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Financial markets are volatile. Consumer confidence is at its lowest level in five years. Economists say recession risks are rising.It all adds up to financial uncertainty for a lot of Americans. Roughly half of U.S. adults say that President Trump’s trade policies will increase prices “a lot,” according to a recent poll by The Associated Press-NORC Center of Public Affairs Research. And about half of Americans are “extremely” or “very” concerned about the possibility of the U.S. economy going into a recession in the next few months.Matt Watson, CEO of Origin, a financial planning app, says it’s a period of uncertainty for everyone, including experts.“No one has a crystal ball. No one, even the people that do this professionally and have done it very successfully for many years, know what’s going to happen,” he said.If you’re worried about how economic uncertainty might affect you, here are some expert recommendations: Take stock of your finances The first step to preparing for uncertain financial times is knowing your starting point, Watson said. Look at your budget or your debit card expenses so you can understand how much you spend every month.“Take stock of where you are across a number of different categories,” Watson said.Looking at the state of your savings and investments can also provide you with an idea of your overall financial health. Find where you can cut back The more nonessential expenses you can pause, the more you can save for an emergency.“Your choice is really to cut now or cut later, so it’s easier to cut now and have a cushion,” Watson said.If you’re having difficulty finding where to cut back, Jim Weil, managing partner at Private Vista, a financial planning firm, recommends that you divide your expenses into three buckets: needs, wants and wishes. Wishes are larger expenses that can be postponed, such as a vacation to Europe.For the time being, cut back expenses from the wishes section until you feel like your finances are in a good place. Take care of your mental health Between news about tariffs and job losses, you might feel your anxiety rising. So, it’s important that you protect your mental health while also caring about your finances, said Courtney Alev, consumer advocate at Credit Karma. Sometimes, reading too much news that can affect your finances can become overbearing and create more stress than you need.“It’s good practice to stay informed but you don’t want to let the news cycle consume you,” Alev said.If you find yourself feeling high levels of stress or anxiety when it comes to your finances, it’s best to contact a professional who can assist you, such as a financial therapist.If looking for regular mental health services, most health insurance covers some type of mental health assistance. If you don’t have health insurance, you can look for sliding-scale therapists around the country, including through FindTreatment.gov and the Anxiety and Depression Association of America directory. Focus on what you can control Rather than worrying too much on the economics of the entire country, Alev recommends that you focus on the aspects of your personal life that you can control in order to feel more confident in case there is a recession.“Identify any changes that you might need to make to have more of a safety net in place that could give you confidence,” Alev said.Things you can control include budgeting, creating an emergency fund and cutting unnecessary expenses. Create an emergency fund Whether you are worried about your job security or the high prices of goods, it’s best that you sit down and reassess your budget to create an emergency fund. An emergency fund can feel unattainable if finances are already difficult, but having even a small amount of cash saved can make the difference, Alev said.Ideally, your emergency fund should amount to three to six months of expenses.Weil recommends you start thinking about any special commitments that you might have in the next year or two, such as college tuition or moving. If you are planning for a large financial commitment in the near future, Weil recommends that you plan to build a larger emergency fund. Do monthly finance check-ins Alev recommends regularly adjusting your budget to keep your financial goals on track. Monthly budget check-ins can help identify when you are overspending or if your needs change. “A budget is only as good as it is to help you actually make decisions, so don’t be afraid to update and adapt your budget as the months go by,” Alev said. Choose which type of debt to tackle first Many Americans struggle with debt, whether it’s credit card debt or student loan debt, which limits their ability to save. But, if you want to create an emergency fund while also tackling your debt, it will take some prioritization.“I would think about different kinds of debt differently,” Weil said, adding that you can place debt in three buckets: short-, medium- and long-term debt.Weil recommends that you prioritize paying off high-interest debt such as your credit card. By making extra payments or paying over the minimum payment, you will be able to pay it off quicker. Student loan debt and long-term debt such as a mortgage can be tackled with more modest payments while you focus on creating an emergency fund. If you have credit card debt and you can’t make too much progress in paying it down, Alev recommends you try to eliminate or reduce the amount of credit you use. Don’t panic about your investments While the stock market has had some bad days, it’s best that you are not reactive to the market. If you have investments, especially in retirement vehicles such as your 401(k), it’s best not to make rushed decisions, Alev said.“You really want to try not to panic. It can be unnerving but most likely, you should have time to make that up,” she added. If you’re closer to retirement, Alev recommends that you look into more conservative investments. The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism. Adriana Morga, Associated Press
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Microsoft’s cloud computing and artificial intelligence business helped deliver $70.1 billion in sales and boosted profits by 18% for the January-March quarter, a dose of relief for investors during a turbulent time for the tech sector and U.S. economy.The company reported quarterly net income of $25.8 billion, or $3.46 per share, beating Wall Street expectations for earnings of $3.22 a share.The Redmond, Washington-based software maker posted revenue of $70.1 billion in the period, its third fiscal quarter, up 13% from the same period a year ago and also beating Wall Street expectations. Analysts polled by FactSet expected Microsoft to post revenue of $68.44 billion for the quarter.Microsoft CEO Satya Nadella credited cloud growth for its strong quarter. The company’s cloud unit posted revenue of $26.8 billion, compared with expectations of $26.17 billion.“Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth,” Nadella said in a statement.The company also saw a 6% increase in revenue in its personal computing unit, which includes its laptop business and Xbox services.Nadella noted on a call with investors that demand for cloud and artificial intelligence remained strong. He said Microsoft is constantly tweaking its investments based on efficiency improvements in computing systems and what kind of services customers want.“We just want to make sure we are accounting for the latest and greatest information,” he said.Microsoft is among a group of the tech industry’s bellwether companies that have been through a period of uncertainty and turmoil since President Donald Trump returned to the White House, with a see-sawing of stocks that has eviscerated trillions of dollars in shareholder wealth amid an onslaught of tariffs and other actions.Microsoft’s stock price has dropped nearly 8% since Trump’s inauguration in January, to about $395 at the close of markets Wednesday. But investors appeared pleased moments later after Microsoft released its earnings report, sending stocks up more than 6% in after-hours trading.Revenue from Microsoft’s cloud computing business segment grew 21%, to $26.8 billion, also beating Wall Street projections.The company felt more tariff uncertainty in its personal computing business, which is centered around its Windows operating system and the fees it collects from computer makers that put it on the hardware they sell. Revenue from that business was $13.4 billion for the quarter, up 6% from the first three months of last year. Associated Press
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The generative AI revolution has seen more leaps forward than misstepsbut one clear stumble was the sycophantic smothering of OpenAIs 4o large language model (LLM), which the ChatGPT maker eventually had to withdraw after users began worrying it was too unfailingly flattering. The model became so eager to please, it lost authenticity. In their blog post explaining what went wrong, OpenAI described ChatGPTs default personality and its behaviorterms typically reserved for humans, suggesting a degree of anthropomorphization. OpenAI isnt alone in this: humans often describe AI as understanding or knowing things, largely because media coverage has consistently framed it that wayincorrectly. AI doesnt possess knowledge or a brain, and some argue it never will (though that view is disputed). Still, talk of sentience, personality, and humanlike qualities in AI appears to be growing. Last month, OpenAI competitor Anthropicfounded by former OpenAI employeespublished a blog post expressing concern about developing AI that benefits human welfare. But as we build those AI systems, and as they begin to approximate or surpass many human qualities, another question arises, the firm wrote. Should we also be concerned about the potential consciousness and experiences of the models themselves? Should we be concerned about model welfare, too? Why is this kind of language on the rise? Are we witnessing a genuine shift toward AI sentienceor is it simply a strategy to juice a sector already flush with hype? In 2024 alone, private equity and venture capital poured $56 billion into generative AI startups. Anthropomorphization, starting with the interface that presents as a person, using I, is part of the strategy here, says Eerke Boiten, a professor at De Montfort University in Leicester, U.K. It deflects from the moral and technical issues, Boiten says. When I complain that AI systems make mistakes in an unmanageable way, people tell me that humans do, too. In this way, errorslike the misconfiguration of the core prompt that guided ChatGPTs botched 4o modelcan be framed as humanlike mistakes by the model, rather than human errors by its creators. Whether this humanization is a deliberate choice is another question. I think that people actually believe that sentience is possible and is starting to happen, says Margaret Mitchell, a researcher and chief ethics scientist at Hugging Face. Mitchell sees less cynicism than some when it comes to how AI employees and companies talk about sentience and personality. There’s a cognitive dissonance when what you believe as a person clashes with what your company needs you to say you believe, she explains. Within a few years of working at a company, your beliefs as an individual meld with the beliefs that would be useful for you to have for your company. So its not that AI company employees are necessarily trying to overstate their systems capabilitiesthey may genuinely believe what theyre saying, shaped by industry incentives. If sentience pumps up valuation, then the domino effect from thatif you don’t step out of the bubble enoughis believing that the systems are sentient, Mitchell adds. But coding humanlike qualities into AI systems doesnt just exaggerate their abilitiesit can also obscure scrutiny, says Boiten. Dressing up AI systems as humans leads them to make the wrong analogy, he explains. We dont want our tools or calculators to be systemically and unpredictably wrong. To be fair, Anthropics blog post doesnt declare sentient AI inevitable. The word when is balanced by if when considering the moral treatment of AI models. The company also notes, Theres no scientific consensus on whether current or future AI systems could be conscious, or could have experiences that deserve consideration. Even OpenAI CEO Sam Altman, in a January blog post reflecting on the past year, conceded that ubiquitous, superintelligent AI sounds like science fiction right now, and somewhat crazy to talk about. Still, by broaching the subject, AI companies are planting the idea of sentient AI in the public consciousness. The questionone we may never definitively answer unless AI actually becomes sentientis whether this talk makes AI companies and their employees the boy who cried wolf, as former Google engineer Blake Lemoine learned after claiming in 2022 that a model he worked on was sentient. Or are they issuing an early warning? And while such talk may be a savvy fundraising tactic, it might also be worth toleratingat least in part. Preparing mitigation strategies for AIs future capabilities and fueling investor excitement may just be two sides of the same coin. As Boiten, a committed AI sentience skeptic, puts it: The responsibility for a tool is with whoever employs it, and the buck also stops with them if they don’t fully know what the tool actually does.
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