Good morning. Andrew here. If you’ve been following the battle between the Trump administration and Anthropic, with OpenAI as the interloper reaching a deal hours after the Pentagon dropped Anthropic as a contractor, you might be scratching your head about OpenAI’s change-up earlier this week. The Pentagon and OpenAI have amended their contract which seems to achieve what Anthropic had sought but was rebuffed. It renews questions about whether the government negotiated in good faith, and whether the talks broke down over the merits of the terms being sought — or over personalities and politics. (The Defense Department’s statement on the OpenAI amendments accused Anthropic of having “their own personal vendettas.”) Whatever the case, this will probably end up in court, where the public may learn a lot more. (Was this newsletter forwarded to you? Sign up here.)
Choke pointThe U.S.-Israeli war with Iran has reached an inflection point. All eyes are on the Gulf states’ vulnerable energy facilities and on the Strait of Hormuz, the transitway for crude oil and natural gas that has been paralyzed by Iranian forces. (More broadly, Iran is seeking to drive up the cost of war. More on that below.) Unless energy shipments quickly return to normal levels, the upheaval could batter the global economy and ratchet up pressure on President Trump. The latest:
Trump floated a plan to address the Hormuz bottleneck, including proposing naval escorts through the strait. The U.S. International Development Finance Corporation, a little-known agency that lends to and invests in overseas companies and projects, said yesterday that it “will offer support” to shipping companies and insurance providers “to minimize market disruptions and help ensure the free flow of goods and capital.” U.S. stocks briefly pared their losses yesterday after Trump’s announcement. But shipping company officials and analysts are skeptical. “We think the insurance proposal is likely in a concepts-of-a-plan stage,” Helima Croft, the global head of commodity strategy at RBC Capital Markets, wrote to clients yesterday. She also questioned if the U.S. military had enough “naval assets” in the region to provide escorts. Some industry executives also worried how quickly these could get up and running. The war’s toll on other businesses is growing. Iranian drone strikes have hit Amazon data centers in the United Arab Emirates and Bahrain, causing widespread app outages. And a travel start-up is reportedly weighing a delay for its I.P.O., The Financial Times reports. But Connor Teskey, the C.E.O. of Brookfield Asset Management, told Bloomberg that his firm was committed to a $20 billion plan to build data centers in Qatar. Things don’t look catastrophic yet. “We’re still some distance from recessionary territory and a full-scale market correction,” Jim Reid, a strategist at Deutsche Bank, wrote to investors today. And David Solomon, the Goldman Sachs C.E.O., said he was surprised by the “benign” overall market reaction to the war so far.
Anthropic is said to be on track to more than double its business. The annual revenue run rate of the artificial intelligence company is now nearly $20 billion, up from about $9 billion late last year, according to Bloomberg, citing unidentified sources. The news underscores the sharp pickup that Anthropic has enjoyed in recent months as businesses increasingly adopt its Claude A.I. model — though the effects of the company’s battle with the Pentagon remain uncertain. The Trump administration says it will defend its attacks on law firms after all. The Justice Department filed a court motion declaring that it would appeal lower-court rulings that overturned executive orders seeking to punish four law firms. The move came a day after the department moved to voluntarily dismiss its appeal; it’s unclear what was behind the reversal. Howard Lutnick offers to testify to House lawmakers about his Epstein ties. Lutnick, the commerce secretary, agreed to a voluntary deposition after the Justice Department’s latest Epstein files release showed the men had more connections than Lutnick had previously disclosed publicly. The House Oversight Committee is also seeking transcribed testimony from Bill Gates and Leon Black, the former Apollo Global Management C.E.O.
Missile defense for $5 billion a dayThe war in Iran is eating into U.S. missile stockpiles, particularly defensive arms, already depleted by the ongoing conflicts in Ukraine and Gaza. Building them back up won’t be quick or cheap, Niko Gallogly reports. “You’re losing missiles at a rate that’s much faster than you can produce them,” Jennifer Kavanagh, a director of military analysis at the think tank Defense Priorities, told DealBook. She cited Israel’s 12-day war against Iran in June, when the U.S. deployed about a quarter of its roughly 600 THAAD missile interceptors. In 2025, the U.S. bought only 12 new THAAD interceptors, though it is expected to procure an additional 37 this year, according to the Defense Department’s 2026 budget request. The battlefield costs add up quickly. Kavanagh estimates that the U.S. “easily” spent more than $10 billion on air-defense systems in the current war’s first 48 hours. That is largely attributed to the high-end weapons systems, such as the THAAD ($12.7 million per interceptor missile) and the Patriot ($3.7 million per missile), used to strike down attacking drones and missiles. Asymmetric economics: The defense systems cost orders of magnitude more than the Iranian weapons they’re shooting down. One common Iranian drone, the Shahed-136, costs roughly $35,000 and can be quickly produced. In the first few days of the conflict, Iran launched as many as 2,000 drones, most of them Shaheds. Security analysts don’t expect the U.S. to run out of critical military supplies anytime soon. (President Trump has asserted that “medium and upper medium grade” munitions supplies have “never been higher or better.”) But stockpile depletion creates vulnerabilities for allies, including NATO, Ukraine, Taiwan and Japan, that rely on the U.S. for defense and weapon supply. (Taiwan is waiting for the Trump administration on an arms sale valued at more than $11 billion.) Who stands to profit? Shares of large military contractors — including Raytheon and Lockheed Martin, both of which make elements of the missile-defense systems — have jumped this week. But the big winners in the long term may be start-ups, like the drone maker Anduril, that “can respond more quickly to changes in demand,” Kavanagh said.
Jeff Zucker on the next big media dealNot even a week after Paramount clinched a deal to buy Warner Bros. Discovery, the media world is poised to get even smaller. The reason: Banijay Entertainment, the Paris-based production company behind shows like “MasterChef” and “Peaky Blinders” and live events like the 2026 Winter Olympics’ opening ceremony, is set to combine with All3Media, the British company behind “The Traitors” television series and the movie “Hamnet.” One of the architects of the deal, the media mogul Jeff Zucker of RedBird IMI, spoke with Michael de la Merced about what drove the transaction. Inside the deal: The transaction will create what Zucker called the world’s biggest independent media production company, with an enterprise value of $8 billion. Banijay Group, the parent company of Banijay Entertainment, and RedBird IMI, the media-focused investment firm, will each own half of the new business. (Because All3Media is smaller, RedBird will pay €625 million, or $725 million, in additional cash.) Zucker will become chairman of the combined business, which will be called Banijay. Marco Bassetti, the chief executive of Banijay Entertainment, will become C.E.O., while Jane Turton, the C.E.O. of All3Media, will become deputy chief executive. The transaction was two years in the making, Zucker told DealBook. RedBird IMI acquired All3Media in May 2024, seeing the production company as “a good foundation” to grow an independent media empire. Banijay Entertainment first approached RedBird IMI about a deal just two months later — “too soon,” Zucker said — and came back in January 2025. RedBird IMI was more receptive then, with talks picking up around the end of summer. Zucker thinks getting bigger is necessary. Banijay will have more than 260,000 hours of content across different genres, including drama, game shows and more. That will give it more negotiating leverage with content platforms like Netflix and, yes, the potentially united Paramount and Warner Bros. Discovery. “As the global media ecosystem consolidates, we’ll be stronger,” he said. It’s a thesis that has driven other media production mergers, including the union of North Road and Mediawan that was announced in January. What lies ahead? Zucker thinks it’s more mergers, as companies seek to get bigger to compete against tech giants and to cut costs. At the same time, consolidation will give companies like Banijay more resources to bring programming to consumers in more formats — including TV, phones and YouTube. “We’re into a new era of media and how consumers enjoy their favorite programs and events,” he said. “This will be a shakeout. I don’t think it is going to be short term.”— Marc Rowan, the C.E.O. of Apollo Global Management, on the turmoil roiling the private credit industry. Shares in Blue Owl Capital, a major lender that’s under pressure, briefly dipped below their I.P.O. price yesterday. And senior executives at Blackstone reportedly put $150 million into a flagship private credit fund to meet investor withdrawal requests, according to Bloomberg.
DEALBOOK QUIZ MrBeast becomes a bankerThis question comes from a recent Times article. Click on an answer to see if you’re right. (The link will be free.) With some 469 million followers, Jimmy Donaldson is the most popular man on YouTube. And the 27-year-old content creator, better known as MrBeast, is using his huge audience to build his own business empire. His Beast Industries produces a reality series for Amazon Prime Video and sells Beast-branded burgers and beef jerky, among other ventures. (Donaldson and his company’s C.E.O. talked about their business strategy at the DealBook Summit in December.) Now the company is getting into fintech, acquiring Step, a teen-focused app that offers spending, savings and investment accounts. What experience first got MrBeast interested in investing? We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
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