Hey friends - if you’re feeling overwhelmed by the news cycle lately, don’t worry. I’m essentially a professional news reader, using tech to consume news at an accelerated rate, and even I feel like I can’t keep up right now. And whether it’s AI advancements, political scandals, trade announcements, geopolitical conflict, protests, policing, or even just the friggin weather - every news alert feels like it’s a warning of the end of civilization.

But I resolved this year to work at finding positive perspectives. And the economy, at least, beneath the scary headlines, seems to be trending in a positive direction. Albeit very slowly and delicately, with plenty of things that could go wrong.

🌎 The Big Picture

The main thing people are freaking out about this week is AI. That’s not new, though, so if someone’s screaming market collapse, push the pause button and take a breath. Even the leading minds in AI can’t forecast what’s going to happen, and the people building the most advanced AI platforms are unleashing breakthroughs faster than they ever expected.

Change is scary. And the main thing happening right now is that this AI tech evolution, to anyone that’s paying close attention, is changing the way we see the world, our operating models, and ways of making money far more quickly than anyone can grasp.

The AI boom has been the main driving force behind the growth of the stock market over the past year or more, and truly much of the growth of the economy. Throughout the rally, investors have tried to wrap their minds around what’s happened, going through waves back and forth between “this is going to change everything and make everyone more money” to “this is a waste of money that won’t turn into value fast enough” to now, this week, more of a “this is too much money going into tech that will change everything quickly but not necessarily drive great profits for everyone.”

Google’s release of Gemini 3 at the end of the year, and then Anthropic’s following updates to Claude Code and Claude Cowork, started shifting investors from thinking that AI is a lift-all-boats kind of tech to recognizing that there will be winners and losers. Google stock has been crushing it because the main determinant of who can win will be who has enough cash flow to burn to maintain this pace of innovation. Google has one of the best cash machines in the world.

This week, investors really got nervous that AI isn’t just going to create winners, but that it could be an industry killer. The latest releases of AI agent tools had a shock factor at the level of ChatGPT’s original release. Fully autonomous agents built their own social media platform with hundreds of thousands of independently interacting agents. They built software in minutes, created religions, and many other scary and fun and exciting breakthrough examples that can easily be called over-hyped or exaggerated, but that showed everyone that the next wave of autonomous operations is here. Then, Anthropic released new tools that put its groundbreaking AI agents into legal and finance tools, showing how these things aren’t just fun side project tools, but that they could make white-collar jobs, from software creation to legal reviews to financial analysis, completely obsolete - not in 10 years. Now.

In combination with that, the biggest tech firms announce the most aggressive plans to invest in more AI this year - hundreds of billions of dollars pouring into this tech. Some of these companies have the money to do it sustainably, but some of them will be burning most of their cash flow.

On top of that, the latest jobs numbers pointed to a spike in layoffs and stalled hiring, adding to the narrative that “Big tech is burning a potentially unsustainable amount of cash for this new tech that may already be stalling hiring and spurring layoffs and could kill entire industries.”

So, obviously, the tech story is a little too aggressive. AI will accelerate and complement existing tech. The drama of the storyline has been emphasized by the market selloff this week, but the market was already near record highs, priced to perfection with massive optimism. This selloff could have happened this week without any of this news.

And the jobs market headlines are a little more about clickbait. Everyone knows hiring has stalled. There have been barely any net new jobs added in the last 6-12 months. There are plenty of arguments to make about why that’s happening, from general policy uncertainty, to lack of available talent, growing costs, and weather before you even get to AI. Initial unemployment claims did rise last week, but they have been historically low. And corporate layoff announcements were really high in January, but that was mainly driven by tens of thousands of job cut warnings from three companies: Amazon, UPS, and Dow. That likely says more about consolidation and the corporate policy shift from employee loyalty to perpetual prioritization of short-term profit maximization regardless of business health. Of course, job data is a backward-looking number, so there are warning signs in these reports, but not the ones implied by the headlines right now.

So what does all of this mean? Ride it out. The economy is doing pretty well, with many signs pointing to marginal improvements in costs, hiring, and business activity over the course of the year ahead.

🏭 The Companies Everyone’s Talking About

❔ The Big Question of the Week

Scoops app users: We have taken the beta app offline for a short period for some major updates. Can’t wait to show you all what we’ve been working on! Reach out if you have any questions.

We’re going to switch up the content in this spotlight for a bit to make sure you all have the info you need to master your week.