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Trade Wars
Eli Lilly Begins Construction On $6.5B Houston Plant
Eli Lilly broke ground Monday on a $6.5 billion pharmaceutical manufacturing facility in Houston, one of 10 sites the company has announced in the U.S. since 2020, according to a news release. Bechtel’s manufacturing and technology business unit is supporting the project, according to a job posting from the Reston, Virginia-based general contractor. Eli Lilly and Bechtel didn’t immediately confirm Bechtel’s involvement. The Houston project forms part of Eli Lilly’s $50 billion push to reshore medicine production to the U.S., according to the pharmaceutical giant.
The Houston facility will use state-of-the-art technologies, such as machine learning, artificial intelligence, digitally integrated systems and advanced data analytics. Eli Lilly also will embed digital automation throughout the site to streamline operations and ensure quality medicines, according to the release. Once operational, the plant will manufacture active pharmaceutical ingredients for Foundayo, Eli Lilly’s first synthetic oral GLP-1 weight loss drug, along with other small-molecule medicines and advanced therapeutics, according to the news release.
Read more at Construction Dive
Defense Department Expands Workforce Development Program To 3 States
The Department of Defense is expanding its workforce development initiative to Ohio, Illinois and Wisconsin in its efforts to rebuild its industrial base, the agency announced Friday. Dubbed BuildFreedom.US, the initiative launched in July to address talent shortages across the defense industrial base. It also enables the government, industry and colleges and universities to connect and bring awareness to “artificial intelligence-proof” jobs in the skilled trades, according to the July 2 press release. The program also awarded former “Dirty Jobs” host Mike Rowe’s nonprofit $10 million. The mikeroweWORKS Foundation will use the funds to help job candidates prepare for work in skilled trades such as welding, plumbing and electrical work through scholarships.
BuildFreedom.US was established in July, the agency launched it in Texas, Michigan and Pennsylvania, with plans to expand to more states later this year. The latest state additions represent BuildFreedom.US’ next phase of its national expansion, Kristin Schaaf, director of DOD’s investment programs, including the Industrial Base Analysis and Sustainment program, said in a statement. “These states are home to industries critical to America’s defense industrial base and our national security,” Schaaf added.
Read more at Manufacturing Dive
OpenAI Scraps Release of New AI Model Over Safety Concerns
OpenAI says it is scrapping the release of its next-generation AI model over safety concerns that researchers raised during internal testing, in one of the clearest signs so far that agent misbehavior could stymie the industry’s rapid progression. The move follows a summer punctuated by reports of artificial-intelligence systems industrywide going rogue, and marks a rare case of a major AI developer ditching a new release because of safety concerns.
The company had planned to launch the model, known as GPT-6.1 Astra, in the coming days or weeks, aiming for an October debut. The model was more capable than the company’s previous models in completing challenging tasks from end-to-end without human assistance, as well as writing. The company instead will focus on improving the safety of future models, which it expects to be even more capable.
Read more at Inside Government Contracts
Mesabi Metallics Plans to Build $15 Billion Steel Mill in Iowa
President Trump and executives from Mesabi Metallics unveiled a plan to build a $15 billion steel mill in Iowa, the WSJ’s Bob Tita and Alex Leary write. Mesabi, a part of Indian conglomerate Essar Group, recently opened the first iron-ore mine in Minnesota in 50 years. Steelmaking at the Iowa plant could begin in 2030, according to a White House official, who said it could support more than 1,700 jobs.
The proposed mill would be one of the largest in the U.S. with an initial annual production capacity of 7.5 million tons. Later additions could increase the plant’s capacity to about 10 million tons a year. The company said the plant would be in eastern Iowa, and would transport iron ore from its mine to the steel mill by railroad. The company expects to build plants at the site to process the ore for use in electric arc furnaces with scrap steel to make new steel.
Read more at The WSJ
AMD Acquiring Fei-Fei Li’s World Labs AI Firm In Deal Worth $8.2 Billion
Advanced Micro Devices said Monday that it’s agreed to acquire World Labs, the San Francisco-based AI lab founded by industry pioneer Fei-Fei Li, for $8.2 billion. The chipmaker, which previously invested in World Labs, said it’s paying for the startup in stock. Li was a Stanford professor who previously worked for Google and led AI research. She will become AMD’s chief scientist and an executive vice president at AMD, which is chasing Nvidia in the market for AI processors.
World Labs is developing a so-called world model, which can be used to simulate 3D environments. In a demo presented by Li and AMD CEO Lisa Su earlier this year, the two executives showed a World Labs model called Marble creating a 3D scene out of a few images. AI researchers expect that world models will be able to help develop robots and other physically grounded AI applications. AMD plans to keep World Labs separate from its chipmaking business until the transaction closes later this year. The lab’s research on next-generation models will allow AMD to plan for what its AI chips need to be capable of years in advance.
Read more at Yahoo Finance
Consumer Product Group Execs Discuss Automation, Sourcing And Logistics Risk
Procter & Gamble, Colgate-Palmolive and Kimberly-Clark highlighted priorities in their supply chain operations, including technology implementation and cost pressures, during the Barclays Global Consumer Staples Conference in early September. P&G, for example, updated attendees on its Supply Chain 3.0 project, saying the initiative is bringing maximum automation to its network. Meanwhile, Colgate-Palmolive warned rising oil prices could increase material costs later this year, while Kimberly-Clark said tight freight and logistics markets could add up to $40 million in costs.
- Procter & Gamble’s Supply Chain 3.0 initiative is in “full execution, meaning maximum automation” in the network, CFO Andre Schulten said. Along with mechanization, the project, launched in 2023 to build more comprehensive systems integration, has carried digital capabilities into quality measurement and inventory management, Schulten said. The advancements will help drive productivity over the next five to 10 years.
- Colgate-Palmolive might feel the impact of rising oil prices on material costs in the back end of the fourth quarter, according to President and CEO Noel Wallace. The company may attempt to offset those price increases through pricing and an acceleration of the company’s premiumization strategy, per Wallace. The initiative seeks to grow sales, market share and margins by developing and marketing higher-priced products with more advanced features.
- Kimberly-Clark expects $30 million to $40 million in incremental costs in the current quarter, partly due to rising prices in a tight freight and logistics market in North America, President and COO Russell Torres said.
Read more at Supply Chain Dive
Has Nvidia Solved The Rogue AI Hacking Problem?
Nvidia has decided the only thing that can stop bad AI is good AI. In the wake of rogue AI models breaking into systems more easily than Angelina Jolie in Hackers, the chipmaker announced a new AI security system called OpenShell to act as a safeguard against your AI breaking any rules. OpenShell has two layers and is an open-source software system that any company can adopt, according to Nvidia. The semiconductor giant said OpenShell would have prevented OpenAI’s attack on the AI platform Hugging Face (which Nvidia bought for $13 billion earlier this month). Here’s how the software works:
- The first layer runs AI agents in a “sandbox,” the virtual space where they can be tested. Testers can define what the agent can access (e.g., networks, files).
- The extra layer is a program called Sentry that can “quarantine a suspicious agent in milliseconds,” according to Nvidia’s vice president of enterprise AI, Justin Boitano.
Nvidia said more than 100 organizations are already using the platform, including Microsoft, Perplexity, and JPMorgan Chase.
Read more at MorningBrew
SpaceX Starship Splashes Down After Reaching Orbit In Unprecedented Test Flight
SpaceX’s massive Starship rocket blasted off from Texas Monday morning on its most ambitious test flight yet, aiming for a roughly 10-hour mission that would have sent the spacecraft around Earth six times, though the company ultimately decided to end the flight earlier than planned. Minutes into the uncrewed spacecraft's ascent, the rocket lost one of its engines, throwing into question whether the test flight would abandon its goal of reaching orbit for the first time. After several tense minutes, flight controllers decided the spacecraft was "go" for orbit and continued with the mission.
Starship successfully completed an orbital burn with just a single Raptor engine to reach the Earth's orbit about 26 minutes after liftoff. SpaceX later made the call to end Starship's first orbital mission earlier than planned. Flight teams were expected to deorbit Starship after three hours in orbit, SpaceX said. Around noon, Starship splashed down in the Pacific Ocean. The launch marks Starship’s 14th test flight and its first attempt to reach orbit, a major step beyond previous suborbital missions that ended with splashdowns about an hour after liftoff. The spacecraft also deployed 26 Starlink satellites while in orbit. The Starlink V3s were operational and operating, SpaceX CEO Elon Musk wrote on X.
Read more at CNN
Soaring Transport Costs Spread Through U.S. Economy
There is virtually no way for businesses to avoid paying more to transport goods, costs that are likely to bleed through to virtually all corners of the U.S. economy. Trucking expenses are at their highest level since the Covid pandemic. Diesel prices are up 77% in the past year. Container-shipping rates, meanwhile, are up, while railroads, parcel-delivery companies such as FedEx, and even the U.S. Postal Service are also raising prices. Contributing to the rise in trucking costs is a shortage of truck drivers. The Transportation Department says it has removed more than 28,000 drivers from the road for failing English-proficiency tests since early 2025. It has also pushed states to cancel over 30,000 CDLs illegally issued to foreign drivers.
Meanwhile, the surge in diesel prices means a driver who drives 500 miles a day, six days a week would have paid $15,000 more for the fuel since the war in Iran started, according to DAT Freight & Analytics. Some businesses have diverted some of their freight from truck to train to find relief from higher trucking costs. But existing customers of railroads also face higher bills. Farmers shipping grain paid a 48-cent-a-mile fuel surcharge per railcar in mid-September, more than double the 19-cent surcharge from a year earlier, according to the USDA.
Read more at The WSJ
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