Washington, DC

1. Zuckerberg shaped Trump’s AI pact
2. S. Korea invests in Alaska
3. Senate heads home
4. Hegseth’s shakeup
5. Inflation rises modestly

House members spent $6.7 million in taxpayer money on Washington meals and lodging last year under a reimbursement system that does not require receipts, according to The Washington Post.

Trump-industry pact on AI began with the Meta CEO

The idea for what became President Donald Trump’s Tuesday pact with the AI industry came from a conversation between Meta CEO Mark Zuckerberg and House Speaker Mike Johnson at last week’s state dinner, Semafor’s Ashley Gold scoops. Per a source familiar with the matter, Zuckerberg spoke to Johnson — whom he was seated next to at the dinner for Chinese leader Xi Jinping — about regulatory concerns around AI. The Meta CEO then talked to Nvidia CEO Jensen Huang about principles that tech executives could use at their next meeting with Trump, the source added. The Trump administration and the executives who gathered on Tuesday both hailed the pact as a historic concord that signals the industry wants to act responsibly, though it’s not clear that the gesture will quell public concerns about safety. Zuckerberg’s central role in shaping it indicates his cultivation of Trump has paid off.

South Korea plans Alaska pipeline investment, Trump announces

Trump announced today that South Korea plans to invest $200 billion in the US as part of a bilateral trade pact signed last year — with one chunk going to a project that could boost Republicans’ electoral fortunes in Alaska. According to a White House official, $54 billion will go toward the stalled Alaska LNG pipeline project, an initiative pushed by Sen. Dan Sullivan, R-Alaska, who is on hand for today’s announcement in the Oval Office. Trump is separately planning to make a campaign stop in Alaska ahead of the midterms, Semafor’s Burgess Everett reported. The rest of the funding from South Korea will support eight nuclear power plants and a power generation facility in Texas, according to the White House. It follows Trump’s announcement earlier this week about a steel plant investing $15 billion in Iowa, another state where Republicans face headwinds.

Data center bill stalls as Senate heads home

Senate Republicans couldn’t catch a win before leaving town for the last time until after the midterm elections. Two bills stalled today that some Republicans had hoped would give them a boost on the campaign trail — one that encouraged states to force data centers to pay for their power costs, and one that would bar members of Congress from some stock trading. The data center bill, called the Ratepayer Protection Act, passed the House last week with bipartisan support. Four Democrats voted yes on a procedural vote today, but most called it too weak and voted no. The bill’s sponsor, Sen. Jon Husted, R-Ohio, is facing former Democratic Sen. Sherrod Brown in a tough reelection contest. The Stop Insider Trading Act was sponsored by Sen. Pete Ricketts, R-Neb., who is also in a close race. Democrats had little incentive to give either a hand.

Hegseth promises more cuts to Pentagon leadership

Defense Secretary Pete Hegseth announced during a speech to enlisted service members and military brass today that he intends to further cut the number of generals and admirals in the military, doubling the target he set last year to 20%. “The ideological clowns are out. The patriotic cowboys are in, with testosterone testing on top,” Hegseth said at Marine Corps Base Quantico. Hegseth has fired or pushed out two dozen military leaders since the start of Trump’s second term, including the Army’s top uniformed officer, Gen. Randy George, in April. George’s ouster shocked Pentagon officials and rattled Democrats and Republicans on Capitol Hill. Hegseth’s new plan is unlikely to repair fraying ties with Republicans, who Semafor’s Burgess Everett and Shelby Talcott report are reluctant to support his $1.5 trillion budget request.

Modest inflation could buy Fed time on rates

Inflation rose modestly in August to 3.4%, tempering expectations that the Federal Reserve will torque interest rates the week before the midterms. The Fed raised rates in September and markets were betting that another hike in October would be more likely than not. But new Commerce Department data today showed prices that consumers pay on “core” goods rose just 0.3% from July, which was lower than expected. That shifts the odds in favor of the status quo — a relief for Republicans who don’t want that signal right before the election. Inflation is still well above the Fed’s target of 2%, so the central bank will likely need to act to tame it eventually. The question is when. Yesterday, John C. Williams, a Fed board member, said in a speech there was “no need for urgency.”

White House

• President Trump signed an executive order to “develop and implement a campaign” to reduce Washington, DC’s mosquito population.

Congress

• The Senate health committee voted to advance President Trump’s nominee for surgeon general, Nicole Saphier, to the floor.

Courts

• A federal court paused the execution of Christa Pike, convicted of murdering her classmate in 1995, hours before she was set to become the first woman executed in Tennessee in more than 200 years.
• An inspector general report found the Federal Reserve broke no rules during a renovation, a conclusion that could draw down a legal battle that kept Jerome Powell from resigning from the central bank. — WSJ

Campaigns

• Ken Paxton, the GOP’s Senate candidate in Texas, complained in private that President Trump’s Dallas convention hurt him. — NYT
• Spending on advertising for Senate and House races hit $1.5 billion, an increase of $317 million from last week.

Business

• Meta has used data centers to duck millions in federal taxes. — NYT

Technology

• The Federal Trade Commission is conducting an industry-wide probe into Anthropic, OpenAI, and other AI ​labs. — Reuters

World

• A Flydubai flight to Israel made an emergency landing in Saudi Arabia after one pilot allegedly stabbed the other, causing a dangerous plunge before crew and passengers regained control.
• The Treasury Department expanded sanctions on Cuba.
• President Trump and Indian Prime Minister Narendra Modi held their first phone call since June.
• Russia warned NATO it could use nuclear weapons if the alliance tries to isolate Kaliningrad, a Russian territory on the Baltic Sea.

— President Trump on the withdrawal of the remaining American troops from Iraq.

Laura McGann, editor

With help from Elana Schor, senior Washington editor, and Morgan Chalfant, Washington briefing editor

Graph Massara and Lauren Morganbesser, copy editors

Contact our reporters:

Burgess Everett, Ashley Gold, Eleanor Mueller, Shelby Talcott, Nicholas Wu, David Weigel, David Lim