Good morning. Andrew here. Breaking: The United Airlines C.E.O. Scott Kirby just publicly described why he had approached American Airlines about a tie-up. The potential deal, he suggested, would have been “about adding and not subtracting” from the airline industry and would have created “a truly great airline that customers love.” Kirby acknowledged that he won’t press the matter — but the message feels a bit like it’s meant to put pressure on American anyway. Separately, we are relieved that this weekend’s shooting at the White House correspondents’ dinner did not result in widespread casualties. We’re also still processing the financial implications. President Trump has called for the event to be rescheduled within 30 days. Was it insured? Would the Washington Hilton offer the venue and services for free? And what is the price tag for security? (Was this newsletter forwarded to you? Sign up here.)
The OpenAI trial is set to startThe trial of the artificial intelligence age, a legal battle between Elon Musk and OpenAI, is set to begin today in a courtroom in Oakland, Calif. But while much of the attention is on the juicy details about OpenAI’s back story, what matters most is what the outcome might mean for the future of the A.I. industry. The fight promises lots of dirt. Musk’s lawsuit accuses OpenAI, which the billionaire co-founded with Sam Altman and others in 2015 as a nonprofit A.I. research lab, of betraying its original mission. OpenAI argues that Musk, who left in 2018, had wanted to control the organization (and had also sought to commercialize it). Legal discovery in the case has already unearthed titillating details involving a wide cast of characters, including Shivon Zilis, a former OpenAI board member and the mother of several of Musk’s children; Mark Zuckerberg of Meta; Satya Nadella of Microsoft; and Jared Birchall, a longtime Musk lieutenant. Some are scheduled to testify. Musk is asking for stiff penalties. They include more than $150 billion in damages; the removal of Altman and another OpenAI co-founder, Greg Brockman, from their leadership roles; and a return of OpenAI to a fully nonprofit status. The A.I. sector has changed a lot since the dispute began. OpenAI isn’t a research lab dependent on Musk’s money anymore: It’s a $730 billion behemoth that has raised hundreds of billions of dollars from an array of tech giants. Yet Musk is a formidable A.I. competitor, too. He raised billions for his xAI lab, then had his SpaceX buy it at a $250 billion valuation. SpaceX has since agreed to potentially buy the A.I. coding start-up Cursor for $60 billion. The A.I. industry doesn’t just revolve around Musk’s and Altman’s businesses, either.
The stakes: A Musk win could deal OpenAI a potentially serious blow. An OpenAI win could permit Altman to run the company more freely. But it’s unlikely to give either side a decisive edge in an industry that in some ways has outgrown their fight.
The suspect in the White House correspondents’ dinner shooting is set to appear in court today. Federal authorities said evidence showed that Cole Tomas Allen, 31, was armed with knives, a shotgun and a handgun and had intended to target administration officials, including President Trump. The president used the incident to justify his push for a secure ballroom, though federal officials said security at the event worked as intended. Iran reportedly offers to reopen the Strait of Hormuz, with a catch. Tehran has proposed talks on letting ship traffic resume through the vital passageway for global energy shipments, but wants to postpone discussions about its nuclear program, according to Axios. The Trump administration is said to plan a discussion about how to resolve the stalemate with Iran. Meanwhile, Brent crude, the international oil benchmark, traded above $106 today. Earnings and central banks are in focus this week. About 44 percent of the S&P 500, by market value, announce quarterly results this week, notably the tech giants Alphabet, Amazon, Meta and Microsoft, all on Wednesday, and Apple on Thursday. Investors will also pay attention to what Fed policymakers do and say on Wednesday — more below on that — as well as the Bank of Japan (Tuesday) and the European Central Bank and the Bank of England (both Thursday).
A big “yes” for WarshPresident Trump looks to be a step closer to getting his man to run the Fed. Yesterday, Senator Thom Tillis, Republican of North Carolina and a key vote on the Senate Banking Committee, signaled he would stop blocking the nomination of Kevin Warsh for Fed chair. A vote to advance Warsh’s nomination to the full Senate could come as soon as Wednesday. Tillis’s announcement may remove some of the succession drama hanging over the central bank. But the path to interest rate cuts, a Trump imperative, still looks uncertain. The context: Tillis had vowed to block confirmation of any of Trump’s Fed picks, including Warsh, until the Justice Department ended its criminal investigation into Jay Powell, the current Fed chair, and a costly renovation of the central bank’s headquarters. On Friday, Jeanine Pirro, the U.S. attorney in Washington, said the department would close its inquiry. While Pirro said she would “not hesitate” to reopen the investigation, Tillis appeared to be satisfied. “I take the Department of Justice at its word: the investigation is closed,” Tillis wrote on X, calling the inquiry a “threat to the Fed’s independence.” Tillis told NBC’s “Meet the Press” that only a criminal referral from the inspector general would be enough in his mind to reopen the criminal investigation. But what will Powell do? His tenure as chair is set to end May 15. But last month, he said he had “no intention of leaving” the Fed’s board — he could stay on as a governor through January 2028 — “until the investigation is well and truly over.” (He’s also deeply invested in what happens to Trump’s effort to fire a fellow governor, Lisa Cook.) So does he also see the matter as a case closed? Expect him to field that question at Wednesday’s news conference:
Worth noting: During his confirmation hearing last week, Warsh never explicitly called for rate cuts. But hours before the hearing, Trump told CNBC that he would be disappointed if a Warsh-led Fed didn’t lower borrowing costs right away. That said, traders are betting that the Fed won’t cut rates until September 2027. Lessons from London on taxing luxury homesIn New York, a pied-à-terre tax proposal aimed at the ultrawealthy and spearheaded by Mayor Zohran Mamdani has roiled the city’s business community. Now, real estate agents and economists have entered the debate with dire warnings that the tax could do wider economic harm, reports Debra Kamin for The Times. As a lesson worth heeding, they point to London, which has placed hefty taxes on luxury homes during the past decade and seen its wider real estate market slump considerably. Kamin writes: The flurry of new taxes, said Lucian Cook, a London-based housing economist who leads research for Savills, has created a narrative that London is no longer as friendly to real estate investment. The number of foreign buyers in Britain registering with a real estate agent — the first step before purchasing property — is now at its lowest level since 2008. At the same time, the real estate markets in cities like Barcelona and Dubai, where tax rules are much friendlier to second-home buyers, are seeing a fresh influx of foreign money. “One city’s tax is another city’s gain,” said Ryan Serhant, the founder and chief executive of the New York brokerage Serhant.
Readers respond: Should Spirit Airlines get a bailout?On Thursday, Andrew asked about a proposal to save Spirit Airlines in which the Trump administration would lend the airline up to $500 million, giving the federal government a controlling stake in the company and giving it preferential status among other lenders. Andrew also pointed out that the government previously blocked Spirit’s proposed sale to JetBlue during the Biden administration. “Should taxpayers rescue Spirit Airlines?” Andrew asked. A lot of you responded and the sentiment was overwhelmingly against a bailout. Here’s what you had to say (the answers have been condensed and edited):
We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
Deals
Technology and artificial intelligence
Best of the rest
|
