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AI politics breaks into a New York congressional race — and signals more fights to come

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Welcome to Eye on AI, with AI reporter Sharon Goldman in for Jeremy Kahn, who is traveling. In this edition…AI politics in a New York congressional race…Microsoft, NVIDIA and Anthropic announce strategic partnerships…Cloudflare outage causes internet outages including AI sites such as OpenAI, Anthropic and Perplexity…Jeff Bezos creates AI start-up where he will be co-CEO..Sam Altman and Masayoshi Son back new AI research lab aiming to revive the spirit of Bell Labs…Japanese AI darling Sakana AI raises $135 million at $2.65 billion valuation.

Leading the Future — a $100 million pro-AI super PAC formed in August and backed by Andreessen Horowitz and OpenAI president Greg Brockman — has identified its first target: Alex Bores, a Democratic congressional candidate running for the New York seat being vacated by Rep. Jerrold Nadler after three decades in Congress.

It’s an early signal of a broader shift: while AI won’t determine every race in the upcoming midterms, it is emerging as a potent new pressure point in American politics, particularly as deep-pocketed Silicon Valley interests begin injecting themselves into local contests from afar.

Bores is the chief sponsor of New York’s RAISE Act, which would require large AI labs to create and follow safety plans designed to prevent critical harms; disclose serious safety incidents, such as the theft of an AI model; and avoid releasing systems that pose “unreasonable” risks. Companies that fail to comply could face civil penalties of up to $30 million. The legislation—similar to a California’s SB-1047, a bill vetoed by California Governor Gavin Newsom last year—awaits Governor Kathy Hochul’s signature and has attracted support from AI safety advocates, policy groups, and prominent researchers including AI “godfathers” Yoshua Bengio and Geoffrey Hinton.

But many AI researchers, engineers, founders, and major tech investors see both the California bill and the RAISE Act as imposing vague, overly burdensome requirements that could be unworkable in practice —especially for startups.

Josh Vlasto, co-head of Leading the Future and a spokesperson for Fairshake, the $141 million crypto-aligned super PAC, told me that Bores “has championed a piece of legislation that would contribute to a national patchwork that is not workable and has not engaged productively with the industry.”

Bores, for his part, is leaning into the role of combatant after learning he would be the PAC’s first target. “It doesn’t surprise me,” he said. “They said they were going to target four states — California, Ohio, Illinois and New York — so I kind of figured who they were thinking about in New York.”

He dismissed opposition to the RAISE Act as “an extremely loud minority that has decided to yell over the broad majority support by spending hundreds of millions of dollars,” because they don’t believe there should be regulation on AI, though he stressed the bill is not a partisan flashpoint. “The RAISE Act passed in New York with every single Republican state senator voting for it, and a majority of the Republican state assembly members voting for it, including a number who co-sponsored it,” he said. “Republicans like Sarah Lightner in Michigan have introduced similar bills, and we conducted a poll that found 84% of New Yorkers supported the bill. There is strong bipartisan support for lightweight, reasonable regulations to keep people safe.”

Leading the Future, however, rejects the idea that it is opposed to regulation. “It’s not true that Leading the Future is anti-regulation,” Vlasto said. “The idea [that] we are trying to stop Congress from acting is just wrong, and we have been clear about it since our launch in August.”

He argued that AI safety advocates have long enjoyed a structural advantage. “The other side has spent billions over the past decade investing in political organizations and think tanks,” he added. He pointed to groups like Open Philanthropy, a grant-making organization funded largely by Facebook co-founder Dustin Moskovitz and his wife, Cari Tuna. It grew out of the Effective Altruism (EA) movement, whose donors focus on areas they view as high-impact but under-resourced — including global health, biosecurity, and long-term or “existential” risks from advanced AI.

Vlasto would not comment on whether Leading the Future will be targeting Democratic California State Senator Scott Wiener, who co-sponsored California’s SB-1047 bill and is now running to fill Nancy Pelosi’s vacant Congressional seat. But with Silicon Valley money flowing in and rising debates over AI regulation, it’s clear this first strike won’t be the last.

With that, here’s more AI news.

Sharon Goldman
sharon.goldman@fortune.com
@sharongoldman

If you want to learn more about how AI can help your company to succeed and hear from industry leaders on where this technology is heading, I hope you’ll consider joining Jeremy and I at Fortune Brainstorm AI San Francisco on Dec. 8–9. Among the speakers confirmed to appear so far are Google Cloud chief Thomas Kurian, Intuit CEO Sasan Goodarzi, Databricks CEO Ali Ghodsi, Glean CEO Arvind Jain, Amazon’s Panos Panay, and many more. Register now.

FORTUNE ON AI

Nvidia’s rise seemed unstoppable, but cracks may be appearing in the strategy that built its $4.5 trillion empire – by Shawn Tully

Google releases its heavily hyped Gemini 3 AI in a sweeping rollout—even Search gets it on day one – by Sharon Goldman

‘Trust is at an all-time low for both job seekers and recruiters’: Hiring platform CEO says talent acquisition is in an ‘AI doom loop’ – by Nino Paoli

Despite AI bubble fears, Warren Buffett’s Berkshire Hathaway loads up on shares of hyperscaler Alphabet amid huge rally – by Jason Ma

AI IN THE NEWS

Microsoft, NVIDIA and Anthropic announce strategic partnerships. Microsoft, NVIDIA, and Anthropic unveiled a sweeping set of partnerships today that dramatically expand Claude’s reach and Anthropic’s compute footprint. Anthropic committed to purchase $30 billion of Azure compute and secure up to one gigawatt of capacity as it scales Claude on Microsoft’s cloud, while also deepening integration across Microsoft’s Copilot ecosystem and Foundry. At the same time, Anthropic and NVIDIA are launching their first major technology partnership, collaborating on model and chip design to optimize performance and efficiency on upcoming Grace Blackwell and Vera Rubin systems. The deal makes Claude the only frontier model available across all three major clouds and comes with major financial backing: NVIDIA will invest up to $10 billion in Anthropic and Microsoft up to $5 billion.

Cloudflare outage causes internet outages including AI sites such as OpenAI, Anthropic and Perplexity. An outage at the internet infrastructure company Cloudflare on Tuesday disrupted major websites globally, including OpenAI’s ChatGPT, Anthropic’s Claude, and Perplexity. According to CNBC, Cloudflare, which manages and secures traffic for an estimated 20% of the web, stated that the problem stemmed from a “spike in unusual traffic” to one of its services around 6:20 a.m. ET, though the cause of the spike remains unknown, leading to the company’s shares sliding over 3% amid ongoing efforts to implement a fix.

Jeff Bezos creates AI start-up where he will be co-CEO. The New York Times reported that Jeff Bezos, the founder of Amazon and one of the world’s wealthiest people, Jeff Bezos, the founder of Amazon, is officially returning to a formal operational role as Co-CEO of a new AI research start-up named Project Prometheus. Since stepping down as Amazon’s CEO in July 2021, this marks the first time he has taken such a hands-on position, distinguishing it from his role as founder at Blue Origin. Project Prometheus is launching with a whopping $6.2 billion in funding, partly contributed by Bezos himself, making it one of the most heavily financed early-stage ventures globally and signaling a serious and well-resourced entry into the AI race.

Sam Altman and Masayoshi Son back new AI research lab aiming to revive the spirit of Bell Labs. According to Ashlee Vance’s Core Memory, Louis Andre, a little-known 27-year-old scientist with a background in neuroscience and computer science from University College London and stints at Princeton, Stanford, and a Brin-backed biotech startup, is launching Episteme—an ambitious, Altman- and Masayoshi Son–backed research lab in San Francisco aiming to revive the spirit of Bell Labs and Xerox PARC. Designed as a “third way” between academia and startups, Episteme will give top scientists generous pay, resources, ownership, and freedom from grant writing and short-term commercial pressures while surrounding them with support staff to help turn breakthrough ideas into real products. Starting with 15 researchers across fields like AI, energy, materials, and neuroscience, the project hopes to counter declining U.S. scientific investment, growing bureaucracy, and competition from China by creating a long-term, idealistic environment where risky, high-impact research can thrive—though, like similar billionaire-funded labs, it still faces questions about sustainability and investor patience.

Japanese AI darling Sakana AI raises $135 million at $2.65 billion valuation. The global race to develop large language models, led by U.S. giants is being challenged by specialized startups like Tokyo-based Sakana AI, which TechCrunch reported recently closed a ¥20 billion (approximately $135 million) Series B funding round, valuing the company at $2.65 billion. Founded in 2023 by former Google researchers Llion Jones, Ren Ito, and CEO David Ha, Sakana AI focuses on creating affordable, generative AI models specifically optimized for the Japanese language and culture, which also work efficiently with small datasets. The funding round, which included Japanese financial firms like MUFG and global investors such as Khosla Ventures and NEA, will be deployed for further R&D, model development, and expanding the engineering, sales, and distribution workforce in Japan, as the company builds on existing partnerships with local enterprises and plans to expand its enterprise business into the industrial, manufacturing, and government sectors by 2026.

EYE ON AI RESEARCH

An AI system takes a gold medal in physics. A new research paper claims that an open-source AI system has reached gold-medal performance on the world’s hardest high-school physics competition — the International Physics Olympiad. Countries send their absolute best teenage physics students to this contest, and the questions are so challenging that even many PhDs struggle with them.

The researchers built a system called P1, which is a combination of a large language model trained on science-heavy data; a reinforcement learning process that teaches the model to reason step-by-step; and an “agentic” setup that lets the model break problems apart, try multiple solution approaches, check itself, and refine its answers — similar to how a human would tackle Olympiad puzzles

Using this setup, the AI solved past Physics Olympiad problems at a level that would earn a gold medal if it were a human competitor. It’s one of the clearest signs yet that AI is not just getting better at language and coding — it’s now beginning to reach elite levels of scientific reasoning.

However, don’t throw away your physics textbooks just yet. The research simply means AI systems can reliably work through extremely difficult problems that require deep conceptual thinking, careful math, and multi-step logic — something out of reach just a year or two ago.

AI CALENDAR

Nov. 19: Nvidia third quarter earnings

Nov. 26-27: World AI Congress, London.

Dec. 2-7: NeurIPS, San Diego

Dec. 8-9: Fortune Brainstorm AI San Francisco. Apply to attend here.

BRAIN FOOD

I had to shout-out this New York Times piece, Can You Believe the Documentary You’re Watching? I so relate: the rise of AI video has made me incredibly suspicious of every online image, scene or voice. I have even seen disturbing, fake Holocaust footage created by AI. 

I’m also a diehard documentary fan who, while I believe there can be some use for AI in documentary production, also understands that there needs to be clear boundaries and full transparency. The New York Times piece points out that both filmmakers and viewers need to help preserve trust and authenticity in documentary storytelling. That may mean new industry norms like voluntary certifications, greater transparency about how films are made, and more documentarians stepping into their own work to explain their methods. 

Perhaps documentarians, the author explains, “are the ones best suited to help us rethink what trust, transparency and authenticity really look like when we can’t believe our eyes.” 



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Senate Dems’ plan to fix Obamacare premiums adds nearly $300 billion to deficit, CRFB says

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December 5, 2025

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The Committee for a Responsible Federal Budget (CRFB) is a nonpartisan watchdog that regularly estimates how much the U.S. Congress is adding to the $38 trillion national debt.

With enhanced Affordable Care Act (ACA) subsidies due to expire within days, some Senate Democrats are scrambling to protect millions of Americans from getting the unpleasant holiday gift of spiking health insurance premiums. The CRFB says there’s just one problem with the plan: It’s not funded.

“With the national debt as large as the economy and interest payments costing $1 trillion annually, it is absurd to suggest adding hundreds of billions more to the debt,” CRFB President Maya MacGuineas wrote in a statement on Friday afternoon.

The proposal, backed by members of the Senate Democratic caucus, would fully extend the enhanced ACA subsidies for three years, from 2026 through 2028, with no additional income limits on who can qualify. Those subsidies, originally boosted during the pandemic and later renewed, were designed to lower premiums and prevent coverage losses for middle‑ and lower‑income households purchasing insurance on the ACA exchanges.

CRFB estimated that even this three‑year extension alone would add roughly $300 billion to federal deficits over the next decade, largely because the federal government would continue to shoulder a larger share of premium costs while enrollment and subsidy amounts remain elevated. If Congress ultimately moves to make the enhanced subsidies permanent—as many advocates have urged—the total cost could swell to nearly $550 billion in additional borrowing over the next decade.

Reversing recent guardrails

MacGuineas called the Senate bill “far worse than even a debt-financed extension” as it would roll back several “program integrity” measures that were enacted as part of a 2025 reconciliation law and were intended to tighten oversight of ACA subsidies. On top of that, it would be funded by borrowing even more. “This is a bad idea made worse,” MacGuineas added.

The watchdog group’s central critique is that the new Senate plan does not attempt to offset its costs through spending cuts or new revenue and, in their view, goes beyond a simple extension by expanding the underlying subsidy structure.

The legislation would permanently repeal restrictions that eliminated subsidies for certain groups enrolling during special enrollment periods and would scrap rules requiring full repayment of excess advance subsidies and stricter verification of eligibility and tax reconciliation. The bill would also nullify portions of a 2025 federal regulation that loosened limits on the actuarial value of exchange plans and altered how subsidies are calculated, effectively reshaping how generous plans can be and how federal support is determined. CRFB warned these reversals would increase costs further while weakening safeguards designed to reduce misuse and error in the subsidy system.

MacGuineas said that any subsidy extension should be paired with broader reforms to curb health spending and reduce overall borrowing. In her view, lawmakers are missing a chance to redesign ACA support in a way that lowers premiums while also improving the long‑term budget outlook.

The debate over ACA subsidies recently contributed to a government funding standoff, and CRFB argued that the new Senate bill reflects a political compromise that prioritizes short‑term relief over long‑term fiscal responsibility.

“After a pointless government shutdown over this issue, it is beyond disappointing that this is the preferred solution to such an important issue,” MacGuineas wrote.

The off-year elections cast the government shutdown and cost-of-living arguments in a different light. Democrats made stunning gains and almost flipped a deep-red district in Tennessee as politicians from the far left and center coalesced around “affordability.”

Senate Minority Leader Chuck Schumer is reportedly smelling blood in the water and doubling down on the theme heading into the pivotal midterm elections of 2026. President Donald Trump is scheduled to visit Pennsylvania soon to discuss pocketbook anxieties. But he is repeating predecessor Joe Biden’s habit of dismissing inflation, despite widespread evidence to the contrary.

“We fixed inflation, and we fixed almost everything,” Trump said in a Tuesday cabinet meeting, in which he also dismissed affordability as a “hoax” pushed by Democrats.​

Lawmakers on both sides of the aisle now face a politically fraught choice: allow premiums to jump sharply—including in swing states like Pennsylvania where ACA enrollees face double‑digit increases—or pass an expensive subsidy extension that would, as CRFB calculates, explode the deficit without addressing underlying health care costs.



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Netflix–Warner Bros. deal sets up $72 billion antitrust test

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December 5, 2025

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Netflix Inc. has won the heated takeover battle for Warner Bros. Discovery Inc. Now it must convince global antitrust regulators that the deal won’t give it an illegal advantage in the streaming market. 

The $72 billion tie-up joins the world’s dominant paid streaming service with one of Hollywood’s most iconic movie studios. It would reshape the market for online video content by combining the No. 1 streaming player with the No. 4 service HBO Max and its blockbuster hits such as Game Of Thrones, Friends, and the DC Universe comics characters franchise.  

That could raise red flags for global antitrust regulators over concerns that Netflix would have too much control over the streaming market. The company faces a lengthy Justice Department review and a possible US lawsuit seeking to block the deal if it doesn’t adopt some remedies to get it cleared, analysts said.

“Netflix will have an uphill climb unless it agrees to divest HBO Max as well as additional behavioral commitments — particularly on licensing content,” said Bloomberg Intelligence analyst Jennifer Rie. “The streaming overlap is significant,” she added, saying the argument that “the market should be viewed more broadly is a tough one to win.”

By choosing Netflix, Warner Bros. has jilted another bidder, Paramount Skydance Corp., a move that risks touching off a political battle in Washington. Paramount is backed by the world’s second-richest man, Larry Ellison, and his son, David Ellison, and the company has touted their longstanding close ties to President Donald Trump. Their acquisition of Paramount, which closed in August, has won public praise from Trump. 

Comcast Corp. also made a bid for Warner Bros., looking to merge it with its NBCUniversal division.

The Justice Department’s antitrust division, which would review the transaction in the US, could argue that the deal is illegal on its face because the combined market share would put Netflix well over a 30% threshold.

The White House, the Justice Department and Comcast didn’t immediately respond to requests for comment. 

US lawmakers from both parties, including Republican Representative Darrell Issa and Democratic Senator Elizabeth Warren have already faulted the transaction — which would create a global streaming giant with 450 million users — as harmful to consumers.

“This deal looks like an anti-monopoly nightmare,” Warren said after the Netflix announcement. Utah Senator Mike Lee, a Republican, said in a social media post earlier this week that a Warner Bros.-Netflix tie-up would raise more serious competition questions “than any transaction I’ve seen in about a decade.”

European Union regulators are also likely to subject the Netflix proposal to an intensive review amid pressure from legislators. In the UK, the deal has already drawn scrutiny before the announcement, with House of Lords member Baroness Luciana Berger pressing the government on how the transaction would impact competition and consumer prices.

The combined company could raise prices and broadly impact “culture, film, cinemas and theater releases,”said Andreas Schwab, a leading member of the European Parliament on competition issues, after the announcement.

Paramount has sought to frame the Netflix deal as a non-starter. “The simple truth is that a deal with Netflix as the buyer likely will never close, due to antitrust and regulatory challenges in the United States and in most jurisdictions abroad,” Paramount’s antitrust lawyers wrote to their counterparts at Warner Bros. on Dec. 1.

Appealing directly to Trump could help Netflix avoid intense antitrust scrutiny, New Street Research’s Blair Levin wrote in a note on Friday. Levin said it’s possible that Trump could come to see the benefit of switching from a pro-Paramount position to a pro-Netflix position. “And if he does so, we believe the DOJ will follow suit,” Levin wrote.

Netflix co-Chief Executive Officer Ted Sarandos had dinner with Trump at the president’s Mar-a-Lago resort in Florida last December, a move other CEOs made after the election in order to win over the administration. In a call with investors Friday morning, Sarandos said that he’s “highly confident in the regulatory process,” contending the deal favors consumers, workers and innovation. 

“Our plans here are to work really closely with all the appropriate governments and regulators, but really confident that we’re going to get all the necessary approvals that we need,” he said.

Netflix will likely argue to regulators that other video services such as Google’s YouTube and ByteDance Ltd.’s TikTok should be included in any analysis of the market, which would dramatically shrink the company’s perceived dominance.

The US Federal Communications Commission, which regulates the transfer of broadcast-TV licenses, isn’t expected to play a role in the deal, as neither hold such licenses. Warner Bros. plans to spin off its cable TV division, which includes channels such as CNN, TBS and TNT, before the sale.

Even if antitrust reviews just focus on streaming, Netflix believes it will ultimately prevail, pointing to Amazon.com Inc.’s Prime and Walt Disney Co. as other major competitors, according to people familiar with the company’s thinking. 

Netflix is expected to argue that more than 75% of HBO Max subscribers already subscribe to Netflix, making them complementary offerings rather than competitors, said the people, who asked not to be named discussing confidential deliberations. The company is expected to make the case that reducing its content costs through owning Warner Bros., eliminating redundant back-end technology and bundling Netflix with Max will yield lower prices.



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The rise of AI reasoning models comes with a big energy tradeoff

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December 5, 2025

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Nearly all leading artificial intelligence developers are focused on building AI models that mimic the way humans reason, but new research shows these cutting-edge systems can be far more energy intensive, adding to concerns about AI’s strain on power grids.

AI reasoning models used 30 times more power on average to respond to 1,000 written prompts than alternatives without this reasoning capability or which had it disabled, according to a study released Thursday. The work was carried out by the AI Energy Score project, led by Hugging Face research scientist Sasha Luccioni and Salesforce Inc. head of AI sustainability Boris Gamazaychikov.

The researchers evaluated 40 open, freely available AI models, including software from OpenAI, Alphabet Inc.’s Google and Microsoft Corp. Some models were found to have a much wider disparity in energy consumption, including one from Chinese upstart DeepSeek. A slimmed-down version of DeepSeek’s R1 model used just 50 watt hours to respond to the prompts when reasoning was turned off, or about as much power as is needed to run a 50 watt lightbulb for an hour. With the reasoning feature enabled, the same model required 7,626 watt hours to complete the tasks.

The soaring energy needs of AI have increasingly come under scrutiny. As tech companies race to build more and bigger data centers to support AI, industry watchers have raised concerns about straining power grids and raising energy costs for consumers. A Bloomberg investigation in September found that wholesale electricity prices rose as much as 267% over the past five years in areas near data centers. There are also environmental drawbacks, as Microsoft, Google and Amazon.com Inc. have previously acknowledged the data center buildout could complicate their long-term climate objectives. 

More than a year ago, OpenAI released its first reasoning model, called o1. Where its prior software replied almost instantly to queries, o1 spent more time computing an answer before responding. Many other AI companies have since released similar systems, with the goal of solving more complex multistep problems for fields like science, math and coding.

Though reasoning systems have quickly become the industry norm for carrying out more complicated tasks, there has been little research into their energy demands. Much of the increase in power consumption is due to reasoning models generating much more text when responding, the researchers said. 

The new report aims to better understand how AI energy needs are evolving, Luccioni said. She also hopes it helps people better understand that there are different types of AI models suited to different actions. Not every query requires tapping the most computationally intensive AI reasoning systems.

“We should be smarter about the way that we use AI,” Luccioni said. “Choosing the right model for the right task is important.”

To test the difference in power use, the researchers ran all the models on the same computer hardware. They used the same prompts for each, ranging from simple questions — such as asking which team won the Super Bowl in a particular year — to more complex math problems. They also used a software tool called CodeCarbon to track how much energy was being consumed in real time.

The results varied considerably. The researchers found one of Microsoft’s Phi 4 reasoning models used 9,462 watt hours with reasoning turned on, compared with about 18 watt hours with it off. OpenAI’s largest gpt-oss model, meanwhile, had a less stark difference. It used 8,504 watt hours with reasoning on the most computationally intensive “high” setting and 5,313 watt hours with the setting turned down to “low.” 

OpenAI, Microsoft, Google and DeepSeek did not immediately respond to a request for comment.

Google released internal research in August that estimated the median text prompt for its Gemini AI service used 0.24 watt-hours of energy, roughly equal to watching TV for less than nine seconds. Google said that figure was “substantially lower than many public estimates.” 

Much of the discussion about AI power consumption has focused on large-scale facilities set up to train artificial intelligence systems. Increasingly, however, tech firms are shifting more resources to inference, or the process of running AI systems after they’ve been trained. The push toward reasoning models is a big piece of that as these systems are more reliant on inference.

Recently, some tech leaders have acknowledged that AI’s power draw needs to be reckoned with. Microsoft CEO Satya Nadella said the industry must earn the “social permission to consume energy” for AI data centers in a November interview. To do that, he argued tech must use AI to do good and foster broad economic growth.



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