Two months into the Iran war, the stock market faces a far bigger risk as the artificial intelligence boom is under a huge threat.

Renewed optimism around AI, bordering on frenzy, has driven the S&P 500 and Nasdaq to record highs. The latter is up 10% since the conflict began, helped in part by the chip sector’s historic winning streak.

But AI fears are never far away. OpenAI missed key targets for revenue and new users, The Wall Street Journal reported late Monday. Board directors have also questioned the company’s huge data-center spending against the backdrop of slowing growth, it added. OpenAI said it was “buying as much compute as we can,” in a statement.

The fallout began almost immediately—shares in Japanese tech conglomerate SoftBank tumbled 10% Tuesday, its worst day in six months. SoftBank has an 11% stake in OpenAI. Oracle and CoreWeave were also falling—both have huge deals with the ChatGPT owner.

But it doesn’t have to be the straw that broke the camel’s back for the AI trade. It may end up being contained to those companies in OpenAI’s orbit—which is still quite an extensive ecosystem including Nvidia, AMD and Broadcom.

Increased competition could be a factor behind OpenAI’s internal warnings, particularly the rise and growth of Anthropic and Google’s Gemini. As opposed to a broader AI slowdown. The company also ended its exclusive partnership with Microsoft on Monday, allowing it to strike deals with the tech giant’s rivals. That could reaccelerate revenue growth eventually.

However, if the others give out similar signals or if large hyperscalers—such as Microsoft, Amazon or Google—start easing capex spending, then the AI rally would be under serious threat.

For now, it may just be some air coming out of the recent run-up.

—Callum Keown

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Elon Musk’s high-profile $100 billion civil lawsuit against OpenAI CEO Sam Altman kicks off with oral arguments after the jury was seated. Musk accuses OpenAI of betraying its nonprofit mission, and Altman and President Greg Brockman of profiting from assets designed to be controlled by the nonprofit. 

• OpenAI began as a nonprofit start-up in 2015, with Tesla CEO Musk heavily involved as an investor and board member. OpenAI now operates as a for-profit company spearheading AI with ChatGPT and has a valuation of around $1 trillion. Musk left OpenAI’s board in 2018 and started xAI in 2023. 

• OpenAI and Altman have said Musk was included in discussions about making the company for-profit and was fully aware of the plan. Wedbush Securities analyst Dan Ives said the lawsuit “heightens the competitive landscape” for AI large-language models, and is weighing on OpenAI’s coming IPO.

• Musk and Altman, rivals who have feuded privately and publicly for years, are both expected to take the stand. Microsoft CEO Satya Nadella is also on the witness list. Microsoft became one of OpenAI’s largest investors after Musk stopped investing and is a defendant in the lawsuit.

• Musk’s xAI and AI assistant Grok compete directly with OpenAI and ChatGPT. Musk and xAI sued OpenAI and Apple in 2025 for anticompetitive behavior; a hearing in that case is scheduled for May in Texas. Musk also sued OpenAI for trade-secret theft, which a federal California judge dismissed in February.

What’s Next: Microsoft and OpenAI have ended their exclusive ties, giving both more flexibility to pursue opportunities in AI. Microsoft will still license OpenAI, but OpenAI has added Alphabet’s Google Cloud and Amazon Web Services, while Microsoft works with Anthropic.

—Kit Norton, Angela Palumbo, and Janet H. Cho

The AI industry is wrestling with solutions to the high demand for power by data centers. Some companies, such as SpaceX, envision putting data centers into orbit and leveraging the power of the sun to run them. Meta Platforms has another idea: bring space solar energy to data centers on Earth.

• The Facebook and Instagram parent, which is undertaking billions of dollars of AI investments, now has an agreement for up to one gigawatt of generating capacity from Overview Energy. Financial details weren’t disclosed. Overview CEO Marc Berte founded the start-up in 2022 to produce energy at scale.

• Overview’s satellites aim to gather sunlight in geosynchronous orbit and beam it down as near-infrared light to existing solar projects, to convert into electricity. The idea is to turn solar power projects into near-24/7 operations. Overview says its beam would be invisible and safe for humans, animals, and aircraft.  

• In addition to SpaceX’s orbiting data centers, other options for space solar propose solar panels in space beaming microwaves to a receiver. But reaching space is still relatively expensive.

• Data centers are looking for ways to power themselves without burdening consumers. Average U.S. electricity prices are up about 15% since OpenAI’s AI chat bot launched in November 2022 and up about 40% since before the pandemic.

What’s Next: Overview aims to increase the output of solar installations without requiring more land, fuel, or grid interconnections. The start-up plans to have its initial orbital demonstration in 2028, with commercial power delivery in 2030.

—Al Root and Janet H. Cho

The Iran war is giving oil producers a reason to look beyond the Middle East to lower-risk countries like Canada for opportunities. British oil giant Shell just made a big bet on Canadian shale oil and natural gas in a $16 billion deal to buy Calgary-based ARC Resources.

• Shell plans to buy ARC in a cash and stock deal for about 32.80 Canadian dollars a share. Shell already owns resources in Canada but had pared back some, including in Canada’s Tar Sands in 2017. That it’s investing heavily in the country now marks an important shift.

• ARC’s resources are in the Montney Formation in Western Canada, a shale tract known mostly for holding natural gas but that also contains liquids. ARC produces about 375,000 barrels of oil equivalents a day, about 40% liquids. Shell produces about 1.4 million barrels a day of liquids.

• Shell also owns part of a major liquefied natural gas export terminal nearby called LNG Canada, so having more of its own production makes sense, analysts said. One of Shell’s plants in Qatar was knocked out of commission in an attack during the conflict.

• Getting oil and gas out of Canada is generally more expensive than the Middle East. Its oil has historically been discounted to oil from elsewhere, partly because Canada relies on the U.S. to transport much of it and often sells it at a discount to U.S. refiners.

What’s Next: Brent crude settled above $100 a barrel. President Donald Trump has met with his advisors about a proposal from Iran, which said it would stop attacking ships in the Strait of Hormuz in exchange for an end to the U.S. blockade of Iranian ports, The Wall Street Journal reported.

—Avi Salzman and Anita Hamilton

Billionaire Bill Ackman’s star power, strong long-term investment record, and an unusual incentive may not create big demand for his new closed-end equity fund, Pershing Square USA, which is expected to price later today. Ackman is set to raise about $5 billion, the low end of the expected range, Bloomberg reported.

• The fund will be offered at $50 a share and trade on the New York Stock Exchange starting Wednesday. Ackman’s firm didn’t comment on the Bloomberg report. The seemingly tepid demand is after Ackman received $2.8 billion in orders from large investors, including $100 million from his firm.

• The buyers of the $2.8 billion (except for Ackman’s firm) will get a sweeter deal than those who participate in the regular initial public offering. But investors can just buy Ackman’s public fund, Pershing Square Holdings, which trades in Europe at a nearly 30% discount to its portfolio value.

• The new fund and Pershing Square Holdings are expected to have similar investments. Pershing Square USA is expected to hold a concentrated portfolio. Based on the investments by Pershing Square Holdings, the new fund could hold Amazon, Alphabet, Meta Platforms, Restaurant Brands, and Uber Technologies.

• In a roadshow presentation, Ackman highlights his 20-year record and performance since 2018. Since then, Pershing Square Holdings has returned 22.6% annually after fees versus 14.3% for the S&P 500 index. But the European fund was down 2.1% this year through April 21. 

What’s Next: Ackman attempted this new fund in 2024 but investors balked. Ackman’s solution is to offer buyers of the new closed-end fund free shares in his management company, Pershing Square Inc., which will be going public at the same time as the new closed-end fund.

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