AI2Day Daily Brief — 3 Aug 2026

Good morning, it is Monday the third of August, and the week opens with big tech burning through cash at a historic pace, chip stocks posting some of their best single-day gains in years, and a guitar company CEO managing to upset an entire community of musicians. Let us get into it.

Fender's chief executive, Edward Bud Cole, has given guitar players a fresh reason to be angry with the brand. In an interview published in May with the tech magazine T Three, Cole argued that learning cover songs is a form of what he called analog A I, drawing a parallel between how beginners absorb existing music and how AI systems train on data. The comments passed quietly at first, then resurfaced online and landed on an audience already frustrated after Fender sent legal letters to independent guitar builders over the Stratocaster body shape. Critics point out that the comparison collapses the difference in scale between a student learning a handful of songs and a model training on millions of copyrighted recordings. Several prominent guitar YouTubers have said publicly they are done buying Fender products.

Scale is exactly the word. There is a meaningful difference between influence and ingestion at industrial volume. Next, a story from Australia.

Australians are paying more at the petrol pump starting today. A temporary cut to the federal fuel excise, the government tax built into every litre of petrol and diesel, expired at midnight Monday after being introduced to cushion drivers from price spikes that followed the outbreak of the Iran conflict. How much prices rise depends on whether service stations pass the full increase on immediately or absorb some of it. Treasurer Jim Chalmers has asked the Australian Competition and Consumer Commission, the national price watchdog, to monitor service stations closely. His words, reported by The Guardian, were direct: watch them like a hawk. The concern is standard: when a cost reduction ends, the reversal at the till does not always match the pace at which the original relief was passed on.

Worth watching over the next few days to see how quickly prices move. Now to the big tech earnings picture.

The four largest technology companies all reported financial results this week and the picture is complicated. Google's parent Alphabet spent so heavily on A I infrastructure that its free cash flow turned negative for the first time since the company went public, on revenue of one hundred and eighteen billion dollars. Meta's free cash was just seven hundred and eighty-four million dollars on sixty-one billion in revenue, meaning it kept less than two cents of every dollar it brought in. Amazon has committed two hundred and twenty billion dollars to A I this year. Microsoft is the clearest bright spot: shares hit a six-month high after it showed strong revenue growth and rising adoption of its A I tools. Google's Gemini chatbot reached nine hundred and fifty million monthly users, three times its count from a year ago. Apple's outgoing chief executive Tim Cook confirmed plans to charge heavy users for a revamped A I-powered Siri.

Enormous spend, thin returns for most, but the user numbers are real. Related, and more directly optimistic for one corner of the market.

Thinking Machines, the startup founded by former OpenAI chief technology officer Mira Murati, has released its second open-source model in two weeks. It is called Inkling Small. Despite the name, it is not small in any ordinary sense: it has two hundred and seventy-six billion total parameters, though it uses only twelve billion at a time, compared with nine hundred and seventy-five billion total and forty-one billion active for the original Inkling. On Artificial Analysis's third-party Intelligence Index, Inkling Small scores forty, one point below its sibling's forty-one. On coding tests it actually outperforms the original, scoring eighty point two percent on the SWE-bench Verified benchmark versus seventy-seven point six for Inkling. It is released under the Apache two point zero licence, which allows companies to use, modify and commercialise it with few restrictions.

One point on the intelligence index and a lower running cost is a trade most teams will accept. Now the market reaction to those earnings reports.

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Strong quarterly results from Microsoft and Amazon triggered one of the sharpest single-day rallies in Asian chip stocks in recent memory. SK Hynix, the South Korean memory chip maker whose products sit inside A I servers, rose more than twenty-five percent in Seoul on Friday, its best single-day gain on record if the move holds. Samsung Electronics climbed over twenty percent the same day. The moves erased a week of losses driven by investor fears that A I spending was running ahead of real demand. Those fears did not survive the earnings calls. Microsoft reported faster-than-expected growth for its Azure cloud service and its shares gained sixteen percent. Amazon's cloud business also beat expectations, sending its stock up more than nine percent in after-hours trading. The iShares Semiconductor E T F, a broad gauge of US chip company health, surged more than eight percent overnight.

For more on every story from this week, including deeper analysis, catch AI Today Weekly, our longer Monday show. That is your A I briefing for today. Every story is at A I two day dot live. That is A, I, the number two, D A Y, dot live. We are back tomorrow morning. Do us a favour before you go: hit that thumbs up, and subscribe for next week.