What's up: Why Apple's CEO is the 'odd man out in the AI race'; Intel's CEO is set to meet with Trump; When to use 'deep research' mode

Good morning. President Trump’s chip-tariff regime could disrupt the global electronics trade and send prices of all kinds of goods higher.

One thing it appears unlikely to do: bring advanced chip-making roaring back in the U.S., WSJ's Asa Fitch and Dan Gallagher write.

Also over the weekend, WSJ reported that Nvidia and Advanced Micro Devices have agreed to give the Trump administration a portion of the sales from their artificial-intelligence chips to China. And Intel CEO Lip-Bu Tan is set to visit the White House Monday. More on those developing stories below.

Trump last week threatened a 100% tariff on “chips and semiconductors,” but offered an exemption. Companies that commit to “build in the U.S.” won’t have to pay the duty, according to Trump.

One issue: All of the world’s big chip companies are already investing in U.S. production. Meanwhile, other big technology companies are likely to invest in areas other than advanced chip production to get their own exemptions.

If anything, the latest tariffs will incentivize chip manufacturers to make just enough U.S. investment to appease politicians, then import whatever else is needed. Read the story.

Nvidia, AMD to give U.S. 15% on AI chip sales to China. The unusual arrangement follows Nvidia CEO Jensen Huang’s meeting with Trump, and deepens their relationships with the U.S. government, the WSJ reports.

The agreements follow criticism from national-security hawks who fear the chips and other technology will boost China’s AI ecosystem and military.

The chip isn’t advanced enough to quickly train large language AI models, but is useful for inference functions, or the processes by which models that have already been trained can draw conclusions from new data.

Chinese authorities have raised concerns about H20 chips, cautioning that they aren’t environmentally friendly and could come with security risks. Nvidia said this month that the chips don’t have so-called “backdoors” that allow them to be controlled or accessed remotely.

Intel CEO Lip-Bu Tan is set to visit the White House Monday. WSJ's Lauren Thomas reports that the meeting is expected after President Trump called for Tan's removal last week over ties to Chinese businesses, according to people familiar with the matter.

Tan is expected to have a wide-ranging conversation with Trump, with the intent of explaining his personal and professional background, the people said. He could also propose ways that the government and Intel could work together, they said.

Google, Schmoogle: When to ditch web search for 'deep research.' Deep research mode on AI chatbots is best for queries with multiple factors to weigh, WSJ's Nicole Nguyen writes. Here's one tip: Be specific. Give the AI context (your situation and your goal), requirements (must-haves) and your desired output (a report, bullets or a timeline). Chatbots can’t read your mind…yet.

Tesla is shutting down its supercomputer team after the departure of its team leader and over a dozen other staffers to startup DensityAI, Bloomberg reports. The supercomputer, Dojo, is used to train the AI models powering the EV maker’s self-driving systems and its humanoid robot, Optimus. Tesla will rely on external providers. DensityAI makes technology for data centers providing services for robotics, automotive applications and other industries, Bloomberg earlier reported.

Meta Platforms has settled a defamation lawsuit with conservative activist Robby Starbuck, who alleged the company’s artificial intelligence chatbot falsely asserted he participated in the Jan. 6, 2021, riot at the U.S. Capitol. Under the settlement, Starbuck will advise Meta, the owner of Facebook, on efforts to curb what they describe as political bias in its AI tools.

Both siding. “Our goal is to remove bias from our AI models and to make sure that Llama can understand and articulate both sides of a contentious issue,” Meta said in the post, referring to its AI model.
 

Billions flow to new hedge funds focused on AI-related bets. Leopold Aschenbrenner, a 23-year-old AI influencer, started Situational Awareness, an AI-focused hedge fund that now manages over $1.5 billion. He has described the firm as a “brain trust on AI.”

Government tech on discount. The Trump administration’s focus on extracting savings from federal contractors is triggering some deep discounts from tech providers. The General Services Administration said Thursday that AWS will offer federal agencies up to $1 billion in discounts. A day earlier, OpenAI said it would charge U.S. federal agencies just $1-a-year for its enterprise product. Oracle in July began offering agencies a 75% discount on its license-based software and a “substantial” discount on its cloud service.

Chatbot conversations never end—that's a problem for autistic people. When chatbots say things that aren’t true or reinforce misguided beliefs, they can be harmful to anyone. But autistic people, who often have a black-and-white way of thinking and can fixate on particular topics, are especially vulnerable.

The Trump administration is interviewing candidates to lead the Bureau of Labor Statistics including at least one longtime critic of the agency, according to a senior administration official. (WSJ)

European powers and Ukraine responded to Vladimir Putin’s cease-fire plan with a counterproposal that they say must serve as a framework so that coming talks between President Trump and the Russian leader can gain traction, according to European officials familiar with the talks. (WSJ)

Prime Minister Benjamin Netanyahu said the new war plan approved by Israel’s security cabinet includes dismantling Hamas in Gaza’s central refugee camps in addition to Gaza City, a broadening that comes as he faces criticism internationally for expanding the war and from the far-right wing of his coalition for not going far enough. (WSJ)

The WSJ CIO Journal Team is Steven Rosenbush, Isabelle Bousquette and Belle Lin.

The editor, Tom Loftus, can be reached at thomas.loftus@wsj.com.