Get ready for more from Bloomberg Businessweek in your podcast feed. Stacey Vanek Smith and Max Chafkin are here in the newsletter to introduce Everybody’s Business (you can skip right to listening here). Plus: Microsoft’s CEO on its AI relationships, a scam affecting foreign care workers in the UK and the need for an American winner in Formula One.

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The US inflation report that came out this week was either comforting or confounding, depending on your point of view. Comforting, because the consumer price index was lower than economists had expected—an early sign, perhaps, that President Donald Trump’s erratic and, to critics, heavy-handed approach to negotiating trade deals might not be as disruptive to the economy as feared. Confounding, because Econ 101 says that tariff rates, which have gone way, way up since Trump’s April 2 “Liberation Day” announcement, should cause prices to soar as companies pass on those costs to consumers.

And yet, it’s probably too early to know where prices are headed. It’s definitely too early to say that Trump’s tariffs (even in their slightly toned-down form, amid a 90 day pause) won’t eventually lead to higher prices, Covid-style product shortages or even a recession later this year. That in turn makes it hard to make any kind of financial decision—whether to take a new job, to figure out your retirement account or even to decide when to buy a new smartphone—without setting aside some time to think through the news, hear from experts and consider differing points of view. 

This kind of uncertainty can be paralyzing, though for us at Bloomberg Businessweek it’s an opportunity. That’s why we’ve launched Everybody’s Business, a podcast dedicated to decoding the week’s business news and to helping people think through tariffs, markets, tech breakthroughs, government cuts—and everything else affecting our lives, businesses and the economy. The show features conversations with some of the magazine’s smartest and best-sourced contributors (including a few whom you’ll recognize from this newsletter) and will be informed by our own reporting. We’ll talk to experts and company insiders, as well as the consumers and business owners living this news every day. The first episode dropped this morning. You can find it on your favorite podcast app or here.

In the first episode of Everybody’s Business—which, don’t forget, you should subscribe to immediately!—Businessweek columnist Amanda Mull explains exactly why those good inflation numbers aren’t likely to last very long. Many products for sale now were actually imported long before April, as businesses sought to stock up on as much inventory as possible to keep prices the same, or even offered discounts to try to get consumers to move up their buying. 

The problem is that by the time holiday shopping season comes around in the fall, those mitigation measures, along with the inventories that made them possible, will be exhausted. That means that many gifts—electronics, toys, beauty products and anything else that comes in a cardboard or plastic package—will be either scarce or pricey or both. Christmas, in other words, may already be ruined, no matter what happens with the latest tariff pause. And right on time, Walmart promised Thursday that price increases will start this month and become “more pronounced” as the year goes on.

In our second segment, sports reporter Randall Williams joins the show to talk about why private equity has started buying up sports franchises. As it turns out, teams are becoming increasingly attractive assets as games dominate live television, attracting big audiences (even as audiences for other shows are decreasing) and causing the prices for television rights to soar. All that money, growth and attention has private equity jumping into the game, pumping up valuations and injecting billions of dollars into teams. Randall concludes that private equity won’t ruin sports, even if the industry’s history in other domains suggests it very well might.

Finally, for the underrated story for the week, we look at the relentless rise of running shoe soles. Shoe brands are creating ever puffier soles, and puffing up prices, even as racing authorities try to put caps and restrictions in place.

In Brief

• A key House committee on Friday failed to advance Republicans’ massive tax-and-spending bill after hard-line conservatives blocked the bill over cost concerns.
• New Jersey Transit locomotive engineers went on strike on Friday, shutting down rail service and disrupting travel for thousands of commuters.
• Charter is in talks to combine with Cox Communications in a deal that would unite two of the biggest US cable providers.

Microsoft in Its AI Era

Nadella. Photographer: Ian Allen for Bloomberg Businessweek

Satya Nadella arrived at the World Economic Forum in January ready to talk up his triumphs in artificial intelligence, when a dangerous threat emerged. A little-known Chinese startup named DeepSeek had just released an AI model that quickly became the talk of Davos, Switzerland. Nadella, the chief executive officer of Microsoft Corp., gathered his lieutenants to assess the out-of-nowhere competition. They set up a virtual war room on—where else?—Microsoft Teams to coordinate a response.

The new model, DeepSeek-R1, could deliver results roughly on par with those of OpenAI at a fraction of the price. Computer processing that would cost $1,000 through OpenAI ran for just $36 through R1. Even crazier, DeepSeek made R1 open-source, meaning anyone could install versions of it for free if they had a powerful enough computer. “OpenAI has been so far ahead that no one’s really come close,” Nadella tells Bloomberg Businessweek. “DeepSeek, and R1 in particular, was the first model I’ve seen post some points.”

To the schmoozers in Davos, this seemed like a huge problem for Microsoft. But instead of trying to stomp out this new rival, Nadella chose to embrace it. Austin Carr and Dina Bass write about that decision and the challenges ahead. Read the story here: Microsoft’s CEO on How AI Will Remake Every Company, Including His. You can also listen here.

Exploited While Seeking Care Work

Mr. Brown (left), a self-described “scammer hunter,” and his de facto bodyguard Sting. Photographer: Carlotta Cardana for Bloomberg Businessweek

On a sunny Sunday in Bedford, England, the peace of a sleepy suburban street is broken by a man rapping at one of the doors. Mr. Brown, as he calls himself, is hoping to speak to the man of the house. A self-styled “scammer hunter,” Mr. Brown believes the man is part of a network wringing tens of thousands of pounds out of would-be migrant health-care workers in the UK. These people are desperate for a job, and that’s made them vulnerable to deception and abuse.

Behind the frosted glass panes of the front door, a male figure appears and then ducks out of sight. A child inside shouts, “Daddy, Daddy!” and is swiftly silenced. No one answers the door.

Mr. Brown waits, knocks again, waits a little longer, knocks again. Eventually he heads back down the driveway to his car. There, an immigrant named Charlie, who says he sent payments of £31,500 ($42,000) from his family back in Nigeria to the man behind the door and received only fake work documents in return, is waiting.

As Mr. Brown and Charlie mull how to proceed, a woman storms out of the house. Charlie recognizes her as the wife of the guy they’re looking for—Charlie has spoken to her when trying to get in touch with her husband. The woman demands to know what they’re doing. Mr. Brown explains that they want to discuss a repayment plan with her husband. She threatens to call the police, and Mr. Brown shrugs. She turns back into the house, and a few minutes later a patrol car swings up to the bottom of the drive.

That’s how Lucy White starts this story from the dark underbelly of the UK’s immigration system: UK Visa Scams Squeeze Millions From Would-Be Care Workers

Illustration: Alex Gamsu Jenkins for Bloomberg Businessweek

No sport saw a bigger boost in popularity during the pandemic than Formula One. That’s mainly thanks to the Netflix docuseries Formula 1: Drive to Survive. But the show, now in its seventh season, gets less compelling the more one guy keeps winning. Max Verstappen, of the Netherlands, has won four consecutive drivers’ championships. Prior to his streak, Lewis Hamilton, of Britain, had won six of seven titles.

It’s impossible to directly correlate Drive to Survive’s popularity with viewership for races. But in 2022, F1 averaged 1.19 million viewers per race, according to Nielsen and ESPN, F1’s broadcast partner. The numbers inched lower in 2023 and lower still in 2024. The most popular race, the Miami Grand Prix, averaged 3.1 million viewers (a record for an F1 event) last year. This year the number was about 30% lower, though that still makes it the year’s most viewed race.

If you remove Miami from the numbers, things begin to look much better this year. In the five other races, viewership is up over 2024. The reason is probably simple: Verstappen isn’t winning as much. In fact, he’s won only one race, in Japan in April. “While people in the US certainly appreciate greatness in sports—we’ve seen that with Tom Brady and many others—there are some people who probably are tired of the same story over and over again,” says John Suchenski, ESPN’s senior director for programming and acquisitions.

Randall Williams, in a new Field Day column, writes about the next big thing that could connect Americans to the sport: F1 Needs More Than Speed to Boost Its US Audience

Crypto Leader Was Hacked

Gold Palaces, Jet Deals and McDonald’s

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