{"slug": "ai-driven-inflation-is-a-political-opportunity", "title": "AI-driven inflation is a political opportunity", "summary": "SK Hynix raised $26.5 billion in the largest foreign listing in US history, driven by AI demand for memory chips. AI-driven shortages are raising consumer prices on electronics and contributing to inflation, creating a political opportunity for candidates to tap into voter anger over rising costs.", "body_md": "# AI-driven inflation is a political opportunity\n\n### Transformer Weekly: GPT-5.6, Grok 4.5 and AI 2040\n\n*Welcome to Transformer, your weekly briefing of what matters in AI. And if you’ve been forwarded this email, click here to subscribe and receive future editions.*\n\n## NEED TO KNOW\n\n**OpenAI** got clearance from the US government to release**GPT-5.6**.** SpaceXAI’s**latest model release may have violated California’s** SB 53**.The\n\n**AI Futures Project** released**AI 2040: Plan A**, a “positive vision” for the future of AI which calls for the US and China to negotiate a deal and pause training of frontier models until sufficient progress is made on alignment.\n\n*But first…*\n\n## THE BIG STORY\n\nThis morning, South Korean memory chipmaker SK Hynix listed its shares on the Nasdaq. It [raised](https://www.bbc.co.uk/news/articles/c4gym70r0y4o) $26.5b, the largest foreign listing in US history.\n\nThe reason for Hynix’s bumper payday? AI. As one of only three manufacturers of the advanced memory needed for AI chips, SK Hynix has seen demand explode in recent months.\n\nBut what’s good for SK Hynix’s share price has costs for the rest of us. The AI-driven demand for memory has created huge shortages for every *other* product that needs it. Consumers are already paying for it. Apple recently [raised](https://www.reuters.com/world/asia-pacific/apple-raises-prices-macbooks-ipads-memory-costs-skyrocket-2026-06-25/) prices on MacBooks and iPads, saying it has “never seen a component price increase this much, this quickly.” Sony, Microsoft and Nintendo have all [hiked](https://www.theguardian.com/games/2026/jul/01/pushing-buttons-ai-datacentres-memory-console-prices-sony-playstation-xbox) console prices. And while new factories ease the shortage, SK Group’s chairman still [expects](https://www.reuters.com/world/asia-pacific/south-koreas-sk-group-chairman-expects-chip-wafer-shortage-last-until-2030-eyes-2026-03-16/) global demand to outstrip supply by about 20% through 2030.\n\nMemory is not the only way AI is driving up consumer prices. Demand for construction workers and electricity is adding pressure too. In a recent [survey](https://www.wsj.com/economy/the-data-center-boom-is-sparking-a-third-wave-of-inflation-926adc6e), 81% of economists said AI would add to inflation in the coming year. In the US it’s already running at double the Fed’s target rate.\n\nThis is bad for consumers. But it creates an electoral opportunity for politicians. The AI backlash has been searching for something to point to. So far, it has [settled](https://www.bloomberg.com/news/articles/2026-07-09/republican-midterm-candidates-break-with-trump-on-data-centers?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc4MzYxMjk4NiwiZXhwIjoxNzg0MjE3Nzg2LCJhcnRpY2xlSWQiOiJUSFdTNEtSMjRVOEEwMCIsImJjb25uZWN0SWQiOiI4MEY4ODRCQzVENzY0MjM4OTA5N0NFMUE5REEzRkRBRCJ9.8bCX-KQQ4wD7cImBhqCj5kK6SOhgPaVZf2RMEzK3-bs) on data centers, but those are a slippery target, defended by unions and localized in their impact.\n\nInflation, in contrast, is almost universally hated — and regularly tops lists of voters’ concerns. The electorate is already drawing the link: [research](https://data.blueroseresearch.org/hubfs/3.16.26%20Odd%20Lots%20AI%20Presentation.pdf) from Blue Rose, a Democratic pollster, finds that “voters aren’t experiencing the cost-of-living crisis and the rise of AI as separate issues; they see one unified threat where a system already rigged for the elite is using new technology to further stack the deck against them.”\n\nTapping into that anger could be a vote-winning strategy. Politicians are staring at a message that combines two of the things voters hate most: “AI is why you can’t afford a PS5.”\n\nA few have already realized this. The other week, Rep. Frank Pallone — ranking member of the House Energy and Commerce Committee — [called for](https://x.com/FrankPallone/status/2071617538497323342) a moratorium on data center construction to tackle “price hikes and inflation spikes.” Across the aisle, some Republicans [fear](https://www.foxnews.com/politics/ai-boom-tests-gops-midterm-affordability-pitch-price-pain-spreads) that Trump’s embrace of AI will backfire as consumers feel the squeeze.\n\nBut most politicians have yet to catch on. In an excellent analysis of Democrats’ fundraising emails, Free Systems’ Andy Hall [found](https://freesystems.substack.com/p/ai-is-the-democratic-partys-next) that only 0.7% are substantively about AI (though that number is growing fast). When Democrats do discuss AI, the most common frame is “AI as an instrument of money, oligarchy and corruption.”\n\nCapitalizing on the AI backlash may not be the wisest move, all things considered. Pallone’s proposed moratorium is crude and [likely to backfire](https://www.transformernews.ai/p/ai-populism-bernie-sanders-aoc-pause-moratorium-safety). But for politicians hoping to win elections, the temptation may be too great to ignore.\n\n*— Shakeel Hashim*\n\n## ALSO NOTABLE\n\nWithin the past 72 hours, two companies not normally known for good AI safety practices released new models. One was a pleasant surprise. The other may have broken the law.\n\nYesterday, Meta [launched](https://ai.meta.com/blog/introducing-muse-spark-meta-model-api/) Muse Spark 1.1. Its performance might not match Anthropic and OpenAI’s latest models, but its [evaluation report](https://ai.meta.com/static-resource/muse-spark-1-1-evaluation-report) comes close. Meta tested for risks in chemical and biological dual-use scenarios, cybersecurity and loss of control, on top of now-standard evaluations of behaviors such as hallucination rates and sycophancy. It’s a commendable level of transparency.\n\nMeanwhile, SpaceXAI (yes, [that’s what it’s called](https://businessinsider.com/xai-rebrand-spacexai-new-logo-x-handle-spacex-2026-7) now) [released](https://www.axios.com/2026/07/08/spacexai-grok-new-model) Grok 4.5. It was trained on Cursor user data, and it scored competitively on public benchmarks (though real world performance seems worse).\n\nPredictably, SpaceXAI didn’t publish a shred of safety information alongside its scant benchmark results. That’s no surprise: SpaceXAI [ranks](https://futureoflife.org/ai-safety-index-summer-2026/) a solid F on the Future of Life Institute’s latest AI Safety Index, and Elon Musk recently [testified](https://www.cnbc.com/2026/04/29/musk-altman-live-updates-day-3-open-ai-trial.html) that he’s “not sure what a safety card is.”\n\nBut for the first time, SpaceXAI’s negligence may have consequences. California’s SB 53 [requires](https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202520260SB53) AI developers to publish transparency reports “before, or concurrently with, deploying a new frontier model or a substantially modified version of an existing frontier model.” As the Midas Project [pointed out](https://x.com/themidasproj/status/2075253971925848242?s=46) yesterday, SB 53’s transparency requirement is active and enforceable, and Grok 4.5 looks like exactly the kind of model this was designed to keep in check. The question now is whether the law has any teeth: if this can’t trigger enforcement, it’s hard to imagine what would.\n\n— *Celia Ford*\n\n## THIS WEEK ON TRANSFORMER\n\n—[Scaling works. These researchers are betting billions it isn’t enough](https://www.transformernews.ai/p/matching-human-intelligence-llms-world-models-scaling-alternatives)**Celia Ford** digs into the LLM alternatives some believe are the key to AGI—[An AI safety group hid its election spending through a Latino-focused PAC](https://www.transformernews.ai/p/manny-rutinel-public-first-action-latino-victory-fund)**Veronica Irwin** reports on Public First’s clandestine backing for a Colorado Democrat—[GPT-5.6 cheats so much its testers couldn’t measure it](https://www.transformernews.ai/p/openai-gpt-56-sol-cheating-scheming-metr)**Celia Ford** on how OpenAI’s new model broke rules and exploited loopholes more than any model METR has tested to date— Fathom CEO[SCOTUS killed the independent agency. AI governance doesn’t need one](https://www.transformernews.ai/p/scotus-slaughter-independent-agency-fathom-verification-supreme-court)**Andrew Freedman** argues that the Supreme Court’s Slaughter ruling makes the case for independent verification for AI governanceAI policy researcher[Don’t let independent AI audits provide a false sense of safety](https://www.transformernews.ai/p/dont-let-independent-ai-audits-provide-false-safety)—**Keller Scholl** argues that a marketplace of AI auditors will always prioritize speed and cost over safety\n\n## THE DISCOURSE\n\nAI power users are pitting **GPT-5.6 Sol **against **Fable**.\n\n**Peter Gostev:**“Fable is a ‘wise owl’ who is very thoughtful and very well spoken, GPT-5.6 Sol is like a rottweiler who will[grab](https://x.com/petergostev/status/2074918176354115886)the problem by the throat and not let go until it is done.”**Dan Shipper:**“GPT-5.6 is like a Porsche, Fable is like a warp drive … If you[need](https://x.com/danshipper/status/2074859437374820691)to get across the galaxy use Fable. If you need to get around town using the best available tool for the job, use 5.6.”\n\n**Mitchell Hashimoto:**“Sol is a charismatic, efficient, talented coworker you’re[jealous](https://x.com/mitchellh/status/2074862990214787301)of. Fable is a genius recluse that is brilliant at its fixations but doesn’t go out, doesn’t date, and you don’t want to hang out with them much lol.”**Sam Altman**[replied](https://x.com/mitchellh/status/2074862990214787301/quotes): “tbh i don’t think sol gets that many dates either”\n\n**The AI Futures Project **[released](https://ai-2040.com) *AI 2040: Plan A*.\n\n“AI companies are racing to build AIs that are smarter than humans in every way. In AI 2027, we predicted that this would result in either extinction or irreversible concentration of power. Plan A is our positive vision for what should happen instead.”\n\nIt calls for the US and China to negotiate a deal and pause training of frontier models until sufficient progress is made on alignment — before “handing over” control to safe, superintelligent AIs in 2040.\n\n[Many](https://x.com/sjgadler/status/2075345902819295321)[people](https://x.com/boazbaraktcs/status/2075308024114147340)praised it as being the most detailed plan for handling superintelligence that exists so far.[Many](https://x.com/krishnanrohit/status/2075395025417171150)[others](https://www.mindthefuture.info/p/selective-optimism-a-critique-of)criticized it for being unrealistic and undesirable.\n\n**Peter Thiel **[continued](https://edition.cnn.com/2026/07/02/us/peter-thiel-aspen-pope-china-ai-cec) his campaign against God’s representative on earth:\n\nHe told the Aspen Ideas Festival that Pope Leo was inadvertently serving as a “Chinese communist agent” in his calls for oversight of AI.\n\nMicrosoft President **Brad Smith** [criticized](https://fortune.com/2026/07/09/microsoft-brad-smith-washingtons-ai-policy-regulation-without-transparent-rules/) Trump’s AI policy:\n\n“Everyone is reluctant to say there should be regulation, but what we really have right now is regulation without transparent or complete rules. Without rules, businesses can’t plan.”\n\nFormer White House AI adviser **Sriram Krishnan** [said](https://www.ft.com/content/5128e476-db8b-48ac-a8fb-0f16d0f5c2ed?syn-25a6b1a6=1) Trump’s AI policy will remain deregulatory:\n\n“There will not be an FDA for AI … That is never, never going to happen under President Trump.”\n\n“This administration, [the] president, from day one has been against burdensome, onerous, bureaucratic red tape.”\n\n## POLICY\n\nThe\n\n**Commerce Department** partially[lifted](https://x.com/sophiacai99/status/2070649934735434176?s=12)its export ban on**Anthropic’s****Claude Mythos 5** model and[allowed](https://www.nbcnews.com/business/business-news/commerce-department-gives-green-light-anthropic-bring-back-fable-5-rcna352501)**Fable 5** to be made available to the public.When the ban was lifted last week,\n\n**Mythos 5** was only available to certain US companies. This week, Anthropic[said](https://x.com/rowlsmanthorpe/status/2075131947521593800)it had begun granting access to foreign organizations, in coordination with the US government.\n\nThe\n\n**government** also[allowed](https://axios.com/2026/07/08/openai-gpt-trump-ban-lifted)**GPT-5.6** to be released, after a several week delay.A White House official\n\n[claimed](https://x.com/ashleyrgold/status/2074867901018906840)that it hadn’t given OpenAI a “green light” because “no such permission is required or granted,” seemingly in an attempt to claim no licensing regime exists.That directly contradicts OpenAI’s statements both\n\n[before](https://x.com/ShakeelHashim/status/2074884788737986782)and[after](https://x.com/Hadas_Gold/status/2075221003324608685)the model’s launch, though.The UK’s\n\n**AI Security Institute**[said](https://x.com/alxndrdavies/status/2075279477626564933)it found universal jailbreaks for the model “within hours,” which gave users access to its potentially dangerous cyber capabilities.AISI said OpenAI’s mitigated those jailbreaks, but that it expects “further red teaming to surface similar jailbreaks.”\n\nThe\n\n**White House** has reportedly[accelerated](https://www.ft.com/content/0bb7e2f9-007b-4577-9c4a-858948ee969a?syn-25a6b1a6=1)plans for voluntary**AI model standards**.When redeploying Fable, Anthropic\n\n[proposed](https://www.anthropic.com/news/redeploying-fable-5)a “consensus industry framework” for assessing jailbreaks’ severity.\n\n**OpenAI** reportedly[proposed](https://www.ft.com/content/7c803eab-8e80-4431-9a87-e943bf00e00b?syn-25a6b1a6=1)that it and other frontier AI companies give the**US government** a**5%** stake of their equity.**Anthropic** has[reportedly](https://www.reuters.com/business/trump-administration-anthropic-have-not-discussed-government-taking-stakes-firm-2026-07-02/)*not*talked to the government about this.\n\n**Sen. Elizabeth Warren** and**Rep. Mary Gay Scanlon** are reportedly preparing to[introduce](https://theverge.com/ai-artificial-intelligence/959033/health-location-data-protection-act-ai-warren-scanlon)a bill to ban AI companies from selling users’ health data to data brokers.**Reps. Josh Gottheimer** and**John Moolenaar**[introduced](https://gottheimer.house.gov/posts/release-gottheimer-moolenaar-introduce-bipartisan-bill-to-close-loophole-in-advanced-ai-chip-export-controls)the**Cloud Security Act,** which would “allow cloud compute providers to voluntarily report suspected misuse of their services by customers associated with US adversaries.”On Friday, the\n\n*Financial Times*[reported](https://www.ft.com/content/5d6aafa1-5d47-4585-aa95-6ec06a6cd20f?syn-25a6b1a6=1)that OpenAI and Google were selling access to their advanced AI models to Singaporean subsidiaries of Alibaba, Baidu and Tencent — all of whom are on the Pentagon’s blacklist of companies linked to the Chinese military.\n\nThe\n\n**FTC**[warned](https://news.bloomberglaw.com/ip-law/companies-following-ai-state-laws-risk-enforcement-ftc-says)companies that** altering AI outputs**to comply with state laws could violate federal consumer protection rules.** California**[launched](https://mashable.com/tech/ai-unemployment-tracker-california)a public AI-unemployment tracker to monitor and predict AI-related job losses.**Illinois Gov. Pritzker**[signed](https://cbsnews.com/chicago/news/pritzker-to-sign-illinois-bill-aimed-artificial-intelligence-accountability)** SB 315**, which requires AI developers to publish transparency frameworks, employ third-party auditors and report safety incidents.China reportedly\n\n[plans](https://theinformation.com/articles/china-plans-let-top-ai-firms-buy-limited-amount-nvidia-h200-chips?rc=rqdn2z)to allow top AI firms including**Alibaba**,** ByteDance**and** DeepSeek**to purchase up to 200,000** Nvidia H200s**for training, due to a shortage of domestic compute.** China’s**also reportedly[considering](https://reuters.com/world/beijing-is-looking-curbing-overseas-access-chinas-top-ai-models-sources-say-2026-07-07)**restricting overseas access** to China’s most advanced AI models, which could include limits on**open-weight models**.A\n\n**Supreme Court** ruling shrinking the**Clean Water Act** has[allowed](https://politico.com/news/2026/07/08/trump-data-centers-water-supreme-court-00958383)dozens of data centers to skip federal water permits, limiting public input on projects.The\n\n**UN AI Scientific Panel**[published](https://www.un.org/independent-international-scientific-panel-ai/en/preliminary-report)its** preliminary report**. It is about as milquetoast as you’d expect, though it does discuss loss of control risks and the potential for “catastrophic outcomes.”\n\n## INFLUENCE\n\n**OpenAI**[published](https://openai.com/index/government-national-security-partnerships)its “National Security Principles,” which say that it “will not support use of OpenAI tools for mass domestic surveillance, high-stakes decisions … without appropriate human judgment and accountability, [or] uses that evade legal obligations, oversight, or accountability.”OpenAI said it will implement these principles via “contractual usage restrictions, model behavior specifications, and customer engagement and oversight.”\n\n**Manny Rutinel**[won](https://www.politico.com/news/2026/06/30/rutinel-wins-colorado-house-primary-00983300)his primary race for Congress.**Mallory McMorrow**[suspended](https://politico.com/news/2026/07/05/mallory-mcmorrow-suspends-campaign-michigan-senate-00987445)her** Michigan Senate**campaign. She’d been[positioning](https://www.transformernews.ai/p/do-voters-care-about-existential-michigan-mallory-mcmorrow-senate)herself as an AI safety champion.**Abdul El-Sayed**, who remains in the race,[released](https://newrepublic.com/post/212447/el-sayed-michigan-ai-artificial-intelligence)an AI policy plan calling for democratic governance of AI companies, public ownership via a sovereign wealth fund, and an FDA for AI.\n\n**Leading the Future**[spent](https://azcentral.com/story/news/politics/elections/2026/06/25/jay-feely-gets-a-600k-boost-from-a-pro-ai-super-pac/90686055007/?gca-cat=p&gca-ds=sophi&gca-epti=z11xx60p119250l004550c119250e1184xxv11xx60&gca-ft=7&gca-uir=false&gnt-cfr=1)**$600k** supporting former NFL kicker**Jay Feely**‘s congressional campaign in** Arizona**.A new\n\n**poll**[found](https://thehill.com/homenews/5957777-americans-concerns-ai-excitement)Americans are nearly three times as likely to be**concerned rather than excited** about AI’s “growing role” in society.A new\n\n**AIPI** poll[found](https://theaipi.org/polling-export-controls-chip-security-bills/)bipartisan majorities of likely voters support the**AI OVERWATCH Act**(66% support), the** MATCH Act**(63%), and the** Chip Security Act**(60%).The\n\n*New York Times*looked at how**political campaigns** are[integrating](https://nytimes.com/2026/06/29/us/politics/political-campaigns-ai-tech.html)AI tools to analyze voter data and craft messages.The\n\n**Foundation for American Innovation**[launched](https://thefai.org/posts/fai-launches-frontier-legal-defense-program)** Frontier Legal Defense**, a legal team to combat “concentration of power, incumbent rent-seeking, and government overreach in AI.”Environmental activist\n\n**Erin Brockovich**[launched](https://theguardian.com/environment/2026/jun/29/were-up-against-forces-that-have-all-the-money-in-the-world-erin-brockovich-on-her-battle-against-ai-datacentres)a campaign against**AI****datacenters**.** Nvidia**[warned](https://thewirechina.com/2026/07/02/nvidia-uses-the-specter-of-huawei-to-make-its-chip-exports-case)the US government that**Huawei** could “satisfy global AI chip demand” as part of a bid to get**H200 export controls** lifted. Experts say the claim was misleading.A\n\n*Punchbowl*survey[found](https://x.com/TimSchnabel/status/2072725548405518574)that**Hill staffers** rank “**losing control of AI**” as one of the “most important challenge[s]” for America over the next 250 years.\n\n## INDUSTRY\n\n## OpenAI\n\n**GPT-5.6** is finally[available](https://politico.com/news/2026/07/08/open-ai-models-release-sol-00989959), after the**Trump administration** asked OpenAI to stagger its release.OpenAI\n\n[launched](https://openai.com/index/introducing-gpt-live/)**GPT-Live-1**, its next generation of voice models that can listen and talk at the same time, creating “a voice experience that is refreshingly easy to talk to.”*(What could possibly go wrong?)*And it\n\n[merged](https://openai.com/index/chatgpt-for-your-most-ambitious-work/)the**ChatGPT** and**Codex** desktop apps.The\n\n**OpenAI Deployment Company**[acquired](https://www.axios.com/2026/07/08/openai-deployment-company-northslope-acquisition)** Northslope**, part of its efforts to help enterprise customers implement OpenAI’s tools.OpenAI apparently never visited one of\n\n**Stargate UK’s key sites**,*The Guardian*[reported](https://www.theguardian.com/technology/2026/jul/04/openai-apparent-failure-visit-key-site-questions-stargate-uk-project), suggesting that most of its advertised investment was just hypothetical.\n\n## Meta\n\n**Mark Zuckerberg** reportedly[admitted](https://www.reuters.com/business/zuckerberg-says-ai-agent-development-going-slower-than-expected-2026-07-02/)to staff that the company’s reorganization around AI — which saw it lay off 10% of its workforce — wasn’t as “clean” as it could have been, and it had miscalculated its timing.According to\n\n*Reuters*, he told a townhall meeting that “that trajectory of the agentic development over at least the last four months**hasn’t really accelerated in the way that we expected,**“ and the intended outcomes from the new structure “haven’t come to fruition yet.”\n\nThe company is reportedly\n\n[planning](https://www.bloomberg.com/news/articles/2026-07-01/meta-is-building-a-cloud-business-to-sell-excess-ai-compute)to set up a cloud business**selling AI compute and model access** to compete with Microsoft, Amazon and Google.It\n\n[launched](https://ai.meta.com/blog/introducing-muse-image-muse-video-msl)**Muse Image** and**Muse Video**, its first AI media generation models from its restructured AI team.Be warned: it\n\n[pulls](https://www.wired.com/story/meta-now-lets-anyone-use-your-instagram-photos-in-ai-images-unless-you-opt-out/)from public Instagram profiles as image fodder, unless users opt out.\n\nIt’s reportedly going to start\n\n[making](https://www.reuters.com/world/asia-pacific/meta-put-ai-chip-into-production-september-it-looks-double-computing-capacity-2026-07-09/)its**custom “Iris” AI chip** in September.It\n\n[announced](https://cnbc.com/2026/07/08/meta-is-building-its-first-big-data-center-in-canada-amid-ai-push.html)its first**Canadian data center**, a $9b 1GW facility in Alberta.It’s\n\n[testing](https://www.ft.com/content/ac282450-91a8-4597-8f60-9e6ef416865a?segmentId=7d4bcc2e-e664-92ba-62e3-5590579f1902&syn-25a6b1a6=1)**“super sensing” AI glasses** that continually record audio and images*without*turning on the LED that currently signals whether AI glasses are recording.It also reportedly\n\n[filed](https://www.404media.co/meta-patents-ai-device-that-tracks-your-emotions-watches-you-take-your-meds/)a**patent for an “apparatus”** that continually records you and your surroundings, then uses AI to analyze your mood and…plan your workouts?An interesting\n\n[post](https://newsletter.semianalysis.com/p/the-future-of-meta-superintelligence?hide_intro_popup=true)from*SemiAnalysis*said it believes Meta is the best placed company to catch up with OpenAI and Anthropic, having set the foundations for becoming “world class” in**data, talent, and compute**.\n\n## Anthropic\n\nAnthropic\n\n[launched](https://anthropic.com/news/claude-science-ai-workbench)**Claude Science**, an app that integrates with commonly-used research tools such as PubMed, Jupyter and R to generate figures and manuscripts alongside code.It\n\n[expanded](https://techcrunch.com/2026/07/07/the-coding-agent-wars-are-spilling-into-the-rest-of-the-office-claude-cowork/?stream=top)**Claude Cowork** to web and mobile, meaning users won’t have to leave their laptops cracked open for agents to get tasks done.It’s reportedly\n\n[talking](https://theinformation.com/articles/anthropic-talks-samsung-manufacture-custom-ai-chip?rc=rqdn2z)to**Samsung** about making**custom AI chips**.It’s\n\n[leasing](https://www.nytimes.com/2026/07/07/nyregion/anthropic-ai-boom-nyc.html?smid=tw-nytimes&smtyp=cur)an**NYC office building** with capacity for at least 1,700 workers.**China**[found](https://wsj.com/tech/ai/china-says-it-has-found-security-vulnerabilities-in-anthropics-claude-code-5ecf05dc?reflink=desktopwebshare_permalink&st=D3sLJ5)“security backdoor vulnerabilities” in**Claude Code**— which Anthropic said it put there to stop Chinese users who weren’t supposed to be running it in the first place.\n\n## Nvidia\n\nNvidia\n\n[lost](https://bloomberg.com/news/articles/2026-07-08/nvidia-s-1-trillion-slide-sends-valuation-to-pre-ai-boom-levels)**$1t in market value** this summer, down from a high of $5.7t in May. According to (a confusingly-framed article from)*Bloomberg*, the company’s shares are currently trading at 18x its projected yearly earnings, the same as in 2019 prior to the AI boom.**Chinese companies** are reportedly[spending](https://www.bloomberg.com/news/articles/2026-07-07/chinese-firms-leave-nvidia-for-local-ai-suppliers-survey-shows)less on Nvidia and more on**domestic products**.\n\n## Microsoft\n\nMicrosoft is starting to\n\n[use](https://bloomberg.com/news/articles/2026-07-07/microsoft-replaces-openai-anthropic-with-own-ai-in-some-apps?stream=top)its own**MAI models in Excel and Outlook**, replacing models from OpenAI and Anthropic.It\n\n[cut](https://theverge.com/news/961528/microsoft-layoffs-july-2026-sales-xbox?view_token=eyJhbGciOiJIUzI1NiJ9.eyJpZCI6IjF6dlc3Vmw1VTQiLCJwIjoiL25ld3MvOTYxNTI4L21pY3Jvc29mdC1sYXlvZmZzLWp1bHktMjAyNi1zYWxlcy14Ym94IiwiZXhwIjoxNzgzNzc2NjMyLCJpYXQiOjE3ODMzNDQ2MzJ9.HkCv3K6oLW-VWU0GRiIAGHen5yS8Di1QBdL2CKGz1ow)**4,800 employees**, mostly in commercial sales and its Xbox division.An internal memo from executive VP Amy Coleman told employees: “the roles eliminated today are\n\n**not being replaced by AI**. At the same time, what is true is that AI is changing how work gets done.”\n\n## Others\n\n**Apple** reportedly[plans](https://wsj.com/tech/apple-to-spend-30-billion-on-u-s-made-chips-from-broadcom-aaf23490?reflink=desktopwebshare_permalink&st=tU4BCQ)to spend over**$30b** on US-made AI chips from**Broadcom**.** Nscale**[got](https://wsj.com/tech/ai/nvidia-backed-startup-nscale-locks-in-900-million-for-data-center-buildout-fd9820b3?reflink=desktopwebshare_permalink&st=TaoTjS)a $900m line of credit to build out data centers internationally.**DeepSeek** is reportedly[developing](https://reuters.com/world/china/chinas-deepseek-developing-its-own-ai-chip-sources-say-2026-07-07)its own**AI chips** for inference.**Nokia**’s stock has gone up by 90% as the former mobile handset maker[pivoted](https://wsj.com/tech/ai/nokias-new-act-supplying-the-ai-data-center-boom-e03045c0?mod=tech_lead_story)to**data center infrastructure**.The US may be short around\n\n**157,000 skilled workers by 2030**,[posing](https://www.bloomberg.com/news/articles/2026-07-07/semiconductor-worker-shortfall-endangers-us-chip-factory-revival)challenges for**semiconductor plants**.Secretive Chinese chipmaker\n\n**CXMT** is[set](https://bloomberg.com/news/features/2026-07-09/china-s-cxmt-chipmaker-eyes-ipo-to-challenge-samsung-sk-hynix-micron)for a**$4.3b IPO**, the country’s biggest of 2026 so far. According to Bloomberg, the company is seen as China’s best bet to produce memory for AI chips.**MiniMax** is[seeking](https://www.bloomberg.com/news/articles/2026-07-09/minimax-seeks-1-9-billion-from-share-sale-convertible-bond)to raise almost**$2b** via shares and convertible bonds, ahead of reported plans to[launch](https://theinformation.com/briefings/exclusive-chinas-minimax-plans-launch-2-7-trillion-parameter-model?rc=rqdn2z)a new 2.7t parameter model that would become China’s largest open-source LLM.CEO\n\n**Junjie Yan** reportedly[vowed](https://www.theinformation.com/briefings/minimax-ceo-vows-forgo-salary-achieving-agi?rc=rqdn2z)to forgo his salary until achieving AGI.\n\nMany US-based companies are increasingly\n\n[switching](https://cnbc.com/2026/07/07/chinese-ai-models-costs-us-openai-anthropic.html)to**Chinese AI models**, citing lower costs and open weights as advantages.PE group\n\n**Carlyle**[sold](https://ft.com/content/a66c1d90-682b-480a-8fc3-fb7b7e2f1873?syn-25a6b1a6=1)its data center energy business** Copia Power**to** EQT**for $2.6b, more than five times its initial investment.a16z-backed startup\n\n**Ornn**[raised](https://axios.com/2026/07/06/ornn-gpu-compute-commodity)a**$33m** seed round to build a marketplace for trading AI compute.\n\n## MOVES\n\n**Fidji Simo**, who joined** OpenAI**last August to work as the company’s No.2 running product and business,[stepped down](https://wsj.com/tech/openai-top-executive-fidji-simo-to-step-down-c3daca47)due to illness.**Ben Bernanke**, former Fed chairman,[joined](https://www.bloomberg.com/news/articles/2026-07-09/former-fed-chairman-ben-bernanke-joins-anthropic-oversight-trust)**Anthropic’s Long-Term Benefit Trust**.** Marc Andreessen, Chad Jones**and** Asha Sharma**[joined](https://x.com/AndrewCurran_/status/2075304462441455874)a new** Federal Reserve**advisory group on AI’s economic impacts.** Joshua Achiam**, OpenAI’s Chief Futurist, is[leaving](https://www.wired.com/story/openai-chief-futurist-joshua-achiam-is-leaving-the-company/)after an almost nine year run.“There’s not a specific reason for me leaving, or a specific reason for why now,” he\n\n[wrote](https://x.com/jachiam0/status/2074605703281693175). “But it’s something I have been thinking about for a while and it feels right. The world is in on the secret now and it feels possible to work on the mission from outside the walls of a frontier lab.”\n\nInstitute for Progress co-founder\n\n**Caleb Watney**[joined](https://x.com/calebwatney/status/2075260079666843847?s=46)** Coefficient Giving**as managing director of public policy, where he’ll lead a new US AI policy team.*Disclosure: Coefficient Giving is Transformer’s main funder.*\n\n**Harvey Lederman**[joined](https://x.com/ledermanharvey/status/2074077795395744142?s=12)** Anthropic**to study “alignment and character.”He will do so while teaching philosophy at NYU.\n\n**Teresa Carlson**[joined](https://fedscoop.com/anthropic-taps-microsoft-aws-teresa-carlson-lead-public-sector/)** Anthropic**to lead public sector strategy, after over 20 years of doing so for Microsoft and AWS.** Darya Kaviana**[joined](https://x.com/daryakaviani/status/2074509397238419504)** Anthropic**’s Safeguards Research team.** Jay Puri**[retired](https://theinformation.com/briefings/nvidias-longtime-sales-chief-retires?rc=rqdn2z)from his role as** Nvidia**’s top sales executive.** Nicholas Parker**will reportedly replace him in August.\n\n**Anna Soellner**[joined](https://axios.com/2026/07/06/nvidia-taps-new-corporate-comms-chief?mrfcid=202607066a409c42b5129c43bc43b4dd)** Nvidia**as its new head of corporate communications.** Nat Purser**and** Patricia Paskov**[joined](https://x.com/NatPurser/status/2074485746560295104)[the](https://x.com/prpaskov/status/2072697513685954880?s=12)**AI Verification and Evaluation Research Institute** as Director of US Policy and Director of Standards, respectively.**Greg Barbaccia** is[leaving](https://fedscoop.com/federal-cio-greg-barbaccia-leaving-government/)his role as federal CIO and chief AI officer.**Jasper Götting** is[taking over](https://securebio.substack.com/p/a-new-chapter-for-securebio-ai?isFreemail=true&post_id=205504439&publication_id=4680018&r=625xqq&triedRedirect=true)leadership of**SecureBio’s AI group**.** Seth Donoughe**, the former director, is moving to** RAND**to focus on AI safety and biosecurity.\n\n**Sayash Kapoor** is[joining](https://x.com/sayashk/status/2074472936627376363)**UC Berkeley’s School of Information** in fall 2027.**Omar Yaghi**[joined](https://scmp.com/news/china/science/article/3359430/nobel-prize-winning-materials-scientist-omar-yaghi-joins-tsinghua-university-us?module=perpetual_scroll_0&pgtype=article)**Tsinghua University**, where he’ll run a new AI-driven materials science research center.\n\n**Fortune**[hired](https://talkingbiznews.com/media-news/fortune-hires-forlini-to-cover-ai)** Emily Forlini**as a senior AI reporter.\n\n## RESEARCH\n\n**Anthropic**[published](https://anthropic.com/research/global-workspace)a buzzy paper introducing the**“J-space,”** a set of internal representations that seem to hold nonverbalized thoughts “in mind” while Claude thinks.**Resolution**, the automated alignment nonprofit founded by Geoffrey Irving,[received](https://resolution.org/post/funding)a massive $160m grant from Coefficient Giving.Irving\n\n[tweeted](https://x.com/geoffreyirving/status/2074134465257914870?s=20): “Our grant took six weeks from first conversation to confirmation. More capital is entering the field fast via the OpenAI Foundation and the Anthropic IPO. It’s time for everyone in AI safety to be more ambitious.”\n\nThe\n\n**Center for Mind, Ethics and Policy** and**Eleos AI**[published](https://nonhumanminds.org/studying-ai-welfare-empirically/)a report advising researchers on how to study AI welfare empirically.**Epoch AI** and**METR**[launched](https://epoch.ai/MirrorCode)MirrorCode, a new benchmark that tests AI models’ ability to complete long tasks end-to-end.**OpenAI**[introduced](https://openai.com/index/introducing-genebench-pro)GeneBench-Pro, a new computational biology benchmark that tests agents’ ability to handle the ambiguity of real-world science.**OpenAI** also[found](https://openai.com/index/separating-signal-from-noise-coding-evaluations)that about 30% of tasks in SWE-Bench Pro, a popular coding benchmark, are broken.**The UK’s AISI**[reported](https://aisi.gov.uk/blog/more-compute-more-capability-why-ai-agent-evals-need-to-account-for-test-time-compute)that running evaluations on a fixed compute budget tends to underestimate frontier AI capabilities.Instead of reporting a single benchmark score, they recommend that evaluators report how an AI agent’s score changes as you give it more compute.\n\n**GovAI**[found](https://governance.ai/research-paper/delays-to-frontier-ai-in-the-eu-and-uk)that 11% of** Meta, Google, OpenAI and Anthropic**model releases were** delayed or withheld**in the EU (7% in the UK) between 2018 and 2026, mainly due to** data protection regulations**rather than the EU AI Act.** Pangram**[reported](https://www.pangram.com/blog/ai-in-your-feed)that a quarter of social media content it scanned was flagged as 100% AI-generated, especially longform content on LinkedIn.\n\n## BEST OF THE REST\n\n*NY Mag*[covered](https://nymag.com/intelligencer/article/artificial-intelligence-anthropic-ipo-effective-altruism-comeback.html)the vibes as effective altruists discuss the incoming wave of post-IPO wealth from Anthropic.LessWrong and Lighthaven’s\n\nOliver Habrykaisworried about it: “I do think my environment will end up being very heavily selected for Anthropic sycophancy … I’m not looking forward to it.”\n\nThe\n\n*NYT*spoke to people who are[using](https://nytimes.com/2026/07/04/us/politics/voters-ai-chatbots-elections.html?smid=url-share&unlocked_article_code=1.vFA.TTCt.7KuPI81ZZaDz)AI chatbots to guide their midterm votes.*The Atlantic*[examined](https://theatlantic.com/economy/2026/07/universal-basic-capital-ai/687759/?gift=B4NINWqiw4tBP9MYaGW-gfXwwfs6UYXgiQLmr3TupNg)“universal basic capital” proposals as a hedge against AI-driven inequality, which potentially risks regulatory capture and government control over AI companies.A Brown University professor said he\n\n[suspects](https://insidehighered.com/news/faculty/learning-assessment/2026/07/08/brown-professor-suspects-most-his-class-used-ai-cheat)most of his students use AI to cheat, citing a suspicious average score of 96% in his class’s midterm take-home exam.The\n\n*WSJ*looked at thewealthy families[choosing](https://wsj.com/us-news/education/alternative-education-wealthy-families-ai-cd7922b3?reflink=desktopwebshare_permalink&st=TeME61)AI-based alternative schools over traditional education.Epoch AI researchers\n\n[argued](https://epoch.ai/gradient-updates/the-missing-half-of-ai-futurism-debates)that AI futurism debates overlook how hard things like Dyson spheres actually are to build.1X\n\n[unveiled](https://wired.com/story/the-1x-neo-robot-has-freaky-fast-fingers)its remarkably dextrous new robot hands, in a video which includes a wild shot of a humanoid robot … undressing someone.\n\n## MEME OF THE WEEK\n\n*(Credit: @RespectfulMemes.)*\n\n*Thanks for reading. Have a great weekend.*", "url": "https://wpnews.pro/news/ai-driven-inflation-is-a-political-opportunity", "canonical_source": "https://www.transformernews.ai/p/ai-driven-inflation-is-a-political", "published_at": "2026-07-10 15:03:16+00:00", "updated_at": "2026-07-10 15:12:46.894936+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-chips", "ai-infrastructure", "ai-policy"], "entities": ["SK Hynix", "OpenAI", "SpaceXAI", "Apple", "Sony", "Microsoft", "Nintendo", "Frank Pallone"], "alternates": {"html": "https://wpnews.pro/news/ai-driven-inflation-is-a-political-opportunity", "markdown": "https://wpnews.pro/news/ai-driven-inflation-is-a-political-opportunity.md", "text": "https://wpnews.pro/news/ai-driven-inflation-is-a-political-opportunity.txt", "jsonld": "https://wpnews.pro/news/ai-driven-inflation-is-a-political-opportunity.jsonld"}}