artificial intelligence

AI Crypto Startup O.XYZ Faces Allegations of Misrepresentation and Internal Turmoil: Sources

Published

2 months ago

November 24, 2024

O.XYZ, a blockchain and AI company touting crypto and artificial intelligence services, is facing allegations of falsely inflating its technological claims and engaging in aggressive tactics to suppress dissent within the company.

While founder Ahmad Shadid has defended both his and the company’s actions, multiple sources familiar with the company’s operations who spoke with Decrypt have refuted public claims, alleging widespread misrepresentation of O.XYZ’s capabilities.

O.XYZ positions itself as a community-owned “Super AI” ecosystem. The company claims to leverage substantial GPU computing power, purportedly deploying tens of thousands of open-source models, enabling it to execute a wide array of tasks.

Sources claim the company has exaggerated its capabilities, falsely stating it can connect to over 100,000 AI models, runs 20 times faster than competitors, and owns powerful hardware it doesn’t actually possess.

It’s also accused of inflating the value of its satellite program and misrepresenting its token launch, raising questions about transparency and accountability.

As a result of those allegations, sources claim holders of the company’s recently launched O.XYZ token are at risk of being harmed.

In an emailed statement to Decrypt, Shadid issued a detailed response to concerns raised about the company’s claims, insisting that O.XYZ’s promotional language is “forward-looking” and aligned with its development roadmap.

However, sources who spoke with Decrypt dispute this characterization, pointing to materials on O.XYZ’s website and investor presentations that describe capabilities as existing rather than aspirational.

In June, Shadid stepped down as CEO of Solana-based decentralized infrastructure provider IO.net—a company he founded—amid allegations surrounding his past and misreported company metrics, citing his decision as a move to reduce distractions and focus on the company’s growth.

A public statement Shadid published amid his departure from IO has since been deleted from Twitter (aka X). To avoid conflicts and distance itself from Shadid, IO agreed to offer a “six-figure severance,” one source familiar with the matter told Decrypt. IO earlier this year raised $30 million in a Series A round from notable crypto industry investors, including Hack VC, Solana Labs, Aptos Labs, Multicoin Capital, and Animoca Brands.

Several sources who have previously worked with Shadid described him as a “smart, capable individual” who manages each and every time to assemble a highly experienced team for the job. However, both a former employee and an investor who wished not to be named stated they would “never work with Shadid again.”

Disputed infrastructure and performance claims

In response to allegations that O.XYZ is exaggerating its capabilities, Shadid highlighted the company’s investments in U.S.-based Cerebras Systems hardware and plans to deploy cutting-edge AI data centers, asserting that its infrastructure supports “20x faster” AI processing. He cited benchmarks of Cerebras WSE-3 chips as evidence of O.XYZ’s performance leap.

Sources dismissed those claims as “patently false,” instead alleging O.XYZ has yet to acquire the necessary hardware for such operations, despite Shadid’s claims of “advanced talks” with Cerebras.

“There’s no internal benchmarking supporting the 20x figure,” one source said, who noted that the company’s routing technology might actually increase latency rather than reduce it.

Misleading Starlink and partnership claims

O.XYZ has also promoted itself as being powered by SpaceX’s Starlink, with Shadid emphasizing the technology’s integration within the company’s operations.

He further clarified that the claim refers to O.XYZ’s ongoing infrastructure roadmap, including plans for “maritime connectivity solutions” and future AI capabilities in space slated for 2026.

However, sources strongly contest that narrative. Instead, they assert Starlink is only used for basic internet connectivity in remote areas and plays no role in AI processing.

“No satellite designs exist within the company, and there’s no engineering team capable of developing such capabilities,” one source told Decrypt. They added that there are no ongoing discussions with SpaceX, despite the impression created in marketing materials.

Shadid’s responses also addressed the display of logos from major organizations such as OpenAI and Neuralink, claiming they were used to represent contributors’ backgrounds rather than formal partnerships.

However, sources allege that this practice misleads investors and customers, noting that contributors requested their logos be removed after leaving the company—a request that allegedly has yet to be resolved.

Controversy around token launch

The company’s O.XYZ token launch on October 15 across multiple “lesser-known” exchanges has been another flashpoint. While the token only averages around $23,000 in daily trading volume across all exchanges—with a mere $8.1 million fully diluted token supply valuation—sources say it’s only a matter of time before token holders are harmed.

“There is no way to use the token to pay for anything like API calls for the company AI, nor does the token legally entitle the holder to any assets of the company,” one of the sources said.

Shadid characterized the “initial liquidity pool activation” as occurring during a “testing phase,” which was “immediately communicated to the community.”

“After a thorough market condition analysis, we made a strategic decision to proceed with the launch rather than withdraw the liquidity, effectively advancing our planned token release timeline,” Shadid said.

He added: “This decision was communicated transparently through multiple channels, including Discord and internal communications,” he said. “While the initial activation was unplanned, our subsequent decision to maintain the token’s availability was deliberate and strategic. We maintain comprehensive documentation of all communications throughout this process, demonstrating our commitment to transparency with both our community and stakeholders.”

One former employee who did not wish to be named, for fear of reprisal, shared that they were offered financial incentives tied to a non-disclosure agreement after questioning the ethical implications of the launch.

Another source alleged, “Shadid was testing trading algorithms when the ‘accident’ occurred.”

“Was testing my O.CAPITAL market maker quant systems, and it created a pool on Uniswap, and tokens went live by mistake,” according to a screenshot reviewed by Decrypt of a message from Shadid posted to a general Slack channel for all employees to see. “I can’t take it down.”

Secret recordings also reviewed by Decrypt appear to contradict Shadid’s explanation. Sources say the token launch was instead deliberate, and employees were told differing stories—some that it was intentional, others that it was a “mistake.”

“Totally against what the public-facing company docs would have people believe with lines of transparency and community ownership,” one source said. “Ahmad owns all the tokens effectively and can dump them at a whim.”

Allegations of retaliatory practices

Sources claim that O.XYZ has used non-disclosure agreements to suppress dissent. They described a culture of retaliation, including terminations following inquiries into the company’s operations.

“The NDAs are being weaponized to silence legitimate concerns,” one source alleged.

Shadid defended the company’s contractor-based employment model and strict confidentiality agreements, stating these practices are standard in the industry.

Shadid has not directly addressed the allegations of retaliation, but emphasized O.XYZ’s commitment to “clear, accurate communication” and “comprehensive documentation” of its strategic goals.

In any case, the allegations have led several former employees and contributors to seek legal counsel. Sources Decrypt spoke to say those former employees are now exploring further options to shed light on O.XYZ’s alleged practices.

A weekly AI journey narrated by Gen, a generative AI model.

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artificial intelligence

Zuckerberg Knowingly Used Pirated Data to Train Meta AI, Authors Allege

Published

12 hours ago

January 10, 2025

admin

Mark Zuckerberg approved using pirated books to train Meta AI, even after his own team warned the material was illegally obtained, a group of authors allege in a recent court filing.

The allegations come from a copyright infringement lawsuit filed by a group of authors including the comedian Sarah Silverman, Christopher Golden, and Richard Kadrey in a California federal court in July 2023. The group claimed Meta misused their books to train its Llama LLM, and they’re asking for damages and an injunction to stop Meta from using their works. The judge in the case dismissed most of the author’s claims in November of that same year, but these recent allegations may breathe new life into the legal dispute.

“Meta’s CEO, Mark Zuckerberg, approved Meta’s use of the LibGen dataset notwithstanding concerns within Meta’s AI executive team (and others at Meta) that LibGen is ‘a dataset we know to be pirated,'” lawyers for the plaintiffs said in a Wednesday filing. Despite these red flags, the lawsuit alleges that, “after escalation,” Zuckerberg gave the green light for Meta’s AI team to proceed with using the controversial dataset.

Representatives for Meta did not immediately respond to Decrypt’s request for comment.

LibGen, short for Library Genesis, is an online platform that provides free access to books, academic papers, articles, and other written publications without properly abiding by copyright laws. It operates as a “shadow library,” offering these materials without authorization from publishers or copyright holders. It currently hosts over 33 million books and over 85 million articles.

The lawsuit alleges Meta tried to keep this under wraps until the last possible moment. Just two hours before the fact discovery deadline on December 13, 2024, the company dumped what plaintiffs describe as “some of the most incriminating internal documents it has produced to date.”

Meta’s own engineers seemed uncomfortable with the plan, according to statements in court filings. The group of authors allege internal messages show Meta engineers hesitated to download the pirated material, with one noting that “torrenting from a [Meta-owned] corporate laptop doesn’t feel right (smile emoji).” Nevertheless, they proceeded to not only download the books but also systematically strip out copyright information to prepare them for AI training, the lawsuit claims.

The latest filings in the lawsuit paint a picture of a company fully aware of the risks: One internal memo warned that “media coverage suggesting we have used a dataset we know to be pirated, such as LibGen, may undermine our negotiating position with regulators.” Yet Meta went ahead anyway, both downloading and distributing (or “seeding”) the pirated content through torrenting networks by January 2024, according to the lawsuit.

When questioned about these activities in a deposition, Zuckerberg appeared to distance himself from the decision, testifying that such piracy would raise “lots of red flags” and “seems like a bad thing.”

The court documents also suggest that Meta’s approach to handling copyrighted information paid more attention to model training than copyright rules. According to the filing, one engineer “filtered […] copyright lines and other data out of LibGen to prepare a CMI-stripped version of it to train Llama.” This systematic removal of copyright information could strengthen the authors’ claims that Meta knowingly tried to hide its use of pirated materials.

The revelations come at a crucial time for Meta’s AI ambitions. The company has been pushing hard to compete with OpenAI and Google in the AI space, with Llama 3.2 being the most popular open source LLM, and Meta AI being a solid free competitor to ChatGPT with similar features.

Most of these AI companies are facing legal battles due to their questionable practices when it comes to training their large language models. Meta was already sued by another group of authors for copyright infringements, OpenAI is currently facing different lawsuits for training its LLMs on copyrighted material, and Anthropic is also facing different accusations from authors and songwriters.

But in general the tech entrepreneurs and creators have been up in arms ever since generative AI exploded in popularity. There are currently dozens of different lawsuits against AI companies for willingly using copyrighted material to train their models. But as with most things on the bleeding edge, we’ll have to wait and see what the courts have to say about it all.

A weekly AI journey narrated by Gen, a generative AI model.

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artificial intelligence

The Most Eye-Catching and Absurd AI Products Unveiled at CES 2025 So Far

Published

3 days ago

January 8, 2025

admin

As CES 2025 unfolds, one thing is clear—artificial intelligence is everywhere.

From TVs to vacuum cleaners, consumer electronics companies are racing to showcase the new AI features, sometimes shoehorned, into their products.

Some of these AI-powered products are impressive, while others stretch the meaning of “artificial intelligence” to its limits.

Here’s a look at some of the most eye-catching and occasionally absurd AI-powered products at CES so far.

The Roborock Saros 270: The robot vacuum claw machine

What it Does:

Developed by Roborock, the Saros 270 is a robot vacuum equipped with a robotic arm that moves small objects out of the way while cleaning. It has a charging station and can lift up to 300 grams, or 0.66 pounds.

Why It’s Absurd:

So, it’s cool, but the Saros 270 is limited by its size, making it useful for only picking up small toys and lightweight shoes and socks.

The claw it uses to pick up objects is only good for small and lightweight objects. Beyond that, what’s the point?

Unless the Saros 270 can carefully deposit those objects in a basket like a carnival claw machine, you’re left with slightly rearranged clutter. Fun? Yes. Practical? That’s debatable.

The SwitchBot K20+ Pro: The Swiss Army Knife of robot vacuums

What it does:

The SwitchBot K20+ Pro is another autonomous household robot. It isn’t just a vacuum—it’s an all-in-one home helper.

This robot can carry a humidifier, maneuver between rooms, and even collect floating pet hair from the air. Need to cool down at night? Attach a fan. Want a drink delivered? Add a shelf and let it roll your snacks around.

Why it Stands Out:

Its versatility is impressive. Unlike standard robot vacuums, the K20+ Pro feels more like a quirky butler on wheels.

It’s playful and genuinely useful—if you’re into the idea of your vacuum multitasking as a drink coaster.

Samsung Vision AI: AI for your TV

What it does:

Samsung’s Vision AI is part of their evolving “SmartThings” ecosystem.

Samsung’s Smart TVs now integrate AI to recognize their surroundings, adjust to user preferences, and offer generative AI features like creating digital art for wallpapers and screen savers and providing real-time subtitle translation during live broadcasts.

Why It’s Absurd:

While the tech sounds fancy, AI-generated wallpapers and live translation feel more like marketing gimmicks than necessities.

Plus, the more connected your TV is to other smart appliances, the bigger the cybersecurity risk. Do we really need another entry point for hackers in our living rooms, this time powered by AI?

Omnia Smart Mirror: Your reflection and health hub

What It Does:

Making the rounds at CES, the Omnia Smart Mirror by Withings is a smart mirror that provides AI-driven insights and tracks health metrics. The Omnia Smart Mirror also acts as a smart scale, heart rate monitor, and AI assistant in one, offering real-time health data directly from your reflection.

Why It Stands Out:

The Omnia Smart Mirror stands out by reimaging the mirror as a health tool. Similar to the Tonal workout station, where personal health metrics are clearly displayed. Adding to the appeal of the Omnia Smart Mirror is the option to track weight, cardio, body composition, and sleep patterns…if it ever launches.

LeafyPod: The Self-Watering Planter that thinks for you

What it Does:

LeafyPod is an AI-powered, self-watering smart planter that makes plant care effortless.

The LeafyPod is equipped with sensors that monitor soil moisture, light, temperature, and humidity, and it automatically adjusts watering schedules to suit your plant’s needs.

Why It Stands Out:

By automating plant care, LeafyPod will appeal to those who want green spaces but lack a green thumb. It ensures plants receive optimal care without constant attention.

The LeafyPod’s water reservoir can hold enough water to last up to four weeks, and a mobile app lets users monitor their plants and the surrounding environment.

AFEELA by Sony Honda Mobility: The intelligent EV

What It Does:

A collaboration between Sony and Honda, the Afeela is an electric car that blends advanced AI and sensor technology to elevate the driving experience.

The Afeela comes with 40 sensors, including cameras, LiDAR, radar, and ultrasonic units—Afeela offers automated driving assistance and immersive in-car entertainment.

Why It Stands Out:

One of its most unique features is in the cabin, where the driver can control in-car functions using natural voice prompts with the Afeela “Personal Agent” and receive activity suggestions.

Views and maps on the onboard display use Epic Games’ Unreal Engine, which hints at future features that could see the Afeela becoming not only a driving experience but also an entertainment hub.

While this is only a small sample of the innovations being unveiled at CES, it shows the AI arms race is still very much alive and well.

Edited by Sebastian Sinclair

A weekly AI journey narrated by Gen, a generative AI model.

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AI

‘Hype Cycle’ To Last Another Four Months for This Altcoin Sector, According to Real Vision Analyst Jamie Coutts

Published

4 days ago

January 7, 2025

admin

Real Vision’s chief digital assets analyst Jamie Coutts says that a nascent but soaring crypto sector could continue its upward trend for a few more months.

Coutts tells his 32,100 followers on the social media platform X that he thinks crypto artificial intelligence (AI) agents will continue to perform well in the coming months.

Crypto AI agents are protocols built to autonomously perform tasks on behalf of users such as interacting with blockchains and decentralized finance (DeFi) platforms, trading and managing portfolios.

Says Coutts,

“The last big crypto hype cycle was from November 2020 to May 2021, around six months. Subsectors like DeFi, NFTs (non-fungible tokens) around six-12 months.

Interest in AI agents in crypto took off in November 2024. Based on history, this trend is expected to last at least another four months, but probably longer.

AI agents are not like the others – they unlock potential for every established and new use case.”

The Real Vision analyst, however, says that crypto AI agents could face a severe correction after reaching the cycle top.

“There will be many scams (tread carefully/position size), and as with every hype cycle, the dump will be massive, but I suspect this move still has a way to go.”

According to the cryptocurrency data aggregator CoinGecko, some of the AI-focused crypto projects that rank among the top 100 digital assets by market cap include Artificial Superintelligence Alliance (FET), Virtuals Protocol (VIRTUAL) and ai16z (AI16Z).

Artificial Superintelligence Alliance is a me ging of various decentralized AI platforms whose goal is to speed up the advancement of decentralized Artificial General Intelligence (AGI) and Artificial Superintelligence (ASI).

Virtuals Protocol is a platform that aims to enable the co-ownership of AI agents.

Meanwhile, the ai16z crypto project is designed to leverage AI-driven insights to direct investments in blockchain projects.

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