State of AI: May 2026
State of AI: May 2026 The cyber threshold, China’s coding sprint, and agents meeting real markets Dear readers, Welcome to the latest issue of the State of AI, an editorialized newsletter that covers the key developments in AI policy, research, industry, and start-ups during the month of April 2026. First up, a few news items: Register for RAAIS 2026 is back in London on June 12. This year’s speakers include Raia Hadsell (VP Research, Google DeepMind), Roberta Raileanu (Senior Staff Research Scientist, Google DeepMind), Jeff Hawke (Co-Founder & CTO, Odyssey), and Philip Johnston (Co-Founder & CEO, Starcloud - yes, data centers in space). Come along and support the RAAIS Foundation’s mission in AI education and research. Profluent (frontier AI for bio) announced their $2.25B partnership with Lilly for large-gene insertion therapeutics and Sereact (embodied AI) closed a $110M Series B! Air Street AI meetups are coming up in NYC on May 14. We’re recruiting Research Analysts for the State of AI Report. If you live and breathe this stuff and want to help us build the next edition, get in touch. I love hearing what you’re up to, so just hit reply or forward to your friends :-) Cyber crossed a threshold Frontier AI has crossed the rubicon into offensive cyber operations. The UK’s AI Security Institute revealed that Anthropic’s Claude Mythos Preview is the first model to clear its 32-step “The Last Ones” (TLO) range - a corporate-network simulation covering reconnaissance to full domain takeover that typically demands 20 hours of human red-teaming. Mythos cleared the range in 3 of 10 runs and maintained a 73% success rate on expert-level tasks. Crucially, the AISI range lacks active defenders or defensive tooling; as such, these evaluations do not yet prove efficacy against hardened targets. The Institute was candid: current benchmarks are failing to discriminate between frontier models without introducing adversarial defensive layers. OpenAI’s GPT-5.5 followed just three weeks later with a near-identical capability profile: 2 of 10 end-to-end solves and 71.4% on expert tasks, carrying the same “defenders-absent” caveat. The headline takeaway is the velocity of progress: AISI now estimates frontier cyber-offence capability is doubling every four months, accelerating from a seven-month doubling rate at the close of 2025. The notion that AI-driven offence is a distant prospect has effectively been liquidated by the data. The public cybersecurity cohort remains remarkably sluggish in pricing this acceleration. Static-signature and rules-based vendors face an existential crisis: their moats are being outpaced by an offensive AI loop that renders legacy detection obsolete. While integrated XDR platforms like CrowdStrike, Palo Alto, and Microsoft Defender hold the orchestration layer defensive agents will require, their survival hinges on shipping AI-native architectures rather than retrofitting legacy stacks. For now, the public market is treating the entire cyber sector as an AI laggard until proven otherwise. The Microsoft-OpenAI reset, and the New Deal politics that followed The original 2019 Microsoft-OpenAI alliance appears, in retrospect, as a lopsided strategic relic: $1B (later $13B) traded for an AGI escape hatch,…