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American Tech Companies Are Suddenly Sweating Bullets as China Catches Up on AI

  

American Tech Companies Are Suddenly Sweating Bullets as China Catches Up on AI

Reality is setting in.
A photo illustration of a businessman biting his nails anxiously.
Illustration by Tag Hartman-Simkins / Futurism. Source: Shutterstock

The head start that the US companies enjoyed in the AI race is quickly vanishing. Chinese competitors are now nipping at their heels, and it’s causing a wave of anxiety in the American sector.

Over a year ago, DeepSeek spurred an existential crisis — and a mass stock selloff — in the US tech industry when it released a competitive AI model created for a fraction of the cost of the leading American models.

If that was a wakeup call, then the release of GLM-5.2 last month is loudly banging on the front door. The model, from the Chinese start-up Z.ai, has been hailed as nearly or just as powerful as frontier US systems, especially when it comes to its coding capabilities and cybersecurity applications — while being significantly cheaper to use. 

It’s generated heaps of discussion in tech circles. Marc Andreessen, one of Silicon Valley’s foremost venture capitalists, tweeted that “AI insiders are saying GLM-5.2 is the first Chinese AI model to match and often beat the American big lab public AI models with no compromises.”

Perhaps betraying their sense of a weakening grip on the field, US companies are crying foul about China’s AI ascension. Earlier this year, Anthropic accused China’s DeepSeek, Moonshot, and MiniMax of using a technique called distillation to illegally gather data to imitate its models, which is essentially claiming that they cheated their way to the front of the pack.

In distillation, a weaker “student” model is trained on the outputs of a more advanced “teacher.” AI labs routinely use this to create smaller and more efficient versions of the their largest systems, but Anthropic says Chinese firms are abusing the trick in a mass coordinated effort involving tens of thousands of accounts that probe its models for data that it can extract and use to train their own AI models, thereby effectively pilfering Anthropic’s tech. These claims were relitigated last month, when Anthropic sent a letter to US senators accusing Chinese titan Alibaba of also engaging in this practice.

“These distillation attacks are carried out illicitly, systematically and at industrial scale to harvest US AI capabilities across frontier labs and repackage them as their own,” Anthropic told the senators, per the New York Times.

But Anthropic may be wasting its breath. Distillation is an open secret among rivals in the US tech sector. And as the NYT notes, it’s not even clear if it’s illegal. Unless some court rulings go their way, US firms will have to rely on their own countermeasures to stop it. (Anthropic was caught trying to do this by secretly embedding code in its Claude Code model that allowed it to spy on Chinese users, creating alarm among its customer base.)

American firms could also benefit for some geopolitical strong-arming, such as the US cutting off China’s access to its powerful AI chips, or even blocking Americans from accessing Chinese models (which isn’t as far-fetched as it may sound, when you consider that the US threatened banning TikTok as a way of forcing China’s ByteDance into divesting its US operations, or that it’s also effectively banned Chinese electric vehicles, which are far cheaper than American ones, with prohibitively high tariffs).

Chinese firms may very well have used surreptitious measures to help catch up to the US, but according to the NYT, many experts believe that a distillation crackdown would be meaningless, as building a model as advanced as Z.ai’s can’t be explained by distillation alone. US firms may simply have to accept that their Chinese counterparts are now on equal footing. The complaining about distillation is a convenient distraction at a time when their coding products are under more scrutiny for being too expensive to use as they get deployed in corporate settings — or perhaps a desperate plea for the US government to intervene and rescue them from the horrors of global, free market competition.

More on AI: Bank of America Warns That AI Investors Are in for a Nasty Reality Check

Google fined €890M in its first Digital Markets Act penalty

Google fined €890M in its first Digital Markets Act penalty

Brussels penalised the company for favouring its own search results and restricting Google Play developers, and gave it 60 days to comply.

July 23, 2026 - 11:33 am


Image by: Shutterstock


The European Commission fined Google €890 million on Thursday for breaking the Digital Markets Act, the first time Brussels has penalised the company under the rulebook it built to rein in the largest technology platforms

.The penalty divides in two. A €460 million share covers search self-preferencing, where Google gave its own shopping, hotel, transport, and sports results more prominent placement than competing services without applying, in the Commission’s words, “transparent, fair and non-discriminatory conditions.”

The remaining €430 million concerns anti-steering rules on Google Play, where the company charged fees and set terms that stopped developers from freely directing users to cheaper purchase options outside its store.

“The best products should succeed because they’re better, not because they’re owned by the company running the search engine,” said Teresa Ribera, the Commission’s executive vice-president for competition, as she set out the decision.

The Commission cast both practices as breaches of the gatekeeper obligations the DMA imposes on the handful of platforms it deems systemically important.


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It is Google’s first sanction under the DMA, though not the regime’s first. Apple and Meta were fined €500 million and €200 million respectively in April 2025, the earliest penalties issued since the law took full effect.

Brussels has pressed Google on other fronts too, including a push to open Android to rival AI assistants under the same legislation.

The case dates to March 2024, when the Commission opened non-compliance proceedings against Alphabet days after the DMA’s obligations became binding on designated gatekeepers. Investigators set out preliminary findings on the search and Play conduct before finalising the fine.

Under the decision, Google has 60 days to end both practices or face periodic penalty payments of up to 5% of Alphabet’s average daily worldwide turnover.

The DMA allows fines of up to 10% of global annual revenue for a first breach, and up to 20% for repeat offences, so €890 million sits well below the theoretical ceiling for a company of Alphabet’s size.

The complaints came largely from price-comparison services, vertical search rivals, and app developers, who argued that Google’s rankings and fees left them unable to compete on equal terms.

Google was designated a gatekeeper in 2023 for core services including Search, Android, Chrome, and Google Play, the label that brought Thursday’s obligations to bear.

Google pushed back hard. Kent Walker, its president of global affairs, called the ruling unfair, describing it as “product degradation driven by a small group of self-serving complainants” rather than genuine competition.

The company argues that the changes Brussels wants would make its services worse for users.

Even so, Google has begun testing revised search layouts and has altered its Play steering terms, steps the Commission acknowledged as “substantial progress” towards compliance.

Regulators are still assessing how the company’s AI Overviews and AI Mode features sit against the same obligations, and the Commission said it would keep monitoring the search and Play changes before deciding whether they go far enough.

Whether Google intends to appeal was not confirmed at the time of the announcement, though the company has contested every major European fine of the past decade in court.

The DMA fine is separate from the bloc’s older antitrust cases. The EU’s top court this month upheld a record €4.1 billion Android penalty, and Google had earlier floated concessions on news-search ranking to head off fresh DMA scrutiny.

Reported widely in dollars as a “$1 billion” fine, the penalty is fixed in euros at €890 million, or roughly $1.02 billion at current rates, with US coverage leaning on the rounder number.

The timing is delicate. The Trump administration has repeatedly cast the EU’s digital rulebook as a trade irritant and a de facto tax on American firms, and trade commissioner Maroš Šefčovič has spent months managing the friction.

Thursday’s decision lands as Washington and Brussels wrangle over tariffs, giving a technical competition ruling an unmistakably political edge.

June home sales disappoint as prices reach an all-time high

 June home sales disappoint as prices reach an all-time high


June home sales disappoint as prices reach an all-time high
Published Thu, Jul 9 202610:00 AM EDT

Diana Olick@in/dianaolick@DianaOlickCNBC@DianaOlickWATCH LIVE

Key Points
Sales of previously owned homes in June dropped 2.4% from May.
Inventory at the end of June was 1.56 million units, down 0.6% from May but 1.3% higher than June 2025.
One quarter of all sales were all-cash, down from 29% last year.


A for sale sign is posted in front of a home on April 13, 2026 in Pasadena, California.
Justin Sullivan | Getty Images


High mortgage rates coupled with record-high prices is causing homebuyers to pull back.

Sales of previously owned homes in June dropped 2.4% from May to 4.09 million units on a seasonally adjusted, annualized basis, according to the National Association of Realtors. Housing analysts were predicting a slight gain month over month.


June sales were, however, were 2.8% higher than the same month a year prior.

“The back-and-forth in monthly home sales activity, driven by mild fluctuations in mortgage rates, shows how sensitive home buyers are to affordability conditions,” said Lawrence Yun, the Realtors’ chief economist, in a release. “However, job gains—more than half a million since the beginning of the year—will continue to provide support for the housing market.”

This count represents closed sales, so contracts that were likely signed in May, when the average rate on the 30-year fixed mortgage was still moving higher. It began rising sharply at the start of March at the start of the Iran war.

Inventory at the end of June was 1.56 million units, down 0.6% from May but 1.3% higher than June 2025. At the current sales pace, that represents a 4.6-month supply. The market is considered balanced between buyer and seller at a 6-month supply.

With the market still lean, prices continue to rise. The median price of an existing home sold in June was $440,600, an increase of 1.8% from the year before and the highest on record. June is usually the strongest month for both sales and prices.


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“Progress on long-term housing affordability could be hampered if inventory growth continues to stall. Without consistent gains in inventory, home prices can accelerate. It is critical to introduce more supply to the market to widen the opportunity for homeownership,” Yun said.

Sales continue to be strongest on the higher end of the market. Sales of homes priced below $100,000 were down 1.7% from a year ago, and sales of those priced between $100,000 and $250,000 were up less than 1%. Meanwhile sales of homes priced between $750,000 and $1 million were up nearly 14% from the year before, and sales of homes priced above $1 million were up 18%.

Regionally, home sales were down in June month over month everywhere except in the Northeast.

One quarter of all sales were all-cash, down from 29% last year. First-time buyers made up 33% of sales, up from 30% a year ago.

Short Sellers Are Having a Field Day Betting Against SpaceX

Short Sellers Are Having a Field Day Betting Against SpaceX as Shares Continue to Slip
It could soon get even worse.


By Frank Landymore


Published Jul 16, 2026 5:04 PM EDT
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Illustration by Tag Hartman-Simkins / Futurism. Source: Angela Weiss / AFP via Getty Images; Shutterstock

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SpaceX bears are smelling blood in the water. As its stock languishes below its IPO price — at press time, $131 — short sellers are going all in against the company, hoping to make a killing off of CEO Elon Musk’s faltering pull on investors.

As CNBC reports citing data from S3 Partners, 185 million SpaceX shares are now sold short, which is nearly 29 percent of its publicly tradable shares, when it was around only five to seven percent three weeks ago.

It’s one of the highest levels of short selling for a company in its first month of being publicly traded, Ihor Dusaniwsky, a managing director at S3, told Bloomberg.

“The recent price weakness has spurred short selling as well as the anticipation of lockups expiring soon,” he added, referring to the additional SpaceX shares that will soon be tradeable and will play a large role in how the stock performs.

SpaceX priced its IPO at $135 a share and seemed to set the tone when its price rose to $150 on its opening day and powered past $200 in the days that followed. Those blockbuster gains were short-lived, however. Its price has steadily declined over the past month, losing a third of its value since its peak.

Investors have questioned Musk’s vision for the company — which includes an ambitious pivot to building orbital AI data centers — while its path to profitability remains unclear. Last year, the company lost nearly $5 billion.

Musk’s decision to combine SpaceX with his AI startup xAI before the IPO has also exposed the rocket company to xAI’s numerous controversies, such as its chatbot Grok being used to generate millions of nonconsensual sexualized images of real people. Before, the public fascination around spaceflight had helped shield SpaceX against anti-Musk sentiment.

Off the back of this waning enthusiasm, short sellers have seen their paper profits surge to $3.88 billion, Bloomberg reported Wednesday.

But the next few months could be a key turning point for the stock’s performance — or further sink its hopes. Only a small percentage of SpaceX’s shares were made available when the company went public as a measure to prevent insiders from quickly cashing out and crashing the stock price. But around half of its shares will be unlocked from now until December, dwarfing what’s currently available.

If investors dump those unlocked shares, it could send SpaceX’s stock tumbling. Experts have warned that this period of gradually unlocking stocks could be considerably volatile— which isn’t exactly reassuring, given the company’s recent performance.

More on SpaceX: SpaceX Investors Are Lamenting All the Money They’ve Lost



Frank Landymore
Contributing Writer


I’m a tech and science correspondent for Futurism, where I’m particularly interested in astrophysics, the business and ethics of artificial intelligence and automation, and the environment. 

Xbox starts major layoffs to save its lagging biz

 Xbox starts major layoffs to save its lagging biz

Moody photograph of an xBox controller, colored in shades of blue.

Morning Brew Inc, Photo: Getty Images

One of the biggest names in gaming could use an infinite money glitch right now. With revenue falling and a string of acquisitions not paying off, Microsoft-owned Xbox will slash about one-fifth of its staff and divest from some development studios, CEO Asha Sharma said yesterday.

Sharma called it “the most significant restructure” in the company’s history. Xbox will…

  • Lay off 1,600 people this week and another 1,250 over the next year.
  • Sell or spin off four to five game studios that it acquired within the past decade, which will cut another 350+ people from Xbox’s staff (games that are already announced won’t be canceled, Sharma said).

“Our business today is not healthy,” Sharma wrote in a memo, acknowledging the company’s measly 3% profit margin. Its quarterly revenue recently declined 5% year-over-year.

The Game Pass gamble

One big reason for Xbox’s slowdown appears to be its struggling subscription service, Game Pass.

TL;DR: To build up an enticing Game Pass library, Xbox bought production giant Activision Blizzard for $69 billion in 2023 and ZeniMax Media, the parent company of Skyrim-maker Bethesda, for $8.1 billion in 2021.

Those splurges didn’t pan out. (Xbox is keeping both companies, but the fifth studio it wants to divest is part of ZeniMax.):

  • Game Pass currently has 30 million subscribers, a far cry from the 77 million that Xbox projected it would reach this year.
  • In a normal year, the company lost 64 cents for every dollar it invested, Sharma wrote.

But now…Sharma, who became CEO in February, said Xbox will return to growth in 2027. Since taking the helm, she has moved to reduce the number of games Microsoft publishes and reprioritize its most popular franchises, like Minecraft, Fallout, and Candy Crush. This streamlining comes as the AI boom sends memory chip prices soaring, pushing Xbox and its competitors to raise console prices.

Zoom out: Xbox’s layoffs are part of 6,400 planned job cuts across Microsoft, whose massive AI spend is spooking investors. It’s the worst-performing megacap tech stock so far this year.

The EU launches its new satellite plan and challenges Starlink

 The EU launches its new satellite plan and challenges Starlink: “Reserve two-thirds of the bandwidth for domestic operators”

The Commission’s proposal aims to strengthen Europe’s technological sovereignty by reducing its dependence on US companies. Under the proposal, companies from third countries will only be able to access one-third of the EU’s satellite bandwidth and will be permitted to provide only commercial services: defence, security and critical communications are excluded
 by Giorgio Dell'Omodarme
27 May 2026
in Net & Tech



Fonte: (Unsplash)


Brussels – The European Commission’s efforts to boost the Old Continent’s industrial competitiveness and strategic autonomy continue to infinity and beyond. Today (27 May), the European Commission has finalised its proposal for a new European regulation on mobile satellite services (MSS), with the aim of increasing the presence of European operators and reducing dependence on US companies, which have historically dominated this strategic market.

“Now more than ever, high-capacity and widely available satellite connectivity is essential to strengthening the resilience of the European Union’s communications networks,” emphasised the Commissioner for Digital Technologies, Henna Virkunnen, during the press conference presentation of the measure. The Finnish politician also added that “our proposal will enable satellite and terrestrial connectivity to be provided directly to mobile devices, particularly in areas where terrestrial networks are not available.”
What mobile satellite services are

Mobile satellite services are systems that enable satellites to “communicate,” i.e., transmit voice, data, and internet connections, rather than relying on traditional terrestrial infrastructure based on antennas and cables. The frequencies required to operate MSS are a particularly valuable and limited resource, so companies that obtain the rights to use them find themselves in a position of great power.

Until recently, the use of these systems was limited to highly specialised contexts (such as maritime and air communications in areas without mobile coverage, for example), but the advent of so-called Low Earth Orbit satellites has brought about a veritable revolution. Thanks to their greater proximity to Earth, these systems—the best-known example being the Starlink network, controlled by Elon Musk—enable much faster signal transmission and therefore much faster and more stable internet connections.

The scope of application for these satellites is therefore expanding very rapidly. For example, they are increasingly being used to provide internet coverage in particularly remote areas or to offer connectivity in the event of a power cut or natural disaster.

The defence sector is also affected by the development of Low Earth Orbit constellations, as seen clearly in the context of the Russia-Ukraine conflict. When Moscow’s bombing struck ground infrastructure in Kyiv, it was Starlink satellites that ensured military communications could continue, and operational coordination was maintained.

At the same time, Ukraine’s dependence on Starlink has placed a potentially lethal weapon of blackmail in Musk’s hands: On several occasions, the South African-born entrepreneur has threatened to shut down his satellites in an attempt to push Kyiv towards a more conciliatory stance towards the Russian aggressor.
The Commission’s proposal

Indeed, it was precisely with the outbreak of the conflict in Ukraine that the EU began to adopt a more practical approach to achieving sufficient technological sovereignty in satellite technology.

The current situation is one of complete dependence on non-European suppliers. Since 2008, when Member States granted the Commission the power to license a specific band of satellite spectrum for the entire EU (the so-called 2GHz band), the sector has been dominated by just two companies: Viasat and Echostar, both US-owned.

In May 2027, however, these authorisations will expire, and the Commission would like to take this opportunity to free itself, at least in part, from its dependence on the US and neutralise the role of actors politically hostile to Brussels, with Musk at the forefront (Starlink recently purchased the valuable wireless spectrum licences from Echostar for $17 million).

“We have a rare opportunity to choose what to do for our future,” Virkunnen told reporters, “and we want to give a new boost to Europe’s competitiveness, strengthen its security and embrace new technological possibilities.”

More specifically, the EU Commission’s proposal to increase the presence of European satellite operators involves dividing the 2GHz band into three blocks of 10 megahertz (MHz) each.

The first block will be reserved exclusively for government use, such as security, critical communications, and military defence. In this case, the satellite communication service may be provided only by a European operator who, according to the official statement issued by the Berlaymont, “will have to integrate with the current and future capabilities of the IRIS2 programme”. This refers to Infrastructure for Resilience, Interconnectivity and Security by Satellite, the European project comprising around 290 satellites that Brussels has developed specifically in response to Starlink.

As for the remaining two-thirds of the EU spectrum, this will be allocated to more purely commercial uses (for example, energy monitoring services, emergency devices and internet coverage in remote areas). In this case, the Commission explains further, “the spectrum will be divided equally between one third for European operators and one third for both European and non-European operators.”

For Virkunnen, the aim remains to “encourage supplier diversification and incentivise the entry of EU companies into the market,” and there is a possibility that the list of European companies could also include firms from neighbouring countries, such as the United Kingdom and Norway: “they could be included via a delegated act, but these countries will have to align their rules with this new legislative proposal,” explained the former Finnish Minister for Education.

Indeed, the definition of the criteria used to determine whether an operator is European or not is one of the most sensitive issues in the proposal.

When questioned several times on the subject, Virkunnen remained vague. While emphasising that “the text sets out very precise criteria for defining what it means to be an EU company,” the Commissioner merely reiterated the obvious: “European entities must be controlled by Member States or by European private individuals,” she said.
Fears of a US reaction divide the EU

Ahead of today’s meeting, the daily newsletter Il Mattinale Europeo reported early this morning that several officials were expecting “a lively debate” during the board meeting on this proposal.

In fact, the division between two-thirds of the spectrum reserved exclusively for the EU and one-third open to all appears to be a compromise between two opposing, irreconcilable positions on the degree of openness the European satellite market should have in the future.

On the one hand, there are those who would have liked to completely close the sector to operators from third countries (the principle of the so-called Buy European in public procurement procedures, which countries such as France and Spain would like to apply to a much wider range of industrial sectors than just the satellite sector). On the other hand, those who would have preferred a less restricted application of the principle of free competition. According to reports from the British news agency Reuters, Virkunnen herself is said to belong to this second group. Precisely for this reason, she is said to have pushed for this compromise herself, fearing a negative reaction from the United States.

“We want to strengthen European capabilities in this sector, but we remain open to allocating a block to non-EU players as well,” the Commissioner reiterated at a press conference, also pointing out that “the US itself has recently decided that its MSS band should continue to be managed by a domestic operator.” “A European company was interested, but was denied access,” she concluded.

In any case, Virkunnen herself inadvertently suggested that this and many other issues (for example, will Brussels really be willing to open up part of its spectrum to Starlink?) are far from settled. Anticipating that negotiations between the Parliament and the Council on the text proposed today by the Berlaymont could take a long time, the Commissioner proposed to “extend the current licences of Echostar and Viasat by two years, so as to ensure that the new regulation is adopted within this timeframe.”

So, at least until 2028, EU airspace will remain firmly in the hands of the United States.

Premier Smith’s Warm Embrace of Meta

Premier Smith’s Warm Embrace of Meta
Not a word about the tech behemoth’s harm to kids. One disgusted jury awarded $375 million in damages.

Andrew Nikiforuk 14 Jul 2026The Tyee

Tyee contributing editor Andrew Nikiforuk is an award-winning journalist whose books and articles focus on epidemics, the energy industry, nature and more.Our journalism is supported by readers like you. Click here to support The Tyee.


Meta CEO Mark Zuckerberg. His trillion-dollar company faces numerous lawsuits for imperiling child safety. Photo via Wikimedia.


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Let’s get this straight. The premier of Alberta, Danielle Smith, dons a cowboy hat and gushes and glows over a $13-billion data centre project in Sturgeon County just outside Edmonton.

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Ah, the success of low taxes and less red tape, she enthuses.

Smith then salutes the centre’s big owner: Meta Platforms.

Yep. That’s the same trillion-dollar company that thousands of people and communities are suing for going fast and breaking things with addictive social media platforms that imperil child safety and mental health.

And isn’t this the same company that also blocked and restricted Canadian news from its platforms?

Yep. And the same company that Iowa whistleblower Frances Haugen accused of choosing profits over safety over and over again before the U.S. Congress.

Now Meta can do it over and over again in Alberta.

No matter. Smith praises Meta for its “largest private sector investment in Canada.”

The massive project will be powered by separate $4-billion power station fuelled by Alberta’s fracked natural gas. The Meta centre will use more electricity than the whole city of Calgary to polarize more people with more manipulative algorithms. Just think of the emissions. Alberta-made.

During the press conference the premier chattered on and on as she tends to do. The project will occupy 30 football fields with several boxes and at its completion will employ 300 people.

Imagine that. For every $43 million of Meta’s investment in computer processing units, Alberta will get one permanent job.



How Age-Restricting Social Media May Play Outread more

Smith calls this “responsible growth” and then praises the company’s “closed loop liquid cooling system” to minimize water usage.

But in her excitement, she forgets to mention that the power station energizing the computer chips will use about 1.2 million litres of water a day, and that fracked gas consumes tonnes of fresh water, too.

During the proceedings not a word is wasted on the subject of human decency. Or AI’s threat to the human condition.

Isn’t Meta the same company that a New Mexico jury just fined $375 million for facilitating child sexual exploitation?

And didn’t the evidence including Meta documents and testimony of whistleblowers show that Meta’s design features enabled pedophiles and predators to engage in child sexual exploitation on Meta’s platforms?

How did New Mexico’s attorney general put it? “Meta’s refusal to follow the laws that protect our kids tells you everything you need to know about this company and the character of its leaders.”

And haven’t Meta’s own studies and global research consistently shown that millions of teens experience sleep deprivation and sexual harassment on Meta’s platforms?



Zuckerberg Is Wrong to Block Canadian News. His Own AI Bot Told Meread more

Has Smith forgotten the compelling evidence collected by Jonathan Haidt and others showing that social media, all powered by data centres, substantially increases the risk of anxiety, loneliness and depression among adolescents?

Or does she just not care?

Did Smith really welcome to her province a corporate miscreant now lobbying the U.S. government to amend its laws to grant it legal immunity from thousands of lawsuits from young people and their families harmed by its products?

Yes, she did. Wearing a cowboy hat.

She played sycophant to another a Big Tech bully whose systemic algorithm failures allowed paid advertisements promoting child sexual exploitation to run on Instagram in India.

But hey.

It’s “responsible growth.”

Innovation.


Read more: Alberta

Freedom Fuel Network

Trump Suddenly Opens Dozens of Gas Stations Selling Suspiciously Cheap Fuel, and Experts Are Already Warning of Impending Disaster
"When losses happen, somebody's got to pay for it."


By Joe Wilkins


Published Jul 8, 2026 2:00 PM EDT
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Illustration by Tag Hartman-Simkins / Futurism. Source: Shutterstock




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Trump Mobile. Trump Steaks. Trump Coin. Trump Vodka. By this point, you know the drill.

The president’s latest personal venture doesn’t bear his name, but it does come with all the signature hallmarks of a Trump brand: it’s garish, incredibly shady, and likely to implode sooner rather than later.

Called Freedom Fuel Network, the enterprise encompasses dozens of gas stations throughout Pennsylvania and New Jersey, USA Today reported, although it isn’t exactly clear which locations are open for business. Plastered in American flag decals and “Freedom Fuel” branding, the gas stations seem to be selling unleaded gasoline for the fixed-price of $3.47 per gallon, about 32 cents cheaper than the current average price in the US.

While there is some grumbling online about that fixed price being higher than local prices, in most scenarios the cost for a gallon of Freedom gas seems far lower than the market rate.

For example, the first Freedom Fuel store, located at a former Sunoco store in Dresher, Pennsylvania, is drastically undercutting the competition. According to GasBuddy, nearby prices range from $3.85 to as much as $4.49 — no doubt reflecting the slower drip of oil from the president’s costly war on Iran, which burst back into active fighting this week.

As head of petroleum analysis at GasBuddy Patrick De Haan told the Philadelphia Inquirer, the current price of crude oil means there’s no way Freedom Fuel’s $3.47 price point can turn a profit.

“Stations selling at this price, it’s not sustainable,” De Haan explained. “Generally, when losses happen, somebody’s got to pay for it.”

De Haan raises an obvious question: who is paying for it? If the stations are losing money on every gallon, somebody has to make up the difference somewhere — whether out of Trump’s pocket, that of a friendly donor, or the taxpayer’s. And if it’s a private company taking the hit, how long until they stop subsidizing Pennsylvania drivers? Will consumers in Ohio ever get to experience a $3.47 gallon at a Freedom Fuel-branded station?

These questions remain largely unanswered. Though Freedom Fuel was first announced on White House social media channels, a government spokesperson told the Inquirer that Freedom Fuel is a private company, not a federal program.

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