Vertical SaaS companies face an existential threat from LLMs such as OpenAI and Anthropic, which has caused a dramatic reset (downwards) of SaaS valuations. Soon there won’t be many tasks left that AI agents can’t do well.

We’re observing four themes playing out, powered by the democratization of access to AI-powered tools:

All four of these trends should be watched closely and evaluated from an investment perspective.

How should companies be thinking about defensibility?

We believe that in this world of AI-powered disruption, companies should be shoring up their thinking across four areas:

Whether you’re an entrepreneur or a well-established incumbent, you should be focusing your AI defensibility strategy around the four areas listed above.

My takeaway: It’s an exhilarating time to be an early-stage investor. The role of the entrepreneur, and how they’re thinking through the issues above, is more important than ever.

Exciting times ahead.

Until next week,

Steve Greenfield
General Partner
Automotive Ventures

Carvana has rapidly grown its business selling new cars over the last few months, data shows, using an established nationwide logistics system to ship Chrysler, Dodge, Jeep and Ram vehicles to customers who often live hundreds of miles from its nearest dealership. Since last year, Carvana bought seven Stellantis dealerships spread across the country for a combined $200 million. But similar to its existing used car operation — long known for a streamlined no-haggle online buying process and home delivery — the company has been shipping its new cars to customers who live all over the country, not just near its stores. In June, for example, 1,378 new Carvana-purchased vehicles were registered in 1,205 ZIP codes across 37 states. Carvana often advertises free shipping and next-day delivery for the new vehicles listed on its website. Carvana's aggressive entry into the new car world has rattled some Stellantis dealers and is being closely watched by other industry insiders who wonder how it might impact an overall U.S. franchised dealership system that counts 16,990 retailers who did $1.3 trillion in sales last year. Carvana is rapidly gaining steam. From March to June, its new car registrations surged by 65%, and its market share doubled — growing even as overall new Chrysler, Dodge, Jeep and Ram registrations declined. In all, more than 4,300 new vehicles purchased from Carvana were registered over those four months, surpassing such big retailers as AutoNation. In June, Carvana's CDJR store near Phoenix sold nearly 1,000 new cars — three times the next-closest Stellantis retailer in the automaker's 2,400-member dealer network. Before Carvana bought the dealership last year, it typically sold a few dozen new cars each month. The same Phoenix-area store continues to lead the rankings by a wide margin so far in August. | The Detroit News ($)

Twenty years ago, General Motors sold twice as many cars and trucks in the U.S. as Toyota. Today that lead has dwindled to just over 100,000 vehicles through July. Toyota is quickly closing the sales gap with GM, threatening to end the American auto giant’s nearly 100-year reign atop the U.S. auto market. Even as the entire new-car market shrinks, GM stands out for selling fewer vehicles, following a strategic decision to kill off traditional sedans and hold the line on profits rather than chase volume with deals and discounts. The result is that the company is making more money and winning over Wall Street. Toyota, meanwhile, is pumping out a string of new models, capitalizing on surging demand for hybrids, and investing billions to expand American production in places like Texas and Kentucky—pivots that come as the company faces more stagnant car markets abroad. The company—the world’s largest automaker by sales—is roughly twice as profitable as GM and recently raised its annual earnings forecast, saying it will benefit from a weaker yen and smaller impact from the Iran war. Both automakers say that market share is only one metric when it comes to how they measure success. A GM spokesman said it also has vehicles in short supply that have constrained sales. Both Toyota and GM have each sold about 1.5 million vehicles this year. | The Wall Street Journal ($)

A dealership typically has four profit streams: new vehicle sales, used vehicle sales, parts and service departments, and finance and insurance offices. This gives dealers some kind of product or service to offer in good times and bad. Now, parts and service departments and finance and insurance packages are becoming more important sources of profit for car dealers, as profits from new vehicle sales show signs of softening. | CNBC

Detroit’s automakers plan to argue to the Trump administration that its proposals for a ​revised North American trade deal could cost the companies billions of dollars and hurt their competitiveness with foreign rivals. U.S. car companies are still struggling to absorb the ‌bevy of tariffs the administration implemented last year, including levies on steel and aluminum, car parts and vehicles shipped in from Mexico and Canada, and say rivals from Japan, South Korea and Europe face lower tariff burdens. Now, U.S. auto executives worry that U.S. proposals floated ahead of talks scheduled with Mexican trade officials next month could jack up costs even further. One of the most contentious points for automakers is Washington's demand that vehicles contain at least 50% ​U.S.-made content to qualify for lower tariffs, as Reuters reported in May. That requirement, as well as a proposal to increase overall North American vehicle content from the current 75% ​level, would add at least $2 billion in annual costs for each Detroit automaker, according to estimates at two automakers. Those expenses would come atop costs the ⁠automakers have already been incurring from the various levies in place since last year. | Reuters ($)

President Donald Trump has made American manufacturing a central focus of his administration, aiming to add jobs through a sweeping tariff policy. Instead, auto manufacturing jobs are declining, according to data from the Bureau of Labor Statistics. “Manufacturing is BOOMING!” Trump posted on the social media site TruthSocial on Aug. 4. “With TRILLIONS OF DOLLARS of new Investment pouring into the United States, and more Factories, more Construction, and more High Paying Jobs on the way, the results are impossible to hide.” For auto parts manufacturing, it’s not that simple. Payrolls at motor vehicle and parts facilities in the U.S. fell about 1 percent in July to 964,500 jobs, compared with 975,300 in March 2025, before the new tariff rules took effect, according to preliminary data from the Bureau of Labor Statistics. Both figures are seasonally adjusted. The numbers challenge Trump’s core goal of using tariffs to restore manufacturing jobs. In fact, the industry has lost positions, driven mostly by parts supplier cuts as the industry leans on automation and adjusts to rising costs. | Automotive News ($)

Ferrari’s first all-electric vehicle defied criticism to sell for $40 million, making it the most expensive new car ever sold at auction. The Sotheby's charity auction of the “tailor-made” Luce at Monterey Car Week in California over last weekend broke a record posted last year, when Ferrari’s customized Daytona SP3 sold for $26 million, the carmaker said in a statement. The buyer wasn’t identified. Ferrari in May unveiled the Luce, priced at €550,000 ($636,356), to a wave of criticism and a drop in the company’s share price. The vehicle marks a break from Ferrari’s heritage of combustion-engine sports cars. | Bloomberg ($)

An estimated 3.2 million vehicles nationwide currently have an outstanding “park outside” recall, according to vehicle history provider CARFAX, which described the surging numbers as “concerning.” The recalls also create new headaches for drivers, who suddenly wonder where it is safe to park their vehicles. | The Washington Post ($)

Falling car-insurance prices have been helping to cool off inflation data. Looking under the hood at insurers suggests they can keep going in that direction for a while. Insurance is historically a cyclical business, featuring “hard” markets of rising premium rates leading to higher profitability, followed by “soft” markets of lower rates eating into those profits, and so on. Right now, it is a softening market in auto insurance. Car insurers are broadly dropping many rates to help them grow, following surges of premiums in the aftermath of the pandemic. The July consumer-price index showed motor-vehicle insurance falling 4.5% year-over-year, the fastest drop since 2020, when the pandemic led to a plunge in driving activity. It was the third month in a row of year-over-year declines, and a stark reversal from the double-digit rises seen from 2022 to 2025. But the question for the Federal Reserve Board and other inflation watchers is how long this new soft market cycle will last. Because within the CPI report was at least one reason to expect rate drops to be short-lived: rising auto-repair costs. It was inflation in those costs that helped cause underwriters’ profits to drop after the pandemic, forcing them to ask regulators for big rate increases. Motor-vehicle maintenance and repair costs in the July consumer-price index were up 6.6% from a year ago, only a small slowdown from June’s sharp 7% jump. That rise isn’t a fluke. While some industries are anticipating tariff refunds following the Supreme Court’s decision, others—such as auto parts—can remain subject to President Trump’s levies under different legal authorities. “Section 232 tariffs are weighing on the auto sector with higher motor vehicle parts and equipment prices spilling over into motor vehicle maintenance and repair, so this isn’t likely a one-off,” wrote economists at RBC. However, there is still quite a bit of cushion for insurers to continue to lower some rates before their margins become too narrow for comfort. | The Wall Street Journal ($)

More than 130,000 of Flock Safety's automatic license-plate readers now dot the country, according to the crowdsourced tracker DeFlock.org. The artificial intelligence-assisted devices have been embraced by law enforcement as powerful investigative tools but widely denounced by the public over privacy concerns. “How-to” videos have spread online that demonstrate how to disable the cameras from collecting footage using wire cutters and heavy gloves. People from an array of backgrounds — college students, computer engineers, a U.S. Air Force engineer — have been accused of vandalizing the devices. Cameras were recently damaged in communities around Detroit. In Winona, Minnesota, all eight of the city’s readers were cut down and stolen. Flock Safety, one of the largest players in technological surveillance, is often the target of the ire. The company operates cameras in more than 6,000 communities across the country that record 20 billion plate scans a month. Critics concerned about the information the devices collect and store say the cameras aren’t just tracking license plates, but people’s personal movements as they visit places like gun ranges, doctor’s offices or marijuana purveyors. | The Washington Post ($)

Flock Safety, the company behind a nationwide network of automatic license plate readers, pitched a plan to convert hundreds of thousands of Uber, Lyft, and delivery drivers into a mobile extension of its surveillance system, according to a company presentation obtained by 404 Media. 404's Joseph Cox wrote that the document describes equipping driver vehicles with dashcams capable of scanning license plates along their routes, effectively expanding Flock's network beyond its usual fixed cameras mounted on poles. The presentation centers on a proposed partnership with Nexar, a dashcam maker whose devices are already marketed to rideshare drivers and commuters. Cox reported that 404 Media had previously uncovered the planned partnership last year through separate sourcing, and that this newly obtained document shows Flock was actively marketing the arrangement to prospective customers around that same period. | Mashable

It wasn’t so long ago that we all got around without GPS, and yet stories of old-fashioned navigation have started to sound increasingly retro. In the worst case, our dependence on GPS can render us vulnerable to glitches. In June, a woman wedged her car onto light-rail tracks in Seattle. People have driven to the edges of cliffs and even into lakes. Mary Hegarty, a psychologist who leads the Spatial Thinking Lab, at the University of California, Santa Barbara, says that by relying on GPS we neglect an intrinsic navigation strategy: cognitive mapping, which depends on a spatial conception of the environment that is populated with landmarks such as trees or buildings. This approach is supported by “place cells,” specific neurons in the hippocampus, each of which represents a precise physical location. (One could think of them as the brain’s internal blue dots.) GPS is more in line with a very different navigation strategy, stimulus response, which treats navigation as a series of motor responses: turn left, go five hundred feet, then turn right. This utilizes a different area of the brain, one that supports habitual learning. “I don’t think there’s enough research yet to say GPS is terrible, that it’s hurting your brain,” Hegarty said. But it’s clear that turn-by-turn directions prioritize stimulus response over cognitive mapping. | The New Yorker ($)

About 10 years ago, a software update for your vehicle, as if it were your smartphone, was rare enough to make the news. Tesla owners were often the only ones who were aware of it and talking about it. In 2018, Consumer Reports tested a new Model 3 and clocked its stopping distance from 60 miles per hour at 152 feet, seven feet longer than a Ford F-150. Tesla responded with a wireless update to the anti-lock braking software, a fix that allowed the Model 3 to stop in 133 feet without a physical repair. Today, a car can update itself in the middle of the night while it sits parked in the driveway and the owner sleeps. There's no phone call to the dealership, no appointment to schedule, and no waiting room involved. Berg Insight, a research firm that tracks the connected car market, found that 83% of new cars sold worldwide in 2025 had a built-in cellular connection, up from 79% the year before. In North America, that number was even higher, with 94% of new cars sold in 2025 having the built-in cellular connection necessary to receive updates wirelessly, or over the air (OTA). | How To Geek

Americans are keeping their cars longer than ever before, with the average U.S. vehicle age rising to 12.8 years, according to Mobility Global. But some industry analysts and forecasters worry that highly complex software-defined vehicles will age more like smartphones. These vehicles rely on sophisticated computers and software to control many functions that were once strictly mechanical or managed by simpler technology. They can also receive over-the-air software updates and are typically connected to the internet or communications networks, allowing automakers to remotely diagnose some problems, perform some fixes and add new features. The rise of these tech-heavy vehicles poses implications for the entire automotive world. A vehicle costs, on average, nearly $50,000 in the U.S. — a far bigger investment than a smartphone — but as they age some features could become unavailable because of obsolete hardware or discontinued product support. Ever-changing and often proprietary technologies raise questions about the long-term repairability of a vehicle. | CNBC

Electric car sales are on track to hit record highs this year, with 29 percent of all new cars purchased around the world expected to be either purely battery-powered models or plug-in hybrids, according to a recent report from the International Energy Agency (IEA). That’s a sharp increase from just 4 percent in 2020. The boom in sales was somewhat unexpected. Some analysts had predicted a slower market for electric vehicles this year — until the U.S. war with Iran and the closure of the Strait of Hormuz caused oil and gasoline prices to spike. That has led to a frenzy of electric car sales in many unexpected corners of the globe. | The New York Times ($)

Tesla fans who are usually breathless supporters of Musk’s businesses are speaking in an unusual tone, channeling what they once accused detractors of: fear, uncertainty and doubt. A segment of devoted Tesla investors find their patience in the company — and its leader — is being tested. Once the crown jewel of Musk’s empire, Tesla’s stock has faltered, dropping more than 20 percent since the beginning of 2026. Some have publicly expressed hope that SpaceX acquires the automaker, to prevent it from teetering toward irrelevance. Tesla’s true believers, including some who reaped handsome payoffs from the automaker’s first renaissance, are being asked to return the favor and keep backing Musk, as he drives the company toward a far-off future. | The Washington Post ($)

U.S. battery startups hit a rough patch when the One Big Beautiful Bill eliminated battery and EV incentives, undercutting a chunk of future demand. But recently, they’ve found a lifeline in the defense world, helping to power everything from drones and torpedoes to infantry radios and fighter jets. The Trump administration, despite its open disdain for EVs, acknowledges that batteries are an inescapable part of modern life. And like many things in Washington these days, it’s leaning on national security as justification for its recent decisions. The latest comes from the U.S. Department of Energy (DOE), which announced Thursday that it is awarding $500 million in grants to bolster the battery supply chain in the United States. The program aims to “reduce reliance on foreign sources, bolster national security, and advance American energy dominance.” Much of the money went to startups. | TechCrunch ($)

China’s car market has deepened its slump this summer, with sales plunging and a flood of new product driving automaker margins to record lows, putting the world’s biggest auto market on pace for its first ever double-digit annual decline, industry data shows. The unprecedented decline marks a reversal for a market that has been the industry’s growth engine for two decades. It is forcing automakers to look abroad for sales growth, pushing exports to record levels. That strategy, pursued by Chinese and international carmakers alike from their underutilized plants in the country, masks mounting pressure on their local businesses. China’s overseas pressure valve, meanwhile, is stoking competition in the global car market. Exports for all major Chinese carmakers have stayed robust this year. For the first seven months, 5.35 million passenger vehicles were shipped overseas, up 73 percent from a year earlier, according to the China Association of Automobile Manufacturers. | Automotive News ($)

Travelers returning from China often report having seen the future. The country’s advances in frontier commercial technologies are visible in the robots that make and serve food in restaurants; the drones that deliver food and medicine; and the deployment of industrial and humanoid robots on factory floors. Even outside China, most of the world is now familiar with Chinese electric vehicles that are as affordable as they are sleek, with massage chairs and swappable batteries winning over passengers from London to Santiago. Most Americans, however, are unaware of this future. Chinese EVs are effectively absent from the U.S. market, blocked by 250 percent tariffs and broad national security restrictions. And a bipartisan fear has prevented many frontier Chinese technologies, including drones and robots, from reaching U.S. shores. Apart from a handful of products, mostly consumer electronics, the U.S. market is largely oblivious to the fruits of China’s advanced manufacturing ecosystem. The United States has its reasons for this blind spot. As early as the second Obama administration, if not before, it became clear that China was not playing fairly in business. Successive administrations have used a slew of trade remedies and official complaints to the World Trade Organization to fight back against unfair subsidies, and rulings by the federal Committee on Foreign Investment in the United States (CFIUS) have tried to prevent sensitive U.S. technologies from falling into the hands of Chinese actors. Since 2017, Chinese firms have also found themselves the targets of heightened security reviews. Today, many actors in Washington think the United States should do even more to disengage from Chinese business. Members of Congress are pressuring American pharmaceutical companies to discontinue clinical trials in China, for instance, citing concerns that China’s research and development ecosystem has ties to the People’s Liberation Army. Others are proposing legislation to ban Chinese ownership of U.S. farmland, ostensibly to protect the U.S. food supply and critical infrastructure. | Foreign Affairs ($)

For decades, global automakers brought platforms and technology to China through joint ventures. Now Geely Automotive Holdings is flipping that model, offering legacy brands from Detroit to Europe starter kits for making cars at China Speed. The offer comes with 800 engineers, modular platforms, artificial intelligence-powered electrical architectures, and hyper-efficient manufacturing systems that can slash development cycles and cost. A recently established division at Geely is dedicated to collaborating with partners on tailor-made, end-to-end services that leverage its China-based engineering and production capabilities. The company says this is a way to show others how to make cars the Chinese Way. Geely established its External Collaboration Research Institute in 2021. Now, it has more than 100 projects underway with a dozen clients, including Renault and Waymo. Its work expanded in July when Ford Motor Company and Geely agreed to establish a joint venture at Ford’s manufacturing hub in Spain to develop new models for Europe. Industry watchers liken the new approach to a “reverse joint venture.” Stellantis leverages its partnership with China’s Leapmotor in similar fashion, as does Volkswagen with its XPENG tie-up. | Automotive News ($)

Chinese automakers are rapidly gaining ground in Europe, but some dealers say they are struggling to get paid for the sales growth they are helping to generate. Dealers for Xpeng and BYD in Germany say they have been waiting for months for payments owed by the automakers, with outstanding claims in some cases reaching several hundred thousand euros. The complaints come as both brands are sharply increasing registrations in Germany. BYD registrations rose more than fourfold in the first seven months of 2026, while Xpeng more than tripled its sales volumne, according to industry data. “Xpeng’s payment practices are abysmal,” said one German dealer, who asked not to be identified. “In some cases, we have been waiting more than six months for contractually agreed payments, including leasing subsidies and quarterly bonuses.” | Automotive News ($)

General Motors has halted Chevrolet's retail sales in China, pivoting the brand's domestic production entirely to exports, as foreign automakers grapple with falling market share and intensifying electric vehicle competition in the world's largest automotive market. In a recent statement, GM China said that Buick and Cadillac hold a solid position to drive sustainable domestic growth, while Chevrolet's product lineup is optimized for overseas markets. The company vowed to deliver continuous after-sales and parts support for more than 7 million Chevrolet owners across China. The strategic reset follows a deal earlier in August, in which GM extended its joint venture partnership with SAIC Motor for 20 years through 2047, marking the longest renewal among major foreign automotive joint ventures in China. Under the new agreement, GM will prioritize electrification for Buick and Cadillac, planning to launch no fewer than 30 new-energy models by 2030. | China Daily

China is poised to leap ahead of the U.S. in the build-out of solid-state battery technology, according to a congressionally mandated report submitted to the U.S. Department of Energy (DOE) earlier this month. It’s not entirely clear that solid-state is one of the critical tech races the U.S. and its carmakers must make a priority: Solid-state systems (or the semisolid-state versions) have been the holy grail of the battery world for decades, but they are expensive to manufacture and may be one of those advances that end up useful only to a small minority of customers. Solid-state batteries have obsessed car and battery makers because they replace dangerous liquid electrolyte with a solid separator. That would allow battery makers to use powerful materials such as pure lithium metal that are ordinarily too volatile, delivering much greater energy without the risk of a fire. EVs equipped with such batteries could drive a lot further, for instance, while drones would fly greater distances and AI-infused electronics would last much longer. | The Information ($)

Royal Navy spy drones used by Britain’s elite special forces secretly sent data to China. The cameras on the K3 Scout surveillance drones had components made in China which were secretly transmitting information to a device in the country. The Royal Marines have been using the £12m fleet since March and the UK Ministry of Defence (MoD) was forced to remove all internet connectivity from the cameras after discovering the breach. The revelation raises fears that Beijing has been attempting to spy on Britain’s military after years of security warnings about the threat from the country. An investigation into the drones revealed that the cameras were transmitting “heartbeat communications” – data to confirm they were online and functioning normally – to an IP address in China. The MoD insisted that there was no evidence that any sensitive data or systems had been sent abroad. | The Telegraph ($)

The Nevada Transportation Authority unanimously approved three permits Thursday that will allow Tesla, Uber, and Waymo to operate commercial robotaxi services in Clark County, home to Las Vegas. Together, these permits would deploy up to 8,000 robotaxis across the county over the next 12 months. Tesla’s permit allows it to deploy up to 5,000 robotaxis, while Waymo is allowed operate up to 1,000 autonomous vehicles over the next year. Uber was also approved for 1,000 robotaxis, which it will operate through partnerships with Hyundai subsidiary Motional and Zoox. Zoox already holds an autonomous vehicle network company permit that allows it to operate 100 robotaxis. | TechCrunch ($)

It’s no secret that AI-powered robots aren’t so good yet. They struggle with a broad range of simple tasks, from untangling cables to chopping vegetables. Nonetheless, morale is high among roboticists who are flush with venture cash as they work toward a “ChatGPT moment” when robots become broadly useful and available. The idea of a “ChatGPT moment” for robotics also calls to mind humanoid robots in particular, whose five-fingered hands could allow them to handle a wide variety of work. But the dream for robotics foundation models is that they will power a variety of robots, from robot dogs and drones, all the way to highly specialized machinery. That might feel far off right now, but if anything, the vibes in robotics are even more positive than they were for language models in the GPT-2 era. | The Information ($)

From Delhi’s recycling colonies to Bangalore’s denim factories, fishing villages to construction sites nationwide, tens of thousands of Indian workers are being recruited to record, in granular first-person detail, how humans use their hands. The footage will be fed into the AI systems being built to teach robots how to do things. The workers are, in the most literal sense, developing the manual for their own job extinction. For years, humanoid robots have dazzled in controlled settings — dancing in choreographed routines or running half-marathons at superhuman speeds. But in real-world settings, they’ve struggled, face-planting while reaching for bins in warehouses and toppling over seconds after meeting the people they were built to impress. The gap between viral demo reels and robots that actually work is the central unsolved challenge for what the tech industry calls embodied AI. To infuse robots with intelligence, the problem isn’t hardware or algorithms. It’s data. Machines that interact with the physical world need something different from the text, photos and video that companies such as OpenAI used to train large language models like ChatGPT. They need real footage of humans folding, soldering, lacing and stacking. This kind of mundane, first-person video is in short supply because no one ever cared about it — until now. | Bloomberg ($)

China’s humanoid robots are sprinting ahead of their rivals—quite literally. On August 17th one of their number, called Superman, clocked up a running speed of 12.66 metres per second, beating the previous record set by Usain Bolt, before crashing into a wall. The triumph only added to the buzz over Unitree Robotics, Superman’s maker, which debuted its shares in Shanghai two days later. Their price leapt by 460%. More impressive displays are expected over the coming days as the Humanoid Robot Games take place in Beijing. Yet as the ignominious end of Superman’s running feat demonstrates, the technology still has a long way to go. Chinese companies are expected to sell 50,000 humanoids this year, more than triple last year’s figure. They have largely mastered the hardware behind the machines. The software, however, is another matter. In order to create the foundation models that will allow robots to seamlessly carry out a multitude of useful tasks, enormous amounts of data must now be collected. The models powering the current generation of humanoids possess a few billion “parameters”; to replicate the functioning of the human body, they will need hundreds of billions. That would put them at a similar size to the large language models powering chatbots. The difference is that chatbots can be trained on the reams of digital text available on the internet. Gathering the data necessary to teach a robot to identify a glass, pick it up and fill it with coffee is much harder. It must understand everything from its spatial position to the brittleness of the glass and the viscosity of its contents. That information must be mined from experiences in the real world, or detailed recreations of those experiences. | The Economist ($)

China’s humanoid robot makers are generating much of their revenue from selling machines to government-backed training centres — which then collect and sell training data back to the robot makers, raising concerns about actual demand in an industry Beijing is keen to promote. The widely adopted model, reminiscent of NVIDIA’s “circular financing” of AI data centres, has fuelled China’s so-called embodied AI industry. Valuations of start-ups such as AGIBOT and Hong Kong-listed UBTECH have soared on expectations that humanoids represent the future of AI. But investors are beginning to question whether government-driven purchases can lead to real commercial demand. | Financial Times ($)

The long-term impact of AI is one of the most hotly debated topics in Silicon Valley. NVIDIA CEO Jensen Huang predicts every job will be transformed—and likely lead to a four-day workweek. Other tech titans go even further: Bill Gates says humans may soon not be needed “for most things,” and Elon Musk believes most humans won’t have to work at all in “less than 20 years.” While those predictions might sound extreme, they’re not just plausible, they’re likely, said Geoffrey Hinton, the British computer scientist widely known as the “Godfather of AI.” The transition, he warned, could trigger a sweeping economic reshuffling that leaves millions of workers behind. | Fortune ($)

Modern AI models are designed to try all possible methods to accomplish a given goal without explicit instructions, which makes them inherently unpredictable. If they succeed, they are rewarded, a training process known as reinforcement learning. In a computer system that lacks understanding of human intentions and morals — a phenomenon the AI industry describes as “misalignment” — the line between a powerful cyber security defender and a dangerous hacker is becoming increasingly blurred. However it is characterised, AI activity is already causing harmful consequences for businesses across sectors and throughout the world. As AI companies accelerate development of the software in a race to achieve artificial general intelligence — a superintelligent machine that can outperform humans on all cognitive tasks — the risk of harmful cyber attacks is increasing, with little in prospect to rein in the threat. | Financial Times ($)

U.S. manufacturing is booming thanks to AI data centers, and industrial companies such as Caterpillar, Eaton and Ford Motor Company are pivoting their business to seize the moment. Manufacturing last month rose to its highest level since 2022, when the recovery from the Covid-19 pandemic fueled a factory-production frenzy. Today, data centers and a handful of AI-related industries are driving the manufacturing sector, and companies in that sector are investing hundreds of millions of dollars to expand their lineups to capitalize on the opportunity. Ford Motor is looking to data centers to repurpose excess production capacity for electric vehicle batteries. The automaker’s new Ford Energy subsidiary expects to spend $2 billion redirecting batteries to electricity storage at data centers and other large industrial users of power. Demand for electric vehicles is in a slump, leaving automakers with the need for fewer batteries than originally anticipated. Ford’s interest in energy storage comes as its auto business is smaller than it was a decade ago. Manufacturing in support of the data-center business is helping to offset market conditions that are holding back other industrial sectors. Inflation, high interest rates and rising material costs are slowing down construction, auto sales and demand for consumer durable goods. | The Wall Street Journal ($)

Seth Godin's critique of the Amazon advertising ecosystem. He's not wrong. I'm a diehard Amazon user, but I increasingly have a hard time identifying the best products from the most reputable sellers. | Seth Godin

Seventy years ago it would take at least 10 days for a ship at London Docklands to be emptied and reloaded by around 50 dockers. Pilfering was rife, accidents were commonplace and port business was vulnerable to labour strikes. Then came the shipping container, an 8ft x 20ft steel box that needed increasingly vast vessels to carry an ever-expanding volume of goods. Such big ships could no longer sail up the Thames to inner London’s docks. The use of cranes to lift the boxes wiped out the need for hundreds of longshoremen. Today, it takes cranes roughly 40 hours to empty and reload a large container ship — around 20,000 steel boxes lifted by 146-metre-high computerized cranes that move two containers every three to four minutes. That efficiency and scale is testament to the unglamorous steel container, an invention that has driven down shipping costs to such a low fraction of total manufacturing value that it has enabled the rapid expansion of global trade over the past 70 years. | Financial Times ($)

Tracks are buckling in Sweden. Highways are cracking in Germany. Commuters are sweltering in airless train carriages across the world’s fastest-warming continent. This is the new reality in Europe, where much of the transportation infrastructure was not built to withstand the scorching summer heat that’s becoming routine. “Europe’s transport systems were engineered for a climate that no longer exists,” Patrice Geoffron, who leads the energy and climate economics team at Université Paris Dauphine - PSL in France, wrote in an email. Many of Europe’s tracks and roads desperately need upgrades to meet new extreme temperature thresholds, or delays and disruptions will become the norm, experts said. Rail services in Britain and France reduced services this week and warned of disruptions as Western Europe endured its fifth heat wave since May. The changes needed to fully accommodate the effects of global warming would require vast amounts of money. And even if cash-strapped European governments had those funds, many countries are focused more on defense than on infrastructure, experts said. For now, they are mostly making smaller adjustments. | The New York Times ($)

The wispy white contrails that airliners streak across the sky may resemble harmless clouds, but scientists have long warned that they intensify climate change. When a jet’s hot exhaust mixes with moisture and soot at high altitude, the lingering trail of ice particles that results can trap dangerous amounts of heat in the atmosphere. Now, research scientists, air traffic controllers and the British government will test whether that warming effect can be reduced through minor flight path adjustments. Over the next two winters, British air traffic controllers will order hundreds of pilots flying across an eastern portion of the Atlantic Ocean to adjust their trajectories, directing them to altitudes where it is less likely that they will generate a lingering contrail. | The New York Times ($)

Our Automotive Ventures “Car of the Week”: a 1989 Ferrari F40. | Broad Arrow

📢 Steve discusses auto dealership Fixed Ops performance. | NADA

📢 Automotive Ventures is very excited to announce our investment in Dirac Labs. | DiracLabs

📢 We’re very proud to be an investor in Auriga Space. | Interesting Engineering

📢 Join Steve at 12:00 Noon Eastern on Monday as CBT News launches its newest show — real-time conversations with the people driving the automotive retail industry forward. | CBT News ($)

📢 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. Customer support may soon 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? | CBT News ($)

SelectFI provides predictive lending AI: dealerships can pencil more accurate, profitable payments from their lenders with no credit impact. | SelectFI

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