Meta Rehires Managers in Applied AI Unit After Flattening Push

The Pentagon's October 5 confirmation that it has ceased all Anthropic product usage formalizes a structural split in government AI procurement, with Google, xAI, and OpenAI signing contracts in its place. Anthropic's S-1 filing, reported by Reuters on September 28, outlines a valuation target of $2T+, double the $965B private valuation from May 2026, alongside a $42B net loss in 2025 that includes a $34B non-cash accounting charge from convertible financing revaluation and an operational loss of $8.06B, plus $518B in multi-year cloud and infrastructure obligations. Revenue reached approximately $4.6B in 2025, up 12x year-over-year, but the loss of the Pentagon's $200M contract signals exclusion from a federal procurement pipeline that is accelerating. OpenAI signed a General Services Administration OneGov deal on October 1 offering a $0 per-user-per-month license for ChatGPT, Codex, and API access to federal, state, local, and tribal agencies under a 27-month GSA agreement, covering approximately 23 million eligible public-sector employees. Google is building on existing cloud and Workspace government authorizations, with Alphabet's Q3 2026 earnings reported October 1 showing Google Cloud revenue at $15.2B, up 34% year-over-year, while xAI's Pentagon engagement and classified-network agreements signal a diversified supplier base that excludes companies unwilling to modify their models for military and intelligence applications. Anthropic is attempting to go public against the D.C. Circuit's 2-1 ruling on September 25 upholding the national security supply-chain risk designation under FASCSA Section 4713, a legal overhang that stands unless the Supreme Court takes the case or Congress amends FASCSA.

Temasek, Singapore's state investment company, has warned that if the investment momentum in artificial intelligence, or AI, begins to fade, it could become the single biggest risk to financial markets right now, even though there is no sign of that happening soon. Rohit Sipahimalani, Temasek's chief investment officer, said at the Milken Institute Asia Summit in Singapore that while there is still no clear signal that AI investment is slowing, markets could face volatility in 2027. AI has been a key driver keeping the S&P 500 near a record high, even as US Treasury yields have risen. However, the overall market is not strong across the board, because roughly half of the stocks in the Russell 3000 index have fallen at least 20% from their June peak, reflecting that most of the market's gains have been driven by just a handful of stocks. Temasek believes the AI investment momentum could stall for several reasons, such as safety concerns leading governments to impose stricter regulations, or customers beginning to see AI technology investments as not delivering returns worth the money spent. At the same time, Temasek remains positive on AI over the long term and is continuing to increase its investments in the sector. Currently, about half of its AI investments are in publicly traded assets, and the company wants to raise that share to around 70-75% so it can adjust its portfolio more quickly as the AI industry changes, since unlisted assets can take longer to sell or reduce. Temasek has invested in private AI model developers such as OpenAI and Anthropic, but Sipahimalani said Temasek will limit the proportion of its investments in these companies because they are assets that are harder to adjust than publicly traded ones.