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A bipartisan group of state attorneys general has warned 13 companies including Microsoft, Meta, Google and Apple that their chatbots' "delusional outputs" could be violating state laws. In a letter made public on Wednesday, dozens of attorneys general said the chatbots "encouraged users' delusions," precipitating mental health risks for children and adults. They urged the companies to allow independent audits of their products, adding that state and federal regulators should be able to review them.

 

TechCrunch

Reuters

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OpenAI has issued a warning regarding its forthcoming artificial intelligence models, indicating they could present a "high" risk to cybersecurity as their capabilities evolve rapidly. The company noted that the models might not only develop zero-day exploits but could also assist in sophisticated intrusion operations aimed at significant effects. To mitigate these risks, OpenAI is investing in bolstering its cybersecurity measures and is creating an advisory group, the Frontier Risk Council, to collaborate with cybersecurity experts on these challenges.

 

Reuters

The EU has launched an investigation into Google concerning its artificial intelligence summaries which appear above search results. The European Commission said it would examine whether the firm used data from websites to provide this service, and whether it failed to offer "appropriate compensation" to publishers. A Google spokesperson said the investigation "risks stifling innovation in a market that is more competitive than ever," adding "Europeans deserve to benefit from the latest technologies and we will continue to work closely with the news and creative industries as they transition to the AI era."

 

Financial Times

BBC News

The Consumer Financial Protection Bureau (CFPB), the top U.S. watchdog agency for consumer financial protection, is to publish "interim" rules governing open banking and consumer data rights because it expects to run out of funds before completing a process now underway to rewrite Biden-era regulations. "The Bureau anticipates having sufficient funds to continue operations until at least December 31, 2025," the agency told a federal court in Kentucky. "In light of that development, the Bureau will undertake efforts to issue an interim final" rule. President Donald Trump and other top officials have said the CFPB should be dismantled; the White House has refused to fund the agency.

 

Reuters

EU officials are to limit the scope of the bloc’s contested supply chain law and remove a clause requiring businesses to make climate transition plans after months of pressure from companies and governments including the United States. Under the changes, the EU will limit its corporate sustainability due diligence directive (CSDDD) to only the largest EU corporations - those with more than 5,000 employees and €1.5bn annual turnover. A spokesperson for U.S. oil and gas major ExxonMobil said the changes "didn’t go nearly far enough," observing that the EU's due diligence law would still apply to foreign companies.

 

Financial Times

Reuters

Nvidia has created a location verification technology designed to help prevent its AI chips from being smuggled into countries where their export is restricted. The system, leveraging the confidentiality features of its graphics processing units (GPUs), will allow customers to track the geographical operation of their chips and monitor overall performance. The development aligns with increasing governmental calls for strict measures against the unlawful export of AI chips, particularly to China, amidst ongoing concerns about national security.

 

Reuters

The Environmental Protection Agency (EPA) has removed references to fossil fuels - the main driver of global warming - from its website discussing climate change causes. Critics, including scientists and former officials, argue the omission is misleading, asserting that nearly all recent warming results from human activities, particularly the burning of fossil fuels. Experts emphasized the importance of accurate information, with one scientist stating: "Ignoring fossil fuel pollution . . . is like pretending cigarettes don’t cause lung cancer."

 

Associated Press

The Federal Reserve's Open Market Committee voted 9-3 on Wednesday to lower the baseline interest rate down to a range of 3.5%-3.75%, a reduction of 0.25 percentage points, its third cut of the year. The vote indicates a division among committee members over how to respond to an economy offering a mixed signal, with inflation remaining above the Fed’s target, which would typically argue for holding rates steady, while slower hiring and a modest uptick in unemployment suggest a case for easing. Following the vote, Fed chair Jerome Powell said that, after three quarter-point reductions, interest rates were in the range of “neutral,” a level that the Fed has been seeking because it neither accelerates growth nor dampens it.

 

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The Hill

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Washington Post

Private credit remains among the most fragile parts of the U.S. credit market, strategists at BofA Global Research have said. The analysts said opaque lending structures and a heavy bias toward technology and services amplify risks. "Private credit is the lowest quality asset class across our leveraged finance universe," observed Neha Khoda, head of U.S. credit strategy at BofA. The brokerage nevertheless expects default rates to ease to 4.5% in 2026 from 5% this year.

 

Reuters

The U.S. posted a $17bn budget deficit in November, down 53% from $367bn a year earlier, as customs duties helped push monthly revenues to a record $336bn, according to the Treasury Department. Spending fell to $509bn, partly due to delays from a recent government shutdown. The fiscal year 2026 deficit so far stands at $458bn, down from $624bn in the same period last year.

 

Reuters

A dozen lawyers are leaving Bernstein Litowitz Berger & Grossmann (BLB&G) to create their own investor law firm. The new entity, JVK Law, is led by Jeroen van Kwawegen, who led the corporate governance department at BLB&G and was one of the attorneys who successfully challenged Elon Musk's $56bn Tesla pay package last year. BLB&G said in a statement to Reuters that van Kwawegen had been terminated for alleged misconduct that it described as "inimical to the best interests of the firm." Van Kwawegen said "any claim of misconduct is pretextual and disappointing," and in an interview with Bloomberg Law announcing his new firm, said he “had a fundamentally different vision about what the law firm should look like."

 

Bloomberg Law

Financial Times

Reuters

Germany's chancellor Friedrich Merz has said foreign companies must obey German and EU rules when they operate there. "Just as European and German companies have to follow the rules in America, sometimes facing very draconian punishments, so American companies must accept our rules here, and if they don't, then there are possibilities for sanctioning them," Merz said following U.S. President Donald Trump's criticism of an EU penalty imposed on social media platform X.

 

Reuters

President Donald Trump's administration has launched the "Trump Gold Card" visa program offering fast-tracked U.S. visas to wealthy foreigners. The card will give buyers a "direct path to Citizenship for all qualified and vetted people . . . Our Great American Companies can finally keep their invaluable Talent," Trump wrote on social media on Wednesday. The gold card program, which was first announced earlier this year, promises U.S. residency in "record time" and will require a $1m fee which is "evidence that the individual will substantially benefit the United States", the program's website said.

 

Reuters

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