Good morning. Andrew here. For a summer Friday in August, there’s a lot going on. We’re following Robinhood’s latest effort to give retail investors an entry to private start-ups, another shake-up in OpenAI’s top ranks and a report that JPMorgan Chase dropped Polymarket as a client over regulatory concerns. More below. We’re also watching Manhattan federal court today: Luigi Mangione is expected to plead guilty to charges tied to the killing of the UnitedHealthcare C.E.O. Brian Thompson. (Was this newsletter forwarded to you? Sign up here.)
Robinhood doubles down on venture investingWe’ve reported over the past year how high finance has increasingly seen retail investors — that is, ordinary, nonwealthy individuals — as a big part of its future. One of the movement’s loudest proponents is Robinhood, which has argued that Main Street shouldn’t be shut out of the astronomical growth of private start-ups like Anthropic and OpenAI. The trading platform has now offered retail investors another route for getting into the world of venture capital — even as skeptics warn of the risks that entails, Niko Gallogly reports. Robinhood Ventures Fund II began trading on the New York Stock Exchange yesterday. The fund raised roughly $200 million in its I.P.O. at $25 per share. How it works: Robinhood Ventures Fund II has teamed up with Y Combinator, a Silicon Valley incubator, to invest in companies that are just getting started. The fund has already invested in 80 of Y Combinator’s start-ups, in most cases with $250,000 in capital each. Robinhood will use the money raised from the new fund’s I.P.O. to invest in more start-ups, mostly inside of the Y Combinator ecosystem. The fund debuted just five months after Robinhood Ventures Fund I, which has invested in later-stage start-ups like Stripe, Ramp and OpenAI. Its share price has been volatile. In May it jumped as high as $74, up roughly 250 percent from the first day of trading, but now trades closer to its opening price of about $21. More investment vehicles are bringing retail investors into the private market. That’s despite the fact that nonaccredited investors — individuals with less than $1 million in net worth or $200,000 in annual income — are largely barred from investing in privately held companies. Retail investors historically have been excluded from “this tiny, esoteric, insular world,” Richard Aberman, Robinhood Ventures Fund II’s portfolio manager, told DealBook. But “retail investors don’t always understand what they are getting into,” Josh Lerner, a professor at Harvard Business School, told DealBook. Retail funds focused on private start-ups have struggled in recent years. Destiny Tech100, for instance, has underperformed the S&P 500 by roughly 11 percentage points over the past year. These funds can also charge significant fees. Robinhood Ventures Fund II charges a 2 percent annual fee plus a 20 percent performance fee on capital gains. That mimics typical venture capital fund fees. Expect the venture industry to keep targeting individual investors. Retail has become an increasingly important fund-raising channel for private equity and private credit funds. “Whether you think it’s a good idea or not, it’s happening,” Lerner said.
The U.S. sells 30-year Treasury bonds at their highest yield since 2001. The $25 billion offering carried yields as high as 5.22 percent, compared with 4.91 percent just before President Trump began his second term. Fears of the swelling federal debt and persistent inflation are driving up borrowing costs for the U.S. The Trump administration’s antisemitism lawsuit against Harvard is thrown out. The federal judge in the case granted Harvard’s motion to dismiss, saying the incidents cited in the lawsuit were “too isolated and episodic” to show that the school was breaking the law. The move hampers the administration’s effort to force Harvard to strike a settlement, though experts said the government may appeal. Another sign of pressure on Mark Walter emerges. The billionaire financier in recent weeks pledged his stake in Guggenheim Partners, the big investment firm he helped found, as collateral for financing, Bloomberg reported, citing unnamed sources. Walter has been seeking money to pay down loans on his insurers’ books that are under federal scrutiny. This week, he agreed to sell the L.A. Lakers for $12.5 billion. JPMorgan Chase reportedly stopped banking Polymarket over regulatory concerns. The lending giant notified Polymarket in October that it needed to find a new bank, according to The Financial Times. Still, JPMorgan has maintained other ties with the prediction market operator. In other prediction market news, a state judge in Washington barred Kalshi from most operations there.
Another shake-up at OpenAIThe revolving door at OpenAI is spinning again. The latest exit of a top executive underscores the quick pace of changes at the top of the artificial intelligence giant, even as it appears to be making headway in revamping its business — all with the company aiming to go public next year. Catch up: OpenAI said yesterday that Denise Dresser, the company’s chief revenue officer, is leaving “for other opportunities.” She was responsible for growing the company’s advertising and enterprise revenue. She’ll be replaced by Dali Rajic, the former president of the cybersecurity company Wiz, which Google acquired last year for $32 billion. Among those who have left OpenAI this year:
Keep an eye on Greg Brockman, OpenAI’s president and a co-founder, who has been taking on a bigger presence at the company lately. It was Brockman who tapped Rajic to focus on increasing enterprise adoption, and Axios notes that Brockman has been building up a team to further drive OpenAI’s growth. OpenAI appears to be making strides in growing enterprise revenue, a key goal as it seeks to catch up with its archrival, Anthropic. DealBook scooped on Wednesday that the company’s run-rate revenue from business customers in July rose 32 percent from the previous month. Bloomberg reported yesterday that OpenAI was on track to generate more than $40 billion in annualized revenue, double its run rate from December. But it still faces challenges. OpenAI and Anthropic have cut prices for some of their models amid a cost war with cheaper Chinese rivals. The issue has grown increasingly urgent as more companies look to trim their A.I. spending.
All this comes as OpenAI works toward a mega-I.P.O., which could come as soon as early next year at what some hope will be a trillion-dollar valuation.
QUOTE OF THE DAY “There are so many red flags here.”Naaja Nathanielsen, Greenland’s former minister of natural resources, about a U.S.-British project to drill for oil on the Arctic island that’s supported by Dr. Phil and Gov. Jeff Landry of Louisiana. Greenland’s government has pushed back the timeline for granting final approvals amid opposition from locals. But Greenlandic officials told The Times they’re worried that reflexive opposition could draw the ire of President Trump.
Talking A.I. with the chair of Ropes & GrayEvery week, we ask a leader how he or she uses artificial intelligence. This week, Julie Jones, who leads the law firm Ropes & Gray, told Sarah Kessler that the firm treated time spent developing A.I. solutions as billable hours. The conversation has been edited and condensed. How do you personally use A.I.? It’s my 5 a.m. buddy. It helps me go really deep in creative matters. And it actually reduces the isolation of the job of C.E.O. I also use an agentic tool to create daily briefings. I travel all the time, and I had trouble staying on top of my exercise goals. So I set up an agent who sends me a reminder every night about what I need to accomplish in the morning. I say, I’m going to be in Chicago, and I’m staying at XYZ hotel. It will recommend a running route. What have you told your employees about how you want them to use A.I.? The typical increment of our pricing is a billable hour. Everyone feels like you have to be really busy, and I understand that mentality. So we needed to open time for people to experiment. Last fall, we announced that you could bill time developing A.I. solutions for clients. Even though that’s not billable to our clients, we would treat it internally in the same way. That, I think, inspired a lot of people. What are some client problems you’re solving with A.I.? On acquisition projects, it’s about: How can we get sharper analysis faster? We’ve been developing tools to help clients do quick dives to make go/no-go decisions. We’re partnering with a frontier lab to develop what we describe as a first-pass review. Another example is management equity plans. We developed an end-to-end tool that helps take the goals of a client’s incented equity program and create the master plan. There are generally available tools, but what clients want is a law firm that knows them really well. To take a tool and use the specific client history, and make it bespoke. We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
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