Good morning. Andrew here. What would the famed economist John Maynard Keynes think about artificial intelligence? Markus Brunnermeier, a Princeton professor, fed thousands of pages of the economist’s body of work into an A.I. model and built a bot to ask it questions about the modern day. “I fear you may end up with skilled and overworked professionals with money but no time, and the rest of society with time but no money,” the A.I. version of Keynes warned. Check out the full video and transcript here. (Was this newsletter forwarded to you? Sign up here.)
No relief in sightThe global bond rout is deepening this morning, with the 10-year Treasury note hitting another worrisome milestone. The sell-off is gaining pace despite inflation data released yesterday that could take some pressure off the Fed. But concerns about the central bank’s independence are again in focus after President Trump renewed his attacks on Jay Powell, the former central bank chair who still sits on its board of governors. A new report by an independent inspector general appears to exonerate Powell and his colleagues for cost overruns at the Fed’s headquarters. But Trump doesn’t seem to see it that way. (More on that below.) The latest:
The turmoil comes despite a decent inflation report. The Personal Consumption Expenditures index, the Fed’s preferred inflation measure, showed that core inflation — which strips out volatile moves in food and energy items — was below economists’ forecasts in August. Bond yields fell and traders dialed back odds that the Fed would need to raise interest rates later this month to tame inflation. But changes to how P.C.E. data is calculated may be glossing over price pressure. “The Fed will likely see the August P.C.E. report as a glass half empty. They want inflation to move lower because price pressures are easing, not because the way it’s measured changes,” Bill Adams, the chief U.S. economist at Fifth Third Commercial Bank, wrote to investors. He believes that the Fed may still need to raise rates this month and in December. Such a scenario would most likely draw the ire of Trump, who has been pushing for lower rates. But his attention yesterday was on the release of a report by a Fed watchdog on a nearly $2.5 billion renovation project at the central bank’s headquarters.
What the report found: no evidence that Powell or his colleagues were guilty of illegal behavior or administrative misconduct. The inspector general also acknowledged that no referrals were made to the U.S. attorney general. In a letter, Kevin Warsh, whom Trump picked for chairman, welcomed the report’s findings. But Trump doesn’t seem to want to drop the matter. On social media, Trump said Powell should be “forced to resign.” If Powell doesn’t step down, he should be sued, the president added. Trump also said that he had asked Todd Blanche, the attorney general, to look into the report’s findings. A reminder: The president would face a high legal bar if he tried to remove a Fed official.
Democrats block a Republican effort to limit, but not ban, congressional stock trading. A leading Senate Democrat called the measure, the Stop Insider Trading Act, a “toothless” bill that doesn’t fully prohibit trading by lawmakers and places no restrictions on the president or the vice president. The House passed the legislation in July. The move denied Republicans a chance to claim progress on an issue concerning voters. Paramount’s buyout of Warner Bros. Discovery prompts C.E.O. changes. The Mattel chief who helped turn Barbie into a blockbuster movie, Ynon Kreiz, was named as a C.E.O. of the new entertainment giant, alongside David Ellison. The announcement came soon after a judge approved the settlement of an antitrust lawsuit against Paramount filed by a group of states. Mattel in turn named Roger Lynch, the head of Condé Nast, as its new C.E.O. Defense Secretary Pete Hegseth taps tech titans as advisers. He announced that the department was creating AutoWarCom, a command operation to oversee the Pentagon’s use of drones and other cutting-edge technologies. He also named Elon Musk, Palmer Luckey and former Speaker Newt Gingrich as advisers to “Project Meridian,” an effort meant to innovate the “future of warfare.” More bullish signs for memory chip makersThe great memory chip rally might still have some room to run. The computer memory giant Micron Technology yesterday reported earnings and sales that blew past Wall Street’s estimates. And it offered an optimistic forecast, saying its long-term supply commitments to customers had grown to $32 billion, up from $22 billion reported in June. That suggests that the wider artificial intelligence spending spree isn’t cooling off. Micron, whose shares increased more than fivefold in the past year, has rallied on torrid demand for computer storage. That has pushed its market value above $1 trillion.
The Micron effect:
In July, South Korea’s SK Hynix, the world’s second-largest memory chipmaker, raised $26.5 billion in a U.S. share sale. The Seoul-listed company’s shares were up some 170 percent this year as of yesterday’s close. The A.I. boom is the catalyst. Micron and its peers are riding a demand wave from the A.I. build-out. The processors that power many A.I. models use vast amounts of DRAM, or dynamic random-access memory. The sharp rise in memory costs has already hit consumers. The chips are vital components in electronic devices, including laptops, cellphones and more. Apple said in June that the storage chip crunch would force it to raise prices. Tim Cook, then the company’s C.E.O., described it at the time as “a hundred-year flood.” A.I. roundup
Google’s movie charm offensiveHollywood is focusing on tech moguls this fall. “The Social Reckoning,” Aaron Sorkin's companion film to “The Social Network” — this time with Jeremy Strong as Mark Zuckerberg — hits theaters next week. Then come a pair of documentaries: “Musk,” a nearly four-hour movie about the world’s richest man, and “You Can See Everything,” Nathan Fielder’s film about Elizabeth Holmes of the failed blood-testing company Theranos. Also premiering this month at film festivals is “Artificial,” a biopic starring Andrew Garfield as Sam Altman of OpenAI. Amazon dropped out as the distributor after announcing a $50 billion investment in OpenAI. Neon eventually picked up the rights. The films aren’t expected to be especially flattering. They reflect growing anxiety about artificial intelligence and skepticism about tech industry leaders. But Google has a Hollywood P.R. plan. Last year, the Silicon Valley titan teamed up with Range Media Partners to commission “Sweetwater,” a short film depicting A.I. as comforting rather than threatening. It’s part of a bigger effort by Google to portray tech, and itself, in a more positive light, Brooks Barnes reports for The Times: “Sweetwater” is part of 100 Zeros, a new partnership between Google and Range that gives the tech giant a foothold in Hollywood’s artistic ranks. The venture, which operates separately from Google-owned YouTube, has three ambitions: Shape how technology — particularly Google technology — appears onscreen; experiment with emerging forms of entertainment; and build relationships with talent. An ambitious slate of microdramas is designed to do all three. Made for phones and unfolding in short, serialized episodes, the shows will begin rolling out on the Google TV streaming app in December. They’re a testing ground for A.I. production tools and other Google technology. And the microdramas put Google in business with marquee producers and actors, relationships that it hopes will extend well beyond the shows themselves. 100 Zeros is not Google’s only Hollywood project: Over the summer, the company announced a partnership between its DeepMind laboratory and A24, the buzzy independent studio, to develop A.I. tools for filmmakers. We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
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