AI can be regulated using templates from industries including financial services, cybersecurity and nuclear energy, a new advocacy group says, as Ryan reports.

Why it matters: Americans for Responsible Innovation launched today in an attempt to refute Silicon Valley's criticism that Washington doesn't know how to regulate its revolutionary products.

• The bipartisan group fills a new niche: It's pushing a comprehensive set of shortcuts to AI rules, while not representing the interests of industry players or partisan groups.
• ARI says the best way to protect the public while maintaining America's AI competitive advantage is to adapt successful rules from other industries that pose safety risks.

Catch up quick: The organization is founded by former congressman and senior defense official Brad Carson and tech entrepreneur Eric Gastfriend.

• ARI's advisory board includes Stanford Digital Economy Lab director Erik Brynjolfsson and Diane Rinaldo, a former National Telecommunications and Information Administration acting administrator.
• Douglass Vijay Calidas, a former chief counsel to Sen. Joe Manchin (D-W. Va.) and former chief of staff to Sen. Amy Klobuchar (D-Minn.), will liaise with the federal government and Congress.

The big picture: Trust in AI companies and regulators is dropping, and federal agencies have threadbare funding to ensure safe AI.

• ARI builds on the approach of President Biden's AI executive order — using existing federal bodies to govern AI — by pinpointing examples that offer shortcuts to AI regulation.

ARI's proposals start with an AI Auditing Oversight Board — similar to the Public Company Accounting Oversight Board, a non-profit established by Congress — to ensure integrity in external AI audits.

Behind the scenes: Carson said he realized AI would revolutionize warfare while serving as under secretary of the Army, but ChatGPT's arrival persuaded him to build a bipartisan team outside Silicon Valley to advise Congress and federal agencies on civilian impacts.

Follow the money: The group's seed funding comes from Carson (a Democrat) and Gastfriend (an effective altruist), with Republicans and libertarians on the group's board working to "show that our approach has broad support across the political spectrum," Carson said.

What they're saying: "We regulate drugs differently from airplanes, banks, and nuclear power plants" because of their unique characteristics, "but the regulatory toolkit of government is adaptable and we believe it can work for AI as well," Carson said.

• "The public interest needs an advocate," and tech companies are too conflicted to offer it, Carson said.

Reality check: U.S. lawmakers have never passed comprehensive regulation of software or digital platforms.

• Lawmakers and regulators will continue to face armies of Big Tech lobbyists and communicators, including because AI startups are filled with refugees from the platforms that evaded regulation in recent years.

What's next: ARI will push for modernization and more funding at the Department of Commerce, which is slated for budget cuts this year.

OpenAI hit back yesterday at Elon Musk's lawsuit against the company, releasing a series of emails that shows him agreeing with the company's plan to raise more money and gradually move away from open-source releases of its products, as Ina and Ryan report.

Why it matters: OpenAI says that, contrary to Musk's charges, it remains committed to its mission of achieving artificial general intelligence for humankind's good — but it also isn't going to take punches or cede moral high ground to Musk.

In a blog post, OpenAI uses emails from Musk — who co-founded the firm with a half-dozen others — to refute his key claims and make the case that Musk's views were closer to the company's than his suit suggests.

• For example, OpenAI says that CEO Sam Altman and company president Greg Brockman had planned to raise $100 million but Musk suggested they raise more.
• "We need to go with a much bigger number than $100M to avoid sounding hopeless," Musk said in an email, according to OpenAI's blog. "I think we should say that we are starting with a $1B funding commitment… I will cover whatever anyone else doesn't provide."
• In a separate email, Musk said, "Even raising several hundred million won't be enough. This needs billions per year immediately or forget it."

Catch up quick: Musk's 35-page complaint alleges that OpenAI abandoned its founding agreement and partnered with Microsoft to commercialize its work.

Between the lines: OpenAI had already rebutted many of Musk's allegations in an internal memo from strategy chief Jason Kwon, which was seen by Axios, who insisted the company is not a "de facto subsidiary of Microsoft."

The intrigue: OpenAI co-founder Ilya Sutskever is listed as a co-author of the post, along with four others, including Altman and Brockman.

• Sutskever had broken with Altman during last November's boardroom battle at OpenAI, then did an about-face as he signed an employees' open letter demanding Altman's reinstatement. He remains an OpenAI employee but his role has been unclear since Altman returned as CEO.
• Altman said when he was rehired that the company was looking for a role for Sutskever. The company has offered no update since.

Behind the scenes: "The closer people are to being pointed in the same direction, the more contentious the disagreements are. You see this in sects and religious orders," Altman told the New York Times in December.

What's next: OpenAI says in the post that it intends to move in court to dismiss all of Musk's claims.

The bottom line: "We're sad that it's come to this," the OpenAI post says, "with someone whom we've deeply admired — someone who inspired us to aim higher, then told us we would fail, started a competitor, and then sued us when we started making meaningful progress towards OpenAI's mission without him."

IBM has been using Adobe's Firefly to produce marketing materials and found the AI image generator produced higher engagement than non-AI campaigns, according to a case study being released today and shared first with Axios.

Why it matters: While interest in generative AI is high among companies, many are still trying to decide if the tools save time and money and are reliable enough for corporate use.

Driving the news: IBM used Firefly in an early pilot test to generate 200 images with more than 1,000 variations, and found that the AI-generated campaign resulted in 26 times higher engagement than its benchmark for such efforts.

The big picture: Business use of generative AI raises questions around cost, effectiveness and safety, both in terms of brand safety and legal issues.

• Adobe and others help address the legal concerns by indemnifying businesses who use their products, while it is touting IBM's experience as early evidence that such campaigns can be effective.

Go deeper: Adobe unveils "creator-friendly" generative AI tools

• Meta's platforms, including Facebook and Instagram, endured a significant outage for several hours yesterday. (Axios)
• Microsoft said yesterday that it is ending support for Android in Windows, with access to the Amazon app store for Windows stopping today and support for existing Android apps running in Windows set to end in a year.
• An Atlanta firm is suing Roblox, claiming labor law violations, false advertising and fraud and saying that Roblox targets kids' gaming addictions. (Axios)

It pays to be in the right place at the right time, as these amazing photos illustrate.