The National Institutes of Health today will begin implementing sweeping cuts to overhead funding for research grants. The cuts, announced Friday, will save taxpayers more than $4 billion, according to the NIH. Scientists have pushed back forcefully, saying that slashing the budget will halt progress on lifesaving medical innovations and imperil jobs, medical research institutions, and regional economies that depend on NIH funding.

The NIH is an economic force

It’s the leading funder of biomedical research in the world and supports 412,000 jobs, according to United for Medical Research, a biomedical research advocacy organization.

Overhead costs at the center of budget cuts: When the NIH awards a grant to a scientist, an additional percentage of that award is provided to the scientist’s institution to pay for infrastructure that supports the research—lab equipment, utilities, hazardous waste disposal, and more. Of the $35 billion awarded to grants in FY 2023, $9 billion (26%) went to “indirect costs,” per the NIH.

That will now be capped at 15%: Under the new Trump administration, the NIH announced that it would cap its funding of indirect costs to 15%, pointing to high indirect rates of 69%, 67.5%, and 63.7%, which have been awarded to ultrawealthy institutions Harvard, Yale, and Johns Hopkins, respectively. The NIH said it was targeting wasteful spending: It is “vital to ensure that as many funds as possible go towards direct scientific research costs rather than administrative overhead.”

Scientists denounced the cuts

They responded that overhead costs such as cutting-edge microscopes and HVAC are vital to research, and a 15% cap would threaten the development of treatments for diseases like cancer, the top category for NIH funding.

It could also ripple across the economy. For every $1 of research funding, the NIH generated $2.46 in economic activity, according to United for Medical Research. And the cuts would disproportionately impact cities and regions that are hubs for biomedical research, like Birmingham, AL, and the Research Triangle in NC. Pittsburgh, for instance, has built a thriving “meds and eds”-based economy in Western PA. Under the new policy, the University of Pittsburgh would receive $183 million less in government research funding, a 25% reduction.

Looking ahead…university lawyers nationwide are likely prepping a legal challenge.—NF

Eagles crush Chiefs 40–22 to win Super Bowl LIX. In a rematch from two years ago, the Philadelphia Eagles romped through a virtually stress-free Super Bowl in New Orleans, denying the Chiefs a historic third straight championship. While the game was short on suspense, it did have some interesting bits: Eagles quarterback Jalen Hurts, named MVP, scored the first touchdown of the game with the unstoppable “tush push” play. Chiefs QB Patrick Mahomes was sacked six times and intercepted twice in a performance the Kansas City Star called “haunting.” And Eagles head coach Nick Sirianni got doused with lemon-lime Gatorade with almost three minutes left in the game. Here is a recap of the best and worst commercials.—HVL

PlayStation Network went down for most of the weekend. It wasn’t game over but it was game temporarily unavailable as PSN suffered a 24-hour outage from late Friday to late Saturday that left online gamers frustrated. At its peak, Downdetector showed nearly 70,000 reports of problems. Sony didn’t specify what caused the outage beyond calling it an “operational issue” with network services. To make amends, Sony is giving PlayStation Plus members five extra days of service, which has resulted in premium subscribers saying, “That’s it?” and everyone else wondering, “What about us?”—DL

This week in tariffs: China’s retaliatory measures take effect. Earlier today, China’s counter-tariffs went live, adding 10% to 15% levies on US exports of natural gas, oil, and coal, as well as some automotive parts and farm equipment headed for China. President Trump described the tariffs that went into effect against China on February 4 as an “opening salvo,” and experts are monitoring the situation to see if the trade war between the two countries will escalate or if the fight will be called off after further negotiations. Consumer electronics, furniture, and appliances may soon get more expensive in the US due to the retaliatory tariffs, the AP reported. Fast fashion and home goods from Temu and Shein are safe for now, as the Trump administration is keeping the de minimis exemption in place.—HVL

World leaders and tech CEOs are gathering in Paris today and tomorrow for the Artificial Intelligence Action Summit. The event is about finding a way for everyone to get the most out of AI while addressing the inherent risks, which is not unlike the conversations parents have with their kids about getting a dog.

These three issues will likely dominate the conversation over the coming days:

DeepSeek: The Chinese company’s chatbot sent shockwaves through Silicon Valley due to its initially reported $5.6 million cost to build, a pittance compared to what US companies have spent. China’s President Xi Jinping is sending Vice Premier Zhang Guoqing as a special representative, a sign that China is taking a more serious role in international AI governance.

President Trump’s agenda: Trump has said he wants to make the US “the world capital of artificial intelligence,” and his “America First” agenda seems to conflict with the global governance of AI. Vice President JD Vance, who has expressed concerns about AI but has also said he’s not a fan of “preemptive overregulation attempts,” will attend on behalf of the US.

Safety: OpenAI CEO Sam Altman will reportedly issue a warning—not about risk, but about the need for leaders to “widen their mindset from risk” and include more consideration of growth and opportunity, per Axios. It will be interesting to see how that conflicts with experts in attendance speaking on the risks involved with general-purpose AI, like chatbots.—DL

Investors brace for inflation, earnings data: Americans will learn if their new fears about rising inflation are justified when the January consumer price index is released on Wednesday. A survey by the University of Michigan showed that respondents expect the inflation rate to be 4.3% a year from now, and Reuters expects to see the CPI rise by 0.3% on a monthly basis. On the earnings front, McDonald’s will report today, although it will be too early to gauge the impact of the return of Uncle O’Grimacey, and Coca-Cola reports tomorrow.

Amazon faces a union push in North Carolina: More than 4,000 workers in the least unionized state in the country will begin a six-day vote today that, if successful, would make it the second Amazon facility to unionize after a sorting and distribution center in New York in 2022. Only 2.4% of workers in the Tar Heel State are union members, but leaders of the Carolina Amazonians United for Solidarity and Empowerment (CAUSE, in case that wasn’t clear) are pushing to increase wages to $30 per hour. The starting hourly wage currently at the facility in Garner, NC, is $18.50 per hour and tops out at $23.80.

Meta’s performance-based layoffs begin today: According to a memo obtained by Business Insider, US-based Meta employees will learn their fate in an e-mail that will also contain details of their severance package. CEO Mark Zuckerberg informed staff in January that the company would “move out low-performers,” which reportedly includes 3,600 workers. Meta has a market cap of $1.8 trillion, and shares are up more than 19% this year.

Everything else…

• Thursday is Galentine’s Day. Kick it breakfast style.
• Friday is Valentine’s Day. If you’re just learning this information, it might already be too late.
• Captain America: Brave New World hits theaters on Friday, in case you need a last-minute date idea.
• The NBA All-Star Game in its new format is on Sunday.

It’s no secret that American mom-and-pop stores are fighting a losing battle with big corporations. But the Washington Post dug into the numbers and discovered the pivot point was the Great Recession. Before the worldwide economic downturn at the end of this century’s first decade, most Americans worked for companies with fewer than 500 employees; today, 53% of Americans work at companies with 500 or more employees.

The biggest drivers in this transformation are the smallest and biggest businesses. From 1978 to 2022, the overall job growth rate was 90.3%—companies with between one and nine employees grew ~40% over that time; companies with 5,000-plus employees grew ~120%. The shift is stark in the grocery industry, as companies with fewer than 10,000 employees made up two-thirds of the industry in 1978 but only constituted around one-third in 2022.—DL