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- AI Is Getting Stupid Cheap
AI is getting cheaper, faster, and way more powerful—which means things are about to get wild. Baidu just threw down the gauntlet, claiming ERNIE 4.5 outperforms GPT-4.5 at just 1% of the cost (yeah, you read that right). Meanwhile, AI-first startups are scaling to $10M ARR with tiny teams, proving you might not need that co-founder after all.
In Today’s Upload:
💰 Baidu’s ERNIE 4.5 claims to beat GPT-4.5 at 1% of the cost
🚀 80% of Y Combinator startups are AI-powered
🤖 Claude gets a “Think Harder” mode for complex coding challenges.
🎮 Microsoft’s AI Copilot is now a gaming coach for Xbox users.
🎬 The Russo Brothers launch an AI-driven film & gaming studio
Let’s break it down.
Image source: Baidu
💰 Baidu’s ERNIE 4.5 claims to beat GPT-4.5 at 1% of the cost
China’s Baidu just dropped ERNIE 4.5, an AI model that it claims outperforms GPT-4.5 while being dramatically cheaper to run.
Key Details:
ERNIE 4.5 reportedly outperforms GPT-4.5 on multiple benchmarks while running at just 1% of the cost.
The model is already being integrated into Baidu’s cloud services, aiming to undercut OpenAI and Google in AI pricing.
Baidu’s AI strategy is focused on efficiency, affordability, and China-first adoption.
Why it matters:
If Baidu’s claims hold up, AI compute costs could drop drastically, making AI far more accessible for businesses worldwide. This also puts pressure on OpenAI, Google, and Anthropic to lower prices or offer more competitive models.
What it means for you:
If AI costs go down, expect cheaper AI subscriptions, more accessible enterprise AI, and increased competition among AI providers—benefiting businesses and developers.
Image source: YC
🚀 80% of Y Combinator startups are AI-powered.
Y Combinator’s latest startup batch shows AI-first businesses are scaling to $10M ARR with fewer than 10 employees.
Key Details:
80% of YC’s new startups are AI-driven, using automation to operate with tiny teams.
Founders report that AI allows them to scale revenue fast while keeping employee counts low.
Some startups are reaching $10M ARR with fewer than 10 people, proving the power of AI-powered automation.
Why it matters:
AI isn’t just changing industries—it’s changing how companies are built. This proves that lean, AI-first startups can outcompete traditional businesses on efficiency alone.
What it means for you:
If you’re launching a startup, AI isn’t optional—it’s the competitive edge. The companies scaling the fastest are automating aggressively, cutting costs, and growing with minimal headcount.
Image source: Anthropic
🤖 Claude gets a “Think Harder” mode for complex coding challenges.
Anthropic is rolling out a new reasoning mode for Claude, allowing the model to think in more structured, logical steps—especially for complex coding tasks.
Key Details:
“Think Harder” mode lets Claude slow down and process complex problems more deeply.
Early tests show it improves multi-step reasoning in coding, math, and problem-solving.
The mode is being tested in Claude 3.5, with a broader rollout expected soon.
Why it matters:
Most AI models struggle with multi-step logic, especially in coding. If Claude can improve at breaking down problems systematically, it could become a top-tier coding assistant.
What it means for you:
Developers and researchers could see huge improvements in AI-assisted coding, making AI tools more reliable for debugging, refactoring, and complex problem-solving.
Image Source: Microsoft
🎮 Microsoft’s AI Copilot is now a gaming coach for Xbox users.
Microsoft is bringing AI-powered gaming assistance to Xbox, offering real-time coaching, strategy tips, and quest guidance.
Key Details:
Copilot for Gaming provides live coaching on strategy, item builds, and quest objectives.
The AI assistant can recommend Overwatch hero picks, optimize character builds in RPGs, and suggest strategies in real-time.
Launching first on Xbox and PC, expanding to cloud gaming later.
Why it matters:
AI coaching could redefine competitive gaming, giving casual players pro-level insights and making complex games more accessible.
What it means for you:
If you game competitively, AI assistance could level up your skills. Expect AI-powered guides and real-time in-game coaching to become the norm.
🎬 The Russo Brothers launch an AI-driven film & gaming studio
The Avengers: Endgame directors, the Russo Brothers, are launching a film and gaming studio built around AI-powered production.
Key Details:
The studio plans to use AI for visual effects, script development, and game world generation.
The goal is to reduce production costs while maintaining high-quality storytelling.
The project signals Hollywood’s growing shift toward AI-driven filmmaking.
Why it matters:
AI is starting to change Hollywood from the inside out—not just in special effects but in writing, directing, and content generation.
What it means for you:
The entertainment industry is on the verge of an AI-powered creative shift. Expect faster production, new storytelling formats, and more AI-generated content in films and games.
🎯 Key Takeaways
Baidu’s ERNIE 4.5 could trigger an AI price war – If its claims hold up, expect cheaper, more accessible AI models worldwide.
AI-first startups are scaling insanely fast – Y Combinator companies are hitting $10M ARR with tiny teams, proving AI’s impact on business efficiency.
Claude’s reasoning abilities are improving – Its new “Think Harder” mode could make AI coding assistants far more useful.
AI coaching is coming to gaming – Microsoft is turning Xbox into an AI-assisted experience with real-time tips and strategies.
Hollywood’s AI revolution is happening now – The Russo Brothers’ AI-powered film studio could reshape how movies and games are made.