Can China Embrace AI Without the Job Losses?

SPEAKER_1 (0:00)

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Luke Vargas (0:18)

Oil rises as hostilities between the US and Iran flare up. Plus, federal prosecutors charge a Google employee with insider trading on Polymarket, and China tries to walk a fine line of pushing companies to embrace AI without firing workers.

Hannah Miao (0:35)

It seems that this is a topic that is increasingly sensitive for China's government, and there appear to be growing concerns about the potential widespread impact of AI on the labor market, which could create all sorts of instability in the economy.

Luke Vargas (0:52)

It's Thursday, May 28th. I'm Luke Vargas for the Wall Street Journal, and here is the AM Edition of What's News, the top headlines and business stories moving your world today.

US forces have conducted new military strikes against Iran in what American officials say was a response to Tehran targeting commercial ships in the Strait of Hormuz. As part of the US response, jets shot down Iranian drones and hit a drone control center near a port city along the Strait, a site that officials say poses a threat to US forces and commercial shipping. As with US strikes earlier in the week, Trump administration officials said the attacks were limited and defensive in nature and not an escalation that would collapse a fragile ceasefire as both sides worked toward a diplomatic agreement. Oil prices are trading higher this morning, while global markets and US stock futures are trending lower.

We're exclusively reporting that the Trump administration is in talks to fund a number of private US drone companies in a bid to lower costs and boost domestic production. Among the companies that the Pentagon has identified for possible funding is Unusual Machines, a drone component supplier that counts Donald Trump Jr. as a shareholder and advisory board member. Talks have included the Office of Strategic Capital, which was set up by the Biden administration in order to fund companies deemed important to national security supply chains. The Pentagon's $1.1 billion drone dominance program is aiming to build an arsenal of around 300,000 low-cost attack drones by the end of next year.

The Justice Department has opened an investigation into writer E. Jean Carroll, who accused President Trump of sexually assaulting her 30 years ago. The DOJ is examining whether Carroll committed perjury during her civil lawsuits against Trump. Federal juries previously sided with Carroll in both sexual abuse and defamation cases awarding her $88 million. Trump has denied the allegations and said he never met Carroll. An attorney for Carroll declined to comment on the new federal probe. Meanwhile, federal prosecutors in New York have charged a Google software engineer with insider trading on Polymarket. According to a criminal complaint unsealed yesterday, the 36-year-old employee who couldn't be reached for comment, allegedly earned more than a million dollars by illegally trading contracts, including about who would be the most searched people of 2025, using restricted non-public search data. The case marks the second time the Manhattan US. Attorney's Office has brought insider trading charges over trades made on Polymarket, but journal reporter Alexander Osipovich told me the charges showed just how many avenues exist to use non-public information in order to gain advantage on the popular betting platform.

Alexander Osipovich (3:40)

We can definitely infer that this is a priority area for prosecutors. Clearly, there's been a lot of interest in Polymarket and a lot of focus on the potential risk of insider trading. I think the concern would be, can they really get a handle on everything that's going on? There have been a lot of allegations out there about other potential insider trades or trades that at least look kind of suspicious. Do they have the bandwidth to investigate those all? And this will all this ultimately have a deterrent effect.

Luke Vargas (4:08)

It's a big question, right, Alex? Because this latest indictment sort of indicates you don't have to be, I don't know, a top executive or someone with access to secret battle plans in order to potentially turn a profit on a prediction market using non-public, potentially restricted information.

Alexander Osipovich (4:21)

Yes. One interesting question about insider trading on prediction markets is, how exactly do you define the type of people who have access to insider information? With a securities insider trading, it's pretty clear that executives of the company know what's going on there. But here, you could have a soldier who knows about a US military operation. You could have a kind of mid-level employee who has access to a database with company info.