Morning Scan

The dominant thread today is Anthropic's increasingly strange relationship with the Trump administration — simultaneously being asked to do the impossible and benefiting commercially from the friction. Elsewhere, AI capital keeps flowing in odd directions: Kazakhstan, Cambridge materials science, world models, and a new Qwen-pedigreed lab none of us had heard about last week.

$70B+ — Xiaohongshu's target Hong Kong IPO valuation, up sharply from $50B in recent private secondary trades — and a signal of how much appetite remains for Chinese consumer tech listings outside the mainland. (Wall Street Journal)

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Connected World

The White House Wants Anthropic to Block All Jailbreaks — That May Not Be Possible

Weeks after Trump's frontier AI executive order, the administration has reportedly told Anthropic to eliminate jailbreaks entirely — a technical bar that AI safety researchers consider unsolvable with current architectures. (WIRED)

Anthropic's Latest Feud With the Trump Admin May Actually Help It, Sales Data Suggests

Being cast as the responsible adult in the room is, apparently, good for enterprise sales — the conflict may be functioning as free positioning against OpenAI. (TechCrunch)

A Profile of Anthropic Researcher Nicholas Carlini (paywall)

The researcher who flagged the Mythos jailbreak threat in March is now briefing the White House directly — the human face of a policy standoff that's anything but abstract. (Wall Street Journal)

Anthropic Pauses Token-Based Billing for Its Claude Agent SDK

"Nothing changes for now" is an unusual thing to say when you just reversed an already-announced billing change — suggests the pushback from power users was louder than expected. (Ars Technica)

Connected World

World Models Startup Odyssey Raised $310M From Amazon at a $1.45B Valuation (paywall)

AWS gets a preferred cloud partner, Odyssey gets Trainium chips and a unicorn stamp — the Amazon model of funding its own ecosystem accelerates. (Financial Times)

Jeff Bezos Is Investing in CuspAI as Part of a $400M Round at a $2.6B Valuation (paywall)

Generative AI applied to material sciences is a quieter bet than the usual LLM races, which is partly why a $2.6B valuation for a Cambridge lab is worth attention. (Financial Times)

Kazakhstan Signs $10B Accords With Firebird on Nvidia-Related Computing Projects (paywall)

"Data Center Valley" is ambitious branding for a landlocked Central Asian nation, but the Nvidia connection gives it more credibility than it might otherwise deserve. (Bloomberg)

“Even basic things are so hard to do in an incumbent bank.” — Mercury CEO Immad Akhund, on why big banks can't replicate what Mercury just shipped with its AI money agent. (Sources/Alex Heath)

Connected World

Mercury Put an AI Agent on Your Money

Mercury is positioning its AI-native banking layer as a structural advantage over incumbents — the CEO's confidence here is either well-founded or the kind of thing that ages badly. (Sources)

US Holds Off Blacklisting DeepSeek and 100+ Chinese Firms

The Entity List hasn't been updated since October — the longest gap in over a decade — which tells you something about how scrambled US-China tech policy is right now. (Reuters)

Illinois Governor Signs Budget Taxing Social Media Giants, Digital Ads, and Crypto Markets

The lawsuits are already forming in the wings, but Illinois just handed every other state a policy template to either copy or warn against. (Chicago Sun-Times)

Trump Admin Tries to Block Clean Air Act Lawsuit Over xAI's Gas Turbines

The administration's argument that the military needs Grok for warfighting is the sentence that will live in legal history regardless of how this case resolves. (Ars Technica)

PayPal Plans to Close Its 10-Year-Old Ventures Arm

New CEO Enrique Lores is cutting the parts of PayPal that looked like a big company trying to act like a startup — the question is whether what's left can actually compete. (Fortune)

Connected World

SFPD Launches Drone Pilot Program in SoMa — Drones Arrive Before Cops Do

San Francisco is testing "Drone as First Responder" this fall in SoMa — either a genuinely useful public safety tool or a preview of a dystopian short film, depending on your priors. (SFist)