In your briefing today:

📣 The Metropolitan Police has launched a formal investigation into allegations that Peter Mandelson leaked Downing Street emails and market-sensitive information to paedophile financier Jeffrey Epstein.

Documents from the Epstein files, released late last week, appear to show the then business secretary forwarded details of internal discussions about a range of subjects during the financial crisis. (Guardian)

📣 The Queen Elizabeth University Hospital has still not been fully signed off by independent experts, despite assurances from the Health Secretary that it is safe for patients.

The revelation only emerged after Neil Gray repeatedly failed to confirm to MSPs that independent auditors had validated the hospital and neighbouring Royal Hospital for Children. (Scotsman)

📣 The share prices of software and data companies worldwide have declined sharply over the past 24 hours, amid escalating fears that artificial intelligence-driven innovation could significantly disrupt their businesses.

New tools from AI developer Anthropic, launched last Friday, specifically target tasks across legal, sales, marketing, and data analysis: companies in all those sectors have been hit hard. (Reuters)

Yesterday, around $300 billion was wiped from the value of companies in the sectors in the US, while £14 billion was shed in London. Overnight, Japanese and Indian IT companies have also seen big falls. (CNBC)

The news is significant for the companies themselves - until now, they’d been valued for their dependable cashflows - but also your savings, and broader society: this is part of an accelerating disruption of business caused by the burgeoning capabilities of AI.

📣 Allan Massie, the renowned Scottish author, columnist and critic, is being remembered after his death yesterday, aged 87. Massie, a noted author of novels and non-fiction himself, reviewed some 3,500 books for The Scotsman from 1975 until his retirement last month, and also wrote on rugby and cricket.

His son Alex Massie writes that his father enjoyed “a long life and a full one. As long as I can recall, our lives were filled with books and newspapers.” (The Debatable Land)

📣 Ash Regan MSP has taken aim at the Scottish Government after her proposals to overhaul prostitution laws in Scotland fell at the first hurdle at Holyrood. “I think in Scotland you have more protection if you’re a dog than if you’re a girl,” she said after the vote. “Why are they protecting sex buyers?” (The Scotsman)

📣 Short-term prisoners will be released after they have served less than a third of their sentences under plans to reduce prison overcrowding. (Mail)

📣 The widow of a firefighter who died in Jenners says her husband was “under-equipped” for the fierce blaze which took his life. (Daily Record)

📣 The Mosmorran plastics plant in Fife has closed two weeks early, with the loss of 400 jobs. (STV)

📣 Russian spy spacecraft have intercepted Europe’s key satellites, officials believe, with unencrypted communications being targeted by Moscow. The interceptions could allow Moscow to manipulate the trajectories of the satellites, or even crash them. (The FT (£) has the exclusive)

📣 Three in four cancer patients will survive the disease thanks to a “revolution” in medicine over the next 10 years, the government has claimed. (🎁 Times - gift link)

📣 Donald Trump has claimed Vladimir Putin “kept his word” despite massive attacks on Ukraine on the eve of peace talks. (Independent)

⚽️ League leaders Hearts slipped up at St Mirren last night, beaten by a late Miguel Freckleton header after playing much of the game with only 10 men.

It was a poor display from the league leaders, and the third Hearts red card in five games. (BBC - report & 🎥 highlights)

⚽️ The most remarkable thing about Arsenal’s 4-2 aggregate victory in the Carabao Cup semi-final last night was that it puts them in their first major cup final since they won the FA Cup in 2020. (BBC)

🏉 Good news for Scotland ahead of the Six Nations opener against Italy in Rome: four injury doubts have been ruled ready to take part. (Scotsman)

🗣️ The rise of artificial intelligence has powered US stock market growth for much of the last three years. But this week, really for the first time, investors are starting to worry about AI’s disruptive impact.

Only yesterday, around $300 million was wiped off the values of a clutch of software and data companies, following an announcement by Anthropic - a leading AI company - that it was adding new legal tools to its assistant. They take aim at drafting and research tasks.

As The Wall Street Journal reports (🎁gift link), companies that provide legal tools and databases all lost out - Legalzoom lost a fifth of its value, Thomson Reuters more than 15%. Companies in payments, travel and financial data felt the chill later, too.

In the UK, The Times reports (£) that almost £14 billion was wiped off the value of companies listed in London.

Art Hogan, chief market strategist at B. Riley Wealth Management, told the Journal: “If things are advancing as rapidly as we hear from OpenAI and Anthropic, it’s going to be a problem. Investors are starting to go after any of the companies that could be disrupted, which is all kinds of software application names,” he said.

The truth is, there are few sectors that aren’t open to significant disruption from the burgeoning power of AI. Legal and financial data might be in focus this week. But software development is also being turned on its head, with users of Anthropic’s Claude model raving, in recent weeks, about its ability to develop quite sophisticated software from only the simplest prompts. In skilled hands, it’s even more powerful.

“They call it getting ‘Claude-pilled’”, writes Bradley Olson. “It’s the moment software engineers, executives and investors turn their work over to Anthropic’s Claude AI - and then witness a thinking machine of shocking capability, even in an age awash in powerful artificial-intelligence tools.”

That’s disrupted the value of established software companies, which have long been valued for their high barriers to competition - until now, it’s simply been hard to write software, requiring lots of skilled and expensive staff doing difficult things.

AI-powered tools have long supported human software development. What’s changed, effectively since the Christmas holidays, is that Claude’s capabilities are ready to take the lead. “Some described a feeling of awe followed by sadness at the realisation that the program could easily replicate expertise they had built up over an entire career,” writes Olson.

This disruptive power will only spread. AI technology is now capable enough to be used in myriad places - from media to medicine - and the vast investments made by AI companies in infrastructure give them an incentive to move quickly.

Read Edinburgh-based Ronee Hulk’s Dear Future: You Can Keep The Change - a deep exploration of AI and its potential impact - and you’ll be left in no doubt about the breadth of applications it will find, and its impact on human endeavour.

The world we’re entering will require us to think hard about what we do that is special and distinct from what AI can do - and about how we choose to regulate the machines which will take so much work from us.

More, on all of this, in future Early Lines.

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