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Here’s all the AI stuff in Trump’s tax bill

Over $2 billion is allocated to deploying AI for nuclear weapons programs, autonomous underwater drones, and sovereign AI models.

Jon Keegan

7/2/25 12:00PM

Yesterday the Senate passed President Trump’s massive tax bill, and today it heads to the House, where it faces an uncertain future.

The text of the bill is loooong — it spans 870 pages as a PDF and is full of allocations of federal dollars for Trump’s priorities, including over $2 billion for AI programs for defense, energy, and homeland security.

Top AI insiders might hold a lot of sway in this administration, but tech companies like Microsoft, Meta, Palantir, and OpenAI did suffer a major loss yesterday when a key provision to halt all state-level AI regulation for a decade was removed from the bill.

Things could change in the House, but let’s take a look at all the AI-related things that made it through the Senate.

Defense

💣 Resources for scaling low-cost weapons into production

$124,000,000 for improvements to Test Resource Management Center artificial intelligence capabilities
$250,000,000 for the expansion of Cyber Command artificial intelligence lines of effort

💻 Improving efficiency and cybersecurity

$200,000,000 for the deployment of automation and artificial intelligence to accelerate the audits of the financial statements of the Department of Defense

☢️ Enhancement of resources for nuclear forces

$115,000,000 for accelerating nuclear national security missions through artificial intelligence

⛴️ Enhancement of Department of Defense resources for shipbuilding

$188,360,000 for the development and testing of maritime robotic autonomous systems and enabling technologies
$174,000,000 for the development of a Test Resource Management Center robotic autonomous systems proving ground
$200,000,000 for the development, procurement, and integration of mass-producible autonomous underwater munitions
$500,000,000 to prevent delays in delivery of attritable autonomous military capabilities
$75,000,000 to contract the services of, acquire, or procure autonomous maritime systems

Energy

🤖 Transformational artificial AI models ($150 million)

“American science cloud”: a system of US government, academic, and private sector programs and infrastructures utilizing cloud computing technologies to facilitate and support scientific research, data sharing, and computational analysis across various disciplines while ensuring compliance with applicable legal, regulatory, and privacy standards
Mobilize National Laboratories to partner with industry sectors within the United States to curate the scientific data of the Department of Energy across the National Laboratory complex so that the data is structured, cleaned, and preprocessed in a way that makes it suitable for use in artificial intelligence and machine learning models
Initiate seed efforts for self-improving artificial intelligence models for science and engineering

Homeland Security

🚔 Border security, technology, and screening

$168,000,000 for procurement and integration of new nonintrusive inspection equipment and associated civil works, including artificial intelligence, machine learning, and other innovative technologies, as well as other mission support, to combat the entry or exit of illicit narcotics at ports of entry and along the southwest, northern, and maritime borders

Rural hospitals

🏥 Rural health transformation program ($50 billion)

Providing training and technical assistance for the development and adoption of technology-enabled solutions that improve care delivery in rural hospitals, including remote monitoring, robotics, artificial intelligence, and other advanced technologies

Rani Molla2h

Elon Musk’s SpaceX reportedly in talks to merge with xAI

Tesla CEO Elon Musk is reportedly exploring a merger between SpaceX and his artificial intelligence startup xAI, a move that would bundle rockets, satellites, the social media site X, and AI under one company ahead of SpaceX’s long-anticipated IPO.

According to Reuters reporting, the deal would swap xAI shares for SpaceX stock, potentially valuing the combined operation north of $1 trillion.

Reuters reports:

Two entities have been set up in Nevada to facilitate the transaction, the person said.

Reuters could not determine the value of the deal, its ‌primary rationale, or its potential timing.

Corporate filings in Nevada show that those entities were set up on January 21. One of them, a limited liability company, lists SpaceX and Bret Johnsen, the company's chief financial officer, as managing members, while the other lists Johnsen as the company's only officer, the filings show.

The combined companies could also set the narrative groundwork for putting data centers in space — an idea that Musk and a number of other tech billionaires have been floating lately but that may not get off the ground.

In its earnings filings yesterday, Tesla disclosed that it recently made a $2 billion investment in xAI. Last year Musk’s xAI bought Musk’s X in an all-stock deal.

Exclusive: Musk's SpaceX in merger talks with xAI ahead of planned IPO, source says

Reuters reports:

Two entities have been set up in Nevada to facilitate the transaction, the person said.

Reuters could not determine the value of the deal, its ‌primary rationale, or its potential timing.

Corporate filings in Nevada show that those entities were set up on January 21. One of them, a limited liability company, lists SpaceX and Bret Johnsen, the company's chief financial officer, as managing members, while the other lists Johnsen as the company's only officer, the filings show.

In its earnings filings yesterday, Tesla disclosed that it recently made a $2 billion investment in xAI. Last year Musk’s xAI bought Musk’s X in an all-stock deal.

Translating Microsoft’s CEO Satya Nadella

Translating Nadella’s jargon to understand his strategy for meeting intense demand for AI computing.

Jon Keegan2h

Rani Molla4h

Driverless Waymo struck a child near school in California

A Google Waymo struck a child near a Santa Monica elementary school during morning drop-off last week, as self-driving cars by Waymo, Tesla, and others continue their expansion across the country. In a blog post, Waymo said the fully driverless car detected the child as they emerged from behind a parked SUV, braked sharply, and reduced speed from approximately 17 mph to under 6 mph before striking the child. The child suffered minor injuries and walked away.

The company reported the incident to the National Highway Traffic Safety Administration, which is currently investigating, adding fresh scrutiny to how robotaxis perform in the wild.

Jon Keegan5h

Digging into Microsoft’s cloud backlog

Microsoft’s Azure cloud computing unit is seeing huge demand. In yesterday’s second-quarter earnings call, Microsoft CFO Amy Hood said the company’s commercial bookings increased 230% thanks to large commitments from OpenAI and Anthropic and healthy demand for its Azure cloud computing platform.

Hood said that the company’s “remaining performance obligations” (RPO) ballooned to a staggering $625 billion, up 110% from the same period last year. How long will it take for Microsoft to fulfill these booked services? Hood said the weighted average duration was “approximately two and a half years,” but a quarter of that will be recognized in revenue in the next 12 months.

Shares of Microsoft tanked today, down over 11%, despite the strong beat on revenue and earnings. The drop puts the stock on track to have its worst single-day drop since March of 2020.

Investors may be concerned that while huge, that extra demand was coming only from OpenAI, an issue that Oracle recently experienced.

But Hood said the non-OpenAI RPO still grew 28% year on year, which reflects “ongoing broad customer demand across the portfolio.”

Meta and Tesla are funding the future with their core businesses — but only one of them is still growing

The two tech giants, on back-to-back earnings calls, made it sound like they’re selling the same AI-powered future. But the picture of the underlying businesses, and how they’re using AI to furnish current sales, couldn’t be more different.

Rani Molla6h