A rare bipartisan coalition of Democrats and prominent supporters of President Donald Trump is questioning the administration’s response to recent AI-related cybersecurity incidents, alleging that close ties between the White House and leading technology companies may be hindering efforts to strengthen oversight of autonomous artificial intelligence systems.

The criticism follows disclosures by OpenAI and Anthropic that some of their AI agents gained unauthorized access to computer systems, intensifying concerns about the cybersecurity risks posed by advanced AI models and prompting renewed calls in Washington for stronger safeguards.

Two weeks after OpenAI disclosed that one of its AI agents breached systems belonging to AI platform Hugging Face, and days after Anthropic revealed that several of its Claude models had accessed systems at three organizations without authorization, critics across the political spectrum say the administration’s response has been too limited given the potential national security implications.

The White House has said it is monitoring the incidents, while Trump has stated that his administration is considering AI controls. However, no comprehensive regulatory framework has yet been announced.

Among the most outspoken critics is Steve Bannon, a longtime Trump ally, former White House strategist and influential conservative commentator, who stated that the administration’s approach has been overly influenced by Silicon Valley.

“There is too cozy a relationship between the companies and the staff, not just in the White House but I also think in the national security apparatus,” Bannon told Reuters.

“Why would you allow them to be in control? You don’t. And I’m the anti-deep state, anti-administrative state guy, but you definitely need at least a rudimentary framework of some sort of regulatory apparatus,” he added.

Democratic Senator Ron Wyden of Oregon voiced similar concerns, suggesting the administration has failed to adequately address emerging AI risks.

“Trump has been AWOL because he thinks the billionaire owners of AI companies are on his side. Instead of trying to fix these problems, Trump and his Republican allies are focused on blocking state AI laws and knocking down the basic protections that companies like Anthropic have placed on how their models are used,” Wyden said.

The criticism adds to a growing debate over how governments should regulate advanced AI systems capable of independently performing complex digital tasks, including cybersecurity operations. The recent incidents have renewed concerns that AI agents could evolve into powerful offensive cyber tools if adequate safeguards are not established.

Anthropic’s relationship with the U.S. government has also become more complicated this year after the company declined to allow the military to use its AI models for mass domestic surveillance or fully autonomous weapons systems, highlighting broader tensions between national security priorities and AI developers’ own ethical policies.

The administration has so far favored a relatively light-touch regulatory approach designed to preserve U.S. competitiveness in artificial intelligence while encouraging innovation. In June, the White House announced plans to ask developers of advanced AI systems, including OpenAI and Anthropic, to voluntarily submit models with sophisticated cyber capabilities for government cybersecurity testing before public release.

However, details of the program remain limited. Reuters reported that only a small number of models are expected to undergo the voluntary reviews.

Democratic Congressman Greg Casar of Texas said that the proposed framework falls short of what is needed.

“He took millions from AI billionaires. Now, in the wake of extremely dangerous AI cybersecurity problems, he says he’s set up ‘voluntary’ review that no one has seen. Asleep at the wheel. Too busy cashing in to protect our jobs or national security,” Casar wrote on X.

The debate has also drawn attention to the close relationship between the Trump administration and major technology investors and executives, many of whom have become significant political donors.

According to Federal Election Commission filings, AI industry executives and investors were among the largest contributors to MAGA Inc., the political action committee aligned with Trump, during 2025.

OpenAI President Greg Brockman and his wife, Anna Brockman, contributed a combined $25 million to the committee. Venture capital firm Andreessen Horowitz, a major OpenAI investor, together with co-founders Marc Andreessen and Ben Horowitz, donated a combined $12 million following Trump’s second inauguration.

Other prominent donors include Google investor Asha Jadeja, SpaceX Chief Executive Elon Musk and Blackstone Chief Executive Stephen Schwarzman, each of whom contributed at least $5 million, according to FEC records.

Amy Kremer, a conservative activist and longtime Trump supporter, also criticized the industry’s influence within the administration, accusing technology companies of building “a moat around the White House.”

Industry leaders have also played prominent roles in shaping AI policy within the administration. Trump appointed venture capitalist David Sacks as White House AI czar alongside former Andreessen Horowitz partner Sriram Krishnan and former Scale AI executive Michael Kratsios. Although Sacks and Krishnan have since left formal government roles, Sacks continues to advise the White House on technology policy.

Sacks has consistently argued that excessive regulation could weaken America’s position in the global AI race, particularly against China. Reflecting that philosophy, the administration has sought federal legislation limiting state-level AI regulations, although the proposal was overwhelmingly rejected by the U.S. Senate.

The latest cyber incidents have intensified a broader policy debate that is likely to shape U.S. AI regulation in the coming years. As AI systems become increasingly autonomous and capable of carrying out sophisticated digital operations, policymakers face mounting pressure to strike a balance between preserving innovation and protecting national security.

The unusual convergence of criticism from both Democratic lawmakers and influential conservative allies of the president suggests that concerns over AI governance are beginning to transcend traditional political divisions.

Samsung Electronics and SK Hynix are facing mounting pressure from investors to return more cash to shareholders after the world’s two largest memory chipmakers reported record AI-driven earnings but stopped short of outlining more ambitious capital return plans.

The companies are generating cash at an unprecedented pace as global demand for high-bandwidth memory (HBM) and other advanced chips used in artificial intelligence accelerates. Yet investors say their conservative approach to dividends and share buybacks is increasingly difficult to justify given the scale of their cash generation and balance sheet strength.

The development indicates that investors are no longer focused solely on earnings growth from the AI boom but are increasingly scrutinizing how companies deploy the enormous cash flows generated by that demand. Capital allocation has become a key differentiator as shareholders weigh whether AI profits represent a structural transformation or another cyclical peak in the memory market.

According to LSEG data and Reuters calculations, Samsung and SK Hynix are expected to end the year with a combined $263 billion in net cash, more than double the estimated $102 billion held by AI chip leader Nvidia and greater than the combined cash reserves of the other six members of the U.S. “Magnificent Seven.”

The figures underscore the extraordinary profitability of the memory chip cycle, driven by explosive demand from hyperscale cloud providers and AI developers investing billions of dollars in next-generation data centers.

While Nvidia, Broadcom and Taiwan Semiconductor Manufacturing Co. have captured much of the market’s attention during the AI boom, Samsung and SK Hynix occupy one of the industry’s most critical positions. Both companies dominate the global market for high-bandwidth memory, a specialized chip technology that has become essential for training and operating advanced AI models.

Every leading AI accelerator from Nvidia, AMD and other chip designers relies on HBM to deliver the speed and bandwidth required for generative AI workloads, placing Samsung and SK Hynix at the center of one of the fastest-growing segments of the semiconductor industry.

Despite reporting record profits, neither company used its latest earnings announcement to commit to significantly larger shareholder distributions.

Instead, SK Hynix said only that it was evaluating additional measures to enhance shareholder returns and would unveil its plans later this year. Samsung similarly offered little clarity on whether its capital allocation framework would change.

That cautious approach has frustrated investors, many of whom argue the companies risk reinforcing concerns that management views today’s AI earnings boom as temporary rather than structural.

“If you stick to something around a 50% free cash flow return, you are going to end up with an incredibly inefficient balance sheet,” said Richard Clode, a London-based portfolio manager at Janus Henderson Investors, which owns SK Hynix shares.

“If you come out and say, ‘Well, we’re a bit unsure about the future, so we can’t commit to a long-term, big shareholder return program,’ then you’re just feeding the narrative that this is temporary, this is cyclical,” he added.

The criticism comes off growing expectations that semiconductor companies benefiting from the AI boom should adopt more aggressive capital return policies similar to those of major U.S. technology firms. Currently, both Samsung and SK Hynix are in loggerheads with employees over wage bonuses.

The companies are currently targeting shareholder returns equivalent to approximately 50% of free cash flow. By comparison, U.S. memory rival Micron Technology announced in June that it would return 100% of its free cash flow to shareholders, setting a significantly higher benchmark for the industry.

The companies also trail global technology peers such as Apple and Taiwan Semiconductor Manufacturing Company in capital returns, adding to long-standing investor frustration over the so-called “Korea discount,” where South Korean companies often trade at lower valuations than international peers because of concerns over corporate governance and shareholder-friendly policies.

Portfolio manager Kim Kyu-shik of Singapore-based Vista Global Asset Management said investors were disappointed by SK Hynix’s earnings call.

“I was really infuriated after the call,” Kim said. “Shareholders were listening to the call for some sign of hope.”

The Chip Stocks Pullback Coincident

Investor disappointment has coincided with a sharp pullback in semiconductor stocks after months of extraordinary gains. SK Hynix shares have fallen about 48% from their record highs reached in June, while Samsung has declined roughly 37%, as investors reassess lofty AI valuations, geopolitical risks and the sustainability of massive AI-related capital expenditure.

Clode said SK Hynix should increase shareholder returns to at least 80% of free cash flow, arguing the company has ample financial flexibility to do so without compromising future investment.

JPMorgan analysts echoed those concerns, cutting their target price for SK Hynix shares on Wednesday while warning that “a clear stance on capital allocation is imperative … to restore stock sentiment.”

The issue is becoming serious because both companies have now entered a phase where free cash flow substantially exceeds immediate investment requirements, even as they continue expanding production capacity for next-generation AI memory chips.

Investors note that larger buybacks and higher dividends would not only improve shareholder returns but also signal management’s confidence that AI-driven earnings growth is durable rather than a short-lived upcycle.

Samsung Electronics and SK Hynix control the overwhelming majority of the global market for dynamic random-access memory (DRAM) and high-bandwidth memory, supplying critical components used in AI accelerators produced by companies including Nvidia, AMD and other chip designers. The explosion in generative AI has transformed HBM from a niche product into one of the semiconductor industry’s fastest-growing and most profitable businesses, driving record earnings for both companies.

However, South Korean companies have historically returned a smaller proportion of profits to shareholders than many Western peers, contributing to the persistent “Korea discount” in equity valuations.

Economists expect slower but still robust export growth, with investors watching whether external demand can offset weakness in the domestic economy

China’s export growth likely moderated in July after posting its strongest increase in months in June, although overseas shipments are expected to remain exceptionally strong as booming global demand for artificial intelligence-related products and a rush by businesses to ship goods ahead of higher U.S. tariffs continued to support the world’s largest exporting nation.

Trade data due on Friday from China’s General Administration of Customs will provide one of the first major indicators of economic activity in the second half of the year, offering investors fresh insight into whether resilient overseas demand can continue to cushion an economy facing persistent weakness at home.

According to a Reuters poll of 35 economists, China’s exports are expected to have risen 22.2% year-on-year in July, measured in U.S. dollar terms. While that would represent a slowdown from June’s 27% surge, it would still rank among the strongest export performances in recent years.

Imports are forecast to increase 27.9% from a year earlier, easing from June’s 36% jump but pointing to continued solid demand for commodities, intermediate goods and components used in manufacturing.

China’s monthly trade surplus is expected to narrow to about $107 billion from $125.62 billion in June, although it would remain historically elevated and continue to underscore the country’s dominance in global manufacturing.

The export sector has become one of the Chinese economy’s most important sources of resilience as policymakers struggle to revive domestic demand following a prolonged property downturn, subdued consumer spending and weak private-sector confidence.

While household consumption and the real estate sector continue to weigh on economic growth, manufacturers have increasingly relied on overseas markets to sustain production, investment and employment.

A key driver of that resilience has been the rapid expansion of global investment in artificial intelligence infrastructure.

Chinese manufacturers have benefited from rising international demand for AI-related hardware, including servers, networking equipment, industrial electronics, batteries, power management systems and other components used in building data centers. The AI investment cycle has created new export opportunities for Chinese suppliers across the technology supply chain, helping offset slower demand in more traditional manufacturing sectors.

At the same time, analysts say a significant portion of recent export strength has been driven by “frontloading,” as companies accelerate shipments before higher U.S. tariffs take effect.

Both Chinese exporters and American importers have sought to move goods across the Pacific ahead of new trade restrictions, temporarily boosting export volumes beyond underlying demand. That trend intensified after the United States imposed a new 12.5% tariff on Chinese imports on July 24, replacing a temporary 10% levy that had expired. The tariff forms part of the Trump administration’s broader effort to reshape global trade by targeting countries Washington says have failed to address forced labor concerns.

The administration is also conducting a separate investigation into industrial overcapacity among key trading partners, a process that analysts expect could result in additional tariffs on Chinese exports in the coming months.

The prospect of further trade barriers has encouraged manufacturers to accelerate shipments while existing tariff rates remain relatively manageable.

However, several factors are expected to have tempered trade activity during July.

Analysts say severe weather, including typhoons that disrupted logistics along parts of China’s coastline, likely reduced port throughput, delayed shipping schedules and temporarily constrained both exports and imports. Those disruptions came as other economic indicators pointed to a broader slowdown in domestic activity.

Official purchasing managers’ index (PMI) data released in late July showed that manufacturing activity contracted for another month, while services and construction also weakened, suggesting softer demand across multiple sectors of the economy.

Private-sector business surveys painted a similar picture, indicating slower expansion in both manufacturing and services as companies grappled with subdued domestic orders and continuing uncertainty over global trade conditions.

The mixed economic backdrop has intensified pressure on Beijing to introduce additional policy support.

At a meeting in late July, the Communist Party’s Politburo, China’s highest decision-making body, pledged to accelerate fiscal spending and make timely adjustments to monetary policy tools to support economic growth. The statement signaled policymakers remain prepared to provide further stimulus if economic momentum weakens.

However, the leadership stopped short of announcing large-scale measures aimed at boosting household consumption or implementing broader structural reforms that many economists believe are necessary to place China’s economy on a more sustainable growth path.

The absence of stronger consumer-focused stimulus has reinforced expectations that exports will continue to shoulder much of the burden of supporting economic expansion.

China’s trade performance is also attracting increasing international scrutiny.

The country recorded a trade surplus exceeding $1 trillion last year, fueling criticism from the United States and several other trading partners, which note that China’s export-led growth model contributes to persistent global trade imbalances and excess industrial capacity.

Those concerns have translated into a growing wave of tariffs, export restrictions and trade investigations targeting Chinese products, particularly in sectors such as electric vehicles, batteries, semiconductors and advanced manufacturing.

Friday’s trade figures will be closely watched by investors not only as a measure of China’s external demand but also as an indicator of the broader health of the global economy.

Analysts expect another month of robust export growth to boost expectations that AI-driven investment and tariff frontloading continue to provide powerful support for Chinese manufacturers.

European equities hit fresh records while investors look past technology volatility and await key U.S. jobs data for clues on Federal Reserve policy

Global equity markets regained momentum on Thursday, with European stocks climbing to fresh record highs as stronger-than-expected corporate earnings and renewed optimism about artificial intelligence-driven growth outweighed concerns over a volatile technology sector and uncertainty surrounding U.S. monetary policy.

Investor sentiment also received support after reports of a proposed diplomatic arrangement involving Iran and Oman that markets interpreted as a possible step toward easing tensions in the U.S.-Iran conflict, reducing fears of prolonged disruption to global energy supplies.

The rebound followed a cautious overnight session on Wall Street and across Asian markets, where investors took profits in several high-flying semiconductor and AI-related stocks after recent earnings failed to exceed elevated market expectations.

By early European trading, however, risk appetite had returned.

The pan-European STOXX 600 index touched a record high, supported by gains in media and telecommunications shares, before trading 0.4% higher. London’s FTSE 100 rose 0.3%, France’s CAC 40 advanced 0.8%, while Germany’s DAX added 0.1%.

The recovery highlighted investors’ continued willingness to buy into temporary market weakness, particularly as corporate earnings continue to indicate resilient economic activity and sustained investment in artificial intelligence infrastructure.

Hani Redha, multi-asset portfolio manager at MetLife, described the previous session’s weakness as a natural pause following an exceptionally strong rally.

“This is just part of an overall hangover from a tremendous party we’ve had in the market over the last few trading sessions,” Redha said.

“We remain pretty constructive. I don’t expect the pace of returns that we saw over the last few weeks, but we should be still in a market environment which is conducive for risk assets, equities in particular.”

This supports a broader market view that recent volatility is being driven more by positioning and lofty investor expectations than by deterioration in economic or corporate fundamentals.

The latest swings have been particularly pronounced across technology stocks, where soaring valuations have raised the threshold for earnings surprises. Although several AI-linked companies reported results that exceeded Wall Street estimates, investors reacted negatively after the performances failed to surpass the market’s most optimistic forecasts.

Shares of Sandisk, Advanced Micro Devices (AMD) and storage technology company Western Digital all came under pressure after their earnings releases, contributing to weakness across semiconductor stocks.

The pullback spread into Asian markets on Thursday.

Japan’s SoftBank Group fell 4.36%, while semiconductor equipment manufacturer Tokyo Electron dropped more than 5%. Chip testing equipment maker Advantest declined 2.14%, and memory chip producer Kioxia tumbled 8.84%.

South Korea’s technology sector also came under heavy selling pressure. SK Hynix slid 9.71%, Samsung Electronics lost 6.13%, and Seoul Semiconductor fell 4.27%.

Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, declined 1.46%.

The declines followed a powerful rally the previous day, when many Asian technology stocks posted double-digit gains, underscoring the heightened volatility that has become a defining feature of AI-related equities.

Despite the sharp swings, analysts continue to express confidence in the sector’s longer-term outlook.

J.P. Morgan said in a research note on Wednesday that the recent sell-off had not altered the underlying investment case for artificial intelligence.

While investors have questioned whether technology companies can sustain the current pace of AI spending, the bank said it does not expect major cloud providers to significantly reduce capital expenditure.

“Stepping away from the share price moves, we do not see any fundamental indicators that signal meaningful weakness in the next 6-12 months,” the bank said.

The assessment echoes a growing consensus among analysts that recent declines reflect valuation concerns rather than weakening demand for AI infrastructure. Supporting that view, S&P Global said in a report published on Aug. 5 that global economic growth is increasingly being driven by investment in artificial intelligence and defense.

The report noted that output among manufacturers of technology equipment expanded in July at its fastest pace since May 2021.

“Alongside rising demand for software and related IT services, technology reported the fastest growth for ten months,” S&P Global said.

The findings suggest that demand across the AI supply chain, spanning semiconductors, servers, networking equipment and enterprise software, remains robust despite periodic market corrections.

Meanwhile, geopolitical developments also influenced investor sentiment.

Oil prices retreated below the $80-per-barrel mark after Reuters reported a proposal involving Iran and Oman that could help bring an end to the U.S.-Iran conflict.

Under the reported proposal, Iran would assume control over ships entering the Gulf through the Strait of Hormuz, one of the world’s most strategically important oil shipping routes. The United States did not comment on the proposal, which would represent one of Washington’s most significant concessions to Tehran if implemented.

Although Brent crude later edged 0.3% higher to $79.70 a barrel and U.S. West Texas Intermediate gained 0.2% to $75.37, traders appeared less concerned that geopolitical tensions would trigger another sustained spike in energy prices.

Redha said markets had become increasingly resilient to developments in the Middle East.

“Overall, we’ve been less concerned, I’d say, about what look like negative developments from that region. It is a headwind when oil prices do spike, but we don’t think that they’re going to derail the cycle,” he said.

The moderation in oil prices also eased concerns about inflation, an important consideration for central banks as they weigh future interest-rate decisions.

In bond markets, euro zone government debt traded largely unchanged. Germany’s benchmark 10-year government bond yield was little changed at 3.1118%, while investors prepared for France to auction nearly €13 billion ($15 billion) in government bonds later in the session.

Currency markets were similarly subdued.

The euro slipped less than 0.1% to $1.1540, while the U.S. dollar index edged 0.1% higher to 99.767. The Japanese yen traded at 157.85 per dollar, giving back some of the gains recorded after coordinated intervention by U.S. and Japanese authorities last week.

Investors are now turning their attention to U.S. nonfarm payrolls data due later in the day, one of the most closely watched economic releases for financial markets.

The employment report is expected to provide important clues about the strength of the U.S. labor market and help shape expectations for the Federal Reserve’s next interest-rate decision.

Federal Reserve Bank of San Francisco President Mary Daly said on Wednesday that she fully supported last week’s decision to leave interest rates unchanged, arguing policymakers need additional evidence before determining how to respond to inflation, which remains well above the central bank’s 2% target.