WSJ What’s News – PM Edition

Episode: Pentagon Gives Anthropic Ultimatum in AI Use Clash

Date: February 24, 2026
Host: Alex Osola
Notable Guests: Robbie Whelan (WSJ, Semiconductors), Rebecca Pichotto (WSJ, Residential Real Estate)

Episode Overview

This episode centers on major clashes between the Pentagon and AI firm Anthropic over military use of artificial intelligence, as well as significant developments in the AI chip sector with a $100 billion mega-deal between Meta and AMD. The show also addresses ongoing challenges in U.S. housing affordability and new legislative approaches to increasing supply and access, alongside a report on potential new banking requirements tied to immigration policy.

Key Discussion Points & Insights

1. Pentagon’s Ultimatum to Anthropic on AI Use

• [01:03] Defense Secretary Pete Hegseth met with Anthropic CEO Dario Amodei, delivering an ultimatum: Anthropic must comply by Friday with Pentagon demands on its AI models or risk contract cancellation.
• The Pentagon wants access to Anthropic’s Claude and other AI tools for “all lawful use cases, including domestic surveillance and autonomous lethal activities”—a scope Anthropic resists.
• If Anthropic refuses, the Pentagon threatens to designate the company as a “supply chain risk”—a designation usually reserved for foreign adversary-linked companies—or invoke the Defense Production Act to force compliance.
  • Notable Insight: “Either move would be nearly unprecedented.” (Alex Osola, [01:21])
• The standoff highlights growing tensions as AI becomes critical to national security, with the U.S. military pushing boundaries on usage.

2. Meta and AMD’s $100 Billion AI Chip Deal

• [02:20] Meta agrees to purchase 6 gigawatts of AI computing power from AMD; the deal could give Meta warrants for up to 10% of AMD stock.
  • Notable Quote: “It might feel sort of circular because it is, but we're still in the stage of the AI boom right now where every one of these big deals is such a big headline. And it's so exciting for investors that investors just bid up the stocks of the companies that are doing them.” (Robbie Whelan, [00:44] & [02:41])
• AMD stock surged 8.8% on the news, while Meta edged up 0.3%.
• Deal Structure:
  • AMD offers Meta warrants on 160 million shares at $0.01/share.
  • Meta gets cheap stock; AMD secures a major customer.
• Concerns: Robbie notes potential “cognitive dissonance”—if AI chip demand is truly insatiable, why “pay” customers to buy?
  • Quote: “If truly there is insatiable demand for AI computing, one would think you wouldn't need to kind of pay these customers… But a lot of the companies in this space are still, for better or for worse, startups.” (Robbie Whelan, [04:00])
• Market Impact: These deals excite investors, pushing up chip company valuations, but contribute to worries about speculative excess—“maybe we're in a bubble?” (Robbie Whelan, [04:44])
• Scale Context:
  • "Six gigawatts is a ton of computing power... many, many football fields worth of data centers." (Robbie Whelan, [05:05])
  • This represents a large chunk—up to five years—of Meta’s AI infrastructure plans.

3. Market and Corporate Headlines

• [05:42] U.S. stocks rallied, led by Nasdaq (+1%), amid AI momentum and the Meta-AMD news.
• Novo Nordisk to slash U.S. prices for popular drugs (Wegovy, Ozempic) by up to 50%, escalating a price war with Eli Lilly. Despite the move being positioned for consumer access, Novo’s stock closed down 3%.
• Warner Bros Discovery received a revised full buyout offer from Paramount; if accepted, Netflix has matching rights under their agreement.

4. Trump Administration’s New Banking/Citizenship Proposal

• [07:27] WSJ reports the Trump administration is weighing a requirement for banks to collect citizenship documents (e.g., passports) from all new and existing customers—part of a broader crackdown on illegal immigration.

  • Notable Insight: Discussions have “alarmed banks in recent days” due to the significant regulatory implications.

• Trump’s upcoming State of the Union expected to address economic measures and cost-lowering plans; around 50 Democratic members plan to boycott, holding counter-events in Washington as a protest.

5. U.S. Housing Affordability Crisis and Legislative Action

• [09:18] Reporter Rebecca Pichotto discusses new bills passed in both the House and Senate targeting supply constraints and affordability.

Key Provisions in Both Bills:

• Incentivizing Cities to Build:
  • Senate bill would revoke/transfer federal grants from cities underperforming in housing production to those over-performing.
• Streamlining Environmental Reviews:
  • Both propose exemptions and process simplification for housing projects—federal adaptation of policies tested by CA and NY.
• Expanding Manufactured/Modular Housing:
  • Amendments to building codes aimed at easing factory-built construction, marketed as faster and cheaper.

Demand-Side Measures:

• Small-Dollar Mortgages:
  • Direct federal agencies to expand access to loans below ~$150,000.
  • Addresses private lender reluctance due to lower profitability.
• Rent-to-Savings Pilots:
  • Allow low-income renters to divert a portion of rent into savings for future down payments or big expenses.

Investor Ban Proposal:

• Trump’s proposal to ban individuals owning over 100 properties from buying single-family homes is not currently included.
  • “[It] did not include the investor ban, despite White House request to do so.” (Rebecca Pichotto, [11:22])
  • The White House is pushing for the amendment in ongoing Senate negotiations.

Notable Quotes & Memorable Moments

• On the AI Boom:
  “Every time one of these semiconductor companies... sign up a new big customer... their stock just jumps like crazy.”
  — Robbie Whelan, [02:41]

• On the Deal’s Oddities:
  “If truly there is insatiable demand... you wouldn't need to pay customers to incentivize them... it makes people...think, well, if the demand there is not totally organic, then does that mean that we're in a bubble?”
  — Robbie Whelan, [04:00–04:44]

• On Housing Policy:
  "Factory built homes are cheaper and quicker to produce, according to builders. So the House and Senate bills are taking some actions to amend building codes..."
  — Rebecca Pichotto, [09:50]

Timestamps for Key Segments

• Pentagon-Anthropic AI Ultimatum: [00:57]–[02:20]
• Meta–AMD AI Chip Deal (with Robbie Whelan): [02:20]–[05:37]
• Market/Drug/Media Headlines: [05:42]–[07:27]
• Banking & Immigration Policy: [07:27]–[09:18]
• Housing Crisis Legislation (with Rebecca Pichotto): [09:18]–[11:55]

Episode Tone & Style

The episode maintains WSJ’s brisk, analytical, and fact-focused tone, punctuated by expert quotes and contextual analysis. Guests provide industry-insider commentary, with a balance of enthusiasm about market developments and caution regarding possible bubbles or unintended consequences of new policy initiatives.

This summary should provide a clear, comprehensive view of the episode’s major themes, notable moments, and nuanced discussions for listeners and non-listeners alike.