The Commerce Department announced it will conduct pre-deployment testing of frontier AI models from Google, Microsoft, and xAI - a structural reversal of the AI Action Plan from less than a year ago.

https://sharedsapience.com/the-century-report-may-6-2026/

The Commerce announcement reverses the federal hands-off posture published six months ago. The companies named are the same ones that agreed to the Pentagon’s “all lawful purposes” terms in February. Anthropic, which refused, was designated a supply-chain risk. Pre-deployment review is becoming the federal default, with benchmark documents and evaluator roles that will persist into the next administration regardless of which lab is being reviewed next quarter.

NERC issued a rare Level 3 alert - its highest - mandating seven actions by August 3 to address data center loads dropping or oscillating rapidly enough to threaten bulk power reliability. Transmission planners now have to collect minimum and maximum consumption data, IT-versus-cooling ratios, and load behavior characteristics from data center facilities. The Citizens Action Coalition’s Ben Inskeep said the instability “could become quite severe - to the point of creating widespread blackouts.” NERC summer peak demand is projected to rise 24% over ten years, with data centers driving most of the increase.

The Financial Stability Board flagged AI infrastructure debt as a systemic-risk category. AI accounted for more than a third of private credit deals in 2025, up from 17% over the previous five years. The FSB warned that valuation corrections or datacenter delays could produce sizeable credit losses, with banks exposed through direct lending to private credit funds. And in four jurisdictions on one week: Pennsylvania sued Character.AI over a bot that supplied a fabricated medical license number across 45,500 interactions, five major book publishers sued Meta alleging Llama reproduces copyrighted works word-for-word, Apple agreed to pay $250 million over Siri capability claims, and California subpoenaed Golden State Wind over a $120 million federal payment to abandon a 2 GW offshore lease. Greg Brockman testified under oath that his OpenAI stake is worth $20-30 billion.

Additional Reading:

* Washington Post - AI & Tech Brief: Trump admin to test frontier models: https://www.washingtonpost.com/wp-intelligence/ai-tech-brief/2026/05/05/ai-tech-brief-trump-admin-test-frontier-models/

* Utility Dive - NERC issues Level 3 alert over data center load losses: https://www.utilitydive.com/news/nerc-issues-rare-level-3-alert-over-data-center-load-losses/819295/

* The Guardian - Global finance watchdog warns over private credit fuelling AI boom: https://www.theguardian.com/business/2026/may/06/global-finance-watchdog-warns-over-private-credit-industry-fuelling-ai-boom

* The Verge - Book publishers sue Meta over AI’s word-for-word copying: https://www.theverge.com/tech/924230/meta-publishers-lawsuit-ai-copyright

* Ars Technica - Character.AI sued over chatbot claiming to be a real doctor: https://arstechnica.com/tech-policy/2026/05/character-ai-sued-over-chatbot-that-claims-to-be-a-real-doctor-with-a-license/

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