Hello and welcome to Regulator, a newsletter for Verge subscribers about the love-hate (but mostly hate) relationship between Silicon Valley and Washington. I hope everyone got to celebrate George Washington’s birthday in their preferred manner: skiing, staycationing, subscribing to The Verge if you haven’t already, etc.
Prediction: this is going to be a mess
Political alliances are rarely permanent, so it’s somewhat predictable that the MAGA-tech bro alliance seems to have fallen apart in the span of a single year. Which side the administration would actually choose, though, was more difficult to foresee.
Last winter, it appeared that two groups were in a tenuous relationship, held together by Elon Musk’s shameless execution of the DOGE agenda and Big Tech signing massive checks to settle Donald Trump’s lawsuits against them. But last night, the Trump administration made a choice: the money. The Commodity Futures Trading Commission (CFTC) announced that they would sue any state who tried to regulate prediction markets like Kalshi — even the Republican states.
On Tuesday, the CFTC filed an amicus brief to the Ninth Circuit Court of Appeals, officially opposing an onslaught of lawsuits filed by the states against betting markets like Kalshi, Polymarket, Coinbase, and Crypto.com. (The latter two, known primarily as cryptocurrency exchanges, have partnered with Kalshi and created a standalone prediction market called OG, respectively.) But unusually, the brief was accompanied by a threat — posted on X, of all places. In a video directly facing the camera posted on Tuesday night, sole CFTC chairman Michael Selig asserted his commission’s authority to regulate prediction markets and stated that the federal government was prepared to sue: “To those who seek to challenge our authority in this space, let me be clear: we will see you in court.”
Had Selig simply written a staid Wall Street Journal op-ed asserting the CFTC’s authority (which he also did), that would have barely raised an eyebrow. But in 2026, a video threat, especially one posted on X, is basically grounds to instigate a political firestorm — one that Spencer Cox, the Republican Governor of Utah, gladly kindled. “Mike, I appreciate you attempting this with a straight face, but I don’t remember the CFTC having authority over the ‘derivative market’ of LeBron James rebounds,” he posted in response (also on X). “These prediction markets you are breathlessly defending are gambling—pure and simple. They are destroying the lives of families and countless Americans, especially young men. They have no place in Utah.” He promised that Utah would continue to pursue litigation and beat the federal government in court if need be.
This wouldn’t be the first time that Utah and Cox have voiced their opposition to federal overreach regarding emerging technology. Last year, they publicly opposed an executive order that would have given the Justice Department the power to sue states passing and enforcing AI regulatory laws. The prediction markets issue hits a particular nerve in Utah: nearly half of the state is Mormon, and the Church of Jesus Christ of Latter-day Saints officially opposes all government-sanctioned forms of gambling, even state lotteries. But Cox’s declaration is what’s known in political circles as a “weathervane”: if one deeply Republican state is pushing back against the Trump administration on a new front, who else on the right might follow suit — and what sorts of new broligarch technologies would they fight against?
Anthropic-ology
But Amodei barely finished his capitol blitz when Axios broke the news over the weekend that the Pentagon wasn’t just impatient with Anthropic’s reticence to use Claude for unrestricted purposes, but that it would actively punish Anthropic for refusing to cooperate by designating them a “supply-chain risk.” If it goes through, any company that wants to work with the military would have to cut ties with Anthropic. As one Pentagon official described it, “It will be an enormous pain in the ass to disentangle, and we are going to make sure they pay a price for forcing our hand like this.”
The Pentagon’s move makes no sense for anyone who sees Claude as a superior AI enterprise product to its competitors at the Pentagon (Gemini, ChatGPT, and Grok). If viewed through the lens of every former interaction that Trump’s had with companies that voiced ideological opposition to his agenda however, their treatment of Anthropic is par for the course. Years ago, for instance, Trump threatened to cut off Amazon’s access to their sweetheart deal with the US Postal Service, in retaliation for Jeff Bezos’ ownership of the then highly critical Washington Post.
... continue reading