This week’s world-famous-news-haiku-competition™ is about how OpenAI made $20 billion less than it thought. Send me your entry — to haiku at cheddar dot com — by noon ET Thursday (today!) for consideration by your Cheddar peers.

Matt Davis — Need2Know Chedditor

Table of Contents

• FBI Makes Arrests in OpenAI Bug Caper

• Anthropic Takes Its Pentagon Blacklist Fight Back …

• Bank Of America Fined $1.2B Over Money-Laundering

• Supreme Court Takes Up Fight Over Musk’s DOGE Reco …

• How a Teen Founder Built a Safety Net for Foster Y …

• Poll of the Day: Something’s Bugging Me…

• Poll of the Day: An Apple a Day

What’s the Stock Market Up To, Eh?

$SPX ( ▼ 1.11% )  $DJI ( ▼ 0.09% )  $NDX ( ▲ 1.59% )  

Companies Mentioned in Today’s Newsletter

$OPEAZZX ( ▲ 0.11% )  $ANTHZZX ( ▲ 0.28% )  $BAC ( ▼ 4.76% )  

FBI Makes Arrests in OpenAI Bug Caper

Corporate espionage usually invokes images of nation-state hackers or stolen source code. At OpenAI $OPEAZZX ( ▲ 0.11% ) , however, spycraft apparently looks like asking a chatbot for instructions on how to hide a microphone inside a roll of toilet paper. As a result, Abdulrahman Alfozan, a 35-year-old employee, was arrested by the FBI after a "sophisticated recording device" was found hidden inside the executive conference room.

According to the Department of Justice, Alfozan didn't exactly exhibit top-tier secret agent tradecraft. Prosecutors allege that a chatbot account linked to his spouse was used to ask prompts on "building, customizing, installing, audio recording, testing, obfuscating, and remote accessing a device.” FBI Director Kash Patel said in a press release that Alfozan "allegedly concealed a covert recording device inside his employer’s executive conference room to secretly capture sensitive communications about the company’s super intelligence technology." 

OpenAI terminated Alfozan and moved quickly to calm industry nerves. In an official post, the company said, "At this time, we have no indications of this individual inappropriately accessing or exfiltrating model weights, source code, or customer data." They added, "We take protecting our technology, data, and people seriously, and as a matter of national importance."

While the hidden bug featured encrypted contents, the broader operation suffered from sitcom-level blunders. Security officers located a forgotten bag on-site containing a second recorder alongside Alfozan's wallet and personal ID.

Super intelligent.

Anthropic Takes Its Pentagon Blacklist Fight Back to Court

When Anthropic $ANTHZZX ( ▲ 0.28% ) created Claude, the ultimate goal was an AI that was helpful, harmless, and honest. What the company probably didn't anticipate, however, was that refusing to power lethal autonomous weapons or enable mass civilian surveillance would get them designated a threat to national security. Indeed, it earned them a spot on the Defense Department's blacklist.

After a divided D.C. Circuit panel upheld the Pentagon's decision to slap Anthropic with a "supply chain risk" designation, the AI developer is taking its fight back to court, petitioning for a full rehearing. In a blistering legal filing, Anthropic’s attorneys argued that “The Secretary of War branded Anthropic — an American AI company whose models help defend the nation — a national-security ‘supply chain risk’ because it declined to permit its models to be used for mass surveillance of Americans or lethal autonomous warfare and publicly explained those AI-safety commitments.”

Anthropic’s legal team pressed further, noting that the court overlooked “straightforward evidence the designation was retaliation for Anthropic’s speech about AI safety.” In short: Refusing to help build autonomous warfare tools gets you placed in a government timeout. Notably, a California federal judge saw things quite differently in August, ruling that the Pentagon’s blacklisting violated Anthropic’s First Amendment rights.

When pressed for further insight, an Anthropic representative declined to comment beyond the filing, while a Pentagon spokesperson offered the classic bureaucrat response, telling CNBC that the agency “doesn’t comment on pending or ongoing litigation.”

I bet it doesn’t.

Quote of the Day

Bank Of America Fined $1.2B Over Money-Laundering

When Bank of America adopted its corporate mantra of "responsible growth," most people assumed it meant prudent investments and careful oversight. Apparently, it actually meant looking the other way while over $5 billion in suspicious transactions — including cash tied to narcotics trafficking, fraud, and Chinese money-laundering networks — slid through the system unnoticed. Allegedly.

Uncle Sam has now handed the nation’s second-largest bank a whopping $1.2 billion penalty. According to regulators, BofA basically outsourced its suspicious activity detection to police inquiries and outside tips, effectively deciding that actual internal compliance was too expensive. Treasury Secretary Scott Bessent was swift to point out that “Today’s actions send a clear message that even the biggest financial institutions are not above the law.”

The Office of the Comptroller of the Currency added its own record $750 million chunk to the total fine, with Comptroller Jonathan Gould saying, “The bank’s poor response to its BSA deficiencies is unacceptable. The second-largest bank’s egregious and continued BSA violations warrant the OCC imposing its largest [civil money penalty] ever assessed against a bank.”

Admitting it "willfully violated" anti-money-laundering regulations, the bank tried to assure investors that it is taking things seriously. Bank spokesperson Christa Robinson said, “Financial crime compliance is serious, and we are responsible for getting it right” — a comforting sentiment, even if "getting it right," in this case, took a 10-figure fine.

Song of the Day: FOLA, Davido, ‘2a.m. in Toronto’

In case you fancied a little late-night R&B and Afro-pop fusion.

Supreme Court Takes Up Fight Over Musk’s DOGE Records

Elon Musk pitched the Department of Government Efficiency (DOGE) as the ultimate Silicon Valley disruption of Washington’s bloated bureaucracy. Tens of billions in federal budget cuts were announced with typical tech-bro fanfare. But when government auditors at the GAO actually checked the receipts, they uncovered math errors, missing supporting evidence, and claims of "savings" from contract cancellations that were already underway before DOGE even existed. Whoops.

Now, the high-stakes legal battle over whether DOGE’s internal memos, group chats, and mass-firing blueprints must be made public under the Freedom of Information Act (FOIA) has officially reached the Supreme Court.

Government watchdog group CREW sued to shed light on DOGE's operations, arguing that the initiative wielded the real authority of a federal agency. The Trump administration insists DOGE was merely an informal advisory body — and thus strictly exempt from FOIA disclosure.

Nikhel Sus, chief legal counsel for CREW, made his team's position crystal clear: “We will continue to pursue transparency for the American people, who deserve to know the details of the Trump administration's efforts to unilaterally remake the federal government.”

Adding fuel to the fire, federal auditors probing DOGE's access to sensitive agency files warned last month that due to limited information, "Congress and the public lack assurance that systems and data were protected.”

Move fast and break things! It’s always been the unofficial motto of the U.S. government, after all.

Free Yourself From Advertising Forever!

How a Teen Founder Built a Safety Net for Foster Youth

While most high school juniors spend their time stressing over SATs or perfecting social media trends, McLain Larson was busy tackling a systemic national crisis. Every year, roughly 20,000 young Americans age out of the foster care system, facing the terrifying reality of adulthood without a safety net, a lease co-signer, or anyone to explain tax withholdings.

Comparing the transition to his own siblings, Larson noted, “Compared to when my brothers left the house, it’s incomparable.… They’re virtually just cast out. A lot of these people don’t have that one phone number where it’s like, ‘Hey, I’m going to the bank. How do I open a bank account?’.… They are way too young, they don’t have the knowledge, and they don’t have the support.”

To bridge the gap, Larson launched Foster Financials and created the Money Academy — a free, friction-free web platform featuring real-world financial simulations like "It's the 17th and you have $58 left. What's your move?". Equipped with a four-layer anti-hallucination AI tutor, the platform runs nationwide for less than $100 per month.

Naturally, being a teenager pitching to executives brought skepticism. Larson admitted, “The hardest part of starting Foster Financials would probably be being taken seriously as a junior in high school.… I’ve always believed in myself, but others haven’t.”

Even Scott A. Henderson, co-founder of Doing Good Works, harbored doubts before seeing the curriculum in action, writing later, “Upon hearing that you were still in high school... I was VERY reluctant to have you lead the session with the customer... I’ve never been so thankful to say, I was wrong!”

Reflecting on his peers, Larson observed, “You go into a classroom full of foster youth, every single person is so passionate about learning.… They just want the opportunity to grow.”

Turns out, the foster kids are doing alright. They're building the safety nets adults forgot to design!

Should You Check Your 401(k) Today?

👎️ 

No.

Poll of the Day: Something’s Bugging Me…

Poll of the Day: An Apple a Day

We asked: What do you think of Apple's new home hub?

You answered:

🟩🟩🟩🟩🟩🟩 Because what my family really needed was Siri judging our faces before letting us adjust the thermostat. (84)
🟨🟨⬜️⬜️⬜️⬜️ $299 is totally 'not an impulse buy' — it's an investment in Apple controlling my front door lock. (35)
⬜️⬜️⬜️⬜️⬜️⬜️ It's 'smaller than it looks,' which is great because my wall space is as limited as my patience. (11)
🟨⬜️⬜️⬜️⬜️⬜️ I can’t wait to spend $149 extra on a HomePod mini just for rainbow lights that match album cover art. (17)
🟨🟨🟨🟨⬜️⬜️ Awesome, now Siri can ignore my voice commands from both the tabletop display and my $299 Apple TV. (59)
🟨🟨⬜️⬜️⬜️⬜️ So glad Apple left Ring and Android users out in the cold — less competition for my wallet. (30)
🟨⬜️⬜️⬜️⬜️⬜️ I kinda like it, to be honest. Where can I get one? (18)
254 Votes via @beehiiv polls

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