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Andrew here. <\/strong>How high will SpaceX\u2019s stock price go? It continues to defy gravity, with Elon Musk\u2019s company now worth more than Amazon. And what will happen when the lockup on SpaceX shares for insiders expires? Those questions are on our minds; we get into more below.<\/p>\n Also: We\u2019ll be watching Kevin Warsh\u2019s first news conference as Fed chair this afternoon (which we previewed on Tuesday<\/a>). How much will he say? And if he hints at raising interest rates, after calling for lowering them, how will he spell that out to the public \u2014 and to President Trump?<\/p>\n Shares in SpaceX are up again on Wednesday in premarket trading, after the company\u2019s market value \u2014 now nearly $2.6 trillion \u2014 surpassed Amazon\u2019s<\/a> on Tuesday.<\/p>\n<\/div>\n<\/div>\n But the $60 billion deal<\/a> that SpaceX formally struck to buy Cursor, a popular coding tool, showed that Elon Musk\u2019s<\/strong> company has gained something more important than bragging rights from its I.P.O. It also has the financial resources to buy its way into greater relevance in artificial intelligence.<\/p>\n SpaceX is using its stock to buy Cursor<\/strong>. While the terms of the deal mean that Cursor\u2019s shareholders missed out on plenty of SpaceX I.P.O. upside, as Bloomberg Opinion\u2019s Matt Levine points out<\/a>, they\u2019re still getting shares in what\u2019s one of the most sought-after stocks in a while.<\/p>\n Andreessen Horowitz\u2019s 10 percent stake in Cursor is now worth around $6 billion<\/strong>, according to Bloomberg<\/a>. Thrive Capital\u2019s 7 percent stake is valued at about $4.2 billion<\/strong>. Cursor\u2019s four founders reportedly each held stakes of 4.5 percent, according to Forbes<\/a>, making them now worth $2.7 billion<\/strong> a pop.<\/p>\n<\/li>\n<\/ul>\n Buying Cursor will make SpaceX\u2019s xAI more attractive to corporate users,<\/strong> who have flocked to Anthropic\u2019s Claude largely because of its coding abilities.<\/p>\n DealBook hears that Cursor\u2019s revenue run rate from enterprise customers grew 50 times year-on-year, and tripled in the first quarter alone.<\/p>\n Cursor is banking on the benefits of a deep-pocketed parent.<\/strong> Among the attractions of the transaction for the start-up was SpaceX\u2019s huge supply of computing power \u2014 it has so much extra that it\u2019s leasing some to Anthropic and Google for billions of dollars.<\/p>\n That will be important for training Cursor\u2019s latest A.I. software.<\/p>\n The deal illustrates the power of the public markets.<\/strong> SpaceX\u2019s Grok model is seen as less capable than rival offerings from Anthropic and OpenAI. But being publicly traded gives Musk a powerful currency for acquisitions to catch up. (Remember, too, that SpaceX raised a record $85 billion in cash from its I.P.O.)<\/p>\n<\/div>\n<\/div>\n Both are benefits that Anthropic and OpenAI could hope to reap when they also go public, perhaps as soon as the fall.<\/p>\n How much will the A.I. market consolidate?<\/strong> An A.I. executive told DealBook\u2019s Michael de la Merced that one company probably won\u2019t end up dominating the industry, but maybe just three or four will, since the technology is so resource-intensive.<\/p>\n Is there room for smaller A.I. companies to thrive when bigger rivals have the cash and stock to buy up resources and start-ups? And what do antitrust regulators think?<\/p>\n The Justice Department asks a federal court to toss a lawsuit against Elon Musk\u2019s xAI. <\/strong>The agency argued that Musk\u2019s artificial intelligence company has the right to run polluting gas-burning turbines<\/a> to power a data center in Mississippi, as the company is a corporate partner supporting the Defense Department in the U.S. war with Iran. (The suit, brought by the N.A.A.C.P., claimed the turbines violate the Clean Air Act.) The filing underscores the Trump administration\u2019s push to prioritize \u201cA.I. dominance\u201d while it continues to fight environmental causes.<\/p>\n<\/div>\n<\/div>\n New Mexico reportedly widens its investigation into Jeffrey Epstein by looking at corporate giants. <\/strong>State investigators ordered more than two dozen companies, including Google and JPMorgan Chase, to preserve documents<\/a> pertaining to the convicted sex offender\u2019s activities at his New Mexico ranch, The Wall Street Journal reported, citing public records it had obtained. Other companies contacted include payment platforms, airlines and travel bookers.<\/p>\n President Trump cancels Jay Clayton\u2019s confirmation hearing. <\/strong>The move puts in limbo the potential appointment of Clayton<\/a>, the U.S. attorney in Manhattan, as the next director of national intelligence. It also keeps Bill Pulte<\/strong>, a housing official with no intelligence experience, as acting director. A former S.E.C. chair, Clayton had been expected to receive a speedy Senate approval. But Trump appears to be holding up the nomination so he can get Jamie McDonald<\/strong>, his choice to replace Clayton as U.S. attorney, approved.<\/p>\n<\/div>\n<\/div>\n World leaders and tech moguls are meeting in the French Alps on Wednesday at the Group of 7 summit. High on the agenda: artificial intelligence.<\/p>\n<\/div>\n<\/div>\n Discussions about how to deploy bleeding-edge A.I. tools will take place amid diplomatic tensions over the Trump administration\u2019s decision to block access to Anthropic\u2019s most powerful models.<\/p>\n Who\u2019s there?<\/strong> Guests at a lunch meeting on Wednesday include Dario Amodei<\/strong> of Anthropic; Sam Altman<\/strong> of OpenAI; Demis Hassabis<\/strong> of Google; and Arthur Mensch<\/strong> of Mistral AI.<\/p>\n They\u2019re expected to discuss<\/a> how to safely regulate social media and A.I. on a global scale.<\/p>\n A.I. has become a dominant issue at the G7<\/strong>. Some U.S. allies fear that Washington forcing Anthropic to shut down its Fable and Mythos models<\/a> over security concerns means it has effectively deployed a \u201ckill switch<\/a>\u201d for the technology.<\/p>\n A Bloomberg report, based on unnamed sources, shed more light on the administration\u2019s move: Howard Lutnick, <\/strong>the commerce secretary, wrote to Anthropic on Friday threatening the A.I. lab<\/a> with criminal and civil penalties if it tried to give foreign nationals access to its most advanced models without first getting government permission.<\/p>\n<\/div>\n<\/div>\n Some experts have questioned the legality<\/a> of threatening Anthropic or other A.I. labs with export controls over their models.<\/p>\n Fears over access have led to some fierce back-channeling at the G7.<\/strong> Some U.S. allies have discussed a carve-out that would give them \u201ctrusted partner<\/a>\u201d status for frontier A.I. models, Reuters reported.<\/p>\n The Trump administration appears unlikely to budge.<\/strong> An unnamed administration official told The New York Post that such an exemption would be \u201ccompletely illogical<\/a>,\u201d and that the hope was that a solution could be worked out with Anthropic.<\/p>\n We\u2019re two days away from the signing of a framework deal to potentially end the U.S. war with Iran, and hard-liners in Israel<\/a> and some within President Trump\u2019s own party<\/a> don\u2019t like what they\u2019ve heard so far.<\/p>\n But investors are pleased, even if big questions remain over the implementation of the plan, which reportedly would involve significant financial relief for Iran, and may involve U.S. companies.<\/p>\n The latest:<\/strong> Brent crude, the international benchmark, traded around $79, a three-month low<\/a>, as traders assessed an agreement.<\/p>\n Bloomberg reports that it could end the U.S. blockade of Iran, reopen \u2060the Strait of Hormuz<\/a> and restore the level of ship traffic through the vital corridor to prewar levels within 30 days.<\/p>\n What else has been reported:<\/strong><\/p>\n Iran would get access to a $300 billion \u201cReconstruction and Development Fund\u201d<\/a> to develop energy, \u200bmanufacturing and transport projects, Reuters reported, citing unnamed sources.<\/p>\n<\/li>\n More than half of the funding has been committed, Reuters said, including from companies from South Korea, Japan, Singapore, Malaysia and the U.S.<\/p>\n<\/li>\n The U.S. would issue waivers to allow Iran to export oil and other petroleum products immediately after signing the framework<\/a>, and would eventually release Iran\u2019s frozen assets estimated at $100 billion<\/a>, The Wall Street Journal reported.<\/p>\n<\/li>\n<\/ul>\n The reaction has been divisive. <\/strong>World leaders at the Group of 7 summit, many of whom have been briefed on the deal, praised<\/a> President Trump\u2019s \u201cstrong leadership\u201d in securing a \u201cbreakthrough\u201d with Iran.<\/p>\n<\/div>\n<\/div>\n Closer to home, it\u2019s been more frosty. \u201cIf this is true, Iran wins<\/a>. There should be zero sanctions relief day one,\u201d Nikki Haley<\/strong>, who served as the U.S. ambassador to the United Nations during Trump\u2019s first administration, wrote on X.<\/p>\n Trump told reporters on Wednesday that the reports of a $300 billion fund were false<\/a>.<\/p>\n DealBook has questions. <\/strong>What\u2019s been leaked so far appears to reflect what Trump aimed for in his proposed business-led redevelopment deals for Gaza<\/a> and Ukraine<\/a>.<\/p>\n Which companies would get involved, especially given that the U.S. has not had diplomatic or business ties with Tehran in half a century?<\/p>\n<\/li>\n Would Congress have to sign off on corporate America\u2019s potential involvement?<\/p>\n<\/li>\n<\/ul>\n But both the platforms and major trading firms are betting that the future of prediction markets lies in much bigger trades made by much bigger users, such as institutions hedging business risks<\/a>, Michael de la Merced reports.<\/p>\n Prediction markets are courting businesses that want to offset their risk, <\/strong>pitching themselves <\/strong>as an alternative to traditional derivatives markets, which are usually opaque and often more expensive.<\/p>\n How to hedge on prediction markets:<\/strong> The Jeffrey, a New York City bar, offered to comp many customers\u2019 tabs during Game 1 of the N.B.A. finals if the Knicks won. It offset that potential cost by betting $5,000 on a Knicks victory \u2014 netting it just under $8,000, which helped pay for $9,500 worth of patrons\u2019 tabs.<\/p>\n \u201cThe Kalshi hedge worked like a charm,\u201d Andrew Freedman<\/strong>, a corporate lawyer who owns the Jeffrey, told DealBook.<\/p>\n Will Hall<\/strong>, a founder and the C.E.O. of Game Point Capital, which helps manage the financial risks of performance incentives in athletes\u2019 and coaches\u2019 contracts, said his firm now arranges millions of dollars in hedges via Kalshi. (Game Point traditionally arranged for specialized insurance, something it still does.)<\/p>\n<\/div>\n<\/div>\n Wall Street giants see potential for hedging even bigger things. <\/strong>Trading shops like Susquehanna International Group and Jump Trading Group have set up shop on Kalshi, helping to arrange transactions for clients.<\/p>\n \u201cIt could end up being one of the largest businesses that come out of prediction markets,\u201d Jeremy Maletz<\/strong>, Susquehanna\u2019s head of macro trading and prediction markets, told DealBook.<\/p>\n It isn\u2019t just about sports.<\/strong> In April, Kalshi completed its first block trade, brokered by Greenlight Commodities on behalf of a hedge fund that wanted to hedge against carbon allowances, with Jump Trading on the other side.<\/p>\n Proponents think institutions will want to hedge in more areas, including against political risks like elections \u2014 and even for things like the price of DRAM memory chips.<\/p>\n Kalshi recently took a big step to making hedging easier.<\/strong> It unveiled perpetual futures contracts<\/a> \u2014 \u201cperps\u201d in industry parlance \u2014 that allow bettors to track whether the price of something goes up or down, with no expiration date.<\/p>\n<\/div>\n<\/div>\n Importantly, \u201cperps\u201d can be traded on margin, meaning that traders don\u2019t have to front the full amount of their wagers and can essentially borrow money to control much bigger positions.<\/p>\n Deals<\/strong><\/p>\n Yum Brands agreed to sell its Pizza Hut locations<\/a> outside of China to the private equity firm LongRange Capital for about $1.5 billion; Yum China will buy its Chinese stores for $1.2 billion. (CNBC)<\/p>\n<\/li>\n Netflix reportedly held merger talks with Roku<\/a> before deciding not to bid for the streaming set-top box maker, which Fox eventually agreed to buy in a $22 billion deal. (Semafor)<\/p>\n<\/li>\n<\/ul>\n Politics, policy and regulation<\/strong><\/p>\n The E.U. finally ratified a trade agreement<\/a> with the U.S. that would ward off steep tariffs. (The Guardian)<\/p>\n<\/li>\n Amy Griffin<\/strong>, the billionaire author of \u201cThe Tell,\u201d sued a childhood classmate<\/a> who says key details in Griffin\u2019s best-selling memoir were pulled from the classmate\u2019s own life. (NYT)<\/p>\n<\/li>\n<\/ul>\n Best of the rest<\/strong><\/p>\n We\u2019d like your feedback! Please email thoughts and suggestions to dealbook@nytimes.com<\/a>.<\/p>\n<\/div>\n<\/div>\nSpaceX flexes its muscles<\/h2>\n
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HERE\u2019S WHAT\u2019S HAPPENING <\/span><\/h3>\n
The G7\u2019s \u201ckill switch\u201d dilemma <\/h2>\n
<\/div>\n<\/div>\nWhat\u2019s in the Iran deal?<\/h2>\n
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<\/div>\n<\/div>\nTHE SPEED READ <\/span><\/h3>\n
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