12 Sep 2025

AI News Digest

🤖 AI-curated 6 stories

Today's Summary

Microsoft’s new rStar2-Agent is shaking things up by letting smaller AI models get real smart without needing a ton of computing power. This could make it easier for companies to deploy capable AI without breaking the bank, signaling a shift in how AI is trained and applied. Meanwhile, Databricks’ AI head is branching out to start a computer company, with Databricks backing him, highlighting the ongoing blend of AI talent and hardware innovation.

In the world of AI search, Perplexity AI just snagged a $200 million funding boost, bringing its valuation to a staggering $20 billion. This shows that investors are still betting big on AI search technologies, potentially heating up competition with giants like Google. On the educational front, IIT Madras is offering free AI courses for teachers, making AI skills more accessible to educators and helping them bring AI concepts into classrooms without pre-existing coding expertise.

Stories

Microsoft Research unveils rStar2‑Agent — trains frontier reasoning models at a fraction of the cost

Microsoft Research published a new training framework, rStar2‑Agent, that uses agentic reinforcement learning and infrastructure optimizations to enable a 14B model to reach near‑state‑of‑the‑art reasoning performance with far less compute than much larger models. The technique (including GRPO‑RoC and an efficient tool‑using training recipe) lets smaller models use tool calls (Python interpreter) and resample high‑quality reasoning trajectories to learn more reliable, concise answers — a promising path for enterprises to build cheaper, more reliable AI agents without massive GPU budgets. This could shift how companies approach agentic AI (favoring smarter training recipes and tool‑use over sheer scale) and lower the barrier for organizations to deploy capable reasoning assistants in production. ([venturebeat.com](https://venturebeat.com/ai/microsofts-new-ai-framework-trains-powerful-reasoning-models-with-a-fraction))

Databricks’ AI head Naveen Rao to leave and start a new computer startup; Databricks to invest

Bloomberg reports that Naveen Rao, Databricks’ head of AI, is exiting to launch a new venture focused on building a novel type of computer. Databricks will transition Rao to an advisory role and is planning to invest in his new startup. The move signals talent and capital flows from large AI/cloud companies into hardware and systems startups—an area investors and incumbents see as strategically important as compute demands rise for next‑generation models. If the new company succeeds, it could accelerate specialized compute innovation and deepen partnerships between infrastructure and AI software players. ([bloomberg.com](https://www.bloomberg.com/news/articles/2025-09-12/databricks-ai-chief-to-exit-launch-a-new-computer-startup))

Perplexity reportedly secures $200M at a $20B valuation as it doubles down on AI search

Perplexity AI has reportedly raised about $200 million in new funding, pushing its valuation to roughly $20 billion as the conversational search startup expands product and infrastructure spending — a fresh sign investors continue to back late‑stage AI search challengers amid heavy competition with Google and ChatGPT‑powered services. The influx helps Perplexity scale compute and product efforts while intensifying consolidation pressure in the AI search/assistant market. ([techcrunch.com](https://techcrunch.com/2025/09/10/perplexity-reportedly-raised-200m-at-20b-valuation/))

Microsoft and OpenAI sign MoU to clear a path for OpenAI’s restructuring and capital raises

Microsoft and OpenAI have signed a non‑binding memorandum of understanding that paves the way for OpenAI to restructure into a more conventional for‑profit entity — a move aimed at unlocking large private capital and potential public-market options while preserving continued commercial ties with Microsoft. The arrangement signals a major re‑engineering of governance and cloud partnerships for one of the industry’s most consequential AI players, but it still faces regulatory sign‑offs in states including California and Delaware and could reshape cloud competition and funding dynamics across the AI sector. ([reuters.com](https://www.reuters.com/business/microsoft-openai-reach-non-binding-deal-allow-openai-restructure-2025-09-11/))

Beginner tutorial: Build an AI agent with LangChain — step‑by‑step guide for developers

TechTarget published a hands‑on tutorial showing how to install LangChain, connect it to an LLM (example uses Google Gemini), add the File System tool and create a simple agent that can read, write and list local files. Why it matters: LangChain remains the go‑to framework for developer‑focused agent and tool integrations — this beginner guide lowers the bar for engineers who want to move from prompts to practical, tool‑enabled agents and learn the exact commands and code patterns used in production workflows. Impact: useful for engineers and learners building agentic AI, prototyping tool‑enabled assistants, and for educators creating practical coding labs. ([techtarget.com](https://www.techtarget.com/searchenterpriseai/tutorial/Build-an-AI-agent-with-LangChain-in-this-beginner-tutorial))

Read more → TechTarget (SearchEnterpriseAI)

IIT Madras rolls out free 'AI for Educators' courses — foundational AI and subject‑specific modules

The Times of India reports that IIT Madras (via the Pravartak Technologies Foundation) launched six free online AI courses for school teachers — including a general 'AI for Educators' plus AI in Physics, Chemistry, Accounting, Cricket Analytics and AI/ML with Python. No prior coding experience required; courses run 25–45 hours with optional paid certification. Why it matters: expands practical, hands‑on AI literacy for K‑12 teachers and offers accessible entry points to coding and AI pedagogy — a useful resource for educators and anyone building classroom AI curricula. ([timesofindia.indiatimes.com](https://timesofindia.indiatimes.com/city/chennai/iit-m-launches-free-ai-course-for-school-teachers/articleshow/123793634.cms))