OpenAI's new GPT-5 model — the engine that will power its key products, including the free and paid versions of ChatGPT — throws down a gauntlet to its arch-competitor Anthropic, Axios AI+ author Ina Fried writes.

• Why it matters: The long-awaited upgrade — which CEO Sam Altman said gives users instant access to a Ph.D-level expert on any subject — ups the ante in the race toward so-called artificial general intelligence.

OpenAI promised GPT-5 will hallucinate less and be less sycophantic than its predecessors were.

• For casual users of ChatGPT, the upgrade is likely to feel significant.

🖼️ The big picture: Anthropic's Claude is frequently viewed as the best AI for writing code, which could be the reason OpenAI leaned so heavily on GPT-5's coding skills as the company introduced its new model yesterday.

• Altman said that the new model not only excels at coding but also at taking software projects from idea to usable code in a single step.
• "This idea of software on demand will be a defining part of the new GPT-5 era," he said.

🔬 Zoom in: Coding prowess is driving massive revenue growth at Anthropic.

• Anthropic is generating revenue at a nearly $5 billion-per-year pace, according to The Information. That's up from a $4 billion-per-year pace earlier this month, and reflects its status as the go-to choice for programmers and coding apps.

Reality check: The new model arrived months later than originally expected. Critics say it doesn't bring the world much closer to the kind of AI that can solve the climate crisis or cure cancer.

• Altman said GPT-5 shows signs of broad intelligence but lacks the ability to learn and improve on its own — a key component of AGI.

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The MAGA movement has spent the past 10 years demanding the arrests of President Trump's political enemies.

• Now, for the first time, the levers of power are aligned to pursue that goal from inside the federal government, Axios' Tal Axelrod and Zachary Basu write.

Why it matters: Attorney General Pam Bondi's decision to order a grand jury investigation into Obama-era intelligence officials is a watershed moment in the history of MAGA retribution.

• The probe, focused on the origins of the 2016 Russia investigation, is the culmination of a yearslong campaign to criminalize the officials and agencies Trump claims undermined his first term.
• Trump's longtime enemies, including former FBI director James Comey and former CIA director John Brennan, now face the very real threat of criminal charges.

🎨 The big picture: Trump loyalists are consolidating control over federal law enforcement, and becoming more aggressive in their targeting of the president's foes.

• The FBI agreed yesterday to help track down Democratic lawmakers who fled Texas in an effort to block an audacious redistricting plan demanded by Trump, according to Sen. John Cornyn (R-Texas).
• The FBI fired senior officials this week who resisted the Trump administration's demands to turn over the names of agents who worked on the Jan. 6 investigation.

Sen. Adam Schiff (D-Calif.), who led efforts to impeach Trump during his first term, is under criminal investigation for mortgage fraud, Fox News reported Tuesday.

• Former special counsel Jack Smith, who prosecuted Trump in two criminal cases, is also under investigation by a federal ethics watchdog.

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Israel's security Cabinet approved Prime Minister Netanyahu's proposal for the occupation of Gaza City, a senior Israeli official told Axios' Barak Ravid.

• Why it matters: The decision is the first phase in an offensive that could include the occupation of the entire Gaza Strip by the Israel Defense Forces.

Netanyahu is poised to escalate the war despite the objections of his own top generals and massive international pressure to stop the fighting and prioritize the humanitarian crisis.

• President Trump has decided not to intervene and to let the Israeli government make its own decisions, U.S. officials say.

🔎 Zoom in: The new operation to occupy additional areas of central Gaza, including Gaza City, is expected to take at least several months and involve displacing around 1 million Palestinian civilians.

• The IDF would also be moving into areas where Israeli officials believe hostages are being held, possibly risking their lives.

Friction point: Israel's top general and several other senior security officials oppose the operation they are about to be asked to undertake.

• IDF Chief of Staff Eyal Zamir told Netanyahu he was "walking into a trap" during one recent meeting, according to reports in the Israeli press.
• Zamir argued the operation would endanger the hostages and could lead to Israeli military rule in Gaza with full responsibility over 2 million Palestinians.

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President Trump has completed his Rose Garden revamp, paving over the famous lawn for a Mar-a-Lago-esque patio, Axios D.C.'s Anna Spiegel writes.

• The garden's new striped yellow umbrellas strongly resemble the ones found at Trump's Palm Beach club.

Trump rationalized the greenery-to-granite swap as practical, saying well-heeled women were "going crazy" sinking into the lawn on wet days.

• It was funded by the Trust for the National Mall and private donors, according to trust spokespersons, and is designed to make the garden more event-friendly.

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The wealthy are keeping America's spending going, while consumption from middle and lower income groups is fading, Axios Markets author Madison Mills writes.

• Why it matters: New tariffs could put even more pressure on lower-income spenders and, potentially, the labor market.

🧮 By the numbers: The top 20% of earners now make up over half of consumer spending, according to Moody's.

• Spending from middle and lower-income consumers has flatlined.

Between the lines: Consumer spending makes up two-thirds of GDP, meaning that it largely determines whether our economy is growing or slowing.

• But the rich are doing most of the spending — making consumption overall look resilient when only a small group is propping up the data.

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The White House is conceding that a major project it has undertaken to keep an invasive fish out of the Great Lakes has stalled — and is pointing its finger squarely at an archenemy: Illinois Gov. JB Pritzker, Axios' Alex Isenstadt writes.

• Why it matters: The flare-up highlights how tensions between President Trump and Pritzker — a potential 2028 Democratic presidential candidate who regularly savages the administration — are boiling over.

It comes days after Pritzker welcomed to Illinois dozens of Democratic legislators from Texas who fled the state to try to stop a Trump-backed redistricting push to create more GOP seats in Congress.

• Pritzker has called Trump a "cheater" over the remap effort — and accused him of trying to "steal" seats in the U.S. House, where Republicans have a slim majority heading into the 2026 midterms.
• Trump has called Pritzker "probably the worst [governor] in the country," and ripped him for opposing the president's hardline immigration measures.

🔭 Zoom in: Trump signed a memorandum in May offering his support for a $1 billion effort — involving Illinois, Michigan and the federal government — that's aimed at preventing invasive Asian carp from entering the Great Lakes.

• Michigan Gov. Gretchen Whitmer — another potential Democratic presidential contender — is an outspoken proponent of the project and lobbied Trump to support it.
• White House officials say they haven't received the same cooperation from Pritzker or his team. They say their calls to Pritzker haven't been returned.

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As it ramps up mass deportations, the Trump administration is pushing to become its own watchdog on the well-being of children in immigrant detention, Axios' Brittany Gibson writes.

• Why it matters: Trump officials are attempting to end a decades-old legal settlement that guarantees extra protections for young detainees. Legal advocates say the oversight is needed more than ever.

The Flores Settlement Agreement was drawn up to limit the time children spend in detention, improve the conditions for children in the system and allow lawyers to inspect detention facilities.

• The Trump administration submitted a court motion to end the agreement in May. The next hearing is today.

The other side: In sworn declarations to the court, children and their parents (with their identities redacted) described subpar conditions.

• "We have to fight for water. We don't get enough water," a 16-year-old said in March about the Karnes detention facility in Texas.

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Kale Williams, co-author of Axios Portland, is gearing up to compete in the "24 Hours of Lemons" — a pun on Le Mans, the famous endurance car race in France — later this month.

• The race's only rule: Your car has to cost less than $500.

Kale's team is driving a 1988 Saab 900 Turbo, Frankenstein'd together from two nonfunctional Saabs.

• More on the race.