Why AI Washing Won’t Work Much Longer

**Nathaniel Whittemore** (0:00)
Today on the AI Daily Brief, what a new Chinese open-weight model release has to do with big shifts in enterprise AI thinking, and before that on the headlines, Palantir and the March to AI sovereignty. The AI Daily Brief is a daily podcast and video about the most important news and discussions in AI.
Welcome back to the AI Daily Brief headlines edition, all the daily AI news you need in around five minutes. This week, tech earnings continue with Palantir, registering another monster quarter. Quarterly revenue came in at 1.94 billion, up 93% from this time last year and beating expectations. Commercial sales were up 149% year over year, up from 133% growth rate in Q1, demonstrating that enterprise AI demand is still booming, despite flashy headlines of token budget cuts. Indeed, it turns out that caps, which by the way, most organizations haven't even gotten close to that level yet, are not the same as cuts. Palantir also managed to expand profit margins with net income reaching a billion dollars for the quarter and growing at a 225% annual pace. CEO Alex Karp described the quarter as otherworldly and used the earnings as a chance to proclaim the message that he has been getting increasingly loud about on his bully pulpit. He basically painted Palantir's results as an expression of the demand for AI sovereignty. He said, Palantir is the only company that has demonstrated it can transform tokens into actual economic value. Our customers trust us to provide them with maximal control over their operations, data and decisions. Palantir hiked annual forecasts, sending the stock surging by 10% in afterhours trading, with maximal control over their operations, data and decisions. This was the message that he echoed in his shareholder letter as well. Karp wrote, Every organization in the world is awakening to the risks of handing the creators of language models the keys to their institutions, of letting these models loose within their homes. The demand from our partners is clear. It is for control over data, the prompts that the models ingest, and more fundamentally, the organizational and business intelligence, or ALFA, that the language labs are not only ready and willing but structurally designed to capture from their customers. Later in the letter he continued, We do not get paid for clicks or tokens or chats. The gamification of the most significant development in modern economic history seems to us misplaced. The usage of a platform may hint at its value but is by no means dispositive. And many are now finding out that consumption and usage alone have little or nothing to do with the production of results. Just to add a little fire to all of it, he then says, There are Marxist overtones and undertones to our business. Others, including many of those building large language models, intend, knowingly or otherwise, to capture the means of production of their purported partners. The limitations and faults of the token industrial complex, which has threatened to overtake and dominate the world economy, have increasingly been exposed. We have always declined and will continue to decline, entering into a parasitic relationship with our partners. In a follow-up interview with CNBC, Cart made it clear exactly who he takes issue with. He said, We have people trying to drug addict us to a future they believe they control. Now, I've spent a lot of time with Dario and the Effective Altruism crew. They want to tell you we have to march into a future where we own nothing, where your businesses aren't profitable, where none of us have jobs, and where our adversaries win.
Now, of course, these are not the type of comments that everyone is going to take at face value, and they generated a wide range of opinions. Summing up the most optimistic version of the take, Amit is investing rights. The age of AI is not about valuations, but about empowering workers, enabling agency, and growing GDP.
Now, speaking of companies that are taking issue with the Frontier Labs, Apple right now is of course embroiled in a lawsuit with OpenAI, claiming that via an employee who left Apple to join OpenAI, the LLM lab stole Apple trade secrets.
OpenAI is biting back. In a new letter, they wrote, Apple is getting this wrong. Apple, they write, is one of the greatest companies of all time, and built a reputation for obsessing over the smallest details. This careless, aggressive, and oddly personal lawsuit, sadly doesn't live up to that reputation. Now, the big jaw drop line was this one. Apple had claimed that they contacted OpenAI in February and that we didn't respond. They now admit that their outside lawyers emailed the wrong person after confusing two Asian last names, only after we brought this to their attention. Which honestly, if true, brought up some big questions with the lawsuit for many folks watching this from the outside. Now, at this stage, this is a little bit more psychodrama than we normally get into on this show. It'll be worth paying attention to if it actually shifts the plans that OpenAI can make with hardware. For now, that is just such a wild mistake to make that I had to capture the zeitgeist of the AIX community by sharing it with you here.