Welcome, humans.

We didn’t get too deep into this yesterday, but as of Project Stargate, Microsoft is no longer OpenAI’s exclusive cloud provider. Don’t get it twisted, they’re still each other’s #1’s until further notice… they’re just no longer “exclusive.”

Salesforce CEO Marc Benioff thinks Microsoft and OpenAI started having relationship troubles as soon as Microsoft hired Mustafa Suleyman, who co-founded DeepMind and Inflection AI (maker of “emotionally intelligent” AI Pi).

Suleyman is now leading Microsoft's entire AI division and reportedly helping them build their own frontier model called MAI-1—a direct competitor to ChatGPT. Some of their prototypes apparently have “near-infinite memory.”

Microsoft made it very clear they still get right of first refusal to any new OpenAI cloud needs, APIs, and IP… and of course, Microsoft wants its money back via their revenue sharing agreement.

Here’s what you need to know about AI today:

• We break down the top findings from Vellum’s State of AI 2025 report.

• Samsung launched Gemini-powered phones.

• Scale AI got sued 3x in past month.

• OpenAI’s agent tool this week + DeepMind promised a 2025 Astra release.

The State of AI Development in 2025…

Late last year, we helped Vellum survey over 1,250 AI builders to understand where AI development is really heading. Spoiler alert: It's not quite the AI takeover you might expect.

Here's the surprising truth about AI development in 2025: most companies are still figuring it out.

Only 25.1% of businesses have actually deployed AI in production. Everyone else is split between building proofs of concept (21%), beta testing (14.1%), or still working on their strategy (25%). The rest are somewhere between talking to users and evaluating their initial attempts.

As for what companies are building: document parsing leads the pack at 59.7%, followed by customer service chatbots at 51.4%. Interestingly, research automation (23.7%) and compliance automation (15%) aren’t getting as much love.

The model landscape looks familiar, but is shifting. Smaller companies prefer direct API access via OpenAI, while enterprises (5000+ employees) love Azure.

OpenAI and Azure continue to dominate, but interesting players like Groq (10.7%) and Together AI are gaining ground.

In fact, The Information just reported that TogetherAI recently hit $100M in annualized revenue, about 3x what it was a year ago, and just raised another $200M in VC funding.

What about “challenges?”?

• 57.4% are wrestling with “hallucinations.”

• 42.5% struggle to prioritize impactful use cases.

• Only 38% are using automated evaluation tools.

The intelligence is certainly there… the hard part now is making that IQ actually useful.

Looking ahead to 2025, companies are dreaming big:

A quarter of companies report “no measurable impact yet” from their AI initiatives—maybe this is why 41.9% plan to upskill their teams in 2025.

If 2024 was the year everyone jumped on the AI bandwagon, then 2025 looks like it'll be the year we figure out how to actually drive it…or run it off the road.

And in related news: The Information dropped another piece of interesting news today: that OpenAI plans to release “Operator”, its agent that can perform tasks for you in the browser, sometime this week.

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Prompt Tip of the Day

According to Grace Leung, Gemini 2.0's killer features are its real-time screen sharing and multimodal capabilities—which means you can use it as your personal UX consultant, troubleshooter, video analyst, process documenter, and multilingual content creator (check out her video to see exactly how to do all this stuff).

Treats To Try.

1. Go-with-the-Flow from Netflix is a new AI model that lets you create videos by drawing simple paths for objects to follow—like dragging a duck across the screen and watching it animate with realistic motion and proper lighting (demo). As far as we know, this is the first video AI model like this ever made.

2. OpenAI changed the way Custom Instructions works so you can tell GPT what traits you want it to have, how it should talk, and any specific rules to follow.

3. Whisk from Google lets you combine a scene, style, and subject to create unique images with more control.

4. Builder.io and Lovable can now convert your Figma designs into working apps via a simple figma plugin.

5. MeetMinutes organizes your meetings using Bill Gates' four-quadrant method to capture key points, decisions, tasks and follow-ups.

6. Screenspace creates interactive product demos that tell your story and showcase value to buyers without needing sales calls.

See our top 51 AI Tools for Business here!

Around the Horn.

• Trouble in OpenAI paradise:

  • Elon Musk publicly accused OpenAI and SoftBank of not “actually” having the money to fund Stargate, saying SoftBank only has $10B secured… Sam Altman, of course, fired back.

  • OpenAI itself will need to cover $19B of the Stargate project, while SoftBank will cover another $19B—so far, OpenAI’s only raised ~$24B in its entire life, so it’ll need to raise some of the cash through debt.

  • OpenAI now spends 7x what it used to on lobbying (to be fair, it’s < $2M)… but if you can’t beat ‘em, regulatory capture ‘em!

• Galaxy Unpacked, unpacked:

  • Samsung launched more AI features in the Galaxy S25 series, integrating Gemini for stuff like background noise removal, personalized insights, cross-app voice commands (this is cool), and AI-enhanced video scaling.

• ScaleAI has now been sued three times in the span of a month for allegedly forcing contractors to write disturbing prompts about violence + abuse.

• Google DeepMind CEO Demis Hassabis claimed the company’s Project Astra agents will become available for consumers this year.

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Thursday Trivia.

One is a real image, and one is AI. Which is which? (vote below!)

A.

B.

Here are the results from last week’s trivia (B was AI):

Here’s what you said:

• J.S chose A: “Too much going on in A. Picture blurry to indicate that it was taken from a moving object (highly unlikely) and even the people are blurry. B seems more realistic of a street race scene with not too many cars so close together.”

• R.J. chose A: “B automatically looks low quality like an old school photo from a kodak camera or something. A looks a bit more high quality as if generated with AI”

• S.H. chose B (for BINGO): “Either B is AI, and it doesn't understand rules of the road, or those 2 cars almost had a head-on smash, with one of them travelling the wrong way on that section of road. The low probability of this being caught so neatly on camera leads me to suspect that A is real, despite the futuristic-looking car, and B is AI.”

A Cat's Commentary.

Trivia Answer: A is AI