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Welcome to The AI Report — the #1 AI newsletter for business leaders.
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• 1. 📈 Deliver fast ROI with The AI Consultancy Project
• 2. 🛡️ LiteLLM breach hits 3.4M
• 3. 💼 Your Business Briefing
• 4. 🧠 Build real AI workflows with the AI Leaders Launch Guide
• 5. ✍️ Today’s Policy Corner
• 6. 🗞️ The News Bulletin
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Latest in AI
LiteLLM breach hits 3.4M
🚨 Our Report
Popular open-source AI tool LiteLLM, which gives developers easy access to hundreds of AI models, was infected with credential-stealing malware this week. The project (downloaded up to 3.4 million times per day) displayed SOC2 and ISO 27001 security certifications from Delve, the Y Combinator startup recently accused of misleading customers with "fake compliance."
🔓 Key Points
The malware slipped in through a software dependency, then harvested login credentials from everything it touched, using those to access more packages and accounts in a chain reaction.
FutureSearch researcher Callum McMahon discovered the attack after his machine crashed. Ironically, a bug in the poorly written malware caused the crash, and both McMahon and AI researcher Andrej Karpathy suspect it was AI-generated.
LiteLLM still displays Delve's certifications on its website, prompting engineer Gergely Orosz to note on X: "I thought this WAS a joke… but no, LiteLLM really was 'Secured by Delve.'"
🔐 Relevance
This incident exposes how supply chain attacks can slip past even certified projects, and raises fresh questions about the value of compliance badges, especially from providers under scrutiny. For enterprise teams relying on open-source AI tooling, it's a reminder that certifications signal policy, not immunity. LiteLLM says it's working with Mandiant on forensics and will share technical lessons with the developer community once the review is complete.
THE BUSINESS BRIEFING: HR & TALENT (powered by Upscaile)
Hugging Face (AI platform, 220 employees) was burning recruiter hours screening thousands of inbound applications with no ATS and full reliance on external agencies. They deployed Workable's AI Screening Assistant to automatically rank top candidates from massive applicant pools and gave hiring managers direct access to manage their own pipelines.
Tool used: Workable -- AI-powered applicant tracking system with automated screening and global hiring support.
Result: 2+ hours saved per recruiter per week. Total hires increased 300% (50 to 220 employees in 4 years). External recruiter spend eliminated entirely.
The lesson: AI screening only scales if non-recruiters can operate the system. Hugging Face succeeded because Workable was simple enough for engineers and managers to own hiring end-to-end, not just TA.
Steal this: Audit one high-volume role this week. Calculate hours spent manually screening resumes. Test an AI screening tool on that role's next 50 applicants and measure time saved before rolling out company-wide.
📘 Move from AI consumer to AI operator
Get the AI Leaders Launch Guide, including:
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THE POLICY CORNER
Gov. Phil Scott signed legislation requiring any campaign using AI-generated images, audio, or video within 90 days of an election to include a clear disclosure label. The label must be visible to the average viewer and large enough to read easily. Applies to all Vermont candidates and campaigns, including third-party ad creators. The law also includes restrictions on deepfakes of candidates.
Deadline: In effect now. Enforcement begins 90 days before the next Vermont election (primaries and general).
Risk: Violation can result in campaign fines and potential nullification of ad buys. Opens door to election law challenges and voter deception claims.
Your move: If you run political ads or manage campaigns in Vermont, audit your creative process now. Add disclosure requirements to vendor contracts and flag any AI-generated content for compliance review before launch.
AI News
🚨 AOC and Sanders push federal AI data center moratorium: Bill would freeze new data centers until national safeguards protect workers, consumers, and the environment; unlikely to pass, but signals progressive concerns about rising power costs and water consumption. FULL STORY
🔐 CrowdStrike launches AgentWorks ecosystem with AWS, Anthropic, OpenAI: A no-code platform lets security teams build custom AI agents with frontier models—partners including Accenture, Deloitte, Salesforce building agentic security businesses on the Falcon platform. FULL STORY
🛡️ Accenture deploys Claude-powered Cyber.AI across 1,600 apps: Security scan times dropped from 3-5 days to under 1 hour, testing coverage jumped from 10% to 80%, and the solution includes Agent Shield for real-time AI agent governance. FULL STORY
☁️ Only 14% of enterprises fully realize cloud value for AI: NTT DATA survey of 2,300 decision-makers shows 88% say current cloud investment levels risk AI initiatives, despite 99% agreeing AI increases cloud demand. FULL STORY
Trending AI Tools (The Full 2026 Tool Stack PDF Included Here)
A curated look at the AI tools quietly transforming how teams work.
ElevenLabs — The world's most realistic AI voice generator, with 98% transcription accuracy
Snack Prompt is a collaborative platform for finding, sharing, and crafting AI prompts
InterviewBoss is an AI-driven tool for interview preparation featuring mock sessions and tailored feedback
⚡️ Looking for the exact AI tools our team uses to run The AI Report?
We just launched the 2026 AI Tool Stack…
The Money: Enterprise AI bets on vertical infrastructure
Two of the highest-profile AI fundraises this month target specific domains, not general-purpose models. As capital shifts from foundation models to deployed systems solving real business problems, investors reward companies building infrastructure that makes agents actually work in production.
Deals to know:
Harvey (Series D, $200M) -- Legal workflow platform running 25,000 custom agents across M&A, due diligence, and contract drafting. Now partnered with majority of AmLaw 100 and 500+ in-house legal teams. Investors: GIC, Sequoia (co-leads), Andreessen Horowitz, Coatue
Reflection AI (Series C, amount undisclosed) -- Nvidia-backed AI infrastructure reportedly seeking $25B valuation. Focus on enterprise deployment layer. Investors: Nvidia (confirmed), others undisclosed
Signal: Capital is moving from general compute to specialized execution layers. Investors now bet on companies proving AI can run complex, multi-step workflows in regulated environments where mistakes cost millions.
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Until next time, Arturo and Liam.
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