Founded by speedboat racer Mal Crease, Kraken\u2014not to be confused with the Wyoming crypto exchange of the same name\u2014makes uncrewed subsurface vessels and the like for military and security purposes. It\u2019s partnered with Anduril in the U.S. and as of this week, it\u2019s worth a billion dollars<\/a>.<\/p>\n \u201cLook at me. Look at me,\u201d the AI warned. \u201cI\u2019m the captain now<\/a>.\u201d\u00a0<\/p>\n More tech news below. Have a wonderful weekend. \u2014Andrew Nusca<\/p>\n Want to send thoughts or suggestions to\u00a0Fortune Tech?\u00a0Drop a line\u00a0here<\/a>.<\/p>\n U.S. AI policy lacks transparency, Microsoft prez says Nathan Howard\/Bloomberg\/Getty Images<\/p>\n In a new interview with Fortune<\/a>, Microsoft President Brad Smith says the Trump administration\u2019s current approach to AI lacks transparency and does not provide the clear rules companies need.<\/p>\n \u201cEveryone is reluctant to say there should be regulation, but what we really have right now is regulation without transparent or complete rules,\u201d he said on the sidelines of the AI for Good Global Summit in Geneva, Switzerland. \u201cWithout rules, businesses can\u2019t plan.\u201d\u00a0<\/p>\n The Trump administration\u2019s recent decisions to restrict access to two of the industry\u2019s most advanced AI models have left even the labs building them guessing at what the government\u2019s AI policy is.<\/p>\n Last month, the Commerce Department invoked export-control law to force Anthropic to pull its Fable 5 and Mythos 5 models from the market worldwide, citing a cybersecurity risk. Weeks later, officials pressed OpenAI to hold back the public rollout of its new GPT-5.6 model family, limiting early access to government-vetted partners. (Both restrictions have since eased.)<\/p>\n Smith said the administration is now effectively regulating frontier AI without the tools it needs to do so.<\/p>\n \u201cThe U.S. government got information that led it to conclude that there was an urgent cybersecurity risk, and when the government gets that information, I think it\u2019s right to act,\u201d Smith said. \u201cBut, what the government found was that it only had one regulatory tool it could use: an export control tool.\u201d<\/p>\n Legal experts have also noted that the export controls Washington reached for were never designed for widely accessible AI models delivered over an API, raising doubts about whether the government\u2019s recent decision could have survived a legal challenge.<\/p>\n \u201cUltimately, common sense says don\u2019t be heavy-handed, but have enough of a touch that you can do what needs to be done,\u201d Smith said. \u201cI hope we can move the conversation in that direction.\u201d \u2014Beatrice Nolan<\/p>\n European Parliament advances contentious CSAM scanning bill<\/p>\n Few disagree with the need to eradicate CSAM\u2014child sexual abuse material\u2014on the Internet.<\/p>\n But how one goes about it? That\u2019s more complicated.<\/p>\n In March, the European Parliament rejected a bill<\/a> (nicknamed \u201cChat Control\u201d) giving tech companies the legal right to scan for CSAM on concerns that it would allow mass surveillance of users\u2019 communications, including those of innocent citizens.<\/p>\n Yesterday, Parliament changed its mind, voting to send the bill<\/a> to EU member countries for approval\u2014with an amendment exempting end-to-end encrypted services such as WhatsApp and Signal.<\/p>\n Support was hardly unanimous. The center-right European People’s Party was the most supportive of the bill; liberal and social-democrat groups were more evenly split. Most other groups were against it.<\/p>\n If the European Council fails to reach a consensus, the bill would go to a rarely used \u201cconciliation\u201d procedure that gives a temporary joint committee six weeks to hammer out a mutually acceptable version.\u00a0<\/p>\n In the meantime, tech companies remain in limbo. Politico notes<\/a> that they\u2019re scanning for the stuff despite the legal complications of doing so, but whether the revived bill addresses any of their collective concerns<\/a>\u2014the need for a narrower scope, voluntary scanning, etc.\u2014remains to be seen. \u2014AN<\/p>\n Fed chair names Andreessen, Sharma to tech task force<\/p>\n Federal Reserve chair Kevin Warsh this week established<\/a> five task forces to advise its work on monetary policy.\u00a0<\/p>\n Appointed to them are a few familiar faces from techland.<\/p>\n The five groups cover Fed communication, its balance sheet, data, inflation, and productivity and jobs. They are co-led by external advisers\u2014\u201caccomplished economists, business leaders, and former central bank practitioners\u201d with \u201cdeep expertise in their fields\u201d\u2014and tasked with giving candid, evidence-based feedback.<\/p>\n The task force focused on data\u2014to \u201cimprove the quality and timeliness of real economic signals that inform the Federal Reserve’s policy judgments,\u201d per the Fed\u2014features former Walmart CEO Doug McMillon, who turned the retailer into an omnichannel juggernaut, alongside two economists.<\/p>\n But it\u2019s the group focused on productivity\u2014to \u201cassess the economic impact of new general-purpose technologies, including artificial intelligence, to inform the Federal Reserve’s policy judgments\u201d\u2014that stands out the most.<\/p>\n It features prominent investor Marc Andreessen (who sits on the board of Meta and backs a number of AI-driven firms including Applied Intuition and Samsara) and Xbox CEO Asha Sharma (who was previously the president of Microsoft’s CoreAI group), complemented by Stanford economist Charles I. Jones, who is currently researching AI\u2019s economic impact at the Anthropic Institute, the San Francisco AI company\u2019s in-house think tank.<\/p>\n We don\u2019t yet know what to expect from the new Fed chair. President Trump nominated Warsh, a former Fed governor and the son-in-law of prominent Republican donor Ronald Lauder, on the belief that he would cut interest rates to boost economic growth. That hasn\u2019t yet happened: the Fed voted in June to hold the current rate. \u2014AN<\/p>\n More tech<\/p>\n \u2014Meta releases Muse Spark 1.1<\/a>, a \u201csignificant upgrade\u201d to its multimodal AI model for agentic tasks.<\/p>\n \u2014Sam Altman says OpenAI made \u201cmany changes\u201d<\/a> to its new AI models after talks with the U.S. government.<\/p>\n \u2014Google will automatically add a disclosure<\/a> to all ads made with its AI tools.<\/p>\n \u2014Interpol and others arrest 5,811 suspects<\/a> and seize $293 million in a global operation combating social engineering scams.<\/p>\n \u2014U.S. venture funding in the first half of 2026<\/a> is already 30% higher than full-year 2025.<\/p>\n![\"Brad](\"https:\/\/www.europesays.com\/ai\/wp-content\/uploads\/2026\/07\/GettyImages-2213401544.jpg\"\/)
<\/a>Brad Smith, president of Microsoft, during a Senate hearing in Washington, D.C. on May 8, 2025.\u00a0<\/p>\n