The Tech Company That Rejects 99.9% of Job Applicants

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0:32Oil prices continue to climb as fresh U.S. attacks on Iran end hopes of a quick resolution to the war. A federal immigration officer kills a man in Maine, the second deadly shooting in a week. And New York moves to ban the construction of data centers as the AI backlash grows. Any data center that's here has to cover the cost of their own energy. You know, we just talked about the high cost of energy. it's not fair to rate payers in our state. They have to have a higher cost because of a data center coming in. It's Tuesday, July 14th. I'm Daniel Bach for The Wall Street Journal, filling in for Luke Vargas.

1:09And here is the AM edition of What's News, the top headlines and business stories moving your world today. The U.S. launched its third consecutive night of strikes on Iran after President Trump announced a multi-day wave of attacks and a renewed blockade in the Strait of Hormuz. The restart of fighting in recent days and fresh block on Iranian shipping sent U.S. crude futures up nearly 10 percent yesterday, wiping out a month of dropping oil prices that came after Washington and Tehran signed their Memorandum of Understanding to wind down the war. Journal foreign correspondent Georgi Kanchev says oil markets and Middle East producers now appear to be aligning around a new reality.

1:50Now there's a realization here that the Strait of Hormuz may no longer be expected to return to its kind of pre-war norm. And so for the oil market and for participants and for countries in the Gulf, the question becomes how do you adapt? And for countries around the Gulf, that means building pipelines and other ways to bypass the strait. And for the oil markets, it's pretty clear that the prices will have to rise because a big chunk of the world's oil supply is still a question mark. The president has also said the U.S. would strike Pickaxe Mountain, a fortified underground nuclear site in Iran yet to be targeted since the war began in late February.

2:30Yesterday, the White House sent a letter to Congress saying it had resumed hostilities with Iran on July 7th, restarting a 60-day clock where the U.S. can go to war with Iran without approval from lawmakers. Authorities in Maine say a federal immigration officer fatally shot a man during an enforcement operation yesterday in the coastal town of Biddeford. The Department of Homeland Security said DHS and Immigration and Customs Enforcement officials tried to stop a person fleeing the scene in a car when an officer who was fearing for public safety discharged his weapon. According to two immigration rights organizations in Maine, the 26-year-old man from Columbia had valid work authorization documents.

3:12Speaking to CNN, Maine Independent Senator Angus King said the man was not the target of the operation and said DHS needed to explain why officers were not wearing body cameras. And that's what really the investigation is all about. What were the facts? Did this young man actually try to run over an ICE agent or was he in danger of running over other people in the street? And was there a reasonable expectation of bodily harm or deadly force to justify this shooting? King told reporters that he had spoken with Homeland Security Secretary Mark Wayne Mullen, who assured him the investigation would be full, fair, and transparent.

3:51The shooting comes less than a week after federal immigration officers shot and killed a man in Houston who DHS initially said had tried to weaponize his vehicle. The man had lived in the U.S. for more than 35 years and was also not the target of the enforcement operation. At the same time, officials in the Minneapolis area said yesterday the state's top investigating agency had taken custody of evidence related to the shooting death of Renee Good by an ICE officer in January, including her vehicle and other physical evidence that they said was originally kept from state investigators.

4:28America's data center developers are ready to cash in on the AI boom. We're exclusively reporting that data center builders and operators across the U.S. are working with bankers to sell majority equity stakes worth tens of billions of dollars this summer. Here's M &A reporter Ben Dummett. The owners of these operations are trying to take advantage of the premium valuations they're able to achieve. Demand for AI, the adoption of AI, means these data centers are in huge, huge demand. Another reason is builders and operators of these data center farms are looking to expand their existing operations and they're bringing in minority partners like private equity and the like, who have the money that can help finance expansion of these operations, which is necessary in order to meet the estimated demand.

5:18Navidia's chief executive, Justin Wang, recently estimated the cost of building a gigawatt of new computer power using his company's architecture could soon reach$80 billion to$100 billion. So that's forcing these operators and builders to bring in new money. Meanwhile, New York Governor Kathy Hochul is banning large data center construction for up to a year. The Democrat is set to sign an executive order for the moratorium today, giving the state time to create regulations for data centers that can help the environment and energy grid. No other state has enacted a similar freeze, though dozens of cities and counties across the U.S.

5:55have issued temporary halts, and many states are working on similar bans amid a growing pushback against AI. They argue the facilities which house the equipment-powering AI and computing systems could overwhelm the local power supply and hike utility bills. And the AI race between the U.S. and China just ramped up a notch, with Chinese startup DFSX launching an AI chip to take on Western competitors. The new chip is entirely built in China and can bypass restrictions on high-end technology that have hurt the ability of Chinese firms to produce cutting-edge semiconductors. Journal reporter Sherry Quinn explains how the DF-1000 chip works differently than leading chips from NVIDIA.

6:34In order for the chip to perform better, you need to use more cutting-edge manufacturing process to make them. And DFSX don't have access to that. And also, for AI chips to work efficiently in data centers, they not only need computing chips, they need memory chips to move data, to see the data. For DFSX, it puts the memory right next to the computing parts, so it reduces the traffic jam of data. So they are making progress very quick. It could signal that Chinese firms are finding ways to developing competitive AI models, and they could pose threats to the American companies and put new variables in this field.

7:21Though the chip still trails those made in the U.S. in AI training, DFSX says its next generation chip, called the DF2000, due out by the end of this year, will close that gap. And if this morning's Chinese export data is any indicator, semiconductors are becoming an increasingly important driver of the country's economic growth. Exports surged 27 % in June, up from just 19 % in May. Coming up, a look at the next labor crisis and how AI could actually help. That story after the break. Thank you. I'm Steve Booth, CEO of Baird, an independent wealth, asset management, and global capital markets firm.

8:01At Baird, our 5 ,000-plus employees are united by an unwavering commitment to excellence and a genuine passion for helping our clients and each other succeed. As a privately held, truly employee-owned company, we treasure our independence since we can focus on delivering results to clients and taking care of our people throughout the cycles in our serve markets. Learn more at rwbear.com slash wsj.

8:29The great fear for many of us in the advancement of AI is a future with too few jobs. But for now, the U.S. economy may be facing the opposite problem. Economics reporter Justin Layhart says instead of job shortages, a sharp slowdown in people entering the workforce could leave the country struggling with an unprecedented era of labor scarcity. A recent analysis by noted demographer Stephen Ruggles finds the U.S. labor force is slowing sharply and will soon shrink outright. Over the decade ending 2030, it grows by just 9.1 million people, the smallest gain since the 1950s. The following decade, it contracts by 2.1 million.

9:10Two things that helped to prop up labor supply have now leveled off or are in decline. Women's participation in the workforce and immigration. At the same time, fewer young adults are entering the workforce because of a sharp decline in the U.S. fertility rate. Justin says the shift could drive higher wages, and for the economy to stay healthy, it will need the productivity boost that AI promises. Ruggles expects that scarcity of labor to push up wages for young workers, draw more people into the labor force, and strengthen organized labor's bargaining power. A smaller workforce also needs to support more retirees.

9:46That's the productivity gap AI could fill. Research from economists finds labor scarcity historically drives higher GDP per worker and higher wages, partly by spurring investment in labor-saving tech. The open question, will AI's gains be enough and come soon enough to offset the demographic shift? Or will AI's productivity gains be so large that companies cut jobs anyway? Well, just as many companies may fear the potential labor shortage, a lack of applicants will have less of an impact on the most desirable places to work or study. While the most cutthroat banks and consulting firms brag about their 1 % hiring rate, NASA accepts a tenth of a percent of budding astronauts, a company you've probably never heard of hires less than half a percent of applicants.

10:36Landing a job at Bending Spoons is 100 times harder than getting into Harvard. Bending Spoons is a holding company based in Milan, Italy, that owns a bunch of tech companies that make software that millions of people use every day without really thinking about it. That's the journal's Science of Success columnist, Ben Cohen. Once promising tech startups that you probably haven't thought about in decades. AOL, Evernote, Vimeo, Brightcove, Romini. The company went public earlier this year and has seen job applications jump from 100 ,000 a few years ago to 800 ,000 last year. Ben spoke to CEO Luca Ferrari and found that Bending Spoons is more rigorous about the people they hire than the companies they take over.

11:21At Bending Spoons, the interview is different than it is at other places. You know, if you ask Luca Ferrari, he says that research shows that a run-of-the-mill interview is almost entirely useless. It's basically like flipping a coin. Every part of the hiring process at Bending Spoons gets fed into one of their hiring models. So for example, they will try to put a number to how polite you were during the application process because they have found that you might be polite to the person who is interviewing you, but you might be kind of a jerk to the person underneath that person. And if you are not as courteous to the people in positions of less power, you might not be the greatest colleague to collaborate with.

12:03Last year, that group of 800 ,000 applicants made its way to 286 offers at the very end of the process, which makes Bending Spoons, this company that most people have never heard of, one of the most ruthlessly selective companies on earth. And that's it for what's news for this Tuesday morning. We're glad to have made the cut on your podcast selection. Today's show was produced by Hattie Moyer. Our supervising producer is Sandra Killhop. And I'm Daniel Bach for The Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.

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