Larry Fabbroni is an architect, strategic advisor, and Chief Innovation Officer for Practice of Architecture. Throughout his career, he has led efforts to reform studio culture and innovate practice. He earned his MBA from the University of Chicago’s Booth School of Business. In 2017, as leaders in the AIA’s Young Architects Forum (YAF), we led the launch of the Practice Innovation Lab (PIL) and hosted a symposium that imagined new architectural practice models. At that time, we already felt that practice innovation was overdue in a profession that has not seen scaled disruption to its business model in over a century. Today, we are confident that there has never been a more critical time for the profession to embrace innovation. Redefining Innovation Henley Hall: Institute for Energy Efficiency by KieranTimberlake, Santa Barbara, California | KieranTimberlake’s research expertise creates value beyond a baseline labor model.  Currently, artificial intelligence dominates strategy conversations, but just as we saw back in 2017, larger patterns prompt calls for innovation. Talent attraction is increasingly challenging, disruptive technology continues to emerge, and actors from outside our industry show growing interest in the space. While incremental innovation has long been a part of the profession, relatively few firms have adopted new practices that create value beyond a baseline labor model. Firms such as KieranTimberlake have shown that research expertise can do this. MASS Design has pioneered a mission-driven approach. BIG has taken on the role of architect-as-developer. Snøhetta houses a product design division. We could continue to list great firms that have pushed the boundaries of practice, but they represent exceptions that have yet to be recognized as new standards. Indeed, the confluence of those factors that led to the original PIL continues to make the case that the time for scaled innovation is now. A Melting Iceberg: Incremental Changes Depleting the Profession Powerhouse Telemark by Snøhetta, Vestfold og Telemark, Norway | Photo by Ivar Kvaal | Snøhetta houses a product design division, innovatively presenting a alternative business model for firms.  One of the dangers of operating in a slow-moving industry is that change is difficult to detect and even more challenging to comprehend. If an iceberg loses 1% of mass per year, it’s tough to take notice, but the end result is catastrophic. This is what is happening to our profession. For newcomers, if it feels like there are increasingly more attractive opportunities elsewhere, that’s because there are. For seasoned professionals, if it feels like it’s become more challenging to maintain the same levels of prosperity, that’s because it has. Less(er) Talent In some ways, the shift towards companies recognizing “talent” as their most excellent resource has bewildered architects: we have always relied on talent. However, the patterns of talent leaving our profession are concerning. We say “feel” because there is no significant data. We spoke to Kendall A. Nicholson, Senior Director of Research at the Association of Collegiate Schools of Architecture (ACSA), who confirmed that aggregated data on graduate placement does not exist. So we inquired about what placement looks like at several programs around the country. Omar Khan, Head of the Carnegie Mellon University School of Architecture, informed us that approximately 90% of students pursue a minor to expand their horizons, and that in 2022, nearly one in three graduates entered the tech sector. Khan stated that these opportunities aren’t just student-driven — large innovative companies increasingly seek the value that graduates of architecture schools will provide. This increasing difficulty in capturing the talent that architecture schools are producing results in a shrinking and diluted talent pool. For a profession so reliant on human resources, this presents extreme risk. Pay Gaps In an increasingly expensive world, we are not able to compete for the best talent with emerging industries. It’s easy to understand why a popular career pivot for architects has become UX design. Designing user experience for websites pays significantly better than designing the same for the built environment. According to Glassdoor, 2023 entry-level UX designers earned an average of $78K, while the AIA salary calculator suggests architecture grads can expect to earn an average of $59 K. The talent we do attract into the profession often loses interest when they experience low pay and long hours, all while most firms lack clear paths and criteria for advancement or compensation increases. A Smaller Piece of the Pie Examining data in isolation, one might conclude that the profession continues to grow; the number of architects has increased substantially over the last century, and this trend has persisted in recent years. The problem with this growth is that the estimated share of the US GDP for Architectural Services has shrunk over time. This is not a manageable number to measure before 1999, when NCARB first aggregated local jurisdictional data. Due to limitations in industry economic data, we’re only showing data since 2011 for the purposes of this article. In that time, the number of architects has grown, the market size for services has grown, but the share those services represent as a portion of the US GDP has declined — by 15% if we use US Census data to almost 30% if we use industry research data (we used IbisWorld.com, however we found data that suggested a worse and others that offered a slightly better picture). To put it another way, architecture is a stagnant industry with a shrinking share of the economy. It’s challenging to examine this data and emerge feeling confident about the profession, but there is a silver lining. The biggest impediment to innovation for architects is not a lack of talent, but rather the business model. Design thinking has been widely adopted throughout the world as a key component of innovation processes; however, the problem is that we operate in the realm of professional services, which inherently is not well-suited to promoting innovation. Reliance on that formula is causing our iceberg to melt. The Tsunami: The AI Tidal Wave is Here The Rwanda Institute for Conservation Agriculture by MASS Design Group, Rwanda | MASS Design has pioneered a mission-driven approach that creates value beyond a baseline labor model.  As we confront the exodus of talent, it is easy for both firm owners and clients to imagine AI bringing efficiencies and replacing “CAD-monkeys” with machines. However, any firm that wants to operate — and win — as anything more than a low-cost provider will need a strategy to increase value, not just cut costs. AI is merely part of the toolbox required to confront a perfect storm of forces. Jobs will Disappear Goldman Sachs predicts that as much as 37% of our industry tasks will be replaced by AI. Many see this as a pathway to lower costs and increased profits. However, that is short-sighted. Markets will adjust quickly and demand lower costs for services; additional new value will need to be articulated and proven, and this will only happen through innovation. New Jobs will Emerge (but fewer of them) AI prophets often emphasize that technological innovation has historically led to net employment gains. Previous World Economic Forum estimates predicted losses of up to 85 million existing jobs worldwide, with parallel gains of as many as 97 million new jobs. However, these estimates were revised in the WEF 2023 Economic Outlook, which now anticipates a net loss of 14 million jobs. This stark outlook signals an even greater need for architects to become more innovative. The 2024 RIBA AI Report indicates that 41% of architecture firms were already utilizing AI, though current tools are indeed just the beginning. Marketing, business development and content creation will be standard areas of AI deployment moving forward. Still, revolutionary changes will come in how we learn, not only to use new tools, but also to collaborate with digital agents. How will this happen? We can theorize, but it is not possible to know for sure until it arrives, so we need to have a plan before we can see the tidal wave from land. The Alien Invasion: Outsiders Are Entering Our Orbit VIA 57 West by BIG – Bjarke Ingels Group, New York City, New York | BIG has pioneered a new model for practice by taking on the role of architect-as-developer. For years, we’ve heard cries that “architects gave away the role of master builder.” But how much did architects actually give, and how much was taken by innovative competition? This distinction is critical because the wagons are circling, and the AEC space has become ever more attractive to investors. Venture Capital and Private Equity Investment The numbers are often difficult to parse because architecture can impact so many verticals and does not operate as its own sector in the investment realm; however, the trends suggest a groundswell is underway. A 2023 McKinsey report shows that construction tech deals nearly doubled from 2019 to 2022, growing by 85%. At the same period, the number of deals increased by 30%, indicating that interest continues to grow. An increasing size of deals also suggests a maturity of the market. As interest in infrastructure investments has declined from its high in 2020, and along with real estate, has been blunted by high interest rates, institutional investors continue to see opportunities in the AEC space. Firm Acquisitions AEC firms that deliver predictable returns have proven to be attractive targets for PE firms. In the second quarter of 2024, private equity firms accounted for over one-third of AEC firm mergers and acquisitions. For M&A deals, the industry has seen an increase in attractiveness with expanded infrastructure spending as a catalyst. However, this interest can also be tied to the lack of innovation that has resulted in an industry ripe for consolidation. M&A orchestrators generate large amounts of profit by streamlining operations, eliminating redundancies, and then stamping out competition. An entire community has been built around this, with AEC Advisors hosting an annual “Private Equity Summit” that brings together CEOs of AEC firms with PE investors. Startups As an extension of the growing interest from venture capital in the space, there is an upward trend in the AEC space being targeted for disruption by entrepreneurs who see an industry that represents a significant portion of the global GDP. AEC Works, a project of e-verse that catalogs AEC startups and investors, lists nearly 800 startups from around the world, with almost 200 identified as “architecture-focused.” The signal is clear: startups are looking to figure out how to do what you do cheaper, better, or perhaps both. Combining this environment with depleted talent pools, a declining share of GDP, and revolutionary technology, it is a correct response to be alarmed. Significant change is inevitable. It is time for architects to see the same opportunities that investors and entrepreneurs see, and learn to navigate within these spaces. The Great Opportunity Throughout history, new actors have enjoyed a “leap-frog” effect and been able to surpass established incumbents to reshape industries, markets and economies. From climate change to pandemic ripple effects, to the housing crisis, to generational shifts in the workforce, there are many forces that directly impact the work of architects and call for innovation. The need for new ways of designing and delivering different components of the built environment is ever-present and will be solved by teams that either include — and might be led by — architects, or those that do not. Most end users will only care if the resulting product is superior. This time of tension is indeed a time of great opportunity. Architects who embrace innovation in pursuing new iterations of our dated business models may actually achieve what many of us have dreamed of from the start: to leave a positive mark on the world. We think the future of the profession depends on it. Top image: Powerhouse Telemark by Snøhetta, Vestfold og Telemark, Norway The post Architects, Your Real Competition Isn’t AI — It’s Business Complacency appeared first on Journal.

Despite what some experts have characterized as an environment increasingly hostile to AI R&D, North America continues to receive the bulk of AI venture dollars, according to data from investment tracker PitchBook. Between February and May of this year, VCs poured $69.7 billion into North America-based AI and machine learning startups across 1,528 deals. That’s compared with $6.4 billion that VC firms invested in European AI ventures across 742 deals across the same period. Asia-based startups have fared a bit worse than their European counterparts, according to PitchBook. Between February and May, VCs invested just $3 billion in Asia-based AI startups across 515 deals. Under President Donald Trump, the U.S. has dramatically cut funding to scientific grants related to basic AI research, made it more difficult for foreign students specializing in AI to study in the U.S., and threatened to dismantle university-housed AI labs by freezing billions of dollars in federal funds. The administration’s trade policies, meanwhile, including its retaliatory tariffs, have led to a chaotic market unfavorable for risky new AI ventures. In a post on X in March, AI pioneer and Nobel Laureate Geoffrey Hinton called for billionaire Elon Musk, who until recently advised Trump’s cost-cutting group, the Department of Government Efficiency, to be expelled from the British Royal Society “because of the huge damage he is doing to scientific institutions in the U.S.” One might expect that Europe, which has pledged to become a global leader in AI, would attract more venture capital in light of Trump’s controversial policies in the U.S., which have created uncertainty and confusion for founders, investors, and researchers alike. Moreover, the EU has committed hundreds of billions of euros to support the development of AI within its member countries and already has a number of successful, well-funded AI startups in its ranks (see Mistral, H, and Aleph Alpha, to name a few). But that anticipated shift in global investment hasn’t come to pass. There isn’t any sign of a mass VC exodus to the bloc, or of significant upticks in AI funding overseas — at least not yet. Techcrunch event Save now through June 4 for TechCrunch Sessions: AI Save $300 on your ticket to TC Sessions: AI—and get 50% off a second. Hear from leaders at OpenAI, Anthropic, Khosla Ventures, and more during a full day of expert insights, hands-on workshops, and high-impact networking. These low-rate deals disappear when the doors open on June 5. Exhibit at TechCrunch Sessions: AI Secure your spot at TC Sessions: AI and show 1,200+ decision-makers what you’ve built — without the big spend. Available through May 9 or while tables last. Berkeley, CA | June 5 REGISTER NOW The same is true for China, which has spawned high-profile AI startups like DeepSeek and Butterfly Effect — the company behind the agentic platform Manus — but where VC activity in the country and the broader Asian region remains relatively austere. (Export controls impacting the ability of certain Asian countries to procure AI chips are almost certainly a factor.) In 2024, North American startups secured 75.6% of all VC AI funding — $106.24 billion. That share has only increased this year. So far in 2025, North American AI investments represent 86.2% ($79.74 billion) of all VC funding for AI globally. It paints a somewhat surprising picture. Even amid mounting political and regulatory headwinds under Trump’s second term, the U.S. remains the undisputed center for AI capital, meaning investors, fatigued as they may be by the administration’s unpredictability, are still counting on U.S. innovation to deliver the biggest returns, at least for now.

In a Bloomberg interview Wednesday night in downtown San Francisco, Alphabet CEO Sundar Pichai pushed back against concerns that AI could eventually make half the company’s 180,000-person workforce redundant. Instead, Pichai stressed the company’s commitment to growth through at least next year. “I expect we will grow from our current engineering phase even into next year, because it allows us to do more,” Pichai said, adding that AI is making engineers more productive by eliminating tedious tasks and enabling them to focus on more impactful work. Rather than replacing workers, he referred to AI as “an accelerator” that will drive new product development, thereby creating demand for more employees. Alphabet has staged numerous layoffs in recent years, though so far, cuts in 2025 appear to be more targeted than in previous years. It reportedly parted ways with less than 100 people in Google’s cloud division earlier this year and, more recently, hundreds more in its platforms and devices unit. In 2024 and 2023, the cuts were far more severe, with 12,000 people dropped from the company in 2023 and at least another 1,000 employees laid off last year. Looking forward, Pichai pointed to Alphabet’s expanding ventures like Waymo autonomous vehicles, quantum computing initiatives, and YouTube’s explosive growth as evidence of innovation opportunities that continually bubble up. He noted YouTube’s scale in India alone, with 100 million channels and 15,000 channels boasting over one million subscribers. At one point, Pichai said trying to think too far ahead is “pointless.” But he also acknowledged the legitimacy of fears about job displacement, saying when asked about Anthropic CEO Dario Amodei’s recent comments that AI could erode half of entry-level white collar jobs within five years, “I respect that . . .I think it’s important to voice those concerns and debate them.” As the interview wrapped up, Pichai was asked about the limits of AI, and whether it’s possible that the world might never achieve artificial general intelligence, meaning AI that’s as smart as humans at everything. He quickly paused before answering. “There’s a lot of forward progress ahead with the paths we are on, not only the set of ideas we are working on today, [but] some of the newer ideas we are experimenting with,” he said. “I’m very optimistic on seeing a lot of progress. But you know,” he added, “you’ve always had these technology curves where you may hit a temporary plateau. So are we currently on an absolute path to AGI? I don’t think anyone can say for sure.” Techcrunch event Save now through June 4 for TechCrunch Sessions: AI Save $300 on your ticket to TC Sessions: AI—and get 50% off a second. Hear from leaders at OpenAI, Anthropic, Khosla Ventures, and more during a full day of expert insights, hands-on workshops, and high-impact networking. These low-rate deals disappear when the doors open on June 5. Exhibit at TechCrunch Sessions: AI Secure your spot at TC Sessions: AI and show 1,200+ decision-makers what you’ve built — without the big spend. Available through May 9 or while tables last. Berkeley, CA | June 5 REGISTER NOW

A new analysis of ancient DNA reveals a previously unknown lineage of hunter-gatherers who lived in what is now Colombia.

We’d like to help everyone get started with the prototype, so here’s a brief summary of the current controls. Controller support is planned for a future update. Posted by AngryCatStudios on May 28th, 2025 - Basic Design/Concepts Controls Spells can be selected in two ways: Hold the Q key briefly to bring up the spell bar, then use A, S, D to navigate or simply left-click on a spell. Or use F2 for Arcane Bolt, F3 for Arcane Shield, and F4 for Time Wrap directly. 💡 Note: This is the first iteration of the keybindings. Full keyboard/mouse and controller support will improve usability in future versions. ■ Character Attributes You can allocate points under Primary Attributes / Skills on your character screen. For a Mage, we recommend: A. Arcana – Grants +1 HP, +1 Tempo, and +3 Focus per rank B. Finesse – Grants +2 HP, +2 Tempo, and +1 Focus per rank If survivability is a priority, invest in Vigor, which grants +4 HP and +1 Tempo per rank. 🧪 Many items also boost these attributes depending on their rarity and stats. ■ Combat Basics Main rule: If you run out of Tempo, end your turn by pressing ENTER or clicking the End Turn button. Your character can only move or act as long as they have Tempo remaining. 🏃‍♂️ Tip: If you're near an Exit (marked with a green arrow), you can flee to the adjacent map. ■ Spell Usage Arcane Bolt – A magical projectile that can hit enemies even without Line of Sight. → Press F2, or hold Q, navigate with A/S/D → Press Q again to enter targeting mode → Rotate target with A/D, cast with F Arcane Shield – Currently self-cast only. Grants both physical and magical protection. → Use F3 or hold Q, navigate to the spell → Target yourself, confirm with F Time Wrap – A spell with dual-purpose effects: → Cast on enemies to increase their Tempo cost → Cast on yourself to reduce your Tempo cost → Use the same selection method as above ■ Targeting & Hit Chance When targeting (rotating with A/D), a stats window appears next to the enemy. ⚠️ Note: The window disappears if you move the mouse. The percentage displayed indicates your hit chance. ■ Additional Tips Lootables such as equipment and consumables (e.g. potions) are essential. You can use potions before or during combat. You cannot change gear while in combat.

Silent Hill f will launch on Sept. 25, Konami revealed during Wednesday’s PlayStation State of Play. It’ll be the first new mainline Silent Hill game in over a decade and the first game in the series overall since last year’s Silent Hill 2 Remake. It follows a student, Hinako, in 1960s Japan — a first for the psychological horror series typically set in rural America — as the town she lives in is overrun with horrifying enemies only a Silent Hill game could produce. A fog descends, causing the town’s citizens to disappear. Hinako comes across what seem to be her fellow students, now turned into terrifying creatures, as she fights her way out of a school with a pipe as her weapon. She also wields a spear when approaching a shrine and the ominous figure before it, whose face is the stuff of nightmares. According to a PlayStation Blog post, Silent Hill f “will have a heavier focus on melee and be more action-oriented” than the Silent Hill 2 remake. Silent Hill f was originally announced in 2022 and is being developed by the Taiwan-based studio Neobards Entertainment with additional support from Japanese developers. Visual novel fans might want to check it out, as Silent Hill f is being written in part by Ryukishi07. The blog post describes Silent Hill f as a “standalone spinoff,” meaning series veterans and newcomers alike will have their socks scared off by it when Silent Hill f is released on PC, PlayStation 5, and Xbox Series X.

Limited-time offer: Get more than 30% off a Vox Membership. Join today to support independent journalism. Federal civil servants are supposed to enjoy robust protections against being fired or demoted for political reasons. But President Donald Trump has effectively stripped them of these protections by neutralizing the federal agencies that implement these safeguards.An agency known as the Merit Systems Protection Board (MSPB) hears civil servants’ claims that a “government employer discriminated against them, retaliated against them for whistleblowing, violated protections for veterans, or otherwise subjected them to an unlawful adverse employment action or prohibited personnel practice,” as a federal appeals court explained in an opinion on Tuesday. But the three-member board currently lacks the quorum it needs to operate because Trump fired two of the members.Trump also fired Hampton Dellinger, who until recently served as the special counsel of the United States, a role that investigates alleged violations of federal civil service protections and brings related cases to the MSPB. Trump recently nominated Paul Ingrassia, a far-right podcaster and recent law school graduate to replace Dellinger.The upshot of these firings is that no one in the government is able to enforce laws and regulations protecting civil servants. As Dellinger noted in an interview, the morning before a federal appeals court determined that Trump could fire him, he’d “been able to get 6,000 newly hired federal employees back on the job,” and was working to get “all probationary employees put back on the job [after] their unlawful firing” by the Department of Government Efficiency and other Trump administration efforts to cull the federal workforce. These and other efforts to reinstate illegally fired federal workers are on hold, and may not resume until Trump leaves office.Which brings us to the US Court of Appeals for the Fourth Circuit’s decision in National Association of Immigration Judges v. Owen, which proposes an innovative solution to this problem.As the Owen opinion notes, the Supreme Court has held that the MSPB process is the only process a federal worker can use if they believe they’ve been fired in violation of federal civil service laws. So if that process is shut down, the worker is out of luck.But the Fourth Circuit’s Owen opinion argues that this “conclusion can only be true…when the statute functions as Congress intended.” That is, if the MSPB and the special counsel are unable to “fulfill their roles prescribed by” federal law, then the courts should pick up the slack and start hearing cases brought by illegally fired civil servants.For procedural reasons, the Fourth Circuit’s decision will not take effect right away — the court sent the case back down to a trial judge to “conduct a factual inquiry” into whether the MSPB continues to function. And, even after that inquiry is complete, the Trump administration is likely to appeal the Fourth Circuit’s decision to the Supreme Court if it wants to keep civil service protections on ice.If the justices agree with the circuit court, however, that will close a legal loophole that has left federal civil servants unprotected by laws that are still very much on the books. And it will cure a problem that the Supreme Court bears much of the blame for creating.The “unitary executive,” or why the Supreme Court is to blame for the loss of civil service protectionsFederal law provides that Dellinger could “be removed by the President only for inefficiency, neglect of duty, or malfeasance in office,” and members of the MSPB enjoy similar protections against being fired. Trump’s decision to fire these officials was illegal under these laws.But a federal appeals court nonetheless permitted Trump to fire Dellinger, and the Supreme Court recently backed Trump’s decision to fire the MSPB members as well. The reason is a legal theory known as the “unitary executive,” which is popular among Republican legal scholars, and especially among the six Republicans that control the Supreme Court.If you want to know all the details of this theory, I can point you to three different explainers I’ve written on the unitary executive. The short explanation is that the unitary executive theory claims that the president must have the power to fire top political appointees charged with executing federal laws – including officials who execute laws protecting civil servants from illegal firings.But the Supreme Court has never claimed that the unitary executive permits the president to fire any federal worker regardless of whether Congress has protected them or not. In a seminal opinion laying out the unitary executive theory, for example, Justice Antonin Scalia argued that the president must have the power to remove “principal officers” — high-ranking officials like Dellinger who must be nominated by the president and confirmed by the Senate. Under Scalia’s approach, lower-ranking government workers may still be given some protection.The Fourth Circuit cannot override the Supreme Court’s decision to embrace the unitary executive theory. But the Owen opinion essentially tries to police the line drawn by Scalia. The Supreme Court has given Trump the power to fire some high-ranking officials, but he shouldn’t be able to use that power as a back door to eliminate job protections for all civil servants.The Fourth Circuit suggests that the federal law which simultaneously gave the MSPB exclusive authority over civil service disputes, while also protecting MSPB members from being fired for political reasons, must be read as a package. Congress, this argument goes, would not have agreed to shunt all civil service disputes to the MSPB if it had known that the Supreme Court would strip the MSPB of its independence. And so, if the MSPB loses its independence, it must also lose its exclusive authority over civil service disputes — and federal courts must regain the power to hear those cases.It remains to be seen whether this argument persuades a Republican Supreme Court — all three of the Fourth Circuit judges who decided the Owen case are Democrats, and two are Biden appointees. But the Fourth Circuit’s reasoning closely resembles the kind of inquiry that courts frequently engage in when a federal law is struck down.When a court declares a provision of federal law unconstitutional, it often needs to ask whether other parts of the law should fall along with the unconstitutional provision, an inquiry known as “severability.” Often, this severability analysis asks which hypothetical law Congress would have enacted if it had known that the one provision is invalid.The Fourth Circuit’s decision in Owen is essentially a severability opinion. It takes as a given the Supreme Court’s conclusion that laws protecting Dellinger and the MSPB members from being fired are unconstitutional, then asks which law Congress would have enacted if it had known that it could not protect MSPB members from political reprisal. The Fourth Circuit’s conclusion is that, if Congress had known that MSPB members cannot be politically independent, then it would not have given them exclusive authority over civil service disputes.If the Supreme Court permits Trump to neutralize the MSPB, that would fundamentally change how the government functionsThe idea that civil servants should be hired based on merit and insulated from political pressure is hardly new. The first law protecting civil servants, the Pendleton Civil Service Reform Act, which President Chester A. Arthur signed into law in 1883.Laws like the Pendleton Act do more than protect civil servants who, say, resist pressure to deny government services to the president’s enemies. They also make it possible for top government officials to actually do their jobs.Before the Pendleton Act, federal jobs were typically awarded as patronage — so when a Democratic administration took office, the Republicans who occupied most federal jobs would be fired and replaced by Democrats. This was obviously quite disruptive, and it made it difficult for the government to hire highly specialized workers. Why would someone go to the trouble of earning an economics degree and becoming an expert on federal monetary policy, if they knew that their job in the Treasury Department would disappear the minute their party lost an election?Meanwhile, the task of filling all of these patronage jobs overwhelmed new presidents. As Candice Millard wrote in a 2011 biography of President James A. Garfield, the last president elected before the Pendleton Act, when Garfield took office, a line of job seekers began to form outside the White House “before he even sat down to breakfast.” By the time Garfield had eaten, this line “snaked down the front walk, out the gate, and onto Pennsylvania Avenue.” Garfield was assassinated by a disgruntled job seeker, a fact that likely helped build political support for the Pendleton Act.By neutralizing the MSPB, Trump is effectively undoing nearly 150 years worth of civil service reforms, and returning the federal government to a much more primitive state. At the very least, the Fourth Circuit’s decision in Owen is likely to force the Supreme Court to ask if it really wants a century and a half of work to unravel.See More:

Despite what some experts have characterized as an environment increasingly hostile to AI R&D, North America continues to receive the bulk of AI venture dollars, according to data from investment tracker PitchBook. Between February and May of this year, VCs poured $69.7 billion into North America-based AI and machine learning startups across 1,528 deals. That’s compared with $6.4 billion that VC firms invested in European AI ventures across 742 deals across the same period. Asia-based startups have fared a bit worse than their European counterparts, according to PitchBook. Between February and May, VCs invested just $3 billion in Asia-based AI startups across 515 deals. Under President Donald Trump, the U.S. has dramatically cut funding to scientific grants related to basic AI research, made it more difficult for foreign students specializing in AI to study in the U.S., and threatened to dismantle university-housed AI labs by freezing billions of dollars in federal funds. The administration’s trade policies, meanwhile, including its retaliatory tariffs, have led to a chaotic market unfavorable for risky new AI ventures. In a post on X in March, AI pioneer and Nobel Laureate Geoffrey Hinton called for billionaire Elon Musk, who until recently advised Trump’s cost-cutting group, the Department of Government Efficiency, to be expelled from the British Royal Society “because of the huge damage he is doing to scientific institutions in the U.S.” One might expect that Europe, which has pledged to become a global leader in AI, would attract more venture capital in light of Trump’s controversial policies in the U.S., which have created uncertainty and confusion for founders, investors, and researchers alike. Moreover, the EU has committed hundreds of billions of euros to support the development of AI within its member countries and already has a number of successful, well-funded AI startups in its ranks (see Mistral, H, and Aleph Alpha, to name a few). But that anticipated shift in global investment hasn’t come to pass. There isn’t any sign of a mass VC exodus to the bloc, or of significant upticks in AI funding overseas — at least not yet. Techcrunch event Save now through June 4 for TechCrunch Sessions: AI Save $300 on your ticket to TC Sessions: AI—and get 50% off a second. Hear from leaders at OpenAI, Anthropic, Khosla Ventures, and more during a full day of expert insights, hands-on workshops, and high-impact networking. These low-rate deals disappear when the doors open on June 5. Exhibit at TechCrunch Sessions: AI Secure your spot at TC Sessions: AI and show 1,200+ decision-makers what you’ve built — without the big spend. Available through May 9 or while tables last. Berkeley, CA | June 5 REGISTER NOW The same is true for China, which has spawned high-profile AI startups like DeepSeek and Butterfly Effect — the company behind the agentic platform Manus — but where VC activity in the country and the broader Asian region remains relatively austere. (Export controls impacting the ability of certain Asian countries to procure AI chips are almost certainly a factor.) In 2024, North American startups secured 75.6% of all VC AI funding — $106.24 billion. That share has only increased this year. So far in 2025, North American AI investments represent 86.2% ($79.74 billion) of all VC funding for AI globally. It paints a somewhat surprising picture. Even amid mounting political and regulatory headwinds under Trump’s second term, the U.S. remains the undisputed center for AI capital, meaning investors, fatigued as they may be by the administration’s unpredictability, are still counting on U.S. innovation to deliver the biggest returns, at least for now.

For the past two years, it’s been a ghost in the machine of American tech. Between 2022 and today, a little-noticed tweak to the U.S. tax code has quietly rewired the financial logic of how American companies invest in research and development. Outside of CFO and accounting circles, almost no one knew it existed. “I work on these tax write-offs and still hadn’t heard about this,” a chief operating officer at a private-equity-backed tech company told Quartz. “It’s just been so weirdly silent.”AdvertisementStill, the delayed change to a decades-old tax provision — buried deep in the 2017 tax law — has contributed to the loss of hundreds of thousands of high-paying, white-collar jobs. That’s the picture that emerges from a review of corporate filings, public financial data, analysis of timelines, and interviews with industry insiders. One accountant, working in-house at a tech company, described it as a “niche issue with broad impact,” echoing sentiments from venture capital investors also interviewed for this article. Some spoke on condition of anonymity to discuss sensitive political matters.Since the start of 2023, more than half-a-million tech workers have been laid off, according to industry tallies. Headlines have blamed over-hiring during the pandemic and, more recently, AI. But beneath the surface was a hidden accelerant: a change to what’s known as Section 174 that helped gut in-house software and product development teams everywhere from tech giants such as Microsoft (MSFT) and Meta (META) to much smaller, private, direct-to-consumer and other internet-first companies.Now, as a bipartisan effort to repeal the Section 174 change moves through Congress, bigger questions are surfacing: How did a single line in the tax code help trigger a tsunami of mass layoffs? And why did no one see it coming? For almost 70 years, American companies could deduct 100% of qualified research and development spending in the year they incurred the costs. Salaries, software, contractor payments — if it contributed to creating or improving a product, it came off the top of a firm’s taxable income.AdvertisementThe deduction was guaranteed by Section 174 of the IRS Code of 1954, and under the provision, R&D flourished in the U.S.Microsoft was founded in 1975. Apple (AAPL) launched its first computer in 1976. Google (GOOGL) incorporated in 1998. Facebook opened to the general public in 2006. All these companies, now among the most valuable in the world, developed their earliest products — programming tools, hardware, search engines — under a tax system that rewarded building now, not later.The subsequent rise of smartphones, cloud computing, and mobile apps also happened in an America where companies could immediately write off their investments in engineering, infrastructure, and experimentation. It was a baseline assumption — innovation and risk-taking subsidized by the tax code — that shaped how founders operated and how investors made decisions.In turn, tech companies largely built their products in the U.S. AdvertisementMicrosoft’s operating systems were coded in Washington state. Apple’s early hardware and software teams were in California. Google’s search engine was born at Stanford and scaled from Mountain View. Facebook’s entire social architecture was developed in Menlo Park. The deduction directly incentivized keeping R&D close to home, rewarding companies for investing in American workers, engineers, and infrastructure.That’s what makes the politics of Section 174 so revealing. For all the rhetoric about bringing jobs back and making things in America, the first Trump administration’s major tax bill arguably helped accomplish the opposite.When Congress passed the Tax Cuts and Jobs Act (TCJA), the signature legislative achievement of President Donald Trump’s first term, it slashed the corporate tax rate from 35% to 21% — a massive revenue loss on paper for the federal government.To make the 2017 bill comply with Senate budget rules, lawmakers needed to offset the cost. So they added future tax hikes that wouldn’t kick in right away, wouldn’t provoke immediate backlash from businesses, and could, in theory, be quietly repealed later.AdvertisementThe delayed change to Section 174 — from immediate expensing of R&D to mandatory amortization, meaning that companies must spread the deduction out in smaller chunks over five or even 15-year periods — was that kind of provision. It didn’t start affecting the budget until 2022, but it helped the TCJA appear “deficit neutral” over the 10-year window used for legislative scoring.The delay wasn’t a technical necessity. It was a political tactic. Such moves are common in tax legislation. Phase-ins and delayed provisions let lawmakers game how the Congressional Budget Office (CBO) — Congress’ nonpartisan analyst of how bills impact budgets and deficits — scores legislation, pushing costs or revenue losses outside official forecasting windows.And so, on schedule in 2022, the change to Section 174 went into effect. Companies filed their 2022 tax returns under the new rules in early 2023. And suddenly, R&D wasn’t a full, immediate write-off anymore. The tax benefits of salaries for engineers, product and project managers, data scientists, and even some user experience and marketing staff — all of which had previously reduced taxable income in year one — now had to be spread out over five- or 15-year periods. To understand the impact, imagine a personal tax code change that allowed you to deduct 100% of your biggest source of expenses, and that becoming a 20% deduction. For cash-strapped companies, especially those not yet profitable, the result was a painful tax bill just as venture funding dried up and interest rates soared.AdvertisementSalesforce office buildings in San Francisco.Photo: Jason Henry/Bloomberg (Getty Images)It’s no coincidence that Meta announced its “Year of Efficiency” immediately after the Section 174 change took effect. Ditto Microsoft laying off 10,000 employees in January 2023 despite strong earnings, or Google parent Alphabet cutting 12,000 jobs around the same time.Amazon (AMZN) also laid off almost 30,000 people, with cuts focused not just on logistics but on Alexa and internal cloud tools — precisely the kinds of projects that would have once qualified as immediately deductible R&D. Salesforce (CRM) eliminated 10% of its staff, or 8,000 people, including entire product teams.In public, companies blamed bloat and AI. But inside boardrooms, spreadsheets were telling a quieter story. And MD&A notes — management’s notes on the numbers — buried deep in 10-K filings recorded the change, too. R&D had become more expensive to carry. Headcount, the leading R&D expense across the tech industry, was the easiest thing to cut.AdvertisementIn its 2023 annual report, Meta described salaries as its single biggest R&D expense. Between the first and second years that the Section 174 change began affecting tax returns, Meta cut its total workforce by almost 25%. Over the same period, Microsoft reduced its global headcount by about 7%, with cuts concentrated in product-facing, engineering-heavy roles.Smaller companies without the fortress-like balance sheets of Big Tech have arguably been hit even harder. Twilio (TWLO) slashed 22% of its workforce in 2023 alone. Shopify (SHOP) (headquartered in Canada but with much of its R&D teams in the U.S.) cut almost 30% of staff in 2022 and 2023. Coinbase (COIN) reduced headcount by 36% across a pair of brutal restructuring waves.Since going into effect, the provision has hit at the very heart of America’s economic growth engine: the tech sector.By market cap, tech giants dominate the S&P 500, with the “Magnificent 7” alone accounting for more than a third of the index’s total value. Workforce numbers tell a similar story, with tech employing millions of Americans directly and supporting the employment of tens of millions more. As measured by GDP, capital-T tech contributes about 10% of national output.AdvertisementIt’s not just that tech layoffs were large, it’s that they were massively disproportionate. Across the broader U.S. economy, job cuts hovered around in low single digits across most sectors. But in tech, entire divisions vanished, with a whopping 60% jump in layoffs between 2022 and 2023. Some cuts reflected real inefficiencies — a response to over-hiring during the zero-interest rate boom. At the same time, many of the roles eliminated were in R&D, product, and engineering, precisely the kind of functions that had once benefitted from generous tax treatment under Section 174.Throughout the 2010s, a broad swath of startups, direct-to-consumer brands, and internet-first firms — basically every company you recognize from Instagram or Facebook ads — built their growth models around a kind of engineered break-even.The tax code allowed them to spend aggressively on product and engineering, then write it all off as R&D, keeping their taxable income close to zero by design. It worked because taxable income and actual cash flow were often notGAAP accounting practices. Basically, as long as spending counted as R&D, companies could report losses to investors while owing almost nothing to the IRS.But the Section 174 change broke that model. Once those same expenses had to be spread out, or amortized, over multiple years, the tax shield vanished. Companies that were still burning cash suddenly looked profitable on paper, triggering real tax bills on imaginary gains.AdvertisementThe logic that once fueled a generation of digital-first growth collapsed overnight.So it wasn’t just tech experiencing effects. From 1954 until 2022, the U.S. tax code had encouraged businesses of all stripes to behave like tech companies. From retail to logistics, healthcare to media, if firms built internal tools, customized a software stack, or invested in business intelligence and data-driven product development, they could expense those costs. The write-off incentivized in-house builds and fast growth well outside the capital-T tech sector. This lines up with OECD research showing that immediate deductions foster innovation more than spread-out ones.And American companies ran with that logic. According to government data, U.S. businesses reported about $500 billion in R&D expenditures in 2019 alone, and almost half of that came from industries outside traditional tech. The Bureau of Economic Analysis estimates that this sector, the broader digital economy, accounts for another 10% of GDP.Add that to core tech’s contribution, and the Section 174 shift has likely touched at least 20% of the U.S. economy.AdvertisementThe result? A tax policy aimed at raising short-term revenue effectively hid a time bomb inside the growth engines of thousands of companies. And when it detonated, it kneecapped the incentive for hiring American engineers or investing in American-made tech and digital products.It made building tech companies in America look irrational on a spreadsheet.A bipartisan group of lawmakers is pushing to repeal the Section 174 change, with business groups, CFOs, crypto executives, and venture capitalists lobbying hard for retroactive relief. But the politics are messy. Fixing 174 would mean handing a tax break to the same companies many voters in both parties see as symbols of corporate excess. Any repeal would also come too late for the hundreds of thousands of workers already laid off.And of course, the losses don’t stop at Meta’s or Google’s campus gates. They ripple out. When high-paid tech workers disappear, so do the lunch orders. The house tours. The contract gigs. The spending habits that sustain entire urban economies and thousands of other jobs. Sandwich artists. Rideshare drivers. Realtors. Personal trainers. House cleaners. In tech-heavy cities, the fallout runs deep — and it’s still unfolding.AdvertisementWashington is now poised to pass a second Trump tax bill — one packed with more obscure provisions, more delayed impacts, more quiet redistribution. And it comes as analysts are only just beginning to understand the real-world effects of the last round.The Section 174 change “significantly increased the tax burden on companies investing in innovation, potentially stifling economic growth and reducing the United States’ competitiveness on the global stage,” according to the tax consulting firm KBKG. Whether the U.S. will reverse course — or simply adapt to a new normal — remains to be seen.

In a Bloomberg interview Wednesday night in downtown San Francisco, Alphabet CEO Sundar Pichai pushed back against concerns that AI could eventually make half the company’s 180,000-person workforce redundant. Instead, Pichai stressed the company’s commitment to growth through at least next year. “I expect we will grow from our current engineering phase even into next year, because it allows us to do more,” Pichai said, adding that AI is making engineers more productive by eliminating tedious tasks and enabling them to focus on more impactful work. Rather than replacing workers, he referred to AI as “an accelerator” that will drive new product development, thereby creating demand for more employees. Alphabet has staged numerous layoffs in recent years, though so far, cuts in 2025 appear to be more targeted than in previous years. It reportedly parted ways with less than 100 people in Google’s cloud division earlier this year and, more recently, hundreds more in its platforms and devices unit. In 2024 and 2023, the cuts were far more severe, with 12,000 people dropped from the company in 2023 and at least another 1,000 employees laid off last year. Looking forward, Pichai pointed to Alphabet’s expanding ventures like Waymo autonomous vehicles, quantum computing initiatives, and YouTube’s explosive growth as evidence of innovation opportunities that continually bubble up. He noted YouTube’s scale in India alone, with 100 million channels and 15,000 channels boasting over one million subscribers. At one point, Pichai said trying to think too far ahead is “pointless.” But he also acknowledged the legitimacy of fears about job displacement, saying when asked about Anthropic CEO Dario Amodei’s recent comments that AI could erode half of entry-level white collar jobs within five years, “I respect that . . .I think it’s important to voice those concerns and debate them.” As the interview wrapped up, Pichai was asked about the limits of AI, and whether it’s possible that the world might never achieve artificial general intelligence, meaning AI that’s as smart as humans at everything. He quickly paused before answering. “There’s a lot of forward progress ahead with the paths we are on, not only the set of ideas we are working on today, [but] some of the newer ideas we are experimenting with,” he said. “I’m very optimistic on seeing a lot of progress. But you know,” he added, “you’ve always had these technology curves where you may hit a temporary plateau. So are we currently on an absolute path to AGI? I don’t think anyone can say for sure.” Techcrunch event Save now through June 4 for TechCrunch Sessions: AI Save $300 on your ticket to TC Sessions: AI—and get 50% off a second. Hear from leaders at OpenAI, Anthropic, Khosla Ventures, and more during a full day of expert insights, hands-on workshops, and high-impact networking. These low-rate deals disappear when the doors open on June 5. Exhibit at TechCrunch Sessions: AI Secure your spot at TC Sessions: AI and show 1,200+ decision-makers what you’ve built — without the big spend. Available through May 9 or while tables last. Berkeley, CA | June 5 REGISTER NOW