An article in this weekend’s New York Times Magazine explored AI chatbot-to-chatbot communications.

It’s hard to find anyone who isn’t at a minimum leveraging their AI bot to draft and proofread emails before they go out. We are increasingly turning to AI for financial advice, medical diagnoses and even companionship.

The NYT article discusses the use of AI in job searches; how job seekers use AI chatbots to churn out resumes and cover letters, while employers use AI to sift through an overwhelming number of applications; high school students who ask their AI chatbot to write essays and teachers who then use AI to grade them; and people who send their AI agent to argue with a company’s AI customer service system.

Customer support may become two bots locked in a recursive loop, sure to become more common as we all grow to trust our AI bot to do our bidding.

What are the implications for the future of car buying?

In the near future, car buyers may turn to their trusted bot to reach out to ten different dealerships to confirm that their preferred vehicle is in stock and to initiate price negotiations. From there, it isn’t too much of a stretch to think that many consumers will ask the bot to negotiate the entire deal: the valuation of the trade, negotiation of price, submitting a credit application, getting a monthly payment, and even negotiating the F&I products. The consumer will sit back and watch their bot do their work for them.

But if that future is in the cards, dealers will soon be overwhelmed by the influx of calls, emails, and texts from these tireless AI agents. The dealer will have no choice but to stand up their own agent to handle their side of negotiations.

If this all plays out, what about the employees at the dealership?

Humans seem hardwired to be pessimists; it’s always been easier to be a doomsdayer and resist new transformational technologies. But history shows disruptive technologies do the opposite of destroying jobs; they automate tasks and shift labor, ultimately increasing total employment.

We should be optimistic about the future but start planning now to anticipate how this change comes to automotive. We’re entering a new world, where the role of both buyer and seller will evolve, not only aided by, but potentially replaced by outsourcing the negotiation to AI-powered bots.

All of this does beg the question: what if the pendulum swings so far towards automation that consumers end up craving human contact during the buying process? Will the dealership of the future be able to differentiate (or even charge a premium) to allow the customer to sit down across the table from a real human being?

Our industry has an interesting future ahead.

Until next week,

Steve Greenfield
General Partner
Automotive Ventures

🚗 Automotive

Dongfeng’s Voyah brand announced that the Voyah Passion S successfully completed a 360° tunnel loop challenge at a closed test tunnel in Wuhan. | Mathew Growden

Even with gasoline prices near a four-year high, global sales of electric vehicles are slowing dramatically as consumers balk at steep prices and spotty charging infrastructure. In this odd climate, hybrid cars are hot again after a quarter-century out of the limelight. Automakers are selling more of them than ever, and in more countries, ramping up production to meet demand. Hybrids accounted for about 1 in 7 new cars sold in the U.S. last year, up from less than 3% in 2020. In Spain hybrids make up almost half of all deliveries; in Japan, more than half. India, South America and Southeast Asia are expected to be the fastest-growing markets through 2035, according to research company GlobalData. Global sales growth for hybrids and EVs will probably be about even in 2026, a sharp reversal from previous years. Hybrid sales are likely to rise in China as well — despite a government policy favoring EVs — while in the U.S. demand is expected to more than double over the next decade. Even California is back on the bandwagon, with hybrid registrations overtaking those of EVs in the second quarter. “The consumer has spoken, and hybrids are a hit,” says David Christ, who leads the Toyota Motor Corporation brand in North America. “We’re just going to keep building more.” | Bloomberg ($)

General Motors, stung in recent years by critical parts shortages, is setting up a $4.5 billion safety net designed to keep critical components flowing through supply-chain troubles. The automaker aims to avoid future parts crunches by securing supplies of high-risk components through a financing arrangement where it pre-funds the purchase of essential parts. The move, which GM disclosed Tuesday in a regulatory filing, aims to give suppliers enough capital to maintain production and potentially stockpile parts. GM in turn can keep its assembly lines moving amid supply-chain disruptions, without tying up large amounts of capital. GM Chief Executive Mary Barra has pledged to remake GM’s supply chain and create a system more capable of managing disruptions. | The Wall Street Journal ($)

New Robert Bosch CEO Christian Fischer is moving quickly to reshape the world’s largest automotive supplier as slowing vehicle production, intensifying Chinese competition and a difficult transition to electric vehicles weigh on profitability. The company’s mobility division, which accounts for more than 60 percent of group sales, has seen profitability deteriorate. Its operating margin has slipped to 3.8 percent, below many competitors and well below Bosch’s long-term target of 7 percent, which management says is needed to internally fund future investments. Competition has also intensified as Chinese suppliers expand aggressively into next-generation automotive technologies. | Automotive News ($)

German auto suppliers are more indebted and spend more on interest than their international rivals as competition from China intensifies, according to ‌excerpts from an upcoming study seen by Reuters. A financial analysis by Strategy&, PwC's German consulting arm, found that average interest expenses at Germany's leading auto suppliers rose for a fourth consecutive year in 2025 to 102% of ⁠operating earnings - far exceeding levels in the rest of Europe and China. "Many companies in the German supplier industry are managing substantial debt loads," said Henning Rennert, partner at Strategy& Germany. The study, expected to be published later this month, also found that German companies had lower average equity ratios than their competitors, leaving them more exposed to ‌financial ⁠stress. | Reuters ($)

Honda has outsourced development of a new vehicle program to Tata Technologies, people familiar with the matter said, the first time the automaker is entrusting an Indian engineering services firm with building an end-to-end platform to help cut costs. This platform is expected to support multiple car models, the people said, asking not to be identified as the details are private. It is intended to accommodate conventional fossil fuel-powered models as well as electrified powertrains for hybrids and electric vehicles, the people added. The farming out of this crucial function marks a departure for Honda, which has typically kept development of core vehicle platforms largely in-house or within its established supplier network. It comes as the Japanese automaker overhauls its product roadmap after reporting its first annual loss since its founding in 1948, shelving several planned electric vehicle programs and accelerating cost-cutting efforts. | Automotive News ($)

Not long ago, Ram thought it had dreamed up the perfect engine for its pickups. The “Hurricane,” a turbocharged six-cylinder engine, would replace an archaic gas-guzzling V-8 that hadn’t changed much in nearly 15 years. The new engine would be more powerful, boast more torque, tow more and use less fuel. It was also smoother and quieter. As it turns out, that was a major problem. Because what truck buyers and muscle-car fans love more than anything, it turns out, is the rich, throaty roar of a V-8 and the vibrations it causes. After just one year of its new Hurricane engine, Ram brought back the old eight-cylinder engine to its lineup for 2026 model-year trucks—and it is paying off for parent company Stellantis. Buyers can pick a truck with a Hurricane or pay more for one with an old V-8 engine, called the Hemi. Ram sales are up 22% this year, bucking an industry decline of 3%. | The Wall Street Journal ($)

Carmakers including Volkswagen, Stellantis and Toyota are turning to new blends of motor oil and lubricants to ease a serious supply shortage caused by the Middle East conflict. After getting through the early months of the war, carmakers have now run out of inventories of high-quality base oils for engine oil that the U.S. and Europe had largely sourced from the Middle East. They have since found alternative lubricant manufacturers but industry executives warn that those supplies remain tight and vulnerable to any fresh shock. For car drivers globally, any further shortage will make their routine oil changes — a procedure critical to prevent engines from malfunctioning — more expensive and prone to delays. Prices of Group III base oils have almost tripled compared with prewar levels, at about $4,000 per tonne in Europe and the U.S.. | Financial Times ($)

The classic car auctions in Monterey could reach a record $500 million this week, as the tech boom and a wave of new collectors drive up the prices of modern supercars. The auctions during Monterey Car Week, the annual extravaganza of classic car auctions, shows, races and awards, are expected to reach $470 million to $500 million, according to Hagerty. The total is likely to surpass the all-time record of $471 million, set in 2022, and would mark the continued rebound of a market that declined in 2023 and 2024 but snapped back during Monterey last year. “With strong bidding, this could be the first half-billion-dollar auction week the collector world has ever seen,” said McKeel Hagerty, CEO of Hagerty, the classic car insurance, auction and events company. Like the stock market, however, the headline strength of the classic car market hides growing volatility and a massive market rotation below the surface. A new generation of millennials and Gen Zers is taking over the collecting market from baby boomers. Rather than buying the 1950s and 1960s cars favored by older generations, new buyers are bidding up modern supercars from their own youth. | CNBC

A growing crowd of car enthusiasts are collecting and showing off rides that would make most car-show attendees pause, because they are remarkably normal. Moreover, they are much newer than the archetype collector car, like a vintage Porsche, and much cheaper to boot—and several insurance providers are finding them to be a growing revenue source. Michigan-based Hagerty Insurance, which specializes in insuring classic and enthusiast vehicles, has seen the number of 2000s Honda Civics and Toyota Corollas it insures more than double in the past three years alone. At OpenRoad Insurance, which also specializes in classic cars, 40.3% of the insured vehicles were built since 1980, according to Chief Marketing Officer Bryan Ballatore. | The Wall Street Journal ($)

Between Elon Musk’s promises of supernimble robots and interstellar colonization, the billionaire has spent plenty of time over the last decade hyping up another ambitious effort: the next version of the Roadster, the sporty electric vehicle that first put Tesla on the map. At first, he said he wanted the vehicle to be the fastest production car in the world. Then he said he wanted it to be “crazier than” every fictional James Bond car combined. And he wanted the car to be able to fly. Musk’s shifting directives sent Tesla designers down a rabbit hole that lasted years, delaying the car’s release. The company first showed a prototype design of the vehicle and began accepting reservations for it in 2017. Since then, it has chucked that design completely and come up with a new one, which it hasn’t publicly revealed. That could change soon. | The Information ($)

Elon Musk’s vision for taking electric vehicles mainstream at Tesla helped make him the world’s richest man. Now he’s pulling up to the gas pump. Last week, SpaceX disclosed plans to build a natural gas power plant in Grimes County, Texas, where the company is developing a huge new chip manufacturing facility. At other campuses in Tennessee and Mississippi, Musk is relying on dozens of gas turbines to power data centers he says are necessary to train the artificial intelligence at the center of his business plan. Earlier this year, Musk even bought a gas turbine manufacturer as a personal investment, regulatory disclosures show. Driving the build-out, and Musk’s pivot, is SpaceX’s immense need for fuel and power to develop next-generation AI. The company’s data centers this spring already accounted for three-quarters of the 2 gigawatts of data center power that was being generated behind-the-meter, or outside of the U.S. electrical grid. | The Wall Street Journal ($)

Flock Safety, based in Atlanta, provides a small black box with a camera that takes photos as cars drive by that alerts law enforcement when it spots wanted cars and allows officers to see where cars of interest have been. Flock’s 120,000 cameras can be found alongside roads in every state but Alaska, allowing law enforcement officers to see within seconds where a car might be, and where it has been. The company has contracts with 7,000 law enforcement agencies, which is 40 percent of all departments in the United States. Other companies sell license plate tracking services, but Flock, a private company valued at $8.4 billion, has become a lightning rod because of its rapid expansion, the ubiquity of its cameras, and a number of controversies involving its product. | The New York Times ($)

A new research project led by BMW suggests automakers could eventually recover much more usable material from end-of-life vehicles than they do today. Via the Car2Car research project, the BMW Group and its partners examine how steel, aluminum, copper, plastics, and glass from scrapped vehicles could be returned to automotive production. Under advanced processing and sorting conditions, researchers managed to increase what BMW calls the “Car2Car rate” from just 6% to 51%. However, that doesn’t mean only 51% of a car can technically be recycled. BMW defines its Car2Car rate more narrowly: it represents materials recovered from an end-of-life vehicle at a high enough quality that they could be reused in new automotive applications. The gains varied dramatically depending on the material. Using more advanced recycling processes, BMW says the Car2Car rate for steel jumped from just 1% to 81%. Aluminum improved from 23% to 52%, while copper rose from 48% to 68%. Plastics and glass remain much harder to return to the automotive supply chain at the quality levels required for new vehicles. Getting those numbers required more than simply feeding old cars into a conventional shredder. The project investigated improved pre-sorting, modified shredding processes, sensor-based material sorting, classification, and more precise separation of different aluminum alloys. With processes closer to what is commonly used today, the overall Car2Car rate was only 6%. | BMWBlog

A visualization of Uber's Q2 2026 financials: sources of revenue, expense and profit. | App Economy

Daniel Abreu Marques at The AV Market Strategist provides Uber's autonomous vehicle (AV) roadmap for the remainder of the year. | The AV Market Strategist

Automakers are aggressively leaning into new technologies to stay competitive. While brands like Nissan use algorithms to halve development time, Ford is taking a different route. Charles Poon, Ford’s VP of Vehicle Hardware Engineering, insists that ultimate quality is measured by long-term powertrain reliability. His team is dedicated to ensuring the mechanical heart of every vehicle operates flawlessly for a minimum of 15 years or 225,000 miles. To hit this ambitious benchmark, Ford engineers are absolutely abusing their engines. They pull powertrains directly off the assembly line and subject them to relentless start-stop cycles and wide-open throttle runs. While other manufacturers are repurposing battery plants for AI infrastructure, Ford is deploying heavy computing power directly on the factory floor to guarantee that customers reach their destinations without any mechanical drama. | AutoBlog

Thank you Timo Resch at Porsche Cars North America for keeping up the good fight! | Road&Track

Carvana's presentation from the August J.P. Morgan investor conference. | Seeking Alpha

🇨🇳 China

China’s auto market remained under pressure in July, as higher oil prices and a weak macro environment weighed on demand. Retail sales of passenger cars fell 20.9% in July from a year earlier to 1.46 million units, the China Passenger Car Association said Tuesday. Sales fell 8.8% compared with June. After falling since October, auto sales didn’t show a recovery at the start of the second half of the year. Instead, the market weakened further amid higher oil prices, a seasonally slow period and demand pulled forward by sales campaigns in June, the CPCA said. Disruptions caused by the Strait of Hormuz’s closure pushed up oil prices, while domestic gasoline prices have risen sharply this year, raising the cost of owning and maintaining a fuel-powered car for the public, the agency said. This has further weakened demand for conventional vehicles while accelerating the shift toward electric vehicles and hybrid cars, the agency said. Meanwhile, new-energy vehicles, a term used to describe both EVs and hybrid cars, continued to gain market share. New-energy cars accounted for 65.1% of total sales in July, the agency said. That said, retail sales of new-energy cars fell 3.9% from a year earlier to 951,000 units in July. | The Wall Street Journal ($)

China's car industry is on a tear overseas, storming markets from Europe to Southeast Asia and heaping pressure on long-established automakers like Toyota and Volkswagen. But it is a different story at home, where car sales have been in steady decline since late last year, as weak consumer demand and years ‌of intense price competition have left the world's biggest auto market glutted with excess capacity. While major Chinese car companies like BYD, Geely and Chery have long aspired to become global heavyweights, the industry's rapid expansion is now driven as much by economic necessity as by ambition, analysts and industry insiders say. Faced with lacklustre domestic demand, China's automakers have an increasingly powerful incentive to accelerate a push overseas that was already well under way. That will only add to the squeeze on European and Japanese rivals already struggling to compete with China's technologically advanced, low-cost electric vehicles. | Reuters ($)

China’s auto factories are building so many cars for export that the global shipping industry can’t keep up. Specialized car carriers, essentially floating parking garages, are booked out years ahead to export cars from Chinese factories. Rates to charter ships are up 65% this year on the surging demand to move vehicles out of China. Chinese carmakers are flooding foreign markets because of fierce competition between more than 100 domestic auto brands, overproduction and a sluggish economy. Now, the shipping industry is navigating skyrocketing rates and scarce capacity. Some automakers are so desperate to get vehicles to Europe, Australia and Latin America they are squeezing them inside shipping containers more commonly used to transport furniture, clothes and electronics. | The Wall Street Journal ($)

There has been no shortage of complaints about Chinese overcapacity in recent years. Beijing’s commitment to driving exports and widening its trade surplus, by any means necessary, has undermined the manufacturing aspirations of advanced economies such as the United States and those in Europe, as well as developing countries in Africa, Asia, and Latin America. There is more of a global consensus about the nature of the challenge than ever before, but it has had little effect on Chinese policy. Now, the problem is morphing into a qualitatively new and more dangerous one: the world’s ability to absorb Chinese overcapacity is approaching a breaking point. And if that breaking point comes, the consequence could be a global economic crisis at a time when governments are particularly ill-equipped to manage the fallout. Over the past two decades, China has established the largest trade surplus in recorded history. In 2025, it reached nearly $1.2 trillion, growing at three times the rate of global goods trade. This paradigm has been strategically beneficial for China and disinflationary for the rest of the world in the short run, but it is politically and structurally unsustainable—creating an increasing and underappreciated risk to the entire global economy. | Foreign Affairs ($)

China’s economy is structurally weaker than it appears and overly dependent on government-subsidized exports. On the surface, China is on track for another year with a trade surplus topping $1 trillion. Exports surged last month by 24 percent year-over-year, according to data published Friday. But the domestic economy is showing prolonged weakness. China’s growth dropped to 4.3 percent in the second quarter of 2026, the lowest in three years, even according to the government’s suspect accounting. Home prices have slumped, and developers and local governments are reeling under piles of debt. Youth unemployment has remained stubbornly around 15 percent. With weak consumer demand at home, China subsidizes global exports to gin up growth. Makers of electric vehicles, steel companies and other industries receive access to cheap loans, tax breaks, free or inexpensive land at government-run industrial parks, and sometimes direct grants. This isn’t new. From 2005 to 2024, Chinese firms across 15 sectors received three to eight times more government support than firms in other major economies, according to the Organization for Economic Cooperation and Development. | The Washington Post ($)

Between February and June, China slashed its crude imports by half, or 5.5m barrels a day (b/d)—enough, experts reckon, to have shaved $30 or more off Brent, the global benchmark. That is more than half of the worldwide decline during the covid-19 lockdowns, when global demand collapsed by 9m b/d. And in contrast to the pandemic, when the world economy slid into recession, China’s GDP has chugged along just fine. It has not been buying less foreign crude because its economy is suffering. This ability to turn oil demand on and off, ostensibly at low economic cost, allows the world’s biggest oil importer to move prices just as the Organization of the Petroleum Exporting Countries (OPEC) and its allies have long done through their control of half of global output. And as the cartel is weakened by the recent departure of the United Arab Emirates and strained production capacity of its remaining Gulf members, China’s market power is growing. As one oil-trading boss puts it, “China is the new OPEC.” | The Economist ($)

6G is not simply going to be faster 5G. Phones will act as radar networks, capable of tracking movement, objects and environment in real time. Artificial intelligence will be built into network architecture to manage traffic and process data. The standards for integrated sensing and AI-native architecture will determine where encryption happens, how metadata is treated and whether there are back doors for states to access that data. The fact that China is setting standards matters a great deal. | The Washington Post ($)

🤖 Autonomy

Sophia Tung from Ride AI: Did you know Zoox doesn’t yet drive over moving bridges? Cruise didn’t either when it was operating. Why? Because getting an AV to recognize when the road is not there is a whole category of edge case that most AV developers haven’t optimized for yet. In China, you can see why. Autonomous delivery vans are falling into holes caused by road construction. This falls in the same category of edge case as moving bridges: With drawbridges, any number of safety features could just not work. The barriers could get stuck and not lower, or the warning lights could be out, and your AV has to understand that there is no road there, rather than just a dip or a hill that it can’t see beyond. The same goes for large holes in the road. In this case, construction workers neglected to close the gate or put up any hazard cones. You could say this is a failure in proper road construction notice (which it is), but these are the edge cases that AVs have to contend with out on the open road. | Ride AI

"Edge cases" (unscripted situations that no one trained the robo-taxis to handle) appear to be piling up as Waymo, the leading autonomous car service, rapidly expands. Owned by Google’s parent Alphabet Inc., Waymo has more than quintupled the number of autonomous cars it has on the road to nearly 4,000 today, up from about 700 early last year. Its vehicles are now in 15 metro areas, having gone fully driverless in Denver, Las Vegas, San Diego and Tampa in the past month alone. Each week, passengers pay for about half a million trips. Amid that growth, Waymo has issued three federal recalls since December for software problems — including one where the cars drove into flooded roadways — compared with three recalls in the previous 22 months. Some edge cases have drawn headlines, including a December power outage in San Francisco that left nearly 1,600 Waymos frozen for at least two minutes. More cars in more cities means more chances to meet something the technology has never seen. That’s hard to fix because the cars often do not recognize they are in trouble and so do not request help. | The New York Times ($)

🦾 Robotics

Automakers have used robots for decades, but they are usually powerful, one-armed machines that are fixed in place and perform repetitive tasks like welding body frames or applying adhesives to door panels. Now, most major automakers are betting that robots designed to resemble human beings, known as humanoids, will usher in a new wave of automation and efficiency. Equipped with artificial intelligence, they are expected to move around and do tasks now done by humans without any modifications to factories or heavy equipment. Unlike most of the robots now in use, humanoids would respond to voice commands and theoretically solve problems and react to unforeseen events. They would never take a lunch break, join a union or require health insurance. To optimists, robots could rescue U.S. manufacturing by increasing productivity, solving shortages of skilled workers and giving Western carmakers a fighting chance at competing with Chinese rivals that enjoy lower costs. Boring but important jobs like sorting parts would be done by robots, freeing humans for more interesting and specialized work. But many experts who have studied the use of robots and other automation tools caution that there is also a gloomier scenario. | The New York Times ($)

China’s humanoid robot makers commanded more than 97% of global shipments in the first half of 2026, according to new industry data affirming the country’s early lead against U.S. rivals in the burgeoning field. Global humanoid robot shipments totaled roughly 19,100 units in the first half of 2026, more than triple the 5,100 units shipped in the same period last year, according to data from Smart Analytics Global (SAG). The California-based research firm expects shipments to rise to around 60,000 units this year and reach half a million by 2030. In late July, the US banned imports of new Chinese humanoid and quadruped robots, along with certain components, citing national security and cybersecurity risks to critical U.S. artificial intelligence infrastructure. | Bloomberg ($)

The United States and China are already vying for supremacy in artificial intelligence and semiconductors. Now robots that look and move like humans are increasingly emerging as another front in that competition. Companies in both countries increasingly see robots as the physical embodiment and next evolutionary step of A.I. The geopolitical tensions came into sharper focus last month when the Federal Communications Commission announced a ban on the import of new models of foreign-made humanoid robots into the United States, citing national security concerns. The measure did not explicitly target China, but most new humanoid robots are made by Chinese companies. This technology is still in the early stages of development, but supporters envision a future when humanoid robots become commonplace: cleaning homes, checking vitals in hospitals and working hazardous jobs in mines and chemical plants. But such activities would also give robots access to vast amounts of data about where and how people lived. For the United States government, this is potentially too sensitive for machines not made in America. Right now, though, very few are. | The New York Times ($)

🤖 Artificial Intelligence (AI)

The quest for machine superintelligence is not merely a gold rush, motivated by money. In the minds of many of its leaders, the arrival of a new form of cognition has a tingling, existential feel because of the danger and disruption it promises. Billions of years of evolution have produced something that we take to be special: human intelligence. But now we have arrived at a perilous moment—the birth of what amounts to a new species, one that outsmarts humans. AI “raises profound questions for us,” the Google executive James Manyika said in an interview. “Who are we? What do we value? What are we good at? How do we relate with each other?” The AI pioneer Demis Hassabis believes that AI will be “the most important invention that humanity will ever make.” Contemplating a technology with almost infinite potential, experts fail to agree even on the basics of what it means for humankind. The leaders of the AI lab Anthropic give better-than-even odds that, by the end of 2028, they will be able to prompt their system to make a smarter version of itself—and that it will do so without any further instruction. The chief executives of other major tech companies speak of systems that will outperform humans on all cognitive assignments; they imagine futuristic companies with almost no human employees and predict cataclysmic job losses. Others are more skeptical. The economist and Nobel laureate Daron Acemoglu suggests that AI will disrupt only a fraction of human tasks and that productivity will therefore change marginally. The computer scientist Yann LeCun stresses the limits of the current AI paradigm, charging that the billions of dollars of investment chasing superintelligence represent the triumph of “complete BS.” On the question of whether AI systems threaten humans and not just their livelihoods, the polarization is equally dizzying. | Foreign Affairs ($)

We live in a world in which AI tools have found their way to the center of a staggering number of professional, academic and personal interactions. Lately these chatbots and agents have been doing more than just talking to us. Students are writing essays with ChatGPT, and teachers are using AI to grade them. Workers are sending lengthy A.I.-generated emails to colleagues, who are responding with walls of chatbot text of their own. AI podcast hosts are holding forth with AI podcast guests on topics like gas prices, the Iran war — and artificial intelligence. Tech wants to take all this even further: In March, Meta acquired a social network designed for bots to talk to one another. The dead internet theory, a concept popular in tech circles, holds that most digital traffic will eventually be software, leaving humans as a minority voice. We may now have a corollary of that prediction — let’s call it a bot loop — when the humans on both sides of an interaction hand over their role to artificial intelligence. These recursive exchanges can be eerie and error-prone, a single mistake bouncing back and forth uncorrected over and over. Stranger still, they flip our conversational dynamic inside out, turning chatbots into the interlocutors and humans into their enablers. Depending on whom you ask, bot loops might be banal, dystopian or genuinely useful. No matter how people feel about them, researchers say we’re going to see bot loops much more often as we deputize AI systems to do our bidding. | The New York Times Magazine ($)

On Wall Street, there’s a disaster scenario known as the “SaaSpocalypse” that goes something like this. The financial industry — and in particular the growing titans of leveraged buyouts — made a generational bet on software companies. A reliable stream of subscription revenue from software-as-a-service, or SaaS, provided cover for aggressive investments in the era of rock-bottom interest rates. Software became one of the most popular subjects for private equity acquisitions in years marked by frenzied dealmaking, while a new class of lenders arose to provide easy credit to fuel the purchases. Everything would be fine, as long as the business model remained intact. With the rise of artificial intelligence, that model and the financial edifice built on top of it are being threatened, with consequences that could extend beyond the software companies themselves. Rapidly developing AI tools, investors fear, could replace many existing tech products. This risk affects all kinds of software companies, but the ones owned by private equity buyout funds are facing piles of debt and market headwinds. Buyouts have always been risky — what’s different now is the worry that a wide swath of wagers could go sideways at once. “The sentiment overhang to software is difficult to disprove in this environment because we don’t know what the pace of the technological advancements will be,” says Amanda Lynam, CPA, chief credit strategist at Goldman Sachs Research. | Bloomberg ($)

Staff members at ChatGPT maker OpenAI didn’t notice for weeks after their AI systems made a chilling leap this spring. Instead of answering questions designed to test their cybersecurity capabilities, a group of AI models began colluding on how to cheat, the company said, setting up a secret internal message board where they swapped notes and ideas. The misbehaving bots used the secret forum throughout May and June, OpenAI said, eventually figuring out how to break out and access the internet. After staff members spotted the escape and cleaned up the compromised system, the AI agents staged another undetected breakout two days later. Only after the rogue models hacked into the network of another AI firm last month did OpenAI staff members shut them down. The details of how OpenAI repeatedly lost control of its AI technology, disclosed by the company at a computer security conference in Las Vegas on Wednesday, delivered an explosive finale to two weeks of revelations that have sent shock waves through the tech industry, prompting fierce criticism of the security practices of AI firms. Lawmakers on both sides of the aisle and state law enforcement officials across the country have called for new scrutiny and regulation of the industry. | The Washington Post ($)

⚓️ Marine

The Arctic is emerging as a viable alternative to the world’s traditional shipping routes as melting polar ice shortens the journey between Europe and Asia and vessels seek to avoid maritime chokepoints. The voyage will cut the usual 40-day sailing time between the two ports by about half, depending on the conditions in the Arctic Circle. Sea ice melts far enough south in summer to allow ships to pass without needing icebreaker capabilities. Despite geopolitical rivalry over control of the region, shipping companies are becoming increasingly interested in the route as a way to avoid chokepoints such as the Bab al-Mandab Strait into the Red Sea, where the Houthis, an Iranian-backed military group, renewed threats last month. | Financial Times ($)

Tomasz Wrzesinski has spent more than 20 years selling supersized boats to the uberwealthy, and he's found one nearly foolproof way to get a client to bite. It starts with sending a cryptic weekend text message: "Maybe I have something for you. I just need to check if it's still available. It's an off-market offer." The last three words are usually enough to cinch the deal. "After 20 minutes, you have an answer: Yes, yes, yes," says the Monaco-based yacht broker. Wrzesinski's method takes advantage of his place in a discreet network of off-market brokers who help the rich purchase boats without them being officially listed for sale. Thanks to the AI boom, a wave of newly minted billionaires is in the market for only the best of the best of yachts — yachts so large and opulent, they're typically never listed on any exchange, but are only heard of through word-of-mouth. It is the market, in other words, for people who want to purchase a yacht that could be worth several million to several billion dollars — the sorts of boats padded out with glass pools, beach club apparatuses, and saunas in the back. | Business Insider ($)

✈️ Aviation & Space

Three years after settling a trade secret lawsuit, electric aircraft company Archer Aviation now owns its former rival, Wisk Aero. Under the terms of the deal, Boeing has agreed to sell Wisk Aero and two other subsidiaries to Archer in exchange for an ownership stake in the company, according to a regulatory filing released Monday. The other subsidiaries are SkyGrid, a digital airspace and air traffic management software company, and drone maker Insitu Inc. Boeing will receive newly issued Archer shares equal to 19.75% of Archer’s shares outstanding immediately before closing, resulting in about a 16.5% stake in the company after the deal, according to a regulatory filing and a person familiar with the matter. The acquisition is a capstone to a once-embittered relationship between two companies developing electric vertical takeoff and landing aircraft. | TechCrunch ($)

Deep in a $1 trillion pay package approved by Tesla’s shareholders is an escape clause that could pay off for Elon Musk in several ways if he folds the automaker into his SpaceX empire. That kind of cars-and-rockets tie-up—the subject of widespread speculation among investors, and hinted at by Musk himself—would likely give him the tighter control he has long sought at Tesla. A hefty-enough price would also, in an instant, wipe away key performance targets standing between Musk and billions of dollars in shares. First a technical note: Musk’s much-ballyhooed potential payout of $1 trillion in stock would now top out around $824 billion. That is because the number of Tesla shares outstanding has risen since shareholders approved the deal. In other words, the same $8.5 trillion market value would be spread across more shares, reducing the value of Musk’s new slug of shares. The record-setting equity award was “designed to align extraordinary long-term shareholder value with incentives that will drive peak performance from our visionary leader,” Tesla Chair Robyn Denholm told shareholders at the time. Yet tucked into the bottom of the fifth page of the 16-page 2025 CEO Performance Award Agreement, a single sentence declares half the targets are as good as accomplished if Tesla is acquired or otherwise taken over. That would leave only market-value targets to determine how many shares Musk gets. The same clause says those targets would be met or missed based on the final deal price—or on Tesla’s market capitalization immediately before any acquisition closed, if that is higher. Musk, SpaceX and Tesla didn’t respond to requests for comment. | The Wall Street Journal ($)

🚘 Car of the Week

Our Automotive Ventures “Car of the Week”: a 1995 Porsche 911 Carrera RS Clubsport. | Broad Arrow

📰 In The News

📢 Michael Cirillo from More Than Cars summarizes our panel discussion from this week's The Reynolds and Reynolds Company Amplify conference. | More Than Cars

📢 Thanks to the Auto Remarketing team for the coverage of Automotive Ventures portfolio company PromptPath! | AutoRemarketing

📢 We’re very proud that our portfolio company BusRight debuted at No. 453 on the 2026 Inc. 5000, which recognizes America's fastest-growing private companies. | BusRight

📢 Thanks to the More Than Cars guys for recognizing the weekly Intel Report. | More Than Cars

📢 One of the great innovations in manufacturing over the past decades has been lean six sigma and just-in-time delivery. But if anything, the fact that we’ve dialed in the supply chain so tightly has left very little to no flexibility if and when we need it. This truth may be most evident in the world of vehicle manufacturing. During COVID, the supply chain shock created a shortage of microchips, which then had the unintended consequence of a shortage of new vehicles. | CBT News ($)

👀 Automotive Ventures Company to Watch

VINCUE is the re-invention of Vehicle Lifecycle Management, built into a single cutting-edge platform, designed to supercharge profit and efficiency for retail automotive dealerships and groups. | VINCUE