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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

Paul Atkins, President Donald Trump’s nominee to chair the Securities and Exchange Commission, is a financial omnivore. He has equity in Chinese tech giant Alibaba, holdings in crypto companies, and stakes in venture capital firms. And he also owns a bulging portfolio of life insurance policies: 54 to be exact, which he holds with his wife and family.

That’s according to a recent ethics disclosure, which must completed by agency heads (Atkins will likely be confirmed as SEC chairmain this week), Members of Congress and other high-level officials.

To put the Atkins’ 54 life insurance policies in context, in 2023, there were just under 260 million active policies in the U.S., according to the American Council of Life Insurers—fewer than one, on average, for every American adult. Meanwhile, the life insurance policies represented almost 10% of Atkins’s net worth, which Bloomberg puts at at least $327 million.

The decision by Atkins to amass dozens of life insurance policies flummoxes even some experts.

“It would make no sense for an individual to have 20, 30, 40, let alone 50, universal life policies on their own life,” James Carson, a professor at the University of Georgia who researches the insurance market, told Fortune. Why, then, does Atkins own so many?

Fortune reached out to Atkins for comment through the consultancy firm Patomak Global Partners, where he is CEO, but did not receive a reply.

Death and taxes

Perhaps the incoming SEC chair’s dozens of life insurance policies are a vehicle to reduce the taxes he owes, Timothy Harris, an economics professor at Illinois State University, told Fortune.

There are two main types of life insurance: term and whole. Term policies are in effect for a fixed period of, say, 20 or 30 years. The latter stay in effect for a policyholder’s life. Each of Atkins’ 54 policies are in the whole category, or a variation of it known as “universal.”  

Whole life insurance combines a savings account with a death payout. Policyholders deposit money into their account and receive tax-deferred interest. When they die, beneficiaries receive the saved money, interest, and lump sum. “It’s less so about insuring against premature death, and it’s more of an investment vehicle,” Harris said.

For those who haven’t maxed out their contributions to more traditional retirement vehicles, like 401(k)s and Roth IRAs, whole life insurance plans aren’t the best investment, Harris said. But “for high earners that have already exhausted all of the benefits from a 401(k), you can turn to these whole or universal life insurance policies to try and circumvent some of the taxes,” he added.

Complex finances—or a speculative wager

Atkins’ hoard of life insurance policies isn’t “a normal thing,” Patricia Born, a professor at Florida State University’s College of Business who studies risk management and insurance, told Fortune. But there may be an explanation beyond taxes, she said.  

The incoming SEC chair’s finances are complex. He has multiple trusts, sits on the board of multiple companies, and is the CEO of financial consultancy Patomak Global Partners. Companies often grant employees or board members life insurance policies, she said. “And it would make sense to have policies written specifically to pay to each of those trusts,” she added.

But Carson, the professor at the University of Georgia, believes the dozens of policies reflect something else: a decision by Atkins to purchase the life insurance of others.  

Such transactions are not uncommon. In some cases, a policy holder may decide the premiums are too expensive, or that they no longer need them to provide for loved ones. Those who want to dump their life insurance can sell it back to the company that issued it for a “surrender value,” or a buyback price.

Policy sellers can, though, choose to sell to a third party that offers more than the original issuer. In these cases, the third party would continue to pay the policy’s premiums and, if the original seller were to die, receive the windfall. Those who buy another’s life insurance policy are betting on a person’s life. Will that person die soon enough to make the short-term pain of monthly or annual fees worth it?

Carson is convinced this is why Atkins has 54 life insurance policies. “This guy clearly likes to have a big pool of varied investments,” he said. “And I think these are investments.”

He pointed to the variety of issuers on Atkins’ disclosure document as well as the variation in value of the life insurance policies. Some are worth north of $1 million, and others lie between $1,000 and $15,000.

Atkins is currently in front of the Senate in a confirmation hearing on Thursday. He plans to or has already divested a large portion of his holdings, but not his life insurance policies, according to an ethics agreement.

This story was originally featured on Fortune.com