America, we have a problem: Young adults are scared and unprepared for the AI revolution upending their early career choices and prospects, Jim VandeHei and Mike Allen write in a "Behind the Curtain" column.

• Young people tell pollsters they're frightened, even angry, about AI's fast arrival. They're rightly unnerved by a tough job market for college grads. And most aren't remotely equipped by schools to be AI-savvy.

Why it matters: This is a growing problem for just about everyone — kids, educators, employers and politicians.

• The youngest, most technologically native age group should be among the biggest cheerleaders and beneficiaries of AI. They aren't. If anything, their feelings are growing more sour.

🧮 By the numbers: Gen Z's excitement about AI dropped 14 points over the last year to just 22%, according to Gallup polling released last week. Hopefulness about the technology fell nine points to 18%, while anger rose nine points to 31%.

• You can't blame that trend on the AI-averse. Daily AI users among the cohort saw even bigger drops in sentiment, with excitement falling 18 points and hopefulness tumbling 11 points.

The school failure is real. More than half of college students surveyed in another Gallup poll this month say their school either discourages (42%) or outright bans (11%) AI use.

• Educators know this is happening. 63% of faculty think their schools' 2025 graduates were not very or not at all prepared to use AI at work, per an American Association of Colleges and Universities survey.

Some students are trying to outsmart the times. 16% of currently enrolled college students changed their major due to AI, Gallup found.

• Khan Academy, the TED conference and testing giant ETS announced this week that they're spinning up a $10,000 interactive online program that aims to train students for AI-era jobs.

The job market isn't helping. Fed data pegged the unemployment rate for recent grads at 5.7% in Q4 2025. That's above the national rate, which almost never happens. Underemployment for recent grads is at 42.5%, the highest since 2020.

• At companies that adopted AI, junior hiring fell nearly 8% within six quarters — not via layoffs, but through a quiet freeze on new positions, according to a Harvard working paper tracking 62 million workers.

🔎 Between the lines: The cruelest part of this shift is structural. Entry-level jobs are likely the ones AI will automate first — and they're what teach young workers to think, build judgment and ultimately move up.

• If a company's bottom rungs are empty, it's hollowing out its own management pipeline years down the road.
• A bright spot: IBM announced earlier this year that it's tripling entry-level hiring, predicting that the rush toward AI will fundamentally expand what the newest workers do.

The other side: There's a counterargument that the tepid job market for the youngest workers isn't solely due to AI. Some prominent economists see it as an overcorrection from the post-COVID hiring binge in 2021.

• Almost 60% of hiring managers use AI as an excuse for layoffs or hiring freezes because it plays better with stakeholders, per a Resume.org survey.
• Marc Andreessen called AI a "silver-bullet excuse" for layoffs last month. Salesforce CEO Marc Benioff said it's "the lazy way out." OpenAI CEO Sam Altman branded it "AI-washing."
• The honest, less sexy answer is that it's probably both: Layoffs and hiring freezes are real and targeting younger workers, while AI solidifies changes in the workforce that are already underway.

🧠 Here are three things you can do to help young people in your life tackle this shift in the most clear-eyed way:

1. Get them using AI — now. It's a vital tool for every job at every level. Encourage them to pay $20 per month for Claude, ChatGPT or Gemini. Share Jim's letter to his kids as a possible road map. But don't just take our word for it: YouTube is loaded with free how-to videos.
2. Lobby schools to teach basic AI ethics and techniques. It's fine for teachers to ban AI use for a specific class. But it's nuts not to equip students with the workplace skills of the future.
3. Encourage AI awareness. Don't repeat the mistakes of the phone-and-internet era. Get everyone you know to think about the ethics, healthy use and societal implications before it captures their minds and habits like their phone did.

The bottom line: The generation best positioned to thrive in an AI world is the most frightened of it — because the people who should be teaching them aren't, and the companies that should be hiring them won't.

• Share this column ... Axios' Shane Savitsky contributed.

📈 If you're a CEO or on a CEO's team: Apply now to join Jim's new Axios C-Suite weekly newsletter.

Worthy of your time: We're out with a new video this morning with Axios Middle East expert Barak Ravid to unpack the high-stakes negotiations between the White House and Iran.

• "This crisis has the potential to last at least a year," Barak told me. "I'm not talking about the high-intensity fighting. I think that's sort of behind us — maybe it will resume for a short period of time if the ceasefire talks collapse. But overall, the crisis itself — the time that the region will stabilize again, the time where the U.S. will be able to get back to the same military posture it had before [the war] ... could at least be a year."

Watch here ... Listen on your commute!

The prospect of an orderly transition atop the Fed when Jay Powell's term ends next month has gotten much messier, Axios Macro author Neil Irwin writes.

• Retiring Sen. Thom Tillis (R-N.C.) is pledging to block Kevin Warsh's nomination from advancing until the Justice Department investigation into the Fed's $2.5 billion headquarters renovation project is resolved.
• That stalemate is escalating.

On Tuesday, three Justice Department officials showed up unannounced at the Fed's construction site, the N.Y. Times reported.

• They were turned away. A lawyer for the Fed subsequently said that it was inappropriate and that the DOJ must go through Fed lawyers in its investigation.

📺 When asked by Fox Business' Maria Bartiromo what he'd do if Powell doesn't resign from his position as a Fed governor when his term as chair ends, President Trump said: "Well, then I'll have to fire him."

• Keep reading.

Both the S&P 500 and the Nasdaq hit new all-time closing highs yesterday:

• The S&P 500 rose 0.8% and closed above 7,000, topping its Jan. 27 high.
• The tech-heavy Nasdaq was up 1.59% and crossed 24,000 — its highest level since last October.

Key reasons stocks are up big, via Axios Markets author Emily Peck:

1. Investors now believe the Iran war will fade and that Americans will continue to spend.
2. Less visible mechanical moves from hedge funds put billions of dollars into the market.

Go deeper: Why stocks surged to a new record.

Before President Trump posted an image of himself as a Christ-like healer, he discussed the meme with his controversial housing finance chief, Bill Pulte, Axios' Marc Caputo has learned.

• Why it matters: Pulte has a penchant for stirring up controversy, grabbing headlines and irritating other members of Trump's administration.

Pulte, the director of the Federal Housing Finance Agency, is a ubiquitous figure in the president's orbit both in the White House and at Mar-a-Lago, where Pulte is a member.

• Trump was in South Florida over the weekend and the two spent time together, according to two advisers who spoke to the president about the image.

At some point, Pulte brought the image to Trump's attention, the advisers told Axios. It's not clear whether he just displayed the rendering on his phone or actually sent it to the president.

• "Everyone thought it was a joke," one of the advisers said.
• A third adviser who's friendly with Pulte said he didn't provide the meme to Trump.

The intrigue: Adding to the strangeness of the AI-generated image Trump posted late Sunday was the inclusion of a mysterious, horned creature in the heavens that some interpreted as a demon.

• The original image of Trump as Christ-like healer didn't include the horned creature.

Keep reading.

When HHS Secretary RFK Jr. testifies on the Hill today, his opening remarks won't include the word "vaccine." Instead, he'll tout new federal dietary guidelines and "historic wins" on drug-pricing deals with 16 pharma companies.

• Why it matters: The remarks reflect Kennedy's diminished autonomy and political influence, as the White House tries to reel in divisive parts of his agenda ahead of midterms, Axios' Peter Sullivan writes.

During seven (!) hearings before House and Senate committees over the next week, Kennedy is expected to face questions about vaccines, autism and other hot-button issues.

• It's a high-stakes test of how well Kennedy can stay on message as the Trump administration tries to pivot away from controversies and emphasize priorities like lowering drug prices.

🥊 Kennedy and his Make America Healthy Again movement have suffered setbacks in court and within the administration.

• He has been making campaign-like appearances around the country, touting less controversial policies like promoting healthy foods.
• His official HHS podcast emphasizes "the root causes of America's chronic disease crisis."

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AI power users are complaining in online forums that Claude suddenly feels ... bad, Axios' Madison Mills and Ina Fried write.

• Why it matters: The backlash lands just as Anthropic, Claude's parent, is testing a more powerful model, Mythos — raising questions about whether cutting-edge AI is becoming less accessible even as it gets more capable.

🔬 Zoom in: Over the past few weeks, users on X, GitHub and Reddit have been swapping anecdotes, benchmarks and prompts in an effort to pinpoint what changed and why.

• Much of the speculation centers on whether Claude has been deliberately scaled back — what users are calling "nerfed" — either to control costs or to redirect scarce compute toward Mythos and other frontier efforts.

🤖 Robot response: Analyst Patrick Moorhead asked Claude what happened. "Anthropic made real configuration changes that objectively reduced default thinking depth across all surfaces including claude.ai," the model replied, "but the most extreme 'secret nerfing' narrative overstates what happened."

🧠 Human response: Anthropic says it adjusted the default level of reasoning in Claude Code, but denies the changes were tied to compute constraints or Mythos.

• Asked about the online complaints, Anthropic pointed us to a March 6 post by Boris Cherny, head of Claude Code, who advised users to "double check you're on the latest version, and ... don't have confusing/conflicting instructions."

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Air New Zealand unveiled the Economy Skynest yesterday — bunk-bed-style sleeping pods that economy passengers can book on its 17-hour flights between Auckland and New York.

• Four-hour sessions in a pod cost just under $300 on a one-way flight.

Passengers get a lie-flat sleeping pod with a full-length mattress (6 feet, 8 inches), fresh bedding and a privacy curtain.

• Read the announcement.