In today’s newsletter:

• News - 🤖💥 GPT-5 Delayed: Can OpenAI Fix the $500M Problem?

• Culture - 📱🚦 Texting While Driving? AI Cameras Are Now Watching You!

🤖💥 GPT-5 Delayed: Can OpenAI Fix the $500M Problem?

OpenAI’s ambitious project to develop GPT-5, code-named Orion, is facing significant challenges, from sky-high costs to technical setbacks. With months-long training runs costing upwards of $500 million and struggles to secure enough high-quality data, progress has been slower than expected. Researchers have resorted to creating data from scratch and incorporating human explanations to boost Orion’s reasoning skills, but results have been mixed. While GPT-5 aims to be a groundbreaking leap in AI, enabling everything from scientific breakthroughs to better error recognition, doubts linger over whether it will justify the immense resources poured into it.

As competitors like Anthropic and Google make headway with rival models, OpenAI is feeling the heat. The company has shifted focus toward refining reasoning models like o1, which simulate human-like problem-solving by analyzing multiple answers to questions. Though promising, this approach is both expensive and unproven at scale. CEO Sam Altman recently hinted at a more advanced reasoning model in development but stopped short of promising a GPT-5 launch. For now, OpenAI is banking on combining smarter reasoning with better data to keep pushing the limits of AI innovation.

🗞️ In Other News…

• OpenAI unveiled o3, a new AI system designed to reason through complex tasks like math, science, and programming, boasting significant accuracy improvements over its predecessor and set for wider release next year.

• Donald Trump has appointed Sriram Krishnan, a former a16z general partner and tech executive, as senior policy advisor for AI, tasking him with shaping U.S. AI policy alongside figures like David Sacks and Elon Musk.

• The EU has approved Nvidia's $700 million acquisition of Israeli GPU orchestration platform Run:ai, but the deal remains under review by the U.S. Department of Justice.

• AI played a significant but nuanced role in 2024 elections globally, with generative tools fueling propaganda and memes to shape narratives rather than directly altering outcomes.

• AI is driving a surge in sophisticated holiday scams, from fake ads and websites to identity impersonation, overwhelming existing fraud prevention tools despite increased investments by banks and credit card companies.

📱🚦 Texting While Driving? AI Cameras Are Now Watching You!

AI-powered traffic cameras are gaining traction globally, tackling unsafe driving behaviors like texting behind the wheel and failing to wear seat belts. Companies like Acusensus have introduced systems such as "Heads Up," which capture and analyze vehicle images to flag potential violations. While these systems have sparked debates about privacy, they’ve shown results—over 3,200 violations were detected during a trial in Manchester, and a program in North Carolina saw a ninefold increase in phone-related offenses. Advocates highlight their ability to address violations in real time, aiming to change driver behavior immediately.

However, concerns about privacy and oversight persist. Critics question whether promises to delete non-violation data and protect personal information are consistently enforced. While some see this as a trade-off between safety and privacy, others urge for stricter accountability measures. With road safety risks like distracted driving causing over 3,000 deaths in 2022, proponents argue these technologies offer a more efficient way to enforce laws, particularly in high-risk areas and among commercial drivers. Whether this balance tips in favor of widespread adoption remains a hot topic.

VC Fundraising Rounds

• Perplexity AI Inc., an AI startup developing a search product to rival Google, has raised $500 million in funding, tripling its valuation to $9 billion. (12/18/24)

• SandboxAQ has raised over $300 million at a valuation exceeding $5.6 billion to advance its AI and quantum sensing technologies, focusing on specialized AI model development. (12/18/24)

• Nuitee, a technology solution provider founded in 2017, has raised $48 million in a Series A funding round to expand its travel and hotel connectivity technology solutions. (12/18/24)

• Databricks is securing an enormous $10 billion in additional funding, a move that will catapult its valuation to $62 billion. (12/17/24)

• Basis, a startup focused on creating AI software for accounting firms, has secured $34 million in early-stage funding. (12/17/24)

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