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Sam S. won last week’s world-famous-news-haiku-competition™ with this beauty about how Americans are spending more money on hobbies despite economic pressure:

Congrats, Sam! And here’s how you stacked up against the competition...

🟨⬜️⬜️⬜️⬜️⬜️ 1. Hobbies rest our minds | Vital drug in high econ | Rehab for livin’ ~ RD (16)
⬜️⬜️⬜️⬜️⬜️⬜️ 2. Building bat mansions | Distracts from doom scrolling while | Dollars disappear. ~ Scott Bauer (7)
⬜️⬜️⬜️⬜️⬜️⬜️ 3. Jobs being replaced | Enjoy time with your hobbies | It’s just ‘centsible’ ~ Mary (7)
🟨⬜️⬜️⬜️⬜️⬜️ 4. Box of postage stamps, | baseball cards, Lincoln pennies; | old hobbies don't die ~ Steve (10)
🟨🟨⬜️⬜️⬜️⬜️ 5. Food on the table? | Gas my car? Too much money. | I'm stock piling yarn. ~ Janine G (23)
🟨🟨⬜️⬜️⬜️⬜️ 6. Hobbies are worth it! | Creating is fun, calming. | It keeps your brain young. ~ Margaret Lea (26)
🟩🟩🟩🟩🟩🟩 7. Crafting, baking, chess, | Distractions from soul crushing | Endless news cycles. ~ Sam S. (61)
🟨🟨🟨🟨🟨⬜️ 8. Bills rise, wallets weep | Yet, Dave buys a telescope | With stars in his eyes ~ Amy Long (53)
⬜️⬜️⬜️⬜️⬜️⬜️ 9. Funflation is real | Time to knit Spot a sweater | With cashmere and yak. ~ Harriett Feldman (4)
🟨🟨🟨🟨⬜️⬜️ 10. Can't afford real life? | Groceries, mortgage, travel? | Get the game instead! ~ Tim Olsen (47)
254 Votes via @beehiiv polls

This week’s world-famous-news-haiku-competition™ is about how OpenAI made $20Billion less than it thought. Send me your entry — to haiku at cheddar dot com — by noon ET Thursday, for consideration by your Cheddar peers.

Matt Davis — Need2Know Chedditor

Table of Contents

• OpenAI Made $20B Less Than It Thought

• Can Skydance Pay Off Debt With a Blockbuster?

• Can Stocks Keep Climbing in Q4?

• Tariffs Caused Inflation, Says NY Fed Branch

• Three Links to Cure Your Monday Blues

• Poll of the Day: Buyer’s Remorse?

What’s the Stock Market Up To, Eh?

$SPX ( ▲ 0.59% )  $DJI ( ▲ 0.83% )  $NDX ( ▲ 1.59% )  

Companies Mentioned in Today’s Newsletter

$OPEAZZX ( ▲ 0.16% )  $ANTHZZX ( ▲ 0.08% )  $AMZN ( ▲ 3.29% )  $GOOGL ( ▲ 0.97% )  $NVDA ( ▼ 0.52% )  $ORCL ( ▲ 4.59% )  $SPGI ( ▲ 1.26% )  $NKE ( ▼ 0.09% )  $HD ( ▼ 1.6% )  $SKYD ( ▼ 1.29% )  $MCD ( ▼ 0.71% )  

OpenAI Made $20B Less Than It Thought

When you are busy engineering “superintelligence,” what is a tiny $20 billion calculation discrepancy among friends? Well, according to recent investor presentation documents, OpenAI’s $OPEAZZX ( ▲ 0.16% ) annualized revenue stood near $50 billion at the end of September. That falls, let’s say, $20 billion short of the $70 billion headline previously circulating across financial media. And it’s a figure the company notably declined to deny at the time. So, how do you accidentally manifest an extra $20 billion?

It turns out Wall Street attempted some creative math. According to people familiar with the matter, quoted by the Financial Times, the discrepancy stemmed from investors attempting a direct comparison with rival Anthropic $ANTHZZX ( ▲ 0.08% ) . Because Anthropic factors in cloud partner revenue from Amazon AWS $AMZN ( ▲ 3.29% ) and Google Cloud $GOOGL ( ▲ 0.97% ) while OpenAI does not, investors attempted to “gross up” OpenAI’s metrics to create an “apples-to-apples” figure. That accounting maneuver inflated July’s actual $30 billion revenue baseline into a rumored $40 billion, laying the groundwork for September’s $70 billion fantasy.

Unsurprisingly, public markets panicked. Tech stocks slid immediately on the news late last week, with chipmaker Nvidia $NVDA ( ▼ 0.52% )  falling 2.9%, Oracle $ORCL ( ▲ 4.59% ) dropping 5.5%, and the Nasdaq 100 slipping 1.4%. They all subsequently recovered their losses, of course. Anyone expecting a rapid public listing to soothe jittery investors will be disappointed. Chief executive Sam Altman previously made it clear that the startup will not “barrel all guns blazing towards an IPO” while AI capabilities continue to accelerate. For a loss-making firm projected to burn nearly $280 billion by 2030 while chasing a $1.4 trillion valuation, losing $20 billion in spreadsheet turns out to just be an inconvenience. But: Should it be? I mean, should it? Really?

Quote of the Day

Can Skydance Pay Off Debt With a Blockbuster?

When you consolidate Hollywood down to four megastudios, "go big or go broke" becomes corporate policy. Following the staggering $111 billion Paramount–Warner Bros. Discovery merger that created Skydance $SKYD ( ▼ 1.29% ) , the newly formed media giant finds itself saddled with $80 billion in debt. So, can a couple of summer blockbusters clear the tab? Short answer: not unless popcorn starts costing $500 a tub. And hey, I realize that’s not a total impossibility with prices at the cinema these days. But… it’s a long shot.

To pull off the deal, Skydance CEO David Ellison spared no expense. As Shirley Lee, staff writer at The Atlantic, told us, Ellison wanted Warner Bros. so desperately that "he would put up any amount of money to do it." Netflix $NFLX ( ▼ 1.77% ) , on the other hand, wisely walked away from the bidding war, with its CEO dismissing the studio takeover as a "nice to have at the right price, not a must have.”

Now comes the financial hangover. Under a government antitrust settlement, Skydance is legally obligated to release at least 30 films a year in theaters for its first two years, scaling to 32 annually. But pumping out volume hardly guarantees box-office gold. As Lee noted regarding Ellison's track record, Skydance isn't famous for visionary artistic risks: "They don't take as many big creative swings. They've mostly been green lighting legacy sequels to horror franchises."

Relying on endless horror reboots to service $80 billion in leverage is a terrifying premise for our, ahem, culture. Isn’t it? But as Lee warns, balancing this debt load will far more likely yield "thousands upon thousands of layoffs" and steeper streaming subscription prices than a miraculous box-office salvation.

Still, best of luck with it all, guys, eh?

Can Stocks Keep Climbing in Q4?

Wall Street kicked off the fourth quarter with the S&P 500 and Nasdaq touching record highs. But can it continue? As Melissa Otto, Head of Visible Alpha Research at S&P Global $SPGI ( ▲ 1.26% ) pointed out, the market's heavy lifting remains almost entirely dependent on Big Tech and its staggering AI budgets. Hyperscalers are funneling capital into AI infrastructure at a breathless rate. As Otto highlighted in her data, "CapEx growth is significantly outpacing sales growth for the hyperscalers." While tech giants certainly have the cash reserves to fund next-gen innovation, she noted that the sheer scale of investment is testing Wall Street's patience: "The magnitude of it is so significant that shareholders are wondering, what do I get out of the deal?"

Meanwhile, everyday consumer mainstays like Nike $NKE ( ▼ 0.09% ) , McDonald's $MCD ( ▼ 0.71% ) , and Home Depot $HD ( ▼ 1.6% ) have been soundly beaten up as inflation and interest rates squeeze household budgets. (More on that in the next story👇🏻, actually.) Add in Middle East conflicts spiking oil prices, and the quarter ahead still looks like a tightrope walk. There are always doomsayers, of course, and markets are up roughly 15% over the last year. It’s just going to continue to be a bit choppy over the months ahead. That’s all. #NotFinancialAdvice

Song of the Day: Dawn Richard, ‘Faith in the Fire’

Here’s the closing track from Dawn Richard’s new album, Creole Culture. It’s slower, reflective, and more meditative than the rest of the album, so it’s a lot like this newsletter. (No, it isn’t, Matt. – Ed)

Tariffs Caused Inflation, Says NY Fed Branch

Ever suspect that the sudden spike in your everyday shopping bill wasn't just mysterious economic bad luck? No? Me neither. 🤷

Still, the Federal Reserve Bank of New York thinks it has solved the mystery of why everything is more expensive, now. And this might come as a shock, but it’s blaming something called “last year’s tariffs.” According to a study by New York Fed economists Mary Amiti, Sebastian Heise, and David Weinstein, the import taxes added 2.9 percentage points to consumer goods inflation across 67 product categories. In fact, without these levies, prices for those everyday goods would have actually dropped by nearly 1%, they said.

Gasoline, of course, has risen because it’s now impossible to ship crude through the Strait of Hormuz for some totally separate and, to me, almost entirely unfathomable reason. I’d use the shrug emoji here for a second time if I wasn’t worried you might think I was being sarcastic. (It’s too late for that, Matt, but thank you. – Ed)

Roughly two-thirds of consumer price impact came directly from the levies, while the rest spilled over through pricier imported components and domestic firms raising prices as foreign competition eased, the report said. As Amiti, Heise, and Weinstein wrote, “Tariffs have a larger and more drawn-out impact on consumer prices than the direct effect alone would suggest.”

Yet despite empirical proof hitting Americans directly in the wallet, official explanations remain unbothered. In a statement to CNBC, White House spokeswoman Taylor Rogers said: “The Trump administration has consistently maintained that the cost of tariffs will ultimately be borne by foreign exporters who rely on access to the American economy.”

A bold theory, of course, and one which is yet to bear fruit. Still, time is a great healer, after all, and the midterms are looming in November. Let us know how you feel about the report in today’s poll below👇🏻.

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Three Links to Cure Your Monday Blues

Mondays aren't a personality flaw, they're an engineering problem. And as we all know, I am nothing if not an engineer of avoiding feelings. I’m English, after all! So, my three-part fix for your bad vibes as follows:

1. Win Sunday night with Eight Sleep. Turns out, the Monday blues start at 11:47pm on Sunday, lying awake doing maths on your own mortality. Eight Sleep's Pod cover heats and cools your side of the bed all night and tracks your sleep like a tiny, judgmental coach. It's expensive—properly expensive—but so is therapy, and this “fix” never asks about your childhood. Thank God.

2. Win Monday morning with Trade Coffee. If your current coffee situation is a dusty supermarket bag and regret, Trade quizzes you, matches you with small-batch roasters, and ships beans on repeat—so you never again do the 7 a.m. empty-canister stare into the abyss.

3. Win Monday night with HelloFresh. Nobody in recorded history has wanted to decide what's for dinner on a Monday night. HelloFresh decides for you: box arrives, instructions are basically IKEA for food, and dinner exists. Future You sends thanks.

You’re welcome. Now it’ll be Tuesday before you know it!

Should You Check Your 401(k) Today?

👍️ 

Sure, why not? I mean, if you’re into that…

Poll of the Day: Buyer’s Remorse?

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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.