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OpenAI vs. Apple? Sam Altman is setting his sights on an even higher-stakes AI battle

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All eyes are on the Big Tech LLM race and, at least in the eyes of investors, it seems like Google (owned by Alphabet, No. 7) could run away with the win.

Google’s Gemini has been steadily stealing buzz and AI traffic share over the last few months from OpenAI. And if there was any moat to be had in LLMs, it would seem like it would belong to the company with the biggest treasure chest of personal data on users. That almost indisputably would be Google, thanks to Android, YouTube, Search history, Maps, and Gmail. On top of that, the company has one of the top AI minds, Demis Hassabis, and Google cofounder Sergey Brin leading its troops toward dominance.

Perhaps that’s why Sam Altman is setting his sights on winning what could be an even higher-stakes AI battle: creating the future mass AI consumer device. Altman feels that in the long term, his greatest foe will be Apple (No. 4), not Google, Meta (No. 22), or Amazon (No. 2). He recruited iPhone designer Jony Ive to OpenAI this May, and Ive has said the company’s secret device could be ready in the next two years.

What will that device be like? If you ask Altman, he describes limitations with the mobile phone. First of all, it can be turned off. It also can’t scan the room around you and give you real-time context and know exactly when to deliver relevant information to you. He sounds more bullish about audio than visual as the primary means of communication. And he sees no reason why a device and an operating system should be sold separately, like Google and Android—a future device should come with the trademark LLM baked in, like iOS in an iPhone.

Thanks largely to that iPhone, Apple is generating tens of billions of dollars a year in cash flow that it can plow into new devices and armies of engineers to design them—two areas where OpenAI lags far behind. Then again, Apple seems ripe to be disrupted: As Meta founder Mark Zuckerberg said on Joe Rogan’s podcast earlier this year, “They haven’t invented anything great in a while. It’s like Steve Jobs invented the iPhone, and now they’re just kind of sitting on it 20 years later.”

But for now, OpenAI and its team are all about perfecting ChatGPT. For more on how Altman is planning to position OpenAI as a long-term hardware play, and how he’s combating fast-rising competition like Anthropic and Google in the short term, check out Fortune’s reporting on what’s happening inside OpenAI as it battles its way through an eight-week code red.

Also, we’re taking a break for the holidays, so Fortune 500 Digest will be back in inboxes Jan. 10. In the meantime, you can read the latest online.



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Georgia regulators OK 50% power capacity boost, betting AI data center demand will materialize

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Georgia’s only private electric utility plans to increase power capacity by 50% after state regulators on Friday agreed 5-0 that the plan is needed to meet projected demand from data centers.

It would be one of the biggest build-outs in the U.S. to meet the insatiable electricity demand from developers of artificial intelligence. The construction cost would be $16.3 billion, but staff members say customers will pay $50 billion to $60 billion over coming decades, including interest costs and guaranteed profit for the monopoly utility.

Georgia Power Co. and the Public Service Commission pledge large users will more than pay for their costs, and that spreading fixed costs over more customers, could help significantly cut residents’ power bills beginning in 2029.

“Large energy users are paying more so families and small businesses can pay less, and that’s a great result for Georgians,” Georgia Power CEO Kim Greene said in a statement after the vote.

But opponents say the five elected Republicans on the commission are greenlighting a risky bet by the utility to chase data center customers with existing ratepayers left holding the bag if demand doesn’t materialize.

“The need for 10,000 megawatts of new capacity resources on the system in the next six years isn’t here,” said Bob Sherrier, a lawyer representing some opponents. “It just isn’t, and it may never be.”

The approval came less than two months after voters rebuked GOP leadership, ousting two incumbent Republicans on the commission in favor of Democrats by overwhelming margins. Those two Democrats won in campaigns that centered on six Georgia Power rate increases commissioners have allowed in recent years, even though the company agreed to a three-year rate freeze in July.

Peter Hubbard and Alicia Johnson — the Democrats who will take office Jan. 1 — opposed Friday’s vote. But current commissioners refused to delay.

Electric bills have emerged as a potent political issue in Georgia and nationwide, with grassroots opposition to data centers partly based on fears that other customers will subsidize power demands of technology behemoths.

Georgia Power is the largest unit of Atlanta-based Southern Co. It says it needs 10,000 megawatts of new capacity — enough to power 4 million Georgia homes — with 80% of that flowing to data centers. The company has 2.7 million customers today, including homes, businesses and industries.

Whether the company’s projections of a huge increase in demand will pan out has been the central argument. Georgia Power and commission staff agreed Dec. 9 to allow the company to build or acquire all the desired capacity, despite staff earlier saying the company’s forecast included too much speculative construction.

In return, the company agreed that after the current rate freeze ends in 2028, it would use revenue from new customers to place “downward pressure” on rates through 2031. That would amount to at least $8.50 a month, or $102 a year, for a typical residential customer. That customer currently pays more than $175 a month, including taxes.

“So we’re taking advantage of the upsides from this additional revenue, but allow it to shift the downside and the risk over to the company. And I’m real proud of that,” Commission Chairman Jason Shaw said after the vote.

But “downward pressure” doesn’t guarantee a rate decrease.

“It doesn’t mean your bills are going down,” said Liz Coyle, executive director of consumer group Georgia Watch. “It means that maybe they’re not going up as fast.”

Existing customers would pay for part of the construction program that doesn’t serve data centers. More importantly, opponents fear Georgia Power’s pledge of rate relief can’t be enforced, or won’t hold up over the 40-plus years needed to pay off new natural-gas fired power plants.

In a Monday news conference, Hubbard likened it to a mortgage “to build a massive addition to your home for a new roommate, big tech.”

“If in 10 years, the AI bubble bursts or the data centers move to a cheaper state, then the roommate moves out, but the mortgage doesn’t go away,” he said.

Staff members say the commission must watch demand closely and that if data centers don’t use as much power as projected, Georgia Power must drop agreements to purchase wholesale power, close its least efficient generating plants and seek additional customers.

Many opponents oppose any new generation fueled by natural gas, warning carbon emissions will worsen climate change. Some opponents were escorted out of the commission meeting by police after they began chanting “Nay! Nay! Nay! The people say nay!”

“Increased natural gas output for the sake of these silicon billionaire kings seems like a lose-lose,” opponent Zak Norton told commissioners Friday.



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U.S. forces stop second tanker off the coast of Venezuela after Trump vows oil ‘blockade’

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U.S. forces on Saturday stopped an oil tanker off the coast of Venezuela for the second time in less than two weeks as President Donald Trump continues to ramp up pressure on Venezuelan President Nicolás Maduro.

The pre-dawn operation comes days after Trump announced a “blockade” of all sanctioned oil tankers coming in and out of the South American country and follows the Dec. 10 seizure by American forces of an oil tanker off Venezuela’s coast.

Homeland Security Secretary Kristi Noem confirmed that the U.S. Coast Guard with help from the Defense Department stopped the oil tanker that was last docked in Venezuela. She also posted on social media an unclassified video of a U.S helicopter landing personnel on a vessel called Centuries.

A crude oil tanker flying under the flag of Panama operates under the name and was recently spotted near the Venezuelan coast, according to MarineTraffic, a project that tracks the movement of vessels around the globe using publicly available data. It was not immediately clear if the vessel was under U.S. sanctions.

“The United States will continue to pursue the illicit movement of sanctioned oil that is used to fund narco terrorism in the region,” Noem wrote on X. “We will find you, and we will stop you.”

The action was a “consented boarding,” with the tanker stopping voluntarily and allowing U.S. forces to board it, according to a U.S. official who was not authorized to comment publicly and spoke on the condition of anonymity.

Pentagon and White House officials did not immediately respond to a requests for comment.

Venezuela’s government in a statement Saturday characterized the U.S. forces’ actions as “criminal” and vowed to not let them “go unpunished” by pursuing various legal avenues, including by filing complaints with the United Nations Security Council.

“The Bolivarian Republic of Venezuela categorically denounces and rejects the theft and hijacking of another private vessel transporting Venezuelan oil, as well as the enforced disappearance of its crew, perpetrated by United States military personnel in international waters,” according to the statement.

Trump following the first tanker seizure, of a vessel named the Skipper, this month vowed that the U.S. would carry out a blockade of Venezuela. It all comes as Trump has ratcheted up his rhetoric toward Maduro and warned that the longtime Venezuelan leader’s days in power are numbered.

And the president this week demanded that Venezuela return assets that it seized from U.S. oil companies years ago, justifying anew his announcement of a “blockade” against oil tankers traveling to or from the South American country that face American sanctions.

Trump cited the lost U.S. investments in Venezuela when asked about his newest tactic in a pressure campaign against Maduro, suggesting the Republican administration’s moves are at least somewhat motivated by disputes over oil investments, along with accusations of drug trafficking. Some sanctioned tankers already are diverting away from Venezuela.

“We’re not going to be letting anybody going through who shouldn’t be going through,” Trump told reporters earlier this week. “You remember they took all of our energy rights. They took all of our oil not that long ago. And we want it back. They took it — they illegally took it.”

U.S. oil companies dominated Venezuela’s petroleum industry until the country’s leaders moved to nationalize the sector, first in the 1970s and again in the 21st century under Maduro and his predecessor, Hugo Chávez. Compensation offered by Venezuela was deemed insufficient, and in 2014, an international arbitration panel ordered the country’s socialist government to pay $1.6 billion to ExxonMobil.

The targeting of tankers comes as Trump has ordered the Defense Department to carry out a series of attacks on vessels in the Caribbean and eastern Pacific Ocean that his administration alleges are smuggling fentanyl and other illegal drugs into the United States and beyond.

At least 104 people have been killed in 28 known strikes since early September.

The strikes have faced scrutiny from U.S. lawmakers and human rights activists, who say the administration has offered scant evidence that its targets are indeed drug smugglers and that the fatal strikes amount to extrajudicial killings.

The Coast Guard, sometimes with help from the Navy, had typically interdicted boats suspected of smuggling drugs in the Caribbean Sea, searched for illicit cargo, and arrested the people aboard for prosecution.

The administration has justified the strikes as necessary, asserting it is in “armed conflict” with drug cartels aimed at halting the flow of narcotics into the United States. Maduro faces federal charges of narcoterrorism in the U.S.

The U.S. in recent months has sent a fleet of warships to the region, the largest buildup of forces in generations, and Trump has stated repeatedly that land attacks are coming soon.

Maduro has insisted the real purpose of the U.S. military operations is to force him from power.

White House chief of staff Susie Wiles said in an interview with Vanity Fair published this week that Trump “wants to keep on blowing boats up until Maduro cries uncle.”

This story was originally featured on Fortune.com



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Elon Musk adds to his $679 billion fortune after Delaware court awards him $55 billion pay package

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Elon Musk, already the world’s richest man, scored another huge windfall Friday when the Delaware Supreme Court reversed a decision that deprived him of a $55 billion pay package that Tesla doled out in 2018 as an incentive for its CEO to steer the automaker to new heights.

Besides padding Musk’s current fortune of $679 billion, the restoration of the 2018 pay package vindicates his long-held belief that the Delaware legal system had overstepped its bounds in January 2024 when Chancellor Kathaleen St. Jude McCormick rescinded the compensation in a case brought by a disgruntled Tesla shareholder.

Tesla didn’t immediately respond to a request for comment late Friday.

McCormick’s ruling so incensed Musk that it spurred him to spurn Delaware and reincorporate Tesla in Texas. That decision also caused Tesla’s board to scramble for ways to keep its CEO happy, including a successful effort to persuade the company’s shareholders to reaffirm the pay package, which was valued at $44.9 billion at the time of the second vote 18 months ago.

With Musk still signaling discontent, Tesla upped the ante again this year by crafting another pay package that could pay him $1 trillion if he can lead the automaker down a road during the next decade that lifts the company’s market value from its current $1.6 trillion to $8.5 trillion. Shareholders approved that pay package last month, to Musk’s delight.

That may sound like a difficult task, but it also appeared like a long shot for Musk to hit all the targets to qualify for the payout that was dangled in the 2018 package. At that time, Tesla was still struggling to expand its production of electric vehicles and burning through cash.

At the time the 2018 pay package was drawn up, Tesla’s market value was hovering in the $50 billion to $75 billion range. But then the company’s manufacturing problems eased, enabling it to start meeting hot demand for its vehicles, which in turn pumped up its sales and stock price to a level that qualified Musk for the big payout that had been promised him.

But based on evidence that included Musk’s testimony during a 2022 trial, McCormick ruled the pay package had been crafted by a board that was too cozy and beholden to the hard-charging Musk.

In its 49-page ruling, the Delaware Supreme Court cited a variety of errors in McCormick’s 2024 decision and declared the 2018 pay package should be restored. It also awarded Tesla $1 in nominal damages.

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