AI is making money predicting the future

PLUS: Excel gets an AI brain, Databricks bets $1B on agents, and Alibaba's image editor

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Gen AI Art
August 20, 2025 • Estimated Reading Time: 9 minutes

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Microsoft is embedding its Copilot AI directly into the cells of Excel spreadsheets. The new Copilot function allows users to perform a range of AI-driven tasks without ever leaving their worksheet.

A new platform from the University of Chicago is testing AI reasoning in a unique arena: live, real-money prediction markets. The initiative moves AI evaluation beyond static benchmarks, using profitability as the ultimate measure of successful forecasting.

What does it mean for AI development when a model's ability to find undervalued opportunities becomes a more important metric than its raw predictive power?

Today in AI:

  • AI tests its skills in real-money prediction markets

  • Excel’s new in-cell Copilot function

  • Databricks bets $1B on enterprise AI agents

  • Alibaba’s powerful open-source image editor

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What’s new? The University of Chicago has launched Prophet Arena, a novel platform testing AI's reasoning abilities in live, real-money prediction markets. This initiative moves AI evaluation beyond static tests to a dynamic environment where profitability is the ultimate measure of accurate forecasting.

What matters?

  • Models are showing distinct "personalities," from aggressive bettors to safer players, and early results reveal that being the most accurate doesn't always lead to the highest returns.

  • While GPT-5 leads in accuracy, other models like OpenAI's o3-mini are making more money by identifying undervalued bets the market has missed.

  • For example, o3-mini made 9x its money on a single MLS bet by correctly predicting a major upset, demonstrating a knack for spotting profitable opportunities over just probable outcomes.

Why it matters?

This experiment shifts AI evaluation from academic scores to real-world financial performance. The results could reveal which models possess genuine worldly understanding, with significant implications for fields like finance and intelligence analysis.

What’s new? Microsoft is embedding a powerful new copilot function directly into Excel, allowing users to run generative AI tasks right from a spreadsheet cell. This represents a major leap in applying practical AI for millions of business users.

What matters?

  • The function lets users perform tasks like summarizing feedback, categorizing data, and pulling in external information simply by typing a formula.

  • Microsoft released a quick tutorial showing how the function can analyze sentiment from customer reviews and extract key details directly within a spreadsheet.

  • It is currently available to beta users and requires the $30/month Microsoft 365 Copilot subscription for access.

Why it matters?

This update moves generative AI from a separate chat directly into the workflow of one of the world's most popular business tools. Integrating AI into the familiar formula bar makes advanced data analysis much more accessible to non-technical professionals.

Former Zillow exec targets $1.3T market

The wealthiest companies tend to target the biggest markets. For example, NVIDIA skyrocketed nearly 200% higher in the last year with the $214B AI market’s tailwind.

That’s why investors are so excited about Pacaso.

Created by a former Zillow exec, Pacaso brings co-ownership to a $1.3 trillion real estate market. And by handing keys to 2,000+ happy homeowners, they’ve made $110M+ in gross profit to date. They even reserved the Nasdaq ticker PCSO.

No wonder the same VCs behind Uber, Venmo, and eBay also invested in Pacaso. And for just $2.90/share, you can join them as an early-stage Pacaso investor today.

Paid advertisement for Pacaso’s Regulation A offering. Read the offering circular at invest.pacaso.com. Reserving a ticker symbol is not a guarantee that the company will go public. Listing on the NASDAQ is subject to approvals.

What’s new? Databricks is closing a massive $1 billion funding round at a $100 billion valuation. The new capital will directly fund its push to build infrastructure for AI agents, which it sees as the new primary users of databases.

What matters?

  • The strategy is driven by a stunning trend: AI agents now create 80% of new databases, a huge jump from 30% just a year ago.

  • To serve these new AI users, the company launched Lakebase, a database that separates compute from storage to affordably handle the high volume of databases that agents create.

  • Its second major project, Agent Bricks, helps developers build agents for practical business tasks like employee onboarding, focusing on real-world automation over AGI.

Why it matters?

This move is about building the fundamental "picks and shovels" that will power the next wave of AI automation. Databricks' major investment signals the market for task-specific AI agents is maturing from an experiment into a core business strategy.

Everything else in AI

Alibaba dropped Qwen-Image-Edit, a 20B parameter open-source model designed for both high-precision and stylistic image editing while preserving original object integrity.

Nvidia released Nemotron Nano 2, a family of small reasoning models from 9B to 12B parameters that achieve strong results at up to 6x the speed of similarly-sized models.

MIT found that 95% of corporate generative AI pilots are failing to deliver a return on investment, primarily due to poor integration with daily operations and a focus on the wrong use cases.

Google revealed new research finding that over 90% of game developers now use AI in their workflows for tasks ranging from playtesting and code generation to content optimization.

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