Welcome back to The Prompt, Elon Musk’s Department of Government Efficiency (DOGE) aims to drastically reduce government expenditures by terminating contracts and laying off thousands of federal employees, although they have also quickly re-hired hundreds. Recently, DOGE requested federal workers to voluntarily submit an email detailing their weekly accomplishments to help evaluate the necessity of their positions. This information is set to be processed by an AI model to identify potential job cuts. However, agency leaders advised against responding to the emails, leading the administration to stress that participation is optional. This is not DOGE’s first foray into AI; earlier, it used sensitive data from the Department of Education to explore spending reductions. DOGE is also developing GSAi, a custom chatbot for the US General Services Administration, aimed at enhancing employee productivity. Now, onto the headlines. **BIG PLAYS** Following the announcement of the $500 billion Stargate AI infrastructure initiative, Apple has pledged to invest an additional $500 billion. The tech giant plans to construct a 250, 000-square-foot AI server factory in Houston, Texas. Meanwhile, Microsoft is re-evaluating its data center strategy after canceling leases, particularly as OpenAI transitions its compute needs from Microsoft to Oracle. **PEAK PERFORMANCE** AI firms like OpenAI and Perplexity recently launched systems claiming to conduct comprehensive research using online data. Google also introduced an AI “co-scientist” to assist researchers in forming hypotheses and proposals.

Additionally, Anthropic has released the Claude 3. 7 Sonnet model, which improves coding performance and is being integrated into applications by startups like Cursor and Cognition. **AI DEALS OF THE WEEK** It was a significant week for AI fundraising, with several startups announcing substantial investment rounds: - AI recruiting startup Mercor raised $100 million in Series B funding, reaching a $2 billion valuation. - Cloud computing firm Lambda Labs secured $480 million at a $2. 5 billion valuation. - TogetherAI, which operates a platform for AI model training, received $305 million, valuing it at $3. 3 billion. - AI healthcare startup OpenEvidence raised $75 million, achieving a $1 billion valuation. - AI inference platform Baseten also raised $75 million, bringing its valuation to $825 million. **DEEP DIVE** Quinten Farmer, CEO of AI voice companion startup Tolan, notes that many AI companion apps tend to "love bomb" users, leading to emotional dependency and litigation. Farmer's approach differentiates itself by creating a non-romantic conversational AI, dubbed an “alien best friend, ” targeting casual, supportive interactions without fostering unhealthy attachments. The app, which has 500, 000 downloads largely among women ages 16 to 24, encourages users to take breaks while varying interaction types. Farmer, previously involved in a fintech firm acquired by Walmart, is part of a growing trend where entrepreneurs utilize existing AI models. Investor David Luan emphasized that companies like Tolan leverage the secondary effects of AI. Tolan has about $10 million in seed funding but faces stiff competition from larger entities. Unlike OpenAI's ChatGPT, which focuses on problem-solving, users seek Tolan as a reliable confidant. **WEEKLY DEMO** EdTech company Chegg is suing Google over AI-generated summaries that allegedly harm its traffic and revenue by competing with its services without attribution. The company recently reported a loss of $6. 1 million for Q4 2024 and has previously attributed revenue decreases to students using ChatGPT. Other platforms, like Kayak and TripAdvisor, are also wary of Google's impact on their site traffic. **MODEL BEHAVIOR**