Andrew here. Wall Street is counting down the hours to Friday, 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.
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:
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Shares in the tech giant Oracle are down nearly 8 percent in premarket trading on Thursday after it reported spending billions more on capital expenditures than expected, with plans to spend $70 billion in its 2027 fiscal year.
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Amazon lined up a $17.5 billion loan as it planned big investments in A.I.
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OpenAI is reportedly in talks to lease a planned data center in Ohio, which could end up costing $500 billion to build, according to The Information.
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Meta and other hyperscalers are reportedly weighing stock sales to help pay for their A.I. investments, following in Google’s footsteps.
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 on Wednesday 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.
HERE’S WHAT’S HAPPENING
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 on Thursday 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’ call
The 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 on Wednesday 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:
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Require third-party testing for frontier models and give the U.S. government the authority to block models deemed unsafe. That’s more aggressive than the voluntary 30-day review period requested in a recent presidential executive order.
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Revamp drug regulators like the F.D.A. to prepare them for A.I.-enabled drug development
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Ban the domestic use of A.I.-powered autonomous weapon systems
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Bolster privacy protections to guard against mass domestic surveillance systems
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Consider policies like taxes on A.I. companies to fund universal basic income, or create universal capital accounts, allowing the public to own a piece of the companies that could put them out of work
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.
The ‘debanking’ inquiry moves forward
One 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.
THE SPEED READ
Deals
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Ares Management raised $8.5 billion from institutional investors, seemingly defying worries about private credit. That said, Scott Kleinman of Apollo warned that pain could return for some private equity players. (FT, Bloomberg)
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Wall Street was puzzling over President Trump’s social media post in which he falsely said Citigroup was No. 1 in M.&A. (FT)
Politics, policy and regulation
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Britain is the latest country to consider a social media ban for children under 16, an initiative that has grown increasingly popular with the public. (NYT)
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A German court ruled that Google’s A.I. Overview search results should be considered the tech giant’s own words, making it liable for false answers. (The Decoder)
Best of the rest
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Lee Raymond, the oil mogul who led the 1998 combination of Exxon and Mobil and resisted the scientific consensus on climate change, has died. He was 87. (NYT)
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“Why the Supreme Court Is Debating Which Founding Fathers Were Drunks” (WSJ)
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