational AI system in place ahead of the Saturday operation, but as per Wall Street Journal reports, Anthropic's technology ended up being used in the strikes despite being declared a supply chain risk hours earlier. Sources said that Claude was used to analyze intelligence, help select targets, and carry out battlefield simulations. To be clear, there are no suggestions that Claude piloted fully autonomous weapons, but the Pentagon has confirmed that this was the first time that autonomous Lucas kamikaze drones were deployed in an active mission. Their use highlights that autonomous weaponry is part of modern warfare already and doesn't require the use of frontier LLMs. Additionally, despite OpenAI signing a new deal on Friday, that company's models were not used in the attack. Katrina Mulligan, OpenAI's head of National Security Partnerships, said that that wouldn't have been possible, as the models haven't yet been approved for use in classified settings. TLDR, in spite of some of the chatter, it doesn't actually appear that the Pentagon hot-swapped AI models on the Friday night before an operation. As the president said on Friday, there's a six-month phase-out period where Anthropix tech will remain in military use. Still, for some, all of this makes the way that it played out even more confusing and contradictory. Democrat Congressman Seth Moulton wrote, Friday, the Pentagon claims Anthropix is a national security risk and should be blacklisted. Saturday, the Pentagon still uses Anthropix Claude during its strikes on Iran. Either they used tech that is a NatSec risk during military action, or they lied in the first place. So that might be what's going on in the actual deployed world of military operations. But what's happening in the world of consumer sentiment is very different. Anthropix saw their downloads spike over the weekend, driving Claude to number one on the app charts, overtaking ChatGPT for the first time. Claude was outside the top 100 free apps at the end of January and spent most of last month outside of the top 20, taking advantage of their surge in popularity, and Anthropix promoted the ability to easily migrate memory from ChatGPT for those making the switch. Now, as a side story, this is something that people are paying a lot of attention to. The Signal account on Twitter writes, This is incredibly fascinating because we initially thought that memory is a moat, but if it is just a file you can take with you? I suspect people aren't going to do this at scale, but very interesting to see this play out and stress tested. Now, to be clear, this isn't some super sophisticated feature. It's basically a big ol prompt that Claude gives you that you paste into whatever LLM you're using and take the results and paste it back to Claude. Point being that it is not going to be perfect. It is not going to have all the context, even if it gets you started. In any case, on Saturday, Sam Altman hosted an AMA on X to answer public questions about their new contract with the Department of War. One of Altman's big points was that the threat of labeling Anthropica Supply Chain Risk is bad for the entire industry. He wrote, We said to the DOW before and after. We said that part of the reason we were willing to do this quickly was in the hopes of de-escalation. I feel competitive with Anthropic for sure, but successfully building safe superintelligence and widely sharing the benefits is way more important than any company competition. I believe they would do something to try to help us in the face of great injustice if they could. We should all care very much about the precedent. OpenAI later published a blog post containing details of their contract with the department, including full text of the sections dealing with AI red lines. Regarding Autonomous Weapons, the contract states, The AI systems will not be used to independently direct autonomous weapons in any case where law, regulation, or department policy requires human control. Regarding domestic surveillance, the contract laid out a series of applicable laws and directives adding, The AI system shall not be used for unconstrained monitoring of US persons' private information as consistent with these authorities. Now, many pointed out that this language does not prevent OpenAI's technology to be used for autonomous weapons or domestic surveillance, as long as the Pentagon deems that use to be lawful. Self-professed AI security hawk Peter Wildeford posted, OpenAI is trying to claim simultaneously that a. their contract with the Pentagon allows for all lawful purposes b. also that their red lines are fully protected. The way OpenAI bridges this is by saying the protections live in this deployment architecture and safety stack rather than in the contract language. But if this contract says all lawful purposes, and your safety stack prevents a lawful purpose, you're in breach of contract. The Pentagon can just say, We both know your model can do this, you should remove that safeguard. And then OpenAI would have to comply or be sued. Both Sam Altman and NATSEC Lead Katrina Mulligan responded to this particular point. Mulligan said, A lot of the concerns about the government's all lawful use language seemed to stem from mistrust that the government will follow the laws. At the same time, people believe that Anthropic took an important stand by insisting on contract language around their red lines. We cannot have it both ways. We cannot say that the government cannot be trusted to interpret laws and contracts the right way, but also agree that Anthropic's policy red lines in a contract would have been effective. Setting out OpenAI's approach, she continued, Let the democratic process decide on the legality and proper use question. Now, somewhat overshadowed by the conflict with the Pentagon, OpenAI finalized the largest startup fundraising round in history on Friday morning. The round ultimately totaled $110 billion, valuing OpenAI at an $840 billion post-money valuation. The valuation positions OpenAI as the most valuable startup ever and the 15th most valuable company in the world. They are now worth slightly more than JP Morgan Chase. Notably the round remains open and OpenAI expects another $10 billion from financial entities including UAE investment fund MGX by the end of March. The $110 billion is entirely from three corporate strategic partners. NVIDIA and SoftBank invested $30 billion each. Details were a little scant on this front, but OpenAI mentioned the NVIDIA strategic partnership includes additional chip supplies. But the largest investor was Amazon, who put $50 billion into the round. This investment is split between $15 billion due at the end of March and a further $35 billion contingent on OpenAI going public or hitting unspecified milestones. Previous reporting rumored that these milestones included achieving AGI. I don't know why these companies keep putting a term as nebulous as AGI as a condition on their contracts. It's just going to make lawyers rich later. Now, overall, the Amazon strategic partnership is wide-ranging. OpenAI will expand their server rental deal with AWS from the previously announced $38 billion over seven years to $138 billion over eight years. As part of the agreement, OpenAI has also committed to use Amazon's Tranium 3 and forthcoming Tranium 4 chips. OpenAI and Amazon will also jointly develop AI models to power Amazon's consumer apps. The Amazon deal also has some interesting implications for Microsoft, who notably did not make a further investment as part of this round. Microsoft continues to hold the exclusive right to serve so-called stateless versions of OpenAI's models, and the revenue sharing agreement also remains in place, so Microsoft will take a cut of revenue generated through AWS. Amazon will be the exclusive provider of OpenAI's Frontier AI Agent Management tool, aside from the first-party deployment. However, the OpenAI branded version of the tool will be hosted on Azure. Alongside the fundraising numbers, we also now learned that ChatGPT has 900 million weekly active users. The last reported figure was $800 million in October, and reports suggested that stagnating user growth had been part of the trigger for Sam Altman's Code Red in December. The announcement underscored that subscriber growth is also strong, now reaching 50 million. Writes OpenAI, Subscriber momentum accelerated meaningfully to start the year, with January and February on track to be the largest month of new subscribers in our history. People use ChatGPT to learn, write, plan and build. As usage scales, the product improves in ways people feel immediately. Faster responses, higher reliability, stronger safety and more consistent performance. OpenAI also shared that they now have more than 9 million paying business users across startups, enterprises and governments. And in addition, weekly codecs users have tripled since the beginning of the year to reach 1.6 million. Now that might be the perfect segue to talk about the big changes that ended up characterizing February. So with that, we will close the headlines and move on to the main episode.