Morning Digest, May 26, 2026

Tuesday, May 26, 2026 · 8 newsletters · 3 overlapping stories

Top Stories

Pope Leo XIV Issues 42,000-Word AI Encyclical

(3 newsletters)

Pope Leo XIV published “Magnifica Humanitas,” his first encyclical, devoting nearly the entire 83-page document to artificial intelligence. Leo warned that AI risks becoming a “new Tower of Babel,” called for it to be “disarmed” before it dominates humanity, and demanded that lethal decisions never be delegated to algorithms. He criticized the concentration of AI power among private transnational companies that “already surpass the capacity of many governments,” and urged robust independent oversight and regulation. In a striking gesture, Anthropic co-founder Christopher Olah stood beside Leo at the public presentation, signaling an unusual Vatican-Silicon Valley dialogue on AI safety. The encyclical was signed May 15, the 135th anniversary of Leo XIII’s landmark labor encyclical on workers’ rights.

Teen Summer Jobs Are Vanishing

(2 newsletters)

Teen summer employment is on track for its lowest level in decades. Outplacement firm Challenger, Gray & Christmas projects just 790,000 seasonal jobs for teens this summer, down from over 1 million two years ago. AI-driven automation and older workers delaying retirement are squeezing teens out of traditional entry-level roles, while hiring in entertainment and leisure is down 70% year-over-year. Some teens are adapting by turning to gig economy platforms: Uber and DoorDash report Gen Z registrations are up 8.4% year over year.

Microsoft Quietly Cancels Most Claude Code Licenses

(2 newsletters)

Microsoft is canceling most direct Claude Code licenses within its Experiences and Devices group, telling affected engineers to migrate to GitHub Copilot CLI by June 30. The move reveals a growing tension in enterprise AI: at current token prices, the unit economics for AI coding tools do not pencil out at scale. Expect similar scrutiny industry-wide if pricing does not compress significantly.

Also Worth Knowing

Google’s AlphaProof Nexus Solves Nine Erdős Problems. One day after OpenAI claimed its own math breakthrough, Google DeepMind quietly did it eight times better. AlphaProof Nexus solved nine open Erdős problems, including two unsolved for 56 years, at a cost of just a few hundred dollars per problem.
Ferrari Luce: Jony Ive’s $640,000 Electric Speedster. Ferrari unveiled the Luce, a glass-clad EV designed in partnership with Jony Ive. Five seats, 330-mile range, 0-60 in under 2.5 seconds, top speed over 190 mph. It is the most expensive non-limited Ferrari and a direct test of whether ultra-wealthy buyers will go electric.
SpaceX Starship v3 Launches, Booster Crashes. The booster separated successfully but crashed into the Gulf of Mexico. Starship itself reached orbit despite losing one engine, deployed satellite-mimicking devices, and exploded on landing in the Indian Ocean. Progress, not perfection.
Nvidia Becomes the World’s First $5 Trillion Company. Nvidia reported $81.6B in Q1 revenue, up 85% year over year, with a $500B order backlog through 2026. It now accounts for roughly 8% of the S&P 500, the largest weight any single stock has ever held.
DeepSeek Makes Its 75% Price Cut Permanent. The Chinese AI lab permanently slashed pricing on its V4 Pro model, now pricing output tokens at least 34x below GPT-5.5. Commodity pricing for capable models is no longer a trend; it is the new baseline.
Data Centers Are Making Nearby Neighborhoods 4°F Hotter. New research found that neighborhoods downwind of data centers in Arizona were up to 4 degrees Fahrenheit hotter, as cooling systems release plumes of hot air that intensify urban heat and drive up energy costs for nearby residents.
Polsia: $250M Startup, Zero Employees. AI startup Polsia, which claims to autonomously run 8,000+ businesses, closed a $30M round at a $250M valuation with no human staff. Its viral announcement got 5M views. The company name is “AI Slop” spelled backwards.
Waymo Pauses in Four Cities After Robotaxis Drive Into Floods. Waymo paused service after its vehicles failed to navigate heavy rain and flooded streets, saying it had not yet developed a “final remedy” for flood avoidance.

Quick Hits

Karpathy declared vibe coding obsolete, arguing that agentic engineering is really product management by another name. As AI handles execution, value shifts to defining the right problems.
Managers are struggling to keep pace with AI productivity gains, per HBR. The best managers will set clearer direction and create faster feedback loops without micromanaging.
Huawei claims it has developed a technique to match 1.4nm chip density without US-restricted manufacturing equipment, projecting it could match Intel-tier chips by 2031.
Supply chain hacker group TeamPCP has corrupted hundreds of open source tools at an unprecedented scale, including breaching GitHub through a poisoned VSCode extension. Group appears financially motivated, deploying ransomware.
Blackberry stock surged 19% on Friday and is now up 108% year to date after an earnings beat and bullish commentary on its software pivot.
Goldman Sachs CEO David Solomon says the AI job apocalypse is “overblown,” citing 200,000+ new construction jobs created for data centers since 2022.
US and Iran are making progress toward a deal to reopen the Strait of Hormuz, though Iranian officials say no agreement is imminent. Trump: “proceeding nicely.”
AI is doing something weird to science: as formal proof verification automates the verifier role, the remaining human job is deciding which questions are worth asking.