How Big Is the AI Economy?

The AI Daily Brief: Artificial Intelligence News and Analysis - Nathaniel Whittemore

The AI economy is valued at $175 billion annually and growing three times faster than past tech shifts. Despite rising compute costs, efficiency gains are driving broader adoption and shifting value toward apps and model

Key takeaways

• AI revenue grew 10X in one year, now at 0.42% of US GDP.

Transcript preview

Today on the AI Daily Brief, just how big is the AI economy? Before that in the headlines, are we about to have to KYC to use the newest AI models? The AI Daily Brief is a daily podcast and video about the most important news and discussions in AI. To get an ad-free version of the show, go to Patreon.com, such AI Daily Brief. Or you can subscribe an Apple podcast. And if you want to learn more about sponsoring the show, send us a note at sponsors at aidely Brief. AI. By the way, if you haven't checked out the new improved AI Daily Brief. You should check it out. Each episode is not only summarized but chunked into the key numbers and a set of between 15 and 20 shareable chunks that are the key points, key quotes from the show organized by topic. If you've been looking the show, go check it out at aidely brief. AI. As per usual, we are starting with our mythos slash fable watch, where we are getting more signs of a fable relaunch, but with some strict new controls. A.I. leaker M1 Astra posted some new code strings added to the Clod app, giving some hints on how the fable relaunch might be handled. Firstly, it seems that fable usage will be credit-based rather than part of subscriptions. It's unclear whether Anthropic will still honor the trial period, but the period, but the, but the code strings, but the code strings. build separately ultimately. In addition, it appears model access will require users to submit identification documents to Anthropic. One code string states your credits will be added once your identity is verified. And folks are not so happy about this. Heater wrote, no sensible person is going to give their identity verification to Anthropic just to use a heavily guardrailed model. While I understand where Hater is coming from, having spent a lot of years closely watching people's relationship with privacy when it comes to technology, I am quite sure that basically everyone is going to verification to Anthropic even if the model is heavily guardrailed. Indeed some believe that this was inevitable as soon as the government intervened. Max Weinberg commented, I called this within 40 minutes of fable and mythos getting banned. Seems like the only path forward similar to getting a gun license. Given how the government seems to view these models I think that's a fair comparison. By the way that is a comparison that Dario Amade made himself when he said about Mythos, companies we gave to it said this is a super weapon you should have to own a gun license to use to use it. just a plus communications all around. Now of course at this stage this is just rumors based on code snippets so we don't have anything official. Especially as we get closer to what people anticipate might be the return of fable people are going to be looking for any information in the tea leaves. Now as we discussed yesterday even when we get fable back the impact of this whole saga is going to be widespread not least of which in Washington DC. In DC senator Mark Warner is preparing to unveil a sweeping new regulation apparatus for AI agents. What is in this bill? Well, first of all, the bill protects access for third-party agents. For example, it ensures users can send their own open claw to shop on Amazon rather than being locked into the built-in agent. Amazon and other platforms have started experimenting with various methods of blocking or restricting third-party agents, although these largely deal with data scraping rather than agentic shopping. The bill also enshrines a concept of a duty of loyalty that ensures agents are acting on behalf of their users rather than the companies that create them. A legislative aid use the example the example to book with Hilton due to an undisclosed partnership with the hotel chain. This kind of behavior would be barred under the regulations. Senator Warner said in a statement, as Agenic AI transforms how Americans interact with technology, consumers deserve a real choice in the marketplace, and AI agents must be accountable to the people they serve. This discussion draft is a major step towards building a clear federal framework that promotes innovation, protects consumers, and ensures the United States continues to lead the world in emerging technology. Now it's worth noting that the bill is exclusively concerned with consumer facing meaning it won't deal with internal workflow agents for enterprises. And at the moment the bill is just a discussion draft and is relatively brief at 25 pages. It largely instructs government agencies to develop regulations according to certain principles. And there's also an understanding that the bill isn't likely to move forward this year. A staffer acknowledged that the bill likely needs a Republican co-sponsor and a companion bill in the House before it can be put through committee. But Senator Warner is one of the most powerful Democrats in Washington, and the fact that we are now at the stage where we're getting the nitty gritty of the nitty gritty of agent you an indication of where things are headed. Now it's too early to get too deep into the substance of this bill, but I'm basically of two minds when it comes to this. On the one hand, it's going to be very important to keep an eye on how much liability these sort of regulations impose on agent providers, as many times we've seen well-meaning proposed regulations effectively amount to a backdoor ban. At the same time, these sort of agent neutrality principles that Warnerner is articulating are probably going to be welcome to lots of folks, and so it's worth not dismissinging out staying in the government's relationship with AI, but moving to a very different part of that, California has cut a deal for half-price clawed. Governor Gavin Newsom announced a new agreement with Anthropic to expand the deployment of Claude across the state government. All State departments and local governments will now have access to Claude in the first statewide rollout of an AI tool. Anthropic has also agreed to provide free workforce training and technical support, all at 50% off. California's CIOO and Department of Technology Director, Chris Givin said, a lot of departments are going to switch their usage to this contract this contract, and that's that folks are going to be using a tool more, we want to make sure that we, as the state, have negotiated the best possible price. Also, despite Anthropic's ongoing schism with the federal government, Newsom's office said the new contract was not intended as a response to Washington. Newsom was also cautious of negative AI sentiment, especially in government services, commenting, AI should not replace the human work of government. It should help our workers move faster, solve problems more effectively, and deliver better results for Californians. Next up, another deal with Californians. Next up, and this, and this, and this, and this, and this, and this, and this, and this, and this, and this, and this, and this, and this, and this, and this, and this, and this time, and this time, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and The Nation reports that Entropic has renegotiated the sweetheart deal that Amazon locked in as part of their $13 billion investment. Until now, Amazon's Clod bill was based on raw computing hours, effectively a wholesale rate. In a new pricing agreement set to begin next year, Amazon will have to pay token-based, similar to every other large anthropic customer. The pricing adjustment doesn't just apply to internal use of Claude, but also to Amazon products powered by Entropic's model, such as Alexa for shopping. Sources. Sources said that Amazon even their own in-house NOVA models. Amazon's recent $50