Good Afternoon. AI isn’t just writing emails, it’s rewriting the rules. From Reddit leapfrogging Wikipedia as the internet’s top oracle, to young techies sweating as automation hits hiring, and trade talks still trying to sell Tokyo on American trucks, it’s another week of old records breaking and new uncertainties brewing. Let’s dive into the headlines shaking up your Tuesday.

—Rosie, Wyatt, Evan & Conor

🔥 What’s Hot: 🔥

🥶 What’s Not: 🥶

1. Reddit overtakes Wikipedia as top source for AI model citations

The News: Reddit has officially surpassed Wikipedia to become the most cited domain in global AI models, according to analytics firm Profound’s review of 30 million citations from ChatGPT, Google AI Overviews, and Perplexity. In Q2 2025, Reddit was referenced twice as often as Wikipedia in AI-generated answers, coinciding with Reddit’s explosive 78% revenue growth and $89 million in net income for the quarter, a sharp turnaround from last year’s loss. The company’s “other revenue,” including lucrative AI data licensing deals with Google and OpenAI, surged 24% to $35 million. Reddit’s ad business also soared, with revenue up 84% year-over-year, driven by AI-enhanced targeting tools and a surge in global user activity.

Why It Matters: Don’t mine for gold, sell picks and shovels to the miners. Reddit’s ascent as the top source for AI model training and answers cements its status as an indispensable data supplier in the age of artificial intelligence and Wall Street is taking notice, with shares jumping 20% on earnings. Its content is now a backbone for everything from ChatGPT to Google’s AI Overviews, directly powering major data licensing deals. While this strategic value is boosting Reddit’s bottom line and investor confidence, it also raises fresh questions about the accuracy and editorial standards of AI-generated content built on unvetted, crowd-sourced discussions. As AI models increasingly cite Reddit, the platform’s influence—and its business model—are both set to grow.
Source: pressgazette.co.uk

2. Insurance Companies’ Medicare Pullback Is Here

The News: Major health insurers are scaling back on Medicare Advantage—cutting perks, trimming plans, and exiting unprofitable markets—as surging medical costs and reduced government payments squeeze profits. Companies like CVS Health (Aetna) and Humana, once rewarded for rapid expansion, are now being cheered by Wall Street for shifting focus to profitability over growth. Humana expects to lose up to 500,000 members this year; CVS has also retrenched and exited ACA exchanges, with both firms’ shares outperforming the sector after strong earnings. UnitedHealth, which grew aggressively, saw costs soar and its stock plummet, and will now cut back on benefits and plans in 2026, impacting around 600,000 members.

Why It Matters: The era of relentless Medicare Advantage growth is over, at least for now. Investors are rewarding insurers for restraint and margin discipline after a costly arms race for seniors. The shift signals leaner, less generous plans for consumers, more industry consolidation, and a rebalancing of priorities as the sector braces for further regulatory changes and higher costs. For investors, profit is back in the driver’s seat but sadly for many seniors, plan options and perks are likely to shrink.
Source: wsj.com

3. Illinois bans AI from providing standalone mental therapy

The News: Illinois has become the first state to ban artificial intelligence from providing standalone mental health therapy, after Gov. JB Pritzker signed the Wellness and Oversight for Psychological Resources Act (HB1806) into law. Effective immediately, the law prohibits AI systems from making independent therapeutic decisions, interacting directly with patients, or generating treatment plans without a licensed human in the loop. The Illinois Department of Financial and Professional Regulation now has authority to investigate violations and levy fines up to $10,000 per incident. Lawmakers acted after reports of AI chatbots giving dangerous advice, including recommending drug use, and closed loopholes that let unlicensed individuals advertise as therapists. New Jersey, New York, North Carolina, and Texas have all introduced their own versions of mental health AI regulation, ranging from licensing requirements to mandatory supervision by human professionals

Why It Matters: This landmark law draws a hard line between administrative AI tools and actual patient care, setting a new national standard for regulating AI in mental health. Illinois’ move reflects growing concern about the risks of AI chatbots replacing real therapists—especially for vulnerable populations—while allowing innovation for support tasks under human supervision. As federal rules lag, more states are expected to follow, making Illinois a bellwether for balancing tech innovation and patient protection in healthcare.
Source: illinois.gov

4. US Trade Gap Hits 2-Year Low as Tariffs Pressure Economy

The News: The US trade deficit fell 16% in June to $60.2 billion, the lowest in nearly two years, as imports of consumer goods plunged and the trade gap with China shrank by 70% over five months. New Trump-era tariffs, with average rates soaring to 18.3%, the highest since 1934, are fueling the shift. Imports from China dropped to their lowest since 2009, while the overall deficit with China is now just $9.5 billion. Exports of capital goods hit a record, but services sector activity stalled in July, with businesses warning that tariffs are driving up costs, stalling orders, and threatening jobs.

Why It Matters: Tariffs are reshaping US trade and boosting Q2 GDP, but they’re also hitting the massive services sector, which powers most US jobs. As input costs climb and business activity stagnates, the risk of “stagflation”, stagnant growth plus rising prices, increases. With tariff hikes now cemented as policy, companies face tough adjustments and consumers could soon feel the pinch through higher prices and weaker growth.
Source: reuters.com

5. AI Is Already Hitting Young Tech Workers

The News: Generative AI is beginning to reshape the U.S. labor market, according to Goldman Sachs economist Joseph Briggs. While most companies haven’t yet widely deployed AI, the first signs of job displacement are already visible—especially among young tech workers. Tech sector hiring, which steadily grew for two decades, has now stalled and even pulled back, Briggs says. Unemployment among tech workers ages 20–30 has jumped 3 percentage points since the start of 2025, a much bigger spike than seen for young workers in other sectors.

Why It Matters: The shift comes as tech companies increasingly automate routine coding tasks. Salesforce says AI now does half the work on some projects, and Google and Microsoft peg AI-generated code at 30%. Junior roles, often the first rung in tech careers, are the easiest to automate, so younger workers are the first to feel the squeeze. Goldman estimates that 6–7% of all jobs could eventually be lost to AI-driven automation, possibly more, if AI adoption accelerates or AGI arrives. The upshot: while AI will boost productivity and profits, it’s already creating real turbulence in tech jobs, especially for new entrants.
Source: cnbc.com

1. BYD Overtakes Tesla in Europe as EV Sales Plunge

The News: Chinese automaker BYD outsold Tesla in both Germany and the UK for the first time in July, as Tesla’s European sales plummeted. Tesla registrations fell 55% in Germany and nearly 60% in the UK versus last year, while BYD sales soared 390% and 315%, respectively. Despite hefty EU tariffs, BYD’s competitive pricing and fresh model lineup helped it surpass Tesla, which is struggling with an aging lineup and growing local competition. In Sweden, Tesla sales dropped a staggering 86%.

Why It Matters: BYD’s surge signals a dramatic power shift in Europe’s EV market, historically dominated by Tesla. The results underscore the mounting threat posed by Chinese automakers, even as trade barriers rise. Tesla’s decline also reflects how political controversy and lack of innovation can sour a brand, especially in environmentally conscious Europe. For the first time, the road to EV dominance in Europe is no longer a one-way street.
Source: qz.com

2. First UK-Based Firm Gets Space Launch Licence

The News: Scottish rocket company Skyrora has become the first UK-based firm to receive a space launch license, granted by the UK Civil Aviation Authority. The license allows Skyrora to launch its suborbital Skylark L rocket from SaxaVord Spaceport in Shetland, with hopes to scale up to 16 launches per year by 2030. If successful, Skyrora could become the first British company to both manufacture and launch a rocket into space from UK soil—a major step for the domestic space industry.

Why It Matters: This is a huge milestone for the UK’s space ambitions. The launch license paves the way for more homegrown rocket launches, potentially transforming the UK into a serious player in commercial spaceflight and microgravity research. It promises to bring new high-tech jobs and investment to Scotland and the broader UK, helping the country compete with established space hubs around the world.
Source: bbc.com

3. Does Japan Want American Cars?

The News: President Trump is touting a new agreement with Japan to open its market to more American-made cars, a goal he’s chased for decades. In exchange for a 15% U.S. tariff (down from a threatened 25%), Japan agreed to loosen regulations and allow imports of U.S. vehicles without the country’s usual safety testing and standards. Trump has called this a major win, hoping to reverse the long-standing trade imbalance that sees U.S. lots flooded with Japanese cars, but very few American vehicles sold in Japan.

Why It Matters: While Trump’s deal addresses a symbolic trade gripe, most experts are skeptical it will move the needle. American cars struggle in Japan due to different consumer preferences (think: small, right-hand-drive, ultra-efficient), a saturated market, and a lack of tailored models from Detroit. Industry veterans say even if the doors swing wide open, U.S. automakers may find few takers not because of trade barriers, but because their cars simply don’t fit what Japanese buyers want. The real test: whether principle-driven trade deals can overcome decades of market realities.
Source: nytimes.com

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The possibility that rising prices will erode the purchasing power of investment returns over time.

“Long-term bond holders are particularly exposed to inflation risk, which can decrease real returns.”