AI Daily: Google adding more AI Overviews, new AI Mode to Search

Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly:

AI MODE: Google (GOOGL) said that it has launched Gemini 2.0 for AI Overviews in the U.S. “to help with harder questions, starting with coding, advanced math and multimodal queries, with more on the way. With Gemini 2.0’s advanced capabilities, we provide faster and higher quality responses and show AI Overviews more often for these types of queries.” “As we’ve rolled out AI Overviews, we’ve heard from power users that they want AI responses for even more of their searches. So today, we’re introducing an early experiment in Labs: AI Mode. This new Search mode expands what AI Overviews can do with more advanced reasoning, thinking and multimodal capabilities so you can get help with even your toughest questions. You can ask anything on your mind and get a helpful AI-powered response with the ability to go further with follow-up questions and helpful web links… Plus, we’re rolling out to more people: teens can now use AI Overviews, and you’ll no longer need to sign in to get access,” the company said.

DEFENSE DEAL: Scale AI on Wednesday announced a deal with the Department of Defense for a flagship AI agent program, a significant move in the controversial military use of artificial intelligence, CNBC’s Hayden Field reports. The AI giant, which provides training data to key AI players like OpenAI, Google, Microsoft (MSFT) and Meta (META), has been awarded a prototype contract from the Defense Department for “Thunderforge,” the DOD’s “flagship program” to use AI agents for U.S. military planning and operations, according to the releases. It’s a multimillion-dollar deal, according to a source familiar with the situation.

CHIPS ACT: President Donald Trump called for the cancellation of the $52B CHIPS Act, one of former President Joe Biden’s signature tech policies, in his first address to Congress of his second term, Nikkei Asia noted. Trump cited recent examples of companies like SoftBank (SFTBY) and TSMC (TSM) announcing new investment in the U.S., arguing that companies will come without billions of dollars in subsidies. Publicly traded chipmakers include AMD (AMD), Marvell (MRVL), Microchip (MCHP), Micron (MU), Nvidia (NVDA), Qualcomm (QCOM) and Texas Instruments (TXN). 

MICROSOFT, OPENAI PARTNERSHIP: The U.K.’s CMA said that it has decided that Microsoft’s partnership with OpenAI does not qualify for investigation under the merger provisions of the Enterprise Act 2002. In a statement, the CMA said, “The CMA does not believe that it is or may be the case that the Partnership, in its current form, gives rise to a relevant merger situation. In particular the CMA does not consider there has been a change of control by Microsoft from material influence to de facto control over OpenAI. Therefore the Partnership will not be referred under section 22 of the Enterprise Act 2002.” 

UNDERMINED BY HEADLINES: Daiwa downgraded Talen Energy (TLN) to Outperform from Buy with a price target of $200, down from $248. The firm says China’s DeepSeek release in January, which likely requires less than 10% of ChatGPT’s training cost, undermined the data center power demand outlook. In addition, Microsoft was reported to have revisited its data center strategy, including cancelling U.S. leases totaling several hundred MWs and delaying lease conversions, Daiwa tells investors in a research note. As such, the firm believes Talen Energy’s artificial intelligence story is “undermined by headlines.” It expects profit taking in the shares is likely to continue.