Welcome back, AI’ers!

Here’s What’s On The Menu For Today

• China’s new open-source AI takes the crown

• Google swoops on failed OpenAI deal

• The dawn of the autonomous burrito

• Malaysia's new AI chip trade rules 

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TODAY’S TOP STORIES

China's New AI Stuns the West

The Recap: Chinese startup Moonshot AI just dropped a bombshell on the AI world with the release of Kimi-K2, a massive 1-trillion-parameter open-weights model showing remarkable performance. The model is already outperforming top-tier AIs like GPT-4.1 and Claude 4 Opus on several key benchmarks.

Unpacked:

• Kimi-K2 demonstrates impressive coding abilities, achieving a 65.8% score on the SWE-bench test for fixing real-world GitHub issues, surpassing GPT-4.1's performance.

• In a major move for the open-source community, Moonshot AI has made the model's weights available for developers to download for themselves on Hugging Face.

• Moonshot claims it achieved this feat through training innovations, including a new tool called MuonClip that enabled stable training at such a large scale, a significant challenge in model development.

Bottom line: Kimi-K2 gives the open-source community access to powerful, near-frontier capabilities, accelerating innovation outside of large, centralized labs. With reasoning and multimodal features on the horizon, Moonshot AI is positioning itself as a major contender in the global AI race.

Google Swoops on Failed OpenAI Deal

The Recap: Google is hiring the team from coding-assistant startup Windsurf, including its CEO. The move comes just after Windsurf's planned $3B acquisition by OpenAI collapsed due to friction with Microsoft.

Unpacked:

• The deal fell apart over concerns about Microsoft's access to Windsurf's proprietary technology through its deep partnership agreements with OpenAI.

• Windsurf’s CEO Varun Mohan and other key researchers will now join Google DeepMind, tasked with advancing agentic coding for Gemini.

• The collapse marks yet another headache for OpenAI in a rocky summer, handing a major talent win directly to a top competitor.

Bottom line: This isn't just a missed deal for OpenAI; it's a strategic talent injection for Google's most important AI projects. The situation underscores how partnership complexities in the AI race can directly create openings for savvy rivals.

🖥️ My Favorite AI Tool: Relevance AI

Relevance is my favorite AI tool right now (even more so than N8N).

Here’s why:

It’s an AI agent building tool that doesn’t require you to build out the logic using nodes. Instead, you use natural language to build out these agents. But the best thing imo is that you can build AI Agent teams.

Like agents talking to each other completing a goal until its done. It’s nuts. No other tool on the market is doing this. You have to check it out.

(Try it out →Link)

👾 AI Tools We Use Everyday

➡️ N8N for AI Agents - Literally use this everyday to write this newsletter (link)

➡️ Axiom AI - AI Browser automation to scrape anything on the web (link)

➡️ GummySearch - AI Reddit research (link)

Tools are sourced from our database and are not sponsored or affiliated.

The Dawn of the Autonomous Burrito

The Recap: Ex-Uber CEO Travis Kalanick’s new venture is deploying fully robotic kitchens that assemble 300 custom meals per hour, aiming to slash restaurant labor costs. He revealed the details on a recent episode of the All In Podcast.

Unpacked:

• A single 60-square-foot machine handles the entire assembly line, from dispensing ingredients and saucing a bowl to sealing it for smart locker pickup.

• The automation from Cloud Kitchens allows partner restaurants to cut labor costs from a typical 30% of revenue down to just 7-10%.

• The long-term vision extends to cooking, creating an "internet food court" where robots could make custom meals cheaper than groceries.

Bottom line: This provides a blueprint for automating service industries far beyond just fast food. As robotic assembly becomes more capable, it will fundamentally challenge business models in retail and even real estate.

Malaysia's New AI Chip Toll

The Recap: Malaysia is now requiring a special trade permit for all exports and transshipments of US-origin high-performance AI chips. The move aims to close regulatory loopholes and prevent the country from being used to bypass US export controls targeting China.

Unpacked:

• The policy comes as Malaysia faces a new 25% US tariff and increasing pressure from Washington to clamp down on illicit chip flows to China.

• The regulation falls under a ‘catch-all control’ provision in Malaysia's Strategic Trade Act 2010, requiring companies to notify authorities 30 days before moving the chips.

• This move follows allegations of Chinese firms renting Malaysian data centers with high-end Nvidia chips, highlighting the nation's role as a key transshipment hub in the global AI supply chain.

Bottom line: his policy tightens the global AI chip supply chain, adding a new layer of compliance for companies operating in Southeast Asia. It signals that nations are increasingly being forced to take a side in the US-China tech rivalry, impacting how and where AI development occurs.

OTHER NEWS YOU MAY LIKE

OpenAI announced it is delaying the release of its next open-weight model to conduct additional safety tests, pushing the launch timeline back indefinitely.

METR published a study showing experienced developers took 19% longer to complete coding tasks with AI assistants, despite feeling 20% more productive.

Meta acquired voice AI startup PlayAI, with the team set to enhance its AI characters, wearables, and audio content creation tools.

Curl's lead developer detailed how the open-source project is being overwhelmed by low-quality, AI-generated security vulnerability "slop," threatening the sustainability of its bug bounty program.

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