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Happy Thursday, AI & Data Enthusiasts! With powerful models now built for just $50, AI is becoming more accessible than ever. Today’s updates include OpenAI’s new data residency in Europe, Google’s expansion of its Gemini models, and John Schulman’s unexpected departure from Anthropic. Let’s dive into the details!
Our newsletter for today is a little late. Bear with us!
In today’s edition:
🧠 Researchers Build Open-Source AI Model for Under $50
🇪🇺 OpenAI Introduces Data Residency in Europe
🌍 Google Expands Gemini AI Models
👨💻 John Schulman Departs Anthropic After 5 Months
- Naseema Perveen
WHAT CAUGHT OUR ATTENTION MOST
🧠 Researchers Build Open-Source AI Model for Under $50
Stanford and University of Washington researchers have developed s1, a reasoning AI model, for under $50 in cloud compute credits. Despite its low cost, s1 performs comparably to OpenAI’s o1 and DeepSeek’s R1 in math and coding benchmarks.
Efficient Training with Distillation: The researchers used distillation, a process where an AI model learns from another by mimicking its responses. S1 was trained on 1,000 carefully selected questions using data from Google’s Gemini 2.0 Flash Thinking Experimental model. The entire training process took under 30 minutes on 16 Nvidia H100 GPUs, costing only $20 in computing.
Challenges for Big AI Labs: S1’s success raises concerns about AI commoditization—if advanced models can be cheaply replicated, how will companies maintain a competitive edge? OpenAI has already accused DeepSeek of misusing its API for similar model distillation.
Limitations and Future Outlook: While distillation offers a cost-effective way to replicate existing AI capabilities, it doesn’t necessarily push the boundaries of AI innovation. Meanwhile, tech giants like Google, Meta, and Microsoft continue investing billions to develop next-generation AI models.
The development of s1 highlights how AI research is becoming more accessible, allowing smaller teams to build competitive models at a fraction of the cost. However, it also raises questions about the future of AI innovation and the challenges major AI labs face in maintaining their competitive edge. As distillation techniques improve, we may see more open-source alternatives emerge, reshaping the AI landscape.
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KEEP YOUR EYE ON IT
🇪🇺 OpenAI Introduces Data Residency in Europe
OpenAI has launched data residency options in Europe, enabling organizations to meet regional data sovereignty requirements using AI products. This update ensures compliance with European data protection laws, including GDPR, Germany’s Federal Data Protection Act, and the U.K.’s data protection regulations.
API Data Processing in Europe: Organizations using OpenAI’s API can now choose to process data within Europe for eligible endpoints. This option provides businesses with greater control over their data while ensuring compliance with regional privacy laws.
Storage for ChatGPT Enterprise and Edu: New ChatGPT Enterprise and Edu customers will have the option to store customer content at rest in Europe. This includes user-generated content such as conversations, prompts, uploaded files, and custom bots.
Zero Data Retention for API Requests: API requests processed within Europe will follow a zero data retention policy, meaning OpenAI will not store AI model inputs or responses.
Limited Availability for Existing Projects: Currently, European data residency is only available for new projects. Existing API projects cannot be updated to enable this feature at this time. While this limitation may impact some organizations, OpenAI’s expansion of regional data control options signals a broader effort toward improving data security and compliance.
OpenAI’s move comes as European regulators continue to scrutinize AI companies’ data practices. Several countries, including Spain, Germany, and Italy, have investigated OpenAI’s data handling policies. In December, Italy’s data protection authority fined OpenAI €15 million for alleged consumer data violations.
By offering European data residency, OpenAI aims to strengthen its compliance with regional privacy laws while giving organizations more control over their data.
Google Expands Gemini AI Models
Google has officially launched Gemini 2.0 Pro Experimental, its most advanced AI model to date. The model, available on Vertex AI and Google AI Studio, is designed to handle complex prompts, coding tasks, and advanced reasoning. It also boasts a 2-million-token context window, allowing it to process vast amounts of information in a single go.
Bringing Reasoning to Gemini: Alongside Gemini 2.0 Pro, Google is making its reasoning-focused model, Gemini 2.0 Flash Thinking, available through the Gemini app. This move comes as AI competitors, such as DeepSeek, continue to gain attention for their efficient and cost-effective reasoning models.
Introducing Gemini 2.0 Flash-Lite: To compete with emerging AI rivals, Google has unveiled Gemini 2.0 Flash-Lite, a streamlined yet more powerful version of its previous Flash model. This new model offers improved performance while maintaining the same price and speed.
With these updates, Google is reinforcing its position in the AI race, responding to competition from companies like DeepSeek. By expanding its Gemini family and enhancing AI reasoning capabilities, Google is aiming to keep pace with the rapidly evolving landscape of AI innovation.
John Schulman Departs Anthropic After 5 Months
John Schulman, co-founder of OpenAI, has left his position at Anthropic after just five months. Schulman, known for his key role in the development of ChatGPT, joined Anthropic in August 2024 to focus on AI alignment and hands-on technical work.
Focus on AI Alignment: In his transition to Anthropic, Schulman expressed his interest in deepening his research on AI alignment—the practice of ensuring AI systems function as intended. He aimed to work alongside those committed to these crucial AI topics.
Anthropic’s Statement: Anthropic has responded to Schulman’s departure with a statement from their Chief Science Officer, Jared Kaplan. Kaplan expressed support for Schulman’s decision to explore new opportunities and acknowledged his valuable contributions during his time at the company.
Schulman’s brief tenure at Anthropic has ended, but his focus on AI alignment will likely continue to shape the future of AI research. His next steps will be of interest to those in the AI community.
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$$$ MONEY MATTERS
SoftBank is in talks to invest as much as $25B in OpenAI.
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European AI startups raised $8 billion in 2024.
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Substack introduces a $20M funding.
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