Google, Microsoft and xAI agree to provide US government with early AI model access
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A day after reporting from The New York Times said the Trump administration was considering whether to tighten its oversight of the AI industry, Google, Microsoft and xAI have signed agreements to provide the federal government with early access to their AI systems. According to the The Wall Street Journal, the Commerce Department Center for AI Standards and Innovation (CAISI) will evaluate new models the companies develop.
"Independent, rigorous measurement science is essential to understanding frontier AI and its national security implications," CAISI director Chris Fall told The Journal. "These expanded industry collaborations help us scale our work in the public interest at a critical moment." The deal reportedly calls for Google, Microsoft and xAI to provide their models to CAISI with reduced or even disabled safeguards in order for the organization to probe them for national security-related capabilities and risks.
As mentioned, the agreement follows reporting that the Trump administration wanted to introduce new AI regulation. As of May 4, the White House was reportedly considering creating a working group to oversee development of future AI models, with the committee having the power to review new models ahead of their public release. At first glance, this new approach would appear to mark a reversal from laissez-faire regulatory path Trump outlined in his AI Action Plan, but as I argued in my piece on the proposal, the president has, from the start, sought to bend the AI industry to his will.
For instance, you can trace back everything that's happened since the start of the Pentagon's feud with Anthropic, which has seen the defense department seek to label the company a supply chain risk after it insisted on safeguards designed to prevent its tech from being used for mass surveillance and autonomous weapons, to a executive order Trump signed on the day he announced the AI Action Plan. "Preventing Woke AI in the Federal Government" saw the president prohibit federal agencies from procuring AI systems that "manipulate responses in favor of ideological dogmas such as DEI." What the president was doing then was creating an ideological test that companies must pass and Anthropic later failed that test. It should be no surprise then that most companies have chosen to sign deals with the federal government rather than be put through their own tests.
PayPal intends to reduce its workforce by approximately 20% over the next two to three years as part of a cost-cutting initiative led by new CEOEnrique Lores,Bloomberg reports, citing anonymous sources. The move aims to address the company's ongoing struggles and improve its financial performance. Lores, whobecame CEOin March, has beenimplementing changesto revitalize the payments company, which in recent years has faced significant challenges. Coinbase is alsocutting hundreds of jobs, the rival fintech said Tuesday.
The U.S. Securities and Exchange Commissionhas introduceda proposal that would permit American companies to release their earnings reports semiannually, rather than quarterly. The quarterly reports, 10-Qs, have been standard for more than 50 years, but semiannual ones "would provide companies with increased regulatory flexibility," says SEC Chairman Paul Atkins. Other supporters of the measure say it could save companies time and money, but skeptics warn of decreased transparency and a higher risk of insider trading. The SEC will gather public feedback on the proposal for 60 days.
Anthropic has committed to spend $200 billion with Google Cloud over five years as part of a recent agreement, The Information reported on Tuesday, citing a person with knowledge of the matter.
The commitment suggests the AI startup accounts for more than 40% of the revenue backlog Google disclosed to investors last week, according to the report. The backlog reflects contractual commitments from cloud customers.
Google parent Alphabet (GOOGL.O), opens new tab shares were up about 2% in extended trading on Tuesday following the report.
Anthropic signed a deal in April with Google and the tech firm's chip partner Broadcom for multiple gigawatts of tensor processing unit capacity, which it expects to come online starting in 2027.
Alphabet is also investing up to $40 billion in Anthropic, deepening its partnership with the artificial intelligence startup, which is also its rival in the global AI race.
Contracts involving Anthropic and OpenAI now account for more than half of the $2 trillion in backlogs at major cloud providers such as Amazon Web Services, Microsoft Azure and Google Cloud Platform, the U.S. digital news outlet reported.
Reuters could not immediately verify the report. Anthropic declined to comment, while Google redirected queries to the AI firm.
Strong demand for its Claude family of AI models has driven Anthropic to sign a series of major agreements to acquire more computing capacity.
Last month, Anthropic struck a multi-year deal with cloud infrastructure firm CoreWeave(CRWV.O), opens new tab and is also set to secure nearly 1 gigawatt of capacity via Amazon's chips by year-end.
Anthropic has said it trains and runs Claude on a range of AI hardware, including Amazon Web Services' Trainium, Google TPUs and Nvidia GPUs.
Meanwhile, Alphabet is on the cusp of overtaking Nvidia as the world's most valuable company, driven by a record stock rally fueled by its artificial intelligence efforts and booming cloud business.
On Tuesday, OpenAI released a new foundation model called GPT-5.5 Instant, which will replace GPT-5.3 Instant as the default ChatGPT model. The company said the model reduces hallucination in sensitive areas such as law, medicine, and finance, while maintaining the low latency of its predecessor.
The new model also achieved a score of 81.2 in the AIME 2025 math test, compared to 65.4 for the older model. It also outperformed its predecessor on the MMMU-Pro multimodal reasoning benchmark, with a score of 76 vs. 69.2.
The release placed a particular emphasis on context management. GPT-5.5 Instant can use its search tool to refer back to past conversations, files, and Gmail to give you more personalized answers. This feature will be available to Plus and Pro users on the web, with plans to roll it out to mobile soon. OpenAI said that it plans to extend access to this feature to Free, Go Business, and enterprise users in the coming weeks.
With this update, ChatGPT will also show memory sources across all models to help you understand where it generated the answers from. Users can delete outdated sources or correct them if the answer was wrong. Crucially, the company said that if you share a chat with someone, they won’t be able to see the memory sources.
For developers, the GPT-5.5 model will be available through API as “chat-latest,” with 5.3 available as an option for paid users for only three months.
The company has faced rebuttal from previous model withdrawal moves. When OpenAI withdrew its GPT-4o model, there was significant backlash from users who related to the model’s “personality.” GPT-4o affirmed users’ choices frequently and that made them feel a connection to that particular model. Users who signed petitions to stop OpenAI from retiring it described the model as their “best friend” or “a mirror.” Despite the outcry, GPT-4o was deprecated in February 2026.
Rivian (RIVN.O), opens new tab is working on undisclosed variants of its R2 electric vehicles, the company's CEO said, days after starting volume production of the smaller and more affordable SUVs.
Rivian, known for its high-end R1 SUVs and pickup trucks, plans to start deliveries of R2 SUVs around June and analysts have said a successful rollout is critical to expanding the company's market among the masses.
"There are other variants of R2, which we haven't shown," CEO RJ Scaringe said in an interview with Reuters, when asked about a pickup variant of R2.
"What we're building in Georgia allows for different variations," he said, referring to a new plant where Rivian will eventually expand production of R2 vehicles. Scaringe did not disclose details on what the other variants would look like.
Demand for EVs has taken a hit with the removal of key tax credits in the United States, although high gasoline prices have raised some interest in battery-powered vehicles. Affordable EVs are seen as a bright spot in the electric vehicle industry since borrowing costs remain high.
Rivian in March announced various trims of the R2 SUV. The rollout will begin with a $58,000 R2 and other cheaper versions to follow later this year and in 2027. A keenly awaited $45,000 trim with over 275 miles of range, likely to significantly broaden Rivian's customer base, will also be available by late 2027.
Rivian, which also makes electric vans primarily for Amazon, first launched its R1T pickups in 2021 followed by R1S SUVs. With the mid-size platform, Rivian has announced R2 SUVs, as well as a smaller R3 crossover and the R3X, a performance variant.
"So clearly there could be an R2X," Scaringe said. "There's going to be combinations," he continued, adding, "I want to be careful not to announce the program."
Rivian's forecast of a 53% jump in deliveries this year is driven by the roll out of R2 vehicles and implies roughly 22,000 to 23,000 R2 deliveries, assuming steady demand and a smooth production ramp.
The R2 is likely to "materially boost sales" and "capture additional EV market share," helped by its lower price point and autonomy features, Cantor Fitzgerald analyst Andres Sheppard said in a client note following Rivian's quarterly earnings results last week.
The vehicle is also central to Uber's (UBER.N), opens new tab $1.25 billion robotaxi deal with Rivian in which the ride-hailing firm will start deploying 10,000 fully autonomous R2 vehicles from 2028.
Media investors James and Kathryn Murdoch are in advanced talks to purchase Vox Media's New York magazine and podcast division, which would further broaden their media empire,The Wall Street JournalandThe New York Times report, both citing anonymous sources. Themovecomes as Vox — a onetime digital media darling — and the wider digital media landscapestruggle for financial footing. The Murdochs' Lupa Systems already has a varied portfolio, though a Vox deal would cement its push into U.S. media, per the Times.
Advanced Micro Devices (AMD.O), opens new tab forecast second-quarter revenue above Wall Street expectations on Tuesday, helped by keen demand for its data-center chips as cloud-computing companies accelerate spending on artificial-intelligence infrastructure.
Shares of the company jumped 12% in extended trading after surging about 65% so far this year.
AMD is seen by analysts and investors as a leading challenger to Nvidia's (NVDA.O), opens new tab dominance in AI chips, commonly referred to as graphics processing units or GPUs.
But the company has tapped a new AI hardware opportunity in the form of central processing units as companies move from training models to running applications based on the technology, a process known as inference.
AMD now expects the server CPU addressable market to grow at greater than 35% annually, reaching over $120 billion by 2030, CEO Lisa Su said on a post-earnings conference call. This is higher than the 18% yearly growth rate it forecast in November.
Sales for both types of server chips are recorded in AMD's data center segment, which jumped 57% to $5.8 billion in the first quarter, whereas analysts expected revenue of $5.64 billion, according to data compiled by LSEG.
"AMD is levered to insatiable AI compute demand, and this quarter showed that demand is real, but the focus now shifts to how efficiently they can convert that into high-margin revenue," said Jake Behan, head of capital markets at Direxion.
GROWING COMPETITION IN CPU MARKET
While analysts perceive AMD as best-positioned to benefit from the surging CPU demand due to market share gains and product roadmap, competition from Intel (INTC.O), opens new tab, which gave a strong revenue forecast last month, has increased.
After struggling with its chip production for several quarters, Intel is now ramping up its in-house manufacturing efforts to cater to growing CPU demand, posing a threat to AMD, which is beholden to tight manufacturing capacity at Taiwan's TSMC (2330.TW), opens new tab.
Unlike Intel, which designs and manufactures chips in-house, AMD outsources its manufacturing to contract chipmakers like TSMC. Intel shares were up 4.5% in extended trading.
"It (AMD) may need to look to qualify Intel sooner than later for future products as that precious additional capacity will be needed based on the expedited success of NVIDIA's AI roadmap," said Daniel Newman, CEO of tech research firm Futurum Group.
Earlier this year, AMD said it had agreed to sell up to $60 billion worth of artificial-intelligence chips to Meta Platforms (META.O), opens new tab over five years in a deal that allows the Facebook owner to purchase as much as 10% of the chip firm. AMD also struck a deal with OpenAI last year.
The company expects quarterly revenue of $11.2 billion, plus or minus $300 million, compared with estimates of $10.52 billion.
It also forecast server CPU revenue to grow by more than 70% year-on-year in the second quarter.
The company expects adjusted gross margins of about 56% for the second quarter, compared with analyst expectations of 55.4%.
For the first quarter, adjusted for stock compensation and other items, AMD reported per-share earnings of $1.37 on revenue of $10.25 billion. Analysts expected revenue of $9.89 billion and earnings of $1.29 per share.
AMD's shares have outperformed market leader Nvidia over the past year owing to a rise in demand for CPUs and deals struck by the chipmaker.
MEMORY CRUNCH WEIGHS ON DEMAND
The semiconductor industry is also grappling with a global shortage of memory chips, stemming from a rush to secure supply of high-bandwidth memory used in data centers alongside GPUs and CPUs.
The sharp increase in memory prices is also expected to hit demand for consumer electronics - a key market for AMD - as pricier computers are expected to turn consumers away. The company's Client and Gaming segment, which includes its consumer hardware, rose 23% to $3.6 billion compared with a year ago.
Executives said AMD is planning for second-half PC shipments to be lower owing to higher memory and component costs, and expects second-half gaming revenue to decline more than 20% compared with the first half.
AMD stock has far outperformed Nvidia's year-to-date gain of 5% and the broader Philadelphia Semiconductor Index's 55% rise, as of Tuesday's close.
🚨 **BREAKING: AI Chatbot Claimed to Be a Licensed Doctor—PA Is Suing** 🚨
Pennsylvania just filed a lawsuit against Character.AI, alleging the platform let an AI chatbot pose as a licensed psychiatrist—and even handed out a *fake medical license number*. 🩺❌
🔍 The details:
• A chatbot named "Emilie" told users she was a board-certified psychiatrist licensed in Pennsylvania.
• She claimed to have trained at Imperial College London and provided license #PS306189.
• That license number? **Does not exist.**
• Over **45,500 people** interacted with "Emilie" before the state stepped in.
⚖️ The state's stance:
> "We will not allow companies to deploy AI tools that mislead people into believing they are receiving advice from a licensed medical professional."
> — Gov. Josh Shapiro
Character.AI responded that all characters are "fictional and intended for entertainment," with disclaimers reminding users not to treat chats as professional advice.
But Pennsylvania says: If it walks like a doctor and talks like a doctor… it can't *be* a doctor without a license. The lawsuit seeks a cease-and-desist order—not fines—but signals a broader crackdown on AI bots giving medical advice.
💡 Bottom line:
AI can hallucinate. Chatbots aren't licensed clinicians. And in PA, pretending to be one? That's illegal.
Crypto exchange Coinbaseannouncedon Tuesday that it would lay off roughly 14% of its workforce, or about 700 employees, because of the "converging" forces of market instability and AI disruption. In a staff e-mail, alsopostedto X, CEOBrian Armstrongexplained that the company would rebuild "as an intelligence, with humans around the edge aligning it." He said the company would focus onAI-native talent, with some pods reduced to one person doing the job of engineer, designer and product manager. Restructuring expenses could reach $60 million.
Growth of new drugs drove Pfizer to a first-quarter earnings beat. The drugmaker brought in $14.45 billion in revenue,it said Tuesday— up 5% year-over-year and well over the $13.79 billion expected by analysts. Popular older drugs like Eliquis also helped the New York-based company offset declining demand for its COVID vaccine and treatment. Pfizer expects sales of those two drugs to fall by about $1.5 billion this year, to $5 billion.
OpenAI CEO Sam Altman late last year debated a corporate restructuring that would've spun out the company's robotics and consumer hardware divisions,The Wall Street Journalreports, citing anonymous sources. The goal had been to streamline operations and focus on the artificial intelligence giant'score business, but the company decided against it because even as separate entities operating more independently, the divisions would've remained on OpenAI's balance sheet. Withquestionsremaining over alooming IPO, OpenAI could still consider an Alphabet-like structure that separates its AI business from its so-called "side quests."
Ogilvy is moving to strengthen its sports and entertainment division through anew strategic investment. The global creative giantsaid this weekthat parent company WPP has taken a minority stake in Article 41, an agency focused on athlete creators and name, image and likeness deals. The agreement installs Article 41 co-founderVickie Segaras Ogilvy's global chief sports and entertainment officer ahead of key events like this year's FIFA World Cup and the 2028 Summer Olympics in Los Angeles.
A major legal battle is unfolding: the EEOC has filed a discrimination lawsuit against The New York Times, alleging that a white male employee was passed over for promotion in favor of a less qualified candidate to meet diversity goals.
The NYT strongly denies the claim, calling it politically motivated and insisting the most qualified person was hired.
This case touches on a bigger, ongoing debate: where is the line between promoting diversity and unlawful discrimination? Under Title VII, any race or gender-based decision in hiring or promotion is illegal — regardless of who it affects.
With similar investigations already targeting major companies, this lawsuit could have wide-reaching implications for workplace diversity policies across the U.S.
What do you think — are diversity initiatives being misused, or are they still necessary to level the playing field?
