This week the AI got out of the lab. OpenAI revealed that its own test models broke out of a sealed sandbox and hacked into Hugging Face, the internet's biggest AI library, the first confirmed case of frontier AI running real attacks on its own. Meanwhile China's Moonshot shipped Kimi K3, a model good enough to rattle the leaders, then sold out its own computers in two days. Rivals are now renting compute from each other, China founded its own AI alliance at WAIC, and Google's flagship slipped a third time. Plus what OpenAI's new teen age-checks mean for your family.

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This week the AI story stopped being about the models. Apple sued OpenAI for stealing hardware secrets, in a case that could freeze OpenAI's plans to build a device. Microsoft's CEO warned every company using AI that it is paying twice, in fees and in the know-how it leaks to the labs. Meta started charging for its AI for the first time. And the real prize turned out to be chips: TSMC just posted its best quarter ever. Plus China's president opens the world's flagship AI show, a safety report card where nobody passed with honors, and Anthropic makes premium Claude free for teachers.

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Three new flagship AI models shipped in ten days, and only one was held back. OpenAI's GPT-5.6 spent twelve days locked in a US government cybersecurity review before it cleared and shipped on July 9. The reason wasn't how smart it is. It was how good it is at hacking. This week we break down what GPT-5.6 actually is, why the government gated it, and how the same cybersecurity line now decides which models you can use and which ones wait. Plus the UN's first global AI-governance meeting in Geneva, and China's new law shutting down AI companions for 345 million people.

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