Sonnet 5 Is Here, Fable and Mythos Are Coming Back, Google’s Cheapest Video Model Yet

Today we’re covering the biggest AI stories of July 1st, 2026. Anthropic launched Sonnet 5 — its most agentic mid-tier model yet, with reasoning and knowledge work that surpasses even Opus 4.8 — but the real headline is that the U.S. Department of Commerce officially lifted export controls on Fable 5 and Mythos 5, with both models set to come back online tomorrow after 18 days offline, ending one of the most disruptive government interventions in AI history. Google dropped two new media models for developers — Nano Banana 2 Lite generating images in four seconds at three cents each for bulk workflows, and Gemini Omni Flash topping the text-to-video leaderboards with full video generation and editing at ten cents per second. Plus, Anthropic launched Claude Science, a dedicated AI workspace for researchers that connects 60 scientific databases across genetics, proteins, and chemistry, with Anthropic also starting its own drug discovery program targeting diseases pharmaceutical companies have historically ignored — and today’s community workflow comes from Matt in Austin, who used ChatGPT as his nutrition coach, uploaded his DEXA scan, connected it to a Google spreadsheet, and lost four pounds of pure fat over 2.5 months while training for his second marathon.