AI Books Flood Market, Defense Booms

The burgeoning world of AI-generated content is making waves, not just in code or art, but now significantly in the publishing industry. A recent study by researchers from Stony Brook, Columbia, Michigan, and the MIT Initiative on the Digital Economy reveals that books with at least some detectable AI text are now capturing approximately 40% of observed sales within self-published categories. This phenomenon, dubbed "bookslop" by a16z's Moses Sternstein, highlights a market flooded with AI-assisted or authored works, driven by low barriers to entry and a volume-over-quality approach.

Since 2023, the number of self-published new books has exploded, increasing nearly 40 times. However, actual revenues have only grown about 9 times. While non-AI books still command higher earnings per unit, the gap is closing. This indicates that AI-authorship is prioritizing output quantity. The ease of generating these books means they can top charts across genres, with AI-text books holding at least a 10% share of the Top 25 in all categories, and a striking 40% in Sci-Fi/Adventure/Dystopian. The core argument from the researchers is that this influx dilutes the market, squeezing human authors. Yet, the overall self-published revenue still saw a nearly 9x increase in three years, suggesting that while the market is flooded, it's also expanding rapidly, potentially benefiting human authors through increased overall sales volume.

Defense Industry Sees Secular Demand Surge

Beyond the literary world, the defense sector is experiencing a significant uptick in demand, mirroring the AI-driven boom in cloud computing. Revenue backlogs for major defense contractors have been climbing since early 2025. Macroeconomic data supports this, with Census data showing defense orders and shipments increasing by about 60% since 2020, a surge concentrated in the last 18 months. The "other" category of defense production, which excludes aircraft, search, and comms, is seeing the most substantial ramp-up. More detailed Bureau of Economic Analysis (BEA) data suggests that demand for ships, missiles, and small arms are key drivers.

This increased demand has spurred a corresponding rise in production. Unfilled defense orders have jumped by roughly $20 billion, even as the estimated backlog has dropped by about 20%. This compression in the aggregate backlog implies that monthly defense shipments have accelerated even faster than order intake. This industrial renaissance is further evidenced by seven consecutive months of manufacturing PMI expansion. Geopolitical conflicts, particularly in Iran and Russia, are contributing factors, but broader structural changes are also at play. European nations are increasing defense budgets, and the U.S. is solidifying its role as a net exporter of defense goods. Crucially, evolving battlefield components, especially the shift towards autonomy, are creating an urgent need to modernize the industrial base. This represents a secular demand impulse, not a temporary surge.

IT Services Navigates the AI Reckoning

The IT services sector, once poised to benefit from AI implementation, is now grappling with a shift in IT budgets away from traditional services and towards AI-specific solutions. Companies like Accenture (NYSE:ACN) have seen a dramatic repricing of forward earnings, with consensus multiples for IT services now around a third of what they were in early 2025. This situation is not unique to Accenture; it reflects a broader industry trend where AI is forcing a fundamental evolution rather than outright elimination of functions.

Consulting firms must adapt by investing in reskilling their workforce and refining their value propositions. This mirrors past industry disruptions, such as the shift to cloud computing. At that time, IT services faced a significant downturn as on-premise services were disrupted by off-premise solutions. However, the industry adapted, with consultants becoming experts in cloud migration and management. This transformation, while painful for some, ultimately became a massive accelerant for those who evolved. The current AI wave presents a similar challenge. Roles will shift, some will disappear, but for many, AI will act as a force multiplier, provided firms can successfully navigate this transition. StartupHub.ai data shows that while some companies like Broadcom (NASDAQ:AVGO) (a semiconductor provider crucial for AI infrastructure) are scoring highly, traditional IT services companies need to demonstrate clear AI integration to maintain their market position.

Moonshot's Kimi Model Gains Global Traction

Moonshot's recent release of its Kimi K3 model has undeniably captured attention, leading to a surge in app downloads and daily active users. SensorTower data indicates that downloads nearly quintupled and daily active users jumped by approximately 40% almost overnight. This indicates that K3 is more than just hype; users are actively engaging with the model.

While in-app purchasing volume increased in the U.S., the global impact was far more pronounced. Kimi's global revenue has been growing throughout 2026, already significantly higher than in the U.S., and saw a vertical leap in July, effectively doubling in a single week. This reinforces Kimi's status as a predominantly global, and particularly Chinese, phenomenon. Interestingly, SensorTower data also suggests Moonshot is attempting to broaden its appeal. The company has shifted its marketing strategy from YouTube to LinkedIn, directing over 60% of its advertising spend to the professional networking platform. While this doesn't definitively signal an enterprise play, it suggests a potential move into that market. LinkedIn, in general, has become a favored advertising channel for AI applications, creating a unique environment for AI-generated content and advertising to converge.