Good morning. Amid the global market turmoil yesterday, the Stanford Institute for Human-Centered AI released its annual AI Index Report. It’s full of interesting findings.
Among them:
—Usage is up. 78% of organizations reported using AI last year, up from 55% the year before.
—Investment is up, and uneven. U.S. private AI investment grew to $109.1 billion last year, nearly 12 times that of China and 24 times the U.K.
—Sentiment is globally divided. The vast majority of people in places such as China, Indonesia, and Thailand see AI as more beneficial than harmful; only a minority of people in places including Canada, the U.S., and the Netherlands feel similarly—though the share of skeptics in the latter is shrinking.
You can read the full report here. (Cheers to Fortune Brainstorm vets Erik Brynjolfsson, Michael Chui, and James Manyika for their contributions to it.) Today’s news below. —Andrew Nusca
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How the tariff shock could affect AI’s data center boom
As President Trump sent the world into tariff turmoil over the past week, many AI watchers were relieved that the White House carved out an exemption for semiconductors.
But the massive data centers running AI services have lots of exposure to tariffs beyond silicon chips.
There is a motherlode of electronic and metal hardware in data centers, many of which are manufactured or assembled in tariff-affected countries like China.
Everything from server hardware like motherboards and network interface cards will be impacted, as well as cooling infrastructure (like air conditioning and liquid cooling systems), power equipment (transformers, circuit breakers, cabling), networking equipment (routers, switches), construction materials and battery systems.
Non-semiconductor components likely represent at least a quarter to one-third of data center costs, Gil Luria, managing director and head of technology research at D.A. Davidson & Co. tells Fortune.
And tariffs on semiconductors are likely still coming.
The most important impact on the highly-touted AI data center buildout will be the cost of capital, Luria says.
“The giant tech companies now have to deal with uncertainty and pressure on their core business,’ he says, “which makes it less likely they will want to continue to over invest in data centers.” —Sharon Goldman
North Korean IT workers have infiltrated the Fortune 500
These days, g8keep founder Harrison Leggio Leggio tells Fortune he won’t even set up an interview with a candidate who seems promising on paper unless they agree to one final step.
“Say something negative about Kim Jong Un,” he tells potential job candidates.
Through research, Leggio learned insulting the DPRK’s Supreme Leader is forbidden. “The first time I ever did it, the person started freaking out and cursing,” he says.
According to UN estimates, the North Korean IT worker scam has generated $250 million to $600 million every year since 2018.
But lately, AI has emboldened the North Korean scheme, allowing the IT workers to develop scripts so they can hold down as many as six or seven jobs at a time, disguise their appearance, and even alter their voices so they don’t have an accent—or so they sound like a woman instead of a man.
Experts predict the scope and scale of such efforts will expand across Europe and Asia in 2025, given the financial upside and limited effects of law enforcement.
“Right now, we have North Korean IT workers adapting so much that they’re not even doing IT work anymore,” says Michael Barnhart, an intelligence leader at Google Cloud who has been tracking North Korean threats for years.
Emi Chiba, a senior principal analyst at Gartner who has been researching the issue, says security experts should partner with internal human-resources teams to periodically re-verify the identities of employees and strengthen recruiting practices.
“One of the biggest things you can do to combat this,” Barnhart adds, “is training up HR staff.” —Amanda Gerut
Facing tariffs, Apple to send more iPhones to the U.S. from India
Apple reportedly plans to send more iPhones to the U.S. from India to offset the high cost of China tariffs.
The maneuver is a “short-term stopgap,” according to the Wall Street Journal, to buy Apple time to win an exemption from President Trump’s import tariffs, which the company obtained during Trump’s first term.
What Apple won’t likely do, at least right now: make substantial and pricey changes to its global supply chain in an environment this uncertain.
Apple has been hit the worst among the biggest U.S. tech companies because it’s principally a hardware company—the iPhone alone is 50% of the company’s almost $400 billion in annual revenue, which ranks behind only Walmart and Amazon in the U.S.—and its supply chain is highly focused on China.
Trump’s latest move raises levies on Chinese imports to at least 54%; India, by contrast, is only 26%. (Vietnam, where Apple makes its AirPods, iPad, and Watch, received a 46% tariff.)
Whatever the result, it won’t nearly be enough. Apple shipped nearly 232 million iPhones globally last year; about 90% of them are assembled in China, according to recent Evercore ISI estimates. —AN
More tech
—Microsoft fires protestors. Now-former employees disrupted 50th anniversary celebrations to protest the company’s contracts with Israel.
—Meta: We didn’t train Llama 4 for benchmark performance. “Simply not true,” VP says.
—Broadcom announces share buybacks. Up to $10 billion through the end of 2025.
—Shopify CEO: “AI usage now a baseline expectation.” Want more humans on your team? First prove you can’t use AI.
—Infineon to buy Marvell business for $2.5 billion. The acquired auto ethernet unit will generate about $235 million for the German chipmaker’s automotive division this year.
—IBM debuts z17 mainframe. Built to handle 450 billion daily AI inferences.
—Google employees can now discuss antitrust case. Silence order rescinded in the wake of a union settlement.
—Apple appeals U.K. “back door” orderto unlock user data stored on its cloud.
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