Axios AM

April 23, 2025
🐫 Happy Wednesday! Smart Brevity™ count: 1,685 words ... 6½ mins. Thanks to Noah Bressner for orchestrating. Copy edited by Bryan McBournie.
🔮 Coming attractions: At a rooftop Axios event tomorrow night, kicking off White House Correspondents' Dinner weekend, I'll interview Michael Kratsios, director of the White House Office of Science and Technology Policy.
- Guests will also hear from OpenAI chief product officer Kevin Weil, and can experiment themselves at demo stations with OpenAI's latest technology.
1 big thing: Trump's "empty shelves" warning
The CEOs of three of the nation's biggest retailers — Walmart, Target and Home Depot — privately warned President Trump in an Office meeting on Monday that his tariff and trade policy could disrupt supply chains, raise prices and empty shelves, Axios' Marc Caputo and Ben Berkowitz report.
Why it matters: The unvarnished scare seemed to work, officials tell us. For the first time, Trump seems more persuadable that his initial plan was too dangerous and disruptive. This slight shift helps explain why he vowed not to fire Fed chair Jay Powell, and publicly said tariffs on China will come down.
"The big-box CEOs flat out told him [Trump] the prices aren't going up, they're steady right now, but they will go up," an administration official familiar with the meeting told Axios. "And this wasn't about food. But he was told that shelves will be empty."
- Another official briefed on the meeting said the CEOs told Trump disruptions could become noticeable in two weeks.
- While that was happening, financial markets were slumping — stocks, bonds, the dollar — as investors panicked about Trump's latest threats to oust Fed chair Jerome Powell and step on the central bank's independence.
Then yesterday, Trump turned the dial down.
- His Treasury secretary, then his press secretary, then Trump himself all indicated optimism about a trade deal with China that would result in much lower tariffs than 145%.
- Treasury Secretary Scott Bessent told investors yesterday at a private investor summit in Washington that he expects "there will be a de-escalation" in the trade war with China in the "very near future," per CNBC.
Trump told reporters in the Oval Office that he had "no intention" of firing Powell, even though his top economic adviser said last week the White House was studying the details of doing exactly that.
- Markets, having gotten what they wanted, promptly rallied hard. Stocks soared and the dollar surged.

👀 The intrigue: White House officials bristle at the notion Trump has softened. One senior official said the president was just showing he's ready to make a deal and that he's "optimistic we can move forward."
- "This is what Donald Trump does. He leads with leverage," the official said. "He gets people to the table. China has expressed interest in negotiation. And the president has made clear that if they play ball, he'll play ball, too."
🎨 The big picture: For the first time since he entered political life, polls show most voters disapprove of Trump's handling of the economy.
- Inflation — which he claims is nonexistent — is still a little hot, growth is slowing, and manufacturers are losing confidence.
2. Advanced AI gets more unpredictable
The rave reviews OpenAI's latest models have been winning come with an asterisk: Experts are also finding that they're erratic — they break previous records for some tasks but backslide in other ways, Axios managing editor Scott Rosenberg writes.
Why it matters: "Frontier AI models" keep pushing into new territory, but their progress hasn't become any more scientific or predictable in the two-and-a-half years since ChatGPT took tech by storm.
Catch up quick: OpenAI released the o3 and smaller o4-mini models a week ago and called them "the smartest models we've released to date."
- The company and early testers lauded o3 for its overall reasoning prowess — its ability to respond to a user prompt by planning, executing and explaining a series of planned steps.
What they're saying: "These models can run searches as part of the chain-of-thought reasoning process they use before producing their final answer. This turns out to be a huge deal," the developer Simon Willison wrote.
- "This is the biggest 'wow' moment I've had with a new OpenAI model since GPT-4," Every's Dan Shipper reported.
Yes, but: Plenty of reviewers found reasons to criticize o3, including math errors and deceptions.
Between the lines: Intriguingly, OpenAI notes that despite o3's impressive capabilities, it's actually regressing in some areas — like its tendency to "hallucinate," or make up incorrect answers.
- In one widely used accuracy benchmark test, OpenAI found that o3 hallucinates at more than twice the rate of its predecessor, o1.
- o3 also answers more questions — and gets more of them right — than o1. "More research is needed" to understand why o3's error rate jumped, OpenAI says.
Zoom out: AI analyst Ethan Mollick describes o3's impressive but scattershot performance as an example of "the jagged frontier": "In some tasks, AI is unreliable. In others, it is superhuman."
The bottom line: Designing, building and training AI models remains stubbornly resistant to developers' efforts to impose scientific rigor on their field or duplicate their results.
3. 🪫 Elon's White House stepback

Discussing brutal Tesla results, Elon Musk said on an earnings call that he'll take a major step back from his work at the White House, likely starting in May, and devote "far more of my time to Tesla," Axios' Nathan Bomey writes.
- "I think I'll continue to spend a day or two per week on government matters for as long as the president would like me to do so and as long as it would be useful," Musk said.
Musk said his "time allocation to DOGE will drop significantly" likely starting in May, declaring the effort "mostly done."
- "I'll have to continue doing it for I think the remainder of the president's term just to make sure the waste and fraud that we stopped does not come roaring back, which it will do if it has the chance," Musk said.
🛣️ Between the lines: Tesla acknowledged for the first time that "political sentiment" may be undermining the company's financial performance and that tariffs are poised to do the same.
- The automaker fell well short of expectations on earnings and sales in the first quarter.
4. 🚛 Driverless trucks are here

Drivers along a 200-mile stretch of I-45 between Dallas and Houston should get ready for something new: the semi-truck in the next lane might not have anyone in the driver's seat, Axios Future of Mobility author Joann Muller writes.
- Why it matters: Autonomous trucking companies have been testing their fleets on Texas highways for several years, but always with backup safety drivers in the cab.
Now one company, Aurora Innovation, says it's ready to go completely driverless, a key milestone that promises to reshape the trucking industry.
- The first autonomous truck is expected to roll down I-45 in the coming days, although Aurora officials declined to share any details.
Keep reading ... Get Axios Future of Mobility, out every Wednesday.
5. Trump's broadening deportation plans
The Trump administration has teased three new tactics as part of their immigration crackdown, which could expand to include deporting convicted U.S. citizens, Axios' Brittany Gibson writes:
- Send convicted U.S. citizens to prisons abroad. This has been floated as a spinoff of Trump's deal with El Salvador, where a high-security prison is holding about 300 U.S. immigration detainees that the administration says are suspected criminals and gang members.
- Put critics of the administration's policies in jeopardy. Some officials say U.S. citizens who criticize administration policies could be charged with crimes, based on the notion that they're aiding terrorists and criminals.
- Question the authority of court orders. The administration's resistance to returning Kilmar Abrego Garcia has raised questions about how far Trump's team can go in trying to skirt court orders.
6. 🇷🇺🇺🇦 Trump's "final offer" for peace deal

The U.S. expects a response from Ukraine today to a peace framework that includes U.S. recognition of Crimea as part of Russia, plus unofficial recognition of Russian control of nearly all areas occupied since the invasion, Axios' Barak Ravid reports.
- Why it matters: The one-page document the U.S. presented Ukrainian officials in Paris last week describes this as President Trump's "final offer." The White House insists it's ready to walk away if the parties don't make a deal soon.
Trump's proposal would require major concessions from Ukrainian President Volodymyr Zelensky, who previously ruled out accepting Russia's occupation of Crimea and parts of four regions in eastern Ukraine.
- While Russian President Vladimir Putin has reportedly offered to freeze the current front lines to reach a deal, he has previously rejected other elements of the U.S. deal, such as a European peacekeeping force.
- A source close to the Ukrainian government said Kyiv sees the proposal as highly biased towards Russia: "The proposal says very clearly what tangible gains Russia gets, but only vaguely and generally says what Ukraine is going to get."
🔮 What's next: Trump's envoy Steve Witkoff will travel to Moscow later this week for his fourth meeting with Putin.
- Full plan: What Russia and Ukraine get.
7. ⚠️ New data: Pollution hits home
Nearly half of Americans are now exposed to potentially dangerous levels of air pollution, Axios' Alex Fitzpatrick writes from a new report.
- Why it matters: The findings, which predate the current Trump administration, come as the White House is reconsidering EPA rules and regulations meant to curb pollution and promote cleaner air.
🧮 By the numbers: Just over 156 million Americans — 46% of the population — are living in areas with unhealthy levels of ozone or particle pollution, per the American Lung Association's 2025 State of the Air report.
8. 🪣 1 fun thing: Ice Bucket Challenge is back
The Ice Bucket Challenge — the ALS fundraiser that first went viral on social media a decade ago — is back, the N.Y. Times writes.
- Why it matters: The new version, started by a student at the University of South Carolina, is being used to spread mental health awareness.
The campaign at South Carolina — #SpeakYourMIND — has raised more than $250,000.
- South Carolina head football coach Shane Beamer posted a video participating in the challenge two weeks ago.
- Jenna Bush Hager took part on "Today" earlier this week.
Keep reading (gift link).
📬 Thanks for reading! Please invite your friends to join AM.
Sign up for Axios AM






