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By Paul Sandle LONDON (Reuters) -OpenAI will offer Britain's government and businesses an opportunity to store data in the UK from Friday, helping unlock the potential of AI for more companies and public services, Deputy Prime Minister David Lammy will announce on Thursday. The plan, secured through OpenAI's partnership with the Ministry of Justice (MoJ), will enhance privacy and security as well as reinforcing resilience to cyber threats, the government said. Led by Sam Altman, OpenAI upended the tech industry with the launch of ChatGPT, its AI chatbot in late 2022. It signed a partnership with the British government in July to work together to use AI to improve public services. Lammy, who will announce the sovereign capability at the OpenAI Frontiers event, said AI was already improving efficiency in the MoJ. More than 1,000 probation officers would be equipped with Justice Transcribe, an AI tool that records and transcribes conversations with offenders, saving hours spent transferring notes into digital systems, he said. "By adopting AI, we're cutting the burdensome admin and ensuring frontline staff can spend more of their time doing the things only humans can do – monitoring offenders and protecting the British public," he said. OpenAI CEO Sam Altman said the number of people using its products in the UK had increased fourfold in the past year. "It's exciting to see them using AI to save time, increase productivity, and get more done," he said. UK data residency will be an option for customers using API Platform, ChatGPT Enterprise and ChatGPT Edu. OpenAI's Matt Weaver, head of EMEA solutions engineers, said pilot projects in the MoJ had sparked interest from other departments. "We expect adoption to accelerate now we've got the first deployment taking place," he said in an interview. ChatGPT, which competes with Anthropic, Perplexity and others as well as big tech companies like Google and Microsoft, on Tuesday announced ChatGPT Atlas, an AI-powered web browser built around its popular chatbot. Its arrival could accelerate a shift to AI-driven search as users seek tailored information rather than keyword-based results. (Reporting by Paul Sandle; editing by William James)

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By Byron Kaye SYDNEY (Reuters) -Australia has ordered four artificial-intelligence chatbot companies to explain their measures to protect children from exposure to sexual or self-harm material, as its internet regulator beefs up safety measures on the AI fronti The realistic conversational abilities of such services have taken the world by storm, but have also fanned concern that a lack of guardrails exposes vulnerable individuals to dangerous content. In a statement, the eSafety Commissioner said it sought details of safeguards against child sexual exploitation, pornography and material promoting suicide or eating disorders. It sent notices to Character Technologies, owner of celebrity simulation chatbot tool character.ai, and rivals Glimpse.AI, Chai Research and Chub AI. "There can be a darker side to some of these services, with many … chatbots capable of engaging in sexually explicit conversations with minors," Commissioner Julie Inman Grant said in the statement. "Concerns have been raised that they may also encourage suicide, self-harm and disordered eating." Australia's online regulatory system gives the commissioner the power to compel internet firms to report internal safety processes or face daily fines of up to A$825,000 ($536,000). The most popular of the services queried, Character.ai, is being sued in the United States after the mother of a 14-year-old said her son died by suicide following prolonged interaction with an AI companion on the site. Character.ai has sought to dismiss the lawsuit and says it introduced safety features, such as pop-ups directing users to the National Suicide Prevention Lifeline if they express thoughts of self-harm. Schools in Australia have reported children as young as 13 spending up to five hours a day talking with chatbots, sometimes sexually, the regulator said, adding that minors risked forming sexual or emotionally dependent ties with them, or being spurred to self-harm. However, the regulator did not query OpenAI, owner of the world's most popular AI search tool, ChatGPT, as its crackdown focused on companion-based tools and ChatGPT is not covered by an industry code until March 2026, an eSafety spokesperson said. Australia has one of the world's strictest internet regulation regimes. From December, social media companies will be forced to deactivate or refuse accounts for users younger than 16 or face a fine of up to A$49.5 million, in a bid to safeguard young people's mental and physical health. ($1=1.5389 Australian dollars) (Reporting by Byron Kaye; Editing by Clarence Fernandez)

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(Reuters) -Social media platform Reddit sued artificial intelligence startup Perplexity in New York federal court on Wednesday, accusing it and three other companies of unlawfully scraping its data to train Perplexity's AI-based search engine. Reddit said in the complaint that the data-scraping companies circumvented its data protection measures in order to steal data that Perplexity "desperately needs" to power its "answer engine" system. The case is one of many filed by content owners against tech companies over the alleged misuse of their copyrighted material to train AI systems. Reddit filed a similar lawsuit against AI startup Anthropic in June that is still ongoing.  "Our approach remains principled and responsible as we provide factual answers with accurate AI, and we will not tolerate threats against openness and the public interest," Perplexity said in a statement. "AI companies are locked in an arms race for quality human content – and that pressure has fueled an industrial-scale 'data laundering' economy," Reddit chief legal officer Ben Lee said in a statement.  Reddit, which features thousands of interest-based "subreddit" web communities, said in the lawsuit that it is the most commonly cited source for AI-generated answers to user questions. It has licensed its content to Google, OpenAI and others for their AI training.  Reddit said that Lithuania-based Oxylabs, Russia-based AWMProxy and Texas-based SerpApi scraped Reddit data from billions of search results without permission and that Perplexity, which does not have a license to use Reddit content, worked with at least one of the data-scraping companies to obtain Reddit material. "We strongly disagree with Reddit's allegations and intend to vigorously defend ourselves in court," a SerpApi spokesperson said. Oxylabs said in a statement that it was "shocked and disappointed by this news, as Reddit has made no attempt to speak with us directly," and that it would also defend itself against the allegations. AWMProxy could not be reached for comment. Reddit said it sent Perplexity a cease-and-desist letter last year, after which it "increased the volume of citations to Reddit forty-fold." Reddit asked the court for unspecified monetary damages and an order blocking Perplexity from using its data. (Reporting by Blake Brittain in Washington; Editing by Nick Zieminski and Stephen Coates)

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By Stephen Nellis SAN FRANCISCO (Reuters) -NextSilicon, an Israeli startup whose computing chips are being evaluated by U.S. national labs, on Wednesday said it is developing a central processor that it hopes will rival Intel and AMD and help it compete with Nvidia's systems. NextSilicon's has raised $300 million in funding and its flagship "Maverick-2" chip is designed to speed up precision scientific computing tasks such as modeling nuclear weapons. That field was once dominated by Nvidia, but as Nvidia has focused its attention on lower-precision computing tasks such as artificial intelligence, startups like NextSilicon have tried to take advantage of the AI giant's shift. On Wednesday, NextSilicon also disclosed for the first time that it is developing a complement to its main chip in the form of a new central processing unit, a market still dominated by Intel and AMD. It uses technology called RISC-V, an open computing standard that competes with Arm Ltd and is increasingly being used by chip giants such as Nvidia and Broadcom. Nvidia often pairs its chip with either its own or a third-party central processing unit, even partnering with companies such as Intel to create a tighter coupling between the two classes of chips. At present, NextSilicon said its central processing unit remains a test chip. But its Maverick-2 chips are in production, and NextSilicon claims it can carry out some of the same work as Nvidia chips, but faster and using less power and without rewriting the software code used. Sandia National Laboratories has been evaluating prototype systems made with NextSilicon's chips for three years. James H. Laros III, senior scientist and Vanguard program lead at Sandia National Laboratories, said in a statement that NextSilicon's "performance results are impressive, showing real promise for advancing our computational capabilities without the overhead of extensive code modifications." (Reporting by Stephen Nellis in San Francisco; Editing by Stephen Coates)

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By Stephen Nellis SAN FRANCISCO (Reuters) -NextSilicon, an Israeli startup whose computing chips are being evaluated by U.S. national labs, on Wednesday said it is developing a central processor that it hopes will rival Intel and AMD and help it compete with Nvidia's systems. NextSilicon's has raised $300 million in funding and its flagship "Maverick-2" chip is designed to speed up precision scientific computing tasks such as modeling nuclear weapons. That field was once dominated by Nvidia, but as Nvidia has focused its attention on lower-precision computing tasks such as artificial intelligence, startups like NextSilicon have tried to take advantage of the AI giant's shift. On Wednesday, NextSilicon also disclosed for the first time that it is developing a complement to its main chip in the form of a new central processing unit, a market still dominated by Intel and AMD. It uses technology called RISC-V, an open computing standard that competes with Arm Ltd and is increasingly being used by chip giants such as Nvidia and Broadcom. Nvidia often pairs its chip with either its own or a third-party central processing unit, even partnering with companies such as Intel to create a tighter coupling between the two classes of chips. At present, NextSilicon said its central processing unit remains a test chip. But its Maverick-2 chips are in production, and NextSilicon claims it can carry out some of the same work as Nvidia chips, but faster and using less power and without rewriting the software code used. Sandia National Laboratories has been evaluating prototype systems made with NextSilicon's chips for three years. James H. Laros III, senior scientist and Vanguard program lead at Sandia National Laboratories, said in a statement that NextSilicon's "performance results are impressive, showing real promise for advancing our computational capabilities without the overhead of extensive code modifications." (Reporting by Stephen Nellis in San Francisco; Editing by Stephen Coates)

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By Arsheeya Bajwa (Reuters) -IBM on Wednesday recorded a slowdown in growth in its key cloud software segment, overshadowing booming AI-driven demand for the company's new mainframe that pushed third-quarter sales and profit above market estimates. The company's shares were down 5% in extended trading. Slower growth in IBM's cloud segment, housed within its software unit, raised alarm bells across investors betting heavily on Big Blue's ability to benefit more from booming demand for cloud services, as artificial intelligence adoption rises. Sales growth in the hybrid cloud unit – known as Red Hat – decelerated to 14% from 16% growth in the previous quarter, stealing the spotlight from third-quarter revenue of $16.33 billion, which beat analysts' average estimate of $16.09 billion, according to LSEG data. The hybrid cloud unit is expected to return to mid-teen percentage growth, or close to that level, entering 2026, CEO Arvind Krishna said during a post-earnings call. "A slowdown in Red Hat revenue and software sales … will disappoint some that were hoping for accelerating growth in what is a high-margin segment," said Michael Ashley Schulman, chief investment officer at Running Point Capital. IBM shares have risen about 30% so far this year and the stock trades with a forward-12-month forward price-to-earnings ratio of about 24, compared with a multiple of about 18 for rival Accenture. "The stock is priced to perfection," said Dan Morgan, portfolio manager at Synovus Trust, an IBM investor. "There was little wiggle room for any metric to come up short." AI MAINFRAME A BRIGHT SPOT The infrastructure segment, housing its mainframe, saw revenue rise 17% to $3.56 billion in the quarter. The new mainframe, which is powered by chips specialized for AI applications, is being widely used by the financial industry, allowing for the maintenance of strict data residency and encryption rules as they work on adopting AI tech, CFO Jim Kavanaugh told Reuters. IBM's AI book of business grew to $9.5 billion, up $2 billion from the second quarter. IBM raised its outlook for the current fiscal year, expecting revenue to grow more than 5% at constant currency, up from its prior forecast of at least 5% growth. (Reporting by Arsheeya Bajwa; Editing by Maju Samuel)

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