US charges two Chinese nationals with attempting to recruit US service members

 Two Chinese nationals face serious charges after they allegedly acted as agents of the People's Republic of China’s government to collect intelligence about U.S. Navy service members and bases, while also recruiting other military members to carry out tasks for the country’s main foreign intelligence service, the Ministry of State Security (MSS).

The Department of Justice (DOJ) said Chinese national Yuance Chen, who resides in Happy Valley, Oregon, and Liren Lai, who traveled to Houston on a tourist visa in April 2025, were arrested on Friday. Both individuals face charges of overseeing and carrying out various clandestine intelligence tasks in the U.S. on behalf of the Ministry of State Security.

Along with assisting with the recruitment of potential MSS assets and gathering intel about service members and bases, the two men are accused of facilitating a "dead drop" payment of cash on behalf of the MSS.

The FBI arrested both men on Friday – Chen was arrested in Happy Valley while Lai was arrested in Houston – with help from the Naval Criminal Investigative Service (NCIS).

"Today’s arrests reflect the FBI’s unwavering commitment to protecting our national security and safeguarding the integrity of our military," FBI Director Kash Patel told Fox News Digital. "The individuals charged were acting on behalf of a hostile foreign intelligence service — part of the Chinese Communist Party’s broader effort to infiltrate and undermine our institutions. Thanks to outstanding coordination with our partners, including NCIS, we disrupted those efforts and sent a clear message: the United States will not tolerate espionage on American soil. Our counterintelligence operations remain focused, vigilant, and relentless."

Citing a criminal complaint filed in the Northern District of California, the DOJ said the government of the PRC conducts intelligence activities against the U.S. using various means, including the MSS, which is involved with collecting intelligence on civilians. The MSS is also responsible for foreign intelligence, counterintelligence and political security.

The complaint alleges that Lai recruited Chen to work for the MSS in 2021.

The two men were in Guangzhou, China in January 2022, when they allegedly collaborated to facilitate a dead-drop payment of at least $10,000 on behalf of the MSS. The operation involved working with others in the U.S. to leave a backpack with the cash at a day-use locker in Livermore, California.

Lai and Chen continued working on behalf of the MSS after the cash drop payment and helped with identifying Navy individuals who might be willing to work on behalf of the MSS as well.

The DOJ said in 2022 and 2023, the two visited a U.S. Naval installation in Washington State as well as a Navy recruitment center in San Gabriel, California.

While at the recruitment center, Chen allegedly took photos of a bulletin board that contained the names, programs and hometowns of Navy recruits. The majority of those listed on the board noted that their hometown was "China," and the photos appeared to be transmitted to an MSS intelligence officer in China, the DOJ claimed.

The DOJ also alleged that the MSS gave Chen instructions on what to say to potential recruits when it came to payment that could be made by the MSS, preferred Naval job assignments for potential recruits and methods to minimize Chen’s risk of being exposed.

Chen ultimately began to communicate with a member of the Navy on social media, the DOJ alleges, and arranged for a tour of the USS Abraham Lincoln in San Diego with the employee. Chen also sent information about the employee to the MSS, the complaint said.

In April 2024 and March 2025, Chen traveled to Guangzhou where he met with MSS intelligence officers, the complaint alleged, to discuss pay for specific tasks.

Lai also allegedly traveled to Houston in April 2025 and claimed the purpose of the visit was related to his business as an online retailer. He also claimed he would be staying in Houston for two weeks.

But on May 9, 2025, which was more than four weeks after he arrived in the U.S., Lai was seen traveling in a car with a companion from Houston to California, and back to Junction, Texas, on May 15.

Chen and Lai have been charged with operating in the U.S. as an agent of a foreign government without notifying the U.S. attorney general. If convicted, both men face a fine of up to $250,000 and up to 10 years behind bars.

"Adverse foreign intelligence services like the PRC’s Ministry of State Security dedicate years to recruiting individuals and cultivating them as intelligence assets to do their bidding within the United States," said Assistant Attorney General for National Security John Eisenberg. "Under my leadership, the National Security Division will continue to defend our nation and neutralize our adversaries’ clandestine spy networks."

https://www.foxnews.com/us/two-chinese-nationals-arrested-spying-us-navy-personnel-bases

AI's next explosive frontier for investors, according to BlackRock

 Software stocks look compelling as companies make it easier for consumers and businesses to take advantage of AI

Stocks driving the artificial-intelligence race have made a comeback. The Roundhill Magnificent Seven ETF MAGS moved back into positive territory last week after recovering everything it lost this year. But as investors pile back into the big names, they may be missing out on where the real strides in AI are expected to take place next, which is in software stocks.

According to BlackRock's Tony Kim, head of fundamental equities for the global technology team, the next big stage in AI's development will be the exploding use cases that come from the software industry, which is expected to permeate every sector of society. Simply put, software companies are building the bridge between AI and its deployment by businesses and everyday people.

This year, MarketWatch interviewed Kim as he was wrapping up BlackRock's annual tech tour that lasted five days and included meetings with about 25 technology companies across Silicon Valley and San Francisco. Kim's overall insight as he reflected on the week is that the development of AI is powering full steam ahead. Despite concerns over the domestic economy, geopolitical tensions, or the development of cheaper AI models like the one that came from DeepSeek, there has been no abatement on the part of U.S. companies developing AI, he said. And the software companies that are deploying AI are well-positioned to be the next beneficiaries of that expansion.

As for investors worried about whether there will be enough demand for AI to justify the optimism that has driven up Nvidia Corp.'s (NVDA) stock, or the hefty capital expenditures hyperscalers are committing to develop AI infrastructure, Kim's simple response is to look around and ask some very basic questions, such as whether AI has transformed all the areas and sectors it can. In other words, does everyone have an AI assistant helping them in their daily lives? Are employees across companies now fully using AI agents in their workflows? And is physical AI in the form of autonomous vehicles and robotics operating at full scale? The answer to all of those questions is no, he said, meaning that AI is just getting started.

Furthermore, he added that AI's capabilities are improving rapidly, suggesting that there will be more use cases and efficiencies that have yet to be discovered. Over time, the costs to develop and run AI are expected to decrease.

As for Nvidia, the company sits at the absolute epicenter of AI's development, especially because there will be a big need for AI factories both domestically and globally to power all these applications, Kim said. During Nvidia's fiscal first-quarter earnings call, Chief Executive Jensen Huang said that one of the main growth areas for the company was the need for AI factories, which create and deploy AI. Huang added that demand is helping cushion revenue losses from China following the U.S. government's export restrictions on its H20 product.

And while Kim was positive about Nvidia's prospects, he was even more excited about the opportunities that could be found in the software sector, as those companies integrate AI into their products.

The case for software stocks in the era of AI development

Within the software sector, there are two main categories - enterprise and consumer-facing applications - and investors should pay attention to both, Kim noted. Consumer-facing providers include tax-software provider Intuit Inc. (INTU) and language educator Duolingo Inc. (DUOL). Enterprise-based software companies include Salesforce Inc. (CRM), which provides customer-relationship-management offerings, and Autodesk Inc. (ADSK), which makes design technology.

According to BlackRock's fundamental equities technology team, there are a few key reasons to focus on software companies at this early stage in the AI boom. For one, these companies have an opportunity to increase their competitive advantage as they acquire or build proprietary AI systems and maintain unique data sets. In other words, companies can differentiate from rivals by building unique AI systems using data they have.

The software sector is also ripe with emerging AI technologies that can serve every industry. At the center of booming AI demand will be agentic AI, which can make decisions and take action. These tools can be built to manage and improve inventory, help developers code, assist doctors with patient care and even help design architecture.

Additionally, software companies can more easily keep up with the AI boom because they can rapidly scale to meet demand, since most rely on central cloud storage rather than expensive hardware. This also means they can grow customer bases without big increases to their operating costs. For this reason, software companies tend to have higher profit margins, with the median subscription profit margin being about 80%, according to BlackRock's fundamental equities technology team.

Software companies also tend to have recurring revenue because most of them run subscription-based businesses where payments are made monthly or annually. This reduces investment risk because there's more predictability when forecasting the company's future cash flows. Furthermore, software companies that operate in niche industries and deploy AI-enhanced solutions are even better investments because it's more difficult for their customers to switch to a different provider, since it's expensive to change a company's entire system, according to BlackRock's fundamental equities technology team. Therefore, these software companies tend to see less customer turnover, making their future cash flows even more predictable.

Overall, investors should focus on companies that show sustainable growth and strong unit economics, meaning that each product or service sold has a good profit margin.

https://www.morningstar.com/news/marketwatch/20250701426/heres-ais-next-explosive-frontier-for-investors-according-to-blackrock

'Productivity Gains From Using AI'

 As AI tools become increasingly integrated—and in some cases, even mandated—into professional workflows, their real-world impact on productivity is becoming more evident.

This chart, via Visual Capitalist's Niccolo Conte, compares the average time it takes U.S. adults to complete 18 common work tasks with and without the use of generative AI, based on a December 2024 survey of 4,278 respondents conducted by Stanford University and the World Bank.

Generative AI Improves Productivity by Over 60%

Across all tasks, using generative AI reduced the average time taken to complete them by more than 60%.

Here’s how much time using generative AI saved across 18 common work tasks, in average number of minutes:

Task	Time With GenAI (avg. minutes)	Time Without GenAI (avg. minutes)	Time Reduction
Writing	25	80	-69%
Active Learning	26	76	-66%
Critical Thinking	27	102	-74%
Troubleshooting	28	115	-76%
Judgement and Decision Making	28	79	-65%
Management of Material Resources	28	92	-70%
Mathematics	29	108	-73%
Time Management	29	77	-62%
Complex Problem Solving	30	122	-75%
Instructing	31	93	-67%
Operations Analysis	31	98	-68%
Systems Analysis	31	87	-64%
Managament of Personnel	32	103	-69%
Programming	33	129	-74%
Equipment Maintenance	34	124	-73%
Quality Control Analysis	36	103	-65%
Management of Finances	38	106	-64%
Technology Design	39	142	-73%

Some of the largest gains came from highly technical or analytical tasks. For example, troubleshooting saw a 76% reduction in time, while critical thinking, programming, and technology design all showed over 70% time savings with generative AI.

Interestingly, even human-centric tasks—such as instructing, judgment and decision-making, and management of personnel—benefited from AI tools, with time reductions ranging from 60–70%.

Accelerating Work With AI

While AI is often framed as a replacement for human labor, this data shows that human workers empowered by AI can do the same tasks far more efficiently.

Writing, for example, dropped from an average of 80 minutes to just 25 minutes with generative AI. For complex cognitive functions like mathematics, systems analysis, and operations, AI reduced the time taken to complete tasks by over an hour.

Furthermore, AI adoption is increasing rapidly. According to the survey, LLM adoption at work for respondents aged 18 or older increased from 30% in December 2024 to over 43% as of March/April 2025.

If this trajectory continues, AI-driven productivity gains could scale from individual tasks to entire organizations, and potentially reshaping broader economic outcomes.

AI is transforming how we work and live online, but which companies are leading this new era of technology? Find out in this infographic on Voronoi, the new app from Visual Capitalist.

https://www.zerohedge.com/ai/productivity-gains-using-ai

"Next Level": AI-Powered "Digital Workers" Deployed At BNY To Work Alongside Humans

 If you’re working in banking, your next colleague could be a bot. Once unthinkable, the Bank of New York Mellon announced that it has deployed dozens of artificial intelligence-powered “digital employees” that operate with human employees, and even have their own company login credentials.

The Wall Street Journal reports:

Similar to human employees, these digital workers have direct managers they report to and work autonomously in areas like coding and payment instruction validation, said Chief Information Officer Leigh-Ann Russell. Soon they’ll have access to their own email accounts and may even be able to communicate with colleagues in other ways like through Microsoft Teams, she said.

What the bank, also known as BNY, calls “digital workers,” other banks may refer to as “AI agents.” And while the industry lacks a clear consensus on exact terminology, it’s clear that the technology has a growing presence in financial services. 

“This is the next level,” Russell told the Journal. “I’m sure in six months’ time it will become very, very prevalent.”

BNY said its AI Hub developed two digital employee personas in three months, according to Adrienne Russell. One persona is engineered to identify and resolve coding vulnerabilities, while the other verifies payment instructions. Each persona can operate in multiple instances—up to several dozen—with each instance confined to a specific team to limit company wide data access.

Soon, the bank plans to integrate its digital workforce with email addresses and Microsoft Teams access in the near future, enabling these AI personas to proactively communicate with human managers, but will maintain its focus on recruiting top human talent while simultaneously expanding its digital workforce, according to the Journal.

Of course, BNY isn’t the only bank looking to shift work from its human staff to AI. Goldman Sachs has already launched an internal AI assistant to 10,000 of its bankers, traders and asset managers to use. In an interview with CNBC, the bank’s Chief Information Officer, Marco Argenti, said the AI assistant will pitch in with basic tasks like proofreading documents and improving language. “Think about all the tasks that you might want to complete with regards to a variety of use cases for all those professions that can be now at your fingertips,” Argenti said. “The AI assistant becomes really like talking to another GS employee."

“As we progress, the second step is when you’re starting to have this agentic behavior, that is, ‘I’m completing a task on behalf of a Goldman employee, and I need to take a set of steps,’” he added. “That’s where the model is going to start to do things like a Goldman employee, not only say things like a Goldman employee.”

At JPMorgan Chase, Chief Analytics Officer Derek Waldron thinks of “digital employees” as more of a helpful model for business people to conceptualize AI tools. They are fundamentally different from human employees, of course, but also traditional software systems, and so they may need their own type of system connectivity and access management, he said. It’s an open question exactly how much or how little access to give an agent, and it’s going to have to be figured out on a case-by-case basis, he said.

And while it’s not clear yet exactly what it will look like, he does envision a future where every employee will have an AI assistant and every client experience will have an AI concierge. 230,000 employees already have access to a general AI chatbot through the company’s proprietary platform, and the goal is to build out more autonomous and more agentic versions of it that are further and further tailored to individual job groups. -WSJ

According to Scott Mullins, Managing Director of AWS for Financial Servies, the question of how to integrate digital workers with a human workforce is a top issue across the finance industry.

"How do we coordinate that work together?" he said, adding "How do we manage those folks? How do we actually instruct those folks? What’s the new operating model? Those are the answers that we’re all working on right now."

https://www.zerohedge.com/technology/next-level-ai-powered-digital-workers-deployed-major-bank-work-alongside-humans

FDA Signs Off on Neurogene’s ‘Best-Case Scenario’ Pivotal Study Design for Rett Syndrome

 

The pivotal trial for Neurogene’s Rett syndrome gene therapy makes use of baseline controls and a rigorous endpoint that could help ensure a broader label for the drug product, if approved, according to analysts.

Neurogene has reached alignment with the FDA regarding the design of a registrational study for the investigational gene therapy NGN-401 for Rett Syndrome, which will allow the biotech to convert its current Phase I/II study into a pivotal trial.

The FDA has allowed Neurogene to run a single-arm and baseline-controlled study with female patients aged three years and up, according to the company’s Monday announcement. NGN-401 will be given at a single dose with the trial assessing for treatment responders, as measured by the Clinical Global Impression-Improvement (CGI-I) scale and achievement of developmental milestones or skills.

In a note to investors on Monday, analysts at William Blair noted that reaching agreement with the FDA is the “best-case scenario” for Neurogene, “as it allows for fast conversion of clinical trial sites.” The agreed-upon trial design also involves “a favorable/feasible control strategy, rigorous primary endpoint, and broad age range,” according to the analysts.

The endpoint, in particular, poses a stringent definition of what a treatment responder is, they added. “We believe the demonstration of clinical benefit as measured through CGI-I will be helpful during future labeling and payer discussions, if approved.”

Stifel analysts agree, writing in a note that Neurogene’s pivotal study protocol is both “favorable” and “doable.” The use of a small sample and a single study arm, in particular, “aligns with the bull case,” they added.

Both Stifel and William Blair compared Neurogene’s study design on Monday with that of Taysha Gene Therapies, which last month also reached alignment with the FDA on a pivotal protocol for its own Rett syndrome gene therapy TSHA-102. The two studies look similar, according to both analyst firms, except for some key differences.

“We see Neurogene’s trial as differentiated by the lower age bound . . . and the definition of responder,” William Blair explained. Stifel analysts likewise flagged the differences in what constitutes a responder, noting that Taysha’s trial employs a lower hurdle for establishing efficacy. Neurogene however intentionally chose a more rigorous endpoint “for the broadest label . . . which could offer a meaningful commercial advantage,” Stifel explained, citing conversations with the biotech.

Monday’s news comes months after Neurogene revealed that a patient died in its Phase I/II Rett syndrome study after being treated with a 3E15-vg dose of NGN-401. The FDA at the time allowed Neurogene to push through with the trial, but only using a lower dose—the same dose to be used in the pivotal study.

The alignment with the FDA is also in line with statements from the agency’s new leadership signaling support for regulatory flexibility for gene therapies and rare diseases.

In April, for instance, Commissioner Marty Makary said that he is open to considering a new pathway for approving rare disease therapies based on a candidate’s “plausible mechanism.” If drugs have a mechanism of action that is “scientifically plausible,” then they could be approved on a conditional basis.

Vinay Prasad, director of the Center for Biologics Evaluation and Research, also said last month that his office will “rapidly make available” treatments for rare diseases by being flexible with regulatory requirements, such as allowing the use of regulatory endpoints. “We will take action at the first sign of promise for rare diseases,” he said at the time. “We’re not going to wait.”

https://www.biospace.com/drug-development/fda-signs-off-on-neurogenes-best-case-scenario-pivotal-study-design-for-rett-syndrome

Perrigo to undergo strategic organizational changes

Perrigo (NYSE: PRGO), a leading provider of Consumer Self-Care Products, has announced a strategic organizational restructuring to optimize its global Category-Led, Market Activation Growth Model. The company is making key leadership changes, with Roberto Khoury appointed as EVP & Chief Commercial Officer to lead global market activation, while Triona Schmelter, EVP & President of Consumer Self-Care Americas (CSCA), will depart the organization.

The reorganization aims to enhance agility, accelerate innovation, and drive sustainable growth as part of Perrigo's multi-year Stabilize, Streamline and Strengthen ('Three-S') plan. The company will centralize its global brand-building capabilities while maintaining market-empowered activation and commercial excellence. The restructuring will not impact Perrigo's full-year 2025 adjusted EPS guidance or reporting segments.

The implementation will occur over the coming months, following all required legal consultation processes. The roles of EVP and President CSCI and EVP and President CSCA will be discontinued as part of this organizational alignment.

https://www.stocktitan.net/news/PRGO/perrigo-announces-strategic-organizational-update-to-drive-3bv98qaheq2x.html

What’s the Hong Kong Dollar Peg and Why Is It Causing Such a Stir?

 

Pegged to the US dollar since 1983, the Hong Kong dollar is usually a dull currency. Except when it’s not, like this year.

The city’s currency has recently experienced wild swings, caused by volatility in the US dollar, which has come under pressure amid uncertainty from President Trump’s trade war.

https://www.bloomberg.com/news/articles/2025-07-01/hkd-usd-why-is-hong-kong-dollar-pegged-to-us-dollar-why-it-matters