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An AI 'gold rush.' What to know about OpenAI's record $40-billion funding round

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An AI 'gold rush.' What to know about OpenAI's record -billion funding round

ChatGPT maker OpenAI this week announced it raised a whopping $40 billion as it races to dominate a competitive AI landscape against tech giants like Google, and rivals including Anthropic and Chinese upstart DeepSeek.

The investment was the highest ever raised for a startup and places OpenAI at a $300-billion valuation, tying it with TikTok parent company ByteDance and behind the $350-billion valuation for Elon Musk’s SpaceX, according to research firm CB Insights.

“It’s a gold rush of epic proportions of gold rushes before,” said Ben Bajarin, chief executive and principal analyst at San José-based consulting firm Creative Strategies. “They’re not sitting on hoards of cash like Amazon, Microsoft and Google … they have to raise that money in order to compete with those three companies and that’s what you’re seeing.”

OpenAI’s funding round shows how much investors are willing to pour into technology that has the potential to disrupt entertainment, healthcare, education and other major industries. The rising popularity of ChatGPT, released in 2022, set off a race among tech companies that could change how people work.

The ability of AI-powered chatbots to quickly generate text and images has sparked concerns among some creatives over how AI models are trained and copyright holders are compensated. But tech companies have also pointed to AI’s potential benefits such as combating diseases and climate change.

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Here’s what to know:

How does the deal work?

Softbank said it plans to fund up to $30 billion of the $40-billion investment round and will syndicate no more than $10 billion to other co-investors.

Softbank has the option to reduce its amount of investment to $20 billion if OpenAI does not change its business structure to a for-profit business by the end of this year, according to a person familiar with the matter who was not authorized to comment.

OpenAI began as a nonprofit in 2015 and later launched a for-profit subsidiary to oversee its commercial operations. The company is exploring changing the for-profit subsidiary to a public benefit corporation.

Elon Musk, who founded xAI, opposes OpenAI’s restructuring plan because he believes it veers away from the company’s founding principles and misleads investors. Meta also raised concerns about the transition, telling California Atty. Gen. Rob Bonta in a letter last year that it would have “seismic implications for Silicon Valley” because investors would have an incentive to launch organizations first as nonprofits and benefit from tax-free donations.

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What will OpenAI use the money for?

OpenAI said the funding will help the San Francisco-based company conduct AI research, release more powerful tools for the 500 million people who use ChatGPT weekly and grow its computing infrastructure such as data centers. People use ChatGPT to quickly generate text and images, search, brainstorm and complete other tasks.

“This investment helps us push the frontier and make AI more useful in everyday life,” said OpenAI’s Chief Executive Sam Altman in a statement.

Softbank, which led the investment round, said it’s backing OpenAI because the company is the closest to achieving what’s known as artificial general intelligence. OpenAI describes AGI as “AI systems that are generally smarter than humans,” making it possible for people to get help with any tasks. Softbank also cited an effort called Stargate they announced with President Trump in January to invest $500 billion in AI infrastructure over the next four years.

About $18 billion of the investment round will go toward Stargate, according to a person familiar with the matter who declined to be named.

“Their support will help us continue building AI systems that drive scientific discovery, enable personalized education, enhance human creativity, and pave the way toward AGI that benefits all of humanity,” OpenAI said in a post announcing the funding round.

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Bajarin said OpenAI will need to expand its infrastructure to power the use of its AI tools. After OpenAI released a new image generator in March that people used to turn themselves into Studio Ghibli-style characters, the startup warned of delays as it dealt with a surge in traffic.

How will this affect the race to dominate AI?

OpenAI still faces plenty of competition from rivals.

“No one knows who’s going to be the winner in AI, and it’s probably not one winner,” said Mike Gualtieri, vice president and principal analyst at Forrester, a research and advisory firm based in Massachusetts.

Rivals such as Google and Meta already gather a trove of valuable data on their users and created apps used by billions of people, he said. Startups don’t always end up winning the race against their more established rivals. Blackberry, for example, dominated the market with a device that paired a phone with a physical keyboard — until Apple introduced its groundbreaking iPhone with a touchscreen.

OpenAI also faces competition from China, where startups such as DeepSeek claim they can compete against ChatGPT at a much lower cost.

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“In order to compete with DeepSeek, you got to be better than DeepSeek, and they need this kind of money to do just that,” said Gene Munster, managing partner at Minneapolis-based Deepwater Asset Management.

It’s unclear whether the multibillion-dollar bets on AI’s future will pay off for investors, but infrastructure such as data centers is still a valuable asset for companies.

AI companies could make money from their models by striking business partnerships and releasing applications for consumers and businesses. “You need to get some data to be unique, to have some value, or they need applications,” Gualtieri said.

Jeffrey Wlodarczak, a principal and senior analyst at Pivotal Research Group, said he wouldn’t rule out ChatGPT as a big contender in the AI race against tech giants.

“The big question is … to win, do you have to spend the most?” Wlodarczak said.

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Movie Reviews

‘Night Nurse’ Review: A Caretaker Explores Her Kink for Elder Abuse in the Year’s Strangest Erotic Thriller

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‘Night Nurse’ Review: A Caretaker Explores Her Kink for Elder Abuse in the Year’s Strangest Erotic Thriller

There are any number of erotic thrillers in which rich old men are robbed blind and/or left for dead, but Georgia Bernstein’s admirably bizarre “Night Nurse” might be the first movie of its kind where elder abuse is the source — and possible subject— of its erotic thrills. If there are others, I’m not sure I want to know.

But this woozy debut feature doesn’t rely on its audience being turned on by the relationship between a nubile caretaker and her dementia-addled patient. Their psychosexual bond, meanwhile, hinges on cold-calling vulnerable old people under the guise of a grandchild in financial distress. (“I’m in trouble, nana, send me $10,000 or I’ll be left to rot in jail!” That sort of thing). With its slim wisp of a premise stretched into a Strickland-esque dreamscape that substitutes kink for conflict, the film itself hardly seems convinced by its own wrinkled lust — all desperate kisses and non-touching poses of subservience. More important to Bernstein is what that lust reveals about her characters’ deepest needs, specifically how their need to care and be cared for can be as easily perverted as any other form of desire. 

The Five-Star Weekend series stars D'Arcy Carden as Brooke, Regina Hall as Dru-Ann, Chloë Sevigny as Tatum, Jennifer Garner as Hollis, Gemma Chan as Gigi, shown here posing for a photo

As moody and weightless as the noir-accented score that blows through the movie like a curlicue gust of wind in an old cartoon (credit to musicians Sam Clapp and Steven Jackson), “Night Nurse” lacks the pulse required for its stray feelings to come alive. Still, the film ambiently taps into the latent eroticism of teasing out the distance between how you see yourself and who you really are. Bernstein plays with that distance like a telephone cord wrapped around her fingers, and Eleni — played by the excellent newcomer Cemre Paksoy, powerfully helpless — only frays even more as the receiver is brought near the hook. “Everything I did before today wasn’t me,” the nurse tells co-worker Mona (Eleonore Hendricks) after starting a new job at an Illinois retirement home. “It was somebody else.” 

What she did before today remains unexplored (specifically, what she did to get herself fired from her last gig), but I’m guessing she’s probably changed less than she thought. There’s a faraway flicker in her eyes the moment she catches the vibe between Mona and Douglas (a ribald and elusive Bruce McKenzie), a white-haired seventysomething who shows early signs of dementia but still commands an undiminished sexual energy. “I’m not an invalid,” he coos as Mona bathes him in the tub, to which she replies, “yes, you are,” in a supplicant tone that hints at a rich history of power games between them. 

Later that same night, Douglas will force Eleni to call a stranger, pretend that she’s their granddaughter, and ask for money — he’ll wrap the phone cord around the nurse’s body as she talks and shove her against the wall as they kiss. She’s into it. So into it that he has to clarify the terms of his whole deal: “If you’re looking for a pogo stick, I’m really not your guy.” But Eleni isn’t looking for anything to bounce on. She just wants to be needed, and maybe to need someone in return. Someone who will see her for who she really is and allow her the fantasy of pretending she isn’t being herself when she cons vulnerable strangers out of their money — when she exploits how enthralled those strangers are by the care they have for their loved ones.

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“Night Nurse” doesn’t belabor the psychology, as Bernstein prefers to express her story through heavy-lidded suggestion. Somnambulating from the moment it starts, the film moves through a series of beautifully arranged poses that stretch their latent meaning thin across the surface (Lidia Nikonova’s cinematography lacquers every shot with a seductive dreaminess). We see Douglas smoking in a lawn chair with Mona and Eleni curled around his feet. Eleni riding in the backseat of a convertible as the wind blows through her curls. The full staff of nurses — all of them under Douglas’ sway — stumbling around his condo in a state of zonked out bliss as they roll on the prescription drugs they’ve stolen from the residents. 

Once you’ve seen one shot of this movie, you’ve practically seen them all, at least until things escalate during a rushed and unsatisfying third act that forces Eleni into an honest confrontation with herself. People will do just about anything to feel needed — they’ll give whatever degree of care allows them to receive it in return. “Night Nurse” understands that desire, but remains far too numb to treat it. 

Grade: C+

The Independent Film Company will relase “Night Nurse” in theaters on Friday, July 10.

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Lucas Museum to give free annual passes to South L.A. neighbors, host community preview day

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Lucas Museum to give free annual passes to South L.A. neighbors, host community preview day

The Lucas Museum of Narrative Art, which is moving at light speed toward its Sept. 22 opening, announced Thursday that it will give free annual passes to its South L.A. neighbors living in the 90037 ZIP Code. The 300,000-square-foot, $1-billion museum located in Exposition Park will also host a special community preview day on Sept. 13, more than a week before the general public gets to step inside.

The 90037 ZIP Code has a population of more than 65,000 and is bordered roughly by the 110 Freeway to the west, Slauson Avenue to the south, Central Avenue to the east and Martin Luther King Jr. Boulevard to the north. Residents can register for passes at lucasmuseum.org/lm37 and will be alerted in August when the program launches. Pass holders can reserve tickets for themselves and one guest.

Tickets for non-pass holders go on sale July 21. They cost $25 for adults and $21 for seniors. Kids 17 and under are free.

“Storytelling has the power to bring people together and create a sense of community,” said Lucas Museum Chief Executive Tracey Bates in a news release about the program. “Through LM37, we are inviting our South Los Angeles neighbors to make the museum part of their lives and take their own path of discovery through the art, programs and experiences that will help shape this new cultural hub for Los Angeles.”

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The community preview day is designed to give local business owners, community partners, civic leaders and registered LM37 pass holders a sneak peak of the 10,000 square feet of exhibition space, as well as the expansive gardens with 11 acres of park space.

The opening programming, curated by co-founder George Lucas, features 20 inaugural exhibitions across more than 30 galleries, including one titled “Star Wars in Motion,” containing vehicle designs, high-speed racers, flying vessels, props, costumes and illustrations from the first six films in the beloved franchise.

More than 1,200 objects will be on display from Lucas’ personal collection of narrative art. Highlights include work by Norman Rockwell and Dorothea Lange, as well as a variety of manga, children’s book illustrations and comics.

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Movie Reviews

Movie review: Supergirl is a blast

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Movie review: Supergirl is a blast

Last year’s “Superman” ended with Iggy Pop singing “Because I’m a punk rocker, yes I am” — an ironic coda for a superlatively square hero. But it rings straightforwardly true for Superman’s cousin.

Milly Alcock’s Kara Zor-El, or Supergirl, sports not a spandex suit but a Blondie T-shirt. When we meet her in Craig Gillespie’s “Supergirl,” she’s been on an interstellar bender for days. She’s more Courtney Love than Clark Kent.

Nonchalant and sarcastic, Kara is also a little Han Solo-ish, you might say, given that she moves capriciously through the galaxy in her junky spaceship while getting in fights in extraterrestrial bars. She’s a welcome, jagged riff on more buttoned-up superheroes, and Alcock is terrific in the role. If only “Supergirl” was as good as she is.

While the latest DC release, and second under James Gunn’s stewardship, has its moments, “Supergirl” struggles to match Kara’s punk-rock energy with an equally spirited supporting cast and story.

Skepticism seems to have gathered for “Supergirl” ahead of its release. Many fans have argued it wasn’t the right next step for DC Universe. But I’m not so sure. Alcock’s breezy cameo in “Superman” was one of that movie’s highlights. Handing the follow-up to her, and her faithful floating dog Krypto, strikes me as an extremely natural next step. When in doubt, follow the dog.

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And much of “Supergirl” is winning. It resides almost entirely in space, touching down only momentarily on Earth. In its consistently creative production design, clever needle drops and underdog story arc, “Supergirl” resides a little closer to Gunn’s “Guardians of the Galaxy” movies than other DC entries. Its outer space is filled with cosmic detritus, mean characters and cute critters. Seth Rogen as the voice of a tiny alien co-piloting a space bus is an inspired concoction, as is a shabbier sci-fi realm with rest stops along the intergalactic highway.

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