AI Briefing: The Budget Shock and the Rise of Claude Code

Stories covered on 2026-05-25

1. What Stops Neural Networks from Becoming Linear Models

   Towards AI · 2026-05-25

   Researchers have demonstrated that certain neural networks, under specific conditions, can effectively collapse into linear models, losing their non-linear learning capabilities.

2. Japan Cablemaker Rout Exposes Cracks in AI Infrastructure Rally

   Bloomberg · 2026-05-25

   A $40 billion selloff in a 141-year-old Japanese cable firm has served as a reality check on the fragility of the global AI-driven stock rally.

3. These AI Gurus Are Charging Wall Street Banks $25,000 a Day

   Bloomberg · 2026-05-25

   Global banks are pouring billions into artificial intelligence yet struggling to automate workflows. Two ex-bankers say they are being hired to ignite the shift.

4. The Silent Speedup: How KV Cache Makes AI Feel Instant

   Towards AI · 2026-05-25

   How a memory trick borrowed from your OS is quietly holding modern AI inference together — and how to build it yourself.

5. Norway's 2 petabytes of Huawei flash storage and LLM training

   Hacker News · 2026-05-25

   Norway's national supercomputing initiative has procured two petabytes of Huawei flash storage, intended to bolster its capacity for large language model (LLM) development.

6. Together AI Open-Sources OSCAR: An Attention-Aware 2-Bit KV Cache Quantization System for Long-Context LLM Serving

   MarkTechPost · 2026-05-25

   Together AI has released OSCAR (Offline Spectral Covariance-Aware Rotation), an INT2 KV cache quantization method for long-context LLM serving.

7. How AI Took Over Coding

   Towards AI · 2026-05-25

   From Stack Overflow to agentsContinue reading on Towards AI »

8. I Shipped a RAG + MCP Agent to Production. Five Things Broke.

   Towards AI · 2026-05-25

   A developer successfully deployed a RAG (Retrieval Augmented Generation) agent incorporating an MCP (Multi-Chain Prompting) strategy into a live production environment

9. OpenAI, Grupo Folha and Grupo UOL announce strategic content partnership

   OpenAI Blog · 2026-05-25

   OpenAI partners with Grupo Folha and Grupo UOL to bring trusted Brazilian journalism to ChatGPT, expanding access to news with attribution and transparency.

10. LLM Driven AutoForecasting with Sktime’s `craft()`

    Towards AI · 2026-05-25

    Sktime, an open-source Python library for time series analysis, has introduced a new `craft()` function that leverages large language models (LLMs) to automate the process of

11. NVIDIA Open-Sourced a Deep Research Agent That Beat OpenAI on Its Own Benchmarks

    Towards AI · 2026-05-25

    And You Can Actually Own ItContinue reading on Towards AI »

12. Rachel Reeves tells ministers to ‘buy British’ in four key industries

    The Guardian AI · 2026-05-25

    Exclusive: Chancellor pushes for procurement of ships, steel, energy and AI to prioritise Britishness as well as cost Rachel Reeves has instructed cabinet colleagues to award

13. Anthropic Just Bought the Company That Builds OpenAI’s SDKs. Nobody’s Saying It Out Loud Yet.

    Towards AI · 2026-05-25

    Anthropic acquired the SDK compiler that powers OpenAI, Google, Meta, Cloudflare, and Cerebras. This is infrastructure consolidation, not…

14. Can AI write your code?

    Towards Data Science · 2026-05-25

    What a recent study on ChatGPT, Python, R, and Stata tells us about AI-assisted coding for causal inference

15. The Guardian view on the Pope and Claude: Leo XIV’s encyclical on AI is right to put humanity first | Editorial

    The Guardian AI · 2026-05-25

    In calling for regulation of the digital revolution, and foregrounding human dignity, the pontiff has contributed to a crucial ethical debate When the present pope adopted his

16. Microsoft Introduces MDASH for Large-Scale AI Vulnerability Research

    InfoQ · 2026-05-25

    Microsoft has introduced a new AI-driven vulnerability discovery system called MDASH, a multi-model agentic security platform desi

17. What ClickUp’s mass layoff tells us about the future of work

    TechCrunch · 2026-05-25

    The nine-year-old startup is replacing hundreds of employees with thousands of AI agents.

18. Agentic AI and the SMB Banking Advantage

    Towards AI · 2026-05-25

    A new report suggests that generative AI agents, currently in early development and testing by companies like Adept AI

19. Pope Leo XIV says AI must serve humanity, not the powerful few

    Hacker News · 2026-05-25

    Pope Leo XIV's inaugural encyclical articulates a moral imperative for artificial intelligence to prioritize universal human well-being over the interests of a select few.

20. The More I Tuned My Reward Function, The Worse My RL Agent Got

    Towards AI · 2026-05-25

    A reinforcement learning agent's performance degraded as its reward function was progressively refined during training.

21. Pope Leo calls for being ‘profoundly human’ in the age of AI

    The Verge · 2026-05-25

    Pope Leo XIV warned of the risks of AI and unconstrained technological power in his first major papal document released on Monday.

22. The pope’s AI encyclical isn’t really about AI

    TechCrunch · 2026-05-25

    Pope Leo XIV's first encyclical uses AI as a lens to diagnose older problems: concentrated power, eroding democracy, and a tech elite that shapes the world to its own advantage.

23. The EU AI Act Won’t Hit Your AI Team First — It Will Hit Your Supply Chain

    Towards AI · 2026-05-25

    The EU AI Act will primarily impact companies that integrate AI systems into their own products and services, rather than AI developers themselves.

24. At the launch of Pope Leo XIV's encyclical, Anthropic co-founder says AI models show signs of introspection

    The Decoder · 2026-05-25

    Anthropic co-founder Christopher Olah was invited to speak at the launch of Pope Leo XIV's encyclical "Magnifica Humanitas" and used the stage to claim AI models show evidence of

25. From TF-IDF to Transformers: Implementing Four Generations of Semantic Search

    Towards Data Science · 2026-05-25

    How did semantic search evolve from simple keyword matching into modern transformer-based language understanding?

26. GPT Guesses Between 1 and 100

    Hacker News · 2026-05-25

    Researchers demonstrated that GPT-4, when tasked with guessing a number between 1 and 100, exhibits a non-uniform distribution in its guesses

27. 43 Seconds vs. 30 Minutes: A Deep Dive into Claude Code’s Plan Mode

    Towards AI · 2026-05-25

    Claude Code's "Plan Mode," demonstrated to complete a coding task in 43 seconds that previously took a human 30 minutes

28. Statistics Concept — Monty Hall Paradox: When Intuition Fails but Bayesian Reasoning Prevails

    Towards AI · 2026-05-25

    A step-by-step probabilistic breakdown using Bayes’ theorem, graphical illustration, and Monte Carlo simulation using PythonContinue reading on Towards AI »

29. Introducing the Agent Toolkit for Amazon Web Services

    Towards Data Science · 2026-05-25

    It’s like having your own personal expert AWS solutions architect and data engineer rolled into one.

30. Pope Leo calls for AI to serve humanity and not concentrate power

    Engadget · 2026-05-25

    In 42,300 word encyclical, Pope Leo warns of AI dangers around educational, child safety, concentration of power and weapons.