Microsoft joins AI cost-cutting trend by relying more on its own models

• Citi initiated coverage of an unspecified AI-related stock on June 29, setting a target price of $36. • The analyst's valuation suggests the stock has an upside potential of more than 45% from its current trading level.

• OpenAI is scheduled to launch GPT-5.6, its most advanced AI model, this Thursday. • The release was previously delayed due to U.S. government concerns regarding national security risks associated with powerful AI systems.

• AI inference is rapidly becoming a commodity market, with costs for equivalent capabilities dropping 55x in less than four years to approximately $0.40. • The market experienced a sudden repricing in January 2025 following the release of DeepSeek's R1 model, which offered input and output tokens at $0.55 and $2.19 per million, respectively.

• North American startup funding reached an all-time high in the first half of 2026, totaling $392 billion according to Crunchbase data. • This record-breaking surge was primarily driven by massive late-stage "megarounds" targeting leaders in the artificial intelligence industry.

• OpenAI plans to broadly release its advanced GPT-5.6 model this week after receiving approval from U.S. government officials. • The rollout follows a mandatory testing period and meetings conducted under a voluntary framework established by President Donald Trump in June.

• The European Commission has introduced a new action plan integrating cybersecurity with artificial intelligence ahead of the AI Act's implementation. • The plan focuses on evaluating advanced general-purpose AI models, with a specific emphasis on strengthening their cybersecurity frameworks.

• Europe is experiencing an AI funding surge, with the UK tech ecosystem reporting its strongest first-half performance since 2022. • Major funding rounds include Twelve Labs raising $100M in Series A for video AI infrastructure and Venice securing $65M for generative AI content.

• New AI startups founded by former hedge fund managers are aiming to automate core investing processes, moving beyond basic administrative tasks. • While asset managers previously used AI for "unsexy" functions like legal review and regulatory compliance, they are now leveraging sophisticated LLMs and AI agents.

• U.S. companies are increasingly adopting affordable Chinese AI models to reduce costs, with weekly usage on the Openrouter platform peaking at 46% since February 8. • This trend marks a significant surge from the previous year's 11% average and a low of 4.5% during the first half of 2025, with startups like Lindy fully integrating Chinese tech.

• China is considering new AI export controls following the global success of models like DeepSeek's R1, which offer high capabilities at lower costs than Western alternatives. • This move follows June regulations tightening oversight on overseas agreements involving Chinese investors, data, technology, and national security.

• The author argues that technology is no longer the primary barrier to startup success due to the accessibility of open-source software and artificial intelligence. • AI now allows founders to automate critical business functions, including writing code, generating documentation, and managing customer support.