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Meta’s employee-monitoring Program, MCI, Puts Its AI ambitions under fresh scrutiny as It Extends to the EU

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Meta Platforms’ push to build AI agents capable of performing workplace tasks autonomously is now drawing scrutiny over how far the company is willing to go to train them. Internal documents reviewed by Reuters indicate that its employee-monitoring system, designed to capture how staff interacts with software, is collecting more data than initially disclosed and may extend its reach beyond the United States.

The initiative, known as the Model Capability Initiative (MCI), sits at the core of CEO Mark Zuckerberg’s broader effort to reshape Meta around artificial intelligence agents. The system tracks how employees use computers, recording actions such as mouse movements, clicks, navigation through menus, and broader software interactions across more than 200 applications and websites.

Meta originally told staff the tool would apply only to U.S. employees and that safeguards were in place to protect sensitive information. But internal documentation suggests a wider footprint and a deeper level of data capture than initially described, raising questions about compliance risks and internal consent.

At stake is a fundamental shift in how Meta envisions AI development. Rather than relying solely on curated datasets or public information, the company is attempting to build systems trained on real workplace behavior, effectively mapping how knowledge workers execute tasks in software environments.

Internal descriptions of the initiative indicate that MCI is intended to support the creation of AI agents that can perform routine digital work autonomously, from navigating applications to executing multi-step workflows. The ambition is to move beyond basic automation toward systems that understand task execution in context.

However, the scope of the data collection has unsettled employees. Internal posts viewed by Reuters describe the system as capable of generating detailed behavioral profiles of workers’ daily activities. One internal analysis, conducted with assistance from Anthropic’s Claude AI, reportedly found that MCI was integrated into existing security software and extended visibility into code changes, computer sleep and wake cycles, URLs visited, clipboard activity, and other workflow signals, some of which were stored in less secure formats.

The analysis concluded that combining these signals could enable a highly granular reconstruction of how employees work. As one employee wrote in an internal post, it could amount to “a complete behavioral model of how a knowledge worker does their job.”

The same post added: “Not ‘an AI that clicks a dropdown for you’ but ‘an AI that knows which dropdown to click, what to select, which document to paste it into, and what to do next.’”

The post was later removed, according to employees who spoke to Reuters.

The internal reaction has been sharp. Some staff have complained that the system consumes unusually large amounts of data, in some cases exhausting monthly home internet limits within days. Others have framed the initiative as part of a broader restructuring in which AI agents gradually absorb tasks previously done by humans.

One internal post referred to the initiative as turning Meta into an “Employee Data Extraction Factory,” reflecting growing unease over the scale of monitoring tied to AI training efforts.

However, Meta spokesperson Dave Arnold rejected those characterizations.

“In the interest of transparency, we notified non-U.S. employees that it was deployed on the computers of U.S. colleagues they may email or chat with in the normal course of business,” he said.

Arnold also said the system is limited to U.S. employees and is focused on interaction patterns rather than content.

“MCI was installed only on U.S. employees’ devices and that its focus was on how people interact with computers, not the content on their screens,” he said.

He declined to address specific claims about data volume or internal conclusions about the system’s architecture.

Still, internal documents suggest a more complex reality. Meta acknowledged in internal materials that the system could capture emails and messages involving U.S. employees regardless of the sender’s location. In one FAQ entry directed at non-U.S. staff, the company stated: “If a U.S.-based colleague has the tool enabled while gchatting or emailing with someone outside the U.S., that activity would be captured.”

The company also said collected data would be “dissociated” from identifying employee information, meaning it could not be traced or deleted at an individual level. That design choice has triggered concern among privacy advocates, particularly in Europe, where data protection laws impose strict limits on how personal information is processed and stored.

Potential European Regulatory Challenge

The initiative could expose Meta to challenges under the European Union’s General Data Protection Regulation (GDPR), which requires a lawful basis for processing personal data and enforces purpose limitation rules. Critics argue that workplace communications collected for operational purposes cannot easily be repurposed for AI model training.

Kleanthi Sardeli, a legal expert at privacy group NOYB (“none of your business”), said even indirect capture of European data could trigger violations. She warned that repurposing employee communications for AI training may be incompatible with GDPR requirements governing purpose limitation and consent.

Meta has informed Ireland’s Data Protection Commission, its lead EU regulator, that EU employee data and screen content “falls within the primary purpose of the tool,” according to a spokesperson for the authority, which did not elaborate further. Arnold declined to comment on regulatory discussions.

Technology companies are increasingly reliant on behavioral data to train AI agents capable of navigating real-world software environments. But as training methods become more intrusive, they are colliding with long-standing privacy frameworks and workplace expectations.

Mercedes-Benz Faces Potential U.S. Market Ban Under New Bipartisan Bill Targeting Chinese Ownership in Auto Sector

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Mercedes-Benz could be barred from manufacturing, importing, or selling new vehicles in the United States under bipartisan legislation advancing in Congress, unless the bill is amended or the German automaker’s largest shareholder divests its stake.

CNBC reports that the Motor Vehicle Modernization Act of 2026, sponsored by House Energy and Commerce Committee Chairman Brett Guthrie (R-Ky.), aims to prevent Chinese automakers from gaining a foothold in the U.S. market. It would prohibit any automaker with “any direct or indirect equity interest” by a foreign-adversary government, including China, Russia, and North Korea, from operating in the United States.

Mercedes-Benz’s largest individual shareholder is the state-owned Chinese automaker BAIC, which holds a 9.98% stake. The company’s second-largest shareholder is Chinese billionaire Li Shufu, founder and chairman of Geely, with a 9.69% stake through his investment firm. Combined, these two Chinese-linked shareholders own approximately 19.67% of Mercedes-Benz Group AG.

Several people familiar with the legislation, speaking on condition of anonymity, told CNBC that gray areas in the bill’s language could, depending on interpretation, effectively ban Mercedes-Benz from the U.S. market. A former automotive policy advisor and lobbyist, who consulted on the bill, described the language as “unambiguous.”

Daniel Kelly, press secretary for the Energy and Commerce Committee, confirmed the details of the legislation but declined to comment on its potential impact on specific companies.

Mercedes’ Substantial U.S. Footprint at Risk

A ban would have major consequences. Mercedes-Benz operates two large assembly plants in the United States — a massive facility in Tuscaloosa, Alabama, that has produced more than 5 million vehicles since 1997, and a van production plant in South Carolina that began operations in 2006. The company employs more than 10,000 people in the U.S. and has long positioned America as a key manufacturing and sales hub.

A Mercedes-Benz spokesman declined to comment on the legislation but highlighted the company’s deep U.S. investments and workforce.

The bill includes exemptions for automakers that have manufactured passenger vehicles in the U.S. for at least five years before January 1, 2026. However, this exemption explicitly does not apply to companies with ownership ties to foreign-adversary governments.

A separate but related bill, the Connected Vehicle Security Act of 2026, was introduced by Sens. Bernie Moreno (R-Ohio) and Elissa Slotkin (D-Mich.) and Reps. John Moolenaar (R-Mich.) and Debbie Dingell (D-Mich.) also include a 15% ownership threshold for restrictions on connected vehicles with Chinese software or hardware. Exemptions under that legislation are still being determined.

Broader Push to Block Chinese Influence in U.S. Autos

The legislation follows growing bipartisan concern in Washington over Chinese involvement in the U.S. auto sector, driven by national security risks, data privacy fears, and economic competition. It builds on previous restrictions banning connected vehicles with Chinese-linked software starting with 2027 models and hardware from 2030 models.

Stephen Ezell, vice president for global innovation policy at the Information Technology and Innovation Foundation, said Mercedes-Benz poses a smaller national security risk than fully Chinese-controlled automakers, calling any inclusion an “unintended consequence” that could result in job losses and reduced profits.

John Bozzella, CEO of The Alliance for Automotive Innovation, praised the bill’s overall direction in a letter to committee leaders but stressed that “details matter.” The group, which represents nearly every major automaker in the U.S., including Mercedes-Benz, declined to comment specifically on potential impacts to individual companies.

Autos Drive America, a lobbying group for foreign automakers that includes Mercedes-Benz, also declined to comment on the potential impact but reiterated support for the goals of related legislation while warning against unintended consequences for U.S. manufacturing.

Potential Impact on Other Automakers

The 15% ownership threshold is expected to also affect other companies with Chinese ties, such as Volvo (majority-owned by Geely), and smaller manufacturers like Faraday Future, Lotus, and Karma Automotive. Volvo recently received specific authorization from the U.S. government to bypass certain federal bans on connected vehicle technology linked to China.

However, exclusion from the U.S. market, one of its most important and profitable regions, would be a severe blow for Mercedes-Benz. The company has invested heavily in American manufacturing to serve both domestic and export markets. A ban would disrupt supply chains, threaten thousands of jobs, and force a painful strategic rethink.

While the bill targets Chinese state influence, its broad language risks collateral damage to established international automakers with legitimate minority stakes from Chinese entities.

As the legislation moves forward, lobbying efforts are expected to intensify. Mercedes-Benz and its allies will likely push for clarifications or exemptions to protect their U.S. operations. The bill is currently a House-only initiative with no Senate companion, but its strong bipartisan support on the committee suggests it has momentum.

Nvidia is Betting $6.5bn on Photonics, Signaling It’s the Next AI Battleground Beyond Chips

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Nvidia is pouring billions of dollars into photonics technology as the artificial intelligence boom exposes a growing problem at the heart of modern AI infrastructure: moving vast amounts of data fast enough without overwhelming power grids and data centers.

Over the past three months alone, Nvidia has committed at least $6.5 billion to companies developing optical and silicon photonics technologies, marking one of the clearest signs yet that the AI race is shifting beyond graphics processors and into the networks that connect them.

The investments span a wide range of companies tied to optical connectivity. Nvidia committed $2 billion in investments into Lumentum, Coherent and Marvell Technology. It also pledged $500 million to Corning for advanced optical connectivity development and joined a $500 million funding round for startup Ayar Labs.

The scale of the spending underlines how rapidly the AI industry’s bottlenecks are evolving. For years, the focus centered almost entirely on access to GPUs. But as AI models become larger and more computationally intensive, the challenge increasingly lies in moving information efficiently between processors, servers, and entire AI clusters.

Photonics, which uses light instead of electrical signals to transmit data, is emerging as one of the industry’s most promising solutions. Existing copper-based systems consume substantial amounts of electricity and generate heat as AI workloads intensify. Analysts say that could become a major constraint on the expansion of AI infrastructure globally.

Alvin Nguyen, senior analyst at Forrester, said Nvidia’s investment strategy reflects growing concern that traditional electrical interconnects may not scale alongside AI demand.

“Photonics represents a way for Nvidia to scale their AI infrastructure without the energy costs that staying with electrical and copper will incur,” Nguyen told CNBC.

The issue has become particularly urgent as hyperscalers and AI developers build massive GPU clusters. Future AI systems are expected to require millions of interconnected chips operating simultaneously across multiple data centers. That scale creates enormous networking demands.

Nvidia Chief Executive Jensen Huang has repeatedly warned that existing infrastructure will struggle to keep pace with the next generation of AI factories.

At Nvidia’s GTC conference in March, Huang said the company was already integrating photonics into networking systems and GPU-to-GPU interconnect technology. He added that future AI deployments would require far more silicon photonics manufacturing capacity than currently exists worldwide.

Morningstar analyst Brian Colello said Nvidia’s next-generation rack-scale AI systems will require exponentially greater bandwidth as models become more advanced and AI usage expands globally.

“Nvidia’s roadmap of next generation AI rack-scale solutions will require an increasing amount of optical connectivity,” Colello told CNBC.

The investment surge has also fueled a dramatic rally in photonics-related stocks. Shares of Lumentum have climbed 134% this year, while Coherent has gained 96%. Marvell has risen 122%, and Corning more than doubled as investors increasingly view optical networking as a critical pillar of the AI economy.

Nvidia is not alone in chasing photonics technologies. Advanced Micro Devices (AMD) has also invested in Ayar Labs and acquired startup Enosemi in 2025, while making strategic bets on companies including Teramount and Celestial AI. Venture arms tied to Alphabet and Microsoft backed startup nEye earlier this year.

The growing investor interest suggests the industry views optical infrastructure as essential to sustaining AI growth through the end of the decade.

Still, analysts caution that photonics deployment at scale remains technically difficult.

Nick Patience, AI lead at The Futurum Group, said manufacturing complex optical assemblies remains one of the industry’s toughest engineering challenges because even small alignment errors between optical and silicon components can render systems unusable.

“The technology is sound, production scale is the harder problem,” Patience said.

That means widespread adoption across the AI infrastructure stack may still take years. Analysts expect large-scale deployment to accelerate closer to 2028 as manufacturing processes mature and costs decline.

Yet Nvidia’s aggressive investment pace suggests the company sees little room for delay. The AI boom has already strained electricity supplies, data center construction pipelines, and semiconductor manufacturing capacity worldwide. If the compute infrastructure cannot move data efficiently enough, the performance gains from more advanced AI chips risk being bottlenecked by the network itself.

CZ Suggests Many AI Companies May Disappear Along the Way

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The artificial intelligence boom has become one of the defining investment stories of the decade. Trillions of dollars in market value have been created, data center construction is accelerating worldwide, and investors continue to pour capital into AI startups at a record pace. Yet amid the excitement, a growing number of industry leaders are warning that the sector may be entering a phase of excessive speculation.

Recent comments from Binance founder Changpeng Zhao (CZ), combined with a sharp decline in Nvidia H200 GPU rental prices, have reignited debate over whether parts of the AI market are experiencing a bubble. CZ recently stated that most AI firms will eventually go bust. While the remark may sound pessimistic, it reflects a historical reality seen across many technological revolutions.

During transformative periods, capital often floods into new industries faster than sustainable business models can develop. The internet boom of the late 1990s produced thousands of startups, but only a small percentage survived to become profitable enterprises. Similarly, while artificial intelligence is likely to reshape industries ranging from healthcare to finance, not every company currently branding itself as an AI business will succeed.

The warning comes at an interesting moment for the industry. Nvidia’s H200 graphics processing units, among the most sought-after AI chips in the market, have reportedly seen rental prices decline by roughly 40%.

For years, access to advanced GPUs was considered one of the biggest bottlenecks in AI development. Companies scrambled to secure computing resources, often paying premium prices to train and run large language models. The surge in demand fueled extraordinary revenue growth for Nvidia and helped drive a massive expansion of AI infrastructure spending.

A significant drop in rental costs suggests that the supply-demand balance may be shifting. New data centers are coming online, cloud providers are expanding capacity, and alternative chip manufacturers are entering the market. As more computing power becomes available, scarcity decreases and prices naturally fall. For AI developers, this is positive news because lower infrastructure costs make experimentation and innovation more affordable.

However, for investors who assumed perpetual shortages and ever-rising prices, it raises important questions. The decline in GPU rental prices does not necessarily mean AI demand is collapsing. Instead, it may indicate that the market is maturing. Infrastructure booms often follow a predictable pattern: an initial shortage triggers massive investment, which eventually leads to increased supply and lower prices.

Railroads, telecommunications networks, and cloud computing all experienced similar cycles. The companies that survive are usually those that can convert technological capability into sustainable revenue rather than relying solely on investor enthusiasm.

This distinction is central to CZ’s argument. Many AI startups have secured impressive valuations despite generating little revenue or demonstrating limited competitive advantages.

As funding conditions become more selective, firms without clear business models may struggle to justify their valuations. Investors are increasingly focusing on profitability, customer adoption, and long-term economic value rather than simply rewarding companies for incorporating AI into their branding. At the same time, the broader AI revolution remains very much intact.

Falling GPU prices could ultimately accelerate adoption by reducing costs for developers, enterprises, and researchers. More affordable compute may enable a new wave of applications that were previously uneconomical. In that sense, lower infrastructure costs could strengthen the industry even as they expose weaknesses among overvalued firms.

The lesson from previous technology cycles is clear: transformative innovations survive, but speculation does not. Artificial intelligence is likely to become a foundational technology of the modern economy. Yet as CZ suggests, many of today’s AI companies may disappear along the way. The challenge for investors is distinguishing between businesses building lasting value and those riding a temporary wave of hype.

Tekedia Capital Invests in Unsupervised Biological AI company, Exonic

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Tekedia Capital is excited to announce our investment in Exonic, an unsupervised Biological AI company pioneering a new generation of biological foundation models focused on heterogeneous, unstructured, and noisy biological datasets.

Why did we make this investment? As always, I begin with business models, and consider two scenarios.

Scenario A: Hire ten world-class movie producers and ask them to create 200 short-form videos over two years for your digital media platform.

Scenario B: Open a platform to tens of thousands of creators worldwide and use AI to discover, rank, and distribute the best content daily.

In the year 2000, Scenario A would have been a sensible business model. Computing power was expensive, AI was primitive, and the infrastructure required to evaluate millions of content interactions in real time did not exist at scale. Human judgment had to substitute for computational intelligence.

Today, Scenario B wins.

Why? Because intelligence compounds when you can learn from everyone. The probability of discovering a breakout hit becomes dramatically higher when you allow thousands or millions of contributors to participate. AI can then identify patterns, surface quality, and continuously optimize distribution. The result is a system that becomes smarter with scale.

This explains why TikTok became a superior business model to Quibi. Quibi relied on a small group of highly accomplished professionals, including industry legends such as Jeffrey Katzenberg and former eBay CEO Meg Whitman. Yet the model was constrained by the insights and decisions of a limited number of people. TikTok, by contrast, leveraged the creativity of the world and used algorithms to discover value wherever it emerged. As I noted years ago, virality compounds; human curation alone does not.

That same principle informs our investment in Exonic. Biology is generating enormous quantities of data across laboratories, research institutions, healthcare systems, genomic repositories, and scientific publications. Much of that information is noisy, fragmented, unstructured, and difficult for traditional models to interpret. Exonic’s thesis is that the next breakthroughs in synthetic biology, cell-type targeting, biological manufacturing, and life sciences will come not from a narrow set of curated datasets, but from learning across the broadest possible landscape of biological knowledge. In essence, Exonic wants to mine ideas from the world.

By combining insights from diverse biological sources with proprietary models and infrastructure, the company is building foundational AI systems for the emerging synthetic DNA age. Just as the internet unlocked the world’s information and AI unlocked the world’s content, biological AI may unlock the world’s biological intelligence.

Good People, the most powerful systems of the future will not merely use knowledge. They will aggregate, synthesize, and learn from knowledge generated by everyone. That is the promise of Exonic, and that is why Tekedia Capital wrote the cheque.