Good morning. This is my final edition of Data Sheet for the year; I’m taking off the next two weeks to—if you’ll permit me this mix of Brian Chesky and George Costanza—shift into family mode.
Fortune’s tireless tech editors, Alexei Oreskovic and Verne Kopytoff, will carry Data Sheet through the new year. I’m so grateful for them.
Thank you for reading and happy holidays to those who celebrate. If you’ll be at our Brainstorm dinner on January 6 in Las Vegas, I can’t wait to see you. —Andrew Nusca
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Palantir, Anduril, SpaceX, OpenAI could partner to bid for U.S. defense contracts
Some of the hottest American defense companies are reportedly in talks with leading tech peers to form a consortium to jointly bid for U.S. government work.
Palantir and Anduril are trying to coordinate with SpaceX, OpenAI, Saronic, Scale AI, and a number of other competitors, according to the Financial Times, in an attempt to break the iron grip of conventional contractors like Lockheed Martin, Raytheon, and Boeing.
The conventional companies have been criticized as slow and characterized as a defense oligarchy. Some of them have also been through the reputational ringer in recent years thanks to repeated quality control issues (Boeing), bribery (Raytheon), or production delays (Lockheed).
SpaceX and Palantir are no stranger to large public contracts, but the others are new to the fray. What do they all have in common? Sky-high valuations, thanks to consistent investor enthusiasm.
(SpaceX is the world’s most valuable private company at $350 billion; OpenAI was last valued at $157 billion. Raytheon’s market capitalization is currently hovering around $155 billion; the market cap of the other two mentioned above is lower.)
All of these companies are vying for a piece of the $850 billion U.S. defense budget, which has, with the exception of President Obama’s second term, consistently risen year after year since the late 1990s. —AN
Donald Trump adds even more techies to his administration
Donald Trump has recruited even more techies to join his administration. The president-elect named three Silicon Valley veterans to key posts over the weekend, adding to the army of people from the tech industry either working directly for the incoming government or advising it.
Sriram Krishnan, a general partner at venture capital firm Andreessen Horowitz until recently, will be senior policy advisor for artificial intelligence at the White House Office of Science and Technology Policy.
Meanwhile, Emil Michael, who was chief business officer at Uber from 2013 to 2017, was nominated to be the Pentagon’s undersecretary for research and engineering. The role is responsible for deciding which new technologies the nation’s military should adopt, including the use of AI and autonomous systems.
Scott Kupor, managing partner at Andreessen Horowitz, will be director of the Office of Personnel Management, the federal government’s HR arm.
Of course, Trump already has a number of tech leaders, current and former, on speed dial. They include billionaire Elon Musk, who is co-head of the Department of Government Efficiency, an advisory role that Musk has taken on with gusto (or recklessness, depending on your politics). Then there’s David Sacks, a tech investor who worked with Musk at PayPal, was recently selected to be the administration’s AI and crypto czar, apparently as an advisor. —Verne Kopytoff
Apple is reportedly working on a doorbell with Face ID
Apple is working on a smart doorbell and lock that would use Face ID to unlock a door, according to a new Bloomberg report.
The degree that Apple would contribute to the system is apparently not yet determined. Apple could choose to support a HomeKit-compatible “smart” deadbolt by a company (e.g. Schlage, Kwikset, Yale) that already makes them; it could also opt to partner and offer an entire integrated system from the outset.
Rivals Amazon and Google, through their Ring and Nest brands, currently lead the category (trailed by Vivint, ADT, and other conventional security companies). While the business itself isn’t that large, both tech giants use the devices as endpoints to deepen engagement on their connected, and lately AI-infused, platforms.
According to the report, Apple’s system is in early development and won’t be ready until the end of next year. It could be joined by a security camera and smart home hub. —AN
EU approves Nvidia acquisition of Run:ai
Nvidia just escaped some of its antitrust problems in Europe.
The European Commission on Friday cleared Nvidia’s reportedly $700 million purchase of RunAI, an Israeli startup that provides “orchestration” (basically, management) software for GPU-based AI installations.
It said even RunAI’s competitors had confirmed that the transaction would give Nvidia “neither the technical ability nor the incentive to hamper the compatibility of its GPUs with competing GPU orchestration software due to the availability and widespread use of tools that ensure such compatibility.”
The RunAI deal is also being investigated by the U.S. Justice Department, which is also looking into other aspects of Nvidia’s monopoly in the AI chip market.
The EU authorities are reportedly also scrutinizing Nvidia’s tactics around ensuring that customers stick to its GPUs—so, RunAI acquisition aside, the company is not off the hook yet. —David Meyer
Is OpenAI’s new o3 reasoning model actually AGI?
OpenAI CEO Sam Altman says his company’s latest model, previewed on Friday, will usher in the “next phase” of AI. Maybe so.
But the claim immediately made some people think OpenAI had achieved artificial general intelligence, or AGI, a long sought milestone in the AI industry. AGI is when AI can perform at least as well as humans at certain tasks.
However, the creator of a benchmark test that OpenAI used to back up its claim of a major improvement in its model’s performance versus previous ones poured cold water on that idea. François Chollet, the benchmark’s creator, said in a post on X after the OpenAI announcement, that while the new model is “very impressive and represents a big milestone on the way towards AGI,” there are still many simple tasks the model, called o3, can’t solve.
AGI will have to wait for another day. —Verne Kopytoff
More data
—Tether invests $775 million in Rumble. Why does a crypto company want a video service? “Freedom tech.”
—NHTSA eases self-driving car rules. With one caveat: Operators must share data.
—Inside Amazon’s drone delivery program. Delays, limited rollouts, and a wary public.
—Grindr will cover up to $300,000 for employee family planning services.
—What to expect at CES. The biggest gadget trade show is only two weeks away.
—The best 5 video games of 2024. One reporter's opinion.
—Tesla recalls 700,000 vehicles. Tire sensor issues for Cybertruck, Model 3, Model Y.
—Masayoshi Son: “Obsessed” with building the next Nvidia. Sure hope he’s ready for a three-decade time horizon.
—Google proposes remedies to federal government’s antitrust lawsuit.
—Robotaxi riders complain about being harassed.
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