Good morning. The construction industry is a prime example of how AI is a so-called horizontal technology, embedded in everything, everywhere, all at once. That ubiquitous quality makes it comparable to electricity, gas or water, in that it is an essential resource with endless uses.

The Wall Street Journal Leadership Institute’s Belle Lin explains the stunning range of applications for AI in the sector.

• Procore Technologies unveiled a slew of AI agents last year that aim to help with daily construction site to-do’s, including a log agent, a foreman’s personal assistant and an action item generator for back-office tasks.

The company’s Assist tool taps large-language models to summarize jobsite information and other documents, so project managers can find answers hidden in their data, such as the fire-rating requirements for a specific room or wall. Other Procore tools use AI to extract data from project documents.

• Trimble and Autodesk and smaller startups are using AI to tackle construction scheduling and design-based tasks.
• AI Clearing and OpenSpace use computer vision to track the progress of construction sites based on aerial and other real-world images. Skillit is using AI and AI agents to match construction workers with open positions.

Over time, Belle writes, AI could help the industry cope with its backlog of unfilled jobs.

AI is driving changes in the labor market at this moment, sometimes for better and sometimes for worse. Amazon announced an additional 16,000 corporate employee layoffs, following 14,000 cuts in October, totaling 30,000 or 10% of its corporate workforce.  Amazon CEO has portrayed the cuts as an attempt to reinvigorate the company’s culture rather than to realize cost savings and warned that AI would lead to the company having a smaller workforce in the future, the WSJ reports.

Amazon isn’t alone. Companies, perhaps looking to the tech sector as a model, see that it’s possible to increase revenue per employee, and AI is a factor in that effort. More below.

Is AI everywhere in your company? Is it anywhere? We would love to hear from you.

Here come the Neolabs. Combine youth, FOMO, and venture-capitalists betting that the current crop of models have hit their limits and you get neolabs, startups that give priority to long-term AI research and model development over immediate profits.

No product? No problem. The AI boom has pushed investors toward funding research itself, the WSJ's Kate Clark reports. This month, Flapping Airplanes raised $180 million at a valuation of $1.5 billion. Humans& in January raised $480 million at a $4.48 billion valuation. Reflection AI raised $2 billion in October at an $8 billion valuation. Periodic Labs, which aims to develop AI to automate scientific research, launched with $300 million in funding in September.

Job cuts everywhere. AI isn’t always cited outright as the cause, but its rapid adoption is clearly influencing how companies reassess productivity and workforce structure.

Take ASML. The Dutch chip-equipment giant on Thursday reported a surge in orders for its most advanced machines that beat expectations. Yet it still moved ahead with plans to eliminate about 1,700 jobs, or roughly 4% of its workforce, mostly in IT and technical roles, Bloomberg reports. CFO Roger Dassen framed the cuts as a response to organizational sprawl, saying the company had grown too complex: “We want to make sure engineers can be engineers again,” he told reporters.

UPS this week also reported higher quarterly profit and guided for higher revenue. Yet it too announced cuts, an additional 30,000 operational positions this year, as it continues with its restructuring efforts.

Pinterest drew a more explicit connection to AI. In a recent securities filing, the company said it plans to cut just under 15% of its staff as it shifts investment toward “AI-focused roles and teams that drive AI adoption and execution” and expands its portfolio of AI-powered products and capabilities. The social-media platform, which had 4,666 full-time employees as of Dec. 31, 2024, said it expects to complete the restructuring by the end of its third quarter, on Sept. 30.

Europe’s tech pivot. France says it plans to ban Zoom, Microsoft Teams and Google Meet from government use, replacing the American tools with a platform designed by its Interministerial Digital Authority, Politico reports. The move comes amid rising concern across the bloc about its reliance on U.S. services. The European Parliament on Thursday passed a “technological sovereignty” resolution that supports using public procurement criteria to favor European products where possible, the WSJ earlier reported.

It's not going to be easy. See below.

E-commerce giant adjusts brick and mortar strategy. Amazon plans to close all of its Amazon Go and Amazon Fresh physical stores. For years Amazon used the stores as test labs to transform the in-person experience with new technologies including Just Walk Out technology, which let customers check out electronically without waiting in line. Amazon is also discontinuing its palm recognition ID system for stores later this year, GeekWire reports.

The company said some of its shuttered Amazon-branded bricks-and-mortar stores would be converted into Whole Foods stores, which have emerged as Amazon's new test lab. Today, robots pick up items from storerooms to deliver to customers looking to shop beyond the aisles, the Journal reports.

Amazon is not done with new brick and mortar formats. The company won approval last week to open its largest-ever store in Orland Park, Ill., where it plans to sell groceries, general merchandise and prepared foods.

In Mysterious Pattern, Math and Nature Converge (Quanta Magazine)

The Viral AI Bot That Sent Cloudflare Stock to the Moon (Barron’s)

Redditors Are Mounting a Resistance Against ICE (Wired)

Trump’s acting cyber chief uploaded sensitive files into a public version of ChatGPT (Politico)

Anthropic everywhere Chief Executive Dario Amodei is on the circuit (again), this time promoting a 20,000 word essay diving into the potential dangers of AI, including job loss. Meanwhile more and more engineers are getting “Claude-pilled,” swayed by the “shocking capability” of Anthropic’s Claude AI. Now the company is set to raise about $20 billion, which would value the OpenAI rival at $350 billion, according to sources. The FT reports that the fund raise is twice the original $10 billion because of rising investor demand. 

Social media on trial. TikTok settled a lawsuit that alleges social-media platforms designed products meant to addict young people, avoiding a trial in California, according to attorneys for a young woman suing several tech giants. Terms of the settlement were confidential. The Los Angeles trial will move forward with Meta Platforms and YouTube, with opening statements expected next week, WSJ reports.

$30 billion. Japanese conglomerate SoftBank is in talks to invest up to $30 billion more in OpenAI, adding to its already large stake in the startup, WSJ reports. The ChatGPT maker is seeking up to $100 billion in new capital from investors, a round that could value it at as much as $830 billion.

18 billion. Microsoft will need 18 billion liters of water for its data centers in 2030, the company tells the New York Times, up from 10.4 liters in 2024. The forecast does not include data center deals signed last year by the company. 

Two federal immigration officials fired shots at Alex Pretti in a fatal encounter in Minneapolis last weekend, the Department of Homeland Security said in a preliminary report sent to Congress Tuesday. (WSJ)

The Census Bureau’s first snapshot of population data for 2025 confirms some big trends, like a major shift in immigration as the U.S. cracks down on border crossings and steps up deportations. (WSJ)

Saudi Arabia on Tuesday ruled out the use of its airspace and territory for a potential U.S. attack on Iran, complicating the Trump administration’s options in response to Tehran’s violent crackdown against Iranian protesters. (WSJ)

Join us tomorrow for a deep dive into the challenges that CFOs and other top executives are seeking to overcome, including the impact of tariffs and geopolitical conflicts on corporate finance and private equity.

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