Welcome to Eye on AI. Beatrice Nolan here. In today’s issue:
After the midterms, Big Tech’s AI data center problem is only getting bigger. Key Claude Code exec jumps from Anthropic to OpenAI. Apple cuts employees’ AI budgets. And, companies’ AI spend is going up.OpenAI took its Dev Day roadshow to London this week, attempting to sell the city’s developers on Dots, the company’s new, always-on AI assistant.
The company first announced Dots at its big annual developer event in San Francisco a month ago, pitching them as its flagship agentic offering. Whereas tools like Codex, the company’s coding assistant, wait for a user’s instructions, Dots are meant to be proactive. The assistant learns a user’s goals, watches their inbox and work tools, and starts tasks before they ask. (Dots aren’t available in Europe yet, but OpenAI said it is working with European regulators to change that.)
The industry is betting that proactive personal agents are the natural next step for AI, potentially driving as much value on the consumer side as coding agents did on the enterprise side. It’s an increasingly urgent new market for the industry right now, as companies, including Apple and Goldman Sachs, move to cap some employees’ AI spend, a trend that could dent revenue growth at the leading AI labs.
Given the stakes, it’s not surprising that OpenAI is arriving in a crowded market. Meta’s Muse got there first and has proved hugely popular with consumers; Elon Musk’s xAI has Grok Bot; and Anthropic has its own Duet on the market too.
How is OpenAI positioning Dots against that competition? By betting on high-end, high-spend users first.
“There are many other assistants out there, some of which have great UI interfaces, but what they can accomplish can be less advanced,” Romain Huet, OpenAI’s head of developer experience, told me. “We really wanted to nail the enterprise and pro use case first, because I think that’s where people will see the most value.”
The company is rolling out Dots to enterprises and its most expensive Pro subscribers in the U.S.
That strategy also reflects how expensive these agents are to run. As my colleague Emily Forlini reported this week, Musk has said Grok Bot’s running costs are “unsustainably high relative to revenue,” and Adam Fry, who runs ChatGPT’s consumer business, told reporters that Dots are “on the compute-heavy side.” OpenAI is trying to combat this by routing some Dot tasks to Terra, a smaller GPT-6.1 model, instead of sending them all to the larger GPT-6 Astra, Emily wrote.
Huet told me OpenAI is aiming for token efficiency to keep costs down. He said the company’s Terra model can perform better than Astra in some areas, such as computer use and writing, at “a tenth of the price.” The company wants “the most amount of value delivered per dollar invested in these Dots,” he said.
But cost isn’t the only problem with agents like these. They also come with a host of privacy concerns. Critics, including Signal president Meredith Whittaker, have warned about the privacy trade-off of personal agents, which need deep access to users’ data in order to be helpful and take autonomous action. The trade-off may be acceptable in some cases, but the security and data privacy risks are substantial.
These always-on agents also raise issues around consent, Whittaker points out. The people who email or message a Dot user, she argues, never agreed to have an AI read and ingest what they send.
“Muse is logging people’s contact lists, the people they talk to,” Whittaker said at the Masters of Scale Summit in October. “If you install Muse, and I am in your contact list. Muse now has my information. They are logging when we talk to each other…That could be extraordinarily serious for somebody working on human rights in an authoritarian country who is trying to communicate data with somebody outside of that country.”
In response to these privacy concerns Huet recommended users build up trust with these agents gradually. A user might start by connecting a calendar, then add Slack, then Gmail. He also has his own limits.
“I personally said to my dot: I would love for you to categorize my email all the time. I would like for you to prep, possibly, what my answer might be, but don’t send any emails on my behalf ever, and don’t send any Slack messages on my behalf ever,” he said. “I want to do that myself.”
That leaves much of the privacy decision to individual users. In a later Q&A, OpenAI leadership said users can already see what their Dot accesses, and that the company is thinking about “an easy way to pick and choose” which connections Dots can use.
Ok, before we get to the rest of the AI news, I want to mention the amazing line up of speakers at our upcoming Fortune Brainstorm AI conference in San Francisco, which is taking place on December 7th and 8th. Come hear about the latest in AI from OpenAI’s Greg Brockman, Microsoft AI CEO Mustafa Suleyman, Palo Alto Networks CEO Nikesh Arora, AI luminaries Fei-Fei Li and Andrew Ng, and LinkedIN cofounder and Greylock partner Reid Hoffman—and that’s just to name a few of the many incredible builders, doers, and thinkers who will be on hand. I’ll be there, of course, alongside my Fortune AI reporting colleagues Jeremy Kahn and Emily Forlini. Why not join us? You can apply to attend here. And with that, here’s the rest of the AI news.
Beatrice Nolanbeatrice.nolan@fortune.com@beafreyanolan
This story was originally featured on Fortune.com
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