Good morning. President Trump postponed the signing of an executive order that would have given the government more oversight over the artificial-intelligence industry, saying he didn’t want to take any action that would slow down the U.S. in the AI race.

• Cold feet: Hours before a scheduled signing event Thursday that was set to include industry executives, Trump told reporters in the Oval Office that the order would have asked AI companies to preview models with the federal government. Such a move would set back the U.S. in its competition with China, which AI analysts say the U.S. is winning, he said.
   
• Divided house: The move is the latest example of the White House being divided on AI policy. Administration officials have been trying to bolster cybersecurity following the release of powerful models including Anthropic’s Mythos, but some AI advisers fear the steps could slow down the development of new AI tools, creating two camps within the administration that are quarreling over the tech agenda.
   
• Possible regulatory directions: A senior administration official recently suggested that the White House was considering potential AI rules comparable to the system used by the Food and Drug Administration to approve medicines. The administration is considering more oversight after Mythos worried top White House officials and business leaders who fear the models are so good at identifying software vulnerabilities that they are capable of cyberattacks. OpenAI is previewing a similar model to customers and, like Anthropic, is restricting access with the government’s input.

The Morning Risk Report won’t be published Monday in observance of Memorial Day in the U.S. We will be back Tuesday.

Social-media companies settle youth-harm case ahead of wave of trials.

Meta Platforms reached a settlement with a Kentucky school district over accusations that social-media companies intentionally designed their platforms to addict young people, becoming the last major platform to resolve the case and avert a coming trial.

The settlement announced Thursday spares the companies from a June jury trial that was poised to be the first among more than 1,200 lawsuits brought by school districts alleging student mental-health harms caused by Meta, TikTok, Snap and Alphabet’s YouTube. The cases are consolidated in federal court in Oakland, Calif., but will be tried individually.

Lawmakers criticize banks over China underwriting.

An influential House committee criticized JPMorgan Chase, Bank of America and Morgan Stanley for their work to raise capital for a Chinese battery company with alleged ties to China’s military, calling for tougher sanctions and other regulations.

The banks’ involvement in raising capital for Contemporary Amperex Technology, a major battery maker known as CATL, didn’t violate U.S. law but shows compliance cultures geared toward dealmaking, a House Select Committee on China report released Thursday said. The report follows a probe that began last year.

• Exxon Mobil is striking back at two proxy advisory firms opposed to the company’s plan to move its legal home to Texas from New Jersey, its latest clash over shareholder governance issues.
   
• The Supreme Court on Thursday made it easier for American companies to get financial compensation if they owned property in Cuba that was confiscated by the Communist regime.
   
• The Commodity Futures Trading Commission agreed to cooperate with the National Hockey League in the oversight of prediction markets, as the U.S. derivatives regulator looks to extend its regulation of the fast-growing sector, Risk Journal reports (free link).

U.S. clears scrap dealer to buy ships sanctioned for Iran activity.

The Trump administration granted a license to the world’s largest cash buyer of ships for scrap to purchase four vessels under sanctions for carrying Iranian cargo.

The decision potentially paves the way for owners of other sanctioned ships to exit the so-called shadow fleet that carries illicit goods for countries such as Iran and Russia. It comes as the administration cracks down on Iran-linked vessels. Just this week, the U.S. seized an Iran-linked tanker in the Indian Ocean.

California governor signs order on AI aimed at helping workers.

California Gov. Gavin Newsom signed an executive order Thursday to study how artificial intelligence affects employment and explore ways to help displaced workers.

The order from Newsom, a Democrat seen as a potential 2028 presidential candidate, follows signs of growing public discontent over the rapid rise of AI, the proliferation of massive data centers around the U.S. and anxiety that the technology could widely displace white-collar workers.

• Mortgage rates in the U.S. this week rose to the highest level since August, more bad news for home shoppers during what is usually the busiest time of the year for home sales.
   
• The U.K. government’s borrowings in April were higher than a year earlier, a sign that progress in narrowing its budget deficit might slow as the conflict in the Middle East pushes inflation higher and growth lower.
   
• Bolivian President Rodrigo Paz’s hold on the country is uncertain after weeks of protests have turned violent with clashes between Bolivian forces and demonstrators.

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• The Trump administration is awarding $2 billion in grants to nine quantum-computing companies in deals that include U.S. government equity stakes, the Commerce Department said.
   
• Senate Republicans broke with President Trump over his administration’s plan to create a $1.8 billion settlement fund to pay people who claim political persecution.
   
• The Democratic National Committee on Thursday released an incomplete and critically annotated report detailing the party’s mistakes in the 2024 presidential election, reversing course on plans to bury the document after pressure from activists and elected officials to share it.
   
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