Good morning. It wasn’t so long ago that people were hot on Reddit and its CEO, Steve Huffman, for re-finding the internet stalwart’s footing in an age of AI.
This year, though, the AI seems to be winning—at least in the eyes of investors. Reddit shares are down 30% year to date as the company mulls renewing a $60 million-a-year licensing deal with Google…versus going to war against the tech giant’s AI training bots. (Turns out those “AI Overviews” might be “Ad Revenue Destroyers.” Whodathunk?)
Stay tuned—though if anyone can pull it off, it might just be the world’s sixth largest website.
Today’s tech news follows. —Andrew Nusca
P.S. Lessons from the OpenAI-Hugging Face snafu? Glad you asked.
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White House accuses Moonshot K3 of distilling Anthropic Fable
A top Trump administration official has accused one of China’s most promising AI startups of stealing from one of the most valuable AI companies in the U.S.
Michael Kratsios, the president’s science and technology advisor, said Moonshot and its formidable new K3 AI model, released last week, distilled Anthropic’s new Fable model, released last month as part of its flagship Mythos series.
(AI distillation involves the training of a smaller, more efficient AI model to replicate the behavior of a larger, more complex AI model. It’s not copying, per se, but it can be a purposeful strategy to fast-follow an innovator.)
What’s more, Kratsios added, Moonshot did so using Thailand-based Nvidia GB300 AI systems—“G” as in Grace CPU, “B” as in Blackwell GPU—which are expressly prohibited from being sold to Chinese companies under current U.S. export controls.
“They developed a sophisticated internal platform to conduct large scale distillation against U.S. models, allowing them to quickly switch between multiple methods of access to avoid detection,” the official wrote in a social media post, adding: “Large-scale, covert industrial distillation aimed at stealing proprietary U.S. technology and undermining American research is unacceptable.”
In his own social media post, U.S. Treasury Secretary Scott Bessent said he was considering blacklisting and sanctioning Moonshot.
In a comment made to Reuters, a spokesperson for the Chinese embassy in Washington called the accusations “entirely unfounded.”
For months, the U.S. government has been on high alert for what it believes are widespread efforts by Chinese tech companies to steal American intellectual property. In February, Anthropic accused three Chinese AI companies of creating tens of thousands of user accounts to harvest data from its Claude model for the purpose of training their own AI models. That same month, Anthropic’s rival OpenAI accused Hangzhou-based DeepSeek of similar behavior. —AN
Anthropic and SpaceX handed Google the biggest profit quarter in company history
Alphabet made history Wednesday with a quarterly profit that stretched into 12 figures for the first time in the search giant’s history—and perhaps for the first time in any company’s history.
Google’s parent company grew its bottom line by 298% year-over-year in the second quarter, totaling an astounding $112.1 billion in net income.
That’s more profit in three months than 459 of the UnHerd 500 companies generate in top line revenue in a full year.
What gives? Alphabet’s Q2 revenue increased by a very impressive 24%, to $119.8 billion, with the Google Cloud business reaching an 82% growth clip—results CEO Sundar Pichai called proof that the company’s “full stack approach to AI is delivering real, measurable value.”
Well, that—plus $99 billion in additional (or “other”) income that’s not directly produced by Alphabet’s day-to-day business operations such as search advertising and YouTube subscriptions.
So where did these record-shattering profits come from? “Unrealized and realized” gains on the equity securities in its investment portfolio. And most of that $99 billion figure comes from Alphabet’s investments in Anthropic and SpaceX.
It’s unclear how much each of the individual investments contributed to the $99 billion gain, but both companies saw their valuations soar in Q2. (Anthropic is now worth $965 billion; SpaceX’s current market cap is $1.52 trillion.)
Still, shares of Alphabet fell 3% in after-hours trading on Wednesday, as investors fretted about the company’s rising capital expenditures (up to $205 billion in 2026 spending) and fierce competition facing its Gemini family of AI models. —Eva Roytburg
Samsung unveils Galaxy Z Fold8 Ultra
Well folks, the hot new thing in smartphones isn’t lasers, or air quality sensors, or even graphene batteries.
Clutch your Razrs, millennials: It’s a foldable display.
Ahead of the long-rumored Apple iPhone Fold (or whatever it ends up being called), Samsung has taken the wraps off its latest and greatest, the Galaxy Z Fold8 Ultra.
If you can believe it, Samsung put out a folding smartphone way back in 2019. What’s changed after seven years of tinkering besides the usual mobile upgrades? A titanium-based display for thinner durability (it’s 4.1mm thick while open), a 5,000 mAh battery (a claimed 27 hours of video playback!), and more Gemini AI integration than you can shake a Qualcomm chip at.
Samsung bills the Fold8 Ultra as a “maximum productivity” device built for “heavier multitasking,” “content creation,” and “AI-powered workflows.” At $2,100, it certainly comes with a maximum, AI-powered price tag.
Will it be popular? Samsung hasn’t shared sales figures for its foldable device family, but industry analysts believe the Fold8’s predecessor was one of the company’s most successful products. In short order, the folding format has evolved from a novelty to a hot category—and the Fold8, with millions of units reportedly on tap, is positioned to capitalize on the trend. —AN
More tech
—AMD and Anthropic ink a multibillion-dollar server deal. The AI firm will buy up to 2GW of AMD chips; the chipmaker will invest up to $5 billion in Anthropic.
—IBM shares sink 2%, bringing its YTD decline to 29%. A miss on Q2 revenue, a drop in infrastructure sales, and a 42% decline in mainframe revenue.
—Samsung’s working on smart glasses with Gentle Monster, Google, and Warby Parker.
—OpenAI will spend $30 billion on a new, 3.2 gigawatt data center in the U.S. state of Georgia.
—WhatsApp gets an Android Auto and CarPlay update. Hear and respond to messages, make calls, etc.
—ServiceNow shares jump 4% as it boosts its full-year subscription revenue estimate.
—SEC will pay $150,000 in legal fees to settle a Coinbase lawsuit about the agency's handling of records requests during the Biden administration.
—Travis Kalanick's robotics startup, Atoms, raises $1.7 billion…and Uber is an equity partner!