Good morning. American companies have a new AI addiction: cheaper Chinese models. But as the race for artificial-intelligence supremacy heats up, Beijing is considering tightening its grip on homegrown technology.

• Made in China: Across Silicon Valley, models made by Chinese companies such as DeepSeek and Moonshot AI have become core to daily work at companies large and small, offering a less costly alternative and supplement to the products of OpenAI and Anthropic.
   
• Closing the door: Until recently, Beijing wanted to encourage the rapid spread of Chinese AI models globally, believing this represented a form of Chinese soft power. Many leading Chinese models are open-source, meaning anyone around the globe can download them without charge and generally use them with few restrictions. The new thinking: Not all technology should be open to everyone.
   
• Cues from Washington: Beijing has been closely watching Washington’s moves to regulate Anthropic’s Mythos, which is capable of detecting cybersecurity flaws automatically. The White House banned foreign access to the model, prompting Anthropic to cut off access to all users. More recently, the White House moved to allow access for some users. To Beijing’s regulators, the back-and-forth in Washington has reinforced the idea that governments need to keep a tight grip on powerful AI technology to prevent misuse in areas such as cyberwarfare and bioweapons development.

Federal regulator warns robotaxis are a ‘danger’ to the public.

The federal government is demanding that autonomous-vehicle companies address their driverless cars’ pattern of impeding or ignoring first responders and emergency vehicles.

The National Highway Traffic Safety Administration has documented incidents of autonomous vehicles driving into active emergency scenes and blocking the paths of ambulances and firefighters.

Autonomous vehicles have also failed to recognize traffic cones, flashing lights, and other safety threats such as smoke and fire, according to a Wednesday letter from NHTSA Administrator Jonathan Morrison.

NY attorney general sues 3M, others over ‘forever chemicals’.

New York’s attorney general sued a group of major chemical and agricultural companies on Thursday, alleging they deceived consumers about the risks of toxic chemicals in their products.

The lawsuit by Attorney General Letitia James targets 3M, Chemours, and DuPont de Nemours, as well as EIDP and its parent Corteva. The companies marketed products containing a group of chemicals called polyfluoroalkyl substances—often called PFAS or “forever chemicals”—while knowing they posed risks to consumers and the environment, James said.

• The German branch of ratings agency Moody’s has been fined €2.15 million ($2.4 million) by the European financial markets regulator for failing to provide accurate and up-to-date data, Risk Journal reports (free link).
   
• The European Union has published its annual national dual-use export control lists, incorporating new entries from Spain, the Netherlands and Finland. The lists extend licensing requirements to advanced artificial-intelligence chips, semiconductor manufacturing equipment and quantum computers not yet covered by the EU’s common control list.
   
• Meta Platforms isn’t doing enough to protect users from the physical and mental harm from its addictive designs of Instagram and Facebook, the European Union said, escalating a probe that could yield heavy fines.

The fight over Hormuz boils down to one poorly worded clause in Trump’s deal.

President Trump’s memorandum of understanding with Iran was supposed to open the Strait of Hormuz and relieve the pressure on the global economy. Instead, it set off a test of wills that has exploded into violence twice in the past two weeks.

The root of the dispute is Paragraph 5, which says Iran will make arrangements to restore shipping through the strategic waterway and then work with Oman to determine how to administer it in the future. But it also includes an Iranian pledge to ensure safe passage and remove military obstacles such as mines.

Trump administration officials saw that clause as unlocking the strait, the main accomplishment of the president’s deal. Iranian hard-liners, however, have used it to push a maximalist interpretation that gives the Islamic Republic exclusive control over the waterway as a key source of leverage.

• Iran Hatched Fresh Plot to Kill Trump, Israel Told U.S.

• Volkswagen’s once-unshakeable business model—and the vast workforce it sustained—is under threat like never before. The world’s second-largest automaker on Thursday said it would cut its lineup of cars by as much as a half and further reduce its production capacity as part of its second major overhaul in under two years.
   
• A British judge ruled that two London-based insurers won’t need to pay out for damage incurred to the Nord Stream gas pipeline after it was hit by two sub-sea explosions in 2022, finding that the policies did not cover the war between Russia and Ukraine.

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• Federal Reserve Chairman Kevin Warsh named more than a dozen external advisers to lead five task forces that will re-examine how the central bank operates, drawing mainly on academics, former central bankers and business executives.
   
• Fidji Simo, OpenAI’s No. 2 executive, plans to step down from her full-time role after an extended medical leave.
   
• San Francisco’s pandemic-era doom loop has been replaced by a land grab, driven in part by anxiety about how artificial-intelligence wealth will impact home buying.
   
• George Johnson, who built Johnson Products into a dominant hair-care provider for Black customers, died at the age of 99.

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