It’s a big week for artificial intelligence news. AI hardware is being dinged by tariff troubles while two juggernauts in the AI field — Meta and Google — are in the crosshairs of the U.S. government. Meanwhile, OpenAI unveiled a more capable and smarter ChatGPT and revealed plans for an AI software engineer.
The President Donald Trump administration’s unpredictable tariff policy is creating long-term uncertainty for the AI industry.
The tariffs don’t target digital services and intellectual property like AI software. AI pioneer Andrew Ng said intellectual property is hard to tax due to its intangible nature and ease of cross-border transfer. A Morgan Stanley note said major software firms like Adobe and Salesforce have not yet seen demand impacts.
However, AI models require powerful hardware to function — and that’s where tariffs may bite.
Although chips are exempted, tariffs on essential infrastructure like servers, cooling systems and networking gear could disrupt AI development. Ng said bringing computer equipment manufacturing back to the United States isn’t feasible due to a lack of domestic expertise and supply chain capacity.
The Federal Trade Commission’s 2020 anticompetition lawsuit against Meta went to trial this week, with the U.S. government seeking a divestiture of Instagram and WhatsApp, among other remedies.
The FTC sued Meta (formerly Facebook) for allegedly engaging in “anticompetitive conduct” to weaken or squash rivals as it protects its “monopoly” in social media, according to the revised complaint.
But Meta Chief Legal Officer Jennifer Newstead said in a blog post that the FTC’s “weak antitrust lawsuit … ignores how the market actually works and chases a theory that doesn’t hold up in the real world.”
In today’s digital landscape, Meta competes with TikTok, YouTube and X for eyeballs and engagement.
“In reality, more time is spent on TikTok and YouTube than on either Facebook or Instagram,” Newstead said in the post.
A Virginia district court judge ruled that Google broke the law to dominate the online advertising technology market, one of two major antitrust lawsuits brought by the U.S. government against the search giant.
The government sued Google for having a monopoly in three parts of the online ad market: online publishers’ tools; advertiser tools; and software that makes this market work.
While it is not illegal to dominate a market by innovating, Google entrenched its monopolies and tied them together, a classic antitrust violation, experts told The New York Times.
Meanwhile, a D.C. judge ruled last year in a separate case that Google holds an online search monopoly. The judge is considering a request by the Department of Justice to force Google to sell Chrome, the world’s dominant browser. A ruling is expected by August.
OpenAI unveiled two new AI models in its reasoning model family that will power ChatGPT: o3 and o4-mini.
The AI startup said these are its smartest models to date. They can use all the tools at ChatGPT’s disposal and even incorporate images into their thinking. This would be helpful for businesses looking to analyze PDFs and faxes. OpenAI said the models can even read blurry or upside-down images.
OpenAI said for most real-world uses, o3 and o4-mini will be cheaper than o1 and o3-mini while outperforming them on tasks.
The models are now available for ChatGPT Plus, Pro and Team users. ChatGPT Enterprise and Edu users will get them in a week. Free users can try o4-mini by selecting “Think” before entering a prompt.
OpenAI Chief Financial Officer Sarah Friar said the company is building an AI agent that can do all the work of software engineers, not just augment their skills.
“This is not just augmenting the current software engineers in your workforce … it’s literally an agentic software engineer that can build an app for you,” Friar said at Goldman Sachs’ Disruptive Technology Symposium in London.
“Not only does it build it, it does all the things that software engineers hate to do,” such as quality assurance tests, bug testing and bashing, as well as the accompanying documentation, she said. “So suddenly, you can force multiply your software engineering workforce.”
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