1. Elon Musk's xAI allows users to edit photos with text prompts, where we can question this: how can we balance privacy and safety in a world dominated by AI? xAI's controversial change allowed users to undress images of real people with its Grok chatbot. Images of naked women have now flooded X. Influencer Ashley St.Clair, who has a child with Musk, sued xAI over Grok-made deepfake pictures of her. California's attorney general and regulators abroad opened investigations into the company. Lawmakers suddenly passed legislation related to deepfakes.
Executives at xAI have repeatedly found that offering AI tools with lower bars than other platforms cooperated in this situation, according to people familiar with the changes. X has now reported in a blog post that it started to block accounts from using Grok to undress images of real people in jurisdictions where the act is illegal, and Musk warned that anyone using Grok to make illegal content would "suffer the same consequences" as if they were to upload illegal content.
AI, or content-creating tools, are violating the rights of users. The EU has reported an AI Safety Act, which will be initiated in January this year, and South Korea is also scheduled to initiate an AI Safety regulation this February. Making people take consequences for their actions by regulating the law could help potential law-breakers from doing their job. However, before approaching the law's territory, the platform itself should have a barrier or a filter to protect individuals' rights. Also, the post-actions for the contents should be available. Machine unlearning, a rising sector for AI research, makes AI models forget what they have learned, and is expanding its scope to a broader model modality.
2. According to new research, the actual payer for Trump's tariffs is found to be the Americans, not foreigners. Trump has repeatedly claimed that his historic tariffs, deployed aggressively over the past year as both a revenue-raising and foreign-policy tool, will be paid for by foreigners. This helped the president come to power and encouraged foreign governments to do deals with the U.S.
The president's claims were by far supported by the resilience of the U.S. economy, which recorded relatively brisk growth and moderate inflation in 2025, even when the growth in Europe and other advanced economies remained mediocre.
However, the new research by the Kiel Institute for the World Economy suggests that the impact of tariffs is likely to show up over time in the form of higher U.S. consumer prices. The findings don't mean the tariffs are a win for Europe: it is actually the opposite. The research echoes recent reports by the Budget Lab at Yale and economists at Harvard Business School, where only a small fraction of the tariff costs were found to be borne by foreign producers. By analyzing $4 trillion of shipments between January 2024 and November 2025, the Kiel Institute researchers found that foreign exporters absorbed only about 4% of the burden of last year's U.S. tariff increases by lowering their prices, while American consumers and importers absorbed over 96%.
The tariffs had a significant effect on trade volumes. Facing higher U.S. tariffs, Indian exporters maintained their prices but reduced the volume of shipments to the U.S. by 18%-24% relative to the European Union, Canada, and Australia. Rather than acting as a tax on foreign producers, the tariffs functioned as a consumption tax on Americans, the report said.
"There is no such thing as foreigners transferring wealth to the U.S. in the form of tariffs," Julian Hinz, an economics professor at Germany's Bielefeld University said. Hinz reported that the $200 billion in additional U.S. tariff revenue last year was paid almost exclusively by Americans, which is likely to fuel higher U.S. inflation over time. U.S. inflation remains moderate even after Trump last year raised tariffs at the most aggressive pace for decades. The Harvard Business School research suggests that only around 20% of the tariffs had fed into higher consumer prices six months after their introduction, which was largely eaten by U.S. importers and retailers.
The economic impact of Trump's trade policy is proving critical again as the president is using the threat of higher tariffs on Europe as leverage to push through an annexation of Greenland. The threatened tariffs could lower economic output in the eurozone by between 0.2% and 0.5%, according to a report published on Monday by Capital Economics.
Here is the question: why haven't foreign producers cut their prices to sell more goods in the lucrative U.S. market? The researchers suggest several possible reasons: The exporters might have found buyers in other countries, or they might think final tariff levels will change, and they will maintain price levels in the meantime. The scale of tariffs, at 50% or more in places, might mean it is better not to sell at all given the impact on profit margins. U.S. importers might also have longstanding relationships with foreign suppliers that they can;t change quickly.