Microsoft is offering voluntary buyouts to 7% of its US workforce for the first time in the company’s history, as the tech giant seeks to expand its investment in AI.

The buyouts are primarily targeted at long-tenured employees and will affect roughly 8,000 to 9,000 workers. It’s part of a broader effort to restructure the company around AI, as Microsoft increasingly ramps up spending amid competition in the AI space.

However, it’s not just Microsoft that’s prioritizing AI over employees:

As of late April, over 100,000 tech workers have been laid off, with a pace that could potentially exceed 330,000 jobs cut by the end of the year. See the latest data tracking layoffs in the tech industry here.

Why not find money for AI in other ways? As tech giants are pouring hundreds of billions into AI infrastructure like data centers, chips, and cloud computing systems, executives argue that AI tools are improving efficiency and allowing fewer workers to do the same (or more) work, which has vastly accelerated the shift away from traditional roles and resulted in mass headcount reductions.

We’re tracking this issue live on NextGen+. Click the button below to see its status, momentum, and other key developments.

A high-stakes legal showdown between Elon Musk and OpenAI CEO Sam Altman began yesterday, with opening statements expected later today. The long-awaited trial could reshape the AI landscape as we know it.

The trial is the climax of years of back and forth between the two tech titans. Musk originally cofounded OpenAI alongside Altman in 2015, intending to build AI that benefits humanity and is free from corporate influence (see their original mission statement).

Now, Musk is accusing Altman and several others (including Microsoft) of breaking their initial vow after the company transitioned to a for-profit model in October of last year:

Elon Musk is seeking $134 billion in damages (which he says he would donate to OpenAI’s nonprofit arm), along with the removal of Sam Altman and OpenAI President Greg Brockman, and a rollback of the company’s for-profit restructuring.

Some important context: In 2018, Musk left OpenAI after internal disagreements over the company’s shift toward a more commercial model and concerns about competing with Tesla on AI development. The next year, Altman became CEO, and then in 2023, Musk formed xAI.

Tensions are expected to run high, in part because Musk, Altman, Brockman, Microsoft CEO Satya Nadella, and several OpenAI insiders are set to testify. Court filings have already hinted at additional drama:

Looking forward: If Musk wins, OpenAI could be stunted ahead of its IPO race with xAI, benefiting rivals like Google, Anthropic, and China’s DeepSeek.

Late last week, shareholders of Warner Bros. Discovery approved Paramount Skydance's massive $111 billion takeover, marking a major step forward in becoming the largest media merger in history.

However, the deal is likely to face intense antitrust scrutiny, as it would combine two of Hollywood’s five remaining legacy studios.

The gargantuan merger wasn’t even originally going to involve Paramount… until it did. Netflix originally struck a $72 billion deal to secure Warner’s film and streaming catalog last year, but then:

So, what does Paramount get from the massive deal? The entertainment behemoth will gain access to Warner’s entire movie studio and most valuable IP, including the entire Harry Potter franchise, DC superheroes, and HBO’s premium series (like Game of Thrones, Succession, etc.). Paramount will also get news and TV networks, like CNN, Discovery, Cartoon Network, and more. See the full list here.

Despite shareholder approval, the merger will still face huge regulatory hurdles, not just in the US, but around the world. But why the scruity? Critics warn the deal could lead to:

Democratic lawmakers and Hollywood creatives echoed those concerns, with more than 4,600 industry professionals signing an open letter opposing the merger (read it here).

What does Paramount have to say? Addressing the rising worries, David Ellison, CEO of Paramount and son of Larry Ellison, said last week that the studios will operate separately and that the company plans to release 30 films annually across Paramount and Warner.

The stock price of Walmart $WMT ( ▲ 0.67% ) has more than doubled over the past two years. And that might be a bad sign for the rest of us.

Recently, a Business Insider article argued that when Walmart outperforms companies that make luxury goods, it’s a sure sign that the US is heading into a recession. After reading it, we might be tempted to sell everything, stockpile soup and crackers, and wait out the coming economic storm.

However, it leaves out important context. There are three things we need to know before we can have confidence in the Walmart Indicator:

It’s that last one that tends to trip people up.

Fortunately, we have the tools to deal with it. One of our new Thinking Tools is the Belief Updater, a calculator that provides a sound way to update our thinking in light of new information.

We can plug in what we know about the indicator's history and see how likely it is that we’re on the cusp of a recession.

After using the sliders to adjust what we know (or what we think we know), the likelihood of a recession increased only modestly, to about 28%. Not the sure thing the article made it sound like.

If you’re interested in markets, you may want to check out Capital Context. It’s a free newsletter we’re publishing occasionally that is more directed at investors. We go a bit more in-depth about the Walmart Indicator here.

JetBlue is facing a proposed class-action lawsuit after the airline posted a tweet (now an X post) that seemingly admitted to using customers’ personal data to influence ticket prices.

Who knows, but customers are thanking the (probably now fired) social media manager. The lawsuit was triggered by a viral social media exchange where a customer complained about a sudden ticket price increase:

While the response was swiftly deleted… JetBlue denied that it uses cached data or personal data to set ticket prices and maintained that they are purely based on demand and availability.

Other companies have faced similar criticism: Delta got heat last year for its AI-driven pricing plans, and Uber has been accused of hiking prices when your phone is about to die, something the company has denied.

Meta is rolling out new internal software that will capture employees’ mouse movements, clicks, keystrokes, and occasional screen snapshots on work devices, which will then be used to train the company’s AI models.

The initiative is designed to help models better understand how humans interact with computers in real-world settings, so they can be better at office tasks. Understandably, employees are not thrilled:

Meta says they should’ve seen it coming: Earlier in the year, Bosworth reportedly told employees that the company would start increasing its data collection among workers.

Not to worry, it’s all in the name of productivity: The new software is designed to help develop AI “agents” that can autonomously complete everyday digital tasks, such as navigating menus, using shortcuts, or interacting with software interfaces. Execs say once they’re trained, it should automate workflows and increase efficiency across the company.

> Neanderthals may have been capable of complex language, suggesting that speech developed earlier than previously thought, and they were more cognitively similar to modern humans.

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> Sloth World, a planned animal attraction in Orlando, is under investigation after 31 sloths died before it even opened. Investigators found the animals were kept in cold, poorly equipped conditions without proper care.

> Sony’s AI research team developed a robot that can actually challenge professional players, marking the first time in history a robot has hit an expert level in a real, physical sport. Watch it play here.