This week's episode tracks a widening split: AI keeps getting cheaper and more capable, but who actually wins from it is dividing companies in half. Google's Gemini 3.5 Flash now hits frontier-class performance at the price of last year's mid-tier model. Anthropic is on track for $10.9B in Q2 revenue, locked in distribution deals with KPMG and PwC, and is preparing a Q4 IPO that could raise $60B. Pope Leo released a 38,000-word encyclical on AI alongside Anthropic's co-founder — a striking signal that voluntary AI governance is being publicly questioned. PwC found 20% of companies are capturing 74% of AI's gains, and 55% of employers regret AI-driven layoffs. Nvidia is skipping its 2026 gaming GPU to free up capacity for AI chips — and smartphone prices are climbing as a result.
Google drops Gemini 3.5 Flash at 40% discount
Gemini 3.5 Flash hit general availability at $1.50/$9.00 per million tokens, 40% cheaper than Gemini 3.1 Pro from three months ago. It scored 83.6 on the MCP Atlas agentic benchmark, beating OpenAI's GPT 5.5 — frontier performance at mid-tier pricing.
Anthropic headed for $30B run rate and IPO
CNBC reports Anthropic is on pace for $10.9B in Q2 revenue, its first profitable quarter. New global alliances with PwC and KPMG put Claude in front of 276,000 KPMG employees. Bankers are already lined up for a Q4 2026 IPO targeting $60B+.
Pope Leo's encyclical takes on AI
The Vatican released a 38,000-word encyclical entirely on artificial intelligence on May 25. Pope Leo presented it alongside Anthropic co-founder Christopher Olah, who said frontier AI labs cannot regulate themselves. The era of voluntary AI governance is being publicly questioned.
Hershey switches to monthly AI marketing
Hershey rebuilt how it manages its $2B marketing budget using agentic AI from Mutinex and Tracer, running on Claude and Gemini. Its marketing mix model now runs monthly instead of three times a year, with an expected 4–5% revenue lift.
20% of companies win 74% of AI gains
A PwC study found 20% of companies are capturing 74% of AI's economic gains by using it for new products and revenue. The rest are mostly cost-cutting. Separately, 55% of employers now regret AI-driven layoffs, with many roles quietly rehired offshore.
Nvidia skips 2026 gaming GPU for AI chips
For the first time in nearly 30 years, Nvidia will not release a new gaming GPU in 2026, cutting gaming chip production up to 40% to free wafer and memory capacity for AI accelerators. Jefferies forecasts a 31% drop in smartphone shipments downstream.