On Monday, Wall Street was taken by surprise when Treasury Secretary Scott Bessent faced a remarkable critique from none other than Stanley Druckenmiller, a storied figure in hedge fund investing and a mentor to Bessent himself.

Druckenmiller shared his sharp rebuttal in an opinion piece for The Wall Street Journal, where he expressed strong disapproval of Bessent's initiative to intervene in the U.S. bond market by increasing government buybacks to lower yields. It’s important to note that the Journal’s editorial team operates independently of its news coverage.

In his critique, Druckenmiller argued that there was no market dysfunction justifying such intervention, asserting that factors like persistent inflation and soaring federal debt were primarily responsible for rising yields.

What started as astonishment at Druckenmiller’s pointed comments soon shifted to speculation regarding the tools behind his articulation. A number of social media users wondered if artificial intelligence had played a role in crafting the article, especially after analyzing it with AI-detection software.

Later, Druckenmiller confirmed that he did indeed utilize artificial intelligence to aid in developing his thoughts for the article. “I wasn’t exactly an English whiz, more of a B student, but I excelled in economics,” he remarked. “These are my ideas, and I've been discussing them for over 15 years now, as anyone familiar with me would know. Would I like to be a better writer? Absolutely, but that’s not really my forte.”

Druckenmiller’s Unexpected Criticism of Bessent Was Aided by AI

A spacious, wood-paneled office bathed in warm afternoon light. On a polished mahogany desk lies a sleek touchscreen tablet displaying a bold critique letter headed “Druckenmiller,” its serif text overlaid with softly glowing neural-network strands weaving through the words—subtle cues to AI assistance. In the background, the edge of a leather armchair hints at an unseen recipient.

Druckenmiller’s Surprising Critique of Bessent Was Delivered With the Help of AI - WSJ

- Stanley Druckenmiller criticized Treasury Secretary Scott Bessent’s intervention in U.S. bond markets.  
- He argued that high inflation and federal debt drive up bond yields, not dysfunction.  
- Druckenmiller confirmed using AI assistance for the article but maintained the ideas were his own.

Stanley Druckenmiller, in 2024 Michael Nagle / Bloomberg News

Wall Street was stunned Monday when Treasury Secretary Scott Bessent was taken to task by one of his friends and mentors: legendary hedge-fund investor Stanley Druckenmiller.

In an opinion article for The Wall Street Journal, Druckenmiller sharply criticized Bessent’s move to intervene in the U.S. bond market, saying that stepping up government buybacks to bring down yields was a mistake. The Journal’s opinion pages operate independently from the newspaper’s newsroom.

Druckenmiller said there was no dysfunction in the market that would warrant such a move and that high inflation and runaway federal debt were among the forces driving up yields.

Investors’ attention soon shifted from shock at Druckenmiller’s broadside against his mentee to the question of whether he used artificial intelligence to write the piece. Some social-media observers said they thought that was the case after running it through AI- detection programs.

In an interview, Druckenmiller said that he did use AI to help produce the piece.

“I was a B student in English, but an A+ in economics,” he said. “These are my ideas and I’ve been speaking about them for over 15 years, as anyone who knows me knows. Would I prefer that I was a great writer? Yes, but that’s not who I am.”

Druckenmiller’s Surprising Critique of Bessent Was Delivered With the Help of AI

The governor of the Reserve Bank has expressed concerns that the rise of artificial intelligence (AI) might be akin to a bubble, noting the lack of evidence to support claims made by the Albanese government that the technology will rejuvenate Australia’s economy. With an anticipated interest rate hike looming next week, Michele Bullock pointed out that the decline in housing prices is more significant than in many of Australia’s recent economic downturns.

As markets grapple with rising oil prices and inflation, US tech shares rallied on Monday, bolstered by Meta’s launch of its new Muse AI agent, which saw its stock jump by 11%. While speaking at a CEDA event in Sydney, Bullock noted the potential negative impacts of a significant decline in tech stock values on overall economic activity. “All central banks are a little bit worried about that,” she remarked, suggesting a cautious stance toward the tech sector.

Bullock acknowledged that perspectives on AI's potential vary, stating, “Some people think it’s a bubble, some people don’t.” However, she indicated that the Reserve Bank of Australia (RBA) and other international bodies had yet to witness the economic efficiency promised by AI, with investment in data centers and rapid adoption inadvertently contributing to inflationary pressures. Notably, research from South Korea indicated that employees engaged with AI often achieved the same output while working 1.5 hours less each week, highlighting a temporary productivity decline during the adjustment phase. “While people fiddle around and try and figure out what to do with this new technology, productivity actually can decline,” she said, adding that only when businesses rethink their processes will they truly harness AI’s potential for productivity gains.

The Australian government's upcoming intergenerational report aligns with the notion that AI holds the promise of significant economic growth. It forecasts that adjusted per-capita economic activity could soar from $99,200 today to $157,300 by the year 2066, a transformation that the treasurer, Jim Chalmers, described as “the most transformative thing that will happen in our lifetime.” However, economists have cautioned about the feasibility of these projections, questioning the assumption of a return to a 1.2% annual productivity increase. If productivity instead rises by only 0.8%, per-person economic activity would reach a mere $136,600 by 2066. Bullock acknowledged skepticism surrounding these projections, framing them as ambitious goals for the future.

When discussing Australia’s current immigration policies amid a slowing housing market, Bullock attributed much of the country’s recent economic growth to immigration. She emphasized that new arrivals typically contribute positively by working and spending, although their influx has not yet translated into increased housing supply, thereby exacerbating the housing crisis. “Where it bites is the housing market, because the housing market can’t respond,” she explained.

In a contrasting stance, One Nation has proposed a plan to reduce the number of migrants over the next three years, aiming to cut the number of temporary migrants by over 750,000. The Labor government, however, intends to tighten immigration limits, which Home Affairs Minister Tony Burke stated would help alleviate the housing crisis, cautioning that severe cuts could harm the economy.

Recent data revealed a 3.1% decrease in house prices over the past three months, a decline attributed to three recent RBA interest rate hikes and adjustments to tax incentives for property investors. Bullock indicated that home loan approvals have significantly decreased, particularly for investors, thereby altering the dynamics of housing investment. She remarked that housing had grown "pretty unaffordable" prior to this downturn, describing it as merely a small decrease after a prolonged increase in prices. The current market correction, she noted, is within historical norms. Though Bullock refrained from confirming a future interest rate hike, market speculation suggests a strong likelihood of an increase from 4.35% to 4.6%, which would represent a 14-year high.

Michele Bullock states that AI may be a bubble and isn't currently boosting productivity in Australia.

A moody twilight scene over a parched Australian farmland: a colossal, translucent bubble imprinted with “AI” hovers precariously above cracked earth and idle tractors. In the foreground a weathered fence post bears a single Australian flag, its fabric fluttering in the dusk breeze. Long shadows stretch across the field under a dim, burnt-orange sky, suggesting promise deflated and productivity stalled.

AI could be a bubble and is not yet making Australia more productive, Michele Bullock says - theguardian.com

- RBA Governor Bullock warns AI may be a bubble with no economic efficiency evidence.  
- House prices have dropped significantly, influenced by rising interest rates and investor dynamics.  
- Immigration is credited for growth but exacerbates the housing crisis without new supply.  

The Reserve Bank governor said AI could be a bubble and there was no evidence it is making the economy more efficient, as the Albanese government claims the technology will solve Australia’s economic malaise.

Ahead of an expected interest rate rise next week, Michele Bullock also said the slump in house prices was deeper than others in Australia’s recent history.

Resurgent oil prices and inflation are weighing on markets but US tech stocks surged on Monday after Facebook owner Meta debuted its new Muse AI agent and saw its shares rise 11%.

Bullock said a messy slump in tech values could hurt economic activity, speaking at a CEDA event in Sydney.

“All central banks are a little bit worried about that,” Bullock said.

“Some people think it’s a bubble, some people don’t. I don’t have a particular view one way or the other, but it’s a risk that I think we’re watching.”

Bullock said the RBA and its overseas colleagues believed AI was “the great white hope” to make economies more productive but had seen little sign of any effect yet, with rapid adoption and investment in datacentres adding to inflation instead.

She cited research from the RBA’s South Korean counterpart that found employees adopting AI tended to produce the same output but work 1.5 hours less each week.

“[While] people fiddle around and try and figure out what to do with this new technology, productivity actually can decline,” Bullock said. “But once we reimagine our business processes… then you might see productivity take off.”

The Australian government’s intergenerational report, released on Tuesday, relied on the potential “profound” boost from AI in its projection that Australians’ inflation-adjusted per-person economic activity would rise from $99,200 today to $157,300 by 2066.

The treasurer, Jim Chalmers, told the Guardian’s Australian Politics podcast: “It’s the most transformative thing that will happen in our lifetime.”

The report assumed productivity would return to its long run level of improving by 1.2% a year, which economists have said appears unlikely. If productivity only rose by 0.8%, per-person activity would only hit $136,600 by 2066.

Bullock said on Tuesday: “Many have put it, ‘well, it’s an unrealistic assumption, we’re not going to get that.’ I guess the way I’m trying to think about it is, ‘OK, that’s what we’ve got to aim at.”

Housing downturn

As the government defends Australia’s easing rate of immigration, Bullock said immigration was almost entirely responsible for Australia’s economic growth in the last year.

Bullock said new arrivals did not add to inflation as they typically worked as well as spending money. She said the exception was the housing market, as new immigrants did not immediately generate new housing supply.

“Where it bites is the housing market, because the housing market can’t respond,” she said.

One Nation has called for more migrants to leave Australia than arrive over three years, including reducing the number of temporary migrants by more than 750,000.

Labor has instead planned to tighten the existing immigration intake, which home affairs minister Tony Burke said would be “part of the solution for the housing crisis” – but Burke warned more severe cuts could “trash the economy”.

House prices have fallen 3.1% over the past three months after the RBA lifted interest rates three times and the government reformed property investor tax breaks. Bullock said home loan approvals had slumped, in her most explicit public comments on the budget to date.

“They’ve dropped for everyone but they’ve really dropped a long way for investors, so it has changed the dynamic for investors, whether it’s worth investing in housing or not,” she said.

Bullock said housing had become “pretty unaffordable” before the decline, which she described as “a slight dip down after a very long run up”.

“The downturn is sort of in the lower range … but it’s certainly not out of the ballpark of the sorts of downturns we’ve seen in the past,” she said.

She declined to say whether she would recommend an interest rate increase next Tuesday. Traders are betting on more than a 90% chance rates will rise from 4.35% to 4.6%, which would be a 14-year high.

AI could be a bubble and is not yet making Australia more productive, Michele Bullock says

Meta Platforms' shares have seen an uptick in early premarket trading as investor enthusiasm grows around the company's approach to monetizing artificial intelligence. The stock experienced a significant surge of 11.3% on Monday, marking its strongest performance since April 2025 and reaching its highest closing rate in almost 11 months. Additionally, the stock is up another 0.4% on Tuesday.

Meta stock continues to rise as optimism around AI grows

A bustling trading floor bathed in warm golden morning light, giant screens displaying Meta’s soaring stock chart with a bold Meta logo on a sleek glass tower visible through floor-to-ceiling windows. In the foreground, suited analysts raise celebratory toasts as glowing AI neural-network nodes float overhead like constellations, symbolizing optimism and growth.

Meta shares extend rally as AI optimism builds - MarketWatch

- Meta Platforms shares rose 11.3% on Monday, their best increase since April 2025.  
- The stock reached its highest close in nearly 11 months amid investor optimism.  
- Additional gains of 0.4% were seen on Tuesday as interest in AI grew.  

Shares of Meta Platforms are higher in early premarket action as investors continue to warm to the Facebook owner's AI monetisation strategy.

The stock jumped 11.3% on Monday, its best day since April 2025, delivering the highest close in nearly 11 months. It's adding another 0.4% Tuesday.

Meta shares extend rally as AI optimism builds

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Outcry over increasing utility costs due to Ohio's surge in AI data centers

A dark, stormy night scene in rural Ohio: looming data center buildings with ominous red warning lights on their rooftops sit behind a tangle of overloaded power lines. In the foreground, two adult residents clutch crumpled, glowing utility bills—one slams it down on a worn wooden porch railing, the other glares at the flickering streetlamp. A torn Ohio state flag flutters beside a rusted transformer sparking with blue-white electricity. Heavy clouds swirl overhead, casting deep shadows and a sense of rising tension.

Ohio AI data center boom sparks outrage over rising utility bills - Fox News

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Ohio AI data center boom sparks outrage over rising utility bills

Rochester, N.Y. (WHAM) — In response to the swift advancements in artificial intelligence, officials in New York are taking steps to establish new regulations that align with the changing landscape of this technology.

Beginning in November, major AI companies will be mandated to register with the state and must report specific safety incidents within 72 hours, as dictated by the RAISE (Responsible AI Safety and Education) Act, which was signed into law by Governor Kathy Hochul in December 2025.

"While we have learned to harness the benefits of AI, we cannot ignore the risk it poses for severe repercussions," Hochul stated at a news conference on Monday.

As the enforcement of this law approaches, a local cybersecurity professional highlighted the importance of ensuring that the regulations are capable of adapting as swiftly as AI technology evolves.

"The intriguing aspect as we navigate the coming weeks, months, and years is whether the act will possess sufficient adaptability to change when necessary," remarked Paul Robinson, a cybersecurity consultant at Tempus Network.

Robinson described the legislation as a promising foundation, noting that further adjustments may be required as AI continues to develop.

"I believe this is a strong initial step," he commented. "Action is essential at this juncture. Is it complete? Not quite, given how rapidly AI is progressing."

Residents in New York have showcased mixed opinions regarding the increasing integration of AI into daily life. 

"It’s natural for people to adapt and learn as the world evolves," said Colin Mrocazko, a student from Rochester. "I tend to believe new technologies are usually beneficial, and while I could be mistaken, I see it as advantageous in the long term."

Conversely, some individuals feel that the pace of technological advancement outstrips society's ability to evaluate its long-term implications. 

"We haven’t had sufficient time to contemplate whether this is the direction we want to take, and what the lasting effects might be," expressed Ella Zack, a resident of Rochester.

As state officials explore further protective measures, Robinson emphasized the distinct challenge AI poses for lawmakers, noting that regulations may need to keep pace with technological advancements.

"This isn’t traditional legislation that remains unchanged indefinitely," Robinson explained. "It’s about ensuring the law can evolve in tandem with advancements in AI."

State Senator Jeremy Cooney was the only senator to vote against an earlier iteration of the RAISE Act in June 2025. His office indicated that he later supported the refined version that the governor eventually enacted.

"The senator recognizes the critical nature of crafting smart, responsible regulations for AI," a spokesperson for Cooney stated. "While he continues to advocate for comprehensive regulations to be set forth by Congress, he backed the revised RAISE Act and voted in favor of the agreement that the governor is now implementing statewide."

A spokesperson for Bruce Blakeman, Hochul's opponent in the gubernatorial race, did not respond when asked for a comment.

New York strengthens AI regulations in response to fast-changing technology.

Moody dusk over the Manhattan skyline, a giant wooden gavel embossed with circuit patterns slamming down on swirling chains of glowing binary code that coil around skyscrapers, a single New York state flag fluttering beside a neoclassical Capitol façade bathed in warm streetlamp glow, dark thematic atmosphere.

New York rolls out new AI regulations as technology rapidly evolves - 13wham.com

- Starting November, large AI developers must register and report incidents under new regulations.  
- Governor Hochul emphasizes the need for flexibility in evolving AI regulations over time.  
- Public opinion on AI's growth is divided between potential benefits and concerns about consequences.  

Rochester, N.Y. (WHAM) — Amid rapid growth in artificial intelligence, New York officials are moving forward with new regulations aimed at keeping pace with the evolving technology.

Starting in November, large AI developers will be required to register with the state and report certain safety incidents within 72 hours under the RAISE (Responsible AI Safety and Education) Act, which Gov. Kathy Hochul signed in December 2025.

"We have seen how to harness the good, but cannot turn a blind eye to the potential for catastrophic impacts," Hochul said during a news conference Monday.

As the state moves to implement the law, one local cybersecurity expert said the challenge will be ensuring regulations can evolve as quickly as the technology.

"The interesting thing as we move along through the weeks and the months and the years with this is: Is there going to be enough flexibility in the act to pivot when we need to pivot?" said Paul Robinson, a cybersecurity consultant with Tempus Network.

MORE: Former Google employee & nonprofit co-founder adds to growing calls to slow down AI | Trump announces he is forming 'AI Force,' will name 'AI czar' soon

Robinson called the law a strong starting point but said additional changes could be needed as AI continues to advance.

"I think it's a fantastic start," he said. "You have to do something at this point. Is it where it needs to be? No, because AI is moving so rapidly."

New Yorkers who spoke with 13WHAM also expressed differing views about AI's growing role in everyday life.

"People adapt and they learn things, and the world always changes, right?" Rochester student Colin Mrocazko said. "I think new technology usually helps. So I may be wrong, but I think it's beneficial in the long run."

Others said the technology is advancing faster than people have had time to consider its potential consequences.

"We haven't really had the time to think about if this is something that we want, and what are the long-term effects?" Rochester resident Ella Zack said.

As state officials consider additional safeguards, Robinson said AI presents a unique challenge for lawmakers because regulations may need to change alongside the technology.

"This isn't your classic legislation where it's like, 'This is law, this is the way it's going to go till, you know, forever,'" Robinson said. "It's making sure that there is flexibility in the law to kind of evolve with AI as AI continues to evolve alongside with it."

State Sen. Jeremy Cooney was the lone "no" vote when the Senate passed an earlier version of the RAISE Act in June 2025. His office said he later supported the negotiated version that Hochul signed into law.

"The senator recognizes the importance of implementing smart, responsible legislation to regulate AI," a spokesperson for Cooney said. "While he continues to believe these kinds of regulations should be systematized by Congress, he supported the updated RAISE Act and voted in favor of the negotiated agreement that the governor is now implementing throughout the state."

A representative for Bruce Blakeman, Hochul's opponent in the governor's race, did not respond to a request for comment.

New York tightens AI regulations as technology rapidly evolves

During a recent event in Hangzhou, Alibaba Group's CEO Eddie Wu announced ambitious plans for the development of a new artificial intelligence model, aimed at reaching between 5 trillion and 10 trillion parameters. This initiative was part of a broader strategy that encompasses AI model development, semiconductor innovation, and the expansion of data center infrastructure.

At the Alibaba Cloud Apsara Conference, Wu emphasized that the Qwen research team is making strides in refining model architecture and optimizing data, with an eye towards tackling more complex tasks and pushing towards artificial superintelligence (ASI). 

In a noteworthy update, Alibaba revealed that its forthcoming Qwen 4 model is currently in training, with the Qwen 4.5 and Qwen 5 series expected to scale up to the proposed 5 to 10 trillion parameters. For context, the existing flagship version, Qwen 3.8 Max, features 2.4 trillion parameters, which means the new models could be two to four times larger.

Wu highlighted the advanced capabilities of the M890 AI supernode, which already performs inference tasks for models exceeding 2 trillion parameters, a feat achieved by only a select few companies globally. 

Additionally, Alibaba unveiled its Zhenwu V900 AI chip, a cutting-edge product from its T-Head semiconductor division, which Wu proclaimed as the most powerful AI chip in China. It boasts three times the performance of its predecessor, the M890, and a single cluster can support up to 500,000 cards for training and inference of advanced models. The mass production and commercial launch of the Zhenwu V900 are slated for the first quarter of 2027.

The announcement comes amid a race among Chinese companies to develop domestic alternatives to Nvidia's GPUs due to U.S. export restrictions. Wu also set an ambitious goal for Alibaba Cloud to expand its global data center capacity to over 20 gigawatts by 2032. Although he noted strong customer demand for AI, Wu acknowledged that global supply chain shortages are hindering quicker growth.

Wu characterized this moment as the beginning of a new "Machine Intelligence" era, similar to the significance of the Industrial Revolution. He forecasts that machines will ultimately achieve over 1,000 times the cognitive capacity of humanity, up from less than 3% today. He likened AI software development to early electrical inventions, suggesting that while significant advancements are underway, the truly transformative products of the Machine Intelligence era are yet to be realized.

Alibaba announces AI model featuring 5 to 10 trillion parameters and introduces a new chip.

A bright, sunlit AI research lab: on a sleek white pedestal rests a massive golden chip etched with the Alibaba logo. From its surface burst thousands of glowing, amber data streams arcing upward into a complex neural lattice, each strand hinting at “5T–10T parameters.” A senior engineer in a crisp suit studies the chip through the soft, natural light streaming in from floor-to-ceiling windows.

Alibaba plans AI model with 5 trillion to 10 trillion parameters, unveils new chip - Reuters

- Alibaba plans to train AI models with 5-10 trillion parameters for advanced tasks.  
- The Zhenwu V900 chip, three times more powerful, supports extensive AI model training.  
- Alibaba aims for a 20GW data center capacity by 2032 amidst growing AI demand.

Item 1 of 2 Qwen and Alibaba logos are seen in this illustration taken, January 29, 2025. REUTERS/Dado Ruvic/Illustration/File Photo

Summary

Companies Alibaba plans 5-10 trillion parameter model

New Zhenwu V900 AI chip unveiled

Data centre capacity targeting 20GW

BEIJING, Sept 22 (Reuters) - Alibaba Group (9988.HK) , opens new tab plans to train a new artificial intelligence model with between 5 ​trillion and 10 trillion parameters, Chief Executive Eddie Wu said on Tuesday, as the Chinese technology giant ‌outlined a sweeping strategy encompassing AI models, chips and data centres.

Speaking at Alibaba Cloud's annual Apsara Conference in Hangzhou, Wu said the company's Qwen team was continuing research into model architecture and data optimisation, with the goal of completing "more complex, longer-horizon tasks" and advancing toward artificial superintelligence, or ​ASI.

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In a separate statement, Alibaba said its next-generation model, Qwen 4, was currently in training, adding that the ​upcoming Qwen 4.5 and Qwen 5 series were projected to scale up to 5 trillion to ⁠10 trillion parameters.

Parameters are the variables a model learns during training and are a rough gauge of its size.

Alibaba's current ​flagship model, Qwen 3.8 Max, has 2.4 trillion parameters, meaning the planned model would be roughly two to four times larger.

Wu said ​Alibaba's proprietary M890 AI supernode already handles inference for models above 2 trillion parameters, a capability he said only "a handful of companies globally" possess.

The Qwen team has made "meaningful progress" on recursive self-improvement, in which models identify their own limitations, design experiments and synthesise data to drive a ​cycle of self-evolution, he said.

Alibaba also introduced the Zhenwu V900, a next-generation AI chip from its T-Head semiconductor unit, which Wu ​called the most powerful AI chip in China.

It delivers three times the performance of its predecessor, the M890 , and a single cluster built on ‌it can ⁠support up to 500,000 cards for frontier model training and inference, he said.

The chip is scheduled for mass production and commercial release in the first quarter of 2027, the company said in the statement. The M890 was released in May.

The company expects "significant growth" in annual AI chip shipments, Wu said.

The launch comes as Chinese firms race to build domestic alternatives to Nvidia's processors ​amid U.S. export restrictions.

Wu set ​a target for Alibaba ⁠Cloud's global data centre capacity to surpass 20 gigawatts by 2032. He said customer demand for AI remained "exceptionally robust" and was accelerating Alibaba Cloud's revenue growth, but acknowledged that global shortages across ​the AI data centre supply chain were limiting how fast the company could expand.

"The industry's ​mid-to-long-term demand far ⁠outpaces our supply capabilities," he said, adding that Alibaba Cloud would begin bringing its AI supernodes online at commercial scale this quarter.

Wu framed the moment as the dawn of an era of "Machine Intelligence" comparable to the Industrial Revolution, predicting machines would eventually produce more ⁠than ​1,000 times the "thinking" of all humanity, up from less than 3% today.

He likened ​AI coding to the light bulb of the electrical age - an early application rather than the breakthrough product.

"The truly groundbreaking products of the Machine Intelligence era ​have not yet arrived," he said.

Reporting by Liam Mo and Eduardo Baptista; Editing by Jacqueline Wong, Kim Coghill and Thomas Derpinghaus

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Alibaba plans AI model with 5 trillion to 10 trillion parameters, unveils new chip

OpenAI has voiced its desire for the United States to spearhead an international initiative aimed at establishing standards for artificial intelligence, coinciding with a significant week of talks on AI safety between Chinese and American representatives. However, the question remains: can the U.S. gain Beijing's trust to set these global standards?

In a blog post released on Monday, OpenAI urged the U.S. government to engage with existing AI safety organizations such as the Center for AI Standards and Innovation (CAISI) and collaborate with global partners to formulate technical standards for advanced AI, particularly in the area of recursive self-improvement (RSI). Although fully automated RSI does not yet exist, OpenAI emphasizes that, if approached securely, it is a goal worth pursuing.

The organization noted that the standards created from this initiative would offer a shared technical framework for measuring capabilities and evaluating risks, as well as ensuring adequate safety measures. OpenAI clarified that these would not serve as mandatory licenses or pre-release approvals for AI models; instead, it would be up to each nation to determine how to integrate these standards into their legal frameworks.

CAISI, which falls under the Commerce Department, has been utilized by the previous Trump administration for testing new AI models. It collaborates with various organizations from nine other countries as part of the International Network for Advanced AI Measurement, Evaluation, and Science. This coalition could help mitigate the uneven distribution of AI expertise and address the fragmented and sometimes conflicting perspectives on AI safety across nations.

OpenAI contends that the United States is ideally suited to lead this effort due to its advanced AI industry and its influential role in critical domains like finance, trade, defense, and technology. They argue that geopolitical competition will hinge not only on technical prowess but also on the adoption and dissemination of AI, which may increasingly be influenced by those promoting effective international cooperation and realistic governance frameworks.

Essentially, OpenAI's position suggests that if the U.S. can take the reins in developing a global AI safety framework, it would not only strengthen its own position in AI adoption but also ensure it remains competitive against China in the burgeoning AI landscape.

This is a strategic push, especially considering the concerns among American legislators regarding maintaining the edge of the U.S. AI industry over its Chinese counterparts. Earlier in the month, Anthropic CEO Dario Amodei had previously expressed alarms about the rapid pace of AI development in an essay that called for governmental intervention to mitigate potential catastrophic outcomes. OpenAI’s CEO, Sam Altman, supported Amodei's call for caution, and company executives engaged with lawmakers in Washington to advocate for proposed legislation aimed at establishing federal safety frameworks and new auditing mechanisms for AI technologies.

However, any suggestion of a government-imposed slowdown on AI innovation met with strong opposition from critics, including Trump, who warned that a deceleration in the U.S. would allow China to forge ahead, potentially creating an imbalance in global AI capabilities that could jeopardize U.S. security interests. This concern implies that any effective globally coordinated slowdown might necessitate cooperation with Beijing to gain acceptance among U.S. policymakers.

While it appears unlikely that China would agree to a global framework dominated by U.S. standards, the Chinese government has expressed its commitment to international collaboration on AI—a collaboration it prefers to shape according to its own interests. Chinese President Xi Jinping emphasized the need for collective action, stating that AI development should not be led solely by one nation but should truly embody a collaborative international effort. This sentiment was echoed at the recent World AI Conference in Shanghai, where China announced the creation of the World Artificial Intelligence Cooperation Organization, comprising 29 member countries including major economies such as Brazil and Russia.

As discussions get underway ahead of this week's meetings, U.S. Treasury Secretary Scott Bessent mentioned that American officials suggested implementing a notification system allowing both nations to alert one another about AI incidents that could threaten national security. A meeting between Xi and Trump is scheduled for later this week to further address AI safety.

OpenAI is expected to play a significant role in these discussions; CEO Sam Altman is set to speak at the UN Security Council—a body that includes both China and the U.S.—on Wednesday before attending a state dinner pertaining to U.S.-China relations on Thursday.

Even if China can be persuaded to allow the U.S. to lead in setting global AI standards, it remains uncertain whether other nations will welcome this arrangement, especially given the current geopolitical climate that has seen the Trump administration strain relations with longstanding allies through a confrontational trade policy.

OpenAI Urges US to Set Global AI Standards; Will China Accept This?

A dimly lit conference room in a moody, film-noir palette, a long polished table holding a glowing binder titled “Global AI Standards” with “OpenAI” text on its cover (no logo). Behind the head chair stands a U.S. flag. At the opposite end, a lone, shadowy figure backlit in faint red tint leans forward, studying the binder—China’s silent response looming in silhouette.

OpenAI Calls for US to Lead Global AI Standards. Will China Be Okay With That? - gizmodo.com

- OpenAI urges the US to lead global AI standards development amid US-China talks.  
- The proposed standards aim to unify AI risk assessment and evaluation processes globally.  
- China's acceptance of US-led AI standards remains uncertain, impacting international cooperation efforts.

OpenAI just said it wants Washington to lead a global effort to establish AI standards, as a consequential week of diplomatic discussions on AI safety coordination between Chinese and American officials begins. But would Beijing be happy to trust the US to define global standards?

In a blog post published on Monday, OpenAI called on the US government to utilize existing AI safety organizations like the Center for AI Standards and Innovation (CAISI) and work with other countries to “develop global technical standards for frontier AI, including for RSI,” which stands for recursive self-improvement, aka when the process of new model development becomes automated by AI. Fully automated RSI does not yet exist, OpenAI says in the blog post, but if developed safely, should be something to strive towards.

“Standards developed by this effort would provide a common technical foundation for capability measurement and evaluation, risk assessment, and safeguard sufficiency,” OpenAI said in the post. “These technical standards would not be licenses, mandatory pre-release review, or approval requirements for AI models. National governments would decide whether and how to incorporate these standards into their own legal systems.”

CAISI, under the Commerce Department, is the government body the Trump administration uses to test new models. Along with organizations from nine other governments, CAISI is part of the International Network for Advanced AI Measurement, Evaluation and Science, a coalition that could be built upon to address uneven distribution of AI expertise and the currently fragmented and potentially conflicting understandings of AI safety across the world, according to OpenAI.

“The United States is well positioned to lead because its AI industry is at the technical frontier, and it still stands in a privileged global network position in critical areas such as finance, trade, defense, technology, and information systems,” OpenAI argued. “Geopolitical competition will not just be about who is ahead technically, but also over AI adoption and diffusion. Increasingly, the latter may be determined by whoever is driving realistic cooperation and sensible rules of the road that businesses and societies everywhere will want if they are going to bet their futures on this technology.”

To help decode that a bit: OpenAI is basically arguing that if the United States were to lead the formation of a global AI safety framework, that will also help the country secure a favorable place in global AI adoption, which could help ensure that the U.S. wins the AI race against China.

That seems to be OpenAI’s primary argument to get Washington on board with the plan, seeing how concerned American politicians and the Trump administration specifically have been about maintaining the American AI industry’s competitive edge over its Chinese counterparts.

Earlier this month, Anthropic CEO Dario Amodei published an essay calling on the government to intervene and slow the pace of AI development, warning of catastrophic scenarios if AI development should continue at its current pace. OpenAI CEO Sam Altman agreed with Amodeiâs essay, and OpenAI executives descended on Washington to meet with lawmakers on the issue. The company ultimately threw its support behind two bills that would establish federal AI safety frameworks and create new mechanisms for audits.

But the prospect of a government-backed slowdown drew fierce backlash from critics, including President Trump, who argued that if the U.S. slowed down, China could continue racing ahead and develop AI capabilities beyond those of American companies. China hawks in Washington fear that such an advantage could pose serious risks to U.S. interests, making some form of globally coordinated slowdown involving Beijing a prerequisite for the idea to gain serious traction with the U.S. government.

Though China may be unlikely to accept a global framework built around U.S. rules, Beijing has long advocated for international cooperation on AIâalbeit largely on its own terms.

âAI development should not be a solo performance by a single country, but a symphony of international cooperation,” Chinese President Xi Jinping said at the World AI Conference in Shanghai this summer, where the country announced the formation of the World Artificial Intelligence Cooperation Organization, with 29 member nations that include large economies like Brazil and Russia.

Chinese and American officials began discussing the issue ahead of this week’s meetings, with Treasury Secretary Scott Bessent saying U.S. officials proposed an emergency notification mechanism that would allow the two countries to alert each other to AI incidents that could pose national security threats. Xi and Trump are set to meet Thursday to discuss AI safety.

OpenAI is bound to have a large presence in those talks; CEO Sam Altman will address the UN Security Council, which seats both China and the US, on Wednesday and will later join the US-China state dinner on Thursday.

Even if China can be persuaded to let the United States take the lead in setting global AI standards, it remains unclear whether other governments would embrace that arrangementâparticularly at a time when the Trump administration has alienated longtime allies with its confrontational approach to trade.

OpenAI Calls for US to Lead Global AI Standards. Will China Be Okay With That?

Mark Zuckerberg, the founder and CEO of Meta, has aggressively promoted the privacy and security features of its newly launched AI assistant, Muse, asserting that it is “built from the ground up for privacy and security.” However, recent revelations surrounding a critical zero-day vulnerability raise significant concerns about its security. Additionally, Amazon has taken the unusual step of blocking Muse from its platform.

Launched just a few weeks back, Muse is marketed as an intelligent assistant capable of managing appointments, completing forms, and assisting with customer service functions. It aims to take proactive control of everyday tasks, enabling users to make purchases, generate images, draft documents, and link with their favorite applications and services seamlessly. Although currently available only as a macOS application—despite the absence of a Windows version—it integrates with users’ WhatsApp, email, calendar, and social media accounts. Notably, Muse possesses the capability to create tools on-the-fly for tasks where no existing solution is available.

Despite these ambitious claims, using Muse requires users to grant it access to a variety of accounts and services. This includes authenticating Muse with specific platforms, and since it operates on macOS, users must permit access to numerous system resources, such as file storage, microphone, camera, location services, and calendar data. These permissions are crucial, considering Apple’s stringent measures designed to safeguard these resources against unauthorized access, as they are deemed serious security risks. Unfortunately, Muse’s architecture undermines these critical protections.

The identified zero-day vulnerability allows any locally running application or terminal command unrestricted access to the token that authenticates users with Muse. Meta’s developers have configured the assistant so that any app or code executed on the macOS can manipulate a range of undocumented settings. While many of these settings are relatively benign (like adjusting dark mode), there’s one concerning option that permits changes to the endpoint for transcription services. Under normal circumstances, this endpoint is a server operated by Meta. If exploited, attackers can redirect this to their own server, gaining complete control over the Muse account by acquiring the authentication token.

Meta's highly privileged AI assistant, Muse, faces a critical 0-day vulnerability.

A dimly lit server room bathed in deep shadows. At its center, a tall rack bearing a single, large Meta logo glows ominously in red. Nearby, a console screen flickers with scrolling lines of code, the phrase “0-day exploit” blazing in blood-red letters. A shattered digital padlock icon lies cracked on the metal console, loose cables sparking. Sporadic red alarm lights cast dramatic, high-contrast shadows, heightening the sense of breach and imminent threat.

Muse, Meta’s extraordinarily privileged AI assistant, has a serious 0-day - Ars Technica

- Meta's AI assistant Muse faces security concerns due to a serious zero-day vulnerability.  
- Amazon has begun blocking access to Muse over these emerging security issues.  
- Muse requires extensive permissions, potentially compromising user privacy and device security.

Meta founder and CEO Mark Zuckerberg has gone to great lengths to hype the security of its new AI assistant Muse, claiming it is “built from the ground up for privacy and security.” A zero-day vulnerability that gives locally run apps and terminal commands complete control of the agent raises serious doubts. Further raising questions, Amazon on Sunday began blocking Muse from its site.

Meta introduced Muse a few weeks ago. The assistant “books appointments, fills out forms and handles customer service,” “proactively takes tasks off your plate,” and can “make purchases, generate images, create documents, and connect with your favorite apps and services.” The macOS app (curiously, there’s no Windows version) also works with a user’s WhatsApp, email, calendar, and social media accounts. When a task requires a tool that doesn’t exist, Muse creates one on the fly.

Meta doth hype Muse security too much

Of course, for Muse to do any of these things, users must first give it access to their accounts. This includes authenticating the assistant to each service and, because the app runs on macOS, giving it permissions to a broad range of operating system-restricted device resources like writing files to disk, accessing the mic and camera, and monitoring location and calendars. Apple has spent years developing these defenses to prevent installed apps or commands entered into the terminal from accessing these resources, clearly because the company considers them a security threat. Muse completely undoes these default measures.

The zero-day allows any app or terminal command to gain access to the token that authenticates users to their Muse account. Meta developers designed the assistant so that any locally installed app or executed code, regardless of the macOS permissions it has, can change a long list of undocumented settings. Most of them are fairly innocuous, such as controlling dark mode. One setting, however, is anything but innocuous. It allows processes to change the endpoint where transcription occurs. Normally, it’s a server address operated by Meta. Attackers can exploit this flaw by changing the location to their own endpoint. Once that happens, the attackers have the token that gives complete control over the Muse account.

Muse, Meta’s extraordinarily privileged AI assistant, has a serious 0-day

As leaders from a multitude of nations, including U.S. President Donald Trump, prepare to gather in New York for the world’s premier annual diplomatic event, we bring you an update from the United Nations General Assembly (UNGA) during its high-level week. Our team is stationed at the U.N. headquarters in Turtle Bay, equipped to cover a week filled with crucial discussions and impactful meetings.

This year, the focus will be on how the U.S. interacts with this significant gathering. President Trump is expected to deliver a speech on Tuesday morning, after a prior address where he expressed robust criticisms of the U.N. In a move to reaffirm its financial commitment, the U.S. recently paid over $800 million in overdue dues, which includes peacekeeping contributions. However, the nation still owes over $3 billion related to both the regular budget and peacekeeping operations.

Despite a backdrop of U.S. withdrawals from various U.N. initiatives and calls to reduce the U.N.’s budget – a historic first for the organization – a senior U.S. official emphasized a desire for a more focused approach, aiming to refine the U.N.'s priorities around peace and security.

U.S. Ambassador to the U.N., Mike Waltz, highlighted the unique diplomatic potential at UNGA, where a diverse array of global leaders, including presidents, prime ministers, and business executives, converge. Trump's itinerary includes meetings with new U.K. Prime Minister Andy Burnham, Japan's Prime Minister Sanae Takaichi, and acting Venezuelan President Delcy Rodríguez, and discussions with Gulf Council leaders centered on resolving tensions with Iran.

A noteworthy aspect of this year's UNGA is the impending transition in the U.N. leadership, as Secretary-General António Guterres prepares to step down after his tenure began in 2017. The field of seven candidates vying to succeed him includes Rebeca Grynspan, the Secretary-General of the U.N. Conference on Trade and Development, who has emerged as the front-runner.

Artificial intelligence (AI) is also expected to garner significant attention at this gathering. Recent concerns about the rapid development of AI technologies have intensified, prompting calls for a pause in advancement until a global governance framework is established. Guterres stressed the importance of international collaboration on AI safety during his last press conference before UNGA. The responses from the U.S. and China, who play vital roles in AI development, will be particularly scrutinized, especially with Trump scheduled to meet with Chinese President Xi Jinping shortly after UNGA.

During conversations at a recent "Digital Cooperation Day," U.N. Undersecretary-General Amandeep Singh Gill indicated that both the U.S. and China have the capacity to influence global AI governance, while also emphasizing that other nations must not await their actions.

In other notable news, American actor Joseph Gordon-Levitt, recently appointed as a U.N. global advocate, shared insights about the societal impact of digital governance at the U.N. and stressed that technology must prioritize human-centric principles.

Looking ahead to tomorrow, the UNGA's opening debate will kick off at 9 a.m. ET, featuring addresses from prominent leaders such as Brazilian President Luiz Inácio Lula da Silva, Trump, King Abdullah II of Jordan, and several others from across the globe. 

In addition to our coverage, Foreign Policy is hosting various events, including discussions on energy and AI, featuring distinguished speakers from various sectors.

In terms of public perception, a recent Pew Research Center survey indicates that more than half of respondents from 37 countries view the U.N. favorably, with the highest ratings in Sweden, Indonesia, and Kenya, while Israel displays significant skepticism with nearly 80% of responses being negative towards the U.N.

Your Guide to the 2026 UNGA

A sunlit editorial desk overlooking the United Nations Headquarters in New York: an open guidebook titled “2026 UNGA Primer” next to a world atlas, a steaming coffee mug, and a fountain pen poised for notes. A September 2026 calendar page is flipped to the UN emblem, and through the window you see the General Assembly building with the UN flag waving gently in natural daylight.

Your 2026 UNGA Primer - Foreign Policy

- President Trump addresses UNGA amid heightened debates on U.S. contributions and leadership changes.  
- U.N. Secretary-General António Guterres will step down, with seven candidates vying for succession.  
- AI governance discussions intensify as U.S.-China relations shape global technology cooperation dialogues.  

Here’s what we’ll be watching as leaders from dozens of countries—including, of course, U.S. President Donald Trump—descend on New York for the world’s biggest annual diplomatic gathering.

Happy Monday, and welcome to the first pop-up edition of Foreign Policy’s Situation Report, coming to you from the United Nations General Assembly (UNGA) high-level week. Your SitRep co-authors are on the ground at U.N. headquarters in New York City’s Turtle Bay neighborhood with recorders, power banks, and comfortable shoes to bring you all the updates from what is shaping up to be an action-packed week.

Happy Monday, and welcome to the first pop-up edition of Foreign Policy’s Situation Report, coming to you from the United Nations General Assembly (UNGA) high-level week. Your SitRep co-authors are on the ground at U.N. headquarters in New York City’s Turtle Bay neighborhood with recorders, power banks, and comfortable shoes to bring you all the updates from what is shaping up to be an action-packed week.

Here’s what we’ll be watching as leaders from dozens of countries—including, of course, U.S. President Donald Trump—descend on New York for the world’s biggest annual diplomatic gathering.

MUNGA 2.0

As always, much of the conversation this week will be dominated and dictated by the United States’ words and actions. Trump, who used his pulpit last year to slam the U.N. and air many of his long-standing international and domestic grievances, is set to address the gathering on Tuesday morning (with hopefully no teleprompter or escalator snafus this time).

Despite Trump’s many criticisms of the U.N., his administration gave the multilateral institution a much-needed boost last week by paying more than $800 million in pending U.S. dues, including a portion of its peacekeeping fees. While that’s a sizable amount, it still leaves Washington’s pending debt to the U.N. at more than $3 billion across the regular budget and peacekeeping functions.

The Trump administration has already pulled out of several U.N. programs, dialed back its contributions to the budget, and pushed the body to shrink its annual budget this year for the first time in the institution’s eight-decade history. “We call it having the U.N. on a diet, getting it back focused, leaner, and back to basics focused on peace and security,” a senior U.S. official said in a briefing ahead of the gathering, speaking on condition of anonymity. “Let’s do less things better.”

Still, U.S. Ambassador to the U.N. Mike Waltz told reporters that there’s “nothing else quite like UNGA,” adding that “you have presidents, prime ministers, foreign ministers, finance ministers, CEOs, diplomats from every country on Earth packed into a few square miles of Manhattan. … That concentration of people creates an extraordinary diplomatic opportunity.”

Trump’s planned meetings include new U.K. Prime Minister Andy Burnham, Japanese Prime Minister Sanae Takaichi, and a pull-aside with acting Venezuelan President Delcy Rodríguez, Waltz said, as well as a meeting with Arab Gulf Cooperation Council (GCC) leaders that is expected to focus on how to end the U.S.-Iran war. Administration officials declined to comment on whether Trump will meet with the Iranian delegation led by President Masoud Pezeshkian.

As for broader engagement with the U.N., Waltz reiterated his statement from last year that the United States has “worked to rebrand it MUNGA, or Make the U.N. Great Again.” (No word on whether there will be more hats, though.)

What We’re Watching

Sec-Gen sweepstakes. The one thing that’s different about UNGA this year is that it foreshadows the U.N.’s first leadership change in a decade. U.N. Secretary-General António Guterres will step down at the end of this year, having led the institution since 2017. The race to succeed him is now down to seven candidates after former Chilean president and U.N. human rights chief Michelle Bachelet withdrew her candidacy over the weekend via a video posted to her Instagram page, reportedly after a secret straw poll on Friday showed a lack of support.

U.N. Conference on Trade and Development Secretary-General Rebeca Grynspan of Costa Rica emerged as the front-runner in that straw poll, remaining on course to become the first woman to hold the U.N.’s top job.

For more on the challenges facing the next U.N. secretary-general, check out the FP podcast World’s Toughest Job.

AI answers. Few issues have animated the U.N. more in the past decade than the rapid rise of artificial intelligence and its potential dangers. Fears of AI’s threat to humanity hit a crescendo in recent weeks, with several executives from some of the leading AI companies advocating for a pause on advanced model development and calling for a global governance framework for the technology.

Guterres dedicated a significant portion of his final pre-UNGA press conference to discussing those fears, calling for “genuine international cooperation and a coordinated global effort” around the technology.

The big question is whether and how the United States and China—the world’s two largest economies and most dominant AI powers—will show up at the table. Trump is only spending two days in New York before rushing back to Washington on Wednesday to host Chinese President Xi Jinping for a bilateral summit. AI is expected to be high on the agenda for that meeting, with both sides discussing a new U.S.-China AI dialogue on Sunday. That has not been formalized, however, and fundamental disagreements between Washington and Beijing remain.

“I am aware of the geopolitical divides and the temptations they might generate,” Guterres said. “But the world cannot afford a race to the bottom on AI safety.”

SitRep sat down with Amandeep Singh Gill, the U.N. undersecretary-general and special envoy for digital and emerging technologies, to discuss what the U.N. can do with and without those two major powers.

The United States and China “can set the tone for the rest of the world,” said Gill, speaking on the sidelines of a “Digital Cooperation Day” that his office hosted, adding that he was “encouraged” by the focus on AI in the Trump-Xi agenda this week. “This doesn’t mean that the rest of the world has to wait for the U.S and China to do something,” Gill added. “I think that would be taking agency away from 191 other member states of the U.N., many of whom are investing in AI, are developing their own frontier models, and actually care about safety.”

Spotted @ UNGA

SitRep’s first UNGA celebrity sighting of this year was American actor Joseph Gordon-Levitt, who was appointed as the U.N. global advocate for human-centric digital governance in March. “The decisions we make in this moment are going to have a massive impact on everyone’s lives and the whole future of humanity. I really believe that,” Gordon-Levitt told an audience at the Digital Cooperation Day. “Digital technology should be governed by people and for people.”

And while this is admittedly stretching the definition of “sighting,” John’s interview with acting World Food Program Director Carl Skau (stay tuned for more on that conversation) was apparently delayed because Skau was with the world’s biggest YouTuber, Jimmy Donaldson, aka Mr. Beast.

Tuesday @ UNGA

The opening of the general debate at the 81st session of the United Nations General Assembly kicks off.

Beginning at 9 a.m. ET, over a dozen world leaders are set to address UNGA on Tuesday, including: Brazilian President Luiz Inácio Lula da Silva, Trump, Jordanian King Abdullah II, Turkish President Recep Tayyip Erdogan, Kyrgyz President Sadyr Zhaparov, Qatari Emir Sheikh Tamim bin Hamad al-Thani, Lithuanian President Gitanas Nauseda, Peruvian President Keiko Fujimori, Chilean President José Antonio Kast, French President Emmanuel Macron, Finnish President Alexander Stubb, Grand Duke Guillaume of Luxembourg, and Angolan President Joao Lourenco.

FP @ UNGA

Foreign Policy is also hosting events on the sidelines of UNGA, which you can learn more about via our events page and tune into via the livestream.

John will be in conversation with European Climate Commissioner Wopke Hoekstra and U.S. Assistant Secretary of Energy Audrey Robertson at FP’s Energy Forum on Tuesday, with other prominent speakers including Greek Environment Minister Stavros Papastavrou, U.K. Secretary of State for Energy Security Miatta Fahnbulleh, and Lithuanian Energy Minister Lukas Savickas.

At FP’s Tech and AI Forum on Tuesday afternoon, Rishi will be interviewing Singaporean Digital Minister Josephine Teo and senior executives from TikTok and Zoom. Also speaking at that event will be U.S. Undersecretary of State for Public Diplomacy Sarah Rogers (whom our colleague Sam Skove recently profiled) and Finnish Foreign Minister Elina Valtonen.

FP will also be hosting a live taping of the World’s Toughest Job podcast.

By the Numbers

A survey of people from 37 countries published last month by the Pew Research Center reveals that more than half of them view the U.N. favorably, with the highest favorability percentages in Sweden, Indonesia, and Kenya. Israel has the highest percentage of unfavorable ratings, meanwhile, with nearly 80 percent of respondents expressing negative views of the U.N.

Your 2026 UNGA Primer

During a significant meeting in Washington, President Donald Trump and Chinese President Xi Jinping are set to navigate the complexities surrounding trade stability and economic collaboration. Their second face-to-face summit of the year occurs against a backdrop of intense discussions about artificial intelligence (AI) and evolving U.S. tariffs, compounded by the implications of sanctions related to conflicts in Iran. Despite previous overtures of goodwill, both leaders still find themselves in a cycle of blame and retaliatory measures as they approach this crucial gathering.

Treasury Secretary Scott Bessent emphasized the mutual respect between Trump and Xi, stating that it positively influences broader U.S.-China negotiations. However, he remarked that China has yet to fully deliver on commitments made in a trade agreement from last year’s summit in Busan, which aimed to cool the escalating tensions. Analysts have noted the peculiar nature of the top-down diplomatic approach currently defining U.S.-China relations, with various conflicting viewpoints at play and Trump steering the primary strategy while allowing incongruous actions to proceed at the periphery.

The trade atmosphere is delicate, particularly as the U.S. election cycle intensifies with looming concerns about the cost of living. Trump, whose approval ratings on economic matters have dipped significantly, is under pressure to emerge from the summit with tangible economic outcomes. Last year’s trade skirmish saw tariffs soar, with U.S. duties on Chinese products peaking at 145% and reciprocal tariffs from China hitting 125%. A temporary agreement reached in mid-2025 reduced these tariffs substantially, and the Busan meeting yielded an accord that involved China halting export controls on rare earth minerals and committing to purchase American agricultural commodities, alongside the U.S. agreeing to reduce certain tariffs. However, this agreement is set to expire shortly after the upcoming elections, raising the stakes for negotiations.

Current tariff rates reflect a substantial burden, with effective tariffs on Chinese imports standing at approximately 22.8%, the highest among the U.S.'s significant trading partners. In fact, some estimates put the average U.S. tariff rate on Chinese goods even higher at around 36.5%. Trade with China plummeted in 2025, and the downturn is expected to continue into 2026. While China remains a crucial trading partner for the U.S., ranking just behind Mexico and Canada, Trump has continuously voiced concerns about the considerable trade deficit, which in the first seven months of 2026 stood at about $91.2 billion.

Previously, Trump and Xi shared a state dinner in Beijing, which was characterized by grand gestures but ultimately failed to yield significant progress. Analysts from Bank of America Global Research anticipate that a one-year extension of the existing trade truce is likely, which would maintain current tariff levels and avoid any new export restrictions. Furthermore, discussions may include China committing to additional purchases of U.S. goods, including potentially more Boeing aircraft. However, experts predict that overall advancements in trade access, particularly in high-tech sectors like semiconductors, are unlikely to materialize.

Both leaders appear focused on securing minimal gains while managing conflicts—an equilibrium they maintain to demonstrate control over their relationship with a leading geopolitical rival and to afford themselves time to mitigate reliance on each other's economies. Bessent confirmed on CNBC that a renewal of the tariff truce is anticipated, citing stability in bilateral relations since the previous autumn.

Moreover, discussions surrounding a proposed $30 billion mutual tariff reduction, dubbed a "30-by-30 trade deal" for non-critical goods, indicate a possible pathway forward. This deal would involve the exchange of U.S. agricultural and energy products for a wider array of consumer goods from China. However, certain analysts believe that the U.S. may prefer to limit the duration of the trade truce to retain leverage.

Artificial intelligence will be a pivotal topic at the summit as both nations vie for dominance in this rapidly evolving sector, which is critical to future economic growth. Trump, linking AI leadership to U.S. economic might, has championed minimal regulation in this space, igniting concerns among industry experts about the implications of unchecked AI development. Despite initial resistance, he hinted at the possibility of regulatory measures if necessary. Discussions are expected to explore creating a framework for both countries to communicate about AI incidents, reflecting a growing recognition of the urgency and complexity of AI governance in international relations.

Trump and Xi aim for trade stability and agreements, but AI, tariffs, and Iran are significant concerns. Key points to observe.

In warm natural afternoon light, former President Trump and President Xi stand across a polished mahogany negotiation table, clasping hands over a stack of treaty papers boldly stamped “TARIFFS” in red. At the table’s edge, a tablet glows with a warm-toned neural-network diagram representing AI. Behind them, the U.S. and Chinese flags hang side by side, while a soft shadow on the wall takes the shape of Iran’s outline, looming quietly in the background.

Trump, Xi seek trade stability and deals, but AI, tariffs and Iran loom large. What to watch - CNBC

- Trump and Xi seek trade stability amidst ongoing disputes over AI and tariffs.  
- U.S.-China trade deal may focus on extending tariff truce and additional purchases.  
- AI discussions are crucial as competition intensifies between the two nations' economies.  

China's President Xi Jinping and President Donald Trump visit the Temple of Heaven in Beijing, China, May 14, 2026. China Pool | Getty Images

President Donald Trump and Chinese leader Xi Jinping's aims of bolstering trade stability and clinching economic wins could be scrambled by a roiling debate over artificial intelligence, as well as shifting U.S. tariffs and an Iran war-related sanctions operation. The two leaders are expected to seek ways to strengthen their fragile trade truce when they meet in Washington for their second face-to-face summit this year. Despite gestures of goodwill surrounding the lead-up to the summit, the two sides continue to lob accusations and launch retaliatory trade actions. Treasury Secretary Scott Bessent, in an interview with CNBC's "Squawk Box" on Monday, said the "great respect" Trump and Xi have for each other trickles down to broader U.S.-China negotiations. He then noted, "We had some deliverables that have not been completely fulfilled" by China as part of a trade agreement Trump and Xi reached in Busan, South Korea, nearly a year ago. Some China analysts have raised concerns about the unusually top-down diplomatic arrangement between the two economic superpowers. "A number of inconsistent viewpoints seem to be jostling each other," as Trump dictates "the overarching approach" toward China "while letting more negative actions occur at the margins," said Claire Reade, a senior associate with the trustee chair in Chinese business and economics at the Center for Strategic and International Studies. The summit comes with less than six weeks left in a U.S. election cycle that has largely centered on Americans' cost of living concerns. Trump, whose polling marks on that key issue have sunk to new lows, has even more of an incentive to emerge from the summit with Xi touting some form of economic deal. Here's where the U.S.-China trade relationship stands and what's at risk when Trump and Xi meet:

State of trade

Last year's explosive trade war saw the two economic superpowers hike tariffs on each other's goods to dizzying heights: U.S. levies on Chinese imports hit 145% at the peak of the squabble, while Beijing's retaliatory duties reached 125%. Those tariffs were slashed in May 2025 after trade negotiators in Switzerland struck a temporary deal, which was extended in mid-August. Trump and Xi then made an agreement in Busan that led the countries to further scale back their tit-for-tat trade measures. As part of that deal, China agreed to suspend export controls on rare earths and buy U.S. agricultural products, while the U.S. reduced some tariffs and suspended other trade retaliation. That deal was set to last for one year, and will expire Nov. 10, a week after the U.S. election, absent an extension. Despite the cooldown, both countries continue to impose high tariffs on each other's goods, multiple analyses show. As of July, the effective tariff rate of 22.8% on Chinese products is the highest among major U.S. trading partners, with steel and aluminum imports facing the heaviest duties, according to the Penn Wharton Budget Model from the University of Pennsylvania. The Congressional Research Service's estimate is even higher, calculating the U.S. average tariff rate on China in July at roughly 36.5%, versus Beijing's 31% rate on U.S. goods. U.S. trade with China fell sharply in 2025, with total goods trade declining nearly 30% from the prior year — and the first seven months of 2026 show a continued decline, according to U.S. Census data. But Beijing remains a major economic partner with Washington, behind only Mexico and Canada. As recently as 2019, China was the largest U.S. trading partner. Trump has long complained about the large trade deficits the U.S. maintains with other countries, including China, while advocating for a domestic manufacturing resurgence. While the U.S. goods trade deficit with China so far this year is lower than the same period in 2025, it remains among the highest in the world at roughly $91.2 billion.

Setting the table

Trump and Xi last convened at a state dinner in Beijing in mid-May, part of a whirlwind summit heavy on pomp and circumstance but ultimately lacking in deliverables. Many China watchers expect a similar outcome this time. A one-year extension of the trade truce is "our base case," China analysts from Bank of America Global Research said in a client note last week. That extension would maintain the status quo on tariffs and bar new export controls, a major sticking point before the Busan meeting. China could also agree to make additional purchases of U.S. goods, "potentially including more Boeing aircraft," they wrote. After Beijing, the countries confirmed that China would buy 200 Boeing planes, a smaller number than some investors had expected. "We expect limited progress elsewhere," including on the prospect of expanding access to advanced semiconductors or changing export controls that remain in place, the bank's analysts said.

watch now

Other China experts agreed. Both Trump and Xi "appear to be managing for small gains and conflict avoidance," Ryan Hass, director of the Brookings Institution's John L. Thornton China Center, told CNBC in an email. "The uneasy equilibrium sustains because it serves two functions for both leaders," Hass explained. "First, it gives both leaders an ability to signal to their citizens that they have the situation with their foremost geopolitical rival under control. Second, it buys time and space for both leaders to reduce dependencies and vulnerabilities from the other." Bessent seemed to confirm some of those predictions Monday morning, telling CNBC, "I think we're going to maintain" the tariff truce. "That was a focal point" of talks over the weekend with Chinese Vice Premier He Lifeng, Bessent said, adding, "We've had great stability in the relationship since last fall."

Bessent also suggested progress was made on an arrangement for a reciprocal $30 billion tariff reduction, which Beijing floated earlier this month. Bessent said U.S. Trade Representative Jamieson Greer has "operationalized" that proposal, which he called a "30-by-30 trade deal for non-critical goods." The U.S. side of the deal would involve selling agriculture, energy and other products such as medical devices, while China "would be bringing in more everyday items," Bessent told CNBC. Reade, of CSIS, told CNBC the U.S. may only want a limited extension of the trade truce. That truce is a key source of U.S. leverage, and "they're not going to want to let go of that leverage on the truce [by letting it] extend too far into the future," said Reade, who was an assistant U.S. trade representative for China during the Obama administration.

AI takes over

Bessent has said AI will be at the top of the agenda for Trump and Xi. They'll have much to discuss. The U.S. and China are competing leaders in the nascent industry, which is increasingly central to the world economy. Trump sees AI dominance and U.S. economic superiority as inextricably linked and has strongly encouraged the buildout of AI infrastructure with minimal regulatory interference. "There is a SICK conspiracy going on against AI and Data Centers, and the only one that is happy about it is China," Trump wrote on Truth Social last week. "WHOEVER WINS AI, WINS! We are leading China, and all others, and will continue to do so." Some heads of AI companies in the U.S., however, have sounded alarms about the potentially catastrophic risks posed by advanced AI models developing too quickly. Those calls have drawn rebukes from Trump. But in a Truth Social post on Monday, Trump said the government "will rein things in if we have to" — suggesting at least a slight shift away from his more laissez-faire stance that could carry into talks with Xi. Bessent said Sunday that he and his Chinese counterparts discussed establishing a dialogue that would allow for the two countries to notify each other about AI incidents.

Iran sanctions

Trump, Xi seek trade stability and deals, but AI, tariffs and Iran loom large. What to watch

On Monday, OpenAI unveiled a series of recommendations aimed at ensuring the safety and security of advanced artificial intelligence development. The proposals emphasize the importance of alignment research and a computing method known as recursive self-improvement (RSI).

In a blog post, OpenAI highlighted the necessity for alignment research to keep up with the rapid advancements in AI capabilities, ensuring that the systems created by them and others continue to align with human values and remain under human oversight.

The company emphasized the need for global collaboration in establishing frontier standards while encouraging the enhancement of initiatives already in place by existing AI safety organizations worldwide.

OpenAI pointed out that these technical standards should prioritize frontier AI models and their developers, as well as integrate beneficial risk management strategies for automated AI researchers, particularly concerning RSI.

RSI has generated considerable excitement among AI developers due to its potential for creating foundational models that can improve themselves independently of human input. 

However, progress in RSI has prompted some experts to express concerns that creators of foundation models might lose control over the underlying technology, possibly overlooking unintended consequences as these AI systems become increasingly complex and prevalent online.

OpenAI's blog cautioned against the pursuit of fully autonomous RSI at this stage, stating, "It should not be pursued unless it can be conducted safely." They warned that without sufficient care, RSI could lead to situations where humans lose effective control over AI development and cannot supervise research processes that have become too advanced for their understanding.

OpenAI suggests creating international AI standards to ensure alignment, RSI

A bright boardroom bathed in warm natural sunlight, featuring a polished wooden table with a translucent glass globe at its center. Around the globe float digital document icons stamped with checkmarks and labeled “AI Alignment,” “RSI,” and “Global Standards.” The word “OpenAI” is subtly engraved on a brass plaque at the table’s edge.

OpenAI proposes development of global AI standards to guide alignment, RSI - CNBC

- OpenAI proposed safety measures for frontier AI, emphasizing alignment research and RSI.  
- They called for international cooperation on developing AI safety standards and guidelines.  
- Concerns arise over uncontrolled advancements in RSI potentially compromising human oversight of AI.

OpenAI on Monday posted a set of proposals for safety and security in the development of frontier artificial intelligence with a heavy focus on alignment research and a computing technique known as recursive self-improvement, or RSI.

"Navigating this transition safely requires alignment research to keep pace with these capabilities so that the systems we and others build remain aligned with human values and under human control," the company said in a blog post.

OpenAI called for international cooperation to develop frontier standards and recommended building on the work of existing AI safety institutes around the world.

The ChatGPT maker said these technical standards should focus on frontier AI models and developers, as well as benefit-risk management for automated AI researchers, which includes RSI.

RSI has excited AI developers over its potential to create foundation models that can upgrade themselves without human involvement.

But advancements within RSI have led some technologists to raise concerns that foundation model makers could lose control of the underlying technology or fail to account for potential unintended consequences as the AI systems become more complicated and ubiquitous across the Internet.

"Fully autonomous RSI is not happening today, and we should not pursue it unless and until it can be done safely," the OpenAI blog post said. "Done without appropriate care and caution, RSI could result in humans losing practical control over AI development, unable to provide oversight on research processes they no longer understand."

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