Good morning. Andrew here. There’s a new phenomenon in the world of investing. For years, Wall Street firms brought celebrities and athletes into investment funds to attract and entertain their wealthy clients. Now, celebrities are creating their own funds, using their star power and relationships to get into deals — and investors are clamoring to be part of their club. The latest example is Jake Paul, the influencer turned boxer, who just raised a new nine-figure growth-stage fund. We’ve got more below. (Was this newsletter forwarded to you? Sign up here.)
A Fed stunnerKevin Warsh’s first meeting as Fed chairman is reverberating through global markets this morning. S&P 500 futures are gaining and the price of oil has fallen after President Trump signed a framework U.S.-Iran agreement in France last night. But investors are also bracing for what seemed unthinkable not long ago: that Warsh, Trump’s pick, would preside over a more hawkish central bank. The latest: Futures traders this morning see at least one interest rate increase this year, possibly as early as October. Fed policymakers are moving to that view, too. (In March, not one Fed official had penciled in a rate increase this year.) Here’s why the math is changing. The war in Iran has sent energy prices soaring, pushing inflation to a three-year high. Warsh called that trend “a burden for the American people,” and signaled that lowering inflation to the central bank’s 2 percent inflation target would be Job 1. Trump may be coming around to the idea. When asked by reporters about the prospect of higher rates, the president, who has bullied and cajoled the Fed to cut rates for much of his second term, said yesterday: “It could happen. It’s hard to believe. It just keeps our country down. It’s so unusual.” Warsh’s influence could be felt elsewhere. He had called for “regime change” at the Fed and is critical of Fed officials freely sharing their views about the economy. Central bank watchers saw glimpses of that focus yesterday, especially in his abbreviated remarks that struck some as Greenspan-ian. “We are going back to the days of Alan Greenspan when FOMC statements were deliberately minimalist,” Jeffrey Roach, the chief economist at LPL Financial, wrote to investors after the news conference. Warsh also announced the establishment of five task forces, including ones focused on:
What’s next? The central bank is expected to offer less forward guidance — Warsh did not submit his outlook on rates, leaving yesterday’s dot plot short one dot — which would force individuals and firms to rely more on the available data to guide investment decisions. If anything, the reliability of economic data has grown more thorny.
Tim Cook of Apple warns price increases are “unavoidable.” Surging prices for memory and storage chips, driven by high demand from artificial intelligence companies, will mean higher prices for Apple devices, Cook told The Wall Street Journal: “The situation has become unsustainable,” he said. In related news, shares in Intel jumped in premarket trading after President Trump said the chipmaker would partner with Apple on U.S.-made chips. Trump administration officials split on taking stakes in A.I. giants. Treasury Secretary Scott Bessent has reportedly favored distributing equity stakes in such companies to Trump Accounts, while Commerce Secretary Howard Lutnick prefers the creation of a sovereign wealth fund, according to Semafor. (Senator Bernie Sanders, independent of Vermont, has drafted legislation for a sovereign fund approach.) But some tech executives and Republicans have regarded the whole idea coolly. Harvard and Bard face more questions about their links to Jeffrey Epstein. Representative Jamie Raskin of Maryland, the leading Democrat on the House Judiciary Committee, asked the schools to hand over documents detailing their interactions with the convicted sex offender, The Wall Street Journal reported. Raskin said that internal inquiries by the schools — Harvard’s looked at Larry Summers, its former president, while Bard’s focused on Leon Botstein, its departing leader — were incomplete.
Can tech moguls keep the West aligned on A.I.?It was striking enough that artificial intelligence executives like Dario Amodei of Anthropic, Sam Altman of OpenAI and Demis Hassabis of Google joined world leaders yesterday for a fish-and-cheese lunch at the Group of 7. But more important than the image was the message that many tech leaders promoted: Don’t let U.S. clampdowns on Anthropic’s leading models Balkanize democracies’ approach to A.I. Political leaders appeared to agree that countries needed to collaborate on overseeing A.I. But cracks in that coalition don’t appear to have been entirely patched over. Tech executives sought to walk a tightrope on A.I. sovereignty and regulation.
But others — perhaps mindful of President Trump, who sat between Altman and Hassabis at the lunch — emphasized that the U.S., home to most of the leading A.I. labs, remained centrally important. Gomez described Washington as “a key partner and the primary investor that created this technology.” World leaders still appear deeply worried about American dominance. “We won’t buy any models made by these companies if overnight, you can just flip the switch,” President Emmanuel Macron of France told reporters at the G7. He has sought to promote Mistral, his country’s homegrown A.I. champion, as a European counterweight to Silicon Valley giants; Arthur Mensch, Mistral’s C.E.O., was at the lunch. And Prime Minister Narendra Modi also expressed concern about the Trump administration’s move on Anthropic, according to the F.T. It’s unclear where Washington’s latest clash with Anthropic stands. Trump told reporters after the lunch that negotiations over the fate of the company’s high-end models, Fable and Mythos, were “going fine.” But unnamed administration officials told Wired that they want Anthropic to make their frontier models jailbreak-proof, something cybersecurity experts say is probably impossible. Meanwhile, some Anthropic employees say that their company is being bullied by the administration, The Times reports.
Scoop: Jake Paul’s big new fundJake Paul is many things, including a professional boxer and content creator. He’s adding another title to his résumé: investor in late-stage start-ups. Anti Fund, the venture capital firm Paul founded with the investor Geoffrey Woo, plans to announce today that it has closed its first growth capital fund at $100 million, Michael de la Merced is first to report. Anti Fund now manages $180 million, a significant evolution from its start in 2021 as an AngelList rolling fund, essentially a subscription-based investment service. The firm is run by Paul and Woo, who have founded several start-ups; Logan Paul, Jake Paul’s brother, is a general partner.
Paul has parlayed fame into investment access alongside other celebrities like actors and athletes. Consider the companies Anti Fund has invested in: OpenAI, SpaceX (before it went public) and the drone maker Anduril. Others its growth fund has invested in include Saronic, a maker of boat drones; Etched, a designer of artificial intelligence chips; and Erebor, a digital bank focused on start-ups. “Fame gets me in the right rooms and the right time, and my business knowledge allows me to strike the right deals and partnerships,” Paul told DealBook via text message. He added that his attention-getting skills helped OpenAI in its debut of the (since-shuttered) Sora video tool. “My goal is to be regarded as the best ‘celeb’ investor of my generation,” Paul said. Where Anti Fund sees opportunity: “The future will be defined by robotics in defense and manufacturing, semiconductors, power and specialized A.I. labs,” Paul wrote, pointing to ventures like Cognition AI, a maker of A.I. agent software, and Helion, a start-up focused on nuclear fusion.
CHART OF THE DAY Snap’s slideShares of Snap fell sharply yesterday after the company announced its latest augmented reality glasses, which cost $2,195, more than sleeker rival products from Meta and are more akin to Apple’s unsuccessful Vision Pro device. Snap laid off about 1,000 workers this year and drew an activist investor amid concerns about its lack of profits.
Talking A.I. with the C.E.O. of PrologisEvery week, we ask leaders how they use artificial intelligence. This week, Dan Letter, who leads Prologis — a logistics real estate company — told Sarah Kessler that A.I. was helping him find deals. The interview has been condensed and edited for clarity. What have you told your employees or your direct reports about how you want them to use A.I.? Every other year, we bring together about 150 leaders from around the globe. This year, our C.T.O. and our head of A.I. created a “Shark Tank”-style challenge, where teams of three or four built a role companion to do or augment a job. And it was all scored by A.I. How did you do? My team chose the C.E.O. role and did not do well. The winner had a more specific role, which was executing a repeatable process. How has A.I. changed your approach to real estate deals or management? We’ve either done or pursued trillions of dollars of transactions. And we’re taking all of that data and using A.I. to build tools to help us make better, faster decisions. How much can you push up rent in that building in one of the hundred markets in which we operate? What buildings in Chicago should we be focused on that we don’t own? What buildings do we own that we shouldn’t own anymore? It’s all-around better, faster decisions around that data. 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 |
