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Chapter 1: Why are companies scaling back on AI usage?
Companies wanted their workers to use more AI until it started costing too much.
There's lots of queries that were happening at companies that were costing lots of tokens for these essentially useless or, you know, queries that could have been free.
Plus, a federal judge puts a temporary pause on the creation of President Trump's, quote, anti-weaponization fund. And why film studios are rushing to set up shop in New Jersey? It's Friday, May 29th. I'm Alex Ocelev for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.
We begin today's show in Virginia, where a federal judge has hit pause on the Trump administration's $1.8 billion anti-weaponization fund because of a legal challenge to stop it. The order temporarily prevents officials from transferring money into it or paying claims out of it. The Justice Department didn't immediately respond to requests for comment.
And in another legal ruling against Trump today, a federal judge in Washington, D.C. said that the president's name must be removed from the Kennedy Center. He said the decision to change the name must come from Congress, and he gave the Cultural Arts Center two weeks to remove Trump's name from the building.
The judge also said that the Kennedy Center can't be closed for two years while it's under renovation, but he said that the repair work can go forward. Turning to the banking industry, several of the largest banks in the U.S. say business is humming along. Dealmaking, trading and lending appear to all be going as planned, despite geopolitical unease that has rattled markets.
At a banking conference this week, JPMorgan Chase CEO Jamie Dimon said things are, quote, gung-ho.
Sponsors are busy.
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Chapter 2: What legal challenges is Trump facing regarding the anti-weaponization fund?
Companies are busy. You know, there's a lot of exuberance out there. So, yeah, right now it's good.
Diamond said his bank might outperform the increase in markets and investment banking revenue that analysts are expecting for the current quarter. Universal Music Group today rejected the $65 billion buyout offer from Bill Ackman's Pershing Square Capital. Universal's board said the bid undervalues the music company. Universal's largest shareholder is also opposed to the deal for the same reason.
Chapter 3: Why are film studios moving to New Jersey?
A Pershing Square spokesperson declined to comment. We've heard it from companies in ways large and small this year. Employees need to start using AI more in their work. The companies want to send a message to Wall Street that they won't be left behind in a coming wave of disruption.
But all that enthusiasm for AI has come at a big cost, specifically with the money they spend on tokens, the basic unit of measurement for AI computing. Some businesses have hit their annual budget in just three months or seen their AI spending bills double or even triple. Deputy Tech Bureau Chief Brad Olson has been following corporate use of AI and is here to tell us more.
Brad, why is it getting so expensive? I mean, are the tokens themselves more expensive or are companies using more of them or is it both?
I think in the beginning, companies were just wanting to encourage all their workers to use AI. to try to think about how to do work and measure things that they could do better. And that was kind of like phase one. And now they're confronting the cost of widespread, uncontrolled experimentation and rethinking things that ended up being very costly.
As we know, something may start in a very well-meaning way, and then the incentives that exist can become kind of perverse. And if employees hear, use AI at all costs, and we're going to grade you on your AI use, then all of a sudden, employees can be like, sure, I'll use AI as much as you want. And then you're not really discerning between a good use and a bad use.
I spoke to a startup founder named Matan Grinberg. He runs a company called Factory, which automates coding. One of the companies he was consulting with, which he just said was a financial institution, had racked up huge amounts of charges from very simple queries like the weather. It's not a great use of tokens to spend a lot of model energy and computing energy being like, what is AI?
You know, very basic queries like that.
So the company's got to this place where they're not allocating the tokens in the right places. So what are they doing to reduce their use of tokens?
Some of them have basically made certain advanced models and capabilities available only to a small subgroup. So one example was Microsoft. And to be clear, Microsoft said, we didn't do this because of cost. They don't want to send a message to the market that, like, they're scrimping on AI. So there was this group of employees that had access to a program called Claude Code.
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Chapter 4: How are banks performing amid geopolitical unease?
We all used to complain and now we miss it because it brings a lot of jobs and a lot of economic stimulus.
How much of an economic benefit is it to have Hollywood come to your town?
The short term is, hey, they're here shooting this month, which means hundreds of people are there. It's a great short-term economic stimulus. But these big tax credits that they're giving are only if the studios make a long-term commitment. So Netflix is building a billion-dollar-plus facility in Fort Monmouth where they are going to have 12 soundstages.
That's obviously a lot of construction jobs. Those are long-term investments in the economy where there'll be production happening for years or, if all goes really well, decades to come.
That was WSJ reporter Ben Fritz. Thanks so much, Ben.
Sure. My pleasure, Alex.
And finally, the hottest job this summer seems to be a spokesperson for one of my least favorite condiments, ranch dressing.
This summer, in honor of America's 250th birthday, we're hiring our first ever ranch ambassadors to spread the flavor of America, ranch, all around the globe.
Hidden Valley Ranch fielded more than 6,000 applicants, and they posted about their love for ranch on social media. Makes sense, since social media posts would be part of the job.
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