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Welcome to The AI Report — the #1 AI newsletter for business leaders.
You don’t need to be technical. Just informed.
• 1. 🔐 Reclaim your privacy today with Incogni
• 2. ⚡️ US accuses China of AI theft
• 3. 💼 Your Business Briefing
• 4. 🤓 Get your whole team AI fluent with Upscaile
• 5. ✍️ Today’s Policy Corner
• 6. 🗞️ The News Bulletin
Are you ready to launch AI transformation for your company?
TOGETHER WITH INCOGNI
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Latest in AI
US accuses China of AI theft
🚨 Our Report
The Trump administration has accused Beijing-based Moonshot AI of covertly extracting proprietary technology from Anthropic's Claude Fable 5 model to build its newly released Kimi K3 system, raising the prospect of sanctions against a Chinese firm for intellectual property theft in the AI sector.
🔓 Key Points
White House official Michael Kratsios alleged that Moonshot built "a sophisticated internal platform to conduct large-scale distillation against U.S. models" and engineered it to quickly switch between access methods to avoid detection.
The allegation also claims Moonshot acquired servers with Nvidia's GB300 chips and accessed GB300-equipped servers in Thailand, likely circumventing US export controls that block top-tier American semiconductors from reaching China.
Treasury Secretary Scott Bessent signaled sanctions are on the table, stating officials are "finding watermarks of our US large language models on many of the Chinese models" and reviewing enforcement options.
🔐 Relevance
The accusations follow Anthropic's February report identifying Moonshot as one of several Chinese AI firms engaged in coordinated distillation campaigns, tracing over 3.4 million Claude exchanges to the company through fraudulent accounts. For enterprise buyers, this signals tightening enforcement around AI intellectual property and potential supply chain disruptions as Washington increasingly treats frontier model technology as a national security asset. Companies deploying US-built AI systems should expect stricter compliance requirements around model access and usage monitoring.
THE BUSINESS BRIEFING: CUSTOMER EXPERIENCE (powered by Upscaile)
Canada Goose (global luxury retailer) faced peak-season overload in its contact center, with style experts spending most of their time answering routine “where is my order” and warranty status questions. In late 2025, the company deployed Salesforce’s Agentforce Service Agent across chat, SMS, WhatsApp, and then voice to handle high-frequency, low-complexity inquiries and route high-intent conversations to human reps.
Tool used: Salesforce Agentforce (with Agentforce Voice) -- AI service agent that automates routine inquiries and transfers complex cases to human reps with full conversation context.
Result: Agentforce resolved 89% of targeted routine interactions, driving a 23% overall contact deflection rate. Peak wait times fell 13.9%, and CSAT increased 21.2% from 3.3 to 4.0. Human reps shifted from status lookups to revenue-generating conversations.
The lesson: AI delivers outsized impact when you automate the low-value 30% and deliberately protect the high-value 70% for skilled operators.
Steal this: Pull 90 days of support tickets and quantify your top two repetitive inquiry types by volume. If they represent more than 20% of total tickets, pilot an AI agent on those use cases only, with strict escalation rules and full transcript summaries for reps. Measure deflection rate, wait time, and CSAT before expanding.
TOGETHER WITH UPSCAILE
Teach your whole team AI — the Stanford way
Right now a few people are experimenting with AI, the rest are hesitant, and there's no shared standard.
Upscaile fixes that in 90 minutes.
It's the same curriculum Arturo Ferreira delivered to 50+ Stanford students, refined across 12+ enterprise teams.
One live virtual session, unlimited attendees, $5,000 flat — while typical workshops charge $500–$1,500 a seat. Your team leaves with prompting frameworks, safe repeatable workflows, and AI applied to your real use cases, plus all the materials to keep.
THE POLICY CORNER
14 states enacted chatbot safety laws in the first half of 2026 — enforcement begins.
Between January and July 2026, state lawmakers passed bipartisan AI chatbot safety measures in 13 states including California, New York, Connecticut, Georgia, and Washington. The laws require operators to disclose AI nature to users, implement suicide prevention protocols, restrict sexually explicit content for minors, ban manipulative engagement tactics, and provide parental controls. Most laws define minors as under 18. Coverage applies to any chatbot operator serving users in these states, regardless of company headquarters location.
Deadline: Most laws take effect between July 2026 and January 2027. Connecticut's SB 5 is already in effect as of October 1, 2026. Washington's HB 2225 enforcement begins January 1, 2027.
Risk: Penalties range from $500 per violation per user (New York) to $15,000 per day (Rhode Island). Wyoming's HB 102 includes felony charges with up to 10 years imprisonment for systems designed to promote self-harm. Violations also open pathways to class action discrimination and consumer protection claims.
Your move: Audit your chatbot products this week. Check if your disclosure language meets notification requirements, verify suicide prevention protocols are active, and confirm minor-protection features are operational. If you serve users in multiple states, implement the strictest standards across all markets to avoid compliance fragmentation.
AI News
🤝 Reddit considers ending Google data access as AI traffic tanks referrals: Social platform executives evaluating if partnership justifies feeding content to Gemini training after AI overviews reduced clicks to external sites, $60M annual deal up for renewal. FULL STORY
💻 IBM's mainframe revenue drops 42% as customers prioritize AI hardware: Enterprise clients delayed hundreds of millions in mainframe purchases to cover 15-30% cost increases on data center gear and memory driven by AI buildout boom. FULL STORY
🚀 Google Cloud revenue jumps 82% on enterprise AI adoption: Cloud business hit $24.8B this quarter, beating Wall Street expectations of $22.46B, with $514B backlog driven by AI infrastructure and solutions. FULL STORY
🔓 Nvidia CEO dismisses Chinese open-source AI security concerns: Jensen Huang urges Washington against restricting models like Kimi K3, calling surveillance fears a "misconception" and arguing models are downloadable with customizable guardrails. FULL STORY
Trending AI Tools (Sponsored by the AI Executive’s Pass)
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The Money: AI infrastructure race hits record deal velocity
Two of the largest AI infrastructure transactions in history closed within 48 hours of each other, signaling hyperscalers and chipmakers are locked in an arms race for compute capacity. The combined $45B in announced commitments dwarfs most sovereign wealth fund portfolios and marks a decisive shift from model development to physical infrastructure as the limiting factor in AI scale.
Deals to know:
Aligned Data Centers (Acquisition, $40B) -- 6.4 GW operational and planned data center capacity acquired by BlackRock's AI Infrastructure Partnership. Additional $5B committed for expansion. Investors: BlackRock GIP, MGX, Microsoft, Nvidia, xAI, Temasek, Kuwait Investment Authority
Anthropic (Strategic investment, up to $5B) -- AMD commits capital and 2 GW of Instinct MI450 GPUs in Helios rack-scale solutions. First gigawatt deploys H1 2027. Investors: AMD
Signal: Smart money is betting AI's constraint isn't algorithms but atoms. The companies controlling power, land, and chip supply will set the terms for the next wave of model deployment.
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Until next time, Arturo and Liam.
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