Pick a winner in the world-famous-news-haiku-competition™ in today’s poll below. 👇🏻

Now: News…

Matt Davis — Need2Know Chedditor

Table of Contents

• Microsoft's Big Bet on AI Pays Off

• Minnesota Pauses Prediction Market Ban

• Todd Blanche’s AG Confirmation Hits a Hurdle

• Boeing’s Big Earnings Test

• Ditching Corporate Life for... Gutter Cleaning?

• Poll of the Day: It’s World-Famous-575™ Time

• Poll of the Day: You’re OK Renting iPhones

What’s the Stock Market Up To, Eh?

$SPX ( ▲ 1.66% )  $DJI ( ▲ 1.19% )  $NDX ( ▲ 1.59% )  

Companies Mentioned in Today’s Newsletter

$MSFT ( ▲ 15.51% )  $GOOG ( ▼ 0.62% )  $OPEAZZX ( ▲ 0.88% )  $KALSZZX ( ▼ 8.25% )  $PLYRZZX ( ▲ 0.07% )  $BA ( ▲ 3.22% )  

Microsoft's Big Bet on AI Pays Off

Microsoft’s $MSFT ( ▲ 15.51% ) Q2 results included an 18% bump for its AI business, Azure, which sent the company’s stock soaring as the company’s “bet the farm on AI” play appears to have paid off. It’s in stark contrast to Google $GOOGL ( ▼ 0.91% ) , whose recent results showed the company has upped its AI spend without the accompanying revenue boost. Awkward.

Microsoft’s net income jumped an eye-watering 31% to $35.8 billion. How? For starters, they managed to convince 30 million paid users to subscribe to Copilot, their shiny new embedded AI feature, up from 20 million just last quarter. Stifel analyst Brad Reback told the Wall Street Journal, “Clearly, the investments they’re making both on the infrastructure side of AI and on the first-party app side are paying off for them.”

But let's be real. Feeding the AI beast isn't exactly cheap. Microsoft also dropped $41 billion on capital expenditures in just one quarter, funneling mountains of cash into data centers and chips to keep their digital infrastructure fed. Is that a terrifying amount of money? Sure. But as Chief Financial Officer Amy Hood cheerfully justified it to investors, “Customer demand continues to exceed available capacity.” They literally cannot build their robot brains fast enough.

Meanwhile, CEO Satya Nadella referenced a recent mishap where an OpenAI $OPEAZZX ( ▲ 0.88% ) system broke out of its testing environment: “The biggest thing that we should take away from that is you can’t sort of depend on any one model.” Or: Keep your friends close, and your multi-billion-dollar AI models on a very short, diversified leash.

With its Azure cloud business quietly passing the historic $100 billion mark for the first time, Microsoft is essentially printing money.

Quote of the Day

Minnesota Pauses Prediction Market Ban

Minnesota this month enacted a first-in-the-nation law to outright ban prediction markets like Kalshi $KALSZZX ( ▼ 8.25% ) and Polymarket $PLYRZZX ( ▲ 0.07% ) . The state basically looked at platforms where people profit by betting on predicting real-world events — like elections and sports — and yelled, “Absolutely not!”

But before the ban could take effect this past Saturday, U.S. District Judge Katherine Menendez swooped in with a preliminary injunction to spoil the state's fun. Why? Because of a pesky little hurdle called federal preemption.

Minnesota Attorney General Keith Ellison was less than thrilled: "Prediction markets are gambling, plain and simple, and Minnesota has every right to keep predatory gambling out of our communities," he proclaimed.

The companies, naturally, were doing victory laps. Kalshi spokesperson Elisabeth Diana delivered the ultimate corporate clapback, stating, "Today’s decision makes it clear: States cannot ban things that they don't have jurisdiction over.”

The crux of the issue is whether betting on real-world events is actually just trading “swaps,” a type of derivative contract regulated exclusively by the increasingly toothless Commodity Futures Trading Commission (CFTC).

Judge Menendez agreed that they are, pointing out that several event contracts fit the legal definition of a swap. With the law’s start date looming, she noted, "But given the unique nature of Minnesota's prediction market statute, the posture of these cases, and the imminent effective date of Minnesota’s statute, a preliminary injunction maintaining the status quo until the merits of this case can be fully resolved is appropriate."

So, for now, Minnesotans can go back to casually trading event contracts. Will the state eventually win the war against "predatory gambling"? I don't know, but I'm sure you can bet on it somewhere.

Todd Blanche’s AG Confirmation Hits a Hurdle

Donald Trump’s nominee for Attorney General, Todd Blanche, just hit a speedbump on his way to the Justice Department. In a shocking twist of fate, the obstacle isn't the Democrat — it's two retiring Republican senators who suddenly remembered they never have to face primary voters again.

The Senate Judiciary Committee has abruptly postponed Blanche’s confirmation vote because Senators John Cornyn and Thom Tillis have some pesky concerns. What's the issue? Just a casual DOJ settlement that Blanche oversaw, which essentially gives Trump, his family, and his business entities a VIP, audit-free pass from the IRS for returns filed before May 2026.

With both Cornyn and Tillis leaving the Senate in January, they are in the rare political position of doing what they want. Cornyn wants written assurance that the DOJ isn't just handing out prospective tax immunity like Halloween candy. He also wants guarantees that the dramatically named “Anti-Weaponization Fund” — a scrapped $1.8 billion pool of cash that could have compensated Trump allies — stays completely dead. The DOJ swears they sent Cornyn a proposal, with an official brightly stating, “We look forward to further discussion around any outstanding concerns.”

Cornyn's response? “I haven’t seen a single piece of writing that is responsive to what I’ve requested.” 

Ouch.

He even canceled a sit-down meeting with Blanche, warning the DOJ, “Maybe they think I’m just going to give up or, you know, go along. But they’re mistaken.” 

(Checks notes). Yes. A GOP senator said this.

Asked if he'll outright vote against Blanche, Cornyn coyly replied, “Well, I’m not prepared to vote ‘yes.’ Let me put it that way.” Noting that Tillis feels the exact same way, Cornyn added, “So they better get real, and there’s not much time left.”

Meanwhile, Trump seems to be living in a blissful alternate reality, cheerfully telling reporters that Blanche’s nomination “is going through quite nicely.”

Song of the Day: Paris Paloma, ‘Pre-Raphaelite’

"Pre-Raphaelite" is an alternative/indie single by British singer-songwriter Paris Paloma, the lead track from her sophomore album, The Fatal Flaw, due out in September. The song serves as a lyrical love letter to the female gaze, focusing on the deep appreciation of feminine beauty without sexualization, while exploring the complex mix of admiration and quiet envy that can exist between women. So, it’s just like this newsletter.

Boeing’s Big Earnings Test

Aerospace giant Boeing is still turning the corner, with its stock essentially flatlining over the past five years. Following their second-quarter earnings, Morningstar equity analyst Nicolas Owens offered a rather sobering, incisive take on the aviation industry's current status.

According to Nicolas, Boeing is "kind of in the upswing of a turnaround from their many years of troubles dating way back to the 737 Max crashes." Their manufacturing got derailed, but now they are finally attempting to prove they can consistently produce airplanes "that are, let's say, made as per the recipe," Nicolas said. Following a recipe is apparently a major step up from their recent past, where, as Owens casually noted, "the bolts weren't in the right place,” which can be an issue at 30,000 feet!

Meanwhile, the airlines buying these hopefully-bolted planes are battling wild fuel cost volatility, driven by geopolitical tensions and a widening spread between the cost of crude oil and actual jet fuel. But don't worry, the airlines aren't eating those costs — you are. Owens explains that U.S. airlines don't bother with fancy financial engineering to hedge fuel costs; instead, they "look at what the fuel price curve will look like in one, two, three months, and they basically bake that into the ticket price."

So, what is the biggest threat to this fragile, sky-high ecosystem? You, the exhausted traveler. Owens warns that if price-gouged consumers finally snap and say, "I've had enough or I'm not going on that extra trip, that is the biggest risk to the industry."

As for anyone looking to invest in this chaotic circus? Owens delivers the ultimate, brutally honest punchline: "I don't think any of the airlines are good investments, so as an investor, my advice would be don't buy an airline stock."

Agreed.

Ditching Corporate Life for... Gutter Cleaning?

Millennials and Gen Z are officially tired of the corporate grind. As a result, millennial franchise ownership has skyrocketed by 163% since 2022. Instead of climbing the corporate ladder, the youth are apparently buying literal ladders and probably using them to run a highly lucrative holiday lighting business.

So, why the sudden urge to pivot from cushy office jobs to bathroom remodeling and pest control? Simple: Existential dread. Scott Abbott, CEO of Five Star Franchising, shared a conversation he had with a millennial software worker who bluntly confessed, “Scott, I'm really worried about what AI is gonna be doing to my industry.” The ultimate solution to the impending robot takeover? Blue-collar home services. As the savvy millennial put it, by moving to franchises, “I've kind of mitigated that risk and get myself in a position where I can take advantage of the boom that's happening in home services.” Because AI can't unclog a drain or spray for mosquitoes.

These aren't broke 20-somethings launching side hustles from their parents' basements. According to Abbott, an astonishing "98% or so of the people that apply to buy a franchise from us already do own a home," and the majority of them have kids. Having magically achieved the elusive homeownership milestone, they are now desperately seeking the next holy grail: Work-life balance. After tasting the sweet freedom of remote work during COVID, they refuse to go back to an office. They want to build personal wealth, but mostly, they "want flexibility of their time and they want to own their calendar."

Of course, building a startup from scratch usually means "you are now a slave to that business because now it owns all your time." Franchises, however, offer a cheat code: Built-in corporate call centers to answer the angry customer calls at 3 a.m. while the owner goes on vacation.

So, cheers to the new American Dream: Paying someone else to answer the phone.

Free Yourself From Advertising Forever!

Should You Check Your 401(k) Today?

👎️ 

No.

Poll of the Day: It’s World-Famous-575™ Time

Poll of the Day: You’re OK Renting iPhones

We asked: Would you prefer to rent a new iPhone for $17.99 a month or buy one for $50 a month?

You answered:

🟩🟩🟩🟩🟩🟩 Is this a trick question? I'll save $32.01 a month, thanks, and trade it in in two years. (219)
🟨⬜️⬜️⬜️⬜️⬜️ Ownership is everything. I'll happily pay an extra $32.01 a month to buy an iPhone for $200 more than it's worth just to feel like a sweet lord or lady of capitalism. (69)
288 Votes via @beehiiv polls

Need2Know is covered by Cheddar’s Terms of Service

P.S. So, you remember the cheese puns that used to open this newsletter? Suffice to say, they were divisive. Now, thanks to a thing called “dynamic content options,” I can offer you the option to see cheese puns again, if you’re one of the thousands who got in touch bemoaning their departure six months ago. All you need to do is answer “true” on this survey, and submit it. If you never want to see cheese puns in this newsletter again, don’t click that link, don’t fill out the survey, don’t submit it. Just keep reading and pretend this conversation never happened. Mmmkay? Thank you.