• Markets: Stocks dipped yesterday as investors waited for Google and Tesla to report their earnings after the market closed like a child who’s been promised a treat after school (more on those below). One stock that was already like a kid in a candy store was Supermicro, which spiked after the AI server-maker reported Tuesday evening that its margins were way higher than expected.

cyber insecure

Nick Iluzada

If this were a sci-fi movie, this would be the moment where the hero asks, “So, what are you saying?” and the brainy sidekick takes off his glasses slowly to convey how serious it’s about to get. OpenAI said on Tuesday that two of its AI models (one unreleased) broke out of a supposedly highly isolated training environment and hacked another AI company called Hugging Face.

What happened: OpenAI was testing a combination of its GPT-5.6 Sol model and an even more powerful unreleased model to assess their ability to work together to cause a cyberattack. Turns out, they were very capable:

• The test took place in a “sandbox,” a contained environment that prevents models from causing real harm. But…the AI was able to hack its way out and find its way online.
• It then hacked into Hugging Face and used its digital library of other AI models and tools to steal answers in order to complete its test.

Hugging Face reported last week that it had detected a breach by a complex system that had accessed internal datasets and company credentials. Now, it’s working with OpenAI to investigate.

Is it really that big a deal if the AIs hack each other?

It’s the first time that we know of an autonomous AI agent committing a cyberattack like this. OpenAI called the incident “unprecedented.” Experts warn this kind of cyberattack is exactly what they’ve been screaming about, urging Washington to create stricter guardrails for AI development.

On the flip side, Hugging Face used a Chinese AI model to defend against the hack, because the US model it tried to use had restrictions in place that couldn’t differentiate between an attacker and a responder to the attack.

Big picture: President Trump said last month he wants as few AI restrictions as possible in an attempt to win the AI arms race against China. His administration rolled back Biden-era restrictions on the tech just hours after returning to the White House, and announced a $500 billion investment into AI-related infrastructure.—MM

      

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World

Tour de headlines

Beata Zawrzel/Getty Images

🔤 Alphabet beat earnings expectations, but investors don’t love its plans to increase spending. The tech company announced in its earnings report that its capital expenditures for 2026 will be between $195 billion and $205 billion, up from an earlier estimate of $190 billion, as it seeks to expand its presence in AI. While some investors worry that Alphabet is abandoning fiscal discipline, the company pointed to continued success in its Google Cloud unit as proof that the AI investments will pay off: It brought in $24.77 billion for the quarter, up 82% from the same period last year, good for the cloud division’s best-ever quarter. Alphabet shares fell by about 3% in extended trading.—HVL

🚘 Tesla missed on earnings despite better-than-expected revenue. The company still makes 70% of its revenue from auto sales, but wants to be known for its yet-to-be-released Optimus robots and self-driving Cybercabs. CEO Elon Musk said production of both is on track, but the growing pains are real, as Tesla’s spending on AI and robotics contributed to its earnings miss. Musk alluded to rumors that SpaceX may acquire Tesla, saying there will be “more and more overlap” between the two companies, but also, “We can’t talk about combining companies and that kind of thing on an earnings call.” Tesla stock fell 4% in after-hours trading.—HVL

🇮🇷 Trump threatens to strike Iran’s bridges and power plants if it hits Hormuz ships. Ratcheting up tensions, President Trump said on Truth Social yesterday that the US “will bomb and destroy ONE BRIDGE OR POWER PLANT,” including those in Tehran, any time Iran shoots at a ship in the Strait of Hormuz. The threat to attack Iran’s infrastructure—which is generally considered illegal under international law unless it is being used for military purposes—came as the US and Iran have been trading attacks since a ceasefire fell apart over Iran’s efforts to control the strait, which is vital for shipping oil. The president has also recently threatened to attack Pickaxe Mountain, the underground power plant Iran is believed to have moved its nuclear equipment to.—AR

POWER MOVE

President Trump and MBS last year. Demetrius Freeman/Getty Images

President Trump approved a deal potentially worth billions yesterday that will provide Saudi Arabia with a 30-year civilian nuclear program and will be administered by US businesses, but also lacks the safety oversights included in similar agreements with other countries, according to the Wall Street Journal.

The controversial agreement was signed by US Energy Secretary Chris Wright yesterday, but still needs to be sent to Congress for approval.

So, what’s the deal?

The agreement would allow for the US construction of a uranium enrichment facility in Saudi Arabia, if needed, following a joint US–Saudi study.

It was designed to put American companies at the forefront of developing Saudi Arabia’s nuclear infrastructure. Exactly which US companies would be involved hasn’t been made public, but the WSJ reported that Westinghouse Electric would be among the biggest beneficiaries.

The US currently has similar deals, known as 123 Agreements, with 26 other countries, but this one reportedly lacks two key stipulations that other agreements contain:

1. The Gold Standard, which prevents countries from enriching uranium and reprocessing spent nuclear fuel—potential precursors to the proliferation of weapons.
2. The Additional Protocol, allowing the UN’s International Atomic Energy Agency to conduct surprise inspections.

This will likely raise lawmakers’ eyebrows because…Saudi Crown Prince Mohammed bin Salman said in 2018 that his country would develop a nuclear bomb if Iran did. Meanwhile, the US and Israel are currently seeking to destroy Iran’s nuclear capabilities.—DL

      

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FLIP OR FLOP?

Samsung

Always a bridesmaid, never a bride: Samsung launched a trio of foldable smartphones yesterday that may only be getting attention because of similarities to the long-rumored folding iPhone that Apple is expected to launch this fall.

Twins: Samsung’s new Galaxy Z Fold 8 has nearly identical dimensions to the unreleased foldable iPhone, according to the Wall Street Journal:

• Samsung implemented a new, passport-sized wide build that was designed with video-watching, gaming, and social media scrolling in mind, the company said.
• The Z Fold 8 costs $1,899, while the foldable iPhone is expected to surpass $2,000.
• “Based on using the Z Fold 8…[the foldable iPhone] is going to be a home run,” Bloomberg’s Apple guru, Mark Gurman, posted on X.

The other two phones in Samsung’s new lineup are the tall $2,099 Z Fold 8 Ultra—designed for productivity—and the $1,199 clamshell-style Z Flip 8.

Once Apple launches its answer to Samsung’s riddles three, the new product could nab as much as 25% of the global foldable phone market, eroding Samsung’s 40% share and Huawei’s 30% share, according to Counterpoint Research. But Apple’s entrance into foldables—a category that researchers said accounted for just 1.6% of smartphones sold last year—could also benefit Samsung, by popularizing the niche sector that it’s dominated since 2019.—ML

      

Reader poll

MOLLY EXPLAINS THE INTERNET

Meet Jimothy, Seattle’s world-famous raccoon

Screenshot via @c1vrgr1/Instagram

The online world can be a beautiful yet confusing series of tubes. On Thursdays, the Brew’s Molly Liebergall untangles them for you.

Last week, a Seattle woman posted a video of an interestingly shaped raccoon traversing her yard, named the creature Jimothy, and unwittingly started a movement.

Since that initial sighting, which has garnered ~8 million views on Instagram, the internet has latched onto Jimothy—who appears to have short spine syndrome—with a ferocity that may surpass fanfare for previous viral animals Moo Deng and Punch the Monkey:

• The raccoon now has a Reddit community with 64k weekly visitors, 1,000+ merch listings on Etsy, an official bobblehead, a cameo in Roku City, a Google Search Easter Egg, a video game, mods that add it to Stardew Valley and Skyrim, and an official Dungeons & Dragons character card.
• Jimothy got a mention on The Daily Show, a feature on Budweiser’s Instagram, and a call-out by NASA and the International Space Station.

Locally, people are getting Jimothy tattoos and painting Jimothy murals. The Seattle Mariners instructed the crowd to “Get loud for Jimothy.” The WNBA’s Seattle Storm celebrated baskets made from behind the arc as “Jimo-threes.” Plus, the University of Washington gave the creature an honorary doctorate, and a Seattle city councilmember plans to proclaim summer 2026 as “Jimothy Summer.”

Protect at all costs: If you see Jimothy, don’t share the animal’s location, say members of r/JimothyTheRaccoon.—ML

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News

What else is brewing

• President Trump threatened to impose 100% tariffs on imported generic drugs as of 2028 in an effort to move production to the US.
• IBM lowered its forecast for the year as it reported disappointing sales.
• Paramount’s $110 billion purchase of Warner Bros. Discovery was cleared by EU antitrust regulators yesterday, but the deal is temporarily paused because of a legal challenge brought by a dozen US states.
• Amazon cut some employees from its artificial general intelligence unit, even as it continues to pour money into AI.
• Chipmaker AMD agreed to invest up to $5 billion into Anthropic, while the AI lab will buy tens of billions of dollars’ worth of AMD AI servers, in the latest high-profile circular deal in the industry.
• Rebel Wilson won a defamation case brought against her by Charlotte MacInnes, the lead actor in the Pitch Perfect actress’s feature directorial debut, The Deb.

recs

• If you use Amazon Prime, you may be entitled to some settlement cash.
• This game lets you be the air traffic controller.
• The very important job those tiny dots on your oven door do.
• This stylish bag designed in Japan folds to fit in your pocket.**

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Play

Brew Mini: Today’s little puzzle looks kind of like a proscenium. Maybe a star takes the stage… Play the Mini here.

Three Headlines and a Lie

Three of these headlines are real and one is faker than a tasty rice cake. Can you spot the odd one out?

1. Monkeys understand shapes in almost the same way as humans
2. Tokyo urges men to wear shorts to work, but women say it’s ‘leg hair harassment’
3. Scientists discovered the perfect company logo by tracking viewers’ brain waves
4. Ed Harris slams his Dutton Ranch role: “Get me the f*** out of here”

Answer

We made up the one about the scientifically derived logo.

Word of the Day

Today’s Word of the Day is: unwittingly, meaning “without intending to.” Thanks to Stephanie from Chicago for unknowingly sending just the suggestion we needed. Submit another Word of the Day here.