WSJ What’s News - A New Chinese AI Resets the Global Tech Race

Episode Date: June 29, 2026

A.M. Edition for June 29. Researchers find a new Chinese AI model is able to match the performance of Anthropic’s Mythos, a development WSJ tech reporter Sam Schechner says is likely to pressure the White House in its overhaul of U.S. AI policy. Plus, we’ll look at how your unsecured home devices like computers and digital photo frames are linked to major cyberattacks. And Venezuela desperately searches for some 50,000 people still believed missing after last week’s earthquakes. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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anthropic in cybersecurity. Plus, we'll look at how your unsecured smart devices could be playing a role in massive cyber attacks. What we're seeing is through these res proxy networks. That's the initial entry point that creates a whole set of computers, laptops, streaming devices, picture frames, smart refrigerators. all hitting the same site at the same time. Very few sites in the world are resilient to that level of inbound traffic.

And a staggering death toll starts coming into focus after last week's Venezuela earthquakes. It's Monday, June 29th. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. China has caught up with Anthropic in cybersecurity, potentially resetting the global AI rate, Security researchers say that a new model released by China's Z.A.I. lags behind products from Anthropic and OpenAI in some tasks, but can match them in finding security bugs.

The release of the model comes as U.S. lawmakers have tried restricting access to the most potentially disruptive AI models like Anthropics mythos. However, as journal tech reporter Sam Shackner explained, Z.a.I's model being open weight, meaning it can be downloaded used. and modified without supervision, makes that impossible. What that means is that there's a kind of toothpaste out of the tube scenario. You have, on one hand, the U.S. trying to lock down some of these capabilities. I mean, you have Anthropics saying, okay, we're not going to release the most powerful version of mythos beyond a certain set of trusted partners. And then you even have the administration telling Anthropic that it had to pull back its

fable model because the guardrails against foreign use. weren't high enough. So the question of whether or not these capabilities that could help enable potential cyber attacks are going to get out there is becoming a much more real one. And then on the other side of the street, practically, you have another company giving away models with similar capabilities for free. And so if those models are out there and they have similar capabilities, then there's some critics who say the U.S. is just shooting itself in the foot by not allowing U.S. companies to sell and distribute their models as well. Critics of the White House AI strategy say it's been lax in restricting use of Chinese open-weight models which are popular among U.S. businesses.

Jacob Helberg, under Secretary of State for Economic Affairs, defended the administration, saying it's, quote, very much focused on Chinese open-source models. South Korean stocks have paired their losses today after the country's president announced a plan to invest nearly $2 trillion in the country's semiconductor sector, data centers, and robotics. Memory chip giants Samsung and SK Hynex also committed to substantial new investments to build chipmaking facilities. SK Hynix, Samsung, and U.S. company Micron Technology, are the world's leading suppliers of high-bandwidth memory chips, which are crucial components for Nvidia's AI accelerators. Shares of both South Korean companies have been on a wild ride this year on the back of the AI buildout, with both crossing the $1 trillion market value threshold. After days of back and forth fighting, the U.S. and Iran have agreed to resume peace talks.

The latest flare-up began on Thursday and reached a peak over the weekend as the U.S. hit a range of Iranian targets, and Tehran said that it targeted American bases in Kuwait and Bahrain. Middle East correspondent Benoit Foukan told me that after things potentially heading towards a return to war, talks in Qatar are reportedly back on. They would take place possibly this week in Doha, which is one. one of the parties that was attacked by Iran, but is the key mediator. We'll focus on the threat of one was trying to find an understanding between both sides, but potentially I would suspect also on the release of cash that is held in Qatar.

And most importantly, both sides agree is to stop attacking each other? Benoit, is there any real appetite, though, for potentially releasing money to Iran if just in the last few days the country has been launching new attacks around the region? First of all, remember, we are talking about a cycle where there, there's always strike and talk. There's always attacks. And then there's negotiations. There's attacks. Then there's negotiations again. So obviously the question would be whether, like you say, there would be an agreement to release some cash when there could be always suspicion that it could be used to fund the military. Now, on that, there is an limitation. I mean,

the US has said it's only humanitarian money, only for food. So that benefits really the Iranian people. And according to the US, it's also US products. The other thing is it would be gradual. So it would be limited amounts at the time. That's pretty much the reason we suspect that Iran stopped the fighting because they realize that the next sequence, which is getting some cash, is going to be jeopardized. So I think it's a huge incentive for Iran to stop the fighting to think they could get some money released. Oil prices are trading slightly higher today on renewed supply concerns, though they remain below Friday's levels when the U.S. and Iran were trading attacks. And nearly 50,000 people remain unaccounted for in Venezuela following a pair of earthquakes last Wednesday.

That's according to an online platform tracking missing loved ones. Venezuela's government has said that more than 1,400 people died, though officials expect that number to rise. With hopes fading of finding more survivors, families who've been digging through the rubble of collapsed buildings themselves have pled for more support from authorities, including heavy machinery. Some residents have Some residents have criticized the government of acting president Delci Rodriguez, accusing it of restricting volunteer workers' access to disaster sites and bureaucracy that slowed the arrival of rescue teams from overseas. The Venezuelan government didn't respond to request for comment.

Coming up, how your home devices could secretly be powering cyber attacks. and we'll cast our eyes to center court for an unexpected return at Wimbledon. Those stories after the break. Smart devices are everywhere these days. And while they're aimed at making our lives more seamless, these everyday gadgets from innocent-looking smart doorbells to our cell phones could be our biggest privacy vulnerability. Our homes are filled with internet-connected devices.

And every year, millions of those products, especially knock-offs that you buy online, can contain a secret digital backdoor that opens up access to your home internet so that anyone, including bad actors, can surf the web as if they were you. Now, cybercriminals are taking advantage of this loophole. Journal reporter Jack Gillum tested a number of these mallware-riddled products to investigate how criminals are using them to launch cyber attacks. For just under $800 total, I purchased two digital picture frames from Amazon

and three super boxes from Walmart. These are streaming devices that connect. to your TV and give you free access to shows and movies. Within minutes of turning the devices on, there was a surge of internet traffic on an entirely separate internet connection I set up for this experiment. Visits to gambling, porn, cryptocurrency,

and loads of other sketchy websites started pouring in from users around the world. Jack says that by leveraging home internet connections, criminals are carrying out some of the biggest cyber attacks we've ever seen. Security experts believe manufacturers are being paid to add this malware. But many people also get tricked into downloading the software onto their phones or computers. Once you connect an infected device to the internet, the backdoor software links up with an intermediary server that's run by what's known as a residential proxy company.

These residential proxy companies rent out access to tens of millions of home networks around the world. But the problem is actually worse than that. Hackers figured out a way to seize control of these backdoors, and they started taking over these residential networks. residential proxy networks aren't always used for nefarious reasons, as companies can use them to see how their ads are being viewed from the perspective of real users. However, government and industry officials say these networks have ballooned in recent years and have been adopted by government-backed hackers looking to hide their connections to countries like Russia, China, and North Korea. Investigators at Comcast started looking into this more than two years ago in their findings that linked millions of consumer devices. to criminal activity rocked the cybersecurity world. Kareem Maruse is Comcast's executive director of cybersecurity.

Let's imagine we pile every friend of ours that we've ever known. We say, hey, at 12 noon on Thursday, let's send a bunch of traffic to some site we're not thrilled with today. That's effectively what a distributed Nile Service attack is. But now it's done at massive scale. Let's say a million machines, two million machines are doing that simultaneously. What we're seeing is through these res proxy networks, that's the initial entry point that creates a whole set of computers, laptops, streaming devices, picture frames, smart refrigerators, all hitting the same site at the same time. Very few sites in the world are resilient to that level of inbound traffic.

We have seen some of the largest computer attacks, meaning computers attacking other computers at human request, ever recorded in our digital history in the last several months. And some warning, they're much larger ones on the horizon if we don't get a hold of this problem. The makers of the photo frame couldn't be reached for comment. And Amazon said that the product is out of stock and that it takes action when it confirms that a third-party product is infected with malware. Walmart said that all items sold through third-party sellers are expected to meet the company's standards and that when a violation is detected, swift action is taken. To find out how to protect your devices from backdoor hackers,

Check out the link we've left in our show notes. And finally, it's time to get two TVs going as the summer of sports heats up. Joining the World Cup knockout stage, Wimbledon is getting underway this morning in London. And in addition to appearances by the game's current stars, this year's championships will see the return of 44-year-old Grand Slam winner Serena Williams, who was already slated to play doubles with her sister Venus, but accepted a last minute while card slot to play singles. Well, I thought not every day when Blin holds a wow card for someone, and I can name a probably like a handful of people and happen to be one of those people. And I thought, well, I should really take this opportunity. Who knows if I'll ever make it here again,

this could be it. Serena's first singles match in nearly four years is scheduled for tomorrow when she'll face off against 20-year-old Australian Maya Joint. Though if you can't wait that long for the tennis, don't worry because competition began. just as we had published this morning. And that's it for what's news. For this Monday morning, today's show was produced by Daniel Bach and Hattie Moyer. Our supervising producer is Sandra Kilhoff,

and I'm Luke Vargas for The Wall Street Journal. We will be back tonight with the news show. And until then, thanks for listening.