The Morning Download: Meta Fine Tunes Leadership Around AI

Good morning. Top model developers including Meta and OpenAI are remaking their leadership structures around AI. These enterprise-level efforts include shakeups at the top of the org chart, and new internal organizations designed to drive adoption and usage tied to the overall performance of the company. Overall, they reflect a growing level of intensity and focus, and I suspect, a healthy level of fear as the stakes get higher.

Time after time, new ideas in business and technology germinate in Silicon Valley and spread throughout business. It may be that the internal leadership changes we are seeing at Meta, OpenAI and other tech companies anticipate an evolution of AI-driven leadership approaches at a broader range of companies.

The concept of AI adoption is quickly moving beyond the goal of getting everyone within an organization to use AI. It’s more about AI adaptation at the highest level, from creating new structures to setting new goals such as Meta’s vision of itself as a $9 trillion company by 2031.

Meta named company veteran and CTO Andrew Bosworth to oversee its “AI For Work” initiative, aiming for agility, according to an internal memo that was viewed by The Wall Street Journal. The company is driving AI adoption across its 78,000-person workforce to accelerate work and change employee jobs. Bosworth also oversees a new organization applying AI and supporting large language model teams.

“The company is now focused on driving AI adoption across its 78,000-person workforce to accelerate the pace of work, eliminate layers from its organizational structure and change the day-to-day jobs of its employees,” the WSJ’s Megan Bobrowsky reports. Read the full story here.

You can see OpenAI’s decision to kill its Sora video initiative after one year in a similar vein. Facing a much higher level of competition from ever-more innovative rivals such as Anthropic and Google, the company is refocusing efforts on business and coding functions ahead of an IPO, the WSJ reports.

On the leadership front, OpenAI said this week that it hired Dave Dugan, a former top advertising executive at Meta, to lead ad sales as the AI startup works to strengthen its ties with major advertisers.

Fidji Simo, OpenAI’s CEO of applications, previewed the more focused portfolio to employees in an all-hands meeting, telling them that top leaders including CEO Sam Altman and chief research officer Mark Chen were actively looking at which areas to deprioritize.

“We cannot miss this moment because we are distracted by side quests,” Simo said, according to remarks reviewed by The Wall Street Journal. “We really have to nail productivity in general and particularly productivity on the business front.” 

Is your company’s leadership model adapting to AI? Let us know how that’s going.

Sora is gone. Enter 'Spud.' OpenAI is spiking its Sora video platform just one year after its debut as the company refocuses efforts on business and coding functions ahead of an IPO, WSJ reports.

In addition to the consumer app, OpenAI is also discontinuing a version of Sora for developers and won’t support video functionality inside ChatGPT, either. Also ending: A Walt Disney partnership and plans for it to take a $1 billion stake in the company, Variety reports.

As part of the strategy shift, CEO Sam Altman on Tuesday said he would focus on raising capital and “building datacenters at unprecedented scale,” the Information reports. He also said the company initial development of its AI model, code-named Spud, according to the Information.

Last week OpenAI announced that it was combining its ChatGPT desktop app, coding tool Codex and browser into one “superapp.” The Journal says that OpenAI expects the consolidated product to align its employees around a single vision.

Bosworth, Zuckerberg lead Meta's AI push. Among big Silicon Valley firms, Meta Platforms may be the most vocal about driving workforce AI adoption to eliminate layers from its organizational structure and change the day-to-day jobs of its employees.

“The speed at which we’ve enabled teams to embrace AI tools has created real momentum and sets us up for this next phase,” Meta's Bosworth said in the note to employees.

Chief Executive Mark Zuckerberg is developing an AI agent to help him perform his duties, the Journal reported earlier this week.

Speaking at The Wall Street Journal’s CFO Council Summit in Palo Alto, Calif., finance chiefs said their companies are seeing big gains in efficiency and productivity from their investments in generative AI.

At ServiceNow, AI investments have produced savings worth $355 million, according to Mastantuono. The software company reinvested about two-thirds of those savings, and let about $125 million fall to its bottom line, she said.

Judge says Trump administration wants to punish Anthropic. A federal judge on Tuesday said the U.S. government appeared to be punishing Anthropic by banning the artificial-intelligence company—in retribution for bringing into the public view its contracting dispute with the Pentagon.

“It looks like an attempt to cripple Anthropic,” U.S. District Judge Rita F. Lin of the Northern District of California said during a court hearing. Such actions “of course would be a violation of the First Amendment.”

The hearing is part of a bid by Anthropic to get relief from the Trump administration’s ban on government use of the company’s AI models. Anthropic, which sought limits on military use of its AI, says its designation by the government as a supply-chain risk has cost hundreds of millions in lost contracts.

Meta harmed children, court finds. A New Mexico jury found Meta liable for failing to protect minors from explicit content, solicitation, and trafficking on Facebook and Instagram, the first state trial victory against a major tech company over child safety, WSJ reports. The jury ordered a maximum penalty for each violation, totaling $375 million in civil penalties.

Grok sued. Baltimore became the first U.S. city to sue Elon Musk's xAI over Grok's deepfake pornography generation, joining regulatory probes across multiple countries, CNBC reports. 

OpenAI is raising $10 billion from investors including MGX, Coatue, Thrive Capital and Altimeter Capital, bringing its latest funding round to $120 billion total, at a $730 billion valuation, Bloomberg reports. The company last month announced last month that it secured commitments for $110 billion in funding from Amazon and SoftBank Group, among others.

Politicians on the midterms campaign trail are shying away from any ties to data-analysis firm Palantir, including holding the company’s stock, as critics cite the company’s ties to Immigration and Customs Enforcement, FT reports. 

South Korean memory-chip maker SK Hynix is planning to list in the U.S. this year as it raises funds for investments to meet demand for advanced chips driven by the AI boom.

Mediators from Turkey, Egypt and Pakistan are pushing for a meeting between U.S. and Iranian officials but both sides remain far apart. (WSJ)

In the past five years there have been 26 runway incidents in the U.S. that the Federal Aviation Administration considers the most serious type—where a collision was narrowly avoided, according to federal data that covers both commercial and private flights. (WSJ)

Wall Street is betting on a veteran of both the Marines and bare-knuckle New Jersey politics to fight Mayor Zohran Mamdani’s push to raise taxes on the wealthy and corporations. (WSJ)

The frustration of travelers with long TSA lines has become a boon for one company: Clear Secure. Passengers have downloaded the Clear app 289,000 times since the beginning of March, when a partial government shutdown started to feel real at airports. (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.