Good morning. Andrew here. DealBook’s Michael de la Merced has the scoop on Kalshi raising another $1 billion. We’ve got a deep dive on a fascinating deal between Anthropic and SpaceX. And we take a look at the accusations of an insider trading scheme that has many in Big Law chattering. (Was this newsletter forwarded to you? Sign up here.)
Kalshi raises another $1 billionPrediction markets have been on a tear, drawing millions of users who bet on sports, TV shows, weather forecasts and more. That growth has helped one of the biggest platforms, Kalshi, raise a huge new round of funding as it courts bigger institutional users, Michael de la Merced is first to report. Kalshi has raised $1 billion at a $22 billion valuation, the company expects to announce today. The round was led by Coatue Management, an investment firm. Other investors included Sequoia Capital, Andreessen Horowitz, IVP, Paradigm, Morgan Stanley and ARK Invest. The valuation is double what Kalshi was worth in a December fund-raising round, which more than doubled the valuation in an October round. Just how fast is Kalshi growing?
“Literally, outside of A.I., you don’t see anything growing like that,” Lucas Swisher, Coatue’s co-lead of growth investing, told DealBook. Kalshi has its eye on drawing institutional users, including brokerages and hedge funds. Those bigger users would bring more liquidity to Kalshi’s trading, which Tarek Mansour, the company’s co-founder and C.E.O., said would make the pricing of its bets more accurate. Last week, the company executed its first custom block trade, a large transaction negotiated off a public market between institutions. Kalshi said that trading volume on its platform from institutional investors grew 800 percent over the last six months. Other prediction markets have their eye on the same market. Polymarket, Kalshi’s chief rival, raised capital from the Intercontinental Exchange, the parent of the New York Stock Exchange, in October. (That said, Polymarket is struggling to get its U.S.-regulated platform going, according to The Information.) Do the sector’s legal concerns threaten that goal? A reminder of what’s happening:
But Mansour noted a recent win: A federal judge permanently blocked Arizona from prosecuting the company for what state officials said were violations of state gambling laws. And Swisher pointed to the company’s announcement of enforcement actions against insider trading. “Institutions want to work with a regulated entity that follows the rules and cares about insider trading,” he said.
Markets gain even as Washington and Tehran send mixed messages. Brent crude, the international benchmark for oil, dipped to around $98 and S&P 500 futures edged higher today despite no clear progress toward ending the war in Iran. New data from the New York Fed shows that lower-income Americans have been especially affected by a surge in gasoline prices. President Trump’s advisers are on edge about the soaring cost of jet fuel, according to The Wall Street Journal. Elon Musk’s romantic partner, a former OpenAI board member, testifies. In the trial over Musk’s lawsuit against the artificial intelligence giant, Shivon Zilis, the mother of four of his children and a former member of OpenAI’s board, faced questions over her funneling of insider information to him. Among the evidence introduced: text messages between Zilis and Musk about whether she should stay close to OpenAI even as he sought to poach employees. Apollo Global Management’s C.E.O. warns of economic fallout for private capital. Marc Rowan privately told investors recently that he was shoring up the balance sheet of the firm’s in-house insurance business and selling its riskier debt investments, according to The Financial Times. Rowan also cautioned of “contagion risk” at rival insurers if the economy contracts. Separately, Blue Owl Capital, the beleaguered private credit firm, said yesterday that it had cut dividend payments for two of its publicly traded funds. What’s driving Anthropic’s deal with SpaceXAnthropic has reached a deal with Elon Musk’s company SpaceX to access vast reserves of computing power. The unlikely partnership between two artificial intelligence rivals underscores Anthropic’s growing need for computing firepower amid concerns in Silicon Valley and Washington that it’s running out of this vital resource, Niko Gallogly writes. The context: Dario Amodei, Anthropic’s C.E.O., told Andrew at the DealBook Summit in December that his job required managing the “cone of uncertainty” around how much to prudently spend on what the industry calls “compute.” He also needled competitors — read: OpenAI — for what he described as “YOLO” spending on compute. But as demand for the Anthropic model Claude has skyrocketed — and interest in its Mythos model grows — Amodei has now found himself in deal mode. Anthropic has been engaged in “deal-making jiujitsu,” Matt Murphy, a partner at Menlo Ventures, which is an investor in Anthropic, told DealBook. They’ve “scratched and scraped together” different partnerships to access compute, Murphy said. In the last month Anthropic announced:
Anthropic wants to keep its breakneck growth rate. Amodei said yesterday that revenue and usage grew 80 times in the first quarter, far outstripping its forecast of 10 times growth. But he added that the expansion has strained its compute resources, frustrating customers. Enter Musk: The billionaire, who is focused on growing SpaceX’s xAI business and has frequently criticized Anthropic, said he agreed to the deal after meeting with Anthropic’s team last week. “No one set off my evil detector,” Musk wrote on X. What the deal says about Musk’s ability to monetize xAI is another big question ahead of SpaceX’s planned I.P.O.
CHART OF THE DAY Tracking a historic profit boomThe war in Iran may or may not be ending, energy prices have spiked, and consumer sentiment has hit a new low, yet the stock market keeps rallying to record highs. What explains such investor exuberance? One answer is that companies continue to deliver historically high profit margins, Christine Zhang reports. The blended net profit margin for the S&P 500 — net income as a percentage of total revenue — is estimated to be 14.7 percent in the first quarter of 2026, according to data from FactSet. That would smash the previous record of 13.2 percent, set in the fourth quarter of 2025. FactSet’s current estimate encompasses reported earnings from about two-thirds of S&P 500 companies as well as analysts’ estimates for the companies that have not yet reported first-quarter earnings.
The insider trading ring inside top law firms“Flights,” “rabbi” and “learning.” Those were among the code words used by a ring of lawyers at elite corporate law firms who passed around tips on multibillion-dollar M.&A. transactions over the last decade, according to charges against the group in court filings unsealed yesterday. The defendants worked at firms that included Wachtell, Lipton, Rosen & Katz and Latham & Watkins. Government lawyers said the scheme netted millions of dollars in gains. Thirty people were charged, according to the indictments by the U.S. attorney’s office in Boston. Among them were Nicolo Nourafchan, a Yale Law School graduate who had worked at Latham and Goodwin & Procter, and Robert Yadgarov, a college classmate. Nourafchan and Yadgarov were accused of recruiting lawyers to funnel information about deals their firms were working on. The participants in the scheme didn’t necessarily work on the deals: Some of the information came from spying on drafts in the firms’ document management systems in preview or read-only mode. Among the transactions involved:
How it worked: Participants in the scheme, government lawyers wrote, used burner phones and met secretly in places like bookstores. They also used code words to mask their discussions. Here’s how a related S.E.C. lawsuit against many of the same defendants described one exchange: On June 17, 2022, Simon Fensterszaub messaged Hatanian: “I am running around on errands today. I hope to find out today when the Rabbi’s surgery is going to take place[.]” “Rabbi’s surgery” was a coded reference to the announcement of the Amazon-iRobot transaction. Hatanian responded: “ok please let me know - I am praying!” And here’s how two defendants discussed the SailPoint transaction being announced earlier than expected, according to the complaint: Simon Fensterszaub responded: “We just arrived at the airport to watch the plane takeoff[.] | Too little too late[.]” Silverstein replied: “Seriously. What a waste[.]” Simon Fensterszaub shared Silverstein’s frustration with missing an opportunity to profit from their advance knowledge of the acquisition: “So basically nobody got in | This sucks!” What some of the affected law firms said, according to Bloomberg:
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