Why AI spending isn't slowing down
Anthropic launches ‘Hybrid Reasoning’ AI
Microsoft prepares for GPT-5
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Why AI spending isn't slowing down
Despite a brief period of investor doubt, money is pouring into artificial intelligence from big tech companies. To understand why, it helps to appreciate the way that AI itself is changing. The technology is shifting away from conventional large language models and toward reasoning models and AI agents. Training conventional large language models—the kind you’ve encountered in free versions of most AI chatbots—requires vast amounts of power and computing time. But we’re rapidly figuring out ways to reduce the amount of resources they need to run when a human calls on them.
Reasoning models, which are based on large language models, are different in that their actual operation consumes many times more resources, in terms of both microchips and electricity. Since OpenAI previewed its first reasoning model, called o1, in September, AI companies have been rushing to release systems that can compete. DeepSeek caused a panic of sorts because it showed that an AI model could be trained for a fraction of the cost of other models, something that could cut demand for data centers and expensive advanced chips. But what DeepSeek really did was push the AI industry even harder toward resource-intensive reasoning models, meaning that computing infrastructure is still very much needed.
Owing to their enhanced capabilities, these reasoning systems will likely soon become the default way that people use AI for many tasks. OpenAI Chief Executive Sam Altman said the next major upgrade to his company’s AI model will include advanced reasoning capabilities. Why do reasoning models—and the products they’re a part of, like “deep research” tools and AI agents—need so much more power? The answer lies in how they work. AI reasoning models can easily use more than 100 times as much computing resources........
Read on The Wall Street Journal
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Anthropic launches ‘Hybrid Reasoning’ AI
Anthropic, an AI company founded by exiles from OpenAI, has introduced the first AI model that can produce either conventional output or a controllable amount of “reasoning” needed to solve more grueling problems. Anthropic says the new hybrid model, called Claude 3.7, will make it easier for users and developers to tackle problems that require a mix of instinctive output and step-by-step cogitation. “The [user] has a lot of control over the behavior—how long it thinks, and can trade reasoning and intelligence with time and budget,” says Michael Gerstenhaber, product lead, AI platform at Anthropic. Claude 3.7 also features a new “scratchpad” that reveals the model’s reasoning process.
Frontier AI companies are increasingly focused on getting the models to “reason” over problems as a way to increase their capabilities and broaden their usefulness. The difference between a conventional model and a reasoning one is similar to the two types of thinking described by the Nobel-prize-winning economist Michael Kahneman in his 2011 book Thinking Fast and Slow: fast and instinctive System-1 thinking and slower more deliberative System-2 thinking.
An LLM can be forced to mimic deliberative reasoning if it is instructed to come up with a plan that it must then follow. This trick is not always reliable, however, and models typically struggle to solve problems that require extensive, careful planning. Penn says that Claude’s reasoning mode received additional data on business applications including writing and fixing code, using computers, and answering complex legal questions. “The things that we made improvements on are … technical subjects or subjects which require long reasoning,” Penn says. “What we have from our customers is a lot of interest in deploying our models into their actual workloads.”....
Read on Wired
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Microsoft prepares for GPT-5
Microsoft engineers are currently readying server capacity for OpenAI’s upcoming GPT-4.5 and GPT-5 models, according to a source familiar with the company’s plans. While OpenAI CEO Sam Altman acknowledged recently that GPT-4.5 will launch within a matter of weeks, I understand that Microsoft is expecting to host the new AI model as early as next week. Codenamed Orion, GPT-4.5 is OpenAI’s next frontier model and the company’s last non-chain-of-thought model. OpenAI has already teased that GPT-4.5 could be a lot more powerful than GPT-4, but the company is also looking ahead to its GPT-5 model that will include more significant changes.
I’m told that Microsoft is expecting GPT-5 in late May, which aligns with Altman’s promise of the next-gen model arriving within a matter of months. As always, this date could shift if release plans change. We reported in October that OpenAI was originally planning to release GPT-4.5 by the end of 2024, but this was subsequently delayed to early 2025. GPT-5 will likely be the more significant release out of the pair, and Altman has referred to it as a “system that integrates a lot of our technology.” It also includes OpenAI’s new o3 reasoning model, which the company teased during its 12 days of Christmas announcements in December.
While OpenAI released o3-mini last month, OpenAI is no longer planning to ship o3 as a standalone model, and it will instead be integrated into this GPT-5 system. This aligns with OpenAI’s goal to combine its large language models to eventually create a more capable model....
Enjoy! SBalley Team