AI

In its Annual Economic Report, published on Sunday, the Bank for International Settlements (BIS), known as the central bank for central banks, warned that the enormous spending on AI is accumulating financial vulnerabilities that could amplify any future shock and spread from markets into the wider economy.

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Presenting the findings, BIS general manager Pablo Hernández de Cos said the message was one of “urgency”, with policymakers urged to act before any reversal makes the eventual adjustment more painful.

At the core of the warning is the scale of the spending, despite massive investment having supported global growth over the past year.

The five largest “hyperscalers”, the technology giants racing to build AI infrastructure, are on track to commit more than $1 trillion (€878bn) to AI-related investment across 2025 and 2026, a pace that is outstripping their earnings and free cash flow and pushing some to borrow heavily to keep up.

The BIS suggests this race is fuelled by a belief that only a handful of dominant players will ultimately prevail, encouraging firms to pour money into projects whose returns remain deeply uncertain.

Echoes of past manias

The report sets today’s AI boom against a long historical lineage, from the canal mania of the 1830s and Britain’s railway mania of the 1840s to the electrification of the 1920s and the dotcom bubble.

Each began with a genuine technological breakthrough that attracted more capital than commercial returns could justify, the BIS notes, with each episode ending “with an eventual reversal in investment, inducing economy-wide recessions”.

Compounding the danger are stretched share prices and opaque financing.

The BIS highlights the spread of “circular financing”, in which chipmakers and cloud giants take equity stakes in AI labs that then commit to buying their chips and computing power, effectively recycling money back to the original investors as revenue.

Much of the funding now flows through hedge funds and private credit vehicles that face lighter scrutiny than banks.

According to Zhang Tao, the BIS chief representative for Asia and the Pacific, that reliance on non-bank channels means an AI downturn could unwind into a sharper, faster crash than a traditional banking crisis.

The hidden costs of data centres

Beyond financial markets, critics argue the true cost of the AI build-out is being obscured in plain sight.

A central concern, examined by the Wall Street Journal, is how the technology giants account for their data centres.

By assuming the expensive equipment inside them will stay useful for longer, firms can spread its cost over more years, lowering the depreciation charged against profits in any given period and making earnings look healthier than the underlying cash burn implies.

However, the specialist chips at the heart of these facilities may become obsolete far faster than those extended schedules assume, leaving a gap between reported profits and economic reality, as well as a balance sheet more exposed than it appears should demand disappoint or a sizable need to replace hardware arise.

The physical scale is staggering.

Columbia University economist Stijn Van Nieuwerburgh estimates the build-out could cost in the region of $8 trillion (€7tn) over the next six years, financed in part through the kind of off-balance-sheet arrangements the BIS flagged.

The costs are also no longer confined to corporate accounts.

Some economists now warn of a so-called “third wave” of inflation, after the pandemic and tariffs, driven this time by the AI build-out. As chip manufacturers prioritise high-margin parts for AI servers, the resulting squeeze on memory and storage has rippled out to consumer electronics.

For example, Apple raised prices on its MacBooks, iPads and other devices last week, citing an “extraordinary surge in demand for memory and storage” and saying it had “never seen a component price increase this much, this quickly”.

The company’s shares fell around 6%, their worst day in over a year, as Microsoft, Nintendo and Sony have also made similar moves.

Beyond hidden costs and inflationary pressures, where the strain may spread furthest is raw power.

Goldman Sachs expects data centres to account for nearly half of the growth in US electricity demand by 2030, with consumer power prices forecast to rise around 6% a year through 2026 and 2027.

The BIS itself notes that the build-out’s hunger for electricity is already pressuring prices and input costs, with potential spillovers to inflation, though it stresses, as do many economists, that AI could yet prove disinflationary if its promised productivity gains eventually arrive.

Halfway through a turbulent year, a clear pattern has emerged across global markets: anything tied to the physical build-out of AI has soared, while several other assets that investors traditionally turn to in uncertain times have stumbled.

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War in the Middle East, political upheaval and an oil-price spike formed the backdrop, yet stock markets in several regions still pushed to fresh record highs.

According to Dan Coatsworth, head of markets at AJ Bell, companies on the receiving end of the AI spending boom were the standout investments of the first half, while Bitcoin proved “a shocker” and gold lost its shine.

It is, Coatsworth noted, a remarkable run of events for only half a year’s worth of trading.

The most spectacular gains came from an unglamorous corner of the technology world: the firms that make memory chips.

As demand for AI computing collided with tight supply, prices surged and took shares with them. SanDisk led the US market with a gain of over 850% in six months, while Western Digital, Micron Technology and Seagate Technology all more than tripled in value, a pace of return that would ordinarily take many years to achieve.

The driver is the vast quantity of high-speed memory and storage needed to train and run AI systems as the largest technology companies race to expand their data centres.

Other US equities that soared on the back of the AI trade include Intel, Dell, Advanced Micro Devices (AMD) and Applied Materials, which all rose between 150% and 280% year to date.

The rush also lifted emerging markets, where Asian chipmakers such as TSMC and SK Hynix carry heavy weight, helping South Korea’s KOSPI double in value, Japan’s Nikkei 225 climb roughly 40% and the MSCI Emerging Markets index rise by around 27%.

In Europe, the FTSE 100 gained 7% in the first half of the year, France’s CAC 40 rose 5%, while Germany’s DAX gained 2%. Meanwhile, the MSCI India index fell 5% and Hong Kong’s Hang Seng lost 6%.

Notably, the memory rally has begun to unwind in recent days, with several of the same names caught in a sharp technology sell-off.

The fallen favourites, takeovers and the trades that cooled

The flipside was brutal for yesterday’s winners.

Previous AI darlings Meta and Microsoft were left behind, down 14% and 24% respectively on a total-return basis, as heavy AI spending turned the technology giants into more capital-hungry businesses and investors stopped paying a premium for them.

Microsoft now trades at its cheapest level in a decade, leaving both it and Meta valued more modestly than McDonald’s, an outcome few would have predicted at the height of the “Magnificent 7” craze.

Elsewhere, the assets many expected to lead disappointed.

Gold took investors on a volatile ride. After surging to a record high of $5,594.82 an ounce on 29 January, the precious metal lost around 28% from its peak despite the geopolitical turmoil that would normally send investors flocking to safe-haven assets. Instead, its appeal was undermined by higher bond yields and cash rates, which offer an income that a gold bar cannot.

Bitcoin fared worse still, falling 28% since the start of the year as enthusiasm for crypto drained away and money rotated towards technology shares instead.

In the UK, takeovers did much of the heavy lifting.

Six FTSE 100 companies, among them Glencore, Schroders and Segro, attracted bid interest in the first half, a sign that buyers still see value in British blue chips even after a three-year re-rating.

Housebuilders such as Persimmon struggled against a sluggish property market, while tech-adjacent names like Experian and RELX were swept up in fears about AI disruption.

One trade that conspicuously cooled was defence.

After a storming 2025, the likes of BAE Systems, Germany’s Rheinmetall and America’s Palantir all gave ground, as the good news on rising military budgets looked fully priced in and investors drifted elsewhere.

This article does not constitute financial advice. Always do your own research and invest according to your specific circumstances.

Published on
25/06/2026 – 10:43 GMT+2

Micron, one of only a handful of companies able to make advanced memory chips at scale, said on Wednesday that revenue in the third quarter reached $41.4 billion (€36.5bn), more than four times the $9.3 billion (€8.2bn) it recorded in the same period last year.

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The figure also comfortably beat the roughly $35.7 billion (€31.4bn) analysts had forecast, while profit climbed even more dramatically.

The Idaho-based group posted net income of $28.24 billion (€24.9bn), or $24.67 per share, against less than $2 billion (€1.7bn) a year ago. Adjusted earnings of $25.11 a share sailed past the $20.49 expected.

The market reaction to the impressive results was immediate.

Micron shares rose more than 15% in after-hours trading to around $1,213, leaving the company valued at roughly $1.16 trillion (€1tn).

The stock has now climbed about 700% over the past year, one of the most dramatic re-ratings of any large company through the AI boom, reflecting a fundamental shift in the economics of the AI build-out.

The vast data centres being constructed by hyperscalers such as Amazon, Microsoft, Google and Meta, which have collectively earmarked hundreds of billions of dollars in capital spending this year, depend on enormous quantities of high-bandwidth memory, a specialised chip that sits alongside the processors made by Nvidia and others.

Micron has said its entire 2026 output of these chips is already sold out under fixed-price contracts.

According to CEO Sanjay Mehrotra, the results reflect what he called the strategic value of memory in the AI era.

The company pointed to a series of multi-year customer agreements that it expects to make earnings more durable and predictable, a notable claim in an industry long defined by brutal boom-and-bust cycles.

Margins to rival the biggest names

What has startled analysts most is Micron’s profitability.

The company reported a gross margin of around 85% for the quarter, a level that now rivals or exceeds those of far larger technology names such as Nvidia and Meta, an extraordinary position for a memory maker historically squeezed by volatile chip prices.

The tightness of supply, with new factories not expected to add meaningful output until 2028, has handed producers exceptional pricing power.

Micron’s guidance was more striking still.

The company expects revenue of around $50 billion (€44bn) in the current quarter and adjusted earnings of roughly $31 a share, implying the boom is accelerating rather than fading. It is ramping up investment to match, lifting planned capital spending to about $27 billion (€23.7bn) this fiscal year and signalling a further jump in 2027, management told analysts during the earnings call.

The results offer reassurance to investors betting that AI infrastructure spending remains robust, with Micron’s order book serving as a real-time gauge of that demand.

The open question, as ever in the memory industry, is how long the upswing can last before supply catches up. Even the most bullish observers acknowledge that risk has not completely disappeared.

HARRISBURG, Pa. — Six months after President Trump warned states not to regulate artificial intelligence, they are increasingly doing just that.

Congress has stalled on producing federal regulations of artificial intelligence as states forge ahead and scrutinize how chatbots interact with children, how AI systems are used by employers and what developers must do to try to prevent an AI-caused catastrophe.

State lawmakers have stepped back from earlier, wider-ranging attempts to regulate AI that were vetoed or otherwise derailed by governors who viewed the measures as too onerous toward the industry’s development, including efforts to hold developers accountable for bias in AI systems.

But they are returning with legislation that is more targeted and, often, probes the corners of life where Americans interact with AI but may not know it.

Presidential power versus state power

Trump’s move to restrain states’ actions on AI drew criticism from members of both political parties and civil liberties and consumer rights groups who worried that banning state regulation would amount to a gift to AI giants, who enjoy little to no oversight.

Trump has made AI a top national and economic security priority, and he said that letting states clutter the regulatory playing field for an industry that’s spending trillions of dollars and driving the economy is too risky in the race with China for AI superiority.

Trump issued an executive order that directed the attorney general to create a task force to challenge state laws that are more than “minimally burdensome,” and directed the Commerce Department to draw up a list of problematic regulations. It also threatened to restrict funding from a broadband deployment program and other grant programs to states with AI laws.

The White House said it wouldn’t target state laws that seek to prevent fraud and protect consumers and children.

In the meantime, the Trump administration released a “national policy framework” in which it urged Congress to preempt state AI laws that are out of step with its regulatory worldview and to pass legislation to protect children, intellectual property rights and free speech. A recent bipartisan draft proposal in the House was met with withering criticism from key Democrats and Republicans.

The White House has given no indication that it has made good on its threat to enforce the president’s executive order by going to court against a state’s AI law or withholding money. In a statement, it said the Trump administration is “eager to work with partners” to enact its policy framework.

States seem largely unrestrained by Trump

Trump’s executive order didn’t seem to discourage states from trying to regulate how AI is used. More bills have been introduced this year than last, including by Republicans, said Justine Gluck, policy director of the Future of Privacy Forum, a nonprofit that advocates for data privacy in technology and whose members are from industry, academia and civic groups.

In Illinois, legislation on the desk of Democratic Gov. JB Pritzker piggybacked on elements of laws passed last year in California and New York that require developers of large advanced AI models to create protocols to prevent their systems from causing catastrophes such as a biological weapons attack, power outage or large-scale hack.

Illinois added a requirement that AI developers must get an independent auditor to review whether they are complying with their own policies. Analysts see it as a step toward requiring AI developers to take greater accountability for their products.

The bill’s sponsor, Democratic state Sen. Mary Edly-Allen, brushed aside Trump’s threat.

“I don’t know if you’ve met Illinois, but we’re pretty independent,” Edly-Allen told the Associated Press.

The bill drew nearly unanimous support, signaling a willingness by members of Trump’s party to cooperate with Democrats in filling the AI regulatory vacuum left by the federal government.

This kind of legislation is expected to expand to other states.

Regulating chatbots, especially for children

A growing number of states are imposing restrictions on how AI chatbots can interact with people, especially children. A mix of Republican- and Democratic-led states have passed such laws this year, including Colorado, Connecticut, Idaho, Iowa, Nebraska and Oregon.

In many cases, states want companies to tell people when they are interacting with AI instead of a human. Many want chatbots to be restricted in how they interact with minors, parents to have control over their child’s access, and data given to chatbots to be kept private.

In recent weeks, Connecticut enacted provisions for companion chatbots that sustain an ongoing relationship with a human. Under them, a chatbot must not be able to interact with someone under 18 unless it is programmed against encouraging self-destructive behavior and provides parents with tools to manage the child’s use.

Transparency in AI and decision-making

In California, lawmakers are advancing the “No Robo Bosses Act of 2026” to prohibit employers from relying solely on AI to fire or discipline workers, and an expansion of how the state regulates AI chatbots, including banning chatbot outputs to children from being used for advertising.

Colorado in May required companies that deploy AI systems in important areas such as employment, education, housing or banking to tell people when AI is being used to influence a decision made about them.

It was a stab at regulating what researchers say is the bias inherent in AI systems that sort through a consumer’s data and render consequential decisions — including who gets hired, a home loan or medical care. But it watered down a 2024 law aimed at preventing AI’s penchant to discriminate, amid pressure from Democratic Gov. Jared Polis.

In Connecticut, lawmakers required employers who are using employment-related AI systems to tell employees or job applicants that they are interacting with AI.

Meanwhile, Connecticut, Washington and Utah required AI developers to embed data into digital content that will allow users to determine whether the content — such as photos or video — has been created or altered by AI.

More laws are possible this year.

Some Republican-led states hold back

In Florida, the state House refused to advance what Republican Gov. Ron DeSantis called his AI “Bill of Rights” legislation. It included provisions to give parents control over their children’s access to companion chatbots and to require companies that use chatbots to tell consumers when they are interacting with AI instead of a human.

Florida House Speaker Daniel Perez, a Republican, said Trump had made it clear that the federal government should be in charge of AI regulation. DeSantis panned that idea, noting that the federal government isn’t acting.

In Utah, progress stalled on legislation modeled on laws in New York and California after the White House sent a one-sentence memo to lawmakers there to warn that it was “categorically opposed” to the bill.

Levy writes for the Associated Press.

WASHINGTON — In congressional races across the country, a new crop of super PACs is taking to the air with millions of dollars worth of advertisements to sway voters.

“President Trump said it best, ‘Celeste Maloy will never let you down,’” says one advertisement supporting the Utah Republican representative in her upcoming primary election.

“Standing up to big pharma, fighting for local jobs, Val Hoyle doesn’t back down,” says an ad backing the Oregon Democratic representative ahead of her primary victory last month.

The super PACs have nondescript names — such as Jobs and Democracy PAC and American Mission — and the text is so generic that it almost seems to have been created by artificial intelligence.

That isn’t so far off the mark. The AI industry has funded the ads.

One network of super PACs is linked to Anthropic, maker of the popular AI tool Claude, and the other to Open AI, maker of ChatGPT.

They have been among the most prolific political spenders so far in the 2026 midterm elections, splashing out more than $37 million to date to influence races across the country and making the groups among the biggest outside spenders so far in congressional races. That number could grow exponentially as campaign season heats up closer to the November election — and as the Silicon Valley giants prepare initial pubic offerings that are poised to raise billions of dollars for the companies and their executives.

The AI political spending boom comes as emerging technology companies have become increasingly “comfortable with using their power to achieve a political goal,” said Adam Kovacevich, a former Google public policy executive and founder of Chamber of Progress, a technology trade group with a progressive orientation.

The leading AI companies have a history.

Anthropic was formed by former OpenAI employees who were concerned that the company was less focused on its original mission to safely harness the power of AI.

The companies are now the leading drivers of the burgeoning AI industry, and their competing views about how the technology should be regulated are playing out in a wide-ranging political ad spending war that has targeted congressional races in big cities and rural areas alike.

OpenAI thinks AI should be regulated solely at the federal level.

Anthropic calls for more stringent regulation and supports efforts by states such as New York and California that have passed more aggressive AI laws.

The groups spending in these races are super PACs, which are able to raise and spend unlimited amounts of money in federal races thanks to the 2010 Citizens United Supreme Court decision.

In some races, the AI-backed political groups have spent more than the candidates they are backing.

“There was no way as a grassroots person that I could compete with that kind of money,” said Al Olszewski, whose opponent in a Montana Republican congressional primary beat him by 30 points after getting a boost from $877,000 in ads from a super PAC backed by OpenAI’s co-founder. “I got crushed.”

The AI behemoths have emphasized that they are independent from the political groups.

One group counts $25 million in support from OpenAI co-founder Greg Brockman and his wife, Anna, alongside $100 million tied to one of Silicon Valley’s biggest venture capital firms, which holds a large stake in OpenAI. The global policy chief for OpenAI was reportedly involved in conceiving the group.

The other side has gotten $20 million from Anthropic and millions more from donors whose identities are not public.

This anonymous political cash is commonly known as dark money, and its prevalence is growing.

(Los Angeles Times photo illustration; source photos courtesy of the Tech Oversight Project)

“This has become very normalized now,” said Brendan Glavin, director of insights at OpenSecrets, which tracks campaign spending. “In 2024, we tracked over $1 billion in dark money.”

That total was $350 million higher than the previous presidential election.

The crypto playbook

The political activity of these AI companies and executives reflects a dramatic shift from how emerging technology companies have historically engaged with politics.

Google, for example, didn’t hire its first in-house Washington lobbyist until after the company had gone public in 2005.

“I think that for a long time, the tech industry lobbying strategy was just ‘leave us alone,’” Kovacevich said.

He sees the spending by these AI-linked super PACs as following the recent playbook developed by the cryptocurrency industry, which has funded the only network of political groups that has spent more on congressional races this year than those linked to OpenAI.

“I think what the crypto industry realized was that there’s no substitute for building up political power,” Kovacevich said.

The political stakes for these technology companies are significant.

“AI policy is far from settled,” said Asad Ramzanali, the former deputy director for strategy in the White House Office of Science and Technology Policy during the Biden administration and the director of artificial intelligence and technology policy at the Vanderbilt Policy Accelerator.

Earlier this month, the Trump administration banned foreign nationals from using the most powerful AI model developed by Anthropic — and even banned the company’s own employees from it — which forced the company to restrict access for all users.

Manhattan matchup

The two super PAC networks have largely shied away from producing ads that mention AI and have mostly chosen to avoid competing against each other in the same races.

There’s one big exception.

In the marquee Manhattan Democratic congressional primary to replace retiring Rep. Jerry Nadler (D-N.Y.), each side has spent millions of dollars.

While the field includes Kennedy scion and social media star Jake Schlossberg and former Republican turned Trump critic George Conway, the target of all the AI-backed spending has been Alex Bores, a former Palantir data scientist who now serves in the New York state Assembly.

New York congressional candidate sponsored a state measure Bores requiring major AI companies to be transparent about their safety protocols and promptly report safety incidents.

(Yuki Iwamura / Associated Press)

That’s because Bores sponsored a state bill, known as the RAISE Act, that requires major AI companies to be transparent about their safety protocols and promptly report safety incidents. The bill was signed into law in December 2025.

The ads sponsored by the group tied to OpenAI, which has spent more than $7.5 million in the race, paint Bores as someone who can’t be trusted.

They cite his support from other tech billionaires, including former crypto mogul and convicted financial fraudster Sam Bankman-Fried, whose super PAC spent $100,000 to support Bores in 2022 when he first ran for New York Assembly.

“Is that really who should be shaping AI safety for our kids?” one ad asks.

An ad sponsored by the Anthropic-backed network, which has also spent more than $7.5 million supporting Bores, makes the case that the bill he sponsored is exactly why he should be elected.

“As a computer engineer, Alex Bores saw how dangerous unregulated AI could be and he wrote New York’s RAISE Act to put real safeguards on A.I. and hold big tech accountable,” the ad says.

The AI ad barrage in New York has even included what might be considered a kumbaya moment in the ad wars — another super PAC created to support Bores is most heavily backed by both an employee of Anthropic and an employee of OpenAI, who both focus on AI safety.

The group, Dream NYC, has spent more than $1.7 million supporting Bores.

Bores and fellow New York State Assemblymember Micah Lasher have been atop the most recent polls in the race ahead of the June 23 primary.

A general view of businesses in St. George, Utah, on Wednesday.

(Ian Maule / For The Times)

Rural Republicans

For voters in many parts of the country, the debate over AI policy has played out locally as a debate over the massive data centers required to power the technology.

In Utah, a proposed data center in Box Elder County, backed by “Shark Tank” television personality Kevin O’Leary, has generated controversy because of questions about its impact on resources in the drought-prone state and its environmental effect on the nearby Great Salt Lake.

In the state’s most competitive Republican congressional primary — the vast, newly drawn 3rd Congressional District — both candidates expressed concerns about how the project has been developed and called for greater transparency in this plan and for future data centers in the state.

Utah congressional candidates Phil Lyman and Celeste Maloy in a debate on June 1. A super PAC backed by Anthropic has spent more than $920,000 to support Maloy.

(Rick Egan / Pool / The Salt Lake Tribune Via Associated Press)

Despite their similar position on the project, a super PAC backed by Anthropic has spent more than $950,000 to support Maloy, who is running in the new district after the boundaries of her old district changed.

“It’s a lot of money to throw at a race,” said her opponent, Phil Lyman, a former conservative Republican state Representative who ran to the right of Utah Republican Gov. Spencer Cox in an unsuccessful primary challenge in 2024.

Lyman insists he is no AI skeptic.

“I’m not anti data centers, I’m pro-transparency,” he said. “I think the future is bright with AI.”

The group said it is backing Maloy because it sees her as “someone who’s worked the issue” of AI regulation and who “has demonstrated leadership” with Republicans in Congress.

Maloy’s campaign didn’t respond to request for comment.

Utah congressional candidate Phil Lyman speaks during a Cottage Meeting at the SunRiver Community Center Ballroom in St. George, Utah, on Wednesday.

(Ian Maule / For The Times)

But Lyman suspects the group’s support for Maloy ahead of their June 23 primary has more to do with old-fashioned politics than any emerging technology.

One of the two co-founders of the political group is Chris Stewart, Maloy’s predecessor in Congress.

“Everything that they’re doing feels very coordinated,” Lyman said. “It makes you wonder if he’s still really controlling that seat.”

When Brian Grazer has an idea for a movie, he now starts with a chatbot. The co-founder of Imagine Entertainment — the company behind “A Beautiful Mind,” “Apollo 13” and “Liar Liar” — said he sits down with Anthropic’s AI assistant, Claude, to rough out a story before handing it to a writer.

“You can build the whole thing into an outline. You still need a screenwriter. I always believe you need a screenwriter,” Grazer said during a keynote at UCLA’s Entertainment Symposium on Thursday. What once could have taken up to a year, he said, now takes him about a week — but the human writer stays.

That balance — AI as an accelerant rather than a replacement — captures where much of Hollywood has landed in practice. Amazon MGM, Lionsgate, Netflix and Disney have all made major investments in the technology. The sharper question at the symposium, which drew many of the industry’s top lawyers and dealmakers to the Westwood campus, was not whether to use AI but how: who authorizes it, how far it goes and who gets paid.

For the companies building the tools, the answer increasingly comes from the client. Studios, production companies and distributors regularly approach Promise, a generative AI company, to bring AI into their productions, and each arrives with its own usage guidelines, said the company’s president, Jamie Byrne. Those rules govern which AI models Promise may use and what protections apply — effectively letting each client decide how heavily AI figures into the work.

“It comes down to a risk appetite,” Byrne said during a panel on AI. “We know that there’s talent that are staunchly against it. We know that there are many who are okay with it.”

He framed adoption as a competitive necessity: “Every time there’s a technology change, certain studios or production companies rise. Others fall, and it’s usually the ones that are not leaning into the new tool.”

Ron Howard, also of Imagine Entertainment, argued the limits will ultimately be set elsewhere — by viewers. “Sure, it’s about efficiencies and budgets, but more than anything, audiences are going to tell us where those restrictions are,” he said. He expects AI-generated content to settle into its own subgenre over time, with audiences signaling what they will accept.

The most contested ground is labor, where consent has become the dividing line. The emergence of synthetic performers such as Tilly Norwood has made AI a central issue in SAG-AFTRA’s contract. The union’s most recent agreement draws a clear line between authorized digital replicas, which use a performer’s likeness with their consent, and fully synthetic creations.

Talent agencies are organizing around the same principle. In recent years, Creative Artists Agency began digitally scanning clients into what it calls the CAA Vault, building a replica of a client’s image, likeness and voice while leaving the talent in complete control of how it is used.

That control is beginning to carry real value, said Tammy Brandt, CAA’s deputy general counsel, who said she is seeing more deals that involve digital likeness. Hollywood has been slow to work out how to monetize these replicas, she said, but once it does, audiences will start to encounter them more often.

“You have to lean into the technology and understand what it can do, and honestly, how you can make money, work with talent and with creative assets in a way that the user is interested in,” Brandt said. “There’s a little bit of trial and error as you go with that.”

Published on 16/06/2026 – 14:21 GMT+2•Updated
14:25

SpaceX is pushing deeper into AI with its largest acquisition yet, striking a $60 billion (€51.7bn) all-stock agreement to buy Anysphere, the developer of the AI coding assistant Cursor.

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The purchase, announced on Tuesday, is intended to strengthen SpaceX’s position in the enterprise AI market, where rivals such as OpenAI and Anthropic have found early commercial traction.

Anysphere is a San Francisco startup that uses AI to automate large parts of software development, and its Cursor tool is widely used by programmers.

According to a regulatory filing, the two sides signed a merger agreement under which a SpaceX subsidiary, X67 Inc., will merge into Anysphere, leaving Cursor as a wholly owned subsidiary.

The merger is expected to close in the third quarter of this year, subject to regulatory approval.

The deal lands barely a week after Elon Musk’s company completed a blockbuster listing, and marks an aggressive move beyond rockets and satellites into enterprise AI software.

At the time of writing, SpaceX shares were trading a few cents below $200 in premarket trading, up more than 4% from Monday’s close and roughly 50% higher than its IPO price of $135.

Tuesday’s rally could see SpaceX overtake Amazon by market capitalisation if gains hold through the session.

The acquisition follows an option SpaceX secured in April, when it agreed to either acquire Cursor for $60 billion (€51.7bn) later in the year or pay $10 billion (€8.6bn) for a narrower partnership to provide compute.

Founded in 2022, Cursor has grown quickly, reporting roughly $2.6 billion (€2.2bn) in annualised business-to-business revenue, according to company data shared with Reuters this month.

The firm had previously raised more than $3 billion (€2.5bn) from backers including Nvidia and OpenAI.

SpaceX merged with Musk’s chatbot venture xAI in February, and this new deal could hand xAI a stronger position in AI-assisted coding, an area where it has trailed competitors, while giving Cursor access to far greater computing power.

Published on
16/06/2026 – 13:52 GMT+2

Wall Street’s most famous market label may be outdated.

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The ‘Magnificent 7’ or ‘Mag 7’ defined the first phase of the AI rally, as it included Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta and Tesla, but a fresh grouping is now circulating among investors keen to capture its next leg.

In the wake of SpaceX’s blockbuster listing, analysts are looking to add Elon Musk’s company, as well as OpenAI and Anthropic, which are expected to IPO later this year, to a new market label.

Coined by the British financial firm Vanda Research, the ‘FAB 10’ stands for Frontier AI & Big Tech 10, and takes the original seven companies from ‘Mag 7’ together with the three new market darlings.

According to Vanda, last Friday’s SpaceX IPO offered the clearest signal yet that attention is widening beyond the ‘Magnificent 7’.

After Monday’s close above $192 per share, Elon Musk’s space and AI firm is now the sixth most valuable company in the world by market capitalisation.

What the new label captures

The term ‘Magnificent 7’ was coined in late 2023 by Michael Hartnett, who wanted a single term for the megacap stocks powering the market to records.

Their combined value now sits at roughly $22.6 trillion (€19.5tn), with Nvidia alone worth more than $5 trillion (€4.33tn) as the most valuable company in the world by market capitalisation.

The three newcomers represent a different flavour of the same AI boom.

SpaceX brings aerospace and satellite connectivity through its Starlink unit, while OpenAI and Anthropic are among the leading developers of frontier AI models.

According to Vanda, the ten companies collectively map the direction of the AI and technology sectors over the coming decade.

However, a wrinkle in the label is that two of the additions are not yet listed.

OpenAI and Anthropic remain private, though both have filed to approach public markets this year, potentially at valuations surpassing $1 trillion (€861bn) and making the ‘FAB 10’ as much a shorthand as a tradable basket.

The ‘FAB 10’ is also not the only contender.

Bank of America has floated an ‘AI Big 10’ that instead adds the chipmakers Broadcom, Advanced Micro Devices (AMD) and Micron, reflecting the semiconductor rally.

Others have suggested smaller clusters, such as the rival ‘MANGOS’ label, which has surfaced and includes Meta, Anthropic, Nvidia, Google (Alphabet), OpenAI and SpaceX.

Strategists caution that none of the names signals the demise of the ‘Magnificent 7’, which still accounts for roughly a third of the S&P 500 index. Investors are not abandoning the originals but simply broadening the definition of who leads the AI era.

As Vanda frames it, the next decade’s winners may simply need a bigger tent.

Published on
16/06/2026 – 11:49 GMT+2

The world’s most valuable company, the chipmaker Nvidia, priced a $25 billion (€21.5bn) bond offering on Monday, marking its first issuance since 2021 and one of the largest by a technology company this year.

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The deal was originally pencilled in at around $20 billion (€17.2bn) but was enlarged after demand ran more than three times the size of the bond, according to a person familiar with the matter cited by Bloomberg.

Investor appetite was the headline of the sale.

Orders reached as high as $85 billion (€73.2bn), allowing Nvidia to upsize the transaction and tighten its borrowing costs in the process.

The timing was also favourable.

The announcement of a US-Iran framework deal to end the conflict in the Middle East steadied credit markets, pushing investment-grade spreads to their narrowest levels since early February, before the Iran war began.

That backdrop helped Nvidia lock in relatively cheap long-term financing.

According to Bloomberg Intelligence analyst Robert Schiffman, inexpensive long-dated debt lowers Nvidia’s weighted average cost of capital and helps bankroll its AI investments without threatening its AA credit rating.

A company spokesperson stated that the proceeds would be used for general corporate purposes, including repaying and refinancing existing notes.

Nvidia last tapped the investment-grade market in June 2021, when it sold $5 billion (€4.3bn) of notes across four maturities, according to a regulatory filing.

The contrast in scale underscores how quickly its financing needs have grown alongside the data centre build-out and increased demand from hyperscalers.

A wider borrowing frenzy

Nvidia joins a queue of technology giants raising vast sums to fund AI infrastructure.

Meta and Oracle have each issued $25 billion (€21.5bn) in bonds this year, while Amazon completed a single $37 billion (€31.8bn) deal, the largest US investment-grade offering of this year before Nvidia’s issuance on Monday.

For Nvidia, the raise also keeps share dilution off the table, giving it greater flexibility as capital commitments mount. The firm has invested $5 billion (€4.3bn) in Intel, pledged up to $10 billion (€8.6bn) to Anthropic and contributed $30 billion (€25.8bn) to OpenAI’s latest funding round.

Nvidia shares closed up 3.5% at $212.45 after the deal, valuing the company at about $5.14 trillion (€4.42tn).

On the other hand, Alphabet, Google’s parent company, opted for equity instead, pricing an upsized $84.75 billion (€73bn) capital raise earlier this month, after originally seeking around $80 billion (€68.9bn), according to a company filing.

The transaction, which includes a $10 billion (€8.6bn) private placement from Berkshire Hathaway, ranks as the largest equity capital raise on record and is intended to fund the group’s AI compute expansion.

Management has guided 2026 capital expenditure to between $180 billion (€155.1bn) and $190 billion (€163.7bn).

However, the equity move came on top of an already heavy borrowing run. According to its own filing, Alphabet raised more than $85 billion (€73.2bn) of debt across six major currencies and markets in the first quarter of 2026, taking its total debt balance above $100 billion (€86.1bn).

That included a US dollar bond round early in the year, leaving Google relying on both debt and equity financing to bankroll its AI ambitions.

Published on
15/06/2026 – 12:06 GMT+2

OpenAI is facing a fresh regulatory challenge after a group of state attorneys general demanded a wide range of documents about how ChatGPT protects the people who use it, a move that arrives at a delicate moment for the company as it lays the groundwork for a potential public listing.

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The investigation, which arrived just days after OpenAI filed confidential paperwork for an IPO, threatens to complicate a listing that some analysts expect will value the ChatGPT maker at roughly $1 trillion (€861bn).

According to The Wall Street Journal, which first reported the matter, OpenAI received the subpoena on Friday from a group of states, with the inquiry led by New York’s attorney general.

Officials are requesting material covering the company’s advertising practices, how it keeps people using its service, its handling of consumer and health data, and its policies towards minors and older adults.

OpenAI said it would engage with the offices behind the request and stressed that protections are already built into its product.

A spokesperson stated that the company takes the concerns raised by the attorneys general “seriously” and works to bring the benefits of the technology to people responsibly. However, the firm has not confirmed which other US states are taking part.

Mounting legal pressure

The subpoena adds to a growing list of legal headaches.

Last Thursday, a Canadian woman sued OpenAI, blaming ChatGPT for her daughter’s suicide. Earlier in June, Florida Attorney General James Uthmeier filed suit against the company and CEO Sam Altman after two shootings in which the alleged attackers reportedly used the chatbot to plan their crimes.

OpenAI responded that its models repeatedly urged the individuals to seek help from mental health professionals and that it cooperated with the police in both cases.

These are not the first courtroom tests of the year for OpenAI.

In May, a federal jury in Oakland, California took less than two hours to reject Elon Musk’s lawsuit accusing Altman of abandoning the firm’s nonprofit roots, finding he had filed too late. Musk, who called the ruling a “calendar technicality”, said he would appeal.

The clampdown also extends across the industry.

European regulators have opened investigations into Musk’s rival chatbot Grok over antisemitic and sexualised content, including deepfake images.

Anthropic, also preparing an IPO, was told by the Trump administration to restrict two of its models abroad on national security grounds, illustrating how AI governance has become an increasingly fraught political battleground.

Additional sources • AP

WASHINGTON — It was perhaps a surprising private overture from OpenAI Chief Executive Sam Altman to Sen. Bernie Sanders.

The meeting between the two had come just after the Vermont senator announced a plan for the public to take a 50% ownership stake in artificial intelligence companies such as OpenAI, using their stock to create a public wealth fund that would spread the fortune generated by AI behemoths.

Altman told Sanders that he, too, wants the public to have equity in AI companies. Though the CEO said he couldn’t support Sanders’ threshold of 50%, he nonetheless wanted to work with him to advocate for the general idea, according to people with knowledge of the conversation.

The nearly hourlong meeting in Sanders’ Senate office this week, held at Altman’s request, highlighted the inherent tension between AI powerhouses and policymakers as Americans are increasingly asked to accept the costs of the AI boom even as many remain unconvinced of its direct benefits. Yet it’s also creating odd political bedfellows fueled by populism as politicians from Sanders to President Trump embrace giving the public a stake in AI’s growth.

Speaking to reporters Friday on Air Force One, Trump described a potential partnership “where the American people can benefit from the success of AI” and said executives from leading AI companies will visit the White House, perhaps in the coming week, to discuss the idea.

“There’s something very interesting about it, where it almost becomes a partnership with the American public,” Trump said.

When reporters noted to the Republican president that Sanders, a democratic socialist and political independent, had proposed public ownership in AI companies, he pointed to similarities in their coalitions. The economic views of Trump voters and those who have supported Sanders for president, Trump said, “aren’t that far apart.”

Trump has embraced government investment in private companies in his second term, scrambling his party’s politics. His administration last year secured a 10% stake in the struggling Silicon Valley company Intel, and it considered a government takeover of Spirit Airlines earlier this year, although the airline couldn’t reach a deal and ultimately closed.

Public backlash

The positioning of leading figures such as Trump and Sanders comes as concerns about AI are emerging far beyond Washington.

In Michigan, Democrats recently clashed over Gov. Gretchen Whitmer’s appearance with Altman at the site of a major data center. Candidates such as New York Democratic House candidate Alex Bores have also made AI regulation a campaign issue by tapping into voters’ unease about the technology.

“This is a real change to society,” Altman told reporters this week. “I think it’s possible both that people can use AI a lot and like using it and also have anxiety about what it’s going to do for the future.”

Data center projects across the country have drawn opposition from residents concerned about electricity demand, water consumption and environmental impacts. Some states once eager to attract the facilities, including Ohio and Virginia, have moved to reconsider tax incentives.

“We need to pass legislation right now that says there’s not going to be any further data center development until they agree to pay for their own electricity, build their own grids and pay for their own water supply,” Sen. Josh Hawley of Missouri, a leading Republican skeptic of Big Tech, told the Associated Press.

Before arriving in Washington, Altman stopped in Michigan on Monday to appear alongside Whitmer, a Democrat, at the site of a 1.65 million-square-foot data center project. Whitmer’s team said the project will create more than 2,500 union construction jobs.

But it also drew criticism from local activists and some fellow Democrats, including Rep. Rashida Tlaib of Michigan, who called the project “disgusting.” She said she was “so disappointed” in Whitmer.

“It’s a very controversial topic right now and it’s coming from the ground up,” Sen. Elissa Slotkin, another Michigan Democrat, said about the grassroots resistance. “People feel very strongly about it.”

Whitmer defended her appearance, telling reporters afterward that “one thing’s very clear: Everyone has a cellphone in our pocket.”

“We are all, more and more, consuming technology and data, and these data centers are going to get built. So, my thought is if we can hold them to a high standard and do it in Michigan, that’s the best way to do it,” she said.

The tensions extend beyond data centers. On college campuses, commencement speakers have been interrupted by boos when discussing artificial intelligence. About 70% of college students see AI as a threat to their job prospects, according to a 2025 poll by the Institute of Politics at the Harvard Kennedy School.

Altman acknowledged those concerns. He said that while “the impact on jobs has been less than many people in our field expected,” he understands “that college students have a lot of anxiety about the future.”

Washington seeks an AI bargain

The idea that AI’s expansion is inevitable is increasingly shared by leaders across the political spectrum, even as they disagree sharply about how to manage it.

That reality was at the center of Altman’s conversations in Washington. In addition to Sanders, Altman met with Trump administration officials such as Michael Kratsios, the White House’s chief science and technology advisor, and congressional leaders from both parties.

Sanders’ team emphasized that the two did not reach an agreement on the main points that the senator made to Altman, including the 50% figure to ensure that the public has decision-making power. The senator also expressed opposition to the growing spending on elections by the AI industry.

“Unfortunately, Sam Altman did not commit to any of those,” Sanders spokesperson Jeremy Slevin said.

Altman, emerging from the conversation, described it as “great,” though noting that the two “obviously don’t agree on everything.”

How AI should be governed

Congress this week released a bipartisan framework that would establish the first broad federal approach to AI regulation while temporarily preempting many state laws.

Anthropic, one of OpenAI’s top competitors, has proposed mechanisms for coordinating pauses on advanced AI development if systems become too powerful.

The Trump administration has also begun constructing its own oversight structure, signing an executive order to establish a process for reviewing national security risks posed by advanced AI systems before their public release.

Sanders said he found the administration’s move notable after years of warnings that regulation could slow American innovation.

“Even these guys are beginning to catch on that there are legitimate concerns that have to be dealt with,” Sanders said.

Cappelletti and Kim write for the Associated Press.

Oscar-winning director Martin Scorsese is joining the ranks of entertainment industry power players embracing generative AI.

Black Forest Labs, the German AI startup behind the text-to-image model Flux, announced Tuesday that Scorsese is joining the company as an advisor.

The company unveiled the collaboration on its website with a video of the auteur using Flux to storyboard scenes, which involves mocking up shots before filming.

“This conveys a cinematic intelligence,” he said in the video, discussing the program’s uses with Black Forest Labs co-founder and Chief Executive Robin Rombach and Creative Artists Agency co-founder Michael Ovitz. According to the New York Times, Ovitz, an investor in Black Forest Labs, helped bring Scorsese aboard, along with Rick Yorn, Scorsese’s talent manager, whose investment firm BroadLight Capital is also an investor.

In a statement, Scorsese emphasized the potential for AI to transform the storyboarding process.

“For 70 years, I’ve been creating my own storyboards. There’s always been this problem of how do you communicate what you see in your head to your cast and crew. There are some things you have to see and feel,” he said. “I’m interested in the intersection of technology and storytelling, and seeing how that can push the bounds of creativity to create deeper and richer experiences for audiences.”

Traditionally, storyboarding is done by hand or digital illustration through a collaboration between directors and storyboard artists.

Scorsese’s public espousal of this technology marks the latest shift in attitude about AI from powerful Hollywood creatives. Since generative AI became widely accessible in 2022, Hollywood has struggled to navigate its power to rapidly upend industry norms.

Scorsese is not the first decorated filmmaker to embrace AI. James Cameron, the Oscar-winning “Avatar” director, is on the board of directors for Stability AI, where Rombach worked before launching Black Forest Labs. In his keynote address at the AI on the Lot conference last week, director and screenwriter Paul Schrader expressed a mixture of admiration and caution toward the technology.

“AI does not create — it combines,” Shrader said. “If AI wants an idea, it has to go to where that idea already exists. Of course, you can make the argument that that’s all artists do anyway, and to a degree that’s a valid argument. But you still have to come up with something.”

Not everybody is on board with generative AI’s potential transformations. Guillermo del Toro and Seth Rogen spoke out against the technology at Cannes last month, and below-the-line wokers, screenwriters and actors have continued to express apprehension and even horror at the prospect of being replaced by generative AI.

Scorsese’s entry into the AI field might especially shock fans given his traditionalist approach to filmmaking. In 2019, he famously criticized Marvel movies, calling them “theme parks” and “not cinema.”

“It isn’t the cinema of human beings trying to convey emotional, psychological experiences to another human being,” he said in a 2019 interview with Empire Magazine.

Even if his filmmaking centers humanity, Scorsese’s partnership with Black Forest Labs demonstrates his willingness to incorporate non-human assistance.

“Remember, cinema is a young medium, only around 125 years old, so we have to be open to how it can evolve,” he said in the statement on Black Forest Labs’ website.

Animator Jorge R. Gutierrez is facing online backlash following news that his latest series, “Punky Duck,” will use artificial intelligence for its production.

Amazon MGM Studios and Amazon Web Services announced on Wednesday the launch of the GenAI Creators’ Fund, a joint initiative that gives creators access to professional-grade AI tools and funding to produce cinematic entertainment.

Three animation projects have already been greenlighted, including Gutierrez’s “Punky Duck,” which follows a punk duck and his best friend, Smiley Cat, through a wildly exaggerated Los Angeles filled with alien invasions, giant monsters, robot criminal conspiracies, telenovela-style family drama and supernatural mayhem.

BuzzFeed Studios’ “Cupcake & Friends” and Albie Hecht’s “Love, Diana Music Hunters” are also part of the initiative.

Speaking at the AI on the Lot event at Culver Studios, Gutierrez spoke positively of using the controversial new technology, comparing it to “having sex and then they hand you the baby.”

Fans took to social media to critique the “Book of Life” creator, sharing their disappointment. Many pointed out how the tool is actively reshaping traditional Hollywood jobs, from storyboarding to production design, raising concerns over creative control.

As a response to the backlash, Gutierrez uploaded a screenshot to Instagram that same day featuring news articles by Variety and the Hollywood Reporter with a caption addressing the collaboration: “I understand a lot of you are happy for me and a lot of you are really angry at me for experimenting with AI at Amazon. I’m going to leave the comments open so you can get it all out and hopefully feel better.”

Gutierrez also warned that any death threats will be reported, as well as threats to his family. The post has since been deleted.

In a subsequent Instagram post, he shared a screenshot of a post on X, which showed edits to Gutierrez’s Wikipedia page, where he is described as a “sellout.” Gutierrez captioned his Instagram: “Whoever did this I thought it was really funny!”

The Mexican creator is behind Nickelodeon’s “El Tigre: The Adventures of Manny Rivera” and Netflix’s “Maya and the Three.” He is also currently developing the long-awaited Speedy Gonzales film with Warner Bros. Pictures Animation.

It took over a decade for Gutierrez to get approval for his 2014 film “The Book of Life,” a beloved storybook animation about the Day of the Dead. After multiple rejections from top animation studios, it was eventually produced by Mexican director Guillermo del Toro — a staunch critic of AI, who described its use as “sharting” at a party to The Times late last year.

By comparison, “Punky Duck,” was greenlighted in two months, according to Cartoon Brew.

In a statement to The Times, Gutierrez said he is “cautiously optimistic” about his collaboration with Amazon MGM Studios: “Artists driving tech, and not the other way around, is my goal.”

“It’s a big experiment for me, and like all experiments it might not work, and I will be as cautious and ethical as possible with AI,” he said.

Gutierrez has been critical of AI in the past, expressing distaste for the tool through a series of cheeky memes shared in 2023, 2024 and 2025. Last year, he referred to the nascent technology as a “mutant AI cockroach.”

At this year’s festival to unveil our inaugural Cannes issue, I had to opportunity to sit down with Sony Pictures Classics co-founders and co-presidents Michael Barker and Tom Bernard and EVP of Acquisitions, Production and Business Affairs Dylan Leiner on the Main Stage at the Marché du Film to discuss the company’s festival strategy, bidding wars, artificial intelligence and more. Watch the full conversation and read edited excerpts below.

How much does the festival reception of a movie, the reviews coming out of a festival, the buzz around it, shape decisions that you’re making? Or is it just confirming what your gut already knows?

Leiner: I want to tell one story that speaks to that, which was at the first Berlin Film Festival we attended after COVID. I remember, in the same day, I ran into three international distributors who all asked if we had seen “The Teacher’s Lounge.” And I didn’t even know what the film was. It wasn’t on our radar, it wasn’t in competition. So we quickly saw “Teacher’s Lounge” and we acquired the film [which went on to be nominated for the 2024 international feature Oscar]. And that was one of the great values of an in-person festival, the ability very quickly to communicate with distributors, with tastemakers, with critics from around the world and get that kind of information. Gut, personal taste… It plays into it a lot, but then we need reassurance. And being at a festival and being in this fishbowl environment is really helpful for that.

For a lot of people, myself included, the mystique of a festival is often around the bidding war narratives: Who’s going to pick up what and what are they going to pay? I’m curious for your take on the first big acquisition of this year’s Cannes, A24 buying “Club Kid” for a reported $17 million.

Bernard: Throughout the years, there were companies [that would] maybe overpay, or they were going to bid to get this movie no matter what, because they were the headline in all the newspapers covering this festival. So in terms of a company that’s branding — which, A24 is one of the best in branding — I think that that had to do with a little bit of the cash that went up. … There’s a branding aspect in a lot of festivals for a movie that’s a hot movie that the press has decided to seize on.

Barker: Here’s a key to how we have survived. It’s different from the way you talk about it. When we acquire a movie, whether anyone else has offers, we try to block it out. And we have trained ourselves to not let that noise bother us. What is it worth to us? What do we think it’s going to do? Dylan runs these incredible models of what it’ll do on the low end, what it will do on the high end. And then you decide where you want to be.

Bernard: Or we think we can make it work.

Barker: But at no point do we sit around and worry about who else has a higher offer for the movie. Because I have to say, in very few instances, on the movies we buy, are we the higher offer. We just do the best we can, and if we lose it, we lose it.

Bernard: [French film producer] Serge Silberman, a sage of the past, he always said, “You never lose money on a movie you didn’t buy.”

That brings up a question that I had about “Nuremberg,” which was a real success. What you’re saying is, it performed in alignment with your expectations. Were there any lessons that you took away from that in terms of future projects that might come along?

Leiner: Yes, it performed in accordance with our expectations. What’s interesting about that film, we acquired it here last year. Nobody else was really interested in the movie. … So our challenge basically was to figure out how to convince the filmmaking team that, because it was a very expensive film, that we were the right company to acquire the film on the terms that we could afford and that we could make it work. And it was a very intense series of phone conversations, in-person meetings.

Bernard: We felt like we were auditioning to get married to somebody. We were never going to be able to pay to make their money back. It was a $40-million movie, and they were really sort of out there without anybody really looking at it. And we said, “Listen, sell it to us. We think it’s going to be a great success. We’ll make your movie way more valuable over the test of time.”

Barker: There are two types of movies that are being made and distributed. One are the big tentpole studio movies. It’s about winning the weekend theatrically. These are the theatrical-driven movies. And it’s all about making that huge budget back very quickly. But the other kind of film, which is why we are in business, is the evergreen. Every one of our films, we open it with the best marketing push we can. Yes, we try to get the highest box office. But what we know will happen, even if the box office ends up being less, we believe in these films as long-term players. And these films have really long tails. You look at movies like “Run Lola Run” or “Call Me By Your Name” or even “Living” … They have generated revenues to the filmmakers and to us that’s way beyond what the box office would have portended when it opened.

I would be curious, what areas of the filmmaking process or the film distribution process do you think AI is appropriate for use, that you’ve experimented with it, that you’re excited about its prospects? And where are your red lines, if you have any?

Barker: One of the people on our staff — we really love our young staff. One of them was writing a screenplay with AI, and told me they got certain rules on AI. And I’m listening to all these rules. You can’t have your main character die in a first scene. You can’t have your romantic female lead be totally unlikable, people aren’t going to go. I’m listening to this, and I said, “Have you ever seen ‘Sunset Boulevard?’” And she goes, “No, what is that?” I said, “Go watch that movie.” She came back and she was like, “Holy cow.” I said, “Billy Wilder sat down and made that up based on what he observed.” AI is not going to be able to do that.

In a Venezuela whose infrastructure has been abandoned to the past, it is easy to forget that even here the famous phrase “the future is already here, it’s just not evenly distributed” still applies. In many ways it perfectly encapsulates the contradictions of Venezuelan society, a country where running water and electricity is far from a certainty and yet adoption of payment technologies and cryptocurrencies far outpaces that of developed countries. Whatever one thinks of the usefulness and value of these technologies, we can expect even more contradictions in the coming age of AI. 

The future and AI will arrive in Venezuela, but to whose benefit? And for which purposes?

Before answering these questions I think it’s helpful to understand the technology which is AI through Jensen Huang’s analogy of a five layer cake, where Layer One is the top and Layer Five the bottom.

One – AI Applications (Claude Code, Copilot, ChatGPT, etc)

Two – AI Models (Claude-Opus, GPT5, Llama, etc)

Three – Cloud Data Center Infrastructure

Four – Chips and Computing Infrastructure

 Five – Energy

Each layer of the cake requires the one below to stand. These are complicated supply chains that allow for the incredible technology that is modern generative AI. 

In the case of Venezuela we can forget about having much to do with Layers Two and Four. These simply require too much know-how that the engineers and manufacturers in Venezuela do not have. We cannot compete with factories in Taiwan or China nor can we compete with computer and electrical engineers making millions of dollars a year in Silicon Valley. For a few decades at least.

Let’s look at how we can expect the other three to apply to Venezuela.

The first layer of the cake, even if these applications are not made in Venezuela (and most won’t be), they will not be difficult to deploy as these companies will offer (as they do now) software-as-a-service (SaaS) products whose infrastructure can run anywhere else in the world. The use of these tools requires little more than an internet connection and we can expect some level of widespread adoption, but likely not much in terms of cutting-edge innovation. 

Because of the insatiable demand from AI companies for energy and places to put their datacenters where it’ll be the most profitable, Venezuela is attractive with its much lower-cost energy in relative terms.

Before discussing more of possible AI applications in Venezuela, let’s consider layers three (cloud datacenter infrastructure) and five (energy). These are where Venezuela is more relevant than may first meet the eye.

As you can see the entire cake relies on one base: energy. Energy and its cost is the main constraint for the entire supply chain of AI and the main reason why companies like Anthropic and OpenAI remain unprofitable despite tens of billions of dollars in revenue.

Venezuela is a potential powerhouse for energy production. Not only does it have incredibly high oil reserves but also impressive hydropower, and an extremely underdeveloped solar and wind industry.

In her bid to ask for international support, opposition leader María Corina Machado has framed Venezuela’s future as an energy hub for the Americas. Because of the insatiable demand from AI companies for energy and places to put their datacenters where it’ll be the most profitable, Venezuela is attractive with its much lower-cost energy in relative terms.

If only it had a functioning grid.

The focus on fixing this enormous issue during this stabilization phase of the American plan is no accident. The world, as has been the case since it first found oil, looks to Venezuela for the energy it can provide. One could see this negatively in that Venezuelans will have to compete with large multinational AI companies for energy, but the “stability” in the political environment that these companies require could incidentally be good for Venezuelans.

Stability of governance and respect of property rights is crucial for any company looking to make hypothetical data center or energy investments since this infrastructure takes multiple years to develop, if not decades. A return to true law and order and unassailable property rights would be an undeniable boon to the economy.

What applications may we see?

Local corporations will probably use AI-powered enterprise software as many others in the world. Though the Venezuelan entrepreneurial spirit keeps surprising, it seems likely that Venezuelan businesses will be not quite at the cutting edge but still positioned to take advantage of AI. 

The area of most interest, or rather most concern, is how the government might use these tools. The Venezuelan government has laid out their first risk-based ethical code for AI, largely modeled after the EU’s AI Act. Whether or not this translates to law, remains to be seen, but they have spoken about their commitment to “humanist” AI which disavows use cases such as manipulation, mass surveillance and disinformation. These are great values to strive for, but the government’s respect for its own laws, let alone ethical codes, has been more than lacking.

AI gives tyrants around the world exactly what they want: an army of intelligent capable agents who can’t say no and don’t need to be fed or housed.

In its ability to perform thinking tasks with lightning speed in a parallelizable manner, AI is a technology which tyrants in years past must have wished they had access to. A virtual army of bureaucrats (which the Venezuelan State already has in human form) observing citizens and making small decisions, putting names on lists, logging personal connections, building political profiles as well as modeling how likely a person would be to vote a certain way or become an annoying political activist, thus saving intelligence agencies hundreds of thousands of man-hours a year. Relying less on actual humans to want to do the work of spying on their own people or even themselves.

AI agents can screen social media and the internet for any sign of online political coordination and connect that to their already centralized data systems, which could be used to target or deny access to benefits for anyone who the AI has decided is toxic to your agenda.

When you are unpopular and attempting to maintain control over a population, technology is your friend because you can leverage your human capital much further, to do what you need done without the need to grow your network of trusted people. AI gives tyrants around the world exactly what they want: an army of intelligent capable agents who can’t say no and don’t need to be fed or housed.

At the moment, Venezuela’s future hangs in the balance, leadership going forward is unclear but one thing is clear. It will not be more of the same. The only permanent thing in the world is change, and the future will arrive in Venezuela. The question is: how will it be distributed? Who will get the benefits?

As always, it will benefit those with power. The question is: who will have power?

Barnes & Noble was turning a page on the chain’s history of declining sales, but recent comments have stirred bad blood for the bookseller.

James Daunt, the chief executive credited with breathing new life into the retailer, is clarifying the store’s stance on stocking its shelves with AI-written books.

The controversy stems from Daunt’s Monday appearance on “Today” with Jenna Bush Hager. In a viral clip from the interview, Daunt said, “I have actually no problem selling any book, as long as it doesn’t masquerade or pretend to be something that it isn’t. So, as long as an AI-written book says it’s an AI-written book, then we will stock them.”

By Wednesday, thousands of calls to boycott the bookseller had flooded social media.

Kathlin Finn, a writer and former employee of the chain, posted on social media, writing, “Hey Barnes & Not Noble, I worked for you and have supported you, but your latest AI decision is extremely disappointing. I will not be shopping or promoting B&N unless you change your AI policy.”

Author Cristin Bishara wrote, “As an author this [is] the most depressing news. I’ve been saying for a long time that this was coming. People told me I was overreacting. And I had a feeling it would start with a cute round table at the front of a B&N.”

Another social media user added, “The Barnes & Noble CEO saying they’ll stock AI generated books as long as they’re labeled and aren’t ‘ripping off somebody else’ is wild considering all generative AI is ripping off someone else.”

Daunt told The Times that the wave of backlash is based on misinterpretations of what he said, and that only a “highly edited version” of what the bookseller “actually said” had been aired.

In an emailed statement, he said the bookseller does not sell AI books, “as far as we are aware.” Barnes & Noble “demand[s] that publishers label any books that are AI generated,” and the chain takes “active measures to exclude all AI generated books.”

Daunt further stated that Barnes & Noble “will sell AI generated books if there is clear demand” and not “ban reputable books published by reputable publishers, even if AI generated, should these be published, labeled and there be clear evidence of customer demand.”

He also said that the retailer thinks it’s “very unlikely” that there will be customer demand for AI-generated books or that reputable publishers will publish them.

“The argument is nuanced, and perhaps over nuanced, but there are important principles that have to be balanced and I believe we do so as sensibly and thoughtfully as is possible,” he said. “Book banning is a clear and present danger, so we are very careful with demands to ban any books” while also remaining vigilant “not to sell AI generated books that masquerade to be by real authors.”

Last year, Daunt spoke with BBC on the issue of AI in publishing and bookselling and said that there’s a huge proliferation of AI-generated content, and “most of it is not books that we should be selling.” He told the broadcaster that, as a bookseller, the company sells what publishers publish and that he’d be surprised by efforts to put forth an “AI-generated piece of nonsense” but that, ultimately, the decision on reading material would lie with the reader.

“We don’t dictate, and we don’t dictate around politics or any other particular issues around books,” he said. “We leave it up to the reader to decide.”

In June 2025, more than 70 authors issued a call to action to big-five publishers Penguin Random House, HarperCollins, Simon & Schuster, Hachette Book Group, and Macmillan, asking the companies to pledge that they will never release books that were created by machines. Authors Lauren Groff, R.F. Kuang, Emma Straub and Emily Henry were among the petitioners.

“At its simplest level, our job as artists is to respond to the human experience. But the art we make is a commodity, and our world wants things quickly, cheaply, and on demand,” the letter read.

“We are rushing toward a future where our novels, our biographies, our poems and our memoirs — our records of the human experience — are ‘written’ by artificial intelligence models that, by definition, cannot know what it is to be human. To bleed, or starve, or love. …

“Every time a prompt is entered into AI, the language that bot uses to respond was created in part through the synthesis of art that we, the undersigned, have spent our careers crafting. Taken without our consent, without payment, without even the courtesy of acknowledgment.”

In March, Hachette pulled “Shy Girl” from publication after widespread allegations that the horror novel appeared to be AI-generated and was swiftly scrubbed from Amazon and the Hachette website. The book’s author, Mia Ballard, denied that she had relied on AI to pen the book but said an acquaintance she had hired to edit the novel used AI.

“Hachette remains committed to protecting original creative expression and storytelling,” a Hachette spokeswoman said, per the New York Times.

The Hollywood sign is ablaze as Spencer Pratt, the reality TV star now running for mayor of Los Angeles, suits up as Batman, enters City Hall and leads the people to overthrow a cabal of corrupt, out-of-touch progressives intent on destroying the city.

Then he is Luke Skywalker. Dressed in a Jedi robe, he swoops through the city on an Imperial speeder bike, as California Gov. Gavin Newsom (Emperor Palpatine) rebukes incumbent Mayor Karen Bass (Darth Vader) for not burning the city down to the ground in her first term.

“Make sure you finish the job in your second,” Newsom tells Bass with a tilt of the head and a smirk.

“The only thing that can stop us is someone telling the truth,” Bass replies. “As long as they don’t have any hope, the city’s ours.”

Pratt’s fan-generated AI election campaign videos have been praised and mocked, but heavily shared. And some see them as a harbinger of how artificial intelligence could reshape political messaging across the country.

His supporters are far from the first to create AI-generated ads. But political experts say it’s remarkable the degree to which they have used new technology to churn out a stream of outlandish, hyper-cinematic memes, creating buzz around his campaign and his message.

Some warn, however, that as the technology becomes more sophisticated, it will become harder for many people to distinguish between AI and real videos.

“When you’re creating content that is not based in reality, and then platforms are amplifying it in order to attract more eyeballs, you are putting a burden on the public for figuring out what is real and what is factual, and what is fake and misleading,” said Mark Jablonowski, the chief executive of DSPolitical, a progressive advertising firm.

Pratt’s campaign did not create the viral AI videos depicting him as a superhero taking on a cast of California Democratic villains. But he has shared the ads crafted by AI filmmaker Charlie Curran, founder of L.A.’s Menace Studio.

Supercharged and Hollywood inspired, the videos represent a brazen new era of fan-generated AI in political campaign advertising. Deploying generative AI tools to clone human voices and images, they bolster a hyperbolic and ultra-conspiratorial political narrative that depicts L.A. under Democratic rule as a hellscape in which Newsom and Bass deliberately conspire to harm the people.

Bass has condemned the ads, describing them as “very scary” and “absolutely 150% fiction.”

“His social media is now taking on a violent turn,” Bass told CNN, citing the Batman ad that depicts Angelenos pelting her with tomatoes.

Some political experts dismiss such fears of AI campaign ads as overblown. Most AI videos shared by political campaigns and their fans, they note, are more comedic than deliberately misleading.

“Spencer Pratt is using AI the way it should be used, which is to sharpen reality,” said Matt Klink, an L.A.-based Republican political consultant. “His whole shtick is that Los Angeles is broken, the insiders have failed, and the political class wants to explain away what voters are seeing with their own eyes.”

“Obviously, you don’t run an AI ad where you have someone saying something that they didn’t say, and you should disclose that they’re generated by AI,” Klink noted. But when it comes to ads that depict Pratt as Batman or Luke Skywalker, he said, “if you don’t know that they’re AI generated, you’re pretty clueless to begin with.”

For as long as political candidates and their supporters have experimented with new technology — from the pamphlets of the 1600s to the memes of the 21st century — they have faced complaints that they mislead the public.

As large language models ushered in a new era of AI, Sen. Richard Blumenthal (D-Conn.) warned in 2024 that “a deluge of deception, disinformation and deepfakes are about to descend on the American public.”

The term “deepfake” was first coined in 2017 by a Reddit user who used open-source face-swapping technology to splice celebrity faces onto porn performers’ bodies. Within months, it entered the mainstream lexicon as a way to describe any AI-generated synthetic media that realistically clones a person’s image or voice.

Blumenthal cited a “chilling example.” In January 2024, Republicans placed robo calls using an AI “deepfake” voice mimicking President Biden to New Hampshire residents to discourage Democrats from voting in the presidential primaries.

New Hampshire authorities said the message violated the state’s voter suppression laws. A month later, the Federal Communications Commission outlawed robocalls that use voices generated by AI. The company that sent the messages agreed to pay a $1-million fine.

But others kept pushing the boundaries of AI — mostly as overt parody or satire, an arena that offers greater 1st Amendment protection.

In July 2024, an AI content creator created a mock campaign ad of Democratic presidential candidate Kamala Harris with a computer-generated voiceover to make it seem she was describing herself as the ultimate “diversity hire” and “deep state puppet.” The post was titled ‘Kamala Harris Campaign Ad PARODY.’

Newsom slammed the post, saying on X, “Manipulating a voice in an ‘ad’ like this one should be illegal.” Two months later, he signed into law a series of bills that clamped down on AI in politics.

But a federal judge blocked one of the new laws that regulated election-related content that is “materially deceptive,” saying it probably violated the 1st Amendment.

No comprehensive federal rules govern the use of AI content in political ads or messaging. According to the National Conference of State Legislatures, 29 states have passed laws restricting the use of deepfakes in political campaigns: Some states, such as Texas and Minnesota, prohibit the use of deepfakes  a certain number of days before an election; the other 27 states require a media disclosure if content contains a deepfake.

Some political advertising experts call for more federal regulation. The state-by-state patchwork of regulations, they argue, makes it very difficult for social media platforms to be compliant.

“At the end of the day, we really need to see platforms being more responsible with the content that they’re sharing,” Jablonowski said. “We need to have clear guidelines and a level playing field across the country, so we’re not in a position where what’s OK in one state is not OK in another.”

Pratt’s embrace of AI is part of a larger 2026 political trend.

In January, Texas Atty. Gen. Ken Paxton released an ad depicting two of his opponents for a Senate seat — Republican Sen. John Cornyn and Democratic Rep. Jasmine Crockett — waltzing and swinging. A few months later, the National Republican Senatorial Committee shared a video that used a manipulated image of James Talarico, the Democratic nominee for the Texas Senate seat, mouthing his own tweets.

But Pratt has been particularly successful in using fan-based AI to help garner attention, pulling in a number of content creators to craft AI videos for his campaign.

One posted a video parody of the 2004 Downfall film, portraying Bass as Hitler. Another created an animated video, geared to a Latino audience, showing Angelenos lining the streets to cheer as Pratt wheels a garbage can piled with trash and the incumbent mayor. The slogan “SPENCER, SACA LA BASSURA” [Spencer, take out the trash] flashes atop the screen.

A recent survey from the American Assn. of Political Consultants shows that AI adoption is growing rapidly among political consultants — and Republicans are more likely to use it than Democrats.

But political observers in L.A. note that leading Democrats in the mayoral race are unlikely to follow Pratt in using AI. Bass, they note, is a more cautious political figure than Pratt, a brash online influencer who relished playing the role of villain on MTV’s “The Hills.”

While Pratt’s user-generated AI ads have inspired giddy delight from out-of-state Republicans — conservative radio host Buck Sexton praised the Batman video for ushering in “a new era of online persuasion” — it’s still not clear if they will convince Angelenos to vote for him.

Certainly, the ads have helped Pratt gain recognition. They have also given voice to a groundswell of frustration with L.A.’s Democratic establishment and created space for more pressing debate on the future direction of the city.

But there is little evidence that the AI ads, in themselves, are persuading new voters.

So far, none of the AI ads that Pratt has shared have received as many views on his X account as a non-AI ad his campaign produced that has racked up more than 14 million views.

In it, Pratt stands outside Bass’ city-owned Hancock Park mansion and Nithya Raman’s home in leafy Silver Lake, then pans to an Airstream on the charred ruins of his own home, which burnt down during the Palisades fire.

“They don’t have to live in the mess they’ve created,” Pratt says as he walks down an L.A. street littered with homeless tents.

Meghan Daum, a former Los Angeles Times columnist who has endorsed Pratt and dubs herself a self-appointed “liberal elite whisperer for Pratt,” said she thought Pratt’s Airstream ad was more effective than the AI superhero ads. She voiced concern his sharing of AI videos could actively undermine his campaign.

“They will be repellent to the undecided voters Pratt needs to catch, most of whom will think they’re coming directly from the campaign,” she said on X. “Get smarter, guys.”

Using AI, she told The Times, could turn off voters in a town where so many film workers have lost jobs to AI. She also worried about the legality of ads — such as one video purporting to be a Bass campaign ad — that put words in the mouth of computer-generated politicians.

But Daum noted that others told her this was the aesthetic of the new world and a way of getting people who have not voted in the past excited about something.

“That may be true,” she said.

So far, there is little evidence that AI in U.S. political campaigns has affected elections.

“There’s a lot more fear about the effects of AI in politics than evidence of the effects of AI in politics,” said Brendan Nyhan, a political scientist at Dartmouth College who co-authored a recent report on AI and persuasion.

During the 2024 election, Nyhan noted, AI was frequently used to create “obviously false” images of attention-grabbing, funny or raging content. “It seems to be more of a mechanism for reaching your base,” he said, “rather than persuading voters who haven’t made up their mind or might stay home.”

Ultimately, Pratt’s personal story of loss — and more specific complaints about L.A.’s systemic failures in preparedness and emergency response during the 2025 firestorms and spending on unsuccessful programs to house the homeless — may resonate more than simplistic AI stories of evil Democrats hellbent on razing their city.

Some L.A. political observers admit they were surprised by Pratt’s performance in a May 6 televised debate with Bass and Raman.

”Spencer Pratt was kind of a laughingstock when he first announced that he was going to run, and he has dramatically exceeded expectations,” said Klink, the GOP strategist. “I think that he surprised people in his ability to come up with solutions. … That’s what’s going to convince people to vote, not the Batman or Star Wars ad.”

As millions of people click on Pratt videos — in some cases more than the 3.8 million people living in L.A. — Klick said there was one question Pratt needs to be asking: “Do views of his ads translate into votes?”

San José Mayor Matt Mahan’s run for California governor has been defined from the start by his donor list.

Mahan entered the race late and with little statewide name recognition, but catapulted into contention thanks to massive funding from billionaire tech titans, venture capitalists, cryptocurrency investors and other Silicon Valley elites. In a state with more than 23 million voters and hugely expensive media markets, the money signaled Mahan would be a contender.

It also spurred accusations from his more liberal Democratic competitors and powerful labor leaders that Mahan is beholden to Big Tech, including forces aligned with President Trump.

California Labor Federation President Lorena Gonzalez Fletcher recently described Mahan as “funded by Trump’s big tech billionaires,” while fellow Democratic candidate Tom Steyer — a billionaire running against corporate interests — called him “MAGA Matt Mahan.”

That framing has persisted, despite Mahan being a centrist Democrat who has publicly criticized Trump.

On Thursday, Mahan released a four-page “Plan to Hold Big Tech Accountable and Ensure AI Works for All Californians.” The proposal called for AI and data centers to pay for their power and water needs, fund workforce stability initiatives and ensure human oversight of AI tools in critical sectors such as healthcare. It also called for the state to use AI to become more efficient, to bar cellphones in schools and to require parental consent for kids 15 and under joining social media.

In an interview with The Times, Mahan, 43, said AI is “one of the most significant trends in society” and needs to be addressed.

He also rejected the notion that he would do Big Tech’s bidding, and the idea that his support from tech leaders is entirely or even largely premised on his plans for their industry.

“I’ve spoken very little about tech with any of my donors,” he said.

Mahan said his fundraising has instead been “centered on how we get California on a better path in terms of building housing, improving the quality of our public schools, solving our biggest problems,” which “just resonates with people in the tech industry.”

A ‘digital native’

Mahan, the son of a teacher and a mailman, grew up in the farming community of Watsonville but commuted to San José to attend high school at Bellarmine College Prep on scholarship as a low-income student. He went on to Harvard University, where he was student body president and classmates with Facebook founder Mark Zuckerberg, spent a year in Bolivia building irrigation systems, and then taught for two years in Alum Rock as part of the Teach for America program.

He then joined Causes, an early Facebook application that allowed nonprofits to build grassroots support online, and rose to become chief executive. In 2014, he co-founded Brigade, a nonpartisan platform where voters could advocate for issues, which was acquired in 2019. He won a San José City Council seat in 2020, and was elected mayor in 2022.

An early mayoral profile described Mahan as painting a whiteboard behind his desk to “write on the wall as I did in my tech days.” Another noted he used ChatGPT to write speeches. A third recounted how he’d used AI to make city buses run faster.

Mahan said he learned as a startup leader and a classroom teacher that metrics matter — that “when we take our precious tax dollars and invest them in public services, we should measure our performance.”

He said he has always believed government should take the best tech has to offer while being vigilant about the risks it poses, which maybe comes naturally to him as a millennial who remembers “the world before the internet” but is also something of a “digital native.”

Donors explain

Between Jan. 1 and April 18, Mahan’s campaign raised nearly $13.5 million, according to state campaign finance filings. During the same period, an independent expenditure backing Mahan called Back to Basics raised about $22.7 million, while another launched by the group Deliver for California raised nearly $3.3 million.

The donors are a who’s who of tech leaders, venture capitalists and other leaders in the gig, gaming, digital media and AI defense fields.

Sergey Brin, the co-founder of Google, gave the maximum individual contribution of $39,200 to Mahan directly, and $1 million to the Deliver for California committee. Reed Hastings, the co-founder and chairman of Netflix, gave the maximum contribution to Mahan, plus $1 million to the Back to Basics committee.

Some donors, such as LinkedIn co-founder Reid Hoffman, who gave the maximum to Mahan, are well-known supporters of progressive causes. Others, such as Palantir co-founder Joe Lonsdale and crypto founder David Marcus, who maxed out to Mahan, are also Trump backers.

Brin, a friend of Gov. Gavin Newsom since the Democrat was mayor of San Francisco, has been moving rightward recently. He has donated to the Republican National Committee and in March was appointed to the White House tech advisory council. He’s also a major donor to the nonprofit opposing the ballot measure for a new tax on California billionaires — which Mahan also is against.

Brin, Lonsdale and Marcus did not respond to a request for comment. Hastings and Hoffman declined to comment.

Several other tech donors did speak with The Times — and universally described their support for Mahan as less to do with his tech policies, and more to do with issues important to all Californians.

Jamie Siminoff, who sold his home security startup Ring to Amazon for $1 billion and gave the maximum donation to Mahan, said he thinks L.A., where he lives, is the “greatest city in the world” and California is the “best state in the world.” But he sees Mahan as someone who could make improvements by bringing the state toward the political middle on public safety, housing and homelessness.

“He’s just like a nice, pragmatic, sort of centrist person, from what I can see, [who] wants to make California better, and I’m 100% behind that.”

Siminoff said it doesn’t hurt that Mahan speaks the same language as many tech leaders, who are mostly just “pragmatic inventors and entrepreneurs” who want California’s leader to be “principled in thinking about fixing things.”

Ruchi Sanghvi, the first female engineer at Facebook and a former Dropbox executive who state records show donated $25,000 to Mahan, said she has known Mahan since he was leading Causes but fell out of touch. When he entered the governor’s race, and she “got all these emails from people that I respect” saying they were supporting him, she asked for a meeting.

At that meeting, she said, Mahan “really dug in on some of the core issues that I care about,” including housing, homelessness and education.

The San Francisco resident, political independent and mother of three said the idea that tech leaders are backing Mahan because they believe he will scratch their back in business is wrong. Referring to his tech plan’s restrictions on social media for youth, she said, “I don’t think of that as scratching my back.”

Instead, “what really resonates with me and my peers is that, yes, he is pragmatic,” Sanghvi said. “He cares about measurable outcomes, which I think is very critical.”

Marc Merrill, co-founder, co-chairman and chief product officer of L.A.-based video game developer and e-sports company Riot Games, gave the maximum to Mahan, as did his wife, Ashley, founder of the sleepwear brand Lunya. In a statement to The Times, Merrill said he and his wife are lifelong Californians who love the state and support Mahan because of his record “addressing California’s most pressing challenges with practical, results-oriented solutions” in San José.

Merrill said Mahan brought down violent crime, reduced homelessness with “data-driven programs that address root causes rather than just managing the problem,” and “fostered an environment where businesses are choosing to invest and grow in the city.”

Tech vs. labor?

Gonzalez Fletcher said tech leaders have long “been very clear about their desire to support candidates who won’t regulate AI, to support candidates who will go after organized labor” — and their support for Mahan is no different.

She pointed as an example to a March event attended by Mahan and hosted by one of his most vocal backers: Garry Tan, a venture capitalist and chief executive of Y Combinator, a startup incubator in San Francisco.

At the event — which was part of Tan’s launch of a new statewide group called Garry’s List, which he has described as a “Rotary Club for radical centrism” — Chris Larsen, the co-founder of the cryptocurrency network Ripple, railed against the influence of unions in California politics and the “weak” response from business leaders, according to video.

“We’ve got to fight on par with the unions when they’re proposing stupid, job-killing ideas like the San Francisco CEO tax,” Larsen said. He noted that several other candidates for governor, including former Orange County Rep. Katie Porter, whom he’d donated to, had backed the measure to tax companies that pay their chief executive 100 times more than their average employee.

Neither Tan nor Larsen responded to a request for comment.

Gonzalez Fletcher, a former state legislator, said the argument that California Democrats have caused the state’s biggest problems by bowing to unions is false, and that what is more true is that “ruling class” Democrats such as Newsom “acquiesce to business interests” driving the state’s affordability and homelessness crises.

She said employers get away with underpaying workers and big landlords are allowed to take advantage of renters. She said Airbnb, as a tech example, has gone unchecked despite causing “a lot of the removal of housing stock.”

She said one reason she opposes Mahan is that he “suffers from the same love affair with Big Tech” as Newsom.

Steyer — who has funded his own campaign to the tune of nearly $200 million — has repeatedly struck a similar note.

Earlier this month, his campaign wrote that “Mahan continues to fail working Californians by catering to tech billionaires and wealthy special interest groups.” In February, it wrote that although Mahan had the support of “powerful special interests hellbent on keeping California a playground for the rich,” Steyer had the backing of “bus drivers, cafeteria workers, and custodians.”

Airbnb declined to comment but in the past has denied claims its platform substantially contributes to housing affordability issues, and has donated to housing initiatives. Airbnb co-founder Nathan Blecharczyk, a Mahan donor, did not respond to a request for comment.

Mahan said he values unions, in part because he grew up in a union household and benefited from the high-quality healthcare that provided, included when he was hospitalized for a collapsed lung as a teenager.

He said he has also worked with tech employers who “are inventing the future, quite literally,” and “creating a lot of jobs and opportunity.”

Mahan said the idea the two are inherently at odds is false, because “business needs labor, and labor needs business,” and the real question is “how to balance everyone’s needs.”

“If we don’t have a strong enough regulatory environment, and business has too much power, workers can be exploited, the environment can be exploited and we can see really negative social outcomes,” he said. “But the flip side is also true. If labor in our politics has too much power, you can also see distortions, you can see investment flow elsewhere, you can see less housing get built.”

Mahan said that “neither side has a monopoly on the truth,” and that government has to “bring people together and strike the right balance.”

He also defended Airbnb, which in San José pays taxes just like hotels, he said.

“We don’t see Airbnb as an antagonistic thing. We don’t let them take over the market, we regulate them, we charge them, and we use their tax revenue to provide services to people.”

He said the state’s housing crisis is due to over-regulation slowing new building to the point where it cannot keep up with job growth — which he called “fundamentally unsustainable and unfair” to low-income folks pushed out of job centers as a result.

The answer is building more homes, more quickly, he said, including by reducing building fees and streamlining permitting processes — which he said he has done in San José and would replicate statewide as governor.

“I am, first and foremost, focused on making government deliver results that make a real difference in people’s lives,” he said. “That’s my North Star.”