According to Bloomberg, the investigation stems from suspicious data extraction activity detected in late 2024 via OpenAI’s application programming interface (API), sparking broader concerns over international AI competition.

Microsoft, OpenAI’s largest financial backer, first identified the large-scale data extraction and informed the ChatGPT maker of the incident. Sources believe the activity may have violated OpenAI’s terms of service, or that the group may have exploited loopholes to bypass restrictions limiting how much data they could collect.

DeepSeek has quickly risen to prominence in the competitive AI landscape, particularly with the release of its latest model, R-1, on 20 January.

Billed as a rival to OpenAI’s ChatGPT in performance but developed at a significantly lower cost, R-1 has shaken up the tech industry. Its release triggered a sharp decline in tech and AI stocks that wiped billions from US markets in a single week.

David Sacks, the White House’s newly appointed “crypto and AI czar,” alleged that DeepSeek may have employed questionable methods to achieve its AI’s capabilities. In an interview with Fox News, Sacks noted evidence suggesting that DeepSeek had used “distillation” to train its AI models using outputs from OpenAI’s systems.

“There’s substantial evidence that what DeepSeek did here is they distilled knowledge out of OpenAI’s models, and I don’t think OpenAI is very happy about this,” Sacks told the network.  

Model distillation involves training one AI system using data generated by another, potentially allowing a competitor to develop similar functionality. This method, when applied without proper authorisation, has stirred ethical and intellectual property debates as the global race for AI supremacy heats up.  

OpenAI declined to comment specifically on the accusations against DeepSeek but acknowledged the broader risk posed by model distillation, particularly by Chinese companies.  

“We know PRC-based companies — and others — are constantly trying to distill the models of leading US AI companies,” a spokesperson for OpenAI told Bloomberg.  

Geopolitical and security concerns  

Growing tensions around AI innovation now extend into national security. CNBC reported that the US Navy has banned its personnel from using DeepSeek’s products, citing fears that the Chinese government could exploit the platform to access sensitive information.

In an email dated 24 January, the Navy warned its staff against using DeepSeek AI “in any capacity” due to “potential security and ethical concerns associated with the model’s origin and usage.”

Critics have highlighted DeepSeek’s privacy policy, which permits the collection of data such as IP addresses, device information, and even keystroke patterns—a scope of data collection considered excessive by some experts.

Earlier this week, DeepSeek stated it was facing “large-scale malicious attacks” against its systems. A banner on its website informed users of a temporary sign-up restriction.

The growing competition between the US and China in particular in the AI sector has underscored wider concerns regarding technological ownership, ethical governance, and national security.  

Experts warn that as AI systems advance and become increasingly integral to global economic and strategic planning, disputes over data usage and intellectual property are only likely to intensify. Accusations such as those against DeepSeek amplify alarm over China’s rapid development in the field and its potential quest to bypass US-led safeguards through reverse engineering and other means.  

While OpenAI and Microsoft continue their investigation into the alleged misuse of OpenAI’s platform, businesses and governments alike are paying close attention. The case could set a precedent for how AI developers police model usage and enforce terms of service.

For now, the response from both US and Chinese stakeholders highlights how AI innovation has become not just a race for technological dominance, but a fraught geopolitical contest that is shaping 21st-century power dynamics.

(Image by Mohamed Hassan)

See also: Qwen 2.5-Max outperforms DeepSeek V3 in some benchmarks

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

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Historically, finding new materials relied on laborious and costly trial-and-error experiments. More recently, computational screening of vast materials databases helped to speed up the process, but it remained a time-intensive process.

Now, a powerful new generative AI tool from Microsoft could accelerate this process significantly. Dubbed MatterGen, the tool steps away from traditional screening methods and instead directly engineers novel materials based on design requirements, offering a potentially game-changing approach to materials discovery.

Published in a paper in Nature, Microsoft describes MatterGen as a diffusion model that operates within the 3D geometry of materials. Where an image diffusion model might generate images from text prompts by tweaking pixel colours, MatterGen generates material structures by altering elements, positions, and periodic lattices in randomised structures. This bespoke architecture is designed specifically to handle the unique demands of materials science, such as periodicity and 3D arrangements.  

“MatterGen enables a new paradigm of generative AI-assisted materials design that allows for efficient exploration of materials, going beyond the limited set of known ones,” explains Microsoft.

A leap beyond screening

Traditional computational methods involve screening enormous databases of potential materials to identify candidates with desired properties. Yet, even these methods are limited in their ability to explore the universe of unknown materials and require researchers to sift through millions of options before finding promising candidates.  

In contrast, MatterGen starts from scratch—generating materials based on specific prompts about chemistry, mechanical attributes, electronic properties, magnetic behaviour, or combinations of these constraints. The model was trained using over 608,000 stable materials compiled from the Materials Project and Alexandria databases.

In the comparison below, MatterGen significantly outperformed traditional screening methods in generating novel materials with specific properties—specifically a bulk modulus greater than 400 GPa, meaning they are hard to compress.

While screening exhibited diminishing returns over time as its pool of known candidates became exhausted, MatterGen continued generating increasingly novel results.

One common challenge encountered during materials synthesis is compositional disorder—the phenomenon where atoms randomly swap positions within a crystal lattice. Traditional algorithms often fail to distinguish between similar structures when deciding what counts as a “truly novel” material.  

To address this, Microsoft devised a new structure-matching algorithm that incorporates compositional disorder into its evaluations. The tool identifies whether two structures are merely ordered approximations of the same underlying disordered structure, enabling more robust definitions of novelty.

Proving MatterGen works for materials discovery

To prove MatterGen’s potential, Microsoft collaborated with researchers at Shenzhen Institutes of Advanced Technology (SIAT) – part of the Chinese Academy of Sciences – to experimentally synthesise a novel material designed by the AI.

The material, TaCr₂O₆, was generated by MatterGen to meet a bulk modulus target of 200 GPa. While the experimental result fell slightly short of the target, measuring a modulus of 169 GPa, the relative error was just 20%—a small discrepancy from an experimental perspective.

Interestingly, the final material exhibited compositional disorder between Ta and Cr atoms, but its structure aligned closely with the model’s prediction. If this level of predictive accuracy can be translated to other domains, MatterGen could have a profound impact on material designs for batteries, fuel cells, magnets, and more.

Microsoft positions MatterGen as a complementary tool to its previous AI model, MatterSim, which accelerates simulations of material properties. Together, the tools could serve as a technological “flywheel”, enhancing both the exploration of new materials and the simulation of their properties in iterative loops.

This approach aligns with what Microsoft refers to as the “fifth paradigm of scientific discovery,” in which AI moves beyond pattern recognition to actively guide experiments and simulations.  

Microsoft has released MatterGen’s source code under the MIT licence. Alongside the code, the team has made the model’s training and fine-tuning datasets available to support further research and encourage broader adoption of this technology.

Reflecting on generative AI’s broader scientific potential, Microsoft draws parallels to drug discovery, where such tools have already started transforming how researchers design and develop medicines. Similarly, MatterGen could reshape the way we approach materials design, particularly for critical domains such as renewable energy, electronics, and aerospace engineering. 

(Image credit: Microsoft)

See also: L’Oréal: Making cosmetics sustainable with generative AI

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Unveiled in December 2024, Phi-4 has been drawing attention for its cutting-edge capabilities despite its compact size. Its release on Hugging Face opens the door for even wider adoption, highlighting that powerful models don’t always require massive infrastructure costs.

From Azure to open access

Although Microsoft initially announced Phi-4 last month, its availability was confined to Azure AI Foundry—the company’s development platform aimed at building AI-driven solutions. This exclusivity created a stir among the AI community, with many eager to get their hands on the model.

Microsoft’s AI Principal Research Engineer, Shital Shah, addressed the demand on X: “We have been completely amazed by the response to phi-4 release. A lot of folks had been asking us for weight release. Few even uploaded bootlegged phi-4 weights on Hugging Face. Well, wait no more. We are releasing today official phi-4 model on Hugging Face!”

The official release eliminates the need for unauthorised or “bootlegged” versions, providing a legitimate channel for developers keen to explore Phi-4’s potential.

Why Phi-4 matters

Phi-4 isn’t just another entry in Microsoft’s AI portfolio—it represents an evolution in the conversation about AI efficiency and accessibility.

At a time when colossal models like GPT-4 dominate discussions due to their expansive capabilities, Phi-4 offers something revolutionary: big performance in a small package.

Key benefits of Phi-4 include:

• Compact size and energy efficiency

Phi-4’s lightweight architecture allows it to operate effectively on consumer-grade hardware, eliminating the need for expensive server infrastructure. Its compact form also translates to significantly reduced energy usage, which aligns well with the tech industry’s growing emphasis on sustainability and green computing.

• Excels in advanced mathematical reasoning

Phi-4 shines in tasks demanding mathematical reasoning, a capability measured by its score of 80.4 on the challenging MATH benchmark. This performance outpaces many comparable and even larger models, positioning Phi-4 as a strong contender for industries such as finance, engineering, and data analytics.

• Specialised applications

Training on curated datasets has made Phi-4 highly accurate for domain-specific uses. From auto-filling forms to generating tailored content, it’s particularly valuable in industries like healthcare and customer service, where compliance, speed, and accuracy are critical.

• Enhanced safety features

By leveraging Azure AI’s Content Safety tools, Phi-4 incorporates mechanisms like prompt shields and protected material detection to mitigate risks associated with adversarial prompts, making it safer to deploy in live environments.

• Making AI accessible to mid-sized businesses

Sustainability and security are vital, but so is cost-effectiveness. Phi-4’s capability to deliver high performance without the need for large computational resources makes it a viable choice for mid-sized enterprises eager to adopt AI solutions. This could lower barriers for businesses seeking to automate operations or enhance productivity.

• Innovative training techniques

The model’s training process combines synthetic datasets and curated organic data, boosting Phi-4’s effectiveness while addressing common challenges with data availability. This methodology could set the stage for future advances in model development, balancing scalability with precision.

Model for the masses

Phi-4’s launch with an MIT licence signifies more than just access—it represents a shift in how AI technologies are developed and shared. The permissive nature of this licence allows developers to use, modify, and redistribute Phi-4 with few restrictions, fostering further innovation.

This move also reflects broader trends in the AI field: a deliberate effort to democratise access to powerful models, enabling smaller organisations and independent developers to benefit from advanced technologies that were previously the preserve of tech giants or highly funded research labs.

As AI adoption becomes increasingly central across sectors, the demand for efficient, adaptable, and affordable AI models continues to climb. Phi-4 is positioned for this next phase of AI proliferation by offering impressive performance at reduced costs. It could catalyse growth particularly in industries like healthcare, where streamlined and precise computational tools make life-changing benefits possible.  

At the same time, Phi-4 highlights the viability of a more sustainable AI future. By showing that smaller AI models can excel in practical applications while consuming fewer resources, Microsoft opens the door for environmentally-conscious advancements in machine learning.  

Smaller, more efficient models are proving that size isn’t everything in AI—and the era of resource-intensive giants dominating the field may be giving way to a more diverse, inclusive, and innovative ecosystem.

See also: NVIDIA advances AI frontiers with CES 2025 announcements

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

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Their combined spending on AI is projected to exceed a jaw-dropping $240 billion. Why? Because AI isn’t just the future—it’s the present, and the demand for AI-powered tools and infrastructure has never been higher. The companies aren’t just keeping up; they’re setting the pace for the industry.

The scale of their investment is hard to ignore. In the first half of 2023, tech giants poured $74 billion into capital expenditure. By Q3, that number had jumped to $109 billion. In mid-2024, spending reached $104 billion, a remarkable 47% rise over the same period a year earlier. By Q3, the total hit $171 billion.

If this pattern continues, Q4 might add another $70 billion, bringing the total to a truly staggering $240 billion for the year.

Why so much spending?

AI’s potential is immense, and companies are making sure they’re positioned to reap the rewards.

• A growing market: AI is projected to create $20 trillion in global economic impact by 2030. In countries like India, AI could contribute $500 billion to GDP by 2025. With stakes this high, big tech isn’t hesitating to invest heavily.
• Infrastructure demands: Training and running AI models require massive investment in infrastructure, from data centres to high-performance GPUs. Alphabet increased its capital expenditures by 62% last quarter compared to the previous year, even as it cut its workforce by 9,000 employees to manage costs.
• Revenue potential: AI is already proving its value. Microsoft’s AI products are expected to generate $10 billion annually—the fastest-growing segment in the company’s history. Alphabet, meanwhile, uses AI to write over 25% of its new code, streamlining operations.

Amazon is also ramping up, with plans to spend $75 billion on capital expenditure in 2024. Meta’s forecast is not far behind, with estimates between $38 and $40 billion. Across the board, organisations recognise that maintaining their edge in AI requires sustained and significant investment.

Supporting revenue streams

What keeps the massive investments keep on coming is the strength of big tech’s core businesses. Last quarter, Alphabet’s digital advertising machine, which is powered by Google’s search engine, generated $49.39 billion in ad revenue, a 12% year-over-year increase. This as a solid foundation that allows Alphabet to pour resources into building out its AI arsenal without destabilising the bottom line.

Microsoft’s diversified revenue streams are another example. While the company spent $20 billion on AI and cloud infrastructure last quarter, its productivity segment, which includes Office, grew by 12% to $28.3 billion, and its personal computing business, boosted by Xbox and the Activision Blizzard acquisition, grew 17% to $13.2 billion. These successes demonstrate how AI investments can support broader growth strategies.

The financial payoff

Big tech is already seeing the benefits of its heavy spending. Microsoft’s Azure platform has seen substantial growth, with its AI income approaching $6 billion. Amazon’s AI business is growing at triple-digit rates, and Alphabet reported a 34% jump in profits last quarter, with cloud revenue playing a major role.

Meta, while primarily focused on advertising, is leveraging AI to make its platforms more engaging. AI-driven tools, such as improved feeds and search features keep users on its platforms longer, resulting in new revenue growth.

AI spending shows no signs of slowing down. Tech leaders at Microsoft and Alphabet view AI as a long-term investment critical to their future success. And the results speak for themselves: Alphabet’s cloud revenue is up 35%, while Microsoft’s cloud business grew 20% last quarter.

For the time being, the focus is on scaling up infrastructure and meeting demand. However, the real transformation will come when big tech unlocks AI’s full potential, transforming industries and redefining how we work and live.

By investing in high-quality, centralised data strategies, businesses can ensure trustworthy and accurate AI implementations, and unlock AI’s full potential to drive innovation, improve decision-making, and gain competitive edge. AI’s revolutionary promise is within reach—but only for companies prepared to lay the groundwork for sustainable growth and long-term results.

(Photo by Unsplash)

See also: Microsoft tries to convert Google Chrome users

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

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While these interconnections make Edge a viable choice, Microsoft’s methods for persuading consumers to choose it have been far from covert.

From default settings that prioritise Edge to persistent prompts at startup, Microsoft has made it clear they want Edge to be the go-to for Windows users. And lately, it’s upped the ante: now, Edge can launch automatically when your computer boots up, instantly nudging you to bring over your data from other browsers.

The most recent update includes an auto-checked option to import browsing data from Chrome, such as history, bookmarks, and open tabs, in the name of users leveraging the features of AI assistant, Copilot. Although AI features may be appealing to some, the aggressive approach has left many users feeling annoyed rather than tempted.

The Verge recently noticed that when you start up your PC, Edge might decide to open on its own, promptly displaying a pop-up for its AI assistant, Copilot. Right next to Copilot, there’s a conveniently checked box allowing Edge to import data from other browsers automatically. For some users, this seems like an overreach, raising doubts about how far Microsoft is ready to go to make Edge the browser of choice.

Microsoft has confirmed this setup and stated that customers have the option to opt-out. Still, with default settings that favour data imports and an eye-catching import button, it’s easy for users to unintentionally make the switch, especially if they’re not paying attention. For those who prefer sticking with their existing browsers without interruption, the approach can feel unwelcome.

But even if users dodge the pop-ups, Edge isn’t exactly shy. Uninstalling it is a complex process, and it often gets reinstalled by Windows updates, much to the frustration of users who would rather go without. For many, this persistence feels more like a forceful sales pitch rather than a friendly suggestion.

Interestingly, this isn’t the first time Microsoft has tried this type of strategy. A similar message appeared to users earlier this year but was pulled back after strong objections. Now, it’s back, with Microsoft’s Caitlin Roulston stating the notification is meant to “give users the choice to import data from other browsers.”

In fact, Microsoft’s bold tactics go back some years. In 2022, it introduced a feature that could automatically pull data from Chrome into Edge – although users had the option to decline. In 2021, the company made it practically impossible to set any browser other than Edge as the default, resulting in enough outcry for Microsoft to back down.

While Microsoft promotes its intrusive pop-ups as a way to give users more control, others who value choice without constant nudges. The relentless push for Edge usage could actually be detrimental, as the company’s persistence may drive users toward other browsers rather than away. To truly compete, Microsoft might benefit from letting Edge’s strengths speak for themselves rather than relying on aggressive prompts to change hearts and minds.

(Photo by Surface)

See also: EU probes Microsoft-OpenAI and Google-Samsung AI deals

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

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This past summer, investors questioned whether top AI stocks could sustain their sky-high valuations, given the lack of returns on massive AI spending. As Autumn approaches, major AI sectors—such as chips, LLMs, and AI devices—received renewed confidence. Nonetheless, there are an increasing number of reasons to be cautious.

Cerebras: A chip contender with a major risk

Chip startup Cerebras is challenging Nvidia’s dominance by developing processors designed to power smarter LLMs. Nvidia, a major player in the AI boom, has seen its market cap skyrocket from $364 billion at the start of 2023 to over $3 trillion.

Cerebras, however, relies heavily on a single customer: the Abu Dhabi-based AI firm G42. In 2023, G42 accounted for 83% of Cerebras’ revenue, and in the first half of 2024, that figure increased to 87%. While G42 is backed by major players like Microsoft and Silver Lake, its dependency poses a risk. Even though Cerebras has signed a deal with Saudi Aramco, its reliance on one client may cause concerns as it seeks a $7-8 billion valuation for its IPO.

OpenAI’s record-breaking funding – but with strings attached

OpenAI made the news when it raised $6.6 billion at a $157 billion valuation, becoming the largest investment round in Silicon Valley history. However, the company has urged its investors not to back competitors such as Anthropic and Elon Musk’s xAI—an unusual request in the world of venture capital, where spread betting is common. Critics, including Gary Marcus, have described this approach as “running scared.”

OpenAI’s backers also include “bubble chasers” such as SoftBank and Tiger Global, firms known for investing in companies at their peak, which frequently results in huge losses. With top executives such as CTO Mira Murati departing and predicted losses of $5 billion this year despite rising revenues, OpenAI faces significant challenges.

Meta’s big bet on AI wearables

Meta entered the AI race by unveiling Orion, its augmented reality glasses. The wearables promise to integrate AI into daily life, with Nvidia’s CEO Jensen Huang endorsing the product. However, at a production cost of $10,000 per unit, the price is a major obstacle.

Meta will need to reduce costs and overcome consumer hesitation, as previous attempts at AI-powered wearables—such as Snapchat’s glasses, Google Glass, and the Humane AI pin—have struggled to gain traction.

The road ahead

What’s next for AI? OpenAI must prove it can justify a $157 billion valuation while operating at a loss. Cerebras needs to reassure investors that relying on one client isn’t a dealbreaker. And Meta must convince consumers to adopt a completely new way of interacting with AI.

If these companies succeed, this moment could mark a turning point in the AI revolution. However, as tech history shows, high-stakes markets are rarely easy to win.

(Photo by Growtika)

See also: Ethical, trust and skill barriers hold back generative AI progress in EMEA

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

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This change was observed in the latest update to the Baidu Baike robots.txt file, which denies access to Googlebot and Bingbot crawlers.

According to the Wayback Machine, the change took place on August 8. Previously, Google and Bing search engines were allowed to index Baidu Baike’s central repository, which includes almost 30 million entries, although some target subdomains on the website were restricted.

This action by Baidu comes amid increasing demand for large datasets used in training artificial intelligence models and applications. It follows similar moves by other companies to protect their online content. In July, Reddit blocked various search engines, except Google, from indexing its posts and discussions. Google, like Reddit, has a financial agreement with Reddit for data access to train its AI services.

According to sources, in the past year, Microsoft considered restricting access to internet-search data for rival search engine operators; this was most relevant for those who used the data for chatbots and generative AI services.

Meanwhile, the Chinese Wikipedia, with its 1.43 million entries, remains available to search engine crawlers. A survey conducted by the South China Morning Post found that entries from Baidu Baike still appear on both Bing and Google searches. Perhaps the search engines continue to use older cached content.

Such a move is emerging against the background where developers of generative AI around the world are increasingly working with content publishers in a bid to access the highest-quality content for their projects. For instance, relatively recently, OpenAI signed an agreement with Time magazine to access the entire archive, dating back to the very first day of the magazine’s publication over a century ago. A similar partnership was inked with the Financial Times in April.

Baidu’s decision to restrict access to its Baidu Baike content for major search engines highlights the growing importance of data in the AI era. As companies invest heavily in AI development, the value of large, curated datasets has significantly increased. This has led to a shift in how online platforms manage access to their content, with many choosing to limit or monetise access to their data.

As the AI industry continues to evolve, it’s likely that more companies will reassess their data-sharing policies, potentially leading to further changes in how information is indexed and accessed across the internet.

(Photo by Kelli McClintock)

See also: Google advances mobile AI in Pixel 9 smartphones

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

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According to the recent announcement, Palantir is integrating Microsoft’s cutting-edge large language models via the Azure OpenAI Service into its AI platforms. The integration will occur within Microsoft’s government and classified cloud environments. As this collaboration is the first of its kind, this specific configuration has the potential to completely transform the use of AI in critical national security missions.

Palantir, whose name draws inspiration from the potentially misleading “seeing-stones” in J.R.R. Tolkien’s fictional works, specialises in processing and analysing vast quantities of data to assist governments and corporations with surveillance and decision-making tasks. While the precise nature of the services to be offered through this partnership remains somewhat ambiguous, it is clear that Palantir’s products will be integrated into Microsoft’s Azure cloud services. This development follows Azure’s previous incorporation of OpenAI’s GPT-4 technology into a “top secret” version of its software.

The company’s journey is notable. Co-founded by Peter Thiel and initially funded by In-Q-Tel, the CIA’s venture capital arm, Palantir has grown to serve a diverse clientele. Its roster includes government agencies such as Immigration and Customs Enforcement (ICE) and various police departments, as well as private sector giants like the pharmaceutical company Sanofi. Palantir has also become deeply involved in supporting Ukraine’s war efforts, with reports suggesting its software may be utilised in targeting decisions for military operations.

Even though Palantir has operated with a large customer base for years, it only reached its first annual profit in 2023. However, with the current surge of interest in AI, the company has been able to grow rapidly, particularly in the commercial sector. According to Bloomberg, Palantir’s CEO, Alex Karp, warned that Palantir’s “commercial business is exploding in a way we don’t know how to handle.”

Despite the urgency of this mission, the company’s annual filing clearly states that it neither does business with nor on behalf of the Chinese Communist Party, nor does it plan to do so. This indicates that Palantir is especially careful in developing its customer base, considering the geopolitical implications of its work.

The announcement of this partnership has been well-received by investors, with Palantir’s share price surging more than 75 per cent in 2024 as of the time of writing. This dramatic increase reflects the market’s optimism about the potential of AI in national security applications and Palantir’s position at the forefront of this field.

Still, the partnership between Palantir and Microsoft raises significant questions about the role of AI in national security and surveillance. This is no surprise, as these are particularly sensitive areas, and the development of new technologies could potentially transform the sector forever.

More discussions and investigations are needed to understand the ethical implications of implementing these innovative tools. All things considered, the Palantir and Microsoft partnership is a significant event that will likely shape the future use of AI technologies and cloud computing in areas such as intelligence and defence.

(Photo by Katie Moum)

See also: Paige and Microsoft unveil next-gen AI models for cancer diagnosis

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

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The Virchow2 and Virchow2G models are based on an enormous dataset that Paige has accumulated. Paige has gathered more than three million pathology slides from over 800 labs across 45 countries, on which the models were trained. Such a volume of data is, unsurprisingly, highly beneficial. This data was obtained from over 225,000 patients, all de-identified to create a rich and representative dataset encompassing all genders, races, ethnic groups, and regions across the globe.

What makes these models truly remarkable is their scope. They cover over 40 different tissue types and various staining methods, making them applicable to a wide range of cancer diagnoses. Virchow2G, with its 1.8 billion parameters, stands as the largest pathology model ever created and sets new standards in AI training, scale, and performance.

As Dr. Thomas Fuchs, founder and chief scientist of Paige, comments: “We’re just beginning to tap into what these foundation models can achieve in revolutionising our understanding of cancer through computational pathology.” He believes these models will significantly improve the future for pathologists, and he agrees that this technology is becoming an important step in the progression of diagnostics, targeted medications, and customised patient care.

Similarly, Razik Yousfi, Paige’s senior vice president of technology, states that these models are not only making precision medicine a reality but are also improving the accuracy and efficiency of cancer diagnosis, and pushing the boundaries of what’s possible in pathology and patient care.

So, how is this relevant to cancer diagnosis today? Paige has developed a clinical AI application that pathologists can use to recognise cancer in over 40 tissue types. This tool allows potentially hazardous areas to be identified more quickly and accurately. In other words, the diagnostic process becomes more efficient and less prone to errors, even for rare cancers, with the help of this tool.

Beyond diagnosis, Paige has created AI modules that can benefit life sciences and pharmaceutical companies. These tools can aid in therapeutic targeting, biomarker identification, and clinical trial design, potentially leading to more successful trials and faster development of new therapies.

The good news for researchers is that Virchow2 is available on Hugging Face for non-commercial research, while the entire suite of AI modules is now available for commercial use. This accessibility could accelerate advancements in cancer research and treatment across the scientific community.

In summary, the recently introduced AI models represent a major advancement in the fight against cancer. Paige and Microsoft have chosen the right path by combining the power of data with state-of-the-art AI technologies. These companies have created new opportunities for more accurate cancer prediction, paving the way for tailored solutions and innovative research in oncology.

(Photo by National Cancer Institute)

See also: The hidden climate cost of AI: How tech giants are struggling to go green

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For instance, take TikTok. According to internal financial documents, as of March 2022, ByteDance’s TikTok was spending nearly $20 million every month on OpenAI’s AI model services, which TikTok accessed through Microsoft. This hefty amount accounted for almost 25% of Microsoft’s total revenue in that sector. At the time, Microsoft’s annual revenue from this business was expected to hit $1 billion, or around $83 million per month.

But behind this success lies a risk: high customer concentration. While Microsoft is relying on AI in its work with TikTok, the latter company has also developed its own AI-related plans. In particular, ByteDance wants to create software that can generate dialogue and images. This means that TikTok’s AI might soon become more competent than the one utilised by Microsoft, which could negatively impact the growth of Microsoft’s cloud business revenue.

To reduce this risk, Microsoft is trying to attract more corporate clients, such as Walmart and financial software provider Intuit. These companies pay millions of dollars monthly to access OpenAI’s models through Microsoft. For Intuit, this subscription is a hopeful sign since the company used to rent its servers from Amazon.

Microsoft is also adopting a diversified strategy by utilising AI in a number of ways. Their cloud service does not just consist of Azure OpenAI; they also have a service named Copilot, through which they sell AI-powered writing, coding, and summarising features to existing Office 365, and other enterprise software customers. Three months ago, CEO Satya Nadella mentioned that the subscription volume for Copilot had doubled, with major buyers including financial services.

The success of Microsoft’s AI can be attributed to major customers like TikTok, which has significantly contributed to the company’s profits. Microsoft has also achieved success in pulling customers away from competitors like Google, Amazon, and Oracle. For instance, TikTok initially used the cloud services of these companies, but now spends money on using Microsoft’s cloud technology.

In addition, Intuit previously rented servers from Amazon. This company developed a range of AI functions aimed at providing financial advice to customers based on their data. As Intuit CEO Sasan Goodarzi mentioned, since September, more than 24 million people have used this function. In the next fiscal year, the company intends to “accelerate investments” in this area.

Walmart, one of the longest-term customers of Microsoft’s Azure OpenAI services, uses this technology at scale to deliver shopping recommendations to its customers. At the same time, a Microsoft customer from Abu Dhabi, G42, spends millions of dollars monthly on Azure OpenAI services, and has announced its partnership with OpenAI to create AI for Middle Eastern customers.

However, some uncertainty still exists. It is unclear whether Walmart or TikTok use this technology to improve their own AI models. If they do, a share of their spending on Microsoft’s products will decrease once their technology matures. Although OpenAI prohibits using its technology to create competitive AI models, many customers still do so, and OpenAI appears to tolerate this practice.

According to reports from the previous year, ByteDance trained its internal AI models using OpenAI’s GPT-4 model by having its chatbot produce text fragments that ByteDance’s model then incorporated. ByteDance responded by saying they were only “very limitedly” utilising OpenAI’s approach.

In order to reduce the risk associated with a high customer concentration, Microsoft is working to increase both its clientele and sources of income. Microsoft has benefited greatly from OpenAI’s AI technologies, but the company is still highly reliant on big clients like TikTok. Microsoft must attract and retain more large clients to meet market expectations. In the hopes that these investments will someday pay off, the corporation has put billions of dollars into OpenAI’s technologies and data centre servers.

Microsoft’s financial report was made public on Tuesday. It revealed a 29% increase in cloud revenue for the second quarter, which was less than anticipated by the market. This was followed by a more than 7% decline in Microsoft’s stock price, which impacted other tech stocks, such as Amazon, Datadog, and Snowflake. Despite the decline, Microsoft remains upbeat and anticipates a spike in Azure revenue the following year.

Additionally, Microsoft is selling a percentage of revenue from AI models directly to enterprises, with this year’s numbers unexpectedly surpassing those of Azure’s OpenAI services. Microsoft also generates billions in revenue annually by renting servers to OpenAI, allowing the startup to run ChatGPT and develop related technology, despite not having high profit margins from this.

See also: Microsoft and Apple back away from OpenAI board

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

Explore other upcoming enterprise technology events and webinars powered by TechForge here.

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According to a Bloomberg report on July 10, citing an anonymous source familiar with the matter, Microsoft has officially communicated its withdrawal from the OpenAI board. This move comes approximately a year after the Redmond-based company made a substantial $13 billion investment in OpenAI in April 2023.

In a memo addressed to OpenAI, Microsoft stated: “Over the past eight months we have witnessed significant progress from the newly formed board and are confident in the company’s direction.” The tech giant added, “We no longer believe our limited role as an observer is necessary.”

Contrary to recent reports suggesting that Apple would secure an observer role on OpenAI’s board as part of a landmark agreement announced in June, it appears that OpenAI will now have no board observers following Microsoft’s departure.

Responding to these developments, OpenAI expressed gratitude towards Microsoft, stating, “We’re grateful to Microsoft for voicing confidence in the board and the direction of the company, and we look forward to continuing our successful partnership.”

This retreat from board involvement by major tech players occurs against a backdrop of mounting regulatory pressure. Concerns about the potential impact of big tech on AI development and industry dominance have prompted increased scrutiny from regulatory bodies worldwide.

In June, European Union regulators announced that OpenAI could face an EU antitrust investigation over its partnership with Microsoft. EU competition chief Margrethe Vestager also revealed plans for local regulators to seek additional third-party views and survey firms such as Microsoft, Google, Meta, and ByteDance’s TikTok regarding their AI partnerships.

The decision by Microsoft and Apple to step back from board positions at OpenAI could be interpreted as a strategic move to mitigate potential regulatory challenges. By maintaining a more arm’s length relationship with the AI firm, these tech giants may be attempting to avoid accusations of undue influence or control over AI development.

Alex Haffner, a competition partner at Fladgate, said:

“It is hard not to conclude that Microsoft’s decision has been heavily influenced by the ongoing competition/antitrust scrutiny of its (and other major tech players) influence over emerging AI players such as Open AI.

Microsoft scored a ‘win’ in this regard at the end of June when the EU Commission announced it was dropping its merger control probe of Microsoft and Open AI, an investigation originally announced when Open AI re-shaped its board structure at the time of Sam Altman’s on-off departure from the company.

However, the Commission confirmed it was still looking at the competitive impact of the broader arrangements between the parties and it is clear that regulators are very much focussed on the complex web of interrelationships that big tech has created with AI providers, hence the need for Microsoft and others to carefully consider how they structure these arrangements going forward.”

As AI continues to play an increasingly critical role in technological advancement and societal change, the balance between innovation, competition, and regulation remains a complex challenge for both industry players and policymakers.

The coming months will likely see continued scrutiny of AI partnerships and investments, as regulators worldwide grapple with the task of ensuring fair competition and responsible AI development.

(Photo by Andrew Neel)

See also: Nvidia: World’s most valuable company under French antitrust fire

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

Explore other upcoming enterprise technology events and webinars powered by TechForge here.

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Margrethe Vestager, the European Commission’s executive vice president for competition policy, warned that AI is “developing at breakneck speed” and revealed that multiple preliminary investigations are underway into various AI-related market practices. Her concerns about potential anti-competitive practices stem from major tech companies’ manoeuvres in the AI sector since the advent of ChatGPT.

The commission’s move highlights the bloc’s growing concern over tech giants’ potential monopolistic power in the rapidly evolving AI sector. The scrutiny focuses on recent deals and collaborations involving Microsoft and Google in AI. These initiatives, often involving strategic partnerships and acquisitions, have drawn regulatory attention due to their potential to undermine competition and innovation. 

Vestager emphasised that the commission has several preliminary antitrust investigations underway concerning various practices within AI-related markets, although specific details were not disclosed.

Microsoft’s partnership with OpenAI

Microsoft’s multibillion-dollar partnership with OpenAI represents one of the most significant collaborations in the AI industry. This partnership, initiated in 2019 and expanded in subsequent years, involves Microsoft investing heavily in OpenAI, providing cloud computing resources through its Azure platform, and integrating OpenAI’s advanced models into Microsoft’s products and services. 

The collaboration aims to accelerate AI research and development, with notable advancements such as the GPT-3 language model and the more recent ChatGPT. However, this alliance has raised concerns about market dominance and potential barriers to entry for smaller AI firms. Vestager said in a speech that the European Commission started reviewing the deal last year to see whether it broke EU merger rules but dropped it after concluding Microsoft hadn’t gained control of OpenAI. 

“Microsoft has invested $13 billion in OpenAI over the years. But we have to make sure that partnerships like this do not become a disguise for one partner getting a controlling influence over the other,” she said while signalling that the commission would take another tack to examine the deal and the industry more broadly. It’s using the bloc’s antitrust rules, which target abusive behaviour by companies with a dominant market position.

After reviewing responses from major AI companies requested in March this year, the EU Commission is requesting specific information about the Microsoft-OpenAI agreement. Vestager said they aim to determine if exclusivity clauses could potentially harm competition in the AI market. The EU wants “to understand whether certain exclusivity clauses could hurt competitors,” she said.

Also in question: Google and Samsung’s partnership

Google’s AI-related arrangement with Samsung also draws significant attention. The partnership leverages Samsung’s hardware capabilities with Google’s AI prowess to develop innovative consumer electronics and mobile technologies. This includes integrating Google’s AI algorithms into Samsung devices and enhancing features like voice recognition, camera functionality, and personalized user experiences. 

While this collaboration promises to bring advanced AI-driven functionalities to a broad consumer base, it also raises questions about competitive fairness, particularly regarding access to critical technologies and market influence. Vestager said EU regulators have sent information requests “to better understand the effects of Google’s arrangement with Samsung” to pre-install Gemini Nano,  the smallest version of Google’s Gemini AI foundation model,  on some devices from the South Korean tech company. 

What’s next?

With tech giants like Microsoft and Google, also prominent players in the global AI landscape, actively expanding their AI capabilities through acquisitions and partnerships, regulators are growing more curious about market dominance and its implications for fair competition. This would have inevitably prompted regulatory intervention from the EU sooner or later.

In response to the EU’s actions, Microsoft and Google have reaffirmed their commitment to comply with regulatory requirements while continuing to innovate responsibly in AI technologies. They emphasise the potential benefits of their AI initiatives, including advancements in healthcare, sustainability, and other critical sectors.

Yet, the outcome of the EU’s antitrust scrutiny could have significant implications for how major tech companies operate in Europe’s AI market. It may lead to regulatory measures to foster a more level playing field and ensure that smaller competitors have fair opportunities to compete and innovate.

(Photo by Guillaume Périgois)

See also: Coalition of news publishers sue Microsoft and OpenAI

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

Explore other upcoming enterprise technology events and webinars powered by TechForge here.

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