Профиль

How Leopold Aschenbrenner built a $45 billion AI hedge fund — and lost most of it in days

How Leopold Aschenbrenner built a $45 billion AI hedge fund — and lost most of it in daysTwo years ago, Leopold Aschenbrenner argued he was one of few people in the world who saw the future clearly. In a sprawling, 165-page essay that became required reading in Silicon Valley, the former OpenAI researcher positioned himself as a kind of prophet for the coming age of artificial super intelligence. But this week, the limits of Aschenbrenner’s vision were on display when the AI-themed hedge fund he runs — named Situational Awareness, also the title of his viral June 2024 manifesto — ran into the harsh reality of tumbling semiconductor stocks and Wall Street margin calls. At its peak earlier this month, his fund sat atop $45 billion in assets. By Thursday, however, after being forced to offload all of his leveraged stock bets — including hard-hit names like SK Hynix and CoreWeave — to Ken Griffin’s Citadel at a discount, the fund’s holdings plunged to around $10 billion, according to people with knowledge of the situation. The story of Aschenbrenner’s meteoric rise and sudden fall has captivated both Wall Street and tech circles, making him the most high-profile casualty yet of the volatility accompanying the AI boom. A polarizing figure, his online followers saw Aschenbrenner — a Columbia University valedictorian at age 19 — as a genius of the next big thing and followed his fund’s quarterly filings for clues on hot AI stocks. Before this month’s decline, Situational Awareness racked up gains of more than 1,000% since inception, The Wall Street Journal reported last month. The Journal noted Aschenbrenner was just 24 years old. Meanwhile, critics pointed out that Aschenbrenner had no experience running money prior to launching his fund in July 2024, calling him more lucky than smart. Some noted that his early work experience was at the doomed crypto firm FTX, where he helped now-disgraced founder Sam Bankman-Fried run a charity out of a Bahamas penthouse. Others on Wall Street, including former traders at global investment banks, noted that in light of reports Situational Awareness used as much as 400% leverage, the collapse wasn’t shocking. “A lot of people saw this blow-up as a matter of not if, but when,” said Jerry Diao, who runs a Wall Street coaching firm. “Maybe his views on AI are correct in the long run, but in the public markets, you have to be prepared for the short-term.” The hedge fund didn’t immediately respond to a request for comment from CNBC. Earlier this week, before the sale to Citadel, about two-thirds of Situational Awareness holdings were in long and short positions in public equities, according to one source. The rest were stakes in private companies, dominated by a multibillion-dollar Anthropic investment, the person said. CNBC’s sources spoke on the condition of anonymity to discuss nonpublic details. The near-collapse of Situational Awareness coincides with the hedge fund manager’s wedding, set for this weekend, sources told CNBC’s David Faber. Aschenbrenner is engaged to Avital Balwit, chief of staff for Anthropic CEO Dario Amodei, according to a Fortune profile. Born in Germany to physician parents before moving to the U.S., Aschenbrenner showed an early aptitude for math and computer science, according to profiles and podcast interviews. He skipped several grades in the German school system, graduating high school at age 15, and as a teen at Columbia University he garnered attention for an academic paper titled, “Existential Risk and Growth.” A Columbia classmate, Sofia Montrone, said that she hadn’t heard of Aschenbrenner before meeting him over Zoom shortly before their 2021 graduation. “It was not like he was some prince, emerging out of the school,” Montrone told CNBC. “He was just some guy.” In the interaction, Montrone, who was salutatorian, said she found her classmate “child-like” and socially awkward. Aschenbrenner has since said that his personality — what he called his own intellectual “weirdness” and “disagreeableness” — was punished in German culture. He came to see it as the source of his edge. While at Columbia, he co-founded the school’s chapter of Effective Altruism, a philosophy popular in some tech circles that advocates for founders to make the most money possible in order to help humanity. That network became his career pipeline, eventually leading him to work with another effective altruism proponent — Bankman-Fried — after his graduation in 2021. He worked for a stint at the Future Fund, the philanthropic arm of FTX, before the crypto firm’s collapse.FTX founder Sam Bankman-Fried is led away handcuffed by officers of the Royal Bahamas Police Force in Nassau, Bahamas on Dec. 13, 2022. In 2023, Aschenbrenner landed on OpenAI’s Superalignment team, working under Ilya Sutskever on the problem of keeping AI aligned with human interests. After a hacker breached OpenAI’s internal systems, he wrote a memo to the board warning that the company’s security wasn’t strong enough to stop foreign espionage, naming China specifically. In 2024, the company fired Aschenbrenner after accusing him of improperly sharing confidential information, a characterization he has disputed, saying he was raising concerns about the company’s security practices. “I liked Leopold while at OpenAI,” Scott Aaronson, a computer scientist now at the University of Texas at Austin who previously worked on AI safety at OpenAI, told CNBC this week in an email. “I was sorry when he got pushed out because of sharing information in a way leadership didn’t approve of,” he said. It “sounded like he was trying to do the right thing and they overreacted.” An OpenAI spokesman declined to comment and referred to statements the company made at the time that the firm disagreed with many of Aschenbrenner’s claims. Representatives for Columbia University and its Effective Altruism chapter didn’t respond to requests for comment. Weeks after his departure from OpenAI, Aschenbrenner turned his brief experience at the leading AI firm into a sweeping vision of where artificial intelligence, and the world, was headed. His June 2024 essay argued that artificial general intelligence could arrive within years and that governments were badly underestimating the pace of progress. Admirers saw it as evidence that Aschenbrenner was a prodigy with valuable insight into AI’s trajectory, while critics said it overstated both the technology’s near-term capabilities and his own certainty about the future. By July of that year, Aschenbrenner parlayed his rising fame into seed capital for his hedge fund, raising a reported $225 million from Stripe co-founders Patrick and John Collison, former GitHub CEO Nat Friedman and investor Daniel Gross. That would mark the start of a two-year run unlike any in recent Wall Street history. “Before long, the world will wake up,” Aschenbrenner wrote at the time, adding that only a few hundred people in the AI community knew what was coming. “If they are seeing the future even close to correctly,” he wrote, “we are in for a wild ride.” — CNBC’s Kate Rooney contributed to this report.www.cnbc.com

Larry Ellison Bet It All on the A.I. Boom. Will He Be the Face of the A.I. Bubble?

Larry Ellison Bet It All on the A.I. Boom. Will He Be the Face of the A.I. Bubble?On Jan. 21, 2025 — the first full day of the second Trump administration — Larry Ellison woke up in his 33-bedroom, 34-bathroom oceanfront mansion in Florida, got into his Gulfstream jet and headed up to Washington. Ellison, who was 80 and worth in the neighborhood of $200 billion, had an appointment at the White House. He didn’t bother to take a driver’s license — he needed to call someone on the president’s staff to vouch for him at the gate — but there he was, at 2 p.m., standing beside Donald Trump in the Roosevelt Room as the president announced “the largest A.I. infrastructure project by far in history” and told the world that his friend Larry Ellison was just the man to get it done. “He’s sort of C.E.O. of everything,” Trump said. “He’s an amazing man and an amazing businessperson.” Ellison began by thanking Trump. “We certainly couldn’t do this without you,” he said. “It would simply be impossible.” He then proceeded to sketch out the ambitious plan. Ellison’s database software and cloud computing company, Oracle, and its partners — most prominently OpenAI — were going to invest as much as $500 billion over the next four years into a group of sprawling data centers, 500,000 square feet each, that would produce 10 gigawatts of computing power, using enough energy to power as many as 10 million homes. It was called Project Stargate, after the 1994 sci-fi movie in which Kurt Russell steps through a wormhole and finds himself inside a pyramid on an alien planet. This Stargate would be a portal leading humanity from the postindustrial era to the artificial-intelligence age. Ellison had come around to Trump long before many other tech leaders. After the 2020 election, he joined a strategy call of Trump confidants about how to overturn the results, and in 2024, he gave tens of millions of dollars to support Trump’s campaign. But OpenAI’s chief executive, Sam Altman, who was on hand at the White House too, was a Democratic donor and Trump critic. Ellison had helped arrange a call between the two men to tee up the event. For Ellison, it was the capstone of a mad two-year scramble to transform Oracle into an A.I. juggernaut. The effort began in late 2022 when the launch of ChatGPT stunned the world and set in motion a race to master and control the most transformative new technology since the birth of the internet. Ellison, a founding father of Silicon Valley and the last of his generation still in the game, was desperate to avoid getting left behind. He’d moved quickly and aggressively — some might even say recklessly — to turn Oracle into a “hyperscaler,” one of the handful of companies providing the critical infrastructure that would power the A.I. boom. These efforts had sometimes put Ellison at odds with the Biden administration, which took a more cautious approach to artificial intelligence, rolling out a host of regulations designed to give the government some control over its development. Biden’s team believed that the best way to maintain America’s lead in the A.I. race was to control the ability of U.S. companies to provide computing power to foreign nations like China and the autocratic regimes of the Persian Gulf.President Trump with Masayoshi Son, the chief executive of SoftBank, and Larry Ellison and Sam Altman after announcing Project Stargate on Jan. 21, 2025.Credit...Haiyun Jiang/The New York Times Trump was promising a very different approach. A big chunk of Silicon Valley had supported him during the 2024 election, donating generously to his campaign, and he embraced Silicon Valley’s agenda, adopting a platform that criticized the Biden administration for hindering “A.I. innovation” and imposing “radical left-wing ideas” on its development. Now that he was in office, he was taking the guardrails off, and Ellison was poised to cash in and maybe even help change the course of humanity. Ellison did cash in, at least at first. He signed the Stargate deal with Altman, putting him in business with the hottest young executive in the A.I. industry. He opened one of the world’s largest data centers in Malaysia, which has provided by one estimate more than one-fifth of China’s A.I. computing power, and developed plans to build another one in the United Arab Emirates. Oracle became a major investor in the U.S. division of the social media app TikTok. Ellison also moved into a whole new realm of influence. In 2024, he backed his son David’s $8 billion bid for Paramount, the owner of a major Hollywood studio as well as CBS News. And in 2025, he helped finance David’s $111 billion bid for Warner Bros. Discovery, the owner of a far bigger studio, dozens of cable channels and CNN. The Ellisons appeared to be building a very new sort of tech and media empire for the A.I. age, and Ellison’s wealth was soaring. Last September, he briefly became the richest person in the world. But his big bet on A.I. was built on an astronomical amount of debt in every imaginable form — bonds, letters of credit, asset-backed securities — available in seemingly unlimited quantities, because the more you spent building A.I. infrastructure, the more you would earn, or so the logic went. Computer theorists called it the scaling hypothesis. It held that advancements in A.I. were directly tied to the generation of unprecedented amounts of computing power to process unprecedented volumes of data. Reaching the holy grail of artificial general intelligence, or A.G.I., when computers match or surpass human thinking at any task, was going to require bigger data centers and a lot more of them. It all came down to capital expenditures — capex, in the lingo of the Valley. Whoever controlled the most computing power would control the A.I. economy. But lately, some investors and analysts have started questioning the scaling hypothesis or at least asking if all this spending is sustainable. The market has been gyrating wildly in recent weeks, as concerns have grown about whether the trillions of dollars being furiously pumped into this global ecosystem of data centers will ever return the promised profits. A year and a half after his triumphant trip to the White House, Ellison may be poised to become something else: a cautionary tale. David has slowed his stop-at-nothing effort to push through his deal to acquire Warner Bros. Discovery in the face of a lawsuit from a group of state attorneys general. Ellison is personally worth about $55 billion less than he was on the morning he flew to Washington, and more than $200 billion less than he was at his peak in September. Oracle has pushed the limits of the credit market and is facing steeper interest rates from lenders, and its credit rating has been downgraded to a notch above “junk” status. Ellison and his hyperscaler peers are confident that all of their borrowing and spending will set them up to dominate a transformed global economy. As a percentage of the nation’s G.D.P., the great A.I. infrastructure build-out is on track to exceed the construction of the American railroad system during the second half of the 19th century, the building of the Interstate highway system 100 years later and the Apollo space program. The hyperscalers — Alphabet, Amazon, Meta, Microsoft, Oracle — are some of the richest companies in the world, and the stock market is heavily dependent on them for its growth. If Oracle were to falter, the repercussions could be wide-ranging. Americans are more invested in the stock market than ever before, and the A.I. boom has been driving a disproportionate amount of America’s economic growth. Last fall, Gita Gopinath, a former chief economist at the International Monetary Fund, writing in The Economist, estimated that an A.I. crash would wipe out $20 trillion in American wealth — far more than the dot-com crash in 2000 or even the 2008 financial crisis. How did Larry Ellison go from being the star of the first formal news conference of the Trump administration to the richest person in the world to the most vulnerable player in this increasingly volatile game? It all started on an island in Hawaii. Tech billionaires love Hawaii. Jeff Bezos has a $78 million estate on Maui; Marc Benioff owns hundreds of acres and an oceanfront estate on the Big Island; Mark Zuckerberg is building a fortified compound on Kauai. But only Ellison owns his own island. Lanai is 140 square miles, and pretty much all of it — the 47 miles of shoreline, the gas station, the movie theater, the Four Seasons resorts and about 150 newly built rental houses for employees, decorated in Japanese style — belongs to him. Local residents, and there are about 3,000 of them, refer to Ellison as “ownership,” and the island’s unusual economic structure does give it a strange, plantation-like feel. Ellison retreated to Lanai during the pandemic and basically stayed put for the next few years, seemingly gliding into a more mellow phase of his career. He enjoyed hosting his many rich and powerful friends on his island paradise: Bezos, Benioff, Benjamin Netanyahu and Tony Blair all flew in for his birthday party in 2021. (Netanyahu’s security team insisted that he stay in a six-bedroom hilltop villa, requiring one of Ellison’s employees to move.) Ellison is building a house on the island for his good friend Elon Musk, a regular visitor. Ellison was living on Lanai with Keren Zhu, a Chinese national who came to the United States as a teenager and who goes by Jolin. Very little is known about her, including whether she and Ellison are married. But people who lived on Lanai and worked for Ellison told us that he and Jolin had their first child when she was about 23 and he was about 70 — before Ellison was divorced from his fifth wife, Nikita Kahn, in 2020 — and that they have since had at least three more. Ellison appears to be attentive to Jolin’s desires. When she complained about missing authentic Chinese food, he had one of the island’s local spots, the Lanai City Bar and Grill, which he also owns, temporarily converted into a Sichuan restaurant.Ellison with his partner, Keren Zhu, at a tennis match at Indian Wells in 2018.Credit...Matthew Stockman/Getty Images Since founding Oracle in 1977, Ellison had become infamous for his ruthless need to win, once hiring private investigators to spy on Microsoft. In more recent years, he had been spending time on a quixotic “agtech” start-up that was promising to disrupt the global food chain. He stepped down as chief executive of Oracle in 2014, though he retained the title of chief technology officer and would still dive into projects that interested him. But those projects did not include the most transformative technology of the century. That all changed on Nov. 30, 2022 — the day OpenAI released ChatGPT. In a matter of days, it had one million users. In a matter of weeks, it had 100 million. Analysts began bidding up how much generative A.I. would add to the global economy: $7 trillion over 10 years, $200 trillion by 2030 and so on. No one could say with any precision how any individual company would profit — indeed, OpenAI itself was burning money at the time and had no clear path to profitability — but everyone knew they had to move fast if they wanted to get in on the action, whatever it ended up being. Google’s chief executive, Sundar Pichai, declared a “code red,” and the company’s co-founders — Larry Page, who was hanging out in Fiji, and Sergey Brin, who had left the company to read physics texts and learn all the Olympic sports — came out of retirement to help. Musk raced to create xAI, his “pro-humanity” A.I. start-up. Zuckerberg directed Meta, the owner of Facebook and Instagram, to launch its first chatbot. Ellison needed to make an abrupt pivot, too. Oracle was, at bottom, a software company, but who was going to need its products once you could use A.I. to make your own custom software? Its business model was obviously under threat. But so was Ellison’s reputation. (Oracle declined to comment and did not make Ellison available for an interview.)In the late 1990s, Ellison pivoted Oracle to exploit the ascendance of the internet. “If the internet turns out not to be the future of computing, we’re toast,” he said. “But if it is, we’re golden.” Credit...Associated Press Ellison was considered a tech visionary who had revolutionized data management and storage. He wasn’t quite a Gates or a Jobs or a Musk, but he had been early to recognize how critical it would be for companies and government agencies to store, secure, sort and analyze the growing reams of information they were able to collect on customers, products and employees in the new computer age. And he had built a hugely important and extraordinarily profitable business to help them do it. But now that business, and really every business, needed to become a different business. If he wanted to remain Larry Ellison — C.E.O. of everything — it was time to get to work. Ellison was no stranger to the sudden arrival of a disruptive new technology. He successfully navigated several previous revolutions with the potential to upend his business. In the second half of the 1990s, he abruptly pivoted Oracle to exploit the ascendance of the internet. “If the internet turns out not to be the future of computing, we’re toast,” he’d said. “But if it is, we’re golden.” By 2000, he was not only golden, but for the briefest of moments the richest man on earth. Now it was time to abruptly pivot again. Ellison gave his first companywide address about A.I. in June 2023, beaming into a town hall meeting from Lanai. “It’s the most important technology ever,” he said, comparing it to the discovery of fire. Months later, in September, Ellison sketched out the company’s emerging A.I. strategy in his keynote address at an Oracle conference in Las Vegas. “Is it the most important new computer technology ever? Probably,” he said. “One thing’s for certain: We’re about to find out.”Ellison in the Japanese garden at his home in Atherton, Calif., in the 1990s.Credit...Louie Psihoyos At the center of Oracle’s strategy were data centers. The company had spent the last several years furiously trying to build out its cloud infrastructure, which relied on the same sort of data centers that would be running and training the new A.I. models, though the workload for A.I. data centers was far more intense. Oracle could retrofit some of its existing cloud facilities to run and train A.I. models. But if it was really going to go big on A.I., it would have to build entirely new and much larger ones. This was going to be enormously complicated and capital-intensive, requiring not only expensive microchips but also racks of servers, backup power and extensive cooling systems, not to mention extraordinary amounts of energy and water. Oracle’s hyperscaler rivals were much bigger and better capitalized. If Oracle was going to keep up, it was going to need to borrow a lot of money. And to do that, it was going to need partners with big A.I. ambitions of their own to commit to buying its computing power. Musk seemed like a perfect fit. He had started OpenAI with Altman in 2015, in what they pitched as a nonprofit effort to develop freely shareable A.I. technology for the good of all mankind. He left a few years later after a bitter power struggle. Musk had since fallen behind in the A.I. race and was now also desperate to keep up. In the spring of 2024, about eight months after Ellison sketched out Oracle’s new A.I. strategy in Las Vegas, he and Musk and their respective teams started discussing a plan for Oracle to build and operate a massive A.I. data center for xAI. It would be in Abilene, Texas, and it would be constructed in the shape of an X. According to the tech site The Information, the plan was code-named Project Ludicrous, a reference to a different sci-fi movie — the Mel Brooks satire “Spaceballs,” whose villain, Dark Helmet, sets his spaceship to “Ludicrous Speed” to catch the good guys. To run this new data center, Ellison and Musk would need a lot of specialized microchips, which were produced almost exclusively by Nvidia and were in short supply. And so they took Nvidia’s chief executive, Jensen Huang, to dinner at Nobu in Palo Alto, Calif., and begged him to sell them more.Ellison and Elon Musk (right) at the F1 Miami Grand Prix in 2023.Credit...Mark Thompson/Getty Images Ellison didn’t wait to finalize the agreement with Musk to start building the facility. That spring, Oracle signed a long-term contract with a data center developer, Crusoe, committing to pay it $1 billion a year over 15 years. But Musk and his team, expecting ludicrous speed, grew frustrated with the pace of Oracle’s progress and wanted more control over the project. He decided he was better off building his own data centers. The deal had fallen apart by that July. Ellison had lost his big client, but he soon found a bigger one. Microsoft had an exclusive deal to provide computing power to OpenAI but was rethinking the agreement. Altman’s appetite for computing power was ever-growing, and Microsoft’s capital expenditures were surging as it raced to build data centers. It did not want to become a highly leveraged player overly dependent on a single client in an increasingly competitive market. And so it gave OpenAI a waiver to work with Oracle. (The Times has sued OpenAI and Microsoft, claiming copyright infringement of news articles. The two companies have denied the claims.) Ellison didn’t share Microsoft’s hesitation about going all in on OpenAI. Oracle agreed to take on the financial burden of building out the data centers and volunteered to turbocharge the process, doing in 11 months what would ordinarily take four years. The joint venture they began hashing out would become Project Stargate. “This is like Formula 1,” Ellison told analysts in September 2024, speaking of the race to dominate the A.I. business. “Someone’s going to be better at this than anyone else, and multiple people are trying.” Ellison intended to be that someone. The only thing slowing him down was the president. ChatGPT landed very differently in Washington than it did in Silicon Valley, setting off a scramble of its own inside the Biden administration to regulate the development of A.I. To oversee his A.I. policy, Biden turned to a veteran Democratic policy adviser, Bruce Reed, who believed that the administration needed to be proactive. A year after ChatGPT’s debut, in late 2023, Biden signed a comprehensive executive order on A.I., seeking to define the government’s role in the future of this new technology. For the Biden administration, artificial intelligence was by no means just a domestic economic issue. Countries around the world were all racing to develop their own A.I. infrastructure and technology, and global power and influence would flow to whoever got there first. From this perspective, A.I. data centers were less businesses than geopolitical assets. The administration was especially concerned about the A.I. ambitions of China and the Persian Gulf, given the powerful role artificial intelligence was likely to play in reshaping the information ecosystem. “Do we really want massive A.I. training architecture built outside the U.S. when we don’t know how they are going to affect reality?” said a former Biden State Department official who requested anonymity to discuss sensitive issues, describing the administration’s thinking at the time. The United States had one major advantage in the A.I. race: China lagged behind in computer chip technology. As the administration saw it, the best way to exploit that advantage was to cut off China’s access to American-made chips, and it had taken steps to do that in the fall of 2022, just before the release of ChatGPT. But there was still a risk that China could obtain U.S. computing power remotely, through other countries. Saudi Arabia, the United Arab Emirates and Qatar, all of which share close ties with China, were in the process of shifting their lever of global influence from oil to investments via their enormous sovereign wealth funds. If computing power was the new oil — about to shape the global economy for decades to come — they were eager to obtain as much of it as they could, and they had the money to do it. The administration’s concerns and Ellison’s ambitions were on a collision course. China and the Gulf were both critical to Ellison’s A.I. plans. Oracle already had a lot of contracts around the Gulf, and it also had a strong business relationship with one of China’s most important A.I. companies, ByteDance. Oracle was the U.S. cloud provider for the U.S. division of ByteDance’s TikTok, storing and securing the data of the app’s 100 million American users. But with ByteDance itself now pivoting into generative A.I., they had the opportunity to do more business together. In the summer of 2024, Oracle started working on a $6.5 billion deal to build a large data center complex in Malaysia, from which it could convey computing power to ByteDance and other foreign companies through opaque leasing deals.The Oracle data center in Malaysia, which, according to one estimate, provides more than one-fifth of China’s A.I. computing power.Credit...Vincent Thian/Associated Press It would be perfectly legal — but under the Biden administration maybe not for long. By that point, national security officials were growing increasingly concerned about China and the Gulf’s A.I. ambitions and were discussing ways to gain more control over them. The administration was especially worried about the role Oracle might play in fueling these ambitions. They knew that Ellison was trying to scale up the company’s A.I. infrastructure quickly and that it was badly in need of cash, which meant that it might be more tempted to make deals that the administration didn’t think were in America’s best interests. The administration’s anxieties around TikTok presented another potential obstacle for Ellison. The platform had personal data — I.P. addresses as well as video preferences — for a huge number of Americans, a potential treasure trove for Chinese intelligence agents. ByteDance was technically a private company, but if the Chinese government requested its data for national security reasons, it would almost certainly have to comply. TikTok had assured the U.S. government that the data of its American users was secure, but it had also provided reason to doubt the claim. In late 2022, ByteDance acknowledged that its employees had accessed the I.P. addresses of two American tech reporters. (ByteDance said it fired the people involved and tightened its protocols so that it could never happen again.) No less concerning for the administration was what China might do with TikTok’s powerful recommendation algorithm. ByteDance owned the algorithm, which China could use to mount influence campaigns in the United States. Oracle assured the government that it had security systems in place to prevent this. But given the company’s close business relationship with ByteDance, Biden administration officials were not so sure. “That wasn’t the solution,” one senior member of the administration who spoke on the condition of anonymity to discuss sensitive issues told us. (TikTok said at the time that the algorithm is free from Chinese political influence.) In early 2024, the administration started working with Congress on a bipartisan bill — the Protecting Americans’ Data From Foreign Adversary Controlled Applications Act — that would force ByteDance to divest its U.S. TikTok operations. Biden signed the bill into law in April 2024, setting a deadline of Jan. 19, 2025, for a sale. If ByteDance failed to meet the deadline, the app would be shut down in the United States. At the same time, the administration was preparing to shore up its efforts to restrict China’s access to American computing power and to exert more control over the Gulf’s. In late 2024, it circulated the draft of a plan to require hyperscalers to go through a licensing process to operate overseas and to keep 50 percent of their computing power in America. All of the hyperscalers were looking to build overseas, but Oracle had the most to lose: Its global plans were the most ambitious, at least relative to its size. The company publicly and aggressively opposed the Biden plan. Its top policy executive in Washington, Ken Glueck, called it “one of the most destructive” moves ever taken against the tech industry, arguing that the best way to solidify America’s lead in the artificial intelligence race was for U.S. companies to build and control as much of the world’s A.I. infrastructure as possible. Biden signed off on the new policy in the final days of his presidency. It was scheduled to go into effect in May 2025. If enacted, it could force Oracle to scale back its ambitions in Malaysia and the Gulf. Ellison’s plan to transform Oracle was in trouble. But a new president was on his way to Washington. Relief came almost immediately. Hours after his inauguration in January 2025, Trump sat down at the Resolute Desk and began signing executive orders aimed at dismantling Biden’s A.I. policies. He also signed an order directing his attorney general to hold off on enforcing the congressionally mandated TikTok ban for 75 days. And then, of course, came the Project Stargate announcement with Ellison and Altman.The Stargate data center in Abilene, Texas.Credit...Scott Ball for The New York Times Trump turned to a very different group of people to shape his new administration’s approach to artificial intelligence. He named as his A.I. and cryptocurrency czar David Sacks, a Silicon Valley venture capitalist who had raised many millions for the Trump campaign and, according to a New York Times investigation, was personally invested in at least 449 companies with ties to artificial intelligence. Sacks, who has denied any conflict of interest, believed that when it came to A.I., the government’s job was to get out of the way. The National Security Council’s technology and national security division had played a key role in shaping America’s A.I. policy in the Biden years. Trump initially appointed David Feith — who had serious concerns about China’s ability to remotely access computing power through Malaysia and other Southeast Asian nations — to run it. But in April, he fired Feith and a few other China hawks and then eliminated the entire directorate. By that point, Biden’s plan to restrict American hyperscalers’ ability to operate overseas was scheduled to go into effect in a matter of weeks. Sacks and Trump’s commerce secretary, Howard Lutnick, wanted to do away with it; Sacks argued that it was overly bureaucratic and would only slow down American companies in the A.I. race. Trump saw another benefit to withdrawing the Biden plan: The Gulf states were adamantly opposed to it. They needed U.S. computing power to build out their own A.I. infrastructures and had something to offer in return. Their sovereign wealth funds were sitting on trillions of dollars that they were ready to invest in all sorts of American companies, including some connected to the Trump family. Two weeks before the Biden policy was scheduled to go into effect, Zach Witkoff — son of the Trump adviser Steven Witkoff and chief executive of the Trump family’s cryptocurrency firm World Liberty Financial — made an announcement at a conference in Dubai: The Emiratis would use $2 billion of the firm’s brand-new stablecoin for an investment in Binance, a crypto exchange. Less than two weeks later — 48 hours before the Biden restrictions would kick in — Trump rescinded the policy. That same day, Trump landed in Saudi Arabia, the first stop on a three-day tour of the Gulf. He was joined in the United Arab Emirates by Altman to announce Stargate U.A.E., a multibillion-dollar initiative to build one of the world’s largest data centers outside Abu Dhabi. Oracle would be a partner, too.A model of Stargate U.A.E. at the Abu Dhabi International Petroleum Exhibition and Conference in November.Credit...Giuseppe Cacace/Agence France-Presse — Getty Images With the Biden plan dead, Oracle was free to operate its data center complex in Malaysia as it saw fit. By the end of June, the facility was on track to become the second-biggest in the world. Oracle doesn’t release the names of its customers there, but by studying its output, an independent A.I. research firm, SemiAnalysis, determined that the facility was feeding most of its computing power to ByteDance. An analyst at the tech-focused think tank ChinaTalk, Aqib F. Zakaria, ran his own numbers and arrived at a startling conclusion: Oracle was providing a staggering 22.6 percent of China’s known A.I. computing power. We can’t independently verify these conclusions, but both SemiAnalysis and ChinaTalk are well-respected A.I. analysts. If their assessments are correct, Ellison was fueling the A.I. ambitions of America’s biggest geopolitical rival — and the very companies that could pose the biggest threat to his partner, OpenAI. Oracle sees the situation very differently. It argues that global computing power is not scarce enough to justify restricting American companies from doing business with China. By its logic, China will find ways to power its A.I. programs with or without the help of U.S. companies — and may in fact be further incentivized to build out its own A.I. infrastructure without it. On Sept. 9, Oracle reported its quarterly earnings, announcing a huge increase in “Remaining Performance Obligations” — signed contracts for orders that had not yet been recognized as sales. Reflecting on the success of Oracle’s A.I. pivot in a conference call with analysts, Ellison said that “not everyone fully grasps the extent of the tsunami that is approaching.” The next day, The Wall Street Journal reported that Oracle had finalized its agreement with OpenAI on the original Project Stargate deal. It would build a group of data centers across the country and then lease the computing power to OpenAI to train its A.I. models. Under the agreement, The Journal reported, OpenAI would pay Oracle $300 billion over roughly five years, beginning in 2027. In the wake of the earnings report and the OpenAI news, Oracle’s stock surged as much as 43 percent. Ellison had pulled off the A.I. pivot, or so it seemed. In a matter of hours, his personal wealth jumped by $88 billion, to nearly $400 billion. For at least part of the trading day, he edged out Musk as the richest person in the world. The A.I. boom wasn’t driving just Ellison’s personal wealth; it was driving the entire U.S. economy. Since October 2022, according to a Morgan Stanley analysis, A.I.-related stocks were responsible for as much as 75 percent of the returns of the S&P 500. During the first half of 2025, data centers accounted for 92 percent of America’s G.D.P. growth, according to a calculation by the Harvard Kennedy School economist Jason Furman. Oracle was on a roll, and Ellison moved to reclaim more responsibility at the company as it pushed deeper into A.I. Last September, as Bloomberg Businessweek would later report, he took charge of all of the company’s spending; Oracle’s top finance executive would now report directly to him. There was another personnel shift too. Oracle’s chief executive and a trusted confidant of Ellison’s, Safra Catz — who had questioned the aggressive pace of its A.I. build-out — stepped down as chief executive. Flush with cash, or at least paper profits from Oracle’s surging stock, Ellison decided to back his son David’s bid to buy Warner Bros. Discovery. Movies were something of a family business. Both David and his sister were film producers and financiers. Ellison had supported both of their Hollywood ambitions, but he and Megan had a falling-out several years ago after her independent film company, Annapurna Pictures, ran into financial trouble and he refused to help her. When David started pursuing Warner Bros. Discovery, he had just closed on his deal to acquire Paramount and CBS, a deal that his father had also helped finance. But Warner Bros. Discovery was a much bigger company. David had his own ambitions, but there were obvious benefits for Ellison, too. Unlike many of his tech-billionaire peers, he had never controlled a public-facing media company, with all the power that came with it, let alone two. And the Warner Bros. Discovery deal would include CNN, which had long been an object of fixation for Trump. Ellison personally guaranteed $45.7 billion of David’s $111 billion offer.Larry Ellison helped finance his son David’s acquisition of Paramount and CBS — as well as David’s bid to buy Warner Bros. Discovery.Credit...Brendan McDermid/Reuters To help cover the rest, they turned to foreign investors. Among them were the United Arab Emirates, Saudi Arabia and Qatar. If the Ellisons could pull off the deal, these three autocratic regimes would own 38.5 percent of one of America’s largest media and entertainment companies. And Ellison would be presiding over a hybrid media and technology empire whose influence would rival some of the biggest in the world. By now, Ellison, Jolin and their growing family were spending more time at their $173 million estate in Manalapan, Fla., a short drive from Trump’s smaller Palm Beach estate, Mar-a-Lago. Thanks in part to his new neighbor, everything seemed to be falling into place for Ellison, even TikTok. Trump granted ByteDance numerous deadline extensions to divest its U.S. operations, essentially violating the will of Congress, and eventually dispatched Vice President JD Vance, a former Silicon Valley venture capitalist himself, to craft a deal that would keep the app running in the United States. This January, the administration announced that Oracle, the Emirati investment fund and several other entities would form a joint venture that would acquire a majority stake in TikTok’s U.S. division. Oracle would continue to safeguard the personal data of U.S. users. The 2024 law explicitly barred ByteDance from having “any operational relationship” with TikTok’s U.S. operations. Under the agreement, ByteDance would retain ownership of the platform’s powerful recommendation algorithm, licensing it to the joint venture. ByteDance would also be the single largest investor, with 19.9 percent of the joint venture — 0.1 percent shy of the permissible limit. A spokesman for the Trump administration said that the agreement comports with the law and that the data of U.S. users is secure. Five Biden-era national security officials told us the deal did not come close to allaying their original concerns, leaving China with far too much control over the platform. “It has clearly violated the spirit of the law and potentially the letter of the law,” said one who worked on the TikTok issue. It was a view shared by China hawks on the right, too. “Don’t be surprised,” The Wall Street Journal editorial board warned, “if the new, but maybe not improved, TikTok becomes a vehicle for China to keep poisoning political debate in the U.S.” If 2025 was a triumphant year for Ellison, 2026 is shaping up to be very different, as Wall Street seems increasingly anxious about the mountain of debt Oracle has taken on. All of the hyperscalers are making huge investments in A.I. and piling on loads of debt to do it. But Oracle is in a category of its own. Late last year, as the company borrowed billions of dollars to finance the continuing construction of data centers in Texas, Wisconsin and New Mexico, two credit analysts at Morgan Stanley sent a note to investors estimating that Oracle’s debt and data center lease obligations could triple over the next three years. “Morgan Stanley Thinks You Should Short Oracle,” read a headline in The Financial Times. Even more striking was Oracle’s so-called debt-to-equity ratio, which stood at around 500 percent — meaning that it had $5 of debt for every $1 of shareholder equity. By comparison, Amazon’s was around 50 percent, and Alphabet’s was considerably lower still. But Oracle kept borrowing. On a single day in February, the company issued $25 billion worth of bonds. Soon after, it increased its bank credit line to $10 billion, preparing to borrow still more. Oracle’s debt was becoming an obstacle to its ambitions, as it stretched the limits of the credit market. In March, Oracle was forced to scale back its plans for its Stargate site in Texas after several banks insisted on limiting their commitments to the project because Oracle was the tenant. That same month, Oracle did what companies do when they are drowning in debt and desperate for cash: It began laying off thousands of employees, roughly 18 percent of its work force, without offering any explanation. It was still unclear if A.I. would decimate the American work force, but it was already decimating Oracle’s. The company’s stock was now collapsing. At the start of April, it was down some 55 percent from its high last September.In late July, Oracle’s stock was down some 60 percent from its peak last year.Credit...Brendan McDermid/Reuters For Oracle, the challenges it suddenly faced were partly a matter of timing. Its capital expenditures were skyrocketing, and it wasn’t scheduled to begin receiving payments from OpenAI — tens of billions of dollars a year — until 2027. But there were other reasons for concern, too. ChatGPT was now facing real competition from Anthropic’s Claude model, as well as various Chinese models. OpenAI was on the hook for hundreds of billions in deals with other A.I. companies and chipmakers; its revenues were growing, but so were its cash needs and its losses. It did not expect to reach profitability until 2030. Still, Oracle remained confident that OpenAI would soon make good on enough of its commitments to more than vindicate its strategy. Oracle’s annual report in June trumpeted the success of its move into A.I. and assured investors that its cloud business was still growing and that its strong cash flow would be sufficient to cover its obligations. But the report also nodded to the precariousness of its situation. The company noted that it could not guarantee that it would be able to manage its outstanding debt, which had now grown to $130 billion. It warned that its customers might not be able to pay for its services and said the regulatory environment might change, which could jeopardize its business with China. In July, S&P Global Ratings downgraded Oracle’s credit rating. Its debt was now just one notch above junk level. If it is downgraded once more, Oracle will become what’s known on Wall Street as a “fallen angel,” which would drive up its borrowing costs even further while shrinking its pool of potential lenders. On the ground, towns and local regulators were pushing back against the construction of resource-consuming data centers in their communities, causing additional problems for Oracle. The public utility commission in Wisconsin is trying to force the company to cover the power-grid upgrades necessitated by the construction of four data center buildings on a 672-acre site. This would require Oracle to raise at least an additional $7 billion, a prospect that the company called “highly problematic” in its testimony opposing the move. In mid-July came another ominous sign on Wall Street: The price of Oracle’s five-year credit default swaps — basically the price investors pay to hedge company bonds against a possible default — reached its highest level on record. By late July, Oracle’s stock was down some 60 percent from its peak last year. Ellison was still worth upward of $170 billion, but his fortune was largely bound up in Oracle’s cratering stock. He owns more than 1.1 billion shares in the company and has also borrowed against them, pledging 346 million shares as collateral for personal loans, according to a recent filing. Ellison is the only Oracle executive permitted to do this sort of borrowing; the company’s governance committee says it monitors his pledging activities. David Ellison’s $111 billion bid to buy Warner Bros. Discovery was also running into trouble. Twelve state attorneys general sued to block the deal, and a judge granted them a temporary restraining order. Soon after, Paramount Skydance announced that it was delaying the acquisition, citing the continuing court case. Ellison’s $45.7 billion pledge to back David’s bid represented a much larger percentage of his net worth than it did when he made the commitment less than a year earlier. It would be a bad time to sell, or borrow against, his Oracle shares if he needed to. The C.E.O. of everything had fallen pretty far. The story of A.I. has been as much a financial story as a technological one, a question of how to structure the mind-boggling investments required to train and run the models. Few people doubt that this technology is going to change everything. What’s less clear is when the profits are going to start rolling in and how big they are going to be. “To me, it’s a math problem,” says Asad Ramzanali, the director of A.I. at a policy center at Vanderbilt University. “We are making trillions of dollars in investments on the back of tens of billions of dollars in revenues.” The growing consensus is that these kinds of numbers add up to a bubble. The more salient question may be how big a bubble, and also what will happen if it bursts. One macroeconomic research firm, MacroStrategy Partnership, has estimated that the A.I. bubble is 17 times as large as the dot-com bubble and four times as large as the 2008 housing bubble. The housing crash may be especially instructive. It rippled across the entire economy like a contagion because the housing market had itself drawn investments from across the entire economy. This is even more true of the A.I. boom, which has been driving America’s growth across the spectrum — real estate companies, banks, even energy wholesalers have all been riding the A.I. wave.Ellison at the Oracle OpenWorld conference in 2011.Credit...David Paul Morris/Bloomberg, via Getty Images The financial structure of the data center build-out makes it especially vulnerable to a crash. The deals themselves are built on enormously complicated debt and equity schemes that involve circular financing. The hyperscalers are investing heavily in the same companies they are counting on to buy their computing power. It’s what economists call an interlocking liability structure. If their customers struggle to monetize their products, they will be hit extra hard — and so will their investors, which include a lot of everyday Americans. And these are just the U.S. companies. The A.I. boom has been a global phenomenon; an A.I. collapse would be as well. The flip side of the dream of making A.I. the future of everything is the nightmare of a financial crash. Oracle has become a barometer for the great A.I. build-out. It’s the most highly leveraged major hyperscaler, and its future profits are heavily dependent on a small number of customers. Before 2025, the last time Larry Ellison was declared the richest person in the world was in April 2000 — the very peak of the dot-com boom. The Nasdaq Composite had hit a then-record closing high in March, more than double what it had been a year before. But investors were starting to notice that the immense burn rate of start-ups like Pets.com and eToys was not leading to immense profits. The joke about kozmo.com, the home delivery start-up, was that it lost money on every order but made up for it in volume. By 2002, Kozmo was gone and the Nasdaq Composite had lost nearly 80 percent of its value. Analysts compared the financial fallout to nuclear winter.Ellison on his 79-foot racing yacht Sayonara in San Francisco Bay in the 1990s, when he was also riding a major financial wave.Credit...Louie Psihoyos Ellison took his knocks, losing tens of billions of dollars in the dot-com crash. But through it all, he remained a billionaire. By 2018, he had more money than when he’d been the richest man in the world — though by then, Bill Gates had even more. It was a bubble that took Ellison to the top in 2000. Was it a bubble that took him to the top again in 2025? Or will his all-or-nothing bet on artificial intelligence pay off, putting Oracle at the center of the new global A.I. economy and giving him control of a huge media conglomerate? The answer will matter a lot to Ellison. But it may matter even more to the rest of us. Kirsten Noyes contributed research. Georgia Gee contributed reporting. Source photograph for illustration above: Phillip Faraone/Getty Imageswww.nytimes.com

Justice Department moves to drop case against ex-Olympian charged with damaging Reflecting Pool

Justice Department moves to drop case against ex-Olympian charged with damaging Reflecting PoolUpdated [hour]:[minute] [AMPM] [timezone], [monthFull] [day], [year] Updated 4:40 PM PDT, July 31, 2026 Add AP News on Google Add AP News as your preferred source to see more of our stories on Google. WASHINGTON (AP) — The Justice Department moved Friday to dismiss a criminal case charging a former Olympian with deliberately damaging the Lincoln Memorial Reflecting Pool, saying evidence prosecutors had recently received refuted the idea that vandals were to blame. Government lawyers said in a 20-page court filing that additional documents provided by the Interior Department since the indictment of David Hearn show that the damage was the result of a botched installation by a contractor as well as “the rush to complete the project prior to events associated with the America 250 celebration in the weeks surrounding Independence Day 2026.” In addition, a recent visual inspection revealed damage throughout the pool, including in the middle — where prosecutors say a vandal would not likely have attempted to peel the lining. “Given all of this newly discovered information, it is difficult to attribute the widespread damage to the Reflecting Pool to vandalism, let alone to establish that fact beyond a reasonable doubt,” said the filing from U.S. Attorney Jeanine Pirro, which asked a judge to formally dismiss the case. Hearn’s lawyers said in a statement that the case against him should never have been brought. “Its dismissal today does not erase the abuse of government power in arresting and charging a patriotic American who did nothing wrong. The government’s approach was ready, fire, aim. The administration owes Mr. Hearn an apology,” the lawyers said. The dismissal marks an embarrassing setback for a Justice Department that had billed the prosecution as accountability for damage at a Washington landmark where President Donald Trump had launched a massive renovation project before the country’s 250th anniversary celebrations. Trump, without providing evidence, has alleged the damage was caused by vandals. But the case has long been saddled with evidentiary problems and challenges. Hearn has for weeks maintained his innocence and his supporters have characterized the prosecution as a politically motivated attempt by the Trump administration to deflect blame and scapegoat others. Earlier this week, Hearn’s lawyers sought access to grand jury transcripts because of what they said were “irregularities” in the process. They said a National Park Service official testified that the pool already was damaged before Hearn allegedly touched it, couldn’t quantify any damage attributable to Hearn and said the same repairs would have been required regardless of his conduct. “The witness’s testimony established that the pool had substantial preexisting damage requiring repair before any alleged conduct by Mr. Hearn,” his lawyers wrote. “According to the witness, the pool was leaking more than one million gallons of water per week; its expansion joints had exceeded their service life; and the liner already contained a rip.” Hearn pleaded not guilty earlier this month to one felony count of property destruction and had a trial scheduled to start Sept. 28 in D.C. Superior Court. The charge, which carries a maximum prison sentence of 10 years upon conviction, accused Hearn of causing at least $1,000 in damage to the pool. In court papers Friday, prosecutors said they had only recently received new information that undermined the basis for the prosecution. “It was not until after these documents were produced that (prosecutors) first became aware of information showing that the damage was the result of a botched installation and not vandalism as initially represented” by the Interior Department. Prosecutors could “only rely,” they wrote, on the initial information suggesting that the damage was caused by vandals. Hearn has told The Associated Press he was detained by National Guard troops and U.S. Park Police for five hours after stopping by the pool during a bike ride on June 19. He said he reached in to examine the pool’s newly peeled coating and briefly touched a chunk attached to the side of the pool, but said he obeyed a park worker who told him to let go of it. Hearn, 67, of Bethesda, Maryland, competed in three Summer Olympics, earning his best finish, ninth, at the 1996 Atlanta Olympic Games, the U.S. Olympic and Paralympic Committee says on its website.apnews.com

U.S. general warns Pentagon he lacks sufficient forces to protect Israel

U.S. general warns Pentagon he lacks sufficient forces to protect IsraelThe top U.S. general in Europe privately warned the Pentagon this week that he lacks sufficient naval forces to continue protecting Israel from incoming ballistic missiles, officials said, illustrating how the ongoing Iran war has imposed constraints on the military.Upgrade for 3 extra accounts to sharePremium comes with extra access for friends and family, plus more benefits.See more details Gen. Alexus Grynkewich, the head of U.S. European Command, sent written notification to senior Pentagon officials saying that without another Navy destroyer he will be forced to choose defense of the United States “homeland” over that of Israel, said the officials, who like some others spoke on the condition of anonymity to discuss the correspondence. The Pentagon declined to comment. U.S. European Command did not respond to requests for comment. A spokesperson for the Israeli Embassy in Washington could not be reached for comment. The general’s warning comes at a tenuous moment in the five-month conflict, as near-daily attacks have resumed following the collapse of peace talks between Washington and Tehran and the operation’s intensity has drained U.S. supplies of key defensive weapons. The Navy has been particularly taxed, as the Trump administration has directed a blockade of Iranian ports in response to Tehran’s closure of the Strait of Hormuz. The standoff has stymied the movement of Middle Eastern oil and other commodities through the narrow waterway, upending the global economy. U.S. naval destroyers in the eastern Mediterranean Sea have been employed as a part of Israel’s defense for many years. The vessels, equipped with powerful radar and armed with an array of missiles, have downed missiles aimed at Israel not only by Iran, but by Houthi militants in Yemen that are equipped by Tehran. European Command is central to this mission, as it coordinates military operations in the Mediterranean. At the same time, its forces must remain ready for any Russian incursion into territory protected by the NATO military alliance. Russia also poses a ballistic missile threat to the United States, with missiles capable of reaching the U.S. mainland. The Navy has five destroyers that deploy from a U.S. port in Rota, Spain, with a sixth expected to arrive there later this year, Pentagon officials have said. But maintenance issues have piled up due to the Iran war’s tempo, complicating matters for Grynkewich, officials said. The Washington Post withheld specific details about the ships’ availability at the request of military officials, who cited security concerns. As The Post reported in May, Pentagon assessments conducted earlier in the war showed that U.S. forces have shouldered the brunt of defending Israel from Iranian ballistic missiles. The assessments found that American weapons, including the Terminal High Altitude Area Defense and naval interceptors launched from the eastern Mediterranean, were used far more frequently than Israeli air defense weapons. Two destroyers, the USS Paul Ignatius and the USS Roosevelt, were in the Mediterranean Sea on Friday, a U.S. official said. Three destroyers were in Rota: the USS Arleigh Burke, the USS Bulkeley and the USS Oscar Austin. Closer to Iran, an armada of additional vessels was in the Arabian Sea, including two aircraft carriers, the USS George H.W. Bush and USS Abraham Lincoln, and at least 15 other warships, this official said. Eleven are destroyers. The fleet has been central to the Trump administration’s blockade of Iranian ports. It also has been involved in an effort called “Project Freedom,” in which the U.S. military has helped protect vessels in the contested Strait of Hormuz. Another destroyer, the USS Gonzalez, is in the Red Sea, where Yemen’s Houthis have attempted to enforce their own blockade of commercial shipping in a bid to further the economic pressure facing the U.S. and its allies in the region. Saudi Arabia, a key U.S. partner, has sought to thwart the Houthis, a longtime adversary, by developing a military coalition to ensure freedom of navigation. The Iran war is increasingly unpopular among the U.S. public, and members of Congress — from both political parties — have grown frustrated with the administration as top officials struggle to articulate a plan for ending the conflict on terms deemed favorable to the United States. There is a deepening worry among many Republicans, particularly, that the war’s impact on the price of gas, food and other goods will cost the party in November’s midterm elections. Tom Karako, director of the Missile Defense Project at the Center for Strategic and International Studies, a think tank, said the warning issued by Grynkewich highlights the scope of the Pentagon’s challenges. “Being on a wartime footing is going to take a toll in terms of readiness and munitions inventory levels,” he said. “Now the question is: What’s the strategy here?”www.washingtonpost.com

DOJ drops Reflecting Pool charge, citing ‘botched’ work and contradicting Trump

DOJ drops Reflecting Pool charge, citing ‘botched’ work and contradicting TrumpFederal prosecutors on Friday moved to drop a criminal charge filed against a former Olympian who had been accused of vandalizing the Lincoln Memorial’s Reflecting Pool, suggesting that the damage was instead due to a “botched” and rushed installation.Upgrade for 3 extra accounts to sharePremium comes with extra access for friends and family, plus more benefits.See more details Prosecutors said they would dismiss an indictment against David Hearn, an Olympic canoeist, whose arrest last month drew national attention amid questions about why the pool’s new blue liner was peeling. President Donald Trump — who had ordered that officials install the new liner and make other changes to the pool — repeatedly blamed vandals after pieces of the refurbished liner started drifting to the surface. A Washington Post analysis earlier this month found that the basin’s peeling was likely due to application errors by workers, a conclusion challenged by Trump administration officials at the time but supported by experts in waterproofing materials. According to Friday’s filing in D.C. Superior Court, internal Interior Department documents also chalked up the peeling of the pool liner to contractor errors made during the hurried effort to overhaul the pool ahead of celebrations to mark the nation’s 250th anniversary in July. Justice Department lawyers said the information they received showed that “the damage was the result of a botched installation and not vandalism as initially represented” by the Interior Department. “Given all of this newly discovered information, it is difficult to attribute the widespread damage to the Reflecting Pool to vandalism, let alone to establish that fact beyond a reasonable doubt,” according to the Justice Department’s filing. The Justice Department also said that officials at the Interior Department initially did not provide sufficient information about contractor errors and turned it over only after “dozens and dozens” of requests from the office of the U.S. attorney for the nation’s capital. “Had [the Interior Department] been forthcoming with the information clearly in its possession, the government would not have sought a grand jury indictment,” the filing reads. The White House and the Interior Department did not immediately respond Friday night to questions about the administration’s past accusations against Hearn and others arrested for allegedly damaging the pool, or questions about the Justice Department’s decision to drop the case. The contractor, Atlantic Industrial Coatings, also did not immediately respond to a request for comment. In a statement on its website dated June 21, the company defended its work, saying that while the U.S. Park Service had identified areas of the pool that required repairs, the areas “are a very small part of the massive 7 acre project, and do not indicate a failure of the liner.” Hearn and three others charged with misdemeanors related to Reflecting Pool damage had a status hearing set for next Thursday. Court records show that at least one of those misdemeanor cases, against Justin Carreno, was dismissed Friday. “While we are pleased with this result,” Carreno’s attorneys, David Benowitz and Rammy Barbari, said in a statement, “Mr. Carreno is innocent of the charge and should never have been prosecuted in the first place.” Hearn’s lawyers and outside watchdog groups said Friday’s move to drop charges was insufficient, and accused the administration of seeking to punish innocent Americans rather than admit its own errors. “The Trump administration’s case against Davey Hearn should have never been brought,” Hearn’s lawyers, Norm Eisen, Mary Dohrmann and Steve Levin, said in a statement. “Its dismissal today does not erase the abuse of government power in arresting and charging a patriotic American who did nothing wrong. The government’s approach was ready, fire, aim. The administration owes Mr. Hearn an apology.” Hearn told The Post last month that he was cycling past the pool and put his hand in the water only to touch a piece of liner that was already dislodged. Reached by phone on Friday night, he declined to comment. The fight over the century-old Reflecting Pool — which sits at the foot of the Lincoln Memorial and has played host to famous speeches and events — has unexpectedly emerged as a major flash point in Trump’s second term. Trump announced plans in April to abruptly overhaul the pool, saying that he had personally picked out a new color for the basin, “American Flag Blue,” and had recommended contractors based on his experience managing pools at his various resorts. At the time, Trump said the pool renovations would cost less than $2 million and be completed within two weeks. The cost later swelled to more than $14 million, and historic preservationists and other experts repeatedly warned that the rapid renovations could backfire. The job was completed within six weeks, with the president and his allies saying it was a symbol of his efforts to remake Washington. “I’m very proud of it,” Trump said in the Oval Office as the pool prepared to reopen. “I’m very good at building things and constructing things.” The celebrations were short-lived. Within days, the pool was beset by major algae outbreaks and the liner’s peeling. The president responded by alleging that vandals were to blame, accusing them of cutting parts of the pool but providing no evidence. “Many additional people have been arrested having to do with the disgraceful Vandalism of our beautiful Reflecting Pool,” the president wrote on Truth Social in June. “It was slashed with a knife, or box cutter, high grade colored waterproofing liner - it was VANDALISM!,” Trump wrote in another post this month, criticizing an ABC News report that suggested the liner was peeling. A recent visual inspection found damage in the middle of the pool — “where a vandal would not likely attempt to peel the lining” — further indicating that the damage stemmed from mistakes during installation, DOJ lawyers wrote in their filing. The administration drained the pool after the July Fourth celebrations on the Mall, with officials saying further renovations would be necessary. In a Justice Department filing Thursday, the administration said the pool would be closed through Aug. 10. The Cultural Landscape Foundation, an education and advocacy organization, is suing to block the administration’s continued work on the pool, saying Trump has disregarded long-established processes and federal requirements intended to protect historic sites. “Today, the iconic pool sits empty, covered in peeling epoxy after a botched job,” the organization’s lawyers wrote in a court filing Friday, asking a federal judge to halt further changes to the pool until they can go through a formal review process. Salvador Rizzo and Aaron Schaffer contributed to this report.www.washingtonpost.com

When the Chips Are Down

When the Chips Are DownThe technology everyone calls AI is remarkable, especially to those who remember the long, depressing history of previous attempts to get computers to do even seemingly simple things, like recognizing the same object seen from different angles, let alone recognize it as a member of a class of related objects. Yesterday I gave Claude the image at the top of the post, and asked, “What is this a picture of?” Claude responded A tuxedo cat (black and white) curled up asleep on a patchwork quilt, on what looks like a bed with a white metal frame. The photo’s a bit blurry/motion-blurred, but the cat’s clearly tucked into a tight, cozy sleeping curl with its face buried near its front paws. Trust me, that’s amazing. I think it’s fair to say that even the leading AI innovators have been shocked by the power of simple arithmetic operations applied repetitively to massive amounts of data. But even amazing technologies don’t necessarily yield big returns to investors. The huge capital expenditures we’ve been seeing by AI and AI-related companies were only justifiable if (a) AI delivers big economic payoffs — which even pathbreaking technologies don’t always do — and (b) first-movers are able to capture a large share of those returns, rather than find them competed away by second-movers offering products that are cheaper and almost as good. In this case that especially means Chinese companies with lighter-weight models that use much less compute but do most of what ChatGPT and Claude do for a much lower price. Here’s Korea’s KOSPI index, which — given Korea’s concentration on semiconductor production — has become a good barometer of expectations about AI capital expenditure: Source: Bloomberg This looks like a real crisis of faith. No, it doesn’t point to a U.S. recession, partly because so much of the AI investment boom has gone to imported equipment (hence KOSPI). But it does feel like the end of the early euphoria, of the triumph of hype over experience. Busy day yesterday, so that’s all for today.paulkrugman.substack.com

ICE’s New Detention Center Contracts Declare State Laws ‘Shall Not Apply’

ICE’s New Detention Center Contracts Declare State Laws ‘Shall Not Apply’US Immigration and Customs Enforcement is moving to place its private detention network beyond the reach of state inspectors, publishing draft contract terms that declare state and local laws “shall not apply” to the facilities, according to federal documents reviewed by WIRED. The new terms were published earlier this month, a day after a federal judge ruled that a contract cannot override state law and ordered ICE’s largest Pacific Northwest detention center opened to Washington health officials. The ruling, by US District Judge Benjamin Settle, came only after three years of litigation; 10 refused inspections, according to the state; and 3,500 detainee complaints. A Ninth Circuit judge temporarily paused the order on July 21, with a decision on a longer stay expected in early August. Settle ordered the operator of Tacoma’s immigration detention center to admit Washington state health inspectors, ruling that nothing in the company's federal contract barred them and that no contract could override state law in any case. The next morning, on July 10, ICE published draft contract terms for 5,500 detention beds in four regions of the country—including language declaring that state and local laws “shall not apply” to the facilities' operations. Settle found that the GEO Group, the private prison company that owns the Tacoma facility, had executed a new contract with ICE in the middle of the lawsuit to support the company’s claim that ICE, not GEO, controlled access to the building. “Preemption requires Congressional intent, not a contract,” Settle responded, “and GEO's new contract cannot preempt state law, even if it purports to.” Settle also noted that GEO's court filing omitted part of a contract provision under which ICE agreed to ask the Justice Department to get GEO dismissed from lawsuits over its performance, or to have ICE substituted as the defendant. The new procurement document, posted to a federal contracting site on July 10 and first reported by the newsletter Project Salt Box, is framed as an early step toward a competitive bidding process, but its terms suggest otherwise. Facilities must begin housing detainees within 30 days of an award—a timeline no new construction could meet—and the required bed counts and locations align with four detention centers GEO already operates: in Tacoma; Aurora, Colorado; Pompano Beach, Florida; and Philipsburg, Pennsylvania. The Florida requirement, 700 beds, matches the Pompano Beach facility’s contracted bed guarantee exactly, according to ICE's own facilities data. Operating agreements for the four sites lapse in the coming months: Tacoma's contract runs through October 27, and the Pennsylvania facility's county agreement expires September 28. GEO’s securities filings show the Colorado and Florida contract terms end in October and September, respectively. Companies had less than a week to respond before the window closed July 17. The draft contract terms are new. But the language attempting to nullify state law is not: It appears nearly word for word in the Tacoma contract that GEO signed in March, in the middle of the lawsuit—the same contract Settle ruled “cannot preempt state law, even if it purports to.” ICE is now proposing to extend it to three more states. Settle rejected the language once. But his ruling is preliminary, it binds no court outside Washington, and for ICE’s purposes it doesn’t need to survive. Washington needed three years of litigation to get inspectors to the door of one facility—and they are still outside, held off by a stay while GEO appeals. Written into contracts across four states, the same language could restart that fight in each of these locations at once. DHS and GEO Group did not respond to a request for comment. The Department of Homeland Security, ICE’s parent agency, has already shown what the strategy looks like by other means: In California, San Diego County officials were blocked from inspecting the Otay Mesa Detention Center; the county sued, and a federal judge ordered access in June. Soon after, its operator, CoreCivic, announced it sold the building and a second California facility to DHS for $1.5 billion. A DHS spokesperson, Lauren Bis, tied the purchase to the state’s “sanctuary politicians,” who she said “continue to push legislation to outlaw or make private prisons financially infeasible.” CoreCivic said it has completed the sale of the California City Detention Facility and Otay Mesa Detention Center to the federal government. The company said the valuations were set by independent appraisers through the government's required appraisal process. The draft terms ICE posted this month could also shift three of the GEO facilities in Colorado, Florida, and Pennsylvania to the National Detention Standards (NDS) ICE issued in June—a rulebook the agency claims will “reduce the burden” on its contractors. ICE records show three of the four facilities were most recently inspected under the stricter 2011 performance-based standards. The fourth—Tacoma—was reinspected in June under the weaker NDS after its new contract took effect, according to ICE's latest facilities data. The new standards bar operators from paying detainees more than $1 a day for “voluntary work” and state that participants are not employees entitled to wages or benefits, permit AI translation tools for “non-critical” communication with detainees, and bar operators from refusing anyone ICE assigns to a detention center, with exceptions only at ICE's discretion. Under the draft contract, external inspections are limited to ICE, ICE-approved third party inspectors, and other federal officials, and facilities may operate indefinitely at 85 percent staffing, including medical staff. The Washington ruling caps years of refused inspections. State health officials, responding to thousands of detainee complaints, were turned away from the Tacoma facility repeatedly; two people have died there since 2024, according to the state. (Settle’s injunction only applies to the GEO-run portions of the detention center and does not reach the parts of the facility ICE controls directly, including its administrative offices and the medical unit.) In June, an inspection by ICE's own detention oversight office found a detainee whose required health assessment came 22 days late and several suicide-watch welfare checks that ran up to nearly 14 hours apart instead of the required eight. The same inspection surfaced an allegation, now under internal ICE investigation, that medical staff assaulted a detainee during a seizure. In Pennsylvania, the new contract structure would have an additional effect: ICE's largest Northeast detention center, in Clearfield County, operates through a county agreement expiring September 28—a renewal residents have packed public meetings to oppose. A direct federal contract would cut the county out of the arrangement.www.wired.com

A Realist's Guide to the American System

A Realist's Guide to the American SystemFriends, I’m devoting the next several Fridays to what I’m calling a “Realist’s Guide to the American System.” If you hadn’t noticed, almost everything’s going to hell. Why? Trump is horrendous, but he isn’t causing all the failures of that system. He’s a consequence of that system. Think of him as a boil on its backside — an infected pustule on the giant ass of the American system. The boil would have become infected eventually because of deeper flaws in how the system has evolved. The best way of beginning is to introduce you to Jamie Dimon. In the spring of 2018, Jamie Dimon phoned me at my office at the University of California, Berkeley. I had criticized him publicly, and he was not pleased. He sounded off on the phone for several minutes without stopping. Dimon has a great deal of influence over the system. He heads the largest bank on Wall Street, JPMorganChase, which survived the 2008 financial crisis better than any other big bank. After the crisis, The New York Times gave Dimon the back-handed compliment of being “America’s least-hated banker.” He has also headed the Business Roundtable, a lobbying group of the most powerful CEOs in America. He is featured regularly on cable news and in the business press. His opinions carry significant weight on Capitol Hill. Dimon describes himself as “a patriot before I’m the CEO of JPMorgan.” He is a lifelong Democrat. He admirably speaks out about the injustices and inequalities of contemporary America. He is not just talk. He has pushed his bank to invest in poor cities and to create better opportunities for the disadvantaged. I believe he’s sincere. But he is awash in self-delusion, a condition especially dangerous in people who have significant power over others. Dimon doesn’t see how he has contributed to the mess we’re in. He doesn’t acknowledge the inconsistencies between his preferred self-image as “patriot first” and his roles as CEO of America’s largest bank and former chairman of the Business Roundtable. He doesn’t understand how he has hijacked the system. Dimon is emblematic of an abdication of public responsibility to maintain the health of our political-economic system at a moment when a comparative few at the top have more power over it than at any time in over a century. They have used their power to give themselves unprecedented wealth, which has bought them even more power. They have justified their wealth and power as being in the interest of the public, but the public has been shafted. Dimon is among the most capable of American CEOs, adept at promoting and defending his corporation. He also understands some of the failings of the system and has called for some useful reforms. If he weren’t running JPMorgan, someone else would be, and probably not doing so nearly as well. Nonetheless, a big part of Dimon’s job is to siphon off the gains of the economy for the benefit of a few at the top. As he does this, he’s eroding trust in the system. He’s undermining democracy. This is how we got into the quagmire we’re in. Dimon is simply playing his part in the current system as it has evolved. He’s responding to how incentives within the system are designed. To the extent Dimon or others like him are blameworthy, the fault lies in their unwillingness to buck these incentives in order to change the system for the well-being of the vast majority. This may be an unrealistically high bar. Dimon has no legal obligation to reach it. But I believe he has a moral duty to try to change the laws and incentives so no one ever again can become as rich and powerful as he and his fellow CEOs at the Business Roundtable and as other major financiers on Wall Street. He has a moral obligation to ensure that the American system is no longer rigged in favor of people like him. I’ll return to Dimon next week, but right now I want to talk about the consequences of all this. Millions of Americans, whether on the left or right of the political spectrum, know something has gone profoundly wrong. The concentration of wealth in America has created a political system in which the super-rich can buy Congress and the presidency, an education system in which they can buy admission to college for their children, a healthcare system in which they can buy care others can’t, and a justice system in which they can buy their way out of jail. Almost everyone else has been hurled into a dystopia of bureaucratic arbitrariness, corporate greed, and the legal and financial sinkholes that have become hallmarks of modern American life. The term “enshittification” was coined in 2022 by novelist Cory Doctorow to describe the declining quality of almost everything. Monopolistic corporations are charging more for the products they sell and cutting back on services. Stuff breaks more often than it used to. Government is being starved of tax money to provide even the most basic of public services. The whole system seems to be collapsing in on itself. The word “enshittification” has been officially incorporated into major lexicons like the Merriam-Webster dictionary because of people’s increasingly common experience of being crapped on by big corporations, big hospitals, big energy, and big insurance, and of being bogged down in seemingly endless legal quagmires of corporate and government bureaucracies. As the New Yorker put it, we live in the “Age of Enshittification.” The advent of AI has highlighted the possibility of mass unemployment and also the growing impossibility of boosting workers’ share of both corporate and national income. The oligarchs who are now spending hundreds of billions of dollars developing AI — with funds funneled to them by Jamie Dimon and others on Wall Street — have done everything in their power to keep workers’ wages low, prevent them from organizing or joining unions, and stop them from having more political power, and they’re now funding campaigns to protect their fortunes against higher taxes on capital income and wealth. This mammoth, systemic dysfunction is generating a great deal of heat — anger, frustration, and outrage. That anger is a major reason why Trump became president, twice (even though he has further enshittified America and much of the world). Heat in any system signals potential change. Like tectonic plates causing earthquakes and volcanoes as they crash into each other, heat is a sign of underlying tumult. In today’s America, the status quo is unsustainable. Subterranean tensions are building. Trump exploited those tensions for his own malignant ends. But even if Trump is replaced by someone who’s noble, humble, and talented, and who cares more about America than himself — in other words, someone who’s the opposite of Trump — we’d still be in trouble. The system is out of whack. It needs fundamental change. If you want to understand why the American system has become so dysfunctional, and what you might do to help it to meet the needs of average people, you need to reassess many of your likely assumptions about it. 1. First, forget politics as you’ve come to see it as electoral contests between Democrats and Republicans. Think power. The underlying contest is between a small minority who have gained power over the system, and the vast majority who have little or none. 2. Forget what you may have learned about the choice between the “free market” and government. A market cannot exist without a government to organize and enforce it. The important question is whom the market has been organized to serve. 3. For the same reason, don’t try to separate economics from politics. They’re two sides of the same issue. (Be suspicious of anyone who tries to separate them.) 4. Forget the standard economic goals of higher growth and greater efficiency. The issue is who benefits from more growth and efficiency. 5. Don’t be dazzled by “corporate social responsibility.” Most of it is public relations. Corporations won’t voluntarily sacrifice shareholder returns unless laws require them to. Even then, be skeptical of laws unless they’re enforced and backed by big penalties. Large corporations and the super-rich ignore laws when the penalties for violating them are small relative to the gains for breaking them. Fines are then simply very manageable costs of doing business. 6. Don’t assume that we’re locked in a battle between capitalism and socialism. We already have socialism — for the very rich. Most Americans are subject to harsh capitalism. 7. Don’t define “national competitiveness” as the profitability of large American corporations. Those corporations are now global, with no allegiance to America. Real national competitiveness lies in the productivity of the American people — which depends on their education, their health, and the infrastructure linking them together. 8. You can also forget the ups and downs of the business cycle. Focus instead on systemic changes that have caused the wealth and power of a few to dramatically increase during the last 40 years at the expense of the many. 9. Forget the old idea that corporations succeed by becoming better, cheaper, or faster than their competitors. They now succeed mainly by increasing their monopoly power. 10. Forget any traditional definition of finance. Think instead of a giant gambling casino in which bets are made on large flows of money, and bets are made on those bets (called derivatives). The biggest winners have better inside-information than anyone else. 11. Don’t assume the system is stable. It moves through vicious spirals and virtuous cycles. We are now in a vicious spiral. The challenge is to turn the vicious into the virtuous. 12. Don’t believe the system is a meritocracy in which ability and hard work are necessarily rewarded. Today the most important predictor of someone’s future income and wealth is the income and wealth of the family they’re born into. 13. Don’t separate race from class. Racial discrimination is aggravating class divides, and wider inequality is worsening racial divides. 14. Think systemically. Most people’s incomes haven’t risen for four decades, and they are becoming less economically secure. Meanwhile, climate change is intensifying competition for arable land and potable water around the world, generating larger flows of refugees and immigrants. Together they allow demagogues to fuel bigotry by blaming immigrants for the stagnant incomes and economic insecurity. 15. Don’t confuse attractive policy proposals with changes in the system as a whole. Even if enacted, such proposals at most mitigate systemic problems. Solving those systemic problems requires altering the allocation of power. 16. Most importantly, you need to understand the nature of power — who possesses it and why, how it is wielded, and for what purposes. Power is the ability to direct or influence the behavior of others. On a large scale, power is the capacity to set the public agenda — to frame big choices, to influence legislators, and to get laws enacted or prevent them from being enacted, to assert one’s will on the world. Power has been leached out of conventional discussions about what is occurring. Power doesn’t show up in standard economics texts, finance courses, or even political science and law. But you cannot comprehend today’s system without confronting power head on. It is the most important subterranean force. Power is exercised through big Wall Street banks, global corporations, the executive and legislative branches of government, the Federal Reserve and the Supreme Court, the military, elite universities, and the media (including social media as organized by Big Tech). But these institutions don’t wield power on their own. Particular people have outsized influence over them. They include CEOs like Jamie Dimon, large investors, hedge fund and private-equity managers, media moguls, key lobbying groups like the Business Roundtable, and major donors to political candidates and universities. To comprehend the nature of their influence over the system you need to understand the role of wealth. In the system we now have, power and wealth are inseparable. Great wealth flows from great power; great power depends on great wealth. Wealth and power have become one and the same. I don’t intend for these underlying realities to make you more cynical about the system or resigned to its intransigence. To the contrary, the first step toward changing the system is to understand it. If we cannot comprehend the truth, we become entrapped in conventional falsehoods and false choices, unable to envision new possibilities. Seeing the system for what it is will empower you to join with others to change it for the better. Please join me next Friday when I’ll continue this discussion. I look forward to reading your comments. RRrobertreich.substack.com

Exxon and Chevron Post Blockbuster Earnings Amid Oil Rally The Morning Sixpack Podcast - 07/31/2026: Spain border crisis, Big Oil profits, AI hacks, Trump AG fight, school shooting accountability, Jimothy mania. #MorningSixpackPodcast

Exxon and Chevron Post Blockbuster Earnings Amid Oil RallyThe Morning Sixpack Podcast - 07/31/2026: Spain border crisis, Big Oil profits, AI hacks, Trump AG fight, school shooting accountability, Jimothy mania. #MorningSixpackPodcastwww.mydailygrind.news

Spain's Ceuta Swamped as 60,000 Migrants Cross in 24 Hours The Morning Sixpack - 07/31/2026: Spain's border buckles, Big Oil cashes in, AI hacks spread, Trump hits GOP roadblock, school shooter's father sentenced, Jimothy steals hearts. #MorningSixpack

Spain's Ceuta Swamped as 60,000 Migrants Cross in 24 HoursThe Morning Sixpack - 07/31/2026: Spain's border buckles, Big Oil cashes in, AI hacks spread, Trump hits GOP roadblock, school shooter's father sentenced, Jimothy steals hearts. #MorningSixpackwww.mydailygrind.news

Reality is a Communist Plot

Reality is a Communist PlotThe Covid vaccine didn’t work, and vaccines cause autism. But hydroxychloroquine worked, and so did ivermectin. Anthony Fauci killed millions of people. Climate change is a hoax. Wind power caused a massive TV blackout during the Trump-Biden debate. Solar power is useless because the sun doesn’t shine at night, and batteries don’t exist. Smoke blanketed North America, not because of climate change, but because Canada didn’t rake its 2 million square miles of boreal forest. We’ve destroyed Iran’s military, and the Iranian regime is begging for a deal. Also, the U.S. isn’t running out of precision weapons as a result of the Iran war, and furthermore the shortage is Joe Biden’s fault. The economy is in a “golden age.” Prices are down. And Trump has a 59 percent approval rating. Trump won the 2020 election. Communism is the greatest threat facing America. The modern American right is very good at hating. MAGA hates immigrants (unless they’re white South Africans); it hates liberals; it hates scientists. What the ongoing show trial of Fauci — which motivated this post — has really driven home, however, is that what Trump and his supporters hate most of all is reality. They know what they want to believe. They fly into paroxysms of rage whenever someone points out that the world isn’t what they want it to be. And they always want to shoot the messenger. Of course, motivated reasoning isn’t confined to the right. Some people on the left insist that zoning restrictions have no role in causing high housing prices, that it’s all about Wall Street greed. Many centrists insist that being in the middle on a left-right scale — which isn’t even how most voters think about politics — is the secret to electoral victory. And so on. I’m not immune to the temptation to believe what I want to be true. I try to fight it, but don’t always succeed. Still, I try to acknowledge and admit it when I have let wishful thinking warp my judgement. But what we’re seeing now isn’t run-of-the-mill motivated reasoning. It’s something far more extreme. If believing something suits MAGA’s prejudices and interests, they don’t hesitate: they simply insist that it’s true. They routinely dismiss scientific and statistical evidence, but they don’t stop there. They’re perfectly willing to deny reality even if the truth is staring them in the face. Thus, Trump urged Americans to remember that 2024 TV blackout, which nobody remembers because it didn’t happen. He insists that California has “blackouts and brownouts every weekend,” when the state’s 39 million residents can tell you it doesn’t. He says that you must show ID to buy groceries, which everyone who buys their own food knows isn’t so. Do Trump and his followers actually believe these things? As I see it, that’s a category error, starting from the presumption that they even accept that objective facts exist. All the evidence (Hah! “Evidence!”) says that they don’t. George Orwell, whose work seems more relevant by the day, knew all about this mindset. In his essay “Looking back on the Spanish war” he wrote about how the rise of totalitarianism had changed the rules: In the past people deliberately lied, or they unconsciously coloured what they wrote, or they struggled after the truth, well knowing that they must make many mistakes; but in each case they believed that ‘the facts’ existed and were more or less discoverable. And in practice there was always a considerable body of fact which would have been agreed to by almost everyone. Totalitarians, however, denied that objective facts existed. Furthermore, reality is mutable, changing with the leader’s whims: If the Leader says of such and such an event, ‘It never happened’ – well, it never happened. If he says that two and two are five – well, two and two are five. If you find the assertion that MAGA has a totalitarian mindset over the top, all I can ask is, have you been following the news? What’s remarkable is the extent to which Republican politicians act as if they are living in a totalitarian state, when they aren’t — not yet, anyway. ICE would clearly like to be an American Stasi, policing any deviation from the party line, but it’s not able, so far, to arrest members of Congress who express skepticism about the president’s claims. And many Republican politicians still, I believe, know the difference between fantasy and reality. But they behave as if they were courtiers to Kim Jong Un. Trump speeches are sometimes followed by “endless applause moments,” because none of Trump’s loyalists wants to be seen as the first person to stop clapping. The susceptibility of the GOP to this totalitarian mindset has come as a surprise even to cynics. I have some idea of how this happened: It involves a confluence of big-money corruption, crony capitalism, religious fanaticism, and the ever-present forces of racism and sexism. But that’s a subject to be delved into another day. What’s clear is that the war on reality is exacting a high price on America as a whole. Remember, 1.2 million Americans died from Covid — a number that would have been much lower if MAGA misinformation hadn’t caused so many people to refuse vaccination. Now we’re seeing a frightening rise in measles and other infectious diseases, and God help us if another pandemic strikes with Trump or his successor still in charge. Climate denial and hostility to renewable energy will mean more pollution even as it consigns the U.S. to energy and economic backwardness. And the Iran war — which Trump started and now refuses to end because he won’t accept reality — has destroyed America’s credibility and depleted our weapon stocks with stunning speed. But anyone pointing out the obvious is, of course, a Communist. MUSICAL CODA Used this before, but different performancepaulkrugman.substack.com

The Bond Market Doesn’t Like Bullshit

The Bond Market Doesn’t Like BullshitCNBC The Federal Open Market Committee of the Federal Reserve meets every six weeks to set interest rates — specifically the federal funds rate, the overnight rate at which banks lend each other money. The Fed funds rate has little direct economic significance, since nobody making important investments relies on overnight money. But an upward or downward change in the Fed funds rate tends to drag longer-term rates up or down with it. Even more important, FOMC decisions, along with their public statements, affect the market’s expectations about future monetary policy. Setting such expectations is one of the major roles of the Fed. So FOMC decision days are something of a theatrical performance. The committee doesn’t just announce its interest rate decision. It releases a statement explaining that decision; then the Fed chair holds a press conference, in which he or she tries to build credibility by answering reporters’ questions. Market traders closely analyze these statements in order to predict the future direction of inflation and monetary policy. As a result, FOMC decisions and statements have critical influence over current market rates. On Wednesday Kevin Warsh, who Donald Trump selected as Fed chair, played the starring role. His job was to explain why the Fed didn’t raise rates in the face of inflation that is persistently well above its 2 percent target. By all accounts he bombed. In particular, the bond market, the ultimate reviewer, really didn’t like Warsh’s performance. As the chart at the top of this post shows, the 30-year Treasury rate spiked and the dollar fell slightly. In plain English, this was the equivalent of bond market traders running for the exits. A little background is in order to understand exactly what happened here. At 3.7%, inflation has been persistently well over the Fed’s 2% target rate — largely as a consequence of Trump’s tariffs, which have raised the prices of imports, and his Iran war, which has caused energy prices to soar. The Fed normally raises interest rates to fight inflation. But it instead left rates on hold in this meeting. The truth is that the case for an immediate rate hike was somewhat iffy. When a spike in inflation is temporary and will soon fade away from its own accord, the Fed tries to “look through” this temporary shock and not base interest rate decisions on it. Both the Trump tariffs and the energy price spikes are arguably one-time events. But whether the inflation shock is truly transitory is not certain. Thus three of the FOMC’s 12 members dissented and called for a small rate hike. And it’s important to note that three dissents is a lot. This was the first time since 1970 that a new Fed chair faced three opponents to an early interest rate decision. Yet Wednesday’s decision not to increase the federal funds rate was widely expected, and shouldn’t have rattled markets. But the bond market was indeed rattled. Its reaction indicated that traders believe that there is a good chance that the Fed is going to keep rates too low for too long and thereby feed inflation. As a result, the Fed will eventually be forced to raise future rates to a higher level than if it acted to rein in inflation now. So it’s clear that the bond market reaction wasn’t a judgment on the rate decision itself. It was, instead, a judgment on Warsh. In other words, Warsh’s remarks on Wednesday led the market to distrust his commitment to fighting inflation. When Trump selected Warsh, I noted that Warsh had been completely wrong about monetary policy in the aftermath of the financial crisis. He called for rate hikes, which was the exactly wrong policy for a deeply depressed economy. He warned about inflation; when the inflation didn’t materialize, he just came up with new arguments for the same policies. I didn’t mince words about the consequences of choosing Warsh as Fed chair: Many media reports are describing Warsh as a monetary hawk. That’s a category error. Warsh is a political animal. He calls for tight money and opposes any attempt to boost the economy when Democrats hold the White House. Like all Trumpers, he has been all for lower interest rates since November 2024. As I pointed out at the time, other independent economists had similar things to say. So how did he end up at the top of the Fed? As I noted, [Warsh is] an effective bullshitter. Sorry for the technical language, but I can’t find another way to say it. Listen to Warsh on economic policy, and he throws around a lot of big words that presumably sound impressive to people who don’t know anything about the subject. But there’s no coherent argument behind the verbiage. What Warsh really needed to do in his press conference was refute the critics and show that he was more than a partisan who got the job in part because Trump thinks he looks the part. He failed. Warsh didn’t necessarily need to advocate a rate hike. But he has harshly denounced the Fed for acting too slowly to tame inflation in the Biden years. Now he finds himself in a superficially similar situation, so at the very least he needed to explain clearly why he thinks this time is different. Instead, his performance at the press conference was stumbling, confusing, and evasive. At times he seemed to suggest that the Fed doesn’t need to do anything to control inflation, a total contradiction of his previous critiques. Scattered reports also suggest that Warsh is failing to gain the respect of his colleagues at the Fed. Three dissents is, as I said, a lot. One Fed governor, Chris Waller, mocked Warsh’s plans to set up multiple task forces to study key issues. According to the Wall Street Journal, What’s the point of all this, [Warsh] asked. Tell me who you’re putting on these groups, he said, and I’ll tell you what they’ll say. There were no brilliant ideas out there that everyone had somehow missed. And Lorie Logan, the president of the Dallas Fed, made a point of concluding a recent speech by reminding the audience that Neither I nor any other single person makes monetary policy on their own in the United States. The Federal Open Market Committee is a committee. Whatever she meant by that, the audience surely heard it as saying, “Don’t worry, Warsh isn’t really in charge.” That’s reassuring if one doesn’t trust his judgment, but it also means that he won’t be an effective leader if we face an economic crisis. Now, Warsh isn’t Trump’s worst appointment, by a long shot. Even among the economic appointments, he’s nowhere near the depths of corrupt sycophancy plumbed by Scott Bessent, the Treasury secretary, and Howard Lutnick, the Commerce secretary. But the markets were looking for some sign that Warsh isn’t the lightweight bullshitter he appears to be. What they got instead was evidence that Warsh is no better than he seems. And let’s hope to God we don’t have another economic crisis while he is at the helm. MUSICAL CODApaulkrugman.substack.com

5 takeaways on Fauci’s hostile Senate hearing, GOP contempt threats

5 takeaways on Fauci’s hostile Senate hearing, GOP contempt threatsFormer chief White House medical adviser Anthony Fauci’s Senate hearing Wednesday ended up being an hours-long opportunity for Republicans to vent criticisms, arguments and theories on the COVID-19 response as the veteran government scientist adamantly refused to answer any questions. Fauci, who led the National Institute of Allergy and Infectious Diseases for nearly 40 years, has a history of acrimonious interactions with Sen. Rand Paul (R-Ky.), the chair of the Senate Homeland Security and Governmental Affairs Committee. In the days before the hearing, Paul released more than a thousand pages of Fauci’s personal diary entries and work records. Fauci blasted the move by the senator as an attempt at “embarrassing and intimidating” him. Over the course of the three-hour hearing, Fauci invoked the Fifth Amendment 111 times as Republicans rehashed their gripes about COVID-19 pandemic guidance. One of Fauci’s attorneys was removed from the chamber, while Democrats deemed the proceedings a partisan waste of time. In a statement following the hearing, Fauci’s attorney David Schertler called the hearing part of Paul’s “public crusade” against the scientist. Here are five takeaways from the contentious hearing. In his opening remarks, Fauci made it clear he planned to invoke his Fifth Amendment right against self-incrimination. True to his word, Fauci did not answer a single question from any lawmakers during the entire three-hour hearing. Fauci said in his opening remarks that he welcomed congressional oversight, pointing to the more than 200 times he appeared before Congress over his more than five-decade career with the federal government. But he indicated that he believed the hearing was being held in bad faith. “Given Sen. Paul’s obvious obsession with calling for my prosecution, his repeated slanderous comments about me and recently his publicly releasing my unredacted personal diary aimed at embarrassing and intimidating me, the only conclusion I can reach is that the sole reason he is calling me before this committee is to get me to say something, anything, that could vindicate his repeated public pledges that I end up, in his words, ‘behind bars,'” Fauci said. Paul challenged Fauci over his Fifth Amendment right, warning him there would be “repercussions” for his refusal to answer. Schertler spoke up to defend Fauci’s decision. Paul demanded that the attorney stop speaking. Ranking member Sen. Gary Peters (D-Mich.) attempted to use his time to allow Schertler to speak, but Paul refused this. After several minutes of heated back-and-forth, Paul had a Capitol Police officer escort Schertler out of the room. Many Republican members of the committee used their allotted time during the hearing to challenge or even mock Fauci for invoking his Fifth Amendment right. Several argued that Fauci had no Fifth Amendment rights pertaining to the topic they were discussing because former President Biden had granted him a pardon. However, Rep. James Comer (R-Ky.), the House Oversight and Government Reform Committee chair, had warned Tuesday that Fauci could be prosecuted for his testimony this week. At the start of his time, Sen. Josh Hawley (R-Mo.) asked rhetorical questions like what day of the week it was and what color tie the former government scientist was wearing. To each question, Fauci again invoked his Fifth Amendment right. Sen. Bernie Moreno (R-Ohio), meanwhile, had one of his aides give Fauci a small copy of the U.S. Constitution as the scientist continued to refuse to answer questions. Sens. Ron Johnson (R-Wis.) and Rick Scott (R-Fla.) similarly excoriated Fauci, with the Florida Republican saying that “if we have another pandemic tomorrow, millions could die because of what you did.” At the end of the hearing, Paul expressed frustration with the scientist’s silence, calling it “the capstone to Anthony Fauci’s 40 years of abuse of power at NIH [National Institutes of Health].” “I really did want to hear from Dr. Fauci,” the Republican chair said. “I wanted to hear perhaps an apology, perhaps some semblance of being sorry for what happened or that judgement errors were made.” In his opening statement, Peters directed his criticism at the committee chair, pointing to Paul’s history of attacking Fauci over his leadership on the pandemic response strategy. Peters cited Paul’s 2023 book, titled “Deception: The Great COVID Cover-Up,” which features the scientist on the cover wearing a face mask. “This hearing appears to be a culmination of months of biased and selected efforts by the majority under the guise of a ‘committee investigation’ to basically legitimize a predetermined conclusion that was reached years ago,” the Democratic lawmaker said. Democrats on the panel did not pose any questions to Fauci, most using their time to speak in his defense. While Fauci did not directly address GOP members’ questions during the hearing, Sen. Richard Blumenthal (D-Conn.) read aloud a statement from Schertler made after his removal from the hearing room. “You are single-minded and fixated on Dr. Fauci, seeing Dr. Fauci prosecuted for imaginary crimes. And you were so invested in that outcome that you have created a personal brand around it,” Schertler’s statement said, addressing Paul directly. If attendance was any indication of how lawmakers felt about the hearing, Democrats did not give the hearing much regard. While all Republican members of the committee attended, two Democratic members did not. Sen. Ruben Gallego (D-Ariz.) had a prior engagement at the UnidosUS Annual Conference in Texas, while Sen. Elissa Slotkin (D-Mich.) also did not attend. The Hill has reached out to Slotkin’s office for comment on her absence. Paul and other Republicans on the panel slammed Fauci over his involvement in lockdowns across the country during the pandemic. Moreno lobbed two expletives at the former longtime health official over restrictions put in place during the COVID-19 pandemic, when Fauci was in a leadership position. Moreno said he decided to run for office soon after learning that a woman was arrested at an Ohio middle school football game in 2020 for refusing to wear a mask, which was reportedly against the school’s policy at the time. “Here I am sitting in front of you six years later, saying, who the f‑‑‑ do you think you were for doing that?” Moreno asked Fauci during the hearing, seemingly referring to the doctor’s views on masking requirements in the country during the health crisis. Fauci’s diary entries released by Paul show he was aware of his impact on state policymakers when it came to school closures and other forms of lockdowns. On March 15, 2020, he wrote that then-New York City Mayor Bill de Blasio (D) decided to close city schools after a conversation they had and Fauci’s public remarks. “I went on to tell him he should close the bars and restaurants in NYC,” Fauci added. “He said that he would base this on my recommendation.” Fauci also wrote of a similar interaction he had with an aide to California Gov. Gavin Newsom (D). While he did not criticize Fauci during his remarks, Democratic Sen. John Fetterman (Pa.) broadly questioned if the pandemic was handled correctly, noting the challenges he faced as lieutenant governor at the time. “So, we were in the middle of all of that maelstrom, trying to find the right balance between protect life and protect the economics for all of it, and I’m not sure if we got it all right or wrong, but without a doubt, I can continue to question myself,” he said. The committee’s chair said after the hearing that he would move to hold Fauci in contempt of Congress for invoking the Fifth Amendment — a penalty reserved for people who are found to have impeded the work of the legislature. Paul told reporters after the hearing that the “question of contempt will be voted on.” “I’ve recommended before for his criminal prosecution, and neither the Biden DOJ [Department of Justice] nor the Trump DOJ have taken it up,” Paul told reporters. “All I can do is recommend prosecution. I can’t initiate prosecution.” Paul and other GOP members of the panel alleged that Fauci could not exercise this right during the hearing because he is already covered by a pardon under former President Biden. “I think there’s another legal question that the courts may have to decide upon and that is whether … you can still claim that you need protection from immunity when you’ve been protected, because Dr. Fauci isn’t liable for anything as long as he tells the truth … All he had to do today was be honest,” Paul said. Blumenthal criticized Paul’s decision to bring forth contempt charges against the scientist Wednesday afternoon. “I’m perplexed that the chairman thinks that someone can be held in contempt for exercising a constitutional right,” the Democrat told The Hill. “He was called before the committee, in fact, subpoenaed by a chairman who has said explicitly, repeatedly, that he wants to put this man behind bars.” Elliott Davis contributed. Copyright 2026 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.thehill.com

Trump considers pulling Todd Blanche's attorney general nomination as senators hold out

Trump considers pulling Todd Blanche's attorney general nomination as senators hold outUS President Donald Trump says he is considering withdrawing Todd Blanche's nomination to be attorney general as his confirmation appears stalled in the Senate. Blanche, who has been acting in the role since April, needs the support of all Republicans on the Senate Judiciary Committee for his confirmation to advance. However, two senators - John Cornyn from Texas and North Carolina's Thom Tillis, whose terms both expire in January - are withholding theirs over the status of a controversial fund to compensate Trump allies. "I have no objection to temporarily withdrawing Todd's name, if they do not do the right thing, and putting him back after Cornyn and Tillis are out of office," Trump said. The proposed $1.8bn (£1.3bn) "anti-weaponisation fund" was announced earlier this year to settle a lawsuit by Trump against the Internal Revenue Service (IRS) over the leak of his tax returns. It would have allowed Trump allies to claim compensation for what they say was politically motivated prosecutions by previous administrations. There was a bipartisan backlash to the deal and Blanche, who negotiated it, later abandoned it. Separately, a federal judge blocked the fund and expressed concerns that it breached ethical guidelines. Cornyn and Tillis now want Blanche, who previously served as Trump's personal lawyer, to state in writing that the justice department will not resurrect the fund later on. The Trump administration has not yet announced that commitment.www.bbc.com

Birx says ‘persistent anger’ over COVID response evident after Fauci hearing

Birx says ‘persistent anger’ over COVID response evident after Fauci hearingSkip to content Deborah Birx, the former coordinator of the White House Coronavirus Task Force, said there is still “persistent anger” about the government’s COVID-19 response following former chief White House medical adviser Anthony Fauci’s Senate hearing Wednesday. Birx, in an interview on CBS News’s “The Takeout,” said the hearing showed frustration from Americans over “questions not being answered adequately” about the pandemic. She added that she agreed with Sen. John Fetterman (D-Pa.) on the importance of answering whether responses to the pandemic balanced “saving lives” with “preserving people’s livelihoods.” Fauci testified in the Senate on Wednesday and invoked the Fifth Amendment 111 times, not answering any questions from senators about COVID-19 pandemic guidance. Sen. Rand Paul (R-Ky.), the chair of the Senate Homeland Security and Governmental Affairs Committee, has scheduled a vote on holding Fauci in contempt next week. Birx in a Thursday interview on NewsNation said public health officials “need to answer the questions that the senators have.” In his opening statement to the committee, Fauci said he believed the sole reason Paul called him before the committee was to have him “say something” that would result in Fauci being put “behind bars.” Birx had a hearing in 2022 in front of the House Select Subcommittee on the Coronavirus Crisis where she criticized the Trump administration’s response to the pandemic. She said the administration had communicated to “underplay” the “seriousness of the pandemic.” Republicans during Fauci’s hearing criticized his newly released diary entries, which detail his communication with state officials as he advised them to close businesses and public institutions. “Here I am sitting in front of you six years later, saying, who the f‑‑‑ do you think you were for doing that?” Sen. Bernie Moreno (R-Ohio) said to Fauci during the hearing as he recounted the story of a woman arrested in his state for refusing to wear a mask at a football game. Birx added on NewsNation that the United States could not go into another pandemic with “American people still having these questions” about the pandemic response. Add as preferred source on Google Tags Anthony Fauci Bernie Moreno Deborah Birx Donald Trump John Fetterman Rand Paul Copyright 2026 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.thehill.com

Commerce Department quietly announces 7 new equity stakes in private companies

Commerce Department quietly announces 7 new equity stakes in private companiesSkip to content The Department of Commerce quietly announced this week it will designate more than $870 million in federal incentives for semiconductor manufacturing in exchange for a minority equity stake in seven companies. In a blog post Wednesday, the National Institute of Standards and Technology (NIST) said Commerce’s CHIPS Research and Development Office signed letters of intent with seven companies to provide a combined $874 million in federal funding under the landmark CHIPS and Science Act. The financial awards will be used to conduct research and development on critical technologies and advanced integrated photonics — a microchip technology that uses light instead of electricity to transfer and process data. It will also be used for research and development on compute architectures and memory for computing and artificial intelligence systems, according to NIST. “The Department will receive a minority, non-controlling equity stake in each company as a condition for receiving the funds to enhance the return for the U.S. taxpayer,” NIST wrote. Up to $300 million will go to GlobalFoundries, a semiconductor manufacturer, while Kepler, which is developing AI memory and logic technologies, will receive up to $245 million. Multibeam Corp. will get up to $140 million for the company’s semiconductor equipment manufacturing, NIST said, with remaining funds going to equipment makers Extropic, Thintronics, Obsidia Semiconductors and Aeluma Inc. “These strategic investments will enhance our country’s domestic capabilities, create high-paying jobs and keep America at the forefront of the semiconductor industry,” Commerce Secretary Howard Lutnick wrote in a press release. The announcement comes nearly a year after President Trump announced the federal government would take a 10 percent stake in Intel, one of the nation’s largest chip manufacturers, for roughly $11 billion in federal subsidies the company received. The practice has drawn criticism from Trump’s Republican base. Sen. Todd Young (R-Ind.), who drafted the foundation of the CHIPS and Science Act, said at the time the law never intended to let the federal government take a major stake in Intel or any other major company. The legislation, signed by then-President Biden in 2022, provides federal subsidies to domestic semiconductor manufacturers to boost domestic production in the U.S. Despite backlash last summer, the Trump administration moved last December to take a $150 million stake in xLight, a startup developing laser technology, in exchange for federal incentives. Add as preferred source on Google Tags CHIP Research and Development Office Department of Commerce Donald Trump GlobalFoundries howard lutnick Howard Lutnick Kepler Multibeam Corporation Copyright 2026 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.thehill.com

Exclusive | ‘The Boss Wants This Money’: Inside Trump’s Unprecedented Fundraising Operation

Second major AI company says its systems hacked into other firms

Second major AI company says its systems hacked into other firmsSAN FRANCISCO — Anthropic, maker of the Claude chatbot, said Thursday that artificial intelligence systems it was testing hacked into three outside companies undetected earlier this year. The disclosure comes just over a week after ChatGPT maker OpenAI said that an AI system it was testing found a way to break out of a test environment and hacked into another tech firm.Get concise answers to your questions. Try Ask The Post AI. The Anthropic incidents are likely to add fuel to debates over whether advanced AI models could cause widespread security problems that have roiled the tech industry and prompted interventions by the White House to contain the potential risks. Anthropic said in a blog post Thursday that OpenAI’s disclosure last week prompted it to review records from its own testing of AI models. The company discovered that on three occasions AI models challenged to break into software created solely to test their skills ended up going out onto the internet and breaking into real companies. Neither Anthropic nor the targeted companies had discovered the breaches until this week, the company said. An Anthropic spokesperson declined to identify the companies hacked by its AI software. In the blog post, Anthropic said the hacks came about because a third-party company named Irregular hired to help test its models provided them with access to the internet due to a “misunderstanding.” Anthropic notified Irregular and the companies hacked on Monday, the company’s blog post said. “We appreciate Anthropic’s collaboration and transparency and look forward to continuing to work together to advance security,” a spokesperson for Irregular said. Both companies said they are continuing to investigate the incidents. OpenAI said last week that an AI “agent” in testing had, instead of working on a cybersecurity problem, used a previously unknown vulnerability in the company’s test environment to gain full access to the internet. Over a five-day period it broke into multiple outside computers to break into AI software company Hugging Face, apparently in search of answers to the test. The OpenAI and Anthropic incidents came to light after weeks of debate in the tech industry and Trump administration about how government should respond to the ability of the latest AI models to find computer security flaws. Anthropic announced an AI model in April called Mythos it said was too powerful to widely release securely, and OpenAI has also developed models with strong cybersecurity skills that could be used for defense or attack. In June, President Donald Trump signed an executive order aimed at giving the U.S. government an advance look at powerful AI models that could pose security risks. Work is underway to define how it will be implemented.www.washingtonpost.com

Exxon and Chevron Post Blockbuster Earnings Amid Oil Rally - The Morning Sixpack Podcast - 07/31/2026: Spain border crisis, Big Oil profits, AI hacks, Trump AG fight, school shooting accountability, Jimothy mania. #MorningSixpackPodcast

Exxon and Chevron Post Blockbuster Earnings Amid Oil RallyThe Morning Sixpack Podcast - 07/31/2026: Spain border crisis, Big Oil profits, AI hacks, Trump AG fight, school shooting accountability, Jimothy mania. #MorningSixpackPodcastwww.mydailygrind.news

Trump says he 'may' pull Blanche AG nomination temporarily

Trump says he 'may' pull Blanche AG nomination temporarilyPresident Trump says he is willing to pull Todd Blanche's nomination for attorney general. The news comes as two key Republicans are withholding their support over concerns about the Justice Department's deal with President Trump to end his IRS lawsuit. Trump said Thursday he was willing to end the nomination, but he was by no means conciliatory in his tone, saying he would keep Blanche on as acting attorney general and renominate him later. In addition, Trump took aim at the two Republican senators withholding their support — John Cornyn of Texas and Thom Tillis of North Carolina, both of whose support Blanche would need to advance in his nomination in committee. "I have no objection to temporarily withdrawing Todd's name, if they do not do the right thing, and putting him back after Cornyn and Tillis are out of office," Trump wrote in a social media post. Both Cornyn and Tillis are leaving Congress in January. Tillis announced his retirement last year, after publicly clashing with Trump over his massive tax-and-spending bill. Cornyn lost his primary this year to a Trump-backed challenger. In his post, Trump bragged that both senators' "political careers have been ended by my action." Blanche, Trump's former personal lawyer, has been a contentious pick to lead the Justice Department amid questions about his handling of the Epstein files, the targeting of Trump's political foes and the broader politicization of justice. Tillis and Cornyn this week voiced their opposition to Blanche over an agreement the Justice Department struck to end President Trump's IRS lawsuit over his leaked tax returns. The settlement included the creation of a nearly $1.8 billion anti-weaponization fund, which Cornyn and Tillis have vocally opposed for weeks. That fund would compensate people who alleged they were unfairly targeted by the government, meaning money could have gone to defendants charged with wrongdoing in the Jan. 6 riots. A second, related part was a sweeping immunity deal for Trump, his family and businesses from audits of past tax returns. Blanche has said the fund is not moving forward, but Cornyn and Tillis wanted written guarantees from the Justice Department about the scope of the tax immunity deal — guarantees that they said the DOJ would not provide. "For some reason, I don't know whether it's the staff of the DOJ or who it is, but they simply, they know what they need to do, but they simply refuse to do it," Cornyn told reporters this week. In response to Trump's Thursday post, Cornyn responded with his own post: "POTUS is mistaken if he believes concerns about the provisions in his tax lawsuit settlement are limited to me and Senator Tillis." Democrats have been united in opposition to his nomination, while Republicans have, by and large, been supportive. In addition to criticizing the anti-weaponization fund, Tillis had also been vocal in criticizing Blanche's handling of the scandal around the late sex offender Jeffrey Epstein. Late Wednesday, the Senate Judiciary Committee chairman, GOP Sen. Chuck Grassley of Iowa, announced the planned vote on Blanche was postponed as work continues to secure sufficient support for his nomination. While Trump says he would renominate Blanche once Cornyn and Tillis are gone from the Senate, that plan would be far more difficult if Democrats win the Senate in November — a distinct possibility given this year's map and Trump's low approval ratings.www.npr.org