The Morning Risk Report: AI Runs Into Its Next Big Obstacle

Good morning. A string of artificial-intelligence safety incidents is exposing a gaping hole for the fast-growing industry: the lack of available insurance.

U.S. tariff pressure is prompting countries to tighten their forced-labor rules, changes that could prove more durable than the tariffs themselves.

Plus, Bank of America faces more than $1.2 billion in penalties over failures to detect financial crime.

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Lawmakers and executives crowded into the East Room of the White House in July 2025 to watch President Trump sign the Genius Act, a landmark crypto bill that set rules for selling stablecoins pegged to the U.S. dollar.

From a podium, Trump rattled off thank-yous to the law’s architects. “Where’s Bo Hines?” he asked. The president’s 29-year-old crypto adviser rose from the front row to applause.

What most people in the room didn’t know: While Hines was leading the White House’s push to pass the Genius Act, Tether—the company with the most at stake in the legislation—was steering millions of dollars to Nxum, a business he co-owned, according to messages, internal documents and payment records reviewed by The Wall Street Journal.

Once the bill was signed, Tether hired him—to run its U.S. operations. A Nxum representative said Hines was unaware of the business dealings with Tether and did not receive Tether-derived funds while in the White House.

Expected global economic growth this year, down from 3.5% in 2025, according to the International Monetary Fund. Growth is being buoyed by strength in a few countries that are leading the AI boom, while other nations, particularly in the developing world and parts of Europe, are getting hit.

Google has a message for New Mexico’s Lea County, an area of arid pastureland in the oil-rich Permian Basin, that the company is eyeing as a possible home for a new data center: “We’re listening.”

The technology company reached out to the community via a website, saying its plans are still in the very early stages, but such projects “naturally bring questions about how data centers operate.” It then tried to answer those queries pre-emptively, assuring the approximately 75,000 residents, for example, that it expects its data center would consume water at a similar rate to an office building. A survey asks what additional investment the area might need.

Hyperscalers, or large tech companies that operate vast networks of computing infrastructure, say they want to be increasingly transparent, getting construction plans out in the open sooner in the hopes of heading off opposition. But answering local queries and frustrations is getting trickier as resistance picks up, with government officials and residents expressing worries about everything from electricity prices to water waste.

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You can also reach us by replying to any newsletter, or by emailing our editors Perry Cleveland-Peck at perry.cleveland-peck@wsj.com and David Smagalla at david.smagalla@wsj.com.