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When AI quietly breaks things, who pays?
Reed Smith partner David Halbreich explains how AI companies can avoid D&O/E&O coverage gaps around mergers, governance warranties, and claims timing.
In an interview, insurance recovery partner David Halbreich of Reed Smith outlines insurance pitfalls for AI companies under claims-made D&O and E&O policies. He highlights 'straddle' claims after mergers that fall between tail coverage and go-forward policies, potentially leaving policyholders with no coverage. He also warns that governance artifacts submitted in insurance applications, such as bias testing records and model cards, can become warranties carriers use to deny claims, and discusses who should answer AI-use questions and how business interruption coverage applies to cloud and compute vendor outages.
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[AINews] Reality Checks on AI News (Yegge shuts down Gas Town, Databricks’ +60% Astra cost)
Latent Space AI news roundup: Steve Yegge shuts down Gas Town, Databricks reports 60% higher coding spend on GPT-6 Astra, OpenAI launches misalignment disclosure framework.
Latent Space's AI News digest for September 15-16, 2026 leads with Steve Yegge shutting down his Gas Town orchestrator despite spending thousands monthly on coding-agent subscriptions. Databricks rolled out GPT-6 Astra to roughly 3,500 engineers, reporting superior long-horizon performance over Opus 5 and Sol 5.6 but a ~60% increase in coding spend. OpenAI published a formal framework for disclosing model misalignment incidents with six case reports, while Microsoft and Google Research released safety papers on 'capability laundering' and the Fuse motive-inference benchmark. Xiaomi shared live RL training telemetry for MiMo-V2.6, estimated at $493k/day for the 1T-class Pro run.
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Clearview AI Is Testing an AI Tool That Would Let Cops Unearth Your Life Online
Clearview AI is prototyping InquiryIQ, an AI analyst assistant that would automatically profile individuals identified through its face-recognition searches for police.
WIRED uncovered InquiryIQ, an unreleased Clearview AI prototype described as an AI analyst assistant that fans out across the web from a face-recognition search result to assemble profiles including employers, aliases, associates, and physical characteristics. The company tested a model from xAI (merged with SpaceX), maker of Grok, and the interface accepts age, gender, and race inputs to guide searches. Clearview says the prototype was never pitched or shipped to customers and no law enforcement user has used it; the database has grown to over 70 billion images used by more than 2,000 law enforcement agencies.
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ChatGPT advanced account security adds passkeys and hardware keys
OpenAI launches Advanced Account Security for ChatGPT and Codex, replacing passwords with passkeys or hardware keys and disabling email/SMS recovery.
The opt-in setting disables password sign-in plus email and SMS account recovery for ChatGPT and Codex accounts, allowing only passkeys, hardware security keys, and user-held recovery keys, with shortened sessions and automatic exclusion of enrolled accounts' conversations from model training. OpenAI partnered with Yubico to offer discounted bundles of the YubiKey C Nano and C NFC, while any FIDO2/WebAuthn-compliant key or software passkey is supported, mirroring standards adopted by Google, Microsoft, and GitHub. Individual members of Trusted Access for Cyber using the most permissive models must enable the setting from June 1, 2026, or their organizations can attest to phishing-resistant authentication in their single sign-on.
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