This Week in AI in 5 Minutes: Fable Chaos Edition

0:00Today on the AI Daily Brief, this week in AI for terrifyingly busy people. The AI Daily Brief is a daily podcast and video about the most important news and discussions in AI.

0:34In order to ensure compliance with the request, Anthropic took the models down entirely for everyone. There are many implications of this, not least of which is that the recommendations at the end of this five-minute recap episode to go out and try Fable 5 don't exactly work at the moment. Now, I will be recording a full emergency episode to go out later today on Saturday, June 13th. However, I did still want to have this five-minute recap as I attempt to continue to make this show more accessible for an even wider audience. So enjoy this partial recap of what ended up being an extraordinarily consequential week in AI.

1:07And I'll be back soon with the full news about the Anthropic Fable 5 shutdown.

1:34an AI, this is the episode that you can send them. Second, even you diehard listeners sometimes have weeks where you're just busy doing, I don't know, real work or sailing around the Mediterranean or something. Consider these episodes for you as well. Now we kick off today with the biggest story of the week, which happens to also be the biggest release of the week, which is of course Claude's Fable 5. Yes, we finally have a Mythos class model. For the last couple of months, ever since the news of Mythos broke and was then confirmed by Anthropic, us in the pleb class have just been waiting as big institutions get to check it out through Project Glasswing, eagerly anticipating the day when we too would have the powers of Mythos.

2:12Well, this week we got them, and powers they were indeed. All of the benchmarks were obviously massive, but was it actually better? Well, aside from the controversy, which we will get to in just a minute, on average I would say, the vast majority of people that I saw that really dug into Fable found it to be incredibly powerful and a distinct jump up from what was previously available. In fact, there was this clever little narrative running around, that we'd reach the point where AI was so advanced that unless you were using it for really powerful things, you wouldn't necessarily know the difference.

2:42Citrini Research tweeted, I think we've reached the point where normal people can't really determine whether new models are better than previous ones. Like Fable doesn't seem that much better to me, but every 150 IQ person I know is like, wow, the singularity came sooner than I thought. Now, I think this has a hint of truth to it in that where Fable uniquely shines is super hard things, but I also think that this is kind of wrong too, because in my experience, Fable 5 is way, way better for the basic things as well. It is, in my opinion, a much better strategic thinker, and it is also a much better first principles arguer in that it doesn't kowtow and isn't as easily manipulable by the person prompting it.

3:19That makes it a much more valuable thought partner, so if you are doing anything with strategy, even if you are not coding big unwieldy web apps, I think you will find a lot of benefit to Fable 5. TLDR, I definitely think that if you haven't yet, you should go try Fable 5 soon. In fact, by soon I mean really soon, because you only have a limited time to do so. That's because Fable 5 was not only the biggest story and the biggest release of the week, but also the biggest controversy of the week. Now, the part that I just alluded to is that Fable 5 is only available in normal plans until June 22nd.

3:51After that, you're going to have to pay for it through the API on a usage basis. This certainly continues the trend that we've seen of companies moving to a usage-based model instead of a seat-based model. And so some of the impact of that was dampened by the fact that it wasn't all that unexpected. And yet when it comes to the controversy, that was small potatoes compared to first, the fact that there were incredibly stringent guardrails on the thing. Biomedical engineer Daria Anutmaz wrote, I can't even say hello to Fable except in incognito mode because it knows I'm a biomedical researcher.

4:19Fable 5 also launched with data retention policies that said that they could keep conversations for 30 days in ways that basically made every enterprise sit up and say, I don't think so. Already we saw Microsoft limit employee use of Fable 5 as they figure out what the data retention policies mean for them. And yet the biggest deal in the controversy was for sure the secret sabotage for LLM researchers. While the approach to the other guardrails around things like biology and chemistry was to explicitly tell the user that it was shifting them back to a previous model like Opus 4.8, when it came to certain types of LLM research, Anthropic said that Fable 5 would nerve its responses without telling the user.

4:55This led to an uproar the likes of which I've never seen, ultimately leading Anthropic to walk back that policy in less than 24 hours. Now, it turns out that what people were really turned off by wasn't just that specific policy, but the realization of just how much power Anthropic and frankly any of these frontier labs really has to control who gets access to the tools of the next stage of the economy. In fact, this week, I think we saw the confluence of the three great challenges for AI labs. power, i.e. the inherent power they have over our economic destiny, policy, in other words, the choices they make in terms of how they wield that power, and PR in terms of how they communicate that stuff, which honestly, Anthropic got all three of them wrong this week.

5:37Now, the one other biggest story sneaking in at the very end of the week was, of course, the SpaceX IPO. If you were watching mainstream media, the big thing that they wanted to talk about was Elon Musk becoming the world's first trillionaire. But for us over in the AI industry, what we were interested in was the performance and what it might mean for future IPOs. Well, on the first day of trading, the stock popped 19%, leading Allspring Global Investments Robert Grundyke to say, it bodes well for the market and for these other IPOs are coming that are going to be quite sizable as well. They clearly priced it right, at least on day one.

6:06It should make you optimistic for the markets, especially for growth stocks. Now, in terms of narratives to watch this week, the big new one was token panic. We've gone from token maxing to token panic in a whiplash-inducingly short period of time. The specific idea of token panic, and one that I think you're going to see coming up a lot more, is the negative market consequences of companies starting to put caps on the amount of AI that their employees can consume. Uber was the first example of this, but just as I was recording this, it broke that Meta was going to be putting those caps on as well.

6:36This was given voice in a specific research note by Citadel Securities, although as I explained in my Friday episode, what they were saying was quite different than what social media said they were saying. The thing you shouldn't take away from this token panic is some big idea of token demand rolling over. The thing you should take away is that there's going to be a lot of push for token efficiency in the foreseeable future with implications for all of us. So what should we be watching for next week? One big thing is that the first day of trading doesn't really mean anything with an IPO. And when it comes to the implications for the other AI IPOs, I want to see what SpaceX does next week before I really start to make any sort of assessments.

7:11The other big thing to watch is how OpenAI responds to Fable. Do we get GPT 5.6? Do we get what the Wall Street Journal reported might be coming in significant price cuts? Basically, the ball is in OpenAI's court and everyone's waiting to see what happens. Lastly, in terms of what you should try this weekend, here are five tests for Fable 5. If I were you and I hadn't played with Fable yet, I would test it on one, strategy, some sort of big question you're pondering, two, some sort of first principles debate where you can see how well it pushes back on you without being just subservient to your opinion.

7:42Three and four, I would test it on research and writing, some tasks that actually come from your normal work experience. And five, yes, I would try to find some big ol' coding project to really see how much farther it can go in a single shot. Fable 5 has certainly reignited my excitement for a number of different projects because it gets much closer to completion than any of the previous models before. So friends, that's going to do it for this week. I hope you are heading into a beautiful early summer weekend, watching the World Cup or binging Widow's Bay in anticipation of this week's final, but for now, that's going to do it for the AI Daily Brief.

8:14Appreciate you listening or watching, as always, and until next time, peace.