Banco BPM intends to proceed with Anima deal, source says
The European Central Bank has issued a negative opinion on Banco BPM's plan to use what is known as the 'Danish Compromise' to facilitate the deal, potentially making it more expensive.
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Reuters
2 hours ago
- Reuters
AI Intelligencer: Art of the chip deal
Aug 14 (Reuters) - (This was originally published in the Artificial Intelligencer newsletter, which is issued every Wednesday. Sign up here to learn about the latest breakthroughs in AI and tech.) A week after OpenAI's long-anticipated GPT-5 launch, one thing is clear: newer isn't always better. Despite benchmark-crushing scores and clear gains in coding and reasoning, many users say they miss chatting with GPT-4o, which OpenAI removed when the new model came out. The backlash was loud enough that the company restored 4o for Plus users within days. The takeaway: even for OpenAI, the 'best model' isn't simply the biggest or the newest. It's about fitness. Different tasks—math, coding, writing, small talk—sometimes pull models in conflicting directions, and building one that excels at all of them is getting harder. Strategically, GPT-5 looks like a shot at Anthropic's API business, especially in code generation. Its lower pricing undercuts Claude Opus 4.1 and could kick off a price war in a money-losing market. The good news is demand is booming—Sam Altman says OpenAI plans to double its compute power to train and serve the models in the next five months. So why do some users prefer the older 4o? In this week's issue, we explore how 'self-affirming' bots might shape user loyalty—and mental health. We also dig into Washington's hottest AI debate: an 'export tax' proposal that could reshape how American AI companies sell advanced tech abroad. Scroll on. (Email me here, opens new tab or follow me on LinkedIn, opens new tab to share any feedback and what you want to read about next in AI.) In President Donald Trump's dealmaking world, few things seem off-limits—national security included. He has cut a deal with Nvidia and AMD that would let them resume some exports of restricted AI chips to China in exchange for the U.S. government taking a 15% cut of those sales. The White House has called the idea 'creative' and suggested it could extend to other firms, effectively creating a pay-to-export model for sensitive tech. It has also drawn bipartisan concern on Capitol Hill. Historically, export controls have been non-negotiable national-security decisions: if certain technology is restricted, companies can't pay to get around the rules. The proposal raises a broader question as well: is it a form of state capitalism when U.S. companies must share revenue with Washington to access a foreign market? Another chipmaker in negotiations with Trump is Intel CEO Lip-Bu Tan, and what's on the line is his job. After Reuters reported in April that Tan made hundreds of investments in Chinese companies over decades, Trump last week demanded Tan's immediate resignation, calling him 'highly conflicted.' Tan, tasked with turning around the American icon, flew to Washington to meet Trump on Monday. For now, Tan appears to be staying, but expect more commitments from Intel to satisfy the White House. Beijing is watching Trump's tactics—and responding. With trade talks extended again, everything from tariffs, rare earths, to AI chips and the fate of TikTok is back on the table. Behind the scenes, Chinese authorities have summoned domestic giants including Tencent, ByteDance, and Baidu over their Nvidia purchases, asking them to explain their needs and warning about information risks, according to sources who talked to my colleagues. U.S. enforcement is tightening its grip on the flow of advanced chips to China, too. Reuters exclusively revealed that U.S. authorities have secretly placed location-tracking devices on targeted shipments of servers containing Nvidia and AMD chips to detect illegal diversion to destinations such as China. The aim is clear: curb the flow of the best AI hardware even as parts of the market reopen. Bottom line: money might buy market access, but it doesn't buy trust. Even if a revenue-sharing scheme moves forward, the underlying security concerns—and the broader U.S.–China tech standoff—aren't going anywhere. This chart from a report, opens new tab by Bessemer Venture Partners shows how fast AI startups can now climb to $100 million in annual revenue. The 'Supernova' cohort, like coding tool Cursor, rockets there in roughly a year and a half. 'Shooting Stars' take about four years. Both are hitting revenue milestones much faster than classic cloud companies, which needed closer to seven years. AI products spread faster because they're easier to try and share, and they improve quickly once people start using them. But speed cuts both ways. The flashiest growth can be fragile. This helps explain the VC fanfare around AI to capture the next 'Supernova,' but the picking game is getting harder, as revenue growth is more likely to be driven by incentives, novelty or low switching costs. As AI becomes part of our daily life, a mental health concern dubbed 'AI psychosis' is getting more attention. It's not new—delusions have always tracked the zeitgeist, from Cold War CIA paranoia to today's AI-fueled beliefs—but the rapid rise of chatbots like ChatGPT may be amplifying the risk, especially for people under stress from sleep loss or substance use. One theory points to engagement-optimized models that act more sycophantic, reinforcing users' false beliefs instead of challenging them. San Francisco–based psychiatrist Keith Sakata said on X that he has seen a dozen hospitalizations linked to AI-related psychosis, a concern echoed by recent research on LLMs in mental health settings. The appetite for self-affirming bots was on display when OpenAI deprecated GPT-4o after the rollout of its GPT-5 last week—and backlash pushed the company to reinstate it for Plus subscribers. As chatbots get more personal, Sakata argues tech companies face a hard trade-off: validate delusions for retention, or risk losing users by challenging them.
Reuters
2 hours ago
- Reuters
Trump funding delays testing Congress' power may be intensified. How will Republicans respond?
WASHINGTON, Aug 15 (Reuters) - The Trump administration's tug-of-war with Congress this year over spending delays of approved federal money could intensify as soon as this week, as the White House weighs a rare maneuver to permanently withhold some federal funding. The tactic -- called a pocket rescission -- has been criticized by a handful of Republican senators as it would essentially cancel congressionally authorized funding without a vote from lawmakers. The funding in question is due to expire at the end of the fiscal year on September 30. The administration could indicate as soon as Friday what it plans to do with the remaining money that has not yet been made available to grantees. The White House Budget Office did not respond to a request for comment. It is unclear whether Congress will object. The U.S. Constitution grants Congress control over spending, but Republicans who control both the House of Representatives and the Senate have broadly supported the administration's unilateral freezes of foreign aid and domestic spending so far. With little Republican objection, several funding programs have been delayed for months. The Government Accountability Office, Congress' independent watchdog agency, ruled this summer that $100 million in federal library funding -- meant to expand services on top of local dollars -- was unlawfully "impounded" and held up by the administration since March. Funding for a Montana children's paleontology education program has remained frozen, as well as copyright and AI research, and librarian training assistance started by former Republican first lady Laura Bush, in Louisiana, Kentucky, North Carolina, South Carolina and Pennsylvania, according to grantees. If it wanted, Congress could consider the funding cuts in committee hearings and vote on the provision. Republican senators Susan Collins from Maine and Lisa Murkowski from Alaska have objected, but other Republican lawmakers have not spoken out. "As a Republican myself, I would love to hear more from my team on this," said Sam Helmick, president of the American Library Association. Republicans on occasion have pushed the administration to release other frozen funding. Ten of the Senate's 53 Republicans successfully urged White House budget director Russ Vought in July to release $6 billion in education funds, while 14 Republicans pushed to release National Institutes of Health research funding. "We need our Republican colleagues to join us in insisting that all blocked funding gets out -- not just the programs most important to them,' Senator Patty Murray, the top Democrat on the Appropriations committee, said last month. But other Republicans have encouraged the administration's funding delays. "I want to spend less, not more," Senator Jim Banks, an Indiana Republican, said. Democrats say the administration has withheld more than $420 billion in funding that was passed on a bipartisan basis in a stopgap funding bill and signed into law by Trump in March. Emory University law professor Matthew Lawrence said the delays are unprecedented in modern times and make the government less accountable to its citizens. 'You know your representative to call and voice your concerns on spending," he said. "But if the power is President Trump's ... I don't know how to do that, nor do my neighbors.' Top Republicans have often sidestepped the funding power fight and said the federal courts -- where there have been more than 60 spending-related cases -- will decide the legality of these delays. Collins, who oversees spending as the top Republican on the Senate Appropriations Committee, says the best way to assert congressional power is to pass funding bills for the upcoming fiscal year. But some Democrats say that is pointless if the Trump administration will not honor them. 'The budget isn't worth the paper that we write it on if they're just going to refuse to spend on things that matter to Democrats," Democratic Senator Chris Murphy of Connecticut told reporters. Vought, the White House budget director, has said these freezes are for 'programmatic review,' a technical term that allows administration to pause and analyze spending. However, the GAO rulings said the delays are not 'permissible." Four other program funds have been ruled as unlawfully impounded by the GAO, and it is investigating 40 other programs facing delays. Vought told reporters in June that the pocket tactic does not require approval from Congress -- a change from the administration's prior approach, when it sought and won approval in July to cancel $9 billion for foreign aid and public media. Collins, Murkowski and Republican Senator Mike Rounds of South Dakota have said they oppose a pocket rescission, but others have said they do not object. "We support rescissions in whatever form they could come to us,' House Speaker Mike Johnson said in July.
Reuters
2 hours ago
- Reuters
Hong Kong Q2 GDP expands 3.1% y/y, full-year growth forecast maintained
HONG KONG, Aug 15 (Reuters) - Hong Kong's economy expanded by 3.1% in the second quarter from the same period a year earlier, supported by a surge in rush shipments following the temporary easing of U.S. tariff measures, the government said on Friday. The latest GDP figure was in line with the official estimate released in late July, marking the 10th consecutive quarter of expansion on the back of robust exports and strengthening domestic demand. Export performance was further boosted by a rebound in inbound tourism, increased cross-boundary traffic and a buoyant local stock market, all contributing to strong growth in services exports. Hong Kong's economy has been growing steadily in the past 2.5 years and the government said it was maintaining its full-year growth forecast of between 2% and 3%. Economic growth in the first quarter of 2025 was 3.0% year-on-year, an improvement from 2.5% recorded during the same period last year, the government said. On a seasonally adjusted quarterly basis, GDP expanded 0.4% in April-June, the data showed. That compared with a revised 1.8% in January-March and 0.9% in October-December 2024. "Looking ahead, the Hong Kong economy is expected to maintain growth for the rest of 2025," acting government economist Cecilia Lam said in a statement, opens new tab. She added that measures to boost consumption and attract investment would support growth. "Yet, the tariff rates announced by the U.S. in early August stay elevated, and its tariff policy on some commodities remains quite uncertain," Lam said, adding that uncertainty around the pace of U.S. interest rate cuts would affect local investment sentiment. The forecasts for underlying and headline consumer price inflation rates for 2025 were maintained at 1.5% and 1.8% respectively. Overall investment expenditure rose further, driven by a sharp increase in spending on machinery, equipment, and intellectual property products. Meanwhile, private consumption returned to growth after four consecutive quarters of decline, according to the government.
