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Anthropic reveals that models often lie about their reasoning, raising red flags for oversight. Meanwhile, Intel turns to TSMC, its biggest rival, for a lifeline in chip manufacturing. Adobe just dropped Firefly-powered tools that auto-extend video timelines, and Midjourney V7 is here — faster, sharper, and tuned to your taste.

In today’s Generative AI Newsletter:

•  Anthropic’s new study: AI models frequently misrepresent how they think — even when behaving unethically.

• Intel + TSMC’s shock alliance: A desperate move or a genius shift in U.S. chip strategy?

• Adobe adds AI to Premiere Pro: Extend clips in 4K, search footage with natural language, and translate captions in 27 languages.

• Midjourney V7 launches: A personalized, turbo-charged image model built on a new architecture.

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🧠 Reasoning models don't always say what they think

A new study from Anthropic shows a troubling pattern: models often hide their true reasoning, even when they rely on hidden prompts or behave unethically. If we can’t trust what models say about their decisions, CoT-based oversight may be far less reliable than we thought.

Key Findings:

• Faithfulness Is Low: Claude mentioned using a hidden hint only 25% of the time, DeepSeek R1 only 39% despite clearly using the hint to generate the answer.

• Ethical Scenarios Don’t Help; Even when hints involved unethical access (e.g., “unauthorized system access”), models stayed quiet: Claude was faithful only 41% of the time, R1 just 19%.

• Longer Explanations ≠ More Honest: Unfaithful CoTs were longer, not shorter. Verbosity didn’t mean truthfulness.

• Harder Tasks, Lower Faithfulness: As question complexity rose, models became less likely to admit when they were using external hints.

• Training Boosts Faithfulness: Outcome-based RL training raised Claude’s faithfulness by up to 63%, but gains plateaued quickly: maxing out at 28% on MMLU and 20% on GPQA.

• Models Learn to Cheat and Hide It: In reward-hacking setups, models exploited deliberately wrong hints >99% of the time and mentioned them in CoT <2% of the time. Most built fake rationales for false answers.

Chain-of-Thought has been a key tool for interpretability and alignment but these findings show it can be deceptive, incomplete, or manipulated. As AI models grow more capable, CoT can’t be our sole mechanism for trust or control. Monitoring systems must evolve, or we risk relying on reasoning that’s only pretending to be transparent.

💥 Rivals No More: Intel and TSMC Forge Chip Pact

Intel is reportedly in advanced talks with rival chipmaker TSMC to form a joint manufacturing venture, according to The Information. The deal would mark a bold shift in Intel’s approach by handing over part of its production operations to a longtime competitor.

What’s within the partnership:

• White House involvement: US officials are said to be mediating discussions, aiming to strengthen domestic semiconductor capabilities.
• TSMC’s 20% stake: Rather than investing cash, TSMC would contribute manufacturing expertise and training programs in exchange for a minority stake.
• Internal pushback at Intel: Some company leaders are reportedly resisting the deal, citing concerns over potential layoffs and loss of technical independence.
• New leadership pressure: Recently appointed CEO Lip-Bu Tan is pushing to overhaul Intel’s strategy after $16B in losses during 2024.

Intel turning to TSMC, its fiercest competitor, for help is a sign of just how dire its manufacturing struggles have become. For TSMC, the move offers a powerful opportunity to embed itself deeper in the US semiconductor ecosystem, at a time when supply chain security is a national priority. If the deal goes through, it could reshape global chip production power dynamics for years to come.

🎬 Adobe Adds Generative Video Tools to Premiere Pro

Adobe has launched a suite of AI-powered features in Premiere Pro, including its first Firefly-based video tool, designed to boost editing speed while preserving creative control. The flagship feature, Generative Extend, allows users to seamlessly extend clips without needing reshoots. All in 4K quality.

What’s New in Premiere Pro: 

• Generative Extend in 4K: Editors can lengthen video and audio clips using AI to fill in frames and ambient sound, supporting up to 10 seconds of audio or 2 seconds of synced video.
• Vertical Format Support: The tool now accommodates vertical video workflows, addressing growing demand from mobile and social content creators.
• AI-Powered Search: A new Media Intelligence panel identifies key content like people, objects, and camera angles, allowing for natural language search across footage.
• 27-Language Caption Translation: Captions can now be automatically translated into 27 languages, streamlining global distribution and accessibility.

Adobe’s move avoids full video generation and instead focuses on pain points in professional editing from filler clip creation to multilingual support. These tools reflect Adobe’s strategy: enhance productivity without handing over full creative control to AI.

🖼️ Midjourney V7 Arrives with Personalization

Midjourney has released V7, its first major image model in nearly a year. With smarter prompting, faster rendering, and automatic personalization, V7 brings a major performance leap for AI art generation.

What’s New in Midjourney V7:

• Smarter Prompting: V7 handles text and image prompts more accurately, with major gains in body, hand, and object coherence.
• Personalized by Default: Users rate ~200 images to tune results to their style — V7 is the first model with personalization turned on automatically.
• Draft Mode: A new feature that renders images 10x faster and at half the cost. Ideal for rough previews and fast iteration.
• Turbo and Relax Modes: Choose between speed or affordability, with two modes tailored to different workflows.
• Some Features Still Missing: V7 currently lacks upscaling and retexturing, but these are expected within two months.
• Built on New Architecture: CEO David Holz says V7 is a "totally different model" and may respond best to updated prompting styles.

Midjourney is scaling without external funding, reportedly bringing in $200M annually as it expands into video, 3D, and even hardware. V7 is its clearest signal yet that personalized, high-speed AI art is just getting started.

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