AI Newsletter

OpenAI has completed initial development of a new model internally called 'Spud', which insiders say should be a significant performance improvement. This complements OpenAI's parallel strategy with GPT-5 integration of reasoning capabilities as a core feature. The timing is strategically critical: Polymarket sees Anthropic with 98% probability as the model leader through the end of March – OpenAI is under pressure to regain the initiative.

Morgan Stanley predicts a major AI breakthrough in the first half of 2026, driven by ~10x more computing power, which could produce ~2x more capable models. However, the biggest obstacle is a looming energy crisis: AI infrastructure's power demand exceeds available capacity, already driving investors toward energy infrastructure stocks. Motley Fool and Yahoo Finance confirm: the next AI wave is not about chips, but about power.

A thread in r/OpenAI with 301 upvotes and 279 comments is causing uproar: reports suggest OpenAI's video generation product Sora could be discontinued. This would be a significant strategic retreat for OpenAI in the fiercely competitive video AI market. The timing coincides with OpenAI's massive personnel expansion – apparently resources are being re-prioritized.

Google DeepMind has published a scientific framework intended to systematically measure how close the AI industry is to AGI – without claiming to have already achieved it. The paper comes at a time when all major labs are shipping models at a pace that overwhelms evaluation methodology. The framework could set industry-wide standards for regulation and benchmark discussions.

Bloomberg reports on Elon Musk's plans for 'Terafab', a megafactory for advanced AI semiconductors, robotics, and aerospace applications. The initiative would free xAI from NVIDIA dependency and compete directly with Meta's MTIA chips and OpenAI's infrastructure strategy. Given ongoing US export controls – three individuals have already been indicted for illegal AI chip diversion to China – vertical chip integration gains massive strategic importance.