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  • Nano Banana goes viral, why Meta’s AI could be in big trouble & more AI News That Matters

Nano Banana goes viral, why Meta’s AI could be in big trouble & more AI News That Matters

Microsoft and GSA ink government deal, Anthropic now valued at $183 billion, OpenAI’s 120-day teen safety initiative and more!

Outsmart The Future

Today in Everyday AI
8 minute read

🎙 Daily Podcast Episode: Meta’s AI troubles are mounting, Google’s Nano Banana image model goes viral, OpenAI’s real-time API and more! Catch up on the AI news that matters this week. Give it a listen.

🕵️‍♂️ Fresh Finds: Researchers trick ChatGPT with psychology, England’s healthcare gets AI boost and Gen Z getting ditched for AI. Read on for Fresh Finds.

🗞 Byte Sized Daily AI News: Microsoft and GSA ink government deal, Anthropic now valued at $183 billion and OpenAI’s 120-day teen safety initiative. For that and more, read on for Byte Sized News.

🧠 AI News That Matters: From Microsoft Copilot’s new refresh to OpenAI’s Image Gen API, here’s what you missed last week in the world of AI. Keep reading for that!

↩️ Don’t miss out: Did you miss our last newsletter? We talked about celebrating 600 episodes, Microsoft unveiling new speech models, Meta adding teen chat restrictions and Alibaba testing a new AI chip. Check it here!

AI News That Matters - September 2nd, 2025 📰

For the second time in just as many weeks, Google dropped impressive AI updates that their competitors will struggle to keep up with. 

Salesforce is cutting it’s support staff due to AI and OpenAI's backend tech could be one of its biggest updates yet. 

And that's just the start. 

Don't waste hours a day trying to keep up with AI developments. That's what we do.

Also on the pod today:

• Google Adds AI Avatars to Google Vids 👥
• Stanford Study: AI Hurting Entry-Level Jobs 💼
• Meta AI Losing Key Talent & Researchers 😬

It’ll be worth your 49 minutes:

Listen on our site:

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Listen on:

Here’s our favorite AI finds from across the web:

New AI Tool Spotlight – Omniflow is an AI operating system for product development, AdClone AI remixes any ad in LinkedIn’s Ad Library and Music AI Bubble connects ChatGPT to your music app for music trivia and info.

ChatGPT – Researchers were able to convince ChatGPT to do things it normally wouldn’t do with psychology

AI in Healthcare – The Stroke centers in England have received AI tools that will help 50% of patients recover.

Future of Work – Fortune 500 warns that CEOs are ditching Gen Z “first-timers” for AI.

AI in Society – Experts are warning that AI stuffed animals could change human brain wiring in kids.

ElevenLabs – ElevenLabs has released a V2 of its SFX model.

1. Microsoft and GSA Ink Major AI-For-Government Deal 🇺🇸

According to Microsoft and the U.S. General Services Administration, Microsoft will offer a government-focused suite — including Microsoft 365 Copilot free for up to 12 months to millions of existing G5 users — under a unified pricing strategy that aims to save about $3 billion in year one.

The agreement bundles Copilot, Azure discounts (with waived egress fees), Dynamics 365, Entra ID and Sentinel with FedRAMP High authorizations, positioning agencies to accelerate cloud modernization, automate services with no per-agent AI fees, and tighten security.

2. Anthropic Raises $13B at a $183B Valuation as Revenue Explodes 🤑

Anthropic confirmed a $13 billion Series F that values the company at $183 billion and follows explosive growth: run-rate revenue jumped from about $1B to over $5B in under nine months and Claude Code alone now accounts for more than $500M in run-rate revenue.

The startup says it has 300,000 business customers and a sevenfold increase in accounts each generating over $100K, underscoring rapid enterprise adoption and the product-market fit for developer and enterprise tools.

3. OpenAI Previews 120‑Day Initiative For Crisis Help and Teen Safeguards 🛡️

OpenAI announced a focused 120‑day initiative to improve how its models handle mental‑health and crisis situations, promising faster routing to stronger reasoning models for acute distress and broader clinician guidance; the move aims to make urgent help more reliable and to connect users to emergency resources and trusted contacts.

The company is expanding an Expert Council on Well‑Being and a 250+‑physician Global Physician Network to shape safety, measurement, and clinical guidance for sensitive moments—changes that could materially reduce risky or unhelpful responses during high‑stakes interactions.

4. WordPress Debuts Telex — Experimental AI Builder for Gutenberg Blocks 🟦

WordPress unveiled Telex, an experimental AI tool that generates installable Gutenberg block plugins from text prompts, during CEO Matt Mullenweg’s WordCamp US 2025 keynote, signaling a push to make advanced site-building more accessible.

Early testers report mixed results and broken outputs, underscoring that Telex is an early prototype rather than a finished product. The move is timely: Automattic’s new AI team and public demo show WordPress trying to keep pace as AI reshapes content creation and developer workflows.

5. Runway Pivots its Video AI Toward Robots and Self-Driving Cars 🤖

Runway — maker of Gen-4 video and Runway Aleph editing models — is now pitching its world-generation tech to robotics and autonomous-vehicle teams, saying simulated visual environments can cut time and cost for training policies.

Runway will fine-tune existing models rather than build a separate stack and is forming a dedicated robotics team.

Meta's reportedly shopping around to use Google's Gemini and OpenAI's models in their own Meta AI assistant.

Awkward. 

Marc Benioff just went full hypocrite mode, cutting 4,000 customer service jobs after claiming two months ago that AI wouldn't cause mass unemployment.

Meanwhile?

Google dropped AI updates so viral that their "nano banana" model jumped 170 points ahead of every competitor on the LMArena leaderboard, while also going after Duolingo's turf with Google Translate.

That’s just the tip. 

Here's what matters, y’all. 

1 – Meta Explores Competitor Models for Meta AI 🤝

How do you signal you're behind in AI without actually saying it?

The Information reports that Meta's Superintelligence Labs leaders have been exploring integrating Google's Gemini and potentially OpenAI's models to deliver better text-based responses in Meta AI. This would be a "near-term strategy" to raise response quality while they work on Llama 5.

Translation: Their current tech isn't cutting it.

A Meta spokesperson said they're taking an "all-of-the-above approach" combining partnerships with building their own systems, which sounds way better than "we need help from our rivals."

Meta already uses Anthropic's Claude for internal coding, so they're clearly comfortable mixing providers where they see advantages, but offering competitor tech to consumers is next level.

What it means: 

There's a steep quality drop-off from Google and OpenAI to everyone else in AI.

Meta spending billions on talent and compute but still needing competitor models shows just how hard this game is.

If Meta can't compete with their resources, most companies are essentially choosing between OpenAI and Google - everyone else is fighting for scraps.

2 – Google Takes Dead Aim at Duolingo 🎯

Why did Google just turn their translate app into a Duolingo killer?

Google rolled out AI-powered practice sessions inside Google Translate that adapt to your skill level and let you choose listening or speaking drills. You set learning goals like "getting to know a host family" and it generates customized scenarios.

Smart move.

The feature launched in beta for English speakers practicing Spanish and French, plus Spanish/French/Portuguese speakers working on English, with Google saying it's "complementary" to other learning methods.

But here's the thing - Duolingo's stock dropped 3% on the announcement before recovering, showing investors the threat. With 130 million active users but only 10% paying, Duolingo's got a problem.

Google processes 1 trillion words daily across Translate, Search, and Lens, so they've got the data advantage plus it's free versus Duolingo's subscription model.

What it means: 

Google realizes they can destroy established markets by adding features to apps they already own.

Unlike Duolingo's gamified lessons that mainly check pronunciation, this offers conversational AI tutoring at zero cost.

Google is systematically targeting startup territories they could have dominated years ago if they'd connected the dots sooner.

3 – Meta Scrambles on Teen Safety After Romance Policy Scandal 🚨

Remember when Reuters exposed Meta's internal policy encouraging romantic conversations with minors?

Meta is rolling out new protections to stop teen users and its AI chatbot from discussing self-harm, suicide, and disordered eating over the next few weeks. They're also blocking teens from user-made chatbot characters that could host inappropriate conversations.

About dang time. And like we talked about last week, the fact that this was reportedly in Meta’s policy in the first place is absolutely disgusting. 

The company said they added guardrails to redirect teens to expert resources after that absolutely disgusting internal policy that literally outlined how their AI should have sensual conversations with children.

Meta called it an "error" when they got caught, but Reuters reported at least four different leaders across departments had signed off on the language. That's not an error - that's an approved company policy.

U.S. Senator Josh Hawley set a deadline for internal documents from Meta this month. 

(Tick tock Meta.) 

What it means: 

Meta's original policy was so disturbing it reveals fundamental problems with their approach to user safety.

Multiple executives approving romantic chatbot guidelines for minors should result in firings, not just policy tweaks.

This was their default stance until public outrage forced changes - imagine what other policies they have that haven't been exposed yet. 

4 – Marc Benioff’s Epic AI Jobs Flip-Flop  🤖

How do you go from "humans in the loop" to "I need fewer heads" in eight weeks?

Salesforce CEO Marc Benioff revealed that AI agents let him slash customer support from 9,000 to 5,000 employees, with AI now handling 50% of customer conversations versus zero a year ago.

Two months ago, Benioff told Fortune that AI accuracy was only 90% and companies needed to keep humans involved. Now he's bragging about cutting nearly half his support staff because he "needs fewer heads."

Either he was lying about AI limitations or the tech advanced impossibly fast - neither looks good.

The CEO also revealed Salesforce had over 100 million uncalled leads from 26 years ago because they lacked staffing, but now AI agents call back everyone who contacts them.

His stock being down 22% year-to-date while other AI companies soared makes this jobs cut announcement feel extra desperate for investor validation.

What it means: 

When CEOs flip this dramatically on AI employment impact within weeks, it signals scrambling to show cost-cutting like competitors.

Benioff's credibility on AI job displacement just took a massive hit after such a public reversal.

This is classic CEO behavior when under pressure - say whatever sounds good for the current audience.

5 – OpenAI’s Real-Time Voice API Changes Everything 🎙️

What's the difference between today's clunky AI phone calls and what's coming next?

OpenAI launched the general availability of its Realtime API alongside gpt-realtime, a speech-to-speech model for production-grade voice agents that supports phone calling integration and image inputs.

Game changer.

Traditional voice AI systems convert speech-to-text, process in text, then convert back to speech - multiple steps that create delays and lose conversational nuance.

This runs a single voice pipeline that handles mid-sentence language switching, better alphanumeric transcription, and tone control with two exclusive voices called Cedar and Martin.

Companies can now plug voice agents into existing phone systems with minimal custom work, meaning your bank could deploy this tech instead of making you wait on hold for human agents.

What it means:

Customer service is about to see a massive quality upgrade as this tech replaces the terrible AI phone systems currently deployed.

The gap between current AI phone agents and what's now possible just became enormous - expect rapid adoption.

Voice-to-voice processing preserves emotional context and conversational flow in ways previous tech couldn't match.

6 – Meta’s $14B Scale AI Investments Shows Cracks 💸

How do you blow a massive AI acquisition in just months?

TechCrunch reports that Scale AI's former SVP Ruben Meyer left Meta after only two months despite being part of the core TBD Labs team "from day one," citing personal reasons.

Rut-roh. 

Despite the $14.3 billion investment and 49% equity stake, five sources say Meta's labs are actively using Scale AI's competitors Surge and Mercur for data labeling, with some researchers viewing Scale's quality as inferior.

Multiple high-profile researchers including Rishabh Agarwal, Chaya Nayak, and Rohan Varma have reportedly left after signing those NBA-level contracts, walking away from tens of millions in compensation.

Inside Meta, sources describe "rising turbulence" with new hires frustrated by big company bureaucracy and parts of the previous GenAI team seeing reduced scope.

What it means:

Throwing billions at top researchers doesn't work if your company culture drives them away within weeks.

These people are leaving generational wealth on the table, suggesting serious internal issues beyond normal corporate friction.

Meta's strategy of outspending everyone for talent is spectacularly backfiring when the talent keeps quitting. 

7 – Perplexity Launches Publisher Revenue Share 🏫

Will LLMs eat the journalism industry, or feed it? 

Well, Perplexity is trying to do the latter with its newest Comet Plus program. 

The Wall Street Journal reports Perplexity is launching Comet Plus, a $5 monthly subscription sharing 80% of revenue with publishers when their AI uses publisher content to answer questions.

Finally.

The plan covers both traditional indexed traffic and new "agent traffic" from actions like calendar scanning and article suggestions - interactions that bypass ads and aren't covered by existing publisher deals.

Existing Pro and Max subscribers automatically contribute since Comet Plus is included, drawing from a $42+ million revenue pool that grows with signups.

What it means:

We’ve been saying this since Day 1 – publishers have three choices with AI - sue, partner, or die.

Since many publications are losing 30-70% of traffic to AI, programs like this might be their only lifeline.

We need partnerships like this to prevent the internet from becoming pure AI slop trained on increasingly low-quality content.

8 – Google Vids Goes Full AI Avatar Mode 🎬

How many video production jobs just vanished?

Google added AI avatars and editing features to Google Vids, letting teams write scripts, select avatars, and generate complete videos with live collaboration like Google Docs.

Brutal for video editors.

New features include noise cancellation, background options, and transcript trimming that automatically removes filler words and awkward pauses - the tedious work that used to take professionals hours.

You can also record yourself and let AI fix lighting, sound, and pacing, with Google executives saying Vids can correct talking speed and filler usage in clicks.

Basic features are free while premium ones require paid Gemini subscriptions, making professional-grade video creation accessible to any small business that couldn't afford agencies.

What it means:

Google just kinda eliminated some entry-level video editing, production, and voiceover opportunities in one update.

Companies like HeyGen and Descript that spent years perfecting these features got steamrolled by Google's resources and integration advantages.

On the flip side, small businesses can now create compelling content without professionals, but thousands of creative jobs disappear in the process.

9 – Stanford Study Exposes AI’s Generational Job Divide 📊

Why are 22-year-olds getting crushed while 40-year-olds thrive?

Stanford economists analyzed ADP payroll data from 25 million workers and found early-career workers in AI-exposed jobs experienced a 13% employment decline since late 2022 while older workers in the same fields grew 6-9%.

Harsh reality check.

The biggest hits are in software engineering and customer service, where entry-level roles dropped 20% while employment for older workers in identical positions actually increased.

Lead researcher Erik Brynjolfsson says AI overlaps heavily with "book learning" that college grads have, while experienced workers possess tacit knowledge and organizational skills AI can't replicate yet.

This isn't about AI replacing all jobs. Nope. It's more about creating a brutal generational divide where experience suddenly became way more valuable than credentials.

What it means: 

Entry-level workers are losing the stepping stones they need to build expertise and climb career ladders.

Companies are keeping senior workers who understand business context while AI handles tasks that used to be training opportunities.

Young workers who learn to use AI effectively can be more productive, but those just doing what AI already does have little value-add left.

10 – Google’s Nano Banana Breaks the Internet 🍌

What makes an AI model so viral it jumps 170 points ahead of every competitor?

Google released Gemini 2.5 Flash Image, previously called "nano banana," and it dominated the LM Arena leaderboard with the biggest quality jump in AI image editing history.

Completely bananas.

The model is multimodal by default with character consistency that preserves exact details when you upload photos and edit them with natural language - no more facial feature changes for safety like other models.

You can combine multiple objects in single photos while maintaining consistent styling, and Google embraced the community nickname by adding banana icons and using "nano banana" in their interface.

At 100 free daily edits through AI Studio and under 4 cents per image via API, it costs a fraction of what less capable competitors charge.

What it means: 

This represents a massive leap in creative AI that puts Google way ahead of every image editing competitor.

Natural language photo editing with perfect character consistency opens entirely new creative workflows that weren't possible before.

Google's pricing makes professional-grade AI image editing accessible to everyone while competitors charge dollars for inferior results.

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