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Matt Davis — Need2Know Chedditor

News you Need2Know

• OpenAI Suggests Giving Gov 5% Stake

• Private Credit Can’t Stop the ‘Freak Out’

• The Terminator Will See You Now

• SpaceX Has Shown Investors an ‘AI Device’

• ‘Big Short’ Investor on AI: ‘Beginning of the End’

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

What’s the Stock Market Up To, Eh?

$SPX ( ▲ 0.0% )  $DJI ( ▲ 1.14% )  $NDX ( ▲ 1.59% )  

Companies Mentioned in Today’s Newsletter

$OPEAZZX ( ▼ 0.11% )  $INTC ( ▼ 5.25% )  $OWL ( ▲ 4.63% )$APOL ( 0.0% )  $BX ( ▲ 2.7% )  $SPCX ( ▲ 2.83% )  $QCOM ( ▼ 3.12% )  $GOOGL ( ▼ 0.36% )  $AAPL ( ▲ 4.84% )  $TSLA ( ▼ 7.49% )  $CAT ( ▼ 2.81% )  $SOXX ( ▼ 5.57% )  $SSNLF ( ▲ 116.8% )  $PLTR ( ▲ 2.84% )  

OpenAI Suggests Giving Gov 5% Stake

The Financial Times reports that OpenAI’s $OPEAZZX ( ▼ 0.11% ) new proposal to hand the US government a 5% equity stake marks a calculated pivot in the tech industry’s relationship with federal power.

Under Sam Altman’s leadership, the $852bn startup is engaging in "conceptual" talks with the Trump administration to secure political buy-in and clear mounting regulatory hurdles. With both OpenAI and Anthropic seeing recent cutting-edge model releases delayed by federal scrutiny, the strategic value of government ownership for companies like OpenAI is clear: aligning federal interests directly with startup valuations.

Altman has argued that giving the public a financial stake is the best way "to share the upside of AI." In April, OpenAI proposed a "public wealth fund" that “provides every citizen — including those not invested in financial markets — with a stake in AI-driven economic growth". This proposal is framed as democratic progress. The OpenAI Foundation said that "society will likely need new approaches that give people durable stakes in the systems creating value," aiming "to give them a stake and a voice in shaping how that change unfolds.”

Yet, the analytical reality is that a public equity stake serves as a bribe let’s say… an elegant lobbying mechanism. By suggesting that other top AI labs also allocate 5% to a vehicle resembling the Alaska Permanent Fund, a constitutionally established $80 billion sovereign wealth fund created in 1976 to save a portion of the state's oil and mineral wealth for future generations, OpenAI is attempting to establish an industry-wide standard of sovereign capitalization.

While some advisers favor tighter regulations, the precedent is already set: after Trump publicly attacked Intel $INTC ( ▼ 5.25% ) , he backed the chipmaker once the government took a 10% stake. Some lawmakers want to go much further. Democratic Senator Bernie Sanders has pushed for "public ownership of closer to half of each US AI company." Ultimately, OpenAI’s 5% proposal represents a preemptive corporate strategy to trade equity for political immunity in an increasingly hostile regulatory climate.

Both the Trump administration and OpenAI declined comment when approached by the FT. I bet they were just delighted this story had leaked out, though. Delighted.

Quote of the Day

Private Credit Can’t Stop the ‘Freak Out’

Wall Street’s absolute favorite prize pig, the private credit industry, is currently having quite a bit of a moment. And by "moment," I mean investors are frantically trying to claw back their cash. Just weeks ago, Marc Lipschultz, co-CEO of private credit firm Blue Owl $OWL ( ▲ 4.63% ) , confidently declared that the "freak out" moment had passed. Yet surprisingly, it hasn't. It’s almost like you can’t trust these private credit bosses, eh?

Blue Owl’s tech-focused fund just got slammed with withdrawal requests for a whopping 38% of its assets. But don’t worry, Blue Owl's president Craig W. Packer reassured everyone that "shareholder retention remained strong, with approximately 90 percent of our 90,000 shareholders remaining invested." Translation: Small retail investors are staying, mostly because they are trapped behind a strict 5% quarterly redemption cap.

Meanwhile, the larger, smarter money is sprinting. As Brian Shapiro, founder of ALTSMARK, told the New York Times: “It’s a vicious cycle. Everyone on earth is running for the same bright red exit sign.”

Even giant firms like Apollo $APOL ( 0.0% ) and Blackstone $BX ( ▲ 2.7% ) are feeling the heat. Blackstone CEO Jonathan Gray recently shrugged, saying, “It’s a trust business.” Except right now, trust looks like a very long, slow-moving line for the exits. Yikes!

The Terminator Will See You Now

Forget flipping burgers. Foundation Future Industries is building "Phantom," a 185-pound humanoid robot designed to fire guns, drop mortars, and breach buildings. Why? Because John Connor ain’t gonna stop his resistance without a fight “we live in a human-shaped world" and need robots that can "interact with the billions of dollars of armaments and weapons" already built for us, according to co-founder Michael LeBlanc, who sat down with us at a robot convention.

A Marine for thirteen years, Mr. LeBlanc is already deploying a Phantom prototype to auto factories and Ukrainian trenches. LeBlanc's own vision is pure scale. "Success is becoming a trillion-dollar company and failure is not," he said. Early tests involved an upper-torso prototype that successfully replaced three factory workers. Now, Phantom is walking through mud and handling ammunition logistics.

LeBlanc believes humanoids will quickly replace human soldiers and night-shift workers. "2027 is going to be a year that you're seeing tens of thousands go out," he said, transforming a research challenge into a "manufacturing and deployment challenge.”

Get ready: these heavy robots are leaving the lab, and they are already lifting "more than any OSHA recommended guideline,” LeBlanc said.

Song of the Day: Cassandra Coleman, ‘Maggie’

Cassandra Coleman’s “Maggie” is earning high praise as an atmospheric, emotionally vulnerable masterpiece that marks a defining moment in her transition from reality TV star to an established indie-pop force. I, of course, had never heard of her until recently because I’m so in touch with the zeitgeist.

SpaceX Has Shown Investors an ‘AI Device’

The Wall Street Journal reports that Elon Musk’s SpaceX $SPCX ( ▲ 2.83% ) has developed a sleek, handset-like prototype designed to reshape human-AI interaction. According to people familiar with the matter, the ultra-thin device — which is reportedly slimmer than an iPhone — was shown to stakeholders ahead of the company's mega initial public offering.

Running on a proprietary operating system, the device is designed to integrate advanced AI technology from SpaceX's sister company xAI and is powered by a Qualcomm $QCOM ( ▼ 3.12% ) Snapdragon chipset.

The revelation marks a fascinating, if contradictory, turn for Elon Musk. In February, he flatly denied hardware ambitions, posting on X: “We are not developing a phone.” This followed his dramatic statement from last October: “The idea of making a phone makes me want to die. But if we have to make a phone, we will.”

It seems the reluctant hour has arrived. According to some of the people familiar with the matter, the prototype draws heavily on Musk's dream of an "everything app," taking inspiration from Asian super-apps like WeChat. By introducing a physical platform, Musk aims to bypass traditional app stores and decrease his reliance on tech giants Google $GOOGL ( ▼ 0.36% ) and Apple $AAPL ( ▲ 4.84% ).

Me too, Elon. Me too.

Hardware is a notoriously brutal, high-stakes consumer industry for ambitious newcomers to break into successfully. Yet, with xAI integrated into a dedicated handset, Musk seems more than ready to challenge the reigning Silicon Valley establishment once again. I just wish he was a little bit less of a Nazi, don’t you?

‘Big Short’ Investor on AI: ‘Beginning of the End’

Michael Burry, the legendary contrarian who predicted the 2008 financial crash, has upgraded his massive bearish bets against AI. This time, his targets include Tesla $TSLA ( ▼ 7.49% ) , Caterpillar $CAT ( ▼ 2.81% ) , and a semiconductor ETF trading under ticker SOXX $SOXX ( ▼ 5.57% ) .

What triggered Burry’s alarm bells? A massive $500 billion plan by South Korea’s Samsung $SSNLF ( ▲ 116.8% ) to build a giant chip hub. While chip stocks soared, Burry saw a bubble about to pop. “The proximate cause of today’s rally is big spending announced out of Korea,” Burry wrote. “Well, I see that as the beginning of the end.”

Burry isn't pulling punches on the semiconductor index, calling the SOXX ETF “a pure form of overvaluation in an index, a form that is rarely seen and never so easily recognized as such.”

Betting against tech giants draws critics. Palantir $PLTR ( ▲ 2.84% ) CEO Alex “pot-and-kettle” Karp famously dismissed Burry on CNBC as “bat----crazy.” But with Palantir shares down 40% since Burry’s short of his stock, maybe there’s a method to Burry’s madness.

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Should You Check Your 401(k) Today?

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Still a no, I’m afraid. Yesterday’s lower-than-expected jobs numbers halted a brief rally in the early part of the week.

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

Poll of the Day: You’re a romantic bunch, eh?

We asked: We just climbed the Empire State Building and got engaged. What are the chances for our marriage?

🟨🟨🟨🟨🟨⬜️ Great. Two thrill-seekers like us will enjoy the roller-coaster of married life. (143)
🟨🟨🟨⬜️⬜️⬜️ Terrible. It's all downhill from here. (79)
🟩🟩🟩🟩🟩🟩 I would have preferred it if we weren't wearing Batman masks when you popped the question, but sure, I think we'll make it out alright. (151)
373 Votes via @beehiiv polls

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