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Category: Economics/Business

Can American democracy survive the next financial crash?

Can American democracy survive the next financial crash?

Sarah Bloom Raskin, a former Federal Reserve governor and former deputy secretary of the Treasury, writes: The bailout clock is ticking. In September, Oracle invoked “force majeure” to delay paying debt on a data center, which led to a drop in the corporation’s stock price. This month, OpenAI significantly cut its revenue projections; CoreWeave, a heavily leveraged data-center company, saw its share price plunge; and investors began racing to buy credit-default swaps to protect their portfolios. These are all signs…

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There’s not enough money in the world to pay for the AI boom

There’s not enough money in the world to pay for the AI boom

The Washington Post reports: The biggest bet in the history of the United States keeps getting bigger and we’re all hanging on for the ride. Technology companies recently launched a record scramble for cash to pay for data centers, computer chips and technology and equipment to power artificial intelligence. This boom is so expensive that even Silicon Valley giants are bleeding cash and companies are now racing one another to collect or borrow other people’s money for the estimated $10…

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New analysis sees ‘rapidly increasing’ odds the AI bubble is about to burst

New analysis sees ‘rapidly increasing’ odds the AI bubble is about to burst

Futurism reports: Whether you use AI in your personal life or not, there is no longer any escaping the grasp of the industry’s tendrils. There are multiple trillions of dollars now resting on AI’s success, much of it bound up in speculative debt. As everybody knows, debt is only an issue if you can’t pay it off — and as top AI labs fail to bring in enough revenue to cover skyrocketing costs, alarms are blaring that the entire global…

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Who’s paying whom? The circular money machine behind the AI boom (or bubble)

Who’s paying whom? The circular money machine behind the AI boom (or bubble)

Nvidia chief executive Jensen Huang, centre, speaking at the White House. OpenAI president Greg Brockman is on the right. AP By Ruipeng Liu, Deakin University and Sagarika Mishra, Deakin University Imagine a company that sells you equipment, invests money in your business, and then rents back what you build with it. It’s your supplier, your investor and your customer all at once. That’s known as circular financing. Many artificial intelligence (AI) companies, including Microsoft, Amazon, Google and Nvidia, have adopted…

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Bill Gates: Prepare for 20 years of tumultuous AI disruption

Bill Gates: Prepare for 20 years of tumultuous AI disruption

  Nilay Patel: My guest today is Bill Gates, co-founder and former CEO of Microsoft and chairman of the Gates Foundation. You may have noticed Bill in the news more lately — he’s been on something of a tour for the past few months talking about AI risk, and how crucial it is that we start taking this seriously. So I was excited to sit down with him and really dig into this subject. I came with many questions, about…

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Apollo economist: AI has delivered zero payoff to corporate America outside Big Tech

Apollo economist: AI has delivered zero payoff to corporate America outside Big Tech

Torsten Slok, chief economist at Apollo Global Management, writes: Despite massive investments and widespread hype around artificial intelligence, the technology has delivered zero financial payoff to corporate America outside of tech. Revenue per worker is rising for the Mag 7 [Alphabet (Google), Amazon, Apple, Meta (Facebook), Microsoft, Nvidia, Tesla] but is flat for the S&P 493, see the first chart below. Profit margins are rising for the Mag 7 but are flat for the S&P 493, see the second chart…

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Study identifies world’s first corporate psychopath

Study identifies world’s first corporate psychopath

Anglia Ruskin University: New research suggests the same personality traits associated with toxic corporate leaders today may have been present at the very birth of global capitalism 400 years ago. The study, published in the Asian Journal of Business Ethics identifies Jeronimus Cornelisz, who was a merchant manager with the Dutch East India Company, as likely being the earliest documented example of a corporate psychopath. The research, by Dr Clive Boddy of Anglia Ruskin University (ARU), is believed to be…

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Bird flu is raging on a mink farm. It could spark a human pandemic, experts say, but officials won’t act

Bird flu is raging on a mink farm. It could spark a human pandemic, experts say, but officials won’t act

ProPublica reports: The strain of bird flu that’s ripped through American barns for the last four years has killed two people who caught it from sick animals. But as far as anyone can tell, humans can’t spread it. The virus has remained a true “bird” flu, tailored to attach to avian cells, not invade human throats and noses, where coughing and sneezing reliably spew droplets. Under the right conditions, however, that could change. A single mutation could give the bird…

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Thanks to AI-enabled hacking, the internet is entering a ‘valley of pain’

Thanks to AI-enabled hacking, the internet is entering a ‘valley of pain’

Matteo Wong writes: This week could go down as the worst in the history of cybersecurity. On Wednesday, news emerged about two major vulnerabilities in PHP, a programming language used by 70 percent of websites, which prompted governments, hospitals, and companies around the world to take digital services offline as a precaution. There have already been millions of attempts to exploit these weaknesses. But the PHP vulnerabilities were just the most attention-grabbing in a series of alarming revelations. Security flaws…

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Unvetted AI agents are accessing U.S. bank accounts, apparently taking actions without user consent

Unvetted AI agents are accessing U.S. bank accounts, apparently taking actions without user consent

Axios reports: Major U.S. banks are detecting unauthorized third-party AI agents operating inside customer accounts, with some agents attempting to take actions that appear to be independent of user instructions, sources tell Axios. Why it matters: AI agents are becoming a nightmare for America’s banks, making their way into banking systems faster than financial institutions can respond. The difficulty in distinguishing between a human and an unauthorized bot is forcing banks to block the technology and rapidly rewrite their terms…

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Hackers used Claude and Grok to automate cyberattacks on over 400 banks and financial firms

Hackers used Claude and Grok to automate cyberattacks on over 400 banks and financial firms

Cyber Security News reports: A cybercrime group used artificial intelligence (AI) agents to coordinate attacks against more than 400 banks, payment providers and other financial organizations across Latin America, according to a report by cybersecurity company Straiker. The group, known as CyberCartel, reportedly used AI models from Anthropic, xAI and Moonshot AI to help plan and carry out parts of its operations. The reported targets span several countries, but Straiker did not name the institutions. Researchers said the system, called…

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The fossil fuel comeback is here

The fossil fuel comeback is here

The Verge reports: The US is building more fossil fuel infrastructure than it has in a decade while renewable energy growth slows down, a new report shows. Electricity demand is also climbing faster than it has in more than a decade with more data centers, factories, and electric vehicles plugging into the grid. Despite those growing demands, the Trump administration has sought to hobble the wind and solar industries in favor of fossil fuels. America’s energy landscape is already shifting…

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French government cracks down on mass protests over cost of living, education cuts

French government cracks down on mass protests over cost of living, education cuts

  Hundreds of thousands of protesters marched in over 140 cities across France on Saturday, demanding relief from the high cost of living, more funding for public services and improvements to deteriorating schools, among other grievances. The demonstrations were the latest — and largest — in a series of protests that began in September with high schooler-led demonstrations against overcrowded classrooms and crumbling school infrastructure. Some cities saw property destruction, arson and theft on Saturday, with city halls and other…

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Weak links start to show in AI borrowing

Weak links start to show in AI borrowing

The New York Times reports: Trillions of dollars in borrowed money have powered the A.I. boom. But now there is growing uncertainty around just how easily more money can be obtained — and how much of it will be paid back. Those questions burst into the forefront this week when investors rapidly lost confidence in one debt-laden data center company, CoreWeave. Prices of its bonds — the company has accrued $72 billion in liabilities to operate 51 data centers —…

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Is there an AI bubble?

Is there an AI bubble?

  The gargantuan bet on the future of A.I. is driving the U.S. stock market and economic growth. And the building of data centers is sucking up so many construction resources, it’s crowding out the construction of homes. The multitrillion-dollar question is: Will this bet pay off? Or is it a bubble, destined to burst and pull the economy down with it? Paul Kedrosky is a partner at SK Ventures, a fellow at M.I.T., and the author of a newsletter…

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The EPA is about to give oil and gas companies a huge methane-related gift

The EPA is about to give oil and gas companies a huge methane-related gift

Mother Jones reports: Last week, less than a month after rolling back power plant pollution standards, Environmental Protection Agency Administrator Lee Zeldin addressed an audience of oil and gas executives at the New Mexico Oil and Gas Association’s annual meeting in Santa Fe. The environmental agency was “within days,” he told them, of releasing the draft reconsideration of a major Biden-era oil and gas methane rule. The new proposal would weaken regulations on oil and gas operators to allow for…

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