TL;DR

xAI open-sources Grok 2/2.5; China restricts Nvidia H20 sales; US takes 10% Intel stake.

Highlights

• xAI open-sources Grok 2 (500GB) and Grok 2.5 LLMs on Hugging Face; Grok 3 release expected in six months; models require 8x 40GB GPUs for full-precision runs 1.
• China restricts Nvidia H20 AI chip sales over security concerns, pausing production and urging reliance on domestic chips; Nvidia in talks with Beijing 2.
• U.S. government acquires 10% equity stake in Intel via $8.9B in CHIPS Act grants; Intel also receives $2B from SoftBank; Samsung exploring partnership 4.
• OpenAI and UK sign MoU to trial ChatGPT Plus in public services; £2B nationwide access proposal discussed but not advanced 3.
• Google confirms “Nano-Banana” generative image model powers Pixel 10 on-device editing, highlighting push for efficient, consumer-grade AI hardware 5.
• Texas AG investigates Meta and Character AI for marketing chatbots as mental health tools for children without medical oversight; data practices and safety under review 6.
• Microsoft ’s Mustafa Suleyman warns of “AI psychosis” risk as chatbot adoption grows; APA and schools flag mental health concerns 10.
• Met Police to deploy live facial recognition at Notting Hill Carnival despite legal warnings; UK remains outlier in European AI surveillance 11.
• Rocket Lab completes 70th Electron launch and expands U.S. chip manufacturing with CHIPS Act funding, targeting space-grade semiconductors 8.
• Apple plans three-year iPhone revamp: ultra-thin “iPhone Air” in 2025, foldable model in 2026, new design in 2027 9.
• White House launches National Design Studio, led by Joe Gebbia, to modernize 7,000+ government websites with improved UX/UI and cost efficiency 12.
• Elon Musk projects xAI will deploy 50 million Nvidia H100 GPUs in five years; cites Chinese firms’ hardware and energy advantages 7.

Commentary

xAI’s release of Grok 2 and 2.5 model weights under a community license, with Grok 3 on the horizon, further expands the open-source LLM ecosystem 1. The move lowers barriers for academic and commercial R&D, but significant compute requirements remain a gating factor for most organizations 1. This follows a broader trend of major players, including Meta and Mistral, using open-source strategies to build developer mindshare and accelerate adoption outside of closed platforms 1.

AI hardware supply chains remain volatile. China’s restriction of Nvidia H20 sales—despite the chip’s compliance with U.S. export rules—reflects ongoing geopolitical friction and growing Chinese preference for domestic solutions 2. Nvidia’s production pause and ongoing negotiations highlight the risks for U.S. chipmakers in China, while the U.S. government’s direct equity stake in Intel and Rocket Lab’s CHIPS Act-backed expansion signal increased U.S. intervention to secure domestic semiconductor capacity 248.

On the regulatory front, scrutiny of AI’s societal impact is intensifying. U.S. and UK authorities are probing the use of AI chatbots in mental health contexts, with concerns over lack of medical oversight, data privacy, and child safety 6. Microsoft ’s AI chief and professional bodies are warning of new psychological risks such as “AI psychosis,” raising the likelihood of stricter oversight for AI products marketed as support tools 10. Meanwhile, the UK’s continued deployment of live facial recognition in public spaces sets it apart from other European countries and may prompt legal and compliance challenges for enterprise AI deployments 11.

For enterprise and product teams, the main takeaways are: monitor open-source model releases for integration opportunities and emerging risks; closely track AI hardware supply disruptions and government interventions; and anticipate tighter regulatory scrutiny around AI safety, especially in consumer-facing and sensitive domains.