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Welcome to today's edition of AI Business Weekly. From Wall Street's brutal four-day selloff driven by AI bubble fears to Google's aggressive launch of Gemini 3, today's stories capture the fundamental tension between market skepticism and relentless technological progress. As the Dow plunges 500 points on valuation concerns, Google doubles down with new AI models, courts struggle with deepfake evidence infiltrating legal proceedings, and biotechs continue raising nine-figure rounds for AI drug discovery. We're witnessing the collision of speculative excess meeting reality checks, while the underlying technology development accelerates regardless of investor sentiment. The contradiction is striking: markets question whether AI can deliver on its promises even as the technology pushes into courtrooms, drug labs, and e-commerce systems. Let's dive in.

Dow Closes Down Nearly 500 Points as AI Bubble Fears Hammer Stocks

Wall Street suffered its fourth consecutive day of losses Tuesday, with the Dow dropping 498 points as mounting AI bubble fears hammered tech stocks. The S&P 500 fell 0.8% and the Nasdaq tumbled 1.2%, marking a sharp departure from 2025's relatively smooth rally. Investors are questioning whether massive AI infrastructure investments will deliver promised returns, with comparisons to the dot-com bubble becoming harder to dismiss. Read more

Google Announces Gemini 3 as Battle with OpenAI Intensifies

Google unveiled Gemini 3 just eight months after Gemini 2.5, promising the new model requires "less prompting" to get desired results. The company also introduced Antigravity, a new agent platform that lets developers code at a higher, task-oriented level. The aggressive release schedule reflects Google's determination to keep pace with OpenAI in the escalating AI arms race. Read more

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AI-Generated Evidence is Showing Up in Court. Judges Say They're Not Ready

A California judge caught AI-generated deepfake video evidence submitted in a housing dispute, exposing how unprepared the legal system is for fabricated content. Judge Victoria Kolakowski noticed telltale signs—disjointed voice, fuzzy expressions, repetitive movements—that revealed the video was entirely fake. Legal experts warn this case is likely just the beginning as deepfake quality improves and detection becomes increasingly difficult. Read more

Iambic Raises $100M to Advance AI Drug Discovery Platforms

California biotech Iambic secured $100 million to advance its AI platforms and accelerate drug candidates into clinical trials. The company uses two complementary models—Enchant and NeuralPLexer—to predict drug viability and protein-ligand structures faster than traditional methods. The funding reflects growing investor confidence that AI can transform pharmaceutical research by identifying promising treatments earlier and catching likely failures before expensive clinical trials. Read more

Albatross AI Secures $12.5M to Fix Stale Web Recommendations

Zurich-based Albatross AI, founded by former Amazon AI leaders, raised $12.5 million to solve e-commerce's stale recommendation problem. The startup's technology focuses on real-time intent rather than historical profiles, aiming to stop showing ads for products users already bought. With Amazon credentials and experience building recommendations at massive scale, the founders believe they can finally solve the lag problem plaguing current systems. Read more

📢 The AI Paradox: Market Panic Meets Unstoppable Progress

Today's headlines capture AI's most contradictory moment. While markets tumble on bubble fears—erasing billions in value over four days—companies like Google accelerate product launches and biotechs raise massive funding rounds for AI applications. Courts grapple with deepfake evidence as AI infiltrates legal systems, while ex-Amazon engineers secure millions to fix everyday e-commerce problems with better algorithms. The disconnect reveals something fundamental: speculation and genuine technological progress aren't moving in sync anymore. Markets demand proof that AI investments will generate returns, yet the technology keeps pushing into new domains regardless of investor sentiment. This isn't irrational exuberance meeting reality—it's the messy middle of a real technological shift where valuation concerns and transformative capability coexist uncomfortably. The AI revolution doesn't pause for market corrections.