Zero Hedge

Anthropic Accuses Alibaba Of Running Major "Adversarial Distillation" Campaign To Extract Claude Capabilities

Anthropic Accuses Alibaba Of Running Major "Adversarial Distillation" Campaign To Extract Claude Capabilities

Anthropic has accused Alibaba Group of orchestrating one of the largest known efforts by a Chinese company to extract capabilities from a leading U.S. artificial intelligence model, according to a letter the AI company sent to several U.S. senators and White House officials.

The letter claims that operators linked to Alibaba’s Qwen AI lab used nearly 25,000 fraudulent accounts to conduct 28.8 million exchanges with Anthropic’s Claude model between April and June. The activity focused on the model’s most advanced functions, including software engineering and agentic reasoning, in what Anthropic described as an attempt to replicate those capabilities at far lower cost through a process known as adversarial distillation, Bloomberg reports.

Anthropic said the campaign represented the most significant effort yet by a Chinese firm to leverage outputs from top U.S. models to accelerate its own development. The company warned that such distillation attacks are being carried out at industrial scale and that the resulting systems often lack the safety measures built into frontier U.S. models.

"These distillation attacks are carried out illicitly, systematically, and at industrial scale to harvest US Al capabilities across frontier labs and repackage them as their own without incurring the training and R&D costs required to train US frontier models," Anthropic wrote in its letter.

Alibaba declined to comment. An Anthropic spokesperson declined to discuss specifics of the letter but stressed the need for coordinated action between government and industry to address the issue.

The practice has alarmed US developers to the point that Anthropic, OpenAI and Alphabet Inc.’s Google have joined forces to share information about distillation attempts that violate their terms of service. Anthropic and OpenAI have each warned that Chinese AI startups, including DeepSeek and Minimax, have employed distillation to develop their own models. -Bloomberg

The letter arrives as U.S. policymakers consider new measures to restrict Chinese access to American AI capabilities. Sen. Bill Hagerty, R-TN., and Sen. Andy Kim, D-NJ, are preparing an amendment to defense legislation that would blacklist or sanction Chinese firms found to improperly use U.S. model outputs for training competing systems. A related bipartisan bill in the House, sponsored by Rep. Bill Huizenga, R-MI, and Rep. Sydney Kamlager-Dove, D-CA, is also under consideration for inclusion in the annual defense measure.

Anthropic’s letter noted that the Alibaba-linked activity continued after a White House memo in April directed agencies to crack down on large-scale exploitation of U.S. AI models through proxy accounts. The company urged the administration to take stronger steps to halt the practice, including clarifying antitrust rules to allow greater information sharing among U.S. firms and imposing penalties on entities engaged in systematic distillation.

The accusations add to existing pressure on Alibaba. Earlier this month, the Defense Department added the company to its list of Chinese firms designated as supporting the People’s Liberation Army. Alibaba has denied any military affiliation and filed a lawsuit this week seeking to overturn the designation.

The letter also comes at a moment of friction between Anthropic and the Trump administration. Less than two weeks ago, the Commerce Department imposed export controls on two of Anthropic’s newest models, Fable 5 and Mythos 5, citing national security concerns. Anthropic disabled access to those models for all users while it works to comply with the restrictions.

Anthropic said the Alibaba campaign fits a pattern seen in earlier efforts by other Chinese developers that the company flagged publicly earlier this year. The firm has joined OpenAI and Google in sharing information about suspected distillation attempts that violate their terms of service. Those companies have argued that the practice allows Chinese labs to acquire advanced capabilities without incurring the full research and development costs or implementing comparable safety controls.

Tyler Durden Wed, 06/24/2026 - 21:00

China's Refiners Slash Runs To Lowest Since 2017, As Asia Refiners Slow Purchases Of Mid-East Oil

China's Refiners Slash Runs To Lowest Since 2017, As Asia Refiners Slow Purchases Of Mid-East Oil

A little over a month ago, we explained that energy traders are "Traders Puzzled As Physical Oil Prices Tumble Amid Surging Chinese Crude Sales, Plunging Imports", and highlighted how already razor-thin independent refiner (teapot) margins had plunged to record negative as a result of the war in Iran and government policies meant to keep prices from rising.

Fast forward to today when the previously discussed dynamics have gotten progressively worse, and this morning Bloomnberg writes that China’s independent oil refiners have slashed operating rates to a nine-year lo.

Run rates at so-called teapots fell to 50.5% in the week to June 21, dropping below pandemic-era lows to the weakest since 2017, according to consultant JLC. High feedstock costs, weak domestic fuel demand, and curbs on product exports have squeezed processors’ margins, prompting them to scale back.

As we noted previously, China - the world’s largest oil importer - sharply reduced crude imports after the conflict erupted in late February as prices initially spiked, sending oil imports to a 9 year low, a key reason why oil prices did not spike even higher in the past few months.

As Bloomberg notes, the nation’s sustained slowdown in flows has brought into focus a nationwide shift away from fossil fuels that’s been driven by greater electrification.

The teapots’ downturn in run rates comes as Iran is now seeking to revive crude exports under a temporary US sanctions waiver. Still, the weak refining economics could limit any near-term rebound in their purchases.

“Teapots are not short of feedstocks, with private-sector commercial inventories in Shandong still above 2025 highs,” said Emma Li, lead China market analyst at Vortexa Ltd., referring to the coastal province where many teapots are located.

Teapot run rates slid further in the second half of June, which means July “could represent a trough before utilization begins to recover,” she said.

In a separate report, Bloomberg also notes that Asian refiners have slowed purchases of Middle Eastern crude after a buying spree over the past three weeks, with oil majors and traders stepping in to take some of the surplus barrels.

Purchases from Abu Dhabi National Oil Co (ADNOC) eased after three rounds of tenders, with a fourth that closes this week set to show a similar pattern, Bloomberg reported citing traders familiar with the matter. More barrels were snapped up by majors and trading houses including Shell and Mercuria.

Adnoc sold around 60 million barrels that will load over June to August across its first three tenders, most of which will flow to Asia. The offers are for grades that are loaded within the Persian Gulf, although buyers will be able to take cargoes via a ship-to-ship transfer outside of the Strait of Hormuz.

Some of the barrels being sold in the latest Adnoc tender are expected to flow toward Europe, said energy traders. That would follow a recent trend, which saw a wave of Middle Eastern oil heading in that direction as China stepped back.

Most refiners have already completed their orders for this month and next, and available crude would need to be significantly discounted to prompt any more buying, traders said. Adnoc has also asked customers with long-term contracts to immediately resume loading supplies, crimping spot demand.

Iraq and Kuwait have also been ramping up output as producers position for a reopening of Hormuz, with talks over a lasting agreement to end the Iran war showing some progress. That’s led to prices for Middle Eastern oil tumbling, with the forward curve of two of the region’s main benchmark grades — Dubai and Murban — now in a bearish contango structure.

A temporary US waiver allowing purchases of Iranian oil has added to swelling supply options, although complications surrounding the financing and insurance of cargoes remain and could be too risky for some refiners. Still, as we reported earlier this week, "Iran Oil Exports Through Hormuz Hit Wartime High,"

Some in the market are assessing whether storing crude could be an option for the impending wave of supply. Traders said freight costs remain too expensive for floating storage to be effective...

... but countries with sites on land should be able to easily accommodate surplus barrels.

Tyler Durden Wed, 06/24/2026 - 20:40

"Heavy Casualties" After Massive Twin Quakes Rock Venezuela, Topple Buildings; "International Response May Be Needed"

"Heavy Casualties" After Massive Twin Quakes Rock Venezuela, Topple Buildings; "International Response May Be Needed"

Twin earthquakes rocked Venezuela on Wednesday evening, collapsing entire apartment buildings across Caracas and leaving behind scenes of widespread devastation.

The USGS said the first quake registered a magnitude of 7.1, with an epicenter near Morón, about 104 miles west of Caracas, at a depth of 8 miles. One minute later, a similarly massive magnitude 7.5 quake struck nearby, roughly 10 miles southwest of Morón, at a depth of 6 miles. Remarkably, the dual quake was followed almost immediately across the world by a 6.9 magnitude temblor in northern Japan, which rattled buildings in Tokyo.

USGS issued a red-alert mass-casualty warning due to the combination of shallow depth, heavy population exposure, vulnerable buildings, and estimated losses large enough to require an international response.

"Red alert for shaking-related fatalities and economic losses. High casualties and extensive damage are probable and the disaster is likely widespread. Past red alerts have required a national or international response," USGS said, adding, "Estimated economic losses are 2-20% GDP of Venezuela."

In the Palos Grandes neighborhood in eastern Caracas, residents tried frantically to rescue people trapped under the debris of collapsed buildings, Bloomberg reports. Terrified families remained in the streets as the capital was hit by aftershocks. Venezuelan migrants in Colombia and elsewhere sought to reach relatives, but cellphone coverage was down in swathes of the country.

The early footage emerging from the devastation is dramatic:

Local news showed significant damage to the capital's airport, with parts of the roof collapsing and throwing up thick clouds of gray dust. 

Interior Minister Diosdado Cabello said in a national address that some houses and buildings have collapsed. He warned residents to stay outside due to the risk from aftershocks. Cabello said that states including Trujillo, Yaracuy, Carabobo, Miranda, Aragua and La Guaira were also affected.

Authorities haven't yet published estimates of the number of dead or injured. There were no immediate reports of damage to the nation's oil infrastructure. Some older residents said the event brought back memories of the massive 1967 earthquake which left hundreds dead.  

The closest historical comparison to the twin quakes this evening likely dates back to the March 26, 1812, Caracas earthquake sequence, which was described as twin destructive shocks within 30 minutes. That quake led to an estimated death toll of 15,000 to 20,000, while a USGS historical summary says it may have claimed about 30,000 lives.

Quake activity elsewhere...

And Japan. 

There were no immediate reports of damage to Venezuela's oil facilities, according to people familiar with the situation. The country's refining hub in Paraguaná, 225 kilometers (140 miles) west of the epicenter, continued operations as usual. Work at the port of Jose complex and at the Puerto La Cruz refinery was unaffected.

The disaster will further strain the nation's crisis-hit economy. The country is reeling from one of the world's fastest inflation rates and rolling power outages. As such, the quake could open a window for President Trump to offer emergency aid and logistical support, potentially creating the first step toward a broader US-backed reconstruction effort in Venezuela.

*Developing...

Tyler Durden Wed, 06/24/2026 - 20:24

Maryland Protests Data Center Costs

Maryland Protests Data Center Costs

By Ethan Howland of UtilityDive

A group of 80 Maryland state lawmakers are backing a complaint at the Federal Energy Regulatory Commission over the PJM Interconnection’s cost allocation for transmission lines that support data centers.

Driven by the way PJM spreads transmission costs, Maryland ratepayers will pay $1.6 billion over the next decade for transmission projects that were approved in the grid operator’s last three regional transmission expansion plans that are designed to mainly serve out-of-state data centers, Maryland’s ratepayer advocate — the Office of People’s Counsel — said in its May 7 complaint.

“While PJM’s rules are unfair for many PJM states, they impact Maryland disproportionately simply because Maryland sits next to Data Center Alley in Virginia,” the Maryland lawmakers said in a Wednesday filing at FERC. “Given the projections of massive data center growth — more than 80,000 megawatts over the next 20 years — PJM is likely to bill Maryland customers billions more for future data center-driven transmission costs.”

The complaint at FERC comes amid an intense focus across the United States on how data centers can affect the electric bills of existing ratepayers through increased generation and transmission costs. The complaint centers on the transmission side of the equation. It contends that FERC is barred from approving transmission cost allocation methodologies that assign costs to ratepayers that won’t gain “roughly commensurate” benefits.

PJM’s cost allocation methodology assigns half of certain regional transmission projects based on a load-ratio share across its footprint, which assumes that all transmission built will benefit the entire grid, according to the ratepayer advocate’s complaint. The other half of transmission costs are assigned via a “solution-based distribution factor analysis,” which fails to capture certain reliability issues caused by data centers, the ratepayer advocate said.

Spreading data center-driven transmission costs across PJM’s footprint could lead to overbuilding, according to the complaint.

“By socializing data center-driven transmission costs to all ratepayers, it insulates states and utilities that attract speculative load growth from overbuilding and stranded asset risk while shifting those risks to neighboring states’ ratepayers,” the ratepayer advocate said.

Further, state-level large-load tariffs fail to address, and may make worse, the misallocation of transmission costs caused by PJM’s transmission cost allocation methodology, according to the complaint. 

Also, recent FERC-approved utility “transmission security agreements” between utilities and data centers are “often confidential, highly variable, and fail to protect existing customers,” the ratepayer advocate said.

The agreements leave ratepayers exposed to transmission costs caused by data centers, according to the ratepayer advocate. “Moreover, they carry potential legal consequences that may prove difficult to unravel,” the ratepayer advocate said. The ratepayer advocate said FERC should order PJM to revise its cost allocation methodology so that data centers pay for the transmission projects that they cause.

As a start, PJM should be required to assign the costs of transmission projects that are designed to serve data centers and other large loads to the grid operator’s zones where the data centers are located, according to the complaint. That would allow state-level large load tariffs to address those transmission costs, the ratepayer advocate said.

“The upstream leakage of a substantial portion of data center driven costs at the regional level to other zones through the current operation of the PJM tariff creates an unjust subsidy for that data center load,” the ratepayer advocate said.

The complaint calls on FERC to order PJM to re-study the baseline reliability projects approved in its last three regional transmission expansion plans to determine the costs caused by forecast load growth from data centers. 

FERC has extended the comment deadline on the complaint to July 27.

Tyler Durden Wed, 06/24/2026 - 20:20

Bessent Insists US Treasury Will Oversee Unfrozen Iranian Funds: Food & Medicine Only

Bessent Insists US Treasury Will Oversee Unfrozen Iranian Funds: Food & Medicine Only

There remains a major divergence in how Iran and the United States are interpreting the results of the MoU signing in the wake of the historic Switzerland peace talks, as lower-level teams remain in place to hammer out the technical details of the agreement.

The divergence/contradiction continues to be seen in not only the latest statements from President Trump himself, but also from the US Treasury:

US Treasury Secretary Scott Bessent has insisted that a large portion of unfrozen Iranian assets would go towards purchasing US food and medicine, despite claims from Iranian officials that they have made no such commitment.

“Any money that the Iranians get is going to be used, first, for the benefit of the Iranian people,” Bessent told CNBC.

It must be remembered that the "Iranian people" that Washington claims to look out for were subject to many weeks of heavy US-Israeli bombing raids, in which men, women, schoolgirls, and children were killed in mass casualty events.

Image via Forbes & Caspian post

Likely the funds will be distributed through Qatar - and Bessent also emphasized in the CNBC remarks that "A very large percentage of it will go to buy US foodstuffs and medicine."

He said further, "So we will be recycling the money back into US products."

On Monday, President Trump said that "If the sanctions go out, money is going to be put into this country,” Trump said. “All that money is coming back in the form of purchases of food, which they desperately need… The money that we lift is going to go to our farmers, largely to our farmers."

But once again this is a situation where Iran's public-facing rhetoric obviously doesn't match up. Nothing regarding the Iranian position has changed:

But the Iranians deny that's part of the deal. A spokesperson for the Iranian Foreign Ministry, Esmail Baghaei, said any agricultural purchases would be based on “prices and quality,’’ not terms dictated by Washington.

“It is interesting that the philosophy and goal of the war, which was the destruction of the Iranian civilization and the collapse of Iran, has become enriching American farmers,” Baghaei said.

Iran’s ambassador in Geneva, Ali Bahreini, rejected Vance’s contention that the U.S. and Qatar would dictate how Iran uses unfrozen funds. “Iran is the only country who decides what to do with those assets,” he told reporters.

As a reminder, in total a whopping $50 billion could eventually be released under the MoU framework - something which will drive Republican hawks mad. Al Jazeera reported Tuesday, citing the Iranian side: 

A spokesperson said the agreement would allow Iran access to previously frozen assets, although the US says restrictions would remain in place under the arrangement.

According to sources familiar with the negotiations, two separate tranches of $6bn were originally agreed in Doha, with the final signing ceremony intended to take place in Switzerland. The Iranian spokesperson now says that process has been completed.

Under the reported framework, an initial $12bn in Iranian funds would be released. During the 60-day negotiation period, a further $12bn could be unlocked. If the parties ultimately reach a final agreement, the value of sanctions relief and released funds could reportedly rise to as much as $50bn.

Another point of disagreement remains the entry of IAEA nuclear inspectors into the Islamic Republic. Vance had hailed Tehran already agreed to this, while Iran's leaders are in effect saying not so fast.

It's but one of several major contradictions in public rhetoric coming from either side in the wake of the top-level round one meeting in Switzerland.

Tyler Durden Wed, 06/24/2026 - 20:00

Antifa Leader Sentenced To 100 Years In Prison For Attack On ICE Facility

Antifa Leader Sentenced To 100 Years In Prison For Attack On ICE Facility

The Antifa attack on the Texas ICE facility in Alvarado was a highly coordinated plan, using fireworks and a fake vandalism call to lure out ICE agents and police so that they could be shot in a hail of gunfire.  Responding Alvarado Police Department Lieutenant Thomas Gross was shot in the shoulder and the rifle round exited his neck during the crossfire, but he managed to survive.  

Members of the group tried to escape the scene, pretending to be harmless pedestrians, but were apprehended anyway.  The common excuse among those detained:  "We're just peaceful protesters..."

Eight of the activists who were found guilty by a federal jury of terrorism-related charges earlier this year learned the details of their punishments this week.  The group's leader, Benjamin Song, was sentenced to a century in prison. 

Song was hit with the longest prison sentence: 100 years behind bars. Maricela Rueda was sentenced to 70 years in prison. Autumn Hill was sentenced to 50 years, along with Zachary Evetts, Savanna Batten, Meagan Morris, and Elizabeth Soto. Daniel Rolando Sanchez-Estrada was sentenced to 30 years in prison.  Critics of the conviction and sentencing claim the decision is purely "political"; designed to make examples out of leftist protesters who committed "minor crimes".

The obvious counter-argument is yes, they are being made into an example, and that's a good thing.

Over 600 conservatives present at the January 6th protests were sentenced to prison for far less - Merely breaking a window or walking peacefully into the Capitol Building earned them a conviction and years of incarceration.  This action was a true case of targeted government prosecution for the sake of making a political example.  Meanwhile, Antifa and BLM protesters were given special protection.

Billions in property damage and numerous deaths later, BLM and Antifa members who were arrested used NGO funded legal resources to get out of jail quickly.  Democrat run cities never pursued charges against the majority of them.  This set a dangerous precedent; Antifa is now emboldened under the assumption that they can do anything they want and the consequences will be slim to none. 

The recent federal court decision changes all that.  At least when if come to federal facilities, they can no longer count on a two-tiered justice system to keep them safe.  

The primary enablers of far left violence (which has grown exponentially over the past decade) are global NGOs and their spinoff organizations, Democrat politicians, the progressive media and a lack of prominent symbols of punishment.  When you're dealing with mentally unhinged zealots, the only way to make them stop is to make them afraid. 

Until recently, Antifa has had little reason to be afraid.  The system they claim to be fighting against has actually been supporting them and their insurgency from behind the curtain.  The Trump Administration is set on changing this dynamic and the Alvarado, TX group is the first in line to face a reckoning.    

Tyler Durden Wed, 06/24/2026 - 19:40

Hormuz Exodus Begins: Ships Finally Sailing As UN-Led Evacuation Corridor Opens

Hormuz Exodus Begins: Ships Finally Sailing As UN-Led Evacuation Corridor Opens

Several vessels have already navigated the Strait of Hormuz utilizing a fresh evacuation framework established by the United Nations' shipping agency, an official confirmed on Wednesday. More via newswires:

US Energy Secretary Wright says roughly 72 ships have exited Strait of Hormuz in last 24 hours.

"Ships have already begun to pass under the plan," stated a spokesperson for the UN's International Maritime Organization (IMO), though they opted not to disclose specific details regarding the transiting vessels.

According to the latest LSEG ship-tracking data Wednesday, at least two dry bulk carriers and one cargo vessel successfully crossed the strait under the new program within a 12-hour window.

An additional analysis of ship movements by Reuters, utilizing data from LSEG and MarineTraffic, indicated that at least 35 other commercial vessels - primarily dry bulk, cargo, and container ships - are gearing up to make the passage.

via UN News

On Tuesday, the IMO noted that the framework is designed to clear the way for hundreds of vessels and roughly 11,000 seafarers who have been stranded in the Gulf to finally sail through Hormuz.

"This large-scale operation will be carried out in close cooperation with Iran, Oman, all other coastal States in the region, the United States and the maritime industry," IMO secretary-general Arsenio Dominguez stated Tuesday.

"We have secured the necessary safety guarantees and have thoroughly verified the conditions for safe navigation to support these operations," he described

Notably, by and large captains and crew members have all along not abandoned their tens of millions or hundreds of millions in precious commodities/cargo - especially after already enduring the blockade for this long.

Meanwhile...

Oil tanker rates have soared since the U.S. and Iran announced the memorandum of understanding as oil importers scramble to charter vessels to pick up Persian Gulf cargoes in the hope these can transit the tentatively reopening Strait of Hormuz. 

One tanker has been provisionally booked to ship crude from the Persian Gulf to India at a rate that’s nine times the benchmark for the route, shipbrokers told Bloomberg on Wednesday.  

South Korea’s Sinokor shipping group, which before the war went on a buying and chartering spree to control about 120 very large crude carriers (VLCCs), will provide one of these supertankers for the shipment of a cargo of up to 2 million barrels from the Persian Gulf to India. The rate at which the tanker has been provisionally booked is 897% of the MEG-India benchmark route, or nine times higher than the normal freight cost, shipbrokers told Bloomberg.

The IMO ​additionally said in a note on the scheme issued Wednesday, "Vessels should wait for instructions before proceeding,"

"Crowding the waiting area will only result in the need to pause further notifications for the safety of navigation," it said.

Tyler Durden Wed, 06/24/2026 - 19:20

DOJ Announces 455 Defendants Charged in $6.5 Billion Health Care Fraud Crackdown

DOJ Announces 455 Defendants Charged in $6.5 Billion Health Care Fraud Crackdown

Via American Greatness,

The Justice Department (DOJ) announced Tuesday that federal authorities have charged 455 defendants in a nationwide health care fraud operation involving an estimated $6.5 billion in false claims against government-funded health care programs.

The cases are part of the department's annual National Health Care Fraud Takedown, which targeted alleged schemes involving Medicare, Medicaid and other taxpayer-funded health care programs.

Acting Attorney General Todd Blanche said during a news conference at Justice Department headquarters that the operation uncovered the second-largest dollar amount ever charged in a single health care fraud enforcement action.

Federal officials alleged that defendants participated in a range of schemes, including fraudulent billing practices, kickback arrangements and the provision of unnecessary medical services in an effort to improperly obtain government health care funds.

The operation involved cooperation among multiple federal agencies, U.S. territories and 45 states.

Health and Human Services Secretary Robert F. Kennedy Jr. said the administration intends to aggressively pursue individuals accused of abusing public health care programs.

"If you exploit patients for profit, if you steal Medicaid or Medicare dollars, if you treat taxpayer dollars as your personal bank account, we will investigate you. We will build the case, and we will bring you to justice," Kennedy said.

Kennedy also noted that participating jurisdictions included 18 states led by Democratic governors.

Among the cases highlighted by federal officials was an alleged fraudulent EKG testing scheme connected to the death of University of Mobile basketball player Kaiden Francis.

According to officials, Francis' EKG was allegedly reviewed incorrectly. Authorities said the test was examined in 11 seconds despite indications that his heart was significantly enlarged.

Francis later collapsed during a team workout in 2024.

His mother, speaking at the event, condemned the physician involved in the case.

"The doctor is as bad as any greedy criminal who is killing people in the streets. I hope he rots in jail so no one else is hurt, but my son will never come back to me. That's the real human cost that we were speaking of on the stage," she said.

A spokesperson for the University of Mobile said Francis had undergone multiple medical evaluations, including heart and lung screenings, before his death, and that "none of these tests indicated health concerns."

Federal officials described the takedown as one of the largest coordinated anti-fraud operations in the nation, emphasizing what they said is the administration's commitment to protecting taxpayer dollars and rooting out abuse within government-funded health care programs.

Tyler Durden Wed, 06/24/2026 - 19:00

Google Loses Another Two High Profile AI Researchers To Anthropic

Google Loses Another Two High Profile AI Researchers To Anthropic

A duo of leading artificial intelligence researchers at Alphabet’s Google are planning to leave for rival Anthropic, adding to a series of high-profile departures that risk undercutting the search giant’s position in AI. 

Jonas Adler and Alexander Pritzel, both viewed internally as key contributors to Google’s Gemini AI model, are set to move to the Claude maker, Bloomberg first reported citing unnamed sources. Adler worked on the company’s AI coding effort and Pritzel was involved in the process of training artificial intelligence systems. 

The two are only the latest to take part in what is becoming a brain drain out of the search giant: the company had already lost two prominent staffers, with Nobel laureate John Jumper heading to Anthropic and star researcher Noam Shazeer going to OpenAI. Their moves rattled investors and cast new doubt on Google’s ability to compete in the fierce race to build better models.

Another researcher, Arthur Conmy, wrote on X Wednesday that he was set to join Anthropic to work on AI safety. During his time at DeepMind, Conmy was a senior research engineer who contributed to the Gemini 2.5 model as well as AI coding, according to his LinkedIn profile.

Google, an early AI pioneer, spent much of the current AI boom playing catch-up with the likes of OpenAI and Anthropic before hitting its stride late last year with more capable models and chips. However, the latest defections suggest that there is internal pushback against the company's upcoming models.

The exits highlight the rising pressure Google faces from two startups that are on the cusp of going public, offering even tenured employees at Big Tech firms the chance at a rare payday by signing on before an IPO. In at least one case, a Google departure also appeared to be preceded by shifting priorities over how to allocate precious computing resources, an issue that has prompted other employees to leave the company entirely.

Shortly before Shazeer announced his plans to join OpenAI, computing power dedicated to one of his projects was reassigned to a London-based team at Google DeepMind, Bloomberg reported. The move was made in an attempt to boost collaboration across teams and streamline Google’s work on pre-training, the initial phase of AI development in which models learn from massive datasets.

A spokesperson for Google told Bloomberg the company remains confident in its position in the market for AI talent and pointed to Google DeepMind CEO Demis Hassabis’s remarks earlier this week.

“There’s a lot of talent movement between all the leading labs and we win our fair share of the top talent. We have by far the biggest and broadest research bench of any of the labs out there,” Hassabis said at an event in Cannes. “It’s a ferociously competitive market right now, the most ferociously competitive it’s ever been in the tech industry.”

Shares of Alphabet closed down slightly after falling as much as 1.2% during the trading day Wednesday following the news.

According to the Bloomberg report, Shazeer’s career trajectory is emblematic of the intense talent wars that have defined the AI landscape. After co-authoring a seminal paper that helped catalyze the AI boom, he left Google in 2021 to found Character.AI, a chatbot startup, only to rejoin the firm in 2024 as part of an unusual licensing deal that valued his company at $2.5 billion.

Once back at Google, Shazeer co-led development of the company’s flagship Gemini AI model. Prior to his departure, he had also been working on a new AI architecture, two people said. The architecture was still based on the transformer, a technique that Shazeer and his colleagues introduced in 2017 that has become a staple of AI development in the years since, but it had been achieving promising results. Shazeer was both an admired and divisive figure within Google: his comments within Google about transgender identity and the Gaza conflict stirred controversy among some employees, bloomberg sources said.

Jumper, meanwhile, had emerged as a face of Google’s most ambitious AI efforts after winning the Nobel Prize for landmark research using AI to predict protein folding. Adler and Pritzel, both of whom are set to join Jumper at Anthropic, worked with him on that research.

Key members of Jumper’s team on the protein-folding research have exited Google DeepMind in recent months. Some have shifted to Isomorphic Labs, an Alphabet spinout company working on AI-designed drugs. 

Anthropic, which both partners with Google and also competes with it, has aggressively siphoned talent from the tech giant. DeepMind engineers are nearly 11 times more likely to leave for Anthropic than the reverse, according to a 2025 industry analysis from the venture capital firm SignalFire. That appears to no longer be the case. 

Like Google, the Claude maker is exploring life sciences and healthcare applications in a bid to broaden the uses of its technology. Anthropic recently raised a new round of funding at a $965 billion valuation, overtaking OpenAI, and is considering going public as soon as this fall.

AI researchers in the UK, where DeepMind’s leadership is based, are often subject to lengthy non-compete agreements, which are enforceable under British law. Jumper would likely not begin work at Anthropic until next year, according to a person familiar with the matter.

Tyler Durden Wed, 06/24/2026 - 18:40

Transcript Shows Bill Gates Claim Epstein Issued 'Veiled' Threats Over Affairs

Transcript Shows Bill Gates Claim Epstein Issued 'Veiled' Threats Over Affairs

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

Bill Gates told lawmakers in a recent interview that Jeffrey Epstein threatened him subtly over his affairs but did not overtly blackmail him, according to a transcript released on June 23.

Microsoft co-founder Bill Gates (C) in Washington, on June 10, 2026. Kent Nishimura/AFP via Getty Images

Epstein in 2013 "made some veiled references that made me wonder whether he had become aware" of one of the affairs, Gates, the co-founder of Microsoft, told the House of Representatives Oversight Committee on June 10.

Epstein later sent a reimbursement request to Gates, according to Gates. The request was for expenses that Epstein said he paid for one of the women with whom Gates had an affair.

"I viewed it as a tactic to reengage with me," Gates said. "I'd never asked him to do anything with respect to the person we're discussing, so I was rather surprised. That was the first time I knew explicitly that he'd become aware of that affair."

Gates said he directed staff members not to pay Epstein.

Still, Gates maintained that Epstein did not blackmail him.

"He never blackmailed me, but looking at these emails, it raises a serious probability that he contemplated blackmailing me," Gates said, referring to documents released by the Department of Justice in January.

Gates also said: "He never sent me anything that I would call blackmail. As I've said, he made veiled references to things like we should all want to be friends.

"Now that I see the January release of documents, it appears that in many cases he, at least in emails to himself, was sort of rehearsing how either he or he coaching someone else might choose to blackmail me, but none of those messages were ever sent to me."

Gates had said through a spokesperson in 2023 that Epstein tried to "leverage a past relationship" to threaten him, without providing details.

Epstein, a convicted sex offender, died in federal prison in 2019 while awaiting trial on charges of sex trafficking of minors.

Gates has said he met with Epstein multiple times from 2011 through 2014, and that he ended the relationship in 2014 after concluding that Epstein could not deliver on claims that he could raise billions for global health efforts.

Gates said in his opening statement that he should have never met with Epstein in the first place but that he never witnessed any indication Epstein was involved in criminal conduct.

He told lawmakers that it was a mistake to engage with Epstein in part because of his prior conviction, according to the newly released transcript.

Rep. Robert Garcia (D-Calif.), the top Democrat on the House Oversight Committee, during the June 10 interview noted that Epstein's employees were among his victims.

"Yeah, that's a very good point," Gates said.

"I never spent time with any women who I was aware were victims, and so that's why I've enumerated very carefully when I ever saw any of those admin assistants, because, tragically, as you say, it appears in the press now that some of those women were indeed victims.

"So, to that degree, for the photos, for sitting on the plane or standing there during the magic trick, I may have been in the presence of victims."

Tyler Durden Wed, 06/24/2026 - 18:20

All Banks Pass Fed's Stress Test, Unleashing Latest Wave Of Dividends And Buybacks

All Banks Pass Fed's Stress Test, Unleashing Latest Wave Of Dividends And Buybacks

In all the excitement over Micron's blowout earnings, we almost forgot that today was another Fed stress test day - which every bank passed with flying colors as usual - which in turn allowed bank to unleash a fresh flood of dividends and buybacks.

The biggest US banks boosted their dividends after passing this year’s Federal Reserve stress tests, a hurdle that even Bloomberg admits has "softened" in recent years as regulators hash out new requirements.

The results of the Federal Reserve Board's annual bank stress test confirmed that large banks are well positioned to weather a severe recession and able to continue to lend to households and businesses. Despite absorbing more than $708 billion in total loan losses under this year's hypothetical scenario, capital declined only 1.6 percentage points in aggregate, staying above minimum capital requirements.

"Today's results underscore the strength of the banking system," Vice Chair for Supervision Michelle W. Bowman said. "As we work to increase the transparency and accountability of the stress test, public feedback will help us continue to improve and instill greater confidence in the stress test and its results.

The Fed’s exam (the results can be found here), an offshoot of the 2008 financial crisis, showed that all of the banks examined would maintain enough capital to withstand a hypothetical economic downturn. All 32 banks tested remained above their minimum common equity tier 1 capital requirements during this year's hypothetical recession scenario, which was similar in severity to the prior test. The hypothetical scenario this year included a severe global recession with a 39 percent decline in commercial real estate prices and a 30 percent decline in house prices. The unemployment rate also increased to a peak of 10 percent, and economic output declined commensurately.

The review tends to set the tone for how aggressive banks are in returning capital to shareholders through dividends and repurchasing shares. It requires banks to consider hypothetical crisis scenarios and estimate the losses they might face based on their books of business. Yet as most banks have consistently passed the test, even those who suffered in the aftermath of the March 2023 bank crisis, the "test" has become more of a greenlight from the Fed to banks to release capital. 

Sure enough, immediately after the results, banks proceeded to announce their shareholder friendly acts: JPMorgan increased its quarterly payout to $1.65 a share from $1.50, while Goldman Sachs raised its dividend to $5 from $4.50 after the results of the Fed’s annual review were announced. JPMorgan also authorized a new $50BN share-repurchase program effective July 1. Wells Fargo raised its payout to 50 cents from 45 cents and Morgan Stanley increased its dividend to $1.15 from $1.

The nation’s six biggest banks paid out more than $140 billion in dividends and buybacks last year, surpassing a record set in 2019. The firms collectively posted their largest annual profit since 2021 on the back of record trading revenue.

Unlike other years, the 2026 results won’t impact capital requirements as the Fed continues revising the tests to make them more bank-friendly. As a result of that decision “there is no expectation that the firms delay until a particular time the public disclosure of their planned capital actions through the third quarter of 2027,” the Fed said in a statement Wednesday. 

Additionally, Bloomberg notes that this year’s test has limited impact because the Fed voted in February to freeze the current stress capital buffer requirements until 2027 as it continues to overhaul the annual exam. Last year, those requirements fell for many banks as the test was less stringent than in past years. 

Tyler Durden Wed, 06/24/2026 - 18:00

Senate Passes War Powers Resolution In Rebuke Of Trump Policy

Senate Passes War Powers Resolution In Rebuke Of Trump Policy

The US Senate on Tuesday passed a war powers resolution - a symbolic rebuke of President Donald Trump which calls for an end to the US-Israeli war against Iran, and requires explicit authorization from Congress.

The Democrat-led concurrent resolution passed by a narrow 50-48 vote, seeking to constrain President Donald Trump’s ability to wage war against Iran. The measure had previously cleared the House of Representatives on June 3.

US President Donald Trump looks on as he stands in front of the VC-25B aircraft gifted by Qatar that will be used as Air Force One, at Joint Base Andrews, Maryland, June 19, 2026. ELIZABETH FRANTZ / REUTERS

The resolution serves as a symbolic rebuke of the military campaign Trump launched against Iran on February 28. However, it lacks clear legal enforceability, as it does not require the president’s signature under the 1973 War Powers Resolution. A 1983 Supreme Court ruling held that such measures must be presented to the president for signature or veto to carry legal effect. The Trump administration has long maintained that the War Powers Act is unconstitutional and therefore not binding.

Tuesday’s vote came days after the Trump administration signed a memorandum of understanding with Iran that established an immediate ceasefire and outlined ongoing negotiations for a more lasting diplomatic resolution.

Democrats had made several prior attempts to pass a war powers resolution on the Iran conflict, but previously fell short in the Republican-controlled Senate.

“We’re once again going to put Republicans on record on whether they want this disastrous war - Trump’s disastrous war - to continue by forcing a vote,” Senate Minority Leader Chuck Schumer (D-N.Y.) said at a press conference before the vote.

Four Republicans joined Democrats in support: Sens. Rand Paul (R-KY), Susan Collins (R-ME), Bill Cassidy (R-LA), and Lisa Murkowski (R-AK). Sen. John Fetterman (D-PA) voted with most Republicans in opposition. Sens. Mitch McConnell (R-KY) and Dave McCormick (R-PA) did not vote.

Meanwhile, hawk are pissed over the MOU... Last week, Senate Armed Services Committee Chairman Roger Wicker (R-MS) told Reuters that he's concerned the framework Trump entered into "negotiates away" U.S. military successes against Iran, and unduly constrains Israeli military operations in Lebanon, the Epoch Times notes further. 

In a June 17 post on X, Cassidy also criticized the memorandum as not doing enough to curb Iran's nuclear program while reducing military and economic pressure against Tehran.

"Before the war, the strait was open, Iran was being crushed by sanctions, and 13 service members were still alive. Now, 13 Americans are dead, families have paid billions at the pump, sanctions will be lifted, and the bombing has stopped," Cassidy wrote. "This is the worst foreign policy blunder in decades."

Trump has defended his handling of the Iran conflict and his decision to enter into the memorandum of understanding, which sets an initial 60-day window for continued negotiations.

"We didn't meet out of desperation, Iran did. They are FINISHED!" Trump wrote in a June 19 post on Truth Social. "We'll play out the 60 days. They get no money, not ten cents!

Trump has repeatedly threatened that military action could resume if Iran violates the current framework for negotiations. Large numbers of U.S. forces also remain in the Middle East, postured to potentially resume operations.

Sen. Roger Marshall (R-KS) voiced support for the deal in an interview with KCMO Radio, saying Trump chose "a path to lasting peace - not another forever war."

Tyler Durden Wed, 06/24/2026 - 17:40

DARPA's X-Plane Designed To Maneuver With Bursts Of Air Gets New Wings Attached

DARPA's X-Plane Designed To Maneuver With Bursts Of Air Gets New Wings Attached

Authored by Chris Young via Interesting Engineering,

Boeing subsidiary Aurora Flight Sciences has begun installing the wings on the X-65, an experimental drone developed under DARPA's Control of Revolutionary Aircraft with Novel Effectors (CRANE) program.

Technicians mounting the wings onto the X-65 experimental drone.Aurora Flight Sciences / X

The installation brings DARPA and Aurora a step closer to flying the unconventional uncrewed aircraft, which was designed to test flight control using only bursts of pressurized air instead of conventional moving surfaces.

The X-65's active flow control

The X-65's key innovation lies in its active flow control (AFC) system. Fourteen AFC effectors embedded across the aircraft's lifting surfaces use jets of high-pressure air to manage roll, pitch, and yaw.

This will either replace or supplement traditional flaps and rudders. The X-65 incorporates both systems to establish performance baselines before transitioning to AFC-only operation. Essentially, it will allow researchers to flight test the technology while minimizing risk.

"The X-65 conventional surfaces are like training wheels to help us understand how AFC can be used in place of traditional flaps and rudders," Dr. Richard Wlezien, former CRANE program manager at DARPA, said in a 2024 press statement. Sensors will compare the two approaches to evaluate potential benefits.

Aurora Flight Sciences announced the wing's arrival on social media, noting that the components were built at its West Virginia facility. Integration is underway in Virginia, with the first flight now targeted for 2027.

Novel effectors to enhance survivability

The X-65 features a co-planar joined wing configuration with triangular wing sections on each side that merge at the tips, plus small extensions for a total wingspan of 30 feet.

The triangular wings support testing across multiple sweep angles and feature modular, swappable sections for future AFC configurations.

The aircraft also includes a twin vertical tail, a chin air intake, and a single exhaust. The uncrewed aircraft has a gross weight of approximately 7,000 lbs.

DARPA kick-started the CRANE program in 2020. Though Aurora has advanced to the detailed design and fabrication phases, the program has encountered delays and cost overruns, as reported by The War Zone.

Original flight plans for 2025 slipped after higher-than-expected prototype costs and supply chain issues. Pentagon funding for the effort since fiscal year 2024 has reached nearly $63 million.

Eliminating moving control surfaces could yield multiple advantages. Removing moving parts could result in improved aerodynamics and efficiency, particularly at high altitudes. Reduced mechanical complexity also offers potential weight savings, lower maintenance demands, and greater reliability. For military applications, such systems could have enhanced survivability against battle damage.

The technology holds particular promise for stealth aircraft. Traditional control surfaces create gaps and protrusions that increase radar cross-section and require constant adjustments in fly-by-wire systems. AFC effectors embedded flush with the airframe could help maintain smoother external contours and lower observability.

An artist’s render of the X-65 drone. Source: Aurora Flight Sciences / X Tyler Durden Wed, 06/24/2026 - 17:20

Bessent: Rate Cuts Don't Have To Break The Dollar

Bessent: Rate Cuts Don't Have To Break The Dollar

With rate-hikes increasingly back 'on the table' fort Fed Chair Warsh's 'regime change' last week, Treasury Secretary Scott Bessent says that cutting interest rates won't necessarily lead to a weaker dollar - arguing that "you can have a strong dollar when rates are being cut" because if the fed is cutting because inflation is falling, while the economy stays strong - capital keeps flowing in and the dollar holds. Of course, that all depends on why the fed is cutting... 

Treasury Secretary Scott Bessent at the Economic Club of New York, on June 23. Photographer: Krisanne Johnson/Bloomberg

Speaking on CNBC's Squawk Box on Wednesday, Bessent said the U.S. can return to 3% growth this year, that inflation will fall back to the Federal Reserve's target now that the Iran conflict has eased, and that artificial intelligence is on track to at least double productivity - the recipe for maintaining a strong dollar while cutting rates. He also defended the administration's emerging Iran deal and its handling of frozen Iranian assets.

The comments followed a Tuesday night speech at the Economic Club of New York's America 250 gala, where Bessent set out a five-part framework he calls economic statecraft, which he defined as the use of American economic power "in service of our sovereignty."

Citing Hamilton's view that a nation "ought to endeavor to possess within itself all the essentials of national supply," he argued that decades of chasing the lowest cost had left the U.S. dependent in areas that matter: semiconductors, AI, quantum computing, advanced manufacturing, shipbuilding, critical minerals and pharmaceuticals. A supply chain, he said, can no longer be judged on price alone, but on whether it survives a crisis, withstands coercion and keeps running through a pandemic or a cyberattack.

Bessent said market access is now conditional, carrying "non-negotiable obligations" for partners that want U.S. capital and the dollar's plumbing while keeping their own markets closed. He also argued that whoever writes the standards for digital assets, stablecoins and tokenized finance will shape the century, and that those rules should be written in Washington. On financial leadership, he said there is "nothing accidental about the dollar's place in the world," calling reserve-currency status both an advantage and an obligation to police the system. The fifth principle was that the payoff is supposed to reach households, not only trading floors.

Wednesday morning, Bessent leaned on AI as the driver - citing the late Alan Greenspan's read of the 1990s and suggesting the current buildout, with hyperscalers such as Meta and Google set to spend on the order of $750 billion, could at least double productivity again. He credited financial deregulation with unlocking roughly $3 trillion in lending capacity, and said the deficit-to-GDP ratio could also carry "a three in front of it" by the end of President Trump's term, though he would not commit to progress this year.

On the Fed, Bessent said he is confident in Fed Chair Kevin Warsh and praised the move away from rigid forward guidance and dot-plot projections. He said the president understands that "the bond market has taken out more governments than howitzers," a warning that if inflation runs hot and the Fed hesitates, the bond market will tighten on its own.

The newest item was on Iran. Once Tehran's frozen assets are released under the interim deal, Bessent said, the Treasury will oversee them, probably through an escrow account run out of Doha, and "recycle" a large share into U.S. food and medicine, including corn, wheat, soybeans and pharmaceuticals. The arrangement turns a concession critics dislike into a farm-state selling point.

He also tied housing affordability to lower rates and more supply, blaming COVID-era mortgage lock-in for low turnover. The timing fit: Trump was set to sign the 21st Century Road to Housing Act the same day.

Dollar Dominance 'Essential'

According to Bessent, the dominance of the US dollar is "essential," telling CNBC: "if you look, the new Venezuela... the dollar is going to be the centerpiece of their trade... We're seeing in the Iranian negotiations, the Iranians will be invoicing in dollars. Everything we are doing is pushing the dollar back... we're reinforcing it."

The latest move in the dollar came after the Fed held its benchmark rate at 3.5% to 3.75%, dropped its bias toward future cuts and signaled that a hike this year is possible, causing two-year yields to jump to their highest in more than a year. 

Let's see if Bessent's prediction of - "Now that we're on the other side of it, prices come down" pans out. Energy shocks have a history of feeding into wages, services and expectations before they fade. The word transitory did real damage in 2021 and 2022 because it was obvious bullshit to cover for the fact that Biden-era policies amplified the damage from so much liquidity during Covid. Bessent may be right that the Iran spike proves temporary. The risk is that he is right about gasoline and wrong about the stickier core that tends to follow it.

Tyler Durden Wed, 06/24/2026 - 17:00

Fauci, The CIA, And The Unanswered Questions Of COVID

Fauci, The CIA, And The Unanswered Questions Of COVID

Authored by Cory Franklin via RealClearWire,

Did Anthony Fauci manipulate the intelligence community (IC) investigation of the origin of COVID as outgoing Director of National Intelligence Tulsi Gabbard claims?

Gabbard recently released previously unseen documents and communications during the COVID pandemic between the IC and the key member of the White House Coronavirus Task Force, Dr. Anthony Fauci. She claims they show that Fauci and the IC coordinated the investigation of the origin of the COVID to suggest it was a natural occurrence rather than a laboratory leak. She further charges that the documents reveal Fauci's direct role in influencing and manipulating IC assessments in an attempt to discourage the lab-leak hypothesis.

It is not clear that the released information shows this, and a careful reading suggests a more complicated scenario. But what the messages do show is that an undue emphasis on Fauci's actions risks missing a more important point - the hidden connection between public health officials and the IC during the pandemic.

The two theories on where COVID originated are that the virus evolved naturally from bats to man via an intermediate animal host; or that the virus leaked from a laboratory in Wuhan, China. The first was more widely accepted by scientists and most of the international press early in the pandemic, but the intermediate host has never been discovered so the theory remains speculative. The second theory, which has gained significant traction since initially being disparaged as conspiracy, is only circumstantial since no definitive proof exists. The answer as to how COVID originated remains unknown.

Where does Dr. Fauci, the government's point man in the pandemic, fit in? He acknowledges the possibility of a lab leak, but initially came down firmly on the side of natural origin - aggressively so. He and his colleagues, notably his boss NIH director Francis Collins, attempted to publicly silence proponents of the lab leak theory. The rub is that Fauci was tangentially involved in "gain of function" viral manipulation research done in Wuhan and clearly misled Congress about this involvement.

Because gain-of-function research could have been responsible for the development of the virus in the Wuhan lab, this means Fauci has a conflict of interest on the COVID source: He could bear some responsibility for the entire affair if this was indeed a lab leak. So he has reason other than scientific inquiry to support the animal host theory. He is aware of that and has written in the past about the necessity and the attendant danger of doing gain-of-function research. He now strenuously denies it had anything to do with COVID.

Enter the IC and Gabbard's document release.

There is uncertainty over whether Fauci frequented CIA offices early in the pandemic, something he was less than forthright about in his 2024 congressional testimony. It is unclear whether or how many times he was there, in part because a whistleblower claims the requirement to sign in was waived for Dr. Fauci. What is not in doubt are his contacts with the CIA after President Biden charged the IC with investigating the origin of COVID.

The CIA asked Fauci to provide recommendations for experts to consult in their investigation of the COVID origin; the extent of his influence on the agency's investigation is unclear. At the time, some officials, aware of the potential conflict of interest, questioned in the documents whether relying on recommendations from someone deeply involved in coronavirus research could create the perception of improper influence regarding their findings. Nevertheless, the IC employed the experts Fauci recommended, who were never publicly identified. Their names have been redacted in communications and the information they provided has never been released.

The lack of transparency by the public health community and the CIA caused Republicans, led by Dr. Rand Paul, to suspect Fauci selected his CIA consultants based on their opposition to the lab-leak theory. Further, Paul proposed there was a self-justifying loop of information in which the medical experts put their thumbs on the scale of the IC report supporting natural origin. Public health officials (and some politicians who saw the lab-leak theory as a potential scandal) then turned around and used the "doctored" IC report to support the conclusions they provided to the public.

Neither of these accusations is supported or refuted by the released communications.

Again, despite Gabbard's claims, there is no smoking gun in the released documents, and the IC did not reach a consensus on the origin of COVID. The larger point, however, is one the public knew little about: the incestuous connection between high-level public health officials and the IC during the pandemic. Making Fauci the bête noire does little to advance our knowledge of what actually happened or how to go forward.

This hardly exonerates Fauci: His actions bear scrutiny because of his disturbing pattern of behavior. (Criminal charges may be a bridge too far, and in any event he has a blanket presidential pardon). Besides misleading Congress about his involvement with gain-of-function research and his attempt to suppress the views of lab leak proponents, he obscured his connection with the IC investigation. When asked, he mocked it with a snide deflection as "a conspiracy that I parachuted in like Jason Bourne." In addition, and almost forgotten today, he confessed to deliberately lying to the American public in the New York Times about "herd immunity" to COVID. This was not, as some claim, the result of incomplete information; he admitted consciously dissembling.

There is still much to be learned about Fauci's IC connection. At the same time, the released documents reveal that the IC responded with its traditional "business as usual" secrecy, the pattern they have used since the JFK assassination and before. There is absolutely no national security or legal reason to withhold the names of the expert consultants referred by Fauci, those names which are still redacted today. Those consultants are not spies, their lives are not in danger, and the public deserves to know who they are and what opinions they shared with the CIA - it is, in the final analysis, a public health question.

Also, why has there been no disapproval registered by the public health community about secret engagements with the CIA? Do they approve of this secretive collusion rather than demanding transparency? After all, the larger point here isn't to spread blame for COVID. It's to better intercept the next pandemic.

This furtive cooperation, and not Fauci, is the crux of the issue generated by the released documents. The public has a right to know about clandestine meetings between public health officials and the CIA. And if true, it is not out of the realm of possibility that there was self-serving connivance between Fauci and the agency, or that a self-justifying information loop kept the American public at bay. What would the public reaction be to that? Especially if the COVID origin turned out to be a preventable occurrence.

To paraphrase Hillary Clinton's provocative question, "At this late date, what does it matter?" The origin of COVID is still uncertain. Yet what these documents reinforce is that, despite the fact COVID killed 1.2 million Americans and caused untold economic, physical, and emotional damage, there has still been no official national reckoning. Doesn't the public deserve better? It is inconceivable that there has been no national fact-finding commission on the order of the Warren Commission (where both the CIA and FBI did lie to investigators), the Challenger Commission, and the 9/11 Commission. Why have the medical community, the press, and leading politicians stopped asking questions about the most significant event of the first quarter of the 21st century, including the nexus between public health and the IC? This is a national embarrassment.

The Roman statesman Cicero explained it best when he said, "To be ignorant of what came before is to remain a child."

And when it comes to COVID, we have been treated like children.

Dr. Cory Franklin is a retired intensive care physician and the author of "The COVID Diaries 2020-2024: Anatomy of a Contagion as It Happened."

Tyler Durden Wed, 06/24/2026 - 16:40

Micron Soars After Reporting Blowout Earnings, Boosts Guidance

Micron Soars After Reporting Blowout Earnings, Boosts Guidance

Step aside Nvidia: as we noted in our preview, with the world's most valuable company going nowhere in recent months, all attention has shifted to Micron, which has rapidly become one of the most important stocks in the world and certainly the most actively traded, surpassing both Nvidia and Tesla in recent days.

As such all eyes were on Micron's earnings today, and even with "sentiment at 11/10", according to UBS, the company still managed to blow away expectations for its Q3 earnings while delivering a sales forecast that topped Wall Street estimates after AI-fueled shortages of the components sent prices soaring.  

Here is what it just reported for the just concluded May/Q3 fiscal quarter:

Starting with the bottom line...

  • Adjusted EPS $25.11, beating consensus of $20.49.

We then go to the top of the income statement: 

  • Adjusted Revenue $$41.46BN, smashing all sellside estimates of $$35.69BN, and even well above the most optimistic buyside bogeys.
    • Cloud Memory revenue $13.77 billion, beating estimate $10.69 billion
    • Core Data Center revenue $11.52 billion, beating estimate $6.8 billion
    • Mobile and Client Revenue $11.52 billion vs. $3.26 billion y/y, beating estimate $9.73 billion
    • Automotive and Embedded rev. $4.63 billion, beating estimate $3.51 billion
  • Adjusted gross margin 84.9% vs. 39% y/y, beating estimate 81.9% 
  • Adjusted operating income margin 81.2% vs. 26.8% y/y, beating estimate 77.9%
  • R&D expenses $1.32 billion, +36% y/y, higher than estimate $1.29 billion 
  • Adjusted operating expenses $1.52 billion, +34% y/y, beating estimate $1.43 billion

Looking ahead, the company's forecast is just as impressive:

  • Micron sees Q4 adjusted Revenue of $49-$51BN, beating estimates of $43.24BN
  • Sees adjusted EPS $30 to $32, beating estimate $25.31
  • Sees adjusted gross margin about 86%, beating estimate 83.6%
  • Sees adjusted operating expenses about $1.65 billion, below estimate $1.66 billion

Commenting on the quarter, the company said that “Micron is investing at record levels in technology, products and supply to address our customers’ rapidly growing demand. We believe our multi-year Strategic Customer Agreements will significantly enhance the durability and predictability of Micron’s strong financial performance.”

More important was the company's discussion of its long-term agreements, i.e. "Strategic Customer Agreement". This is what it said in the accompanying presentation:

  • We are pleased to announce that we have completed 16 SCAs with customers across the data center, consumer and auto market segments. These SCAs accelerate the transformation of our business model, enhance partnership in technology and innovation, and provide customers with contracted supply assurance.
  • Typically, these agreements have a five-year term, from calendar 2026 through the end of calendar 2030. Automotive agreements generally have a three-year term.
  • The 16 signed agreements represent roughly 20% of our DRAM volume and a third of our NAND volume over this period.
  • These SCAs include four very large customers and three medium-sized customers.
  • The remaining agreements relate to smaller customers from the automotive industry and represent our commitment to this important sector.
  • When completed, we expect approximately half or more of our company revenue to be under these SCAs with customers across end markets. Our customers value our U.S. supply plans, and this is reflected in our SCAs.
  • These SCAs are structured as take-or-pay agreements, with binding commitments to purchase specific volumes over this multi-year term.
  • The largest agreements generally have a ceiling price for existing products at the current CQ2 (calendar Q2) market price, and a floor price through the term of the agreement.
  • Several SCAs, which account for a modest portion of the SCA-related revenue, include either fixed prices or have no price bands associated with them where pricing will be subject to market conditions. When all planned SCAs are executed, agreements with either fixed prices or price ceilings at or close to current CQ2 market prices are expected to be approximately 40% of our revenue.
  • For SCAs which do contain such price bands, pricing is designed to stay within this floor to ceiling level through the course of the term. This pricing visibility will help our SCA customers across market segments to better manage their business and grow their demand.
  • For our SCAs with price bands, the floor price enables a very robust gross margin for Micron, well above our peak quarterly margins in any past cycle.
  • 14 of the 16 SCAs that we have signed have a cumulative revenue at minimum price per our contracts of approximately $100 billion over the remaining agreement term.
  • They also strengthen our long-term financial performance, margins and free cash flow expectations, with higher visibility and improved stability in our business performance.
  • Under the SCAs we have signed so far, we project to receive cash deposits and related financial commitments of $22 billion. This further demonstrates customer commitment to this new business model. Mark will provide additional details.
  • Our SCAs with customers across data center to consumer devices to auto and industrial applications create a new paradigm for us to strengthen our customer relationships. They provide committed DRAM, including HBM as appropriate, and NAND supply to our customers over a multi-year time horizon.
  • In a period of significant shortage, this supply visibility is extremely beneficial to our customers. This visibility enables our customers to leverage SCA supply to make progress on their strategic plans, drive growth and enable their end consumers to benefit from their products and services. We are very appreciative of our customers, who have worked with us through this period of tight supply with a strong collaborative spirit to create win-win outcomes for the long term for the entire ecosystem and end consumers.

Micron and its peers in the memory space — Samsung Electronics and SK Hynix — have become major beneficiaries of the artificial intelligence boom. A spending spree by data center operators has stoked the appetite for both conventional memory and a newer variety called high-bandwidth memory, or HBM, that works with AI systems.

Micron has struggled to satisfy memory-chip demand, creating shortages in areas like computers, phones and cars. Though the company is expanding its manufacturing capacity, prices are expected to remain high for the foreseeable future. 

Micron works with Nvidia to integrate its memory into AI infrastructure. Earlier this month, Nvidia Chief Executive Officer Jensen Huang confirmed that his company will rely on Micron’s HBM4 memory, along with those of its rivals, for its next-generation Vera Rubin platform. All three of the major memory makers have been jockeying for a slice of that business. 

Meanwhile, SK Hynix, which currently leads the HBM market, just announced plans for a stock listing in the US. The company is seeking roughly $29 billion in the offering, aiming to further capitalize on memory demand.

In a note published by Goldman's analyst, James Schneider, he write the following post-earnings observations:

  • Key stock takeaways: We expect the stock to move higher following a quarter and guidance that were well ahead of the Street, despite elevated investor expectations given continued industry pricing momentum for both DRAM and NAND markets. We expect investors to focus on critical elements of management's commentary on today's conference call, including (1) additional color on the company's 16 Strategic Customer Agreements; (2) potential updates to the company's FY27 CapEx outlook; (3) market color on the conventional DRAM and NAD segments.
  • Quarterly results were well above the Street: Micron reported revenue of $41.46 bn, well above GS at $37.58 bn and the Street at $36.28 bn, while gross margin of 84.9% was above GS at 83.4% and the Street at 82.5%. Non-GAAP EPS of $25.11 was also well above GS at $22.07 and the Street at $21.05. DRAM revenue of $31.33 bn was well above GS at $28.30 bn and the Street at $28.21 bn, while NAND revenue of $9.94 bn was also above GS at $9.18 bn and the Street at $7.77 bn.
  • FY4Q guidance is well above the Street. Micron guided FY4Q well above the Street on revenue and margins. Revenue was guided to $50.00 bn at the midpoint, which is well above GS at $48.77 bn and the Street at $43.34 bn. Non-GAAP gross margin was guided to 86%, in line with GS at 86.1% and above the Street at 84.6%. Non-GAAP EPS guidance of $30.00 - $32.00 (midpoint of $31.00) was above GS at $29.95 and well above the Street at $25.77.
  • Read-through to our coverage: We expect a positive initial reaction for SNDK (Buy) in our coverage given similar end-market exposure. 
  • Price target and risks: Our 12-month target price of $900 is based on a 18X P/E multiple applied to our normalized EPS estimate of $50.00. Key upside/downside risks include: (1) continued execution on the company's HBM roadmap and share gain vis-a-vis Samsung, (2) sizable step-up (above current expectations) in HBM content for AI accelerators, (3) continued signs of CXMT gaining DRAM market share, negatively impacting pricing dynamics.

In kneejerk response, the stock which slid in the past 2 days, has recovered most of the losses and has surged more than 10% rising to $1136 after briefly dipping below $1000 just before the market closed.

The company's investor presentation is below (pdf link)

Micron Q3 26 Earnings Deck by Zerohedge

Tyler Durden Wed, 06/24/2026 - 16:19

72 Ships Transited Hormuz In A Day: US Energy Secretary Says 'Taking Away' Iran's Key Leverage

72 Ships Transited Hormuz In A Day: US Energy Secretary Says 'Taking Away' Iran's Key Leverage

WTI futures briefly fell below $70 a barrel for the first time since the US-Iran conflict erupted, as tanker flows through the Strait of Hormuz are showing further signs of normalization and physical market tightness continues to ease.

Bloomberg noted that option markets are positioning for ongoing normalization. Put volume is exceeding calls, with some of the heaviest trading in August and September expiries between $60 and $68. The September $60 strike put is one of the most active contracts, along with August $60, $65, and $68 strike puts. This only signals that traders are positioning for more downside as the war risk premium in crude oil evaporates.

This is why:

Earlier today, US Energy Secretary Chris Wright told the audience at the Reuters Global Energy Forum that roughly 72 ships carrying about 20 million barrels of crude moved through the strait over the past 24 hours. That figure is roughly one-fifth of global daily consumption.

"I could say roughly 72 ships in the last 24 hours, and 20 million barrels of oil," Wright told the audience in New York. "We have normal flows today."

He noted that even if the interim peace deal between the US and Iran fails, Tehran no longer has the ability to close Hormuz, saying the Trump administration has eroded one of Iran’s key points of leverage. 

"Iran will not have the ability to close the Strait of Hormuz going forward. That's a critical thing, that's their key leverage, and we're taking that leverage away from them," he added.

We pointed this out on Tuesday morning:

Wright said some ships are choosing not to transit the narrow waterway due to naval mine risks, instead moving close to Iran’s coast or along the southern route near Oman with military escorts. He said that full navigation could take several more weeks.

"To return to complete normalcy takes a demining of the strait, probably a few weeks' effort," he said.

Tehran’s leverage will all but disappear in the coming years as Gulf producers and oil majors are set to expand a network of pipelines and export routes that bypass the Hormuz chokepoint entirely, building on existing infrastructure designed to neutralize the risk. Read the full report.

Tyler Durden Wed, 06/24/2026 - 15:40

Grand Theft Auto VI Pre-Orders Begin Thursday; Wall Street Responds...

Grand Theft Auto VI Pre-Orders Begin Thursday; Wall Street Responds...

Take-Two Interactive said that its Rockstar Games studio will begin long-awaited pre-orders for Grand Theft Auto VI on Thursday. The action-packed game is priced at $79.99 and is scheduled to launch on November 19 for PlayStation 5 and Xbox Series X|S.

"Launching November 19, 2026, for the PlayStation 5 computer entertainment systems and Xbox Series X|S games and entertainment systems for $79.99, Grand Theft Auto VI features a single-player experience set in the biggest, most immersive evolution of the series yet," Take-Two wrote in a press release. 

The last major GTA release was GTA V, which launched on September 17, 2013. Gamers have been waiting 13 years for a major GTA installment.

Last week, Rockstar Games gave gamers the best look yet inside the new GTA game, which has excited players worldwide. This comes after years of launch delays.

Raymond James analyst Andrew Marok said the pricing for GTA VI and launch data is "broadly in line with expectations." 

Marok's first take:

Rockstar announced pre-order and pricing details for Grand Theft Auto VI this morning. Preorders will begin at midnight local time on June 25, with two editions of the game available. The base game will retail for $80, with the Ultimate Edition (including an exclusive collection of ingame vehicles, weapons, and skins) priced at $100.

Base game pricing in line with our expectations. Based on commentary from management around pricing to value, and making the game as accessible as possible to the broadest player segment as they can, we did not expect aggressive pricing on the base game, and $80 feels like a fair trade in that department. It is slightly above the current industry norm of $70; some publishers including Nintendo have attempted to reset the bar at $80 with varying levels of success. However, if there is one game that can price at $80 without garnering significant player pushback, Grand Theft Auto VI is that game given its massive scale and anticipation.

Ultimate edition pricing also around expectations, but "high-end"/deluxe edition absent. Rockstar announced the Ultimate Edition for $100, which includes the base game plus a collection of exclusive in-game items including vehicles, weapons, character skins, and more. The Ultimate edition is priced at only a 25% premium to the base game, which would be the lowest percentage increase on an upsell edition in the post-GTA IV era for Rockstar (though given their convention of rounding to the nearest $10 for pricing, it is the closest figure they could have gotten to without "over-pricing" the SKU - $110 would have been a 38% increase).

We may not have heard the last word on premium editions. Interestingly, Rockstar announced only two editions of GTA VI in this morning's release. That breaks with their pattern of three different launch SKUs per title, which was true for both Gen-7+ releases (GTA V and Red Dead 2). The key difference this time is that we have not yet heard any announcements about the GTA VI Online launch. Given that we would expect that virtual currency bundles and/or GTA Online exclusive in-game items to be part of any premium edition that exists when GTA Online is confirmed, we still see the possibility that there could be another deluxe SKU announced when the gaming public receives more detail on GTA Online.

Separately, BTIG analyst Clark Lampen initiated coverage of Take-Two earlier this morning with a Buy rating and a 12-month price target of $290, explaining:

WHAT YOU SHOULD KNOW: We're launching coverage of Take-Two Interactive with a Buy rating and a $290 PT. Later this year, Take-Two is scheduled to release the next installment of its most important and commercially relevant global gaming franchise – Grand Theft Auto VI (11/19 release date).

We expect the title to catalyze a sustainable, multi-year improvement in earnings power for the enterprise (BTIGe $10 in average earnings power over the FY27-29 timeframe) and based on other tentpole releases from the Rockstar label, there is precedent for multiple expansion throughout the prerelease marketing cycle. In tandem, we see a path to a higher share price over the balance of the year, which underpins our Buy rating and price target.

Related:

TTWO shares were muted on Wednesday morning following the release.

For the next leg up, shares need to trade north of $250.

Tyler Durden Wed, 06/24/2026 - 14:40

Google's Dual Nuclear Tech Strategy Takes Shape With Kairos & GE Vernova

Google's Dual Nuclear Tech Strategy Takes Shape With Kairos & GE Vernova

Google is placing its nuclear bets through more than one channel. Elementl Power, the independent developer that received early-stage capital from Google in 2025 to prepare three US sites, has now made its first clear technology choice on at least one of them.

Elementl signed an Early Works Agreement with GE Vernova Hitachi Nuclear Energy (GVH) to deploy BWRX-300 SMRs at a nearly 700-acre site in Meigs County, Ohio. 

The project targets up to 1.5 GW of power production. Elementl has already filed a PJM interconnection request for the initial 600 MW. Construction remains targeted for 2030 with commercial operation eyed around 2034.

Elementl positions itself as technology agnostic. Its selection of the BWRX-300 therefore stands out, as the design draws on decades of GE boiling water reactor experience rather than the novel fluoride salt-cooled, TRISO-fueled path Kairos Power is advancing. 

Google already holds a separate multi-plant agreement with Kairos targeting up to 500 MW of advanced reactor capacity by 2035, as we reported when that deal was first announced in October 2024.

Google now effectively supports two distinct reactor approaches through its capital and offtake commitments. One pushes the technological frontier with higher temperatures and new fuel forms via Kairos. The other, advanced through Elementl's new Ohio project, favors a more conventional SMR that could encounter fewer first-of-a-kind regulatory and construction risks. 

Both address the same core need: reliable, around-the-clock carbon-free power for AI data centers that intermittent sources and gas alone cannot satisfy.

Timelines remain distant. Even with hyperscaler development dollars flowing and policy momentum building, first steel in the ground is years away. 

GE Vernova remains one of the most well-funded reactor developers, alongside Westinghouse, as their turbine business continues to see no end in sight for their backlog of data center related orders. The company now has multiple advanced stage projects underway including locations in Canada, Tennessee, and Europe. 

Tyler Durden Wed, 06/24/2026 - 14:20

Oil Tanker Earnings Soar To $470,000 A Day As Hormuz Hopes Drive Tanker Frenzy

Oil Tanker Earnings Soar To $470,000 A Day As Hormuz Hopes Drive Tanker Frenzy

By Tsvetana Paraskova of OilPrice.com

Oil tanker rates have soared since the U.S. and Iran announced the memorandum of understanding as oil importers scramble to charter vessels to pick up Persian Gulf cargoes in the hope these can transit the tentatively reopening Strait of Hormuz. 

One tanker has been provisionally booked to ship crude from the Persian Gulf to India at a rate that’s nine times the benchmark for the route, shipbrokers told Bloomberg on Wednesday.  

South Korea’s Sinokor shipping group, which before the war went on a buying and chartering spree to control about 120 very large crude carriers (VLCCs), will provide one of these supertankers for the shipment of a cargo of up to 2 million barrels from the Persian Gulf to India. The rate at which the tanker has been provisionally booked is 897% of the MEG-India benchmark route, or nine times higher than the normal freight cost, shipbrokers told Bloomberg. 

Tanker rates have surged since last week as the industry is preparing for a return of supply from the Middle East. 

According to Reuters, the cost of hiring a tanker in the Gulf has nearly doubled in just a week, jumping from around $106,000 per day to more than $190,000 per day. For some VLCCs hauling cargoes through the Strait of Hormuz, daily earnings have surged to nearly $470,000—a level that would have seemed absurd before the war began. 

Eager to balance continued risks around Hormuz and market opportunities emerging after an interim deal was signed between Iran and the US, shipowners have been repositioning their vessels. Some have already begun to redirect their tankers to the gulf, with around 65 empty VLCCs now able to reach the Gulf of Oman within a week. Sinokor owns around 25 of those, according to brokers’ estimates.

Since the agreement last week, four empty Sinokor VLCCs have sailed into the Persian Gulf, based on transponder signals and shipping data reviewed by Bloomberg. Three other supertankers owned by mainstream companies have also entered, adding at least 14 million barrels worth of capacity to the region. An Iranian VLCC has separately sailed into the area.

At least seven very large crude carriers have sailed into the Persian Gulf since the US and Iran agreed to an interim ceasefire deal late last week.Source: Bloomberg

The spike in rates for the Middle East Gulf (MEG) routes have also pushed up spot freight rates in other regions as the competition for who will line up most of their tankers outside Hormuz first is intensifying. 

Some of the biggest state-owned refiners in China and India have failed to procure supertankers to load crude from the Persian Gulf later this month as tanker rates are too high and guarantees on safe passage through the Strait of Hormuz lacking. 

“There are tankers available, but the problem is it's too expensive and there is no guarantee you can exit the strait,” an executive at PetroChina told Reuters last week. 

Tyler Durden Wed, 06/24/2026 - 13:40

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