Scott examines prediction markets on Anthropic's Pentagon troubles (minimal impact expected), the 2026 midterms (Democratic wins likely despite voting law concerns), groundhog weather predictions (mostly broken clocks), Iran conflict outcomes (under 50% regime change), and introduces MNX, a new AI-focused futures exchange. Longer summary

Scott analyzes several recent prediction market stories. First, he examines how Anthropic's stock price barely changed after the Pentagon declared it a 'supply chain risk', because markets predict the company will win on appeal and the designation only affects a small portion of their business while generating positive publicity. He then discusses the 2026 midterms, where Democrats are favored to win but various Republican voting law changes could create chaos, though markets suggest turnout won't be significantly affected. The post includes a statistical analysis of groundhog weather predictions, showing Staten Island Chuck's high accuracy is likely due to consistently predicting spring. He covers prediction markets about the Iran conflict, including regime change odds and potential casualties. Finally, he announces MNX, a new cryptocurrency-based futures exchange focused on AI-related hedging markets, and shares miscellaneous prediction market news including Substack's partnership with Polymarket. Shorter summary

Scott analyzes the legal controversy around AI companies contracting with the Department of War, showing that 'all lawful use' permits mass surveillance and autonomous weapons through existing legal loopholes, despite OpenAI's claims of safeguards. Longer summary

Scott Alexander analyzes the controversy around AI companies' contracts with the Department of War, focusing on Secretary of War Pete Hegseth's designation of Anthropic as a 'supply chain risk' after they refused to allow their AI to be used for mass surveillance and autonomous weapons. The post examines OpenAI's subsequent agreement with the DoW, which permits 'all lawful use' of their models. Through detailed legal analysis provided by anonymous readers, Scott shows that current laws have significant loopholes: mass domestic surveillance is technically legal when data is 'incidentally obtained' or purchased from third parties, and autonomous weapons are only regulated by vague DoW policies that can be changed at will. The post critiques OpenAI's FAQ as misleading, arguing their safeguards are inadequate, and concludes with questions that employees, journalists, and lawmakers should be asking about the contract. Shorter summary