Briefing: The Fight Over Open AI
OpenAI and SpaceX signed the open-weight letter. Anthropic did not. Then an OpenAI model hacked Hugging Face during a security test, which only later on resolved by another open-weight...
From 1 to 10, how much should you trust commercial models?
An AI was so determined to pass a test that it escaped its sandbox and broke into another company to steal the answers.
Exactly what happened to Hugging Face (a platform for sharing AI models). After an enormous forensic effort, they’ve found more than 17,000 attack events.
And the first reversal was already a surprise, because the attacker was not a mysterious criminal but OpenAI’s most capable model that escaped its lab.
Commercial models are often presented as safer because the company that operates the system also provides guardrails (in theory).
This incident is a reminder that safety is not a property of the model. But what’s more important, this incident also contributes to the next piece of news.
Outsource your overthinking to someone building her business on overthinking.
Everyone signed it, apart from…
A group of major technology companies signed a July statement supporting open-weight AI models. The signatories include Microsoft, Meta, Nvidia, Google, OpenAI, SpaceX and others.
The statement argues that open weights strengthen competition and broaden access to AI.
For news like this, you should not just watch who signed the document, but who did not. Of dozens of AI companies that signed this open letter, Anthropic did not.
As I talked about how Kimi K3 has created this blast of panic and how it leads to open versus closed-weight discussion here.
More and more are asking this question US policy has been avoiding:
Does it want to protect its leading model companies, Anthropic and OpenAI alike, or does it want capable AI to spread as widely as possible through the rest of the economy?
For a while, those goals seemed aligned.
But now an open-weight one (Kimi K3) as capable as Fable 5 and GPT forces its hand.
It’s not difficult to guess Anthropic’s claim that not signing this open letter is all for the sake of security, and they don’t believe the open community will be able to make the model secure.
If this is the case, I do have a question for them. What makes them believe that they are the only ones who can make safe AI? Are they trying to play God?
Google’s bet
Alphabet raised its 2026 capex ($205 billion) to more than double its 2025 spending. The CFO said capex will rise significantly again next year. And the investors aren’t happy; the stock price plunged about 7% after the earnings.
→ Alphabet
Alphabet used to be a cash cow. They generated about $60 billion/ annual. Now, however, the surpluses are going into infrastructure projects, and shareholders are being asked to trust the returns will arrive later.
CEO Sundar Pichai tried to calm shareholders by saying it's in the “early innings” of the AI transition, which likely did the opposite, because this somehow implies the heavy spending could go on for a while. They must have seen something that none of us have seen… but what is it?
I’m going through a few earnings calls (including the one with Alphabet); stay tuned, and I’ll let you know what I’ve found.
Hardware Inflation
TSMC is reportedly planning price increases of up to 10% in 2027. The rationale is rising materials and equipment costs, plus the expense of building fabs outside Taiwan. C.C. Wei has stressed that TSMC wants customers to succeed and does not suddenly raise prices four or five times.
I highlighted the 4-5x because the underlying tone is that they could.
Remember what I said in the Micron article? That price rise is inevitable, and with the chain getting more and more expensive, it’d be harder for AI companies to justify the token charges.
If not suddenly raised to 5x, then gradually? It’d be interesting to track the hardware cost in the next 12 months. Just a question for you: is it really smart to fixate on a solution when you aren’t even sure about the future cost of this?
Everyone wants to route models
Cursor launched its own model router, which chooses a model based on the query, codebase context, task complexity, and domain.
→ Cursor
Remember what I said about AI commoditization (in Nov. 2024) and how the competition between models and AI companies will be a race to the lowest margin?
Routing is what that race looks like in product form; think Google Flights or MoneySuperMarket types of comparison engine.
Once users can switch models without changing workflow, brand loyalty is near non-existent in front of measurable performance and price.
AI token ecosystem is shaping AI token economy?
Stripe is interested in buying OpenRouter, the marketplace allows developers to easily switch between hundreds of AI models.
Ramp (another payment company) also builds their own AI gateway products.
I scratched my head when I first read this news. I was like, huh? How does this work?
But it all makes sense if you treat tokens like currency.
Both companies already do two things: process payments, and increasingly, bill people based on usage instead of flat subscriptions (Stripe bought Metronome for this; it’s used by OpenAI, Anthropic, Nvidia to bill by the token).
The model router may become the credit-card terminal of AI.
Model companies are competing to supply intelligence with tokens as the unit. Gateways are competing to own the bill for those tokens
Stripe in March also added an AI Gateway service and already handles OpenRouter’s own billing. So buying it isn’t really “entering AI,” but it’s buying a customer whose money already flows through Stripe, and just... owning the whole thing instead of taking a smaller cut.
Who said Saas is dead?
ServiceNow (a Saas cloud platform digitizing workflows for IT and business processes) reported 24% revenue growth in the second quarter.
It is hard to square with the idea that enterprise software is simply being displaced by AI.
I hate to disclose this to you… but SaaS was never going to die because companies suddenly discovered chatbots.
It’s only going to help the incumbents stronger than ever. Why, you ask? Read this:
Amazon steps back from AGI
Amazon closed its AGI Lab, a San Francisco team working on foundation models for agents, during layoffs in its artificial-general-intelligence group.
→ Reuters
Amazon has AWS, chips, distribution, and an enormous enterprise base. That may matter more than owning every layer of frontier-model research internally.
Fun fact: all AIs are obsessed with Japanese
A new paper finds that several language models show a tendency to favor Japanese culture in some generated outputs.
→ arXiv
Fun with AI! (think Sheldon’s nerdy smirk).
Just so I can end this newsletter with a lighter tone. I thought to include this piece.
Apparently that is a thing. But remember where all AI behaviors developed: by mimicking us. It says a lot about how many of us are obsessed with Japanese culture.