AI stocks fall, agents are failing & more (August 20, 2025)

Good morning!

Today feels like the AI hype may be catching up to us. This news lineup has everything from market meltdowns, to agent failures to Microsoft’s AI soul-searching. Plus, some upbeat news regarding investments into sleep recovery and the search for an Alzheimer’s cure.

Let’s dive in 👇

🧠 Big Tech vs AI Consciousness

Microsoft exec warns about "seemingly conscious" AI

Mustafa Suleyman, Microsoft’s AI CEO, warned that AI systems pretending to be sentient are a real danger. He argues that treating models like they have rights risks fueling “AI psychosis” among users. His essay urged companies to stop marketing AI as conscious and instead build AI “for people, not to be a person.”

Bill Gates funds $1M Alzheimer’s AI challenge

Bill Gates is backing the Alzheimer’s Insights AI Prize, aimed at developing autonomous AI agents that can analyze decades of research to speed up breakthroughs. The winning tool will be released free for scientists worldwide.

The Altman Paradox: warning of a bubble while chasing trillions

Sam Altman, the CEO of OpenAI, raised alarms about escalating AI hype that could be fueling a speculative bubble, where expectations outpace practical results. While full context wasn’t accessible due to site restrictions, his comments urge caution as AI investment fervor heats up. Meanwhile, he still claims that OpenAI plans to raise trillions.

📉 AI Market Shakes & Model Breakthroughs

AI stocks tumble, MIT study impact

A new MIT report found 95% of companies are getting “zero return” on AI investments. Combined with Sam Altman’s warnings about hype, it sent tech stocks sliding, Nvidia dropped 3.5% and Palantir fell nearly 10%.

DeepSeek drops V3.1, rivals OpenAI & Anthropic

China’s DeepSeek just released V3.1, a 685B-parameter open-source model that rivals Claude Opus 4, at a fraction of the cost. It scored 71.6% on the Aider coding benchmark, with tasks costing just $1 compared to $70 for proprietary models.

Eight Sleep Raises $100M for AI “Sleep Agent”

Smart mattress company Eight Sleep has raised $100M to build the world’s first “Sleep Agent,” an AI that proactively monitors and optimizes recovery during sleep. The funding will accelerate development of adaptive features like real-time adjustments to temperature, comfort, and recovery tracking.

⚒️ Tools of the Day

• CopyCat – Build browser automations with AI
• Wavel – Turn long videos into viral shorts
• Kira.art – From simple words to consistent, professional art
• ChartDB – Turn your database into a clean visualization

💡 Prompt of the Day

Code Explainer & Debugger
Role: Senior software engineer mentor.
Task: Review code, explain in plain English, flag bugs, and suggest improvements.
Style: Step-by-step, approachable for juniors, but with pro best practices.

⚡ Quick Hits

• Meta reorgs its Superintelligence structure…again
• Google Docs adds AI-powered audio read-aloud mode
• Sam Altman teases GPT-6 with memory-focused updates
• Nvidia working on a new China-focused AI chip beyond the H20
• Alibaba unveils an AI image model that edits outfits and objects
• Adobe launches Acrobat Studio to manage multiple PDFs

📝 TLDR

Microsoft’s Mustafa Suleyman says “stop pretending AI is alive,” while Bill Gates funds Alzheimer’s AI research. MIT pours cold water on AI hype, tanking stocks, but DeepSeek’s open model is heating up the competition. Meanwhile, Excel, Adobe, and Alibaba are quietly bringing AI into the tools we use every day.

See you tomorrow,
David