TheChek News Flow

Readers of The Information are sharply divided on the future value of OpenAI, with roughly one-fourth expecting the value of the ChatGPT maker to soar past $500 billion in three years—and an almost equal number expecting it to plunge below $100 billion. OpenAI was most recently valued at $157 billion

Government is bracing for a possible renationalisation of the UK’s biggest water company

The UK government has approached consultancies about taking the role of special administrator in a sign that ministers are bracing themselves for the imminent renationalisation of Thames Water. 

Consultancies including Teneo, Interpath and EY are among the potential candidates to run a so-called special administration regime, according to people familiar with the process. A SAR is a temporary measure designed to keep services running, and suppliers and staff paid, in the event of a corporate collapse. 

“We are ready now, we could do one [SAR} today, if we had to,” said one official. “Incidentally, being ready for a SAR is also the strongest lever that we as government can have to make sure that another market-led, private-led solution is found.”

Thames Water is struggling under its £19bn debt pile and has warned that it will run out of cash in March unless the High Court signs off a controversial £3bn loan at a hearing in early February.

Another government official said that there had been “informal engagement” with certain consultancies over a special administrator role but no formal interview process.

Steve Reed, the environment secretary, said in October that he had “ruled out nationalisation”.

Officials insist that taking the company into SAR would not technically be a nationalisation despite it being a big state intervention. 

But plunging Thames Water into special administration may be unavoidable if the court blocks the loan agreed with its senior creditors, or if the company runs out of cash earlier than expected. The £3bn loan is controversial because it would carry an interest rate of 9.75 per cent as well as fees and incentives for the existing Thames Water management. 

The agreement is being challenged by a separate group of Thames Water’s junior creditors — which have proposed a cheaper deal — and by environmental campaigners who argue that the company would be better off in special administration.

The loan would buy the company time to raise at least £3bn of equity in a parallel process. Companies including Castle Water, Covalis and CKI Infrastructure are among investment groups lining up to put in potential bids for the utility.

Bidders and creditors are waiting to see if the company appeals to the Competition and Markets Authority over regulator Ofwat’s decision last month on the level by which water companies can hike customer bills over the next five years. Thames Water has not yet made a decision whether to appeal Ofwat’s decision to the CMA, according to people familiar with the matter.

Ofwat has said that Thames will be allowed to raise bills 35 per cent — much lower than the 59 per cent increase it had sought — taking average bills from around £436 now to £588 between now and 2030. 

The Department for Environment, Food and Rural Affairs, Thames Water and Ofwat did not respond to requests seeking comment.

EY, Teneo and Interpath declined to comment. 

In an update to the market on Wednesday, the company’s chief restructuring officer, Julian Gething, said: “Our plan delivers for customers and stakeholders by unlocking up to £3bn of new money and securing a total of £3.5bn of debt maturity extensions over the next two years and cash releases, so we can continue investing the billions of pounds required to improve our network’s resilience.

“We believe it is the only implementable solution to enable the equity investment required to provide stability and certainty in the longer term and will not impact customer bills.”

The government’s choice of administrator may be complicated by potential conflicts of interest. Teneo is already an adviser to Thames Water and has received £5mn in fees since August 2023. It had also received at least £60mn from running the special administration of collapsed energy supplier Bulb, according to the National Audit Office.

It has also written a report to the High Court supporting the senior creditors’ £3bn loan, while Interpath has written a separate report on behalf of the junior creditors.

Sir Dieter Helm, professor of economic policy at Oxford university, has argued that a SAR would enable Thames Water to focus on a restructuring and on delivering improvements, rather than on negotiating a deal with creditors.

Meta’s chief AI scientist, Yann LeCun, says that a “new paradigm of AI architectures” will emerge in the next three to five years, going far beyond the capabilities of existing AI systems.

LeCun also predicted that the coming years could be the “decade of robotics,” where advances in AI and robotics combine to unlock a new class of intelligent applications.

Speaking in a session dubbed “Debating Technology” at Davos on Thursday, LeCun said that the “flavor of AI” that we have at the moment — that is, generative AI and large language models (LLMs) — isn’t really up to all that much. It’s useful, sure, but falls short on many fronts.

“I think the shelf life of the current [LLM] paradigm is fairly short, probably three to five years,” LeCun said. “I think within five years, nobody in their right mind would use them anymore, at least not as the central component of an AI system. I think [….] we’re going to see the emergence of a new paradigm for AI architectures, which may not have the limitations of current AI systems.”

These “limitations” inhibit truly intelligent behavior in machines, LeCun says. This is down to four key reasons: a lack of understanding of the physical world; a lack of persistent memory; a lack of reasoning; and a lack of complex planning capabilities.

“LLMs really are not capable of any of this,” LeCun said. “So there’s going to be another revolution of AI over the next few years. We may have to change the name of it, because it’s probably not going to be generative in the sense that we understand it today.”

“World models”

This echoes sentiments that LeCun has espoused in the past. At the heart of this is what are coming to be known as “world models” that promise to help machines understand the dynamics of the real world. This includes having a memory, common sense, intuition, reasoning capabilities — traits far beyond that of current systems, which are mostly about pattern recognition.

Previously, LeCun has said this could still be some 10 years away, but today’s estimate brings things closer on the horizon. Though to what extent it will get to in that time frame isn’t exactly clear.

“LLMs are good at manipulating language, but not at thinking,” LeCun said. “So that’s what we’re working on — having systems build mental models of the world. If the plan that we’re working on succeeds, with the timetable that we hope, within three to five years we’ll have systems that are a completely different paradigm. They may have some level of common sense. They may be able to learn how the world works from observing the world and maybe interacting with it.”

“The decade of robotics”

As impressive as generative AI is, capable of passing the bar exam or unearthing new drugs, LeCun reckons that robotics could be a central component of the next wave of AI applications in such real-world scenarios.

Meta itself is doing some research work in the robotics realm, but so is the AI darling of the moment, ChatGPT-creator OpenAI. Earlier this month, new job listings emerged detailing a new OpenAI robotics team focused on “general-purpose,” “adaptive,” and “versatile” robots capable of human-like intelligence in real-world settings.

“We don’t have robots that can do what a cat can do — understanding the physical world of a cat is way superior to everything we can do with AI,” he said. “Maybe the coming decade will be the decade of robotics, maybe we’ll have AI systems that are sufficiently smart to understand how the real world works.”

Davos : World Economic Forum : Debating Technology - Video

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An OpenAI Math Test Raises Eyebrows

When OpenAI previewed o3, its latest reasoning model, in December, one of the ways the company demonstrated its strength was by showing off its 25.2% score on FrontierMath, a test of AI models’ math abilities that Epoch AI developed. (You might remember Epoch, the nonprofit research organization, from their work on AI scaling laws.)

That’s not the kind of grade I would have bragged about after taking a math test, but the problems in FrontierMath are extremely hard. Before the o3 announcement, the top scores were below 2%. But over the past weekend, it came to light that OpenAI had funded the development of the test and had access to the problems and their solutions, sparking skepticism about o3’s score, along with frustration from AI observers.

“It came off as being a totally independent benchmark that was going to be equal to all firms,” said Ozzie Gooen, Executive Director at the Quantified Uncertainty Research Institute, which develops Squiggle AI, a probabilistic software. “A lot of the frustration comes out from people thinking it was an independent thing while it was actually a proprietary set.”

Mathematicians who contributed to the project also expressed concern. “I try to evaluate all my research projects from the point of view of ‘do they contribute at least as much to safety as to capabilities’” of AI models, said one mathematician who contributed. They figured that Epoch had an industry partner, and they were not surprised to learn it was OpenAI, but the industry connection made the research seem less valuable, they said. “Is this even positive for humanity? It’s very unclear,” they said.

For its part, an OpenAI spokesperson said it did not use the benchmark to train its models—the equivalent of snagging a pop quiz from the teacher’s drawer to study in advance. But even without directly training its models on the solutions, access to FrontierMath could help OpenAI improve its models’ performance by making tweaks and checking whether their scores improved.

Another reason to moderate expectations for o3 is that 25% of the problems in FrontierMath are “easy,” meaning a high school math olympiad competitor could solve them. It’s possible this category made up the bulk of the problems that o3 was able to solve. That would still be impressive, but not new territory for AI.

Epoch revealed OpenAI’s involvement on December 20, the day OpenAI announced o3, and revised the FrontierMath paper to credit OpenAI’s involvement. Epoch’s contract prevented them from disclosing OpenAI’s involvement until around that time (this is not the first time OpenAI has faced concerns about restrictive NDAs).

Math Is Hard

Because AI models were already acing existing benchmarking tests, Epoch paid mathematicians $300 to $1,000 to come up with hundreds of new challenging math problems. Here’s one of the “high-medium difficulty” problems that those mathematicians came up with: Construct a degree 19 polynomial p(x) ∈ C[x] such that X := {p(x) = p(y)} ⊂ P1 × P1 has at least 3 (but not all linear) irreducible components over C. Choose p(x) to be odd, monic, have real coefficients and linear coefficient -19 and calculate p(19).

In case you’re curious, the answer is 1876572071974094803391179 (duh).

The full benchmark will eventually contain 300 problems, said Elliot Glazer, who leads the FrontierMath project. Epoch sent OpenAI the first 200 by early December and expects to finish collecting the last 100 within a month or so. At that point, Epoch will randomly choose 50 of those hundred problems to form a “hold out set” that Epoch will withhold from OpenAI so it can’t train its models on them.

Going forward, all benchmarks funded by industry players like OpenAI should retain a hold out set to preserve their ability to independently evaluate models from different companies, advised Glazer.

“We made a mistake in not being more transparent about OpenAI's involvement,” said Epoch’s co-founder and Associate Director Tamay Besiroglu in a statement. “We should have pushed harder for the ability to be transparent about this partnership from the start, particularly with the mathematicians creating the problems.”

OpenAI has already purchased 30 to 50 more problems from Epoch over the next three months, at $12,000 each, said a person who attended a recent talk by an Epoch employee. Epoch is paying contributors $7,500 for each of these extremely hard “tier 4” problems, which are intended to be so hard that solving all of them requires the skills of a full university math department, said Glazer.

OpenAI CEO Sam Altman kicked off this year by saying in a blog post that 2025 would be big for AI agents, tools that can automate tasks and take actions on your behalf.

Now, we’re seeing OpenAI’s first real attempt.

OpenAI announced on Thursday that it is launching a research preview of Operator, a general-purpose AI agent that can take control of a web browser and independently perform certain actions.

Operator is coming to U.S. users on ChatGPT’s $200 Pro subscription plan first. OpenAI says it plans to roll this feature out to more users in its Plus, Team, and Enterprise tiers eventually.

“[Operator] will be [in] other countries soon,” OpenAI CEO Sam Altman said during a livestream Thursday. “Europe will, unfortunately, take a while.”

This initial research preview is available through operator.chatgpt.com, but soon, OpenAI says it wants to integrate Operator into all of its ChatGPT clients.

Operator promises to automate tasks such as booking travel accommodations, making restaurant reservations, and shopping online, according to OpenAI. There are several task categories users can choose from within the Operator interface, including shopping, delivery, dining, and travel — all of which enable different kinds of automation.

When ChatGPT users activate Operator, a small window will pop up showing a dedicated web browser that the agent uses to complete tasks, along with explanations of specific actions the agent is performing. Users can still take control of their screen while Operator is working, as Operator uses its own dedicated browser.

OpenAI says that Operator is powered by a computer-using agent, or CUA, that combines the vision capabilities of the company’s GPT-4o model with the reasoning abilities from OpenAI’s more advanced models. The CUA is trained to interact with the front-end of websites, meaning it doesn’t need to use developer-facing APIs to tap into different services.

In other words, the CUA can use buttons, navigate menus, and fill out forms on a webpage — much like a human would.

OpenAI says it’s collaborating with companies like DoorDash, Instacart, Priceline, StubHub, and Uber to ensure that Operator respects these businesses’ terms of service agreements.

“The CUA model is trained to ask for user confirmation before finalizing tasks with external side effects, for example before submitting an order, sending an email, etc., so that the user can double-check the model’s work before it becomes permanent,” OpenAI writes in materials provided to TechCrunch. “[It] has already proven useful in a variety of cases, and we aim to extend that reliability across a wider range of tasks.”

But OpenAI warns the CUA isn’t perfect. The company says it “[doesn’t] expect [the] CUA to perform reliably in all scenarios just yet.”

Out of an abundance of caution, OpenAI is also requiring supervision for some tasks, like banking transactions, the CUA and Operator could perform entirely on their own. Users will need to take over to put in credit card information, for example. OpenAI says that Operator doesn’t collect or screenshot any data.

“On particularly sensitive websites, such as email, Operator requires active user supervision, ensuring users can directly catch and address any potential mistakes the model might make,” OpenAI says in its support materials.

This limits the usefulness of Operator, to be sure — but also ensures that the agent doesn’t hallucinate and, say, spend your mortgage payment on accent chairs. Google took a similar approach with its Project Mariner AI agent, which also doesn’t fill in info like credit card numbers.

Operator is OpenAI’s boldest attempt yet at creating an AI agent. Last week, OpenAI released Tasks, giving ChatGPT simple automation features such as the ability to set reminders and schedule prompts to run at a set time every day.

Tasks gave ChatGPT users some familiar, but necessary, features to make ChatGPT as practical to use as Siri or Alexa. However, Operator shows off capabilities that the previous generation of virtual assistants could never do.

AI agents have been pitched as the next big thing in AI after ChatGPT: a new technology that will change how people use the internet and their PCs. Instead of simply delivering and processing information, agents can — in theory — take actions and do things.

As OpenAI releases its first concrete take on agents, it’ll soon become clear just how realistic that vision is.

Call between Mohammed bin Salman and US president comes as kingdom seeks to deepen ties with western ally

Crown Prince Mohammed bin Salman said Saudi Arabia aimed to invest at least $600bn in the US over the next four years, as the kingdom sought to deepen ties with its most important western ally after the return of Donald Trump to the White House.

The prince said in a Thursday phone call to congratulate Trump on his inauguration that the new US administration’s proposed reforms would “create unprecedented economic prosperity and opportunity”, according to the official Saudi Press Agency.

The White House did not immediately provide a summary of the call. Secretary of state Marco Rubio and Saudi Arabia’s de facto leader — often known by his initials MBS — also spoke on the phone to discuss developments in the Middle East, the state department said on Wednesday.

Trump said on Monday that he would consider making Saudi Arabia his first foreign trip as president again if Riyadh agreed to buy $500bn worth of US products, as he claimed the kingdom did in his first stint in power.

“I did it with Saudi Arabia last time because they agreed to buy $450bn worth of our products,” Trump told reporters in the Oval Office after his inauguration. “If Saudi Arabia wanted to buy another $450bn or $500bn — we’ll up it for all the inflation — I think I’d probably go.”

When he took office for his first term in 2017, Trump departed from tradition by making Saudi Arabia his first overseas destination as he attended a summit of Arab and Muslim leaders in Riyadh. Newly elected US presidents typically visit neighbouring Canada or Mexico first.

The statement about the call between Prince Mohammed and Trump did not provide details on the sectors or industries that would receive the $600bn of investment, but it said the amount could go “potentially beyond that if additional opportunities arise”.

It is unclear how much of that the $450bn repeatedly touted by Trump materialised in the form of deals and trade between the two countries during the president’s first term.

The $600bn investment pledge represents more than half of Saudi GDP, according to official figures, and comes as pressure grows on the kingdom’s budget due to softened oil prices and a widening deficit. The announcement follows comments by officials last year that Saudi Arabia would further scale back its overseas investment and shift focus towards delivering a series of mega projects, including tourist resorts and a futuristic city in the country’s north-west.

Saudi Arabia is also facing a daunting set of deadlines to build infrastructure for events including the Asian Winter Games in 2029, Expo 2030 and the 2034 World Cup.

Trump maintained close ties with Saudi Arabia during his first term, while the kingdom’s sovereign wealth fund invested billions of dollars in companies run by Trump’s son-in-law, Jared Kushner, and former Treasury secretary, Steven Mnuchin, shortly after Trump left the White House.

The Trump Organization also signed deals to license Trump’s brand for real estate developments in Saudi Arabia and other parts of the Gulf.

Rubio and Prince Mohammed discussed Gaza, Lebanon and Syria, as well as the threat posed by Iran, Saudi Arabia’s main regional rival.

Israeli strikes on the Islamic republic in October hit a host of Iranian military facilities, including missile factories and air defence systems.

The military capabilities of Iran’s so-called axis of resistance, including proxies and allies such as Lebanon’s Hizbollah and Gaza-based Hamas, have also been severely degraded after 15 months of conflict with Israel. Islamist rebels in Syria last month also overthrew the regime of former president Bashar al-Assad, another Tehran ally.

Trump said on Monday that he expected Saudi Arabia to eventually normalise ties with Israel and join the Abraham Accords, an initiative agreed during his first term that normalised relations between Israel and several Arab states including the United Arab Emirates.

Pastacorp, l’entreprise familiale qui produit les pâtes sèches de la célèbre marque, cherche à faire entrer un actionnaire minoritaire.

Le grand public n’a jamais entendu parler de la société Pastacorp. Et pourtant, elle et ses actionnaires, la famille Skalli, sont intimement liés à l’un des noms les plus fameux du patrimoine agroalimentaire français : Lustucru. L’entreprise fabrique et commercialise les pâtes sèches de la marque, quand les pâtes fraiches sont aujourd’hui produites par le groupe alimentaire espagnol Ebro Foods… Un drôle de schéma hérité du passé - nous y reviendrons. Aujourd’hui, Pastacorp conserve une taille plutôt intermédiaire : en 2023, la société faisait état de 149 millions de chiffre d’affaires pour un Ebitda de 12 millions d’euros. Mais son patron, Antony Cohen Skalli, le quadragénaire aux commandes de l’affaire familiale, planche sur une opération qui pourrait lui donner les moyens de changer de dimension, a appris l’Informé.

Selon plusieurs sources, Pastacorp a effectivement mandaté en fin d’année dernière la banque Rothschild & Co pour la conseiller dans une recomposition de son capital. Plusieurs actionnaires familiaux à l’âge avancé sont donnés sortants, et Antony Cohen Skalli entend profiter de cette opportunité pour renforcer sa participation. Pour ce faire, il lui faudra trouver un allié extérieur, d’où sa volonté d’attirer un acteur financier à ses côtés comme actionnaire minoritaire.

S’il parvient à boucler son opération, l’entrepreneur essaiera-t-il de renouer avec les gros coups qu’il a tentés ces dernières années ? Fin 2023, comme l’avait révélé l’Informé, PastaCorp n’avait pas hésité à partir à l’assaut d’un peu plus gros qu’elle, en ciblant une autre marque bien connue des consommateurs français, Tipiak, mise en vente par ses actionnaires familiaux. L’industriel avait monté une offre en compagnie de plusieurs acteurs financiers, en l’occurrence Bpifrance, Idia (société d’investissement de la galaxie Crédit Agricole) et Unigrains (le bras armé financier de la filière céréalière française). Mais c’est finalement la coopérative Terrena qui avait emporté le morceau.

En 2021, Pastacorp avait aussi tenté de pousser ses pions dans le rachat de Panzani auprès de l’espagnol Ebro Foods. Elle n’avait pas hésité à se rapprocher du fonds CVC Capital Partners pour faire ticket commun. Mais l’initiative est restée sans lendemain pour Pastacorp car le financier avait finalement bouclé seul l’acquisition, officiellement parce que le vendeur était réticent à voir émerger un géant français des pâtes mais aussi, dit-on, pour éviter de potentiels mouvements sociaux liés au rapprochement.

Pastacorp avait déjà eu l’occasion de croiser sur son chemin Panzani. Ce dernier avait failli absorber l’affaire familiale des Skalli en 2002… Mais là aussi pour des raisons liées à l’antitrust, l’actionnaire de Panzani, PAI Partners, avait dû se contenter de racheter la seule activité pâtes fraîches de Lustucru. Le fonds avait ensuite revendu son actif en 2006 à Ebro Food. Les Skalli, eux, avaient conservé les pâtes sèches de Lustucru, mais aussi celles commercialisées sous les marques Rivoire et Carret. Depuis, Pastacorp a discrètement fait son retour au rayon des pâtes fraîches, en reprenant à la barre du tribunal de commerce l’activité que possédait sur ce segment Financière Turenne Lafayette, l’ex-empire de Monique Piffaut (William Saurin, Garbit…) en pleine déconfiture. Ce deal lui permet d’être un fournisseur important de marques de distributeurs sur ce marché. Pastacorp reste également présent dans un autre domaine, la semoule, le métier d’origine des Skalli.