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Welcome to AI Decoded, Fast Companys weekly newsletter that breaks down the most important news in the world of AI. You can sign up to receive this newsletter every week here. The AI regulation freeze that almost silenced the states The Republicans One Big Beautiful Bill Act has passed the Senate and is now headed for a final vote in the House before reaching the presidents desk. But before its passage, senators removed a controversial amendment that would have imposed a five-year freeze on state-level regulation of AI models and apps. (The bill also includes billions in funding for new AI initiatives across federal departments, including Defense, Homeland Security, Commerce, and Energy.) Had the amendment survived, it could have been disastrous for states, according to Michael Kleinman, policy lead at the Future of Life Institute. This is the worst possible way to legislate around AI for two reasons: First, its making it almost impossible to do any kind of legislation, and second, its happening in the most rushed and chaotic environment imaginable, he says. The bill is over 900 pages long, and the Senate had just 72 hours to review it before debate and voting began. The original proposal called for a 10-year freeze, but the Senate reduced it to five years and added exceptions for state laws protecting children and copyrights. However, it also introduced vague language barring any state law that places an undue or disproportionate burden on AI companies. According to Kleinman, this actually made the situation worse. It gave AI company lawyers a chance to define what those terms mean, he says. They could simply argue in court that any regulation was too burdensome and therefore subject to the federal-level freeze. States are already deep into the process of regulating AI development and use. California, Colorado, Illinois, New York, and Utah have been especially active, but all 50 states introduced new AI legislation during the 2025 session. So far, 28 states have adopted or enacted AI-related laws. That momentum is unlikely to slow, especially as real job losses begin to materialize from AI-driven automation. AI regulation is popular with voters. Supporters argue that it can mitigate risks while still allowing for technological progress. The freeze amendment, however, would have penalized states financiallyparticularly in broadband fundingfor attempting to protect the public. Kleinman argues that no trade-off is necessary. We can have innovation, and we can also have regulations that protect children, familiesjobs that protect all of us, he says. AI companies will say [that] any regulation means theres no innovation, and that is not true. Almost all industries in this country are regulated. Right now, AI companies face less regulation than your neighborhood sandwich shop. The new precedent for copyrighted AI training data may contain a poison pill On June23, Judge William Alsup ruled in Bartz v. Anthropic that Anthropics training of its model Claude on lawfully purchased and digitized books is quintessentially transformative (meaning Anthropic used the material to make something other than more books) and thus qualifies as fair use under U.S. copyright law. (While thats a big win for Anthropic, the court also said the firm likely violated copyright by including 7 million pirated digital books in its training data library. That issue will be addressed in a separate trial.) Just two days later, in Kadrey v. Meta Platforms, Judge Vince Chhabria dismissed a lawsuit filed by 13 authors who claimed that Meta had trained its Llama models on their books without permission. In his decision, Chhabria said the authors failed to prove that Metas use of their works had harmed the market for those works. But in a surprisingly frank passage, the judge noted that the plaintiffs weak legal arguments played a major role in the outcome. They could have claimed, for example, that sales of their books would suffer in a marketplace flooded with AI-generated competitors. In cases involving uses like Metas, it seems like the plaintiffs (copyright holders) will often win, at least where those cases have better-developed records on the market effects of the defendants use, Chhabria wrote in his decision. No matter how transformative LLM training may be, its hard to imagine that it can be fair use to use copyrighted books to develop a tool to make billions or trillions of dollars while enabling the creation of a potentially endless stream of competing works that could significantly harm the market for those books. Chhabria may have laid out a legal recipe for future victories by copyright holders against AI firms. Copyright attorneys around the country surely took note that they may need only present as evidence the thousands of AI-generated books currently for sale on Amazon. In a legal sense, every one of those titles competes with the human-written books that were used to train the models. Chhabria said news publishers (like The New York Times in its case against OpenAI and Microsoft) could have even more success using this market delusion argument than book authors. Apple is bringing in its ace to rally its troubled AI effort Siri has a new owner within Apple, and it could help the company finally deliver the AI-powered personal assistant it promised in 2024. By March, Tim Cook had lost faith that the core Apple AI group led by John Giannandrea could finish and release a new, smarter Siri powered by generative AI, Bloombergs Mark Gurman reported. Cook decided to move control of Siri development to a new group reporting to Apples software head, Craig Federighi. He also brought in a rising star at the company, Mike Rockwell, to build and manage the new teamone that would sit at the nexus of Apples AI, hardware, and software efforts, and aim to bring the new Siri to market in 2026. Apple announced the new Siri features in 2024 but has so far been unable to deliver them. Rockwell joined Apple in 2015 from Dolby Lbs. He first worked on the companys augmented reality initiatives and helped release ARKit, which enabled developers to build 3D spatial experiences. As pressure mounted for Apple to deliver a superior headset, the company tapped Rockwell to assemble a team to design and engineer what would become the Vision Pro, released in February 2024. The Vision Pro wasnt a commercial hitlargely due to its $3,500 price tagbut it proved Rockwells ability to successfully integrate complex hardware, software, and content systems. Rockwell may have brought a new sense of urgency to Apples AI-Siri effort. Recent reports say that Rockwells group is moving quickly to decide whether Siri should be powered by Apples own AI models or by more mature offerings from companies like OpenAI or Anthropic. Apple has already integrated OpenAIs ChatGPT into iPhones, but one report says that Apple was impressed by Anthropics Claude models as a potential brain for Siri. It could also be argued that Anthropics culture and stance on safety and privacy are more in line with Apples. Whatever the case, it seems the company is set to make some big moves. More AI coverage from Fast Company: AI chatbots are breaking the weband forcing a 404 makeover Inside Wikipedias AI revoltand what it means for the media Why this bank is hiring full-time AI employees How to tell if the article youre reading was written by AI Want exclusive reporting and trend analysis on technology, business innovation, future of work, and design? 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Elon Musks anger over the One Big Beautiful Bill Act was evident this week as the world’s richest man took to X, the social media platform he owns, to lambast President Donald Trumps signature legislation. But theres plenty of anger from investors at the performance of his own electric vehicle company, Tesla, which again posted weak delivery results for its electric vehicles. The company delivered just over 384,000 vehicles in the second quarter, only marginally better than the previous three months, which were the companys worst in more than two years. Overall, the number of cars Tesla delivered in April, May, and June this year was down 13% from the year before. It caps a difficult time for Musk, whose personal and business brands have taken a tumble. The proportion of people who dislike the EV company has more than doubled in the last two years, according to data from YouGov, which tracks public sentiment about the firm. In all, 35.2% of Americans have a negative view of Tesla, up from just 16.5% two years earlier, and nearly as many as those who now hold a positive view of the company. That correlates with Musks personal popularity in the same YouGov surveys, with people moving from being on the fence about him to reporting actively disliking him. And his continued engagement in U.S. politics is only turning people against him more, analysts believe. Elon Musks frustration boiled over with the latest Senate budget deficit, reneging on his promise to focus more on his businesses, write Jed Dorsheimer and Mark Shooter, analysts at William Blair. We only see downside from these actions, and would prefer effort to be channeled towards the robotaxi rollout at this critical juncture. (Tesla did not immediately respond to Fast Company‘s request for comment.) That said, there are green shoots ahead. The number of deliveries this last quarter wasnt quite as bad as William Blair analysts feared. In fact, it beat their estimate by 8%. We expect the stock to react positively as investors feared worse, Dorsheimer and Shooter said. The issue Tesla faces isnt with brand perception among its own customers, but with trying to attract new ones, suggest analysts at Forrester. Tesla is a compelling case study in the divergence between customer experience and brand perception, explains Keith Johnston, group research director at Forrester. While Tesla remains top-of-mind for many noncustomers, boasting above-average salience, they are less likely to perceive it as trustworthy, and even less inclined to buy it. Its a major issue, agrees Jay Nagley, a consultant at Redspy Automotive Consultancy. You can still disapprove of a company and buy its products, because nobody else knows youre doing it, he says. You might publicly disapprove of McDonald’s and go and have a crafty burger from time to time, but you can’t do that with Tesla. Its sitting in your driveway. You get out of it. Your friends see you in it all the time. So it’s a constant source of potential awkwardness and embarrassment. This comes on top of Tesla facing significant challenges in China, which has traditionally been one of its biggest markets. In the first half of 2025, China accounted for nearly half of Tesla’s global deliveries, with Tesla’s Shanghai Gigafactory alone producing almost 50% of all Tesla vehicles delivered worldwide. The problem is Tesla faces growing competition from Chinese automakers like BYD, which reported one million EV sales in the first half of 2025 compared to Teslas 721,000. BYDs vehicles, often cheaper and equipped with advanced features like a five-minute charging system, are eroding Teslas market share, particularly in China. While the company has seen significant weakness in China in previous quarters given the rising competitive landscape across EVs, Tesla saw a rebound in June with sales increasing for the first time in eight months reflecting higher demand for its updated Model Y as deliveries in the region are starting to slowly turn a corner, says Dan Ives, managing director and senior equity research analyst at Wedbush Securities. Ives remains bullish on Tesla and Musks ability to turn the ship around. If Musk continues to lead and remain in the drivers seat, we believe Tesla is on a path to an accelerated growth path over the coming years with deliveries expected to ramp in the back-half of 2025 following the Model Y refresh cycle, he says. The company plans to release a lower-cost Model Y in the second half of the year. That would be important because Tesla has traditionally been slow at updating its models, something Nagley attributes to Musks naiveté about how the auto industry operates. But even if the Model Y succeeds, theres a Trump-shaped obstacle in the way to Teslas success going forward. The U.S. president is eliminating the EV tax credit that helped bolster Teslas sales, which tilts the scales back in favor of gas-powered cars, which are cheaper than electric alternatives. And tariffs from China on battery materials will push Tesla costs up further. While Musks departure from DOGE brought back Teslas most important asset,” Ives says, “the feud between Musk and Trump brings further frustration to investors with more fear around the Trump administration becoming more hawkish around government-related spending tied to Tesla, especially the autonomous future with AV regulations key for Robotaxis and Cybercabs.”
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Restaurant industry leaders are excited for artificial intelligence to make the business better. But many feel unprepared to handle its implementation. Thats according to a new survey from consulting firm Deloitte that asked hundreds of restaurant industry executives about their current use and future plans for AI. Overwhelmingly, respondents cited AIs potential to enhance the guest experience; to make a customers time more enjoyable, comfortable, and memorable, as a top benefit of the tech. In fact, almost all98%operators in the survey said they expect a high impact on the customer experience in three years. {"blockType":"creator-network-promo","data":{"mediaUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/03\/Expedite-Icon-E-white-background.jpg.jpg","headline":"Expedite","description":"Restaurant technology and the big ideas shaping the future of hospitality, by Kristen Hawley. To learn more visit expedite.news","substackDomain":"https:\/\/www.expedite.news\/","colorTheme":"salmon","redirectUrl":""}} AI is already showing up to help restaurant guests. It answers the phones, works the back office, and helps with marketing efforts. Eventually, itll show up during table service. Plenty of restaurants are already using AI to their advantage; 8 in 10 industry leaders surveyed by Deloitte say theyll increase spending on the tech in the next year. Most of the surveys respondents work in quick service restaurants; nearly half work as franchise operators for larger brands. But that doesnt mean AI and its benefits are reserved for corporate restaurants. Big chains are usually first to test new technologies in the restaurant space, and AI is no different, says Emma Blecker, a New York-based operations consultant. It makes sense, the tools are often built for them, and theyve got the resources to spend on research and development, pilot programs, training, and rollouts. But that doesnt mean small operators are missing out. For now, she advises, restaurants of all sizes can learn from industry early adopters, experimenting with new tech tools and ideas, like these: AI can handle the conversation According to Deloittes survey results, less than 1 in 5 surveyed leaders use conversational voice AItech that can talkin their restaurants daily operations now. But they plan to; roughly a third are testing or piloting the tech, with another third planning or developing a conversational AI strategy. Voice AI can staff a drive-thru, taking orders and upselling to guests with smart add-onsthink: Do you want fries with that? except instead of blindly suggesting a side of fries to every customer, it uses factors like their order, time of day, or even the weather to suggest something else. It can also answer their phone, providing diners with info on location, hours, reservations, and other details, a boon for busy restaurants, like perennial San Francisco favorite Flour + Water, which tapped a local service called Hostie to work the phones. Its already made guests and employees happier. We’re finding that people walking in the door already have answers to some of the questions theyd walk in with prior, says Amanda Flores, director of operations for the Flour +Water restaurant group. That means fewer people walk in frustrated and the host gets to spend more time with people that are stoked to be here with their questions already answered. AI targets the right diners Restaurant software has long collected data on dinersaverage spend, visit frequency, dining preferencesand AI can help make sense of all the numbers. For example, a text-based feature from reservations and customer relationship management platform SevenRooms helps restaurants segment customers into target groups and generate text messages to invite them to special events, share new menu items, or offer same-day reservation nudges. Celeb-chef backed Fabio Viviani Hospitality group, an early product tester for SevenRooms, said the tech helped book 1,800 reservations and drove close to half a million dollars in revenue in six months. The groups chief marketing officer said the texts had a 98% open rate. About half of restaurant operators in the survey say they already see a high impact from AI-enhanced loyalty tech; another quarter think theyll see a high impact in three years. AI is coming to the table The case for AI at fast food and other casual restaurants is straightforward; it can make the experience faster, easier, and more pleasant for people on both sides of the transaction. But integrating technology into full-service dining is a trickier proposition; even the best bots cant replace warm, in-person hospitality. But it can certainly help, and a new generation of devices has the potential to enhance human service. Plenty of companies are working on new, hands-free devicespins, glasses, earpiecesthough transformational change is likely years away. (Jony Ive, the longtime Apple design exec and architect of the iPhone, recently sold his new company to OpenAI with vague promises to right the iPhones wrongs, moving our eyes from screens to reality.) In fact, its already being tested. Yum China, the Shanghai-based parent company of American brands KFC, Taco Bell, and Pizza Hut, and also the largest restaurant company in that country, just debuted a hands-free AI assistant for some of its KFC restaurant managers. They wear earphones and smart watches wired to process language and offer help, from inventory reminders to real-time troubleshooting. Its a pilot program, but the point is to help employees look up from screens and better interact with the physical world in front of them. Still, practicalities might slow progress. In Deloittes survey, less than a third of industry leaders said their businesss tech and talent are ready to implement big AI-related changes. In a recent conversation, Kelly Esten, chief marketer for restaurant point of sale company Toast, declined to speculate on how soon transformative new hardware might arrive at Americas restaurants. But Esten agrees its coming. I do think were going to go through another platform shift, she told me, and it creates a tremendous amount of opportunity for restaurants and for restaurant tech. {"bockType":"creator-network-promo","data":{"mediaUrl":"https:\/\/images.fastcompany.com\/image\/upload\/f_webp,q_auto,c_fit\/wp-cms-2\/2025\/03\/Expedite-Icon-E-white-background.jpg.jpg","headline":"Expedite","description":"Restaurant technology and the big ideas shaping the future of hospitality, by Kristen Hawley. To learn more visit expedite.news","substackDomain":"https:\/\/www.expedite.news\/","colorTheme":"salmon","redirectUrl":""}}
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