Good morning. Andrew here. Chipmakers are taking a hit this morning because investors worry that Big Tech’s extravagant artificial intelligence spending isn’t delivering real profits yet. At the same time, powerful open-weight models are making A.I. cheaper to run, raising questions about whether companies need to keep buying such expensive tech, including chips. Still, there are huge long-term investment build-out commitments from major tech players. So, the big question: Is this just a healthy reset for a hot market, or the start of a bigger slowdown? Also: Make sure to read Bernard Arnault’s reply to a critical series of articles in Le Monde about LVMH. It is quite a read. More below. (Was this newsletter forwarded to you? Sign up here.)
Triple threatNot long ago, chipmakers central to the artificial intelligence boom were the hottest trade on Wall Street. Now investors are reckoning with headwinds that could put that sector’s gains at risk. Those concerns are playing out across global markets on the eve of a momentous string of tech earnings reports. The latest:
A trio of factors are driving the sell-off: Investors are concerned about a breakneck A.I. spending spree, circular financing in the sector and growing Chinese competition. Numbers to watch:
And then there’s the circular question. Nvidia, AMD and other chipmakers have pledged billions of dollars to A.I. companies. Some analysts wonder if these are legitimate investments or a form of vendor financing to prop up the start-ups that are also their biggest customers. Those concerns re-emerged yesterday on reports, including from The Wall Street Journal and The Times, that Nvidia is in talks with OpenAI to provide the ChatGPT maker with a $250 billion financial backstop to help cover lease costs on a $500 billion data center in Ohio. Will tech bosses reassure investors? Chipmakers — SK Hynix and Samsung — and hyperscalers — Meta, Microsoft and Amazon — report quarterly results tomorrow and Thursday. From the latter trio, investors will want more insight into when their mammoth A.I. bets will pay off. For chip giants, the big focus will be on demand for their hardware, and how they are positioned to fend off a growing threat from Chinese rivals.
Oil prices fall again. Brent crude, the international benchmark for oil, eased to $86.65 this morning as a pause in U.S. fighting with Iran extended into a fourth day. President Trump said yesterday that there was “a good chance” negotiations with Tehran could yield a more lasting peace deal. Iranian officials appear less upbeat. Johnson & Johnson reaches a deal to settle decade-old talc lawsuits. The company agreed to pay $5.5 billion to settle about 80,000 suits that claim that its talc products caused ovarian cancer. J&J has seen several settlement deals fall through before, but there appears to be more optimism this time. Minnesota’s ban on prediction markets is in doubt. A federal judge sided with the Commodity Futures Trading Commission, and Kalshi and Polymarket, the prediction markets companies, which sued to stop the ban, arguing that the platforms can only be regulated at the federal level. The C.F.T.C. has sued more than a dozen states that have tried to use anti-gambling laws to block prediction market trading.
Arnault’s “merci”Shares in LVMH are gaining in Paris this morning on renewed hopes of a turnaround at the luxury-goods conglomerate that’s home to Dior handbags and Hennessy cognac. But the thing everyone seems to be talking about is Bernard Arnault’s social media savoir-faire. A recap: On Sunday, the fashion tycoon delivered a rebuttal to Le Monde’s six-part series investigating potential ruptures in the Arnault family power structure. The 77-year-old wrote an open letter dripping with sarcasm, titled “Merci,” that the company posted on X and was quickly translated into English by users. It was a defense of his business and family replete with the following zingers: I learned, first of all, that my staff are impeccably turned out and not one of them is overweight. I offer apologies to readers for this failure of bodily diversity, and I shall raise the matter with the company canteen. And then: …comes “the business-first strategy.” That a group exporting most of its French-made products should place commerce somewhere in its strategy, it appears, qualifies as a scoop. I await the follow-ups: L’Oréal sells beauty products, Danone takes an interest in food, Renault makes cars, and so on. We can keep this going until Christmas. And finally: … the crowning touch: the family. Once cannot write about a man for six months without ending up, in thought, at his table. There I found my five children, my wife, my nephews. I would have liked to find one nuance: the one that lets five strong personalities work in the same house without turning it into Italian opera. At the Arnault family, apparently, we don’t argue, we conspire. We don’t deliberate, we plot. Very novelistic. In the real world, my children run Maisons, build teams, make decisions and — sacrilege — call one another on Sundays. In what could be viewed as a victory lap of sorts, Arnault made his first post yesterday on X under his personal account. He thanked those who cheered his open letter (and gave his Le Monde critique more oxygen). The open letter has generated roughly 9 million views, garnering hat tips from X’s former C.E.O. Linda Yaccarino (a “masterclass!,” she raved), the billionaire investor Dan Loeb and Alfred Lin, a partner at Sequoia.
The billionaire suing Trump’s crypto companyPresident Trump’s embrace of crypto has been astonishingly profitable, netting him roughly $1.4 billion last year alone. Much of that windfall came through World Liberty Financial. The company, run by Trump’s sons and the sons of Steve Witkoff, a Trump adviser, has cultivated a lucrative trade in $WLFI digital tokens. Now it has spawned a legal battle, pitting the company against an early investor, the crypto billionaire Justin Sun. The Chinese-born founder of the crypto exchange Tron became an adviser to the company in 2024 and invested a total of $75 million. But Sun sued World Liberty in federal court in April, accusing it of fraud, breach of contract and extortion. He claims that World Liberty froze his tokens after he refused to invest more money. Sun says he believes World Liberty is giving crypto a bad name, and the breakup is getting messy, as Jen Wieczner writes in New York magazine: Sun would come to believe he’d made a colossal mistake. World Liberty would disappoint his expectations and those of many other investors: The decentralized crypto products it promised would largely never materialize; the money investors put in would remain mostly locked away from them; and the $WLFI cryptocurrency would crash, leaving many token holders with huge losses while the president and his partners made hundreds of millions in profits. Sun would be stripped of his tokens entirely. “Today, the thing I regret the most is not only that my money got stuck but that my name is on the project,” Sun says. World Liberty countered by suing Sun for defamation in May in Florida state court. The company accuses Sun of betting against its tokens and embarking on a “public smear campaign.” The billionaire says it’s his duty to call out World Liberty’s bad behavior. But Sun himself has a rocky legal track record, and a less-than-sterling reputation. Wieczner writes: Many in that industry dismiss the claims as a pot-versus-kettle situation. “It’s scammers scamming scammers,” more than one crypto investor told me.
A new foundation to honor a slain Blackstone executiveOne year ago today, a gunman walked into an office building in Midtown Manhattan with an assault rifle and killed four people. Among those who died was Wesley LePatner, a senior executive at the private equity firm Blackstone. Today, LePatner’s husband, Evan LePatner, is introducing the Wesley Mittman LePatner Foundation in honor of his wife. The foundation’s goal is to encourage business leaders to take on leadership roles in nonprofit organizations. It is launching in New York and aims to train 1,000 leaders nationwide to carry forward LePatner’s legacy of balancing professional success with philanthropic and civic engagement. “Wesley was a born leader,” Evan LePatner told Niko Gallogly. The two met during their freshman year of college at Yale. They married in 2006 and had two children together. LePatner started her career at Goldman Sachs, before joining Blackstone in 2014. She was one of Blackstone’s top-ranking women leaders and became the C.E.O. of Blackstone Real Estate Income Trust in January 2025. She was known for mentoring colleagues, especially other women navigating the male-dominated financial industry. “I felt so strongly from the moment after she died that I had to keep her flame going,” Evan LePatner said. “She had this pulsating energy.” She founded the Altneu Synagogue in New York and served as a board member of UJA-Federation of New York, a charitable organization focused on Jewish causes, and the Metropolitan Museum of Art. The foundation aims to help young professionals follow in her footsteps. Evan LePatner said it will connect them with service-minded mentors. The hope is that it will lead to opportunities for them to serve on boards and partner with nonprofits and civic organizations. The organization’s advisory board includes Ken Caplan, the global co-chief investment officer of Blackstone; Brian Friedman, the president of the investment bank Jefferies; Chris Lee, a partner at the private equity firm KKR, and others. Evan LePatner will serve as the chair of the foundation, a position he said he will balance alongside his full-time role as managing partner at the private equity firm he founded, Courizon Partners, and raising his two teenage children. “Wesley was the expert juggler,” he said. “I have become better than I ever thought I could be, but I’m still junior league compared to her.” We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
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