Leaning In to Automation

Ask typical corporate executives about their goals in adopting artificial intelligence, and they will most likely make vague pronouncements about how the technology will help employees enjoy more satisfying careers, or create as many opportunities as it eliminates. A.I. will “help tackle the kind of tasks most people find repetitive, which frees up employees to take on higher-value work,” Arvind Krishna, the chief executive of IBM, wrote in 2023.

And then there’s Sebastian Siemiatkowski, the chief executive of Klarna, a Swedish tech firm that helps consumers defer payment on purchases and that has filed paperwork to go public in the United States with an expected valuation north of $15 billion.

Ambitious Plans

Over the past year, Klarna and Mr. Siemiatkowski have repeatedly talked up the amount of work they have automated using generative A.I., which serves up text, images and videos that look like they were created by people. “I am of the opinion that A.I. can already do all of the jobs that we, as humans, do,” he told Bloomberg News, a view that goes far beyond what most experts claim.

According to Klarna, the company has saved the equivalent of $10 million annually using A.I. for its marketing needs, partly by reducing its reliance on human artists to generate images for advertising. The company said that using A.I. tools had cut back on the time that its in-house lawyers spend generating standard contracts — to about 10 minutes from an hour — and that its communications staff uses the technology to classify press coverage as positive or negative. Klarna has said that the company’s chatbot does the work of 700 customer service agents and that the bot resolves cases an average of nine minutes faster than humans (under two minutes versus 11).

A Bold Statement

Mr. Siemiatkowski and his team went so far as to rig up an A.I. version of him to announce the company’s third-quarter results last year — to show that even the C.E.O.’s job isn’t safe from automation.

In interviews, Mr. Siemiatkowski has made clear he doesn’t believe the technology will simply free up workers to focus on more interesting tasks. “People say, ‘Oh, don’t worry, there’s going to be new jobs,’” he said on a podcast last summer, before citing the thousands of professional translators whom A.I. is rapidly making superfluous. “I don’t think it’s easy to say to a 55-year-old translator, ‘Don’t worry, you’re going to become a YouTube influencer.’”

Saying What Investors Can’t

Mr. Siemiatkowski may have at times overstated what A.I. has accomplished at Klarna, but that doesn’t mean he’s wrong about the future.

Dr. Brynjolfsson of Stanford notes that most office jobs are collections of tasks, and that while A.I. can take on some of them, it still struggles to combine most or all of them in the manner of a human.

A Growing Concern

But even he believes that could change within a few years, while a growing number of tech experts argue that artificial general intelligence — a bot that can do anything the human brain does — is not far-off. Mr. Altman of OpenAI recently predicted that A.I. agents — bots than can perform relatively complicated tasks on their own— would soon “join the work force” and “materially change the output of companies.” Others have predicted that such agents will take over a wide variety of jobs.

Conclusion

Mr. Siemiatkowski has brought clarity to this discussion. In his eagerness to court investors, and in his tendency to overstate the case and say the quiet part out loud, he has laid bare Silicon Valley’s ambition. In his own slightly muddled way, for his own slightly idiosyncratic reasons, he is helping to surface a conversation that has largely been whispered in the executive suites.

FAQs

Q: What are the goals of adopting artificial intelligence in the corporate world?
A: According to executives, A.I. will help employees enjoy more satisfying careers, or create as many opportunities as it eliminates.

Q: What has Klarna automated using generative A.I.?
A: According to Klarna, the company has automated tasks such as generating images for advertising, reducing the time spent generating standard contracts, and classifying press coverage.

Q: Does Mr. Siemiatkowski believe that A.I. will simply free up workers to focus on more interesting tasks?
A: No, Mr. Siemiatkowski believes that A.I. will displace certain jobs, and that it is not easy to say to workers that they will be able to transition to new roles.

Q: What does the future hold for A.I. and job displacement?
A: While A.I. is not yet capable of performing all tasks, many experts believe that it will soon be able to do so, and that this will have significant implications for the workforce.

DeepSeek Founder Lian Wenfeng: A Hero in the Making?

A Billionaire with a Heart of Gold

DeepSeek founder Lian Wenfeng is being hailed as a hero in the southern Chinese province of Guangdong, where he grew up and reportedly returned for the Lunar New Year, joined by bodyguards. At 40, Wenfeng is already a billionaire due to his hedge fund, High-Flyer. His recent breakthrough research has significant implications, particularly in China, where access to the highest-end chips has been restricted.

A Childhood in Guangdong

Residents in Guangdong fondly remember Wenfeng as a "top student" who loved comic books and was a math whiz. He came from a family of educators and even played some football. "We all grew up in this village," a local resident tells the Financial Times. "We’re very proud of him."

The Rise to Success

Wenfeng’s success has made him a subject of interest, but he has largely avoided public attention, frustrating those eager to learn more about him. Given the fate of high-flying Chinese CEOs like Jack Ma and Pony Ma, who faced government scrutiny after gaining too much visibility, it’s no surprise that Wenfeng might choose to stay in the background.

The Impact of DeepSeek’s Breakthrough Research

DeepSeek’s research has demonstrated that powerful AI models can be built with fewer Nvidia chips, a finding that has significant implications in China, where access to the highest-end chips has been restricted. This breakthrough could pave the way for more affordable and accessible AI technology, with far-reaching consequences for industries and individuals alike.

Conclusion

Lian Wenfeng’s story is one of rags-to-riches, with a dash of humility and a commitment to his roots. As he continues to make waves in the tech world, it’s clear that his impact will be felt for years to come.

FAQs

Q: What is DeepSeek’s breakthrough research?
A: DeepSeek’s research demonstrates that powerful AI models can be built with fewer Nvidia chips, a finding that has significant implications in China, where access to the highest-end chips has been restricted.

Q: Who is Lian Wenfeng?
A: Lian Wenfeng is the founder of DeepSeek and a billionaire due to his hedge fund, High-Flyer.

Q: What is High-Flyer?
A: High-Flyer is a hedge fund founded by Lian Wenfeng.

Q: Why has Lian Wenfeng avoided public attention?
A: Lian Wenfeng has avoided public attention to avoid government scrutiny, given the fate of high-flying Chinese CEOs like Jack Ma and Pony Ma.

OpenAI’s Latest Feature: Deep Research

What is Deep Research?

OpenAI has introduced a new agentic feature called Deep Research, which can operate autonomously to "plan and execute a multi-step trajectory to find the data it needs, backtracking and reacting to real-time information where necessary." This feature is designed to generate high-quality research results, similar to those produced by human researchers.

How Does Deep Research Work?

Instead of simply generating text, Deep Research shows a summary of its process in a sidebar, with citations and a summary showing the process used for reference. Users can ask questions using text, images, and additional files like PDFs or spreadsheets to add context. The model then takes anywhere from 5 to 30 minutes to develop a response, which is provided in the chat window.

Limitations of Deep Research

OpenAI notes that Deep Research can sometimes "hallucinate" and make up facts, struggle with telling the difference between authoritative information and rumors, and register how certain it should rate a response. These limitations are a step towards developing ways for generative AI tools to be more useful and worth paying for.

What Can You Expect from Deep Research?

Developing ways for generative AI tools to be more useful and worth paying for is the future companies like OpenAI have promised for agents. Deep Research is capable of operating at the level of a research analyst, as showcased in a demo video where a request for information on changes in the retail industry over the last three years received a response with bullet points and tables.

Comparison to Other Tools

Deep Research is similar to OpenAI’s launch of Operator, a tool that can use a web browser to complete tasks for you, and is also similar to the Project Mariner research prototype Google showed off in December. However, unlike Google’s tool, Deep Research is launching with a version optimized for Pro users today.

Pricing and Availability

OpenAI is offering up to 100 queries per month for those paying the $200 monthly fee and "limited access" promised for Plus, Team, and eventually, Enterprise users. The company notes that all paid users will get higher rate limits in the future when a faster, more cost-effective version is available.

Accuracy and Performance

A press release states that the model powering Deep Research scored a new high for accuracy on an AI benchmark dubbed "Humanity’s Last Exam," which asks for responses to expert-level questions. The OpenAI deep research model reached an accuracy of 26.6 percent with browsing and python tools enabled, well above GPT-4o’s 3.3 percent, and the next highest scorer, its o3-mini (high) model evaluated only on text, at 13 percent.

FAQs

Q: What is Deep Research?
A: Deep Research is a new agentic feature from OpenAI that can operate autonomously to plan and execute a multi-step trajectory to find the data it needs, backtracking and reacting to real-time information where necessary.

Q: How does Deep Research work?
A: Deep Research generates text based on user input, and provides a summary of its process in a sidebar, with citations and a summary showing the process used for reference.

Q: What are the limitations of Deep Research?
A: Deep Research can sometimes "hallucinate" and make up facts, struggle with telling the difference between authoritative information and rumors, and register how certain it should rate a response.

Q: Is Deep Research available to the public?
A: Yes, Deep Research is launching with a version optimized for Pro users today.

Q: How much does Deep Research cost?
A: OpenAI is offering up to 100 queries per month for those paying the $200 monthly fee and "limited access" promised for Plus, Team, and eventually, Enterprise users.

OpenAI Unveils Deep Research: A Tool That Can Gather Information and Synthesize Reports

OpenAI, the artificial intelligence company, has released a new tool called Deep Research that can gather information from across the internet and synthesize it in concise reports.

A.I. Technology

Deep Research uses artificial intelligence (A.I.) technology to gather information and synthesize reports. This technology is called an A.I. agent, which can use other software and services on the internet to accomplish tasks. For example, it can order dinner via DoorDash or gather information from across the internet.

Features

Deep Research can accomplish complex research tasks that might take a person anywhere from 30 minutes to 30 days. By contrast, the tool can accomplish such tasks in five to 30 minutes, depending on the complexity. It can also:

• Surf the web and understand text, images, and P.D.F.s
• Do recursive searches, where one search leads to other searches
• Synthesize all the information it has learned
• Provide citations showing where the information was found

Limitations

While Deep Research is a powerful tool, it is not perfect. It can still get things wrong or even make up information, a phenomenon that A.I. researchers call “hallucination.” This may mean that it provides incorrect citations. The tool may also struggle to distinguish authoritative information from rumors and often fails to accurately convey when it is uncertain about the information it is delivering.

Purpose

OpenAI believes that Deep Research can help accelerate economic growth. The tool will be particularly useful for people in fields like finance, science, and law. It can also help individuals and organizations make better decisions by providing them with accurate and concise information.

Availability

Deep Research will be available to anyone who is subscribed to ChatGPT Pro, a $200-a-month service that provides access to all of OpenAI’s latest tools. It will also be offered via OpenAI’s other paid services.

Conclusion

Deep Research is a powerful tool that can help individuals and organizations make better decisions by providing them with accurate and concise information. While it has limitations, OpenAI believes that it can help accelerate economic growth and make a significant impact in various fields.

FAQs

Q: What is Deep Research? A: Deep Research is a tool that can gather information from across the internet and synthesize it in concise reports.

Q: How does Deep Research work? A: Deep Research uses artificial intelligence (A.I.) technology to gather information and synthesize reports.

Q: What are the limitations of Deep Research? A: Deep Research can still get things wrong or even make up information, a phenomenon that A.I. researchers call “hallucination.” It may also struggle to distinguish authoritative information from rumors and often fails to accurately convey when it is uncertain about the information it is delivering.

Q: Is Deep Research available to anyone? A: Deep Research will be available to anyone who is subscribed to ChatGPT Pro, a $200-a-month service that provides access to all of OpenAI’s latest tools. It will also be offered via OpenAI’s other paid services.

EU’s AI Act Enters Compliance Phase

As of Sunday, the European Union’s regulators can ban the use of AI systems they deem to pose "unacceptable risk" or harm.

Compliance Deadline

February 2 is the first compliance deadline for the EU’s AI Act, the comprehensive AI regulatory framework that the European Parliament finally approved last March after years of development. The act officially went into force August 1; what’s now following is the first of the compliance deadlines.

Risk Levels

The specifics are set out in Article 5, but broadly, the Act is designed to cover a myriad of use cases where AI might appear and interact with individuals, from consumer applications through to physical environments. Under the bloc’s approach, there are four broad risk levels: (1) Minimal risk (e.g., email spam filters) will face no regulatory oversight; (2) limited risk, which includes customer service chatbots, will have a light-touch regulatory oversight; (3) high risk — AI for healthcare recommendations is one example — will face heavy regulatory oversight; and (4) unacceptable risk applications — the focus of this month’s compliance requirements — will be prohibited entirely.

Unacceptable Activities

Some of the unacceptable activities include:

• AI used for social scoring (e.g., building risk profiles based on a person’s behavior).
• AI that manipulates a person’s decisions subliminally or deceptively.
• AI that exploits vulnerabilities like age, disability, or socioeconomic status.
• AI that attempts to predict people committing crimes based on their appearance.
• AI that uses biometrics to infer a person’s characteristics, like their sexual orientation.
• AI that collects "real time" biometric data in public places for the purposes of law enforcement.
• AI that tries to infer people’s emotions at work or school.
• AI that creates — or expands — facial recognition databases by scraping images online or from security cameras.

Fines and Enforcement

Companies that are found to be using any of the above AI applications in the EU will be subject to fines, regardless of where they are headquartered. They could be on the hook for up to €35 million (~$36 million), or 7% of their annual revenue from the prior fiscal year, whichever is greater.

Preliminary Pledges

The February 2 deadline is in some ways a formality. Last September, over 100 companies signed the EU AI Pact, a voluntary pledge to start applying the principles of the AI Act ahead of its entry into application. As part of the Pact, signatories — which included Amazon, Google, and OpenAI — committed to identifying AI systems likely to be categorized as high risk under the AI Act.

Possible Exemptions

There are exceptions to several of the AI Act’s prohibitions. For example, the Act permits law enforcement to use certain systems that collect biometrics in public places if those systems help perform a "targeted search" for, say, an abduction victim, or to help prevent a "specific, substantial, and imminent" threat to life. This exemption requires authorization from the appropriate governing body, and the Act stresses that law enforcement can’t make a decision that "produces an adverse legal effect" on a person solely based on these systems’ outputs.

Conclusion

The European Union’s AI Act is a significant step towards regulating the use of AI in the region. As the compliance deadline approaches, companies must ensure that they are not using AI systems that pose unacceptable risk or harm. The Act’s prohibitions and exceptions are complex, and companies must carefully review the guidelines and standards to ensure compliance.

FAQs

Q: What is the EU’s AI Act?
A: The EU’s AI Act is a comprehensive AI regulatory framework that aims to regulate the use of AI in the European Union.

Q: What is the purpose of the AI Act?
A: The purpose of the AI Act is to ensure that AI systems are developed and used in a way that is safe, transparent, and respects human rights.

Q: What are the risk levels under the AI Act?
A: The AI Act categorizes AI systems into four risk levels: minimal risk, limited risk, high risk, and unacceptable risk.

Q: What are the unacceptable activities under the AI Act?
A: The AI Act prohibits the use of AI systems that manipulate a person’s decisions subliminally or deceptively, exploit vulnerabilities like age, disability, or socioeconomic status, and other activities that pose unacceptable risk or harm.

Q: What are the fines for non-compliance with the AI Act?
A: Companies found to be using AI systems that pose unacceptable risk or harm can be fined up to €35 million (~$36 million), or 7% of their annual revenue from the prior fiscal year, whichever is greater.

The Impact of Tariffs on the Auto Industry

The New Reality for Car Buyers

Around 5.3 million vehicles are built in Canada and Mexico, 70 percent of which are destined for the United States. Those vehicles will soon be subject to 25 percent tariffs, which were just announced by the Trump administration. And the companies paying the higher price to import those vehicles are very likely to pass that cost along to the consumer — to you.

Higher Prices Ahead

You may not see higher MSRPs right away, says Mike Wall, executive director for automotive analysis at S&P Global Mobility. But you will likely see fewer incentives and special deals at dealerships as dealers get stingier about their vehicle inventories. Perhaps fewer vehicles even get made as manufacturers weigh the costs of paying 25 percent duties on key parts and components. Eventually, the higher cost of building and selling a car in the US will filter down to the consumer.

The Impact on Consumers

A tariff is a tax on goods imported from another country. The Trump administration claims it’s levying the new tariffs on Canada, Mexico, and China to stop the flow of illegal drugs into the US. Often, presidents use tariffs as a threat during trade negotiations or to protect domestic industries from cheaper foreign products (as the Biden administration did with electric vehicles from China). But as the New York Times has noted, Trump sees tariffs as a significant source of revenue for the US, perhaps even as a replacement for income taxes.

The Companies that Will Be Impacted

Just listen to the companies who will be bearing those costs. "If we get tariffs, we will pass those tariff costs back to the consumer," said Philip Daniele, CEO of AutoZone, on an earnings call in September, according to CNN. Virtually every car company will be impacted: Ford’s F-series trucks and Mustangs with engines made in Canada; Mazda CX-50s from Mexico; full-size pickup trucks from General Motors and Stellantis; even the Toyota Rav-4.

The Price Tag

S&P Global Mobility estimates that a 25 percent tariff on a $25,000 vehicle from Canada or Mexico would be $6,450 — most of which would be borne by the consumer. As that price goes up, consumers exit," Wall said. "They’re gonna hold off, they’re gonna wait. They may go to the used market. I’ll tell you what, if pricing on the new market goes up, guess what? That pricing on the used market is gonna be impacted because it’s a supply and demand thing."

The Impact on Electric Vehicles

Electric vehicle prices may be impacted as well, especially if the price of certain components go up as a result of the tariffs. Rivian CEO RJ Scaringe recently warned that the tariffs represent a bigger threat to the EV industry than the potential elimination of tax incentives under Trump. And while many EV makers are making huge investments in domestic manufacturing thanks to the Biden administration’s Inflation Reduction Act, they are still just as exposed as companies that build combustion engines.

Conclusion

The 25 percent tariff on vehicles built in Canada and Mexico will undoubtedly have a significant impact on the auto industry. With companies passing the cost along to consumers, prices are expected to rise. The outcome is higher prices for a wide range of consumer goods, from clothes, to shoes, to food, to cars.

FAQs

Q: How will the 25 percent tariff affect car buyers?
A: Car buyers will likely see higher prices as companies pass the cost of the tariff along to consumers.

Q: How will the auto industry respond to the tariff?
A: Automakers have contingency plans, but the details are not publicly disclosed. Most companies are planning for various scenarios and hope for a swift resolution on tariffs.

Q: Will electric vehicle prices be affected by the tariff?
A: Yes, electric vehicle prices may be impacted as the cost of certain components increases due to the tariff.