There’s OpenAI and then there’s open-source AI. The first is Sam Altman’s growing empire. The second is Zuck’s play. 

On Tuesday, the tech giant formerly known as Facebook debuted the latest version of Llama, its large-language model (LLM). The catch? Unlike rival ChatGPT, Llama is open source, meaning the underlying tech will be available for the public to use for free… for now, at least. It’s a textbook Mark Zuckerberg gambit, and one that sets Meta apart from its chief competition in the AI space.

Zucking the Trend

By all accounts, Llama 3.1 is the biggest and best open-source AI model ever created — about on par with OpenAI’s GPT-4o and Anthropic’s Claude 3.5 Sonnet, Meta claims. And, in an open letter published on Meta’s blog Tuesday, Zuckerberg argues that making it open source is essentially philanthropic: “open source AI represents the world’s best shot at harnessing this technology to create the greatest economic opportunity and security for everyone.” Most importantly, of course, it might just be the greatest economic opportunity ever for Meta, a company that’s had its share of big ones.

By going the open-source route, Meta is explicitly trying to turn Llama into the Linux system of the AI age (Linux is the bedrock open-source code underlying just about everything in the tech-verse, from cloud computing to smartphone operating systems). Essentially, Meta wants everyone — from Big Tech competitors to startups to firms outside of tech — to use and rely on Llama’s open-source code to develop new tools and LLMs of their own. But just because it’s free (requiring users only to adhere to an “acceptable use policy”) doesn’t mean there’s no financial upside for Meta:

• First and foremost, by making Llama open source, Meta can potentially grab significant market share while kneecapping the business model of rivals who offer closed-source models at a premium. OpenAI, for instance, says it is on track to cross $2 billion in revenue this year, in part by selling Enterprise packages to businesses.
• It also opens the door for Meta to employ one of the tech industry’s most time-tested business strategies: fostering a massive ecosystem of developers and users by offering a free product, and then layering in various paid-for products and services.

Still, return on investment may be years and years away; Meta reported billions in costs to develop Llama in its latest earnings call. 

Turing Test: Experts, meanwhile, are somewhat split on the safety of open-sourcing AI models. Turing Award winner and outspoken former Googler Geoffrey Hinton told Wired that “cyber criminals everywhere will be delighted.” On the other hand, Dan Hendrycks, director of the Center for AI Safety, says it’ll allow third parties to conduct much-needed AI safety research. 

The winds keep shifting at Shell.

On Tuesday Bloomberg reported that Shell has started to shop around for buyers to offload its stake in an offshore wind project off the coast of Scotland. Shell declined to comment both to Bloomberg and The Daily Upside, but the news is indicative of Shell’s shrinking energy transition ambitions.

Winds of Change

Shell has made it clear that it’s not hitting the accelerator on clean energy. CEO Wael Sawan took the top job in January 2023, and in November of that year, he told the Financial Times he wants the company’s energy transition strategy to be “leaner,” adding that it “inevitably will include choices around where we are going to operate but also importantly how we operate.”

As well as watering down some oil production targets and selling “phantom” carbon credits, the newest stage in Shell’s less-green strategy is to ice planned projects:

• Shell announced earlier this month it’s pausing development at a huge biofuel plant project that’s been in the works since 2021, citing a need to “address project delivery and ensure future competitiveness given current market conditions.” The European biofuel industry has hit a rough patch, with supply outpacing demand.
• The offshore wind industry has also been struggling. The sector weathered a stormy 2023, hit hard by high inflation and interest rates, suffering what was essentially its first full-blown financial crisis.

Shell already cut the size of its in-house offshore wind team in May, Bloomberg reported.

More Squalls: The industry is also facing a major supply chain squeeze. The FT reported on Saturday that increased demand for parts plus tight shipping availability is throwing yet another storm in the direction of the UK’s offshore wind industry, just as the Labour government is gearing up to make offshore wind a cornerstone of its energy policy.

No steering wheel? No side-view mirrors? No brake pedal? No thanks.

General Motors shares tumbled more than 6% Tuesday after the company said its struggling driverless taxi division, Cruise, will suspend production of the Origin robotaxi, a van-sized, self-driving pod-on-wheels that lacks conventional driving controls.

Indefinitely Maybe

Cruise said in September 2023 that it was “just days away” from getting the regulatory green light to begin mass production of the Origin. A month later, the company’s self-driving taxis were banned in California after one failed to brake before hitting and dragging a pedestrian in San Francisco — who had been knocked into its path by a hit-and-run involving a human driver — resulting in multiple legal probes. The model involved was not an Origin.

Meanwhile, the National Highway Traffic Safety Administration hasn’t acted on a 2022 petition from Cruise asking for permission to deploy up to 2,500 Origin robotaxis per year. And GM, which has lost over $8 billion on Cruise since 2017, has had to inject more and more capital to keep it afloat amid the regulatory uncertainty — most recently, an $850 million investment in June. Cruise’s new direction will involve a frugal turn and an actual brake pedal:

• Cruise will pivot its focus to self-driving versions of the Chevrolet Bolt electric car, and has restarted test driving in Dallas, Houston, and Phoenix. It’ll also have to focus on competition: Alphabet’s Waymo has 300 vehicles operating in San Francisco and Tesla has pledged a robotaxi unveiling later this year.
• While halting production on the Origin cost GM a $583 million charge, CEO Mary Barra said going forward with the Bolt means “per-unit costs will be much lower.” GM as a whole solidly beat analyst projections in its latest financials, released Tuesday, making $48 billion in revenue against a FactSet estimate of $45.5 billion. 

Golden Sell-Off? Not all analysts were convinced by the stock plunge, instead pointing to GM’s solid financials. “We believe this is just a knee-jerk reaction and the GM quarter was a robust one which should drive the stock higher over the coming weeks and months,” Dan Ives, an analyst at Wedbush Securities, told Reuters.