The AI prodigy who won over Silicon Valley—and lost $45 billion

1. FROM MY DESK

Good morning. We lead today with new reporting on the unraveling of Situational Awareness, detailing how its wunderkind founder Leopold Aschenbrenner forged close ties with tech’s top players even as he rankled some of his own bosses.

Elsewhere in tech, Nvidia reports earnings after the close—a critical bellwether for the AI boom’s staying power. Follow our live markets coverage here.

We’re also following the escalating U.S.-Canada trade war. The neighbors have sparred before, but as our Washington coverage chief Damian Paletta notes, “Canada is punching and counterpunching with a swagger that I’ve never seen from them before.” The standoff, he adds, could carry major political consequences in states like Maine and Michigan if it isn’t resolved soon.

This is an edition of The 10-Point newsletter, a guided tour of the best coverage in The Wall Street Journal. If you’re not subscribed, here. If you’re reading this in your inbox, tap the headline above for online and audio versions of this newsletter.

2. TODAY’S HEADLINES

Sen. Darline Graham narrowly won South Carolina’s Republican Senate primary runoff.Dolly Parton, who died Tuesday at the age of 80, was “at least temporarily,” in her words, “a full-fledged movie star,” according to her autobiography. We look back at her Hollywood years.President Trump has submitted a landmark nuclear accord with Saudi Arabia to Congress for review.Bill Gates issued a stark warning about AI, saying companies were barreling ahead with the technology with no plan for the upheaval it would cause.The Iranian Shahed drone transformed war—with China’s help. Here’s how.

3. LIVE FROM THE MARKETS

📈 Follow our live financial coverage all day.

Wall Street legend Stanley Druckenmiller said he used AI to help draft an op-ed criticizing the Treasury department’s bond market intervention, but the ideas were his own.Federal Reserve Chairman Kevin Warsh is heading to Jackson Hole without a clear stance on inflation.Mark Walter’s troubles are disrupting the insurance world’s hottest trade.

4. READ IT HERE FIRST

Insider connections turned a precocious teen into the fallen ‘Nostradamus of AI.’

Two years ago, Leopold Aschenbrenner made bold predictions about the impending arrival of superintelligence in a 165-page manifesto called “Situational Awareness.” He quickly turned that interest into a hedge fund that managed $45 billion in assets, backed by investors who believed in his prophecy. He was barely of drinking age and had no prior investing experience, but his cozy relationships inside the industry fed into his reputation as an oracle of AI. When the Situational Awareness fund unraveled last month, veterans on Wall Street saw it as the latest cautionary tale of hubris. But in Silicon Valley, Aschenbrenner’s stature has grown among the elite group that shares his zealotry for an AI-dominated future, report Berber Jin, Ben Cohen and Anissa Gardizy.

5. REPORTER’S NOTEBOOK

Reporter Kris Maher: I’ve been tracking the opposition to Flock Safety among people who think the company is ushering in a surveillance state for the past few months. But it wasn’t until June, when I reported on how the technology is stirring fights in cities around the U.S., that I learned more about the reach and tactics of opposition groups like DeFlock.

One of the first things I did was search DeFlock’s crowdsourced map for cameras near my home in Pittsburgh. I found several. I also spoke with Flock’s CEO about his vision and why he thinks people react so strongly to the company.

When I learned there would be protests outside Flock’s conference with law-enforcement agencies in Atlanta, I went to cover the demonstrations. Media weren’t permitted into the event, but I met one critic, Benn Jordan, and watched as he attempted to eavesdrop on the proceedings from a van loaded with electronics.

The sheer diversity of the opposition took me by surprise. I spoke with college students, IT professionals, democratic socialists and even a retired art teacher at the protests. Many people told me they feel Flock’s technology has been foisted on them without their consent, in a way that mirrors anxiety over data centers and AI.

I see those same concerns reflected in readers’ comments on the article. Questions that come up over and over are: How many crimes are actually solved using this technology, and how common are cases of misuse? These questions—and more—are reporting lines we’re following.

6. SEE THE STORY

Thousands are flocking to Maine to see the elusive puffin.

Atlantic puffins are the harlequins of the sea, colorful as a rainforest parrot—black backs, white bellies, quad-colored beaks and intensely orange feet and legs. Add orange-rimmed eyes with jet-black pupils set against white cheeks, a dashing black under-eye line and a radiant round orange bill hinge, and the puffin looks like something invented by a talented circus makeup artist. The birds draw thousands of visitors to coastal Maine each summer. The challenge of spotting them adds to their allure.

7. HAPPENING TODAY

Economic data: The Commerce Department releases the July PCE index, the Federal Reserve’s preferred inflation gauge.Earnings: Nvidia, Salesforce, HP, CrowdStrike Holdings, Kohls, J.M. Smucker📰 Today’s paper

8. THE NUMBER

The latest price tag for California’s high-speed rail line connecting San Francisco and Los Angeles—nearly four times its original estimated cost of $33 billion. Approved by voters 18 years ago with a 2020 completion target, the project has been bogged down by legal battles, cost overruns and political fights. Crews have yet to lay a single track and the project isn’t expected to be fully operational until 2040.

9. AND FINALLY…

Olivia Dean is pop’s breakout star—and she almost didn’t release her biggest hit.

Grammy-winning artist Olivia Dean is packing arenas and smashing records. Yet she almost didn’t release her signature billion-stream hit, “Man I Need.” “I’m somebody that puts a lot of pressure on myself,” Dean told WSJ. Magazine. “I have crippling perfectionism.” That perfectionism almost snuffed out the song that became her calling card. Ahead of her U.S. arena tour, Dean opened up about her meteoric rise, music-making process and more.

10. BEYOND THE NEWSROOM

Opinion: Steel and aluminum tariffs are a case study in how a narrow special interest calls the tune for the rest of the American economy.WSJ | Buy Side: If you’re facing a college-funding gap, private student loans might help you pay for school.

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Today’s newsletter was curated and edited by Morgan Smith and Bryony Watson in collaboration with Editor in Chief Emma Tucker. Got a tip for us? Here’s how to submit.