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Today's newsletter is 676 words, a 2.5-minute read.

AI has an image problem. And one way to fix it is for top companies to dive headlong into health care.

Why it matters: Saving the world with AI-designed cures is better than being blamed for ruining the environment or driving up Americans' utility bills.

• But even the most advanced AI models can't produce miracle treatments at the moment — and could create serious security risks if they try.
• That could set up a fraught debate over the next two or three years about the allocation of resources and whether the benefits of throwing vast amounts of computing capacity into medical research outweigh the costs.

Driving the news: The Wall Street Journal reported last month that Anthropic was trying to shore up investor confidence ahead of its massive initial public offering with talk of pushing harder into health care and biology.

• CEO Dario Amodei wrote on X that Anthropic is moving quickly in biology and medicine "and we hope to have incredible results in the coming years and some early glimmers in the coming months."
• Anthropic isn't alone: Nvidia and Eli Lilly are building a $1 billion drug discovery lab in San Francisco that will team up life science researchers with AI model builders and engineers.

Yes, but: Breakthroughs may still be years away. That's hardly reassuring to an increasingly anxious U.S. public that's gone NIMBY against data centers, with moratoriums, threatened lawsuits and fears of AI models taking more jobs.

• The technology is dramatically speeding up drug development and helping clinicians analyze medical scans and diagnose conditions. But it's also making health care more expensive, with software and scribes that more thoroughly document the care that's delivered.
• There also are concerns that AI-enabled research tools could be used for nefarious purposes, including potentially making a biological weapon.

Between the lines: AI's push into health care comes as frontier labs like Anthropic and OpenAI prepare to go public to help cover the huge cost of training new models and maintaining multi-gigawatt computing infrastructures.

• Moving into the life sciences is a way to both diversify the companies' revenue streams and reshape public sentiment, said Lloyd Price, a partner at Nelson Advisors, a digital health M&A firm.
• "It's a bit of a hearts-and-minds play. ... The bad guys are stealing all of the resources, but they could help humanity. The truth is very in the middle," Price told Axios.
• Price said real medical advances could transform people's perception of AI from an environmental and security risk into an essential public utility.

Friction point: There still are big hurdles ahead, including rocky relations with the Trump administration, which is trying to take a hands-off regulatory approach while maintaining oversight of safety and privacy concerns.

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⛽ Diesel fuel prices in California hit a new record over the weekend, a jump that could ripple into shipping and everyday costs. (San Francisco Chronicle)

Community members say the Tenderloin is being left out of the city's downtown revival efforts. (SF Standard)

🎨 Artists behind the Clarion Alley murals say they're "heartbroken and furious" after sections of the neighborhood's public art were erased. (SFGATE)

SF's "most infuriating empty lot," the Touchless Car Wash shell that has sat vacant for years at 400 Divisadero St., is about to go away. Finally.

• The Chronicle reports that Greystar, the largest developer in the US, is planning a 203-unit housing project there, with construction slated to start this fall.

Stay tuned for the Oct. 19 start date.

☺️ Nadia enjoyed a long holiday weekend doing Nadia things.

This newsletter was edited by Geoff Ziezulewicz.