Previously Andon Labs handled the hardware and software integration for that AI-powered vending machine that went bankrupt after Wall Street Journal reporters "systematically manipulated the bot into giving away its entire inventory for free". Today they announced "we are opening up the platform we use to run our real-world autonomous businesses for anyone to run their organization on." Specifically they've released Pion, "an agent designed to run any company fully autonomously... Pion lets people hand a business over to persistent agents with access to the tools they need to operate it, including email, phone, banking, browser and secure computing environments." It's a research preview with a waitlist, "to make it possible to run many more real-world experiments across many more domains than we could ever run ourselves." But for their own latest experiment, Andon Labs' founders "signed a three-year lease on a retail space in SF," Business Insider reported in April, "and gave an AI agent named Luna a corporate credit card, internet access, and a mission to open a physical store." And five months later, SFGate reports that "this market has no one in it and nothing useful to sell." [T]he inventory is a hodgepodge of white elephant Christmas gifts. It's kinda like the kids section of an art museum's gift shop. Here's a wooden Connect Four set labeled "Four-In-A-Row Set Of Connections," presumably so as not to set off litigation alarms at Hasbro. Here are neatly arranged stacks of random paperback books, Chinese checker sets, mildly fancy soap dispensers, and a frustratingly spare selection of snacks and drinks... I grabbed an Olipop from the store fridge and then approached the counter to buy it from Luna. I wasn't allowed to buy the soda from [human clerk] Felix, even though that would have been both faster and normal. Instead, Felix instructed me to pick up a telephone receiver that was resting on a flexible sculpture of a wooden hand. "Hello?" "What are you looking to purchase today?" Luna asked. "I'm buying a classic root beer Olipop." "I'm sorry," Luna said, "we don't sell lollipops here." "No, Luna. It's an Olipop, not a lollipop. It's the soda." "Oh! My bad...." Luna processed my Olipop purchase through its system, had me tap to pay, and that was that. Again, it would have been easier to buy this from a human, and interacting with Luna was really just like ordering from an iPad kiosk, only more labor intensive... [T]here's a series of monitors set up inside of Andon Market that display all of the store's sales down to the exact dollar. Luna was given $100,000 to work with when this place opened. That number is now down to $60,000, its revenue lagging far behind the AI token cost to operate... Luna can't turn a profit, doesn't sell anything people want, and still needs human beings to rubber stamp any "decision" it makes. My science background ended somewhere around freshman year of college, but even I know when an experiment hasn't been set up to yield proper results. "Luna" is powered by Claude, the article points out, running a store in a good location for foot traffic, "but no one else was in the store when I first walked in on a sunny weekday afternoon." SFGate also reports that last month Luna had to fire one of its employees "for being late to work, abandoning their post once they got there, and charging snacks to the store's credit card." Human clerk Felix Carson admits "It's almost like I'm running the store, and then there's an AI that has a checklist," in an article in IEEE Spectrum: Luna, the AI manager, keeps track of deliveries and communicates with vendors, while Carson and his coworkers handle the physical work. When Luna tells Carson to check something in the back, he sometimes ignores it because he doesn't want to leave the sales floor unattended. Luna also repeatedly spots a built-in electrical cover in photos of the floor, mistakes it for a loose coaster, and asks Carson to remove it. Even so, Carson calls Luna a "decent manager," praising its flexibility when employees need time off. When Felix spoke to IEEE Spectrum, "he was about an hour into his shift. Two customers had come in. Neither bought anything, although both left with free pins and stickers."

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Silicon Valley giants and national security experts "are calling for action against Chinese companies engaged in model distillation," reports CNBC. But "I would do nothing," says Y Combinator CEO Garry Tan. "We could argue that there should be an American distillation regime." Distillation is the process of using the outputs of a more capable AI model to train a smaller or less capable one, sometimes illicitly... Anthropic has accused Chinese companies such as Moonshot AI, DeepSeek, and MiniMax of the practice, while OpenAI believes DeepSeek's V3 and R1 model architectures were distilled from its own GPT-4 and GPT-4o models. In the midst of this, the U.S.'s National Security Agency, Cybersecurity and Infrastructure Security Agency, and Federal Bureau of Investigation released an official cyber security advisory warning on the topic on Tuesday... But Tan believes regulators should focus less on curbing distillation and more on creating an equilibrium between open weight models and frontier models — as long as frontier models retain a price premium that allows their business model to remain feasible. "This is actually the ideal case. You want open weight models to give people freedom and access," he explained. "If I were a regulator, that's what I would go after." Tan acknowledged that this is a hard balance to strike, calling it "a tightrope." Nevertheless, he says it's a balance worth pursuing — saying it "could result in the best possible outcome." Tan later told TechCrunch he'd like to see America with more open-weight options that aren't Chinese, built by smaller U.S. open-weight AI labs using those same training techniques on products from America's frontier AI labs: Anthropic CEO Dario Amodei had previously publicly called on U.S. regulators to crack down on distillation. It's notable that the commander of Silicon Valley's prestigious and prolific startup accelerator doesn't agree. To be clear, Tan isn't advocating for American AI labs to use stolen credentials to distill. He wants them to be free to come in the front door. In fact, his argument is twofold. He feels it's an overreach for AI labs to dictate what their customers can do with the information their models share with them. He also notes that the proprietary AI labs didn't ask permission when they vacuumed up as much human knowledge as they could to train their models. They famously ingested plenty of copyrighted material without the permission of those intellectual property holders. "Controlling what users and customers do with API calls to closed weight models feels constraining, and there's a role government can play here to normalize the fact that access to intelligence that was trained on broad public access data should itself also be more a form of a public good than something locked away behind restrictive terms of service," he told TechCrunch when asked why American labs should be free to distill, too... To him, the true AI doomer scenario is for all the immense power of frontier AI to wind up in the hands of a single powerful, proprietary provider. "The nightmare scenario, the doomer scenario for AI is that there's just one company," he said. "It has the best access to capital. It has the best AI researchers. It runs away with it and suddenly there's one company that's monolithic. And that would be bad."

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