AI

It has been nearly three years since Hollywood writers went on a historic strike that lasted 148 days and ushered in an extraordinary period of labor unrest that virtually shut down the film and TV business.

Now, writers are poised to commence another round of bargaining with the major studios on a new three-year film and TV contract. Few observers think the union is girding for another showdown, especially at a time when many of its members are struggling to find work amid media consolidation and belt-tightening.

But in advance of negotiations that begin on Monday , union leaders are eager to dispel any perception that they might have scaled back their demands.

“Our members have shown many times that they’re willing to fight for what we need as a collective group,” WGA West President Michele Mulroney said in an interview. “And there’s no exception here.”

With its current contract expiring on May 1, the WGA hopes to improve its members’ healthcare plans, increase streaming residuals and expand AI protections.

Michele Mulroney speaks as the Screen Actors Guild (SAG-AFTRA) and Writers Guild of America (WGA) join GLAAD in releasing the 11TH Annual GLAAD Studio Responsibility Index at The Village at Ed Gould Plaza Los Angeles LGBT Center in Los Angeles, California, on September 14, 2023.

(Michael Tran/AFP via Getty Images)

Ellen Stutzman, the union’s executive director, said despite popular belief, the studios have weathered the transition from cable television to streaming “very well,” citing their efforts to maximize revenue with streaming bundling, rising subscription fees and advertising revenue.

“Writers are watching as Netflix and Paramount are fighting it out to acquire Warner Bros… Paramount is spending $81 billion,” said Stutzman. “There’s money for a fair deal for writers.”

The union leaders agree that this year’s negotiations are all focused on the sustainability of a writer’s career.

A spokesperson from the Alliance of Motion Picture and Television Producers, which represents the major studios in negotiations, said in a statement that they look forward “to engaging in a constructive and collaborative bargaining process with the WGA. Through continued good-faith dialogue, we are confident we can reach balanced solutions that support talented writers while sustaining the long-term success and stability of our industry and its workforce.”

A top priority for the WGA is to increase the caps that companies contribute to the union’s healthcare plan. Union officials say the current cap has remain unchanged for two decades as healthcare contributions have steadily declined due to fewer writers working.

AI is also top of mind for the WGA.

In 2023, the guild secured various AI protections by establishing that AI isn’t a writer and nothing it produces is considered literary material.

But as major studios start to make deals with AI companies, like Disney’s $1 billion investment into OpenAI’s Sora platform, many writers are concerned about how their work could be used.

“AI is using [studios’] IP, which is stuff that we wrote to license these models,” said John August, the co-host of the “Scriptnotes” podcast and WGA’s negotiating committee co-chair. “With the Sora deal, it seems clear that the companies intend to monetize this IP for use with AI.”

August says the union will be skeptical toward arguments that it’s still too early to seek more safeguards around such a nascent industry, citing the union’s past history with the rise of DVDs and the internet and how profoundly those technologies changed the compensation for writers.

“If you’re taking the work that we created to generate AI outputs, we are owed money. They’re using our work to do something down the road,” added August.

WGA’s negotiating committee also is looking to boost streaming residuals, expand the minimum number of people allowed in a writers’ room and add protections for scribes working on pilots.

“We very much hope that lessons were learned in 2023 and that the AMPTP will come to the table ready to take our proposal seriously and to make a fair deal, and to do that quickly,” Mulroney said. “It provides stability for the companies and for our membership. It’s better for everybody.”

WGA is entering contract negotiations nearly a month after the actors’ union, SAG-AFTRA, began its bargaining sessions. Last week,
the AMPTP said it was extending negotiations another seven days.

AUSTIN, Texas — One of the most anticipated events at this year’s SXSW Film & TV Festival wasn’t a movie at all, but a speaking appearance by director Steven Spielberg. The talk, a live taping of the podcast “The Big Picture” lead by co-host Sean Fennessey, covered many aspects of the Hollywood legend’s career, with a through line of sci-fi and space aliens in conjunction with Spielberg’s upcoming alien invasion thriller “Disclosure Day,” due June 12.

Though no real details about the new film were revealed, references to it peppered the conversation as if it were very much on Spielberg’s mind — the film he was ostensibly there to promote.

To an audience that included filmmakers Robert Rodriguez and Daniel Kwan, the event began with a clip reel that served as a reminder (as if anyone in the packed hotel ballroom needed one) of just how influential the 79-year-old filmmaker is. A selection of Spielberg’s work plays like a trailer for the idea of movies themselves; this one included “Jaws,” “Raiders of the Lost Ark,” “E.T.” “Schindler’s List,” “Jurassic Park,” “The Sugarland Express,” “Catch Me If You Can,” “Munich” and many more.

Fennessey noted that Spielberg wanted to make 1977’s “Close Encounters of the Third Kind,” his first sci-fi movie about the existence of aliens from other worlds, even before making 1975’s “Jaws.” Spielberg went further, saying he had actually wanted to make “Close Encounters” — then just referred to as “The UFO Movie” — even before 1974’s “Sugarland Express.”

Asked about President Obama’s recent comments about the possible existence of intelligent life elsewhere in the universe and how his own feelings may have evolved over the years, Spielberg said, “I think that for one thing, when President Obama made that comment, I thought, ‘Oh my God, this is so great for “Disclosure Day,”’ and then, two days later, he stepped back the comment and said what he believed in was life in the cosmos, which of course everybody should believe that because no one should ever think that we are the only intelligent civilization in the entire universe. So I’ve always believed, even as a kid, that we were not alone. So that just goes without saying. The big question is: Are we alone now?”

He added this interest was “reinvigorated” by a 2017 New York Times article about U.S. Navy pilots seeing unexplained aerial phenomenon, then by a 2023 Congressional subcommittee hearing on the topic.

“I don’t know any more than any of you do,” Spielberg said, “but I have a very strong, sticky suspicion that we are not alone here on Earth right now. And I made a movie about that.”

Spielberg and “The Big Picture” co-host Sean Fennessey taping a live podcast at SXSW on Friday.

(Tibrina Hobson / Getty Images)

As to how he feels about that possibility, Spielberg added, “I’m not afraid of any aliens, there or here. I have no fears about that, whatsoever. I think our movie does take into consideration, without giving too much away, the social dislocation that could occur, theologically, if it would be announced that there’s evidence — not only evidence, where it’s interaction that’s has been going on for decades, that we are not just now finding out about. It is going to cause a disruption in a lot of belief systems, but I don’t think it’s a lethal disruption at all.”

Among other topics that were discussed, Spielberg revealed he is developing a western that would shoot in Texas, though he was reluctant to discuss it in any further detail except to say it would contain “no tropes.”

He also said he is not on any social media, but did install Instagram on his phone once for two weeks and felt as if he had been abducted by aliens for the amount of time he lost.

To that end, he also noted, with comic frustration, how he himself has never had any sort of alien encounter.

”I made a movie called ‘Close Encounters of the Third Kind.’ I haven’t even had a close encounter of the first or second kind,” Spielberg said. “Where’s the justice in that? If you’re listening out there, I’m talking to you.”

There was a brief moment of confusion when Fennessey asked Spielberg for his thoughts on AI and Spielberg wasn’t clear if he was asking about his own 2001 movie or the broader topic of artificial intelligence.

Once that was cleared up (Fennessey meant the latter, a serious labor issue in Hollywood), Spielberg noted he has not used AI on any of his own films. “I don’t want to go into a whole rant about AI because I am for AI in many different disciplines. I am not for AI if it replaces a creative individual.”

Speaking to the theatrical experience, Spielberg made a brief allusion to the flare-up around comments by Timothée Chalamet regarding the popularity of opera and ballet in relation to the movies.

He noted that he does not decry the at-home streaming experience and that he works with Netflix, but that “for me, the real experience comes when we can influence a community to congregate in a strange dark space. All us are strangers and, at the end of a really good movie experience, we are all united with a whole bunch of feelings that we walk into the daylight with or into the nighttime with. And there’s nothing like that. I mean, it happens in movies, it happens at concerts and it happens in ballet and opera.”

Here there was a round of applause from the audience. “And we want that sustained and we want that to go forever.”

Spielberg noted how many of his favorite filmmakers, including David Lean and Billy Wilder and more recent examples such as Paul Thomas Anderson and Christopher Nolan, are always making films that feel different from what they have done before. He sees himself as part of that same school.

“If we’re just not making the same sequel over and over and over again and they’re not the same Marvel title over and over and over again, we all get a real chance to experience something, which is freshness,” Spielberg said. “And that is why I don’t judge my accomplishments based on a single film.”

The index provider reviews the S&P 500 every quarter using rigorous criteria on market capitalisation, profitability, liquidity and sector balance to ensure it reflects the largest and most representative top 500 US companies.

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The latest update will bring Vertiv Holdings, Lumentum Holdings, Coherent Corp. and EchoStar Corporation into the index.

They replace Match Group, Molina Healthcare, Lamb Weston Holdings and Paycom Software, with the changes taking effect before the market opens on Monday 23 March.

With trillions of dollars in assets tracking the S&P 500, the rebalance typically prompts buying from passive funds, often providing a short-term lift to new members.

Shortly after the S&P Global announcement, on Friday 6 March, all four companies’ shares rose on average 8% as investors began anticipating the increased flow.

Three out of the four incoming firms supply critical infrastructure for the AI boom, from power and cooling systems to high-speed optical components.

According to S&P Global, the changes show how sustained AI investment has become a structural force in the market, to the point that it is reshaping the index composition.

Big Tech is guiding for roughly €600bn in AI spending this year alone.

Vertiv

Vertiv Holdings specialises in critical digital infrastructure, offering power management, thermal management and modular systems that support high-density computing in data centres.

The company has seen explosive demand for liquid cooling and high-power solutions as AI workloads drive energy consumption far beyond conventional levels.

According to Vertiv’s fourth quarter 2025 earnings, released in February, organic orders grew 252% year-on-year in the final quarter, pushing its backlog to $15bn (€13bn) –– a 109% rise from the previous year.

The book-to-bill ratio reached approximately 2.9 times and full-year 2026 guidance points to organic sales growth of 27% to 29%, indicating very strong requisition.

The firm’s strong performance reflects its central role in enabling the hyperscalers’ expansion of AI infrastructure.

Inclusion in the S&P 500 is expected to increase visibility and liquidity through passive fund inflows. This milestone underscores Vertiv’s evolution into a key enabler of the physical infrastructure powering AI growth.

Lumentum

Lumentum Holdings develops advanced optical components, lasers and transceivers that deliver the ultra-high-speed connectivity required inside data centres and across communications networks.

Its products are essential for handling the massive bandwidth demands of AI model training and inference.

In early March, Nvidia announced a multi-year strategic partnership with Lumentum that includes a $2bn (€1.7bn) investment to expand capacity, advance US-based manufacturing and deepen research and development collaborations.

This partnership came alongside multibillion-dollar purchase commitments for advanced laser components.

The S&P 500 addition elevates the profile of optical technologies as a foundational layer in next-generation AI infrastructure.

For Lumentum, the move reinforces its position as a critical supplier in the race to scale AI systems efficiently and at unprecedented speeds.

Coherent

Coherent Corp. focuses on photonics and laser technologies, with a strong emphasis on silicon photonics and high-speed optical interconnects designed for large-scale AI computing clusters.

The company has repositioned its portfolio to tackle latency and power-efficiency challenges in hyperscale environments.

Similar to Lumentum, the company recently disclosed a parallel strategic partnership with Nvidia, also including a $2bn (€1.7bn) investment and multibillion-dollar purchase commitments for advanced optics.

The collaboration targets technologies vital for future data centre architectures and supports expanding US manufacturing.

The S&P 500 inclusion recognises Coherent’s transformation and the structural demand from global AI build-outs.

Greater institutional interest and enhanced liquidity are widely expected once the rebalance takes effect. This development cements the company’s role as an indispensable partner in the infrastructure underpinning rapid advances in AI.

EchoStar

EchoStar Corporation is the outlier of the group as it is the only company being added to the S&P 500 that is not directly tied to the expansion of AI infrastructure.

The firm delivers satellite communications, video entertainment and broadband services, primarily through its DISH network operations.

The addition brings dedicated exposure to the communications sector, balancing the heavy tilt toward AI infrastructure providers in this quarterly update.

In line with its fellow entrants, EchoStar has delivered triple-digit gains over the past year, reflecting resilience in the telecom space amid broader technology shifts.

The move complements the data centre focus of the other new companies and underscores how communications continues to shape the composition of the US’ flagship equity index.

The quarterly adjustments follow a pattern of the S&P 500 evolving alongside technological shifts. While passive inflows deliver an immediate boost, the longer-term impact lies in better alignment with the sectors driving the modern economy.

Just in time for the Oscars, Tilly Norwood, and by extension her creator, Eline van der Velden, gave actors at every level an unexpected gift — the chance to breathe a little easier.

AI will not be replacing you any time soon.

On Tuesday, the AI phenomenon known as Tilly debuted a single and music video titled “Take the Lead.” In it, Tilly sings a self-celebratory, pro-AI anthem with the big-eyed feisty longing of an algorithm marked “Disney princess: Big song” while she wanders through increasingly fantastic self-affirming scenarios that scream “Plus ‘Barbie.’”

Van der Velden was clearly trying to persuade actors to embrace the possibilities of AI but like Timothée Chalamet, who managed to prove that opera and ballet have many devoted fans by publicly suggesting the opposite, her attempt will likely backfire. The underlying message of the video, at least to performers, appears to be: Relax — AI hasn’t figured out how to lip sync properly, much less act.

It’s a bit of good news in a time of AI anxiety, some of which was Tilly-induced. Last year, Van der Velden, a Dutch actor and founder of the production company Particle6, debuted Tilly, via Instagram, as the “world’s first AI actress.” Around the time the account hit 50,000 followers, Van der Velden announced that several talent agents were interested in representing Tilly. Not Van der Velden, but Tilly Norwood, a “performer” who did not exist.

For a few minutes, Hollywood lost its collective mind. Not only were creators and performers facing a future in which their work, bodies and faces could be scanned and fed into an algorithm capable of imitating writing styles or creating images of actors doing things they never did (in a recent AI video, Tom Cruise and Brad Pitt duke it out on a war-torn rooftop), now some feared they would be competing for jobs with “actors” who could work 24 hours a day, required no health benefits and would never demand bowls of M&Ms with the green ones removed.

SAG-AFTRA, which had just ended a strike caused in part by concerns about AI, protested Tilly and the use of “stolen performances to put actors out of work.” Various actors were outraged and some called for the interested talent agencies to be identified. Even Emily Blunt was publicly disconcerted, begging Hollywood agencies to “please stop taking away our human connection.”

Van der Velden quickly responded, insisting that Tilly was “not a replacement for a human being, but a creative work — a piece of art … a new tool — a new paintbrush.”

Then, on Tuesday, “Tilly” released a music video that seems to argue the exact opposite.

In the video, which appears over the message “Can’t wait to go to the Oscars,” the computer-generated young woman trips through a montage of “famous person moments,” as Tilly insists that she is not a puppet but a star; she encourages all actors to embrace and use AI, to own their creativity and “be free.”

A note prefacing the video states that “18 real humans” were involved in its production (including Van der Velden who is the basis of the performance), who provide the subtext for Tilly warbling: “They say it’s not real, that it’s fake, but I’m a human, make no mistake.”

Whatever Van der Velden and her team hoped to achieve, one thing is very clear: Emily Blunt has nothing to fear from Tilly Norwood.

The questionable merits of the song, performance and production value aside, the video is the best argument yet for why AI “performers” are a limited threat. As Tilly walks the streets of London, poses for selfies, signs autographs, appears on talk shows, performs live in front of enormous audiences, interacts with photographers, we are reminded that Tilly could never do any of this. AI performances are, by their very nature, limited to a screen.

Instagram fame is a real thing and can be monetarily beneficial, just as animated and digitally enhanced characters can connect deeply with audiences. But beyond her ability to raise the spectre of wholly coded “performers” constructed from borrowed bits of humans (which, as anyone who has read or seen “Frankenstein” knows, never ends well), Tilly doesn’t appear to have anything like star power.

And to consider her as existing separate from her creators is like imagining that the ventriloquist dummy Charlie McCarthy could have a career, and an agent, separate from the real performer Edgar Bergen.

Though Charlie did have the advantage of being able to be seen live and in person.

Watching Tilly, one is reminded that the magic of actors is that they are human. Audiences are, after all, human too and whether facing a stage or a screen, we are captivated by certain performers’ ability to bring all manner of characters and stories alive, while also being, as Us Weekly says, “just like us.”

People with bodies that age and change, people who fall in love, get messy, say dumb things, say smart things, fall prey to illness and accidents, shop at Trader Joe’s, end up in court or trip when about to receive an Oscar.

Their faulty, glorious humanity allows them to connect to their art, but it also connects them to us. We may never get an Oscar or be able to masterfully deliver a Shakespeare soliloquy on a chat show, but we know what it’s like to trip or say something dumb or experience aging, illness or accident.

You can’t replace actors with algorithms, even if/when someone comes up with something more convincing than Tilly, because actors are not just about performances. They are people who are alive in the world and no amount of coding can replicate that.

As Hollywood writers continue contract negotiations with major studios, one topic remains front and center: the role of artificial intelligence.

On Friday, the Writers Guild of America released a list of contract demands, which 97% of the union membership supports. Though some details have yet to be revealed, many of the union’s asks involve expanding protections over the use and abuse of AI, in addition to improved health coverage and higher residuals.

AI and streaming residuals were central issues in strikes by actors and writers in 2023.

WGA’s current contract, which expires May 1, established that AI isn’t a writer and nothing it produces is considered literary material. It prohibits companies from giving writers AI-generated scripts for a rewrite fee or requiring writers to use AI software, and a company must disclose whether any written materials were developed using AI.

The union says its current demand is to simply “expand” these protections. Other priorities include increasing contributions to the WGA benefit plans, raising minimums for “page one” rewrites and boosting streaming residuals.

The Screen Actors Guild-American Federation of Television and Radio Artists has identified similar issues as it negotiates a new contract for actors. Last week, SAG-AFTRA and the bargaining group for the major studios disclosed that they are extending their negotiations for seven days. The discussions began Feb. 9.

The union, whose contract expires June 30, is expected to propose what has been called the Tilly tax, a fee that studios would have to pay to the union in exchange for using an AI actor. This demand is in response to the first AI actor, Tilly Norwood, being introduced to Hollywood. Though the bot has yet to star in a major project, the fear of AI-generated characters taking jobs is real for many actors. The bot’s creator, Xicoia, also recently announced the expansion of its AI actor universe, called the “Tillyverse.”

WGA’s negotiations are set to start Monday and will be led by Ellen Stutzman. The studios will be represented by the Alliance of Motion Picture and Television Producers’ new president, Gregory Hessinger.

The negotiations are happening as WGA West’s own staff members have been on strike, forcing the guild to call off its L.A.-based award show. The staff union, with more than 100 employees, are similarly demanding higher pay and protections against AI.

WASHINGTON — President Trump, his Treasury secretary and his choice to lead the Federal Reserve believe they can coax the U.S. economy back to a boom reminiscent of the 1990s.

They are putting their faith in artificial intelligence to duplicate what happened when another technology arrived during the Clinton era: the internet. Back then, the American economy surged as businesses became more productive, unemployment tumbled and inflation remained in check.

Trump expresses confidence that his nominee to become Fed chair, Kevin Warsh, can unleash an economic bonanza by jettisoning what the president sees as the central bank’s hidebound reluctance to slash interest rates.

Many economists are skeptical.

The world looks a lot different today than it did when the Spice Girls ruled radio and “Titanic’’ dominated the box office. And the story the Trump team is telling — that a visionary Fed chair, Alan Greenspan, fueled the 1990s boom by keeping interest rates low — is incomplete at best.

“The administration is offering a rather distorted version of what actually happened in the 1990s,’’ economist Dario Perkins of TS Lombard said in a commentary.

Nonetheless, the Trump administration believes history can repeat itself. All that’s been missing, Trump says, is a Fed chair with Greenspan’s foresightedness.

AI’s influence over interest rates

Trump has repeatedly attacked current Fed chief Jerome H. Powell, whose term as chair ends in May, for his caution in lowering rates while inflation hovers above the central bank’s 2% target. Treasury Secretary Scott Bessent said on social media in January that the president sought to replace Powell with someone with “an open, Greenspan-like mind.”

“Our nation can see productivity boom like we did in the ’90s when we are not encumbered by a Federal Reserve which throws the brakes on,’’ Bessent wrote.

On Jan. 30, Trump said he was picking Warsh.

In speeches and writings, Warsh has argued that AI-driven improvements in productivity could justify lower interest rates.

These views align with Trump’s desires for Fed rate cuts but mark a break with Warsh’s past as an inflation hawk.

In the aftermath of the 2007-09 Great Recession, Warsh — then a Fed governor — objected to some of the central bank’s efforts to help the struggling economy by pushing down rates even though unemployment exceeded 9%. He warned then, wrongly, that inflation would soon accelerate.

At issue now are gains in productivity and the possibility that AI will make them bigger — much bigger.

To economists, productivity improvements are almost magical. When companies roll out new machines or technology, their workers can become more efficient and produce more stuff per hour. That enables firms to earn more and to raise employees’ pay without raising prices. In short: Surging productivity can drive economic growth without spurring inflation.

Greenspan and the internet

In the mid-1990s, Greenspan was contending with a strange set of economic circumstances: Wages were rising but inflation wasn’t heating up.

Big productivity gains might have explained things, but government data showed no sign of them. Other Fed policymakers worried that surging wages and tame inflation couldn’t coexist and that higher prices were coming. They wanted to raise interest rates.

But Greenspan suspected that the official productivity numbers were missing something. For one thing, they didn’t jibe with the amazing tales of efficiency improvements the Fed was hearing from companies investing in computers and turning to the internet.

So he ordered his lieutenants to dig through decades of productivity numbers. The official statistics they assembled told an implausible story: Services firms — including retailers and legal practices — had supposedly seen productivity fall over the years, despite intense competitive pressure and massive investments in technology.

Greenspan didn’t believe it. He persuaded his Fed colleagues that the government’s numbers were wrong and were understating productivity. They agreed in September 1996 to hold off on raising rates.

The economy took flight.

Tardily, productivity advances began to show up in the official data. Overall, American economic growth surpassed 4% every year from 1997 through 2000, something it would do again only once in the next quarter century. The unemployment rate plunged to 3.8% in April 2000, the lowest in three decades. Inflation stayed in its cage, coming in below 2% — later the Fed’s official target — for 17 straight months in 1997-99.

History repeats itself … maybe?

American productivity looked strong in the second and third quarters of 2025, and some economists attribute the improvements to the early adoption of AI; they see bigger gains and stronger economic growth ahead.

Others aren’t so sure.

Joe Brusuelas, chief economist at consulting firm RSM, wrote that the 2025 productivity improvements “are not because of artificial intelligence’’ but reflect investments in automation that companies made when they couldn’t find enough workers during the COVID-19 pandemic. “Those investments are starting to pay off,’’ Brusuelas wrote.

Economist Martin Baily, senior fellow emeritus at the Brookings Institution, believes it will take time for AI to have a big effect on the way companies do business and on the nation’s productivity.

“Companies don’t change that fast,” said Baily, chair of President Clinton’s Council of Economic Advisors during the boom era. “It’s expensive to change. It’s risky to change. The managers don’t necessarily understand the new technology that well. So they have to learn how to use it. They have to train their staff. All that stuff takes a long time.’’

A productivity boom can raise the economy’s speed limit — how fast it can grow without pushing prices higher. But it might not justify lower interest rates, Fed Gov. Michael Barr said in a speech last month.

Businesses will borrow to invest in AI, putting upward pressure on interest rates. Likewise, American workers and their families probably would save less and borrow more in anticipation of higher wages, the payoff for being more productive; that would put still more pressure on rates to rise.

Bottom line, Barr said: “The AI boom is unlikely to be a reason for lowering policy rates.’’

Even Greenspan’s Fed eventually came to the same conclusion, reversing course and starting to raise its benchmark rate in mid-1999, taking it from 4.75% to 6.5% in less than a year. (The rate Trump complains about now is around 3.6%.)

“Warsh and Bessent talk only about the dovish 1995/96 version of Greenspan; they overlook the hawkish 1999/2000 variant,’’ Perkins wrote.

Then and now

Many of Warsh’s potential future colleagues on the Fed’s interest-rate setting committee see the late-1990s experience differently than he does, setting up what could be a clash at the central bank if the Senate confirms Warsh as chair.

Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said last week that “the analogy to the late ‘90s is a little harder for me to understand.” Greenspan’s insight was that productivity gains meant the Fed could hold off on raising rates, not that it should slash them, Goolsbee noted.

“It wasn’t, ‘Should we cut rates because productivity growth is higher?’” he said.

The economic backdrop that awaits Warsh is also far less friendly than the one Greenspan enjoyed.

Greenspan was avoiding rate hikes at a time when the usually profligate U.S. government was running rare budget surpluses and didn’t need to borrow so desperately. Now, after a series of spending hikes and tax cuts, deficits are piling up year after year, and the Congressional Budget Office expects federal debt to hit a historic high of 120% of America’s gross domestic product by 2035.

Nor was productivity the only thing controlling inflation in the 1990s. Countries were lowering tariffs and dismantling trade barriers. Immigration was surging.

Now, due largely to Trump’s policies, notably his sweeping taxes on imports and his crackdown on immigration, the world is much different. “Trade barriers are going up,’’ Perkins wrote. “Globalization has given way to de-globalization.’’

“That benign era is clearly behind us,’’ said Michael Pearce, chief U.S. economist at Oxford Economics.

Wiseman writes for the Associated Press. AP writer Christopher Rugaber contributed to this report.

President Trump on Friday directed federal agencies to stop using technology from San Francisco artificial intelligence company Anthropic, escalating a high-profile clash between the AI startup and the Pentagon over safety.

In a Friday post on the social media site Truth Social, Trump described the company as “radical left” and “woke.”

“We don’t need it, we don’t want it, and will not do business with them again!” Trump said.

The president’s harsh words mark a major escalation in the ongoing battle between some in the Trump administration and several technology companies over the use of artificial intelligence in defense tech.

Anthropic has been sparring with the Pentagon, which had threatened to end its $200-million contract with the company on Friday if it didn’t loosen restrictions on its AI model so it could be used for more military purposes. Anthropic had been asking for more guarantees that its tech wouldn’t be used for surveillance of Americans or autonomous weapons.

The tussle could hobble Anthropic’s business with the government. The Trump administration said the company was added to a sweeping national security blacklist, ordering federal agencies to immediately discontinue use of its products and barring any government contractors from maintaining ties with it.

Defense Secretary Pete Hegseth, who met with Anthropic’s Chief Executive Dario Amodei this week, criticized the tech company after Trump’s Truth Social post.

“Anthropic delivered a master class in arrogance and betrayal as well as a textbook case of how not to do business with the United States Government or the Pentagon,” he wrote Friday on social media site X.

Anthropic didn’t immediately respond to a request for comment.

Anthropic announced a two-year agreement with the Department of Defense in July to “prototype frontier AI capabilities that advance U.S. national security.”

The company has an AI chatbot called Claude, but it also built a custom AI system for U.S. national security customers.

On Thursday, Amodei signaled the company wouldn’t cave to the Department of Defense’s demands to loosen safety restrictions on its AI models.

The government has emphasized in negotiations that it wants to use Anthropic’s technology only for legal purposes, and the safeguards Anthropic wants are already covered by the law.

Still, Amodei was worried about Washington’s commitment.

“We have never raised objections to particular military operations nor attempted to limit use of our technology in an ad hoc manner,” he said in a blog post. “However, in a narrow set of cases, we believe AI can undermine, rather than defend, democratic values.”

Tech workers have backed Anthropic’s stance.

Unions and worker groups representing 700,000 employees at Amazon, Google and Microsoft said this week in a joint statement that they’re urging their employers to reject these demands as well if they have additional contracts with the Pentagon.

“Our employers are already complicit in providing their technologies to power mass atrocities and war crimes; capitulating to the Pentagon’s intimidation will only further implicate our labor in violence and repression,” the statement said.

Anthropic’s standoff with the U.S. government could benefit its competitors, such as Elon Musk’s xAI or OpenAI.

Sam Altman, chief executive of OpenAI, the company behind ChatGPT and one of Anthropic’s biggest competitors, told CNBC in an interview that he trusts Anthropic.

“I think they really do care about safety, and I’ve been happy that they’ve been supporting our war fighters,” he said. “I’m not sure where this is going to go.”

Anthropic has distinguished itself from its rivals by touting its concern about AI safety.

The company, valued at roughly $380 billion, is legally required to balance making money with advancing the company’s public benefit of “responsible development and maintenance of advanced AI for the long-term benefit of humanity.”

Developers, businesses, government agencies and other organizations use Anthropic’s tools. Its chatbot can generate code, write text and perform other tasks. Anthropic also offers an AI assistant for consumers and makes money from paid subscriptions as well as contracts. Unlike OpenAI, which is testing ads in ChatGPT, Anthropic has pledged not to show ads in its chatbot Claude.

The company has roughly 2,000 employees and has revenue equivalent to about $14 billion a year.

Blame AI or the White House social media employee who put controversial, profane words in the mouth of U.S. Olympic men’s hockey star Brady Tkachuk.

Either way, Tkachuk doesn’t appreciate the doctored video published Sunday on the official White House TikTok account that made it appear he was disparaging Canadians in the aftermath of the stirring U.S. gold medal victory at the Milan-Cortina Olympics.

Tkachuk’s day job, you see, is star player and team captain of the NHL Ottawa Senators.

The video features footage from a year-old news conference, except that Tkachuk’s words are freshened through AI. With U.S. Olympics goal song “Free Bird” playing in the background, Tkachuk was made to say, “They booed our national anthem, so I had to come out and teach those maple syrup eating f—s a lesson.”

The clip included a disclaimer that it used AI-generated media. After it had been viewed by more than 12 million people, Tkachuk indicated the stunt annoyed him.

“Well, it’s clearly fake, because it’s not my voice, not my lips moving,” he said Thursday in Ottawa. “It’s not my voice. It’s not what I was saying. I would never say that.

“That’s not who I am, so I guess I don’t like that video because that would never come out of my mouth, and I never had that thought.”

In its efforts to celebrate the U.S. victory, the White House has come off as tone deaf to many of the players. Sportsmanship and maturity seem less important than disparaging Canadians.

The U.S. players have made it abundantly clear that they respect their Canadian brethren. Several U.S. players — including Tkachuk— play for NHL teams north of the border.

And the men’s players admire the U.S. Olympics women’s hockey team that also won gold despite their spontaneous laughter at President Trump’s attempt at humor during his congratulatory call.

Trump invited the men’s team to the State of the Union address, saying: “I must tell you, we’re going to have to bring the women’s team, you do know that,” adding with a laugh that if he didn’t also invite the women, “I do believe I probably would be impeached.”

It was as if the president was talking to third graders afraid they might get cooties from the girls. Tkachuk explained the wonderful relationship between the men’s and women’s Olympics players while expressing regret at the laughter.

“[We’re] just coming off the ice, and I think it was 15 minutes later, you have the President of the United States calling you,” Tkachuk told reporters Thursday. “You just can’t really believe, you’re still riding the high of being a world champion, and for the President to take the time and call.

“When it comes to the women’s team, one of my favorite memories from the Olympics is after we won and after the women’s team came back from the closing ceremonies, both our teams are just in the dining hall hanging out having fun, just kind of being on top of the world.

“You have two gold medalist teams just hanging out before we’re going back to our respective cities. And it was just great to hear their experience.”

Several Big Tech companies have reported earnings in recent weeks and provided estimates for their spending in 2026, along with leading analysts’ projections.

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The data point that seems to have caught Wall Street’s attention the most is the estimated capital expenditure (CapEx) for this year, which collectively represents an investment of over $700bn (€590bn) in AI infrastructure.

That is more than the entire nominal GDP of Sweden for 2025, one of Europe’s largest economies, as per IMF estimates.

Global chip sales are also projected to reach $1tn (€842bn) for the first time this year, according to the US Semiconductor Industry Association.

In addition, major banks and consulting firms, such as JPMorgan Chase and McKinsey, project that total AI CapEx will surpass $5tn (€4.2tn) by 2030, driven by “astronomical demand” for compute.

CapEx refers to funds a company spends to build, improve or maintain long-term assets like property, equipment and technology. These investments are meant to boost the firm’s capacity and efficiency over several years.

The expenditure is also not fully deducted in the same year. CapEx costs are capitalised on the balance sheet and gradually expensed through depreciation, representing a key indicator of how a company is investing in its future growth and operational strength.

The leap this year confirms a definitive pivot that began in 2025, when Big Tech is estimated to have spent around $400bn (€337bn) on AI CapEx.

As Nvidia founder and CEO Jensen Huang has repeatedly stated, including at the World Economic Forum in Davos last month, we are witnessing “the largest infrastructure build-out in human history”.

Hyperscalers bet the house

At the top of the spending hierarchy for 2026 sits Amazon, which alone is guiding to invest a mammoth $200bn (€170bn).

To put the number into perspective, the company’s individual AI CapEx guidance for this year surpasses the combined nominal GDP of the three Baltic countries in 2025, according to IMF projections.

Alphabet, Google’s parent company, follows with $185bn (€155bn), while Microsoft and Meta are set to deploy $145bn (€122bn) and $135bn (€113bn) respectively.

Oracle also raised its 2026 CapEx to $50bn (€42.1bn), nearly $15bn (€12.6bn) above earlier estimates.

Additionally, Tesla projects double the spending with almost $20bn (€16.8bn), primarily to scale its robotaxi fleet and advance the development of the Optimus humanoid robot.

Another of Elon Musk’s companies, xAI, will also spend at least $30bn (€25.2bn) in 2026.

A new $20bn (€16.8bn) data centre named MACROHARDRR will be built in Mississippi, which Governor Tate Reeves stated is “the largest private sector investment in the state’s history”.

xAI will also expand the so-called Colossus, a cluster of data centres in Tennessee that has been described by Musk as the world’s largest AI supercomputer.

Furthermore, the company was acquired by SpaceX in an all-stock transaction at the start of this month.

The merger valued SpaceX at $1tn (€842bn) and xAI at $250bn (€210bn), creating an entity worth $1.25tn (€1.05tn), reputedly the largest private company by valuation in history.

There are also reports that SpaceX intends to IPO sometime this year, with Morgan Stanley allegedly in talks to manage the offering that now includes exposure to xAI.

Elon Musk stated that the goal is to build an “integrated innovation engine” combining AI, rockets and satellite internet, with long-term plans that include space-based data centres powered by solar energy.

Conversely, Apple continues to lag in spending with “only” a projected $13bn (€10.9bn).

However, the company announced a multi-year partnership with Google last month to integrate Gemini AI models into the next generation of Apple Intelligence.

Specifically, the collaboration will focus on overhauling Siri and enhancing on-device AI features. Therefore, one could say that Apple is outsourcing a lot of the investment it needs to be competitive on AI development.

As for Nvidia, it will report earnings and release projections on 25 February.

The company is primarily in the business of selling AI chips, and is expected to get the lion’s share of the Big Tech’s spending. Particularly, for the build-out of data centres.

In last August’s earnings call, CEO Jensen Huang estimated a cost per gigawatt of data centre capacity between $50bn (€42.1bn) and $60bn (€50.5bn), with about $35bn (€29.5bn) of each investment going towards Nvidia hardware.

The great capital rotation

Wall Street has had mixed feelings about the enormous spending Big Tech companies have planned for 2026.

On the one hand, investors understand the necessity and urgency of developing a competitive edge in the artificial intelligence age.

On the other, the sheer scale of the spending has also spooked some shareholders. The market’s tolerance hinges on demonstrable ROI from this year onwards, as the investments are also increasingly financed with massive debt raises.

Morgan Stanley estimates that hyperscalers will borrow around $400bn (€337bn) in 2026, more than double the $165bn (€139bn) that was loaned out in 2025.

This surge could push the total issuance of high-grade US corporate bonds to a record $2.25tn (€1.9tn) this year.

Currently, projected AI revenue for 2026 is nowhere near matching the spending, and there are valid concerns. For instance, the possibility of hardware rapidly depreciating due to innovation, and other high operational costs such as energy usage.

It can be confidently stated that the numbers have a heavy reliance on future success.

As Google CEO Sundar Pichai acknowledged this month, there are “elements of irrationality in the current spending pace”.

Back in November, Alex Haissl, an analyst at Rothschild & Co, became a dissenting voice as he downgraded ratings for Amazon and Microsoft.

In a note to clients, the analyst wrote “investors are valuing Amazon and Microsoft’s CapEx plans as if cloud-1.0 economics still applied”, referring to the low-cost structure of cloud-based services that allowed Big Tech firms to scale in the last two decades.

However, the analyst added “there are a few problems that suggest the AI boom likely won’t play out in the same way, and it is probably far more costly than investors realise”.

This view is also shared by Michael Burry, who is best known for being among the first investors to predict and profit from the subprime mortgage crisis in 2008. Burry has argued that the current AI boom is a potential bubble pointing to unsustainable CapEx.

Big Tech’s AI race is funded by a tremendous amount of leverage. Whether this strategy will pay off, and which companies will be the winners and the losers, only time will tell.

At the moment, Nvidia certainly seems to be a great beneficiary. Moreover, Apple has a distinct approach by increasing third party reliance, through a partnership with Google, instead of massively scaling their spending. It is a different trade-off.

Europe’s industrial deficit

Amid all this spending, urgent questions have also been raised about Europe’s ability to compete in a race that has become a battle of balance sheets.

For the European Union, the transatlantic contrast is sobering. While American firms are mobilising nearly €600bn in a single year, the EU’s coordinated efforts do not even match the financial firepower of the lowest spender among the US tech titans.

Brussels has attempted to rally with the AI Factories initiative, and the AI Continent Action Plan launched last April, which aim to mobilise public-private investments.

However, the numbers tell a stark story. Total European spending on sovereign cloud data infrastructure is forecast to reach just €10.6bn in 2026.

While this is a respectable 83% increase year-on-year, it remains a rounding error compared to the US AI build-out.

Last year, at the time when the initiatives mentioned were being discussed, the CEO of the French unicorn Mistral AI, Arthur Mensch, stated that “US companies are building the equivalent of a new Apollo program every year”.

Mensch also added that “Europe is building excellent regulation with the AI Act, but you cannot regulate your way to computing supremacy”.

Mistral represents one of the only flickers of European resistance in the AI race. The French company is employing the same strategy as most of Big Tech and aggressively expanding its physical footprint.

In September 2025, Mistral AI raised a €1.7bn Series C at a valuation of almost €12bn, with the Dutch semiconductor giant ASML leading the round by singly investing €1.3bn.

During the World Economic Forum in Davos last month, Mistral’s CEO confirmed a €1bn CapEx plan for 2026.

Just last week, the company also announced a major €1.2bn investment to build a data centre in Borlänge, Sweden.

In a partnership with the Swedish operator, EcoDataCenter, the facility will be designed to offer “sovereign compute” compliant with the EU’s strict data standards, and leveraging Sweden’s abundant green energy.

Set to open in 2027, this data centre will provide the high-performance computing required to train and deploy Mistral’s next-generation AI models.

This is an important move for the company, as it is the first infrastructure project outside France, and it is also a core venture for European data sovereignty.

Meanwhile, US tech titans are attempting to placate European regulators by offering “sovereign-light” solutions. Several Big Tech projects have been rolled out for “localised cloud zones”, for example in Germany and Portugal, promising data residency.

However, critics argue these remain technically dependent on US parent companies, leaving the European industry vulnerable to the whims of the American economy and foreign policy.

As 2026 unfolds, the stakes are clear. The US is betting the house, and its credit rating, on AI dominance.

Europe, cautious and capital-constrained, is hoping that targeted investments and regulation will be enough to carve out a sovereign niche in a world increasingly run on American technology.