US energy department eyes carbon removal funding cuts, and Artificial Intelligence toys go global

The newsletter reports potential termination of funding for two direct air capture hubs, tracks the rise of Artificial Intelligence-enabled toys from China to US stores, and spotlights Pairwise’s gene-edited crops for a warming world.

The US Department of Energy appears poised to terminate funding for two large direct air capture plants, according to a department-issued list obtained by MIT Technology Review and circulating among federal agencies. One is the South Texas Direct Air Capture Hub, a facility Occidental Petroleum’s 1PointFive subsidiary planned in Kleberg County, Texas. The other is Project Cypress in Louisiana, a collaboration between Battelle, Climeworks, and Heirloom. Both were originally set to receive substantial government grants to build carbon-sucking factories.

Artificial Intelligence-enabled toys are rapidly gaining traction in China and starting to appear on shelves in the United States. By embedding chatbots and voice assistants into stuffed animals and other playthings, companies are creating toys that can talk back to kids. A report from the Shenzhen Toy Industry Association and JD.com predicts the sector will surpass ¥100 billion by 2030, growing faster than almost any other branch of consumer Artificial Intelligence. Chinese toy makers are already looking beyond domestic sales to expand into overseas markets.

The newsletter’s climate tech spotlight features Pairwise, which is using CRISPR gene editing to develop crops that can better withstand increasingly harsh growing conditions. The startup delivered its first product to the US market last year, a less-bitter mustard green, and is now working with two of the world’s largest plant biotech companies to cultivate climate-resilient traits. Pairwise is included in MIT Technology Review’s annual list of 10 climate tech companies to watch as pressure mounts to secure food supplies on a warming planet.

A new MIT Technology Review Narrated episode explores how to measure the returns on R&D spending amid significant cuts to US federal science funding. Recent economic research uses novel approaches to evaluate the payoff and reaches a shared conclusion that public investment in R&D is one of the better long-term bets governments can make. The narrated story is available as a weekly podcast on Spotify and Apple Podcasts.

Today’s must-reads span market, policy, and science. They include concerns that deals among companies like OpenAI and Nvidia are inflating an Artificial Intelligence bubble, data showing around 15 percent of the world’s working population uses Artificial Intelligence, and Europe’s push to increase adoption even as US public opinion sours. Other highlights cover Nobel-winning quantum research tied to Google’s machines, new covid vaccine guidance from the CDC, law enforcement’s phone-tracking tools, tools to strip watermarks from Sora 2 videos, and efforts to cool chips with diamonds. A quote of the day argues the Artificial Intelligence ecosystem is consolidating on infrastructure it does not control, while a feature shows how MIT’s Civic Data Design Lab, led by Sarah Williams, turns urban data into accessible tools for better city planning.

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Mustafa Suleyman says Artificial Intelligence compute growth is still accelerating

Mustafa Suleyman argues that Artificial Intelligence development is being propelled by simultaneous advances in chips, memory, networking, and software efficiency rather than nearing a hard limit. He contends that rising compute capacity and falling deployment costs will push systems beyond chatbots toward more capable agents.

China and the US are leading different Artificial Intelligence races

The US leads in large language models and advanced chips, while China has built a major advantage in robotics and humanoid manufacturing. That balance is shifting as Chinese developers narrow the gap in model performance and both countries push to combine software and machines.

Congress weighs Artificial Intelligence transparency rules

Bipartisan lawmakers are pushing a federal transparency standard for the largest Artificial Intelligence models as Congress works on a broader national framework. The proposal aims to increase public trust while avoiding stricter state-by-state requirements and heavier regulation.

Report finds California creative job losses are not driven by Artificial Intelligence

New research from Otis College of Art and Design finds California’s recent creative industry job losses stem from cost pressures and structural shifts, not direct worker displacement by generative Artificial Intelligence. The technology is changing workflows and expectations, but it is largely replacing tasks rather than entire jobs.

U.S. senators propose broader chip tool export ban for Chinese firms

A bipartisan proposal in the U.S. Senate would shift semiconductor equipment controls from specific fabs to targeted Chinese companies and their affiliates. The measure is aimed at cutting off access to advanced lithography and other wafer fabrication tools for firms such as Huawei, SMIC, YMTC, CXMT, and Hua Hong.

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