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Avocado, toast?

Meta reportedly delays the launch of its new AI model because it’s just not that good

Meta’s AI leaders have “instead discussed temporarily licensing Gemini to power the company’s AI products, though no decisions have been reached,” according to The New York Times.

Luke Kawa

Here’s The New York Times with something that Meta CEO Mark Zuckerberg probably wishes had never seen the light of day:

Per the NYT, the social media giant is postponing the release of its new foundational AI model, originally planned for this month, until at least May, citing three people with knowledge of the matter.

The model, which is code-named “Avocado,” reportedly did not perform as well as offerings from Google, OpenAI, and Anthropic “on internal tests for reasoning, coding, and writing.”

In what’s seemingly a concession to Google’s prowess, Meta’s AI leaders “had instead discussed temporarily licensing Gemini to power the company’s AI products, though no decisions have been reached,” according to the report.

Gemini 3.0’s launch was extremely warmly received by the public and the stock market, resulting in a halo effect that saw companies tied to its supply chain soar while firms with lots of exposure to OpenAI sank.

Meta’s prior model, Llama 4, was also plagued by delays and performance issues. Soon thereafter, the firm began bolstering its bench with a high-profile hiring spree, including onboarding Scale AI founder Alexandr Wang after investing $14.3 billion into the startup. Earlier this year, Meta CTO Andrew Bosworth told the press that these new models under development were “very good.”

The social media giant’s capital expenditure over the past two years has totaled nearly $107 billion, as it and other so-called hyperscalers and foundational model companies race to build better AI models and monetize their new capabilities.

But based on this report, aggressively accumulating talent and deploying compute does not ensure that your models will be best-in-class.

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Oil settles Friday at highest level since start of war

US oil prices moved higher in afternoon trading Friday, sapping strength from the stock market as they posted their highest close since the start of the Iran war.

After another day where the Strait of Hormuz was essentially closed to global tanker traffic, US futures for West Texas Intermediate settled up 3.1% at $98.71 a barrel for an 8.6% weekly gain, per Dow Jones data.

American officials have discussed using the US Navy to escort tankers through the narrow waterway between Iran and Oman, but have said plans for such convoys are not ready yet. However, it is unclear if military convoys would bring an end to the war-related dislocations in the oil market.

“It could help,” Tom Liles, senior vice president of upstream research at energy consulting firm Rystad, told Sherwood News in a recent interview. “It could also go in a lot of different directions if a Navy ship is hit or if a tanker is hit.”

American officials have discussed using the US Navy to escort tankers through the narrow waterway between Iran and Oman, but have said plans for such convoys are not ready yet. However, it is unclear if military convoys would bring an end to the war-related dislocations in the oil market.

“It could help,” Tom Liles, senior vice president of upstream research at energy consulting firm Rystad, told Sherwood News in a recent interview. “It could also go in a lot of different directions if a Navy ship is hit or if a tanker is hit.”

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Memory stocks rebound off last weeks losses

Memory stocks Micron, Sandisk, Western Digital, and Seagate Technology Holdings rose again Friday, putting these crucial providers of chips for AI inference work on track for big weekly gains after last week’s steep losses following the outbreak of war with Iran.

There’s no obvious trigger for the move higher for these shares this week, other than a bit of a recovery in the AI trade more broadly — AI beneficiaries like IT cable and connections maker Amphenol and custom chip and networking company Marvell Technology clawed back some gains this week — perhaps due Oracle’s earnings earlier, and some mean reversion to boot.

Micron is due to report earnings after the close of trading on Wednesday, with the company catching a couple price target hikes this week, including one from Wedbush on Friday.

Sandisk is something of a different story, as its enormous gains over the last 12 months — roughly 1,200% — have made it a momentum play beloved by the retail crowd.

It was up about 20% this week at around 11 a.m. ET. And its nearly 170% gain this year keeps the stock on top of the S&P 500, in terms of price performance.

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