Good morning. Andrew here. Wall Street is counting down the hours to tomorrow, when SpaceX will debut in the public markets, as investors scramble for a piece of the I.P.O. Investors are hoping for a major pop — but a little-known financial instrument may be serving as an indicator of which way the stock will go. We have the breakdown below. Plus: Dario Amodei of Anthropic has put out a provocative paper that is guaranteed to turn heads in Silicon Valley and Washington alike. We get into why it’s worth your time. And the Trump administration is reportedly moving ahead with an inquiry into “debanking” — with Wall Street’s top firms in the cross hairs. (Was this newsletter forwarded to you? Sign up here.)
Can SpaceX escape the gravity of the A.I. race?It’s now just over 24 hours until the moment Wall Street has waited years for: when SpaceX begins trading on the public markets, via the biggest I.P.O. on record. The order books for the offering have already closed amid heavy demand. But those who have bought in will have to reckon with a potentially unsettling reality: SpaceX is now largely a bet on artificial intelligence — and that industry remains locked in an unprecedented trillion-dollar spending spree. How will SpaceX shares perform? An esoteric financial instrument known as a perpetual futures contract offers some clues. A “perp,” as it’s known, basically lets investors bet on something’s price without having to actually own the asset. The SpaceX perp on Hyperliquid, a blockchain-based platform, is trading around $163. That’s 20 percent above the price SpaceX was aiming for in its I.P.O., suggesting the company’s shares could jump tomorrow. Yet the contract is down sharply from where it was last month. Could A.I. worries weigh on trading in SpaceX shares? As we’ve written, Elon Musk has made the company’s xAI division a big part of its investment story. That may be driving much of the enthusiasm for SpaceX shares — but may also leave it vulnerable to the economics of an expensive A.I. race that may be becoming untenable. Consider:
The potential spending tab keeps climbing. A new research report by Goldman Sachs analysts argues that Wall Street forecasts for A.I. spending are too low: Think $1.1 trillion in 2027, not $920 billion. Not even the potential for higher interest rates appears to be denting tech giants’ spending plans, the Goldman analysts add. SpaceX will probably have to spend loads to compete, especially since its xAI division lags far behind Anthropic and OpenAI — both of which are also planning to go public. The company is expected to report losses for quite a while. Skeptics think that’s reason to be bearish on SpaceX long-term. Jim Chanos, the prominent short-seller, noted at a conference yesterday that Tesla was currently trading at 14 times its revenue, based on future promises like robotaxis. By contrast, he said, SpaceX was trading at an astronomical 90 times its revenue. “This is really a hopes-and-dreams I.P.O.,” Chanos said. But, he added, “bull markets put a premium on promises” — and we’re clearly in such a market right now.
Markets rebound despite a flare-up of fighting in the Middle East. U.S. stock futures are in the green and oil prices have dipped today as another exchange of attacks between Washington and Tehran risked pushing the war into a new phase. Investors are anxiously awaiting the Labor Department’s release of wholesale inflation data at 8:30 a.m. Eastern, which could signal the Fed’s next move on interest rates. The Trump administration steps up tariff refund payments. The Treasury Department last month paid back importers nearly $22 billion in tariffs that the Supreme Court has ruled unlawful. That’s roughly what it collected in customs duties in May, underscoring the economic effect of the court’s ruling. The E.U. opens an antitrust inquiry into Paramount’s bid for Warner Bros. Discovery. The European Commission, the bloc’s executive arm, has set a provisional July 14 deadline to wrap up an examination focused on about $24 billion in investments for the deal from the sovereign wealth funds of Abu Dhabi, Qatar and Saudi Arabia. The three would collectively have a roughly 38.5 percent stake in a newly combined media giant.
Amodei’s ‘exponential’ callThe artificial intelligence boom faces all kinds of questions. Few are bigger than how to regulate these companies as their technology grows more powerful. Talk of reining in the tech giants is hardly what investors want to hear before a wave of mega A.I. listings, including SpaceX’s. But Dario Amodei, the C.E.O. of Anthropic, disagrees. He published a missive yesterday in which he predicted A.I. would become “the dominant source of military and economic power of any nation.” Policy is moving far too slowly to keep up with A.I. advancements, he argues in the framework essay, “Policy on the A.I. Exponential.” Among his prescriptions:
Economic relief is a big theme. Amodei reiterated that tech companies ought to pay their fair share of the soaring costs for electricity needed to power A.I. infrastructure, writing: I see public hostility to data centers as largely a symbol or outlet for broader economic anxieties about A.I. It is important we have a direct societal conversation about these wider economic issues and truly have compelling solutions for them, or else they are likely to manifest indirectly, as they have with data centers. Amodei’s views could ruffle feathers again in Washington and Silicon Valley. Anthropic is still battling the Pentagon in court over its designation of the company as a supply chain risk to national security. (Some administration officials, including Defense Secretary Pete Hegseth, have dismissed the company as “woke.”) And some in tech have called Amodei’s go-slow warnings “doom marketing” meant to bolster its leading position in the A.I. race.
QUOTE OF THE DAY “I should never have met with Epstein in the first place.”Bill Gates, in prepared remarks for a House committee, about his ties to the convicted sex offender Jeffrey Epstein. Gates, the Microsoft co-founder, said that he met with Epstein about potential philanthropic donations but then cut off communication, after which Epstein tried to exploit information about his extramarital affairs to pressure Gates to re-engage. In related reading, Maggie Haberman and Jonathan Swan of The Times go deep into the White House’s response to the release of the Epstein files.
The ‘debanking’ inquiry moves forwardOne of President Trump’s primary fixations in his second term has been to crack down on what he and his allies call the “debanking” of conservatives — notably of Trump himself. Now, the Justice Department is advancing that effort, issuing subpoenas to lenders like JPMorgan Chase, Bank of America and Wells Fargo, The Wall Street Journal reports, citing unnamed sources. The latest move is overseen by Jeanine Pirro, the U.S. attorney in Washington and a longtime Trump ally, and has put the banking sector at loggerheads with the Trump administration. A reminder: In August, Trump signed an executive order instructing federal regulators to investigate whether banks had barred customers for political or religious reasons. The process has been led by the Office of the Comptroller of the Currency. The agency said in December that it had found evidence of “debanking” at nine major banks. Now the O.C.C. is coordinating with the U.S. Attorney’s Office in Washington, The Journal reports, adding: One challenge for prosecutors and regulators is identifying what laws the banks violated by choosing not to do business with certain industries, or cutting off particular customers they deemed as too risky to bank due to anti-money-laundering laws. While civil-rights laws prohibit banks from discrimination in connection with their lending, firms have wide discretion around whom they decide to bank. Pirro’s office is investigating whether banks’ actions may have violated laws including the Financial Institutions Reform, Recovery and Enforcement Act of 1989, a broad statute traditionally used to prosecute bank-related fraud, some of the people said. Debanking is personal to Trump. He has repeatedly claimed that JPMorgan and Bank of America rejected his business after his first term. In January, he sued JPMorgan and its C.E.O., Jamie Dimon, for $5 billion. JPMorgan said at the time that the lawsuit had “no merit.” And last year, Trump’s company, the Trump Organization, filed suit against Capital One with similar claims of improper account closures. Capital One also rejected the allegations. We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
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