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Macquarie Strategists See ‘Very Large’ USA Crude Build in Next EIA Report

In an oil and gas report sent to Rigzone by the Macquarie team late Thursday, Macquarie strategists outlined that they “anticipate a very large U.S. crude build” in the U.S. Energy Information Administration’s (EIA) next weekly petroleum status report. That report is scheduled to be released on February 5 and will include data for the […]

In an oil and gas report sent to Rigzone by the Macquarie team late Thursday, Macquarie strategists outlined that they “anticipate a very large U.S. crude build” in the U.S. Energy Information Administration’s (EIA) next weekly petroleum status report.

That report is scheduled to be released on February 5 and will include data for the week ending January 31. The EIA’s latest weekly petroleum status report at the time of writing was released on January 29 and included data for the week ending January 24.

“Looking ahead to next week’s release, we anticipate a very large U.S. crude build (+11.7 million barrels), with runs falling further (-0.2 million barrels per day), nominal implied supply showing a meaningful recovery from freeze impacts (+0.7 million barrels per day), net imports higher (+0.3 million barrels per day), and a larger increase in SPR inventory (+0.9 million barrels) on the week,” the Macquarie strategists said in the report.

“We note potential for volatility in these figures given the incomplete nature of this week’s data. Among products, our preliminary expectations point to draws in gasoline (-0.7 million barrels) and distillate (-3.6 million barrels), with a build in jet (+1.2 million barrels),” they added.

In the Macquarie report, the Macquarie strategists highlighted that, this week, the EIA “reported builds in commercial crude (+3.5 million barrels) and at Cushing (+0.3 million barrels), with mixed product stats (gasoline +3.0 million barrels, distillate -5.0 million barrels, jet -0.3 million barrels)”.

“While crude and gasoline builds were reasonably close to our expectations, the large distillate draw represented a bullish surprise,” the strategists said in the report.

“Within the crude balance, runs realized below our expectation this week (-0.3 million barrels per day). Offsetting this impact, net imports were lower than expected on a nominal basis (-0.2 million barrels per day),” they added.

“Implied domestic supply (prod.+adj.+trans.) was a nominally soft 13.0 million barrels per day (we modeled ~13.3 million barrels per day), amidst potential large freeze impacts,” they continued.

The strategists went on to state in the report that, “among products, implied demand was well above” their “expectation this week, with gasoline+distillate+jet at 14.3 million barrels per day (vs. ~13.7 million barrel per day est.), with the trailing four week average at 13.8 million barrels per day vs. 13.3 million barrels per day for the same four weeks last year”.

“Likewise, total disappearance (impl. demand + exports) for those three products was also above our expectation at 16.4 million barrels per day (vs. ~15.8 million barrel per day est.), with the trailing four week average at 16.1 million barrels per day vs. 15.5 million barrels per day for the same four weeks last year,” the strategists continued.

The EIA’s January 29 weekly petroleum status report showed that crude oil stocks, not including the SPR, stood at 415.1 million barrels on January 24. Crude oil in the SPR stood at 394.8 million barrels on January 24, the report revealed.

Total petroleum stocks – including crude oil, total motor gasoline, fuel ethanol, kerosene type jet fuel, distillate fuel oil, residual fuel oil, propane/propylene, and other oils – stood at 1.608 billion barrels on January 24, according to the report. This figure was down 13.6 million barrels week on week and up 19.2 million barrels year on year, the report outlined.

In an oil and gas report sent to Rigzone by the Macquarie team late Monday, Macquarie strategists revealed that they were forecasting that U.S. crude inventories would be up 4.8 million barrels for the week ending January 24.

“This compares to our early look for the week which anticipated a 2.7 million barrel build, and a 1.0 million barrel draw realized for the week ending January 17,” the strategists said in that report.

To contact the author, email [email protected]

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What is NaaS? Providers, delivery models, and benefits explained

Subscription hardware: Instead of making an outright purchase (Capex), a business pays a monthly subscription (OpEx) for the hardware but still handles the installation and operation of the equipment. Managed service: Subscription-based hardware plus a managed service to operate it. Pure NaaS: The provider owns, installs, and operates all equipment,

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US Justice Department sues to block HPE’s $14 billion Juniper buy

“Even well-resourced networking companies in complementary networking markets are unlikely to be strong alternatives to Cisco and HPE immediately, as several face reputational headwinds and have not developed the distribution networks for rapid growth in the enterprise-grade WLAN market,” the DOJ stated. The DOJ said that if the deal were

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WTI Slips Below $73 on Mixed Tariff Signals

Oil settled slightly lower after a turbulent session buffeted by conflicting messages about the timing and scope of tariffs on major US crude suppliers Canada and Mexico. West Texas Intermediate edged down below $73 a barrel after White House press secretary Karoline Leavitt reiterated that the planned tariffs on Canada, Mexico and China will start as soon as Feb. 1. Crude had earlier declined as much as 1.1% after Reuters reported the measures would be delayed until March 1 and may allow for exemptions, assuaging concerns about supply disruptions. “I saw that report, and it is false,” Leavitt told reporters on Friday during a press briefing. “I was just with the President in the Oval Office, and I can confirm that tomorrow the Feb. 1 deadline that President Trump put into place” remains, she added. She didn’t clarify whether crude would be exempt from the incoming levies. The inclusion of crude in the tariffs would risk major reverberations across the oil market. Canada ships about 4 million barrels a day to the US, and the countries’ energy markets are closely integrated, with refiners in the Midwest the most vulnerable to disruptions. Valero Energy Corp., the third-biggest US fuelmaker by market value, expects processors to cut production if tariffs hit oil imports. Canadian crude prices have been volatile in the weeks since the tariffs were first floated, while premiums for gasoline and diesel have risen in recent days. “The inclusion of Canada oil in a 25% tariff on Canada and Mexico would likely initially raise gasoline prices in the US Midwest, and eventually weigh on crude prices globally (via weaker demand) and especially in Canada, where producers have limited export options,” Goldman Sachs Group Inc. analysts including Daan Struyven said in a note. Crude was little changed in January after gains

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Jonathan Cole: Outgoing Corio CEO says now is the time for discipline

Friday marked the last day of Corio Generation CEO Jonathan Cole’s tenure at the top of the company. Speaking to Energy Voice before the announcement of his departure, Cole shared his thoughts on his career and the direction of the offshore wind sector. Corio reported that Cole would step down last week, with his last day on 31 January, as he looks to prioritise his family life. Having spent three years at the head of the company, the announcement comes not long after he received the Outstanding Contribution Award at last year’s Scottish Green Energy Awards. “I was a kid 20 years ago when the awards first started, so it was nice to be recognised,” he says. “But I think the recognition was not just about running two successful businesses in this space, but actually doing a lot more outside of my company to help grow the sector and work collaboratively and constructively with organisations and people who, on the face of it, are competitors. “When you look at the bigger picture, we also have to be collaborators to make the case for renewable energy in the face of quite a lot of opposition sometimes.” Career Cole has served in a variety of leadership roles across the energy sector for the past 20 years. Before moving to Corio, he was involved in creating and running Iberdrola’s global offshore wind business, which was started in Glasgow within Scottish Power. Since taking over the top job at Corio, he has built up the business over three years to the point it is now a global player with 25GW of projects all over the world and more than 250 professional staff. In addition to his leadership roles, he currently serves – and aims to carry on – as chairman of the Global Wind

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Macquarie Strategists See ‘Very Large’ USA Crude Build in Next EIA Report

In an oil and gas report sent to Rigzone by the Macquarie team late Thursday, Macquarie strategists outlined that they “anticipate a very large U.S. crude build” in the U.S. Energy Information Administration’s (EIA) next weekly petroleum status report. That report is scheduled to be released on February 5 and will include data for the week ending January 31. The EIA’s latest weekly petroleum status report at the time of writing was released on January 29 and included data for the week ending January 24. “Looking ahead to next week’s release, we anticipate a very large U.S. crude build (+11.7 million barrels), with runs falling further (-0.2 million barrels per day), nominal implied supply showing a meaningful recovery from freeze impacts (+0.7 million barrels per day), net imports higher (+0.3 million barrels per day), and a larger increase in SPR inventory (+0.9 million barrels) on the week,” the Macquarie strategists said in the report. “We note potential for volatility in these figures given the incomplete nature of this week’s data. Among products, our preliminary expectations point to draws in gasoline (-0.7 million barrels) and distillate (-3.6 million barrels), with a build in jet (+1.2 million barrels),” they added. In the Macquarie report, the Macquarie strategists highlighted that, this week, the EIA “reported builds in commercial crude (+3.5 million barrels) and at Cushing (+0.3 million barrels), with mixed product stats (gasoline +3.0 million barrels, distillate -5.0 million barrels, jet -0.3 million barrels)”. “While crude and gasoline builds were reasonably close to our expectations, the large distillate draw represented a bullish surprise,” the strategists said in the report. “Within the crude balance, runs realized below our expectation this week (-0.3 million barrels per day). Offsetting this impact, net imports were lower than expected on a nominal basis (-0.2 million barrels per day),”

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2025 US power sector outlook

The election of President Donald Trump has injected fresh uncertainty into the U.S. clean energy transition, with a bevy of tax credits, grants, federal programs and loan guarantees authorized by the Biden administration or previous administrations now under threat. Observers say momentum and private-sector profits will continue to drive investment in climate solutions, but the path ahead is murkier without certain federal support.  In the stories below, Utility Dive takes a detailed look at how the Trump administration and other factors at play in 2025 may impact the U.S. renewables sector, electricity prices, natural gas infrastructure, power demand, nuclear development, energy siting and more.

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Senate confirms Doug Burgum as Interior Secretary

The Senate voted to confirm former North Dakota Gov Doug Burgum as the Secretary of the Interior in a 79-18 vote late Thursday, adding him to President Donald Trump’s cabinet. Burgum joins an administration committed to expanding oil and gas production and curtailing wind generation on federal lands, though Burgum increased production of all three during his time as governor and said during his confirmation hearing that he supports an “all of the above” approach to generation. He added, however, that he thinks more generation overall is needed, “and the thing we’re short of right now is baseload [generation].” Trump said in a November Truth Social post that Burgum will also serve as chairman of a new National Energy Council, and through that role will also have a seat on the National Security Council. “This Council will oversee the path to U.S. ENERGY DOMINANCE by cutting red tape, enhancing private sector investments across all sectors of the Economy, and by focusing on INNOVATION over longstanding, but totally unnecessary, regulation,” Trump said. Burgum will also conduct a comprehensive review of offshore wind during a six-month pause on federal issuances of permits and leases. The review will examine “the ecological, economic, and environmental necessity of terminating or amending any existing wind energy leases, identifying any legal bases for such removal,” according to the White House, and will conclude with Burgum submitting a report to Trump. National Rural Electric Cooperative Association CEO Jim Matheson praised Burgum’s confirmation in a Thursday statement, saying that he “has long been a steadfast advocate for safeguarding the reliability of our electric grid, effectively stewarding our nation’s public lands and natural resources, reducing wildfire risk and helping rural communities across America thrive.” The American Clean Power Association’s CEO Jason Grumet also issued a supportive statement Thursday, congratulating Burgum

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Transmission is the key to American energy dominance

Christina Hayes is the executive director of Americans for a Clean Energy Grid. A lot can change in four years. When it comes to our energy grid, the axiom rings especially true. As the Trump administration gets settled in, new challenges are threatening the reliability and affordability of our energy systems. The rise of artificial intelligence and a domestic manufacturing boom has sent electricity demand skyrocketing after more than a decade of level use. Moreover, electricity demand is projected to continue increasing by 128 GW over the next five years, or five times greater than thought just two years ago. A modern electric grid remains the cornerstone of our nation’s economy, national security and global competitiveness. To their credit, President Trump’s nominees to lead the agencies in charge of ensuring energy dominance clearly understand this reality and have articulated it well. During his confirmation hearing, Energy Secretary nominee Chris Wright said that he would “seek to find the best ways to improve our transmission grid, including expansion and new lines.” Those sentiments were echoed by Interior Secretary Doug Burgum, who said during his confirmation hearing that public lands can help bolster the grid through transmission line development, noting that “if we don’t have the ability to transmit [energy] to the places where it’s needed, that’s going to be a problem.” To remain competitive and win the AI race with China, we will need all the energy we can generate while expanding our ability to transmit those electrons wherever they need to go.  Simply put: More transmission is an essential component of American energy dominance. Global competition for large-scale transmission is accelerating. China is currently building 80 times more high-voltage transmission than the United States. In 2022, China invested $166 billion in its transmission grid, surpassing the combined grid investments of

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Timeline of HPE’s $14 billion bid for Juniper

June 20, 2024: HPE-Juniper merger faces antitrust inquiry in UK An inquiry into HPE’s $14 billion takeover of Juniper Networks by the UK’s Competition and Markets Authority (CMA), a move that potentially could delay approval of the deal, will have little impact on data center managers, said one analyst with Info-Tech Research Group. Both companies were informed of the inquiry by the CMA, the UK’s principal antitrust regulator, on Wednesday. July 17, 2024: Juniper advances AI networking software Juniper continues to improve its AI-native networking platform while HPE’s $14 billion deal to acquire Juniper continues to advance through the requisite regulatory hurdles. The latest platform upgrades are designed to help enterprise customers better manage and support AI in their data centers. Juniper is also offering a new validated design for enterprise AI clusters and has opened a lab to certify enterprise AI data center projects. Aug. 01, 2024: EU clears HPE’s $14 billion Juniper acquisition Hewlett Packard Enterprise’s proposed acquisition of Juniper Networks took a big step forward this week as the European Commission unconditionally approved the buy. Next up: US and UK regulatory approval? Nov. 21, 2024: AI networking a focus of HPE’s Juniper deal as Justice Department concerns swirl HPE’s acquisition of Juniper has been under regulatory scrutiny ever since HPE announced the $14 billion deal in January. The proposed deal has passed muster with a number of world agencies so far, but there is reportedly some concern about it from the US Department of Justice.  Jan. 30, 2025: U.S. Justice Department sues to block HPE’s $14 billion Juniper buy After months of speculation, the U.S. Justice Department sued to block the $14 billion sale of Juniper Networks to HPE. The DOJ said reduced competition in the wireless market is the biggest problem with the proposed buy. “This proposed acquisition risks substantially lessening competition in

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Verizon brings AI suite to enterprise infrastructure customers

Verizon Business has launched AI Connect, an integrated suite of products designed to let businesses deploy generative artificial intelligence (AI) workloads at scale. Verizon is building its AI ecosystem by repurposing its existing infrastructure assets in its intelligent and programmable network, which consists of fiber, edge networking, and data center assets, along with its metro and long-haul fiber, ILEC and Fios footprint, its metro network build-out, lit and dark fiber services, and 5G network. Verizon believes that the drive toward real-time decision-making using inferencing will be what drives demand for additional computing power.  The company cites a McKinsey report, which states that 60% to 70% of AI workloads are expected to shift to real-time inference by 2030. That will create an urgent need for low-latency connectivity, compute and security at the edge beyond current demand.

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Trump’s 100% tariff threat on Taiwan chips raises cost, supply chain fears

“I don’t think we will see a near-term impact, as it takes years to build fabs, but by the end of the decade, the US share could rise by a few percentage points,” Gupta said. “It’s hard to give an exact number, but if I were to estimate, I’d say 14-15%. That isn’t a lot, but for the US to gain share, someone else must lose it, and while the US is making efforts, we see similar developments across Asia.” Yet, if Washington imposes smaller tariffs on imports from countries such as India, Japan, or Malaysia, Taiwanese chipmakers may shift production there rather than to the US, according to Stephen Ezell, vice president at the Information Technology and Innovation Foundation (ITIF). “Additionally, if the tariffs applied to Chinese chip exports were lower than for Taiwanese exports, Trump would be helping Chinese semiconductor manufacturers, whose exports to the US market would then be less expensive,” Ezell said in a recent note. “So, for this policy to have any real effect, Trump effectively must raise tariffs on all semiconductors, and that would likely lead to global tit-for-tat.” Enterprise IT faces tough choices If semiconductor tariffs drive up costs, enterprises will be forced to reassess spending priorities, potentially delaying or cutting investments in critical IT infrastructure. Rising chip prices could squeeze budgets for AI, cloud computing, and data center expansions, forcing businesses to make difficult trade-offs. “On the corporate side, hyperscalers and enterprise players need to brace for impact over the next 2-3 years if high tariffs continue along with the erosion of operating margin,” Faruqui said. “In addition, the boards and CEOs have to boldly make heavy CAPEX investment on US Soil via US and Asian partners as soon as possible to realize HVM on US soil and alleviate operating margin erosion due to

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New tweak to Linux kernel could cut data center power usage by up to 30%

When network traffic is heavy, it is most efficient, and delivers the best performance, to disable interrupts and run in polling mode. But when network traffic is light, interrupt-driven processing works best, he noted. “An implementation using only polling would waste a lot of resources/energy during times of light traffic. An implementation using only interrupts becomes inefficient during times of heavy traffic. … So the biggest energy savings arise when comparing to a high-performance always-polling implementation during times of light traffic,” Karsten said. “Our mechanism automatically detects [the amount of network traffic] and switches between polling and interrupt-driven to get the best of both worlds.” In the patch cover letter, Damato described the implementation of the new parameter in more detail, noting: “this delivery mode is efficient, because it avoids softIRQ execution interfering with application processing during busy periods. It can be used with blocking epoll_wait to conserve CPU cycles during idle periods. The effect of alternating between busy and idle periods is that performance (throughput and latency) is very close to full busy polling, while CPU utilization is lower and very close to interrupt mitigation.” Added Karsten: “At the nuts and bolts level, enabling the feature requires a small tweak to applications and the setting of a system configuration variable.” And although he can’t yet quantify the energy benefits of the technique (the 30% saving cited is best case), he said, “the biggest energy savings arise when comparing to a high-performance always-polling implementation during times of light traffic.”

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Macquarie’s Big Play in AI and HPC: $17+ Billion Invested Across Two Data Center Titans

Macquarie Asset Management (MAM) is making bold moves to position itself as a dominant force in the rapidly growing sectors of AI and high-performance computing (HPC). In a single week, MAM has made two pivotal investments in Applied Digital and Aligned Data Centers, committing over $17 billion to fuel innovation, growth, and capacity expansion in critical infrastructure markets across the Americas. Both deals highlight the immense demand for AI-ready and HPC-optimized data centers, underscoring the ongoing digitization of the global economy and the insatiable need for computing power to drive artificial intelligence (AI), machine learning (ML), and other resource-intensive workloads. Applied Digital Partners with Macquarie Asset Management for $5 Billion HPC Investment On January 14, Applied Digital Corporation announced what it billed as a transformative partnership with Macquarie to drive growth in HPC infrastructure. This agreement positions Applied Digital as a leading designer, builder, and operator of advanced data centers in the United States, catering to the growing demands of AI and HPC workloads. To account for the $5 billion commitment, funds managed by MAM will invest up to $900 million in Applied Digital’s Ellendale HPC Campus in North Dakota, with an additional $4.1 billion available for future HPC projects. This could support over 2 gigawatts (GW) of HPC data center development. MAM is a global asset manager overseeing approximately $633.7 billion in assets. Part of Australia-based Macquarie Group, it specializes in diverse investment solutions across real assets, real estate, credit, and equities. With its new landmark agreement with Macquarie, Applied Digital feels it is poised to redefine the HPC data center landscape, ensuring its place as a leader in the AI and HPC revolution. In terms of ownership structure, MAM’s investment here includes perpetual preferred equity and a 15% common equity interest in Applied Digital’s HPC business segment, allowing

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Data Center Frontier Announces Editorial Advisory Board for 2025 DCF Trends Summit

Nashua, NH – Data Center Frontier is excited to announce its Editorial Advisory Board for the second annual Data Center Frontier Trends Summit (DCF Trends Summit), taking place August 26-28, 2025, at the Hyatt Regency Reston in Reston, Virginia.  The 2025 DCF Trends Summit Editorial Advisory Board includes distinguished leaders from hyperscale and colocation operators, power and cooling solutions companies, IT and interconnection providers, and design/build/construction specialists. This year’s board has grown to include 15 esteemed executives, reflecting DCF’s commitment to providing comprehensive and diverse insights for the data center sector.  This visionary group of leaders, representing the critical facets of the data center ecosystem, will guide the event’s content and programming to address the most pressing trends impacting the industry. The group’s unparalleled expertise ensures the Summit will deliver essential insights to help data center stakeholders make informed decisions in the industry’s rapidly evolving landscape.  The Editorial Advisory Board for the 2025 DCF Trends Summit includes:  Scott Bergs, CEO, Dark Fiber & Infrastructure (DF&I) Steven Carlini, VP, Innovation and Data Center Energy Management Business, Schneider Electric Dan Crosby, CEO, Legend Energy Advisors Rob Coyle, Director of Technical Programs, Open Compute Project (OCP) Foundation Chris Downie, CEO, Flexential Sean Farney, VP of Data Centers, Jones Lang LaSalle (JLL) Mark Freeman, VP of Marketing, Vantage Data Centers Steven Lim, SVP of Marketing & GTM Strategy, NTT Global Data Centers David McCall, VP of Innovation, QTS Data Centers Nancy Novak, Chief Innovation Officer, Compass Datacenters Karen Petersburg, VP of Construction & Development, PowerHouse Data Centers Tara Risser, Chief Business Officer, Cologix Stefan Raab, Sr. Director, Business Development – AMER, Equinix Phill Lawson-Shanks, Chief Innovation Officer, Aligned Data Centers Brenda Van der Steen, VP of Global Growth Marketing, Digital Realty “The Editorial Advisory Board for the second annual Data Center Frontier Trends Summit is

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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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