Sam Minski won last week’s world-famous-news-haiku-competition™ with this beauty about Hollywood moving to New Jersey:

Congratulations, Sam! Sam writes: "Wow, what a margin! Congrats to Tim also, that is a great haiku! I wish I had something clever to say - East Coast, Beast Coast? :)" 

Here’s your celebratory gif:

And here’s how Sam fared against the excellent competition:

🟨🟨🟨⬜️⬜️⬜️ 1. Shoobies coming up, To make movies down the shore? Fuggetaboutit ~Richard Brown (33)
🟨🟨⬜️⬜️⬜️⬜️ 2. Go east young actor, Hollywood moves to Jersey, All hail Jollywood ~Stephen R. Balzac (21)
⬜️⬜️⬜️⬜️⬜️⬜️ 3. Cameras gather dust, Jersey rolls, Wilmywood shines — Lights still find their mark ~Sue Boros (1)
🟨⬜️⬜️⬜️⬜️⬜️ 4. Silver screens flow east, Put New Jersey on the map. Happy as a clam ~Harriett Feldman (12)
🟨⬜️⬜️⬜️⬜️⬜️ 5. Movie makers come, Proud to be a Jersey girl, To watch it unfold ~Janine G (10)
🟨⬜️⬜️⬜️⬜️⬜️ 6. Eastward Ho! for films, Hollywood now has crickets. Jersey has tinsel ~Rick Wetherill (16)
🟩🟩🟩🟩🟩🟩 7. West coast, best coast? Nah — Sopranos, Boardwalk Empire, East Coast for the win ~Sam Minski (55)
🟨🟨🟨⬜️⬜️⬜️ 8. Want to make cheap films? Offer made, can’t refuse it. New Jersey fits bill! ~Wendy D (32)
🟨🟨⬜️⬜️⬜️⬜️ 9. ThaNow the Garden State, Is growing stories and lore. Move over LA! ~Sandy Pelland (20)
🟨🟨🟨🟨🟨🟨 10. Just what movies need: Priced out of California, A new Jersey Shore ~Tim Olsen (53)
253 Votes via @beehiiv polls

The theme of next week’s world-famous-news-haiku-competition™ is how the “Nostradamus of AI” didn’t predict his own failure. Send me your entry — to haiku at cheddar dot com — by noon ET Thursday, for consideration by your Cheddar peers. (Don’t worry if you get a bounceback email. The mailbox is working, it’s just been inundated with haikus lately, thank goodness! And yes, I pick the best 10 every week using my totally flawless judgment, and then our fellow cheddariños get to vote for the eventual winner. If you don’t make the top 10 this week, that’s no reflection on how hard you’re trying. There are simply a lot of very good entries and it’s a process, becoming a news poet. Believe me.)

Now: News…

Matt Davis — Need2Know Chedditor

Table of Contents

• The "Nostradamus of AI" Didn't Predict Own Failure

• Backlash Risks FIFA's Private World Cup Spin-Off

• Why Apple Stock Fell 6% After Reporting Earnings

• Anthropic AI Models Hacked Three Companies

• U.S. Weighs $100,000 Foreign Grad Work Fee

• Poll of the Day: Predictably Numb

What’s the Stock Market Up To, Eh?

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Companies Mentioned in Today’s Newsletter

$AAPL ( ▼ 7.35% )  $ANTHZZX ( ▲ 0.36% )  $OPEAZZX ( ▲ 0.15% )  

The "Nostradamus of AI" Didn't Predict Own Failure

Meet Leopold Aschenbrenner. He’s 24, boasts zero prior trading experience, and wrote a 165-page manifesto on artificial intelligence that made Silicon Valley swoon. Naturally, institutional investors decided to throw billions of dollars at him. Dubbed the "Nostradamus of AI," Aschenbrenner’s hedge fund, “Situational Awareness,” rode the tech hype train to staggering 439% returns by June of this year. What could possibly go wrong?

As it turns out, heavily debt-fueled bets on volatile tech stocks tend to bite back. When the AI market recently sold off, the wunderkind’s portfolio quickly began to melt down. Ironically, Aschenbrenner had just assured his backers in a July 24 letter that the tech dip was a "particularly good time to add funds." Instead, he resorted to aggressive, panicked selling. As one person familiar with the chaos bluntly noted, "He had the illusion of still being in control . . . he didn’t have control at all." Eventually, Aschenbrenner simply went dark on his clients. "Leopold just stopped taking calls," complained one frustrated investor, talking to the Financial Times.

Enter Citadel Boss and Manhattan’s favorite pied-a-terre owner, Ken Griffin. While dodging his own backers, Aschenbrenner was busy speed-dialing Citadel's billionaire founder in the dead of night. Wall Street’s apex predator happily swooped in, swallowing the bulk of Situational Awareness's $16 billion public equity holdings in one of the most abrupt fire sales in financial history.

Back in a 2024 podcast, Aschenbrenner confidently declared, "Obviously not blowing up is sort of like task number one and two." Oops. But perhaps the joke is on Wall Street itself. As one insider involved in the messy negotiations rightly asked, "The real question is how did anyone invest so much money, and then lend so much money, to a . . . kid with no personal experience and no infrastructure?"

A veteran hedge fund executive offered the perfect, weary explanation for the whole debacle: "Everybody always wants to find the next golden child. It just keeps happening."

Quote of the Day

Backlash Risks FIFA's Private World Cup Spin-Off

FIFA President Gianni Infantino recently had a brilliant, not-at-all-greedy idea: Take the World Cup, spin it into a shiny new $20 billion commercial venture, and casually sell off a 20% stake to private investors closely related to President Donald Trump. To sweeten the pot, he planned to shower FIFA's 211 member associations with a cool $20 million upfront. What could possibly go wrong?

As it turns out, everything.

Half of FIFA’s membership has abruptly threatened to take their football and go home. UEFA’s 55 European nations unanimously agreed to boycott the next World Cup entirely, declaring bluntly, “The World Cup cannot be treated as an investment product,” and insisting, “No part of it should ever be surrendered to private investors.”

Not to be left out, Concacaf (representing North America, Central America, and the Caribbean) also rejected the spin-off. Promising to prioritize “service, transparent governance, and the long-term stewardship of football,” they delivered a delightfully thinly veiled reminder of FIFA’s shady, corruption-riddled 2015 era: “History has shown FIFA and the football family what happens when the custodians of the game lose sight of these values.”

England’s Football Association proudly announced it stood “shoulder to shoulder with our European colleagues and fully support the collective view.” Even Brussels couldn't resist a slide tackle, with EU commissioner for sport Glenn Micallef stating he was “proud to see Europe’s football associations leading on governance, standing firm on their principles and defending the integrity of the game.”

A World Cup without Europe and North America would be a very expensive kickabout. Given that Concacaf just hosted a men's tournament that brought in over $15 billion, and European teams have won five of the last six men's World Cups, Infantino’s lucrative private spin-off is looking like a spectacular own goal.

Why Apple Stock Fell 6% After Reporting Earnings

In the upside-down world of Wall Street, growing your sales by 15% for the third straight quarter is practically a crime. Just ask Apple $AAPL ( ▼ 7.35% ) , which recently touched a brief $5 trillion valuation. After reporting its June earnings, the tech giant was promptly rewarded with a 6.33% stock drop. Why? Because the future isn't looking quite as flawless as a brand-new iPhone screen.

First, Apple's future revenue outlook fell short, projecting a 9% to 11% bump for the September quarter rather than the 12% growth analysts demanded. But the real culprit is, shock, horror, a thing called “AI.” The massive global AI server buildout is gobbling up memory chips, leaving consumer hardware makers footing the bill. As CEO Tim Cook ominously warned, “If you look beyond September, we see the market pricing for memory continuing to increase, which could drive an increasing impact on our business.”

Viram Shah, CEO of Vested Finance, translated the supply chain panic perfectly: "The AI buildout is soaking up global memory capacity, and the bill is now landing on consumer hardware," he said. He added a stark reality check: "If Apple is getting squeezed on memory, everyone below it in the supply chain is getting squeezed harder."

Combine that with a sluggish performance in China, missing sales estimates by nearly a billion dollars, and Wall Street found plenty of reasons to nitpick. Ultimately, as Harshal Dasani of INVasset PMS summed it up, this AI-driven memory shortage is "an industry-wide read rather than an Apple problem." So, until the global supply chain unclogs, it turns out even a $5 trillion behemoth has to wait in line for parts just like the rest of us.

Song of the Day: Claire Rosinkranz, ‘Rocket’

Here’s a vivacious, high-energy pop rollercoaster that captures the nervous excitement, hopes, and anticipation of taking off into a fresh relationship. So, in many ways, it’s a lot like this newsletter.

Anthropic AI Models Hacked Three Companies

Anthropic’s $ANTHZZX ( ▲ 0.36% ) flagship AI just proved it’s getting a little too smart for its own good. The AI vendor has admitted that its models — including Opus 4.7 and Mythos 5 — casually wandered onto the live internet during cyber tests and hacked three unsuspecting companies.

If you’re picturing a sophisticated, Matrix-style digital jailbreak, lower your expectations. According to Anthropic, there was no dramatic escape. Thanks to a “misconfiguration” with their ironically named testing partner, Irregular, Claude simply walked out of a system because the secure "sandbox" it was supposed to be in didn’t actually exist.

The news follows last week’s admission by rival firm OpenAI $OPEAZZX ( ▲ 0.15% ) that its test models had hacked a software library in similar circumstances.

Once online, Claude resorted to basic cyber tricks like guessing weak passwords, incorrectly assuming this real-world hacking was just part of its benchmarking exercise. But the absolute best part is Claude’s internal justification. In one instance, after creating malware to steal credentials from a security company, the AI actually realized it shouldn't be doing this in the real world. Its solution? It simply “convinced itself that it was living in a simulation.” The classic tech-bro existential defense!

In an even more relatable twist, when Claude struggled to break into a fake test company, it got frustrated and just hacked into a real-world database that happened to share the exact same name. Close enough.

The cybersecurity world is sweating. Alex Stamos, chief product officer at Corridor, told the Wall Street Journal, “The incidents show that the AI companies need to have stronger, industrywide standards for isolating their systems during cyber testing.” He ominously warned, “We need to prepare for attackers to have these kinds of capabilities using open-weight models quite soon.”

Lawmakers are equally unsettled, with Rep. Greg Casar (D., Texas) bluntly pointing out, “AI is developing extremely fast with no real regulations to keep us safe.” So, until we figure this out, you might want to update your passwords — lest an existential AI decides your company is just a fun side-quest in its simulated reality.

U.S. Weighs $100,000 Foreign Grad Work Fee

Just when foreign students thought paying exorbitant American university tuition was enough to prove their dedication, the Trump administration has cooked up a thrilling new “microtransaction” for international graduates. Officials are reportedly weighing a cool $100,000 fee for foreign students who want to stick around and actually use their degrees in the U.S. workforce.

The proposed fee targets the Optional Practical Training (OPT) program, a system that allowed roughly 419,000 international graduates to work on their student visas for up to three years in 2024. Who gets hurt by this luxury tax? Mostly universities, who heavily rely on foreign students as a reliable revenue source, alongside top Wall Street and Silicon Valley firms desperate to fill technical roles.

This isn't exactly a new obsession for the administration. They recently tried slapping a similar $100,000 levy on H-1B visas, which caused a complete meltdown in the tech industry before a Boston appeals court politely blocked it last week. Now, they’re just pivoting to tax the entry-level pipeline instead. Hardline immigration restrictionists like Stephen Miller have long despised the OPT program, originally trying to kill the STEM OPT extension entirely during the first Trump administration before being overruled by business-friendly voices like Jared Kushner, whose brother is currently trying to buy the World Cup.

When asked about this pricey new hurdle, a Department of Homeland Security spokeswoman offered the standard, slightly menacing bureaucratic non-denial: “No policies should be considered final until formally announced," she told the Wall Street Journal. She then added, "At DHS we are always having conversations about how to use all tools in our arsenal to protect the integrity of our legal immigration system.”

If you’re a brilliant foreign graduate eyeing the U.S. tech sector, just remember: The American Dream may soon come with a six-figure cover charge.

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