AI Daily: OpenAI said to plan IPO by end of year

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. 

IPO LATER THIS YEAR: OpenAI is accelerating its plans for a public listing as its rivalry with Anthropic intensifies and is now planning on listing in Q4 of this year, Berber Jin, Corrie Driebusch, and Kate Clark of The Wall Street Journal report. OpenAI is holding discussions with Wall Street banks about a potential initial public offering and has hired several executives to oversee its finance team, sources told the Journal.

MERGER: Elon Musk’s SpaceX and xAI are in talks to combine ahead of a blockbuster public listing slated for later this year, Reuters’ Echo Wang and Joey Roulette report. The merger would bring the Tesla CEOs rockets, Starlink satellites, X, and Grok AI chatbot under one combined entity, the authors say, citing a person briefed on the matter.

INVESTMENT IN OPENAI: Amazon.com (AMZN) is in discussions to invest up to $50B in OpenAI, The Wall Street Journal’s Jessica Toonkel, Dana Mattioli, and Kate Clark report, citing people familiar with the matter. CEO Andy Jassy is leading the negotiations with OpenAI CEO Sam Altman, according to people familiar with discussions. The $50B investment would make Amazon the biggest contributor to the AI company’s ongoing fundraising round, the report states.

PROJECT GENIE: Google (GOOGL) said that Google AI Ultra subscribers in the U.S. can now try out Project Genie, an experimental research prototype that lets users create and explore worlds. “In August, we previewed Genie 3, a general-purpose world model capable of generating diverse, interactive environments. Even in this early form, trusted testers were able to create an impressive range of fascinating worlds and experiences, and uncovered entirely new ways to use it. The next step is to broaden access through a dedicated, interactive prototype focused on immersive world creation. Starting today, we’re rolling out access to Project Genie for Google AI Ultra subscribers in the U.S (18+). This experimental research prototype lets users create, explore and remix their own interactive worlds… Project Genie is a prototype web app powered by Genie 3, Nano Banana Pro and Gemini, which allows users to experiment with the immersive experiences of our world model firsthand,” the company said.

Shares of Unity (U), Roblox (RBLX) and Take-Two (TTWO) were trading lower following the news. 

DEAL: Perplexity has signed a $750M deal with Microsoft (MSFT) to use its Azure cloud service, Bloomberg’s Brody Ford and Matt Day report, citing people familiar with the deal. The 3-year commitment will let Perplexity deploy AI models through Microsoft’s Foundry service, including OpenAI, Anthropic and xAI, the report states. Perplexity has not shifted spending from Amazon (AMZN) Web Services as part of agreement, Bloomberg further noted.

MILITARY AI USE: The Pentagon is deadlocked with Anthropic over safeguards limiting the use of its AI for autonomous weapons targeting and domestic surveillance, stalling talks tied to a contract worth up to $200M, Reuters’ Deepa Seetharaman, David Jeans and Jeffrey Dastin report. The dispute reflects broader tensions between the AI company and the Trump administration over acceptable military and government uses of the technology.

TRAINING DATA: When analyzing data gathered to improve AI models, Amazon found hundreds of thousands of pieces of content it believed included child sexual abuse, Riley Griffin and Matt Day of Bloomberg reports. Amazon removed the content before training its models, but has not provided information about its source, potentially hindering law enforcement from finding perpetrators and assisting victims.