Connect with us

Tech & AI

Fal Doubles Its Valuation to $16B After a $1.3B Raise as AI Inference Demand Surges

Published

on

ai inference

Header image: AI-generated illustration by WordUp News.

The market for AI inference just got another vote of confidence from investors. Fal, a San Francisco startup that hosts and runs image, video and audio AI models for developers, has raised $1.3 billion at a $16 billion valuation, according to Bloomberg’s reporting as relayed by TechCrunch and The Next Web. That is double the $8 billion the company was valued at in April.

Who backed the round

Bessemer Venture Partners, an existing investor, led the round, which closed in October. Nvidia, T. Rowe Price and Sound Ventures took part, and The Next Web also lists HOF Capital among the participants. Fal announced its Series E and Series F rounds together, with a combined $1.65 billion raised across the two. Sequoia led the earlier round.

Advertisement

Fal was founded in 2021 by Burkay Gur, formerly a machine learning leader at Coinbase and an Oracle engineer, and Gorkem Yurtseven, a former Amazon developer. Gur is now chief executive.

Why AI inference demand is outrunning supply

Inference is the work of running an already-trained model to produce outputs, and it is where much of the real-world usage of AI happens. Demand has been strongest among customers who rely on open source models. Fal’s annualized revenue passed $800 million earlier this year, a person familiar with the matter told Bloomberg.

The growth has strained the company’s capacity. “We hit a point in summer where we were not able to serve our customers and had to rate limit them,” Gur said. Fal plans to use the new money to buy more computing power and to expand its 185-person team.

The company is also changing how it works with model makers. It has started fine-tuning video models alongside the companies that build them, sometimes in exchange for licensing fees or a share of revenue. Gur framed the strategy as a scale game: “The more scale you have, the more likely you are to win at the end of the day.”

Advertisement

A crowded and richly funded field

Fal is far from alone. Rival Modal raised $750 million at a $15.75 billion valuation in October. Fireworks AI raised $1.5 billion at a $17.5 billion valuation in July. Baseten is reportedly set to more than double its value to $30 billion. On those numbers, Fal’s $16 billion sits in the middle of a pack that investors are funding aggressively.

The margin question

The valuations come with a caveat. According to several people familiar with the financials of inference companies, quoted by TechCrunch, gross margins across the sector remain thin. The reason is the high cost of buying or leasing compute, which is the main input for a business that sells model outputs.

That helps explain the logic of the latest round. Much of the money is earmarked for computing power, and Gur’s emphasis on scale suggests Fal is betting that bigger volume will eventually translate into stronger economics. Whether that holds is not something the sources address, and none of them disclose Fal’s profitability.

What the figures do show is a market where demand is real enough to force a leading provider to throttle customers, and where investors, including the chip giant Nvidia, are willing to pay steep prices for a place in it. For Fal, the challenge now is turning that appetite into sustainable returns while competitors raise comparable sums.

Advertisement
Related reading:
Sources:

WordUp Morning

Ten stories, both sides of each, in five minutes. Free, every weekday at 7am, plus a Saturday weekend edition.

We'll email you a link to confirm. Unsubscribe any time.

Continue Reading
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Tech & AI

Cyber Essentials Discount Cuts Certification to as Little as £80 for 6,000 Small Firms

Published

on

cyber essentials discount

Header image: AI-generated illustration by WordUp News.

The government is backing a new cyber essentials discount worth 75%, aimed at helping around 6,000 small and micro businesses get certified against the most common online attacks. The scheme is funded with £2.4 million and was announced on 3 November after a run of high-profile hacks.

What the cyber essentials discount offers

Cyber Essentials was developed by the National Cyber Security Centre. The government describes it as the minimum security standard it recommends, and it is designed to help organisations of any size guard against the most widespread internet-based attacks. Under the new funding, small and medium-sized enterprises (SMEs) and micro businesses can obtain the certification for between £80 and £125, plus VAT.

Those figures imply a standard price of roughly £320 to £500 before the reduction, though the sources do not state this directly. Spread across the expected 6,000 firms, the £2.4 million works out at about £400 of public money per business.

Advertisement

Who qualifies, and for how long

The offer is not open-ended. It runs on a first come, first served basis and is limited to businesses that have not been certified in the past four years. It will be available until March, or until the ring-fenced money runs out, whichever comes first. With funding for a finite number of firms, owners who want to take part may be better off applying early than waiting for the deadline.

Why the government is acting now

Cyber security minister Liz Lloyd said SMEs are “particularly vulnerable in the age of rising cyber threats”. She added: “We are not going to sit back and let malicious actors take advantage – we will back our SMEs and make them match-fit.”

The announcement follows several widely reported incidents. Last week, according to the exchange itself, around $6.3 billion (£4.7 billion) was stolen from Binance wallets, which it described as the largest cryptocurrency theft in history. Blockchain intelligence firms and other organisations have accused a North Korean hacking unit of carrying out the attack. Those are accusations rather than established findings.

In October, fashion marketplace Asos said an “unauthorised party” had accessed an employee’s account. Customers received a phone alert saying the retailer had been hacked, and Asos said the attacker obtained some personal data, including customers’ names and contact details. Last year, a cyber attack on Jaguar Land Rover forced the carmaker to halt production at its factories for several weeks, which weighed heavily on its sales and overall financial performance.

Advertisement

A big problem and a modest fix

The incidents named in the announcement involve a global crypto exchange, a well-known retailer and a major manufacturer. They are far larger than the typical small business. The reasoning appears to be that if even large organisations can be breached, smaller firms with fewer resources face real risk too. The Jaguar Land Rover episode shows how one successful attack can disrupt operations for weeks.

The basic certification is no guarantee against sophisticated, state-linked attackers. Its stated purpose is narrower: to help firms defend against the most common internet-based attacks. By lowering the cost, the government is betting that more small firms will cross that basic threshold. The cyber essentials discount will only matter, though, if owners hear about it and apply before the funding or the March cut-off runs out.

Related reading:
Sources:
Advertisement

WordUp Morning

Ten stories, both sides of each, in five minutes. Free, every weekday at 7am, plus a Saturday weekend edition.

We'll email you a link to confirm. Unsubscribe any time.

Continue Reading

Tech & AI

Altman Says PCs Use RAM Just 5% of the Time, and Musk Mocks Him Amid a RAM Supply Crunch

Published

on

ram supply crunch

A throwaway line about computer memory has turned into a public spat between two of tech’s best-known figures, and it lands in the middle of a RAM supply crunch that is already pushing up prices for ordinary buyers. OpenAI CEO Sam Altman said it is “quite terrible” for people to keep DRAM in their own computers. Elon Musk answered with a meme.

What Altman actually said

Altman made the remark on the YouTube channel Cheeky Pint. His argument was about efficiency. “From a global allocation perspective, actually, it’s quite terrible to have everybody have a bunch of the world’s limited supply of DRAM sitting in their own computer and being used 5% of the time,” he said. He added that anyone dealing with a “very supply-constrained environment” should want “maximum utilization in the cloud,” and that “many people’s intuition is the opposite of that.”

The 5% figure is Altman’s own characterization. The sources do not offer data to back it up. His underlying point is that a scarce component works harder in a data center running AI workloads than in a desktop that spends most of its time idle.

Advertisement

Musk’s meme response

Musk replied on X, the platform he owns, with a meme built on a scene from Inglorious Basterds. It shows Christoph Waltz’s Nazi officer character apparently hunting for people hiding sticks of DRAM. The caption read: “The people deserve to have their RAM too!”

TechRadar noted that Altman has been keen to secure more memory for OpenAI recently, which gives the joke extra bite. Decrypt and Tom’s Hardware both framed the exchange as Musk ridiculing the idea that personal computers are wasting memory.

Why the remark struck a nerve

The comments arrived while consumers already face rising prices for computing hardware as demand for RAM and other components gets passed down the chain. Against that backdrop, a leading AI executive suggesting that households hold too much memory was always likely to provoke anger. TechRadar said the remark drew widespread condemnation and confusion across the industry.

The excerpts we have do not say how long the shortage will last. TechRadar points readers to related coverage suggesting the AI boom could keep memory prices high until 2030, and mentions that Intel CEO Lip-Bu Tan has warned about the situation, though the details of his warning are cut off. Those claims are outside what these sources let us verify.

Advertisement

The bigger question

Altman’s economic logic is not absurd on its face. Shared infrastructure can use hardware more efficiently than millions of individual machines. But it leaves out how people actually use computers. Consumers buy RAM so their own machines run smoothly, not to donate capacity to a global pool, and nobody is proposing a mechanism to redistribute it.

Musk’s meme may be crude, but it taps into a real grievance. As long as the RAM supply crunch pushes prices up, a chief executive describing home memory as a misallocation is likely to be heard as a complaint about customers rather than a diagnosis of the market. Neither man has offered a plan beyond the rhetoric.

Related reading:
Sources:

File photo: Elon Musk (54816836217) (cropped 2) (b).jpg by Gage Skidmore, CC BY-SA 4.0, via Wikimedia Commons.

Advertisement

WordUp Morning

Ten stories, both sides of each, in five minutes. Free, every weekday at 7am, plus a Saturday weekend edition.

We'll email you a link to confirm. Unsubscribe any time.

Continue Reading

Tech & AI

Fridge cyber-attacks reach UK as meat suppliers’ units hit 100C, but no meat lost

Published

on

fridge cyber-attacks

Header image: AI-generated illustration by WordUp News.

The wave of fridge cyber-attacks that disrupted supermarkets across Europe has now reached Britain, with several UK meat suppliers reporting that their cold storage overheated or began defrosting overnight. Luckily, the damage appears to have been limited, because the affected units were empty at the time.

The Association of Independent Meat Suppliers (Aims), which represents roughly 300 firms, said a few of its members had “unexpectedly become collateral” in the hack. One company saw its refrigeration climb as high as 100C, while two others reported units starting to defrost. Because of the way abattoirs typically operate, nothing was inside. “None who have been affected have lost any meat,” a spokesman said, but he called the episode a reminder that food businesses “may be seen by some as targets”.

Advertisement

What happened across Europe and in the UK

The UK incidents followed a day after retailers in Belgium, Estonia, Finland, Ireland, Luxembourg, the Netherlands and Sweden reported refrigeration faults, with some temperatures reportedly reaching 50C. Similar problems were reported in France last month. It has since emerged that the French attack exploited legacy equipment connected to the internet and protected only by default passwords.

No major UK supermarket chain is understood to have been directly affected. The most vivid British account came from Alex Pearce, managing director of London wholesaler Langridge Organic. Six of his 10 fridges were tampered with on Monday morning. Manual checks showed abnormal temperatures and defrost settings, so he suspected a hack and unplugged the network cable. By his account, the hackers had altered six, seven or eight parameters in each unit, including settings that triggered long defrost cycles. He and his staff reset them before any stock was damaged. “I reckon I caught them by luck right in the middle of it being hacked,” he told BBC Radio 4.

What the NCSC says about the fridge cyber-attacks

The National Cyber Security Centre (NCSC) described the national impact as “minimal” and said it was working with the affected organisations. Its chief executive, Richard Horne, said staff worked through the night contacting firms whose vulnerable technology was exposed online. He said “handfuls” of UK organisations had been alerted and that officials knew of a couple of impacts, though “we don’t know the full impact”.

On who is responsible, officials were cautious. Horne said it was too early for a definitive answer, and the NCSC’s director of operations, Paul Chichester, said the agency could not comment on culprits. He did say the attacks were not AI-enabled and relied on weaknesses that had been “out there for a long period of time”. Separately, cybersecurity experts told the Guardian that attacks on decoy fridge controls, deliberately left online to attract hackers, showed characteristics similar to operations linked to Russia. That is an observation from researchers rather than an official attribution.

Advertisement

A warning about the “foothills”

The NCSC used the incidents to make a wider point. Horne called them the “foothills” of a bigger threat, as AI tools expose flaws in networks that owners have neglected to patch. In his speech launching the agency’s annual report, he said the UK had left itself exposed through decades of “tech on the cheap”. The agency’s chief technology officer, Ollie Whitehouse, argued that manufacturers must be pushed to build safer products and that buyers must accept paying more for them.

The annual report offers context for the scale of the problem. The NCSC received 1,831 reports of cyber-attacks this year, 337 of which needed support and 80 of which were judged nationally significant. It also warned 8,500 organisations that their systems had been compromised.

Asked whether the episode backed up the Defence Secretary’s advice that people should stockpile supplies, Horne replied “absolutely”, pointing to criminal attacks on UK retailers last year. “At the end of the day, it’s your business. It’s your charity. It’s your life,” he said. “You need to make the choice and choose wisely.”

What the industry is doing

Retailers are being urged to monitor their systems, keep software up to date and prepare contingency plans in case food has to be moved. The British Retail Consortium said its members invest heavily in cybersecurity and are working with the NCSC to secure their fridges and freezers. The British Frozen Food Federation said members are assessing how vulnerable their freezer systems might be.

Advertisement

For now, the lesson of these fridge cyber-attacks in the UK is as much about luck as resilience. Empty units and one quick-thinking wholesaler kept this round of tampering from becoming a food-loss story. The NCSC’s message is that old, internet-connected equipment with weak passwords will not always be so forgiving.

Related reading:
Sources:

WordUp Morning

Ten stories, both sides of each, in five minutes. Free, every weekday at 7am, plus a Saturday weekend edition.

We'll email you a link to confirm. Unsubscribe any time.

Continue Reading

Tech & AI

Utopai Studios Taps Ex-Disney AI Exec Hans Ku as Chief Product Officer After $60M Raise

Published

on

chief product officer

Header image: AI-generated illustration by WordUp News.

Utopai Studios, the AI-focused entertainment company, has hired former Disney AI executive Hans Ku as its chief product officer, adding a studio veteran just weeks after raising $60 million at a $1 billion valuation, according to reports from Variety and Deadline.

Ku will oversee product, engineering, research and business development, and report to CEO and co-founder Cecilia Shen. His central assignment is scaling Utopai’s technology, including its AI production platform, PAI, across the company’s film and television projects, and shaping how the studio builds its proprietary tools.

What the chief product officer role covers

The job is as much about infrastructure as creativity. Ku is expected to take technology that has been developed on individual productions and turn it into repeatable products. In his own words, the aim is to “take what we learn from real productions, turn those lessons directly into better products and workflows,” then offer them to filmmakers and studios around the world. He stressed that PAI is being built alongside filmmakers and that creative decisions should remain in their hands, a notable emphasis in an industry still wary of AI and job losses.

Advertisement

Shen framed the hire as a bet on someone who knows how to move emerging technology “from experimentation into an organization operating at global scale.”

A résumé spanning animation, tech and Sora

Ku most recently served as Disney’s vice president of AI and engineering in its Office of Technology Enablement, where he worked on expanding AI tools across the company and exploring AI-native production pipelines. He also helped link Disney and OpenAI teams around Sora, OpenAI’s generative video product.

That collaboration has since unraveled. Deadline reports that Disney struck a deal at the end of 2025 to license characters for Sora in exchange for a $1 billion equity investment, and that the arrangement was later undone after Sora was shuttered. Variety describes the pact as short-lived.

Earlier in his career, Ku worked at Walt Disney Feature Animation, building a system for traditional animators, and at DreamWorks Animation, where he created the DreamColor display with HP and won a Scientific and Engineering Award from the Academy of Motion Picture Arts and Sciences. Deadline adds that he has also been an entrepreneur and a product executive at Tubi, Yahoo and Flipagram, a TikTok predecessor.

Advertisement

Growing a slate while the industry watches

Founded in 2022, Utopai has been assembling a mix of AI-generated and AI-enabled projects. They include the Antonio Banderas-led live-action film “Cortés,” an AI-assisted animated adaptation of the children’s book “The Most Serious Fart,” and a fully AI-generated adaptation of “Journey to the West: The Lost Five Hundred Years” with Chinese production company Huace. Variety says “Cortés,” “The Most Serious Fart” and the live-action feature “Half Moon” are all slated for release next year.

The hire fits a broader pattern Deadline describes: Hollywood’s gradually growing, though conditional, willingness to work with AI. For Utopai, recruiting a chief product officer with deep studio and big-tech experience signals that it wants to be seen as a durable production company rather than a showcase for experimental tools. Whether PAI can win over filmmakers at scale will be tested when its first films reach audiences.

Related reading:
Sources:

WordUp Morning

Ten stories, both sides of each, in five minutes. Free, every weekday at 7am, plus a Saturday weekend edition.

We'll email you a link to confirm. Unsubscribe any time.

Continue Reading

Tech & AI

ChatGPT’s Chat and Work tabs merge in December – and your usage allowance will be shared with Codex

Published

on

chatgpt chat and work tabs

Header image: AI-generated illustration by WordUp News.

OpenAI is folding the ChatGPT chat and work tabs into a single experience starting in December, a move aimed at simplifying a desktop app that has grown crowded with overlapping sections. The change, first spelled out in an email to users and a support note on OpenAI’s website, also reshapes how paid plans count usage.

The reporting from ZDNET and TechCrunch agrees on the core facts. Neither source gives an exact December date, and both describe the rollout as staged rather than immediate.

Advertisement

Why OpenAI is merging the ChatGPT chat and work tabs

The current layout is, by TechCrunch’s account, confusing. The ChatGPT desktop app has separate ChatGPT and Codex sections, and inside the ChatGPT section sit separate Chat and Work tabs. With that many options, TechCrunch notes, it is easy to lose track of where a project lives.

OpenAI’s email frames the merger as a way to take an idea from exploration to execution without switching contexts. “You can bring in your files and plugins and ask ChatGPT to build a website, create a presentation, or do things for you on the web, while reviewing and guiding its work,” the company told users. In effect, the agentic abilities now housed in Work will move into the main ChatGPT experience.

Codex, OpenAI’s coding product, is not part of the merger. The email says it will remain a separate experience inside the desktop app.

A shared usage pool for ChatGPT and Codex

The more consequential change for heavy users may be the billing mechanics. Starting in December, usage allowances on Plus, Pro and Business plans will be shared across ChatGPT and Codex. Both products will draw from the same pool of tokens, the units of information a model processes and generates.

Advertisement

OpenAI says how quickly someone burns through that pool depends on the model and the task. More advanced models and more complex jobs generally consume more. One carve-out: instant chat will not draw from the allowance.

The company expects little disruption. Most customers, it says, won’t be affected, though depending on usage and model choice, some people may find themselves waiting for resets more often than they do now. “We’re preparing carefully for this transition to help prevent disruption to your workflows,” OpenAI said.

A gradual rollout, and a rival that moved first

The merged experience will not reach everyone at once. According to the email, it will first go to select users who can give feedback before a wider release. OpenAI has not said, in the material reported, how long that testing phase will last or when all users will see the change.

The timing follows a similar step by competitor Anthropic, which in September combined the chat and Cowork functions of its Claude assistant into one screen. Both companies appear to be converging on the same idea: that a single interface should handle conversation and autonomous task work, rather than forcing users to choose a mode up front.

Advertisement

What to expect

For most people, the practical takeaways are straightforward:

  • The ChatGPT chat and work tabs will become one experience, beginning in December with select users.
  • Codex stays separate in the desktop app, but shares a token allowance with ChatGPT on Plus, Pro and Business plans.
  • Instant chat doesn’t count against that allowance.
  • Power users running advanced models on complex tasks are the likeliest to notice more frequent waits for resets.

Details that remain unclear include the exact rollout date, the specific allowance sizes and how the new pooling will feel in day-to-day use. Those answers will likely emerge once the feedback phase begins. ZDNET disclosed that its parent company, Ziff Davis, filed a lawsuit against OpenAI in April 2025 alleging copyright infringement.

Related reading:
Sources:

WordUp Morning

Ten stories, both sides of each, in five minutes. Free, every weekday at 7am, plus a Saturday weekend edition.

We'll email you a link to confirm. Unsubscribe any time.

Continue Reading

Tech & AI

OpenAI Pitches ‘Compute Campuses’ as 54% of Americans Say AI Data Centers Hurt the Environment

Published

on

compute campuses

OpenAI wants the world to stop saying “data centers” and start saying “compute campuses.” The ChatGPT maker confirmed the plan to Business Insider on Sunday, just two days before the US midterm elections, in a bid to reshape how the public sees the buildings that power its AI.

An OpenAI spokesperson said the new term “better describes the scale and role of the infrastructure we’re building for AI,” and called the projects “long-term investments in computing, energy infrastructure and skilled work.” The company also said it wants host communities “to help shape it and share in the opportunities it creates.”

Why OpenAI Is Rebranding Now

The timing is not subtle. Axios reported that OpenAI is preparing a post-election “PR blitz,” and TechCrunch noted that Democrats appeared likely to retake the House and possibly the Senate. A Democratic majority could mean a more regulation-minded Washington. OpenAI’s chief global affairs officer, Chris Lehane, reportedly described the midterms as “a bit of a movie trailer” for 2028, when he expects AI to be “the issue” in the presidential race.

Advertisement

TechRadar reports that the new name could be rolled out as soon as this week. Some outlets used the longer form “AI compute campuses,” so the exact wording may still be settling.

A Public-Image Problem With Real Numbers

The rebrand is aimed at a measurable reputation gap. Business Insider cited a recent Pew Research poll in which 54% of Americans said AI data centers are bad for the environment. Data centers have also become a live issue for voters, though one Business Insider headline noted it is not their top concern. Rising electricity prices are a particular sore spot, according to TechRadar.

Other tech giants have tried to soften opposition with money. Meta, Amazon and Microsoft have pledged millions to communities and schools near their facilities. Pressure from local governments has also pushed Amazon and Microsoft to say they will stop using nondisclosure agreements in negotiations, per TechCrunch. Business Insider says those efforts have largely failed to improve the image of data centers, and OpenAI is betting that new vocabulary can do more.

Beyond the Name

The new name is only one item on Lehane’s list. He also discussed AI “speed limits,” ways to help people see AI as empowering in daily life, and a bigger US role in setting global standards. He called the public debate over data centers “good and healthy” and said communities should hold companies accountable so they “really and truly get a transformative benefit.”

Advertisement

OpenAI has made promises of its own. At the start of 2026 it said it would “pay our own way on energy” so its operations don’t raise customers’ electricity prices. Whether residents see that pledge as real, and whether it is kept, will likely matter more to them than any label.

Business Insider put it plainly: time will tell whether the “compute campus” lingo catches on. Renaming a facility does not change its power draw, its footprint or its effect on local bills. Critics may see the term as polish, while supporters may argue it better reflects how large and complex these sites have become. Either way, the debate over what to call them is part of a larger fight over who benefits from AI’s expansion and who pays for it.

Related reading:
Sources:

File photo: Person holding the OpenAI icon.jpg by FoxTPNL, CC BY 4.0, via Wikimedia Commons.

Advertisement

WordUp Morning

Ten stories, both sides of each, in five minutes. Free, every weekday at 7am, plus a Saturday weekend edition.

We'll email you a link to confirm. Unsubscribe any time.

Continue Reading

Tech & AI

Grok Bot usage limits cut as costs outrun revenue, despite 800,000 paid weekly users

Published

on

grok bot usage limits

Subscribers to SpaceX’s Grok Bot woke up over Halloween weekend to find their allowances gone, and the tighter Grok Bot usage limits were no glitch. Elon Musk confirmed on X on Sunday that the cost of running the AI agent had become a problem. “The cost of serving Grok Bot was unsustainably high relative to revenue,” he wrote in reply to a user.

What users saw over the weekend

Several subscribers reported that their weekly usage meters leapt without any extra activity on their part. One user’s meter reportedly went from 33% to 66%, and others said theirs jumped from as low as 50% to 100%. On Cursor’s community forum, which is relevant because SpaceX acquired the coding platform earlier this year, users described meters flipping between 77% and 100%.

Cursor did report a billing and usage-dashboard problem on Sunday, later marked as resolved. Reporting so far doesn’t establish whether that bug had anything to do with the jumps, and Musk’s comments point to a deliberate change in allowances rather than a technical fault.

Advertisement

What Musk actually said

Musk’s replies were brief. To one user he asked whether the cost increase for a higher-usage plan was “too high?” In another, he described reducing allowances and telling users about it as “just being sensible.” He has not published a figure for what the agent costs to run, and he hasn’t said how subscribers’ limits will look going forward. According to reports, his main X feed has stayed focused on promoting the product, including as a tool for buying family gifts.

Some users were less forgiving. TechRadar reported that critics were calling the move a “rug pull,” a charge that tends to stick when people have paid for a plan and then find it delivers less than expected.

A hit product with a cost problem

The timing is awkward because Grok Bot has been held up as a success story. Launched in August, it is an agent that uses a virtual computer to carry out tasks such as shopping, with plans ranging from free to $200 a month. On SpaceX’s third-quarter earnings call, the company said it had 800,000 paid weekly users in early October, more than double the previous month. Musk called it “the fastest growth of a product that I’ve ever seen in my life” and suggested it could end up consuming most of the compute in the company’s Super Intelligence division.

That growth is the likely source of the strain. Agents that run multi-step tasks on a virtual computer use far more processing than a simple chat reply, so each new heavy user adds to the bill. Weekly caps that refresh are a standard way to stop a handful of power users from racking up huge costs, and the cap is the lever SpaceX appears to have pulled.

Advertisement

The company’s wider finances make the admission notable. A filing last month said AI now accounts for 52% of SpaceX income, and the Super Intelligence division posted a $431 million profit, rare in the AI industry. That figure would have been higher without $1.2 billion in one-time costs tied to the Cursor acquisition. Grok Bot’s economics may be a different story from the division’s overall results, and the sources do not break them out.

Changing plans and mixed messages

SpaceX has also been reshaping what subscribers get. It recently announced that Grok Bot would be folded into a new $8-a-month “X subscription” that includes X Premium and Cursor. In October, Musk said the agent would also draw on outside models, including Claude, Midjourney and Suno, which could add further costs depending on how those partnerships are priced.

Musk also left himself open to mockery. Users circulated his recent claim that saving money is pointless because AI will bring abundance, setting it beside his new insistence on being “sensible” about costs.

An industry-wide squeeze

SpaceX isn’t alone in rationing. Meta has not said what its Muse agent costs to run, but Mark Zuckerberg told investors last month it is “very compute-intensive” and not yet profitable, even with more than 10 million users. OpenAI plans to merge its separate ChatGPT and Codex allowances next month, which could mean people who use both hit their caps sooner. It said higher-paying subscribers would get bigger allowances but made no such promise for cheaper plans.

Advertisement

The pattern suggests the industry is still working out how to price agents that do real work. For Grok Bot subscribers, the open questions are how far the Grok Bot usage limits will fall, whether they can be reset, and whether the $200 tier will offer enough headroom to justify its price. Until SpaceX publishes details, users are left guessing.

Related reading:
Sources:

File photo: Elon Musk (54816836217) (cropped 2) (b).jpg by Gage Skidmore, CC BY-SA 4.0, via Wikimedia Commons.

Advertisement

WordUp Morning

Ten stories, both sides of each, in five minutes. Free, every weekday at 7am, plus a Saturday weekend edition.

We'll email you a link to confirm. Unsubscribe any time.

Continue Reading

Tech & AI

xAI Data Center Lawsuit Moves Ahead After Judge Rejects “Mobile Turbine” Defense

Published

on

xai data center lawsuit

Header image: AI-generated illustration by WordUp News.

The xAI data center lawsuit brought by the NAACP will go forward after a federal judge rejected the company’s attempt to have it thrown out. The ruling, reported at the end of October 2026, keeps alive allegations that the Elon Musk-founded AI company ran gas turbines without the air permits the law requires.

US District Judge Debra M. Brown denied xAI’s motion to dismiss, dealing a setback to a company that has argued its power equipment sits outside the usual permitting rules. The NAACP, represented by the Southern Environmental Law Center, filed the suit in April. It alleges xAI “installed and operated at least 35 combustion turbines and other sources of air pollution” at its Colossus site near Memphis without obtaining the necessary preconstruction or operating permits, in violation of the Clean Air Act.

Advertisement

Why the “mobile” argument failed

xAI’s central defense was that its turbines are mobile and therefore exempt from permitting requirements. Judge Brown disagreed. According to her ruling, the turbines are not “mobile sources” under Mississippi’s State Implementation Plan, and reporting on the decision notes that the power plant supplying the data center is not mobile either. That leaves the exemption xAI relied on unavailable at this stage.

The company also argued that the plaintiffs lacked standing and that the Clean Air Act’s citizen-suit provision is unconstitutional. The judge rejected both points. She found the plaintiffs have statutory standing under the Act. On the constitutional challenge, she wrote that citizen-suit plaintiffs “sue on their own behalf, in their own name, and seek penalties that redress harm to themselves,” so they are not exercising the federal government’s executive power.

Federal backing didn’t change the outcome

xAI had some help. One report says the Justice Department supported its bid for dismissal, arguing that the company’s operations are an important part of US military activity. TechCrunch reports that a similar motion from the DOJ was denied earlier in October. NAACP environmental and climate justice director Abre’ Connor called the latest ruling “another important victory” and said the courts have “repeatedly rejected attempts by xAI and the DOJ to dismiss” the case. “xAI cannot operate gas turbines without the required permits,” she said.

The ruling is not a finding that xAI broke the law. It only means the claims can proceed, and the merits have yet to be argued. TechCrunch said it had reached out to SpaceX, which owns xAI, for comment. The sources do not include a response from the company.

Advertisement

The case also unfolds while xAI keeps expanding. Even with the suit pending, the company continued adding gas turbines at another AI data center site in nearby Southaven, Mississippi, according to Engadget.

A wider backlash against data centers

The litigation lands amid growing public resistance to AI infrastructure. New York recently passed a moratorium on new data centers, and other state and local governments are weighing similar steps. The backlash has also pushed Amazon and Microsoft to promise to stop using nondisclosure agreements in their dealings with government agencies, and it could become a factor in the coming US midterm elections.

For AI companies racing to build the power capacity they say they need, this xAI data center lawsuit is a reminder that speed does not exempt them from permitting law, at least not at this stage of the case.

Related reading:
Advertisement
Sources:

WordUp Morning

Ten stories, both sides of each, in five minutes. Free, every weekday at 7am, plus a Saturday weekend edition.

We'll email you a link to confirm. Unsubscribe any time.

Continue Reading

Tech & AI

Sam Altman RAM Remark: ‘Quite Terrible’ for PCs, and What We Can Confirm

Published

on

sam altman ram

The Sam Altman RAM comment has set off a debate among PC enthusiasts, but the coverage available for this article is thin. Both source pages we received contain almost nothing beyond their headlines, so the full context of what the OpenAI CEO said, and where he said it, cannot be confirmed here.

What the Sam Altman RAM headlines say

Two tech outlets, TechRadar and Tom’s Hardware, ran stories with nearly identical framing. Both put the phrase “quite terrible” in quotation marks and attribute it to Altman. TechRadar’s headline says he used it about people having RAM in their PCs “when there’s not enough for AI data centers.” Tom’s Hardware’s headline says Altman argued that data centers “offer better utilization.”

Taken together, the headlines suggest an argument about efficiency. On this reading, memory sitting in an individual computer, which often idles, is a poorer use of a scarce component than memory in a large facility that can run at much higher load. That is an inference from headline wording, not something the source text spells out.

Advertisement

What we can’t verify

The source material does not include the body of either article. We therefore have no direct transcript of Altman’s remarks and no information about the setting, such as an interview, a podcast or a public event. We also have no detail on whether he was speaking literally or being provocative, and no data on current RAM supply or pricing. Any claim about those points would be speculation.

TechRadar’s headline also opens with a line in single quotes: “He can pry it from my cold, dead hands.” The text we have does not identify the speaker. It reads like a retort from the outlet or its audience, not something Altman said, so we are not treating it as part of his statement.

Why the comment struck a nerve

Even with the gaps, the reaction is easy to understand. Memory is a basic component that anyone building or upgrading a computer buys. Hearing the head of one of the world’s best-known AI companies describe consumer use of it as “quite terrible” pits everyday users against industrial-scale demand. Both outlets chose to lead with the quote, which suggests they saw it as the most provocative part of the remarks.

The utilization argument is also a familiar one in computing. Pooled, shared resources are generally used more efficiently than the same hardware spread across many individual machines. Whether that logic justifies the tone of the Sam Altman RAM remark, or reflects the real trade-offs consumers face, is something the available sources do not address.

Advertisement

What to watch for

To judge the comment fairly, readers would need the original remarks in full, preferably a recording or transcript, plus any clarification from OpenAI. Until then, the reliable takeaway is narrow. Two reputable hardware outlets report that Altman called it “quite terrible” for PCs to hold RAM when AI data centers are short of it. We can’t yet say how he meant it or what, if anything, he proposed in response.

Related reading:
Sources:

File photo: Sam Altman speaking at TED (cropped).jpg by Steve Jurvetson, CC BY 2.0, via Wikimedia Commons.

Advertisement

WordUp Morning

Ten stories, both sides of each, in five minutes. Free, every weekday at 7am, plus a Saturday weekend edition.

We'll email you a link to confirm. Unsubscribe any time.

Continue Reading

Tech & AI

CMA Meta Investigation Targets Terms Affecting “Thousands of UK Businesses”

Published

on

meta investigation

The UK’s competition regulator has opened a Meta investigation into whether the Facebook and Instagram owner is imposing “exploitative terms” on publishers and advertisers, in a case that could shape how AI products draw on online journalism.

The Competition and Markets Authority (CMA) says Meta’s commercial terms could let the company access and use content from news publishers’ websites to develop and provide its own products and services. That would include AI features, and the CMA’s concern is that the businesses involved would get no say over how, or whether, their content is used.

What the Meta investigation will examine

The probe has two main parts. The regulator will first assess whether Meta, which also owns WhatsApp, holds a dominant position in a relevant UK market. If it does, the CMA will then ask whether the terms breach the Competition Act 1998. The CMA warned that forcing publishers and content businesses to accept them could “amount to an unlawful imposition of unfair trading conditions for thousands of UK businesses.”

Advertisement

Meta had planned to revise its terms next month but has put that on hold. The reports do not say whether the pause was prompted by the CMA’s interest, and no new date has been given.

Regulator promises speed

CMA chief executive Sarah Cardell said the authority moved quickly after hearing “concerns” from news publishers and other businesses. She said digital platforms play an important role in helping UK firms reach customers worldwide, but that a dominant company “must not use that position to impose unfair terms.”

Cardell said the CMA was using “the most appropriate powers available to us” to examine the issues in detail, and aims for a “swift and satisfactory resolution.” No timetable or potential penalties were set out in the material available.

Meta rejects the premise

Meta disputes the need for action. A spokesman said there were “no grounds for a competition investigation” and noted that the company has already committed not to change its terms without consulting publishers and other stakeholders. He added that Meta welcomed the chance to explain its approach to the CMA.

Advertisement

Opening a case does not mean any finding has been made. Dominance and unfairness both have to be established, and Meta’s pledge to consult suggests the company expects to argue that its process is already fair.

Why it matters for publishers

The Meta investigation lands amid wider unease among publishers over AI systems that use their material. News organisations have long relied on big social platforms to reach audiences, which can make it hard to refuse the terms those platforms set. The CMA’s framing, with terms accepted as a condition of doing business and no choice over AI use, goes to the heart of that imbalance.

The outcome could affect more than news groups. The CMA described the potential impact as reaching thousands of UK businesses, and its statement refers to publishers, advertisers and other content businesses. With Meta’s revision on hold and the regulator promising pace, the next steps will show how far UK competition law can be applied to AI-era content terms.

Related reading:
Advertisement
Sources:

File photo: Meta HQ 2023.png by InvadingInvader, CC BY-SA 4.0, via Wikimedia Commons.

WordUp Morning

Ten stories, both sides of each, in five minutes. Free, every weekday at 7am, plus a Saturday weekend edition.

We'll email you a link to confirm. Unsubscribe any time.

Continue Reading

Trending