☕ Win a free mug — refer 10 friends to The Operating Brief and we'll ship you one. Your referral link is at the bottom of this email.

May 26, 2026

The Operating Brief

For Australian business operators

Today's Briefing

AI & Technology

Microsoft has made a startling admission: AI agents are currently more expensive to run than human employees. The finding, reported this week, centres on the rising cost of tokens and agent compute — and it's forcing boardrooms to rethink the "replace headcount with AI" playbook. This doesn't mean AI is a dead end, but it does mean the ROI case needs to be built more carefully than the hype suggests.

Meanwhile, ClickUp laid off a significant portion of its workforce, with leadership explicitly citing AI as the reason fewer humans are needed to do the same work. The irony of a productivity software company cutting staff because of productivity software is not lost. For workers watching on, it's a sharp reminder that no sector is immune.

The Pope also weighed in this week. Leo XIV issued his first encyclical warning that opaque AI controlled by a handful of corporations risks "new forms of dehumanisation." He called AI a potential "Tower of Babel" — powerful, but built without wisdom. Whether you're religious or not, the moral framing is landing in policy conversations globally.

Australian Business & Finance

A community in the NSW Southern Highlands is pushing back hard against plans to build gas-powered data centres near Moss Vale. Locals say the proposal contradicts Australia's clean energy transition and threatens the character of the region. It's a collision between the insatiable power demands of the AI boom and communities that don't want to bear the cost.

The tension is real: data centres need enormous, reliable energy, and renewables alone can't yet guarantee that at scale. Developers are turning to gas as a bridging fuel — but bridging to what, and at whose expense, remains hotly contested. Expect this fight to play out in more Australian towns as the AI infrastructure buildout accelerates.

Separately, Sydney's social housing crisis has a new, visible symptom. Squatters are moving into empty units at a Redfern complex, exposing the gap between housing demand and management response. For small business operators in inner Sydney, the broader affordability and social stability pressures are very much on the doorstep.

World Markets & Global Business

Oil prices slid this week on hopes that a US-Iran nuclear deal could be within reach, easing fears of a supply disruption from the Middle East. Iran, however, has pushed back — saying a deal is not imminent. The back-and-forth is keeping energy markets volatile, and any Australian business exposed to fuel or freight costs should be watching closely.

Russia escalated its warnings over Ukraine, threatening further strikes on Kyiv and telling foreign nationals to leave. Markets have largely priced in the war as background noise, but fresh escalation carries real risk for European supply chains and energy prices that ripple out globally. Meanwhile, over 1.5 million pilgrims have begun the Hajj despite regional tensions — a reminder of just how much the world keeps moving regardless.

The Big Picture

The Pope's AI encyclical is the most philosophically significant document on technology issued by any major global institution in years. Leo XIV isn't just moralising — he's articulating a structural concern: that AI's benefits are concentrating in the hands of a very few while the costs and disruptions are distributed broadly. That's not a theological argument. That's economics.

For Australian business operators, the takeaway is practical. The rules of the road for AI — who owns it, who's liable, how transparent it must be — are being written right now. Governments, regulators, and now the Vatican are all signalling that the "move fast" era has a shelf life. Getting ahead of governance questions inside your own business is no longer optional.

Scroll down for the full digest, including today's top stories across AI, world markets, and Australian business.

AI Stories

Overview

ClickUp laid off a large share of its workforce this week, with leadership citing AI as the reason fewer people are needed to ship the same output. It's a significant moment — a company that sells productivity tools is now using AI to cut the humans who built those tools. For workers in software, operations, and project management roles, this is the clearest real-world signal yet that AI displacement is accelerating beyond theory.

Podcast Picks

World News

Global Snapshot

Russia has escalated its rhetoric over Ukraine, threatening fresh strikes on Kyiv and urging foreign nationals to leave the country — a significant hardening of tone that markets have not fully priced in. If strikes intensify, European energy and supply chain disruptions could follow, with flow-on effects for Australian exporters tied to global commodity pricing. Separately, over 1.5 million foreign pilgrims have begun the Hajj despite active fears of a broader Iran-Israel conflict — a signal of just how much geopolitical risk the world is now normalising.

Australian News

Australia Snapshot

A community near Moss Vale in NSW is fighting back against plans to build gas-powered data centres in their region, putting the tension between AI infrastructure demand and clean energy commitments squarely on the table. As Australia's data centre buildout accelerates to support AI workloads, the question of what powers them — and who bears the environmental and social costs — is becoming a live political issue. Expect this to surface in more regional communities as hyperscalers and AI companies scout land for new facilities across the country.

Big Tech · Weekly Wrap

This Week in Big Tech

Google used its I/O 2026 conference to announce Gemini 3.5, positioning it as its most capable and action-oriented model yet — built for the agentic era where AI doesn't just answer questions but completes tasks autonomously. The company also announced over 100 updates across Search, Workspace, and its AI subscription tiers, signalling a full-court press to embed Gemini across every product a business might use daily. For Australian businesses already using Google Workspace, many of these AI features will arrive without requiring a separate purchase — making this week's announcements immediately relevant.

Enjoying the brief? Forward it to one person who'd find it useful.
And if someone sent this your way — subscribe here and we'll see you tomorrow.

Thoughts on today's edition? Hit reply — we read every response.