Claude 365

0:00This episode is brought to you by Focus Features. On March 27th, Focus Features invite you to be a part of the most explosive movie of this year's Sundance and South by Southwest Film Festival. The AI doc or how I became an apocalypticist is being called supremely entertaining and the most urgent movie of our time. The AI doc or how I became an apocalypticist rated PG-13 only in theaters March 27th. Welcome to the Tech Brew Red Home from Monday, March 9th, 2026. I'm Brian McCulloch today. Anthropic is fighting the government in court. Microsoft is turning to Anthropic to get agent again all its productivity products. A big new hyperscaler startup is raising a monster round and could the war in Iran be something that could pop the AI bubble. Here's what you missed today in the world of tech.

1:01Anthropic has officially sued to block the Department of Defense from designating it a supply chain risk saying the designation is unlawful and violates its free speech and due process rights, quoting the verge. The suit filed in a California district court accuses the Trump administration of illegally punishing the company for setting red lines on mass domestic surveillance and fully autonomous weapons. The federal government retaliated against a leading frontier AI developer for adhering to its protected viewpoint on a subject of great public significance, AI safety and the limitations of its own AI models in violation of the Constitution and laws of the United States, the suit reads. Defenders are seeking to destroy the economic value created by one of the world's fastest growing private companies, which is a leader in responsibly developing an emergent technology of vital significance to our nation. The lawsuit follows a roller coaster couple of weeks for Anthropic in which the company was faced with the threat of and then the official designation of being made a supply chain risk.

2:01The designation is typically not made public and often applies to foreign companies that could be a cyber security threat or other material risk to national security rather than companies had courted in the US. Additionally, President Donald Trump ordered all government agencies to cease using Anthropics tech within six months. Anthropics blacklisting raised eyebrows and caused significant bipartisan controversy due to fears that disagreeing with a current presidential administration could significantly affect a company's bottom line and whether it was able to operate as a business altogether. Anthropic argues that the government's actions penalize it for speech protected under the First Amendment and violate its Fifth Amendment rights. Moreover, it says the demand for all government agencies to drop it falls outside the authority of the executive branch. Anthropic has said since the original announcement that it would challenge the supply chain risk designation in court in recent days some of the company's biggest clients like Microsoft have made clear that they're continuing to work with Anthropic but setting up processes so that their work with Anthropic has no involvement in any of their own work with the Pentagon.

3:02However, the suit notes that government agencies outside the Department of Defense have cut ties with Anthropic. The General Services Administration terminated its one-gov contract, quote, ending the availability of Anthropic services to all three branches of the federal government. And multiple other agencies including the Department of the Treasury and State Department have publicly or reportedly privately said they plan to cease using it as well. As mentioned, you know who made a point of saying they weren't dropping Anthropic Microsoft and now we can see why among probably a bunch of other reasons Microsoft this morning launched co-pilot co-work integrating Anthropic's Claude co-work tech into Microsoft 365 co-pilot and using work IQ to ground its actions in work data. Quoting venture beat. If you thought Anthropic was about to run away with the enterprise AI business, you're not totally off the mark actually this morning Microsoft announced co-pilot co-work a new cloud-based AI agentic automation tool within Microsoft's existing AI tool 365 co-pilot except now it can complete work on users behalf across many Microsoft apps instead of contained within each one.

4:14If it sounds suspiciously similar to Anthropic's own Claude co-work applications for Mac and Windows released in January and February of this year respectively, that's to be expected as Microsoft and Anthropic work together on this new feature. Like Claude co-work co-pilot co-work allows users to delegate complex multi-step tasks to an AI agent that plans executes and delivers finished work in this case the AI is able to move across and use all the tools and features of Microsoft's outlook teams excel PowerPoint and other M365 applications. The announcement represents Microsoft's most significant step yet in transforming co-pilot from a conversational assistant into what the company calls an execution layer an AI that doesn't just answer questions but actually completes work on a user's behalf. Microsoft's announcement blog post explicitly states that co-pilot co-work integrates the technology behind Claude co-work and both products share a core premise. AI should plan and execute multi-step work not just respond to prompts but the two products diverge sharply in where they operate what they can reach and who they're built for.

5:19Claude co-work is a desktop agent it lives on your machine first Mac now windows and operates within folders you explicitly granted access to it can read edit and create local files automate browser tests and connect to external services through Anthropic's growing library of MCP connectors and plugins. Spanning tools like Google Drive Slack DocuSign and Salesforce its power comes from flexibility users can point it at essentially any local workflow and Anthropics open plugin architecture means it's reach keeps expanding. But it is fundamentally a personal tool the user manages what Claude can see and the security model depends on folder level sandboxing and individual judgment about what to share. Co-pilot co-work operates in the cloud inside Microsoft 365's infrastructure and draws on something Claude co-work simply cannot access the full graph of a user's enterprise work data. That means outlook email threads teams conversations calendar history SharePoint files Excel workbooks and the relationships between them when co-pilot co-work reschedules a meeting or build a briefing document.

6:24It is pulling from signals across all of those systems simultaneously a capability that requires deep integration with M365's APIs and data layer rather than just local file access enterprise IT administrators retain control through existing identity permissions and compliance policies and all actions are auditable by default. The practical upshot is that these products are likely to appeal to different buyers solving different problems at least in the near term organizations that are deeply embedded in the Microsoft 365 ecosystem which is to say most large enterprises are the natural audience for co-pilot co-work for a Fortune 500 company who's employees live and outlook teams and SharePoint all day the value proposition is compelling an AI agent that already understands your organizational context operates within your existing security and compliance framework. And doesn't require employees to adopt a new application or manage local file permissions. IT departments that have spent years configuring M365 governance policies will find co-pilot co-work far easier to green light than a standalone desktop agent that requires individual users to make security decisions about folder access.

7:31Claude co-work by contrast is likely to attract organizations and individuals who need more flexibility than M365 can provide. Teams working across heterogeneous toolstacks power users who went granular control over what the AI can touch and companies already building on anthropics API and plugin ecosystem and quote. UK based data center developer and scale raised a $2 billion series sea round led by acre and 80 90 industries at a $14.6 billion valuation and added Cheryl Sandberg and Nick Clegg to its board. Quoting Bloomberg Norwegian energy firm acre ASA and investment firm 80 90 industries led the series sea round which values the startup at 14.6 billion dollars. The AI hyperscaler said in a statement on Monday several tech companies also participated in the round including Nvidia Lenovo and Nokia spun out of cryptocurrency mining operations in early 2024 and scale quickly became one of the most prominent data center newcomers cashing in on the AI boom as a so called neocloud operator.

8:42Running out computing resources to companies developing AI and scale has tried to distinguish itself as a provider tailor made for Europe pledging major projects in the UK Norway and Portugal and scales latest round places at among Europe's most valuable startups and the new board appointments at season tech executives to a board that previously consisted of its management and investors without much experience in the sector and scale has raised funds quickly bringing in one and a half billion dollars and a short span in 2025 and lining up around the same amount in loans earlier this year. Bloomberg previously reported the company was planning to raise a two billion dollar round last year and scale and acre announced plans to develop a data center project near the Arctic Circle as a joint venture with open AI as the anchor customer on Monday and scale said it was folding its Norway operations into one entity and quote. This episode is brought to you by state farm listening to this podcast smart move being financially savvy smart move another smart move having state farm help you create a competitive price when you choose to bundle home and auto bundling just another way to save with the personal price plan like a good neighbor state farm is there prices are based on rating plans that vary by state.

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11:07We put in the work so you can perfect yours with purpose in every detail and crafted with intention. Timberland built on craft visit Timberland dot com to shop. Score more with the college branded Venmo debit card and earn up to 5% cash back with Venmo stash. Got paid back with the Venmo debit card you can instantly access your balance and spend on what you want like game day snacks gear tickets and more. The more you do the more cash back you can earn plus there's no monthly fear minimum balance sign up now at Venmo dot com slash college card. The Venmo master card is issued by the bank court bank NA select schools available Venmo stash terms and exclusions apply at Venmo dot me slash stash terms max $100 cash back per month. The information says that the US led war in Iran is complicating plans by golf nations to spend more than $300 billion on AI investments putting at risk a potential source of funding for AI tech startups. Quote country such as the UAE and Saudi Arabia have become big destinations for data centers local firms are developing the projects along with US companies such as X AI open AI Microsoft Amazon Oracle and Google which are drawn to the region for its cheap energy.

12:18Drone strikes on three Amazon data centers in the region suddenly made those projects appear riskier a prolonged war could also reduce overseas investment into the region from firms such as Brookfield which is working with multiple golf nations on their AI investments open AI and X AI have raised money from golf nations and made plans to build data centers in the region leaving them more exposed to the risks of the conflict than rival anthropic which has raised money in the golf but has been reluctant to build large scale computing facilities there. Golf nations won't rush to divert resources away from AI investments because of their economic and strategic importance said analysts who cover the region but they might have little choice if the conflict stretches on for a long time. If that turns into months or even longer there could certainly be a disruptive pause to some of that investment said step on minton and analyst at technology research from IDC minton said he expects the golf spending to continue in the near term after the tech giants themselves golf countries. Have been among the biggest funders of AI spending plans by Kuwait Qatar Saudi Arabia and the United Arab Emirates cover everything from land and power for data centers to efforts to build powerful AI models in local dialects the prices items are in video GPUs which the countries have fought hard to import due to national security concerns on the part of the US government.

13:38Saudi Crown Prince Mohammed bin Salman recently said the country planned to spend $50 billion on semiconductors in the short term and the UAE could spend upwards of $30 billion purchasing its allotment of envidia chips through next year according to current market prices those chips won't be usable if regional leaders can't find a way to continue funding and protecting their data centers. Saudi Arabian officials have said they plan to build data centers consuming 6.6 gigawatts of energy by 2034 Elon Musk's XAI is working with humane the company overseeing the plans to develop a data center in the country that could consume 500 megawatts of energy before the AI boom data centers used to be between 10 and 50 megawatts a 1 gigawatt data center cost between 50 and 60 billion dollars to build and quote. Finally today another one of these a study of 1400 and 88 US workers has found that AI use can reduce burnout but also cause AI brain fry a mental fatigue from using AI tools beyond one's cognitive capacity.

14:46quoting Harvard Business Review firms are incentivizing employees to build and oversee complex teams of agents for example by measuring and rewarding token conception as a proxy for performance matter for one includes the number of lines of code generated by AI as a performance metric for engineers as enterprises use more multi agent systems employees find themselves toggling between more tools contrary to the promise of having more time to focus on meaningful work juggling and multitasking can become the definitive features of working with AI on surprisingly workers are finding themselves up against the limits of their cognitive abilities when working this way in recent weeks online AI users have described increased cognitive load saturated attention and mental fatigue and social media posts engineer Francisco Bonacci founder of QAI wrote a popular expost titled vibe coding paralysis when infinite productivity breaks your brain in which he lamented quote I and each day exhausted not from the work itself but from the managing of the work six work trees open for half written features two quick fixes that spawned rabbit holes and a growing sense that I'm losing the plot entirely end quote.

15:57As a research group that studies emergent workforce and AI trends these signals caught our attention the literature is filled with mixed signals on the relationship between AI and worker burnout burnout is a state of chronic workplace stress consisting of exhaustion negative feelings about work and decreased effectiveness on the job some studies suggest that using AI to replace tiring tasks alleviates exhaustion other studies sometimes on the same population show AI use worsening burnout outcomes the emergence of acute overwhelming mental fatigue with intensive AI oversight as distinct from burnout adds new complexity to the picture to understand what was going on we conducted a study of fourteen hundred and eighty eight full time us base workers forty eight percent male versus fifty one percent female fifty eight percent independent contributors versus forty one percent leaders at large companies across industries roles and levels we ask them about patterns and quality of AI use work experiences and cognition and emotions we found that the phenomenon described in these posts cognitive exhaustion from intensive oversight of AI agents is both real and significant we call it AI brain fry which we define as mental fatigue from excessive use or oversight of AI tools beyond one's cognitive capacity participants described a buzzing feeling or a mental fog with difficulty focusing slower decision making and headaches this AI associated mental strain carry significant costs in the form of increased employee errors decision fatigue and intention to quit there's some nuance here however we also found

17:27when AI is used to replace routine or repetitive tasks burnout scores but not mental fatigue scores are lower this highlights the subtle but important distinction between the types of stress that AI can alleviate and those that it may worsen first we found that the most mentally taxing form of AI engagement was oversight or the extent to which the AI tools required the workers direct monitoring the workers in our study who reported that their AI worked required high rather than low degrees of oversight expended fourteen percent more mental effort on the job a high degree of AI oversight also predicted twelve percent more mental fatigue for participants finally more intensive AI oversight also predicted nineteen percent greater information overload the experience of feeling overwhelmed by the amount of information one must process at work a second important AI related predictor of both cognitive load and mental fatigue was the extent to which an employee reported that the presence of AI tools has increased their workload those two factors together AI oversight and an increase in workload increase in employees sphere of accountability requiring them to pay attention to more outcomes for more tools in the same amount of time it makes sense that cognitive load increased and with it their mental exhaustion

18:36we also found a fascinating relationship between the number of AI tools used simultaneously and perceived productivity increases as employees go from using one AI tool to two simultaneously they experienced a significant increase in productivity as they incorporate a third tool productivity again increases but at a lower rate after three tools though productivity scores dipped multi-tasking is notoriously unproductive and yet we fall for it's a lower time and again our findings are both a guide and a warning used thoughtfully this data can help design AI driven workflows to diminish burnout they also point to specific manager team and organizational practices to avoid mental fatigue even as AI work intensifies and quote nothing more for you today talk to you tomorrow rinse knows that greatness takes time but so does laundry so rinse will take your laundry and hand deliver it to your door expertly cleaned and you can take the time pursuing your passions time one spent sorting and waiting folding and queuing now spent

19:42challenging and innovating and pushing your way to greatness so pick up the Irish flute or those calligraphy pens or that daunting beef Wellington recipe card and leave the laundry to us rinse it's time to be great