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Everyone Is Freaking Out About OpenAI and Anthropic’s Race for DominanceI was offline last week in my home state of New Jersey, but when I got back to Silicon Valley, everyone was panicking again about how quickly artificial intelligence is advancing. While this is certainly not the first time I’ve seen such concerns, it’s the biggest anxiety attack I’ve seen in years.More than 1,000 employees at OpenAI, Anthropic, and other AI labs signed a petition earlier this week arguing the US should find a way to “pace” the AI race—a diplomatic way of saying the industry should have the option to coordinate a temporary pause on AI development, or slow things down if they get out of hand. OpenAI and Anthropic themselves ended up supporting the letter.The petition arrived a week after OpenAI revealed it had caused an unprecedented cybersecurity incident in which one of its AI agents hacked into Hugging Face’s platform and several other services during internal testing.Around the same time, top Trump administration officials started freaking out about an impressive new Chinese open weight AI model called Kimi K3, which was allegedly distilled from Anthropic’s Fable 5. In response, most of the tech industry—except Anthropic—signed onto an open letter from Nvidia asking the US government to protect open-weight AI models, arguing they’re a necessary counterbalance to their closed counterparts.These events might look like a whole bunch of disjointed chaos. But I think they are evidence of a larger worldview taking hold in Silicon Valley, where many tech insiders are increasingly worried about OpenAI and Anthropic’s dominance. Researchers and investors I’ve talked to recently have framed the AI industry as a two-horse race that doesn’t seem to be slowing down, and that’s a cause for concern.But different groups have their own reasons to be worried. Some OpenAI and Anthropic staffers think their employers are behaving recklessly in their pursuit to take over the market, and that the AI industry may soon develop models that are too capable for current safety methods to contain. They have said as much in public statements attached to this week’s Pacing the Frontier petition.“I’ve seen how the relentless pace of AI makes it hard for society to keep up and how it puts pressure on labs to cut corners on safety,” Jeremy Hadfield, a research product manager at Anthropic, said in a statement attached to the petition.For some AI employees, the Hugging Face debacle was a warning shot that demonstrated how OpenAI’s efforts to mitigate the risks of its most capable AI technology are already falling short. Granted, the incident happened when OpenAI was testing an AI model on its ability to find software exploits, and the company had intentionally turned off safeguards designed to rein in its cybersecurity capabilities.OpenAI said in its postmortem that these tests were conducted in a sandbox, but the model ultimately gained access to the open internet. Some experts previously told WIRED that OpenAI’s security practices should have been more robust.Other groups in Silicon Valley are more worried about power than safety. Venture capitalists, tech executives, and startup founders are concerned that OpenAI and Anthropic will simply become the next generation of Apple and Google, forcing the rest of the tech industry to play by their rules. It is slightly strange to argue that private startups with little to no profit are acting like monopolies, but that’s the lens through which many—including Mark Zuckerberg—are starting to view the two biggest AI labs.The Meta CEO wrote a Wall Street Journal op-ed this week warning against the centralization of power in the AI industry, saying that superintelligence should be widely distributed. Zuckerberg is arguably talking out of both sides of his mouth—Meta recently decided to stop open sourcing its best AI models and instead offering them through a paid API and subscription service, just like OpenAI and Anthropic.#Freaking #OpenAI #Anthropics #Race #Dominancemodel behavior,artificial intelligence,robotics,generative ai,anthropic,openai,ai safety

Everyone Is Freaking Out About OpenAI and Anthropic’s Race for Dominance

I was offline last week in my home state of New Jersey, but when I got back to Silicon Valley, everyone was panicking again about how quickly artificial intelligence is advancing. While this is certainly not the first time I’ve seen such concerns, it’s the biggest anxiety attack I’ve seen in years.

More than 1,000 employees at OpenAI, Anthropic, and other AI labs signed a petition earlier this week arguing the US should find a way to “pace” the AI race—a diplomatic way of saying the industry should have the option to coordinate a temporary pause on AI development, or slow things down if they get out of hand. OpenAI and Anthropic themselves ended up supporting the letter.

The petition arrived a week after OpenAI revealed it had caused an unprecedented cybersecurity incident in which one of its AI agents hacked into Hugging Face’s platform and several other services during internal testing.

Around the same time, top Trump administration officials started freaking out about an impressive new Chinese open weight AI model called Kimi K3, which was allegedly distilled from Anthropic’s Fable 5. In response, most of the tech industry—except Anthropic—signed onto an open letter from Nvidia asking the US government to protect open-weight AI models, arguing they’re a necessary counterbalance to their closed counterparts.

These events might look like a whole bunch of disjointed chaos. But I think they are evidence of a larger worldview taking hold in Silicon Valley, where many tech insiders are increasingly worried about OpenAI and Anthropic’s dominance. Researchers and investors I’ve talked to recently have framed the AI industry as a two-horse race that doesn’t seem to be slowing down, and that’s a cause for concern.

But different groups have their own reasons to be worried. Some OpenAI and Anthropic staffers think their employers are behaving recklessly in their pursuit to take over the market, and that the AI industry may soon develop models that are too capable for current safety methods to contain. They have said as much in public statements attached to this week’s Pacing the Frontier petition.

“I’ve seen how the relentless pace of AI makes it hard for society to keep up and how it puts pressure on labs to cut corners on safety,” Jeremy Hadfield, a research product manager at Anthropic, said in a statement attached to the petition.

For some AI employees, the Hugging Face debacle was a warning shot that demonstrated how OpenAI’s efforts to mitigate the risks of its most capable AI technology are already falling short. Granted, the incident happened when OpenAI was testing an AI model on its ability to find software exploits, and the company had intentionally turned off safeguards designed to rein in its cybersecurity capabilities.

OpenAI said in its postmortem that these tests were conducted in a sandbox, but the model ultimately gained access to the open internet. Some experts previously told WIRED that OpenAI’s security practices should have been more robust.

Other groups in Silicon Valley are more worried about power than safety. Venture capitalists, tech executives, and startup founders are concerned that OpenAI and Anthropic will simply become the next generation of Apple and Google, forcing the rest of the tech industry to play by their rules. It is slightly strange to argue that private startups with little to no profit are acting like monopolies, but that’s the lens through which many—including Mark Zuckerberg—are starting to view the two biggest AI labs.

The Meta CEO wrote a Wall Street Journal op-ed this week warning against the centralization of power in the AI industry, saying that superintelligence should be widely distributed. Zuckerberg is arguably talking out of both sides of his mouth—Meta recently decided to stop open sourcing its best AI models and instead offering them through a paid API and subscription service, just like OpenAI and Anthropic.

#Freaking #OpenAI #Anthropics #Race #Dominancemodel behavior,artificial intelligence,robotics,generative ai,anthropic,openai,ai safety

I was offline last week in my home state of New Jersey, but when I got back to Silicon Valley, everyone was panicking again about how quickly artificial intelligence is advancing. While this is certainly not the first time I’ve seen such concerns, it’s the biggest anxiety attack I’ve seen in years.

More than 1,000 employees at OpenAI, Anthropic, and other AI labs signed a petition earlier this week arguing the US should find a way to “pace” the AI race—a diplomatic way of saying the industry should have the option to coordinate a temporary pause on AI development, or slow things down if they get out of hand. OpenAI and Anthropic themselves ended up supporting the letter.

The petition arrived a week after OpenAI revealed it had caused an unprecedented cybersecurity incident in which one of its AI agents hacked into Hugging Face’s platform and several other services during internal testing.

Around the same time, top Trump administration officials started freaking out about an impressive new Chinese open weight AI model called Kimi K3, which was allegedly distilled from Anthropic’s Fable 5. In response, most of the tech industry—except Anthropic—signed onto an open letter from Nvidia asking the US government to protect open-weight AI models, arguing they’re a necessary counterbalance to their closed counterparts.

These events might look like a whole bunch of disjointed chaos. But I think they are evidence of a larger worldview taking hold in Silicon Valley, where many tech insiders are increasingly worried about OpenAI and Anthropic’s dominance. Researchers and investors I’ve talked to recently have framed the AI industry as a two-horse race that doesn’t seem to be slowing down, and that’s a cause for concern.

But different groups have their own reasons to be worried. Some OpenAI and Anthropic staffers think their employers are behaving recklessly in their pursuit to take over the market, and that the AI industry may soon develop models that are too capable for current safety methods to contain. They have said as much in public statements attached to this week’s Pacing the Frontier petition.

“I’ve seen how the relentless pace of AI makes it hard for society to keep up and how it puts pressure on labs to cut corners on safety,” Jeremy Hadfield, a research product manager at Anthropic, said in a statement attached to the petition.

For some AI employees, the Hugging Face debacle was a warning shot that demonstrated how OpenAI’s efforts to mitigate the risks of its most capable AI technology are already falling short. Granted, the incident happened when OpenAI was testing an AI model on its ability to find software exploits, and the company had intentionally turned off safeguards designed to rein in its cybersecurity capabilities.

OpenAI said in its postmortem that these tests were conducted in a sandbox, but the model ultimately gained access to the open internet. Some experts previously told WIRED that OpenAI’s security practices should have been more robust.

Other groups in Silicon Valley are more worried about power than safety. Venture capitalists, tech executives, and startup founders are concerned that OpenAI and Anthropic will simply become the next generation of Apple and Google, forcing the rest of the tech industry to play by their rules. It is slightly strange to argue that private startups with little to no profit are acting like monopolies, but that’s the lens through which many—including Mark Zuckerberg—are starting to view the two biggest AI labs.

The Meta CEO wrote a Wall Street Journal op-ed this week warning against the centralization of power in the AI industry, saying that superintelligence should be widely distributed. Zuckerberg is arguably talking out of both sides of his mouth—Meta recently decided to stop open sourcing its best AI models and instead offering them through a paid API and subscription service, just like OpenAI and Anthropic.

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#Freaking #OpenAI #Anthropics #Race #Dominance

In its decision, the NHTSA says it determined that Zoox robotaxis “have an equivalent or greater level of motor vehicle safety” compared to vehicles compliant with federal vehicle safety standards. Under the exemption, Zoox will be subject to “an enhanced oversight condition” that “may update and expand” as the company’s self-driving technology evolves. Zoox issued a software recall for its vehicles earlier this month over concerns that they may not detect smoke.

#Zoox #charge #rides #steeringwheelfree #robotaxisAmazon,Autonomous Cars,Electric Cars,News,Tech,Transportation">Zoox can now charge for rides in its steering-wheel-free robotaxisZoox just got permission to charge for robotaxi rides in its boxy, steering-wheel-less vehicles. On Thursday, the National Highway Traffic Safety Administration announced it has granted the Amazon-owned Zoox a temporary exemption, allowing it to deploy up to 2,500 vehicles annually over the next two years, as reported earlier by Reuters.In its decision, the NHTSA says it determined that Zoox robotaxis “have an equivalent or greater level of motor vehicle safety” compared to vehicles compliant with federal vehicle safety standards. Under the exemption, Zoox will be subject to “an enhanced oversight condition” that “may update and expand” as the company’s self-driving technology evolves. Zoox issued a software recall for its vehicles earlier this month over concerns that they may not detect smoke.#Zoox #charge #rides #steeringwheelfree #robotaxisAmazon,Autonomous Cars,Electric Cars,News,Tech,Transportation

announced it has granted the Amazon-owned Zoox a temporary exemption, allowing it to deploy up to 2,500 vehicles annually over the next two years, as reported earlier by Reuters.

In its decision, the NHTSA says it determined that Zoox robotaxis “have an equivalent or greater level of motor vehicle safety” compared to vehicles compliant with federal vehicle safety standards. Under the exemption, Zoox will be subject to “an enhanced oversight condition” that “may update and expand” as the company’s self-driving technology evolves. Zoox issued a software recall for its vehicles earlier this month over concerns that they may not detect smoke.

#Zoox #charge #rides #steeringwheelfree #robotaxisAmazon,Autonomous Cars,Electric Cars,News,Tech,Transportation">Zoox can now charge for rides in its steering-wheel-free robotaxis

Zoox just got permission to charge for robotaxi rides in its boxy, steering-wheel-less vehicles. On Thursday, the National Highway Traffic Safety Administration announced it has granted the Amazon-owned Zoox a temporary exemption, allowing it to deploy up to 2,500 vehicles annually over the next two years, as reported earlier by Reuters.

In its decision, the NHTSA says it determined that Zoox robotaxis “have an equivalent or greater level of motor vehicle safety” compared to vehicles compliant with federal vehicle safety standards. Under the exemption, Zoox will be subject to “an enhanced oversight condition” that “may update and expand” as the company’s self-driving technology evolves. Zoox issued a software recall for its vehicles earlier this month over concerns that they may not detect smoke.

#Zoox #charge #rides #steeringwheelfree #robotaxisAmazon,Autonomous Cars,Electric Cars,News,Tech,Transportation
Microsoft is in a unique position as AI overtakes the tech industry. It’s one of the world’s largest cloud providers and software-as-a-service companies, while also holding valuable stakes in the two biggest AI labs, OpenAI and Anthropic.

Those incentives are starting to clash as Microsoft posts blockbuster financial results. The company just reported an extremely profitable quarter with $90 billion in revenue and net income of $35.8 billion. For the fiscal year, which ended June 30, Microsoft reported $331.8 billion in revenue with a net income of $133.7 billion for the year.

And CEO Satya Nadella is not about to let the trajectory of Anthropic and OpenAI — which are expanding into applications and agentic infrastructure that could ultimately let them own customer relationships — derail that kind of cash.

Nadella has been preaching to enterprises to use multiple models and to stop relying on the frontier AI labs for the agentic harness/app layer.

Doing so is dangerous, he’s been saying, because it requires companies to share too many of their internal secrets with model makers of dubious trustworthiness. He knows his customers. Enterprise IT fears both data leaks and being locked into a vendor.

Now he has openly told Wall Street analysts during the company’s quarterly conference call Wednesday that this is an opportunity for Microsoft to sell customers its own homegrown models, alongside agents, AI security and more, while promising lower costs.

In other words, he’s pitching Microsoft as an alternative to many of the upscale services that OpenAI and Anthropic are developing for their own growth.

When UBS analyst Karl Keirstead specifically asked Nadella to weigh in on the open vs. closed-sourced debate roiling the AI industry, and how Microsoft will benefit from it, Nadella came out swinging.

“The goal is to have the firm be in control of their own destiny,” the CEO said of enterprises. “We are very, very clear about the architectural sort of design of the platform, which is you got to keep your harness separate from the model … that means any model at any given time is swappable.”

Microsoft, of course, sells a menu of harnesses (aka AI agents), too, under the Copilot name, including its coding agent GitHub Copilot. Coding agents are where much of the AI dollars are being spent today.

And he used the high-profile incident from last week as proof of his warnings.

“If you look even at the Hugging Face incident, the biggest thing that we should take away from that is you can’t sort of depend on any one model,” Nadella said. “You will maybe need multiple models to even remediate some challenges that get caused by one model. Like that’s the way to think about it, right? Which is you can’t be subject to a refusal of one model.”

The incident involved an unreleased model from OpenAI breaking out of its sandbox and successfully mounting a full-scale hack on Hugging Face, all in pursuit of besting a benchmark. Trying to understand what happened, Hugging Face at first tried to use a private frontier model (which it hasn’t named) that refused to help it. So it turned to the Chinese open-source model Z.ai GLM 5.2 to analyze logs and defend its infrastructure. The incident has so shocked the industry that even Sam Altman is now saying that maybe AI development should slow down a bit.

Nadella also made clear that Microsoft is happily selling its own homegrown models, the MAI family, on its own homegrown AI chips, Maya, and pitching them as cheaper alternatives.

“Every customer wants the right model for each task based on quality, latency, cost, and compliance. We offer the broadest model catalog in the cloud with over 11,000 models, including the leads from OpenAI, Anthropic, Mistral, xAI, as well as our own MAI family,” he said.

He added: “We’re also accelerating our own model development. We announced more than a dozen new models across image, voice, transcription, coding, security, including our first reasoning model, MAI thinking one, all with cost-efficient inference at the core for the enterprise use cases. We are co-designing these models with our silicon, and we are seeing 40% better performance per watt when running MAI models on Maya 200.”

As for Mythos? Nadella pointed to Microsoft’s new Mythos competitor announced earlier this week, MAI Cyber One Flash. It “achieves better performance than the much larger Mythos model, but at half the cost when combined with our multi-agent security harness,” he said.

Sure, the Microsoft CEO says that enterprises should use the frontier models that OpenAI and Anthropic offer in their mix. But his bigger message is: don’t trust them enough to rely on them.

When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.

#Microsoft #openly #competing #OpenAI #Anthropic #TechCrunchMicrosoft">Microsoft is openly competing with OpenAI, Anthropic more than ever | TechCrunch
Microsoft is in a unique position as AI overtakes the tech industry. It’s one of the world’s largest cloud providers and software-as-a-service companies, while also holding  valuable stakes in the two biggest AI labs, OpenAI and Anthropic.

Those incentives are starting to clash as Microsoft posts blockbuster financial results. The company just reported an extremely profitable quarter with  billion in revenue and net income of .8 billion. For the fiscal year, which ended June 30, Microsoft reported 1.8 billion in revenue with a net income of 3.7 billion for the year.







And CEO Satya Nadella is not about to let the trajectory of Anthropic and OpenAI — which are expanding into applications and agentic infrastructure that could ultimately let them own customer relationships — derail that kind of cash.

Nadella has been preaching to enterprises to use multiple models and to stop relying on the frontier AI labs for the agentic harness/app layer.

Doing so is dangerous, he’s been saying, because it requires companies to share too many of their internal secrets with model makers of dubious trustworthiness. He knows his customers. Enterprise IT fears both data leaks and being locked into a vendor.

Now he has openly told Wall Street analysts during the company’s quarterly conference call Wednesday that this is an opportunity for Microsoft to sell customers its own homegrown models, alongside agents, AI security and more, while promising lower costs.

In other words, he’s pitching Microsoft as an alternative to many of the upscale services that OpenAI and Anthropic are developing for their own growth.


When UBS analyst Karl Keirstead specifically asked Nadella to weigh in on the open vs. closed-sourced debate roiling the AI industry, and how Microsoft will benefit from it, Nadella came out swinging.

“The goal is to have the firm be in control of their own destiny,” the CEO said of enterprises. “We are very, very clear about the architectural sort of design of the platform, which is you got to keep your harness separate from the model … that means any model at any given time is swappable.”

Microsoft, of course, sells a menu of harnesses (aka AI agents), too, under the Copilot name, including its coding agent GitHub Copilot. Coding agents are where much of the AI dollars are being spent today. 







And he used the high-profile incident from last week as proof of his warnings.

“If you look even at the Hugging Face incident, the biggest thing that we should take away from that is you can’t sort of depend on any one model,” Nadella said. “You will maybe need multiple models to even remediate some challenges that get caused by one model. Like that’s the way to think about it, right? Which is you can’t be subject to a refusal of one model.”

The incident involved an unreleased model from OpenAI breaking out of its sandbox and successfully mounting a full-scale hack on Hugging Face, all in pursuit of besting a benchmark. Trying to understand what happened, Hugging Face at first tried to use a private frontier model (which it hasn’t named) that refused to help it. So it turned to the Chinese open-source model Z.ai GLM 5.2 to analyze logs and defend its infrastructure. The incident has so shocked the industry that even Sam Altman is now saying that maybe AI development should slow down a bit.

Nadella also made clear that Microsoft is happily selling its own homegrown models, the MAI family, on its own homegrown AI chips, Maya, and pitching them as cheaper alternatives.  

“Every customer wants the right model for each task based on quality, latency, cost, and compliance. We offer the broadest model catalog in the cloud with over 11,000 models, including the leads from OpenAI, Anthropic, Mistral, xAI, as well as our own MAI family,” he said.

He added: “We’re also accelerating our own model development. We announced more than a dozen new models across image, voice, transcription, coding, security, including our first reasoning model, MAI thinking one, all with cost-efficient inference at the core for the enterprise use cases. We are co-designing these models with our silicon, and we are seeing 40% better performance per watt when running MAI models on Maya 200.”

As for Mythos? Nadella pointed to Microsoft’s new Mythos competitor announced earlier this week, MAI Cyber One Flash. It “achieves better performance than the much larger Mythos model, but at half the cost when combined with our multi-agent security harness,” he said.

Sure, the Microsoft CEO says that enterprises should use the frontier models that OpenAI and Anthropic offer in their mix. But his bigger message is: don’t trust them enough to rely on them.
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.#Microsoft #openly #competing #OpenAI #Anthropic #TechCrunchMicrosoft

valuable stakes in the two biggest AI labs, OpenAI and Anthropic.

Those incentives are starting to clash as Microsoft posts blockbuster financial results. The company just reported an extremely profitable quarter with $90 billion in revenue and net income of $35.8 billion. For the fiscal year, which ended June 30, Microsoft reported $331.8 billion in revenue with a net income of $133.7 billion for the year.

And CEO Satya Nadella is not about to let the trajectory of Anthropic and OpenAI — which are expanding into applications and agentic infrastructure that could ultimately let them own customer relationships — derail that kind of cash.

Nadella has been preaching to enterprises to use multiple models and to stop relying on the frontier AI labs for the agentic harness/app layer.

Doing so is dangerous, he’s been saying, because it requires companies to share too many of their internal secrets with model makers of dubious trustworthiness. He knows his customers. Enterprise IT fears both data leaks and being locked into a vendor.

Now he has openly told Wall Street analysts during the company’s quarterly conference call Wednesday that this is an opportunity for Microsoft to sell customers its own homegrown models, alongside agents, AI security and more, while promising lower costs.

In other words, he’s pitching Microsoft as an alternative to many of the upscale services that OpenAI and Anthropic are developing for their own growth.

When UBS analyst Karl Keirstead specifically asked Nadella to weigh in on the open vs. closed-sourced debate roiling the AI industry, and how Microsoft will benefit from it, Nadella came out swinging.

“The goal is to have the firm be in control of their own destiny,” the CEO said of enterprises. “We are very, very clear about the architectural sort of design of the platform, which is you got to keep your harness separate from the model … that means any model at any given time is swappable.”

Microsoft, of course, sells a menu of harnesses (aka AI agents), too, under the Copilot name, including its coding agent GitHub Copilot. Coding agents are where much of the AI dollars are being spent today.

And he used the high-profile incident from last week as proof of his warnings.

“If you look even at the Hugging Face incident, the biggest thing that we should take away from that is you can’t sort of depend on any one model,” Nadella said. “You will maybe need multiple models to even remediate some challenges that get caused by one model. Like that’s the way to think about it, right? Which is you can’t be subject to a refusal of one model.”

The incident involved an unreleased model from OpenAI breaking out of its sandbox and successfully mounting a full-scale hack on Hugging Face, all in pursuit of besting a benchmark. Trying to understand what happened, Hugging Face at first tried to use a private frontier model (which it hasn’t named) that refused to help it. So it turned to the Chinese open-source model Z.ai GLM 5.2 to analyze logs and defend its infrastructure. The incident has so shocked the industry that even Sam Altman is now saying that maybe AI development should slow down a bit.

Nadella also made clear that Microsoft is happily selling its own homegrown models, the MAI family, on its own homegrown AI chips, Maya, and pitching them as cheaper alternatives.

“Every customer wants the right model for each task based on quality, latency, cost, and compliance. We offer the broadest model catalog in the cloud with over 11,000 models, including the leads from OpenAI, Anthropic, Mistral, xAI, as well as our own MAI family,” he said.

He added: “We’re also accelerating our own model development. We announced more than a dozen new models across image, voice, transcription, coding, security, including our first reasoning model, MAI thinking one, all with cost-efficient inference at the core for the enterprise use cases. We are co-designing these models with our silicon, and we are seeing 40% better performance per watt when running MAI models on Maya 200.”

As for Mythos? Nadella pointed to Microsoft’s new Mythos competitor announced earlier this week, MAI Cyber One Flash. It “achieves better performance than the much larger Mythos model, but at half the cost when combined with our multi-agent security harness,” he said.

Sure, the Microsoft CEO says that enterprises should use the frontier models that OpenAI and Anthropic offer in their mix. But his bigger message is: don’t trust them enough to rely on them.

When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.

#Microsoft #openly #competing #OpenAI #Anthropic #TechCrunchMicrosoft">Microsoft is openly competing with OpenAI, Anthropic more than ever | TechCrunch

Microsoft is in a unique position as AI overtakes the tech industry. It’s one of the world’s largest cloud providers and software-as-a-service companies, while also holding valuable stakes in the two biggest AI labs, OpenAI and Anthropic.

Those incentives are starting to clash as Microsoft posts blockbuster financial results. The company just reported an extremely profitable quarter with $90 billion in revenue and net income of $35.8 billion. For the fiscal year, which ended June 30, Microsoft reported $331.8 billion in revenue with a net income of $133.7 billion for the year.

And CEO Satya Nadella is not about to let the trajectory of Anthropic and OpenAI — which are expanding into applications and agentic infrastructure that could ultimately let them own customer relationships — derail that kind of cash.

Nadella has been preaching to enterprises to use multiple models and to stop relying on the frontier AI labs for the agentic harness/app layer.

Doing so is dangerous, he’s been saying, because it requires companies to share too many of their internal secrets with model makers of dubious trustworthiness. He knows his customers. Enterprise IT fears both data leaks and being locked into a vendor.

Now he has openly told Wall Street analysts during the company’s quarterly conference call Wednesday that this is an opportunity for Microsoft to sell customers its own homegrown models, alongside agents, AI security and more, while promising lower costs.

In other words, he’s pitching Microsoft as an alternative to many of the upscale services that OpenAI and Anthropic are developing for their own growth.

When UBS analyst Karl Keirstead specifically asked Nadella to weigh in on the open vs. closed-sourced debate roiling the AI industry, and how Microsoft will benefit from it, Nadella came out swinging.

“The goal is to have the firm be in control of their own destiny,” the CEO said of enterprises. “We are very, very clear about the architectural sort of design of the platform, which is you got to keep your harness separate from the model … that means any model at any given time is swappable.”

Microsoft, of course, sells a menu of harnesses (aka AI agents), too, under the Copilot name, including its coding agent GitHub Copilot. Coding agents are where much of the AI dollars are being spent today.

And he used the high-profile incident from last week as proof of his warnings.

“If you look even at the Hugging Face incident, the biggest thing that we should take away from that is you can’t sort of depend on any one model,” Nadella said. “You will maybe need multiple models to even remediate some challenges that get caused by one model. Like that’s the way to think about it, right? Which is you can’t be subject to a refusal of one model.”

The incident involved an unreleased model from OpenAI breaking out of its sandbox and successfully mounting a full-scale hack on Hugging Face, all in pursuit of besting a benchmark. Trying to understand what happened, Hugging Face at first tried to use a private frontier model (which it hasn’t named) that refused to help it. So it turned to the Chinese open-source model Z.ai GLM 5.2 to analyze logs and defend its infrastructure. The incident has so shocked the industry that even Sam Altman is now saying that maybe AI development should slow down a bit.

Nadella also made clear that Microsoft is happily selling its own homegrown models, the MAI family, on its own homegrown AI chips, Maya, and pitching them as cheaper alternatives.

“Every customer wants the right model for each task based on quality, latency, cost, and compliance. We offer the broadest model catalog in the cloud with over 11,000 models, including the leads from OpenAI, Anthropic, Mistral, xAI, as well as our own MAI family,” he said.

He added: “We’re also accelerating our own model development. We announced more than a dozen new models across image, voice, transcription, coding, security, including our first reasoning model, MAI thinking one, all with cost-efficient inference at the core for the enterprise use cases. We are co-designing these models with our silicon, and we are seeing 40% better performance per watt when running MAI models on Maya 200.”

As for Mythos? Nadella pointed to Microsoft’s new Mythos competitor announced earlier this week, MAI Cyber One Flash. It “achieves better performance than the much larger Mythos model, but at half the cost when combined with our multi-agent security harness,” he said.

Sure, the Microsoft CEO says that enterprises should use the frontier models that OpenAI and Anthropic offer in their mix. But his bigger message is: don’t trust them enough to rely on them.

When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.

#Microsoft #openly #competing #OpenAI #Anthropic #TechCrunchMicrosoft

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