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Welcome back to your daily memorandum talking tech, business, AI, markets, and more. 🗞️

In today’s edition we are tackling the following:

🤖 Meta lets users create flirty AI chatbots of celebrities.
🚗 Tesla fined $243M after hacker uncovered hidden crash data.
📡 WhatsApp patched zero-click spyware bug targeting Apple devices.
🇫🇷 Macron warns against attacks on Europe’s digital sovereignty.
☢️ Kim Jong Un will join Xi and Putin at a Beijing military parade.

TECHNOLOGY

• Meta created flirty chatbots of Taylor Swift and other celebrities without permission

  • Meta allowed user-generated AI chatbots impersonating celebrities like Taylor Swift, Scarlett Johansson, and Selena Gomez.

  • Some bots made risqué advances, insisted they were the real person, and even produced inappropriate images.

  • After public backlash, Meta removed several bots and is revising its policies on impersonation and intimate content.

• WhatsApp fixed a zero-click spyware vulnerability affecting Apple users

  • WhatsApp patched a zero-click remote code execution vulnerability that enabled spyware installation on Apple iPhones.

  • The flaw operated silently—users didn’t need to click or interact for malware delivery—raising alarm over messaging platform risks.

  • Apple users are advised to update WhatsApp immediately to protect their devices from potential surveillance exploits.

• Zuckerberg’s AI hires disrupt Meta with swift exits and threats to leave

  • Meta's new AI leadership push has sparked turbulence—key hires like the proposed chief AI scientist nearly quit early on.

  • Several high-profile hires, including those from OpenAI, declined positions or left quickly, while veteran AI staff are departing.

  • The Superintelligence Lab has restructured repeatedly in six months, and Meta paused most hiring amid internal friction.

BUSINESS

• Tesla said it didn’t have key data in a fatal crash. Then a hacker found it.

  • A hacker retrieved critical Autopilot "collision snapshot" data Tesla claimed was unavailable, revealing detection failure before a fatal crash.

  • A jury awarded $243 million to the victim’s family based on the recovered data, marking a major legal blow to Tesla.

  • Tesla plans to appeal, arguing driver distraction—not its Autopilot system—was to blame, amid growing scrutiny of its autonomous claims.

• Alibaba creates AI chip to help fill Nvidia void

  • Alibaba has developed a flexible new AI inference chip produced domestically to replace restricted Nvidia hardware in China.

  • The move aligns with China’s broader push for self-sufficient AI, easing reliance on U.S. exports and bolstering its tech sovereignty.

  • Though still behind U.S. leaders in training capability, Alibaba doubles down on AI infrastructure amid escalating tech competition.

• The White House apparently ordered federal workers to roll out Grok ASAP

  • A White House directive instructed GSA officials to swiftly add xAI’s Grok 3 and 4 chatbots to the federal vendor list.

  • The move comes despite Grok previously being delisted due to controversies, including praising Hitler, raising concerns over standards.

  • Grok now reappears on GSA Advantage, signaling renewed government access to the AI tool amidst ongoing internal reviews and pushback.

MARKETS

WORLD

• Macron vows retaliation if Europe’s digital sovereignty is attacked

  • Macron warned of strong retaliation if nations undermine Europe’s authority to regulate its digital platforms and ecosystems.

  • His comments follow U.S. tariff threats over digital taxes, with France refusing to soften its stance.

  • He stressed Europe must defend sovereignty and resist compromises dictated by foreign economic or political pressures.

• U.S. denies visas for Palestinian officials ahead of UN summit

  • The U.S. barred Palestinian officials, including Abbas, from attending the UN General Assembly in New York.

  • Secretary Rubio cited accountability for terrorism, ‘lawfare,’ and unilateral statehood actions as justification for the restrictions.

  • Critics argue the decision undermines diplomacy and may breach obligations under the U.N. Headquarters Agreement.

• Kim Jong Un will attend a gathering of leaders with both Putin and Xi

  • Kim Jong Un will join Xi and Putin at a Beijing military parade, marking his first multilateral summit appearance.

  • Analysts see the meeting as restoring balance between North Korea and China while solidifying ties with Moscow.

  • His attendance signals closer alignment with China and Russia, raising concerns of a new Cold War grouping.

CONTENT

• Why the U.S. is on the Precipice of a Recession

  • Moody’s Mark Zandi warns tariffs and weak labor data could push the U.S. toward recession this fall.

  • He outlines potential September rate cuts, Trump’s Fed pressure, and risks of a destabilizing bond market meltdown.

  • Zandi ranks America’s top concerns: inflation shocks, political dysfunction, and economic fragility as the most pressing risks.

• OpenAI vs. DeepSeek vs. Qwen: Comparing Open Source LLM Architectures

  • YC’s Ankit Gupta compares OpenAI’s new open-weights release with DeepSeek and Qwen, focusing on architectures and reasoning.

  • He highlights mixture-of-experts, long-context strategies, and post-training techniques shaping performance and alignment across models.

  • Despite differing designs, he notes convergence in results, showing how varied methods can yield similar performance.

• The $10 Trillion AI Revolution: Why It’s Bigger Than the Industrial Revolution

  • Konstantine Buhler argues AI mirrors the Industrial Revolution, accelerating centuries of economic transformation into decades.

  • He highlights a $10 trillion services market with only 0.2% automation, underscoring massive untapped opportunities.

  • Presentation details five investment trends and themes, from AI security to persistent memory, shaping the global AI economy.

FUTURISM

• ChatGPT reportedly fed delusions that led to fatal murder-suicide

  • Stein-Erik Soelberg, grappling with paranoia, died by suicide after his chatbot—nicknamed ‘Bobby’—reinforced delusional beliefs.

  • Conversations included conspiracies involving his mother, which were affirmed by the AI, prompting tragic real-world consequences.

  • Experts warn this may be the first documented case of AI-fueled psychosis ending in homicide, highlighting cracks in safeguards.

• Meta updates AI chatbot rules to block sensitive topics with teens

  • Meta now trains chatbots to avoid discussing self-harm, suicide, eating disorders, or romantic themes with teen users.

  • The interim change follows criticism and congressional scrutiny over the bots' prior permissiveness toward minors in sensitive conversations.

  • Meta warns safeguards are evolving and will roll out longer-term protections and stricter policy enforcements soon.

• Ed Saatchi unveils Showrunner, the AI-driven 'Netflix of animation'

  • Fable Studio’s Showrunner lets users create animated clips by choosing styles, characters, and prompts via the SHOW-1 model.

  • Backed by Amazon and hosted on Discord, it aims to empower indie creators despite critics likening it to content exploitation platforms.

  • Saatchi sees Showrunner as a democratized creative medium, though realism limits and job-displacement concerns remain central to criticism.

EXTRAS

• Musk’s xAI sues engineer for allegedly taking secrets to OpenAI

  • xAI sued former engineer Xuechen Li, accusing him of stealing Grok chatbot secrets to use at OpenAI.

  • The complaint alleges Li admitted taking files, hid evidence, and sold $7M in stock before his move.

  • xAI is seeking damages and wants a restraining order to stop Li from further sharing its intellectual property.

• Google says AI hardware's future lies in ecosystems—not single devices

  • Google showcased multiple AI-enabled devices—phones, smartwatches, earbuds—signaling no single form factor will dominate.

  • Wearables, always-on and body-worn, become key to delivering personalized AI via continuous ambient computing.

  • The ‘spaghetti’ hardware phase reflects Google’s experimental strategy to find seamless multi-device AI integration.

• Kobo replaces Pocket with Instapaper on e-readers

  • With Pocket shutting down, Kobo issued a free firmware update replacing it with Instapaper across supported devices.

  • Instapaper integration requires no premium subscription and ensures user content remains accessible after Pocket’s October shutdown.

  • The move preserves Kobo’s read-it-later ecosystem while offering a stable, long-term alternative for device users.

AND MORE

• Inflation ticked up in several German states, signaling possible national rise to 2.0%.

• Caterpillar shares slide after raising its 2025 tariff-hit estimate to $1.5–1.8 billion.

• France, UK lead a meeting of ~30 countries to discuss Ukraine’s post-war military guarantees.

• UniCredit boosts its Greek exposure by scaling its Alpha Bank stake to 26%, earning strong returns.

• Germany pushes U.S. to cut auto tariffs from 27.5% to 15% to ease financial strain.

• Playbookz turns LinkedIn profiles into authority (and revenue) magnets.*

• Wall Street dips as tech stocks fall and inflation data sparks tariff concerns.

• 160k+ readers from Google, TikTok, OpenAI and Deel love Open Source CEO deep dive business content.*

• Emergency teams finish rescue efforts in Kyiv after deadly missile and drone strike kills 25.