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OpenAI value surges to $157bn in funding deal

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OpenAI value surges to $157bn in funding deal

OpenAI, the maker of ChatGPT, has raised $6.6bn in its latest funding round, as investors including its early backer Microsoft continue to bet big on artificial intelligence (AI).

The deal gave the tech company a value of $157bn (£118bn) – similar to investment bank Goldman Sachs and more than most of America’s biggest companies – making it one of the most valuable start-ups in the world.

OpenAI said the money would allow it to stay at the cutting edge of AI research.

The influx comes as the company has been in the spotlight, in part for internal leadership drama and debate over its future status.

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Chief executive Sam Altman is said to be restructuring the company to become a for-profit entity, stripping it of its non-profit board.

While the company’s transformation has helped attract investors, it has alienated some members of its staff and critics.

Those critics include OpenAI co-founder Elon Musk who departed the firm in 2018. He has said the company has abandoned its founding mission of developing AI for the benefit of humanity.

OpenAI is widely credited with helping bring artificial intelligence tools into the mainstream and sparking a gush of wider investment and interest in the sector.

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“The new funding will allow us to double down on our leadership in frontier AI research, increase compute capacity, and continue building tools that help people solve hard problems,” OpenAI said.

Funders in the latest round included investment firm Thrive Capital, Japanese tech conglomerate SoftBank, American chip giant Nvidia, and Microsoft, which already has a large stake in the company.

Under the terms of the deal, investors can renegotiate or claw back their funds if the structural change into a for-profit does not take effect within two years. It also hinges on and the removal of cap on returns for investors.

While the valuation announced Wednesday looked high by normal standards, “these are not normal times,” said Karl Freund, principal analyst at Cambrian AI Research.

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“Unless AI is somehow a bust, which I cannot imagine, OpenAI will be a powerful force to be reckoned with.”

OpenAI said it has 250 million weekly active users, as well as one million paying business customers.

The company is on track to generate $3.6bn in revenue. But projected losses of more than $5bn are set to outpace revenue, according to Reuters.

Pressure to quickly rollout new versions of its blockbuster chatbot has also strained relations between OpenAI’s research and safety teams and staff focused on monetising the company’s products, according to reports.

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OpenAI has seen an exodus of key executives in the year since Mr Altman was briefly ousted as its top executive in November, with departures including former chief scientist Ilya Sutskever.

Last week, the company’s long-time chief technology officer Mira Murati stepped down, saying in a statement that she had “made the difficult decision to leave” after much reflection.

Two top OpenAI researchers also announced their departures the same day as Murati.

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Uber to launch limited-edition safari experiences in South Africa

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Uber to launch limited-edition safari experiences in South Africa

Uber is launching a limited-time safari experience in Cape Town, South Africa, available from 4 October, 2024, to 25 January, 2025, as the latest experience in their ‘Go Anywhere’ series of travel products

Continue reading Uber to launch limited-edition safari experiences in South Africa at Business Traveller.

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Parental rights ought to be motherhood and apple pie

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You wrote about Kemi Badenoch’s controversial comments on maternity pay at the Conservative party conference (Report, October 1), yet over the past two weeks a broader and ongoing clash of opinions over parental rights has been unfolding.

Deloitte made a clear statement by equalising parental leave, Campaign group The Dad Shift called for longer paternity leave and Badenoch argued statutory maternity pay is “excessive”. What’s clear is the lack of consensus on how best to support working parents.

But this isn’t about pitting genders against each other over caregiving roles or trading the “motherhood penalty” — the term used to describe the disadvantages that working mothers face in the workplace compared to childless women or men — for a broader “parenthood penalty”.

The choice hinges on organisations offering extended or equalised parental leave to encourage fathers to share responsibilities — critical to reducing the motherhood penalty, which accounts for 80 per cent of the gender pay gap. A cultural shift is needed where senior leaders model and endorse active parenthood to create an environment where both men and women feel confident using parental support without fear of damaging their careers or reputations.

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Emma Spitz
Chief Client Officer and Parental Transition Coach, The Executive Coaching Consultancy, London EC3, UK

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Story that speaks to lack of co-ordination at the UN

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Andrew Jack’s article on the Model UN for schools (“Students learn from Model UN to handle disagreements diplomatically”, Outlook, September 26) says Model United Nations was created at Georgetown University in 1963.

As the organiser of the Model UN General Assembly held at Cambridge university in 1964, that claim comes as a surprise, as when contacted back in 1963, we were told by the UN that we were the first to host such an event. Such is British-American rivalry!

The Cambridge version was funded by a £20,000 donation from Roy Thomson, owner of the Sunday Times, and this paid for student delegations to come for a week from further and higher education institutions across the UK. The 7,000-strong membership of the Cambridge University United Nations Association (CUUNA) was an example of the international idealism that then permeated the university.

Attending this year’s UN General Assembly and the Summit of the Future event and recalling the frequent cynicism about the ability of the UN to resolve major issues in today’s world, I am pleased to see the Model UNGA format continues, albeit now more at high school than university.

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Anthony Colman
Chair, CUUNA 1963-64, Aylmerton, Norfolk UK

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Sri Lankans have some reasons to be cheerful

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I read with interest your observations on Sri Lanka’s election of President Anura Kumara Dissanayake (“Sri Lanka’s Lenin-loving new president riles old guard”, Report, September 28; and “Sri Lanka bets on a leftist outsider”, FT View, September 27).

I agree that there is concern about the remains of Dissanayake’s old People’s Liberation Front (JVP) and its role in insurrections in 1971 and 1987-89, but the general election on November 14 is unlikely to give the party a two-thirds majority in parliament, and the president is keen to reduce his own executive powers. He has clearly renounced any return to the use of force.

Yet I felt the article was less than generous in its critique when previous elected governments have been mired by corruption and incompetence, with Gotabaya Rajapaksa, the 2019 election winner, needing to flee the country to escape the consequences of misrule — the fall in the value of the Sri Lanka rupee from SLRs250 to SLRs420 to the pound sterling being just one example.

In last month’s vote, the old guard was well defeated at the ballot box and indications so far are more optimistic than you portray. The stock market has moved sharply upwards, the IMF seems to have had satisfactory preliminary talks and the impression that he is anti-Indian does not correspond with his public statements. Indeed the island itself seems to have confidence in the new dawn, although of course it’s very early days.

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David Panter
Blandford Forum, Dorset, UK

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Bank transfers could be delayed for four days to investigate fraud

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Bank transfers could be delayed for four days to investigate fraud

Banks will have the power to pause payments for up to four days to give them more time to investigate fraud, the government has said.

Currently, transfers must be processed or declined by the end of the next business day, but the new law will allow an extension of three more days.

For years, banks have needed to have reasonable grounds to suspect fraud before being able to investigate – but have also faced pressure from customers who want payments to be made instantly.

The long-proposed new regulations will come into force at the end of October – later than originally planned.

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Fraud is the most common offence in the country, accounting for a third of all crime in England and Wales.

Criminals have stolen billions of pounds through romance scams or by impersonating a genuine trader to trick victims into transferring money.

“We need to protect these people better, which is why we are giving banks more time to investigate suspicious payments and break the criminal spell that scammers weave,” said Tulip Siddiq, the economic secretary to the Treasury.

Banks have lobbied for permission to take longer to agree to payments, to allow them to investigate suspicious transfers.

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The new law will give them time to look at unusual spending patterns, contact a customer, and investigate further before the money is transferred.

The previous government’s draft legislation had proposed giving banks the new powers by 7 October, but now they will take effect from the end of the month.

UK Finance, the banking trade body, has welcomed the new rules. Consumer groups say the powers should be used in a careful and targeted way.

The changes could lead to some frustration among account holders who have become accustomed to bank transfers made online or via a mobile app going through almost instantly.

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Banks will need to inform customers when a payment is being delayed, explain what the customer needs to do in order to unblock the payment, and pay compensation if the delay lands the customer with extra charges.

The rules will come into force a few weeks after the introduction of a stricter mandatory scheme that will see fraud victims receiving up to £85,000 in refunds from banks within five days of an authorised push payment scam.

The maximum compensation has been reduced from a previous proposal of £415,000.

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US and G7 warn Israel against strikes on Iranian nuclear facilities

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The US and its western allies are trying to limit Israel’s response to Iran’s ballistic missile attack in the hope of preventing a widening regional conflict from spiralling out of control.

Washington has made clear it supports Israel’s right to respond militarily to Tuesday’s missile attack, and is holding frequent calls with Israeli officials as they plan their next move.

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US President Joe Biden on Wednesday spoke with the other leaders of the G7 to co-ordinate sanctions on Tehran for the attack and advise Israel on its response.

“We’ll be discussing with the Israelis what they’re going to do . . . all seven of us agree that they have a right to respond, but they should respond in proportion,” Biden told reporters after the call.

But US officials acknowledge their influence on Israel may be limited.

Israel is weighing several response options to retaliate against Iran, including attacks on missile launchers or oil infrastructure. Some Israeli officials have called for strikes against its nuclear facilities, though a person familiar with the matter said this is not being considered. Biden has also said he would oppose such an attack.

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The US and other western allies are instead urging Israel to focus on military targets, said people familiar with the matter.

A woman holds a picture of late Hezbollah leader Hassan Nasrallah during an anti-Israeli rally in solidarity with Lebanese and Palestinian people in Tunis, Tunisia, 02 October 2024.
A woman holds a picture of late Hizbollah leader Hassan Nasrallah during an anti-Israeli rally in Tunis, Tunisia © Mohamed Messara/EPA-EFE/Shutterstock
Still image from video shows projectiles in the night sky
Only a few of Iran’s ballistic missiles got through Israel’s air defences © AP

Kurt Campbell, the deputy US secretary of state, on Wednesday said Washington recognised a “response of some kind would be important” and there had to be a “return message” to Iran.

But he added: “The region is really balancing on a knife’s edge and [there are] real concerns about an even broader escalation, or a continuing one . . . which would imperil not only Israel, but our strategic interests as well,” he said in a virtual event at the Carnegie Endowment for International Peace, a think-tank, on Wednesday.

However, western officials acknowledge Israel is increasingly self-confident and emboldened after its recent success in assassinating much of the leadership of Iran-backed Hizbollah — including its leader, Hassan Nasrallah.

The Israeli government may be prepared to take military and political losses if it means notching a strategic victory over Iran, they said.

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US state department spokesperson Matt Miller on Wednesday said: “They’re a sovereign country, they do make their own decisions, we talk with them at a number of different levels about what we believe is in their interest, what we believe is in the interest of the region — we’ll continue to do that, but ultimately it’s up to them.”

Tuesday’s strikes, in response to the assassination of Nasrallah last week, were much larger than an earlier Iranian attack in April, incorporating about twice as many ballistic missiles — although only a few got through Israel’s air defences.

US national security adviser Jake Sullivan warned Iran would face “severe consequences” for the strikes, which he described as “defeated and ineffective”, adding the US would “work with Israel to make that the case”.

But the green light to go ahead with a response does not mean a blank cheque, analysts said. The goal for the US and its allies is that Israel’s response does not in turn prompt further escalation by Iran.

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Dana Stroul, the Biden administration’s former top Pentagon official on the Middle East who is now at the Washington Institute for Near East Policy, said: “The administration continues to adhere to the line that they want to see de-escalation and prevent the kind of all-out regional war that could lead to massive collateral damage and civilian casualties across much more of the region than we have seen thus far.”

Jonathan Panikoff, a former senior intelligence official now at the Atlantic Council, said that while some in Israel are arguing for targeting Iranian oilfields, “US officials are probably concerned that an Israeli decision to target oilfields could result in Iran striking back by targeting oilfields of US companies and allies in the Gulf”.

Such an attack could also hit petrol prices ahead of next month’s US presidential election.

Panikoff added that direct targeting of Iranian nuclear sites would be viewed in Tehran as a significant threat that would demand a response.

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“Tehran is likely to view a strike against its nuclear programme as a fundamental and direct attack on the regime’s stability itself, likely ensuring a response that moves all parties up the escalatory ladder,” he warned.

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