Good morning. We’re officially in the era of “the AI ate my homework,” at least if you’re in the business of making the AI.
Months after Meta said its latest Llama model wasn’t ready and OpenAI punted on its now-launched GPT-5, Chinese rival DeepSeek finds itself in a similar spot: excusing itself for delays in the launch of its highly anticipated R2 model.
The official reason relates to the model’s compatibility with domestic Huawei Ascend chips (versus Nvidia’s preferred-but-hard-to-get-in-a-trade-war goods). Still, I can’t help but think that all of the AI companies are in the same hot seat: racing to meet public expectations that are always a few steps ahead.
Today’s tech news below. —Andrew Nusca
Want to send thoughts or suggestions to Fortune Tech? Drop a line here.
U.S. secretly tracked AI shipments to see if they ended up in China
U.S. authorities secretly placed tracking devices in some shipments of advanced computer chips that they believed could illegally end up in China, according to a new report.
According to Reuters, the tactics are an attempt to build cases against the smugglers working to profit from violating U.S. export controls and “apply only to select shipments under investigation.”
U.S. law enforcement has been using location trackers in this way for decades, though their use in semiconductor shipments is relatively new. (It comes with the territory: The U.S. has restricted AI chip exports since 2022.)
Some of the trackers are the size of a smartphone, per Reuters; others are much smaller. Sometimes they’re used together.
The shipments in question reportedly involve servers from Dell and Super Micro, which contain chips made by Nvidia and AMD. Reuters sources told the news agency that the trackers were “typically hidden in the packaging” of shipments, though it remains unclear who’s installing them, where, and when.
What we do know: Based on previous activity, the U.S. Departments of Commerce and Homeland Security, plus the FBI, are likely to be involved.
The tech companies, though? Not so much. There’s as much chance that the trackers have been installed without their knowledge as the opposite. —AN
New York sues Zelle over consumer fraud losses
The State of New York’s attorney general sued Zelle on Wednesday, alleging that the payment platform “enabled widespread fraud” by not properly fortifying its systems against bad actors.
AG Letitia James said Zelle—which is owned by Arizona fintech company Early Warning Services, which in turn is co-owned by Bank of America, Capital One, JPMorgan Chase, PNC Bank, Truist, U.S. Bank, and Wells Fargo—knew for years that its platform was vulnerable.
Instead of addressing its security issues, Zelle allegedly took no action, ignoring customer complaints and refusing to address fraud after it occurred.
Zelle has become “a hub for fraudulent activity,” James’s office said in a press release, adding that common scams include unauthorized transfers and scams based on false pretenses, such as the sale of nonexistent goods.
The suit seeks to force Zelle to implement additional anti-fraud protections as well as pay restitution and damages to New York citizens who have been defrauded.
Zelle competes with PayPal (and Venmo, which it owns), Block’s Cash App, Apple Pay, and Google Pay in the P2P payments category. Because of its massive built-in bank audience, Zelle is considered the category leader in the U.S.
In a statement provided to the press, Zelle described the AG’s claims as “overreach” and “meritless,” adding that holding it liable for criminals tricking people could lead to higher consumer costs. —AN
There are already 498 AI unicorns (and they’re worth $2.7 trillion)
No longer do business leaders need to spend decades building the next big thing to join the ranks of Bill Gates, Mark Zuckerberg, and Jeff Bezos at the top of the billionaires club; they just need to build an AI company.
There are now some 498 AI unicorns, or private AI companies, valued at $1 billion or more, with a combined value of $2.7 trillion, according to CB Insights.
A complete 100 of them were founded since 2023. There are more than 1,300 AI startups with valuations of over $100 million.
We’ve not seen a tech boom like this since the late 90s and early 2000s, which propelled many of the tech giants of today, from eBay to Google, into the mainstream.
With a boom in company valuation also comes hefty paydays for its founders, investors, and C-suite. In March, Bloomberg reported that four of the largest private AI companies, including OpenAI, Anthropic, Safe Superintelligence, and Anysphere, have created at least 15 billionaires with a combined net worth of $38 billion.
More than a dozen unicorns have been crowned since then.
According to data from Crunchbase, global venture funding in 2024 edged above 2023’s totals, with AI showing the biggest leap in amounts year-to-year.
As investments into AI continue to boom, so do the net worths of billionaires working at them. For example, Nvidia’s CFO Colette Kress and EVP Jay Puri have become billionaires, joining its CEO Jensen Huang after its market cap surpassed $4 trillion. —Jessica Coacci
More tech
—Kodak could cease operations. Substantial debt, substantial doubt.
—Perplexity fundraising at a $20 billion valuation. Any readers have a few extra billion lying around? We could do the funniest (unsolicited) thing ever…
—U.S. Navy, Air Force mull HR software do-over. More than a decade’s work may be reset as the White House considers giving Salesforce and Palantir work.
—Russia restricts WhatsApp, Telegram. Kremlin allegations that the communication platforms are used to support extortion and terrorism.
—Bullish closes at $68. Shares of the CoinDesk parent company finished their New York Stock Exchange debut up 84%, valuing the firm at $10 billion.
—Apple’s AI turnaround will reportedly include a slate of new smart home devices, from security cameras to smarter speakers.
—Pony AI has more than 200 robotaxis on the road, on track to meet its 1,000-vehicle goal by the end of the year.
Endstop triggered
