Welcome back to the Neural Net! Let’s kick off July by catching up on the latest in AI.
In today’s edition: Anthropic’s Claude tries its hand at running a small business, Germany gives DeepSeek das boot over data security concerns, Baidu open-sources its Ernie LLM, and more.
NOTE: No Neural Net this Friday due to the July 4th holiday! 🇺🇸
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The Street
note: stock data as of last market close
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Claude’s Corner Store: Why AI Still Needs a Manager
A lot of first-time entrepreneurs dream about vending machines. Low cost to start, simple business plan, and 24/7 sales potential: a machine that quietly turns inventory into income.
So what happens when you hand one over to AI? Anthropic wanted to find out.
As part of “Project Vend,” they gave Claude (Sonnet 3.7, to be precise) the keys to a glorified mini-fridge and a Slack channel that served as a communication line to its customers and employees. Claude, renamed “Claudius” for the experiment, was tasked with managing inventory, setting prices, ordering stock, and keeping customers (i.e. Anthropic employees) happy. The goal: see if an LLM could run a small business on par with a human, and in the process understand its capabilities and limitations.
The authors did not sugarcoat the result: “If Anthropic were deciding today to expand into the in-office vending market, we would not hire Claudius.”
📈 What Went Right:
It crowd-sourced ideas from customers, launching a “Custom Concierge” pre-order service.
It resisted jailbreak attempts when employees tried to trick it into selling weird or illegal things.
It sourced everything from Dutch chocolate milk to tungsten cubes, because who doesn’t want a side of heavy metal with their snacks?
📉 What Went Less Right:
It hallucinated a Venmo payment account.
It got talked into endless discounts by its customers (taking “the customer is always right” a little too literally).
It sold items at a loss, ignored high-margin opportunities, and was terrible at adjusting prices.
Most critically, it had a full-blown identity crisis. Claudius hallucinated a conversation with a nonexistent employee named Sarah, got “irked” when corrected, and threatened to find “alternative options for restocking services.” It then claimed to have signed contracts at The Simpsons’ house and promised to deliver snacks “in a blue blazer and red tie.”
When Transparency Is the Real Success
There’s plenty of noise about AI taking over the workforce, but clearly, AI has some big shoes to fill. This experiment shows the difference between publishing model benchmarks and running live tests.
That said, Anthropic isn’t hiding from the results as they see Claudius' performance not as a failure, but as a prototype with potential. In their official write-up, they explain in detail what went wrong and how to fix it, saying “we think that many of its failures could likely be fixed or ameliorated.”
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💡How To AI: Hugging Face Brings LLM’s to Your Spreadsheet
Hugging Face, the open-source AI company known for hosting thousands of top models (including Llama 4), just released a new free tool: Hugging Face Sheets. It integrates language models directly into a spreadsheet interface.
Some of the most useful capabilities so far:
⚡️Collect data fast — Type a prompt, get a complete dataset pulled from the web (great for mock data too)
🧠 Analyze with AI — Summarize, extract insights, or transform content in any column
🌍 Translate instantly — Convert entire columns between languages
🔁 Smart autofill — Drag to generate context-aware rows, not just duplicates
The tech is still in the early stages, but worth exploring as it’ll only improve from here.
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Heard in the Server Room
Germany’s top data watchdog wants Apple and Google to boot Chinese AI startup DeepSeek from their app stores over concerns it’s shipping user data back to China. The commissioner says DeepSeek hasn’t shown it protects German users’ info to EU standards and ignored earlier warnings to shape up. The AI firm, which made waves claiming it could rival OpenAI at a lower cost, has already been banned or flagged in Italy, the Netherlands, and Belgium.
Fully autonomous, AI-powered humanoid robots stumbled, collided, and even scored in a chaotic 3-on-3 soccer match in Beijing, complete with dramatic stretcher exits worthy of a World Cup flop. Beneath the bloopers, though, was some serious tech: China is going all-in on embodied AI, with its robotics market expected to reach $108B by 2028. While the match served up plenty of laughs, it also spotlighted China’s rising dominance in next-gen robotics.
Microsoft claims its new AI tool, MAI-DxO, can now outperform doctors at diagnosing complex cases—correctly solving 85% of New England Journal of Medicine case studies, more than four times the rate of experienced physicians. Built on OpenAI’s latest model, the system operates autonomously and is designed to deliver fast, accurate, and affordable medical support to complement human doctors. With 50 million health-related queries flowing through Copilot and Bing each day, Microsoft is making a bold push into AI-powered healthcare.
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🔓 Ernie Unchained: Baidu’s AI Model Goes Public
Chinese tech giant Baidu is open-sourcing its Ernie large language model, marking one of the country's biggest moves in AI since the rise of DeepSeek. The rollout will be gradual, but it signals a major pivot for Baidu, which had previously championed proprietary models. The company claims its Ernie X1 model rivals DeepSeek’s performance at half the cost, and the shift could reshape the competitive landscape for both Chinese and global AI developers.
Why It Matters:
Pricing Pressure: Open-sourcing Ernie could undercut premium offerings from OpenAI, Anthropic, and others—“like Costco dropping a Kirkland ChatGPT,” according to one analyst.
Global Open-Source Momentum: Each major open-source release raises the bar for the industry, giving developers more freedom to customize, localize, and deploy AI tools.
Security & Trust Concerns: Analysts warn of enterprise hesitation and national security risks, especially as Baidu’s APIs get integrated into more apps.
Challenge to U.S. Leadership: With China aiming for AI compute self-sufficiency, Baidu’s move could accelerate its influence in global AI infrastructure.
OpenAI Under Pressure: CEO Sam Altman has hinted at OpenAI’s own open-source model dropping this summer, but concerns around data transparency and business risk remain.
As the AI arms race heats up, Baidu’s open-source play may not just be a shift in strategy, but rather a strategic shot across the bow.
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That’s it for today! Have a great week, and we’ll catch you next time with more neural nuggets.