Opinion

Can AI Save a Company’s Soul?

Published

2 months ago

June 6, 2026

There’s a particular kind of corporate self-delusion that arrives gift-wrapped in a press release. The language is always the same: commitment to responsible innovation, our values-driven approach, AI as a force for good. And then, six months later, the ethics board resigns.

That cycle has accelerated dramatically. In 2024 and 2025, multiple senior safety leads departed OpenAI in succession. A University of Zurich experiment secretly used AI to alter users’ political opinions without consent. In early 2026, ElonUsk’s Grok generated an estimated 3 million sexualized images of real people — including private citizens — in just 11 days, according to researchers at the Centre for Countering Digital Hate. These weren’t fringe incidents. They were the predictable outcomes of organisations that treated ethics as a compliance checkbox rather than a governing principle. Crescendo

The question isn’t whether AI is reshaping corporate culture. It is. The question is whether it’s reshaping it toward anything resembling integrity — or whether the technology is simply amplifying whoever was already in charge.

The Corporate Soul Has Always Been a Contested Asset

Before examining what AI does to organisational ethics, it’s worth acknowledging what corporate culture actually is: not a mission statement, not a values wall in the lobby, but the aggregate of a thousand small decisions made under pressure. Culture is what happens when no one senior is watching.

In 2025, organisational culture placed greater emphasis on authenticity, trust, fairness, and psychological safety — rather than abstract ideals and surface-level values — as companies grappled with rapid AI adoption, economic uncertainty, and heightened workforce anxiety. That shift wasn’t voluntary. It was forced by employees who stopped believing the official line. Yardi Kube

AI entered this environment not as a neutral tool but as an amplifier. The EU AI Act, which comes fully into force in 2026, represents the first comprehensive regulatory regime for AI ethics. Elsewhere, the landscape remains patchy. In the absence of binding rules, corporations made their own. And predictably, their own rules tended to serve their own interests. Darden Report

By 2030, AI will be so embedded in business and government infrastructure that retrofitting ethical standards may be nearly impossible, according to researchers at the University of Virginia’s Darden School of Business. The window for course correction is now. And most organisations are still debating whether to open it. Darden Report

AI Corporate Ethics: The Gap Between Pledge and Practice

The first principle of AI corporate ethics — the phrase that every CTO and chief compliance officer now deploys with confidence — is that ethics must be proactive, not reactive. Too often, AI ethics have been treated as an afterthought rather than a core design principle. When ethics is left until the end, it is always the weakest link. Companies find themselves reacting to scandals instead of building trust and resilience. Darden Report

That observation, from Darden’s LaCross Institute, is not particularly surprising. What’s striking is how consistently it describes the actual behaviour of organisations that publicly claim otherwise.

A 2025 McKinsey Digital report found that fewer than half of C-suite leaders involve nontechnical employees in the early stages of AI tool design — despite the same report emphasising the need for diverse perspectives and transparent communication about AI’s impact on jobs. The gap between stated values and operational reality is, in itself, an ethical failure. It signals to the workforce that participation is performative. Cerkl Broadcast

The consequences are measurable. Multiple senior safety leads departed OpenAI during 2024 and 2025, a pattern that has since been documented across other major AI firms. A Harvard Law Review analysis described this pattern as “amoral drift” — a gradual erosion of ethical commitments as equity valuations and competitive pressures crowd out principled dissent. When the people hired specifically to raise alarms keep leaving, it’s no longer a personnel problem. It’s a governance failure. Aicerts News Harvard Law Review

Still, the picture is more complicated than simple cynicism allows. Some companies are building ethics into their infrastructure in ways that are costly, unglamorous, and — crucially — not immediately profitable.

What Does Responsible AI Actually Look Like Inside an Organisation?

Can AI improve a company’s ethical culture? The short answer: yes, but only when the culture already has something to work with.

AI can surface bias in hiring algorithms, flag anomalous decision patterns in financial approvals, and create audit trails that make accountability visible where it was previously invisible. Businesses that implement bias audits, establish clear accountability for AI-driven decisions, and communicate openly about the uses and impacts of AI earn trust and differentiate themselves in a competitive market — because ethics is not just a compliance issue but a strategic advantage that strengthens relationships and reinforces brand credibility. McLane Middleton

That framing is becoming increasingly material rather than rhetorical. Under the EU AI Act, non-compliance with high-risk AI obligations can trigger fines of up to €35 million or 7% of worldwide turnover — a figure that concentrates the board’s attention in ways that a values statement never will. The Act elevates AI governance to board-level responsibility, shifting European AI governance from voluntary ethical guidelines to mandatory legal requirements. For multinational corporations, that shift isn’t confined to Brussels. It sets a de facto global standard. LegalNodes Secure Privacy

What follows, however, is a crucial distinction: compliance and ethics are not the same thing. A company can satisfy every regulatory requirement and still build an AI system that corrodes its own culture from within. Algorithmic management tools that track employee keystrokes, sentiment-analysis systems that flag dissent before it reaches a manager, performance models that optimise for measurable output while punishing everything human beings value about work — all of these can be technically compliant and culturally corrosive simultaneously.

In 2026, organisations that will win are those that lean into both AI and human strengths — treating “cognitive capital,” meaning uniquely human capabilities like ethical reasoning, creative synthesis, and stakeholder empathy, as measurable assets rather than soft intangibles. That’s a useful frame. It’s also, at the moment, more aspiration than practice. Senior Executive

The Second-Order Effects No One Is Pricing In

The downstream consequences of getting AI corporate ethics wrong are not primarily regulatory. They’re cultural, and culture moves slowly enough that organisations rarely recognise the damage until it’s structural.

Consider what happens to employee trust when AI systems make consequential decisions — about promotions, performance ratings, credit approvals — without meaningful human review. Studies show that employees are more likely to trust AI systems when organisations are transparent about their AI use and incorporate ethical guidelines into AI deployment, per KPMG research cited in peer-reviewed analysis. Remove that transparency, and trust doesn’t remain neutral — it actively degrades. Gapinterdisciplinarities

Key challenges with AI adoption in 2025 included unclear policies for data use leading to confusion and ethical concerns, job security fears, and significant changes in how employees work, make decisions, and interact. These aren’t abstract concerns. They translate into attrition, disengagement, and the quiet exit of the kind of employees who have enough self-respect to leave when they’re not trusted. Yardi Kube

Then there’s the reputational dimension. A Berkeley Haas analysis found that ninety percent of public criticisms toward AI touch on social norms and values — not technical performance. When an AI system fails ethically, it fails publicly. Single events have the potential to cause lasting damage to organisational reputation, and most companies remain strategically unprepared to respond. The Grok image scandal of early 2026 wasn’t a technical glitch. It was a cultural statement about what its developers believed was acceptable — and the market heard it clearly. berkeley

For investors, the calculus is shifting. A 2026 study examining 449 corporations across China and Europe found that corporate AI ethics practices significantly influence sustainable development outcomes and ESG performance, with the relationship moderated by international innovation capacity. In plain English: ethical AI deployment is becoming a predictor of long-term business value, not merely a cost centre. Wiley Online Library

The Counterargument: Ethics as Competitive Disadvantage

There’s a dissenting view worth taking seriously — not because it’s right, but because it’s prevalent enough to shape real decisions.

The argument runs roughly as follows: companies that impose rigorous ethical guardrails on their AI systems will be outcompeted by those that don’t. If a US firm restricts its models from certain military applications while a Chinese competitor does not, the US firm loses the contract. If a European fintech builds extensive bias audits into its credit model while a less scrupulous rival skips them, the rival processes applications faster and cheaper. Ethics, in this framing, is a luxury that market structure doesn’t permit.

It’s a coherent argument. It also describes exactly how industries create the conditions for their own eventual regulation — or collapse.

Speed may provide a temporary competitive edge, but it often backfires. Flawed launches damage consumer trust, attract lawsuits, and invite regulatory crackdowns. This creates reputational harm that outweighs early gains. The pharmaceutical industry learned this through thalidomide. The financial industry learned it through 2008. AI appears determined to learn it through a series of smaller, faster, harder-to-attribute disasters — the kind that don’t produce a single dramatic reckoning but accumulate into systemic distrust. Darden Report

There’s also a labour market dimension that the move-fast advocates consistently underweight. The engineers most capable of building responsible AI systems are also the most mobile and the most ethically discerning. They leave organisations whose stated values don’t match operational behaviour. And they talk.

What Remains When the Slide Deck Is Gone

The honest answer to whether AI can save a company’s soul is this: it can’t. Not on its own.

AI can enforce the values an organisation already holds. It can make ethical behaviour cheaper to maintain and easier to audit. It can surface the gap between what a company says it believes and what its systems actually do — which, if the leadership has the appetite to close it, is genuinely useful. But a technology cannot generate integrity in an organisation that has chosen not to have any. It can only scale what’s already there.

The companies that will navigate the next decade without a major ethical rupture aren’t the ones with the most sophisticated models. They’re the ones that show how accountability works — including who makes decisions, how ethical issues are escalated, and what remediation paths exist when things go wrong — as a matter of operational transparency rather than periodic disclosure. UNESCO

That’s not a technology problem. It never was.

The soul of a company, if it exists at all, is a daily political negotiation between power and principle. AI just makes the outcome arrive faster.

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Asia

Down But Not Out: Inside the Slow Sinking of Russia’s War Economy

Published

6 days ago

July 20, 2026

Abdul Rahman

Introduction

The European Council formally extended its economic sanctions against Russia for another full year on 25 June 2026, keeping restrictive measures in place until 31 July 2027 (Council of the EU). More than four years into the war, the headline story of Russia’s economy has shifted from whether sanctions would work to a more nuanced question: how much longer can the Kremlin keep financing the war before the accumulated strain becomes impossible to hide behind favorable official statistics.

The Sanctions Architecture, Renewed Again

The EU’s economic measures against Russia, first introduced in 2014 and dramatically expanded after the February 2022 full-scale invasion, now span trade, finance, energy and dual-use technology restrictions, alongside asset freezes and travel bans on a broad range of individuals and entities (Council of the EU). Since February 2022, the EU has adopted 20 separate sanctions packages, and the European Council has explicitly stated it remains determined to keep weakening Russia’s war economy by further reducing its energy revenues, curbing shadow-fleet oil shipping operations and constraining its banking system (Council of the EU). Separately, on 3 July 2026 the EU sanctioned six individuals connected to the poisoning and death of opposition figure Alexei Navalny, underscoring that the sanctions regime continues to expand on human-rights grounds as well as economic ones (Council of the EU Sanctions Timeline).

The Headline Numbers Beijing-Style Optimism Can No Longer Explain Away

Russia’s GDP is now put at roughly $2.51 trillion, the world’s eleventh-largest economy — comparable in size to South Korea despite Russia’s vastly larger landmass and resource base — with 2026 growth projected at just 1.0% and inflation running at 5.2% (Statistics of the World). More pessimistic estimates put full-year 2026 growth even lower, at around 0.4%, which would be worse than 2025’s already-weak 1% expansion and would mark a sharp deceleration from the 4.1% growth Russia posted in 2023 as it forged new trading relationships to route around initial sanctions (Forbes).

Oil and gas revenues — historically around half of Russia’s state income — have fallen to roughly a quarter, a deliberate outcome of Western sanctions strategy that targets how much Russia earns from exports rather than blocking those exports outright (Stockholm School of Economics/SITE). Russia’s oil and gas budget revenues reportedly halved in January 2026 alone, with crude prices falling below $73 a barrel before the Middle East conflict briefly reversed the trend, sending Brent surging more than 55% to near $120 a barrel at its peak (Forbes).

The Middle East War: A Temporary Lifeline With Long-Term Costs

The spike in oil prices tied to the Iran conflict, combined with a period of eased US sanctions enforcement on Russian oil under President Trump, offered Moscow unexpected fiscal breathing room in mid-2026 (Forbes). But that same conflict has undermined Russia’s longer-term energy diversification ambitions in the region: two Russian-backed power plant projects in Iran have been put on hold, along with oil and gas exploration work and plans to build new transit routes linking Russia to India via Iran (Forbes).

The Gap Between Official Statistics and Underlying Reality

Perhaps the most important analytical point from recent research is not about any single data point but about the reliability of Russian statistics themselves. Torbjörn Becker of the Stockholm Institute of Transition Economics has argued the real test of sanctions is not whether they end the war overnight, but how much they erode the Kremlin’s capacity to finance it — and by that measure, the evidence points to deeper strain than headline GDP figures suggest (Stockholm School of Economics/SITE). Becker notes that Russia’s economy grew only modestly in 2022 despite oil prices rising sharply that year — a gap between expected and actual performance that implies a considerably larger hidden economic hit than the official contraction figures showed (Stockholm School of Economics/SITE). Compounding the problem, Russian authorities have stopped publishing several key statistics since 2022, making independent assessment of inflation, consumption and real economic conditions increasingly difficult — leading Becker to conclude that “statistics have become part of the narrative” rather than a neutral measure of economic reality (Stockholm School of Economics/SITE).

The Military-Civilian Economic Split

A recurring theme across recent analysis is the growing bifurcation between Russia’s overheating military-industrial sector and a stagnating civilian economy. This imbalance has pushed interest rates higher and forced the liquidation of a striking 71% of Russia’s gold reserves to help fund continued war spending (Forbes). Russia’s total fossil fuel export revenue is estimated at roughly €734 million per day, underscoring just how central hydrocarbon income remains to the entire war financing model even as that revenue stream shrinks (Forbes).

The Counter-Narrative: Wages Still Rising

It would be inaccurate to describe Russia’s economy as in freefall. CSIS research notes that Russian salaries rose 17.8% in nominal terms and 8.7% in real terms in 2024 compared to 2023, with disposable incomes up 6.1% in 2023 and 7.3% in 2024 — growth rates not seen in Russia in almost two decades (CSIS). Government budget projections still expect real salaries to rise, albeit at a decelerating pace: 7% in 2025, 5.7% in 2026 and 4.1% in 2027 — a marked slowdown from the 2024 peak but still roughly double the pre-invasion decade average (CSIS). This wage growth, driven substantially by wartime labor shortages and military-adjacent spending, is precisely the kind of headline-stabilizing data point that has allowed Putin to argue publicly that sanctions have failed to cripple his economy (Fortune) — even as think tanks describe the broader trajectory as pushing Russia toward what one report calls an “economic, political, and military abyss” (Fortune).

What Comes Next

Renewed legislative pressure in Washington — including the Sanctioning Russia Act introduced with strong bipartisan support — signals appetite in the US for tightening the screws further, even as the loss of a key congressional champion for that effort has complicated the political path forward (TIME). Whether the EU’s renewed sanctions regime, continued oil price pressure, and constrained reserves ultimately force a shift in Kremlin calculus toward negotiation remains the central open question for 2027.

Key Takeaways

The EU has extended Russia sanctions for a further year, through 31 July 2027, continuing a regime built from 20 separate packages since 2022.
Russia’s 2026 GDP growth is forecast between 0.4% and 1.0%, a sharp deceleration from 2023’s 4.1% post-shock rebound.
Oil and gas revenue’s share of Russian state income has fallen from roughly half to about a quarter as Western sanctions target export earnings specifically.
Russia has liquidated a large share of its gold reserves to sustain war financing amid a widening split between an overheating military sector and a stagnating civilian economy.
Official Russian statistics likely understate the true economic strain, according to independent economists who cite a widening gap between reported and expected performance.

Sources: Council of the EU, Council of the EU Sanctions Timeline, Stockholm School of Economics/SITE, Forbes, Statistics of the World, CSIS, Fortune, TIME

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Analysis

Why Fed Independence Is Hanging by a Thread

Published

7 days ago

July 19, 2026

Abdul Rahman

The Federal Reserve’s independence faces its most serious test in decades: a Justice Department investigation into Chair Jerome Powell over building-renovation costs, a Supreme Court case over Trump’s attempt to fire Governor Lisa Cook, and an incoming chair nomination openly tied to Trump’s demand for rates cut “by a lot” — all unfolding as the Fed tries to keep monetary policy decisions separate from the White House.

An institutional crisis hiding inside a rate-cut story

Most financial coverage this year has framed the Federal Reserve story as a simple tug-of-war over interest rates. That framing understates what is actually happening: a structural challenge to the 111-year-old convention that US monetary policy sits outside presidential control — a convention every advanced economy has treated as a prerequisite for market credibility.

The three fronts of the fight

1. The Powell investigation. In January, federal prosecutors served grand jury subpoenas tied to Powell’s congressional testimony about roughly $2.5 billion in cost overruns on the Fed’s headquarters renovation. Powell called the inquiry a “pretext” for punishing the central bank for not cutting rates as quickly as the administration wants, and warned it should be viewed “in the broader context of the administration’s threats and ongoing pressure” on the institution (CNBC). Every living former Fed chair signed a joint statement calling the probe an unprecedented attempt to use prosecutorial pressure to undermine central bank independence (NBC News).

2. The Lisa Cook case. The Supreme Court has separately taken up whether Trump can remove Fed Governor Lisa Cook over mortgage-fraud allegations she denies — a case with direct bearing on whether a president can reshape the Fed’s voting board outside the normal confirmation process (Euronews).

3. The succession fight. Trump has said publicly that Powell’s replacement — due when his term as chair ends in 2026 — should be someone who “believes in lower interest rates, by a lot” (Bloomberg). Analysts note this is a break from decades of precedent in which presidents, whatever their private preferences, avoided direct pressure on the Fed’s leadership pipeline.

Why markets are watching the mechanics, not just the rhetoric

It’s worth noting a structural check that has received less attention than it deserves: the Fed chair casts only one of twelve votes on the Federal Open Market Committee. Appointing a more compliant chair does not, by itself, guarantee the rate cuts Trump wants — any change still requires majority support across the full committee (CBS/AOL).

That has not stopped the market repricing. Following Powell’s Jackson Hole remarks suggesting the Fed could act if the labour market kept weakening, traders moved to price an 85% probability of a September rate cut, sending the S&P 500, Nasdaq and Dow higher while the dollar index and Treasury yields fell — a reaction some economists read as evidence that political pressure is already bleeding into policy expectations, independent of the FOMC’s actual vote (Barchart).

At the same time, inflation data complicates the picture for anyone expecting an easy capitulation. The Fed’s preferred inflation gauge, the PCE price index, sat at 2.8% year-over-year as of November — still above the Fed’s 2% target — while the FOMC’s December dot plot showed a more cautious rate path than markets had previously expected, with the median policymaker view placing the federal funds rate in the low-to-mid 3% range by the end of 2026 (CNBC).

Why it matters beyond the US

Central bank independence is not a purely domestic US concern. The dollar’s role as the world’s reserve currency, and Treasury yields’ function as the global risk-free benchmark, mean that any erosion in perceived Fed independence has second-order effects on borrowing costs from London to Karachi. Emerging-market central banks — including the State Bank of Pakistan and Bank Indonesia — routinely calibrate their own policy against expected Fed moves; a Fed seen as politically compromised makes that calibration harder and potentially more volatile for every economy that prices debt off US Treasuries.

RSM chief economist Joe Brusuelas has predicted Powell will use his public platform to mount “an erudite but accessible defense of central bank independence” at upcoming FOMC press conferences — a sign that Fed leadership itself views the institutional question, not just the rate decision, as the story that matters (AOL/CBS).

What to watch next

Whether the DOJ investigation into Powell produces formal charges or fizzles amid criticism of its timing
The Supreme Court’s ruling on the Cook removal case, which could set precedent for presidential authority over independent agency officials generally
Trump’s formal nomination for the next Fed chair, and how openly that nominee campaigns on a specific rate target
Whether the FOMC’s committee-based voting structure continues to act as a moderating check regardless of who chairs the meetings

The rate-cut headlines will keep coming. The more consequential story is whether the institutional guardrails around the Fed — designed explicitly to keep monetary policy insulated from electoral cycles — hold through 2026.

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Analysis

Russia’s War Economy Model Is Starting to Crack, Think Tank Warns

Published

2 weeks ago

July 15, 2026

Abdul Rahman

Most headlines on Russia’s economy in July 2026 focus on the latest sanctions package or oil price cap negotiation. The more important story is structural: the model Russia has used to fund its war for four years is showing real signs of running out of road.

The core finding

A research brief from the Center for Strategic and International Studies (CSIS) argues Putin is pushing Russia toward an “economic, political, and military abyss,” according to Fortune. While Russia’s economy remains large — roughly $2.6 trillion — growth is slowing and shrinking on a quarterly basis, with 2026 growth projected at just 0.4%, worse than 2025’s 1% growth, which itself narrowly avoided recession.

Analysts describe Russia’s approach as a form of “military Keynesianism” — the state investing heavily in militarizing the economy while extending financial support to households affected by the war. But per Fortune’s reporting, “after more than four years of war, that well is running dry.” Russia’s fiscal reserves are dwindling, and 71% of the country’s gold reserves have been liquidated to sustain spending.

The number that matters most: oil and gas budget share

The most underreported data point here: the share of oil and gas receipts in Russia’s federal budget revenue fell to just 23% in 2025 — the lowest share in two decades — according to the Oxford Institute for Energy Studies, cited by Fortune. To compensate, Russia has turned to expansive taxation, including raising VAT from 20% to 22% — a move that has proven unpopular domestically.

This matters because Russia’s economy has historically been described, correctly, as fossil-fuel dependent — with oil and gas taxation making up 44% of federal revenues in the decade before the Ukraine invasion, and still around 24.5% over the first three quarters of 2025, according to a Brookings Institution analysis. A further slide to 23% signals the sanctions and diversification pressure are compounding, even as Russia continues finding workarounds through its “shadow fleet.”

The Iran-war reprieve was temporary — and it’s over

The Iran war offered Russia a brief lifeline: Brent crude surged more than 55% at its peak, nearing $120 a barrel, after President Trump eased some sanctions on Russian oil, per Fortune. But that chaos also undermined Russia’s own long-term energy and infrastructure projects in the Middle East — two Russian-linked power plants in Iran were put on hold, along with oil and gas exploration and plans to link Russia to India via Iran through new transit routes. Since then, oil prices have normalized as demand softened and the Strait of Hormuz reopened, removing that temporary cushion.

The sanctions escalation now in motion

The pressure is intensifying on multiple fronts simultaneously. US senators unveiled a sweeping bipartisan Russia sanctions bill in mid-July, which would impose mandatory sanctions on Russian political and military leaders including President Putin, and up to a 100% tariff on the top five countries — including China and India — that purchase Russian crude oil and natural gas, according to CNN. Separately, the EU has been racing to avoid an automatic upward revision of its Russian oil price cap, which would otherwise jump from $44.10 to roughly $58 per barrel if a new sanctions package wasn’t agreed by July 15, per Euronews.

Analysis from the Center for European Policy Analysis notes the outcome depends heavily on whether India and China accept the risk of secondary sanctions: “If China stands firm, Moscow’s dependence on Beijing deepens,” per CEPA. If Russian seaborne oil exports were to fall to near-zero, the budget would lose roughly a quarter of its revenue — an extreme but non-trivial scenario given the pace of legislative and diplomatic pressure building in July 2026.

Why this matters beyond Russia

For countries positioned between Western sanctions regimes and continued Russian energy purchases — including India, and by extension trade partners like Pakistan whose remittance and trade flows intersect with Gulf and South Asian energy markets — the trajectory of Russia’s budget dependency and the secondary-sanctions risk attached to its buyers is a live variable, not a settled one. A further deterioration in Russia’s oil-and-gas revenue share would likely accelerate Moscow’s reliance on China specifically, reshaping regional energy-trade alignments well beyond the Russia-Ukraine conflict itself.

FAQ

What percentage of Russia’s federal budget comes from oil and gas? 23% in 2025 — the lowest share in two decades, according to the Oxford Institute for Energy Studies.

What is Russia’s projected GDP growth for 2026? 0.4%, according to CSIS research cited by Fortune — down from 1% growth in 2025.

What is “military Keynesianism” in the context of Russia’s economy? A term analysts use to describe Russia’s strategy of heavy state investment in militarizing the economy alongside financial support for war-affected households, functioning as a form of stimulus that is now showing signs of fiscal strain.