All News (Page 298)

Straight‑A report cards have never been more common for America’s teens—but the payoff is not what parents think. A new National Bureau of Economic Research study finds that when teachers hand out “easy A” grades, their students are more likely to skip class, score worse on future tests, and earn less money years later. For a typical high school class, the researchers estimate grade inflation can shave about $213,000 off the group’s future earnings, or roughly $150 a year for each letter grade quietly nudged up.

The findings arrive as President Donald Trump pushes a crackdown on grade inflation on college campuses, tying federal funding to whether universities hold the line on grading. Gen Z is already the first generation to score lower than their parents on some measures of cognitive performance, as reading habits erode and schools lean harder on grades instead of learning.

The study, entitled “Easy A’s, Less Pay: The Long-Term Effects of Grade Inflation,” found that for each individual student, this dynamic chalks up to a decrease in yearly earnings of about $150 for every grade bumped up to a B+ from a B, for example.

“Average grade inflation hurts,” Nolan Pope, one of the study’s researchers and a labor economist at University of Maryland, told Fortune. “They are less likely to learn if it’s very easy to get an A. They spend less time and effort.”

The debate around grade inflation has stretched from the classroom to the Oval Office. President Donald Trump weighed in on the issue last November, establishing a higher-ed compact linking federal funding for universities to strict parameters his administration set, barring grade inflation (or deflation). The practice could be harming young people. Gen Z is the first generation less cognitively capable than their parents. Many young people are ditching books at record levels and some are even failing to complete reading assignments on par with previous expectations. From high school to college, grade inflation has offered educational institutions increasingly dubious value propositions.

The researchers analyzed administrative high school records from Los Angeles and Maryland and linked them to long-term postsecondary and earnings data. They measured grade inflation by comparing student grades to their actual performance on standardized tests.

The hidden costs: absences, suspensions, and dropping out

Whether it be with grades or money, inflation degrades value. Wealth managers are grappling with a strange problem in 21st century America: the rise of many “everyday millionaires” who are illiquid, with much of their wealth tied up in housing, often struggling to afford the things they feel entitled to by their paper worth. The straight-A students, in other words, likely have parents with straight-A portfolios, but both end up with B- or even C-level experiences in this inflated economy.

“The economy wasn’t built to handle this many people with this much money,” Nick Maggiulli, New York Times bestselling author of The Wealth Ladder, told Fortune in an interview last year. “On a relative basis in the United States, the competition for these higher-end goods is very high, so now it feels like we’re all canceling each other out with all this extra wealth,” he added. So too, in the classroom, when high scores are liberally handed out, the A loses its sought-after value.

The NBER study found that it’s not just future earnings being degraded. Grade inflation could actually have the inverse effect of their implied outcome. Students that are assigned a teacher that inflates grades are more likely to score poorly on future tests. They’re less likely to graduate high school, and even less likely to enroll in college. Most of these impacts, of course, usually happen well after the student has handed in their final exam, and that makes it harder to catch.

Teachers generously tossing out easy As also made it easier for students to skate by. The research found that higher grade inflation is linked to increased absences and suspensions, suggesting that when the academic bar is lowered, student engagement and school discipline may fall with it.

“It ends up actually being somewhat harmful for the student,” Pope said. “Nobody really is on the side of that harm because nobody sees it until much later.”

However, the study found grade inflation benefitted some students, specifically those at threat of flunking out. When teachers raised scores for students at threat of failing—from an F to a D, for example—that actually paid off, preventing those students from repeating a grade and improving their high school graduation rate.

Whatever the outcome, grade inflation has gained steam over the past decade. And despite the president’s efforts, the trend doesn’t seem to be stopping anytime soon. Pope said grade inflation remains so pervasive because all parties benefit from it, offering a perverse incentive that perpetuates the seemingly benign practice semester after semester. 

“As a teacher it’s usually easier,” he said. “You get less complaints. Parents are happy. Students are happier if you give slightly higher grades. A school typically looks better if their grades are higher. It benefits everyone.”

This story was originally featured on Fortune.com

This post was originally published here

In a world of protein-maxxing and fiber-counting, it’s hard to remember a time when a baked good itself could be a fad.

But a decade ago, people underwent a frenzy for cupcakes. Adults would line up around the block for cupcakes that came out of vending machines; a company selling jumbo cupcakes with custard filling IPO’d at $13 a share, and people raced to buy a sheet of miniature tie-dye cupcakes for $45. The frenzy was so massive, the cupcake boom moved 669 million units in a single year, but like an overdone cupcake in the oven, it deflated just as quickly as it went up. Crumbs went from a Nasdaq darling to bankrupt in three years. Sprinkles, the brand that invented the cupcake ATM, shut its doors for good just weeks ago. Nearly every gourmet cupcake company from that era has dramatically flared out and died—except one.

Melissa Ben-Ishay founded Baked by Melissa in 2008 after getting fired from her job as an assistant media planner at 24. Eighteen years and more than 500 million bite-sized cupcakes later, she’s stepping down as CEO—and for the first time, she says the company is open to a sale.

Ben-Ishay will transition to president—a title she held before the board installed her as CEO in late 2019—while Sanjay Khetan, the company’s current CFO, takes over as chief executive. In an exclusive Fortune interview with both Khetan and Ben-Ishay, Ben-Ishay said she’d planned to bring Khetan on with the intention of finding someone who could replace her. On her first day of being the President and not the CEO of her company, Ben-Ishay described the move candidly: “I am so freaking thrilled that I am no longer needed in that seat,” she said, “so I can focus on the areas of the business that I can uniquely drive.”

The openness to a sale marks a reversal for Ben-Ishay. In a 2025 interview with the Food Institute, Ben-Ishay said that maintaining quality standards was one of the reasons she’d “avoided acquisitions.” When Fortune read the quote back to her, she said she didn’t remember making it, then acknowledged the shift in her perspective. “It’s something we’re definitely interested in exploring and working towards,” she said. She noted that the company fields acquisition offers regularly. “Every day we get offers in my inbox,” she said.

Asked what Baked by Melissa figured out while other brands from that era burned out, Ben-Ishay credited its bite-sized format—mess-free, with no knife or fork required—and a “best in class” shipping experience. That, and a refusal to scale recklessly. “We didn’t try and grow too quickly,” she said. The company now has 14 retail locations, nationwide shipping, and claims continued year-over-year top-line growth. Where Crumbs chased a Nasdaq listing and Sprinkles sold to private equity, Baked by Melissa stayed private, taking in just $6 million in outside funding in its 18-year tenure and kept a light footprint. 

Going viral for the opposite of cupcakes 

Ben-Ishay had been CEO for barely three months when COVID shuttered stores across New York. “I was scared out of my mind,” she said, unsure of how to scale the business. Ben-Ishay has been open about the imposter syndrome that defined her early years—she has previously told Fortune she didn’t think she deserved the CEO title. Asked whether she ever felt the company had outgrown her, she was unequivocal. “Never,” she said.

In her first year of being a CEO and during a pandemic, she said the company grew e-commerce revenue roughly 99% year over year. It was also during the pandemic that Ben-Ishay accidentally built what she now calls “a business within my business”—going viral on TikTok not for cupcakes but for her Green Goddess salad recipe, which racked up over 27 million views. Her social following has spawned a brand partnerships division, two cookbooks (including a New York Times bestseller), and collaborations with Oatly, Squishmallows, and Ferrero.

Ben-Ishay’s TikToks are chaotic—food bits flying, kids yelling, smoke detector beeping—with the overachieving-burnt-out-mom energy that millennials have made aspirational. It clearly speaks to a strong contingent: Baked by Melissa has nearly 3 million followers on TikTok alone. On the call with Fortune, the vibe wasn’t all that different; Ben-Ishay took part of the interview from the passenger seat of a car, at one point pausing to hug and chat with someone while Khetan answered questions.  

“I am a mom with young kids. I am a creator. I am a cookbook author—New York Times bestselling cookbook author—and an executive co-founder of Baked by Melissa,” she said. “Today, president and co-founder. Yesterday, CEO and co-founder,” which, she said, make up “many, many hats, and I have my priorities straight. I think this transition is not only best for Baked by Melissa, but best for me so I can breathe, like, a tiny bit.”

The question of what happens to the brand’s social media presence—arguably its most valuable marketing asset, built almost entirely on Ben-Ishay’s personal content—seems central to the transition. But she said she expects the shift to give her more time to create, not less. She has resisted the label “influencer” even as her following has grown. “I’m not an influencer by trade,” she said. “I have this greater responsibility, not only to Baked by Melissa, but also to my customer.”

The company’s founding story has always been a family affair. Ben-Ishay’s brother Brian Bushell co-founded the business and served as its first CEO until 2016. He remains a shareholder and is involved in high-level strategic conversations, according to Ben-Ishay. She declined to comment on a books-and-records inspection lawsuit that Bushell appears to have filed against the company. (Bushell has not responded to a request for comment). Her husband, Adi Ben-Ishay, also works at Baked by Melissa and will continue to report to Khetan.

Khetan said the partnership works because the division of labor is clean: Ben-Ishay leads brand and creative, he handles operations and finance. “The potential to create more value over the next couple of years is extraordinary,” he said. 

Ben-Ishay offered a final thought. “Baked by Melissa—we make bite-sized stuffed cupcakes in a variety of flavors that make you feel like a kid again, and we ship nationwide,” she said. “And hop to it, because Easter is on its way.” Eighteen years in, and she’s still closing.

This story was originally featured on Fortune.com

This post was originally published here

A regional war filled with missiles and drones flying overhead has dismantled the Middle Eastern airspace. The blockage of the Strait of Hormuz has sent oil costs skyrocketing. A partial government shutdown has left 50,000 TSA agents working without pay for more than a month. It’s everything, everywhere, all at once, forcing travelers to rethink their plans as the landscape begins to mirror something we’ve experienced a few years earlier during the pandemic.

“It’s a crazy situation,” said Eric Napoli, Chief Legal Officer at AirHelp, the world’s largest flight compensation platform. “Different situations in different places in the world are all convening at once.”

Napoli said that more travelers have been turning to AirHelp in recent months to recover money lost due to flight disruptions. Again, the combination of a war grounding flights and driving up fuel costs, coupled with ongoing conflicts in Mexico, government workers calling out sick after a month and counting of working without pay, and poor weather conditions, has led to a perfect storm that hasn’t been seen since COVID-19 saw the world come to a standstill. Above all, Napoli said, we’re all asking the same question we asked back then: when is it going to end?

“The sensation of the pandemic is similar in the sense that we’re like, okay, we don’t know what just happened,” Napoli told Fortune. “What’s the future going to be? Is this something that’s going to last two weeks, three weeks, a year? Is everything going to change? This is what we don’t know.”

The Iran war is closing airspace and increasing fuel prices

The conflict between the U.S., Israel, and Iran has effectively shattered the Gulf’s role as a global aviation crossroads. Airlines have grounded or rerouted flights, leaving passengers who booked connections via Dubai, Abu Dhabi, or Doha in limbo.

“Economies like Qatar or the Emirates that have really based themselves on being the connecting hub between Europe, the US, and Asia. All that stuff has been frozen,” Napoli said. “Anybody traveling to Asia from the U.S. or Europe suddenly sees major flight disruption. That’s been incredibly frustrating for passengers.”​

For those stranded in the Gulf, options are grim. Napoli described scenes of travelers scrambling for alternatives, such as driving for hours to reach operational airports in neighboring countries. “People are all on wait lists for flights, and it’s very touch-and-go,” he said. “From one day to the next, airspace might close.”​

Making matters worse is a dramatic spike in fuel costs. Brent crude has surged more than 50% over the past month and is now at $115 a barrel. Jet fuel now averages $157.41 per barrel globally, nearly double industry forecasts for 2026, according to the International Air Transport Association (IATA). For travelers, that translates directly into sticker shock at checkout. “We see the concern of fuel increases,” said Napoli, who himself has noticed prices jump as he reconsiders a family vacation to Texas from his home in Spain this summer. “Ticket prices will increase astronomically.” Passengers who booked through Gulf carriers months ago at competitive fares now face rebooking on European or American carriers at two or three times the cost, if they can find a seat at all.​

The TSA meltdown

While the war plays out abroad, a slow-motion crisis is unfolding at America’s own checkpoints. The partial government shutdown, now entering its 31st day, has forced 50,000 TSA officers to work without pay since Feb. 14. Absenteeism at major hubs like Atlanta, Houston, and New York has surged to approximately 20%. Small airports, officials have warned, could face outright closure if the standoff in Washington continues.

“We’ve had TSA issues: really long lines just to go through security, really long lines at border control,” Napoli said. “All of that has just made travel super frustrating for Americans.”​

Data from AirHelp highlights the scope of the disruption. In February 2026, the worst-performing major airports recorded staggering flight disruption rates: Fort Lauderdale-Hollywood International led the country at 61.8% of flights disrupted, followed by Newark Liberty at 61.0% and O’Hare at 59.1%. New York’s LaGuardia and Ronald Reagan National rounded out the bottom five at 58.7% and 58.2%, respectively. Even the best-performing airports were far from smooth: Salt Lake City International topped that list at a 39.6% disruption rate.​

Tourism at risk

The timing couldn’t be worse. The 2026 FIFA World Cup is set to kick off across 16 North American host cities, including Dallas, Houston, Los Angeles, Miami, and New York. The LA28 Olympics follow two years later. Both events were expected to deliver billions in tourism revenue to a U.S. travel industry still rebuilding consumer confidence, and as worldwide general sentiment towards the U.S. has hit all-time lows thanks to tariffs and policing efforts. ​

“Uncertainty is always bad for consumer confidence, and it’s bad for passenger confidence,” Napoli said. “We want people to come to the U.S. for the World Cup. If there’s a fear of really long passport control difficulties, if there are fears of lots of delays and nothing people can do about it, if ticket prices become incredibly expensive, then we won’t see those numbers.”​

The consequences extend well beyond the airport. “It won’t just be bad for the event,” Napoli added. “It will be bad for all the businesses that have planned their budgets around it. Hotel occupancy, restaurants: a lot of businesses are really depending on a successful World Cup.”​

For now, Napoli says it’s still too early to measure the full fallout of what he calls an “incredibly uncomfortable” moment for the airline industry. Claims, he notes, come in months after disruptions occur, not days. In the meantime, he has his own verdict on how bad things really are. “These things always happen when I’m about to travel,” he said with a laugh. He’s still booking his family vacation anyway.

This story was originally featured on Fortune.com

This post was originally published here

After six years on the sidelines, Uber is making a clear push to deploy its own robotaxis again, with deal structures that seem designed to limit its risk.

It’s a significant reversal from a few years ago, when Uber sold its self‑driving unit, ATG, after a fatal crash in 2018 and years of heavy losses. Since then, Uber has gone a different path—inking deals with nearly every major robotaxi player in the market, from Waymo to WeRide. It’s only Tesla that doesn’t work with the ride-hail company, though that wasn’t for lack of trying on Uber’s part. 

In all of those deals, Uber has integrated other companies’ AV fleets into its app; the AV companies own and operate the cars. That’s changing. 

First, there was the deal with Lucid Motors in 2025 to purchase and deploy up to 20,000 vehicles equipped with Nuro’s autonomy stack. On Thursday, Uber announced a similar deal with Rivian for its yet‑to‑be‑built R2 platform. The company is planning to purchase 10,000 fully autonomous R2‑based robotaxis if Rivian meets development and validation milestones, with an option to scale to 50,000, according to SEC filings and company statements. Uber is also making a $300 million investment in the company as part of the deal, and potentially another $950 million more should Rivian meet certain, undisclosed development requirements. Rivian has also agreed not to sell fully autonomous vehicles to Uber’s direct ride‑hailing rivals for a specified exclusivity period, according to the SEC filing.

Uber is planning to deploy the new fleet in San Francisco and Miami in 2028, and hopes to be in 25 cities by 2031, the companies said. Uber said in January it was still planning to deploy Lucid vehicles later this year.

To be clear, there’s still a lot that will need to happen first for the Rivian deal. Rivian laid out what its R2 autonomy platform will look like in December—a multi-modal sensor suite with 11 cameras, five radars, and one LiDAR that is built on two of Rivian’s in-house RAP1 chips—but it still has yet to finish developing it or to start production of the new vehicle. Language in the SEC filings suggest that Rivian still has a long way to go, noting that Rivian “intends to develop” an autonomous driving system featuring its own Level 4 system as well as “certain technology” that will let Rivian vehicles integrate into ridehailing and logistics networks. Rivian and its suppliers still apparently need to purchase the tooling necessary to manufacture and assemble these vehicles, too, the agreement shows.

All of this will be expensive. As TechCrunch first reported, Rivian said in an SEC filing that it no longer anticipates reaching EBITDA profitability by 2027 due to expected increase in autonomy R&D. It looks like Rivian may effectively be using Uber’s order book and cash to help finance this autonomy push.

Uber and Rivian had not responded to requests for comment before press time.

Uber moves away from asset-light

Uber’s been making strategic, expensive bets on autonomy for a long time, and has been a frontrunner in partnering with various robotaxi companies.

It is working in cities like Austin with Waymo vehicles, with Motional in Las Vegas, and has plans to expand into Los Angeles with Zoox. It’s even planning to work directly with Nvidia in 2027. These partnerships have allowed Uber to have skin in the game with the race to autonomy, but still deflect some of the brand and reputational risk. 

There are reasons why Uber would want to do that. In 2018, one of Uber’s self-driving testing vehicles struck a pedestrian, who passed away. It was the first self-driving car fatality, and it made waves. Arizona’s governor suspended Uber’s testing in 2018; Uber then shut down the Arizona AV program and later sold it in 2020 for stock in Aurora Innovation, a self-driving trucking company in Texas.

For years, as it has signed on to new partnerships, CEO Dara Khosrowshahi has insisted that Uber is an asset‑light marketplace that doesn’t own cars itself.

These recent deals represent a change in direction.

Uber still isn’t building vehicles or core autonomy software—Rivian and Lucid are—but Uber would now own thousands of highly specialized vehicles in specific cities, meaning it is taking on asset risk (like depreciation and utilization) as well as operational risk should those system underperform or be responsible for an incident.

It’s unclear whether these new arrangements are having any kind of impact on Uber’s pre-existing partnerships—and if companies like Waymo will start viewing Uber as more of a rival. Waymo and WeRide did not respond to requests for comment before press time.

For a company that has spent years insisting it’s just the marketplace and not the fleet, this is more than a tweak to the business model. It’s a bet that this time, owning the robots will hurt less than it did the first time around.

This story was originally featured on Fortune.com

This post was originally published here

Jack Schlossberg has a confession: He thinks Donald Trump did something right.

At Fortune‘s CEO Initiative dinner in New York, the grandson of President John F. Kennedy — and now a Democratic congressional candidate running in Manhattan’s 12th District — sat down with Fortune editor Diane Brady for a candid, wide-ranging conversation that was as much diagnosis as campaign pitch. The verdict from the 32-year-old: Democrats have a serious problem with young men, and they brought it on themselves.

Schlossberg’s first question was to find an issue on which he and President Trump agreed. “I disagree with President Trump a lot,” he immediately offered, before saying he gives Trump credit for “getting people fired up about politics.” Trump “poached” many of the young men away from the Democratic Party, Schlossberg continued, urging his own party to look closely at how and why this happened.

“I think that they’re not stupid, those young men, and I give President Trump a lot of credit for being able to influence new meeting environments and make politics accessible.”

It’s a striking admission from a man who spent 2024 making viral social media videos for the Biden campaign — until he quit, that is. “I went down to Wilmington,” he explained, only to hear “no” over and over again. “Anyway, long story short, I quit the campaign because I thought if I don’t do this my way, I’m not going to be able to live with myself. A month later, I got a call from the campaign being like, ‘Hey, can you come back and make videos for us?’”

Schlossberg, who holds degrees from Yale Law and Harvard Business School, has built an unlikely second identity as a progressive content creator, deploying deadpan humor to reach an audience the Democratic Party has consistently fumbled. He told Brady that he thinks his use of humor and sense of the unexpected has been an effective vehicle for conveying information, and he argued that viral social media posts actually contain a lot of information. It’s misguided to think viral content is shallow or light.

With the Democratic Party at an all-time low in popularity, Schlossberg said it can’t be down to losing their way on policy, but rather no longer reaching young voters. “People aren’t looking for a superhero … They just want someone who knows how to speak their language, meet them where they are, and give them something of value.”

And he has a clear theory: “The Republican Party has embraced modernity in a way that the Democratic Party used to own,” he told the room of CEOs. “Whether it’s space, whether it’s the AI race, crypto, investing in new technologies — the Democratic Party has been way anti-everything, and anti-business in particular. Anti-modernity. Trump has flipped the script.”

That framing — Democrats as the party of “no” — is the sharpest arrow in Schlossberg’s quiver. He doesn’t believe the party lost its way on policy so much as it lost the plot on storytelling and cultural relevance. “I don’t think that’s because we all of a sudden lost our way on policy,” he said. “I think we’ve mainly been out in terms of reaching young people and telling them a story about what we’re for, not just being a reactionary party.”

The Democratic Party’s shift since JFK

What would his grandfather make of all this? Schlossberg described a sense of disappointment in the current landscape and a desire to, well, make the Democratic Party great again.

“I feel really proud of being a Democrat,” he said, “and that’s because I associate Democrat not with what it is today, but what it was in the past.” He explained that Democrats used to embrace maternity, science, and new media channels, a party that was pro-affordable healthcare, pro-immigration, pro-education. He also talked about “responsibility” and “courage” from political leaders to tell voters what they need to hear, not something false and harmful. This is the danger of Trumpism, he argued.

“Whether you support the president or not, I think he succeeds when people can’t really believe in anything the government is saying. We can’t even necessarily believe what he says on a given basis.” Schlossberg added that he doesn’t think Trump is wrong about everything, “that’s too simplistic a view.” But he said Trump is failing to give Americans confidence in the government. “He’s not giving us confidence in our ability to solve the problems of the future, and I think we really have too many problems that we’re not paying attention to right now that we need to solve.”

His campaign slogan — “Believe in Something Again” — is a deliberate callback to that lost Kennedy-era confidence. He acknowledged it’s “a little cheesy,” but insisted it captures exactly what this political moment demands: not a superhero, but a leader who meets people where they are and gives them something of genuine value. “Young people are not a monolith,” he said. “And young people are really smart. They can probably really tell authenticity from someone who’s not telling the truth.”

Schlossberg is running in one of the bluest, most compressed districts in the country — Manhattan’s 12th, stretching from 96th Street down to 14th — so his path to Congress runs through a Democratic primary, not a general election battle against Trump voters. But his argument, delivered over dinner to a room full of corporate executives, is clearly aimed at a broader audience: the Democratic Party, which, unless it rediscovers its appetite for modernity and courage, risks losing an entire generation of young men for good.​

This story was originally featured on Fortune.com

This post was originally published here

Patreon’s CEO Jack Conte is tired of watching AI companies strike deals with huge corporations like Disney while ignoring the myriad of smaller creators who contribute to their models.

Speaking at the South by Southwest conference this week, Conte, whose company allows people to pay their favorite creators directly, argued AI companies should view creators’ work in the same way it views that of Disney, Conde Nast, or Warner Music, aiming to reach agreements with them rather than use their content without permission.

He attacked the legal doctrine of “fair use,” which allows someone to use copyrighted material without permission or payment depending on the purpose and character of the use, the nature of the original work, how much of the work was used, and whether the use harms the market. AI companies have cited fair use to justify using content to train or contribute to their models without paying. These companies often argue they are using copyrighted content in a “transformative” way and not just regurgitating it verbatim. 

For Conte, this legal “fair use” loophole is utter quackery.

“The AI companies are claiming fair use, but this argument is bogus,” Conte said during the conference. “It’s bogus because while they claim it’s fair to use the work of creators as training data, they do multimillion-dollar deals with rights holders and publishers like Disney, and Condé Nast, and Vox, and Warner Music.”

Conte pointed out the large licensing deals these AI companies have reached with intellectual property owners in recent years demonstrate the double standard of these companies. While AI companies recognize some copyrighted content requires permission and agreements, the same doesn’t seem to be true for creator-made content.

In the past several years, AI companies like OpenAI have made waves for the deals they have struck with some content owners while staving off lawsuits from others like the New York Times, which in 2023 accused OpenAI of training ChatGPT on millions of its articles without permission.

In December, OpenAI, the AI giant led by CEO Sam Altman, struck a deal that saw Disney invest $1 billion in the company and licensed more than 200 characters to OpenAI so they could be featured in the company’s video app, Sora. OpenAI has also signed licensing deals with Condé Nast, which owns The New Yorker and also with Vox Media, which owns New York Magazine. In November, Warner Music Group struck two separate licensing deals with music-focused AI companies Suno and Udio, after settling copyright suits with the companies.

Conte mentioned these deals specifically to highlight the hypocrisy demonstrated by AI companies when deciding who gets a licensing agreement and who doesn’t. Smaller creators, he claims, are being left out.

“If it’s legal to just use it, why pay?” Conte asked the crowd. “Why pay them and not creators—not the millions of illustrators and musicians and writers—whose work has been consumed by these models to build hundreds of billions of dollars of value for these companies?”

A spokesperson for Patreon told Fortune Conte’s comments reflect the mix of excitement and concern the company has heard from creators on how their work is being used and valued in the age of AI.

“At Patreon, our focus is on ensuring creators can build sustainable businesses, and that includes advocating for a future where creators are recognized and compensated for the value they bring, even as technology evolves,” the spokesperson said in a statement.

The AI companies’ fair use claims have been called into question several times as AI models have become increasingly more popular. The New York Times filed a lawsuit in 2023 claiming OpenAI used millions of its articles without permission and that its large language model ChatGPT was in some cases regurgitating entire Times articles, potentially striking a blow to OpenAI’s fair use argument. A date for the trial has not yet been set, but if the Times wins it could be owed billions in damages. More recently, dictionary makers Encyclopaedia Britannica and Merriam-Webster sued OpenAI after it rebuffed the companies’ offer of a licensing agreement in 2024. The publishers claimed in the lawsuit that OpenAI’s ChatGPT is cutting into their search traffic and ad revenue by absorbing the content created by their hundreds of human writers and editors. 

OpenAI rival Anthropic also settled a class action lawsuit by a group of authors to the tune of $1.5 billion in September. As a result of the case, the judge ruled that training an AI model on pirated books—as the authors accused Anthropic of doing—did not qualify as “fair use,” but that training an AI model on purchased books qualified as legal transformative use.

While Conte said he was not against AI, generally, and noted that change is inevitable, humans will continue to enjoy human-created content long into the future, he said.

“Still, the AI companies should pay creators for our work, not because the tech is bad—but because a lot of it is good, or it will be soon — and it’s going to be the future. And when we plan for humanity’s future, we should plan for society’s artists, too, not just for their sake, but for the sake of all of us. Societies that value and incentivize creativity are better for it,” he said. 

March 19: This article has been updated to include comments from a Patreon spokesperson

This story was originally featured on Fortune.com

This post was originally published here

Social Security is six years from insolvency. That’s not a projection buried in an actuarial footnote—it’s the opening finding of a new report from the Penn Wharton Budget Model (PWBM), released Thursday, which puts the program’s Old-Age and Survivors Insurance Trust Fund on track to run dry by 2032.​

And the fix lawmakers will likely reach for first—raising taxes—may be precisely the wrong move.

That’s the stark, counterintuitive conclusion suggested by PWBM researchers Seul Ki “Sophie” Shin and Kent Smetters, who modeled five distinct reform packages ranging from all-tax to all-cuts and found the approach most conventional analysts dismiss as politically radioactive—deep benefit reductions—generates the strongest long-term economic growth.​

The counterintuitive math

Run the numbers through a standard accounting lens and the tax-heavy plan, called Option A, looks like the winner. It delays insolvency from 2032 all the way to 2058 by raising the payroll tax rate one percentage point (to 13.4%), lifting the taxable earnings ceiling to $250,000 (up from $184,500 in 2026), and switching to a slower inflation index for cost-of-living adjustments.​

Switch to dynamic economic modeling—the kind that tracks how people actually change their saving and working behavior in response to policy—and the picture flips. Option E, the most aggressive benefit-cut plan (no new taxes, deeper formula reductions, and a retirement age raised to 69), projects a 6.1% GDP boost and a 13.5% surge in private capital by 2060. Option A, the tax-heavy plan, delivers only a 2.4% GDP increase and a 4.4% rise in private capital over the same period.​

The mechanism is straightforward: Tell Americans their Social Security checks will be smaller, and they’ll save more on their own. Smetters and Shin call this the “incentive to save.” More private savings means more capital available for productive investment, which drives up wages. By 2060, wages are projected to be 5.7% higher under Option E versus just 1.6% higher under Option A.​

Smetters told Fortune his goal in this exercise isn’t to make recommendations, but to show a “range of options,” instead. If he had to guess, he added, most people would prefer Option C, somewhere in the middle, but he is leaving that to the political process. His job is to “show the tradeoffs across a wide range of options on a holistic basis without bias.”

For critics who argue the math in this analysis is cruel, though, he offered the perspective that the cruelest approach is likely the one on the books under current law, in which benefits would be cut immediately in just six years. This means a $2,500-$2,700 cut in benefits per year for a person retiring in seven years, versus PWBM’s Option E, the harshest scenario, which would cut benefits by $2,300 per year (for women) and $2,500 per year (for men).

Even that comparison hides a lot of pain headed for retirees under current law, Smetters said. Once the trust fund is depleted, current law would cut benefits for all retirees, even the proverbial 90-year-old grandmother. His Option E, on the other hand, would concentrate pain for newer retirees, in their sixties.

Why Washington gets this wrong

The disconnect, the researchers argue, comes down to a concept that rarely makes it into political debate: implicit debt. Under Social Security’s pay-as-you-go structure, today’s payroll taxes flow directly to today’s retirees—a transfer that carries the same economic drag as explicit Treasury borrowing but doesn’t show up on the federal balance sheet. PWBM estimates those implicit pay-as-you-go obligations are currently twice the size of the U.S.’s explicit national debt. If they were booked under standard accounting rules, America’s debt-to-GDP ratio would exceed 300%.​

That’s why plans that look good on paper—Options A and B significantly reduce the official debt-to-GDP ratio—can underperform in the real economy. They cut the visible debt while leaving the hidden debt intact.​

The generational tradeoff nobody wants to talk about

None of this comes free. The gains from aggressive reform flow primarily to younger and future workers, while current retirees and near-retirees absorb the losses. Under Option A, a 60-year-old middle-income earner today loses $30,745 in lifetime value. Under Option E, that same person loses $60,970.​

For someone born in 2051, those options produce lifetime gains of $42,025 and $81,932, respectively—in the same middle-income bracket.​

But the PWBM report does offer one unexpected piece of good news on the fairness front: Achieving the best long-run outcomes for future generations doesn’t always require the worst short-term pain for current ones. Under Option C—a middle-ground package combining some tax adjustments with retirement age increases—most 60-year-olds today actually come out ahead on a lifetime basis, even while future generations gain more than they would under Option A.​

Importantly, none of the five options would fully close Social Security’s long-term funding gap. They would reduce the bleeding, not stop it. And with the 2032 deadline now just one presidential term away, PWBM’s core message is methodological as much as political: Decisions made using conventional budget scoring will lead lawmakers to the wrong place. The math that drives political consensus isn’t the same math that determines economic outcomes.

This story was originally featured on Fortune.com

This post was originally published here