Technology

➚ MOVE FAST: Scale. The AI startup is losing its CEO as part of Meta’s $14.3 billion investment, but he will still be in its orbit given their growing commercial ties. Plus, Scale’s new boss, Jason Droege, is a sensible successor, investors and employees will be paid out, and its valuation jumps to $29 billion.

➘ BREAK THINGS: Meta. Users of the firm’s AI chatbot are unwittingly and publicly sharing text conversations and other sensitive information, TechCrunch reported. That includes requests for help on tax evasion, home addresses, and interest in having an affair.

This week I attended a debate about whether humans should be dating AI chatbots, held by nonprofit Open to Debate. Developmental psychologist Thao Ha was for the cause, arguing that it’s already happening, while evolutionary biologist Justin Garcia said AI is an “existential threat” to human relationships.

“One third of Americans think AI will destroy humanity,” said Garcia, who is also the chief scientific advisor to Match. “You generally don’t want to wake up next to someone who you think might kill you.”

Based on my conversations with attendees, most people arrived siding with Garcia but left a little more sympathetic to Ha’s argument. I was less interested in picking a side than looking at this through the lens of the loneliness epidemic. For someone who has tried dating and not found a connection — would it be better to date a chatbot or be alone? I asked Garcia, and to my surprise, he sided with AI.

The response was, to me, indicative of where we are heading. Humans are likely going to prefer other humans for a long time, but there will be situations where, for some, confiding socially, romantically, spiritually, intellectually with a chatbot isn’t so shocking. The taboo is lifting, albeit slowly.

— Rachyl Jones

Lions, tigers, and bears, AI!

In the tornado of product releases, missteps, and policy measures, we break down the dizzying AI landscape with the help of the iconic 1939 movie, and an assist from Wicked.

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Ali Ghodsi, CEO of Databricks, believes AI agents could transform business. There’s just one problem: For a lot of Databricks’ customers, AI agents are failing, and Ghodsi says he knows why.

Companies are, essentially, overcomplicating things by trying methods like “fine tuning” AI models based on proprietary data, and then using techniques to corral AI models into a narrow set of responses to eliminate erroneous answers.

It takes trillions of tokens, or bits of data, to train an AI model. But companies only have a tiny fraction of that amount of data. In essence, fine tuning only goes so far. On top of that, techniques change every day. Once a company implements a fine-tuned AI model, it is outdated the very next day.

Databricks’ new philosophy is to keep it simple. Instead of customize, companies should try out a lot of different AI models and see which one is best for specific goals.

With AI models improving in capability every couple of weeks, what doesn’t work today might work very soon.

Databricks announced a handful of new products at its Data + AI summit this week that offer this philosophy as a service. “We have a whole cookbook that we’re throwing in there. We’ll see which one does best. And there’ll be new techniques, you know, and new models, and so on,” Ghodsi told me earlier this week. “Whatever you come up with that you think is really smart, the next day, someone [will] say, ‘You need to see this thing on Twitter yesterday.’”

This is, of course, a product announcement. At the same time, it says something about the blistering speed of the AI revolution. Whatever you build today, you might have to throw out in a few months. Companies are going to spend a lot of money on technology that will end up on the cutting-room floor.

The amount of Foxconn’s India iPhone exports that went to the United States between March and May, as opposed to 50% last year, Reuters reported. The exports, worth $3.2 billion, signify Apple’s attempt to evade the Trump administration’s tariffs on China, which accounts for the majority of the company’s iPhone production.

Protests against Israel have hit marquee conferences hosted by Apple, Microsoft, and other major tech companies, with employees and others angry about software and product sales to that country. The attacks in Iran further showcase Israel’s defense tech prowess, but Silicon Valley’s close ties to the latter’s government indicate no signs of ebbing, while it’s expanding partnerships with the US military.

The latest example: Meta CTO Andrew Bosworth is among the tech executives who will be sworn in today as uniformed officers in the Army’s new innovation corps. “There’s a lot of patriotism that has been under the covers that I think is coming to light in the Valley,” Bosworth told The Wall Street Journal.

Like other traditional reservists, they will serve a certain amount of hours every year on projects like helping to train soldiers, and have the rank of lieutenant colonel. It shows how much the industry has moved on from the once taboo notion of working with militaries, and the backlash against such pushes is losing its muscle.

Semafor is partnering with RAISE AI Summit, one of the world’s largest AI gatherings, bringing 5,000+ global leaders to Paris, France this July. Semafor Tech Editor Reed Albergotti will be moderating on-stage conversations with speakers including Nikesh Arora, Andrew Feldmann, Matt Hicks, and top executives from Google Cloud, AWS, Nvidia, and more.

Tickets are available here, and Semafor Technology readers can benefit from a 25% discount using the code SEMAFOR25 on the RAISE ticketing page.

July 8-9 | Paris | Learn More

They grow so fast. OpenAI is getting into the toy business through a partnership with Mattel, the companies announced Thursday, that will create AI-powered products and “play experiences” for children, likely transforming how humans interact with the technology at an early age.

The partnership could see AI woven into Mattel’s existing and new fan experiences, which include a theme park with Hot Wheels roller coasters and a life-size Barbie Beach House, planned to open later this year. In 2015, Mattel launched a “Hello Barbie” doll that connected to the internet and used AI to hold conversations, play games, and tell jokes. But they quickly discontinued it due to data security concerns when a child spoke to Barbie’s built-in speaker. Both companies in the new partnership heavily vowed to offer AI products with data protection.

“Mattel and OpenAI will emphasize safety, privacy, and security in the products and experiences that come to market,” the companies said in the release.

There are five ways out of the US’ $37-trillion-and-rising national debt, Carlyle co-founder David Rubeinstein told Semafor’s Liz Hoffman.

But the only one anyone seems to be willing to talk about is for the economy to grow its way out of the hole. It’s a bet that a combination of AI, tax cuts, AI, energy independence, and AI will unleash productivity gains not seen since the 19th century and let America’s earnings catch up with its borrowings.