What's up: Betting on AI; Intel's move toward nationalization; Silicon Valley is obsessed over "smarter" babies.

Good morning. Billion-dollar offers for top tier AI talent make great headlines, but if the current frenzy continues, it could threaten the broader Silicon Valley innovation pipeline. CIOs should pay attention.

Enter the “reverse acquihire.” As the WSJ’s Asa Fitch reports, the biggest tech companies are not just poaching AI researchers from each other, they are dipping into startups, claiming founders and other top AI talent with enticing offers, while leaving “the husk of the businesses” behind to figure out their own way.

The practice challenges Silicon Valley’s cultural foundations, which require visionaries, of course, but also rank-and-file employees who are just as bought in. Who would want to pour blood and sweat into an organization where any day the founder could be plucked by a Meta or Google?

More could start avoiding startups altogether, opting instead for a safer route through big tech companies. That would make the pool of available startup talent shallower, further weakening the broader innovation pipeline.

Chief information officers are not on the sidelines. In this current hiring environment, they can’t assume their best data scientists and other AI experts will stay put. Also, if these “reverse acqui-hires” continue, leaving in their wake a sea of hollowed-out startups along Hwy 101, CIOs may have fewer options for certain AI needs, leading to further reliance on Big Tech and all that entails.

The move won't work—at least for the long haul. Intel definitely needs help. But government support always comes with strings attached, and those strings in this case could ultimately trip up the Silicon Valley pioneer—and the broader U.S. chip industry, WSJ's Dan Gallagher and Asa Fitch write.

The Trump administration is discussing options with Intel that could involve the federal government taking a financial stake in the troubled chip maker. The idea came up during President Trump’s meeting with Intel Chief Executive Officer Lip-Bu Tan on Monday and the discussions are still in an early stage, The Wall Street Journal reported.

But investors should still be wary. Intel’s problems are such that even a big check from Uncle Sam won’t fully solve them.

Tech execs are paying tens of thousands to find brilliant dates or select high-IQ embryos. Parents in Silicon Valley are paying up to $50,000 for new genetic-testing services that include promises to screen embryos for IQ, WSJ reports.

Tech futurists such as Elon Musk are urging the intellectually gifted to multiply, while professional matchmakers are setting up tech execs with brilliant partners partly to get brilliant offspring.

The fascination with what some call “genetic optimization” reflects deeper Silicon Valley beliefs about merit and success. But the growing IQ fetish is sparking debate, with bioethicists raising alarms about the new genetic-screening services.

On Kalshi, Polymarket and other sites where people wager “predictions” on real-world events, gamblers lay down millions each month on their picks for AI’s top model, the WSJ's Ben Raab reports.

Bettors are making hundreds of trades a week on AI markets, on a range of wagers such as “Best AI at the end of 2025,” “AI regulation becomes federal law this year,” and “Will [Chief Executive] Sam Altman be granted an equity stake in OpenAI this year?”

Trading volume across AI prediction markets has surged to around $20 million this month. Kalshi, the only platform currently available in the U.S., is seeing 10 times the volume on AI trades compared with the start of the year, a spokesman says.

Meta’s consumer AI app has persistent flaws months after debut. While Meta Platforms Inc. is investing billions in improving and accelerating the development of artificial intelligence, the most comprehensive showcase of its efforts—the Meta AI app—is an under-personalized and inconsistent experience, showing how far the company has to go in order to meet or exceed what rivals already offer, Bloomberg reports.

Anthropic has new rules for a more dangerous AI landscape. Anthropic has updated the usage policy for its Claude AI chatbot in response to growing concerns about safety. In addition to introducing stricter cybersecurity rules, Anthropic now specifies some of the most dangerous weapons that people should not develop using Claude, The Verge reports.

Applied Materials sinks 14% on weak guidance due to China demand. The company forecast adjusted earnings per share of $2.11, falling short of the $2.39 per share expected by LSEG. The company projected $6.7 billion in revenue, versus the $7.34 billion estimate, CNBC reports.

European leaders will join Ukrainian President Volodymyr Zelensky in a visit to the Oval Office Monday in an effort to sustain President Trump’s support while responding to Russian territorial proposals he feels compelled to refuse. (WSJ)

The New York City office market is recovering from its pandemic debacle faster than any other in the U.S. Nothing speaks more to the turnaround than the gleaming new office tower built for JPMorgan Chase. (WSJ)

Exports to the U.S. from the 27 nations that make up the European Union dropped 10% on year in June to hit their lowest level since the end of 2023, at a little over $46.8 billion, according to figures released Monday by statistics agency Eurostat. (WSJ)

This September, The WSJ Technology Council will convene senior technology leaders to examine how AI is reshaping organizations—redefining teams and workflows, elevating technology’s role in business strategy, and transforming products and services. Conversations will also delve into AI’s evolving security risks and other fast-emerging trends shaping the future.

Select speakers include:

• Carolina Dybeck Happe, COO, Microsoft
• Severin Hacker, CTO, Duolingo
• Yang Lu, CIO, Tapestry
• Tilak Mandadi, CTO, CVS Health
• Helen Riley, CFO, X, Google's Moonshot Factory

September 15-16 | New York, NY
Request an invitation | Participants and program

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.