Sat 16 May 2026
Daily Brief — Curated and contextualised by Best Practice AI
Tech Giants Borrow Abroad, Venture Capital Surges, and Job Losses Mount
TL;DR US tech giants like Alphabet and Amazon are increasingly borrowing from foreign debt markets. Venture capital in AI hit $255.5 billion in Q1 2026. Meanwhile, US job losses continue in roles vulnerable to AI automation. Energy prices in the largest US market have surged 75% due to datacenter demand. Nvidia faces uncertainty in China as local firms shift to domestic chipmakers.
The stories that matter most
Selected and contextualised by the Best Practice AI team
The enterprise risk nobody is modeling: AI is replacing the very experts it needs to learn from
For AI systems to keep improving in knowledge work, they need either a reliable mechanism for autonomous self-improvement or human evaluators capable of catching errors and generating high-quality feedback. The industry has invested enormously in the first. It's giving almost no thought to what's happening to the second. I’d argue that we need to treat the human evaluation problem with just as much rigor and investment as we put into building the model capabilities themselves. New grad hiring at major tech companies has dropped by half since 2019. Document review, first-pass research, data cleaning, code review: Models handle these now. The economists tracking this call it displacement. The companies doing it call it efficiency. Neither are focusing on the future problem. Why self-improvement has limits in knowledge work The obvious pushback is reinforcement learning (RL). AlphaZero learned Go, chess, and Shogi at superhuman levels without human data and generated novel strategies in the process. Move 37 in the 2016 match against Lee Sedol, a move professionals said they would never have played, didn't come from human annotation. It emerged from AI self-play. What enables this is the stability of the environment. Move 37 is a novel move within the fixed state space of Go. The rules are complete, unambiguous, and permanent. More importantly, the reward signal is perfect: Win or lose, and immediate, with no room for interpretation. The system always knows whether a move was good because the game eventually ends with a clear result. Knowledge work doesn't have either of those properties. The rules in any professional domain are dynamic and continuously rewritten by the humans operating in them. New laws get passed. New financial instruments are invented. A legal strategy that worked in 2022 may fail in a jurisdiction that has since changed its interpretation. Whether a medical diagnosis was right may not be known for years. Without a stable environment and an unambiguous reward signal, you cannot close the loop. You need humans in the evaluation chain to continue teaching the model. The formation problem The AI systems being built today were trained on the expertise of people who went through exactly that formation. The difference now is that entry-level jobs that develop such expertise were automated first. Which means the next generation of potential experts is not accumulating the kind of judgment that makes a human evaluator worth having in the loop. History has examples of knowledge dying. Roman concrete. Gothic construction techniques. Mathematical traditions that took centuries to recover. But in every historical case, the cause was external: Plague, conquest, the collapse of the institutions that hosted the knowledge. What's different here is that no external force is required. Fields could atrophy not from catastrophe but from a thousand individually rational economic decisions, each one sensible in isolation. That's a new mechanism, and we don't have much practice recognizing it while it's happening. When entire fields go quiet At its logical limit, this isn’t just a pipeline problem. It’s a demand collapse for the expertise itself. Consider advanced mathematics. It doesn’t atrophy because we stop training mathematicians. It atrophies because organizations stop needing mathematicians for their day-to-day work, the economic incentive to become one disappears, the population of people who can do frontier mathematical reasoning shrinks, and the field’s capacity to generate novel insight quietly collapses. The same logic applies to coding. Our question is not “will AI write code” but “if AI writes all production code, who develops the deep architectural intuition that produces genuinely novel systems design?” There is a critical difference between a field being automated and a field being understood. We can automate a huge amount of structural engineering today, but the abstract knowledge of why certain approaches work lives in the heads of people who spent years doing it wrong first. If you eliminate the practice, you don’t just lose the practitioners. You lose the capacity to know what you’ve lost. Advanced mathematics, theoretical computer science, deep legal reasoning, complex systems architecture: When the last person who deeply understands a subfield of algebra retires and no one replaces them because the funding dried up and the career path disappeared, that knowledge isn’t likely to be rediscovered any time soon. It’s gone. And nobody notices because the models trained on their work still perform well on benchmarks for another decade. I think of this as a hollowing out: The surface capability remains (models can still produce outputs that look expert) while the underlying human capacity to validate, extend, or correct that expertise quietly disappears. Why rubrics don't fully substitute The current approach is rubric-based evaluation. Constitutional AI, reinforcement learning from AI feedback (RLAIF), and structured criteria that let models score models are serious techniques that meaningfully reduce dependence on human evaluators. I'm not dismissing them. Their limitation is this: A rubric can only capture what the person who wrote it knew to measure. Optimize hard against it and you get a model that's very good at satisfying the rubric. That's not the same thing as a model that's actually right. Rubrics scale the explicit, articulable part of judgment. The deeper part, the instinct, the felt sense that something is off, doesn't fit in a rubric. You can't write it down because you need to experience it first before you know what to write. What this means in practice This isn’t an argument for slowing development. The capability gains are real. And it’s possible that researchers will find ways to close the evaluation loop without human judgment. Maybe synthetic data pipelines get good enough. Maybe models develop reliable self-correction mechanisms we can’t yet imagine. But we don’t have those today. And in the meantime, we’re dismantling the human infrastructure that currently fills the gap, not as a deliberate decision but as a byproduct of a thousand rational ones. The responsible version of this transition isn’t to assume the problem will solve itself. It’s to treat the evaluation gap as an open research problem with the same urgency we bring to capability gains. The thing AI most needs from humans is the thing we’re least focused on preserving. Whether that’s permanently true or temporarily true, the cost of ignoring it is the same. Ahmad Al-Dahle is CTO of Airbnb.
EY retracts study after researchers discover AI hallucinations
Incident is latest example of professional services firm being led astray by new technology
Consulting’s Partnership Model Is Shifting with AI - Strat-Bridge
McKinsey’s reported partner compensation overhaul reveals a deeper shift in consulting economics as AI, outcome-based pricing, and capital investment reshape the traditional partnership model.
Nvidia’s Future in China Remains Unclear After Trump-Xi Summit
The standoff comes as Chinese firms increasingly turn to domestic chipmakers like Huawei, in a drive to reduce China’s dependence on Western technologies.
The Free Sample Phase: Why AI Tools Are Underpriced and What Comes Next | MindStudio
Enterprise AI, productivity tools, ... most are priced well below their actual cost to deliver. That’s not an accident. It’s a strategy. And like all strategies, it has an end date. This piece breaks down why AI pricing is where it is, what the endgame looks like, and — most importantly — how to get the most value out of the window that’s still open. The economics of large language models are brutal ...
How RecursiveMAS speeds up multi-agent inference by 2.4x and reduces token usage by 75%
One of the key challenges of current multi-agent AI systems is that they communicate by generating and sharing text sequences, which introduces latency, drives up token costs, and makes it difficult to train the entire system as a cohesive unit. To overcome this challenge, researchers at University of Illinois Urbana-Champaign and Stanford University developed RecursiveMAS, a framework that enables agents to collaborate and transmit information through embedding space instead of text. This change results in both efficiency and performance gains. Experiments show that RecursiveMAS achieves accuracy improvement across complex domains like code generation, medical reasoning, and search, while also increasing inference speed and slashing token usage. RecursiveMAS is significantly cheaper to train than standard full fine-tuning or LoRA methods, making it a scalable and cost-effective blueprint for custom multi-agent systems. The challenges of improving multi-agent systems Multi-agent systems can help tackle complex tasks that single-agent systems struggle to handle. When scaling multi-agent systems for real-world applications, a big challenge is enabling the system to evolve, improve, and adapt to different scenarios over time. Prompt-based adaptation improves agent interactions by iteratively refining the shared context provided to the agents. By updating the prompts, the system acts as a director, guiding the agents to generate responses that are more aligned with the overarching goal. The fundamental limitation is that the capabilities of the models underlying each agent remain static. A more sophisticated approach is to train the agents by updating the weights of the underlying models. Training an entire system of agents is difficult because updating all the parameters across multiple models is computationally non-trivial. Even if an engineering team commits to training their models, the standard method of agents communicating via text-based interactions creates major bottlenecks. Because agents rely on sequential text generation, it causes latency as each model must wait for the previous one to finish generating its text before it can begin its own processing. Forcing models to spell out their intermediate reasoning token-by-token just so the next model can read it is highly inefficient. It severely inflates token usage, drives up compute costs, and makes iterative learning across the whole system painfully slow to scale. How RecursiveMAS works Instead of trying to improve each agent as an isolated, standalone component, RecursiveMAS is designed to co-evolve and scale the entire multi-agent system as a single integrated whole. The framework is inspired by recursive language models (RLMs). In a standard language model, data flows linearly through a stack of distinct layers. In contrast, a recursive language model reuses a set of shared layers that processes the data and feeds it back to itself. By looping the computation, the model can deepen its reasoning without adding parameters. RecursiveMAS extends this scaling principle from a single model to a multi-agent architecture that acts as a unified recursive system. In this setup, each agent functions like a layer in a recursive language model. Rather than generating text, the agents iteratively pass their continuous latent representations to the next agent in the sequence, creating a looped hidden stream of information flowing through the system. This latent hand-off continues down the line through all the agents. When the final agent finishes its processing, its latent outputs are fed directly back to the very first agent, kicking off a new recursion round. This structure allows the entire multi-agent system to interact, reflect, and refine its collective reasoning over multiple rounds entirely in the latent space, with only the very last agent producing a textual output in the final round. It is like the agents are communicating telepathically as a unified whole and the last agent provides the final response as text. The architecture of latent collaboration To make continuous latent space collaboration possible, the authors introduce a specialized architectural component called the RecursiveLink. This is a lightweight, two-layer module designed to transmit and refine a model's latent states rather than forcing it to decode text. A language model's last-layer hidden states contain the rich, semantic representation of its reasoning process. The RecursiveLink is designed to preserve and transmit this high-dimensional information from one embedding space to another. To avoid the cost of updating every parameter across multiple large language models, the framework keeps the models' parameters frozen. Instead, it optimizes the system by only training the parameters of the RecursiveLink modules. To handle both internal reasoning and external communication, the system uses two variations of the module. The inner RecursiveLink operates inside an agent during its reasoning phase. It takes the model's newly generated embeddings and maps them directly back into its own input embedding space. This allows the agent to continuously generate a stream of latent thoughts without generating discrete text tokens. The outer RecursiveLink serves as the bridge between agents. Because agents in a real-world system might use different model architectures and sizes, their internal embedding spaces have entirely different dimensions. The outer RecursiveLink includes an additional layer designed to match the embeddings from one agent's hidden dimension with the next agent's embedding space. During training, first, the inner links are trained independently to warm up each agent's ability to think in continuous latent embeddings. Then, the system enters outer-loop training, where the diverse, frozen models are chained together in a loop, and the system is evaluated based on the final textual output of the last agent. The only thing that gets updated in the training process is the RecursiveLink parameters and the original model weights remain unchanged, similar to low-rank adaptation (LoRA). Another advantage of this system comes into effect when you have multiple agents on top of the same backbone model. If you have a multi-agent system where two agents are built on the exact same foundation model acting in different roles, you do not need to load two copies of the model into your GPU memory, nor do you train them separately. The agents will share the same backbone as the brain and use the RecursiveLink as the connective tissue. RecursiveMAS in action The researchers evaluated RecursiveMAS across nine benchmarks spanning mathematics, science and medicine, code generation, and search-based question answering. They created a multi-agent system using open-weights models including Qwen, Llama-3, Gemma3, and Mistral. These models were assigned roles to form different agent collaboration patterns such as sequential reasoning and mixture-of-experts collaboration. RecursiveMAS was compared to baselines under identical training budgets, including standalone models enhanced with LoRA or full supervised fine-tuning, alternative multi-agent frameworks like Mixture-of-Agents and TextGrad, and recursive baselines like LoopLM. It was also compared to Recursive-TextMAS, which uses the same recursive loop structure as RecursiveMAS but forces the agents to explicitly communicate via text. RecursiveMAS achieved an average accuracy improvement of 8.3% compared to the strongest baselines across the benchmarks. It excelled particularly on reasoning-heavy tasks, outperforming text-based optimization methods like TextGrad by 18.1% on AIME2025 and 13% on AIME2026. Because it avoids generating text at every step, RecursiveMAS achieved 1.2x to 2.4x end-to-end inference speedup. RecursiveMAS is also much more token efficient than the alternative. Compared to the text-based Recursive-TextMAS, it reduces token usage by 34.6% in the first round of the recursion, and by round three, it achieves 75.6% token reduction. RecursiveMAS also proved remarkably cheap to train. Because it only updates the lightweight RecursiveLink modules, which consist of roughly 13 million parameters or about 0.31% of the trainable parameters of the frozen models, it requires the lowest peak GPU memory and cuts training costs by more than half compared to full fine-tuning. Enterprise adoption The efficiency gains — lower token consumption, reduced GPU memory requirements, and faster inference — are intended to make complex multi-step agent workflows viable in production environments without the compute overhead that limits enterprise agentic deployments. The researchers have released the code and trained model weights under the Apache 2.0 license.
Economics & Markets
Labor, Society & Culture
‘I didn’t want to be the guinea pig’: inside tech’s AI-fueled manager purge
Tech workers say AI-driven restructurings are eroding mentorship, support and paths to promotion across Silicon Valley As tech companies pour billions into artificial intelligence bets and slash their workforces, middle managers are squarely in the crosshairs. A trend is emerging: when tech CEOs announce that AI is making it possible to do more with fewer workers, they promise to flatten their structures by cutting away what they call unnecessary management layers and bureaucracy. Just last week, the cryptocurrency exchange Coinbase laid off 14% of its workforce while gesturing to the thrill of AI-fueled, minimal-management efficiency. In doing so, it joined companies including Amazon, Block and Meta that in the last year have laid off tens of thousands of employees with a specific focus on removing management layers. Continue reading...
The enterprise risk nobody is modeling: AI is replacing the very experts it needs to learn from
For AI systems to keep improving in knowledge work, they need either a reliable mechanism for autonomous self-improvement or human evaluators capable of catching errors and generating high-quality feedback. The industry has invested enormously in the first. It's giving almost no thought to what's happening to the second. I’d argue that we need to treat the human evaluation problem with just as much rigor and investment as we put into building the model capabilities themselves. New grad hiring at major tech companies has dropped by half since 2019. Document review, first-pass research, data cleaning, code review: Models handle these now. The economists tracking this call it displacement. The companies doing it call it efficiency. Neither are focusing on the future problem. Why self-improvement has limits in knowledge work The obvious pushback is reinforcement learning (RL). AlphaZero learned Go, chess, and Shogi at superhuman levels without human data and generated novel strategies in the process. Move 37 in the 2016 match against Lee Sedol, a move professionals said they would never have played, didn't come from human annotation. It emerged from AI self-play. What enables this is the stability of the environment. Move 37 is a novel move within the fixed state space of Go. The rules are complete, unambiguous, and permanent. More importantly, the reward signal is perfect: Win or lose, and immediate, with no room for interpretation. The system always knows whether a move was good because the game eventually ends with a clear result. Knowledge work doesn't have either of those properties. The rules in any professional domain are dynamic and continuously rewritten by the humans operating in them. New laws get passed. New financial instruments are invented. A legal strategy that worked in 2022 may fail in a jurisdiction that has since changed its interpretation. Whether a medical diagnosis was right may not be known for years. Without a stable environment and an unambiguous reward signal, you cannot close the loop. You need humans in the evaluation chain to continue teaching the model. The formation problem The AI systems being built today were trained on the expertise of people who went through exactly that formation. The difference now is that entry-level jobs that develop such expertise were automated first. Which means the next generation of potential experts is not accumulating the kind of judgment that makes a human evaluator worth having in the loop. History has examples of knowledge dying. Roman concrete. Gothic construction techniques. Mathematical traditions that took centuries to recover. But in every historical case, the cause was external: Plague, conquest, the collapse of the institutions that hosted the knowledge. What's different here is that no external force is required. Fields could atrophy not from catastrophe but from a thousand individually rational economic decisions, each one sensible in isolation. That's a new mechanism, and we don't have much practice recognizing it while it's happening. When entire fields go quiet At its logical limit, this isn’t just a pipeline problem. It’s a demand collapse for the expertise itself. Consider advanced mathematics. It doesn’t atrophy because we stop training mathematicians. It atrophies because organizations stop needing mathematicians for their day-to-day work, the economic incentive to become one disappears, the population of people who can do frontier mathematical reasoning shrinks, and the field’s capacity to generate novel insight quietly collapses. The same logic applies to coding. Our question is not “will AI write code” but “if AI writes all production code, who develops the deep architectural intuition that produces genuinely novel systems design?” There is a critical difference between a field being automated and a field being understood. We can automate a huge amount of structural engineering today, but the abstract knowledge of why certain approaches work lives in the heads of people who spent years doing it wrong first. If you eliminate the practice, you don’t just lose the practitioners. You lose the capacity to know what you’ve lost. Advanced mathematics, theoretical computer science, deep legal reasoning, complex systems architecture: When the last person who deeply understands a subfield of algebra retires and no one replaces them because the funding dried up and the career path disappeared, that knowledge isn’t likely to be rediscovered any time soon. It’s gone. And nobody notices because the models trained on their work still perform well on benchmarks for another decade. I think of this as a hollowing out: The surface capability remains (models can still produce outputs that look expert) while the underlying human capacity to validate, extend, or correct that expertise quietly disappears. Why rubrics don't fully substitute The current approach is rubric-based evaluation. Constitutional AI, reinforcement learning from AI feedback (RLAIF), and structured criteria that let models score models are serious techniques that meaningfully reduce dependence on human evaluators. I'm not dismissing them. Their limitation is this: A rubric can only capture what the person who wrote it knew to measure. Optimize hard against it and you get a model that's very good at satisfying the rubric. That's not the same thing as a model that's actually right. Rubrics scale the explicit, articulable part of judgment. The deeper part, the instinct, the felt sense that something is off, doesn't fit in a rubric. You can't write it down because you need to experience it first before you know what to write. What this means in practice This isn’t an argument for slowing development. The capability gains are real. And it’s possible that researchers will find ways to close the evaluation loop without human judgment. Maybe synthetic data pipelines get good enough. Maybe models develop reliable self-correction mechanisms we can’t yet imagine. But we don’t have those today. And in the meantime, we’re dismantling the human infrastructure that currently fills the gap, not as a deliberate decision but as a byproduct of a thousand rational ones. The responsible version of this transition isn’t to assume the problem will solve itself. It’s to treat the evaluation gap as an open research problem with the same urgency we bring to capability gains. The thing AI most needs from humans is the thing we’re least focused on preserving. Whether that’s permanently true or temporarily true, the cost of ignoring it is the same. Ahmad Al-Dahle is CTO of Airbnb.
The WPI Conversation: ‘Every job now and in the future is going to have an AI component to it’ - WP Intelligence
The Acting Secretary of Labor on preparing Americans for the future of work
Labor market resilient to AI, so far | Semafor
A recent survey by the New York Fed showed “firms intend to incorporate AI mainly via retraining, with limited effects on hiring.”
Entry-level productivity expectations have increased due to AI, report says | HR Dive
Nearly a third of HR professionals told D2L they’re hiring fewer early career workers and using artificial intelligence to fill in the gaps.
AI now screens 95% of job applicants. A wave of state laws is about to change how companies can use it
AI tools handle 95% of initial candidate screening in 2026, but new state laws in Colorado, California, NYC and Illinois are reshaping compliance.
The dignity deficit: Why AI policy frameworks miss the point
Every time a new jobs report drops and AI is mentioned in the same breath, the conversation follows a familiar script. How many roles are at risk. Which sectors will recover. Whether universal basic income...
Wjcl
They recommend that companies invest in training programs to help workers transition into roles that use AI tools but still rely on non-automatable skills. The study also uses job postings as a proxy for the labor market, meaning "ghost job postings" could distort the true picture of hiring trends ...
Technology & Infrastructure
Meet the California cheese mogul who turned to AI agents to save his iconic $50 million business
When the pandemic pushed a 113-year-old California institution to the brink of collapse, Larry Peter called his cousin.
Companies confront challenges of AI agent proliferation
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Japanese flash memory maker’s profits surge on AI frenzy
Toshiba spinout Kioxia plans to list American depositary shares to widen US investor pool
SMIC Reports Surge in Foreign Orders Amid Global AI Chip Demand, ETTelecom
China's top chipmaker, SMIC, reveals an increase in foreign client orders as AI demand reshapes global semiconductor production, impacting capacity and manufacturing trends.
Why AI Hardware Could Become More Important Than Software Innovation
AI requires large amounts of electricity because advanced models continuously process enormous volumes of data using powerful servers. These systems also need extensive cooling infrastructure to prevent overheating, making energy consumption a major concern in AI expansion. 5. Could hardware become ...
Graphene's Role in Next-Gen AI Hardware
How Graphene is Reshaping the Physical Backbone of AI Computing The rapid expansion of artificial intelligence is placing unprecedented demands on physical hardware, specifically regarding thermal management and energy efficiency. As data centers struggle to cool increasingly powerful processors, ...
Adoption, Deployment & Impact
EY retracts study after researchers discover AI hallucinations
Incident is latest example of professional services firm being led astray by new technology
Europe’s public sector deploying AI faster than it can manage – report
A new global study on sovereign AI, commissioned by Dell Technologies, highlights the key challenges for Europe. Read more: Europe’s public sector deploying AI faster than it can manage – report
Geopolitics, Policy & Governance
House talks look at blocking some state AI laws, including in California and New York - POLITICO
New details about the talks, which have not previously been reported, come as the White House grapples with a similar set of questions posed by the emergence of Mythos.
Tech titans should pick up the phone — and so should the rest of us
The lesson from Elon Musk’s case against OpenAI is that writing things down can be embarrassing
Lawyers Hub and AFD Report Urges Africa-Europe Reset on AI Governance Before Political Window Closes - iAfrica.com
A landmark report on Africa-Europe cooperation in AI governance has warned that Africa's regulatory capacity has grown significantly but has not translated
The Real AI Tech Stack: Local to Global Governance - Penn Washington
The 2026 SCSP AI Expo made one thing clear: AI governance operates in layers, and the U.S. is still figuring out how to connect them.
Don’t Believe the Hype: The Impact of AI on Regulatory Policy and Process Plus Policy Recommendations - Public Citizen
Artificial intelligence (AI) is an ever-evolving technology that presents new challenges to regulatory policy and the regulatory process writ large.…
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