Issue #95

AI teddy bear teaches kids about arson, China’s £45 billion UK shopping spree, Meta wins antitrust case, and more.

‍News from November 13 - November 20 2025

‍AI Teddy Bear Teaches Kids About Arson

Children's toymaker FoloToy pulled its AI-powered teddy bear "Kumma" after safety researchers found it was giving inappropriate responses to kids, including tips on lighting matches.

The bear, powered by OpenAI's GPT-4 model, dropped its guardrails as the conversations went on longer. In tests, it gave step-by-step instructions for lighting matches while maintaining a friendly tone, and detailed explanations of Norse warriors dying gloriously in battle.

FoloToy said it would suspend sales and conduct a comprehensive safety audit. The findings come as Mattel announced a collaboration with OpenAI on a new toy line. Public Interest Research Group director RJ Cross: "Right now, if I were a parent, I wouldn't be giving my kids access to a teddy bear that has a chatbot inside of it."

Source

China's £45 Billion UK Shopping Spree

China has invested £45 billion in UK businesses and projects this century, some giving it access to military-grade technology, according to BBC Panorama and US research group AidData.

The UK was the top G7 destination for these investments relative to its economy. The spending peaked after a 2015 Chinese directive aimed at making the country a global leader in high-tech industries like aerospace and robotics.

One case involved Imagination Technologies, a semiconductor firm bought in 2017 by a fund with links to China's State Council. Its former CEO, Ron Black, says the British government vetted the deal, which saw him transfer technology "from the heads of the British engineers to the Chinese engineers, then lay off the British engineers." 

Former foreign secretary Sir Jeremy Hunt: “We thought China was basically a very friendly power and there was lots of money to be made. But under the surface, we were beginning to sense a much more assertive China."

Source

Buy Now, Pay Later Users Can't Afford Groceries

Buy now, pay later services have exploded to 91.5 million US users, with 25% now using them to finance groceries, and default rates are accelerating fast.

Capital One co-founder Nigel Morris, an early investor in Klarna, says the trend is alarming. "To see that people are using these services to buy something as basic and fundamental as groceries, I think is a pretty clear indication that a lot of people are struggling."

Most BNPL loans aren't reported to credit bureaus, creating "phantom debt" invisible to other lenders. Late payments hit 42% of users in 2025, up from 34% in 2023. The Trump administration reversed Biden-era rules that would have brought BNPL under consumer protection laws. Morris on the economy: "Delinquency is not rising yet. Charge-offs are not rising yet. But there's clearly storm clouds on the horizon."

Source

Bulletin Board

• S&P 500 Hits Four-Day Losing Streak. The S&P 500 posted its fourth consecutive day of losses, its longest streak in three months, as valuation concerns hit tech stocks. Home Depot fell 6% after cutting its profit forecast, while Nvidia dropped 2.8% ahead of Wednesday's earnings report. This comes after concerns over high evaluations led to a pullback of US stocks. However, year-over-year earnings growth for the S&P 500 now stands at 16.9%, well above the 8.8% estimated in early October. Source
• Bitcoin Crashes Below $92,000. Bitcoin dropped below $92,000 for the first time since mid-April, wiping out hundreds of billions in market value after hitting an all-time high of $126,000 six weeks ago. Analysts attribute the fall to dwindling hopes for a December Fed rate cut and macro uncertainty. Bitwise CIO Matthew Hougan: "Crypto was the canary in the coal mine, it was the first to flinch." Source
• Cloudflare Outage Takes Down Major Sites. A Cloudflare outage on Tuesday morning knocked ChatGPT, Claude, Spotify, and X offline after a latent bug in its bot mitigation system crashed. The infrastructure giant, used by 20% of all websites, resolved the issue within two hours. The outage came one month after Elon Musk mocked AWS customers during a similar failure. Source
• Chinese Hackers Trick Claude. AI firm Anthropic claims Chinese state-sponsored hackers used its chatbot Claude to automate cyber attacks against 30 global organisations, including tech companies and government agencies. The hackers posed as cybersecurity researchers to trick the bot into performing automated tasks. Critics question the claim's accuracy, noting Anthropic provided little verifiable evidence. Anthropic has since banned the hackers and notified law enforcement. Source
• Meta Wins Antitrust Case. A US judge ruled Meta didn't violate antitrust laws with its acquisitions of Instagram and WhatsApp, defeating the FTC's 2020 lawsuit claiming the company secured a social media monopoly. Judge James Boasberg noted Meta's market share "seems to be shrinking" as TikTok and YouTube reshape the landscape. The ruling spares Meta from a potential breakup. Vanderbilt Law School professor Rebecca Haw Allensworth: “I think that's going to influence the likelihood of more cases like this being brought." Source

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