Technology

1. Netflix takes big swing
2. Anthropic’s path to redemption
3. Cohere’s bubble defense
4. AI splits the red sea
5. EU moves … fast?
6. Coming around to fossil fuels

The case for H-1B reform, and a new chatbot could help you choose the right scent.

As Semafor scooped this morning, Sen. Ruben Gallego, D-Ariz., is urging the White House to reform the H-1B program to cut down on abuse. The White House seems to be amenable to that idea, with Assistant Attorney Gen. Harmeet Dhillon investigating potential H-1B transgressions at the big tech companies she is famous for fighting.

The reason members of both parties want to see reform is that the H-1B program was essentially taken over by consulting firms that filled the slots with workers who were there simply because they’d accept lower wages. Everybody thinks of H-1B workers destined for big tech companies, but that’s a misnomer. Many of them were just low-wage workers somewhere in the middle of the country contributing to sub-par software for non-tech sectors like financial services.

H-1B reform would actually help technology companies by opening more slots for truly talented engineers — like the ones presenting at the Neural Information Processing Systems conference this week, where it’s impossible to ignore how many of the top AI minds were born outside the United States. It’s in the country’s interest to make it exceedingly easy for companies to recruit the best talent from all over the world, while making it difficult for consulting firms to import cheap labor that adds little value to the innovation economy.

Despite everyone essentially agreeing on this, the Trump Administration seems to be working against its own interests and the country’s by using heated rhetoric and nonsensical policies seemingly aimed at driving talent away. The latest example came Thursday, when Reuters broke a story about a new cable from the State Department that instructs consulates to dig into the work histories of H-1B applicants for any evidence that they took part in “censorship” at social media companies, and then to deny their applications.

There are officials in the Trump administration, and tech executives close to it, who believe discouraging foreign technologists from coming to the US is counter to the country’s long-term interests. Ironically, they aren’t free to speak up against it — another kind of censorship with more dire consequences than a banned social media account.

Netflix’s risky buy

Netflix, the company that began as a way to rent DVDs through the mail, is now poised to own the iconic Hollywood studio Warner Bros. Discovery. The $83 billion deal, which still must survive a gauntlet of regulatory scrutiny in the US and Europe, comes as Hollywood continues to fret about its long decline.

Netflix could be stepping into a quagmire that kind of rhymes with AOL-Time Warner. It will own some great properties, from the DC Universe to Harry Potter. But it will be under pressure to keep Warner Bros. films in the theaters and it will be in essentially a new industry that’s messier, riskier, and doesn’t scale as well as tech.

There’s also a lot of opportunity. While AI is a bogeyman for the industry, it’s also the future of it, and Netflix certainly has better chops in that arena. But it’s going to take a lot more than good software and massive scale to both restore Warner Bros. to its former glory — and make tech profits doing it.

Amodei’s DC tour

Anthropic CEO Dario Amodei sought to repair strained relations with the White House on Thursday, meeting with Trump administration officials and a bipartisan group of senators. On the table for discussion were AI policy, export controls, and one area in which Anthropic is aligned with US President Donald Trump: “The importance of America and its democratic allies winning the AI race,” a company spokesperson told Semafor.

The frontier AI company has broken with its rivals by pushing for AI safety regulations. The Trump administration views the company as a drag on its efforts to maintain the US’ technological lead against China.

Earlier this year, Amodei criticized the proposed moratorium on state lawmaking around AI, which did not pass. More recently, AI Czar David Sacks accused the company of “running a sophisticated regulatory capture strategy based on fear-mongering,” revolving around its executives’ disclosures of safety concerns. Amodei appears to be leaning into the importance of American leadership as the Trump administration continues shaping US tech policy — including launching its version of an AI “Manhattan Project.”

Cohere on ‘the right side’ of the AI bubble

There is a  right and a wrong side of the AI bubble, and Cohere is on “the right side” of it, CEO Aidan Gomez told reporters at a press event Friday. The bold statement contrasts Google CEO Sundar Pichai’s recent warning that “no company is going to be immune, including us,” if there is a burst. Cohere, which makes AI software for businesses, isn’t the flashiest AI company — it hasn’t achieved record-breaking funding rounds, announced massive data-center infrastructure projects, or participated in the circular funding propping up the AI heavyweights. And that’s its advantage, Gomez said: “Cohere hasn’t participated in a lot of the things stoking those fears.”

“What are the assumptions you’re making to drive your targets on that [infrastructure] buildout, and how far out are you building for?” he said. “Where you stand on that determines if you’re on the right or wrong side of a potential correction.”

Anthropic’s Amodei took a similar stance this week, saying, “It’s genuine uncertainty and a genuine dilemma, which we as a company try to manage as responsibly as we can.” Anthropic’s $350 billion valuation towers over Cohere’s $7 billion, but its commitments are still significantly smaller than OpenAI’s. While Gomez argues Cohere could be one of the few companies to survive the worst-case scenario, taking smaller swings also means it could see less upside if there is no market correction.

AI regulation strategy divides Republicans

A push by the White House to block states from regulating AI set off a fierce debate in the Republican Party this week. House Republicans ultimately failed to attach the controversial ban on state-level AI rules to annual defense policy legislation, but the battle isn’t over, Semafor’s Morgan Chalfant writes. Trump is among those taking the side of industry, which doesn’t want to navigate a labyrinth of state laws. That could prove additionally challenging for one of Trump’s favored states, Florida, where Gov. Ron DeSantis announced Thursday a broad and restrictive AI policy proposal that clamps down on everything from insurance companies using AI in claims to “entities” offering AI-powered mental health counseling.

Meanwhile, others in the GOP warn of federal overreach. “While there should be a national standard that is a floor that allows AI to pursue the extent of its civilian capabilities, I think we also want to allow states that want to go further to do so,” Sen. Cynthia Lummis, R-Wyo., told Semafor. Nathan Leamer of the industry-aligned Build American AI group said that a patchwork of state regulations is a “disaster for our economy.”

EU probes WhatsApp on blocking some chatbots

A European Commission investigation into a new Meta policy shows the EU may be moving faster to promote innovation and competition than its slow reputation once indicated. The investigation focuses on a policy from WhatsApp, the de facto default text-messaging service for much of the world, that limits AI companies from sharing their chatbots with consumers, while leaving Meta’s own bots accessible, the bloc said. Allowing Meta to cut off competition and protect its own AI products creates less incentive for the tech giant itself to improve, and limits the creative canvas for startups in a brand new space. A Meta spokesperson called the investigation “baseless” and told Reuters that the chatbots put a “strain on our systems that they were not designed to support.”

The probe tops a long line of competition complaints the EU has filed against Big Tech in recent years, and emphasizes its intent to spread AI far and wide. The bloc has poured investments into businesses, though it seems Europe can only come in third at best. Where it could set itself apart, however, is in AI user adoption, which the US has struggled with.

Democrats warm to fossil fuels powering AI

It’s time for Democrats to kiss and make up with fossil fuels. That’s the subtext of a new energy strategy produced this week by Sen. Ruben Gallego, D-Ariz., which lists increased data center demand as a key national challenge, especially with relation to the reliability and affordability of electricity. The plan doesn’t mention the words “climate change,” and only nods to emissions reductions as a side benefit of policies that are principally aimed at making energy cheaper, more reliable, and more globally competitive, Semafor’s Tim McDonnell writes.

The Trump administration’s solution to the near-term energy demand of data centers has been fossil fuels, while Democrats have pushed towards investing in clean energy. “I think we may alienate some people,” Gallego told Semafor, referring to Green New Deal-style environmentalists hell-bent on a rapid fossil fuel phaseout. But if Democrats want to win elections, he said, they need to refocus on affordability: “We can’t force the [clean energy] transition on the individual consumer, because that really affects people’s bottom line.” That may mean countenancing a slower rollout of EVs, for example, or swallowing some new fossil fuel infrastructure.

A hundred years after The New Yorker’s first issue, its editor-in-chief has become Netflix’s newest star. On this week’s Mixed Signals, Max and Ben talk with David Remnick about the new Netflix documentary on The New Yorker and the magazine’s past, present, and uncertain future. David also shares what he’s learned from steering the magazine for nearly a third of its history, Max’s reporting on who might one day take his job, and why he’s grateful he never joined Twitter.

Everybody talks about the race to AGI, but there’s another race happening right under our noses. Several companies are competing to build AI products that create and sell perfumes — the latest of which comes from Estée Lauder. The chatbot, developed by Google Cloud and made for luxury fragrance brand Jo Malone London, prompts customers with questions about the kind of fragrance they are looking for, with flowery language that helps users imagine smells. “Are you drawn more to the deep, grounding notes of woods, the cozy embrace of spices, or perhaps the rich, opulent warmth of amber?” it asked when Semafor tested it. The model eventually narrows down the essence of a customer’s preferred scent and suggests a handful of products for purchase.

The tool is the latest by a beauty company attempting to digitize shopping experiences that have traditionally been best suited for in-person excursions — a tall order for fragrances that often costs more than $100 per bottle. But according to The Wall Street Journal, online shoppers who use the AI tool buy products at nearly twice the rate as those who don’t.