How the Pentagon Standoff is Shaking Up the Fight for AI Talent

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Welcome to Tech News Briefing. It's Friday, March 13th. I'm Isabel Buscat for the Wall Street

Journal. Today, we're looking at how AI-generated digital versions of humans are changing the game

for market research. Companies like CVS say they are using these simulated people to get feedback

on products and store layouts cheaper and faster than ever before. And then, since open AI

reached a deal with the Pentagon to deploy its AI models in classified settings, at least two

of its high-level employees have resigned, citing values and principles. We're diving into how

that's shaping the latest wave of the battle for AI talent.

But first, the latest job AI is taking over is market research. A handful of companies are

using AI-generated digital clones of real people to replace the lengthy and expensive process,

essentially a shortcut instead of going the human route. It works like this. Real people

participate in in-depth interviews and share data, including their purchase histories,

to train AI agents who then become their digital twins. Companies can ask infinite questions

of these AI clones, making the work of customer research cheaper and faster. But does it really work?

Wall Street Journal Enterprise Tech reporter Belle Lin joins us for a breakdown of how it's all

going. Belle, what kinds of companies are interested in these AI-simulated people? And what are they

doing with them specifically? Yeah, so CVS is one example in which they use these AI-simulated

people for things like market research, for getting a better sense of what their customers are

thinking and feeling. The head of their enterprise insights group told me that they discovered that

for their pet RX, their pet medication, that through talking with their AI-simulated people,

that essentially people don't consider administering pet medicine a chore. And so that affirmed

that people have this deep emotional connection with their pets. And they're also using AI-simulated

people to do things like test store layouts. So it's replacing what they would traditionally

consider using panel research for. And instead, they're able to use these AI-simulated people to

give their thoughts and feedback. And then also Gallup, which is a historical, well-known polling

company, they are launching a partnership with Simily in which they have a joint offering to provide

polling services to their joint customers. So you can imagine polling in areas like well-being

and mental health, job satisfaction. Those are some of the areas they're starting with.

So what's the upshot here? Why not just do traditional market research?

Traditional market research is a huge industry. It's roughly over $150 billion. The whole realm

of market insights. But it's very cumbersome. You have to do the work of recruiting and collecting

the people who are representative sort of randomized sample of the population you're trying to reach.

And then people get tired. We can only handle so many things at once, maybe five different scenarios

that are presented to us. And you know, we have to take breaks. But these AI agents, these AI

simulated people don't. And that's what companies like CVS told me that they can reach so many more

people with thousands of potential scenarios in mind. And they don't get tired. So they can keep

asking questions again and again and again. And then also there's an interesting idea that

AI-simulated people can have some benefits for a healthcare company like CVS because they're

able to simulate hard to reach populations like people with chronic conditions.

But how effective is this actually compared to traditional market research?

Companies like CVS have told me that they're able to replicate what their

agentic twins have found compared to what their real people have told them with 95% accuracy.

And that's really high for an area like market research. And so there's a lot to be gained from

essentially finding and creating a great digital twin of a person.

Are there any risks though to relying on the opinions of AI people rather than real people?

Absolutely. So the companies that I talked to are also concerned about AI solutions,

about model drift. And so they've started to do things like build in some guardrails. And

similarly the startup that I talked to that's offering the service does the same thing where they

filter out for harmful content or sensitive content. And so there's caution being applied to

this area. But at the moment it feels that there's more enthusiasm than caution because there's

so much to be gained from being able to query your AI people indefinitely versus having to work

with humans who are slower and have to take breaks and get tired. So where is all this going?

Is this the end of traditional market research? The industry is quite slow and relies on these

consulting companies, these traditional market research companies that sort of have a strong hold

over the market. And so it is an industry that is very ripe for disruption. But at the same

time the companies I talked to are saying that they'll continue to talk to their customers,

that they'll always have the voice of the real human in mind. And so that they'll augment

with the voice of the agentic twins. That was Wall Street Journal reporter Bell Lim.

What do you make of digital twins? If you're a listener on Spotify, leave us a comment with your

thoughts. Coming up, why some top open AI employees are resigning after the companies deal with

the Pentagon and what it signals about the latest wave of the fight for tech talent. That's after the

break. OutSystems is an outstanding way to quickly deploy apps in AI agents and deliver results.

A top US bank deployed apps for customers to open new accounts while a global brewer developed

an app to automate tasks worldwide. OutSystems build your agentic future.

Last summer, the AI talent wore hit a new peak as Meta tried to poach top talent with sky high

salary packages. Now it's entered a new phase thanks to a recent showdown in Washington.

Anthropic was renegotiating its deal with the Pentagon and looking to weave in new safeguards

when talks broke down, prompting the Trump administration to declare the company a supply chain

risk. Shortly after, open AI said it signed a deal with the Pentagon.

NewsCorp, owner of the Wall Street Journal, has a content licensing partnership with Open AI.

Anthropic's unique focus on safety and responsible AI has long made its culture attractive to

top talent. And that has some employees at rival firms making moves now. WSJ's Megan

Bebrowski joins us to break down the latest. Megan, how has this showdown with the Pentagon

impacted the talent war between Open AI and Anthropic? We've seen at least two Open AI

employees announce decisions to leave the company in the last two weeks. One of those employees

specifically said that they were leaving to join Anthropic and that they were very impressed with

Anthropics values. One woman who was sort of in charge of the hardware efforts for Open AI's

robotics team, she said she felt that the contract with Open AI reached with the government

shouldn't have happened so quickly and that the things that they agreed to, you know,

deserved more time and consideration and to talk through it first.

So overall, how has Anthropics approached to talent and retention differed from other AI

companies? Anthropics hasn't tried to match the incredibly high salaries that Meta offered last

summer. Open AI offered bonuses in kind of response to that situation. And also in December, Open AI

got rid of its destined cliff, meaning that employees can have access to their stock immediately

without joining. Typically, at a company, there's a period you have to wait. So at Anthropic,

that period is a year. So Anthropic is not matching these insanely high salaries, but at the same

time, you reported that its retention rates still really stand out in the industry. What is it

about the culture there that's so uniquely compelling for researchers? Yeah, so if we remember

Dario Amloudei, he actually left Open AI to found Anthropic and said that it was because of safety

reasons he didn't feel like Open AI was taking safety into enough consideration when they were

building these models. And so Anthropics always sort of had this safety slam. It's similar to

Open AI, but it has the sort of what Dario calls values driven culture. And so when Meta, you know,

Blitz was happening last summer, he said that people could leave if they wanted to, but that anyone

Anthropic was there solely for the mission. And beyond this talent question, how else has the

Pentagon issue impacted public perceptions of these companies? And what do the companies themselves

have to say about it? So Anthropics is certainly winning in the court of public perception.

Downloads of Claude, its chatbot were way up last week, even surpassing Open AI for a bit.

We got people supporting them on social media. Open AI has sort of had to do a lot of damage control

and specifically at CEO Sam Altman over the weekend spent time answering questions and concerns

and then internally hosted a Q&A with employees, shared talking about everything that happened

and how they would have done things differently. How has the talent more evolved over the last year?

The talent was just continued to be an incredibly fascinating thing to follow last year. It was a lot

about money and Meta was offering that this year so far. I mean, it's still partially about money,

but there's also this idea as AI gets closer to having more and more real world impacts,

how the technology, these engineers and researchers are building increasingly becomes a part of

their decision and where they want to work. It's not just little things that exist in a theoretical

box of nowhere anymore, like these things are being used in wars, they're completely disrupting

the stuff market. Like you're increasingly seeing AI get integrated into daily life and so the

decision of where to work and what they do just carries more weight than ever right now.

That was Wall Street Journal reporter Megan Bebrowski and that's it for tech news briefing.

If you're a listener on Spotify, be sure to leave us a comment. Today's show is produced by

Julie Chang. I'm your host, Isabelle Busgett. Jessica Fenton and Michael Laval wrote our theme

music. Our supervising producer is Katie Ferguson. Our development producer is Isha al-Muslim.

Chris Dinsley is the deputy editor and Philana Patterson is the Wall Street Journal's head of

news audio. We'll be back later this morning with TMB Tech Minute. Thanks for listening.

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