Table of Contents

• This Week

• Business Use Cases

• Things to Pay Attention to

This Week

Why This Is Important

• Perplexity's AI-powered Comet browser is now free worldwide, aiming to change the way people browse the web with its integrated AI assistant.

• The browser offers features such as summarizing text, making grocery lists, and pulling answers from emails and calendars, with some advanced tools available only to Comet Plus and Max subscribers.

• The author's experiment with Comet showed promising results, with the AI assistant successfully completing tasks such as scheduling events and creating charts, but also raised concerns about privacy due to the AI's access to browsing data.

Bottom Line Up Front

• Governor Gavin Newsom has signed a landmark bill, SB 53, regulating artificial intelligence in California, requiring companies to disclose safety and security protocols.

• OpenAI has introduced a major e-commerce feature allowing users to make purchases directly through ChatGPT, challenging Google's dominance in product search and advertising.

• Slack has launched "Channel Expert", an AI teammate designed to streamline team communication and boost productivity, especially for small businesses.

Business Use Cases

Why is this important

• The current technological shift with AI is profound and will impact the world for centuries to come, requiring intentionality in the decisions made and companies built.

• AI is becoming a potent force that will live alongside humans, influencing thinking and requiring trust to be built, with potential applications in various industries such as healthcare.

• To build companies successfully in this ambiguous world, it's essential to learn how to navigate ambiguity effectively, be highly iterative, and develop a new level of relationship with customers, focusing on partnership and transformation.

• Some companies are creating thin wrappers around AI models, often with negative gross margins, which may not be a durable business model.

Why is this important

• Perplexity CEO Aravind Srinivas has invested in Maximor, an AI startup that automates finance tasks.

• Maximor has raised a $9 million seed round to expand its platform, which can cut month-end close time in half and reduce manual accounting work by 40%.

• The startup's platform connects to various systems, including ERPs and banking systems, to produce audit-ready outputs and give finance leaders unified visibility across financial and operational data.

Bottom Line Up Front

• AI skills like coding are improving rapidly due to reinforcement learning (RL), which relies on billions of easily measurable tests to train models.

• Skills that can be automatically graded, such as bug-fixing and competitive math, are advancing quickly, while skills like writing are making only incremental progress.

• The "reinforcement gap" is emerging as a key factor in determining what AI systems can and can't do, with testability being the deciding factor in whether a process can be developed into a functional product.

Bottom Line Up Front

• The fashion industry is using AI to predict the next big trend, with companies like Heuritech and WGSN leveraging AI algorithms to mine data from runway shows, social media, and other sources.

• AI is helping fashion industry players make decisions, such as choosing between different design options, and predicting emerging trends like dotted prints, flat-thong sandals, and the color yellow.

• While AI is useful for trend prediction, human expertise is still necessary to ensure the information provided by AI is accurate and relevant, with experts like Noémie Voyer and Francesca Muston emphasizing the importance of human judgment in the process.

Bottom Line Up Front

• There is concern about the return on investment in AI, with $350 billion in CapEx and infrastructure, and the potential mismatch between investment and revenue.

• The deployment of capital in AI is expected to have winners and losers, with some investments delivering attractive returns and others not.

• The impact of AI on productivity is exciting, allowing businesses to be more productive, but it's a give-and-take situation with some areas requiring fewer people and others requiring more.

Bottom Line Up Front

• The worldwide SAS market is about $300 billion per year, while the labor market in the US alone is $13 trillion. The global labor market is a significant opportunity for AI.

• Software companies have taken a filing cabinet and turned it into a database, with the whole process now being done end-to-end.

• The goal is to find companies that will make software look small, and AI is a key part of this effort.

• The use of AI will continue to expand and enable new businesses and industries, leading to a larger market for software and labor.

Things to Pay Attention to

Bottom Line Up Front

• The German government, led by Chancellor Friedrich Merz, has agreed to integrate artificial intelligence (AI) into various aspects of government and public services, aiming to reduce bureaucracy costs by 25% by 2029.

• Digitalization Minister Karsten Wildberger's "Modernization Agenda" promotes AI as a key technology, alongside the "High-Tech Agenda" presented by Federal Minister of Research Dorothee Bär, which highlights AI as one of six key technologies to be promoted.

• Experts, including Holger Hoos, a Humboldt Foundation Professor of AI, caution that the government's understanding of AI is limited and that its implementation should be guided by science, not business interests, to ensure fair and responsible use.

Bottom Line Up Front

• OpenAI has released a new app called Sora, which allows users to generate short-form videos using artificial intelligence, including videos of real individuals with their permission.

• The app has raised concerns among researchers, such as Solomon Messing and Henry Ajder, who worry about the potential for creating realistic but fake content, including "deepfakes", and the erosion of trust in what people see online.

• Despite OpenAI's efforts to place guardrails on the app's content, testers found loopholes that allowed for the generation of videos that supported conspiracy theories, depicted violence, and used copyrighted material without permission.

Bottom Line Up Front

• The US Air Force is testing AI-piloted drones, such as the XQ-58, to operate alongside manned aircraft, with the goal of having 150 AI-piloted aircraft by the end of the decade.

• General Adrian Spain, head of Air Combat Command, believes AI drones can execute attacks on complex targets and could be armed with weapons, but emphasizes that humans will make life-or-death decisions.

• Retired Air Force Lt. Gen. Clint Hinote says the use of AI drones is a revolution born of necessity, as the US Air Force needs to adapt to counter potential threats from countries like China, and that AI drones could help even the odds in combat scenarios.