Microsoft and OpenAI Patch Things Up?

Hey folks, Stay ahead with the latest in AI—let’s dive in!

WHAT YOU’LL READ TODAY

• Nvidia & OpenAI to Back Massive UK AI Hub

• California Eyes New Rules for AI Companion Chatbots

• Microsoft and OpenAI Patch Things Up?

• FTC Probes Google, OpenAI, xAI, and Meta Over AI Companions for Kids

• And more…

Nvidia & OpenAI to Back Massive UK AI Hub

Nvidia and OpenAI are reportedly set to announce a multi-billion-dollar investment in UK data centers next week in partnership with London-based Nscale Global. The UK government will supply power, Nvidia will provide chips, and OpenAI will contribute AI tools—part of a push to build sovereign AI infrastructure amid escalating demand for compute.
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California Eyes New Rules for AI Companion Chatbots

California has passed SB 243 in the Assembly, a bill that would be the first in the US to regulate “AI companion” chatbots—imposing safety protocols on how they interact (especially around minors), requiring disclaimer prompts, and allowing legal recourse for users harmed by violations. If approved by the Senate and signed into law by Gov. Newsom, the rules would take effect January 1, 2026.
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Microsoft and OpenAI Patch Things Up?

Our Take
Microsoft and OpenAI have updated their partnership with a “Nonbinding Memorandum of Understanding (MOU).” While not legally enforceable, the MOU sets expectations on both sides and clears the path for OpenAI to continue its push to convert its for-profit arm into a Public Benefit Corporation (PBC). The move would let OpenAI raise outside capital and eventually pursue a public listing.

Key Highlights

• OpenAI chairman Bret Taylor confirmed that the non-profit parent will remain intact and will receive equity in the company once it becomes a PBC—a structure that could value OpenAI north of $100B.

• Both companies acknowledged the MOU but stressed they are still “working with attorneys general” on the transition, signaling that regulatory hurdles remain.

• Despite months of tension, both sides reaffirmed their commitment to “delivering AI tools for everyone, grounded in our shared commitment to safety.”

The Bigger Picture
OpenAI’s shift to a PBC has sparked heated debate across the tech world. Elon Musk—an original co-founder—is suing, arguing the company has “abandoned” its founding mission of developing AGI for the benefit of humanity in favor of chasing profits. Non-profits like Encode and The Midas Project have sided with Musk, leading OpenAI to issue subpoenas alleging that Musk secretly funded their stance.

FTC Probes Google, OpenAI, xAI, and Meta Over AI Companions for Kids

The Federal Trade Commission (FTC) has launched an investigation into seven companies developing AI companions for minors—including Google, OpenAI, Meta, and Elon Musk’s xAI—focusing on how these platforms handle safety and monetization.

Regulators are examining whether the companies’ safeguards are effective, as OpenAI itself has acknowledged that guardrails designed to filter or redirect sensitive topics “can be less reliable in long interactions.”

The probe follows reports of troubling incidents involving AI companions. Mental health experts have also flagged a rise in “AI-related psychosis,” a condition where users begin to believe their chatbot is an actual human.

Anthropic Expands Claude’s Memory Capabilities

Anthropic has upgraded its AI chatbot, Claude, with a smarter “Memory” feature that automatically recalls past conversations. This means Claude can now apply details—like user preferences or prior context—without needing to be prompted.

The feature is currently available only to Team and Enterprise users and builds on an earlier update last month, when Claude gained the ability to remember conversations but only if explicitly asked.

Early adopters report that Claude’s memory is especially effective for work-related tasks, helping it retain information about team workflows, client needs, and project details. Importantly, users remain in control: memories can be viewed, edited, or deleted at any time.

• ChatNode – Build custom, advanced AI chatbots that boost customer support and user engagement.

• Hi AI – An AI-powered email client that automatically replies to emails, saving you time and effort.

• Marketeam.ai – AI-driven agents designed to accelerate brand growth and marketing performance.

That’s all for now — thanks for spending a few minutes with us today. We hope you found something valuable to carry into your week. Got thoughts, feedback, or just want to say hi? We’d love to hear from you. Until next time, stay curious and keep moving forward.

-Team AI Paradox