• Markets: Stocks fell yesterday as China’s latest AI model spurred fears (more on that below), closing out a losing week due mostly to a big dip from chips—as semiconductors looked not-so-tasty to investors. The faltering chip sector meant Apple took the crown from Nvidia as the world’s most valuable company yesterday for the first time since April of last year, with its market value sitting at $4.88 trillion, while Nvidia’s dropped to $4.86 trillion.

IT’S RIGHT BEHIND YOU

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Kimmy from Full House 🤝 Kimi from China 🤝 barging right in. A Beijing-based artificial intelligence lab called Moonshot surprised Silicon Valley yesterday when it released Kimi K3, a new AI model that it says beats most US systems and costs less to use.

According to benchmarks provided by Moonshot:

• Kimi outperforms all available AI models except for two—Anthropic’s Claude Fable 5 and OpenAI’s GPT-5.6 Sol—both of which came out in the last two months.
• Kimi can store far more information than leading US models, boasting 2.8 trillion parameters (which are like an AI model’s brain cells) compared with an estimated 1.5 trillion for Claude Opus 4.8, released in May.

Price comparison: Moonshot will charge businesses $15 per million output tokens (a metric of AI usage), compared to costs of $30 for GPT-5.6 Sol and $50 for Claude Fable 5.

Threat Level Midnight: Kimi is also supposedly better at most coding and agentic tasks than other recently released versions of GPT and Claude, while still being cheaper. That’s especially threatening to OpenAI and Anthropic, because their models’ coding capabilities are major revenue drivers, and both companies are eyeing IPOs. Kimi’s birth announcement rattled markets in Taiwan, Japan, and the US, where the tech-heavy Nasdaq recorded its biggest dip of the week.

Déjà vu…

China’s DeepSeek similarly spooked Silicon Valley last year, when it released open-source AI that it claimed went toe-to-toe with US models and undercut their prices. Moonshot also plans to open-source Kimi later this month, meaning developers will be able to download and customize it.

Chinese President Xi Jinping applauded his country’s progress on low-cost AI yesterday and called for “a symphony of global cooperation,” panning the US for its efforts to restrict China’s access to AI technology.

But US companies claim China isn’t playing fair: Anthropic recently accused Chinese tech giant Alibaba (one of Moonshot’s investors) of attempting to extract Claude’s AI capabilities to train its own models, and OpenAI has made similar claims against DeepSeek.—ML

      

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Tour de headlines

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🥬 Lettuce grower recalls products potentially linked to parasite outbreak. Taylor Farms is yanking all of its iceberg lettuce grown in central Mexico from the US market, in an effort to curb the recent outbreak of the parasite cyclospora, which has sickened people in multiple states and caused all those alarming “explosive diarrhea” headlines. The recall comes after the CDC and FDA on Thursday linked cases in five Midwestern states to shredded lettuce supplied to Taco Bell. The fast-food chain has already voluntarily removed some items. Taylor Farms is one of the country’s largest produce growers, supplying not just Taco Bell, but also other restaurants and major grocers.

🚀 SpaceX has lost $1 trillion in value in a month. Although it hopes to one day colonize Mars, SpaceX is currently looking pretty earthbound to investors. Its stock fumbled yesterday following the decision to abort a Starship launch on Thursday. Last month, the Elon Musk-led company popped after pulling off the world’s largest IPO, but more recently, the stock has pulled back and traded below its IPO price. Per Bloomberg, its market value was $1.63 trillion yesterday, compared to $2.64 trillion on June 16, at the close of its third trading day. Short-sellers, meanwhile, have made ~$4 billion betting against it.

🇮🇷 The US and Iran traded strikes for a seventh day. It looks like President Trump meant it when he said the ceasefire was “over” amid tensions concerning the Strait of Hormuz, as both the US and Iran have been attacking ever since. This continued yesterday, with the US hitting targets including bridges and energy sites, and Iran striking the US’ Middle Eastern allies. The price of oil rose yesterday, with crossings through the strait hitting a three-week low, according to the Associated Press. Meanwhile, Iraq and Syria signed an agreement yesterday to rebuild an oil pipeline that could provide an alternative for moving oil that bypasses the strait, though experts said Iran would still pose a regional threat.—AR

KNOW BURNHAM

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Andy Burnham will become England’s seventh prime minister in a decade on Monday—the type of job turnover usually reserved for head coaches of a dysfunctional NFL franchise. He is tasked with something his predecessors failed to accomplish: reigniting an economy that has stagnated since the country left the European Union a decade ago.

Installed as leader of the Labour Party yesterday, Burnham called the moment the “most significant change” in British politics in 40 years. He promised to unify his party and “beat Britain’s new right,” while remaining “pro-business.”

But some businesses may get more help than others. His introductory speech included the slogan: “Good growth in every British postcode.” Bloomberg reported that big businesses and banks based in London—where productivity has widely outpaced the rest of the country for decades—expect less favorable policies. And strategists close to Burnham told the New York Times that decentralization could be at the center of his still-unfinalized economic agenda.

Burnham may also push for other major reforms: He said yesterday that public ownership of essentials, like water and energy, that were privatized in the 1980s under Conservative Prime Minister Margaret Thatcher would reduce inflation, which sat at 2.8% in May, above the Bank of England’s goal of 2%.—DL

      

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ICYMI

Have you heard...

➡️ Chanel ballet flats are the shoe of choice for successful women again, per the New York Times. Let’s hope fans of the expensive, quilted flats guaranteed to make your feet extra sweaty are also devotees of Dr. Scholl’s Powder Spray.

➡️ Artist Justin Gignac sold cubes of trash from the street outside of Taylor Swift and Travis Kelce’s wedding. As much as you want to believe the Sbarro napkin and half-disintegrated paper straw were from Ed Sheeran, they’re not.

➡️ A black lab named Tokyo had to be rescued on a hike in the UK after becoming ill and even losing consciousness. Ultimately, vets discovered that she, like so many before her, just got too high, after presumably eating an edible someone had dropped on the trail (she’s fine now after receiving emergency care). The mountain was known as the nation’s highest even before the incident.

➡️ Two employees smeared 800 pounds of peanut butter on the floor of a Dutch museum, not to protest anything, but to honor the late conceptual artist Wim T. Schippers. It took the workers a few days and nearly 40 buckets of peanut butter to create the creamy tribute, which is surprising, because a toddler can get the same amount onto the floor in seconds.

➡️ A 77-year-old Florida woman was shocked when she was given a license plate that read “SQZ A55.” We were shocked, too, because we’ve been trying unsuccessfully to get that plate for the Brew Mobile for years.—MM

News

What else is brewing

• Meta is in talks to sell some of its excess computing power to Anthropic in what could be a $10 billion deal.
• The company behind President Trump’s Truth Social platform will sell early access to market-moving posts, including the president’s, to Wall Street firms.
• The FAA will allow Boeing to issue its own airworthiness certificates for its 737 Max and 787 Dreamliner aircraft—something it stopped letting the company do after fatal crashes in 2018 and 2019.
• Madison Square Garden sued Wired magazine for defamation over an article saying the Taylor Swift wedding venue assigned risk scores to its celebrity visitors.
• Brenda Fricker, the first Irish actress to win an Oscar—who was also beloved by fans as the Pigeon Lady in Home Alone 2—has died at age 81.

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Community

Crowd work

Last week, we asked, “What’s the nicest thing a neighbor has done for you?” Here are some of our favorite responses:

• “Our neighbor is a commercial pilot. He occasionally brings us a baguette baked that morning in Paris or other fresh treats from Europe.”—Jen from Waconia, MN
• “Growing up, my parents’ professional engineer neighbor handcrafted fine furniture as a hobby. When I moved into my first apartment after college, he made a beautiful coffee table for me that I still have today, 30 years later!”—Beth Ann from Pennsylvania
• “For whatever reason, my pandemic hobby was learning to play the drums. I was so nervous that my downstairs neighbors would freak out, but one day I found a simple drum notation taped to my door for me to practice. It turns out my neighbor was a drummer and was cheering me on.”—Sarah Jeanne from Chicago, IL
• “An 85-year-old neighbor in Michigan named Tom mowed my lawn while I was working nights during residency, without me asking. He noticed my car wasn’t around at night and the house was buttoned up all day. RIP Tom, you were the best!”—Tired Resident from Michigan
• “I once had a neighbor who was really into baking. Every few days at 4pm, he would post his address on Facebook and the fact that three cakes were ready for pickup. The first three people to his house (who hadn’t gotten cakes before) would be awarded the cakes. All he asked in return was that you post a selfie with your cake to the Facebook group so he could see the joy in your face.”—Laura from Birmingham, AL

This week’s question

What’s a superstition you abide by even if you’re not superstitious?

Sam’s answer to get the juices flowing: “I never fail to take a quick seat right before leaving my home for a long trip, as prescribed by the Slavic pagan custom. While the traditional belief is that the practice safeguards your journey, I view it as a way to collect my thoughts and make sure I didn’t forget my passport.”

Submit your response here.

recs

• Salad recipes with no lettuce, just in case.
• The best photos from the World Cup (so far).
• Add some books from this list of the 250 most influential ones in US history to your nightstand pile.
• A beach towel that’ll make you feel like you’re at a luxury resort.**

^{*A message from our sponsor. **This is a product recommendation from our writers. When you buy through this link, Morning Brew may earn a commission.}

Play

Brew Crossword: Your sample clue from our biggest puzzle of the week is “Babysitter’s nightmare.” Give it a go and play the Crossword here.

Open House

Welcome to Open House, the only newsletter section not willing to fully commit to a castle in the mountains. We’ll give you a few facts about a listing and you try to guess the price.

Today’s property is in Golden, CO, a town situated just outside of Denver that oozes with smalltown charm. Known to locals as “The Music House,” the home was built in 1940 and has a perfectly preserved turret (complete with a grand piano). Amenities include:

• 3 beds, 3 baths
• Artistically textured walls
• French doors that open to the patio

How much for the historic home?

Answer

$1.3 million

Word of the Day

Today’s Word of the Day is: decapitation, meaning “the total separation of the head from the body.” Thanks to Jillian from Los Angeles for keeping a cool head and sending a suggestion. Submit another Word of the Day here.