A new federal chatbot is spitting out nonsense while Washington hands military and tech decisions to Elon Musk — unsettling for anyone worried about AI running government.

• The new "Hello America" government chatbot breaks down into rambling gibberish when users type odd prompts, raising doubts about the rollout.
• A new Pentagon effort on the future of warfare will be co-led by Elon Musk, Palmer Luckey, and Newt Gingrich, pointing to big government contracts for their companies.
• The Pentagon is cutting 20% of its top generals and admirals, and setting up an Office of Religious Affairs reporting straight to the top.
• Markets are shaky: government bond yields hit a 24-year high, so borrowing costs are spiking, and stocks fell even after inflation data came in softer than expected.
• The UK is now pointing at Iran over the incident at a US-linked air base, though the men arrested were released on bail and earlier described as ordinary smugglers.

Outlook: Expect more federal money and authority to flow to Musk's companies, with rising borrowing costs keeping pressure on stocks.