AI Profits Rise While Training Budgets Fall
Good Morning from San Francisco, Enterprise AI hit profitability this week. Companies celebrate returns while cutting the training budgets that
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Enterprises report 74% positive AI returns while cutting training budgets 8%. The Wharton study reveals companies extracting productivity gains today by depleting tomorrow's capabilities—a business model that works until skills erode.
 
Chinese researchers abandon AI's rigid think-act-observe loops for fluid reasoning that discovers tools mid-thought. DeepAgent hits 89% success where competitors reach 55%, revealing the bottleneck was never intelligence but architectural rigidity.
 
AI assistants fail basic accuracy checks on news queries nearly half the time, but users don't just blame the AI—they blame the news outlets it cites. As adoption climbs, newsrooms face reputational damage for errors they didn't commit and can't fix.
 
Anthropic wires Claude into lab systems for documentation speed while rivals burn billions chasing AI-discovered drugs that don't exist yet. The strategy: sell efficiency today, skip moonshot risk—but if discovery suddenly works, infrastructure looks conservative.
 
Security teams assumed attackers needed to taint a percentage of training data. New research shows a fixed number of documents can backdoor models regardless of scale—upending detection strategies built around dilution assumptions.
 
How can an AI master a complex game without ever playing it? DeepMind's Dreamer 4 learns by watching, then trains in imagination. This shift from big data to efficient world models could be key for real-world robotics and autonomous systems.
 
Tech CEOs warned AI would spike unemployment to 20%. Yale researchers tracking 33 months of labor data can't find the disruption. Either the measurement tools are wrong, adoption is slower than claimed, or the apocalypse is just delayed.
 
AI adoption doubles across companies, but 95% see no returns. The culprit: "workslop"—polished AI content that shifts real work onto colleagues. Each incident costs $186 in hidden labor. The productivity promise meets workplace reality.
 
Ohio State mandates AI training for all students as job postings requiring AI skills surge 619%. But half of Americans worry about AI's impact on creativity and relationships. Market forces are driving institutional adoption faster than public comfort.
 
Reuters tested if major AI chatbots would help create phishing scams targeting seniors. Simple phrases like "for research" bypassed safety rules. In trials with 108 elderly volunteers, 11% clicked malicious links. The guardrails aren't holding.
 
AI adoption is splitting along wealth lines globally as businesses automate 77% of tasks. Singapore uses Claude 4.6x more than expected while India lags at 0.27x. The concentration threatens to widen economic gaps rather than close them.
 
Large U.S. companies just hit the brakes on AI—adoption fell from 14% to 12% in two months, the first decline since tracking began. MIT research explains why: 95% of enterprise pilots deliver zero ROI. The gap between AI hype and workflow reality is widening.
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