What's up: Meta scales up; new AI tools threaten big ad agencies; how Chinese AI companies dodge U.S. chip curbs

Good morning. Advanced Micro Devices on Thursday announced its next-generation AI chips, called the Instinct MI400 series, at an event in San Jose, Calif. Joining CEO Lisa Su onstage was OpenAI CEO Sam Altman, discussing how the AI powerhouse plans to use AMD’s new chips.

The chips won’t be available until next year, however, when the so-called rack-scale solution AMD calls Helios starts to ship. That means the hardware is a full system for a data center, which the chip company says is “fully integrated” with all the compute, memory and performance needed for AI workloads.

A major theme of AMD’s event Thursday was its focus on not just beating the competition–namely, Nvidia–to market with new chips, but also its emphasis on open-source and an open software stack. AMD’s open software framework is called ROCm, and serves as a direct contrast to Nvidia’s proprietary CUDA programming language for GPUs.

Also on Thursday, AMD announced that its MI350 series accelerators are now shipping to customers, and introduced a host of other big-name customers onstage, including Meta Platforms, xAI, and Microsoft. Oracle said that it would be “among the first hyperscalers to offer an AI supercomputer with AMD Instinct MI355X GPUs.

But AMD has a long way to go. Nvidia holds over 90% of the AI chip market, by some analyst estimates.

As the need for AI compute doesn’t seem to be slowing down, Su asked Altman onstage, “Is there ever enough GPUs?”

Altman replied, “You can see that a significant fraction of the power on earth should be spent running AI compute. Maybe we’re going to get there.”

New AI ad tools are moving in on big agencies. Share prices of agency networks including Publicis Groupe, Omnicom, WPP and Interpublic fell by approximately 3% to 4% last week following a Wall Street Journal report that Meta Platforms plans to release AI tools by the end of 2026 automating the entire process of creating and placing ads. Now Google, Amazon and Comcast are developing new tools to help advertisers automate more creative work, WSJ’s Patrick Coffee reports.

Some agency heads feel that they are insulated from the threat. Big brands “want consistency and brand stewardship,” said Chris Beresford-Hill, chief creative officer at BBDO, part of Omnicom. “AI may be able to create a visual or even create a video, but the idea of developing a unique concept seems far-fetched.”

Or is it? Beauty giant L’Oréal on Wednesday announced a collaboration with Nvidia to scale up its work with artificial intelligence in areas including ad creation.

Jack Rae, a principal researcher at Google DeepMind, is joining Meta’s “superintelligence team,” Bloomberg reports, part of CEO Mark Zuckerberg's efforts to boost the company’s AI capabilities. Alexandr Wang, co-founder and CEO of Scale AI, is also expected to be part of the team. What's behind the moves? The WSJ earlier reported that Meta senior executives were frustrated with the performance of the team that built its Llama 4 AI models.

Scale AI announced a significant investment from Meta Thursday that values the company at more than $29 billion, WSJ reports. Scale AI didn’t disclose the size of the investment, but it was valued at nearly $14 billion after a fundraising round last year. The nine-year-old San Francisco-based startup manages more than 100,000 contractors from across the world who label images, write sentences and type out stories that help AI chatbots learn how to think and speak like humans.

Thursday was the day the music died, for some Spotify users anyway, as Google's cloud experienced an hours-long global outage, impacting the music app and host of other applications, TechCrunch reports. 

Mattel has inked a deal with OpenAI, with plans to incorporate AI into its toys and games as well as across business operations, Reuters reports.

Google’s Deepmind is working with the National Hurricane Center to improve its hurricane forecasts, supplying the Miami-based unit with improved weather models, New York Times reports.

Executives from Palantir, Meta and OpenAI are among those joining a new innovation corps in the Army Reserve called Detachment 201, WSJ reports.

Micron Technology said it will invest more than $200 billion in semiconductor manufacturing in the U.S., a move it estimates will create roughly 90,000 direct and indirect jobs, WSJ reports.

Walmart, Amazon.com and other multinational giants have recently explored whether to issue their own stablecoins in the U.S., a move  that could allow them to circumvent traditional payment rails, which cost them billions of dollars in fees each year.

• Auto-parts supplier Marelli became one of the first big companies to file for bankruptcy under the weight of the Trump administration’s tariffs.
• Retailers are raising the bar for free delivery—or eliminating the perk—as they seek to mitigate tariff costs.
• Recent changes to CPA licensing laws in many U.S. states mean one thing for some prospective accountants: School’s out early.
• Nvidia has unveiled a new generative foundation model that it says enables simulations of Earth’s climate with unprecedented resolution. The question is what else humans will do with it.
   

Israel launched a wide-ranging attack on Iran’s nuclear program and military leadership, killing the head of the Islamic Revolutionary Guard Corps and striking dozens of targets in an operation that pushes the region into a new conflict with uncertain consequences.(WSJ)

An investigation into the crash of a London-bound Air India Boeing 787-8 is focusing on whether the aircraft had a loss or reduction in engine thrust, and if that contributed, according to people briefed on the probe. (WSJ)

A federal judge ruled Thursday that President Trump illegally federalized the California National Guard in response to the Los Angeles protests and ordered that the force be returned to the control of Democratic Gov. Gavin Newsom. (WSJ)

Sen. Alex Padilla (D., Calif.) was forcibly ejected from a press conference Thursday and handcuffed after he interrupted a press conference with Homeland Security Secretary Kristi Noem. (WSJ)

The WSJ CIO Journal Team is Steven Rosenbush, Isabelle Bousquette and Belle Lin.

The editor, Tom Loftus, can be reached at thomas.loftus@wsj.com.