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LLM + RAG: Creating an AI-Powered File Reader Assistant

Introduction AI is everywhere.  It is hard not to interact at least once a day with a Large Language Model (LLM). The chatbots are here to stay. They’re in your apps, they help you write better, they compose emails, they read emails…well, they do a lot. And I don’t think that that is bad. In fact, my opinion is the other way – at least so far. I defend and advocate for the use of AI in our daily lives because, let’s agree, it makes everything much easier. I don’t have to spend time double-reading a document to find punctuation problems or type. AI does that for me. I don’t waste time writing that follow-up email every single Monday. AI does that for me. I don’t need to read a huge and boring contract when I have an AI to summarize the main takeaways and action points to me! These are only some of AI’s great uses. If you’d like to know more use cases of LLMs to make our lives easier, I wrote a whole book about them. Now, thinking as a data scientist and looking at the technical side, not everything is that bright and shiny.  LLMs are great for several general use cases that apply to anyone or any company. For example, coding, summarizing, or answering questions about general content created until the training cutoff date. However, when it comes to specific business applications, for a single purpose, or something new that didn’t make the cutoff date, that is when the models won’t be that useful if used out-of-the-box – meaning, they will not know the answer. Thus, it will need adjustments. Training an LLM model can take months and millions of dollars. What is even worse is that if we don’t adjust and tune the model to our purpose, there will be unsatisfactory results or hallucinations (when the model’s response doesn’t make sense given our query). So what is the solution, then? Spending a lot of money retraining the model to include our data? Not really. That’s when the Retrieval-Augmented Generation (RAG) becomes useful. RAG is a framework that combines getting information from an external knowledge base with large language models (LLMs). It helps AI models produce more accurate and relevant responses. Let’s learn more about RAG next. What is RAG? Let me tell you a story to illustrate the concept. I love movies. For some time in the past, I knew which movies were competing for the best movie category at the Oscars or the best actors and actresses. And I would certainly know which ones got the statue for that year. But now I am all rusty on that subject. If you asked me who was competing, I would not know. And even if I tried to answer you, I would give you a weak response.  So, to provide you with a quality response, I will do what everybody else does: search for the information online, obtain it, and then give it to you. What I just did is the same idea as the RAG: I obtained data from an external database to give you an answer. When we enhance the LLM with a content store where it can go and retrieve data to augment (increase) its knowledge base, that is the RAG framework in action. RAG is like creating a content store where the model can enhance its knowledge and respond more accurately. User prompt about Content C. LLM retrieves external content to aggregate to the answer. Image by the author. Summarizing: Uses search algorithms to query external data sources, such as databases, knowledge bases, and web pages. Pre-processes the retrieved information. Incorporates the pre-processed information into the LLM. Why use RAG? Now that we know what the RAG framework is let’s understand why we should be using it. Here are some of the benefits: Enhances factual accuracy by referencing real data. RAG can help LLMs process and consolidate knowledge to create more relevant answers  RAG can help LLMs access additional knowledge bases, such as internal organizational data  RAG can help LLMs create more accurate domain-specific content  RAG can help reduce knowledge gaps and AI hallucination As previously explained, I like to say that with the RAG framework, we are giving an internal search engine for the content we want it to add to the knowledge base. Well. All of that is very interesting. But let’s see an application of RAG. We will learn how to create an AI-powered PDF Reader Assistant. Project This is an application that allows users to upload a PDF document and ask questions about its content using AI-powered natural language processing (NLP) tools.  The app uses Streamlit as the front end. Langchain, OpenAI’s GPT-4 model, and FAISS (Facebook AI Similarity Search) for document retrieval and question answering in the backend. Let’s break down the steps for better understanding: Loading a PDF file and splitting it into chunks of text. This makes the data optimized for retrieval Present the chunks to an embedding tool. Embeddings are numerical vector representations of data used to capture relationships, similarities, and meanings in a way that machines can understand. They are widely used in Natural Language Processing (NLP), recommender systems, and search engines. Next, we put those chunks of text and embeddings in the same DB for retrieval. Finally, we make it available to the LLM. Data preparation Preparing a content store for the LLM will take some steps, as we just saw. So, let’s start by creating a function that can load a file and split it into text chunks for efficient retrieval. # Imports from langchain_community.document_loaders import PyPDFLoader from langchain.text_splitter import RecursiveCharacterTextSplitter def load_document(pdf): # Load a PDF “”” Load a PDF and split it into chunks for efficient retrieval. :param pdf: PDF file to load :return: List of chunks of text “”” loader = PyPDFLoader(pdf) docs = loader.load() # Instantiate Text Splitter with Chunk Size of 500 words and Overlap of 100 words so that context is not lost text_splitter = RecursiveCharacterTextSplitter(chunk_size=500, chunk_overlap=100) # Split into chunks for efficient retrieval chunks = text_splitter.split_documents(docs) # Return return chunks Next, we will start building our Streamlit app, and we’ll use that function in the next script. Web application We will begin importing the necessary modules in Python. Most of those will come from the langchain packages. FAISS is used for document retrieval; OpenAIEmbeddings transforms the text chunks into numerical scores for better similarity calculation by the LLM; ChatOpenAI is what enables us to interact with the OpenAI API; create_retrieval_chain is what actually the RAG does, retrieving and augmenting the LLM with that data; create_stuff_documents_chain glues the model and the ChatPromptTemplate. Note: You will need to generate an OpenAI Key to be able to run this script. If it’s the first time you’re creating your account, you get some free credits. But if you have it for some time, it is possible that you will have to add 5 dollars in credits to be able to access OpenAI’s API. An option is using Hugging Face’s Embedding.  # Imports from langchain_community.vectorstores import FAISS from langchain_openai import OpenAIEmbeddings from langchain.chains import create_retrieval_chain from langchain_openai import ChatOpenAI from langchain.chains.combine_documents import create_stuff_documents_chain from langchain_core.prompts import ChatPromptTemplate from scripts.secret import OPENAI_KEY from scripts.document_loader import load_document import streamlit as st This first code snippet will create the App title, create a box for file upload, and prepare the file to be added to the load_document() function. # Create a Streamlit app st.title(“AI-Powered Document Q&A”) # Load document to streamlit uploaded_file = st.file_uploader(“Upload a PDF file”, type=”pdf”) # If a file is uploaded, create the TextSplitter and vector database if uploaded_file :     # Code to work around document loader from Streamlit and make it readable by langchain     temp_file = “./temp.pdf”     with open(temp_file, “wb”) as file:         file.write(uploaded_file.getvalue())         file_name = uploaded_file.name     # Load document and split it into chunks for efficient retrieval.     chunks = load_document(temp_file)     # Message user that document is being processed with time emoji     st.write(“Processing document… :watch:”) Machines understand numbers better than text, so in the end, we will have to provide the model with a database of numbers that it can compare and check for similarity when performing a query. That’s where the embeddings will be useful to create the vector_db, in this next piece of code. # Generate embeddings     # Embeddings are numerical vector representations of data, typically used to capture relationships, similarities,     # and meanings in a way that machines can understand. They are widely used in Natural Language Processing (NLP),     # recommender systems, and search engines.     embeddings = OpenAIEmbeddings(openai_api_key=OPENAI_KEY,                                   model=”text-embedding-ada-002″)     # Can also use HuggingFaceEmbeddings     # from langchain_huggingface.embeddings import HuggingFaceEmbeddings     # embeddings = HuggingFaceEmbeddings(model_name=”sentence-transformers/all-MiniLM-L6-v2″)     # Create vector database containing chunks and embeddings     vector_db = FAISS.from_documents(chunks, embeddings) Next, we create a retriever object to navigate in the vector_db. # Create a document retriever     retriever = vector_db.as_retriever()     llm = ChatOpenAI(model_name=”gpt-4o-mini”, openai_api_key=OPENAI_KEY) Then, we will create the system_prompt, which is a set of instructions to the LLM on how to answer, and we will create a prompt template, preparing it to be added to the model once we get the input from the user. # Create a system prompt     # It sets the overall context for the model.     # It influences tone, style, and focus before user interaction starts.     # Unlike user inputs, a system prompt is not visible to the end user.     system_prompt = (         “You are a helpful assistant. Use the given context to answer the question.”         “If you don’t know the answer, say you don’t know. ”         “{context}”     )     # Create a prompt Template     prompt = ChatPromptTemplate.from_messages(         [             (“system”, system_prompt),             (“human”, “{input}”),         ]     )     # Create a chain     # It creates a StuffDocumentsChain, which takes multiple documents (text data) and “stuffs” them together before passing them to the LLM for processing.     question_answer_chain = create_stuff_documents_chain(llm, prompt) Moving on, we create the core of the RAG framework, pasting together the retriever object and the prompt. This object adds relevant documents from a data source (e.g., a vector database) and makes it ready to be processed using an LLM to generate a response. # Creates the RAG      chain = create_retrieval_chain(retriever, question_answer_chain) Finally, we create the variable question for the user input. If this question box is filled with a query, we pass it to the chain, which calls the LLM to process and return the response, which will be printed on the app’s screen. # Streamlit input for question     question = st.text_input(“Ask a question about the document:”)     if question:         # Answer         response = chain.invoke({“input”: question})[‘answer’]         st.write(response) Here is a screenshot of the result. Screenshot of the final app. Image by the author. And this is a GIF for you to see the File Reader Ai Assistant in action! File Reader AI Assistant in action. Image by the author. Before you go In this project, we learned what the RAG framework is and how it helps the Llm to perform better and also perform well with specific knowledge. AI can be powered with knowledge from an instruction manual, databases from a company, some finance files, or contracts, and then become fine-tuned to respond accurately to domain-specific content queries. The knowledge base is augmented with a content store. To recap, this is how the framework works: 1️⃣ User Query → Input text is received. 2️⃣ Retrieve Relevant Documents → Searches a knowledge base (e.g., a database, vector store). 3️⃣ Augment Context → Retrieved documents are added to the input. 4️⃣ Generate Response → An LLM processes the combined input and produces an answer. GitHub repository https://github.com/gurezende/Basic-Rag About me If you liked this content and want to learn more about my work, here is my website, where you can also find all my contacts. https://gustavorsantos.me References https://cloud.google.com/use-cases/retrieval-augmented-generation https://www.ibm.com/think/topics/retrieval-augmented-generation https://python.langchain.com/docs/introduction https://www.geeksforgeeks.org/how-to-get-your-own-openai-api-key

Introduction

AI is everywhere. 

It is hard not to interact at least once a day with a Large Language Model (LLM). The chatbots are here to stay. They’re in your apps, they help you write better, they compose emails, they read emails…well, they do a lot.

And I don’t think that that is bad. In fact, my opinion is the other way – at least so far. I defend and advocate for the use of AI in our daily lives because, let’s agree, it makes everything much easier.

I don’t have to spend time double-reading a document to find punctuation problems or type. AI does that for me. I don’t waste time writing that follow-up email every single Monday. AI does that for me. I don’t need to read a huge and boring contract when I have an AI to summarize the main takeaways and action points to me!

These are only some of AI’s great uses. If you’d like to know more use cases of LLMs to make our lives easier, I wrote a whole book about them.

Now, thinking as a data scientist and looking at the technical side, not everything is that bright and shiny. 

LLMs are great for several general use cases that apply to anyone or any company. For example, coding, summarizing, or answering questions about general content created until the training cutoff date. However, when it comes to specific business applications, for a single purpose, or something new that didn’t make the cutoff date, that is when the models won’t be that useful if used out-of-the-box – meaning, they will not know the answer. Thus, it will need adjustments.

Training an LLM model can take months and millions of dollars. What is even worse is that if we don’t adjust and tune the model to our purpose, there will be unsatisfactory results or hallucinations (when the model’s response doesn’t make sense given our query).

So what is the solution, then? Spending a lot of money retraining the model to include our data?

Not really. That’s when the Retrieval-Augmented Generation (RAG) becomes useful.

RAG is a framework that combines getting information from an external knowledge base with large language models (LLMs). It helps AI models produce more accurate and relevant responses.

Let’s learn more about RAG next.

What is RAG?

Let me tell you a story to illustrate the concept.

I love movies. For some time in the past, I knew which movies were competing for the best movie category at the Oscars or the best actors and actresses. And I would certainly know which ones got the statue for that year. But now I am all rusty on that subject. If you asked me who was competing, I would not know. And even if I tried to answer you, I would give you a weak response. 

So, to provide you with a quality response, I will do what everybody else does: search for the information online, obtain it, and then give it to you. What I just did is the same idea as the RAG: I obtained data from an external database to give you an answer.

When we enhance the LLM with a content store where it can go and retrieve data to augment (increase) its knowledge base, that is the RAG framework in action.

RAG is like creating a content store where the model can enhance its knowledge and respond more accurately.

Diagram: User prompts and content using LLM + RAG
User prompt about Content C. LLM retrieves external content to aggregate to the answer. Image by the author.

Summarizing:

  1. Uses search algorithms to query external data sources, such as databases, knowledge bases, and web pages.
  2. Pre-processes the retrieved information.
  3. Incorporates the pre-processed information into the LLM.

Why use RAG?

Now that we know what the RAG framework is let’s understand why we should be using it.

Here are some of the benefits:

  • Enhances factual accuracy by referencing real data.
  • RAG can help LLMs process and consolidate knowledge to create more relevant answers 
  • RAG can help LLMs access additional knowledge bases, such as internal organizational data 
  • RAG can help LLMs create more accurate domain-specific content 
  • RAG can help reduce knowledge gaps and AI hallucination

As previously explained, I like to say that with the RAG framework, we are giving an internal search engine for the content we want it to add to the knowledge base.

Well. All of that is very interesting. But let’s see an application of RAG. We will learn how to create an AI-powered PDF Reader Assistant.

Project

This is an application that allows users to upload a PDF document and ask questions about its content using AI-powered natural language processing (NLP) tools. 

  • The app uses Streamlit as the front end.
  • Langchain, OpenAI’s GPT-4 model, and FAISS (Facebook AI Similarity Search) for document retrieval and question answering in the backend.

Let’s break down the steps for better understanding:

  1. Loading a PDF file and splitting it into chunks of text.
    1. This makes the data optimized for retrieval
  2. Present the chunks to an embedding tool.
    1. Embeddings are numerical vector representations of data used to capture relationships, similarities, and meanings in a way that machines can understand. They are widely used in Natural Language Processing (NLP), recommender systems, and search engines.
  3. Next, we put those chunks of text and embeddings in the same DB for retrieval.
  4. Finally, we make it available to the LLM.

Data preparation

Preparing a content store for the LLM will take some steps, as we just saw. So, let’s start by creating a function that can load a file and split it into text chunks for efficient retrieval.

# Imports
from  langchain_community.document_loaders import PyPDFLoader
from langchain.text_splitter import RecursiveCharacterTextSplitter

def load_document(pdf):
    # Load a PDF
    """
    Load a PDF and split it into chunks for efficient retrieval.

    :param pdf: PDF file to load
    :return: List of chunks of text
    """

    loader = PyPDFLoader(pdf)
    docs = loader.load()

    # Instantiate Text Splitter with Chunk Size of 500 words and Overlap of 100 words so that context is not lost
    text_splitter = RecursiveCharacterTextSplitter(chunk_size=500, chunk_overlap=100)
    # Split into chunks for efficient retrieval
    chunks = text_splitter.split_documents(docs)

    # Return
    return chunks

Next, we will start building our Streamlit app, and we’ll use that function in the next script.

Web application

We will begin importing the necessary modules in Python. Most of those will come from the langchain packages.

FAISS is used for document retrieval; OpenAIEmbeddings transforms the text chunks into numerical scores for better similarity calculation by the LLM; ChatOpenAI is what enables us to interact with the OpenAI API; create_retrieval_chain is what actually the RAG does, retrieving and augmenting the LLM with that data; create_stuff_documents_chain glues the model and the ChatPromptTemplate.

Note: You will need to generate an OpenAI Key to be able to run this script. If it’s the first time you’re creating your account, you get some free credits. But if you have it for some time, it is possible that you will have to add 5 dollars in credits to be able to access OpenAI’s API. An option is using Hugging Face’s Embedding. 

# Imports
from langchain_community.vectorstores import FAISS
from langchain_openai import OpenAIEmbeddings
from langchain.chains import create_retrieval_chain
from langchain_openai import ChatOpenAI
from langchain.chains.combine_documents import create_stuff_documents_chain
from langchain_core.prompts import ChatPromptTemplate
from scripts.secret import OPENAI_KEY
from scripts.document_loader import load_document
import streamlit as st

This first code snippet will create the App title, create a box for file upload, and prepare the file to be added to the load_document() function.

# Create a Streamlit app
st.title("AI-Powered Document Q&A")

# Load document to streamlit
uploaded_file = st.file_uploader("Upload a PDF file", type="pdf")

# If a file is uploaded, create the TextSplitter and vector database
if uploaded_file :

    # Code to work around document loader from Streamlit and make it readable by langchain
    temp_file = "./temp.pdf"
    with open(temp_file, "wb") as file:
        file.write(uploaded_file.getvalue())
        file_name = uploaded_file.name

    # Load document and split it into chunks for efficient retrieval.
    chunks = load_document(temp_file)

    # Message user that document is being processed with time emoji
    st.write("Processing document... :watch:")

Machines understand numbers better than text, so in the end, we will have to provide the model with a database of numbers that it can compare and check for similarity when performing a query. That’s where the embeddings will be useful to create the vector_db, in this next piece of code.

# Generate embeddings
    # Embeddings are numerical vector representations of data, typically used to capture relationships, similarities,
    # and meanings in a way that machines can understand. They are widely used in Natural Language Processing (NLP),
    # recommender systems, and search engines.
    embeddings = OpenAIEmbeddings(openai_api_key=OPENAI_KEY,
                                  model="text-embedding-ada-002")

    # Can also use HuggingFaceEmbeddings
    # from langchain_huggingface.embeddings import HuggingFaceEmbeddings
    # embeddings = HuggingFaceEmbeddings(model_name="sentence-transformers/all-MiniLM-L6-v2")

    # Create vector database containing chunks and embeddings
    vector_db = FAISS.from_documents(chunks, embeddings)

Next, we create a retriever object to navigate in the vector_db.

# Create a document retriever
    retriever = vector_db.as_retriever()
    llm = ChatOpenAI(model_name="gpt-4o-mini", openai_api_key=OPENAI_KEY)

Then, we will create the system_prompt, which is a set of instructions to the LLM on how to answer, and we will create a prompt template, preparing it to be added to the model once we get the input from the user.

# Create a system prompt
    # It sets the overall context for the model.
    # It influences tone, style, and focus before user interaction starts.
    # Unlike user inputs, a system prompt is not visible to the end user.

    system_prompt = (
        "You are a helpful assistant. Use the given context to answer the question."
        "If you don't know the answer, say you don't know. "
        "{context}"
    )

    # Create a prompt Template
    prompt = ChatPromptTemplate.from_messages(
        [
            ("system", system_prompt),
            ("human", "{input}"),
        ]
    )

    # Create a chain
    # It creates a StuffDocumentsChain, which takes multiple documents (text data) and "stuffs" them together before passing them to the LLM for processing.

    question_answer_chain = create_stuff_documents_chain(llm, prompt)

Moving on, we create the core of the RAG framework, pasting together the retriever object and the prompt. This object adds relevant documents from a data source (e.g., a vector database) and makes it ready to be processed using an LLM to generate a response.

# Creates the RAG
     chain = create_retrieval_chain(retriever, question_answer_chain)

Finally, we create the variable question for the user input. If this question box is filled with a query, we pass it to the chain, which calls the LLM to process and return the response, which will be printed on the app’s screen.

# Streamlit input for question
    question = st.text_input("Ask a question about the document:")
    if question:
        # Answer
        response = chain.invoke({"input": question})['answer']
        st.write(response)

Here is a screenshot of the result.

Screenshot of the AI-Powered Document Q&A
Screenshot of the final app. Image by the author.

And this is a GIF for you to see the File Reader Ai Assistant in action!

GIF of the File Reader AI Assistant in action
File Reader AI Assistant in action. Image by the author.

Before you go

In this project, we learned what the RAG framework is and how it helps the Llm to perform better and also perform well with specific knowledge.

AI can be powered with knowledge from an instruction manual, databases from a company, some finance files, or contracts, and then become fine-tuned to respond accurately to domain-specific content queries. The knowledge base is augmented with a content store.

To recap, this is how the framework works:

1️⃣ User Query → Input text is received.

2️⃣ Retrieve Relevant Documents → Searches a knowledge base (e.g., a database, vector store).

3️⃣ Augment Context → Retrieved documents are added to the input.

4️⃣ Generate Response → An LLM processes the combined input and produces an answer.

GitHub repository

https://github.com/gurezende/Basic-Rag

About me

If you liked this content and want to learn more about my work, here is my website, where you can also find all my contacts.

https://gustavorsantos.me

References

https://cloud.google.com/use-cases/retrieval-augmented-generation

https://www.ibm.com/think/topics/retrieval-augmented-generation

https://youtu.be/T-D1OfcDW1M?si=G0UWfH5-wZnMu0nw

https://python.langchain.com/docs/introduction

https://www.geeksforgeeks.org/how-to-get-your-own-openai-api-key

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Energy Secretary Keeps Critical Generation Available in Mid-Atlantic

WASHINGTON—U.S. Secretary of Energy Chris Wright today issued an emergency order to address critical grid reliability issues facing the Mid-Atlantic region of the United States. The emergency order directs PJM Interconnection L.L.C. (PJM), in coordination with Constellation Energy Corporation, to ensure Units 3 and 4 of the Eddystone Generating Station in Pennsylvania remain available to operate and to employ economic dispatch to minimize costs for the American people. The units were originally slated to shut down on May 31, 2025. “The energy sources that perform when you need them most are the most valuable,” Secretary Wright said. “During recent Mid-Atlantic heat waves, coal, natural gas, and nuclear kept the lights and air conditioners on. President Trump and the Energy Department are committed to keeping critical generation available when demand is highest, reducing the risk of blackouts and ensuring Americans have affordable, reliable, and secure power—regardless of whether the wind is blowing or the sun is shining.” As outlined in DOE’s Resource Adequacy Report, power outages could increase by 100 times in 2030 if the U.S. continues to take reliable power offline. This order is in effect beginning on August 23, 2026, through November 20, 2026.                                                                                             ###

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Energy Department Announces $500 Million to Secure America’s Critical Mineral and Battery Supply Chains

WASHINGTON—The U.S. Department of Energy’s (DOE) Office of Critical Minerals and Energy Innovation (CMEI) today announced $500 million for seven selected projects to expand critical mineral and material processing, battery manufacturing, and recycling capacity in the United States. In accordance with President Trump’s Executive Order, Unleashing American Energy, the selected projects advance the President’s agenda to strengthen America’s domestic critical minerals and materials supply chains, reduce reliance on foreign sources, bolster national security, and advance American energy dominance. “For too long, America has depended on foreign actors for critical materials essential to modern life that underpin our economy, energy security, and national security,” said U.S. Secretary of Energy Chris Wright. “President Trump is reversing that dependence by securing our critical supply chains, unleashing American industry, and bringing critical materials production and processing back to the United States.” “DOE is taking decisive action to secure the critical supply chains necessary to power our nation,” said Assistant Secretary of Energy Audrey Robertson. “These projects underscore DOE’s commitment to driving innovation, reducing reliance on foreign sources, and promoting American energy dominance.” This is the third round of funding from DOE’s Battery Materials Processing and Battery Manufacturing and Recycling programs, which support battery materials processing, recycling, and manufacturing projects. These include demonstration projects, construction of commercial-scale facilities, and retrofitting or retooling existing facilities.  Critical minerals and materials are essential to American industry, energy production, and national security. Expanding domestic capacity will help ensure the resources America needs are processed, manufactured, and recycled in the United States.  Information on the selected projects is available here and here.

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bp lets Shah Deniz compression automation contract

bp has let a contract to Emerson to deliver automation technologies for the Shah Deniz Compression project offshore Azerbaijan. Emerson will provide integrated control and safety systems aimed at enhancing production, safety, and reliability on the new offshore compression platform. The contract includes systems to provide process control, safety shutdown, fire and gas detection, and power management. Together, these systems deliver real-time visibility and remote control of critical operations, Emerson said. The $2.9 billion Shah Deniz Compression project, which includes an electrically powered, normally unattended offshore production platform, is a next stage development of the Caspian Sea Shah Deniz field. Designed to access low-pressure gas reserves and maximize overall recovery, the platform will be equipped with four 11 Mw compressors and serve as the central compression hub for gas from the Shah Deniz Alpha and Bravo platforms. The platform will operate remotely from bp’s onshore Sangachal terminal 55 km south of Baku. The project is expected to enable about 50 billion cu m of additional gas and about 25 million bbl of condensate production and export. Construction is scheduled to be completed in 2029, with first gas compression expected from the Shah Deniz Alpha platform in 2029 and from the Shah Deniz Bravo platform in 2030. The agreement follows a previous automation contract bp signed with Emerson for the Azeri Central East and Shah Deniz Stage 2 developments. bp is operator at Shah Deniz (29.99%) with partners Lukoil (19.99%), TPAO (19%), Cenub Qaz Dehlizi (16.02%), NICO (10%), and MVM (5%).

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Federal court voids Texas GulfLink license over agency’s ‘serious procedural errors’

The ruling voids the license, halting all construction or progress. Sentinel Midstream declined comment on the ruling and would not answer questions about the status of construction. GulfLink, sited about 30 miles offshore Freeport, Tex., is designed to export up to 1 million b/d via Very Large Crude Carriers (VLCCs) to the government of Japan and Freeport Commodities. The project involves a 44-mile, 42-in. OD pipeline and was scheduled to begin operations around 2028. The estimated $2.1 billion investment was funded as part of a broader trade agreement between the US and Japan. The legal battle stems from a specific rule in the Deepwater Port Act of 1974 that dictates that the federal government can only permit one crude oil deepwater port, including any supporting infrastructure, within a single designated “application area.” Because the competing SPOT project’s pipeline route physically overlaps and intersects GulfLink’s lines, the plaintiff—Citizens for Clean Air & Clean Water in Brazoria County (Better Brazoria), represented by Earthjustice—successfully argued that MARAD violated the “one port” rule when issuing GulfLink’s license in February. The three-judge panel found that MARAD “improperly drew” the map designing the project’s official boundaries to exclude the pipelines and approved two overlapping projects in the same zone instead of only licensing one. The court wrote that the scope of the error made vacatur, not the less serious remand without vacatur, the appropriate remedy. Vacatur deems the license invalid and is used when the court finds “serious procedural errors” that cannot be easily explained or fixed with minor changes. Remand without vacatur sends the decision back to the agency for corrections but leaves the current license in place in the meantime. SPOT project status The $2.5-3-billion SPOT project, developed by Enterprise Products Partners in partnership with Enbridge Inc., also lies about 30 miles from Freeport. Designed to handle VLCCs,

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IBM unveils dual-architecture processor to run Arm-native apps on Z mainframes

“These caches have enormously low latency, and that is one of the key reasons and key engineering choices to support the performance and scalability of enterprise workloads, very data-intensive workloads like databases and transactions,” Jacobi said. “In addition, we have an on-chip data processing unit for IO acceleration and dedicated AI accelerators as well as accelerators for data compression, cryptography and data sorting.” One of the biggest takeaways from this processor announcement is that the enormous catalog of software already built for Arm becomes accessible on a mainframe without anyone having to port it first, notes Matt Kimball, senior datacenter analyst at Moor Insights & Strategy, in a research note about the news. Still, “this is a 2027 conversation, and with no date, supported software list, or Arm licensing treatment, the work now is inventory and scenario planning rather than financial modeling,” Kimball wrote.

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PJM’s New Data Center Power Equation

PJM Interconnection has now filed one of the most consequential proposed changes yet in the relationship between data centers and the electric grid. Rather than simply treating a new hyperscale or AI facility like any other customer whose demand will be backed through regional capacity procurement, PJM is proposing a framework under which the largest new loads would need to be supported by new capacity, have their needs covered through the Reliability Backstop Procurement, or face potential curtailment when the regional power system is short of supply. The approach has been developing since PJM launched its Critical Issue Fast Path process for large loads in 2025, but it became substantially more concrete in late July and August 2026. PJM filed its proposed Reliability Backstop Procurement with FERC on July 31 and began accepting applications that day for its FERC-approved Expedited Interconnection Track. On Aug. 13, PJM filed its proposed Interim Resource Adequacy Service, or IRAS, along with the Large Load Registry that would support it. The immediate numbers explain the urgency. PJM’s July 2026 capacity auction for the 2028/2029 delivery year procured 138,318 MW of unforced capacity through the centralized auction. Even after including Fixed Resource Requirement resources, however, PJM came up 6,831 MW short of its reliability requirement. The auction cleared at the FERC-approved $325/MW-day price cap. It was the second consecutive auction in which the PJM region failed to procure its full reliability requirement, something that had not happened before these two auctions. That gap is occurring while demand continues to accelerate. PJM’s 2026 long-term forecast projects summer peak demand growing at an average 3.6% annually over the next decade, compared with just 0.3% in the comparable forecast issued in 2021. Summer peak demand is projected to rise by nearly 66 GW over 10 years. Data centers are

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Zayo, NVIDIA Build the Long-Haul Backbone for Distributed AI

The data center industry’s increasingly power-first approach to site selection has created a follow-on question: Once the megawatts are found, is there enough network infrastructure to make the site useful at AI scale? Zayo and NVIDIA are putting real infrastructure behind that question. Zayo said it is working with NVIDIA to expand network capacity supporting AI factories across North America, including an 8,000-route-mile program targeting some of the fastest-growing AI corridors in the United States. The project encompasses six new long-haul routes along with overbuilds of existing network across 10 high-demand corridors. The announcement arrives as AI data center development moves beyond the largest established hubs toward markets where power and land may be more readily available, but fiber capacity cannot necessarily be taken for granted. That geography is increasingly important. NVIDIA has separately developed “scale-across” networking technology designed to allow AI infrastructure distributed among different buildings — or even data centers separated by hundreds of kilometers — to operate as a more unified computing environment. Put together, the developments suggest that networking is becoming inseparable from the AI factory buildout itself. Power may determine where the next generation of AI infrastructure can be built. Fiber will increasingly determine how effectively those sites can participate in the larger AI ecosystem. Fiber Follows the Power Zayo CEO Steve Smith said AI demand is changing both where network infrastructure is needed and how aggressively capacity must be deployed ahead of development. “AI is fundamentally reshaping where and how network infrastructure needs to be built across the U.S.,” Smith said. The company’s 8,000-mile program is more nuanced than that top-line number might suggest. Zayo disclosed in April that the expansion includes approximately 3,000 route miles across six new long-haul routes, plus more than 5,000 route miles of overbuilds across 10 existing corridors. Zayo

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Southern’s 17 GW Pipeline Puts AI Power Demand Into Utility Math

The headline number from Southern Company’s latest earnings report is hard to miss: electricity use by data centers across the utility’s system increased 55% in the second quarter compared with a year earlier. But the more consequential numbers may be the ones sitting behind it. Southern now has more than 1.2 GW of operating data center load, up by more than 500 MW from a year ago. At the same time, its electric utilities have signed contracts and large-load agreements totaling more than 17 GW by the mid-2030s, with another 8 GW in late-stage development and a prospective pipeline of large industrial and data center projects exceeding 75 GW. That leaves an enormous gap between the data center megawatts consuming electricity today and the load Southern has contractually positioned itself to serve during the next decade. For the data center industry, that gap may be the most important part of Southern’s second-quarter story. It offers a look at how utilities are beginning to convert the AI infrastructure boom from forecasts and campus announcements into contracts, generation procurement, transmission investment and eventually energized capacity. From Contracts to Megawatts Southern added roughly 6 GW of contracted large load during the quarter alone. Alabama Power signed three projects representing about 3 GW, while Georgia Power reached a 25-year agreement to serve OpenAI’s planned project in Effingham County near Savannah. That facility is expected to require approximately 3.2 GW and begin taking electric service in phases in 2028. The numbers nevertheless require an important distinction. Seventeen gigawatts contracted does not mean 17 GW will suddenly appear on Southern’s grid. Large data center campuses ramp gradually, often over several years, and Southern executives acknowledged that actual customer ramp schedules do not always match the assumptions made when projects are first approved. CEO Chris Womack said

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PORTS-Pike Takes Shape as an 8-GW AI Infrastructure Model

Back on March 31, 2026, we discussed we discussed SoftBank and SB Energy’s plans to redevelop the former Portsmouth Gaseous Diffusion Plant site near Piketon as a 10-GW artificial intelligence data center campus supported by almost an equal amount of new power generation. At the time, the plan called for as much as 10 GW of new generation, including 9.2 GW of natural gas capacity, along with approximately $4.2 billion of high-voltage transmission infrastructure developed with AEP Ohio. An initial 800-MW data center phase was targeted for service in 2028. The March story was notable because Pike County appeared to offer a preview of a new model for building hyperscale infrastructure: develop the generation, transmission and data center simultaneously rather than wait for an increasingly congested regional grid to deliver multiple gigawatts of capacity. Not to mention the reuse of a brownfield site with the encouragement of the federal government. Since then, almost every important part of the project has moved forward, and on August 17, the most consequential missing pieces fell into place. NVIDIA announced that it will become the exclusive AI compute infrastructure provider for the PORTS-Pike Technology Campus. OpenAI will be the data center customer, signing a 20-year lease with SB Energy for approximately 8 GW of IT capacity. NVIDIA will invest another $1.5 billion in SB Energy and provide credit support for the land, power and shell infrastructure behind an initial 4.25 GW of IT load, with an option covering approximately another 3.75 GW. The Securities and Exchange Commission filing accompanying the announcement makes the financial commitment even more significant. NVIDIA disclosed that its aggregate payment obligation associated with its initial commitment is capped at $105 billion. That is not a conventional capital commitment to spend $105 billion building the campus, nor is it simply a

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Nvidia scales back financing guarantee for OpenAI data center

Nvidia is scaling back a proposed financial guarantee tied to a massive OpenAI data center project in Ohio, reducing its initial commitment from as much as $250 billion to less than $120 billion, according to report in the Wall Street Journal. Earlier this month, Nvidia announced partnerships with major financial firms including Apollo Global Management, BlackRock, Blackstone, Brookfield Asset Management, Goldman Sachs and KKR, aimed at mobilizing more than $500 billion in capital for AI computing infrastructure. The change represents a significant restructuring of Nvidia’s role in financing the planned facility, which is being developed by SB Energy, a subsidiary of SoftBank. Under the revised arrangement, Nvidia would guarantee financing for the project’s first phase, representing roughly 5 gigawatts of capacity, or half of the total proposed capacity. Financing for the remaining capacity would be considered separately at a later stage.

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Microsoft will invest $80B in AI data centers in fiscal 2025

And Microsoft isn’t the only one that is ramping up its investments into AI-enabled data centers. Rival cloud service providers are all investing in either upgrading or opening new data centers to capture a larger chunk of business from developers and users of large language models (LLMs).  In a report published in October 2024, Bloomberg Intelligence estimated that demand for generative AI would push Microsoft, AWS, Google, Oracle, Meta, and Apple would between them devote $200 billion to capex in 2025, up from $110 billion in 2023. Microsoft is one of the biggest spenders, followed closely by Google and AWS, Bloomberg Intelligence said. Its estimate of Microsoft’s capital spending on AI, at $62.4 billion for calendar 2025, is lower than Smith’s claim that the company will invest $80 billion in the fiscal year to June 30, 2025. Both figures, though, are way higher than Microsoft’s 2020 capital expenditure of “just” $17.6 billion. The majority of the increased spending is tied to cloud services and the expansion of AI infrastructure needed to provide compute capacity for OpenAI workloads. Separately, last October Amazon CEO Andy Jassy said his company planned total capex spend of $75 billion in 2024 and even more in 2025, with much of it going to AWS, its cloud computing division.

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John Deere unveils more autonomous farm machines to address skill labor shortage

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More Self-driving tractors might be the path to self-driving cars. John Deere has revealed a new line of autonomous machines and tech across agriculture, construction and commercial landscaping. The Moline, Illinois-based John Deere has been in business for 187 years, yet it’s been a regular as a non-tech company showing off technology at the big tech trade show in Las Vegas and is back at CES 2025 with more autonomous tractors and other vehicles. This is not something we usually cover, but John Deere has a lot of data that is interesting in the big picture of tech. The message from the company is that there aren’t enough skilled farm laborers to do the work that its customers need. It’s been a challenge for most of the last two decades, said Jahmy Hindman, CTO at John Deere, in a briefing. Much of the tech will come this fall and after that. He noted that the average farmer in the U.S. is over 58 and works 12 to 18 hours a day to grow food for us. And he said the American Farm Bureau Federation estimates there are roughly 2.4 million farm jobs that need to be filled annually; and the agricultural work force continues to shrink. (This is my hint to the anti-immigration crowd). John Deere’s autonomous 9RX Tractor. Farmers can oversee it using an app. While each of these industries experiences their own set of challenges, a commonality across all is skilled labor availability. In construction, about 80% percent of contractors struggle to find skilled labor. And in commercial landscaping, 86% of landscaping business owners can’t find labor to fill open positions, he said. “They have to figure out how to do

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2025 playbook for enterprise AI success, from agents to evals

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More 2025 is poised to be a pivotal year for enterprise AI. The past year has seen rapid innovation, and this year will see the same. This has made it more critical than ever to revisit your AI strategy to stay competitive and create value for your customers. From scaling AI agents to optimizing costs, here are the five critical areas enterprises should prioritize for their AI strategy this year. 1. Agents: the next generation of automation AI agents are no longer theoretical. In 2025, they’re indispensable tools for enterprises looking to streamline operations and enhance customer interactions. Unlike traditional software, agents powered by large language models (LLMs) can make nuanced decisions, navigate complex multi-step tasks, and integrate seamlessly with tools and APIs. At the start of 2024, agents were not ready for prime time, making frustrating mistakes like hallucinating URLs. They started getting better as frontier large language models themselves improved. “Let me put it this way,” said Sam Witteveen, cofounder of Red Dragon, a company that develops agents for companies, and that recently reviewed the 48 agents it built last year. “Interestingly, the ones that we built at the start of the year, a lot of those worked way better at the end of the year just because the models got better.” Witteveen shared this in the video podcast we filmed to discuss these five big trends in detail. Models are getting better and hallucinating less, and they’re also being trained to do agentic tasks. Another feature that the model providers are researching is a way to use the LLM as a judge, and as models get cheaper (something we’ll cover below), companies can use three or more models to

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OpenAI’s red teaming innovations define new essentials for security leaders in the AI era

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More OpenAI has taken a more aggressive approach to red teaming than its AI competitors, demonstrating its security teams’ advanced capabilities in two areas: multi-step reinforcement and external red teaming. OpenAI recently released two papers that set a new competitive standard for improving the quality, reliability and safety of AI models in these two techniques and more. The first paper, “OpenAI’s Approach to External Red Teaming for AI Models and Systems,” reports that specialized teams outside the company have proven effective in uncovering vulnerabilities that might otherwise have made it into a released model because in-house testing techniques may have missed them. In the second paper, “Diverse and Effective Red Teaming with Auto-Generated Rewards and Multi-Step Reinforcement Learning,” OpenAI introduces an automated framework that relies on iterative reinforcement learning to generate a broad spectrum of novel, wide-ranging attacks. Going all-in on red teaming pays practical, competitive dividends It’s encouraging to see competitive intensity in red teaming growing among AI companies. When Anthropic released its AI red team guidelines in June of last year, it joined AI providers including Google, Microsoft, Nvidia, OpenAI, and even the U.S.’s National Institute of Standards and Technology (NIST), which all had released red teaming frameworks. Investing heavily in red teaming yields tangible benefits for security leaders in any organization. OpenAI’s paper on external red teaming provides a detailed analysis of how the company strives to create specialized external teams that include cybersecurity and subject matter experts. The goal is to see if knowledgeable external teams can defeat models’ security perimeters and find gaps in their security, biases and controls that prompt-based testing couldn’t find. What makes OpenAI’s recent papers noteworthy is how well they define using human-in-the-middle

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