Hello and welcome to Eye on AI. In this edition…the new Pope is all in on AI regulation…another Chinese startup challenges assumptions about how much it costs to train a good model…and OpenAI CEO Sam Altman says Meta is offering $100 million signing bonuses to poach AI talent.

Last week, OpenAI CEO Sam Altman wrote on his personal blog that: “We are past the event horizon; the takeoff has started. Humanity is close to building digital superintelligence, and at least so far it’s much less weird than it seems like it should be.” He went on to say that 2026 would be the year that we “will likely see the arrival of systems that can figure out novel insights. 2027 may see the arrival of robots that can do tasks in the real world.”

Altman’s blog created a buzz on social media, with many speculating about what new development had caused Altman to write those words and others accusing Altman of shameless hype. In AI circles, “takeoff” is a term of art. It refers to the moment AI begins to self-improve. (People debate about “slow take off” and “fast take off” scenarios. Altman titled his blog “The Gentle Singularity,” so it would seem Altman is positioning himself in the slow—or at least, slowish—takeoff camp.)

In the blog, Altman made it clear he was not yet talking about completely automated self-improvement. Rather, he was talking about AI researchers using AI to help them develop yet more capable AI. “We already hear from scientists that they are two or three times more productive than they were before AI,” he wrote. “We may be able to discover new computing substrates, better algorithms, and who knows what else. If we can do a decade’s worth of research in a year, or a month” then the rate of AI progress will accelerate from its already rapid clip.

Altman allowed that “​​of course this isn’t the same thing as an AI system completely autonomously updating its own code, but nevertheless this is a larval version of recursive self-improvement.”

But, as Altman is probably aware, there are a growing number of AI researchers who are in fact looking at ways to get AI to improve its own code.

The ‘Darwin Goedel Machine’

Just a few weeks ago, Jeff Clune, a well-known AI researcher who holds positions at both the University of British Columbia and Google DeepMind, and a team from Tokyo-based AI startup Sakana AI published research on what they called a “Darwin Goedel Machine.”

This is AI that evolves its own code to perform better on a benchmark test that measures how well AI models function as “coding agents” that can write and evaluate software programs. The first initial agent is tested on the benchmark. Then it is prompted to evaluate the logs of its own performance on that benchmark and propose one single modification to its own code that would likely improve its performance on that benchmark (this could be the ability to use a particular software tool, or it could be something more fundamental in how the model reasons about the code it is generating). The AI model is then told to rewrite its own Python code to implement that one change. Then the new, evolved agent is tested again on the benchmark and the process repeats.

After the first modification, each new version of the AI that can successfully try the benchmark is stored in an archive—even if its score is lower than the parent version. (Those that fail to produce valid code at all are discarded.) The AI is then told it can pick any version of itself from the archive and propose changes to that version. This is designed to prevent the model from going down what will ultimately prove to be an evolutionary dead-end, allowing it to step across different evolutionary pathways to find useful modifications.

After 80 generations, the Darwin Goedel machine was able to improve its performance from an initial 20% score on SWE-Bench, a common coding benchmark, to 50%. On Polyglot, another coding test, it boosted its score from an initial 14.2% to 30.7%. (The best human-coded agent for that particular test only scores 16%.) What’s more the strategies the model came up with to improve its own performance were general enough that they still worked when researchers switched the underlying foundation model being used to power the system as well as if the researchers asked the model to switch coding languages, for instance going from Python to C++.

Is self-improving AI safe?

If you think self-improving AI sounds a little scary—like it might be possible for this sort of AI to escape human control—you’re right. The computer scientists acknowledge this and emphasize that they tested the system in a “sandbox” where its access to the web was “strictly limited,” according to the Sakana blog describing the research.

The researchers also speculated that self-improvement could be a tool for enhancing AI safety. For instance, in a discovery that is becoming alarmingly common when using advanced AI models, the research team found that the Darwin Goedel Machine sometimes lied about having conducted certain unit tests on the code it was writing—and even forged logs supposedly showing the successful test results.

The researchers wanted to see if the Darwin Goedel Machine could propose ways to keep itself from engaging in this deceptive behavior. So it decided to give the model points for reducing instances of “tool use hallucination,” and asked it to try to maximize that score. This worked in many cases, the researchers reported, with instances of faked test logs declining. But in other cases, the model simply tried to cheat again—removing the markers the researchers used to detect hallucinations, even when the prompt the researchers used told the model explicitly not to do this. Yikes!

Because the researchers had full access to all code changes the AI was making and the AI had no ability to alter this record, the researchers were easily able to see that the Darwin Goedel Machine was attempting to engage in this kind of deception. “While in this case the issue was easily detected, more work is needed to prevent the model from attempting to cheat in this way in the first place,” the researchers wrote.

So, Altman may indeed be right—we are past the event horizon. But as these results show, whether the singularity will be a gentle one, as Altman suggests, remains to be very much to be seen.

With that, here’s more AI news. (And hat tip to Google DeepMind research scientist Ed Hughes for highlighting the Darwin Goedel paper in his fascinating talk at the always interesting Research and Applied AI Summit in London last week.)

Jeremy Kahn
[email protected]
@jeremyakahn

This story was originally featured on Fortune.com

© Justin Sullivan—Getty Images

• Luxury brands are retreating to exclusivity after years of trying to broaden their appeal, but they’re now struggling to reconcile that elusiveness with younger consumers’ desire to share and express identity online. With the luxury market shrinking—marked by a 3% dip in early 2025 and the loss of around 50 million customers—brands must urgently innovate to maintain relevance, exclusivity, and emotional connection in the social media era.

Luxury brands have retreated back to their safe space of exclusivity, having explored new avenues to win customers during COVID. The only problem is, to win and retain the next generation of shoppers they must marry their need to remain elusive with a consumer who wants to share everything online.

These companies have no time to waste. According to a spring update on the sector from Bain & Co, the industry is losing speed relatively quickly.

The study released Thursday shows the sector’s worth was €1.5 trillion ($1.7 trillion) in 2024, though for Q1 of 2025 estimates are shrinkage of 3% compared to last year.

Even last year, personal luxury goods was one of the categories which marked the most notable slowdown, knocking from €369 billion in 2023 down to €364 billion in 2024. That marked its first contraction in 15 years—with the notable exception of the pandemic.

And the gap between winners and losers in the luxury sector is also growing, added the author’s writers Claudia D’Arpizio and Federica Levato.

The gap between the top 75th percentile and the bottom 25th percentile performers increased by 1.5 times in Q1 2025 compared to a year earlier, with market leaders continuing to charge ahead while the bottom 20% to 30% of the sector continued to report a reduction in growth.

Part of the problem is consumers are wrangling with what Bain & Co describes as the “value equation”—basically, are they getting enough—be it experience, social and cultural kudos, or workmanship—out of the purchase for the elevated price they are paying?

For a “long period” luxury brands were trying to enlarge their customer base to be more inclusive, D’Arpizio tells Fortune. This was really reinforced in some categories with “entry items like streetwear, sneakers, and even beauty—all the categories that could have been more relevant for young people, but also with people with less discretionary spending.”

That strategy “overcorrected” she added, with brands overly relying on iconic design or experiences, reducing their pace of innovation and hence, leading consumers to question if their spend is really worth it.

“So last year we had a big loss of customers—around 50 million less customers buying luxury product—in particular in the younger generation, and a big drop on customer advocacy,” D’Arpizio continued. “What is happening now that the brands are trying to fix that, and trying to reignite this relationship with these customers without losing their exclusivity.”

Exclusivity in the online age

Shifting back to exclusivity is a more difficult ask when younger consumers are known as the social media generation for their propensity to post online.

Gone are the days of galas with no cameras, of designer handbag back rooms with no filming allowed: It’s all available on a For You Page within moments of ending.

“Luxury has always been about showing off,” D’Arpizio, who is Bain & Co’s lead for the global fashion, luxury goods vertical, continued. “The previous generation was showing off wealth and showing off accomplishments in life, now it’s more showing off of your of your personality or your ability to choose your aesthetics, your quality of life. 

“There is a big need, in particular in Gen Z, for sharing. This sharing means expressing their personality … but also a desire of conformity. These are two forces that are contradictory but in reality are a big driver for luxury consumption because luxury brands can provide this conformity, but then inside the luxury brand, mixing and matching, choosing your own style, developing your own style, creates your self-expression.”

She continued: “Social media has provided a huge impulse to luxury consumption because the potential of sharing with a larger audience has created both more customers but also in augmentation of their communication strategies and so they have a broader reach. 

“So yes, they want to be exclusive, but they know the power of social media.”

This story was originally featured on Fortune.com

© Mike Kemp/In Pictures - Getty Images

OpenAI is phasing out the work it does with data-labeling startup Scale AI, cutting ties with the company days after Meta Platforms Inc. invested billions of dollars in it and hired its founder. 

Scale accounted for a small fraction of OpenAI’s overall data needs, according to an OpenAI spokesperson who confirmed the firm’s decision to phase out work with the company. The ChatGPT maker was already in the process of winding down its reliance on Scale before Meta, an OpenAI competitor, took a 49% stake in the firm, the spokesperson said, adding that OpenAI had been seeking other providers for more specialized data needed to support increasingly advanced artificial intelligence models. 

OpenAI’s plans inject new uncertainty into Scale’s business in the wake of Meta’s unusual deal. Meta is investing $14.3 billion in Scale and has poached the startup’s chief executive officer, Alexandr Wang, for a new so-called “superintelligence” unit, focused on building a more powerful, and hypothetical, form of AI software. Other Scale employees are expected to follow Wang to Meta to work on AI.

A Scale AI spokesperson declined to comment.

Founded in 2016, Scale signed up prominent customers, including Alphabet Inc.’s Google, Meta and OpenAI, providing them with the data needed to build AI models. However, Meta’s deal with Scale raised concerns that the social-media company may gain new visibility into its rivals’ AI development efforts. Google plans to cut ties with Scale, Reuters reported, citing unnamed people familiar with the matter.

Right after the Meta deal was announced, OpenAI Chief Financial Officer Sarah Friar had signaled that the company intended to keep working with Scale. “We don’t want to ice the ecosystem because acquisitions are going to happen,” Friar said at the VivaTech conference in Paris last week.

Over the past six to 12 months, however, OpenAI had determined that Scale was not the best fit for it because the AI developer needed more data expertise than Scale could provide, the OpenAI spokesperson said. OpenAI has shifted to building more advanced AI models that can mimic the process of human reasoning, as well as agent-like models that can carry out tasks with limited input from users. Forbes previously reported OpenAI had been winding down its Scale work for months.

Scale initially focused on working with an army of contractors to do the grunt work of labeling text and images for earlier AI systems. Scale has gradually enlisted better-paid contractors with doctorates, nursing and other advanced degrees to help develop more sophisticated models.

Despite those efforts, OpenAI has increasingly relied on other data providers, including newer entrants like Mercor, according to a person familiar with the matter who asked not to be identified because the information is private. Mercor was previously known for using AI for recruiting tech employees, but now focuses on finding experts to help AI companies develop more advanced models. 

This story was originally featured on Fortune.com

© Photo by Justin Sullivan/Getty Images

MILAN (AP) — Global sales of personal luxury goods are ”slowing down but not collapsing,” according to a Bain & Co. consultancy study released Thursday.

Personal luxury goods sales that eroded to 364 billion euros ($419 billion) in 2024 are projected to slide by another 2% to 5% this year, the study said, citing threats of U.S. tariffs and geopolitical tensions triggering economic slowdowns.

“Still, to be positive in a difficult moment — with three wars, economies slowing down, inequality at a maximum ever — it’s not a market in collapse,’’ said Bain partner and co-author of the study Claudia D’Arpizio. “It is slowing down but not collapsing.”

Alongside external headwinds, luxury brands have alienated consumers with an ongoing creativity crisis and sharp price increases, Bain said. Buyers have also been turned off by recent investigations in Italy that revealed that sweatshop conditions in subcontractors making luxury handbags.

Sales are slipping sharply in powerhouse markets the United States and China, the study showed. In the U.S., market volatility due to tariffs has discouraged consumer confidence. China has recorded six quarters of contraction on low consumer confidence.

The Middle East, Latin America and Southeast Asia are recording growth. Europe is mostly flat, the study showed.

This has created a sharp divergence between brands that continue with strong creative and earnings growth, such as the Prada Group, which posted a 13% first-quarter jump in revenue to 1.34 billion euros, and brands like Gucci, where revenue was down 24% to 1.6 billion euros in the same period.

Gucci owner Kering last week hired Italian automotive executive Luca De Meo, the former CEO of Renault, to mount a turnaround. The decision comes as three of its brands — Gucci, Balenciaga and Bottega Veneta — are launching new creative directors.

Kering’s stock surged 12% on news of the appointment. D’Arpizio underlined his track record, returning French carmaker Renault to profitability and previous roles as marketing director at Volkswagen and Fiat.

“All of these factors resonate well together in a market like luxury when you are in a phase where growth is still the name of the game, but you also need to make the company more nimble in terms of costs, and turn around some of the brands,’’ she said.

Brands are also making changes to minimize the impact of possible U.S. tariffs. These include shipping directly from production sites and not warehouses and reducing stock in stores.

With aesthetic changes afoot “stuffing the channels doesn’t make a lot of sense,’’ D’Arpizio said.

Still, many of the headwinds buffering the sector are out of companies’ control.

“Many of these (negative) aspects are not going to change soon. What can change is more clarity on the tariffs, but I don’t think we will stop the wars or the political instability in a few months,’’ she said, adding that luxury consumer confidence is tied more closely to stock market trends than geopolitics.

President of Italian luxury brand association Altagamma Matteo Lunelli underlined hat the sector recorded overall growth of 28% from 2019-2024, “placing us well above pre-pandemic levels.”

While luxury spending is sensitive to global turmoil, it is historically quick to rebound, powered by new markets and pent-up demand.

The 2008-2009 financial crisis plummeted sales of luxury apparel, handbags and footwear from 161 billion euros to 147 billion euros over two years. The market more than recovered the losses in 2010 as it rebounded by 14%, with an acceleration in the Chinese market. Similarly, after sales plunged by 21% during the pandemic, pent-up spending powered sales to new records.

This story was originally featured on Fortune.com

BEERSHEBA, Israel (AP) — Israel’s defense minister threatened Iran’s supreme leader on Thursday after the latest missile barrage from Iran damaged the main hospital in southern Israel and hit several other residential buildings near Tel Aviv. Israel meanwhile struck a heavy water reactor that is part of Iran’s nuclear program.

At least 240 people were wounded by the Iranian missiles, four of them seriously, according to Israel’s Health Ministry. The vast majority were lightly wounded, including more than 70 people from the Soroka Medical Center in the southern city of Beersheba, where smoke rose as emergency teams evacuated patients.

In the aftermath of the strikes, Israeli Defense Minister Israel Katz blamed Iran’s Supreme Leader Ayatollah Ali Khamenei and said the military “has been instructed and knows that in order to achieve all of its goals, this man absolutely should not continue to exist.”

U.S. officials said this week that President Donald Trump had vetoed an Israeli plan to kill Khamenei. Trump later said there were no plans to kill him “at least not for now.”

Israel carried out strikes on Iran’s Arak heavy water reactor, in its latest attack on the country’s sprawling nuclear program. The conflict began last Friday with a surprise wave of Israeli airstrikes targeting military sites, senior officers and nuclear scientists.

A Washington-based Iranian human rights group said at least 639 people, including 263 civilians, have been killed in Iran and more than 1,300 wounded. In retaliation, Iran has fired over 400 missiles and hundreds of drones, killing at least 24 people in Israel and wounding hundreds.

Meanwhile, an Israeli military official said that Iran used a missile with multiple warheads in an attack Thursday, posing a new challenge to its defenses.

The official spoke on the condition of anonymity in line with military regulations.

There was no immediate independent analysis that could be made. However, Iran has hinted in the past that it was pursuing such weaponry.

Instead of having to track one warhead, missiles with multiple warheads can pose a more difficult challenge for air defense systems, like Israel’s Iron Dome.

Missile hits main hospital in southern Israel

Two doctors told The Associated Press that the missile struck almost immediately after air raid sirens went off, causing a loud explosion that could be heard from a safe room. They spoke on condition of anonymity because they were not authorized to brief media.

The hospital said the main impact was on an old surgery building that had been evacuated in recent days. After the strike, the medical facility was closed to all patients except for life-threatening cases, it said. Soroka has over 1,000 beds and provides services to around 1 million residents of Israel’s south.

There were no serious injuries from the strike on the hospital.

Israeli Prime Minister Benjamin Netanyahu condemned the attack and vowed a response, saying: “We will exact the full price from the tyrants in Tehran.”

Iran has fired hundreds of missiles and drones at Israel, though most have been shot down by Israel’s multi-tiered air defenses, which detect incoming fire and shoot down missiles heading toward population centers and critical infrastructure. Israeli officials acknowledge it is imperfect.

Many hospitals in Israel activated emergency plans in the past week, converting underground parking to hospital floors and moving patients underground, especially those who are on ventilators or are difficult to move quickly.

Israel also boasts a fortified, subterranean blood bank that kicked into action after Hamas’ Oct. 7, 2023 attack ignited the ongoing war in the Gaza Strip.

‘No radiation danger’ after strike on reactor

Israel’s military said its fighter jets targeted the Arak facility and its reactor core seal in order to prevent it from being used to produce plutonium.

“The strike targeted the component intended for plutonium production, in order to prevent the reactor from being restored and used for nuclear weapons development,” the military said. Israel separately claimed to have struck another site around Natanz it described as being related to Iran’s nuclear program.

Iranian state TV said there was “no radiation danger whatsoever” from the attack on the Arak site. An Iranian state television reporter, speaking live in the nearby town of Khondab, said the facility had been evacuated and there was no damage to civilian areas around the reactor.

Israel had warned earlier Thursday morning it would attack the facility and urged the public to flee the area.

Iran rejects calls to surrender or end its nuclear program

Iran has long maintained its program is for peaceful purposes. However, it also enriches uranium up to 60%, a short, technical step away from weapons-grade levels of 90%. Iran is the only non-nuclear-weapon state to enrich at that level.

Israel is the only nuclear-armed state in the Middle East but does not acknowledge having such weapons.

The strikes came a day after Iran’s supreme leader rejected U.S. calls for surrender and warned that any military involvement by the Americans would cause “irreparable damage to them.” Israel had lifted some restrictions on daily life Wednesday, suggesting the missile threat from Iran on its territory was easing.

Already, Israel’s campaign has targeted Iran’s enrichment site at Natanz, centrifuge workshops around Tehran and a nuclear site in Isfahan. Its strikes have also killed top generals and nuclear scientists.

Iran’s Foreign Minister Abbas Araghchi said he would travel to Geneva for meetings with his European counterparts on Friday, indicating a new diplomatic initiative might be taking shape. Iran’s official IRNA news agency said the meeting would include foreign ministers from the United Kingdom, France and Germany and the European Union’s top diplomat.

Trump has said he wants something “much bigger” that a ceasefire and has not ruled out the U.S. joining in Israel’s campaign. Iran has warned of dire consequences if the U.S. deepens its involvement, without elaborating.

Arak had been redesigned to address nuclear concerns

The Arak heavy water reactor is 250 kilometers (155 miles) southwest of Tehran.

Heavy water helps cool nuclear reactors, but it produces plutonium as a byproduct that can potentially be used in nuclear weapons. That would provide Iran another path to the bomb beyond enriched uranium, should it choose to pursue the weapon.

Iran had agreed under its 2015 nuclear deal with world powers to redesign the facility over proliferation concerns.

The reactor became a point of contention after President Donald Trump withdrew from the nuclear deal in 2018. Ali Akbar Salehi, a high-ranking nuclear official in Iran, said in 2019 that Tehran bought extra parts to replace a portion of the reactor that it had poured concrete into to render it unusable under the deal.

Israel, in conducting its strike, signaled it remained concerned the facility could be used to produce plutonium again one day.

“The strike targeted the component intended for plutonium production, in order to prevent the reactor from being restored and used for nuclear weapons development,” the Israeli military said in a statement.

The International Atomic Energy Agency, the United Nations’ nuclear watchdog, has been urging Israel not to strike Iranian nuclear sites. IAEA inspectors reportedly last visited Arak on May 14.

Due to restrictions Iran imposed on inspectors, the IAEA has said it lost “continuity of knowledge” about Iran’s heavy water production — meaning it could not absolutely verify Tehran’s production and stockpile.

___

By SAM MEDNICK, NATALIE MELZER, and JON GAMBRELL. Melzer reported from Tel Aviv, Israel, and Gambrell from Dubai, United Arab Emirates. Associated Press writer Melanie Lidman in Tel Aviv contributed.

This story was originally featured on Fortune.com

© Office of the Iranian Supreme Leader via AP

Nike Inc.’s new brand with entrepreneur and reality TV star Kim Kardashian’s Skims label has pushed back its launch after initially planning to release its first collection this spring.

NikeSkims is dealing with production delays as it prepares to debut the brand this year, according to people familiar with the matter. Shoppers have been awaiting the line’s initial products in recent months, ahead of a global rollout planned for 2026. 

Despite the delays, Nike still expects to release NikeSkims products sometime this year, one of the people with knowledge of the matter said. It’s unclear exactly when the first NikeSkims goods will be available for purchase, what products will be included in the line and if consumers will get a preview before the initial release. 

Both Nike and Skims have bet heavily on the partnership. Nike is counting on Kardashian to help boost its women’s business and add cultural relevance as it looks to spark a turnaround. Skims, meanwhile, has an opportunity to solidify its presence in the activewear market by teaming up with the world’s largest sportswear company.

Nike Chief Executive Officer Elliott Hill, who came out of retirement to take the role last year, told investors in March he expected the first “comprehensive collection” would be available during the quarter that ended in May.

Nike shares fell as much as 0.5% on Wednesday, erasing an earlier gain. The stock is down more than 20% this year, compared with a 2% increase in the S&P 500. Investors will be looking for updates when the company reports its fourth-quarter earnings results on June 26. 

Nike has been putting together a dedicated team for the project, which had been kept secret for more than a year until an announcement in February. The division, which is made up of employees from Nike, Skims and new hires, is still recruiting designers. It’s expected to create and sell a selection of training footwear, apparel and accessories.

This story was originally featured on Fortune.com

© Photo by Kevin Mazur/Getty Images for SKIMS

LONDON (AP) — Google faced a big setback Thursday in its attempt to overturn a multibillion-dollar European Union antitrust penalty involving Android after a top court’s legal adviser sided with regulators.

The European Court of Justice’s advocate general, Juliane Kokott, recommended in a non-binding opinion that Google’s appeal against the fine worth more than 4 billion euros ($4.7 billion) should be dismissed.

The case dates back to 2018, when the EU’s executive Commission slapped Google with a 4.134 billion euro fine after finding that the U.S. tech company used the dominance of its mobile Android operating system to throttle competition and reduce consumer choice.

After Google filed an initial appeal, a lower court trimmed the penalty to 4.125 billion euros in 2022, which the company also appealed to the Court of Justice.

Kokott advised that the Court of Justice confirm the fine and uphold the lower court’s judgment, according to a press release summarizing her opinion.

Google said it was disappointed with the opinion, adding that if the court follows it, it “would discourage investment in open platforms and harm Android users, partners and app developers.”

″Android has created more choice for everyone and supports thousands of successful businesses in Europe and around the world,” the company said in a statement.

Opinions from the advocate general aren’t legally binding but are often followed by judges.

The judges “are now beginning their deliberations in this case. Judgment will be given at a later date,” the court said.

The fine was one of three antitrust penalties totaling more than 8 billion euros that the European Commission slapped on Google in the last decade, as the 27-nation bloc launched its crackdown on Big Tech companies.

Google still faces a decision from Brussels in an antitrust case targeting its digital ad business.

This story was originally featured on Fortune.com

© CAMILLE COHEN/AFP via Getty Images

– To the top. At the Tribeca Film Festival in New York last week, two new documentaries aired that, while wildly different, had something in common. Barbara Walters: Tell Me Everything and Call Her Alex, the two-part documentary about podcaster Alex Cooper now streaming on Hulu, both showed what it took to get to the top of the male-dominated media business—in two very different eras.

Tell Me Everything traces the story of Barbara Walters, the first woman to co-anchor an evening news program in the U.S. She made her debut in that role on ABC in 1976, breaking the hardest glass ceiling for women in journalism and television. The film by director Jackie Jesko follows the barriers Walters continued to break, from her famous celebrity sitdown interviews to her late-in-life reinvention on The View, alongside her personal struggles. While she married, divorced, and had a child, her personal life often suffered, the documentary observes. “Her job was the love of her life,” one talking head says on camera.

“She was an incredibly ambitious woman who loved the work, loved being on TV, she loved the thrill of the chase, she loved the competition,” says Jesko. “She got a lot of joy out of it—and it doesn’t always have to be a huge personal life that brings someone joy.” Jane Rosenthal, the cofounder and CEO of the company behind the Tribeca Film Festival, adds: “We grew up with her—and you didn’t realize what she was really doing as a woman, that she was the only woman in the room, the kind of fights that she had to have.”

Still, other era-defining women in media, including Oprah Winfrey and Katie Couric, reflect in the documentary about how seeing Walters’ path influenced their own choices. Couric says she knew she didn’t want to sacrifice her family life for her career, after seeing Walters.

Which brings us to the next Tribeca documentary. Alex Cooper, the host of Call Her Daddy and media mogul behind the Unwell network, has often been called the millennial or Gen Z Oprah. In Tell Me Everything, Winfrey remembers watching Walters to learn how to succeed as an on-air journalist. Without Barbara, there would be no Oprah. And without Oprah, there would be no Alex.

Cooper built Call Her Daddy within Barstool Sports, another overwhelmingly male-dominated media company. Her new documentary traces her upbringing, an experience of sexual harassment in college that she now says motivated her to never be silenced again, and the rise of her podcast.

Several decades after Walters’ career, Cooper doesn’t have to make the same trade-offs that Walters did. Her husband is her business partner. While Walters struggled with private insecurity about her appearance, another topic of Tell Me Everything, Cooper shares her most personal experiences and challenges with her audience. “She didn’t just build an audience, she built a movement,” Rosenthal said while introducing Call Her Alex. Rather than being beholden to someone else’s platform—like a television network—Cooper has been able to build her own.

Despite all these obvious differences, watching the films back-to-back, it’s clear Cooper and Walters have a lot in common. “I’m a competitive mother*******,” Cooper says. “I’m hard on myself.”

As much as the media industry has changed—the drive it takes to get to the top hasn’t.

Emma Hinchliffe
emma.hinchliffe@fortune.com

The Most Powerful Women Daily newsletter is Fortune’s daily briefing for and about the women leading the business world. Today’s edition was curated by Nina Ajemian. Subscribe here.

This story was originally featured on Fortune.com

© Gilbert Carrasquillo/GC Images

Amazon CEO Andy Jassy anticipates generative artificial intelligence will reduce its corporate workforce in the next few years as the online giant begins to increase its usage of the technology.

“We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,” Jassy said in a message to employees. “It’s hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company.”

The executive said that Amazon has more than 1,000 generative AI services and applications in progress or built, but that figure is a “small fraction” of what it plans to build.

Jassy encouraged employees to get on board with the e-commerce company’s AI plans.

“As we go through this transformation together, be curious about AI, educate yourself, attend workshops and take trainings, use and experiment with AI whenever you can, participate in your team’s brainstorms to figure out how to invent for our customers more quickly and expansively, and how to get more done with scrappier teams,” he said.

Earlier this month Amazon announced that it was planning to invest $10 billion toward building a campus in North Carolina to expand its cloud computing and artificial intelligence infrastructure.

Since 2024 started, Amazon has committed to about $10 billion apiece to data center projects in Mississippi, Indiana, Ohio and North Carolina as it ramps up its infrastructure to compete with other tech giants to meet growing demand for artificial intelligence products.

The rapid growth of cloud computing and artificial intelligence has meanwhile fueled demand for energy-hungry data centers that need power to run servers, storage systems, networking equipment and cooling systems. Amazon said earlier this month that it will spend $20 billion on two data center complexes in Pennsylvania.

In March Amazon began testing artificial intelligence-aided dubbing for select movies and shows offered on its Prime streaming service. A month earlier, the company rolled out a generative-AI infused Alexa.

Amazon has also invested more heavily in AI. In November the company said that it was investing an additional $4 billion in the artificial intelligence startup Anthropic. Two months earlier chipmaker Intel said that its foundry business would make some custom artificial intelligence chips for Amazon Web Services, which is Amazon’s cloud computing unit and a main driver of its artificial intelligence ambitions.

This story was originally featured on Fortune.com

© Photo by Jordan Strauss/Invision/AP, File

Good morning!

The current labor market appears strong on the surface, but there are big problems lurking underneath. 

Unemployment is still low at 4.2%, wage growth is steady, and the U.S. added a relatively healthy 139,000 roles in May according to the recent jobs report from the Bureau of Labor Statistics. But a growing number of Americans are “functionally unemployed” according to a new report.  

That’s a term that describes people who are not included in topline unemployment numbers, but are still struggling in the labor market. That includes people who are jobless but have stopped searching for work, as well as people who are employed but earning an annual salary of less than $25,000 a year.  

Around 24.3% of Americans currently fall under that category, according to a report from The Ludwig Institute for Shared Economic Prosperity (LISEP), a nonprofit focused on economic and policy research. That’s up from around 22.3% two years ago. 

“We are facing a job market where nearly one-in-four workers are functionally unemployed, and current trends show little sign of improvement,” said LISEP Chair Gene Ludwig in a press release. “The harsh reality is that far too many Americans are still struggling to make ends meet, and absent an influx of dependable, good-paying jobs, the economic opportunity gap will widen.”

Alternative metrics like “functional unemployment” might help partially explain why so many workers are feeling down about the economy right now. One recent report from employment platform Glassdoor, for example, found that employee confidence amongst entry-level workers has hit an all-time low. Traditional unemployment is still modest, but the labor market has cooled from where it was just a few years ago, and employees are looking warily at how tariffs and AI will affect their future job prospects. 

“Amid an already uncertain economic outlook,” said Ludwig, “the rise in functional unemployment is a concerning development.”

Brit Morse
[email protected]

This story was originally featured on Fortune.com

© Getty Images

One of Elon Musk’s SpaceX Starships exploded during a routine test late Wednesday in Texas, law enforcement said, in the latest setback to the billionaire’s dream of turning humanity into an interplanetary species.

The Starship 36 suffered “catastrophic failure and exploded” at the Starbase launch facility shortly after 11:00 pm (0400 GMT Thursday), a Facebook post by the Cameron County authorities said.

A video shared with the post showed the megarocket attached to the launch arm, and then a flash and a towering, fiery explosion.

Musk’s Space X said the rocket was preparing for the tenth flight test when it “experienced a major anomaly while on a test stand at Starbase,” without elaborating on the nature of the complication.

“A safety clear area around the site was maintained throughout the operation and all personnel are safe and accounted for,” Space X added on social media.

“There are no hazards to residents in surrounding communities, and we ask that individuals do not attempt to approach the area while safing operations continue.”

The Starship was not scheduled for launch on Wednesday evening when the explosion occurred during a “routine static fire test,” according to the Cameron County authorities.

During a static fire, part of the procedures preceding a launch, the Starship’s Super Heavy booster would be anchored to the ground to prevent it from lifting off during the test-firing.

Starbase on the south Texas coast, near the border with Mexico, is the headquarters for Musk’s space project.

Megarocket

Standing 403 feet (123 meters) tall, Starship is the world’s largest and most powerful rocket and central to Musk’s long-term vision of colonizing Mars.

The Starship is billed as a fully reusable rocket with a payload capacity of up to 150 metric tons.

The latest setback follows an explosion of a prototype Starship over the Indian Ocean in late May.

The biggest and most powerful launch vehicle ever built had lifted off on May 27 from the Starbase facility, but the first-stage Super Heavy booster blew up instead of executing its planned splashdown in the Gulf of Mexico.

The previous two outings also ended poorly, with the upper stage disintegrating over the Caribbean.

But the failures will likely do little to dent Musk’s spacefaring ambitions.

SpaceX has been betting that its “fail fast, learn fast” ethos, which has helped it dominate commercial spaceflight, will eventually pay off.

The company has caught the Super Heavy booster in the launch tower’s giant robotic arms three times — a daring engineering feat it sees as key to rapid reusability and slashing costs.

NASA is also increasingly reliant on SpaceX, whose Dragon spacecraft is vital for ferrying astronauts to and from the International Space Station.

The Federal Aviation Administration (FAA) in early May approved an increase in annual Starship rocket launches from five to 25, stating that the increased frequency would not adversely impact the environment.

The decision overruled objections from conservation groups who had warned the expansion could endanger sea turtles and shorebirds.

This story was originally featured on Fortune.com

© Susan Walsh—AP

Farmers, cattle ranchers and hotel and restaurant managers breathed a sigh of relief last week when President Donald Trump ordered a pause to immigration raids that were disrupting those industries and scaring foreign-born workers off the job.

“There was finally a sense of calm,’’ said Rebecca Shi, CEO of the American Business Immigration Coalition.

That respite didn’t last long.

On Wednesday, Assistant Secretary of the Department of Homeland Security Tricia McLaughlin declared, “There will be no safe spaces for industries who harbor violent criminals or purposely try to undermine (immigration enforcement) efforts. Worksite enforcement remains a cornerstone of our efforts to safeguard public safety, national security and economic stability.’’

The flipflop baffled businesses trying to figure out the government’s actual policy, and Shi says now “there’s fear and worry once more.”

“That’s not a way to run business when your employees are at this level of stress and trauma,” she said.

Trump campaigned on a promise to deport millions of immigrants working in the United States illegally — an issue that has long fired up his GOP base. The crackdown intensified a few weeks ago when Stephen Miller, White House deputy chief of staff, gave the U.S. Immigration and Customs Enforcement a quota of 3,000 arrests a day, up from 650 a day in the first five months of Trump’s second term.

Suddenly, ICE seemed to be everywhere. “We saw ICE agents on farms, pointing assault rifles at cows, and removing half the workforce,’’ said Shi, whose coalition represents 1,700 employers and supports increased legal immigration.

One ICE raid left a New Mexico dairy with just 20 workers, down from 55. “You can’t turn off cows,’’ said Beverly Idsinga, the executive director of the Dairy Producers of New Mexico. “They need to be milked twice a day, fed twice a day.’’

Claudio Gonzalez, a chef at Izakaya Gazen in Los Angeles’ Little Tokyo district, said many of his Hispanic workers — whether they’re in the country legally or not — have been calling out of work recently due to fears that they will be targeted by ICE. His restaurant is a few blocks away from a collection of federal buildings, including an ICE detention center.

“They sometimes are too scared to work their shift,” Gonzalez said. “They kind of feel like it’s based on skin color.”

In some places, the problem isn’t ICE but rumors of ICE. At cherry-harvesting time in Washington state, many foreign-born workers are staying away from the orchards after hearing reports of impending immigration raids. One operation that usually employs 150 pickers is down to 20. Never mind that there hasn’t actually been any sign of ICE in the orchards.

“We’ve not heard of any real raids,’’ said Jon Folden, orchard manager for the farm cooperative Blue Bird in Washington’s Wenatchee River Valley. “We’ve heard a lot of rumors.’’

Jennie Murray, CEO of the advocacy group National Immigration Forum, said some immigrant parents worry that their workplaces will be raided and they’ll be hauled off by ICE while their kids are in school. They ask themselves, she said: “Do I show up and then my second-grader gets off the school bus and doesn’t have a parent to raise them? Maybe I shouldn’t show up for work.’’

The horror stories were conveyed to Trump, members of his administration and lawmakers in Congress by business advocacy and immigration reform groups like Shi’s coalition. Last Thursday, the president posted on his Truth Social platform that “Our great Farmers and people in the Hotel and Leisure business have been stating that our very aggressive policy on immigration is taking very good, long time workers away from them, with those jobs being almost impossible to replace.”

It was another case of Trump’s political agenda slamming smack into economic reality. With U.S. unemployment low at 4.2%, many businesses are desperate for workers, and immigration provides them.

According to the U.S. Census Bureau, foreign-born workers made up less than 19% of employed workers in the United States in 2023. But they accounted for nearly 24% of jobs preparing and serving food and 38% of jobs in farming, fishing and forestry.

“It really is clear to me that the people pushing for these raids that target farms and feed yards and dairies have no idea how farms operate,” Matt Teagarden, CEO of the Kansas Livestock Association, said Tuesday during a virtual press conference.

Torsten Slok, chief economist at Apollo Global Management, estimated in January that undocumented workers account for 13% of U.S. farm jobs and 7% of jobs in hospitality businesses such as hotels, restaurants and bars.

The Pew Research Center found last year that 75% of U.S. registered voters — including 59% of Trump supporters — agreed that undocumented immigrants mostly fill jobs that American citizens don’t want. And an influx of immigrants in 2022 and 2023 allowed the United States to overcome an outbreak of inflation without tipping into recession.

In the past, economists estimated that America’s employers could add no more than 100,000 jobs a month without overheating the economy and igniting inflation. But economists Wendy Edelberg and Tara Watson of the Brookings Institution calculated that because of the immigrant arrivals, monthly job growth could reach 160,000 to 200,000 without exerting upward pressure on prices.

Now Trump’s deportation plans — and the uncertainty around them — are weighing on businesses and the economy.

“The reality is, a significant portion of our industry relies on immigrant labor — skilled, hardworking people who’ve been part of our workforce for years. When there are sudden crackdowns or raids, it slows timelines, drives up costs, and makes it harder to plan ahead,” says Patrick Murphy, chief investment officer at the Florida building firm Coastal Construction and a former Democratic member of Congress. “ We’re not sure from one month to the next what the rules are going to be or how they’ll be enforced. That uncertainty makes it really hard to operate a forward-looking business.”

Adds Douglas Holtz Eakin, former director of the Congressional Budget Office and now president of the conservative American Action Forum think tank: “ICE had detained people who are here lawfully and so now lawful immigrants are afraid to go to work … All of this goes against other economic objectives the administration might have. The immigration policy and the economic policy are not lining up at all.’’

This story was originally featured on Fortune.com

© Damian Dovarganes—AP

The go-broke dates for Medicare and Social Security ‘s trust funds have moved up as rising health care costs and new legislation affecting Social Security benefits have contributed to earlier projected depletion dates, according to an annual report released Wednesday.

The go-broke date — or the date at which the programs will no longer have enough funds to pay full benefits — was pushed up to 2033 for Medicare’s hospital insurance trust fund, according to the new report from the programs’ trustees. Last year’s report put the go-broke date at 2036.

Meanwhile, Social Security’s trust funds — which cover old age and disability recipients — will be unable to pay full benefits beginning in 2034, instead of last year’s estimate of 2035. After that point, Social Security would only be able to pay 81% of benefits.

The trustees say the latest findings show the urgency of needed changes to the programs, which have faced dire financial projections for decades. But making changes to the programs has long been politically unpopular, and lawmakers have repeatedly kicked Social Security and Medicare’s troubling math to the next generation.

President Donald Trump and other Republicans have vowed not to make any cuts to Medicare or Social Security, even as they seek to shrink the federal government’s expenditures.

Social Security Administration Commissioner Frank Bisignano, sworn into his role in May, said in a statement that “the financial status of the trust funds remains a top priority for the Trump Administration.” A common misconception is that Social Security would be completely unable to pay benefits once it reaches its go-broke date.

“Current-law projections indicate that Medicare still faces a substantial financial shortfall that needs to be addressed with further legislation. Such legislation should be enacted sooner rather than later to minimize the impact on beneficiaries, providers, and taxpayers,” the trustees state in the report.

The trustees are made up of six people — the Treasury Secretary serves as managing trustee, alongside the secretaries of Labor, Health and Human Services, and the commissioner of Social Security. Two other presidentially-appointed and Senate-confirmed trustees serve as public representatives, however those roles have been vacant since July 2015.

About 68 million people are enrolled in Medicare, the federal government’s health insurance that covers those 65 and older, as well as people with severe disabilities or illnesses.

Wednesday’s report shows a worsening situation for the Medicare hospital insurance trust fund compared to last year. But the forecasted go-broke date of 2033 is still later than the dates of 2031, 2028 and 2026 predicted just a few years ago.

Once the fund’s reserves become depleted, Medicare would be able to cover only 89% of costs for patients’ hospital visits, hospice care and nursing home stays or home health care that follow hospital visits.

The report said expenses last year for Medicare’s hospital insurance trust fund came in higher than expected.

Income exceeded expenditures by nearly $29 billion last year for the hospital insurance trust fund, the report stated. Trustees expect that surplus to continue through 2027. Deficits then will follow until the fund becomes depleted in 2033.

A payroll tax on covered earnings provides the main funding for the hospital insurance trust fund. Future expenses paid by the fund are expected to increase at a faster pace than earnings.

Legislation is needed to change those tax rates.

The report states that the Social Security Social Security Fairness Act, enacted in January, which repealed the Windfall Elimination and Government Pension Offset provisions of the Social Security Act and increased Social Security benefit levels for some workers, had an impact on the depletion date of SSA’s trust funds.

Romina Boccia, a director of Budget and Entitlement Policy at the libertarian CATO Institute called the repeal of the provisions “a political giveaway masquerading as reform. Instead of tackling Social Security’s structural imbalances, Congress chose to increase benefits for a vocal minority—accelerating trust fund insolvency.”

“It’s a clear sign that populist pressure now outweighs fiscal responsibility and economic sanity on both sides of the aisle,” She said. “Pair that with a Republican reconciliation bill that increases tax giveaways while refusing to rein in even the most dubious Medicaid expansions, and the message is unmistakable: Washington is still in giveaway mode.”

AARP CEO Myechia Minter-Jordan said “Congress must act to protect and strengthen the Social Security that Americans have earned and paid into throughout their working lives.” “More than 69 million Americans rely on Social Security today and as America’s population ages, the stability of this vital program only becomes more important.”

Social Security benefits were last reformed roughly 40 years ago, when the federal government raised the eligibility age for the program from 65 to 67. The eligibility age has never changed for Medicare, with people eligible for the medical coverage when they turn 65.

Nancy Altman, president of Social Security Works, an advocacy group for the popular public benefit program said in a statement that “there are two options for action: Bringing more money into Social Security, or reducing benefits. Any politician who doesn’t support increasing Social Security’s revenue is, by default, supporting benefit cuts.”

Congressional Budget Office reporting has stated that the biggest drivers of debt rising in relation to GDP are increasing interest costs and spending for Medicare and Social Security. An aging population drives those numbers.

Several legislative proposals have been put forward to address Social Security’s impending insolvency.

This story was originally featured on Fortune.com

© AP Photo/Jenny Kane, File

We all have our own south side that we think of immediately. 

When I first saw the name South Loop Ventures, I thought of Chicago, where I lived for almost six years—and I told Zach Ellis, the Houston-based firm’s managing director and founder, as much. The firm’s name references Houston’s South Loop, which connects various historically diverse neighborhoods and is near the historically Black Third Ward, Beyoncé’s birthplace. But the fact that I thought of my own touchpoint is, actually, somewhat ideal. 

“It’s not just Chicago, there are all these regions around the country where diverse communities are,” said Ellis, who served as a U.S. Naval Officer before he was a VC. “South Central Los Angeles, Southeast D.C., South Philly, South Bronx, Southwest Atlanta—SWATS—all these areas. You’re ‘othered’ because you’re from the wrong side of the tracks, and you get this neighborhood affiliation. But it also becomes this point of pride. I’ve even played with the idea of one of our slogans, being ‘we’re all from the south side of somewhere.’”

Ellis recently launched South Loop’s first $21 million fund. Rice Management Company and Chevron Technology Ventures served as anchor LPs, with additional backing from Texas Capital Bank and The Great Commission Foundation of the Episcopal Diocese of Texas. It’s a busy time for Ellis, who was just this week announced as a Kauffman Fellow, the longstanding VC leadership development program. He’s building South Loop Ventures—just an hour’s drive from Galveston, where the Juneteenth holiday has its historical origins—on a strategy that looks quite rebellious right about now: Investing in entrepreneurs of color in Houston and similar urban ecosystems, who are working on problem-solving in sectors like healthcare, biotech, and advanced materials. 

“I don’t do this out of a sense of fairness,” said Ellis, who was previously manager at CVC PepsiCo Technology Ventures and managing director at Rev1 Ventures. “I do this out of a core belief that intentional innovation is good for society. We have problems that need solving and it’d be a crime not to get as many brains as possible trying to solve these problems. Why leave talent on the bench and profit on the bench by not investing in everyone?” 

South Loop’s portfolio currently includes breast milk freeze-drying company Milkify, life science sales AI platform PraxisPro, AI-powered tax software SmartWiz, and AI drug discovery platform CircNova. The firm invests beyond Houston, but it does represent a significant bet on the city and on Texas—which is home to four of the ten fastest-growing counties in the U.S. by percentage growth. Ellis looks to build on Texas’ talent, institutions, and economic strength to generate outsized returns in a high-potential market that remains underserved. When most people think of tech in Texas, they probably think of Austin—but Houston has the right ingredients to be a hub in its own right, he said.

“Houston has the third-most Fortune 500 companies of any city in the country,” said Ellis. “If you think about the IT departments, the engineers at energy companies—from mechanical engineers to systems engineers—the talent is here. It’s just about awakening that talent.”

See you tomorrow,

Allie Garfinkle
X: @agarfinks
Email: [email protected]
Submit a deal for the Term Sheet newsletter here.

Nina Ajemian curated the deals section of today’s newsletter. Subscribe here.

This story was originally featured on Fortune.com

© South Loop Ventures

• OpenAI says its next generation of AI models could significantly increase the risk of biological weapon development, even enabling individuals with no scientific background to create dangerous agents. The company is boosting its safety testing as it anticipates some models will reach its highest risk tier.

OpenAI is warning that its next generation of advanced AI models could pose a significantly higher risk of biological weapon development, especially when used by individuals with little to no scientific expertise.

OpenAI executives told Axios they anticipate upcoming models will soon trigger the high-risk classification under the company’s preparedness framework, a system designed to evaluate and mitigate the risks posed by increasingly powerful AI models.  

OpenAI’s head of safety systems, Johannes Heidecke, told the outlet that the company is “expecting some of the successors of our o3 (reasoning model) to hit that level.”

In a blog post, the company said it was increasing its safety testing to mitigate the risk that models will help users in the creation of biological weapons. OpenAI is concerned that without these mitigations models will soon be capable of “novice uplift,” allowing those with limited scientific knowledge to create dangerous weapons.

“We’re not yet in the world where there’s like novel, completely unknown creation of bio threats that have not existed before,” Heidecke said. “We are more worried about replicating things that experts already are very familiar with.”

Part of the reason why it’s difficult is that the same capabilities that could unlock life-saving medical breakthroughs could also be used by bad actors for dangerous ends. According to Heidecke, this is why leading AI labs need highly accurate testing systems in place.

One of the challenges is that some of the same capabilities that could allow AI to help discover new medical breakthroughs can also be used for harm.

“This is not something where like 99% or even one in 100,000 performance is … sufficient,” he said. “We basically need, like, near perfection.”

Representatives for OpenAI did not immediately respond to a request for comment from Fortune, made outside normal working hours.

Model misuse

OpenAI is not the only company concerned about the misuse of its models when it comes to weapon development. As models get more advanced their potential for misuse and risk generally grows.

Anthropic recently launched its most advanced model, Claude Opus 4, with stricter safety protocols than any of its previous models, categorizing it an AI Safety Level 3 (ASL-3), under the company’s Responsible Scaling Policy. Previous Anthropic models have all been classified AI Safety Level 2 (ASL-2) under the company’s framework, which is loosely modeled after the U.S. government’s biosafety level (BSL) system.

Models that are categorized in this third safety level meet more dangerous capability thresholds and are powerful enough to pose significant risks, such as aiding in the development of weapons or automating AI R&D. Anthropic’s most advanced model also made headlines after it opted to blackmail an engineer to avoid being shut down in a highly controlled test.

Early versions of Anthropic’s Claude 4 were found to comply with dangerous instructions, for example, helping to plan terrorist attacks, if prompted. However, the company said this issue was largely mitigated after a dataset that was accidentally omitted during training was restored.

This story was originally featured on Fortune.com

© Sven Hoppe—picture alliance via Getty Images

• With the Fed’s interest rate decision out of the way and a national holiday for the U.S. stock markets, investors are turning their attention to whether President Trump will bomb Iran. Stocks were largely down in Asia and Europe this morning, following a decline in the S&P 500 yesterday.

The human cost of global conflict is unbearable for the victims, of course, and it comes with an economic cost too, which analysts are trying to estimate right now.

President Trump has reportedly approved a plan to bomb Iran but not yet given the green light for action. The main issue for investors is what the Iran conflict might do to the price of oil and how that will affect the strength of the dollar. That, in turn, will likely influence the U.S. Federal Reserve’s future decisions on whether or not to cut interest rates.

Trump, of course, wants Fed Chair Jerome Powell to lower interest rates. He insulted Powell early this morning on Truth Social to underline that point: “Too Late—Powell is the WORST. A real dummy, who’s costing America $Billions!”

One possible outcome is that if Trump decides to bomb Iran and the conflict produces a prolonged disruption to the supply of oil, that might strengthen the dollar while damaging the global economy. (Oil markets are settled in dollars, and rising oil prices would thus trigger greater demand for U.S. currency.) Those two factors—economic weakness but dollar strength—could push the Fed to make the interest rate cuts that Trump wants.

Convera’s Antonio Ruggiero sent a note to clients on the dollar issue this morning: “Rising geopolitical tensions in the Middle East this week lent support to the greenback, with the DXY briefly pushing above 98.800 on Tuesday before paring gains. Behind the façade of safe-haven appeal lies the true driver of the dollar’s rebound: rising oil prices, now hovering near a five-month high. Since most global oil trades are settled in U.S. dollars, surging crude demand tends to drive additional demand for USD. This rebound in sentiment is also reflected in the options market, where—for the first time since April—traders have backed off from bearish dollar positions. Escalating tensions could amplify this further.” 

At JPMorgan, Joseph Lupton and Bruce Kasman published a note that argued: “The rise in risk premia associated with the Mideast war, if sustained, is already sufficient to fully offset the cushion provided by the oil supply increase [from Saudi Arabia]. This leaves a net drag on global GDP growth of 0.6% this year. Concentrated in the second half, this drag should lower 2H25 global GDP growth by more than 1% at an annualized pace,” they said.

“A full curtailment of Iranian oil exports (1.8mbd) would, according to our model, lift oil prices to near $100/bbl and, if sustained, reduce global GDP by a full %-point (or, more likely, 2%-point annualized in 2H25), threatening a global recession,” they said.

The Fed, as always, is waiting for more data and less uncertainty.

The uncertainty of war won’t help, according to Daiwa Capital Markets: “The Trump administration has yet to take a definitive stance on intervention in the Iran-Israel conflict–with the plotted course either facilitating a return to calm or potentially triggering a broader conflict that could disrupt energy markets. Thus, uncertainty remains high and officials have demonstrated that they are willing to wait for additional clarity,” Lawrence Werther and Brendan Stuart told their clients in a note seen by Fortune.

Here’s a snapshot of the action across global markets this morning:

• South Korea’s Kospi was up 0.19%.
• India’s Nifty 50 was flat.
• The S&P 500 closed flat yesterday. The market is closed for the Juneteenth holiday today.
• The U.K.’s FTSE 100 slipped 0.3% in early trading.
• China’s SSE Composite was down 0.82%.
• Japan’s Nikkei 225 was down 1%.
• Hong Kong’s Hang Seng was down 2%.

This story was originally featured on Fortune.com

© From left: Andrew Harnik—Getty Images; Yasin Ozturk—Anadolu/Getty Images

London is seeking to attract more Chinese firms to list on its stock exchange as the city struggles with a shrinking equity market and a deal drought across Europe. 

“We need to get more IPOs happening in London,” Chris Hayward, policy chairman of the City of London Corp., said in an interview from Shanghai. “We don’t want to lose business across the Atlantic.” 

The authority for London’s Square Mile financial district can provide opportunities for Chinese firms to secure customers and funding in the UK and drive them to list in the city via its connect scheme with Shanghai, Hayward said. The city can also encourage UK firms to raise capital and list on the Shanghai Stock Exchange, he said.   

China introduced its stock connect program with the UK in 2019, allowing listed companies to issue depository receipts on each other’s exchanges. It later expanded the program to include Switzerland and Germany. Six years later, only a handful of Chinese firms, including Huatai Securities Co., have listed in London, raising a total $6.6 billion, and trading has been muted.

Beijing and London vowed early this year to deepen economic and financial ties, promising efforts to boost the China-UK stock connect.

“You’ve got to proactively go out there and encourage listings on your exchange,” said Hayward, drawing lessons from Hong Kong’s success in igniting a boom in initial public offerings in the first half of this year. Hayward, who was in Shanghai this week for China’s annual financial Lujiazui forum, is traveling to Hong Kong later in the week for IPO discussions.

Hong Kong’s share-sale bonanza this year saw new listings and additional offerings fetch more than $27 billion as of early June. That eclipsed annual totals in the last three years, and is the most since records were reached in 2021, according to data compiled by Bloomberg. The London bourse, on the other hand, has had just four pending or trading IPOs this year, as its valuation discount to the rest of the world discourages firms. 

London, as a key offshore yuan center, has also worked with China’s central bank to help promote the internationalization of its currency. 

London established a working group with the People’s Bank of China in 2018 to monitor the yuan market in the UK capital. The authority has been pushing global asset managers in the city to issue new products in yuan to facilitate greater use of the currency, said Hayward. 

He downplayed the potential impact that UK’s recent tax for wealthy non-domiciled residents and its immigration crackdown could have on London’s appeal as a global financial center, while urging efforts to resolve the non-dom issue.

“I would encourage the government to continue to review this matter,” he said. “It’s important to us to try and keep wealth creators in this country.”

This story was originally featured on Fortune.com

© Christoph Meyer/picture alliance via Getty Images

Good morning. As more graduates view finance as a promising career path, companies have a unique opportunity to attract the next generation of CFOs.

According to the CFA Institute’s 2025 Graduate Outlook Survey, interest in finance careers is on the rise. This year, 37% of surveyed respondents named finance as the most promising career path—a notable increase from 30% in 2024 and just 24% in 2023. The global survey, which included over 9,000 participants ages 18-25 who are either pursuing or have recently completed a bachelor’s degree or higher, highlights a clear upward trend for the industry.

Meanwhile, salary remains the top motivator for graduates, with 58% citing it as their primary career driver. However, flexibility and favorable working arrangements are also highly valued, with 49% saying these factors are important when considering a job offer.

“This position of privilege for the finance industry should not be taken for granted,” Margaret Franklin, president and CEO of CFA Institute told me. “Employers must listen to the priorities of new career entrants and make necessary adjustments to attract and retain top talent.”

Franklin emphasizes that today’s graduates also seek meaningful work. The survey found that 90% of U.S. graduates want to make a positive societal impact through their careers. Finance can indeed be included in that scenario—think financial planning. “We need to lean into this messaging more, especially during recruitment,” she said.

Embracing technology is another key to attracting top graduates. The survey revealed that 66% of U.S. graduates are more interested in roles that offer AI training.

Today’s graduates and students are eager to grow their skillset around AI, Franklin noted. Companies that invest in robust AI training programs and foster environments that embrace technological innovation will be best positioned to attract ambitious young professionals, she said.

“Graduates don’t want to work for companies that will be left behind,” Franklin said.

Sheryl Estrada
[email protected]

This story was originally featured on Fortune.com

© Getty Images

• Lukas Walton, an heir to the Walmart fortune, has quietly invested $15 billion of his wealth into Builders Vision, a Chicago-based organization focused on environmental and societal impact through sustainable investments in clean energy, food, and agriculture. Preferring to stay out of the spotlight, Walton believes in engaging the business community for scalable change and insists that impactful projects can deliver financial returns comparable to traditional investments.

In the current economy, the work, opinions and battles of billionaires can be hard to avoid—yet the dynasty behind the leading business in the Fortune 500 tends to stay out of the spotlight.

Every now and again members of the Walton family, whose relatives began the Walmart empire, will quietly share their thoughts on the political or economic outlook before returning to their work.

And that’s precisely how Lukas Walton has wanted it to be. The man worth $39 billion courtesy of the business founded by his grandfather, Sam Walton, established Builders Vision in 2017 as an umbrella for his philanthropic, investment, and advocacy work.

The focus of the Chicago-based company is to deploy capital, advocate for change, and support partners more widely in a range of endeavors across clean energy, food and agriculture, and ocean preservation.

Walton had declined all media interviews, but spoke to the Financial Times for the first time in an interview published today, saying he had made the decision to prevent people “leading with their assumptions” about him.

Instead Walton has directed his time and funds towards environmental efforts and told the FT he had plowed $15 billion of his own funds into Builders Vision—to bankroll endeavors that come with both financial and societal returns.

Walton, 39, is adding his voice to a wider push from other billionaire philanthropists for a greater focus on a more sustainable and equal planet.

Earlier this year, for example, Microsoft co-founder Bill Gates confirmed the largest philanthropic donation from an individual in modern history. He announced the Gates Foundation will receive the vast majority of his wealth—approximately $200 billion—to be spent within the next two decades.

While Walton’s motives are clear—he wants the world to be more “humane and healthy”—he has experienced first-hand the benefits that access to good nutrition can bring.

As a preschooler Walton was diagnosed with a rare form of cancer and, according to the Walton family, was cured in part thanks to his mother feeding him an all-natural diet.

Walton said he is “constantly reminded” of how lucky he is to be alive, and added: “My parents taught me the good habits that have kept me around. My mom basically raised me out of her garden, and that way I got to learn where our food comes from.”

The Colorado College graduate continued: “Starting with food and agriculture, I want to put my money to work and I saw there was a space for innovative, flexible capital.

“My gut feeling all along has been to engage the business community because of its size and scale.”

Not charity

Fundamental to Walton’s belief is that investors—and indeed his high net worth peers—need to see returns if they are going to fully engage their capital in projects which have societal or environmental benefits.

As such, he told the FT, his projects should not be framed as charitable because they have a very clear focus on returns that either match or outperform the rest of the market.

Walton has already undertaken significant projects which he says demonstrate returns, for example backing a business in Nebraska that purchases and then leases farmland for organic agriculture.

Making the green economy a more palatable investment than markets is certainly no small undertaking, but Walton, the CEO of Builders Vision, maintains: “The opportunities are out there.

“[The finance gap] is not for lack of pipeline. But people first need to realize that the environment is industry, it’s infrastructure, it’s financial products, it’s not simply trees.”

It seems Walton—ranked 37th on Bloomberg’s Billionaires Index—is happy to get on with the job in his own way. He’s often spotted cycling to the office in Chicago, and drives a Volvo SUV instead of the higher-end luxury vehicles preferred by other billionaires.

His urge to stay out of the limelight extends to his hobbies. The quiet of trail biking, he says, is a draw because “it’s one of those places I can’t be on a phone call.”

This story was originally featured on Fortune.com

President Donald Trump’s immigrant deportation efforts have escalated dramatically over the past few weeks, setting workers on edge and stirring up fear in workplaces across the U.S. 

From Los Angeles to Texas and Florida, agents from the U.S. Immigration and Customs Enforcement (ICE) have shown up at businesses to check for undocumented workers and make arrests. Trump wrote in a social media post on Sunday that ICE agents would “do all in their power to achieve the very important goal of delivering the single largest Mass Deportation Program in History.” 

These efforts have created a new sense of urgency among business leaders about how they should prepare their workforces if ICE comes knocking. “This week was the first time ICE raids actually came up in conversations I had with CHROs,” says Kevin Martin, chief research officer and CHRO advisor for research firm i4cp. “If you are potentially subject to raids, and are not communicating something out to your employees about this, to me, that’s negligence.”

Even if their workplace is unlikely to attract ICE attention, the latest developments should make bosses consider how these policy changes may affect employees—whether staffers are just reading headlines, or of they’re affected by the immigration crackdowns through their friends, family, or community at large.   

Here’s what communication experts told Fortune about how managers should address an increasingly fearful atmosphere around immigration in the U.S. 

Tell employees if the company has a plan if ICE comes knocking.  Some businesses have created detailed protocols to help guide employees about what to do if immigration agents actually show up at work. Having a clear policy around what’s expected in these instances can help workers feel prepared and less anxious. That includes knowing who to notify, and where these agents are allowed to go (public spaces only, not private). 

These plans can include reminders for workers about their rights. For instance, employees don’t have to answer direct questions from ICE officers or other government agents about their citizenship status, even if they are on the premises, legal experts previously told Fortune. They also have the right to remain silent and ask for legal representation.

“It requires a kind of training that goes down to a granular level,” says Nonnie Shivers, an employment lawyer and managing shareholder at firm Ogletree Deakins. “All companies, no matter the culture, have a duty to provide a safe workplace for their employees, and that requires being aware of exactly what’s transpiring in real time, and having a plan of action.”

Internal messaging is key. Many business leaders are reluctant to speak publicly about ongoing immigration crackdowns around the U.S. But communication experts that Fortune spoke with say they should still address the issue among their own workforce. 

“We live in such a divided culture that it’s difficult to step out and become involved in politics. But that being said, I absolutely think companies need to address the stress that this is creating in the workplace and acknowledge that it exists,” says Diana Scott, a former CHRO and current leader of the U.S. human capital center at The Conference Board, a non-profit business membership and research association.

Acknowledge it’s a personal issue for many people. Simply recognizing that there are people who have friends and relatives fearful of getting deported can go a long way, says Scott

“It can be as simple as saying ‘This is a difficult time for all of us, and we need to be focused on caring for one another,’” she tells Fortune. “Remind people that we’re all human beings and that no matter what the situation is, many of us are going to be impacted by this.”

Offer flexible work arrangements. The recent protests in Los Angeles, and subsequent deployment of the National Guard, closed some areas of the city and resulted in evening curfews. It’s unclear how the protests will unfold over the course of this summer, but bosses should have a plan in place if employees are physically barred from the office.  

“Every leader needs a contingency plan right now that would allow the business to operate even if certain spaces are shut down, or office buildings are inaccessible,” says Edward Segal, crisis management expert and author of The Crisis Casebook: Lessons in Crisis Management from the World’s Leading Brands. 

Offer to connect employees with legal resources. While company leaders should avoid giving out legal advice, they can connect employees to outside counsel and provide them with referrals to local immigration attorneys, support groups, or emergency hotlines, says Shivers. Some companies even offer legal services as a company benefit, which employees should be reminded of. “I think we have to look at all of the tools in our toolkit as employers, that allows people to be successful,” she says.

Highlight emotional support systems. Many employees feeling anxious right now, and bosses should remind them of any mental health care resources available to them. That includes things like access to counseling benefits through work, or even employee resources groups that might allow them to talk about their experiences in a setting away from management. 

“This is a good time to lean into employee resource groups as a safe space where employees can talk about how they’re feeling and share access to different kinds of support,” says Scott.

This story was originally featured on Fortune.com

© (Carlin Stiehl / Los Angeles Times via Getty Images)