☕️ xAI's Trade Secrets, China's Call & The Cracks Between Meta and Scale AI

Trouble at xAI means another lawsuit, while China calls for collaboration between allies, and insiders give an unpleasant update on Meta and Scale AI.

Here are our main key takeaways in more detail:

Join us at AI Tangle as we untangle this week's happenings in AI!

xAI sues a former engineer after allegedly stealing and forwarding AI trade secrets to OpenAI

Xuechen Li, a former engineer at xAI, has been sued by the AI company under allegations of forwarding trade secrets tied to its Grok chatbot to OpenAI before joining it and selling $7m in xAI stock earlier in August. Filed in the California federal court, the complaint alleges that Li admitted to taking files and trying to cover his tracks, with xAI later discovering additional stolen material. xAI claims the data could help OpenAI unfairly improve its ChatGPT with "more innovative AI and imaginative features," and is now seeking damages on top of a restraining order.

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Xi Jinping calls for closer cooperation on AI at the latest SCO summit in Shanghai

At the latest Shanghai Cooperation Organization's (SCO) summit, Chinese President Xi Jinping called for stronger cooperation on AI, rejecting what he called a "Cold War mentality." He cast China as a global peacemaker amid geopolitical tensions, joined by the likes of Russia's Vladimir Putin and India's Narendra Modi. To achieve this, Xi underscored $84 billion of Chinese investment in SCO states and pledged support for 10,000 students through Beijing's "Luban" education program. At the summit, SCO leaders signed a "Tianjin Declaration" and long-term development plan, with Xi also proposing a new "Global Governance Initiative."

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Meta's and Scale AI's relationship begins to show signs of cracks

Just months after Meta's roughly $13.4 billion investment in AI data labeling startup Scale AI, insiders report that the pair's relationship has begun to sour. Among the many executives that joined Alexandr Wang at Meta's Superintelligence Labs (MSL), former Scale AI vice president Ruben Mayer departed after just two months at Meta, while sources claim that researchers within Meta's TBD Labs prefer Scale AI's competitors, Surge and Mercor, for their data quality. Although Scale AI has made attempts to remedy this with its Outlier program, its main competitors have better foundations.

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Salesforce CEO Marc Benioff claims it has laid off thousands in customer support due to AI agents

During a recent episode of the "Logan Bartlett" show, Salesforce CEO Marc Benioff revealed that the company had reduced its customer support headcount from 9,000 to a staggering 5,000. Benioff attributes the change to AI agents, which have helped the company pursue millions of leads that it otherwise wouldn't have been able to call back due to a lack of employees, such as in Salesforce's last 26 years. Even more so, Benioff believes that half of Salesforce's customer support conversations could be with AI agents as early as next year.

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U.S. and Indian VCs form a $1 billion coalition to finance India's deep tech startups

A total of eight U.S. and Indian VC and PE firms, including Accel, Blume Ventures, and Premji Invest, have banded together to launch the India Deep Tech Investment Alliance (IDTIA), pledging over $1 billion over the next decade. The coalition looks to fund domestic startups in areas like AI, semiconductors, space, and biotech, leveraging the government's new ₹1 trillion RDI scheme. Although an unusual move between VCs, members see long-term cooperation, mentorship, and policy engagement as critical to strengthening U.S.-India tech ties despite recent trade tensions between the two.

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The Collapse of Builder.AI & What it Means (10-min read)

At a time when AI is at its present-day peak, how did a $1.5 billion AI company lose it all in months? The New York Times dives into the story behind Builder.AI, what the industry could learn from it, and what it means for AI in Silicon Valley.

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