The 5 things you need to ‘really create magic’ with AI: the LLM, the context, the prompt, the workflow, and the evaluation

I spoke with serial entrepreneur Geoff Nudd yesterday, whose startup Anonymous Health deploys AI to help people overcome addiction and unwanted habits. Launched in June, it now serves more than 10,000 users. While Nudd is pleased to have access to more intelligence, he likens the update to the “heyday of semiconductors, where you always want to be planning for what’s going to be out there in 18 months.”

Nudd argues there are five main components to delivering value: the LLM, the context, the prompt, the workflow and the evaluation. “It’s those five things working together in concert that really create magic,” he says. “The frontier models are effectively commoditized. How you create value goes back to those other four components.” 

“Folks like us will go to whatever is cheapest at some point, because they’re all basically the same,” he added. “If I have the system of record for the industry, plus touch points into other systems, then I have the broadest possible context.”

His advice: Seek breadth in your systems, go deep in understanding your customer and deploy new capabilities with purpose. Nudd’s model, for example, uses AI to engage users at times of high risk for addictive behavior. It’s a tool to help humans live better lives in an age of AI.

Top news

Trump demands Intel CEO’s resignation

In a Thursday post on Truth Social, President Donald Trump described Intel CEO Lip-Bu Tan as “highly conflicted” and demanded that he resign. Earlier in the week, Sen. Tom Cotton asked that Tan be removed for his alleged personal investments in Chinese companies.

Lip-Bu Tan denounces “misinformation”

“There has been a lot of misinformation circulating about my past roles . . . I want to be absolutely clear: Over 40+ years in the industry, I’ve built relationships around the world and across our diverse ecosystem — and I have always operated within the highest legal and ethical standards,” Tan said.

Context: Intel’s board and CEO disagree on strategy

Board chairman Frank Yeary believes the company should exit the chip manufacturing business entirely; Tan believes it is central to the business and doesn’t want Intel to become dependent on foreign suppliers, the WSJ reports.

Bitcoin jumps on new 401(k) rules

President Trump is set to sign an executive order allowing holders of 401(k) retirement savings plans to invest in crypto. Bitcoin rose on the news. The FT reports that 154 public companies have bought or plan to buy crypto for their balance sheets, committing a total of $98.4 billion. In the previous year, companies had only committed $33.6 billion to crypto. Companies are tempted to acquire Bitcoin because stock investors like having exposure to crypto without actually buying it directly, and the added demand from companies has boosted the price of Bitcoin.

President Trump appointed Stephen Miran to the Fed

Miran will serve temporarily on the Federal Reserve’s Board of Governors, filling a vacancy until January, when a permanent appointment can be made. Miran was the head of the White House Council of Economic Advisers. He is best known as the author of the so-called “Mar-a-Lago Accord” document, titled “A User’s Guide to Restructuring the Global Trading System,” which argued in favor of raising tariffs on imports to rebalance global trade. He is also an inflation hawk. 

Switzerland reels from 39% tariff blow

Swiss businesses are struggling to figure out how they will survive now that their U.S. export market is subject to a 39% tariff, one of the highest on Trump’s list. Switzerland’s main exports are pharmaceuticals, watches, industrial machinery, chocolate and cheese. “The worst-case scenario has become a reality,” said the Swiss lobby group for engineering and tech industries. “If this exorbitant customs burden is maintained, the Swiss tech industry’s export business to the U.S.A. will be effectively annihilated.” To add insult to injury, the CPB added another category of goods into the 39% bracket: gold bars—another Swiss export staple. Context: The Swiss don’t understand why Trump regards the country with such hostility.

Apple gifts Trump “Made in USA” plaque

Apple CEO Tim Cook presented President Trump with a 24-karat gold “Made in USA” plaque during a meeting to celebrate the tech company’s plan to invest a further $100 billion in U.S. manufacturing. That increases Apple’s commitment to domestic production to $600 billion.

Other news: The Israeli cabinet approved a plan to fully occupy Gaza City … Armenia and Azerbaijan have agreed to a U.S.-brokered peace deal … The U.S. DOJ announced a $50 million reward for the capture of Venezuelan dictator Nicolás Maduro, whom the administration believes supports various organized crime operations, drug dealers, gangs and gun-runners.

The markets

S&P 500 futures were up 0.26% this morning, premarket, after the index closed flat yesterday. STOXX Europe 600 was up 0.15% in early trading. The U.K.’s FTSE 100 was down 0.11% in early trading. Japan’s Nikkei 225 was up 1.85%. China’s CSI 300 was down 0.24%. The South Korea KOSPI was down 0.55%. India’s Nifty 50 was down 0.77%. Bitcoin rose to $116.5K.

Around the watercooler

AI-driven layoffs are shrinking the job market for recent grads by Beatrice Nolan

Here’s everything in GPT-5 that’s new and different than OpenAI’s previous AI models, by Alexandra Sternlicht

Can Allbirds get its groove back? Once the go-to shoe of tech elites, the eco-friendly brand is going back to its roots, by Phil Wahba

Toyota sounds its loudest warning bell yet about tariffs with an expected $9.5 billion profit hit, by Chris Morris

Stunning new data reveals 140% layoff spike in July, with almost half connected to AI and ‘technological updates’ by Nick Lichtenberg

CEO Daily is compiled and edited by Joey Abrams and Jim Edwards.