The afternoon briefing.

AI Model Policy. Anthropic's advanced Fable 5 AI model is reportedly set to return within days, as the Trump administration prepares to lift restrictions imposed due to safety concerns. This move follows a period of government-mandated testing and review. Meanwhile, OpenAI has unveiled significant upgrades to its GPT-5.6 model for ChatGPT, though these enhancements are not yet available to the public, pending government access and testing. The ongoing regulatory scrutiny in the US is also creating opportunities for Asian AI startups, which are launching new models promising similar capabilities without the fear of export bans.

AI Market & Adoption. The broader AI market is showing signs of investor exuberance, with J.P. Morgan highlighting "red flags" such as concentrated profits among a few AI companies and technical patterns in semiconductor rallies reminiscent of the dot-com bubble. Despite these warnings, AI adoption continues to grow, with a recent Anthropic survey indicating that nearly half of Claude users believe AI already handles 50% or more of their work tasks. In a significant development, major AI companies including Amazon, Anthropic, Microsoft, and the OpenAI Foundation are jointly funding a $1 billion program to retrain American workers for AI-driven job shifts, a move that raises questions about the independence of the initiative.

Hardware Supply Chain. Apple is reportedly seeking an exception from the Trump administration to purchase RAM chips from CXMT, a blacklisted Chinese supplier, in an effort to alleviate pressure on its supply chain. This comes as skyrocketing memory prices have already led Apple to increase prices across many of its products, including MacBooks and iPads. The memory shortage is creating an "existential crisis" for smaller consumer electronics companies, which lack the leverage of tech giants to absorb or pass on these rising costs.

AI Applications & Tech. In practical applications, an Australian rescue team successfully used an AI-powered drone with thermal imaging to locate lost hikers in a national park, marking a significant first for the technology in rescue operations. Meanwhile, the talent flow within the AI sector continues, with a key Apple Vision Pro executive reportedly leaving to join OpenAI's hardware team. Beyond AI, Tesla has settled a lawsuit stemming from a fatal pedestrian crash involving its Full Self-Driving system, highlighting ongoing safety and regulatory challenges in autonomous vehicle technology.