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Greetings! Artificial intelligence really does make mistakes—sometimes big ones. Last weekend, I put half a dozen emails with details of airplane and hotel bookings for an upcoming vacation into Google's NotebookLM and asked it to write me an itinerary. The resulting document read great—until I realized it listed a departure date 24 hours later than the actual one, which could have been disastrous. Similarly, my colleague Jon Victor today wrote about how some businesses using AI coding tools discover serious flaws in what they end up developing. This point seems worth remembering as more businesses talk about the labor savings they can achieve with AI. On Wednesday, for example, a Salesforce executive said AI agents—software that can take actions on behalf of the user—had "reduced some of our hiring needs." Plenty of companies are heeding suggestions from AI software firms like Microsoft that AI can cut down on the number of employees they need. More alarmingly, Anthropic CEO Dario Amodei told Axios in an interview this week that AI could "wipe out half of all entry-level white-collar jobs" in the next few years, even as it helps to cure cancer. To be sure, not every job cut nowadays is caused by AI. Business Insider on Thursday laid off 21% of its staff, citing changes in how people consume information, although it also said it was "exploring how AI can" help it "operate more efficiently." We're hearing that a lot: When Microsoft laid off 3% of its staff this month, it denied AI was directly replacing humans, but it still said it was using technology to increase efficiency. This is where AI's errors would seem to be relevant: Isn't there a danger that AI-caused mistakes will end up reducing efficiency? Leave aside the more existential question of why we're spending hundreds of billions—and taxing our power grid in a way that is setting back efforts to fight climate change—to create a technology that could create huge unemployment. The more practical question may be whether businesses should use AI to replace jobs right now if they want to be more efficient. Remember Klarna, the Swedish "buy now, pay later" fintech firm, which became the poster child for using AI to cut staff last year. A few weeks ago, its CEO declared that he was changing course, having realized focusing too much on costs had hurt the quality of its service. That's a warning companies should heed. You can just imagine the employees' screams of outrage. Meta Platforms and defense tech firm Anduril announced a partnership on Thursday to design and build augmented reality and virtual reality products for the military. The jargon-filled announcement didn't offer any examples, but you can guess that Meta's VR headset technology would come in handy for soldiers in a war zone. It makes perfect sense for Meta to take this step given the revenue potential, but it's likely to be unpopular with some of its employees. Remember the protests at Google over its military dealings, which led to 28 firings last year? (Those protests had been going on for several years.) Meta employees have complained about other moves CEO Mark Zuckerberg has made in the past few months, such as ending its diversity, equity and inclusion efforts and pulling back on content moderation. Zuckerberg, of course, shows no signs of caring. Not that you'd expect him to. In partnering with Anduril, Zuckerberg is teaming up with Palmer Luckey, whom he fired in 2017, reportedly because of Luckey's support for Donald Trump. Yes, it's ironic. • Less than 24 hours after Elon Musk announced he was leaving the Trump administration, several of his lieutenants are also departing, including Steve Davis and Katie Miller (more here). • Amazon will license editorial material from The New York Times to train its AI models, the companies said Thursday. • Elf Beauty shares surged more than 25% Thursday morning, a day after the company announced it would acquire influencer and model Hailey Bieber's skin care and makeup company, Rhode. • Protein bar startup David announced $75 million in fresh funding and the acquisition of ingredient supplier Epogee Thursday. Inclusive of the new funding, David's valuation is now $725 million, co-founder and CEO Peter Rahal said in an interview. Introducing: Applied AI. This new newsletter explores how businesses and leaders are using AI to innovate, improve efficiency, and foster collaboration. Stay ahead with insights and stories on the transformative power of AI. Sign up here. | 
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