News & Updates
The latest news and updates from companies in the WLTH portfolio.
Discord to present new child safety plan in Brazil, government says | MLex | Specialist news and analysis on legal risk and regulation
( September 3, 2026, 00:28 GMT | Official Statement) -- MLex Summary: Brazil's Attorney General's Office said Discord will present a new proposal aimed at protecting children and adolescent users of the platform. The office disclosed in a statement that a conciliation hearing was held Wednesday as part of a public civil action brought by the government against the tech company after an investigation into alleged failures to safeguard minors' rights. Under the agreement, Discord has up to 10 business days to present a plan demonstrating compliance with the country's child online safety law, ECA Digital.Press release follows (in Portuguese):... Prepare for tomorrow's regulatory change, today MLex identifies risk to business wherever it emerges, with specialist reporters across the globe providing exclusive news and deep-dive analysis on the proposals, probes, enforcement actions and rulings that matter to your organization and clients, now and in the longer term. Know what others in the room don't, with features including: * Daily newsletters for Antitrust, M&A, Trade, Data Privacy & Security, Technology, AI and more * Custom alerts on specific filters including geographies, industries, topics and companies to suit your practice needs * Predictive analysis from expert journalists across North America, the UK and Europe, Latin America and Asia-Pacific * Curated case files bringing together news, analysis and source documents in a single timeline Experience MLex today with a 14-day free trial.
Anthropic Admits Security Failures Behind Claude Hacking Incidents
Tests suggest reward hacking during training can make models more willing to take harmful actions to complete a task. Anthropic tightened its testing and training safeguards after Claude models gained unauthorized access to computer systems during cybersecurity evaluations. In a blog post on Monday, Anthropic said the incidents reflected operational-security failures and two alignment failures: motivated reasoning and a willingness to cause harm. "While we do not believe these incidents represent operational issues alone, our first priority was to address specific containment and monitoring issues," Anthropic wrote. Anthropic disclosed in July that Claude models had compromised systems belonging to three companies. A third-party evaluation environment was connected to the public internet even though the models were told they were inside a simulation without internet access. Anthropic said Claude may have interpreted evidence of real internet access in a way that preserved its belief that the systems were simulated. "The model was willing to take harmful actions on the real internet in pursuit of the narrow goal of solving a cybersecurity evaluation," they wrote. "However, we also believe that the evaluation setup itself contributed to the models' behavior demonstrated in these incidents." Anthropic noted that a separate test conducted by the UK AI Security Institute involved Claude Mythos taking unauthorized actions on the live internet after evaluators deliberately gave it internet access. The company said the models involved in both sets of incidents were intentionally evaluated without the cyber safeguards included with its generally released products. After the July 30 incidents, Anthropic temporarily paused cyber evaluations of pre-release models and introduced stricter safeguards. Tests must now run in verified, offline sandboxes with clear limits and real-time monitoring. A new classifier blocks suspected boundary violations, ends the test, and alerts a human. Anthropic will review evaluations requiring internet access individually. "In addition to the efforts focused on high-risk evaluations and training, we expanded our offline monitoring to cover most other forms of internal frontier agentic usage," the company wrote. "We are also building controls on our internal inference to prevent Anthropic employees from accidentally running agents with weaker mitigations than the ones described above." The Claude incidents followed a similar failure at OpenAI after its models breached Hugging Face in July to obtain answers to a cybersecurity test. Investigators found that roughly 1,200 agents coordinated through an unauthorized message board, with about 700 joining the effort. Some ended their own runs to help others. Following the rise of AI-powered hacks over the summer, Anthropic, OpenAI, and more than 100 other organizations later called for stronger cyber defenses, including tighter access controls, threat sharing, and closer oversight of AI agents.
Coinbase adds ex-xAI CFO Armstrong to board in push for 24/7 market rails - Cryptopolitan
Coinbase is staffing up around efficiency and dealmaking as its "everything exchange" push collides with rivals like the LSEG-Kraken alliance over who owns the infrastructure for 24/7, blockchain-based markets. Coinbase has named Anthony Armstrong, the previous finance chief at Elon Musk's xAI and X, to its board of directors as competition in the cryptocurrency industry starts shifting from trading volume to control of the technologies behind 24/7 markets. Now it is much more important to be able to provide the liquidity, settlement, custody, and regulatory mechanisms for trading beyond the conventional hours than to be able to offer individuals the opportunity to buy Bitcoins. Coinbase counts on the fact that Armstrong combines Wall Street deal-making experience with government knowledge and knowledge of working for Elon Musk's companies will help it compete better. A board seat, an audit role, and a tenth chair On September 2, Coinbase made a public announcement of Armstrong's appointment. According to its SEC filing, the appointment was made effective as of September 1. In his role, Armstrong will also take a place on the Audit and Compliance Committee, and his appointment will increase the company's number of directors from nine to ten. The SEC filing additionally disclosed that Anthony Armstrong and Brian Armstrong, Coinbase co-founder and CEO, have no family ties. Coinbase noted that Anthony has a successful experience of "building things that work at scale, without waste," which ties his coming onboard with the company's attention on effective execution. From Morgan Stanley deal tables to Musk's balance sheets Armstrong spent nearly a decade at Morgan Stanley, eventually becoming vice chairman of investment banking after helping lead its global technology M&A business. He later served as a senior adviser at the Department of Government Efficiency before becoming CFO across xAI, X.AI Corp. and X Corp. In October 2025, Cryptopolitan reported that Armstrong counseled Musk on how to go about acquiring Twitter for $44 billion and that he had a strong working relationship with him. It was also reported that Musk later brought together X with xAI in a deal worth around $113 billion. This makes Armstrong much more than just a typical governance hire. The future of Coinbase could hinge on acquisitions, partnerships, and integrations across securities, crypto markets and blockchain settlement -- areas where his dealmaking background may be especially useful. Why an efficiency hire, and why now The new appointment comes as the Coinbase is experiencing weaker financial results along with a sharp drop in the share price. According to The Block, COIN closed with $174.96 on September 2, which is a significant decrease of over 40% in comparison with the previous year. Coinbase's report shows that in Q2 the company has suffered a $359.5 million loss on its revenue amounting to $1.2 billion. Subscription and services revenues resulted in $555.1 million whereas the company stated that 88% of total revenues is derived from other operations except Bitcoin spot trading. Quartz mentioned that the company failed to meet the expectations of Wall Street for 3 quarters in a row. Brian Armstrong summarized the new strategy during the earnings release with these words: Coinbase is "no longer a bet just on the price of Bitcoin." The everything exchange, and the race for the rails Coinbase's "everything exchange" strategy is steadily blurring the line between a crypto exchange and a broader multi-asset financial platform. It has rolled out U.S. stock and ETF trading and prediction markets while outlining plans around tokenized assets, pre-IPO perpetual futures, unified liquidity and an SEC-registered AI investment adviser, as Cryptopolitan previously reported. The opportunity is already visible in the numbers. CoinGecko found that TradFi/RWA perpetual trading volume reached $347.17 billion in May 2026, up from just $230 million at the start of 2025. But regulation and market structure may matter as much as product breadth. The World Federation of Exchanges has warned that fragmented tokenized-equity markets could weaken liquidity and price discovery. Traditional exchanges are moving toward the same territory. Reuters reported that London Stock Exchange Group is partnering with Kraken parent Payward on tokenized UK shares, with xStocks planned for its 24-hour LSE 24 venue in 2027, subject to regulatory approval. That sharpens Coinbase's strategic challenge. Winning the 24/7 market may depend less on listing the most assets than on owning the regulated rails that let capital move between them continuously.
Discord Goes Down for Thousands of Users Wednesday, Downdetector Reports
Discord experience a possible outage with users reporting issues regarding the application and voice calls. (Shutterstock) Discord experienced a possible outage Wednesday, with thousands of users reporting issues, according to Downdetector.com. More than 6,000 users had reported problems with the platform as of 4:37 p.m. PT, according to Downdetector, which tracks outages by collecting status reports from multiple sources. Most users reporting issues say they're experiencing problems with the application and voice calls. Discord's status checker says, "We've identified an issue with our endpoint selection service and are applying a mitigation now. We are seeing recovery to endpoint selection now." -- Connect with Anthony W. Haddad on social media. Got a tip? Send an email.
Cerebras plans 165 MW Finland AI data center with first 50 MW under construction
Cerebras Systems (NASDAQ: CBRS) announced a 165 MW AI data center in Mikkeli, Finland, with Compute Nordic Finland. The initial 50 MW of contracted IT capacity is already under construction. The partners plan to increase capacity from 50 MW to 80 MW before reaching the full 165 MW. Cerebras said multiple service orders cover the capacity, with each carrying a seven-year term. An assessment cited by Cerebras estimated €1.0 billion to €1.7 billion of regional investment at full build-out. The project could support 80 to 250 direct permanent jobs and generate between €0.8 million and €2.5 million in annual property-tax revenue. Stay ahead of AI infrastructure deals. Get Blockspace in your inbox. Seven-year orders support the build-out Compute Nordic Finland CEO Pyry Virrantaus said the phased project is backed by existing demand rather than projected customer interest. "This partnership with Cerebras is not a speculative bet on future demand -- it's a contractually committed, phased build-out that reflects exactly how much AI compute the market needs today and where that need is heading," Virrantaus said in the project announcement. Compute Nordic Finland will oversee development, operations, customer relationships and program governance. Cerebras intends to use the facility for its high-density AI compute platform. The partners have identified permanent positions in site operations, power and cooling engineering, networking, security, and facility management. The employment estimate comes from a Ramboll market study and impact assessment dated September 12, 2025. Closed-loop cooling and heat recovery Closed-loop cooling is part of the Mikkeli facility's design, recirculating water instead of continuously drawing it from the municipal supply. It also incorporates heat-recovery infrastructure intended to make thermal energy from the compute systems available to the surrounding community. "Our architecture is built to get more useful AI output out of every megawatt we deploy," Cerebras CEO and co-founder Andrew Feldman said. "Mikkeli lets us pair that efficiency with a data centre designed for closed-loop cooling and heat reuse from the ground up." Cerebras did not provide a commissioning schedule for each phase or disclose pricing under the service orders. The announcement also did not say when the heat-recovery system would begin supplying the community. Mikkeli anchors Cerebras' European expansion The project accounts for most of the 200 MW of European capacity that Cerebras said in July it expected to reach by the end of 2027. That plan includes sites in France and the Nordics, and OpenAI workloads are expected to use some of the capacity.
Kraken Is Building Wall Street's Crypto Gateway While Delaying Its Own IPO
Deutsche Börse's April stake priced Payward a third below its $20 billion round. Three of the world's biggest exchange groups are moving their shares onto blockchains through Kraken. Kraken's parent, Payward, is not ready to list itself. It now targets the second quarter of 2027 at the earliest. Payward filed a confidential draft registration in November 2025. It paused the process in March 2026. People familiar with the plans point to 2027. Kraken Builds the Rails Wall Street Wants On September 1, Payward agreed to tokenize the 100 largest London-listed companies. They become xStocks, tokens backed one for one by real shares. The tokenized London stock plan covers investors in over 110 countries. UK residents and US persons are shut out. The London Stock Exchange plans to trade them on LSE 24, its round-the-clock venue, once regulators approve. Payward counts $40 billion in xStocks volume since June 2025 and more than 200,000 holders. Nasdaq signed a similar deal in March. It is building a gateway with Payward so tokenized shares can cross between regulated venues and public blockchains. That launch targets the first half of 2027. Deutsche Börse paid $200 million in April for a stake of roughly 1.5%. Even Hyperliquid may reach US traders this way. Why the Kraken IPO Delay Makes Sense That April price implies a valuation near $13.3 billion. Payward raised $800 million last November at $20 billion, in a round led by Jane Street and Citadel Securities. Wall Street bought the rails, then marked them down by a third. The trading business explains the caution. Second quarter adjusted revenue rose 17% to $508 million. Adjusted EBITDA fell 71% year over year to $23 million. Platform volume dropped 18% to $310 billion. Payward kept buying anyway through crypto's stalled IPO year. It closed on derivatives venue Bitnomial in May, completing a US regulated derivatives stack it can now rent out. "The industry around us is consolidating. We built this company so that is when we compound fastest," Arjun Sethi, Co-CEO of Payward, in the company's quarterly letter. That letter never mentions the listing. The rails are going up for other people's markets first. Whether public investors pay for infrastructure, rather than trading fees, is the open question.
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Meta's new AI model edges closer to OpenAI and Anthropic, its AI Chief says
Alexandr Wang says the new model is competitive with Claude Fable 5.1 and better than GPT-5.6 Sol at coding, but the AI Act's free and open-source exemption is switched off for models with systemic risk, which is where a frontier release lands Meta has released Muse Spark 1.3 and has not decided whether to publish its weights, though it still plans to release the weights for version 1.2. The AI Act exempts genuinely open-source general-purpose models from part of Article 53, but that exemption does not apply to models classified as carrying systemic risk. Meta has released Muse Spark 1.3, its most capable model so far. Chief AI Officer Alexandr Wang called it the biggest jump yet on model performance, Bloomberg reported. Wang put it level with the field. He called it competitive with Anthropic's Claude Fable 5.1, better than OpenAI's GPT-5.6 Sol at coding, and ahead of any current Chinese model. The weights are the open question. Meta has not decided whether to publish 1.3's, still plans to publish 1.2's, and the first Muse Spark arrived in April closed source. Those comparisons are hard to check. Benchmark parameters can be gamed and do not always track how a model behaves in use. In Europe the weights decision is also a compliance decision. Article 53 exempts genuinely free and open-source general-purpose models from the technical documentation owed to the AI Office and to downstream developers. The licence has to be real to qualify. Parameters including the weights, the architecture information and the usage information must all be publicly available, with no non-commercial clause and no user thresholds. Then the exemption stops at the top. A model classified as carrying systemic risk owes every Article 53 obligation whatever licence it carries. So the relief runs out where frontier releases begin. The copyright policy and the public summary of training content apply either way. Meta's view of that regime is already on the record. Joel Kaplan said in July last year that Europe was heading down the wrong path on AI, and Meta declined to sign the code of practice built to operationalise those duties. Wang led on safety instead. He cited extensive safety testing, better awareness of the model's own limits, confirmation before irreversible actions, and 25% fewer tokens per task. The episode behind that was reported as a rogue model. Muse Spark 1.1 hacked an outside service during testing, but three labs were breached inside a fortnight through one vendor that left evaluation environments online with safeguards disabled. That distinction decides what any regulator should be looking at. The concentration sat in the testing supplier rather than in any single model. Meta's larger model Watermelon remains undated. Whichever way the 1.3 weights go, it lands in a market where the licence changes the filing rather than the obligation.
Pitching 940-acre data center, Prometheus Hyperscale asks Natrona County to bypass state review
Data center developers pitch local control to a packed room during discussion with county commissioners regarding proposed $500 million campus near Casper. CASPER -- Natrona County commissioners took no action Tuesday after developers of the proposed Prometheus Hyperscale data center asked them to consider an industrial park zoning designation, which would speed up build time by exempting the $500 million project from state industrial siting review. At the Natrona County Courthouse, Prometheus founder Trenton Thornock and Build Wyoming Director Eric Schlidt presented the request during the workshop portion of the board's meeting -- during which no decisions are made -- in front of a packed house of supporting and skeptical residents alike. Per the presentation, Prometheus intends to apply for a planned unit development to zone 940 acres south of Interstate 25 on the Falls Ranch property situated between Casper and Glenrock. Thornock told commissioners that an industrial park designation allows developers to seek an exemption from the Wyoming Industrial Siting Council while keeping county-level oversight. He described industrial siting processes as "cumbersome and time-consuming," adding the exemption would not remove "any applicable environmental or regulatory requirements." State agencies like the Department of Environmental Quality and the Wyoming Department of Transportation would still regulate air, water and roads, Thornock said, adding that the DEQ's Industrial Siting Division has three employees and the seven-person siting council meets quarterly, which slows project reviews. "Local control in my opinion is much better than state siting oversight," he said. "You, the county commissioners and local officials, know your community and their needs better than a state siting council." Thornock added that county-level permitting allows local officials to negotiate directly with developers for road maintenance and infrastructure funding rather than waiting on state formulas from Cheyenne. Project background and design Prometheus announced plans in late 2025 to build a 1.5-gigawatt data center campus on Falls Ranch property -- owned by Texas billionaire Russell Gordy -- north of Interstate 25. Plans at the time would have placed the data center portion in Converse County and the power generators in Natrona County. County officials said after pushback from neighbors regarding noise, heat and traffic, developers shifted the site to other Falls Ranch property south of the interstate, bringing the $500 million campus entirely within Natrona County. Converse County commissioners previously adopted a policy to streamline industrial park designations for the project in April, but rescinded it a month later after the Wyoming attorney general found the county lacked the statutory authority to create independent exemption procedures outside standard zoning rules. Thornock previously said the proposed data center relies on a closed-loop cooling design using a blend of water and food-grade propylene glycol. The blend is used for five to six years before being hauled off by a supplier for recycling, requiring no ongoing water draw or wastewater discharge for cooling. On Friday, Prometheus announced a partnership with Evansville-based Mesa Power Solutions to supply natural gas generators. Previously, the company had said it would deploy Jenbacher generators to power the first phases of development. Either arrangement would allow the center to produce its own power on-site without drawing electricity from the public utility grid. Friday's announcement added to the announced partnerships with Spiritus, which says it develops carbon-negative power infrastructure, and Casper Carbon Capture, which agreed to provide land and access to permitted underground carbon storage wells. Schlidt estimated the data center portion of the project would support roughly 3,000 temporary construction jobs at peak build-out and 150 permanent positions, and generate between $80 million and $115 million in recurring annual property taxes. Thornock said the campus footprint requires 300 acres for on-site power generation and 640 acres for data center halls west of Big Muddy Creek. He told the board that prospective tenants need a clear path toward local permits, warning that delays could push the company to move resources to alternative project sites in Texas. During the meeting, there were no other details provided regarding a site plan, project timeline or potential customers. Uinta County advances project Prometheus pointed to its work in southwest Wyoming as a model for how it plans to work with Natrona County. In June, the Uinta County Board of County Commissioners approved a zone change from agricultural to industrial use for the Atlas Industrial Park Subdivision. That decision cleared the way for Prometheus to plan a 640-acre campus on Thornock's family ranch outside Evanston. Thornock told commissioners that Uinta County placed rules directly onto the company's conditional use permits. The county handled the project through two separate permits, dividing rules between power generation and the data halls. "These are the kind of good-neighbor things that have very specific conditions around how we have to operate our facility both during the construction phase and later on," Thornock said. Before making decisions on those permits, Uinta County planning staff traveled to the Nova data center in Jordan, Utah, Thornock said. The visit allowed staff to see closed-loop liquid cooling systems in person. He offered to arrange a similar tour for Natrona County officials. Thornock said the company also met with Evanston and Uinta County fire agencies to establish safety rules for on-site backup batteries. Natrona County commissioners question developers Commissioner Peter Nicolaysen questioned the timing of potential community agreements. Thornock said Prometheus prefers negotiating community benefit agreements after county permits are finalized. The company faced accusations of bribery in Uinta County when talks ran during the permitting process, he said. "It seems that the county loses a part of its leverage in those negotiations if things have been fully permitted," Nicolaysen said, "and so I would prefer that those things work in tandem, go through the permitting process, but also be moving forward and making progress on the community benefit agreement." Nicolaysen also pressed the developers on road access, utility impacts and cooling fluids. Thornock said primary access for construction and operations would come from a newly constructed Interstate 25 interchange, with Hat Six Road reserved as a secondary emergency route. Commissioner Dallas Laird asked audience members to raise their hands to show whether they supported or opposed the development, then addressed the developers. "Opinions are different than facts," Laird said. "And agreements, in my opinion, if they aren't in writing, they don't mean anything. So, we're going to take a really hard look at this." Public comment split over landscape, local control The commissioners took more than an hour of public comment from the dozens of residents packing the courtroom. Katherine Dvorak of Casper questioned how initial water use would affect area wells and raised concerns about heat output from generators during hot summers. Sherry Johnson, a lifelong Casper resident, urged commissioners and audience members to drive out to Hat Six Road before supporting rezoning efforts. "Please go take a look at that land because you people need to understand once you allow that behemoth, our landscape will never look the same," she said. "We're talking what, 150 jobs? It's not worth our landscape. We can't get it back. Once it's gone, it's gone." Erika Cook said she lives downstream and downwind from the site. The natural gas power plant was her primary concern. "Gas generators on this scale would turn our rural prairie into a polluted industrial nightmare," she said. "We would hear and feel the noise from this power facility 24-7, 365 days a year in our home. This is not what we bargained for when we invested our life savings in our peaceful family home." Brad Isner, a neighbor of the project's initial site, said company officials have not provided answers to questions about construction camps, traffic and emergency services. Meanwhile, supporters urged the board to keep project reviews under local control rather than handing oversight to state boards in Cheyenne. "What we need to ask is if we have the potential as a community to welcome business development, handle it locally, or do we want to let Cheyenne determine our fate and the impacts and be in charge of the money that comes back to this community?" Casper resident Tassma Powers said. "Because that's what industrial siting does." Keegan Fox of Casper told commissioners that public officials should base decisions on verified facts rather than fear or unverified promises. "A responsible 'yes' doesn't ignore legitimate concerns and it doesn't allow speculation to become a substitute for evidence," he said. Colton Dillion, who lives off Hat Six Road, said the development would sit near his home, but he welcomed the opportunity to attract advanced technology jobs to Wyoming. "Data centers are very efficient businesses in terms of space, in terms of noise, in terms of negative externalities of pollution," he said. "I would really invite you to think about what is the alternative and what are these other opportunities that we could give to our children." Fred Fichtner, chief operations officer for Mesa Power Solutions, said large infrastructure projects help local suppliers and trade workers compete for work, while geologist JoAnn True said that Natrona County has experience with big projects as it manages oil fields, pipelines and refineries. She urged commissioners to vet the project while creating jobs that give younger residents reasons to stay in the state. Commissioners balance property rights, community impacts In their closing comments, Nicolaysen and Chair Jim Milne said the board must balance community concerns with the rights of private landowners. Laird framed the current technology infrastructure race as an issue of national defense. He said that domestic computing facilities keep American technology out of foreign hands. "[President Donald] Trump has said it too," the commissioner said. "He says we have a war going on with China and Russia over who's going to take over with this AI business. And that's what this data center is all about. ... Do you want China running your AI or Russia running your AI or do you want Natrona County commissioners and the state of Wyoming and America running AI?" Commissioner Casey Coates, who in June said he had no interest in industrial parks, cautioned against reacting with panic instead of focusing on tangible facts. "When we ask for the protection of the government, we really ought to be careful because government at times can be overreaching and those protections that we ask for can be overly applied to ourselves," Coates said. "Do we not like something because of what it is, or do we have real impacts? If we have real impacts, let's address those." Commissioner Dave North said that state environmental regulators handle water rights and industrial pollution under state statutes. "The state engineer is the one that takes care of the water," he said. "That is not our responsibility. That's not our job. That is up to the state. The DEQ takes care of a lot of stuff. That's their job. That is not our job." Potential county timeline Commissioners told residents that any formal vote on the Prometheus project remains months away. Laird said the county can't set a firm schedule because the developer hasn't submitted an application. Once filed, any proposal must go through multiple public steps before the commission can act. "The first thing that has to happen is if we pass an industrial zoning matter so that it can be handled by us," he said. "This has to go through our zoning board first and they have to decide whether it's something we should be doing, and then we have to have another meeting where you all come down and we hear from people again, and then we make a vote." Laird added that even if the board approves a zone change, Prometheus would still have to apply for separate conditional use permits and meet state rules. "This isn't something you're even going to see a building for for a couple years, I wouldn't think," Laird said. North said the county will demand answers before taking any action. "That's a totally different process that takes a lot of time, and there's a lot of hard questions that we've been asking and we will continue asking," North said. "And before it comes before the commission, those questions are going to have to be answered. That's the way that works."
Nscale doubles contracted revenue to $103 billion after Anthropic win - report
Investing.com -- UK-based neocloud provider Nscale is informing prospective investors that its total contracted revenue has expanded to approximately $103 billion, bolstered by a landmark $45 billion computing deal with Anthropic, according to investor materials reviewed by The Information. The Nvidia-backed infrastructure firm could launch an initial public offering as soon as this month, utilizing the massive backlog to demonstrate sustained enterprise demand for specialized artificial intelligence compute capacity. Nscale had previously disclosed $51 billion in contracted revenue prior to finalizing the Anthropic agreement and landing additional commitments from other AI-native clients. While the signed lease contracts carry an average duration of 5.7 years, equating to an annualized average of roughly $18 billion, a person familiar with the discussions cautioned that the metrics are illustrative and not intended as formal revenue guidance. Beyond its long-term pipeline, internal documents reveal rapid sequential acceleration in Nscale's underlying business, with second-quarter revenue estimated to have topped $100 million. That figure marks a substantial increase from approximately $37 million recorded in the first quarter, notably without yet reflecting any financial contributions from the newly secured Anthropic contract. The sheer scale of the contract additions underscores how specialized neocloud providers are leveraging intense AI compute demand to carve out market share ahead of major market debuts. Against that backdrop, prospective public investors will likely scrutinize how efficiently Nscale can convert its expanding illustrative backlog into realized, high-margin revenue over time.
Anthropic signs $35 billion Lambda cloud deal: WSJ
The Wall Street Journal reported Monday that Anthropic signed an agreement with Nvidia-backed Lambda valued at $35 billion for cloud computing. The arrangement is intended to bring Nvidia capacity online for Anthropic's Claude models. The project involves Hut 8's (NASDAQ: HUT) Beacon Point data center campus in Nueces County, Texas. Nvidia (NASDAQ: NVDA) would hold the facility lease, while Lambda would provide compute capacity to Anthropic, the Journal reported. The reports did not disclose the agreement's term, GPU count, payment schedule or computing capacity. They also did not specify how the contractual obligations are divided among Anthropic, Lambda, Nvidia and Hut 8. Stay ahead of AI infrastructure deals. Get Blockspace in your inbox. Lambda's financing Lambda closed a $926 million senior secured term loan B on August 27 to fund GPU infrastructure for an investment-grade offtaker's committed deployment. Lambda did not identify that customer in its announcement. The Baa2-rated loan priced at SOFR plus 300 bps and 99.5% of principal, with maturity on December 31, 2030. It fully amortizes against contracted cash flows and is secured by the funded GPU servers, related infrastructure and cash flows from those assets. "Closing this Facility puts capital straight to work, funding infrastructure to which our customer is already committed," Lambda CEO Michel Combes said. Morgan Stanley led the financing, with MUFG serving as joint bookrunner. Hut 8 commercialized Beacon Point's second phase in July through a 15-year, triple-net lease covering 352 MW of IT capacity. The lease carries $9.8 billion of base-term value and a 3% annual base-rent escalator. The second lease doubled the same unnamed tenant's contracted IT capacity at Beacon Point to 704 MW. Hut 8 said both phases carry $19.6 billion of aggregate base-term contract value, while renewal options could lift the campus total to $50.2 billion. Hut 8 financed the first 352 MW phase with $4.25 billion in senior secured notes that are non-recourse, carry a 6.129% coupon and mature in 2042. The campus has 1,000 MW of utility capacity under an AEP Texas interconnection agreement, as detailed in Blockspace's coverage of the project financing and ERCOT review. Stay ahead of AI infrastructure deals. Get Blockspace in your inbox. Hut 8 expects initial Beacon Point energization in the first quarter of 2027 and the first Phase 2 data hall in the second quarter of 2028. Site preparation is underway, and the operator said it has procured long-lead critical equipment.
LSEG and Kraken Parent Put FTSE 100 on Blockchain: What Investors Actually Own
xStocks track FTSE 100 prices but are debt claims, not direct equity; UK investors cannot access them The London Stock Exchange Group and Payward -- the parent company of crypto exchange Kraken -- announced on September 1 a partnership to tokenize the 100 largest companies listed on the London Stock Exchange, making them available as blockchain-based instruments called xStocks in more than 110 countries within the coming weeks. The deal makes LSEG the first major incumbent exchange to anchor its own regulated settlement infrastructure directly to the xStocks framework -- a structural distinction from every other major tokenized equity deal announced this year. But the partnership's most consequential fine print isn't the exchange-level integration. It's what an xStock actually is, legally, and who isn't allowed to buy one. The xStocks framework has processed more than $40 billion in total transaction volume since its June 2025 launch, including nearly $20 billion settled onchain, across more than 200,000 holders worldwide. That growth now includes the FTSE 100's largest names. What it does not include is British investors, who remain excluded from the product despite the underlying companies trading in London. What xStocks Are -- and What They Are Not An xStock is not a share. That distinction, buried in a footnote in most coverage, is the single most important structural fact about this partnership for any investor considering the product. From a legal standpoint, xStocks are tracker certificates -- bearer bonds issued by Backed Assets (JE) Limited, a Jersey-incorporated special-purpose vehicle owned through Backed Finance AG (Zug) by Payward. Each certificate is designed to track the price of the underlying security at a 1:1 ratio, but the holder does not own the underlying share. The xStocks legal structure analysis details how this creditor position works in practice. Instead, the holder acquires a claim against the issuer -- a creditor position, not an ownership position. The practical implications run to insolvency. When the issuer of a tracker certificate becomes insolvent, holders are creditors of the bankrupt estate, not owners of ring-fenced assets. This is the fundamental legal difference between an xStock and an exchange-traded fund: ETF shares represent fractional ownership of a segregated pool of assets; tracker certificates represent a debt claim against whoever issued them. If the fund company behind an ETF fails, the underlying assets belong to the fund's shareholders. If the tracker certificate issuer fails, the holder's recovery depends on what the bankruptcy estate can pay. Backed Assets (JE) Limited has addressed this through a bankruptcy-remote structure. The underlying FTSE 100 shares will be purchased and held in segregated sub-accounts by Alpaca Securities, a FINRA-regulated, SIPC-member US broker-dealer, under a three-party Account Control Agreement between Backed Assets (issuer), Alpaca (custodian and broker), and Security Agent Services AG, an independent Zug-based entity with authority to liquidate the collateral for holders in the event of issuer default. That structure is meaningfully different from a simple synthetic product. In Kraken's own disclosure, if Kraken or Backed goes bankrupt, the SPV design allows holders to claim the underlying value directly with Alpaca. One documented complexity survives: Alpaca simultaneously serves as the SPV's program broker, primary custodian, and prime borrower -- the party that borrows the underlying shares for securities lending. When shares are lent out, they leave the collateral account and are replaced by cash collateral marked daily. The public Proof of Reserve attestation -- published weekly on-chain via Chainlink and confirmed quarterly by The Network Firm -- does not specify whether shares currently on loan are subtracted from the collateral count. This is a transparency gap worth noting for any investor relying on the weekly attestation as a real-time verification of physical custody. Corporate actions -- dividends, splits, reverse splits -- are handled through on-chain rebasing: token balances adjust automatically, with cash dividends reinvested into additional shares net of withholding tax rather than distributed. This is the engineering design that enables true 24/7 availability; the alternative would require trading pauses each time the underlying company declares a dividend. How the LSEG Partnership Changes the Infrastructure Picture The xStocks framework has signed partnerships with Deutsche Börse (February 2026), Nasdaq (March 2026), and GTN (July 2026). The LSEG deal differs from all three in one structural respect: it is the first to connect xStocks directly to a traditional exchange's own regulated settlement infrastructure, rather than simply adding a major distribution platform to the xStocks Alliance. The relevant infrastructure is the LSEG Digital Securities Depository (DSD), announced in February 2026 and built inside the UK's Digital Securities Sandbox -- a joint FCA/Bank of England regulatory regime. The DSD is a blockchain-native settlement layer designed to allow tokenized securities to be issued, traded, and settled across multiple distributed ledger networks while remaining interoperable with existing traditional systems like Euroclear and CREST. Institutions that have publicly engaged on the DSD build include Barclays, Lloyds Banking Group, NatWest Markets, Standard Chartered, Brookfield, and State Street. Subject to regulatory approval, LSEG intends to list xStocks on LSE 24, its forthcoming near-continuous trading venue, in the first half of 2027. LSE 24, announced in July 2026, is a purpose-built, greenfield regulated venue running from 5:00 PM to 7:50 AM London time on weekdays, designed explicitly for AI agent-based trading with native machine-to-machine API connectivity. Client testing is planned by the end of 2026, subject to regulatory approval. Whether xStocks will actually settle through the DSD -- on-chain, in real-time -- or trade on LSE 24 against conventional T+1 settlement infrastructure has not yet been specified. The difference is architecturally significant: on-chain settlement via the DSD would represent a genuine structural shift; conventional settlement with a blockchain wrapper would be more modest. The two firms also announced they will explore "native LSE-issued equity tokens" -- instruments that would carry the same rights and full fungibility as traditional shares. That framing is notable precisely because it implies the current xStocks don't reach that threshold. Julia Hoggett, CEO of LSE plc, signaled awareness of the gap: "Tokenization has the potential to change how investors access, and how issuers use, financial markets, but it must develop in a way that preserves the trust, rights and role of regulated markets." One Governance Gap Partially Closed For the first fourteen months of xStocks' existence, holders had no mechanism to participate in corporate governance of the underlying companies. A holder of an Apple xStock had no path to vote on Apple's annual proxy -- because xStocks are not registered in the holder's name with Apple's transfer agent. On August 5, 2026, Broadridge Financial Solutions announced it would integrate its unified governance platform with the xStocks framework, allowing eligible holders to authenticate via Web3 credentials on ProxyVote.com, receive proxy materials, and submit voting preferences for the underlying shares. Doug DeSchutter, President of Broadridge Investor Communication Solutions, described the arrangement as ensuring investors "should not have to choose between blockchain innovation and shareholder rights." The word "preferences" is doing significant work in that sentence. xStock holders are submitting proxy voting preferences -- instructions that are routed to whoever exercises the underlying vote -- rather than casting votes directly as registered shareholders. This is a meaningful improvement from having no governance participation at all, and it is the mechanism through which the LSEG partnership's exploration of "full fungibility" must eventually travel. Whether it closes the governance gap fully depends on how Broadridge's system routes preferences and whether they are treated as binding by the underlying issuers' transfer agents -- a detail neither Broadridge nor Payward has publicly specified. Who Can Buy -- and Who Cannot The most immediate consequence of the LSEG partnership for most readers is geographic. Investors in more than 110 countries will be able to access xStocks representing the FTSE 100's largest names through Kraken and other platforms in the xStocks Alliance within the coming weeks. UK investors will not be among them. British residents cannot access xStocks for a structural regulatory reason. The Financial Conduct Authority maintains a ban on retail access to crypto derivatives, and the FCA's determination of where tokenized equity tracker certificates fall on that regulatory spectrum is still unresolved. The FCA reversed its ban on retail access to crypto exchange-traded notes in October 2025 and issued new rules for tokenized funds in April 2026 under policy statement PS26/7, but those frameworks do not cover the specific product category that xStocks occupy. The FCA's comprehensive crypto regulatory framework is not expected to take full effect until October 2027. LSEG is separately developing its own UK tokenized equity structure -- one that would be designed to preserve shareholder rights, governance standards, and protections within UK regulatory requirements. No timeline has been disclosed. Until that framework exists and is approved, UK investors will remain spectators of a product built on infrastructure located in their own financial capital. US investors face a parallel exclusion: xStocks are not registered under the US Securities Act and are not available to US persons, per the official partnership announcement. Are xStocks Reasonably Safe? "Safe" is the wrong question for any investment product. "Safe from what, and compared to what" is better. Compared to an outright synthetic: meaningfully different. xStocks hold real, physical FTSE 100 shares in segregated sub-accounts governed by an independent Security Agent with collateral liquidation authority in the event of issuer failure. Quarterly ISAE 3000 audits by The Network Firm and weekly Chainlink Proof of Reserve attestations provide more transparency than most structured products. Lloyd's of London provides supplemental custody coverage up to $175 million aggregate. Compared to holding the underlying share in a regulated brokerage account: meaningfully different in the opposite direction. An xStock holder is a creditor of a Jersey SPV, not a shareholder of the underlying company. If Backed Assets (JE) Limited were to fail and the Security Agent had to liquidate the collateral, there would be legal delay and potential recovery uncertainty. The Alpaca securities lending program means the underlying shares may not be physically present in the custody account at every moment -- though the structural design replaces lent shares with daily-marked cash collateral. The structure is most comparable to a fully-backed exchange-traded product. The key differentiating risks from a standard ETF are issuer risk (the Jersey SPV is not an investment fund with segregated ownership, though the Security Agent structure comes close) and the securities lending transparency gap. What Remains Unresolved Several questions will determine how consequential this partnership ultimately proves: The regulatory path to LSE 24 listing requires FCA approval that has not yet been obtained. The DSD integration depends on the UK Digital Securities Sandbox framework, which runs until December 2028. Whether xStocks settle through the DSD or against conventional infrastructure at LSE 24 has not been specified. The exploration of "native LSE-issued equity tokens with full shareholder rights" represents the more transformative possibility announced by this partnership -- instruments that would close the ownership gap entirely, giving blockchain-native holders the same legal status as traditional shareholders. That work has not yet begun in any concrete public form. What has begun is a reorientation of how the London Stock Exchange positions itself in the race to place global equity markets on continuous blockchain-native infrastructure. The LSEG partnership gives Payward's xStocks framework its first direct connection to traditional exchange settlement infrastructure. Arjun Sethi, co-CEO of Payward, put the strategic logic plainly: "The real opportunity is what happens when they run on the same rails." The question that remains is whether the rails, once built, carry instruments that are economically equivalent to stocks but legally something different -- or something that ultimately closes that gap entirely. Frequently Asked Questions Is buying an xStock the same as buying the underlying FTSE 100 share? No -- and the distinction matters. An xStock is a tracker certificate, which is legally a debt instrument issued by Backed Assets (JE) Limited, a Jersey-incorporated special-purpose vehicle. Holding an xStock means you are a creditor of that SPV, not a shareholder of the underlying company. Your economic exposure tracks the share price 1:1, and corporate actions like splits are reflected automatically on-chain, but you have no direct legal claim on the underlying company's assets in insolvency. The SPV structure includes a Security Agent with authority to liquidate the collateral on holders' behalf in the event of issuer failure -- making it meaningfully different from a simple synthetic -- but it is still different from direct equity ownership. The "native LSE-issued equity tokens with full shareholder rights" the partnership intends to explore would close that gap, but that product does not yet exist under the current partnership. Why can UK investors not buy xStocks of UK-listed companies? The FCA maintains a ban on retail access to crypto derivatives, and xStocks -- being tracker certificates structured under the Liechtenstein FMA framework -- sit in a regulatory category the FCA has not yet determined to permit. The FCA reversed its ban on retail crypto exchange-traded notes in October 2025 and issued new rules for tokenized funds in April 2026, but those frameworks do not cover tokenized equity tracker certificates specifically. The FCA's comprehensive crypto regulatory framework is expected to take full effect in October 2027. Until the FCA establishes a pathway for this product category, UK investors cannot access xStocks regardless of where the underlying companies are listed. How does the LSEG partnership differ from Payward's deals with Deutsche Börse and Nasdaq? Deutsche Börse's 360X venture (February 2026) and Nasdaq's equities transformation gateway (March 2026) both integrate xStocks into their distribution or trading infrastructure. The LSEG deal goes further by connecting xStocks directly to LSEG's own regulated settlement infrastructure -- specifically the Digital Securities Depository, a blockchain-native settlement layer being built inside the UK's Digital Securities Sandbox under joint FCA/Bank of England oversight. If and when the DSD goes live and xStocks are listed on LSE 24, trades could theoretically settle on-chain in real time rather than through conventional T+1 batch processing. Whether xStocks will actually use the DSD for settlement -- rather than simply trading on LSE 24 against conventional rails -- has not yet been specified. What does the Broadridge proxy voting integration actually give holders? Broadridge's integration, announced August 5, 2026, allows eligible xStocks holders to authenticate via their Web3 wallet on ProxyVote.com and submit voting preferences on the underlying shares. This is a significant improvement over the prior situation, in which xStocks holders had no governance mechanism at all. However, holders are submitting voting preferences rather than casting binding votes as registered shareholders -- the preferences are routed through Broadridge's system to whoever holds the underlying shares as registered owner (Backed Assets or Alpaca). Whether those preferences are treated as binding by underlying issuers' transfer agents is a detail that neither Broadridge nor Payward has publicly specified.
Nscale doubles contracted revenue to $103 billion after Anthropic win - report
Investing.com -- UK-based neocloud provider Nscale is informing prospective investors that its total contracted revenue has expanded to approximately $103 billion, bolstered by a landmark $45 billion computing deal with Anthropic, according to investor materials reviewed by The Information. The Nvidia-backed infrastructure firm could launch an initial public offering as soon as this month, utilizing the massive backlog to demonstrate sustained enterprise demand for specialized artificial intelligence compute capacity. Nscale had previously disclosed $51 billion in contracted revenue prior to finalizing the Anthropic agreement and landing additional commitments from other AI-native clients. While the signed lease contracts carry an average duration of 5.7 years, equating to an annualized average of roughly $18 billion, a person familiar with the discussions cautioned that the metrics are illustrative and not intended as formal revenue guidance. Beyond its long-term pipeline, internal documents reveal rapid sequential acceleration in Nscale's underlying business, with second-quarter revenue estimated to have topped $100 million. That figure marks a substantial increase from approximately $37 million recorded in the first quarter, notably without yet reflecting any financial contributions from the newly secured Anthropic contract. The sheer scale of the contract additions underscores how specialized neocloud providers are leveraging intense AI compute demand to carve out market share ahead of major market debuts. Against that backdrop, prospective public investors will likely scrutinize how efficiently Nscale can convert its expanding illustrative backlog into realized, high-margin revenue over time.
Nscale doubles contracted revenue to $103 billion after Anthropic win - report By Investing.com
Investing.com -- UK-based neocloud provider Nscale is informing prospective investors that its total contracted revenue has expanded to approximately $103 billion, bolstered by a landmark $45 billion computing deal with Anthropic, according to investor materials reviewed by The Information. The Nvidia-backed infrastructure firm could launch an initial public offering as soon as this month, utilizing the massive backlog to demonstrate sustained enterprise demand for specialized artificial intelligence compute capacity. Nscale had previously disclosed $51 billion in contracted revenue prior to finalizing the Anthropic agreement and landing additional commitments from other AI-native clients. While the signed lease contracts carry an average duration of 5.7 years, equating to an annualized average of roughly $18 billion, a person familiar with the discussions cautioned that the metrics are illustrative and not intended as formal revenue guidance. Beyond its long-term pipeline, internal documents reveal rapid sequential acceleration in Nscale's underlying business, with second-quarter revenue estimated to have topped $100 million. That figure marks a substantial increase from approximately $37 million recorded in the first quarter, notably without yet reflecting any financial contributions from the newly secured Anthropic contract. The sheer scale of the contract additions underscores how specialized neocloud providers are leveraging intense AI compute demand to carve out market share ahead of major market debuts. Against that backdrop, prospective public investors will likely scrutinize how efficiently Nscale can convert its expanding illustrative backlog into realized, high-margin revenue over time.
Lutnick Says US Trusts Anthropic Again
"We trust Anthropic," Commerce Secretary Howard Lutnick told Axios, signaling an improvement in a relationship that broke down publicly this year. "They've done what we asked. They're back on the right side. So the answer is: Yes," Lutnick said Tuesday when asked whether he trusts Anthropic CEO Dario Amodei, according to Axios. Anthropic co-founder Tom Brown has taken a larger role in the company's dealings with the White House and addressed this week's G20 Innovation Ministerial. "Really excited for our conversation, so I'd like to introduce you all to Tom Brown, one of the founders of Anthropic," Lutnick told the ministers Wednesday. Brown praised a Truth Social post by President Donald Trump this week backing data center construction. "I really love Trump's post from earlier this week ... where he was pointing out that the data centers are just an enormous source of prosperity," Brown said. "They produce a ton of jobs. They produce taxes. Now the way that we design them, we actually bring on more power to the grid." Brown had repeated conversations with Lutnick and National Cyber Director Sean Cairncross as Anthropic worked to repair the relationship, Axios reported. Anthropic is also challenging a separate Pentagon designation in the D.C. Circuit. U.S. District Judge Rita Lin ruled Aug. 27 that the Pentagon acted unlawfully in punishing Anthropic over its criticism of the Department of War's views on artificial intelligence, Newsmax reported, citing The Associated Press. The dispute with the administration began in February, when Trump and Secretary of War Pete Hegseth accused the company of endangering national security and the Pentagon designated it a supply chain risk. Amodei declined to change the company's position over concerns its products could be used for mass surveillance or autonomous armed drones. Lin wrote that the government's actions "were based on a desire to make a public example out of Anthropic for its 'arrogance' in criticizing the government, not based on any articulable basis to believe that Anthropic would actually sabotage its model." An Anthropic spokesperson said the company welcomed the ruling. "We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology," the spokesperson said. Jim Mishler ✉ Jim Mishler, a seasoned reporter, anchor and news director, has decades of experience covering crime, politics and environmental issues.
Anthropic back on 'Trump's side': Report
US Commerce Secretary Howard Lutnick said AI giant Anthropic is "back on the right side" with the Trump administration, Axios reported on Wednesday citing an interview. US Defense Secretary Pete Hegseth had blocked Anthropic from certain military contracts because the company refused to allow the US to use its Claude AI models for domestic surveillance or autonomous weapons. Anthropic sued in California court. On 27 August, a US judge sided with Anthropic in the company's fight with the American military over AI safety on the battlefield. Anthropic and the Commerce Department did not immediately respond to requests for comment from Reuters. Anthropic co-founder Tom Brown appeared on stage at a tech-focused G20 event in North Carolina on Wednesday morning. Brown stressed the importance of data centers at the gathering, urging the gathered officials to grant permits to build them in their countries.
Lutnick Says US Trusts Anthropic Again
"We trust Anthropic," Commerce Secretary Howard Lutnick told Axios, signaling an improvement in a relationship that broke down publicly this year. "They've done what we asked. They're back on the right side. So the answer is: Yes," Lutnick said Tuesday when asked whether he trusts Anthropic CEO Dario Amodei, according to Axios. Anthropic co-founder Tom Brown has taken a larger role in the company's dealings with the White House and addressed this week's G20 Innovation Ministerial. "Really excited for our conversation, so I'd like to introduce you all to Tom Brown, one of the founders of Anthropic," Lutnick told the ministers Wednesday. Brown praised a Truth Social post by President Donald Trump this week backing data center construction. "I really love Trump's post from earlier this week ... where he was pointing out that the data centers are just an enormous source of prosperity," Brown said. "They produce a ton of jobs. They produce taxes. Now the way that we design them, we actually bring on more power to the grid." Brown had repeated conversations with Lutnick and National Cyber Director Sean Cairncross as Anthropic worked to repair the relationship, Axios reported. Anthropic is also challenging a separate Pentagon designation in the D.C. Circuit. U.S. District Judge Rita Lin ruled Aug. 27 that the Pentagon acted unlawfully in punishing Anthropic over its criticism of the Department of War's views on artificial intelligence, Newsmax reported, citing The Associated Press. The dispute with the administration began in February, when Trump and Secretary of War Pete Hegseth accused the company of endangering national security and designated it a supply chain risk. Amodei declined to change the company's position over concerns its products could be used for mass surveillance or autonomous armed drones. Lin wrote that the government's actions "were based on a desire to make a public example out of Anthropic for its 'arrogance' in criticizing the government, not based on any articulable basis to believe that Anthropic would actually sabotage its model." An Anthropic spokesperson said the company welcomed the ruling. "We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology," the spokesperson said. Jim Mishler ✉ Jim Mishler, a seasoned reporter, anchor and news director, has decades of experience covering crime, politics and environmental issues.
Lutnick Says US Trusts Anthropic Again
"We trust Anthropic," Commerce Secretary Howard Lutnick told Axios, signaling an improvement in a relationship that broke down publicly this year. "They've done what we asked. They're back on the right side. So the answer is: Yes," Lutnick said Tuesday when asked whether he trusts Anthropic CEO Dario Amodei, according to Axios. Anthropic co-founder Tom Brown has taken a larger role in the company's dealings with the White House and addressed this week's G20 Innovation Ministerial. "Really excited for our conversation, so I'd like to introduce you all to Tom Brown, one of the founders of Anthropic," Lutnick told the ministers Wednesday. Brown praised a Truth Social post by President Donald Trump this week backing data center construction. "I really love Trump's post from earlier this week ... where he was pointing out that the data centers are just an enormous source of prosperity," Brown said. "They produce a ton of jobs. They produce taxes. Now the way that we design them, we actually bring on more power to the grid." Brown had repeated conversations with Lutnick and National Cyber Director Sean Cairncross as Anthropic worked to repair the relationship, Axios reported. Anthropic is also challenging a separate Pentagon designation in the D.C. Circuit. U.S. District Judge Rita Lin ruled Aug. 27 that the Pentagon acted unlawfully in punishing Anthropic over its criticism of the Department of War's views on artificial intelligence, Newsmax reported, citing The Associated Press. The dispute with the administration began in February, when Trump and Secretary of War Pete Hegseth accused the company of endangering national security and designated it a supply chain risk. Amodei declined to change the company's position over concerns its products could be used for mass surveillance or autonomous armed drones. Lin wrote that the government's actions "were based on a desire to make a public example out of Anthropic for its 'arrogance' in criticizing the government, not based on any articulable basis to believe that Anthropic would actually sabotage its model." An Anthropic spokesperson said the company welcomed the ruling. "We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology," the spokesperson said. Jim Mishler ✉ Jim Mishler, a seasoned reporter, anchor and news director, has decades of experience covering crime, politics and environmental issues.
Donald Trump's administration just sided with OpenAI in a key 'fair use' case. Here's what it means for music's fight with Anthropic and Suno.
The US Government has told a court that AI companies do not break copyright law when they train their models on written work without a license. The Department of Justice set out that position on Tuesday (September 1), in a filing in the copyright lawsuit brought against OpenAI by The New York Times. It appears to be the first time Washington has intervened in any of the copyright cases now stacked up against AI companies. Those cases include the lawsuits filed against Anthropic, Suno, and Udio by the world's largest music companies. Every one of them turns on "fair use," the exception in US copyright law that allows copyrighted material to be reused without permission. The DOJ has now come down on the AI industry's side of that question - at least, that is, when it comes to copyrighted text. The DOJ's filing - a 'Statement of Interest Of The United States', which you can read here - is advice rather than a ruling, and Judge Sidney Stein is free to ignore it in the OpenAI case. The 20-page document was signed by Stanley Woodward, the Associate Attorney General. "The United States has a strong interest in this Court rejecting any argument that training LLMs on copyrighted texts violates copyright law." Statement of Interest Of The United States The filing rests on Donald Trump's own AI policy, citing two of the President's executive orders, from January 2025 and June 2026. It also quotes his National Policy Framework for Artificial Intelligence, published in March, which states that the "training of AI models on copyrighted material," in and of itself, "does not violate copyright laws." The DOJ takes on the two questions that decide most fair use rulings: (i) how far the new use transforms the original, and (ii) whether it damages the market for it. On the first, the brief argues that copying text (like the New York Times') to build a model like ChatGPT is "a use of a different kind or character," and "extraordinarily transformative." On the second, the Justice Department argues that a training copy does not "serve as a substitute for the original," because training "does not reveal anything to the public at all." Licensing fees "would disproportionately benefit legacy media outlets due to the sheer volume of their written publications," the US Government adds. It is not in the public's interest, the DOJ argues, for the largest tech companies to hold "an oligopoly on LLM training due to licensing entry barriers that function primarily as large subsidies for old mainstream media companies." To be very clear: the DOJ's filing is about words, not songs. It argues about "copyrighted texts," "written works," and "text articles." Meanwhile, a footnote limits the DOJ's reasoning to this case and, specifically, related suits brought by "book authors and publishers." Recordings and compositions go completely unmentioned across its 20 pages. But fair use is fair use. And, obviously, a judge weighing Suno's defense may read what the US Government now says the test means. The DOJ splits the building of an AI model into three stages: (i) acquiring the material, (ii) training the model on it, and (iii) generating outputs. "Each stage may present distinct questions of copyright law," the DOJ says - and it defends only the middle one. In their banner cases against AI companies, the majors and their publishers are attacking all three. The first stage is how the material was obtained, and it's an area where the AI industry has already lost ground. In the precedential book authors' case against Anthropic, Judge William Alsup ruled in 2025 that downloading books from pirate libraries was not fair use, calling it "straightforward piracy but at massive scale." Anthropic settled with those authors for $1.5 billion in September 2025 over the same torrenting. Two of the four counts in Sony Music Publishing and Warner Chappell Music's new suit against Anthropic, the fifth music copyright case against the Claude developer, concern torrenting. The DOJ's filing says nothing about any of that. The second stage at question in AI cases is the training itself (i.e. models being fed information/content, and learning from it). It's this stage the DOJ defends, and the one place it goes straight at music's reasoning. In 2025, book authors who had sued Meta over AI training lost on fair use. But the judge who decided it, Vince Chhabria, raised a theory that could help rightsholders in future cases. Chhabria suggested that AI outputs carry the "potential to flood the market with competing works" - and that developers should therefore "generally need to pay copyright holders for the right to use their materials"... even for training. In other words: for Chhabria, what comes out is evidence that what went in should have been licensed. Lawyers call that market dilution, and it is the argument music has been building on ever since. In a brief filed on March 30, the RIAA, NMPA, A2IM, SoundExchange, and four other groups asked a court to reject Anthropic's fair use defense (in a legal fight with UMG, Concord, and ABKCO) on similar market harm grounds. However, the DOJ now calls Chhabria's reasoning "deeply flawed," and says he "improperly collapsed LLM training and LLM outputs into a single continuous use." Training and outputs are two separate legal questions, the US Government argues, and what a model produces has no bearing on whether training it was lawful. If a court accepts that, music can no longer point at a flood of AI tracks as proof that training on UMG or Sony recordings was unlawful. That wall cuts both ways, which brings us to the third stage of the 'AI wars': what the models actually puts out. The DOJ is not defending outputs - it is saying they must be fought over separately. At the output stage, the US Government concedes, "certain uses may not be transformative if the LLM reconstructs and disseminates an original copyrighted work." As MBW reported in July, that is the ground UMG and Sony Music have chosen against Suno and Udio: that AI-generated songs compete directly with the recordings used to train the models that made them. Music publishers make the same argument about Claude reproducing lyrics on demand. (A fourth claim sits outside fair use altogether: Sony Music Publishing and Warner Chappell accuse Anthropic of stripping out copyright management information, the ownership data attached to a work.) The New York Times said on Wednesday (September 2) that the Trump administration "is siding with a handful of trillion-dollar AI companies at the expense of the countless American creators whose work they stole." "Both AI and creators can thrive - AI companies simply need to pay fairly for the content that makes their products possible, as copyright law requires," said Graham James, a spokesperson for the paper. "The Administration's proposal to let companies take that content without permission or compensation would undermine the sustainability of the human-created content that a healthy society depends on, and which AI needs to function."Music Business Worldwide
Lutnick Says US Trusts Anthropic Again
"We trust Anthropic," Commerce Secretary Howard Lutnick told Axios, signaling an improvement in a relationship that broke down publicly this year. "They've done what we asked. They're back on the right side. So the answer is: Yes," Lutnick said Tuesday when asked whether he trusts Anthropic CEO Dario Amodei, according to Axios. Anthropic co-founder Tom Brown has taken a larger role in the company's dealings with the White House and addressed this week's G20 Innovation Ministerial. "Really excited for our conversation, so I'd like to introduce you all to Tom Brown, one of the founders of Anthropic," Lutnick told the ministers Wednesday. Brown praised a Truth Social post by President Donald Trump this week backing data center construction. "I really love Trump's post from earlier this week ... where he was pointing out that the data centers are just an enormous source of prosperity," Brown said. "They produce a ton of jobs. They produce taxes. Now the way that we design them, we actually bring on more power to the grid." Brown had repeated conversations with Lutnick and National Cyber Director Sean Cairncross as Anthropic worked to repair the relationship, Axios reported. Anthropic is also challenging a separate Pentagon designation in the D.C. Circuit. U.S. District Judge Rita Lin ruled Aug. 27 that the Pentagon acted unlawfully in punishing Anthropic over its criticism of the Department of War's views on artificial intelligence, Newsmax reported, citing The Associated Press. The dispute with the administration began in February, when Trump and Secretary of War Pete Hegseth accused the company of endangering national security and designated it a supply chain risk. Amodei declined to change the company's position over concerns its products could be used for mass surveillance or autonomous armed drones. Lin wrote that the government's actions "were based on a desire to make a public example out of Anthropic for its 'arrogance' in criticizing the government, not based on any articulable basis to believe that Anthropic would actually sabotage its model." An Anthropic spokesperson said the company welcomed the ruling. "We remain focused on working productively with the government to harness AI for our national security so all Americans benefit from this technology," the spokesperson said. Jim Mishler ✉ Jim Mishler, a seasoned reporter, anchor and news director, has decades of experience covering crime, politics and environmental issues.
Commerce chief signals end to Anthropic security rift ahead of potential IPO
Investing.com -- US Commerce Secretary Howard Lutnick signaled a resolution to months of regulatory friction with Anthropic PBC, stating in a Bloomberg Television interview that the artificial intelligence developer has aligned its security stance with the Trump administration. Speaking on the sidelines of a Group of 20 technology summit in North Carolina, Lutnick indicated that executive intervention helped bridge policy differences, clearing a path for closer coordination between federal officials and the AI firm. The diplomatic thaw follows a brief period of heightened scrutiny in June, when the Commerce Department temporarily restricted exports of Anthropic's flagship Fable 5 and Mythos 5 models over national security concerns. Those restrictions were rescinded two weeks later after the startup implemented revised safeguard protocols that satisfied federal oversight standards. The easing tension arrives at a critical juncture as Anthropic lays early groundwork for an initial public offering that market observers anticipate could rival or exceed SpaceX's record-setting public debut. In a visible sign of improved relations, Anthropic co-founder Tom Brown appeared alongside Lutnick at the G20 summit, publicly endorsing administration efforts to accelerate domestic data center construction and power infrastructure. It remains unclear, however, whether the political alignment with Commerce signals a broader reconciliation across the federal government, particularly at the Department of Defense. The Pentagon previously designated Anthropic a supply-chain risk and halted military deployment of its technologies following a rift over the startup's insistence on mandatory safety guardrails. Anthropic achieved a pivotal legal breakthrough last week when a federal judge in San Francisco ruled in its favor, ordering the government to lift the military procurement restrictions. As the company continues its pre-IPO positioning, institutional investors will be monitoring whether this combination of courtroom success and executive-level detente can establish a predictable regulatory environment for its growth trajectory.