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Lead Story

OpenAI Gives US Agencies 50% Off Models, Ending $1 Per Year Deal

OpenAI is ending a pilot program that allowed government agencies to use its models for only $1 per year and moving to a usage-based pricing system that will give federal workers access to the technology at a 50% discount from standard prices, according to a statement from the General Services Administration.

Bloomberg AI1:15 PMHeat 88
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Bloomberg AI / 11:02 PM

Skylar CIO: AI & Power Story Will Play Out Over Years

Bill Perkins discusses a new ETF built around short-dated electricity futures in PJM and ERCOT, saying it gives investors direct exposure to power pricing rather than to utilities themselves. He argues the product is timely because electricity demand is expected to grow, driven by manufacturing reshoring, data centers, and the broader AI buildout. He speaks with Romaine Bostick on "The Close." (Source: Bloomberg)

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Simon Willison LLMs / 7:55 PM

Quoting Drew Breunig

Prior to Fable, it felt silly to waste too much time improving your coding harness or context strategies. A new model would arrive at the same price (or cheaper!) and paper over most of your problems. But then Fable landed. It was (and still is!) incredible . But the cost was so high and Opus was good enough (as was 5.6, K3, and even GLM) for most of the code we needed. So we started to think about what work went where. — Drew Breunig , Fable & The End of the Free Lunch Tags: drew-breunig , anthropic , claude , llm-pricing , ai , llms , generative-ai , claude-mythos-fable

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VentureBeat AI / 7:16 PM

The AI compute gap: Enterprises are buying infrastructure faster than they can measure what it costs

Across 107 enterprises, AI infrastructure spending is accelerating well ahead of the ability to see or steer its economics. Most organizations run their AI on a familiar base of hyperscalers and model-provider APIs, yet the next dollar is aimed at specialized compute almost none of them use today; a majority intend to switch or add providers within the year, many within a quarter. Buying decisions turn on integration and total cost of ownership rather than headline token price — which is fortunate, because most enterprises cannot yet see their unit economics clearly: GPUs sit at half utilization or less, and fewer than half rigorously track what their compute actually costs. The result is a compute gap — heavy, fast-moving investment running ahead of the visibility needed to control it. This wave of VentureBeat Pulse Research examines enterprise AI infrastructure and compute: where organizations are in their deployment journey, what they run AI on today, how satisfied they are, what would make them switch, where they plan to evaluate their investments, and — most revealingly — how well they can measure and control the economics of the compute underneath it all. The central finding is a compute gap — the distance between how aggressively enterprises are investing in AI infrastructure and how little of its economics they can see. Only about one in five (21%) run AI in production at scale, yet spending intentions are outrunning that maturity: the single largest planned area enterprises plan to evaluate over the next year is AI-specialized clouds (45%), a layer almost none of these enterprises use today. Meanwhile the compute already in place runs cold — 83% report GPU utilization of 50% or less — and fewer than half (44%) can rigorously track what their AI compute costs. Enterprises are buying more infrastructure faster than they can account for what they already own. Enterprises are not settled on their infrastructure vendors, either: A clear majority (64%) plan to switch or add an infrastructure provider within twelve months, and 38% within the next quarter — unusually high churn intent for a category this foundational. When they choose, they choose on integration with the existing stack (41%) and total cost of ownership (35%), not on headline price: cost per million tokens is the deciding factor for just 8%. And the frontier constraint that will shape the next round of decisions — the shift from GPU compute to memory bandwidth as inference scales — is barely on the radar, with roughly one in five enterprises either unaware of it or yet to address it. Methodology VentureBeat fielded this survey as part of its ongoing Pulse Research series, this survey focused on enterprise AI infrastructure, compute, and inference economics. Responses are filtered to organizations with more than 100 employees (n=107; the survey’s smallest size band, 1–100 employees, is excluded), drawn from a single Q2 2026 (June) wave. Because this is one wave rather than a pooled multi-month sample, the report reads cross-sectionally and does not infer month-over-month trends. Several questions were multiple-select, so those shares can sum to more than 100%. By organization size the sample concentrates in the mid-market: 101–250 employees (36%) and 251–1,000 (27%) lead, with 1,001–5,000 (22%), 5,001–10,000 (8%), and 10,001+ (7%) above them. By role it spans managers (38%), individual contributors (28%), VPs and directors (19%), and the C-suite (13%); on purchasing authority it is buyer-credible, with 45% final decision-makers and another 30% recommenders or influencers for AI solutions. Technology/Software is the largest industry at 26%, followed by Healthcare/Life Sciences (15%), Financial Services (13%), and Retail/E-commerce (12%). At 107 respondents the sample is large enough to read directionally but should be treated as a directional signal rather than a precise measurement; it is self-selected and is not a probability sample. It also skews toward the mid-market and toward earlier-stage adopters, so it is best read as the view from organizations actively building out AI infrastructure rather than from the largest hyperscale operators. Finding 1: Ambition outpaces production Only one in five run AI in production at scale We asked where organizations sit in their AI deployment journey. Most are still building toward production rather than operating at scale. The maturity curve is front-loaded. Three-quarters of enterprises (76%) are either experimenting or running only some workloads in production, and just 21% describe AI in production at scale. This matters for everything that follows: the infrastructure decisions in this report are being made largely by organizations still early in deployment, whose compute footprint — and whose costs — are about to grow. The evaluation and switching intentions in Findings 3 and 4 are the leading edge of that build-out, not the settled preferences of operators who have already found what works. Finding 2: Enterprises run on hyperscalers and model APIs The specialized GPU clouds barely register — today We asked which providers and platforms enterprises currently use to run their AI. The answer is a familiar one: the incumbents. The current stack is hyperscaler-and-API. Google Cloud leads at 48%, and the general-purpose clouds (Google, Microsoft, AWS, Oracle) together with the major model APIs (Gemini, OpenAI, Anthropic) account for essentially all current deployment. The specialized “neocloud” GPU providers that dominate AI-infrastructure headlines — CoreWeave, Lambda, Crusoe, Nebius and peers — register at or near zero among these enterprises today. Only 6% run their own on-prem GPU clusters and 4% a custom open-source stack. Enterprises are, for now, running AI on the providers they already buy from — which makes the evaluation intentions in Finding 3 all the more striking. (A note on reading these shares. As described in the methodology section, this sample is self-selected and skews mid-market, and this question counted every provider a respondent uses — an average of 2.1 selections each — so the figures measure presence in the stack rather than spending or primary status. A sample built this way will show a different provider mix than a spend-weighted census of the broader market; Google's strength here, for example, is consistent with its long-standing position among smaller enterprises building on AI. Read these shares as a portrait of what this AI-active cohort runs today, and treat gaps between these figures and industry-wide market share estimates as a property of the sample rather than a contradiction of either.) Finding 3: The next dollar goes to infrastructure they don’t yet run AI-specialized clouds top the evaluations list We asked where enterprises planned to evaluate AI infrastructure over the next 12 months. Their answers point away from the stack they run today. Here is the report’s sharpest tension. The single most-cited planned evaluation area — AI-specialized clouds, at 45% — is the very category almost none of these enterprises use today (Finding 2). Nearly a third (32%) intend to evaluate non-Nvidia accelerators, and 28% in next-generation Nvidia silicon; even decentralized compute networks (16%) and sovereign compute (11%) draw meaningful interest. Read against current usage, this is not incremental — it is the leading edge of a re-platforming. The direction-of-travel question tells the same story: every infrastructure approach is net-expanding, but specialized AI clouds carry the highest net momentum (+24), edging out even the hyperscalers (+22). Enterprises are preparing to move a meaningful share of AI compute off the general-purpose cloud. This continues a trend we saw in our April-May survey wave. Back then, usage of the AI-specialized clouds was equally marginal — CoreWeave at 3%, Lambda at 4%, Crusoe at 2% of enterprises. When we asked enterprises what change they planned in their AI infrastructure strategy over the next twelve months, the most-cited answer was moving workloads to specialized AI clouds, at 33%. Asked in April-May which emerging compute option they were most likely to evaluate AI-specialized clouds again drew the most responses. Two waves, two differently worded questions, one consistent picture: the type of cloud enterprises are most eager to assess is the type they have barely begun to use. Finding 4: A switching wave is building Six in 10 plan to change providers within a year — many within a quarter We asked whether and when enterprises plan to switch or add an infrastructure provider. Very few intend to stand still. For a category as foundational as compute, this is a remarkable amount of intended movement. Only 36% have no plans to change, meaning a clear majority (64%) intend to switch or add a provider within twelve months — and 38% within the next quarter alone. Where that interest points is telling: the providers drawing the most switching consideration are again the incumbents — Microsoft Azure and Google Cloud (33% each), OpenAI (30%), and Gemini (22%) — which suggests much of the near-term movement is reshuffling among the majors and consolidating spend rather than defecting to new entrants. The neocloud interest in Finding 3 is a 12-month evaluation thesis; the switching in the next quarter is mostly incumbents trading share. ( Method note: Respondents who selected both "no plans to change" and a specific switching window are counted as switchers, on the logic that naming a timeframe is the more specific answer; three respondents were reclassified under this rule. ) Finding 5: Nobody buys on token price Integration and total cost of ownership decide — not sticker price We asked what matters most when enterprises select an AI infrastructure provider. Headline price finished last. Enterprises do not buy AI infrastructure on pricing, which is the place vendors compete on hardest. Integration with the existing stack (41%) and total cost of ownership (35%) dominate, while the headline metric — cost per million tokens — is the deciding factor for just 8%, dead last. The pattern is coherent: buyers are optimizing for how a provider fits and what it truly costs to operate, not for the advertised unit rate. It also foreshadows Finding 7 — enterprises say TCO matters most, yet most cannot yet measure it rigorously. The stated priority and the measured capability are out of step. Finding 6: Expensive GPUs, idle most of the time 83% report GPU utilization of 50% or less We asked what share of their GPU capacity enterprises actually utilize. The answer is a well-known but rarely quantified inefficiency. Disclosure: Band percentages count every selection against all 107 qualified respondents; 14 respondents selected more than one band, so bands overlap. At the respondent level, 83 of the 100 GPU-operating enterprises reported utilization at or below 50% The compute already in place runs cold. Adding the bands at or below half capacity, 83% of enterprises that operate GPUs report utilization of 50% or less, and nearly half (49%) run at 25% or below. Only 12% clear the 50% mark, and a further 8% do not measure utilization at all. Idle accelerators are expensive accelerators, and this is the clearest single measure of the compute gap: enterprises are planning to buy more GPUs and specialized compute (Finding 3) while the capacity they already own sits substantially unused. The efficiency headroom in the current fleet is large — and largely unmeasured. Finding 7: Spending fast, measuring slowly Fewer than half rigorously track what their compute costs We asked whether enterprises can quantify the cost and return of their AI infrastructure spend, and how satisfied they are with what they run. Confidence in the ledger lags the spending. Measurement trails money. Fewer than half of enterprises (44%) rigorously track the cost and return of their AI compute; the majority track only partially (39%), cannot quantify it yet (20%), or have not prioritized it (6%). That gap is consequential given Finding 5, where total cost of ownership was the second-ranked buying criterion — enterprises are choosing providers on an economic basis they mostly cannot yet measure. Satisfaction with current infrastructure is moderately positive but not enthusiastic: on a five-point scale, overall satisfaction averages 4.0, with ease of implementation (3.8) and value for money (3.9) trailing slightly — the softness landing, tellingly, on cost. Enterprises are spending quickly and accounting slowly. Finding 8: The next bottleneck few are watching As inference shifts from compute to memory, the field scatters Finally, we asked how enterprises would address the emerging constraint in large-scale inference — the shift from GPU compute to memory, specifically KV-cache capacity. The responses reveal a frontier that is not yet a priority. The memory frontier is real but barely governed. Asked which approach they would rely on as the binding constraint in inference shifts from compute to memory bandwidth, enterprises scatter: Dell leads at 31%, Nvidia follows at 16%, and the rest fragments across storage vendors, open-source tooling, and model-level efficiency techniques. Most telling is that roughly one in five (18%) either do not recognize the constraint or have not begun to address it. For a shift that will reshape inference cost and architecture, this is an early and unsettled market — and, consistent with the measurement gap in Finding 7, one where many enterprises simply do not yet have a view. It is the next chapter of the compute gap, arriving before most have closed the current one. The bottom line: A compute gap that faster spending will widen, not close Organizations with more than 100 employees are investing in AI infrastructure faster than they can measure it. Most are still early in deployment, yet their spending intentions point past their current stack — toward specialized clouds and alternative accelerators almost none of them run today — and a clear majority intend to change providers within the year. They buy on integration and total cost of ownership rather than headline price, which is rational; the difficulty is that most cannot yet see those economics clearly. The visibility gap is concrete. The GPUs enterprises already own run at half utilization or less for the overwhelming majority, and fewer than half can rigorously track what their compute costs or returns. Satisfaction is decent but unenthusiastic, softest on value for money — the dimension hardest to judge without measurement. And the next constraint, the shift from compute to memory in large-scale inference, is arriving while most enterprises are still unaware of it. At 107 respondents in a single Q2 wave this is a directional read, skewed toward the mid-market and earlier-stage adopters — but the direction is consistent: the appetite to spend is running well ahead of the instrumentation to spend well. The compute gap is not a capacity problem that more hardware will solve on its own; it is, first, a problem of seeing what the hardware already costs. The open question for later waves is whether enterprises build that visibility before the re-platforming arrives — or buy the next layer of infrastructure as blind to its economics as the last. Based on survey responses from 107 qualified enterprise respondents (100+ employees), drawn from a single Q2 2026 (June) wave. Because this is one wave rather than a pooled multi-month sample, the results read cross-sectionally rather than as a month-over-month trend, and at 107 respondents this is a directional signal rather than a precise measurement — the sample is self-selected, skews mid-market, and leans toward earlier-stage adopters rather than the largest hyperscale operators. Respondents include managers, individual contributors, VPs/directors, and the C-suite, with buyer-credible purchasing authority, across Technology/Software, Healthcare/Life Sciences, Financial Services, Retail/E-commerce, and other industries.

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The Decoder / 2:28 PM

OpenAI starts charging some customers only when its AI actually works

OpenAI is offering some large customers outcome-based pricing, where they pay only once the AI actually finishes a task. Salesforce, Adobe, and several startups are also moving away from fixed subscription fees. The central dispute stays the same. Who gets credit for the success, the software or the customer? The article OpenAI starts charging some customers only when its AI actually works appeared first on The Decoder .

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Bloomberg AI / 12:48 PM

Alphabet Eyes $3.6 Billion in First Australian Bond Sale

Alphabet is looking to raise about $3.6 billion in what would be its debut bond offering in Australia, according to people familiar with the matter. Initial price guidance on the deal may be provided as early as Tuesday, with the notes potentially pricing the following day. Mandeep Singh of Bloomberg Intelligence has more. (Source: Bloomberg)

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Simon Willison LLMs / 7:30 PM

An Inside Look at the Relay Market Powering Token Resellers and Fraud

An Inside Look at the Relay Market Powering Token Resellers and Fraud Fascinating investigation by Matt Lenhard into the market that has grown up around reselling LLM tokens at a discount by pooling API keys from various sources. This looks to be mostly a thing in China. Resellers sell access to an LLM proxy that offers significant discounts on regular API pricing, which they achieve by abusing free trials, proxying through unprotected support bots, or sometimes through stolen credit cards or chargeback attacks. The software they are using for these proxies is open source - mostly one-api and its more actively developed fork new-api , both legitimate API proxy products which can be used to load. balance requests across a pool of API credentials. The buyers are seeking cheap tokens, avoiding geo-restrictions, and in some cases collecting data for model distillation. I've been cautious about exposing my own LLM-driven applications publicly out of fear of abuse leading to big token bills. The existence of this marketplace makes me even more cautious: there's now an entire ecosystem that can profit from finding a new unprotected endpoint to exploit. LLM vendors really need to get better at offering strict caps for their API keys. I want my LLM apps to stop working the moment they hit a dollar threshold I've set for a period of time. Here's the (Chinese language) forum thread that served as the principal source for Matt's article. Via Hacker News Tags: ai , generative-ai , llms , llm-pricing , ai-ethics , ai-in-china

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The Decoder / 4:58 PM

Meta's Muse Spark 1.1 API pricing squeezes OpenAI and Anthropic as the AI price war heats up

Meta is entering the AI API business with Muse Spark 1.1 at prices that undercut even the dirt-cheap Grok 4.5, released just yesterday. At $4.25 per million output tokens, Meta charges a fraction of what Anthropic or OpenAI ask. For pure-play AI labs burning through billions, the pressure just got worse. The article Meta's Muse Spark 1.1 API pricing squeezes OpenAI and Anthropic as the AI price war heats up appeared first on The Decoder .

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Simon Willison LLMs / 11:57 PM

Rewriting Bun in Rust

Rewriting Bun in Rust Jarred Sumner has been promising this blog post ( since May 9th ) about his Zig to Rust rewrite of Bun for significantly longer than it took him to finish the rewrite. Honestly, it was worth the wait. This is a detailed description of an extremely sophisticated piece of agentic engineering, featuring dynamic workflows, trial runs, adversarial review and all sorts of other interesting tricks. Jarred spends the first half of the post praising Zig for getting Bun this far. Then we get to a core idea in the piece, emphasis mine: Our bugfix list felt bad and I was tired of going to sleep worrying about crashes in Bun. I don't blame Zig for that - other users of Zig don't have the bugs we had, and mixing GC with manually-managed memory is an uncommon enough thing for software to need that no language really designs for it. We wouldn't have gotten this far if not for Zig, and I'll always be grateful. Until very recently, programming language choice was a one-way decision for a project like Bun. Everyone knows you should never stop the world and rewrite a large piece of software from the ground up. Joel Spolsky highlighted that in Things You Should Never Do, Part I back in April 2000! Coding agents powered by today's frontier models change that equation. Why pick Rust? It all came down to those challenges with memory management: A large percentage of bugs from that list are use-after-free, double-free, and "forgot to free" in an error path. In safe Rust, these are compiler errors and RAII-like automatic cleanup with Drop . A crucial enabling factor for the rewrite was that the Bun test suite was written in TypeScript, which meant it could act as a conformance suite . This allowed an agent harness to automate much of the initial port from Bun to Rust, initially as an experiment to try out an earlier version of the model we now have access to as Mythos/Fable. At first, I didn't expect it to work. A few days in, a high % of the test suite started passing and I saw how much the new Rust code matched up with the original Zig codebase. My opinion went from "this is worth trying" to "I'm going to merge this". [...] For most of those 11 days (and after), I monitored workflows - manually reading the outputs to check for issues and bugs, and prompting Claude to edit the loop to fix things. How do you review a PR with +1 million lines added? How do you start to build the confidence needed to responsibly merge large quantities of LLM-authored code? A language-independent test suite with a million assertions, adversarial code review and when something does go wrong, fixing the process that generates the code instead of hand-fixing the code. The new implementation of Bun has been live in Claude Code for nearly a month now: Claude Code v2.1.181 (released June 17th) and later use the Rust port of Bun. Startup got 10% faster on Linux but otherwise, barely anyone noticed. Boring is good. A perk of working at Anthropic is that you don't have to pay for your tokens - handy when the estimated cost is $165,000! Pre-merge, this took 5.9 billion uncached input tokens, 690 million output tokens, and 72 billion cached input token reads — around $165,000 at API pricing. This whole thing is a fascinating case study in taking on wildly ambitious projects with the help of coordinated parallel agents. Via Hacker News Tags: ai , rust , zig , generative-ai , llms , ai-assisted-programming , anthropic , bun , conformance-suites , agentic-engineering , claude-mythos-fable , jarred-sumner

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Simon Willison LLMs / 11:59 PM

The Pelican comparison grid for Astra is pretty interesting

I got access to GPT-6 Astra this afternoon, so naturally I used it to generate SVGs of pelicans riding bicycles - at low, medium, high, xhigh and max reasoning levels (Astra doesn't support reasoning=none). Then I rendered those pelicans in a comparison grid with GPT-5.6 Sol, Terra, and Luna, and beyond being fun the result was surprisingly useful. See the grid for full quality images. Here's the transcript that created the GPT-6 Nova pelicans. There are a few interesting things that stand out from this grid. The Astra pelicans are much better . The very best GPT-5.6-Sol pelican (I liked xhigh better than max) is still pretty clearly a bunch of abstract shapes. Every single one of the Astra pelicans, from low to xhigh, looks better than that. The Astra max one is really good. Astra below max still doesn't reliably get the pelican legs on both sides of the frame. In terms of cost, Astra may be around twice the price of Sol ($10/million input, $50/million output, compared to $5/$30 for Sol), but it uses significantly less tokens at each of the levels, making the prices at the different levels closer than they might otherwise be. Astra low produces a better pelican than ANY of the GPT-5.6 Sol models at any level, for 9.55 cents. Spending 10 cents on any other model gets a much worse result. Look at the input token counts: Astra and Luna both used 16 input tokens, Sol and Terra used 26. That's interesting. I wonder if Astra and Luna are more related to each other than OpenAI let on? Tags: ai , openai , generative-ai , llms , pelican-riding-a-bicycle , gpt-6-astra

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The Decoder / 11:45 AM

Meta closes in on the top with Muse Spark 1.3, and undercuts rivals on price

Meta has released Muse Spark 1.3, its fourth model in the series in five months. According to Artificial Analysis, the model gains the most on agentic benchmarks but still trails Claude Fable 5.1 and other top models. The strongest argument is price. At $0.55 per task, Muse Spark undercuts every comparably scored rival. The article Meta closes in on the top with Muse Spark 1.3, and undercuts rivals on price appeared first on The Decoder .

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