We’ve been talking about AI changing the world for a long time. But this week I felt different – like it was in the middle of something big.
The stock market fell – three days apart – because of investors and Fears about AI, including Nvidia’s controversial opinion and a viral blog post that envisioned a hypothetical scenario in which white-collar work exploded.
Anthropic has unveiled new tools that can improve how people interact. Then Anthropic got into a big fight over red lines with the Pentagon that risked making the company an AI pariah. At the same time, the company has loosened its security policy as the AI market continues to charge forward.
Then there was Block, which laid off 4,000 people – almost half of its workforce – because of AI. The CEO of this company predicted that other companies were about to do the same.
What a week, really. Here’s how it went.
The Dow fell more than 800 points on Monday, in large part due to a Substack post from Citrini Research that laid out a hypothetical scenario of how advances in AI could affect other economies, including AI agents that make white-collar workers more efficient.
The post, which was published last Sunday, clearly stated that it was not supposed to be speculative. It was a work of fiction.
And yet stocks of companies mentioned in the report — like DoorDash and American Express — fell on Monday.
Tech stocks fell again on Thursday after leading chipmaker Nvidia released its earnings. Although the company’s profit more than doubled in the fourth quarter and sales rose sharply, Wall Street seemed disappointed by its deficit. It has raised AI bubble concerns – that large investments in AI infrastructure may not translate to large returns.
The decline this week showed just how serious online owners are about AI – even if the news is good, if the last day’s situation was made entirely of thin air.
Anthropic plunged into disruption fears earlier this month when it announced an update to its Claude Cowork agent, sparking fears that it could replace many of its software tools.
On Tuesday, Anthropic announced an update to Claude to improve the tool’s performance on specific tasks, such as design, human resources and financial management tasks, and now it can work within tools like Microsoft Excel and PowerPoint.
Anthropic denied that its tools will replace existing software tools and services, noting Claude Cowork is designed for interoperability. But its rapid-fire reforms are giving Wall Street whiplash.
Dario Amodei, the head of Anthropic, went head-to-head with the Pentagon in a high-profile battle over AI security.
Anthropic has set two red lines for its AI: Claude will not be used in autonomous weapons, and it will not be used in mass surveillance of US citizens.
Defense Secretary Pete Hegseth said the Pentagon will use the Defense Production Act to acquire Anthropic technologies regardless of the company’s decision. He met with Amodei on Tuesday, saying that the Pentagon wanted to use the AI model “for all legitimate purposes” and set Friday as the deadline for the company to agree.
Hegseth also threatened to terminate Anthropic’s $200 million contract and may deem the company a “commercial risk,” barring all companies with military contracts from doing business with Anthropic.
Trump escalated the threat on Friday, posting on Social Media that federal agencies should “immediately stop” using Anthropic technology. The president said there will be a “six-month grace period” for organizations using Anthropic products.
“Anthropic better get their act together, and help them out this time, or I will use the Full Power of the President to make them comply, with major government and criminal consequences to follow,” Trump said.
But Anthropic has rejected the Pentagon’s offer.
“Threats do not change our position: we cannot accept their request in good conscience,” Amodei said in a blog post.
Meanwhile, on Wednesday, Anthropic loosened its central security policy to comply with a fast-moving market where competitors may not adhere to the same security standards.
Economists and investors have worried for years that the adoption of AI could lead to mass layoffs.
Those fears appeared to be coming true on Thursday when Block – the company behind Square, Cash App and Afterpay – said it would cut its workforce by 40 per cent. Co-founder Jack Dorsey publicly cited “intelligent tools” as the reason in a letter to shareholders.
The company would lay off more than 4,000 people, reducing its workforce to less than 6,000. And Dorsey said in his letter that “many companies are late” and he thinks “most of the companies will come to the same conclusion.”
This has led to new fears of a jobs apocalypse – which many economists still doubt is coming in abundance. But Dorsey’s prediction of the number of AI-induced layoffs seems closer to reality this week than at any time in history.
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