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OpenAI and Microsoft add new image generation and AI agent features—and showcase their platform advantage

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Hello and welcome to Eye on AI. In today’s edition…OpenAI releases a more capable image generator, while Microsoft plants its stake in reasoning agents; Google debuts Gemini 2.5 “thinking” models; Amazon tests AI assistants for health and shopping; Character.AI gives parents a lens into their kid’s time on the platform; and AI companies’ aggressive crawlers overwhelm open-source projects. 

This week, both OpenAI and its backer (and erstwhile rival…it’s complicated) Microsoft rolled out some of their newest and most powerful AI capabilities into their main platforms. OpenAI debuted a new image generation capability for GPT-4o on its main ChatGPT service, offering enhanced image creation and granular editing capabilities based on text prompts. This makes the image generation far superior to what was possible with its earlier DALL-E model. And Microsoft announced its boosting its Microsoft 360 Copilot offering with two “deep reasoning agents,” as well as “agent flows” designed to remove some of the unpredictability that comes with using AI agents.

ChatGPT already had an image generator, and Microsoft has already rolled out various sorts of agents geared toward the enterprise. Both releases, however, offer a new twist on what they were offering—and shows the power of being able to instantly roll out a new feature on a platform that already has hundreds of millions of users. Having that kind of distribution is a huge edge as the competition among similar products heats up. 

4o Image Generation raises the bar 

Now rolling out to ChatGPT Plus, Pro, Team, and free users, OpenAI describes the new integration as its “most advanced image generator yet.” And I have to say, the results are impressive. 

Overall, 4o Image Generation can produce vivid realistic scenes and produce impressive “style transfer” transformations of uploaded images based on prompts. (You can also edit key features of uploaded images, just from prompts too.) Based on the plethora of images flooding the ChatGPT subreddit, this style transfer capability is proving popular. An image the model created after a user prompted it to change the “Distracted boyfriend” meme into the style of “South Park,” for example, is honestly kind of shocking in how spot-on it is to the show’s visual look—no wonder companies creating generative AI models are being inundated with copyright lawsuits. On another note, users are already testing the boundaries of creating images of public figures such as Donald Trump and Elon Musk. OpenAI confirmed to Eye on AI that it isn’t restricting the new image model from creating images of real people except in cases of nudity or graphic violence. This represents a shift from its restrictions for DALL-E, which would refuse to generate images of real people. 

Perhaps the most interesting advancement, however, is the massive leap in the model’s ability to generate text. DALL-E and other previous image generating models would usually create garbled text, but 4o Image Generation can create long, detailed, and accurate strings of text inside images. The first example in OpenAI’s blog post shows an entire whiteboard of text that is easily readable and accurate to the prompt. 

A ‘researcher’ and ‘analyst’ join your 365 workspace

Microsoft describes its new “deep reasoning agents” for Microsoft’s 365 Copilot as being designed to “handle complicated tasks that require detailed analysis, methodical thinking, and nuanced understanding.” Based on OpenAI’s o1 reasoning model, the Researcher agent is geared toward multi-step research and integrates with external platforms like Salesforce, ServiceNow, and Confluence to garner insights from across a company’s data. Then there’s the Analyst agent, which is based on Open AI’s o3-mini reasoning model. Microsoft claims it’s optimized to do advanced data analysis at work, uses chain-of-thought reasoning, and can run Python to tackle complex data queries. Both are set to start rolling out in April.

In addition to the new agents, Microsoft also announced a new capability it’s calling “agent flows” that’s meant to add predictability to the use of agents. Agent flows provide structured, rule-based workflows that incorporate AI actions, following predefined and deterministic paths. This is important because as I wrote in last Thursday’s newsletter, AI agents have serious issues with reliability and can be risky, especially when it comes to critical actions or sensitive data. 

Various companies have been releasing AI agents touted for “deep research” lately, but Microsoft 365’s role as many businesses’ central platform—and integration with all the other data products they use—gives Microsoft a unique advantage. The AI field is crowded with companies competing with similar products, each jockeying for toeholds of differentiation. These updates make advanced AI features easily accessible right where the users of popular products already operate, which is likely to be a significant market advantage. What’s more, both Microsoft and Google moved to bundle their AI features into their enterprise software by default—and raised the prices of the core products—after previously allowing customers to opt-in to the AI features for an extra cost. That’s the platform advantage. 

And with that, here’s more AI news. 

Sage Lazzaro
sage.lazzaro@consultant.fortune.com
sagelazzaro.com

This story was originally featured on Fortune.com



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Amazon is reportedly joining a long list of potential suitors to buy TikTok with last-minute bid

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Amazon has put in a bid to purchase TikTok, a Trump administration official said Wednesday, in an eleventh-hour pitch as a U.S. ban on the platform is set to go into effect Saturday.

The official, who was not authorized to comment publicly and spoke on the condition of anonymity, said the Amazon offer was made in a letter to Vice President JD Vance and Commerce Secretary Howard Lutnick.

The New York Times first reported on the bid.

President Donald Trump on Inauguration Day gave the platform a reprieve, barreling past a law that had been upheld unanimously by the Supreme Court, which said the ban was necessary for national security.

Under the law, TikTok’s Chinese-owned parent company ByteDance is required to sell the platform to an approved buyer or take it offline in the United States. Trump has suggested he could further extend the pause on the ban, but he has also said he expects a deal to be forged by Saturday.

Amazon declined to comment. TikTok did not immediately respond to a request for comment.

The existence of an Amazon bid surfaced as Trump was scheduled on Wednesday to meet with senior officials to discuss the coming deadline for a TikTok sale.

Although it’s unclear if ByteDance plans to sell TikTok, several possible bidders have come forward in the past few months. Among the possible investors are the software company Oracle and the investment firm Blackstone. Oracle announced in 2020 that it had a 12.5% stake in TikTok Global after securing its business as the app’s cloud technology provider.

In January, the artificial intelligence startup Perplexity AI presented ByteDance with a merger proposal that would combine Perplexity’s business with TikTok’s U.S. operation. Last month, the company outlined its approach to rebuilding TikTok in a blog post, arguing that it is “singularly positioned to rebuild the TikTok algorithm without creating a monopoly.”

“Any acquisition by a consortium of investors could in effect keep ByteDance in control of the algorithm, while any acquisition by a competitor would likely create a monopoly in the short form video and information space,” Perplexity said in its post.

The company said it would remake the TikTok algorithm and ensure that infrastructure would be developed and maintained in “American data centers with American oversight, ensuring alignment with domestic privacy standards and regulations.”

Other potential bidders include a consortium organized by billionaire businessman Frank McCourt, which recently recruited Reddit co-founder Alexis Ohanian as a strategic adviser. Investors in the consortium say they’ve offered ByteDance $20 billion in cash for TikTok’s U.S. platform. Jesse Tinsley, the founder of the payroll firm Employer.com, says he too has organized a consortium and is offering ByteDance more than $30 billion for the platform. Wyoming small business owner Reid Rasner has also announced that he offered ByteDance roughly $47.5 billion.

Both the FBI and the Federal Communications Commission have warned that ByteDance could share user data — such as browsing history, location and biometric identifiers — with China’s authoritarian government. TikTok said it has never done that and would not do so if asked. The U.S. government has not provided evidence of that happening.

Trump has millions of followers on TikTok and has credited the trendsetting platform with helping him gain traction among young voters.

During his first term, he took a more skeptical view of TikTok and issued executive orders banning dealings with ByteDance as well as the owners of the Chinese messaging app WeChat.

This story was originally featured on Fortune.com



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A $1.8 billion accounting error snowballed over 10 years in South Carolina—and could cost the state’s treasurer his job

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For the first time in over two centuries as a U.S. state, South Carolina lawmakers are going to try to remove a statewide elected official from office.

The Republican-dominated Senate on Wednesday decided to hold a hearing to decide if Republican state Treasurer Curtis Loftis should be removed from office over a $1.8 billion accounting error and then failing to report the problem to the General Assembly. Loftis says the attempt to oust him is politically motivated.

Loftis can be removed if two-thirds of the Senate and House vote against him. At a hearing on April 21, senators will present their case and Loftis or his attorney will have three hours to respond. The House would then follow suit with their own hearing.

Money that didn’t exist

58-page report released last week on the accounting error said South Carolina’s books have been inaccurate for 10 years and continue to not be corrected. The state paid millions of dollars to forensic accountants who eventually determined the missing money was not cash the state never spent, but instead was a series of errors in balancing books and shifting accounts from one system to another that were never reconciled.

The state should “not consign the ongoing fiscal oversight — the banking and investment functions of our state — to continued incompetence. In sum: if the treasurer cannot keep track of the treasury, then he should not remain treasurer,” senators wrote in their report that included more than 600 pages of exhibits.

Loftis responded by pointing out he has won four elections since 2010 and called the Senate investigation a power grab so they can get support for a bill to have the treasurer become an appointed position.

“South Carolina’s financial threat isn’t from mismanagement or missing money. The real danger comes from a relentless, politically motivated attack on my office — one that risks undermining our state’s financial reputation, increasing taxpayer costs, and stripping voters of their right to elect a Treasurer who works for the people, not special interests,” Loftis wrote in a statement.

The origins of the mistake

The problems started as the state changed computer systems in the 2010s. When the process was finished, workers couldn’t figure out why the books were more than $1 billion out of whack. A fund was created to cover the accounting error and over the years more was added on paper to keep the state’s books balanced.

The error came to light after Comptroller General Richard Eckstrom resigned in March 2023 over a different accounting mistake and his replacement reported the mystery account.

The report said Loftis not only ignored or failed to find mistakes made by his office but also rejected or slowed down attempts to independently investigate the problem.

“The treasurer tried to cover them up. He covered it up for the better part of seven to eight years,” Republican Sen. Stephen Goldfinch said.

A Senate subcommittee has held hearings to question Loftis under oath. They have been contentious. Loftis has slammed papers, accused senators of a witch hunt and threatened to get up and leave.

Showdown with senators

One move that particularly angered senators occurred after a lawmaker asked Loftis why he didn’t file reports on the state finances, as required by law. The treasurer said he would publish a report online that could include bank account numbers and other sensitive information.

Senators were in an uproar the next day. They said the report could easily be published without information that would allow cybercriminals to empty the state’s accounts.

They had the governor and the head of the state police find Loftis and demand he not publish the report. The treasurer said he was just following the Senate’s instructions.

“His volatile temperament and angry demeanor degrade those who are charged to work with him to secure the financial standing of South Carolina,” senators wrote in last week’s report.

The report also said Loftis is responsible for millions of dollars to be spent through his lack of oversight and later lack of cooperation investigating the account.

What happens next?

The Senate approved Wednesday what is called the “removal on address” hearing by a voice vote with no opposition. Lawmakers have never taken the constitutional step to its conclusion.

The resolution’s future is a little more murky in the House, where no Republicans have come out to forcefully call for the treasurer’s removal.

Republican Gov. Henry McMaster has also suggested removing Loftis from office is too drastic, but the governor does not have a major role in the process.

This story was originally featured on Fortune.com



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Even the wealthiest Americans are suffering from shorter lifespans than those in Europe. A new study cites 3 major reasons

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Americans are dying earlier than Europeans—and the rich are not exempt. 

In a new study published today, researchers at Brown University analyzed the survival rates and wealth of older adults in the U.S. and Europe over 12 years. They found that Americans’ survival rate was lower than their European counterparts across all wealth tiers. The wealthiest in Northern and Western Europe had a mortality rate roughly 35% lower than that of the wealthiest Americans.  

“Whatever is happening with mortality in the U.S. and these decreases that we see in life expectancy are not just things that are happening to the poorest Americans,” Irene Papanicolas, senior author of the study and a professor of health services, policy, and practice at Brown School of Public Health, tells Fortune. “There’s something systemic that’s happening that affects every American.” 

In the study, published in the New England Journal of Medicine, researchers used data from over 73,000 adults between the ages of 50 and 85 in the U.S. and 16 European countries. 

Despite socioeconomic privilege, the researchers found that the survival rate of the wealthiest bracket of Americans “was statistically equivalent to the poorest wealth quartile in North and Western Europe,” Papanicolas says. “So they’re not just doing worse than the richest quartile. They’re statistically equivalent to the poorest quartile in that region.”

Papanicolas hypothesizes that several of the European countries at play, like Germany, the Netherlands, and Switzerland, are high spenders on health care, but they address the social determinants that exacerbate the health and wealth gap more adequately than the U.S.

Wealth still equals better health

Despite the discrepancy for the wealthiest in the U.S., across the board, the study underscores that wealth impacts health. The richest have better survival rates than the poorest, explained by the ability to pay for out-of-pocket health care costs, access to safer living situations, and education that provides health literacy, says Papanicolas. 

But the study found that America’s health gap between the richest and poorest was most stark. The poorest Americans had the lowest survival rates of all the study participants. 

“Greater inequity might just make a lot of what we need for a healthy life inaccessible to more and more people,” she says. “For a country that spends so much more, we really should be doing more.” The researchers conclude that a mixture of culture, policy, and environment can influence how much wealth impacts health, which seems most notable in the U.S. 

“Across all wealth quartiles [in Europe], people were more likely to have a college education as compared to the U.S. where that was much more concentrated across the most wealthy. Even things like smoking, we saw that there was less of a social gradient than we saw in the U.S,” Papanicolas says. “In a lot of the European countries, the top three quartiles were much more clustered together, so it didn’t really seem to make that much of a difference. The poorest do worse everywhere, but the majority of people had a much more similar trajectory in Europe [than in the U.S.].” (The authors note that the sample size in Europe cannot be generalized across all European countries). 

Papanicolas notes that the paper does not conclude definitive causes for the results but does extrapolate on the potential systemic issues afflicting the U.S. survival rates. 

“As we think of policies to address this, we really need to think, what are these factors that are so prevalent that they’re influencing everybody but that in other countries aren’t?” Papanicolas says. 

Here are three reasons for shorter U.S. lifespans:  

Avoidable causes of death

In the U.S., external deaths, such as from firearms, alcohol, and suicide, were higher compared to other wealthy countries. 

“This points to a weaker public health infrastructure that isn’t protecting people, as well as other high-income countries are from these deaths,” says Papanicolas. “I think we really need to think about how we bolster public health and protect people.”

High rates of cardiovascular death

High rates of heart disease, a significant risk factor for early mortality, also plague the U.S more dramatically than other high-income countries. 

“We need to think about diagnosis and treatment and making sure that everybody has access to affordable medications and is able to prevent the risk factors that can lead to deaths from heart disease,” Papanicolas says. 

A weaker social state 

Compared to the U.S., Papanicolas says European countries “invest in, potentially, a more robust social state that protects you from the stress of losing your job.”

“Your healthcare isn’t attached necessarily to your employment, and you have, maybe with more equal access to education, also more equal opportunities to become wealthy throughout the life course,” she says.

Another flag for a weaker social state: The U.S. dropped to its lowest rank on the annual World Happiness Report last month. “All of these play a role in the population, not only in the short term, but particularly in the long term,” Papanicolas says.

The study points to an urgent priority: a public health strategy with a goal of equal access to aging well, just as the Trump admin is dismantling health agencies charged with offering services to older adults, from mental health care to access to healthy food.

“Look to other countries and understand what they do, because it is possible to achieve a better survival with less,” says Papanicolas. “There’s also potentially a note of hope here that we can do better.”

This story was originally featured on Fortune.com



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