Microsoft took a major hit from the erosion of trust between Washington and Beijing, the five people said. China has since 2017 pushed the use of domestic software, which Beijing sees as more secure and whose quality is increasingly competitive with Windows and Office. U.S. restrictions, including export controls on advanced technology, have meanwhile hindered efforts to scale Microsoft’s lucrative AI and cloud businesses in China.

[…] Microsoft ultimately decided to remain because it had carved out a profitable business servicing Chinese companies like TikTok owner ByteDance, which need Western technology to manage overseas operations, according to three people familiar with the matter. The company also believed that it needed a presence to maintain access to China’s world-class engineering talent, two of them said. Microsoft had also cultivated a relationship with the government that is among the deepest of any tech company, its former China head Alain Crozier told Reuters. “Because of the geopolitics … some days it’s a little bit harder, but we never had a crisis,” he said.

A Microsoft spokesperson did not address questions about the firm’s deliberations on its China business but said it operates in a regulatory “environment that applies to every international supplier” and that it remains committed to the Chinese market. The state of Microsoft’s China business reflects market competition, regulatory demands and technological trends, the company said.

For enterprise developers, the more consequential story may be the combination of those intelligence gains with lower inference costs: through the end of 2026, Gemini 3.7 Flash costs $0.75 per million input tokens and $3.75 per million output tokens.

Starting Jan. 1, 2027, pricing rises to $1.50 per million input tokens and $7.50 per million output tokens. That means the current discount is temporary, but it gives teams deploying high-volume coding and business agents several months to evaluate whether Google’s claimed reductions in retries and manual oversight translate into lower total operating costs. The launch also underscores Google’s rapid iteration on its Flash line while its next flagship Pro model remains absent. […]

Google describes Gemini 3.7 Flash as its “most intelligent workhorse model yet for coding and agents.” The company says the model is better at adapting when it encounters roadblocks, clarifying intent when necessary and following instructions with greater fidelity. […] Google’s benchmarks show a large generational improvement in several software engineering tests. […] Google’s own results do not show 3.7 Flash universally displacing higher-priced competitors. They instead suggest a model that has become substantially more competitive in coding and agent workloads while occupying a lower price tier.

The updates are intended to be a technical milestone in preparation of the “super app” Microsoft is planning to launch later this year, so this is laying the foundations of what will be changing for Copilot products. A worldwide rollout for the mobile and web apps will start in “mid-August,” according to Microsoft, with a rollout to Windows and Mac apps set for “mid-September.” Mobile app users will be prompted to download the new Copilot app, and the updates will start appearing for some Windows Insiders this week.

What changes you’ll see will depend on which Copilot apps you’re already using. Existing Microsoft Copilot users will be moved to the updated version, along with your chats and content, while Microsoft 365 Copilot app users will see “minor navigation changes,” the updated Copilot icon, and gain access to Copilot chat. If you already use both apps, Microsoft says your chats and content will be merged to a single updated Copilot app, but notes that chats, content, and data will remain separate between account types within the app.

For Amazon, these stream recordings are incredibly valuable, offering thousands of hours of audio and video content to help train AI models. But Twitch users worry that since creators have to manually opt out, they might be surrendering their content to train Amazon’s AI content models without even knowing it. This is especially concerning on a platform like Twitch, where creators are often recording livestreams of themselves and their voices for many hours per week.

[…] Twitch knows that its community of streamers is largely opposed to the use of generative AI, since the most prevalent generative AI products are trained on books, images, videos, and other materials scraped from the internet without consent. Even Twitch’s approach to breaking this news shows that the company is braced for backlash. Instead of telling the community that Amazon would begin training on Twitch users’ content, Twitch framed this change as "[adding] a setting that lets you opt out of having your channel content used to train generative AI content models across Amazon.”

In some cases, this created confusion among streamers about whether their content had already been fed to Amazon without their knowledge. When one user asked if their videos had already been used for training, Minton responded, “I don’t actually know the answer to that question because I don’t know what Amazon […] has done in terms of model training and what they’ve used and not used.”

Anthropic investors expect the AI startup to float at a valuation of $2 trillion or more in October, a dizzying figure that would eclipse SpaceX and make the AI lab’s debut the largest-ever initial public offering. Half a dozen of the company’s backers told the FT that Anthropic’s rapidly rising revenue would enable it to more than double its current valuation in a planned autumn float. A listing at that level could unlock billions of dollars in gains for the five-year-old company’s early investors but would also test public markets that are growing more nervous about the AI boom.

Anthropic’s backers say booming demand for the lab’s advanced AI models and tools justifies their lofty expectations. Investors expect the Claude maker’s annualized revenue to be between $100 billion and $120 billion by the end of 2026 — using the startup’s preferred measure, which infers full-year sales from recent performance — up by more than 10 times over the course of 2026. “If Anthropic is growing 800 percent a year, you’d think at the incredibly low end they would trade at 30 times [revenue],” said one investor in the group. “That would make them a $3 trillion company.”

Developed by Heart Aerospace, the X1 demonstrator lifted off from Plattsburgh International Airport in New York on Wednesday, August 12. The piloted aircraft remained in the skies for about 27 minutes and made it to a 1,100-foot altitude above ground level (AGL). According to the Swedish aerospace company, the aircraft has a wingspan of 106 feet (32 meters). It’s additionally 76 feet (23 meters) long and has a takeoff weight exceeding 25,000 lbs (11,340 kilograms).

[The Wall Street Journal] did not reveal the specific publishers Apple reached out to, but did note the company has proposed structuring payments around a variable compensation plan, which would see it pay those organizations when their content is used. By contrast, most large AI labs like OpenAI have typically offered guaranteed fees in exchange for broad access. According to the The Journal, Apple has paid publishers for access to their content in the past as part of earlier agreements that saw the company secure AI training rights.

U-M’s College of Literature, Science and the Arts plans to replace first-semester letter grades on freshmen’s transcripts with pass/no-credit marks, tentatively beginning in fall 2027. Professors would still assign grades, but they wouldn’t appear on external transcripts or count toward students’ GPAs.

U-M says the idea, known as “grade covering,” could help students adjust to college, take academic risks and "embrace the joy of learning.” University spokesperson Chris Sebastian tells Axios that LSA faculty, staff and students will continue shaping the pilot, with more details to come this fall.

The U.S. Department of Veterans Affairs announced the launch of a new clinical trial to evaluate the effectiveness and safety of psilocybin to treat major depression in Veterans, including those with concurrent PTSD. The new trial comes after a recent executive order on “Accelerating Medical Treatments for Serious Mental Illness,” which aims to increase clinical trial participation and accelerate innovative research models and drug approvals for psychedelic drugs.

[…] The randomized, controlled trial will enroll Veterans diagnosed with treatment-resistant major depressive disorder, with or without concurrent PTSD, and will compare outcomes between two psilocybin dosage levels. The study will also assess participants’ levels of depression before and after treatment, tolerability of side effects, and overall patient-reported depression. […] In addition to this trial, VA is involved in 20 active clinical trials focused on psychedelic therapies for mental health conditions. All VA research — including research into psychedelics — is conducted under strict safety protocols and in full compliance with federal guidelines.

The new map, created by the Dark Energy Spectroscopic Instrument (DESI) Legacy Imaging Surveys team, contains a staggering 5.6 trillion pixels and combines more than 263,000 telescope exposures collected over more than a decade. The observations span visible and near-infrared wavelengths, providing an enormous portrait of stars, galaxies and other cosmic phenomena across the sky, according to a statement from the National Science Foundation (NSF) NOIRLab.

Two days before tens of thousands of migrants surged into Ceuta, one of Spain’s enclaves on Morocco’s northern coast, a newspaper there posted a video on TikTok and Instagram showing two young women walking in the city in wet suits, their hair still damp. The posts didn’t say so explicitly, but the implication was clear: The women had just swum across the border from Morocco. “Ceuta can’t take it anymore,” the newspaper, El Faro de Ceuta, declared in the posts. On the other side of the border, the video resonated very differently. Cropped and reposted in Arabic, the video seemed like an invitation. The women were smiling, flashing peace signs and thumbs up and, most of all, walking around freely. The video seemed to legitimize rumors that had percolated for weeks on social media suggesting that a recent ruling by Spain’s Supreme Court meant migrants who arrived illegally by sea could stay in the country. As one account on Facebook put it, falsely, “Ceuta is turning into an open gate,” when in fact migrants still faced expulsion after a judicial review. The responses to the posts about the swimmers were a critical part of a cascade of disinformation that experts described as one of the starkest instances in which social media contributed directly to a real-world tragedy.

Over the past two decades, researchers using functional magnetic resonance imaging (fMRI), which tracks the iron in the hemoglobin supplying oxygen to neurons, have been building up increasingly detailed maps and inventories of the mammalian cortex. Thanks to huge advances in machine-learning artificial intelligence — computer algorithms that are able to sort through enormous amounts of information and use statistical methods to make classifications and predictions — fMRI scans can now be used to identify everything from depressive thoughts to the nuanced feelings of envy and schadenfreude. Other algorithms have been able to accurately piece together reconstructions of movie clips watched by subjects, just by analyzing their brain scans; or have detected, in probing the brain activity of swing voters in the US presidential election, responding to photographs and videos of presidential candidates, which candidates provoked anxiety or even disgust, and which elicited positive responses or feelings of empathy.

In just the last few years, neuroscience researchers have progressed from decoding images and emotions as they play across the cortex to sounds, words, phrases, and even language. In 2023, in a remarkable demonstration of this emerging technology, a woman called Ann Johnson, who had been paralyzed for 18 years by a brain-stem stroke, was able to speak again through the insertion of a grid of 253 electrodes onto the surface of her brain, which translated her neuronal signals into sentences, in real time, at a rate of 78 words per minute (just about half the speed of standard conversation). The research team at the University of California, led by neurosurgeon Edward Chang, had combined this brain-computer interface with an animated avatar of Johnson’s head, which spoke in her own voice, as reconstructed from a recording of a 15-minute toast she had given at her wedding. Just as the avatar’s mouth spoke Johnson’s words as she thought them, so its expressions were similarly influenced by the nuances of her brain activity, which turned her thoughts about facial gestures into displays of emotion — from smiles to pursed lips and frowns.

[…] The more invasive the recording equipment, the richer and more detailed the data. Surgical interventions are at the vanguard of neuroscience and remain very rare — fewer than 100 people on the planet have brain-computer interfaces like Johnson’s embedded beneath their skulls. Yet almost inevitably, a concerted trickle-down effect is occurring. In the summer of 2023, a team at the University of Texas demonstrated that they could use fMRI to translate brain scans into words and sentences, after subjects listened to 16 hours of the storytelling podcasts The Moth Radio Hour and The New York Times’ Modern Love to train an AI model. When the subjects then listened to new podcasts, the algorithm was able to convert the gist of what they heard, as it manifested in their brains, into words, phrases, and sentences that roughly captured the stories. As the team’s lead computational neuroscientist, Alexander Huth, put it in an interview with Science, “Our thought when we actually had this working was, ‘Oh my God, this is kind of terrifying.’" Now noninvasive, wearable brain scanners are beginning to proliferate beyond the lab, making their way into our workplaces and, through the vast global consumer market, into our homes too.

Speaking on an episode of the science podcast Huberman Lab this week, Li talked about the fears around how students are using AI. “The absolute bad outcome is that our young generation, their agency and human-level motivation of learning and living is taken away by tools,” the ImageNet inventor warned. “It should not be taken away by humans nor should it be taken away by machines.” If we see a generation of graduates who have completely relied on AI without actively trying to learn anything for themselves, they risk leaving education without having “properly developed the brain,” Li said.

[…] Li certainly isn’t advocating for a complete ban on students using AI. She believes it can genuinely help struggling students who are already engaged in their learning. Li herself noted how she struggled with organic chemistry as a premed student, when teaching assistants and professors didn’t have enough time to answer every question. While there’s no obvious solution, Li says we need to find a way to keep children and students’ motivation and agency. “Let’s find a way to give them the access and the right way of using these tools,” she said. Li added that if AI is used properly in education, it could make the students of the future “way smarter than us because they are superpowered.”

The market emergency alleged by the CFTC is that New York Attorney General Letitia James sued Kalshi on July 31. James’ lawsuit seeks a court order to permanently enjoin Kalshi “from operating an unlawful gambling business” in the state. The lawsuit also demands that Kalshi “make full restitution to customers who have engaged in betting” and pay financial penalties.

“New York intends to make event contract derivatives waste away under its iron curtain of state gaming laws before the courts get the chance to issue final rulings,” CFTC Chairman Michael Selig said yesterday. “Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws… New York has no business regulating these interstate financial markets. The commission is required by law to ensure order in these markets, and that is what we have done today.” […]

The CFTC says it alone has the power to regulate platforms such as Kalshi and Polymarket under the Commodity Exchange Act, a US law that gives the CFTC exclusive jurisdiction over designated contract markets (DCMs). “These are financial exchanges that offer financial instruments and operate across state lines,” Selig said yesterday. “They match the bid from a resident of one state with the offer of a resident from another state and submit the trade to a clearinghouse that backstops the transactions of customers throughout the country.”