AI starts building AI, and the checks fall behind

Last month brought one incident after another, from backdoored extensions to agents breaking into companies. This week adds a new kind of leak. TechCrunch reports that security researchers found hundreds of servers running Artex, an AI penetration testing tool, exposed to the internet. Penetration testing means attacking your own systems to find weak spots before criminals do. Left open, anyone could use the hacking tool.

At the same time, the money for agent security is rising fast. TechCrunch says Palo Alto Networks is in talks to buy Clutch, a startup that secures AI agents, for $500 million. Clutch was last valued at $85 million, according to a source. OpenAI also announced a partnership with Hacktron to find weak spots in its own systems, including its connections to third-party services.

Our sources do not say if anyone abused the exposed servers. That is the question to watch.

Update on Friday's doubts about Anthropic's $1.5 trillion valuation. Bloomberg reports that IPO buyers now see a valuation as low as $1.1 trillion, after the AI stock rout. The story got 281 points and 556 comments on Hacker News. A smaller site says talks dropped to $1.3 trillion; treat that number with more care.

OpenAI goes the other way. Bloomberg says it raised another $11 billion at a $1.25 trillion valuation. The round is not closed yet and is expected to close in the coming weeks. In March, OpenAI raised $122 billion at $852 billion.

The spending data is mixed. Ramp's data shows AI usage still climbing, but spending has stalled, as price cuts and cost controls kick in. Menlo Ventures, discussed on The AI Daily Brief, says companies spend nearly five times more than last year, driven by agents.

Last Sunday, we saw Claude block more reverse engineering and game cloning. Now a post on r/LocalLLaMA says open-weight labs are doing it too. Open-weight models are the ones anyone can download and run on their own computer. The author says Kimi K3.1 and Tencent's Hy4 remove cybersecurity, reverse engineering and vulnerability-patching skills. This is one user's claim; our sources have no answer from the labs.

The worry is for defenders. People who check their own code for weak spots on their own hardware could lose good tools and be pushed to closed models.

The same week brought a different fight about what is inside a model. NousResearch released Arete-27B, a retrained version of Alibaba's Qwen3.8-27B. Nous says it saw refusals, deflections and "CCP-framed answers" on politically sensitive topics, and trained the model "to reinforce western values".

Nvidia makes the chips that run most of today's AI. The New York Times reports that China's Ministry of State Security recruited Alice Huang, an executive at a company called Megaspeed, to spy on Nvidia CEO Jensen Huang. According to the report, the goal was to learn about American AI chips and "potentially influence" Nvidia to push for its most advanced chips to be made available to China.

This is a news report. Our sources do not include replies from the people or governments named.

In a separate story shared on Reddit, six pallets of Nvidia hardware worth $11.4 million were stolen on the way to Texas. And AMD's CEO says AMD is now a "data center first company", which means less focus on cheap graphics cards for regular buyers.

On Thursday, we saw that data centers lost the US midterms. Now we have numbers. TechCrunch says voters faced 41 data center ballot measures on Tuesday. In all but one, the majority chose more restrictions on building.

The fight is not only American. Reuters reports that around 100 protesters from the group Geef Tegengas got into the construction site of a new Microsoft data center near Amsterdam. The project plans three 85-meter towers.

The business side moves too. Crusoe sold its troubled Wyoming data center project to Google, TechCrunch reports. Bloomberg, via Reuters, says Microsoft is winding down a deal to rent AI cloud capacity from Oracle. Transformer asks whether Democrats will now split on how hard to push on AI.

Some good news from the lab. Anthropic reported on November 5 that Claude helped find the first 3D structure of a "vault" particle. It is a hollow protein shell built from a protein made by a bacteriophage, a virus that infects bacteria.

According to Anthropic, the project took under four months. A science-focused version of Claude scanned about 15 billion computer-predicted proteins to find vault-like shapes. The work is a preprint on bioRxiv, so other scientists have not reviewed it yet.

Anthropic also published a piece on how researchers use Claude for scientific discovery, which got 93 points on Hacker News.