My kid did what?
If you are a parent or a pet owner, you are familiar with the experience of your child or pet doing something you previously never thought about because you assumed it was impossible for them to do such a thing. And yet, you stand there, dumbfounded and slack-jawed, as your child/pet stands proudly victorious, having achieved the thing you previously knew conclusively to be impossible, and you are forced to recalibrate your entire approach to them.
I imagine that is the feeling among Sam Altman and some of the folks over at OpenAI this week, after one of their bots
The twist here isn't that an AI hacked an AI. The twist here is that OpenAI's hacking AI did the hack on its own. Yes, OpenAI built this thing, and though the company never directed its AI to hack into another system, the bot went ahead and did it anyway. Just because. "AI is accelerating the discovery and exploitation of vulnerabilities," OpenAI wrote in a statement, putting it in the running for understatement of the year.
"The unprecedented is becoming the norm," one expert told Penny.
There are a number of lessons here, for banks and other businesses, as Penny details. And of course there is a question of just how OpenAI failed to prevent this in the first place; the programs were supposed to be operating in a walled-off sandbox that should not have had any access to the outside world. It's ultimately possible this was largely a human's error. But I think the whole incident underscores the degree to which everybody is together on this ride of discovering what exactly these products can do.
Public enemy
There is a movement in San Francisco to start a city-owned public bank. Our Jasmine Ni wrote about it last week. I'd imagine in an industry that is dealing with competition among not only yourselves but also nonbanks, neobanks and whatever stablecoins are, the last thing you want to have happen is a public bank.
But the plan is there regardless. The city will put a measure in front of voters in November. If the measure passes, the city would become the first municipality in the nation to authorize a public bank. There seems to be a good chance the measure passes; one survey found 67% of those polled in favor of it. The point of San Fran having its own bank would be to boost local investment and local profits, support housing, support small businesses, and extend credit to people who have trouble getting it from private banks.
Yet I say authorize and not operate, because even a passing vote would be only a first step. One thing the city has not done yet is come up with a detailed plan to actually capitalize the bank. That, it appears, would require an entire separate piece of legislation. So whatever happens in November, the San Francisco City Bank probably won't be opening its doors soon (not the San Francisco Citi bank, there are plenty of them, or the Bank of San Francisco, there's one of those, too. Frankly, they're going to have to work on the name.)
Read more:
Four factors that drove banks' blowout 2Q performance Banks face a dilemma: More loan growth or better margins? The top-performing 20 public banks with under $2B of assets in 2025 How a serial borrower fooled 7 banks out of $39 million
Public banking is relatively common overseas, but has little presence in the states (technically, the Federal Reserve is a public bank but let's not go there right now). The only operating example is the Bank of North Dakota, though even that doesn't operate as a traditional retail bank but rather as a partner to private banks. A bill was introduced to Congress in 2021 that
The ICBA had a host of objections. It of course didn't want community banks to have to deal with the competition, but it also argued that community banks were more ubiquitous and therefore in better positions to serve the public, that taxpayers would be at risk of failures or losses from public banks, and that public banks could become political tools.
In the U.S., about 95% of households
