Good morning. U.S. economic growth slipped in the first quarter amid still-high inflation and rising interest rates, adding to worries about a possible recession later this year.

U.S. gross domestic product, a measure of the value of all the goods and services produced in the country, rose at an inflation- and seasonally-adjusted 1.1% annual rate from January to March, a significant slowdown from 2.6% growth in the fourth quarter, the Commerce Department said Thursday.

• Doubling defaults: U.S. corporate defaults doubled to 20 in the first quarter of 2023 from 10 in the previous quarter, according to a report from Moody’s Investors Service published Thursday. Moody’s said it expects that “higher interest rates, slower economic growth and limited market liquidity will fuel more defaults among lower-rated debt issuers in the months ahead.”
   
• Risky business: Most financial-services companies worry that traders and portfolio managers will take more risks in a recessionary environment, according to a survey of compliance chiefs and other corporate officials published earlier this month by SteelEye Ltd., a compliance software company. In the U.S., 69% of survey respondents expressed such concerns.
   
• Other worries: Just over a half year ago, risk experts didn’t consider prolonged economic downturn a top-10 risk, according to the World Economic Forum’s Global Risks Report, which was published in January using survey results collected in September and October. An economic downturn ranked 13 on the list of short-term concerns. The top three were cost-of-living crisis, natural disasters and geoeconomic confrontation.
   
• Wage Growth, Inflation Data to Inform Fed Before Rate Decision
• Europe’s Economy Avoids Recession—Just About

The Risk & Compliance Forum on May 9 will feature speakers including Glenn Leon, chief of the fraud section at the Justice Department, Assistant Secretary for Export Enforcement Matthew Axelrod, Elizabeth Atlee, chief ethics & compliance officer at CBRE and Sidney Majalya, chief risk officer at Binance.US. You can register here.

Coinbase armed for legal clash over crypto regulation.

Coinbase Global Inc. said Thursday it would fight the Securities and Exchange Commission over the agency’s claim that much of its business is illegal and try to convince a court that Wall Street regulators lack the authority to oversee cryptocurrency markets.

The company outlined its legal strategy in a memorandum that formally responded to the SEC’s earlier notice of a potential enforcement action against the company. The memo, made public by Coinbase along with a video featuring its chief executive, underscores the company’s effort to generate political backing and public support for its confrontation with the SEC.

Europe to ChatGPT: disclose your sources.

Makers of artificial-intelligence tools such as ChatGPT would be required to disclose copyright material used in building their systems, according to a new draft of European Union legislation slated to be the West’s first comprehensive set of rules governing the rollout of AI.

Such an obligation would give publishers and content creators a new weapon to seek a share of profits when their works are used as source material for AI-generated content by tools like ChatGPT.

• An appeals court said it wouldn’t revive a major antitrust case against Meta Platforms Inc., handing a defeat to dozens of state attorneys general who sought to undo the Facebook parent’s acquisition of messaging platform WhatsApp and photo-sharing app Instagram.
   
• The Biden administration imposed sanctions on the leading security services in Russia and Iran for what it said was a pattern of wrongfully detaining Americans in an effort to use them for political leverage.

China ratchets up pressure on foreign companies.

Chinese authorities have embarked on a campaign to bring foreign businesses to heel, just months after Beijing delivered an open-for-business message to global investors.

In recent weeks, Chinese authorities have questioned staff at consulting firm Bain & Co.’s Shanghai office in a surprise visit, launched a cybersecurity review of imports from chip maker Micron Technology Inc., detained an employee of Japanese drugmaker Astellas Pharma Inc. and raided the Beijing office of U.S. due-diligence company Mintz Group.

• China Spy Law Adds to Chilling Effect of Detentions
• Bain’s Staff in Shanghai Questioned as China Targets Foreign Businesses
   

The surprising risk that turbocharged a $142 billion bank run.​

A buzzy new working paper presents compelling evidence that social media like Twitter didn’t simply expose the risks of a bank run. It exacerbated them. The technology of Silicon Valley really did contribute to the demise of Silicon Valley Bank.

“SVB faced a novel channel of bank-run risk that is unique to the social-media era,” wrote Dr. Tony Cookson, an associate professor of finance at the University of Colorado’s business school, and his colleagues. “We do not expect this risk to go away."

• A number of prominent hedge funds have been buying portions of companies’ claims against their insurers for losses suffered in Las Vegas and elsewhere during the pandemic.
   
• Senior U.S. cybersecurity officials said all the positive and negative aspects of artificial intelligence are still unknown, and that companies rushing to meet popular trends by deploying new models may be exposing themselves to risk.
   
• Iran’s naval forces on Thursday seized an oil tanker bound for Texas in the Gulf of Oman, a move that drew condemnation from the U.S. military at a time of heightened tensions between Tehran and Washington.
   
• Kim Jong Un’s regime has carried out a spree of weapons tests unlike any in the country’s previous history.

Nearshoring. Automation. Supplier diversification. Sustainability. WSJ Pro takes a closer look at how companies are reshaping their logistics.

• Intel Corp. suffered its largest-ever quarterly loss and said it would remain in the red as it faces a slow recovery from the sharp fall in personal-computer sales that have hammered its business.
   
• Gap Inc. said it is eliminating 1,800 jobs, Lyft Inc. is cutting over 1,000 jobs, and DropBox Inc. will cut about 16% of its workplace.
   
• The pay bump workers get for switching jobs is shrinking.
   
• Airlines say that travel demand is picking up heading into the critical summer travel season, fueling their expectations for profits after what was in some cases a more lackluster winter.