Investigators have started combing the wreckage of Air India flight AI171 as they seek to determine what caused the Boeing Co. Dreamliner to crash shortly after takeoff Thursday afternoon, killing all but one of the 242 people aboard in the deadliest aviation accident in more than a decade. 

On Friday morning, one of the two so-called black boxes, which contain critical evidence of a plane’s final minutes, was located, according to the Hindustan Times. The report didn’t specify which of the flight data or cockpit voice recorder was recovered. 

The accident site is a scene of total devastation, with burnt debris and scattered aircraft parts still smoldering. The BJ Medical Hostel, where medical students were dining at the time of the accident, has been severely damaged, with four tower blocks half-burnt and blackened. Firefighters continue to spray water on the site, while police and officials work to clear the wreckage.

The focus yesterday was on rescue efforts, while the search for material evidence starts today, said a senior official from the Aircraft Accident Investigation Bureau of India, who asked not to be named discussing private matters.

Indian Prime Minister Narendra Modi briefly visited the crash site on Friday morning. 

Questions are growing over how and why the 787-8 Dreamliner, bound for London, exploded into a huge fireball just minutes after takeoff. Video footage shared on social media showed a plume of smoke at the crash site. The miraculous survival of one passenger, Ramesh Vishwaskumar is also unexplained. Vishwaskumar, who was seated in the first row of economy class, may be able to offer valuable clues as to what caused the accident.

Officials on Thursday said that emergency responders had recovered more than 200 bodies, though they didn’t immediately say how many were passengers, crew or area residents. They said the toll could rise as emergency workers comb through the wreckage. 

The flight to London’s Gatwick airport was carrying 12 crew and 230 passengers, most of whom were Indian and British nationals.

The 787 Dreamliner appeared to not achieve sufficient thrust as it lumbered down nearly the full length of an 11,000-foot runway, a distance that should have been more than enough to take off, said Bob Mann, head of aviation consultant RW Mann & Co.   

That could stem from a misconfiguration of the plane prior to takeoff or erroneous weight data entered into the plane’s computer system that determines how much power is needed to get off the ground, he said. Mann cautioned that his views were unofficial and not corroborated by data or cockpit voice recorders, which have yet to be recovered from the site. 

“If the weight is high compared to the actual number, you end up with a very aggressive takeoff,” Mann said. “If the weight is low compared to the actual, you end up with not enough commanded power.”

The pilots in command issued a mayday call immediately after takeoff to air traffic controllers, according to India’s civil aviation regulator. The aircraft was in the command of captain Sumeet Sabharwal and first officer Clive Kundar, who had 8,200 flying hours and 1,100 flying hours of experience, respectively, the Directorate General of Civil Aviation said.

According to air traffic control data, the jet departed from Ahmedabad at 1:39 p.m. local time using runway 23. After the initial mayday call, there was no response from the cockpit to subsequent calls made by controllers on the ground.

The accident extends a series of serious and fatal incidents in the civil aviation industry this year, including a midair collision in Washington early in 2025 between a military helicopter and an aircraft. 

Thursday’s crash marks the first-ever complete loss of a 787, a plane Boeing introduced more than a decade ago with advanced lightweight composite materials that improve fuel efficiency. The 787 has become a crucial source of revenue for Boeing, with 1,148 of the jets in service globally.

Boeing chief executive officer Kelly Ortberg said in a statement Thursday that he has spoken to Air India chairman N. Chandrasekaran and that Boeing is ready to support the investigation. Ortberg and Boeing commercial aircraft head Stephanie Pope cancelled their plans to attend the upcoming Paris Air Show, according to a company memo seen by Bloomberg News.

Among the 242 people on board, 169 were Indian nationals, 53 were British citizens, one 1 was Canadian and seven Portuguese, according to Air India.

Based on the number of people on board, this is the worst commercial airline crash since Malaysia Airlines Flight 17 in 2014, which was shot down over Ukraine, killing 298 people, according to Aviation Safety Network, which tracks fatal crashes. The last crash of this magnitude for Air India was Flight 182 in 1985. That Boeing 747 aircraft was destroyed by a bomb over the Atlantic Ocean, killing all 329 people on board.

Boeing has been involved in several accidents in recent years, including two fatal crashes with Lion Air Flight 610 on October 29, 2018, and Ethiopian Airlines Flight 302 on March 10, 2019. Early last year, a nearly-new 737 Max aircraft lost a door panel during flight. While there were no fatalities, the accident plunged the company into a deep crisis.

Under international rules for aviation crash investigations—known as “Annex 13”—a probe is led by air safety authorities in the country where the crash occurred, with assistance from other countries. Investigators typically issue a preliminary report within a few weeks. A final report, which includes safety recommendations, is then released a year to two later. 

This story was originally featured on Fortune.com

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Japan’s top trade negotiator expects a trade deal with the U.S. to spare Tokyo from higher auto tariffs, even if US President Donald Trump decides to increase them against other nations.

“We are in bilateral negotiations with the U.S.,” Ryosei Akazawa said Friday as he left for Washington for his sixth round of trade talks with US counterparts. “Generally speaking, if we reach a deal it should secure special treatment for Japan, and exclude it from rules that apply to most countries.”

Akazawa made the remarks after being asked about Trump’s comments that indicated he’s considering raising tariffs on imported cars further to boost production in the U.S. Akazawa also said he was aware that US Treasury Secretary Scott Bessent has signaled a possible extension of the July 9 deadline to return across-the-board tariffs to original rates, which would mean a bump to 24% from 10% for Japan. 

Akazawa heads to the U.S. as the two nations eye a potential trade deal out of an expected summit in Canada between Trump and Japanese Prime Minister Shigeru Ishiba. The two are expected to meet on the sidelines of the Group of Seven leaders’ gathering starting Sunday. 

A 25% tariff on cars and car parts threatens to push the Japanese economy into a technical recession with a hit to the nation’s most important exports, just as Ishiba prepares for a national election in July. The U.S. has also recently doubled a levy on steel and aluminum to 50%.  

Akazawa said Japan will continue to seek a review of all U.S. tariffs and aim for a package of agreements. 

This story was originally featured on Fortune.com

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South Korean President Lee Jae-myung called on the heads of the country’s largest conglomerates to help restore market trust while hearing out their concerns over the impact of Donald Trump’s tariffs on global trade.

In his first meeting with the nation’s powerful business leaders since taking office, Lee faced a delicate balancing act, appealing to the economic clout of the chaebols and reassuring them on trade negotiations, while signaling his intent to follow through on campaign pledges to curb their outsized influence in Asia’s fourth-largest economy. 

“Our economy can no longer sustain growth through unfair competition, special privileges for, or exploitation of some actors like it did in the past,” Lee told executives at the gathering, including the chiefs of Samsung Group, SK Group, [hotlink]Hyundai Motor[/hotlink] Group, LG Group and Lotte Group. “There is still some distrust, and I want you to help alleviate it.”

Lee, who defeated his conservative rival to become South Korea’s new president last week, has made economic revitalization one of his top priorities. The country’s chaebols, sprawling family-controlled conglomerates, such as Samsung Electronics Co. and Hyundai Motor Co., have long been a key engine of growth for the economy, giving them broad sway over business and society. 

The new president has pledged to rewrite the commercial code to weed out the rubber-stamping of corporate decisions by directors. The revised code aims to strengthen the duty of company boards to shareholders to improve corporate governance and tackle the so-called Korea discount that has been a long-standing grievance among global investors.

But ahead of his trip to Canada to attend the Group of Seven summit, Lee found many executives at the meeting expressing more immediate concern about the impact of trade protectionism.

“In particular, U.S. tariffs and the uncertainty surrounding the issue have created an unstable environment, making it extremely difficult for businesses to make any decisions or investment,” SK Group Chairman Chey Tae-won said. 

Chey cited the intensifying U.S.-China rivalry among the key risks facing businesses in South Korea, along with weak domestic demand, subdued investment sentiment and an aging population. SK’s semiconductor unit is the world’s leading AI memory chipmaker and a close partner of Nvidia Corp. 

Samsung Electronics Co. Executive Chairman Jay Y. Lee went further, comparing the current environment to the Asian financial crisis of the late 1990s. 

South Korea remains a critical player in global supply chains, producing everything from smartphones and semiconductors to ships and EVs. That makes its economy heavily dependent on trade to power growth with exports equivalent in size to more than 40% of gross domestic product. 

Hyundai Motor, one of the world’s biggest automakers, has pledged to invest $21 billion in the U.S, something Lee can flag to Trump should they meet in Canada. Even so, carmakers may face yet another hike in duties after Trump said Thursday he was considering raising auto tariffs even higher than the recently introduced 25% level to support the industry in the U.S.

With the deadline for imposing reciprocal tariffs approaching early next month, Trump is keen to show progress in reaching deals with key economies that have large trade surpluses with the U.S. 

Talks between Washington and Seoul have been held back by the leadership vacuum and domestic political unrest before Lee’s election win.

This story was originally featured on Fortune.com

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• Wilbur Ross, former Commerce Secretary and a key architect of Trump’s first-term trade policy, describes Trump’s current tariff strategy as a deliberate evolution: moving faster, hitting harder, and using broader executive powers to impose tariffs for both economic and diplomatic leverage.

The Trump administration’s use of tariffs has sparked debate over the ultimate goals of its economic strategy. However, a former cabinet member and key trade advisor to the President has suggested there is an underlying logic to the approach.

Since winning the Oval Office, President Trump has announced an evolving range of policies with economic sanctions spinning higher on some trade partners while others have been granted pauses.

Many of the announcements have not come through official White House channels, for example Trump threatened a 50% tariff on the EU in April in a bid to get European negotiators to the table—all posted on his social media site, Truth Social.

Indeed, Trump has come under scrutiny from Beijing, arguably the most critical region for the U.S. to make a deal, who claim America’s tariff tactics have been “coercion and blackmail” when instead it should “convey information to the Chinese side … through relevant parties.”

But Wilbur Ross, Trump’s former Commerce Secretary under the first administration, says there’s a clear tactic at play beneath Trump’s bluster.

The 87-year-old banker turned D.C. power player said there is an “art” to Trump’s dealmaking, as White House Press Secretary Karoline Leavitt has suggested, telling Fortune in an exclusive interview: “Well, everybody’s reaction to [tariffs] was first shock and amazement, but the actual retaliatory measures that they put in were fairly modest—even China didn’t match in dollar for dollar.

“There’s a real reason for that, I think the other countries, as they’ve thought about it, have recognized that while they have to talk very bravely for their domestic political constituencies … they also recognize that at the end of the day, they can’t afford a tit-for-tat escalating trade war with us.”

And this was a fact Trump was relying on, continued Secretary Ross: “One of the earliest things he put in was that 10% tariff on everything from everywhere. 

“Nobody is even complaining about that anymore. When you think about it, in the normal course, getting quietly to do a 10% tariff on everything from everywhere was a huge achievement, even if he didn’t get anything else. But because he followed it with these much more extreme things, it makes the 10% look like it’s not such a big bother.

“But it’s a huge number, and he’s been collecting it every day.”

Indeed, imported goods alone into the U.S. in 2024 stood at $3.36 trillion—even before tax, duties and levies were collected (worth $82 billion) and before imported services are added to those figures.

Even 10% of near-$3.4 trillion is an eye-watering sum to add to federal budgets, though some items like autos and steel are even higher. Indeed nations like China, Canada and Mexico are all already subject to more than the baseline 10% universal tariff.

‘A more adventurous path’

When Secretary Ross spoke to Fortune in a previous exclusive interview earlier this year, he said President Trump would be all the more confident in his second term because he now better understands the inner-workings of Washington D.C., and has a stronger mandate courtesy of a solid election sweep.

And President Trump’s tactics, which have included everything from threatening a 25% hike on Apple’s iPhones specifically to raising sanctions to more than 150% on China at some points, reflect the path Secretary Ross expected.

After all, Secretary Ross was one of the key allies in Trump’s team when renegotiating America’s position on the North American Free Trade Agreement (NAFTA). At the time, Trump was a fierce critic of the deal with Mexico and Canada and wanted to withdraw from the agreement and begin negotiating from there.

Secretary Ross felt the better tactic was to threaten such action and keep an exit as a last resort, an opinion that Trump eventually came around to agreeing with.

Likewise, having been appointed in 2017 Secretary Ross oversaw the tariff action in the first Trump administration which included sanctions on Chinese goods as well as aluminum and steel more widely.

“He has started out on a much more adventurous path than last time,” Secretary Ross told Fortune this week. “Broader in scope and more extreme in terms of the numbers themselves.”

Trump has three objectives, he adds: Shrinking trade deficits, producing revenue to offset his ‘One Big, Beautiful Bill’ and achieving other diplomatic purposes such as the flow of fentanyl into the U.S. and global defense spending.

“He has a much more fulsome, much more complicated agenda than before,” Secretary Ross explains. “It’s also different in … that last time I was very careful to set the groundwork to do public hearings, stakeholder meetings, to do written reports, to set a whole record so that under the Administrative Procedures Act we would be relatively safe from people trying to knock it out in court.

“This time, they did a very different thing. They went in mostly just by his say so using the IFA, the Emergency Powers Act, and they ran into a snag at the Court for International Trade.”

This snag may alter the course of tariff reaction on the account of businesses, he added, because their investment timelines may shift based on when the tariffs are legally approved.

But Secretary Ross added: “Most people are operating under the assumption that sooner or later, he’ll get something like what he was looking for … and therefore, while it’s slowed down a bit, don’t think it will derail [trade talks] because [foreign governments] also know there are other ways he could punish them rather than just the tariffs. 

“So it’s a bump in the road, but I don’t think it’s a huge pothole that would wreck the car.”

This story was originally featured on Fortune.com

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BYD Co. sees China’s electric vehicle price war as unsustainable, according to a senior company executive, who stopped short of saying the country’s largest EV maker would scale back the aggressive discounting it helped trigger.

“It’s very extreme, tough competition,” executive vice president Stella Li said in an interview with Bloomberg News in London. “No, it’s not sustainable,” she added, noting that consolidation across the sector is likely as the market matures.

The comments highlight mounting strain within China’s overheated EV market, where a flood of new entrants and deep price cuts—many led by BYD—have eroded margins and triggered rare government intervention. While BYD has gained market share, the fallout is growing, with investors, regulators and rivals all pushing for a reset.

Beijing summoned industry leaders for talks earlier this month, telling EV makers not to sell cars below cost or offer unreasonable price cuts.

The EV price war has weighed heavily on automaker shares, with BYD losing around $22 billion in market capitalization since peaking in late May. Still, the company is seen as a likely long-term winner if smaller and mid-sized rivals are squeezed out, allowing BYD to grow its dominant market share.

Li said BYD plans to continue investing aggressively outside China, with a particular focus on Europe. The company expects to spend as much as $20 billion in the region over the coming years, she said.

BYD’s market share is rising rapidly in key European countries including Germany, the UK and Italy, helped by a fast-expanding dealer network and competitively priced offerings—especially plug-in hybrids. 

The company recently overtook rival Tesla Inc. in Europe, a shift attributed in part to BYD offering a wider lineup of models. It currently sells around nine to ten vehicles in the region, compared to Tesla’s four.

Li also said that BYD has no immediate plans to partner with a European automaker, a strategy that local rivals Xpeng Inc. and Zhejiang Leapmotor Technology Co. have embraced. “But the door is open,” she said. 

Li added that BYD is also investing heavily in after-sales service, and expects its European market share to climb further as more customers become familiar with the company’s technology and support.

“If we decide to do something, we put all our resources behind it,” she said. “We want to make sure it’s successful in the long run.”

This story was originally featured on Fortune.com

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The House narrowly voted Thursday to cut about $9.4 billion in spending already approved by Congress as President Donald Trump’s administration looks to follow through on work done by the Department of Government Efficiency when it was overseen by Elon Musk.

The package targets foreign aid programs and the Corporation for Public Broadcasting, which provides money for National Public Radio and the Public Broadcasting Service as well as thousands of public radio and television stations around the country. The vote was 214-212.

Republicans are characterizing the spending as wasteful and unnecessary, but Democrats say the rescissions are hurting the United States’ standing in the world and will lead to needless deaths.

“Cruelty is the point,” Democratic leader Hakeem Jeffries of New York said of the proposed spending cuts.

The Trump administration is employing a tool rarely used in recent years that allows the president to transmit a request to Congress to cancel previously appropriated funds. That triggers a 45-day clock in which the funds are frozen pending congressional action. If Congress fails to act within that period, then the spending stands.

“Under President Trump’s leadership, your taxpayer dollars are no longer being wasted,” House Speaker Mike Johnson said after the vote. “Instead, they are being directed toward priorities that truly benefit the American people.”

The benefit for the administration of a formal rescissions request is that passage requires only a simple majority in the 100-member Senate instead of the 60 votes usually required to get spending bills through that chamber. So if they stay largely united, Republicans will be able to pass the measure without any Democratic votes.

Senate Majority Leader John Thune, R-S.D., said the Senate would likely not take the bill up until July and after it has dealt with Trump’s big tax and immigration bill. He also said it’s possible the Senate could tweak the bill.

The administration is likening the first rescissions package to a test case and says more could be on the way if Congress goes along.

Republicans, sensitive to concerns that Trump’s sweeping tax and immigration bill would increase future federal deficits, are anxious to demonstrate spending discipline, though the cuts in the package amount to just a sliver of the spending approved by Congress each year. They are betting the cuts prove popular with constituents who align with Trump’s “America first” ideology as well as those who view NPR and PBS as having a liberal bias.

Four Republicans voted against the measure — Reps. Mark Amodei of Nevada, Brian Fitzpatrick of Pennsylvania, Nicole Malliotakis of New York and Mike Turner of Ohio. No Democrats voted for the measure.

The bill looked like it was in danger of going down, but two lawmakers — Reps. Don Bacon of Nebraska and Nick LaLota of New York — changed their votes to yes, allowing it to advance to the Senate.

LaLota had an extensive conversation with Johnson on the House floor as Johnson could be seen trying to win him over. Afterward, LaLota called it “private discussions” to make sure “my constituents will get what they need.”

Bacon said he was reassured by House Republican leadership that PBS would receiving funding for next year. He said he was also told that funding for the U.S.-led global response to HIV, known as PEPFAR, will not be affected.

“Because of these reassurances, I voted yes on H.R. 4,” Bacon said.

In all, the package contains 21 proposed rescissions. Approval would claw back about $900 million from $10 billion that Congress has approved for global health programs. That includes canceling $500 million for activities related to infectious diseases and child and maternal health and another $400 million to address the global HIV epidemic.

The Trump administration is also looking to cancel $800 million, or a quarter of the amount Congress approved, for a program that provides emergency shelter, water and sanitation, and family reunification for those forced to flee their own country.

About 45% of the savings sought by the White House would come from two programs designed to boost the economies, democratic institutions and civil societies in developing countries.

Democratic leadership, in urging their caucus to vote no, said that package would eliminate access to clean water for more than 3.6 million people and lead to millions more not having access to a school.

“Those Democrats saying that these rescissions will harm people in other countries are missing the point,” said Rep. Lisa McClain, House Republican Conference chair. “It’s about people in our country being put first.”

The Republican president asked lawmakers to rescind nearly $1.1 billion from the Corporation for Public Broadcasting, which represents the full amount it’s slated to receive during the next two budget years. About two-thirds of the money gets distributed to more than 1,500 locally owned public radio and television stations. Nearly half of those stations serve rural areas of the country.

“Cutting off federal funding to public media will not only damage local stations, it will be disruptive for millions of Americans who rely on it for news and information that helps them make decisions about their lives and participate in their communities,” said Patricia Harrison, president and CEO of the Corporation for Public Broadcasting.

Several advocacy groups that serve the world’s poorest people had urged lawmakers to vote no.

“We are already seeing women, children and families left without food, clean water and critical services after earlier aid cuts, and aid organizations can barely keep up with rising needs,” said Abby Maxman, president and CEO of Oxfam America, a poverty-fighting organization.

Rep. Jim McGovern, D-Mass., said the foreign aid is a tool that prevents conflict and promotes stability, but the measure before the House takes that tool away.

“This bill is good for Russia and China and undertakers,” said Rep. Steve Cohen, D-Tenn.

Republicans disparaged the foreign aid spending and sought to link it to programs they said DOGE had uncovered.

Rep. Chip Roy, R-Texas, said taxpayer dollars had gone to such things as targeting climate change, promoting pottery classes and strengthening diversity, equity and inclusion programs. Other Republicans cited similar examples they said DOGE had revealed.

“Yet, my friends on the other side of the aisle would like you to believe, seriously, that if you don’t use your taxpayer dollars to fund this absurd list of projects and thousands of others I didn’t even list, that somehow people will die and our global standing in the world will crumble,” Roy said. “Well, let’s just reject this now.”

This story was originally featured on Fortune.com

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• In today’s CEO Daily: Diane Brady on the impact of ICE raids on CEOs.
• The big story: Israel attacks Iran and oil surges.
• The markets: Down on Middle East fight.
• Analyst notes from Convera, UBS, and Deutsche Bank.
• Plus: All the news and watercooler chat from Fortune.

Good morning. I spoke with a C-suite leader of a large retailer this week who shook his head when I asked about the ICE raids and protests. “I understand and support our laws,” he said. “What I don’t understand is why we have to be so vindictive and cruel in applying them.”

Therein lies the challenge for CEOs in speaking up right now as some fear that seemingly innocuous statements might put a target on their backs. We do hear from those who are already wounded, like Gary Rohwer of Glenn Valley Foods whose plant is operating at 30% capacity after federal immigration officials arrested half his workforce, despite him clearing them through the government’s own E-verify system. Even those who haven’t been raided may be feeling an impact from the crackdowns. More than a million foreign-born workers have dropped out of the labor force since March, according to the St. Louis Fed. One leader in the construction sector told me that one of his workers quit because they’re worried a raid might harm an undocumented sibling who’s staying in their home.

For Scott Boatwright of Chipotle, whose workforce is 52% Hispanic, the answer has been to focus on his people. As he put it during a recent Leadership Next podcast: “All of our team members go through the E-verify process. But it’s not lost on me that I could have team members within the organization that could have family members that are affected one way or another. I think it’s important for us as leaders in the organization to ensure we are connecting with all of our people, and just a mental check-in to say, ‘Hey, how are you doing? How can we help? How can we support? I know you may be going through a challenging time.’”

More news below.

Contact CEO Daily via Diane Brady at [email protected]

This story was originally featured on Fortune.com

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JetZero Inc. announced plans Thursday to build its first manufacturing plant for a next-generation passenger jet in central North Carolina, a project that if successful would create more than 14,500 jobs there in a decade.

The California-based startup intends to build the factory at Greensboro’s airport, investing $4.7 billion. The planned hirings from 2027 through 2036 would be the largest job commitment in North Carolina history, according to Gov. Josh Stein.

The company previously identified Greensboro as one of three finalists for the factory to build its fixed-wing — also known as all-wing or blended-wing — Z4 aircraft, which JetZero says will be up to 50% more fuel-efficient than traditional tube-and-wing airliners.

JetZero has said it’s already raised about $300 million toward investment in the Z4 project, including a U.S. Air Force grant to build and fly a demonstrator model by 2027.

United Airlines and Alaska Airlines also are project investors and have made conditional purchase agreements for their fleets, the company said. JetZero aims for the planes to go into service in the early 2030s, with a goal of completing 20 airplanes per month at full production.

Stein, on hand with JetZero executives and other officials for the formal announcement at Piedmont Triad International Airport in Greensboro, cited North Carolina’s robust aerospace industry and the first manned powered flights at Kitty Hawk by the Wright brothers in 1903.

“North Carolina is the perfect location,” Stein said. “North Carolina was first in flight. We are also the future of flight.”

The jobs would pay minimum average salaries of more than $89,000, according to the state Department of Commerce, which provided details of the project discussed earlier Thursday by a state committee that awards economic incentives.

State and local monetary and training incentives for JetZero and the project described at the committee meeting could exceed $2.35 billion by the 2060s if investment and job-creation thresholds and other requirements are met.

A portion of state incentives awarded by the committee — more than $1 billion over 37 years — is based on a percentage of income taxes withheld from plant workers’ paychecks. The incentives also include up to $785 million from Guilford County and Greensboro and up to $450 million from the General Assembly in part to help with infrastructure, officials said. The project includes a research facility for composite structures.

A commerce department official said that JetZero, headquartered in Long Beach, California, looked for over a year for a plant location, examining 25 sites in 17 states.

JetZero, currently with just 225 workers, enters a jet purchasing market dominated by industry behemoths U.S.-based Boeing and European Airbus.

“We have already shown strong commercial interest and momentum to meet the real airline demand for this aircraft,” CEO Tom O’Leary said. “So this is more than just a factory. It’s a launchpad for a new chapter of American aerospace.”

While a variant of the Z4 would have tanker and transport uses in the military, JetZero has said that it would focus first on building a commercial jetliner with about 250 seats and a range of 5,000 nautical miles.

The 5-year-old company says the plane’s shape will reduce drag and the mounting of engines on the top and back of the plane will make it much quieter than traditional airliners. The Z4 would run on conventional jet fuel but could be converted to hydrogen fuel, according to JetZero.

JetZero says Z4 travelers will board through larger doors and into shorter but wider cabins, and aisles will be less congested as bathrooms will be far away from galleys where meals are prepared.

“It’s going to deliver a better passenger experience than you’ve ever had before on any other plane,” O’Leary said.

Stein said the state is already home to more than 400 aerospace companies. And the Piedmont Triad airport has emerged as an industry hot spot, with Honda Aircraft placing its headquarters there and Boom Supersonic building its first full-scale manufacturing plant for next-generation supersonic passenger jets.

The central location and easy access to interstates also lured Toyota to build an electric battery plant in adjoining Randolph County.

North Carolina’s previous largest economic development project, measured by employment, was revealed in 2022, when Vietnamese automaker VinFast announced plans to build an electric vehicle manufacturing plant in Chatham County, promising 7,500 jobs.

This story was originally featured on Fortune.com

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Novo Nordisk A/S reclaimed its position as Europe’s most valuable public company, overtaking software developer SAP SE. 

Shares in the Danish drugmaker climbed as much as 2.3% on Friday after Novo said it plans to advance its experimental weight management treatment amycretin into late-stage development following feedback from regulatory authorities. 

Novo’s market capitalization stood at $365 billion as of 10:20 a.m. in Copenhagen. That compares with $364.3 billion for SAP, according to data compiled by Bloomberg.

Novo has suffered a series of setbacks since reaching a record high in June of last year, including disappointing clinical trial results for its experimental obesity treatments and mounting competition from US rival Eli Lilly & Co. The drugmaker last month decided to replace Chief Executive Officer Lars Fruergaard Jorgensen.

The shares have been boosted this week following a Financial Times report about activist hedge fund Parvus Asset Management building a stake in Novo, hoping to influence the appointment of the drugmaker’s new CEO. 

This story was originally featured on Fortune.com

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Meta is making a $14.3 billion investment in artificial intelligence company Scale and recruiting its CEO Alexandr Wang to join a team developing “superintelligence” at the tech giant.

The deal announced Thursday reflects a push by Meta CEO Mark Zuckerberg to revive AI efforts at the parent company of Facebook and Instagram as it faces tough competition from rivals such as Google and OpenAI.

Meta announced what it called a “strategic partnership and investment” with Scale late Thursday. Scale said the $14.3 billion investment puts its market value at over $29 billion.

Scale said it will remain an independent company but the agreement will “substantially expand Scale and Meta’s commercial relationship.” Meta will hold a 49% stake in the startup.

Wang, though leaving for Meta with a small group of other Scale employees, will remain on Scale’s board of directors. Replacing him is a new interim Scale CEO Jason Droege, who was previously the company’s chief strategy officer and had past executive roles at Uber Eats and Axon.

Zuckerberg’s increasing focus on the abstract idea of “superintelligence” — which rival companies call artificial general intelligence, or AGI — is the latest pivot for a tech leader who in 2021 went all-in on the idea of the metaverse, changing the company’s name and investing billions into advancing virtual reality and related technology.

It won’t be the first time since ChatGPT’s 2022 debut sparked an AI arms race that a big tech company has gobbled up talent and products at innovative AI startups without formally acquiring them. Microsoft hired key staff from startup Inflection AI, including co-founder and CEO Mustafa Suleyman, who now runs Microsoft’s AI division.

Google pulled in the leaders of AI chatbot company Character.AI, while Amazon made a deal with San Francisco-based Adept that sent its CEO and key employees to the e-commerce giant. Amazon also got a license to Adept’s AI systems and datasets.

Wang was a 19-year-old student at the Massachusetts Institute of Technology when he and co-founder Lucy Guo started Scale in 2016.

They won influential backing that summer from the startup incubator Y Combinator, which was led at the time by Sam Altman, now the CEO of OpenAI. Wang dropped out of MIT, following a trajectory similar to that of Zuckerberg, who quit Harvard University to start Facebook more than a decade earlier.

Scale’s pitch was to supply the human labor needed to improve AI systems, hiring workers to draw boxes around a pedestrian or a dog in a street photo so that self-driving cars could better predict what’s in front of them. General Motors and Toyota have been among Scale’s customers.

What Scale offered to AI developers was a more tailored version of Amazon’s Mechanical Turk, which had long been a go-to service for matching freelance workers with temporary online jobs.

More recently, the growing commercialization of AI large language models — the technology behind OpenAI’s ChatGPT, Google’s Gemini and Meta’s Llama — brought a new market for Scale’s annotation teams. The company claims to service “every leading large language model,” including from Anthropic, OpenAI, Meta and Microsoft, by helping to fine tune their training data and test their performance. It’s not clear what the Meta deal will mean for Scale’s other customers.

Wang has also sought to build close relationships with the U.S. government, winning military contracts to supply AI tools to the Pentagon and attending President Donald Trump’s inauguration. The head of Trump’s science and technology office, Michael Kratsios, was an executive at Scale for the four years between Trump’s first and second terms. Meta has also begun providing AI services to the federal government.

Meta has taken a different approach to AI than many of its rivals, releasing its flagship Llama system for free as an open-source product that enables people to use and modify some of its key components. Meta says more than a billion people use its AI products each month, but it’s also widely seen as lagging behind competitors such as OpenAI and Google in encouraging consumer use of large language models, also known as LLMs.

It hasn’t yet released its purportedly most advanced model, Llama 4 Behemoth, despite previewing it in April as “one of the smartest LLMs in the world and our most powerful yet.”

Meta’s chief AI scientist Yann LeCun, who in 2019 was a winner of computer science’s top prize for his pioneering AI work, has expressed skepticism about the tech industry’s current focus on large language models.

“How do we build AI systems that understand the physical world, that have persistent memory, that can reason and can plan?” LeCun asked at a French tech conference last year.

These are all characteristics of intelligent behavior that large language models “basically cannot do, or they can only do them in a very superficial, approximate way,” LeCun said.

Instead, he emphasized Meta’s interest in “tracing a path towards human-level AI systems, or perhaps even superhuman.” When he returned to France’s annual VivaTech conference again on Wednesday, LeCun dodged a question about the pending Scale deal but said his AI research team’s plan has “always been to reach human intelligence and go beyond it.”

“It’s just that now we have a clearer vision for how to accomplish this,” he said.

LeCun co-founded Meta’s AI research division more than a decade ago with Rob Fergus, a fellow professor at New York University. Fergus later left for Google but returned to Meta last month after a 5-year absence to run the research lab, replacing longtime director Joelle Pineau.

Fergus wrote on LinkedIn last month that Meta’s commitment to long-term AI research “remains unwavering” and described the work as “building human-level experiences that transform the way we interact with technology.”

This story was originally featured on Fortune.com

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• Boeing’s Air Force One project has fallen years behind schedule and billions of dollars over budget amid continued labor and design hiccups. The Government Accountability Office said in a report this week “ongoing design issues, modification rework, and workforce challenges” are still plaguing the manufacturer. The Trump administration has resorted to procuring a $400 million jet from Qatar to serve as the interim Air Force One.

Boeing is continuing to battle production issues plaguing the jets that will serve as Air Force One, according to the Government Accountability Office (GAO).

The Pentagon told the congressional auditors that “ongoing design issues, modification rework, and workforce challenges slowed the progress toward modifying two Boeing 747-8 aircraft into presidential aircraft,” a report released Wednesday said.

The United States, under President Donald Trump, signed a $3.9 billion contract with Boeing in 2018 to have two planes designed, modified, and tested to serve as Air Force One by 2024, but persistent delays have pushed the project past its delivery date.

In order for the aircraft to meet Air Force One specifications, Boeing needs to heavily modify the jets to meet travel and top-level security needs, which has slowed down the production process considerably. Trump has dropped a requirement for the VC-25B planes to have air-to-air flying capabilities, which would allow them to receive fuel from a tanker aircraft while in flight.

Progress on the aircraft has stalled as a result of issues around decompression and the environmental control system design, and Boeing’s incomplete certification plans and aircraft design have also pushed back the timetable for testing, the GAO said. The aircraft manufacturer has also been unable to keep a steady workforce for the project.

“Boeing still faces challenges hiring and retaining qualified mechanics due to ongoing market conditions, according to VC-25B officials,” the report said. “Program officials said that approval rates for mechanics to acquire necessary clearances remain a workforce limitation.”

Last fall, Boeing announced plans to lay off 10% of its workforce, despite industry-wide talent shortages.

As Boeing tries to push through its scheduling woes, Trump has instead procured a $400 million Boeing 474 from Qatar after threatening in February to find alternatives to the VC-25B project. The gifted Qatari jet has not only raised ethical and security concerns, but it will likely cost taxpayers $1 billion in servicing and updating the jet to Air Force One standards.

The 10-digit chunk of change is on top of the projected development and procurement cost of the two Boeing aircraft, according to GAO, which is nearly $6.2 billion—at least $2 billion more expensive than the cost originally outlined in the contract.

Boeing and the Pentagon did not respond to Fortune’s requests for comment.

Years of delays

Though Trump commissioned Boeing for the new jets during his first term, there’s a good chance the president will likely not fly on the new Air Force One during his administration. In February 2024, Boeing revised its delivery schedule from May 2027 to December 2029, but a Boeing senior official told Reuters in February the program could stretch “years beyond” 2029. 

The issues plaguing Boeing’s production now look similar to the delaying variables from years past. In a June 2022 GAO report, the auditors said Boeing’s aircraft mechanic workforce was limited because of a competitive labor market and that many of the skilled workers needed on the project were unable to get security-clearance approval.

“Employees must meet stringent security requirements to work on the VC-25B program because of its presidential mission,” the report said. “VC-25B officials said that Boeing continues to work with the program office to improve the prescreening process for applicants to ensure timely processing of security clearances.”

Earlier in Trump’s second term, Boeing sought help from Elon Musk, former leader of the Department of Government Efficiency (DOGE). Boeing CEO Kelly Ortberg said at a Barclays conference in February the advisory has helped remove some production bottlenecks. Musk visited Boeing’s San Antonio, Texas, facility in December 2024.

“The president’s clearly not happy with the delivery timing. I think he’s made that well known,” Ortberg said. “And Elon Musk is actually helping us a lot.”

This story was originally featured on Fortune.com

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Foot traffic at Target declined for the fourth consecutive month since it rolled back its diversity, equity, and inclusion (DEI) efforts in January, and a reputation analytics company reports that the retailer’s reputation has suffered, too.

For the month of May, foot traffic fell 1.6% YoY, which while nothing to pop the bubbly over was less grim than previous declines in February (-9%), March (-6.5%), and April (-3.3%), according to Placer.ai. While correlation—we’ll say it again—is not causation, the traffic slump began after Target announced it was rolling back its DEI efforts on January 24, the day after President Trump said he was acting to “abolish all discriminatory diversity, equity, and inclusion nonsense…throughout the government and the private sector.”

Costco, which rebuffed calls to dismantle its DEI program, saw its foot traffic increase 5.1% YoY in May, following increases for the previous three months when traffic fell at Target, up 2.2% in February, 7.5% in March, and 3.4% in April, per Placer.ai.

Foot traffic has been down for 16 of the last 18 weeks at Target, inching into positive territory only for the weeks that began April 14, when it was up 0.4%, and April 21, up 0.1%. For the same 18 weeks, traffic was down at Costco for only one of them, falling 2.5% on the week that began April 14.

“This is concerning”: Reputation analytics firm Caliber, meanwhile, has found that Target’s reputational score fell over the same period on multiple metrics, according to data it provided exclusively to Retail Brew.

To the question, “Target is ethical in the way it conducts its business,” which Caliber calls its Governance Score, the retailer’s score fell 15.4%, from 65 (out of a possible 100) in January to 55 in May. Over the same period, the average for the top 30 Fortune 500 companies fell only 1.6%, from 64 to 63, meaning Target began slightly above the average and fell well below it. The scores are based on how strongly respondents agree or disagree with statements on a 7-point scale and, in the statistical parlance of Caliber, are “normalized to 0-100.”

When respondents weighed in on other statements, Target’s reputation score dropped from January to May, too:

• “Target behaves responsibly,” what Caliber calls its Integrity Score, fell 10.8%, from 65 to 58.
• “Target demonstrates leadership,” its Leadership Score, also fell 10.8%, from 65 to 58.

Caliber’s Recommendation Rate—based on responses to the statement that consumers “would recommend Target to others, if given the chance”—is calculated differently. It’s based on how many respondents selected 6 or 7, with 7 being “strongly agree,” and it slipped from 49% in January to 37% in May, a 24.5% decline.

Although those reputational scores are lower in April than they had been all year, Shahar Silbershatz, Caliber’s founder and CEO, noted that they have tended to rise and fall from month to month rather than steadily declining. But with Target, “the rebounds are not as fully bounced back; they just go part way,” Silbershatz told Retail Brew.

“This is concerning,” he continued. “There is a negative trend here. This is going to continue to snowball, and it’s a problem.”

In response to our request for comment about both the foot-traffic and reputational declines, Brian Harper-Tibaldo, director of corporate media relations at Target, pointed us to a passage from the company’s Q1 earnings call on May 21 when CEO Brian Cornell acknowledged the retailer “faced an exceptionally challenging environment that affected our performance with declines in both traffic and sales.” The company reported a 2.4% decline in both online and in-store transactions, which it refers to as “traffic,” while the Placer.ai data calculates only the foot traffic in stores irrespective of whether purchases are completed.

On the call, Cornell attributed the declines to “headwinds,” namely “five consecutive months of declining consumer confidence, uncertainty regarding the impact of potential tariffs, and the reaction to the updates we shared on belonging in January.” (“Belonging” is a reference to DEI, with the company having replaced its now-archived DEI page with one called “Belonging at the Bullseye.”)

Harper-Tibaldo declined to comment on the reputational data.

Dems the breaks: Lending credence to the notion that publicity over its DEI shift led to its reputational slippage is the contrast between Democrats and Republicans.

What Caliber calls its Trust & Like score fell 5 points, to 70, among Democrats, and rose 5 points, to 67, among Republicans, for the period of January 27 to June 3 compared to the previous 127 days. (January 27 was the first Monday following Target’s announcement that it was rolling back DEI.)

Over the same period, Target’s Integrity score among Democrats fell 8 points, to 63, while remaining unchanged at 60 for Republicans; its Recommendation rate among Democrats fell 10%, to 45%, while remaining unchanged at 37% for Republicans.

Silbershatz noted political-affiliation parallels with Tesla, which Caliber also tracks, over Elon Musk’s (now fraying) ties to President Trump.

“It was mostly Democrats that bought Teslas, not Republicans,” Silbershatz said. “Now Democrats are a lot more negative about Tesla [and] Republicans are a lot more positive, but Republicans are not buying Teslas because they’re not interested in electric cars.”

But Silbershatz noted that the shift for Target is not as dramatic—at least not yet—as what has happened at Tesla, where Democrats once rated Tesla’s reputation more highly than Republicans, but now it is the other way around.

“We’re not at that point yet with Target, but that’s where it seems to be going,” Silbershatz said. “You could say it’s net neutral, but it’s not neutral because Republicans are less likely to buy a Tesla. Same thing with Target: It won’t be net neutral if Republicans are less likely to shop at Target.”

This report was originally published by Retail Brew.

This story was originally featured on Fortune.com

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The Republican tax bill approved by the U.S. House of Representatives would cost the poorest Americans roughly $1,600 a year while increasing the income of the wealthiest households by an average of $12,000 annually, according to a new analysis released Thursday by the Congressional Budget Office.

Middle-income households would see a boost of roughly $500 to $1,000 per year under Republican President Donald Trump’s tax bill, the CBO found.

The cuts to the lowest-income households come from proposed cuts to social safety net programs including Medicaid and a food assistance program for lower-income people, known as Supplemental Nutrition and Assistance Program.

The bill also proposes expanding work requirements to receive food aid and new “community engagement requirements” of at least 80 hours per month of work, education or service for able-bodied adults without dependents to receive Medicaid. Some proposed tax breaks would be temporary, including a tax break on tips and overtime, car loan interest and a $4,000 increase in the standard deduction for seniors.

Treasury Secretary Scott Bessent and other Republicans have sought to discredit the CBO’s analyses of the bill and say that the U.S. could head toward economic catastrophe if the measure is not passed. GOP Idaho Sen. Mike Crapo said during a Senate Finance Committee hearing on Thursday that the tax bill “recognizes the solution to our debt crisis is not to tax Americans more, it is to spend less.”

“The legislation recognizes that extending proven tax reform is critical for working families,” he said.

Administration officials have said the the cost of the tax bill would be offset by tariff income. Recently, the CBO separately estimated that Trump’s sweeping tariff plan would cut deficits by $2.8 trillion over a 10-year period while shrinking the economy, raising the inflation rate and reducing the purchasing power of households overall.

The CBO was established more than 50 years ago to provide objective, impartial analysis to support the budget process. It is required to produce a cost estimate for nearly every bill approved by a House or Senate committee and will weigh in earlier when asked to do so by lawmakers.

The office’s analysis released Thursday considers Trump’s “One Big Beautiful Bill Act” in isolation, excluding the potential impact of the tariffs that Trump has imposed and paused on nations around the world.

Democratic Rep. Brendan Boyle of Pennsylvania, who requested the CBO analysis released Thursday, said in a statement that “this would be one of the largest transfers of wealth from working families to the ultra-rich in American history. It’s shameful.”

This story was originally featured on Fortune.com

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The 9th U.S. Circuit Court of Appeals on Thursday temporarily blocked a federal judge’s order that directed President Donald Trump to return control of National Guard troops to California after he deployed them there following protests in Los Angeles over immigration raids.

The court said it would hold a hearing on the matter on Tuesday. The ruling came only hours after a federal judge’s order was to take effect at noon Friday.

Earlier Thursday, U.S. District Judge Charles Breyer ruled the Guard deployment was illegal and both violated the Tenth Amendment and exceeded Trump’s statutory authority. The order applied only to the National Guard troops and not Marines who were also deployed to the LA protests. The judge said he would not rule on the Marines because they were not out on the streets yet.

California Gov. Gavin Newsom, who had asked the judge for an emergency stop to troops helping carry out immigration raids, had praised the earlier ruling.

“Today was really about a test of democracy, and today we passed the test,” Newsom said in a news conference before the appeals court decision.

The White House had called Breyer’s order “unprecedented” and said it “puts our brave federal officials in danger.”

“The district court has no authority to usurp the President’s authority as Commander in Chief,” White House spokesperson Anna Kelly said in a statement. “The President exercised his lawful authority to mobilize the National Guard to protect federal buildings and personnel in Gavin Newsom’s lawless Los Angeles. The Trump Administration will immediately appeal this abuse of power and looks forward to ultimate victory on the issue.”

Marines in civil disturbance training at nearby base

About 700 Marines have been undergoing civil disturbance training at Naval Weapons Station Seal Beach in Orange County, California. Nicholas Green, an attorney for the state, told the court: “I have been told by the office of the governor that within the next 24 hours, 140 Marines will replace and relieve National Guard members in Los Angeles.”

Typically the authority to call up the National Guard lies with governors, but there are limited circumstances under which the president can deploy those troops. Trump federalized members of the California National Guard under an authority known as Title 10.

Title 10 allows the president to call the National Guard into federal service under certain limited circumstances, such as when the country “is invaded,” when “there is a rebellion or danger of a rebellion against the authority of the Government,” or when the president is unable “to execute the laws of the United States.”

Breyer said in his ruling that what is happening in Los Angeles does not meet the definition of a rebellion.

“The protests in Los Angeles fall far short of ‘rebellion,’” he wrote.

California sued the federal government

Newsom sued to block the Guard’s deployment against his wishes. California later filed an emergency motion asking the judge to block the Guard from assisting with immigration raids.

The governor argued that the troops were originally deployed to protect federal buildings and wanted the court to block the troops from helping protect immigration agents during the raids, saying that involving the Guard would only escalate tensions and promote civil unrest.

Maj. Gen. Scott Sherman, commander of Task Force 51, which is overseeing the Guard troops and Marines sent to Los Angeles, said that as of Wednesday about 500 of the Guard troops had been trained to accompany agents on immigration operations. Photos of Guard soldiers providing security for the agents have already been circulated by immigration officials.

None of the Marines have been trained to go on immigration raids, and it is not yet clear if they eventually will, Sherman said.

Trump improperly called up the Guard, judge says

In his broad ruling, the judge determined Trump had not properly called the Guard up in the first place.

The lawsuit argued that Title 10 also requires that the president go through governors when issuing orders to the National Guard.

Brett Shumate, an attorney for the federal government, said Trump complied with the statute by informing the general in charge of the troops of his decision and would have the authority to call in the Guard even if he had not.

In a brief filed ahead of the Thursday hearing, the Justice Department said Trump’s orders were not subject to judicial review.

“Courts did not interfere when President Eisenhower deployed the military to protect school desegregation. Courts did not interfere when President Nixon deployed the military to deliver the mail in the midst of a postal strike. And courts should not interfere here either,” the department said.

“Our position is this is not subject to judicial review,” Shumate told the judge.

Breyer, who at one point waved a copy of the Constitution, said he disagreed.

“We’re talking about the president exercising his authority, and the president is of course limited in that authority. That’s the difference between a constitutional government and King George,” he said.

Protests intensified

The protests over immigration raids in Los Angeles intensified after Trump called up the Guard and have since spread to other cities, including Boston, Chicago and Seattle.

Trump has described Los Angeles in dire terms that Mayor Karen Bass and Newsom say are nowhere close to the truth.

This story was originally featured on Fortune.com

© Damian Dovarganes—AP

Israel attacked Iran’s capital early Friday in strikes that targeted the country’s nuclear program and killed at least two top military officers, raising the potential for an all-out war between the two bitter Middle East adversaries. It appeared to be the most significant attack Iran has faced since its 1980s war with Iraq.

The strikes came amid simmering tensions over Iran’s rapidly advancing nuclear program and appeared certain to trigger a reprisal, with Supreme Leader Ayatollah Ali Khamenei warning that “severe punishment” would be directed at Israel. Hours later, Israel’s military said it had begun intercepting Iranian drones launched in retaliation.

An Israeli official said the interceptions were taking place outside of Israeli territory, but did not elaborate. The official spoke on condition of anonymity pending a formal announcement.

Iraq said more than 100 Iranian drones had crossed its airspace, and a short time later neighboring Jordan said its air force and defense systems had intercepted several missiles and drones that had entered its airspace for fear they would fall in its territory.

Israel’s attack on Iran hit several sites, including the country’s main nuclear enrichment facility, where black smoke could be seen rising into the air. Later in the morning, it said it had also destroyed dozens of radar installations and surface-to-air missile launchers in western Iran.

The leader of Iran’s paramilitary Revolutionary Guard, Gen. Hossein Salami, was confirmed dead, Iranian state television reported, a development that is a significant blow to Tehran’s governing theocracy and an immediate escalation of its long-simmering conflict with Israel.

The chief of staff of Iranian armed forces, Gen. Mohammad Bagheri, was also confirmed dead by Iranian state television. Other top military officials and scientists were believed to have been killed.

In Washington, the Trump administration, which had cautioned Israel against an attack during continued negotiations over Iran’s nuclear enrichment program, said that it had not been involved and warned against any retaliation targeting U.S. interests or personnel.

Still, it seemed likely the U.S. suspected an attack could be in the offing, with Washington on Wednesday pulling some American diplomats from Iraq’s capital and offering voluntary evacuations for the families of U.S. troops in the wider Middle East.

Israel calls attacks preemptive strikes on Iran’s nuclear program

Israeli leaders cast the preemptive assault as a fight for the nation’s survival that was necessary to head off an imminent threat that Iran would build nuclear bombs, though it remains unclear how close the country is to achieving that or whether Iran had actually been planning a strike soon.

“It could be a year. It could be within a few months,” Prime Minister Benjamin Netanyahu said as he vowed to pursue the attack for as long as necessary to “remove this threat.”

“This is a clear and present danger to Israel’s very survival,” he said.

Israel is believed to have carried out numerous highly secretive attacks on Iranian soil over the years, though it has rarely acknowledged them. Most have been aimed at Iran’s nuclear program, though Iran has also accused Israel of targeting its natural gas pipelines and of assassinating Hamas political leader Ismail Haniyeh in Tehran.

Over the past year, Israel has also been targeting Iran’s air defenses, hitting a radar system for a Russian-made air defense battery in April 2024 and surface-to-air missile sites and missile manufacturing facilities in October.

Some 200 Israeli aircraft took part in Friday’s operation, hitting about 100 targets, Israeli army chief spokesman Brig. Gen. Effie Defrin said, adding that the attacks were ongoing.

In the aftermath, Defrin said Iran had launched more than 100 drones toward Israel and that “all the defense systems are acting to intercept the threats.”

Israel, Iraq, Iran and Jordan shut down their airspace to all flights as a precaution.

Iran confirms top officials and scientists killed

Khamenei issued a statement carried by the state-run IRNA news agency. It confirmed that top military officials and scientists had been killed in the attack.

Israel “opened its wicked and blood-stained hand to a crime in our beloved country, revealing its malicious nature more than ever by striking residential centers,” Khamenei said.

For Netanyahu, the operation distracts attention from Israel’s ongoing and increasingly devastating war in Gaza, which is now over 20 months old.

There is a broad consensus in the Israeli public that Iran is a major threat, and Israel’s opposition leader, Yair Lapid, a staunch critic of Netanyahu, offered his “full support” for the mission against Iran. But if Iranian reprisals cause heavy Israeli casualties or major disruptions to daily life, Netanyahu could see public opinion quickly shift.

Netanyahu expressed hope the attacks would trigger the downfall of Iran’s theocracy, saying his message to the Iranian people was that the fight was not with them, but with the “brutal dictatorship that has oppressed you for 46 years.”

“I believe that the day of your liberation is near,” the Israeli leader said.

Multiple sites in the Iranian capital were hit in the attack, which Netanyahu said targeted both nuclear and military sites. Also targeted were officials leading Iran’s nuclear program and its ballistic missile arsenal. The International Atomic Energy Agency confirmed that an Israeli strike hit Iran’s uranium enrichment facility at Natanz and said it was closely monitoring radiation levels.

The strike on Iran pushed the Israeli military to its limits, requiring the use of aging air-to-air refuelers to get its fighter jets close enough to attack. It wasn’t immediately clear if Israeli jets entered Iranian airspace or just fired so-called “standoff missiles” over another country. People in Iraq heard fighter jets overhead at the time of the attack. Israel previously attacked Iran from over the border in Iraq.

Tension had been growing for weeks ahead of attacks

The potential for an attack had been apparent for weeks as angst built over Iran’s nuclear program.

President Donald Trump on Thursday said that he did not believe an attack was imminent but also acknowledged that it “could very well happen.” Once the attacks were underway, the U.S. Embassy in Jerusalem issued an alert telling American government workers and their families to shelter in place until further notice.

U.S. Secretary of State Marco Rubio said Israel took “unilateral action against Iran” and that Israel advised the U.S. that it believed the strikes were necessary for its self-defense.

“We are not involved in strikes against Iran, and our top priority is protecting American forces in the region,” Rubio said in a statement released by the White House.

Trump is scheduled to attend a meeting of his National Security Council on Friday in the White House Situation Room, where he is expected to discuss the conflict with top advisers. It is not clear if he plans to make public remarks on the strikes.

Israel has long been determined to prevent Iran from developing nuclear weapons, a concern laid bare on Thursday when the Board of Governors at the International Atomic Energy Agency for the first time in 20 years censured Iran over its refusal to work with its inspectors. Iran immediately announced it would establish a third enrichment site in the country and swap out some centrifuges for more-advanced ones.

Even so, there are multiple assessments on how many nuclear weapons it could conceivably build, should it choose to do so. Iran would need months to assemble, test and field any weapon, which it so far has said it has no desire to do. U.S. intelligence agencies also assess Iran does not have a weapons program at this time.

In a sign of the far-reaching implications of the emerging conflict, Israel’s main airport was closed and benchmark Brent crude spiked on news of the attack, rising nearly 8%. Both Iran and Israel closed their airspace.

Israeli Defense Minister Israel Katz warned that in the aftermath of the strikes, “missile and drone attacks against Israel and its civilian population are expected immediately.”

“It is essential to listen to instructions from the home front command and authorities to stay in protected areas,” he said in a statement.

As the explosions in Tehran started, Trump was on the lawn of the White House mingling with members of Congress. It was unclear if he had been informed, but the president continued shaking hands and posing for pictures for several minutes.

Trump earlier said he urged Netanyahu to hold off on any action while the administration negotiated with Iran over nuclear enrichment.

“As long as I think there is a (chance for an) agreement, I don’t want them going in because I think it would blow it,” Trump told reporters.

This story was originally featured on Fortune.com

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May has been quite a month for Christian Klein, the baby-faced boss of Europe’s most valuable company, SAP. 

He has just finished off his opening keynote at SAP’s Sapphire event in Madrid, a summit attended by more than 6,000 people, when he finds time to squeeze in a putt-off on the main stage with Team Europe’s 2014 Ryder Cup captain, Paul McGinley. A hole in one (on his second attempt) seems a fitting celebration. 

The false start nature of his foray on the putting green is reflective of his time at the helm of SAP, with his latest landmark the culmination of a tumultuous introduction, several false starts, and an overhaul of the company’s organizational structure. 

Boasting a market value of $350 billion as of the end of May, SAP outpaced a struggling Novo Nordisk and a stunted luxury retail sector in March to confirm the unusual sighting of a German tech group atop Europe’s public markets.

The feat tops off a remarkable rise for the enterprise resource planning group, which is toasting record revenues and profits after a bet on cloud computing coincided with a global AI pivot that has seen demand for the company’s business processes suite skyrocket.

Fortune spoke with members of SAP’s C-suite and leadership team to understand how Klain approached the mammoth task of turning a disparate SAP into Europe’s most valuable company.

SAP’s awkward phase

Klein, just 45 years old, knows SAP better than most of the 120,000 people working at the company today. He first joined as a 15-year-old summer intern, ferrying clunky monitors around SAP’s Walldorf headquarters with one eye on a professional football career.

”I can still remember, I tested them all, and one out of 10 didn’t work,” Klein told Fortune in Madrid.

“In our area, SAP is a logical choice,” Klein says of the fateful application to the company he would run decades later. Indeed, former classmates of his continue to work at the company, though he’s not as close to them as he was then.

SAP offers software packages that help businesses deal with all sorts of admin, like HR, supply chain management, and procurement, also known as enterprise resource planning (ERP). Klein throws his head back with laughter as this reporter suggests it’s not the most exciting subject matter for the layperson to try and care about.

His time at the helm of the company, though, has betrayed the dull, bureaucratic principles on which SAP has made its billions.

Following the departure of its previous boss, ServiceNow’s American CEO Bill McDermott, the software as a service (SaaS) provider faced criticism that it was a bloated amalgam of various acquisitions with no obvious plans to align them. 

McDermott and SAP got it in the neck on more than one occasion from executives at one of its main competitors, Oracle. The late former Oracle co-CEO Mark Hurd was critical of the company’s acquisition strategy in 2019 after SAP’s $8 billion move for experience management platform Qualtrics.

“We’re not buying somebody to just buy them. We’re buying companies that fit into our portfolio,” Hurd said at the time.

It was under this cloud of uncertainty that Klein took on the role of co-CEO alongside Jennifer Morgan in 2019. In April 2020, Klein took on the mantle of CEO alone, a month into global lockdowns, after Morgan abruptly stepped down. 

Sebastian Steinhaeuser, SAP’s chief operating officer, first worked with Klein in 2020 as a consultant at Boston Consulting Group, ironing out a Presidency-style plan for Klein’s first 100 days in charge. Something about that time with Klein convinced Steinhaeuser to jump on board, even if it raised eyebrows among his confidants.

“I think the general perception when I joined SAP, many friends and colleagues looked at me like, ‘What are you doing? Like, are you sure?’” said Steinhaeuser.

“I think there was a time where instead of executing, [SAP] just defined a new strategy every two years. Every year, customers would sit here at Sapphire, we talked about the year before, if we had delivered it or not delivered it, and just pulled a new rabbit out of the hat.”

Within a few months of taking sole charge of the company, Klein had to abandon a medium-term profitability forecast as the worst economic effects of the Coronavirus kicked in.

“I think the stock got a hit of 20 or 25%, and everybody thought ‘It’s crazy. Why would you do that?’” recalls Jan Gilg, SAP’s chief revenue officer, of reactions to the guidance call. “But then, in retrospect, you see that it was the only option he had.”

Shades of Satya

Some of Klein’s other big calls have been met with frustration from within his own ranks. SAP announced plans for a 10,000-strong headcount reduction in January last year. The company faced €3.1 billion in “restructuring expenses” as a result of the deal, and retrained thousands of workers to adjust to its AI-first approach. An internal company survey released the following September, reported by Bloomberg, revealed more than half of SAP’s employees were ready to join a competitor. 

Klein’s proponents would argue his experience demonstrates what a CEO can achieve with the proper mandate for revolution. In that regard, it’s not hyperbolic to compare Klein to Satya Nadella, the Microsoft CEO who increased the value of the company 10-fold in his first decade in charge by pivoting the firm first from PCs to cloud computing, then to the AI era. Just ask Muhammad Alam, a man who has worked with both men, about the comparison. 

Alam heads up SAP’s product and engineering board and is a member of the company’s executive board. A 17-year Microsoft veteran, Alam left a cushty role as corporate vice president at the company’s Dynamic 365 ERP division to join a then-uncertain SAP project. One of the reasons Alam took the leap of faith was Klein.

“I felt three years ago when I joined, and having seen Satya sort of transform Microsoft beginning in 2014, I felt the same level of energy, vision, and commitment from Christian and the leadership team here,” Alam said of the parallels between Klein and Nadella.

“I felt like he had both the ability to make the hard decisions and the energy and the commitment to see them through, because some of them aren’t going to be popular with employees and others, if you will, but they’re needed for the transformation.”

Unlike Nadella’s journey of being parachuted into Microsoft, it must have been a challenge for Klein to diagnose the strategy shift required at a company he had known intimately since his teens.

Examples of long-running CEOs at Fortune 500 companies are rare. Burnout, a lack of experience, or boardroom preference for an outsider mean the one-time graduate rarely progresses to the boardroom.

BMW’s Oliver Zipse and General Motors’ Mary Barra are two rare examples of CEOs who have worked at the same company their whole careers. When that happens, Klein, unsurprisingly, sees it as an advantage.

“In the early days of becoming a CEO, it was of extreme value to understand who my stakeholders are. Because the transformation is not only about, ‘oh, we are now developing all software in the Cloud,’ it’s a transformation for everyone. Everything is changing. And that’s why I would say in this situation, it was definitely a big plus,” Klein says on the advantages of being a lifer at SAP. 

“I had to make sure that I communicated extremely often. All hands, investor meetings, customer meetings, because you have to explain more than once why this change is needed.”

The rewards have been lucrative. In February, Klein secured a record $19.8 million payday for his efforts turning around SAP in 2024, a 165% increase on the year before. SAP stock surged to make it Europe’s most valuable company weeks later.

After an aggressive five-year overhaul, the outside observer would be pretty confident in declaring Klein had afforded himself the space to relax. Instead, though, Klein appears emboldened to go further, and look to the U.S.’s dominant tech sector.

“I would say I’m a bit more demanding than at the beginning, where there was sheer uncertainty. And I just had to make sure, as a leader, that everyone believes that the strategy is the right one. Now everyone believes in the strategy. Now it’s about, how can we raise the bar and compete with the biggest tech companies in the world?”

This story was originally featured on Fortune.com

© Courtesy of SAP

Sunrise Robotics, a startup building modular industrial robotics and AI models that makes them simple to deploy in different environments, has emerged from stealth with $8.5 million in seed funding.

The investment round is being led by Plural, a London-based early stage venture capital firm formed by a group of prominent startup founders including Wise cofounder Taavet Hinrikus and SongKick cofounder Ian Hogarth. Venture capital firms Tapestry, Seedcamp, Tiny.vc and Prototype Capital also participated in the funding.

Sunrise, which is headquartered in Ljubljana, Slovenia, declined to comment on its valuation following the funding round.

The startup is trying to address an acute and worsening labor shortage in many European manufacturing firms, Tomaz Stolfa, its cofounder and CEO, said. These businesses currently represent 15% of Europe’s GDP and employ 32 million people. But close to a third of this existing European manufacturing workforce is set to retire in the coming decade and industrial companies are already saying they cannot find enough young workers to replace those who are leaving. Sunrise sees industrial robots being able to take over some of the manual cutting, welding, fastening, and bolting human workers currently perform on the production lines of these businesses.

Photo courtesy of Sunrise Robotics

The company can have its two-armed robots up-and-running on a new industrial production line in less than 10 weeks, Stolfa said, while it can take as long as eight months to deploy traditional industrial robots that have to be programmed on site.

The startup accomplishes this by using cameras to gather detailed three-dimensional data on the workstation where the robot will be deployed and also recording the steps a human worker currently takes to accomplish a task at that workstation. Sunrise uses this camera data to build what is essentially a digital twin of that workstation and trains AI models in a simulator that can control its robots to complete the task. Then it transfers this control software to its real robots.

Sunrise Robotics is not the only robot startup trying to use modern AI techniques and modular designs to make the delivery of robots for factories and warehouses much faster and more affordable. Paris-based Inbolt is also targeting industrial robotic arms, while Physical Intelligence is building “foundation models” that will enable any robotic arm designed to pick up and maniuplate a wide variety of objects.

Stolfa says that Sunrise’s software uses a combination of small AI models and conventional computer coding to control its robots. He said that as its robots master new skills, the time it should take to deploy them to future environments that demand similar skills should shorten considerably.

He also says that Sunrise’s decision to build standardized “cells”—as it calls its robotic workstations—makes it easier to train the robots for new tasks. The robot workstations are Sunrise’s own design, but are composed of mostly off-the-shelf parts, which makes them cheaper to build and maintain. “What we’ve done is we’ve productized the hardware,” he said.

Stolfa said one reason traditional industrial robots were expensive and time-consuming to deploy is that they were often designed specifically for one particular assembly line. This meant that only the largest manufacturing companies could afford to use them.

Sunrise, Stolfa said, is not targeting these businesses, such as major automakers. Instead, he said the company is going after the 60% of European manufacturers that are “high mix, low volume,” meaning that they produce a lot of different parts, but a relatively small number of finished products. He said Sunrise’s sweet spot was probably companies producing less than 100,000 parts each year, but that it could also work for those producing up to about 400,000 parts.

So far the company said it has signed letters of intent with about 10 customers, including those in supercar development, high-performance batteries, and consumer electronics manufacturing. Andrew Buss, the managing director at Asteelflash, an electronics manufacturer based in Bedford, England, that is an early Sunrise customer, said in a statement that the startup has helped it “adopt cutting-edge innovation at remarkable speed. Just a few months after initial data collection, we had a fully-trained, operational-intelligent robot up and running within hours of delivery.”  

Two of Sunrise’s three cofounders are experienced entrepreneurs, and all three spent time working in tech in Silicon Valley. Stolfa co-founded a number of previous companies—including the voice-over-internet company vox.io and also the messaging app builder Layer. Cofounder Marko Thaler, the company’s chief technology officer, previously founded Airnamics, which built AI brains for robots and drones. Meanwhile, Joe Perrott, Sunrise’s third cofounder and its chief commercial officer, was head of global program management at PCH International, which helps businesses build supply chains, including finding contract manufacturing partners. Its clients have included Apple, Amazon, Google, and Square.

The company currently employs 25 people in Ljubljana and working in a dozen locations across Europe. Stolfa said it plans to use its new funding to expand its team and ramp up production of its robot workstations.

This story was originally featured on Fortune.com

© Courtesy of Sunrise Robotics

In a move to improve customer experience and make its stores easier to shop, Sainsbury’s is investing in multiple trials of exciting new formats across the U.K. They provide an insight into the grocer’s philosophy for the future of its stores. And nowhere else is this more evident than at its Kiln Lane store in Epsom, Surrey.

Kiln Lane is a 100,000 square foot so-called “Destination Plus” store, stocking the full range of products and brands, including Tu, Habitat, and Argos, in addition to general merchandise and groceries.

But what makes it stand out is not tech-driven; it is the layout and ease of navigation for the shopper.

The first thing on entering the store is a feeling of calm, and this is no accident; a lot of work by many teams across the business has gone into creating this environment.

Courtesy of Andrew Busby

Clear white signage using light boxes allows for easy navigation. Speaking to Fortune, Sainsbury’s Director of Future Stores and Customer Experience, Darren Sinclair, said, “The store has been designed based on the mission, the purpose of the store, the experience we want to create for customers”.

In the words of Sinclair, the signage is “really quick, really simple, really clear”. To achieve this, Sainsbury’s has stripped away a lot of it, especially pendant signs hung from the ceiling, as, using eye-tracking technology, they found that customers weren’t actually looking at them.

Another contribution to that feeling of calmness are the new shelving units, which look slicker and more modern but are easier to clean and don’t cost any more. Noticeably, this color scheme also links very well with the purple Nectar signage.

Good product availability was also in evidence, and again, this is no accident. According to Sinclair, a lot of effort has gone into ensuring the right space allocation for each product so that it can be traded throughout most of the day, with far less need for replenishing.

“The store has been designed based on the mission, the purpose of the store, the experience we want to create for customers”.

Darren Sinclair, Director of Future Stores and Customer Experience, Sainsbury’s

What underpins the Epsom store is the concept of what Sainsbury’s calls “mission-based” shopping. Sinclair said, “What we wanted to do is make it really easy when customers enter the store. If they want dairy or they want meat, fish, or poultry, they can easily see it”.

An example of this is the location of the wines, beers, and spirits. Rather than being tucked away at one end of the store as one might expect, it’s front and center. The reason, according to Sinclair, is that, for example, this makes it easy (and quicker) for someone on their evening meal mission shop. They can choose their core product(s), and then on the way to the checkout, easily pick up their drink.

The trials Sainsbury’s is undertaking also extend to technology. First introduced in 2016, SmartShop (a method for shoppers to scan their purchases as they shop via an app or handheld scanner) has become embedded in the Sainsbury’s shopping experience. However, in what Sinclair describes as a “technology trial” at their Richmond and Kempton stores, in conjunction with partners, Zebra Technologies, they have added a payment option.

Speaking to Fortune, Mark Thomson, Retail Industry Director at Zebra Technologies, said of the Zebra handheld devices, “It’s also a technology stack because it’s Sainsbury’s software on Zebra’s devices with location services provided by a third-party company using the magnetic field and then payment services provided by Worldline”.

According to Thomson, there’s more functionality which will enhance the customer experience waiting to be unlocked, “Where better place to get a promotion than at the moment of purchase when you’re, say, in the crisps aisle, and Walkers suddenly offer you a promotion”.

In another move to improve the customer experience, at their Witney store in Oxfordshire, Sainsbury’s is trialing electronic shelf-edge labels (ESLs) from VusionGroup, allowing the grocer to introduce dynamic pricing.

Designated a “Future Store” the trial at Witney is across the majority of categories. It is a move in common with most U.K. grocers, who are revisiting the technology as a way to drive efficiencies in the face of increased costs. However, at Witney, the grocer is also trialing computer vision technology, also from VusionGroup, in order to monitor the shelf life of perishable products in real time in order to improve availability and reduce wastage.

Better store experiences aren’t solely the preserve of deploying new technology; it is achieved through blending technology with what is right for the customer, and creating an inviting environment in which to shop. Sainsbury’s “mission-based” strategy is a back-to-basics, cutting-edge technology approach for the future.

This story was originally featured on Fortune.com

© Matt Cardy / Contributor via Getty

Democratic U.S. Sen. Alex Padilla on Thursday was forcefully removed from Homeland Security Secretary Kristi Noem’s news conference in Los Angeles and handcuffed by officers as he tried to speak up about immigration raids that have led to protests in California and around the country.

Video shows a Secret Service agent on Noem’s security detail grabbing the California senator by his jacket and shoving him from the room as he tried to speak up during the DHS secretary’s event. Padilla interrupted the news conference after Noem delivered a particularly pointed line, saying federal authorities were not going away but planned to stay and increase operations to “liberate” the city from its “socialist” leadership.

“I’m Sen. Alex Padilla. I have questions for the secretary,” he shouted in a halting voice.

Scuffling with officers outside the room, he can be heard bellowing, “Hands off!” He is later seen on his knees and then pushed to the ground and handcuffed in a hallway, with several officers atop him.

🚨 #BREAKING @SenAlexPadilla tries to interrupt a press conference by @DHSgov Sec @KristiNoem and he’s forcibly removed.

California’s senior U.S. Senator was handcuffed and detained.

Video from @AlexPadilla4CA’s staff 🚨 pic.twitter.com/PXfszkBXxo

— Elex Michaelson (@Elex_Michaelson) June 12, 2025

The shocking scene of a U.S. senator being aggressively removed from a Cabinet secretary’s news conference prompted immediate outrage from his Democratic colleagues. Images and video of the scuffle ricocheted through the halls of Congress, where stunned Democrats demanded an immediate investigation and characterized the episode as another in a line of mounting threats to democracy by President Donald Trump’s administration.

Senate Democratic leader Chuck Schumer said what he saw “sickened my stomach.”

“We need immediate answers to what the hell went on,” the New York senator said from the Senate floor. “It’s despicable, it’s disgusting, it’s so un-American.”

In a statement, DHS said that Padilla “chose disrespectful political theater” and that Secret Service “thought he was an attacker.” The statement claimed erroneously that Padilla did not identify himself — he did, as he was being pushed from the room.

“Padilla was told repeatedly to back away and did not comply with officers’ repeated commands,” the statement said, adding that “officers acted appropriately.”

The fracas in Los Angeles came just days after Democratic U.S. Rep. LaMonica McIver was indicted on federal charges alleging she assaulted and interfered with immigration officers outside a detention center in New Jersey while Newark’s mayor was being arrested after he tried to join a congressional oversight visit at the facility. Democrats have framed the charges as intimidation efforts by the Trump administration.

It also follows days of rising tension between Trump and Democratic California Gov. Gavin Newsom over the federal military intervention in California. In a speech earlier this week, the governor warned that “democracy is under assault before our eyes.”

Emerging afterward, Padilla said he was removed while demanding answers about the Trump administration’s “increasingly extreme immigration enforcement actions.” He said he and his colleagues had received little to no response to their questions in recent weeks, so he attended the briefing for more information.

“If this is how this administration responds to a senator with a question … I can only imagine what they are doing to farmworkers, to cooks, to day laborers throughout the Los Angeles community, and throughout California and throughout the country,” he said.

Noem told Fox LA afterward that she had a “great” conversation with Padilla after the scuffle, but called his approach “something that I don’t think was appropriate at all.”

The White House accused Padilla of grandstanding.

“Padilla didn’t want answers; he wanted attention,” White House spokeswoman Abigail Jackson said. “It’s telling that Democrats are more riled up about Padilla than they are about the violent riots and assaults on law enforcement in LA.”

Padilla, the son of immigrants from Mexico, has been a harsh Trump critic and his mass deportations agenda. In a social media post, he said of recent federal immigration raids in Los Angeles, “Trump isn’t targeting criminals in his mass deportation agenda, he is terrorizing communities, breaking apart families and putting American citizens in harm’s way.”

Padilla in 2021 became the state’s first Latino U.S. senator when he was selected by Newsom to fill Kamala Harris’ Senate seat after she was elected vice president. At the time, Padilla was the state’s chief elections officer.

Harris wrote in a social media post Thursday that Padilla “was representing the millions of Californians who are demanding answers to this administration’s actions in Southern California.” She called his forceful removal “a shameful and stunning abuse of power.”

Democratic senators quickly gathered in the chamber, denouncing the treatment of their colleague — a well-liked and respected senator — and urged Americans to understand what was happening.

Sen. Elizabeth Warren, D-Mass., said Trump is making this country “look more and more like a fascist state.”

“Will any Republican senator speak up for our democracy?” Warren pleaded.

Sen. Tina Smith, D-Minn., called on Noem to resign, saying that there was no justification for Padilla’s treatment and that the Trump administration needed to be held accountable.

House Speaker Mike Johnson, R-La., accused Padilla of “charging” Noem and indicated that the behavior “rises to the level of a censure.”

“My view is it was wildly inappropriate,” Johnson, a Trump ally, told reporters outside the House chamber as Democrats walking past shouted over him, “That’s a lie!”

“A sitting member of Congress should not act like that,” Johnson said, loudly speaking over reporters’ questions. “It’s beneath a member of Congress. It’s beneath the U.S. senator.”

Senate Republican leader John Thune said he has spoken to Padilla and is trying to reach Noem but hasn’t yet connected with her.

“We want to get the full scope of what happened and do what we would do in any incident like this involving a senator and try to gather all the relevant information,” the South Dakota senator said.

The No. 2 Republican, Sen. John Barrasso of Wyoming, said that he was unaware of what happened but that Padilla should have been at work in Washington.

The stark incident comes as Congress faces increasing episodes of encroachment on its authority. As a coequal branch of the U.S. government, the Trump administration is exerting its executive powers in untested ways.

As part of their work in Congress, lawmakers are responsible for providing oversight of the administration, its agencies and actions.

Several senators and representatives have been exercising their oversight roles by surveying the treatment of immigrants and others being detained as part of the Trump administration’s mass deportation operation.

From the steps of the U.S. Capitol, House Democratic leader Hakeem Jeffries said what happened to Padilla “was un-American” and those involved must be held accountable.

“This is not going to end until there is accountability and until the Trump administration changes its behavior,” he said.

This story was originally featured on Fortune.com

© AP Photo/Etienne Laurent

Polly Pocket may one day be your digital assistant.

Mattel Inc., the maker of Barbie dolls and Hot Wheels cars, has signed a deal with OpenAI to use its artificial intelligence tools to design and in some cases power toys and other products ​based on its brands.

The collaboration is at an early stage, and its first release won’t be announced until later this year, Brad Lightcap, OpenAI’s chief operating officer, and Josh Silverman, Mattel’s chief franchise officer, said in a joint interview. The technology could ultimately result in the creation of digital assistants based on Mattel characters, or be used to make toys and games like the Magic 8 Ball or Uno even more interactive. 

“We plan to announce something towards the tail end of this year, and it’s really across the spectrum of physical products and some experiences,” Silverman said, declining to comment further on the first product. “Leveraging this incredible technology is going to allow us to really reimagine the future of play.”

Mattel shares rose 1.8% to $19.59 Thursday morning in New York. The stock is up 10% this year. 

Mattel isn’t licensing its intellectual property to OpenAI as part of the deal, Silverman said, and remains in full control of the products being created. Introductory talks between the two companies began late last year, he said. 

Mattel Chief Executive Officer Ynon Kreiz has been looking to evolve the company from just a toy manufacturer into a producer of films, TV shows and mobile games based on its popular characters. OpenAI, meanwhile, has been courting companies with valuable intellectual property to aid them in developing new products based on iconic brands. 

“The idea exploration phase of creative design for companies like Mattel and many others, that’s a critical part of the workflow,” Lightcap said. “As we think about how AI builds tools that extend that capability, I think we’re very lucky to have partners like Mattel that we can work with to better understand that problem.”

On Tuesday, OpenAI released its newest model — o3-pro — which can analyze files, search online and complete other tasks that made it score especially well with reviewers on “comprehensiveness, instruction-following and accuracy,” the company said. 

OpenAI held meetings in Los Angeles with Hollywood studios, media executives and talent agencies last year to form partnerships in the entertainment industry and encourage filmmakers to integrate its new AI video generator into their work. In the meetings, led by Lightcap, The company demonstrated the capabilities of Sora, a service that at the time generated realistic-looking videos up to about a minute in length based on text prompts from users. OpenAI has not struck any deals with movie studios yet because it still has to establish a “level of trust” with Hollywood, Lightcap said in May at a Wall Street Journal conference in New York. 

This story was originally featured on Fortune.com

© Photo by Scott Eisen/Getty Images for Airbnb