Transitioning from Prompting to Loops

Today on the AI Dailyrief The way we use AI is changing before that in the headlines, more White House level discussion about the government taking a stake in the big AI labs. AI Daily Briefs a Daily podcast and video about the most important news and discussions in AI All right, friends, quick announcements before we dive in First of all, thank you to today's sponsors, KPMG, Scrunch, Section, and Out Systems To get an ad free version of the show, go to Patreon d. com,ash AIaily brief Or you can subscribe on Apple podcasts And if you want to learn more about sponsoring the show or really find out anything about the show at all, head on over to aiailybrief. ai. and for sponsorship specifically, you can email at sponsors at ai dailybrief. ai Welcome back to the AI Daily Brief Headlines dition all the daily AI news you need in around five minutes Last week was a pretty interesting one when it comes to AI policy spepecifically in the fact that you had people as far apart as Bernie Sanders and Donald Trump talking about, frankly, not totally dissimilar proposals for the government's relationship with big AI companies Now heading into this week, President Trump has confirmed reports that the government is looking to take an equity stake in major AI labs Notice first reported on the topic late last week, and while the reporting was well sourced and from a very well known Washington insider type of reporter, it was unclear how far along the plans were, certainly seeming a lot more like a concept of a plan than a full executable plan itself When reporters asked about the plan on Friday, however, Trump responded concept out there where pieces could be given to the American public There's something very interesting about it, where the American public essentially becomes a partner with the companies. I've spoken to all of them We're talking about it where the American people can benefit from the success of AI And by doing that, they're going to like it better Trump added that he is potentially meeting with, quote, all the big ones at the White House this week Now some reporters even straight up asked him about Bernie Sanders called to tax fifty percent of AI company equity to form a sovereign wealth fund Trump said, As far as the economics is concerned, we have certain things that aren't that far apart. Pe are surprised Open AI appears to be actively pushing the concept in Washington The NBC reports that Sam Altman met with Bernie Sanders on Wednesday to discuss the idea, with sources saying that OpenAI is pitching the idea of donating equity to the U.S. government to ced a public wealth fund OpenAI views this as a way for the public to benefit in the upside of AI growth, possibly through dividend distribution from the fund. They've also suggested that the fund could be allocated to individuals such as through the new Trump accounts for Chren. Now for anyone who's been watching this president closely, his interest in this probably isn't all that surprising First of all, there's been talk of a sovereign wealth fund since early in the term, and the government has taken stakes in multiple companies, including Intel over the past year He also understands the PR power of cutting a check to the American people, with his Friday comments suggesting that part of the plan is AI dividends, directly attributable to openen AI and others participating in the fund Now as you might imagine, there are a lot of cynical responses to this Former Microsoft employee and tech commentor Darryl Bosingjo writes, The groundwork is already being laid for a government bailout of open AI I don't want to dismiss a cynical take out of hand And maybe some of you will find this even more cynical But at this point, if you don't think the government already views our leading AI labs as too big to fail, you're not paying attention In other areas, though, there is a bit more of a nuanced debate forming around the concept. Grappling with the issues, former AISR David Saxs wrot While I'm no fan of socialism or arbitrary confiscations of wealth I can see why Bernie Sanders's proposal for the government to take a fifty percent stake in AI companies resonates, including with many on the right Sacks argue that as public benefit companies open AI and Anthropic could maximize their benefit by using a portion of their profits to pay down the national debt Alternatively, he said he could almost support the Sanders' proposal as a stupidity tax for the AI job apocalypse narrative stoked by AI leaders over recent years There's just one problem, Saxs continued. Nationalization of AI will accelerate the corporate government fusion we're already sliding towards Conservatives rightly fear a central bank digital currency. They ought to be even more concerned about central goovernment AI, a system with even more totalistic power over information, decision making and human behavior America won't win the AI race if we beat China but end up with a CCP style social credit system in the US And that is the danger as the government becomes more deeply involved in AI development and assumes direct ownership and control. Now to be clear, Sacks was commenting on the Bernie proposal, not the later news about Trump So make of that what you will Investor Brad Gertzner took both sides of this, arguing that it's all about the mechanism He wrote When government owns or controls the means of production, it is socialism don't trust shares in the hands of some future politicians that can coerce or liquidate and spend on whatever their political beliefs purchased or donated, the shares should be directly held by American citizens through their Trump accounts or in a pool to trust or Trump account that will be divided among citizens in the future In a later tweet, he said, I'm against government taking or nationalizing AI labs or other AI business, terrible slippery slope, crony capitalism etca I'm encouraging founders and companies to donate shares for the direct benefit of all citizens through a pooled private account or ideally in their Trump accounts Look, this is just the headlines so we're not going to go much deeper today. But this is a topic where the Overton window has become a flapping open oververton door, and it is going to get even weirder before it resolves The optimistic take, as RaserX put it is this is how you make the AI revolution something the whole country can support Let Americans share in the wealth of the most important technology boom in human history Next up Elon's role as Earl of comppute gets its second major customer as Google signs a three year deal with SpaceX In an SEC filing, SpaceX disclosed that Google had agreed to pay nine hundred twenty million a month to rent compute The deal will run from October of this year through June of twenty twenty nine and grants access to at least one hundred ten thousand NvIDia GPU's The deal is structured in the same way as the landmark anthropic deal last month, which granted access to the entire Colossus One supercluster SpaceX will ramp up delivery over the summer at a reduced fee But Google has the right to terminate the deal in October if SpaceX fails to deliver on the full capacity Both parties also have the right to terminate the deal early on ninety days' notice. The filing didn't specify which SpaceX facilities would be used to fulfill the deal A Google Cloud spokesperson said, This is a short term, timely agreement to ensure we have bridge capacity to meet surging customer demand for our agent platform, Gemini Enterprise, which has been even higher than we expected As always with Elon Dals, this one is amounting to a Rorschach test for one's personal opinion of Elon Musk Certainly heading into the SpaceX IPO later this week, both parties have a strong incentive to puff up the company For Google's part, they own a six percent stake in SpaceX that could be valued at a one hundred billion dollars if the IPO hits its target To somem, the early termination clauses suggest the deal is all about boosting the stock over the short term Provinident short seller Jimm Channs post This nine month contract has more easy outs than a kids Tball game The other interpretation, however, is that Elon's pivot to Cloud Kingmaker is succeeding Boring Bus wrote This is absolutely insane. Elon Musk's XAI reportedly spent forty billion dollars to build their data centers. Based on public disclosure of the anthropic and Google deal, XAI will get paid twenty six billion per year to license the compute from these data centers payback period of eighteen months for all the data center spend from just two customers And you still think AI infrastructure CappeEx is a bubble Now to the extent that you're thinking, this is Elon's clloud strategy playing out according to plan, it's fairly unclear if there actually was a plan. In September of last year, when XA I was in the middle of scaling Colossus two, Elon posted Step one, byy a shortload of GPU's. step two, question mark. Step three, profit And it now appears that step two is simply to have GPU's available during a compute crunch Maybe that was Elon's plan all along, but I think people are wildly discounting How much? justust in advance of this IPO, Elon figured out how to make SpaceX make sense Y Chen Jin remarked, SpaceX has accidentally become the largest neoc clloud on Earth five hundred and fifty K GPUs more than double corewave Starlink is doing fifteen billion ARR, so GPU rentals is SpaceX's biggest business. Elon may not need XAI to beat openp AI Speaking of compute C crunch, Jensen H Wang has secured NidDia's memory supply in a new multi yearar deal with SK Heyinix The two year deal will deepen ties between the two companies. SK Henx will continue to be Nvidia's largest memory supplier as we head deeper into the shortage And in addition, Nvidia will join as a design partner on new memory chips for physical AI, personal AI, and AI infrastructure The deal also secures Nvidia' supply of high bandwidth memory as they begin to ramp production of next generation Verauben chips Announcing the deal at a press conference in Seoulong said cure and buy from SK Heynx already billions and billions of dollars each year, and it's going to grow substantially Now, a big part of NvIidia's story this year has been Jensen traveling the globe to secure a supply chain taking a very face to face approach to critical deal making Last month, he was in Thaipeay to shore up his Fab allocation with TSMC. And Reuters wrote that in his trip to Seoul, you could find him dining on grilled pork belly and local spirit soju with the company's top corporate bosses, throw baseball pitch and meet with a well known gamer Last week, a video went viral of Jenson sitting down at the Nvidia booth during a Taipei conference sipping a beer with executives And while of course, there's an element of marketing to the candid moments, it is also very clearly a critical part of Jensen's supply chain strategy This new deal was reportedly sealed over a chicken and beer meeting with SK group chairman Shei Taiwan at a local restaurant And while the dining is casual, the stakes of the moment for Nvidia are very high As he exited the restaurant on Sunday, Huang told the press, Demand is enormous. Everything in the entire industry supply chain from wafers to silicon photonics to cable connectors is in a state of supply shortage Now, if a lot of the headlines today were about the infrastructure side of AI, The main episode is all about some shifts in how we actually use AI, and that is what we turn to now One of most important AI questions right now isn't who's using AI, it's who's using it well KPMG and the University of Texas at Austin just analyzed one point four million real workplace AI interactions and found something surprising. The highest impact users aren't better prompt engineers. They treat AI like a reasoning partner They frame problems, guide thinking, iterate, and push for better answers. And the good news, these behaviors are teachable at scale If you're trying to move from AI access to real capability, KPMG's research on sophisticated AI collaboration is worth your time Learn more at kpmg. com slash US slash sophisticated That's kpmg dot com slash US slash sophisticated. question. When was the last time you actually visited a website to research something If you're like me, AI pretty much does that work for you now That of course raises a new question for brands. If AI is doing the discovering, researching and deciding, who or what is your website really for That shift in user behavior, the rise of AI bots becoming your most important new visitors, is what my sponsor Scrunch is taking head on Grunch is the AI customer experience platform that helps marketing teams understand how AI agents experience their site, where they show up in AI answers, where they don't, and what's preventing them from being retrieved, trusted, or recommended And it's not just visibility. Scrunch shows you the content gaps, citation gaps, and technical blockers that matter and helps you fix them so your brand is found and chosen in AI answers Now for our listeners, scrch is providing a free website audit that uncovers how AI sees your site, where there's gaps, and how you're showing up in AI versus the competition. Run your site through it at scrunch d. com slash Ai daily Here's a harsh truth Your company is probably spending thousands or millions of dollars on AI tools that are being massively underutilized Half of companies have AI tools, but only twelve percent use them for business value Most employees are still using AI to summarize meeting notes If you're the one responsible for AI adoption at your company, you need seection Seection is a platform that helps you manage AI transformation across your entire organization It coaches employees on real use cases, tracks who's using AI for business impact, and shows you exactly where AI is and isn't creating value With the result, you go from rolling out tools to driving measurable AI value Your employees move from meeting summaries to solving actual business problems and you can prove the ROI guessing if your AI investment is working Check out section at sectioni. com SEC Ti O n AI. com This episode of the AI Daily Brief is brought to you by Out Systems, a leading Aentic Sstems platform built for the enterprise. 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It's the leading agendic Systems platform that is unified, agile and enterprise proven, allowing you to accelerate growth, reduce operational friction, and deliver real enterprise impact with AI Out Systems, Build your agentic future Welcome back to the AI Daily Brief There was a story this weekend about some planned updates to the Chat GBT app that I think many are completely misreading and which the accurate read of tells us a lot about the future direction of AI user experiences. Now for those of you who are watching, just to be clear, the mockup that is on your screen right now was generated by the person who is tweeting it just as a way to have a visual alongside their tweet. We haven't seen any mockups or leaks of a potential open AI super app did get, was this article in the Financial Times, OpenAI plot's biggest chat GPT overhaul since launch And certainly the thrust of the article was that a super app is coming FT writes, the company intends to transform the chatbot into a quote unquote super app combines coding tools and AI agents, adding products that executives believe will generate more revenue Now, none of this is a surprise or exactly secret Open AI, employees, leadership, etcetera have used the superApp term extensively on Twitter slash X. And last week during the CodeEx events for Enterprise, we even heard more about Codex and Chat GPT blending, although exactly what that meant remains unclear Now for the financial Times, this is about business strategy. They write, The changes are part of a broader reorganization at Open AI as the San Francisco company shifts resources into trying to win lucrative business customers and compete more fiercely with rivalanthropics The role of ChatyBT in the ecosystem looks like it might be a little bit different Again, FT writes, Open AI executives increasingly view Chat GPT, which has attracted nearly a billion users since its launch, as a gateway to introduce users to higher value products The majority of consumers use the chat bot for free FT says the overhaul is going to begin rolling out in the coming weeks, and will initially appear as changes to the Chat CBT website and mobile apps, which encourage customers towards using coding, image generation, and apps from external partners Now for FT, this is all about the IPO The changes they write underline how open AI's strategy is moving closer to that of Anthropic, whose focus on developing products for businesses has stoked its blistering growth and will be at the heart of its pitch to investors in an IPO this year. They quote Leon' capital partner, Jennyiaau who writes, Approximately a year ago, openenAI's strategy was swinging for the fences whereas anthropic strategy is make money first Now the two are converging because both of them are trying to aim for an IPO and investors care more about money than dreams. As evidence, FT points to the shutting down of Sora as an example of their commitment to this new business focus, which is obviously something that we've talked about here as well Now, not everyone is sold on the idea of a super app David Geer Geiggan writ Super apppp usually means we couldn't find the next big thing, so we're bundling everything we have Hedgy markets, which you can guess their focus from their handle, certainly thinks this is about the IPO as well The overhaul they write shifts resources towards enterprise clients with two million businesses already at forty percent of revenue and expected to hit fifty percent by year end Altman said last year that apps would become obsolete because of AI and now he wants to build a super app Nine hundred million people use ChatPT every week, fifty million pay for it, and OpenAI still loses fourteen billion dollars a year The suuper app is supposed to change that. Open AI has shifted hard towards entnterprise with two million businesses already at forty percent of revenue, and a target of fifty percent by December, but those are the same enterprise customers who discovered last week what AI tools cost and whether they produce anything Putting these slightly cynical take even more bluntly, noobbody builds a super apppp because users ask for one They build it because a chatpot is hard to put a multiple on This is a feature for the S one, not for you Now one other take which I don't think is exactly right but does deserve some discussion is summed up by Yoshik, who writes, One thing I've learned from tech, the best technology doesn't always win. The company that owns the user usually does That's why OenAI is trying to turn Chat GBT into a super app before the IPO Every model eventually gets copied Getting millions of people to open your app every day is the hard part Although on the flip side, anan thinks that consumers might be in for a shock with these changes They write, It's going to be interesting to watch how casual chat GPT users react to this Most people have only used it as a chatbot The full redesign into Super App is going to feel like a completely different product to them Is this all just about money and the IPO? The answer is yes, but And I think it's worth pausing to note How frequently the investor class cannot imagine that anything that any company does is not specifically and primarily about impressing them the investor class. What's actually going on here is the embodiment of a much bigger trend And the instantiation and extension of what we have discovered are the most valuable categories of use cases for AI, which are simply put not about chat Now what's very clear is that there is a major difference between power users of Chat GPT and regular users of Chat GPT In a recent interview, openpAICFO, Sarah Freyar said, ourur free users do about seven turns or seven questions a day. Our first paid tier does double that about fifteen. Our real paid tier plus, which is twenty dollars is about three X and Pro is about eleven X over free user In other words, Power users are using AI moreore And they're not just using AI more, they're using it differently It's clear at this point that openpenAI views Codex as their most successful product att least their most successful product with the type of success that they want And anyone who's living on the AI side of X can attest to the fact that there has been a major vibe shift towards CodeX over the last few months. developer Ben Holomes recently did a poll on Twitter asking how people use coding agents right now, with fifty one point one percent of nearly twenty one hundred votes going to Codex app with the next highest thirty point nine percent being CLIs in the terminal We're in the midst of a widening AI advantage gap. The gap between the value that power users are getting out of AI and that casual users are getting out of AI is increasing fairly dramatically Now, for most of the early history of post chat GPTAI, while there was a differential between the value that power users were getting versus casual users, I'd argue that the space between them was relatively consistent Over time, casual users got more value and power users got more value as they learned better and more use cases. But then agents actually became a viable thing And specifically People figured out that coding tools weren't just for software engineers, but for any knowledge worker who could use code and bespoke applications to solve their problems and create opportunities. which is all knowledge workers This inflection point whichich really happened around the end of last year in the beginning of this year, basically between november twenty fiveth and january twenty sixth shift the advantage gap into oververdrive. The people using agents are seeing compounding value, while the people using regular chat continue to see linear gains only Now, when it comes to the business model side It is absolutely the case that the people who are using agents are spending far more money than those who are using regular chats The difference between seat based pricing and usage based pricing is the difference between the three billion dollars run rate that Anthropic had last year and the forty seven billion run rate that they're currently on If you've been listening to this show at all over the last few weeks The number one most dominant and most important theme has been the shift from the token subsidy era to the token scarcity era, where the business models are all shifting to sell people the tokens that they're actually consuming with lots and lots of consequent changes Would I think that was a mistake in just assuming that this is a business model question and an IPO question is to think the thing that primarily these companies care about is the revenue scoreboard That obviously matters, but the reason that I think you're going to see a major change in the interfaces and user experiences that openp A and Anthropic put in front of their customers is a recognition of the fact primarily that the people using agents are getting more value and a desire to use interfaces and user experiences to bring more of that to everyone else. If you are watching closely, there is even a gap between the power users and the power power users, reflecting just how quickly user experience patterns are evolving Open Clw creator and now open AI employee Peter Steinberger wrote, Here's your monthly reminder that you shouldn't be prompting coding agents anymore You should be designing loops that prompt your agents On CNBC recently, Claud code creator Boris Churnney told the host that about six months ago, he shifted from writing code by hand to prompting Claude to write all of his code, but it turns out that even that isn't the limit of how things are changing Here's a snipp of a conversation with Boris from just last week At that point, I was running, you know, maybe five, ten quads in parallel And my coding was prompting Claud to write code. Now it's actually leveled up, I think, again, to the next wayave of abstraction where I don't prom claot anymore. I have loops that are running They're the ones that promptinglaud and kind of figuring out what to do. My job is to raay loops And this is this kind of next transition that I think we're going to see in the next few months and you know maybe through the rest of the year Now this idea of loops isn't totally new. Last year and into the beginning of this year, we had a lot of discussion around the Ralph Wigam loop basasically a way to set up your coding agents So they would continuously try and try again without you having to sit there and prompt and interact every time they came up against the challenge. Then in March we had Andre Carpathy talking about auto research, which was a specific type of loop designed to improve an actual AI model And now we've got the slash goal primitive, which is a way that both open AI and anthropic have embedded the idea of loops into the core experience of their major coding tools, claoged code and Codex. The goal in each of these cases is to require less human intervention and get the AI to run for longer and longer, being able to fix its own mistakes, improve its own results, and ultimately accomplish much more comprehensive and complex tasks And so the point is, if you've already got people who are using agents, opening up a significant advantage gap compared to people who are just using regular chat And then you've got the vanguard of people at the labs who are even going a step farther in terms of how they're getting the most value. It strikes me as obvious that one of the places that the labs can try to democratize those experiences to more users is via the user experiences of their core app interfaces. And that I think, is the key point of the Chat GBT overhaul Now yes, like I said, this does come with financial implications because the people who are running loops are burning way more tokens than the people who are just casually popping in to ask a question that they might have asked Google before I just think it's reductive to think that that is the primary motivation for the labs, as opposed to getting more people to experience the insane power and opportunity that comes with actually being able to run agents at scale And there is a lot of work to do. Railwways just Jake retweeted a post about loops and said The Prom with this and why I think people are frustrated, noody has taught folks how to do this. It feels both evidently the future and also somehow gateapped But justust to be clear, he clarified, I believe it's being expressed at the fastest rate it can be. It's just both evolving rapidly and so dense, like pulling a neutron star out of a magic hat. Adding evidence to that, Shaanu Matthew had a post go viral with over three hundred thousand views that retweeted Peter Steinberger's call to use loops and said, non technical idiot guy here What does this mean for the noncoder audience? I truly want to feel what Boris and Peter are talking about Anyone got resources to help bridge me there Exponential views as ZMSR responded and said It's interesting. Really tricky to get it to work with deep analytical problems that aren't coding. Loops make it worse the error rate of each loop magnifies. Manwhile, Dane catched the CT of Cloudflare had about two hundred and fifty responses when he asked how are people using loops In a world where the advantage gap is compounding, where there's new, even more advanced behavior patterns evolving, and where most people don't have any idea how to do this How do you get everyone up to speed One option is learning materials And OpenAI just published a list of Codex use cases, which get into some of this. So that's clearly part of the strategy But the other approach is to just lead people to how they want them to use the tools by changing the interfaces through which they use the tools And that I think is why openp AI is plotting the quote biggest chat GPT overhaul since launch. and that's why the way we use AI is changing. There will be lots more to talk about on this front as the changes become clearer, but for now, that's going to do it for the AI Daily brief Appreciate you listening, or watching as always, and until next time Peace.