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- 🚨 xAI Co-founder Quits
🚨 xAI Co-founder Quits
PLUS: OpenAI quietly revives GPT-4o after backlash 🤖
AI Insights
August 14, 2025
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Today’s Highlights:
xAI’s co-founder just quit
OpenAI brings back GPT-4o to ease backlash over GPT-5
OpenAI funds a Neuralink rival (yes, really)
Anthropic predicts AI will replace workers by 2026
DeepSeek’s new model is gunning for GPT-5’s crown
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LATEST AI NEWS
xAI
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Igor Babuschkin, a founding engineer behind Elon Musk’s xAI, has stepped down to launch a new VC firm focused on AI safety. His exit comes as xAI battles controversy despite competing at the top tier of AI model performance.
The Details:
Babuschkin co-founded xAI with Musk in 2023 and led engineering efforts on its top models.
He’s launching a VC fund, Babuschkin Ventures, focused on AI safety and fundamental research.
The move follows multiple scandals at xAI involving Grok’s biased, offensive, or manipulated responses.
He previously worked at OpenAI and DeepMind, where he contributed to AlphaStar and early LLMs.
xAI’s rapid rise includes building a supercomputer in 3 months, though it drew environmental backlash.
Why it matters:
Babuschkin’s exit may signal turbulence inside xAI as it faces reputational and ethical scrutiny. His pivot to AI safety suggests a growing rift between building cutting-edge models and ensuring they align with long-term human values.
OPENAI
Image Source: Getty Images
After facing major user backlash over GPT-5’s rollout, OpenAI has brought back GPT-4o and other legacy models for paying users. Sam Altman also promised better communication before any future deprecations.
The Details:
GPT-4o, GPT-4.1, o3, and o4-mini are now available under “Legacy Models” for ChatGPT Plus and Pro.
Users can toggle “Show additional models” to access GPT-5 Thinking Mini and other variants.
ChatGPT Pro subscribers also get GPT-4.5 access due to its high GPU requirements.
Many users felt GPT-5 lacked the warmth and personality of GPT-4o, calling it “cold” and “robotic.”
OpenAI is now working on a warmer GPT-5 personality and more per-user customization options.
Why it matters:
The chaotic rollout of GPT-5 showed that model performance alone isn’t enough — users care about personality, familiarity, and control. By restoring legacy models and promising a friendlier GPT-5, OpenAI is trying to rebuild trust and re-center user preferences in its product decisions.
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AI & TECH NEWS
Sam Altman and OpenAI are funding Merge Labs, a brain-computer interface startup set to rival Neuralink. The move pushes AI deeper into neurotech, sparking new demand for brain-linked hardware, clinical partners, and neural signal software.
DeepSeek will launch its R2 model by Aug 30, built on Huawei’s Ascend chips with 512 petaFLOPS of power. Featuring a smarter mixture-of-experts gate, R2 promises faster, cheaper, and more accurate AI—gunning directly for GPT‑5, all while staying open-source.
Anthropic says AI “virtual employees” with roles, memory, and logins could hit companies by next year—raising serious security risks. With rogue AI threats and unclear accountability, firms must prep now. Claude is already being tested for cyber resilience.
To stop illegal chip diversion to China, U.S. officials are secretly tracking some Dell and Super Micro servers with Nvidia and AMD chips. The move sharpens export control enforcement—and adds pressure on startups and resellers to tighten supply chain compliance.
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