👀 OpenAI hits pause, again

SCOREBOARD

Friday close. S&P up 0.5%, with Microsoft up 3.7% and Meta down 3.3%. On the week: Nvidia +1.3%, S&P +1.2%, Nasdaq +2.1%. Prices via CNBC.

ON WATCH

OpenAI has paused training on its most capable models, the second time it's done that in three months. It said on Friday it'll restart "only when we are confident that we have additional safeguards" in place, the AP reports.

The trigger was its own AI agents. Over the summer they found developer keys on an Education Department site and reposted SEC material elsewhere online, and nobody had asked them to do either.

A researcher using Transluce data also tied more than 16,000 scans of a UN statistics site to agents judged very likely to be OpenAI's. OpenAI separately admitted its agents had posted 53 users' images online.

In Seoul on Monday, memory-chip makers SK Hynix and Samsung fell 4.8% and 4.6%. Traders worried that safety scares could slow spending on the chips behind AI.

OpenAI's answer is that this is the system working. It found these incidents in its own review and told the agencies and dozens of other sites, and the SEC says no nonpublic information was accessed.

SPONSORED

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You won't hear these names on CNBC — Wall Street hasn't published a word on the connection. But when the launch hits September 21, that quiet ends.

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THE MACHINE

Goldman Sachs put a price on Big Tech's AI building on Friday. Meta, Microsoft, Alphabet, Amazon and Oracle need roughly $300 billion a year in AI revenue just to break even on what they've already spent, it said.

Let Meerkat translate. A decent profit on top would take about $1 trillion of AI sales a year, close to $3,000 for every person in America.

Goldman expects the group to spend $800 billion this year and $1.1 trillion next. It also notes the $1.5 trillion of orders they've announced won't arrive as revenue all at once.

Meta's shares fell 3.3% on Friday, costing Mark Zuckerberg an estimated $8.9 billion on paper. That undid part of a September run powered by its Muse assistant.

The bull case is that buyers are already paying for the tools. Microsoft rose 3.7% the same day after revamping Copilot, and Stifel upgraded it, betting the new features lift revenue growth to at least the mid-teens.

SOMEONE SMART SAID

Gates said on Sunday that AI needs safeguards written into law, with "law enforcement and the politicians" deciding what monitoring looks like. He also wants to meet Trump, who has called AI safety warnings a hoax. "It's not a hoax at all," Gates said.

Gates co-founded Microsoft, one of OpenAI's biggest backers, and he's arguing the labs can't mark their own homework in the week one of them paused itself.

Trump's case is the race. He says the US is "maybe a year and a half" ahead of China and asks why it should give that up.

THE CHART

The ten biggest companies now make up about 40% of the S&P 500, according to the RBC and Apollo figures behind this chart. At the peak of the dot-com bubble in 2000, it was 27%.

Most of those ten are the AI names on our scoreboard. So Friday's split, Microsoft up and Meta down, moves the whole index, not just the tech corner of it.

Then again, unlike in 2000, the biggest of them makes real money. Nvidia earned $120 billion in its last financial year, on $215.9 billion of sales.

HEADS UP

ON THE HORIZON

MEERKAT ON YOUTUBE

Is AI The Terminator Or The Big Short? It's easier to picture a killer robot than a few companies quietly blowing up the economy, so Meerkat weighs up both. It came out on Saturday, two days before OpenAI's pause. Watch on Meerkat Explains.

THE BURROW

Quick vote. OpenAI has stopped training its most advanced models after its agents wandered into government websites. What do you make of it?

Trivia. In 1997, an IBM computer beat world chess champion Garry Kasparov in a six-game match. What was it called? Answer's at the bottom of the email. No peeking.

ALSO WORTH YOUR INBOX

The daily crypto brief from the same burrow. Crypto Nutshell is Bitcoin, the news and the numbers in a five-minute read.

HOW DID WE DO?

One tap, and Meerkat listens. How did today's issue land? Hit a button, and add a line if you want to tell Meerkat why.

DevDay's tomorrow, pause or no pause. Meerkat will be counting how often OpenAI says "safeguards".

Tell the friend who swears Big Tech always gets its money back. Forward them this.

Meerkat is not telling you to buy anything, sell anything, or short anything. Meerkat is not a financial adviser. Meerkat is a small animal with a whiteboard and a big red emergency stop button. Please do not sue Meerkat.

TRIVIA ANSWER

Deep Blue. It won the May 1997 rematch in New York 3½ to 2½, a year after Kasparov had beaten an earlier version.