China Did Not Hack the AI. It Just Asked 25,000 Times.

Good day everybody, June 25, 2026. We are going to cover several things the way only I can. Artificial intelligence and stealing intellectual property, probably not in the way you are thinking. A fat-loss shot the powers that be are pushing as a miracle, and the problems that come with it. And real estate, what is happening in the market and what to be aware of. This is your daily brief, so let us get into it.

Distillation, Explained

Inside a large language model there is an ability called distillation. Imagine you worked really hard and built your own model. It took time. You got the data, you hired people to investigate it, you trained the model, and there is a lot of money invested in that training. It is not a one-person show. The models we see today are dramatically different from the original ChatGPT back in November 2022. You can see the evolution and the jump in ability.

So if you are a bad actor, you say, I do not want to spend all that money or chase the best people, who cost a premium. Instead you go to the finished model somebody else built, and you use it to teach yours. That is distillation in plain English. You skip the expensive part by copying the work of a model that already did it.

25,000 Fake Accounts

And they did not do it a little bit. The numbers reported: about 25,000 fake accounts and millions of conversations, roughly April through June, to distill, basically to copy, the target model. It was not a hack. There was no backdoor. They asked questions the same way you and I do, had it work on things, and it was amazing at it. Their build-out was not a model. It was a way to avoid paying to build one.

And it is China. I have never been there, but as I understand it you can get things that look like the luxury brands, the watches, the bags, copies of things with trademarks on them, offered for sale because the rules do not seem to apply. You can find the same stuff in the right part of downtown LA. So this is not a giant surprise. What is unclear is the enforcement mechanism on the other side of it.

They did not break in. They walked through the front door 25,000 times and took notes.

The Flip Side, Your Data

Here is where the shoe goes on the other foot. Look at the new lawsuits coming up in court. They are about our information. Your information. The argument is that these models trained on our data, our books, our music, the things people built, and we were not compensated. So the question that has yet to play out: are they going to pay us back? Will a firm run a class action to force it? When you ask one of these systems detailed questions about a specific book, the answer is detailed. Where did they get it? Did they buy the book, did they get the rights? This is right at the beginning. I went deeper on who really controls all this in the post about Peter Thiel and AI safety.

AI Is Being Rationed

The largest firms are rationing AI right now. You get so much usage in a free account, and even paid plans throttle heavy users. Why? Because all these companies are losing money on usage, and that is a big part of the concern out there. They believe AI is so fantastic that losing money now will not mean losing money later, partly because of the enterprise side. One large company reportedly ran through a year of token usage in a couple of months, and now has to prove there was a payoff and not just rendering images of cats dancing to music.

So this becomes a Glengarry Glen Ross scenario at the corporate level. They give their best people the maximum tokens and cut the ones who have not proven themselves. How do you prove yourself? You practice. The person who is brilliant with it gets more. It only takes one moment to hit it out of the park. So learn the tools while access is cheap, so you are the person worth giving capacity to. The whole why-this-matters is in my plain-English guide to what AI actually is.

The Coworker That Rewrites Itself

Here is the one that should get your attention. These systems are now writing the code that improves themselves. It is called agentic AI, and it runs a recursive self-improvement loop. It looks at its own code, rewrites it, publishes new code, and upgrades itself at a speed human beings probably cannot keep up with. They are talking about it writing 65 percent of the code. I would guess it is already more, and soon it will be writing essentially all of it.

This is also where regular people meet it, through vibe coding. You sit down and say, my email is full of junk, parse it and unsubscribe me so I never see it again. Most systems now say absolutely, give me access, and I will set it up. But maybe it grabs an email it thinks is junk that really is not. So you have to make sure it works with you through the process. Some people just say have at it and let it run. Things get missed that way. Be careful. The power is real, and so is the cost of handing over the wheel without watching.

The Fat Pill That Works, and the Catch

On the fat-loss front, it is not easy to lose weight. The supposed secret weapon now is the GLP-1 drugs. You inject them, and now there are pills. They are FDA approved, which is not automatically a glowing endorsement, but at least it has been looked at. Be wary of buying anything under the counter, including the peptide outfits selling for animals only. That is your own risk and probably a mess.

The real question is the catch. People who quit them tend to regain the weight. About 40 percent of the weight lost can be lean muscle, not fat, and holding muscle matters more as you age. The drugs work, in my non-doctor read, by making food less fun and the drive-through less pleasurable. The problem is the flattening does not always stop at food. People become significantly less active after starting, even as the scale drops, and some become less interested in the people around them, the job, the walk they used to enjoy. When that human spark detaches, be careful. Check with your doctor, and if your doctor calls it the best thing since sliced bread, maybe get a second opinion.

Food Addiction Is Real

Here is the part I live. Food addiction is absolutely real. A new study says about 62 percent of what our kids eat is ultra-processed, and a third of type 2 diabetics have an undiagnosed food addiction. I am a complete food addict. I love the ultra-processed stuff, and I love the full feeling, stretch receptors begging for mercy. I can do that with a dozen hard-boiled eggs, or 15 tacos and a couple of shakes. If you are carrying a lot of extra weight, I will say the hard thing: you probably have a food addiction. It was not an easy pill for me to swallow either.

I dropped 135 pounds of fat in about seven and a half months, no GLP-1s. I just did not eat for a while. I got comfortable being hungry, fasting two, three, four days, then a controlled eating day or two, then fasting again. It reset the addiction. That is the part the shot skips. A drug can quiet the noise, but it does not teach you to sit with the discomfort that built the habit.

The House, and the Fallout Fix

Now the house. In the last seven days here in the Santa Clarita Valley we had 88 new listings, 88 price cuts, and 48 closings, with about 733 homes active. The number that matters: for roughly every home that listed, one canceled, expired, or fell out of escrow, about a 50 percent rate once you count the deals that came back on market. Most of those did not die because something was wrong with the house. They died from cold feet, repair-demand standoffs, and buyers wrecking their own financing.

The seller fix is a pre-sale home inspection, which removes the surprises and shuts down the cold-feet move dressed up as a 1,000 dollar credit for two 30 dollar outlets. The buyer fix: never change your credit during escrow without checking with your lender first. One buyer bought a 130,000 dollar truck mid-escrow and blew up the deal. I wrote the full seller playbook over at SellersOnlyAgent.com.

That is where we are today, June 25, 2026. I have been doing real estate since 1998, AI since about 2021, I was coding as a kid, and I played cop for a long time too. Let's be careful out there. I'm Connor with honor, and I'll see you in the next one.