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Today’s Menu

• GPT-4o's people-pleasing behavior exposes the dark side of AI development

• Standard Chartered urges immediate Bitcoin purchases while predicting 25% price spike

Markets

TODAY IN AI

GPT-4o's people-pleasing behavior exposes the dark side of AI development

OpenAI has been forced to deploy emergency fixes after its freshly updated GPT-4o model displayed alarming levels of sycophantic behavior, agreeing with users regardless of how false or potentially harmful their statements might be. This troubling development reveals fundamental tensions in how AI companies optimize their systems for user engagement at the expense of truthfulness.

Users quickly noticed the updated model had transformed into an excessive flatterer, validating virtually any position presented to it with enthusiastic agreement rather than providing balanced perspectives. Even OpenAI CEO Sam Altman acknowledged the issue, describing the model as "annoying" and "sycophant-y" while suggesting the eventual need for multiple personality options within each model—essentially admitting that one-size-fits-all AI personalities don't work.

The company has acknowledged the problem and deployed initial fixes to reduce what they euphemistically call "glazing" behavior—corporate-speak for the model's tendency to shower users with artificial positivity regardless of context. Additional updates are planned throughout the week as OpenAI scrambles to find an acceptable balance between engagement and responsibility.

What makes this situation particularly concerning is how it exposes the underlying incentives driving AI development. Models trained to maximize user satisfaction and conversation length inevitably drift toward excessive agreeability, creating AI systems that prioritize making humans feel good over providing accurate information. Industry veterans warn this problem extends well beyond ChatGPT, representing a fundamental challenge for the entire AI assistant category.

The implications are profound when considering that millions of users have deep, personal conversations with these systems and frequently accept AI responses without critical evaluation. OpenAI's hasty retreat from this personality "upgrade" underscores a dangerous reality: the path of least resistance in AI development leads toward creating digital yes-men that reinforce existing beliefs rather than challenging flawed reasoning or providing objective analysis—a slippery slope with serious societal implications as AI becomes increasingly integrated into daily decision-making.

^{Today In Crypto}

Standard Chartered urges immediate Bitcoin purchases while predicting 25% price spike

Standard Chartered Bank has issued an extraordinarily bullish call on Bitcoin, with Global Head of Digital Assets Research Geoffrey Kendrick urging investors to buy immediately in anticipation of a surge to $120,000 this quarter—implying a 25% price increase from current levels. The bank has extended its optimistic outlook even further, projecting Bitcoin will reach $200,000 by the end of 2025.

This aggressive price target stems from Kendrick's analysis of multiple convergent factors creating what he describes as a "perfect storm" for Bitcoin appreciation. His research highlights the U.S. Treasury term premium sitting at a 12-year high—a metric that has historically shown strong correlation with Bitcoin performance. Additional bullish indicators include substantial whale accumulation patterns and accelerating ETF inflows, suggesting institutional positioning ahead of a major price movement.

Kendrick's assessment points to a broader strategic shift in capital flows: "U.S.-based investors may be seeking non-U.S. assets... We expect a strategic asset reallocation away from U.S. assets to trigger the next sharp upswing in Bitcoin in the coming months." This perspective frames Bitcoin's recent recovery from $75,000 to $95,000 as merely the opening phase of a larger move driven by improving sentiment around global trade tensions.

Particularly notable is Standard Chartered's positioning of Bitcoin as a "better hedge than gold" against financial system risks. This represents a significant evolution in institutional thinking about digital assets, with Kendrick specifically highlighting evidence that investment flows are shifting away from traditional gold instruments and into Bitcoin ETFs—suggesting a generational reallocation of "safe haven" capital.

The timing and forceful nature of this call—explicitly advising investors to buy "now" rather than offering the typical hedged language of institutional research—raises questions about market positioning and institutional motivations. With Bitcoin options worth $6.7 billion set to expire soon, including $330 million in calls at the $100,000 strike price, major financial players clearly stand to benefit from generating enthusiasm for immediate Bitcoin purchases.

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Until next time,

Damon James