Axios

OpenAI on Friday detailed o3, the next in its foundation models that focus on the ability to do multi-step reasoning.

Why it matters: OpenAI and others are trying to keep the pace of progress while grappling with the fact that they have already ingested nearly all the readily available content from the Internet.

Elon Musk seemingly endorsed the far-right, anti-immigration Alternative for Germany (AfD) party on Friday.

The big picture: The X owner has used his social media platform to promote his own ideologies. Since gaining more influence in the incoming Trump administration, the billionaire CEO appears to be exercising that power over politics in the U.S. and abroad.

There's plenty to say about the failures that let hackers inside companies this year.

• But senior officials and industry executives say there's also a lot to be proud of in 2024.

I spent the last week asking them what those successes — and failures (see below) — actually are. Here's what they said:

Todd McKinnon, CEO of Okta: "There was more collaboration across the industry. Security is a team sport, and we're all focused on the same threats. We have to work together to win — we can't rest on our laurels."

Hari Ravichandran, founder and CEO of Aura: "There has been a lot of enthusiasm around consumer education and security awareness, so I think consumers are getting a lot smarter about what to look for to identify threats."

The cybersecurity industry has a lot of room to grow in the new year — as evidenced by the long list of attacks that started with simple mistakes.

Why it matters: Companies keep repeating the same mistakes that allow malicious actors to break into their systems.

• Finding new solutions will be a huge focus of 2025 and beyond, experts say.

Along with the wins, I also asked experts to share the biggest failures of 2024. This is what they said:

Mike Wiacek, founder and CEO of Stairwell: "2024 showed that even the best-in-market tools remain vulnerable to increasingly evasive attackers, as seen in incidents like the UnitedHealth Change Healthcare ransomware attack."

@ D.C.

🚨 The Commerce Department is weighing a ban on routers from China-based manufacturer TP-Link, which account for 65% of the U.S. router market, amid growing hacking concerns. (Wall Street Journal)

🏛️ Congress approved $3 billion in new funding for the Federal Communications Commission's effort to rip and replace Chinese equipment from telecom networks. (Washington Post)

👋 Rob Silvers, undersecretary for policy at the Department of Homeland Security, left his post this week after giving notice before Thanksgiving. (The Record)

@ Industry

💰 Bureau, a fast-growing cybersecurity startup focused on user-identity fraud prevention, raised a $30 million round led by Sorenson Capital. (Reuters)

🗓️ Codebook is back in your inbox Jan. 3 — and I'd love to feature your predictions for 2025.

• 📩 Hit reply on this email with your quick, snappy thoughts!

Sunairio, an AI-driven weather and climate modeling software firm aimed at boosting energy grid reliability, raised $6.4 million in a new funding round, Axios has learned.

Why it matters: The investment demonstrates the demand for software that uses AI to provide specific and actionable information for the energy industry.

When things are going fine, blow everything up and risk it all. That principle has made Elon Musk the richest human alive — and he's now applying it to the government of the United States.

Why it matters: High risk can mean high return — or it can mean ruin.

This week's epic fight over funding the government captures the power — and flaws — of the new information ecosystem.

Why it matters: Elon Musk and his followers on X proved they dominate the Republican media industrial complex — using a digital revolt to kill a spending bill, and open the door to a government shutdown. That revolt was powered by some false information, tweeted with total self-certainty.

If Elon Musk can effectively veto a congressional budget deal, imagine how much influence he might wield over more arcane policy issues affecting his pantheon of business interests.

Why it matters: The incoming Trump administration and Congress could soon take action on a litany of regulatory matters and spending affecting the self-proclaimed First Buddy's business empire, including self-driving cars, space and AI.

SAN FRANCISCO – Implementation of new AI tools needs better usage of AI training on the front end — something small to medium-sized businesses in particular need to adopt, several attendees at Axios' Expert Voices roundtable said Dec. 17.

Why it matters: Businesses need upfront training to responsibly implement AI in a secure manner.

• "Are these businesses prepared for the additional risk that they're taking on?" asked California chief technology officer Jonathan Porat.
• "I'm not sure if small businesses … are really investing in security or preparing for emergency or disaster," Porat added.

Plus, a lack of training and information is a "big barrier to entry" to taking advantage of AI tools for all businesses, Slack Senior vice president of research and analytics and head of workforce lab Christina Janzer said.

• Without training and knowledge, "people just don't feel like they have the proper competence to be able to get started," Janzer said.
• Janzer added that people need to have time to experiment with AI in their workflow to make an informed decision, and build confidence in the technology.

Adoption of AI will depend on individual businesses having access to tools that can help determine if AI's use will "pass the gut check," said HopSkipDrive chief product and technology officer Corey McMahon.

• "You can't just trust that they're going to trust the system or the tools. You have to give them the capability to actually evaluate it," McMahon said.

Yes, but: There's "significant innovation" within SMBs that helps bring "parity" with some larger companies in California, Porat said.

• Porat says implementing AI takes a ton of upfront investment.
• "It doesn't really make sense for some of these multibillion dollar companies to invest in very specialized solutions. So that really opens up a lot of opportunity for smaller businesses to really focus on a specific policy area or area of interest that it wouldn't make sense to invest all that data into," Porat said.

The details: Intuit sponsored the event, where tech, government and business leaders gathered for a private roundtable at Axios' AI+ SF Summit to discuss how SMBs are navigating the opportunities and challenges of applying AI.

Donald Trump wasn't physically present at the Amazon workers' strike Thursday, but he's part of the reason the union can flex its muscles with a work stoppage mere days before Christmas.

Why it matters: Since its founding as an indy worker group, the Amazon union joined the Teamsters — one of the biggest in the country — whose president Sean O'Brien just spent the past few months cultivating a relationship with the president-elect.

SAN FRANCISCO – AI's big advancements and challenges, the wave of AI agents, and Databricks' latest round of funding ​​were top of mind for leading tech leaders at Axios' AI+ SF Summit on Dec. 17.

Why it matters: The rapid pace of innovation is coming to a head with pressures to enact policy guardrails amid booming investment deals, which is shaping the future of AI developments.

Driving the news: Databrick CEO Ali Ghodsi said they "got a bargain" during this latest round raising $10 billion.

• Ghodsi also said AI is in its "peak" investment bubble. "When you get billion dollar valuations on companies that have nothing, that's a bubble," Ghodsi said, referring to other companies.

Separately, Anthropic chief product officer Mike Krieger discussed how AI agents are at least a year away from being autonomous.

• He said one of the biggest problems with current AI chatbots is how tough it is for users to learn to write prompts.
• "The future is here, it's just that not everybody knows how to use it yet.... is chatting with a model even the right UI? Can we do something better?"

AI chatbots make mistakes too and Sierra co-founders Clay Bavor and Bret Taylor are looking at ways to solve that with more chatbots.

• "The solution to many problems with AI is more AI," Bavor said.
• For instance, there could be "supervisor" bots trained on company policies that could review and potentially intervene if the frontline AI agents strayed from policy.

Of note: This event was sponsored by Meta, Siegel Family Endowment, Kapor Foundation, Intuit, Lightspeed Venture Partners and Workato.

Content from the sponsored View from the Top conversations is below:

Meta vice president of product management Sue Young highlighted the "incredible" growth of their AI assistant with 600 million users every month.

• "A lot of that has been really just giving utility and access to where people are spending time," such as Instagram, Messenger, WhatsApp, Facebook, Young said.

Kapor Foundation CEO Allison Scott and Siegel Family Endowment executive director and president Katy Knight emphasized the need for investments and policies to support "a more equitable future" with responsible AI.

• "Those diverse viewpoints allow us the opportunity to actually think really differently about how we design, deploy, and govern new technologies," Knight said.

Intuit executive vice president, general counsel and corporate secretary Kerry McLean discussed how AI can enable small businesses.

• "AI can truly help level the playing field for these small businesses with larger businesses who have access to financial expertise, marketing expertise, all those things," McLean said.

Workato chief of AI products and solutions Bhaskar Roy said AI agents are going to become increasingly more prevalent.

• "Remember the time when we used to say 'there's an app for that'? I think we are in an era where everyone is saying 'there's an agent for that.' If not, it'll happen soon," Roy said.

Wednesday's extraordinary display of Elon Musk's social media power saw the world's richest man funnel the anger of his hundreds of millions of online followers against a bipartisan compromise funding bill.

Why it matters: Musk's arresting demonstration of government-by-tweet left Washington reeling — but the magic trick will get harder to repeat.

The past two days on Capitol Hill raise the prospect of a more unpredictable period for U.S. fiscal policy than seemed likely a few days ago.

Why it matters: Economists' hope has been that unified Republican control of the White House would create similar tax and spending outcomes as when they controlled those branches in 2017 — tax cuts paired with steady-as-she-goes spending.

The Federal Aviation Administration issued a temporary ban Wednesday on drone flights over parts of New Jersey.

The big picture: Reports of suspicious drones flying over states, including New Jersey, New York and Virginia, have raised public concern, though authorities have said there's no evidence of a specific threat.

Driving the news: The FAA said it issued 22 temporary flight restrictions at the request of federal security partners, prohibiting drone flights over critical New Jersey infrastructure.

• The restrictions are in place until at least Jan. 17 in the central and northern part of the state.
• Temporary flight restrictions are limits on aircraft operations due to temporary hazardous conditions, a security-related event or "other special situations, like VIP movement."

Between the lines: Violating the restrictions can carry jail time and fines. Given the intense public pressure, that gives law enforcement one more tool to prosecute potential violators.

More from Axios:

• Schumer requests "special drone-detection tech" for N.Y. and N.J.
• Drone debate rolls on following arrests
• What to know about New Jersey drone sightings

Sen. Rand Paul (R-Ky.) is floating Elon Musk to be Speaker of the House after the powerful, billionaire tech businessman helped torpedo a bipartisan agreement on a short-term spending bill.

Why it matters: He's the first GOP lawmaker to explicitly suggest Musk should be Speaker, and his comments come as Speaker Mike Johnson's (R-La.) bid to keep his job is under serious threat.

Democratic members of Congress are incensed at the outsized power billionaire-turned-Trump lieutenant Elon Musk appears to be exercising over the policymaking process.

Why it matters: Musk's fervent public opposition helped scuttle a federal funding deal Democrats were prepared to support en masse — putting the government on the brink of a holiday shutdown.

The International Brotherhood of Teamsters launched a strike against Amazon Thursday morning, saying workers at seven facilities would take to the picket line.

The big picture: The strike, which the union is calling the largest against Amazon in U.S. history, coincides with the final week of holiday shopping — one of the company's busiest times of year.

Elon Musk is arguably the most powerful person in business, the most powerful man in media and, at least at this moment, the most powerful man in politics.

Why it matters: This much power, across this many pillars of society, is without precedent. Musk yesterday single-handedly, his voice amplified by his daylong bombardment of scores of tweets on his X platform, sank a 1,547-page, bipartisan House spending bill aimed at preventing a government shutdown at 12:01 a.m. Saturday.

OpenAI's planned restructuring will likely require the company's board to put a price tag on its groundbreaking technology.

Why it matters: OpenAI wants to spin out its for-profit subsidiary as an independent company and give it control over OpenAI's innovations — but in order to do that, the nonprofit that now controls the company will want, and is legally required, to be fairly compensated.