E86: 5/2/25

MSFT and AMZN beat Q1 earnings, Meta/Microsoft see 30-40% of code AI generated, China announced AI 'national plan', VISA in ChatGPT, and more.

Hey everyone! Sending this week’s newsletter a bit early, as I’m en route to Asia. I will be skipping next week’s update and resuming 5/15, the day after our FUSE’ Annual Meeting.

Big week (4 days) of updates: US/China soveriegn AI updates, Seattle hyperscalers beating Q1 earnings despite tariff volatility, AI-embedded shopping with ChatGPT / VISA, and more. Enjoy!

PNW AI News:

• Microsoft stock jumps 6% after topping Q1 estimates with $70.1B in revenue (+13% YoY) and $25.8B in profits (+18% YoY)

  • They did cite concern about tariffs for next 3 quarters

  • Satya: “Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth. …From AI infra and platforms to apps, we are innovating across the stack to deliver for our customers.”

• Amazon also topped Q1 earnings expectations, with $155.7B in revenue (+9% YoY) and $17.1B in profit

  • The also cited concerns about tariffs, but more regarding Amazon.com supply chain than AWS datacenters

• Microsoft and Meta CEOs Satya and Zuckerburg collectively said on a panel they are seeing a "surge in AI-generated code in their own companies, up to 30-40%"

• Google has expanded its generative AI offerings, with 601 use cases now available through Google Cloud, up from 101 last year

Key AI Product/Research Updates:

• OpenAI just announced the reversal of a controversial GPT-4o update that made the model excessively agreeable and flattering in any context

  • Sparked an industry-wide debate about AI personality tuning

• OpenAI just released new shopping capabilities within ChatGPT’s Search feature, bringing new AI-driven product recommendations

• Visa just introduced Intelligent Commerce, enabling AI to shop and pay on consumers’ behalf through partnerships with Anthropic, OpenAI, and others, while Mastercard is releasing ‘Agent Pay’ to embed payments into AI chatbot conversations

  • AI chatbots the future interface of online shopping?

• Chinese AI lab DeepSeek just released Prover-V2, a specialized open-source model that combines informal math reasoning with formal theorem proving, beating major 'complex math' benchmarks

• Reddit just revealed that researchers from the University of Zurich conducted an unauthorized AI experiment on its R/changemyview community, using chatbots that engaged in debates about sensitive topics to test AI persuasion capabilities

• Duolingo launched 148 new language courses in the “largest expansion of content in the company’s history,” coming on the heels of its transition to an AI-first organization

• Meta made a series of AI announcements at its first LlamaCon developers event:

  1. The Llama API as a limited free preview, allowing developers to build using the latest Llama 4 Scout and 4 Maverick models

  2. New security tools Llama Guard 4 and LlamaFirewall, with a Defenders Program giving select partners access to AI-enabled security evaluation tools

• Elon Musk confirmed that X’s social media feed will be getting an algorithm update powered by xAI’s Grok AI model

• Baidu just unveiled two upgraded, lower-cost LLMs, publicly taking aim at DeepSeek, with:

  1. ERNIE 4.5 Turbo costs just 11c/million input tokens, an 80% price reduction from its predecessor

  2. ERNIE X1 Turbo reasoning model is priced at 14c /million input tokens, 75% cheaper than competitor DeepSeek R1

• Anthropic CEO Dario Amodei published a new blog highlighting the critical need for "mechanistic interpretability" in AI, arguing that understanding models’ inner workings as safeguards is the only ethical approach

• Alibaba’s Qwen AI lab just released Qwen3, a new family of eight open-weight language models featuring a hybrid thinking system and new agentic capabilities

Key AI Business/Investment Updates:

• Chinese President Xi Jinping just declared AI self-sufficiency as a national priority, promising government support to boost the development of AI chips, software, and talent, amid escalating tech rivalry with the US

  • Xi outlined a "new whole national system" approach, with chipmaker Huawei leading the charge

• The Trump administration may soon replace the Biden-era AI chip export control system, potentially moving to licensing deals with specific countries over broad tiers

• Digital publisher Ziff Davis filed a lawsuit against OpenAI, alleging the company stole content from its properties (like Mashable, PCMag, and IGN) to train models

• UPS is partnering with Boston Dynamics to push humanoids toward teal-world use cases in supply chain and logistics

  • Figure AI is in the conversation as well

PNW AI/ML/CV Fundings:

• Supio (Seattle, WA) raised $60M in Series B funding led by Sapphire Ventures, joined by Mayfair Fund & Thomson Reuters

  • AI legal software intended to offer automation for law firm research use cases – TFTD $93M

  • CEO: Jerry Zhou

• EdgeRunner (Seattle, WA) raised $12M in Series A funding from Madrona, Four Rivers Group, HP Tech Venture, and Alumni Ventures

  • Generative AI platform designed for domain-specific AI for the warfighter, defense community, and regulated enterprises – TFTD $17.5M

  • CEO: Tyler Saltsman

• Gumshoe.ai (Seattle, WA) raised $2M in Pre-Seed funding led by PSL Ventures

  • AI that generates thousands of conversations with AI models, helping marketers see how their brands are discussed and what sources are cited – TFTD $2M

  • CEO: Todd Sawicki