TheChek News Flow

Why OpenAI is Hiding its Reasoning Model’s ‘Thoughts’

In the artificial intelligence race, competition is fierce. Every big AI developer is watching rivals like a hawk and trying to reverse-engineer or copy their best work, as we’ve reported.

What can a leader like OpenAI do to keep its edge? The company’s newly released reasoning model, o1-preview, aka Strawberry, shows one way: by hiding the ball on how the model actually solves problems.

The blog post announcing o1-preview last week said the model uses an “internal chain of thought” to break down problems into simpler steps before solving them. As we have previously shown, developers have used “chain-of-thought prompting” to get existing large language models, including OpenAI’s GPT-4, to perform better on complex or multistep queries.

The new reasoning model does this on its own, but without showing its work to the customer. Instead, the o1 model shows a “model-generated summary of the chain of thought,” which implies that its thoughts are rewritten by a different model altogether before the customer sees them.

OpenAI said it decided to keep the raw chain of thought hidden primarily because that would allow its employees—and only its employees—to “read the mind” of the model to understand how it operates. OpenAI said it doesn’t want the model’s unfiltered thinking to be shown because it might contain unsafe thoughts and that the company wants to “monitor” the model to make sure it’s not being treacherous, such as by “manipulating” the customer.

But OpenAI didn’t hide the fact that another factor in its decision was a “competitive advantage.” That’s understandable.

The move implies that o1-preview could perform even better if its chain of thought wasn’t filtered, as customers might be able to get more out of it by refining their questions in response to what the model was thinking.

We’re curious whether OpenAI will find ways to limit the purported performance dip from hiding the chain of thought before it launches a fuller version of the model, o1.

Some developers have said they are annoyed by the hidden chain of thought because they could get billed for something they can’t see. OpenAI charges developers based on how many tokens—words or parts of words—its models process and spit out in the form of answers.

Still, reviews of o1-preview continue to be largely positive among developers who post about it on X.

The good reception to o1-preview ups the ante for rivals such as Google. The search company has already had a tough time winning over customers for its Gemini LLMs because of how alarmingly difficult Google makes it to use them, as my colleague Erin reported on Monday.

Thanks to OpenAI, the mountain Google must climb to attract business customers just got taller.

Steelmaker cited an impairment and lower earnings from the steel-mills segment as selling prices have fallen

Nucor decrease; red down pointing triangle warned of a big year-over-year earnings decline in the current quarter after steel prices fell and the company incurred a hefty impairment charge.

The Charlotte, N.C., steelmaker Tuesday said it expected to post a profit of 87 cents to 97 cents a share for its third quarter ending Sept. 28, down from $4.57 a share in the same quarter last year.

Stripping out $123 million in one-time noncash charges, adjusted earnings are projected to hit $1.30 to $1.40 a share. Analysts polled by FactSet had been forecasting $1.81 a share.

The excluded charges are tied to the impairment of certain noncurrent assets in Nucor’s raw-materials and steel-products units.

Beyond the impairment, earnings are set to decline because of lower earnings from the steel-mills segment as selling prices have fallen. The steel-products unit is expected to record lower prices and volumes, the company said.

Nucor warned in July that its third-quarter profit was expected to drop sequentially due to lower steel prices.

Shares fell 1.7% to $140.50 in premarket trading.

Designer Daniel Lee presented a pared-back collection for spring/summer 2025

There was an air of suspense ahead of Burberry’s London show. The kind you might expect when there’s new leadership in place. The fresh arrival here is not a designer — spring/summer 2025 marks Daniel Lee’s fourth fashion show as chief creative officer — but a chief executive, as of July, in the form of Joshua Schulman, a former Coach and Jimmy Choo boss.

Questions abound — in particular, what impact Schulman would have in this short period (his appointment signalled Burberry’s repositioning as a more affordable brand, although chair Gerry Murphy has been effusive about the American executive’s luxury pedigree). And also, which renowned British models the brand would coax out this time, following the last show where Lily Donaldson and Lily Cole made a runway comeback.

There were no surprising faces on the catwalk (held this time at the National Theatre, rather than the usual outdoors tent) but clearer indicators of where Schulman, who was in attendance, and Lee might be looking to take Burberry next. The largely beige, black and grey-coloured looks felt like a more casual and muted take for the designer who made a big statement in his first season with mallard prints and bright checks.

Backstage, Lee shared his desire “to explore the use of colour in a different way” and using more tranquil colours to “bring a sense of lightness to Burberry, which isn’t typically a very summertime brand.” That also translated to cargo trousers paired with sparkly vests, and rugged field jackets teamed with flowy maxi skirts and metallic dresses, marking a new kind of high-low styling for the brand. 

They align with Lee’s vision of creating “things that don’t feel too precious, that you can wear day to night, which I think is what Burberry is essentially about.” Although one wonders what the pricing for these pieces may be, given Murphy’s rejection of a potential move downmarket, despite the fact that the brand’s recent price hike has alienated aspirational customers.

Some things remained unchanged, like Lee’s love for electronic music (the opening track was “Lambent Rag”, a track by British electronic musician Clark), but a slight vibe shift of guests was discernible: footballers, including Marc Guéhi and Declan Rice, sat front row, alongside regular attendees such as brand ambassadors and actors Barry Keoghan and Bright Vachirawit. They sat facing a green sheet of hanging tarpaulin with rectangular and circular cutouts, an original installation by English artist Gary Hume, which Lee felt shared similarities with the shower-resistant gabardine of Burberry’s coats.

Burberry’s signature check appeared frequently, across bags, shirts and trousers, although they weren’t as vividly coloured as seasons past. “What we’ve endeavoured to do is to explore the check and move it into new colours, new textures, and really treat it as the most precious element of the house, in a way that the trenchcoat is,” Lee said — a staple item that the brand seems to be doubling down on. “A coat is something that I feel people invest in,” he noted.

Investors will surely be monitoring any signs of recovery: earlier this month Burberry dropped out of the UK’s FTSE 100 index due to weak sales and a shrinking share price. For now, Lee is buoyant. “What I’ve felt with Josh’s arrival is a sense of American optimism. I really enjoy his drive, positivity and way of communication. I think Burberry in its heyday really enjoyed American CEO leadership together with a British designer,” he added, referencing former designer and CEO duo Christopher Bailey and Angela Ahrendts’ successful tenure in the 2000s. “Hopefully that’s a great synergy we can get back onboard.”

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Financial services company says the acquisition will provide professionals with ETF selection tools

French financial services company Kepler Cheuvreux has bought a majority stake in Trackinsight, the Financial Times’ data partner for the ETF Hub.

The deal is not expected to have any impact on Trackinsight’s arrangements with the FT. Neither the size of Kepler Cheuvreux’s shareholding in Trackinsight nor the financial terms of the deal were disclosed.   

Paris-based Kepler Cheuvreux’s operations span research, execution and corporate finance. It also has an asset management operation, largely through its Ellipsis AM arm, which manages €3.9bn ($4.3bn) in convertible bonds, credit, volatility and listed derivatives.   

The privately held business employs 600 people across 14 financial centres in Europe, the US and the Middle East, and claims to have 1,300 institutional clients.

Trackinsight, also based in France, operates a proprietary exchange traded fund database; helps institutional investors analyse and select ETFs; and assists in the creation and optimisation of ETF portfolios.

The privately held company, which employs 30 people in Europe and North America and claims 50 institutional clients, also runs websites in partnership with several stock exchanges aimed at professional investors in the rapidly expanding ETF market.

The eight-year-old company’s database covers 11,000 ETFs, which it said represented 99.8 per cent of the European and North American market. Trackinsight’s branding and staff will remain in place.

Kepler Cheuvreux said the acquisition “will provide professionals with ETF selection tools based on high-quality data, cutting-edge analyses for manager and fund selection and innovative portfolio construction tools”.

Philippe Malaise, chief executive and chair of Trackinsight, said: “We are delighted to join forces with a leading partner like Kepler Cheuvreux to embark on the next stage of our development. Technology and innovation in the service of clients are at the heart of our daily concerns.”

Jean-Pierre Ané, deputy chief executive in charge of business development at Kepler Cheuvreux, said it “was already the leading independent European ETF execution provider”, although for compliance and commercial reasons it was not able to disclose data on volumes, commission or market share. More broadly, it said it traded more than €1.5bn of equities a day, on average.

“We aim to go even further by supporting our clients across the entire value chain, from selection to transaction,” Ané added.

Kepler Capital Markets was founded in 1997 by Swiss private banking group Julius Baer, before a spell under the ownership of doomed Icelandic bank Landsbanki, which collapsed during the island’s financial crisis.

It was the subject of a management buyout in 2008 and since then a number of outside investors have built stakes. In 2013 KCM bought Cheuvreux from French bank Crédit Agricole and was renamed Kepler Cheuvreux.

Management and employees now own 27.5 per cent of the company, with 40 per cent of the voting rights. The next largest shareholders are Atlas Merchant Capital, the investment vehicle of former Barclays chief executive Bob Diamond (19.5 per cent), Crédit Agricole (14.6 per cent) and Italian bank UniCredit (10 per cent).