OpenAI, Microsoft reach ‘boiling point’

Good morning, AI enthusiasts. The AI world’s biggest partnership feels able to explode — with a brand new report saying OpenAI is potentially able to drop the “nuclear option” of antitrust complaints against Microsoft.

With tensions between the 2 sides reportedly reaching a “boiling point,” it looks like the alliance that defined the AI boom might end with lawyers as an alternative of AGI.

Reminder: Our next live workshop is today at 4 PM EST with Retool — join and learn tips on how to supercharge and automate your prospect follow-ups with AI agents. RSVP here.

In today’s AI rundown:

• OpenAI, Microsoft partnership hits ‘boiling point’

• MiniMax’s open reasoner with 1M token context

• Add image generation and editing to projects

• McKinsey details AI investment ‘paradox’

• 4 latest AI tools & 4 job opportunities

LATEST DEVELOPMENTS

OPENAI & MICROSOFT

😡 OpenAI, Microsoft partnership hits ‘boiling point’

The Rundown: The WSJ just declared that the huge partnership between OpenAI and Microsoft is at a “boiling point,” with the AI leader considering filing antitrust complaints after disputes over compute access, IP rights, and company restructuring.

The small print:

• The most recent argument comes over OpenAI’s $3B acquisition of Windsurf, with the corporate wanting to withhold the IP because of Microsoft’s rival GitHub Copilot.

• OpenAI is reportedly considering the “nuclear option” of accusing Microsoft of anticompetitive behavior and pushing for a federal review of the partnership.

• Microsoft was also a key holdout in OpenAI’s PBC restructuring, with the 2 sides reportedly meeting to renegotiate their partnership last month.

• OpenAI has been looking for to scale back its dependency on Microsoft, partnering with rival Google on cloud compute last week.

Why it matters: AI’s defining partnership has been absolutely frigid for some time now, but OpenAI’s resort to a legal “nuclear option” can be a shocking move against its largest investor. The AI leader is desperate to interrupt free and control its own destiny before AGI arrives, and its initial collaboration is quickly turning into competition.

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MINIMAX

🧠 MiniMax’s open reasoner with 1M token context

The Rundown: Chinese AI startup MiniMax released M1, an open-source reasoning model with an enormous 1M token context window that achieves comparable performance to leading open models at a fraction of the training cost.

The small print:

• MiniMax claims M1 has the “world’s largest context window,” handling 1M input tokens while supporting an 80k token “pondering budget” for outputs.

• While competitive across the board, M1 excels in software engineering and agentic tool use, also massively outperforming in long-context benchmarks.

• The corporate also introduced CISPO, a brand new reinforcement learning algorithm that achieved 2x faster training in comparison with existing methods.

• The startup said CISPO helped the model’s full training run cost just $535k and took just three weeks, dramatically undercutting the budgets of rival systems.

Why it matters: Chinese labs proceed to push forward with latest open-source powerhouses, with M1 pushing the boundaries for context capabilities. MiniMax’s training efficiency also shows that modern AI architecture continues to challenge assumptions about cost being a key think about scaling intelligence.

AI TRAINING

🎨 Add image generation and editing to projects

The Rundown: On this tutorial, you’ll learn tips on how to use Flux.1 Kontext API so as to add skilled image generation and editing capabilities to any application with easy API calls.

Step-by-step:

1. Visit Black Forest Labs playground, create a free account, and replica your API key for authentication

2. Use the Google Colab notebook provided here, replace “BFL_API_KEY” together with your key, and modify the prompt

3. For editing, upload your image to Colab, update the filename, and add editing prompts

4. Copy the working code to Cursor/Windsurf and prompt: “Create an internet app for image generation with this API structure”

Pro tip: Use the Pro model for development speed, then switch to Max for production quality.

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AI ENTERPRISE RESEARCH

💸 McKinsey details AI investment ‘paradox’

The Rundown: McKinsey released a report analyzing why many firms aren’t seeing returns on their AI investments, arguing that agents are the important thing to unlocking its impact by reimagining business processes moderately than simply automating tasks.

The small print:

• The firm identifies a “genAI paradox,” noting that almost 80% of firms use the tech, but the same number report almost no material impact on earnings.

• McKinsey says firms largely use general-purpose AI tools, which make improvements which can be hard to measure and don’t show up in financial results.

• The corporate argues that success requires enterprises to rebuild processes around agents moderately than inserting them into already existing workflows.

• The report concludes the shift is a leadership challenge, calling to finish broad “experimentation phases” and drive more strategic, top-down transformations.

Why it matters: Almost every company is attempting to implement AI, but few are likely willing to revamp operations completely for a brand new AI-driven world. While some firms may spend hundreds of thousands on copilots, they could find themselves leapfrogged by competitors who’re willing to take the organizational leap and embrace agent-based systems.

QUICK HITS

🛠️ Trending AI Tools

• ⚡ Deepgram Voice Agent API – Construct production-ready voice agents with a unified speech-to-speech API*

• 🧊 Hunyuan 3D 2.1 – Recent open-source model for creating 3D assets

• 🗂️ ChatGPT Projects – Support for Deep Research, Voice Mode, and more

• 🎥 KLING 2.1 – SOTA AI video model lineup with enhanced speed and quality

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💼 AI Job Opportunities

• 📞 The Rundown – Account Manager

• 🚀 Cohere – Enterprise Deployment Specialist

• 🛠️ Union – Full-Stack Software Engineer

• 🧱 Lakera AI – Senior Full-stack Engineer

📰 Every little thing else in AI today

Moonshot AI launched Kimi-Dev-72B, an open-source coding model that achieves SOTA results on software tasks, surpassing rivals like DeepSeek R1, V3, and Devstral.

OpenAI added support for Anthropic’s open Model Context Protocol inside ChatGPT, allowing users to attach external tools to the platform.

TikTok released latest updates to its Symphony AI suite, including image-to-video, text-to-video, and AI avatar marketing for promoting content.

Reddit debuted Reddit Insights and Conversation Summary Add-Ons for real-time analytics and auto-curated social listening for brands on the platform.

Google is reportedly planning to finish its relationship with Scale AI following Meta’s investment, with Microsoft, xAI, and OpenAI also seeking to shift away from the startup.

“Godfather of AI” Geoffrey Hinton said “mundane mental labor” is most susceptible to AI displacement, with “physical manipulation” jobs being safer within the near term.

Google DeepMind partnered with creative studio Primordial Soup on “ANCESTRA,” a brief premiering on the Tribeca Festival that uses Veo alongside live-action scenes.

COMMUNITY

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See you soon,

Rowan, Joey, Zach, Alvaro, and Jason—The Rundown’s editorial team