Hello and welcome to Regulator, a newsletter for Verge subscribers about the love-hate (but mostly hate) relationship between Silicon Valley and Washington. I hope everyone got to celebrate George Washington’s birthday in their preferred manner: skiing, staycationing, subscribing to The Verge if you haven’t already, etc.
Technology
It’s MAGA v Broligarch in the battle over prediction markets
Prediction: this is going to be a mess
Political alliances are rarely permanent, so it’s somewhat predictable that the MAGA-tech bro alliance seems to have fallen apart in the span of a single year. Which side the administration would actually choose, though, was more difficult to foresee.
Last winter, it appeared that two groups were in a tenuous relationship, held together by Elon Musk’s shameless execution of the DOGE agenda and Big Tech signing massive checks to settle Donald Trump’s lawsuits against them. But last night, the Trump administration made a choice: the money. The Commodity Futures Trading Commission (CFTC) announced that they would sue any state who tried to regulate prediction markets like Kalshi — even the Republican states.
On Tuesday, the CFTC filed an amicus brief to the Ninth Circuit Court of Appeals, officially opposing an onslaught of lawsuits filed by the states against betting markets like Kalshi, Polymarket, Coinbase, and Crypto.com. (The latter two, known primarily as cryptocurrency exchanges, have partnered with Kalshi and created a standalone prediction market called OG, respectively.) But unusually, the brief was accompanied by a threat — posted on X, of all places. In a video directly facing the camera posted on Tuesday night, sole CFTC chairman Michael Selig asserted his commission’s authority to regulate prediction markets and stated that the federal government was prepared to sue: “To those who seek to challenge our authority in this space, let me be clear: we will see you in court.”
Had Selig simply written a staid Wall Street Journal op-ed asserting the CFTC’s authority (which he also did), that would have barely raised an eyebrow. But in 2026, a video threat, especially one posted on X, is basically grounds to instigate a political firestorm — one that Spencer Cox, the Republican Governor of Utah, gladly kindled. “Mike, I appreciate you attempting this with a straight face, but I don’t remember the CFTC having authority over the ‘derivative market’ of LeBron James rebounds,” he posted in response (also on X). “These prediction markets you are breathlessly defending are gambling—pure and simple. They are destroying the lives of families and countless Americans, especially young men. They have no place in Utah.” He promised that Utah would continue to pursue litigation and beat the federal government in court if need be.
This wouldn’t be the first time that Utah and Cox have voiced their opposition to federal overreach regarding emerging technology. Last year, they publicly opposed an executive order that would have given the Justice Department the power to sue states passing and enforcing AI regulatory laws. The prediction markets issue hits a particular nerve in Utah: nearly half of the state is Mormon, and the Church of Jesus Christ of Latter-day Saints officially opposes all government-sanctioned forms of gambling, even state lotteries. But Cox’s declaration is what’s known in political circles as a “weathervane”: if one deeply Republican state is pushing back against the Trump administration on a new front, who else on the right might follow suit — and what sorts of new broligarch technologies would they fight against?
Is it a coincidence that Anthropic CEO Dario Amodei’s big visit to Washington happened just as the Pentagon was reconsidering its relationship with the AI company? Over the past two weeks, Amodei published a 38-page letter to Congress warning of the rising existential risks of artificial intelligence, conducted an interview with Axios’s Mike Allen (and sponsored their newsletter), and met with Sens. Elizabeth Warren (D-MA) and Jim Banks (R-IN) on Capitol Hill to support their bill banning the sale of advanced AI chips to China.
But Amodei barely finished his capitol blitz when Axios broke the news over the weekend that the Pentagon wasn’t just impatient with Anthropic’s reticence to use Claude for unrestricted purposes, but that it would actively punish Anthropic for refusing to cooperate by designating them a “supply-chain risk.” If it goes through, any company that wants to work with the military would have to cut ties with Anthropic. As one Pentagon official described it, “It will be an enormous pain in the ass to disentangle, and we are going to make sure they pay a price for forcing our hand like this.”
The Pentagon’s move makes no sense for anyone who sees Claude as a superior AI enterprise product to its competitors at the Pentagon (Gemini, ChatGPT, and Grok). If viewed through the lens of every former interaction that Trump’s had with companies that voiced ideological opposition to his agenda however, their treatment of Anthropic is par for the course. Years ago, for instance, Trump threatened to cut off Amazon’s access to their sweetheart deal with the US Postal Service, in retaliation for Jeff Bezos’ ownership of the then highly critical Washington Post.
But for me, the question is: exactly what caused the ideological break, and how much of it was even about national security? In the past few months, there’s been a bizarre spurt of online messaging from right-wing influencers trying to claim that Anthropic, of all the AI companies, was too woke — the kind of woke that could convince kids to become trans, or DEI-pill them, or whatever lib-coded nightmares a MAGA personality could dream up. There wasn’t much proof that they could point to, other than its employees expressing opinions that could be lib-coded, if you’re not fully reading the entire tweet:
Screenshot va @KatieMiller/X.
Speaking of influencers eating their own:
- Steve Bannon is under MAGA siege for his 2018 texts with Jeffrey Epstein, newly unearthed from the Justice Department’s Epstein Files, wherein he suggested that Trump should be removed from office using the 25th Amendment. Influencers calling for him to be questioned include Rep. Marjorie Taylor Greene, who broke from Trump and the GOP for trying to bury the Epstein Files, and retired Gen. Mike Flynn. Notably, both of them rose to prominence in 2020 by backing QAnon, the online conspiracy theory that claimed that an elite ring of Satan-worshipping pedophiles were in control of the government. (It may not help Bannon that he called Epstein “God” in one of the texts).
- Mike Davis, an anti-Big Tech lawyer who previously represented Trump in his lawsuits against Meta, took credit for the ouster of former friend and ally Gail Slater from the Department of Justice’s antitrust division, according to texts obtained by The Free Press. Though the two were once allies due to their shared interest in holding Big Tech accountable, their relationship started fracturing over disagreements about when to enforce antitrust laws and when to go for settlements.
- And we’re back to Bannon: per The Bulwark, he and fellow MAGA political operative Boris Epshteyn are being sued for their own shady cryptocurrency operation.
The White House is convening a third meeting between the crypto industry and the banking industry this week, continuing to hash out which major financial entity gets to reap the interests from yield-bearing stablecoin accounts (or if they get to bear interest at all). They have until March 1st to deliver draft language for the Senate. Good luck, y’all!
And finally, looksmaxxing Recess.
Can we all agree that HHS Secretary Robert F. Kennedy is framemogging Kid Rock in this video?
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Not only is it the first release to support the upcoming Steam Machine living room gaming PC, it comes with long-awaited features for Valve’s handhelds and more support for other companies’ handhelds than we’ve seen to date — including Microsoft and Asus’ Xbox Ally series, the Lenovo Legion Go 2, the OneXPlayer X1, and additional support for MSI, GPD, Anbernic, OrangePi, and Zotac.
The one that excites me most: Valve is adding genuine hibernation and “memory power down” modes to the Steam Deck — though just the LCD model to start — which should help extend battery life when you hit the power button or leave them idle. Some Windows machines currently last longer than the Steam Deck when asleep, because they self-hibernate to save power, while the Steam Deck has an instant-on sleep mode.
Plus, Valve has finally added a setting in its gaming mode to let you use your Bluetooth headset microphones — something I’ve been asking for since the beginning. (Valve did add it to the Linux desktop mode last year.) And the Steam Deck LCD is finally getting Bluetooth Wake re-enabled, so you can turn on your TV-connected Deck with a wireless controller from your couch.
The update comes with all sorts of improvements for the Linux desktop modes that sound like they’ll come in handy on a Steam Machine plugged into a TV or monitor, too, including desktop HDR, VRR display support, per-display scaling, “improved windowing behavior for games running in Proton,” and an upgrade to KDE Plasma 6.4.3 among other things.
And for a Steam Machine or Steam handheld plugged into a home entertainment system, they can now detect how many audio channels you have over HDMI to enable surround sound. (I believe surround sound was already a thing, so perhaps this is just a different and better automatic implementation.)
There’s also a new Arch system base and an updated graphics driver.
Perhaps most surprisingly, the “Non-Deck” section of the changelog is huge. Valve says long-pressing your power button should work “across a wide variety of devices” to power off, restart, or switch to the desktop mode. You should be able to change your processor’s power modes on the Xbox Ally now, and night mode and screen color settings should work on AMD Z2 Extreme handhelds in general.
There’s also “Greatly improved video memory management with discrete GPU platforms,” you can limit how far the battery charges in any of the Lenovo Legion Go handhelds (in desktop mode), and it should fix “washed out colors for Zotac and OneXPlayer handhelds with OLED.”
There’s a lot in this update, and it’s possible I missed a feature you care about, so check out the whole changelog here and below.
Under the five-year contract, Gecko will begin work on 18 ships in the U.S. Pacific Fleet, with the initial award valued at up to $54 million. The contract vehicle is structured to allow other military services to access the technology as well. (Gecko Robotics )
NEWYou can now listen to Fox News articles!
Welcome to Fox News’ Artificial Intelligence newsletter with the latest AI technology advancements.
IN TODAY’S NEWSLETTER:
– WATCH: Wall-climbing robot swarms crawl US Navy warships as China’s fleet surges
– OPINION: AI comes with a hefty charge, and you are the one who gets stuck with the bill
– Dell workforce shrinks 10% for third consecutive year
Swarms of wall-climbing robots will soon be crawling across U.S. Navy warships in a $71 million effort to slash repair delays and boost fleet readiness as China continues expanding its naval power. (Gecko Robotics )
TECH AT SEA: WATCH: wall-climbing robot swarms crawl US Navy warships as China’s fleet surges – Fox News Digital reports on a new development in naval technology, featuring wall-climbing robot swarms that are crawling on U.S. Navy warships. This advancement comes at a critical time in defense politics as China’s naval fleet continues to surge in size and capability.
WALLET SHOCK: OPINION: AI comes with a hefty charge, and you are the one who gets stuck with the bill – In this opinion piece, the author discusses the economic implications of the growing artificial intelligence industry. The article argues that the hefty costs associated with AI development and its massive energy infrastructure will ultimately be passed down, leaving everyday consumers to foot the bill.
Dell Technologies headquarters in Round Rock, Texas, US, on Sunday, Nov. 26, 2023. (Sergio Flores/Bloomberg via Getty Images)
COST CRUNCH: Dell workforce shrinks 10% for third consecutive year – Fox Business reports that Dell’s workforce has shrunk by ten percent. This marks the third consecutive year of workforce reductions for the major technology company amid shifting economic conditions and corporate restructuring.
AIMING HIGH: FULL AUTONOMY: AI pilot technology advances towards military capability – Merlin CEO Matt George details how the company is using artificial intelligence to enable military and commercial aircraft to operate fully autonomously on Fox Business’ ‘The Claman Countdown.’
Single family homes in a residential neighborhood in San Marcos, Texas, US, on Tuesday, March 12, 2024. (Photographer: Jordan Vonderhaar/Bloomberg via Getty Images)
SHOULD I BUY?: Homebuyers, sellers turning to AI chatbots for advice – Prairie Operating Co.’s Lou Basenese and real estate broker Kirsten Jordan discuss how artificial intelligence is impacting homebuyers and sellers on ‘Fox Business In Depth.’
DISRUPTION IS HERE: Charles Payne: AI disruption is here – Fox Business host Charles Payne discusses the economic impact of the rise in artificial intelligence on ‘Making Money.’
BUILDING HER BUSINESS: How Angie Hicks turned Angi into a home services giant and AI player – Angi co-founder Angie Hicks discusses entrepreneurship, company growth and how she built out her business on ‘Mornings with Maria.’
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For almost two hours last week, Meta employees had unauthorized access to company and user data thanks to an AI agent that gave an employee inaccurate technical advice, as previously reported by The Information. Meta spokesperson Tracy Clayton said in a statement to The Verge that “no user data was mishandled” during the incident.
A Meta engineer was using an internal AI agent, which Clayton described as “similar in nature to OpenClaw within a secure development environment,” to analyze a technical question another employee posted on an internal company forum. But the agent also independently publicly replied to the question after analyzing it, without getting approval first. The reply was only meant to be shown to the employee who requested it, not posted publicly.
An employee then acted on the AI’s advice, which “provided inaccurate information” that led to a “SEV1” level security incident, the second-highest severity rating Meta uses. The incident temporarily allowed employees to access sensitive data they were not authorized to view, but the issue has since been resolved.
According to Clayton, the AI agent involved didn’t take any technical action itself, beyond posting inaccurate technical advice, something a human could have also done. A human, however, might have done further testing and made a more complete judgment call before sharing the information — and it’s not clear whether the employee who originally prompted the answer planned to post it publicly.
“The employee interacting with the system was fully aware that they were communicating with an automated bot. This was indicated by a disclaimer noted in the footer and by the employee’s own reply on that thread,” Clayton commented to The Verge. “The agent took no action aside from providing a response to a question. Had the engineer that acted on that known better, or did other checks, this would have been avoided.”
Last month, an AI agent from open source platform OpenClaw went more directly rogue at Meta when an employee asked it to sort through emails in her inbox, deleting emails without permission. The whole idea behind agents like OpenClaw is that they can take action on their own, but like any other AI model, they don’t always interpret prompts and instructions correctly or give accurate responses, a fact Meta employees have now discovered twice.
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