AI Daily: Microsoft ready to play hardball with OpenAI, Meta eyed Perplexity

Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly:

OPENAI NEGOTIATIONS: Microsoft (MSFT) is prepared to withdraw from high-stakes talks with OpenAI over the future of their alliance, as the company behind ChatGPT is aiming to become a for-profit entity, the Financial Times’ Cristina Criddle, Tabby Kinder, Rafe Uddin, and George Hammond report. The software and technology giant has weighed pausing complex negotiations with OpenAI if the two sides still can’t agree on critical issues, including the size of Microsoft’s future stake, the authors say, citing people with knowledge of its plans.

TAKEOVER TALKS: Meta Platforms (META) held talks with Perplexity AI about a possible takeover before moving ahead with an investment in Scale AI, Mark Gurman, Katie Roof and Riley Griffin of Bloomberg report, citing people familiar with the matter. Meta and Perplexity couldn’t come to an agreement and decided not to pursue the deal, sources told Bloomberg. The talks took place before Meta finalized a deal this month to invest $14.3B in Scale AI and take a 49% stake in the data-labeling startup, Bloomberg says.

TRAIN AI MODELS: Google (GOOGL) is using its expansive library of YouTube videos to train its AI models, including Gemini and the Veo 3 video and audio generator, CNBC’s Zach Vallsee reports. The company confirmed to CNBC that it relies on its vault of YouTube videos to train its AI models, but Google said it only uses a subset of its videos for the training. “We’ve always used YouTube content to make our products better, and this hasn’t changed with the advent of AI,” said a YouTube spokesperson in a statement. “We also recognize the need for guardrails, which is why we’ve invested in robust protections that allow creators to protect their image and likeness in the AI era — something we’re committed to continuing.”

ARIZONA AI HUB: SoftBank (SFTBY) founder Masayoshi Son is seeking to team up with TSMC (TSM) to realize a trillion-dollar industrial complex in Arizona to build robots and artificial intelligence, Bloomberg’s Tom Mackenzie reports. SoftBank officials are keen to have TSMC, the Taiwanese maker of Nvidia’s (NVDA) advanced AI chips, play a prominent role in the project, Mackenzie says.

AI FUTURE AT TESLA: Wedbush analyst Daniel Ives says that “the golden era of autonomous” for Tesla (TSLA) officially kicks off on Sunday in Austin as the special invites went out giving selected Tesla users permission to use the Model Y Robotaxi service starting on Sunday. While the Austin launch will start off small with roughly 20 Model Y vehicles in this “geofence” service around Austin this service should steadily ramp throughout the summer in Austin and it’s Wedbush’s view Tesla will launch and scale its robotaxi service to roughly 25 cities in the U.S. over the next year. The firm views this autonomous chapter as one of the most important for Musk and Tesla in its history as a company as it believes the AI future at Tesla is worth $1 trillion to the valuation alone over the next few years. The firm maintains an Outperform rating on the shares with a price target of $500.

WORLD ID: Reddit (RDDT) is considering using World ID, the verification system based on iris-scanning Orbs whose parent company was co-founded by OpenAI CEO Sam Altman, Semafor’s Reed Albergotti reports. According to two people familiar with the matter, World ID could soon become a way for Reddit users to verify that they are unique individuals while remaining anonymous on the platform. Talks between representatives of Reddit and World ID parent Tools for Humanity highlight the growing market for new identity verification technologies, as artificial intelligence floods online platforms with inauthentic content and governments around the world consider new age verification laws to prevent children and teenagers from accessing social media, the author writes.

PERIDOT: Maris-Tech (MTEK) announced the completion of the first prototype of Peridot, an AI-based passive observation system designed for comprehensive situational awareness. Peridot integrates multiple high-definition day and thermal video sensors with advanced stitching algorithms to create a panoramic view, both horizontally and vertically. The result is uninterrupted coverage and early detection of conventional and modern threats, including drones and unmanned vehicles. This technology is designed for border and strategic site protection, offering a fully integrated, standalone solution to monitor, detect and enable quicker response to aerial and ground-based risks. In addition to its observation capabilities, Peridot can serve as a trigger system for passive or active threat defeating mechanisms.