*** Ross Rant ***
OpenAI's federal funding trial balloon reveals structural fragility
Sam Altman rarely miscalculates. His unassuming St. Louis demeanor belies a strategist who understands how to navigate Washington, Silicon Valley, and global capital markets simultaneously. Which makes OpenAI's recent fumble over federal loan guarantees particularly revealing.
When Sarah Friar, OpenAI's chief financial officer, floated the idea of government-backed financing at the WSJ's Tech Live event in California, the swift backlash prompted Altman to engage in damage control. His subsequent insistence that OpenAI neither has nor wants federal guarantees can't erase what the initial request disclosed: a financing model under severe strain.
The CapEx challenge
Three dynamics converge to create OpenAI's precarious cash position:
Margin compression in a CapEx-intensive business. The real story of AI right now is an infrastructure story. Generative AI requires massive computing infrastructure that operates more like a capital-intensive utility than a high-margin software company. Reports suggest OpenAI is burning significant cash, with projections reaching into the hundreds of billions—possibly even $1 trillion—for the infrastructure needed to maintain a competitive advantage. This inversion of the traditional software economics model raises fundamental questions about sustainable profitability.
Market signals of excessive risk—that is, a bubble. When a company valued at potentially $500 billion seeks taxpayer guarantees for private investment, it signals that sophisticated capital markets view the risk-return profile as inadequate. The implicit message is that private financing at market rates would be prohibitively expensive or unavailable at the required scale, suggesting that investors fear these assets may never generate returns commensurate with their investment.
The "too big to fail" gambit. Altman's messaging whiplash—from entertaining federal backing to categorically rejecting it within days—reveals a company testing multiple financing strategies simultaneously. This isn't confidence; it's contingency planning. The pattern suggests OpenAI is attempting to embed itself so deeply in critical infrastructure that U.S. government support becomes inevitable, effectively creating a private-sector moral hazard.
Strategic implications
For corporate decision-makers, board members, and communications professionals, three considerations emerge:
Evaluate AI vendor stability through a credit lens, not just a technology lens. The sustainability of your AI partnerships depends on whether providers can finance infrastructure buildout without extraordinary measures—vendors requiring government intervention to maintain operations present concentration risk.
Prepare for market correction. When industry leaders signal financing stress, it typically precedes broader sectoral repricing. Companies that have heavily invested in AI infrastructure or are dependent on aggressive AI roadmaps should stress-test their assumptions and build contingency plans.
Monitor regulatory capture risk. OpenAI's willingness to pursue federal guarantees demonstrates how quickly the "move fast and break things" mantra can become "too important to let fail." This dynamic creates regulatory and competitive distortions that disadvantage market participants unwilling to pursue similar strategies.
The most sophisticated companies understand that breakthrough technology doesn't exempt you from financial gravity. OpenAI's trial balloon exposed that even AI's most prominent player is discovering this truth.
For executives making multi-year AI investment decisions, that's the signal worth hearing.
—Marc
*** Caracal Daily ***
The new malaise of civilization: When words, truth and reality fall apart: The proliferation of wars, increase in mental health disorders, devaluation of speech, and loss of connection to reality are troubling signs of the tipping point our societies are facing. Nearly a century ago, Freud identified a malaise that resonates with what we are going through today. Nicolas Truong
Trump's attorney concedes: His legal theory would let a president tax foreign cars to combat climate change: Justice Neil Gorsuch got Solicitor General D. John Sauer to admit one "likely" outcome, if the Supreme Court upholds Trump's tariffs. Reason
Trump suggests $2,000 payouts to Americans as he defends tariffs: WSJ reports the president praises benefits of the levies after Supreme Court appears skeptical of his justification for many of them.
Trump’s tariff rebate contradictions: He’s floating a $2,000 rebate to blunt the harm from his border taxes. WSJ-Editorial
US politics are a mystery, Britain’s are a mess: It’s unclear what message Democrats should take from Tuesday’s victories. In the UK, the clear message is that things are about to get worse. Tobin Harshaw
Britain’s new ambassador to France: ‘You all play the game of influence’: Mere weeks into the job, ‘securocrat’ Sir Thomas Drew has positioned Paris’s 18th-century Hôtel de Charost as ‘an informal annex to formal discussions at the Élysée’. It’s no small feat. FT
German far-right activist seeks asylum in US as Trump ties deepen: WP reports social media influencer Naomi Seibt, a supporter of the nationalist AfD party, said she is being persecuted in Germany for her political views.
French lawmakers vote to tax American retirees who freely benefit from social security: Le Monde reports members of the Assemblée Nationale backed an amendment to the social security that would create a 'minimum contribution' on foreign retirees who receive free healthcare.
The rise of 'crypto bros' and neoliberalism in France's business schools: Student societies, blockchain clubs, and crypto and Web3 conferences are bringing together a young generation of fintech fanatics, pushing ideas inspired by radical neoliberalism. Le Monde
Greece deepens US energy ties with first gas exploration deal in 40 years: FT reports ExxonMobil leads drilling agreement targeting reserves in Ionian Sea.
Wealthy Chinese sidestep Singapore for Dubai: FT reports private bankers and advisers report rise in interest in the Gulf as Asian city-state tightens scrutiny of applicants.
The mystery of China’s slumping investment: Its leaders don’t seem concerned. Should they be? Economist
South Korea’s new president is fixing relations with America, Japan, and China: A refreshing burst of pragmatism after a turbulent time. Economist
‘Wolfpack’ and ‘Running Deep’: The battlefield below: The German U-boat force maintained a fearsome reputation. But American submariners fought more effectively. WSJ
‘The Last 600 Meters’ review: The Iraq War’s realities on PBS: A documentary revisits the battles of Fallujah and Najaf in on-the-ground detail. WSJ
Gang violence deepens Haiti's educational crisis: Le Monde reports a lack of electricity, no cafeterias and overcrowded classrooms: Haitian schools have long suffered from structural weaknesses, exacerbated by the proliferation of criminal gangs. More than 1,600 schools have been forced to close across the country, deepening poverty among families.
Alaska’s new mining rush chases something more coveted than gold: Miners are racing to extract antimony, an obscure element used by defense companies, which China cut off as retaliation in the trade war. WSJ
WP: Flight cancellations ‘only going to get worse,’ transportation secretary says
Bloomberg: Duffy warns Thanksgiving holiday travel to slow to a trickle
Bloomberg: Air travel woes grow as Chicago storm adds to shutdown mess
Officials warn of big hit to air travel and GDP as US government shutdown drags on: FT reports Trump administration says flights will slow to a ‘trickle’ with no end in sight to budget impasse.
Bloomberg: US shutdown nears end as Senate Democrats agree to funding deal
Senate closes in on vote on ending government shutdown: WSJ reports a proposal by GOP senators to send money directly to consumers’ health accounts rather than to insurance companies showed signs of breaking a stalemate on negotiations.
Senate moves toward deal to end shutdown, but hurdles remain: WP reports the proposal under discussion doesn’t include more funding for Affordable Care Act subsidies. If a bill passes the Senate, it needs the House’s approval and President Donald Trump’s support.
US senators strike deal in first step to ending government shutdown: FT reports a small group of Democrats joins Republicans in advancing bill to reopen government after record budget impasse.
Democratic defectors relent on shutdown, backing bill to reopen: NYT reports two Democratic negotiators said a group of Senate Democrats was ready to fund the government through January without extending Affordable Care Act subsidies.
Trump says US 'getting close to the shutdown ending': Le Monde reports top Republicans have been working with Democrats to potentially reopen the government into January. Over the course of the 40-day shutdown, Democrats have voted 14 times not to reopen as they demand extension of subsidies for health plans offered under the Affordable Care Act.
Americans see a government that can’t solve their problems: WSJ reports decisive Democratic wins just a year after Trump’s GOP sweep signal voters are impatient for change.
Bloomberg: Data fog intensifying for Fed as shutdown delays US inflation numbers
The trouble with America’s shutdown economy: Gridlock in Washington prevents official data releases. And unofficial ones disagree. Economist
The lessons Democrats need to learn to win again: Continued success depends on properly understanding this week’s victories. Fareed Zakaria
What Mamdani and Martha Stewart tell us about the vibe shift: An election win and a politically incorrect cookbook show that Americans are embracing candour over caution. Jemima Kelly
How New York’s affordability crisis reshaped its politics: Zohran Mamdani’s mayoral upset reflects growing frustration with soaring living costs. FT
American politics is all about affordability now: Democrats are seizing on rising costs to turn Donald Trump’s campaign messaging against him — and it’s working. Bloomberg
Mamdani isn’t the future of the Democrats. This guy is. Binyamin Appelbaum
‘I want to win’: Inside Gavin Newsom’s plan for taking on Trump: Armed with a podcast, a ballot measure and tweets, California’s governor is spoiling for a fight with the president. Bloomberg
This sweary ‘wine mom’ is the Democrats’ answer to Joe Rogan: Former reality TV star from Oklahoma is emerging as one of Left’s most powerful podcasters. Telegraph
Trump’s spin on the economy won’t work Nia-Malika Henderson
Four charts explain why Donald Trump is in trouble: America’s last elections before next year’s midterms have given Democrats hope. Economist
Trump’s MAGA coalition fractures over far-right interview: Heritage Foundation in turmoil after head defends airing of exchange with Holocaust denier Nick Fuentes. FT
Bloomberg: Greg Abbott unveils bid for record fourth term as Texas governor
BBC director general and news chief resign: WSJ reports Tim Davie and Deborah Turness are leaving the news organization following criticism over the editing of remarks by President Trump that were included in a documentary program.
BBC’s top leaders resign over Trump speech editing controversy: WP reports the British broadcaster’s top officials, Tim Davie and Deborah Turness, stepped down amid allegations that a documentary misleadingly edited Trump’s Jan. 6 speech.
Tim Davie quits as BBC chief, taking ‘ultimate responsibility’ for errors: The Times reports the corporation is expected to apologise for broadcasting a doctored clip of a speech by President Trump — who welcomed the resignation.
Two top BBC leaders quit over editing of Trump documentary: NYT reports the abrupt moves followed furor over claims that a documentary had misleadingly edited footage of President Trump’s speech before the Jan. 6 Capitol riot.
Xu Yangtian, Shein’s mysterious founder under fire: China’s fast fashion giant, dealing with outrage in France, was created by a man who is unrecognisable even to his own employees. FT
AI is on its way to something even more remarkable than intelligence Barbara Gail Montero
The AI spending frenzy is so huge that it makes no sense: For $360 billion, the country could fund SNAP benefits for four years. Big Tech spent that much on AI data centers in one year. WP
The boss has a message: Use AI or you’re fired: At companies big and small, employees have feared being replaced by AI. The new threat: Being replaced by someone who knows AI. WSJ
One in six employers expect job cuts from AI in next year: Survey by Chartered Institute of Personnel and Development reveals the extent of the threat to white-collar workers from artificial intelligence. The Times
Voice phishing is AI fraud in real time: Just as we learnt to treat emails with caution, we must now learn to doubt a human-sounding voice. FT
Chatbots are sparking a new era of student surveillance: As US educators embrace AI in the classroom, firms are selling software to flag mentions of self-harm, raising concerns over privacy and control. Bloomberg
OpenAI confronts signs of delusions among ChatGPT users Bloomberg
What happened when small-town America became Data Center, USA: Residents, politicians, and local agencies are making the most of the tech boom, but prosperity comes with costs; ‘What’s going to happen once they stop building?’ WSJ
The AI boom comes to America’s loneliest place: Plans for a 230-mile transmission line threaten Nevada’s wilderness and have united hunters and wildlife groups. FT
Should facial analysis help determine whom companies hire? A new paper suggests a photo can tell a recruiter much about an applicant’s personality. Economist
Meta is earning a fortune on a deluge of fraudulent ads, documents show: Meta projected 10% of its 2024 revenue would come from ads for scams and banned goods, documents seen by Reuters show. And the social media giant internally estimates that its platforms show users 15 billion scam ads a day. Among its responses to suspected rogue marketers: charging them a premium for ads – and issuing reports on ’Scammiest Scammers.’ Reuters
+ Meta's fraud problem: The social media giant projected 10% of its 2024 revenue would come from ads for scams and banned goods, documents seen by Reuters show
+ @mulvihill79: Incredible reporting by @Reuters. Meta makes more money from ad fraud - as much as $16 billion - than all the NFL TV partners put together make on NFL ad sales. Theft on an epic scale.
AP: Denmark’s government aims to ban access to social media for children aged under 15
The men who shaped the internet won’t be able to fix it: Tim Berners-Lee dreamed of a World Wide Web for everyone. Nick Clegg and Meta had different ideas. In new books, both ignore how profit undermined the internet. Bloomberg
Elon Musk has one trillion reasons to finish his robot story: The Tesla chief faces intense competition from rivals like Uber, even in the automaker’s hometown. Tim Higgins
Elon Musk’s $1trn pay deal is a troubling display of corporate capture: He has Tesla and its board wrapped around his finger. Economist
Riding in a Chinese robotaxi is pretty smooth—That’s a problem for Waymo: While US companies dominate their home market, other countries look to China for driverless technology. WSJ
Why commercial space stations are the next frontier: The retirement of the International Space Station ends an era of geopolitical co-operation in orbit. Private operators are racing to fill the gap. The Times
Jamaicans have been turning to solar power. It paid off after the storm. NYT reports people with panels got their power back almost immediately after Hurricane Melissa passed. The “entire neighborhood benefits,” one resident said.
Visa, Mastercard near deal with merchants that would change rewards landscape: WSJ reports the deal under discussion would lower credit-card interchange fees for merchants, but could make it harder for consumers to use rewards cards at the register.
First, grinning Labubu dolls. Now, a TV show and theme parks: Pop Mart, maker of the wildly popular toys, wants to be China’s Disney. Economist
The hidden costs of living alone: In ways both large and small, American society still assumes that the default adult has a partner and that the default household contains multiple people. Joe Pinsker
How the Pompidou took over the world: The Paris institution has closed for a major five-year renovation — but its tentacles span the globe, from Saudi Arabia to South Korea. FT
I tried the track where rich people drive 150 miles an hour to unwind WSJ
The 6-Foot-5 Viking warrior who’s terrorizing European soccer: Even by his own prolific standards, Manchester City’s Erling Haaland is on an unprecedented tear this season, topping the scoring charts despite hardly ever touching the ball. WSJ
The Big Ten, SEC, and the battle over the future of college football: The two athletic conferences effectively rule the sport. But they disagree on critical points about its future. WSJ
Indiana’s perfect season saved by catch of the year Jason Gay
MLB pitchers charged in gambling investigation: WSJ reports Cleveland Guardians pitchers Luis Ortiz and Emmanuel Clase are accused of manipulating pitches for sports betting purposes. Both had already been suspended by the league.
MLB pitchers charged with taking bribes to rig pitches: WP reports Emmanuel Clase and Luis Ortiz are alleged to have thrown certain pitches in exchange for money from bettors. Each could face up to 65 years in prison.
Lando Norris takes grip of title race as Max Verstappen falls short: The Times reports Briton delivers perfect drive in Brazil to open up 24-point gap over McLaren team-mate Oscar Piastri, with Max Verstappen finishing third after starting from pitlane.
WSJ: Former NFL Commissioner Paul Tagliabue dies at 84
Enjoy the ride + plan accordingly.
-Marc
Marc A. Ross | Chief Communications Strategist @ Caracal
Caracal Daily | November 7
The three technologies disrupting the global order: The great Austrian economist Joseph Schumpeter argued that you could spot a fundamental economic transition by the arrival of new types of goods, new production methods, and new forms of industrial organization. The spread of cheap drones, phones, and solar checks all of these boxes. Mark Blyth + Daniel Driscoll
Trump’s tariffs are a massive money grab. That’s why they are in trouble. The president has exercised tax and spending powers that belong to Congress. The Supreme Court might be ready to say “enough.” WSJ
Trump’s tariffs may not please the court: The government’s claims in defense of the emergency border taxes don’t stand ‘major questions’ scrutiny. WSJ-Editorial
White House tells Supreme Court it doesn’t care about the tariff money raised: President Donald Trump has repeatedly boasted that the government is making a “fortune.” WP
Why manufacturing’s last boom will be hard to repeat: The industrial golden age in the middle of the last century resulted from a convergence of factors unique to that time. WSJ
China bans foreign AI chips from state-funded data centres, sources say: The Chinese government has issued guidance requiring new data centre projects that have received any state funds to only use domestically-made artificial intelligence chips, two sources familiar with the matter told Reuters.
Inside Gaza, BBC sees total devastation after two years of war: The Gaza of maps and memories is gone, replaced by a monochrome landscape of rubble stretching flat and still for 180 degrees, from Beit Hanoun on one side to Gaza City on the other. BBC
AP: Israeli jets strike southern Lebanon towns, escalating near-daily attacks
Syria: The White House is preparing to deploy the United States military to an air base in the Syrian capital of Damascus to help shore up a potential security pact between Syria and Israel that US President Donald Trump is currently brokering, according to a new report.
AP: Sudan’s paramilitary group agrees on truce proposed by US-led mediator group
Donald Trump steps up military threats against Nigeria over attacks on Christians: Nigerians say claims of religious persecution are false but blame government for inaction over violence. FT
Russia close to its biggest capture of a Ukrainian city since 2023: NYT reports the Kremlin is focusing its fire on Pokrovsk, a gateway to the Donetsk region, which Russia’s president, Vladimir V. Putin, has long coveted.
Russian forces in Ukraine near first major conquest in more than two years: WSJ reports Russia is betting that its military machine will eventually overwhelm its western neighbor, and that battle is playing out in the southeastern Ukrainian city of Pokrovsk.
As Pokrovsk is set to fall, Ukraine must choose to fight or save troops: WP reports Pokrovsk has been a bastion of resistance, and Russia taking it would be a propaganda win, but experts say it is time to withdraw and save lives for future battles.
AFP: With war next door, Poland seeks to train 500,000 volunteers to reinforce defense
+ @sebs_tweets: 2032 will be the 200 year anniversary of the Great Reform Bill - when Britain, on the verge of revolution and collapse, was forced to finally address systemic issues in the way the country was run. I wonder if we are going to see history repeat itself.
Swiss plan to cap population at 10m by halting immigration: The Times reports:‘Our little country’ is being overrun, say the proposal’s advocates — while critics warn of damage to the economy and national security.
Macron is France’s ‘worst’ president. Just ask his old mentor. The French leader is a narcissist who is in denial of reality, argues Alain Minc. Politico
Japan’s Iron Lady: Japan’s first female prime minister, Takaichi Sanae, presents herself as a leader who can be tougher than the men. This, combined with her hawkish views on immigration and defense, suggests that Takaichi will not use her position to help other women crack the glass ceiling. Ian Buruma
China-US deal to ease rare-earth controls hits snag over scope: Nikkei reports regional authorities contradict claims that measures from April will be halted.
American soybean farmers 'cautiously optimistic' after US-China truce: Nikkei reports despite Beijing's removal of tariffs, US crop still costlier than South American grains.
Milei halts decade-long Chinese radio-telescope project in Argentina’s west: BAT reports US-leaning administration of President Javier Milei ends a decade-long scientific cooperation project; Cancellation of the China-Argentina Radio Telescope in San Juan seen as part of foreign policy shift.
Sexual assault of the president exposes Mexico’s endemic machismo: NYT reports President Claudia Sheinbaum was groped on the street this week, in an episode that set off a national conversation about what has and has not changed since Mexico elected its first female leader.
Russia ramps up rhetoric over US threats to Venezuela: A senior offical has suggested deploying hypersonic missiles to support President Maduro’s regime, as the Kremlin warns Washington over it’s naval build-up. The Times
WP: Senate readies war powers vote to oppose Trump’s Venezuela threats
CNN: Trump admin tells Congress it currently lacks legal justification to strike Venezuela
Trump has the legal power to bomb drug boats: But Congress can stop it by constitutional means—namely by employing the power of the purse. Nicholas B. Creel
+ Three-quarters of Americans oppose presidential use of military force overseas without approval from Congress, according to a new poll conducted by the Institute for Global Affairs at the Eurasia Group. That includes some 94 percent of Democrats and half of Republicans.
Nobel Peace Prize winner: US escalation is ‘only way’ to free Venezuela: Opposition leader María Corina Machado talks about life in hiding, the fight for democracy, and unconventional regime change. Bloomberg
America’s plans for a Golden Dome are dangerously obscure: Without clarity, the missile shield risks becoming a costly, destabilising white elephant. Economist
Flight-cancellation plans prompt scramble across travel industry: WSJ reports US transportation officials revealed plans to cut air traffic at 40 airports by as much as 10% starting Friday.'
Nation’s busiest airports face FAA’s cut in flights, initial list shows: WP reports the preliminary list of flight reductions will affect 40 high-traffic airports. The Trump administration says the order is aimed at easing pressure on air traffic controllers as the government shutdown drags on.
Trump administration must fully fund SNAP benefits for November, judge rules: WSJ reports the order directs the government to deliver the money by Friday for federal food-assistance benefits that have been delayed by the shutdown.
Senate considers revised plan to end government shutdown: WSJ reports apparent progress toward resolving the impasse comes as airport woes grow.
Bloomberg: Lilly, Novo to lower obesity drug prices in deal with Trump
Congressional Budget Office believed to be hacked by foreign actor: WP reports the nonpartisan office makes economic projections for lawmakers and evaluates legislation for how much it would add or subtract from the national debt. The breach potentially exposes key financial data.
BBC: Nancy Pelosi announces retirement after decades in US Congress
Guardian: ‘Iconic, heroic, trailblazing’: Democrats praise Pelosi’s work after she announces plan to retire
Former House Speaker Nancy Pelosi to retire from Congress: Democratic lawmaker won’t run for re-election for her House seat representing San Francisco. WSJ
Pelosi plans to retire in 2027 after 39 years in Congress: NYT reports Representative Nancy Pelosi, the only female House speaker, said she will not run for re-election. She wielded immense power and became a Democratic icon, while she was demonized by conservatives.
Nancy Pelosi is an American political giant John A. Lawrence
Spanberger’s unlikely journey from the CIA to VA’s first female governor: The former House member ran a centrist campaign focused on affordability, health care, and education, providing a potential road map for other Democrats. WP
Democrats take the night: The party swept the three big races, notched major ballot initiatives, and even broke a state GOP supermajority in Mississippi. There’s a message here for Donald Trump and Republicans. Kimberley A. Strassel
How Gavin Newsom struck the year’s heaviest blow against Trump Ed Kilgore
Trump’s GOP is losing independents: The 2025 election results spell doom for Republicans in 2026 if they don’t get serious about the economy. Matthew Continetti
Ranking the 2028 Democratic presidential contenders: There already are a few standouts among Democrats’ potential 2028 candidates, but the long road to the next presidential contest features plenty of dark horses. WP
Stefanik to launch campaign to challenge Gov. Hochul in New York: NYT reports Elise Stefanik, a Republican congresswoman, is a leading ally of President Trump who has gone to great lengths to criticize Ms. Hochul and Mayor-elect Zohran Mamdani.
America’s future is being sacrificed for short-term “wins”: Despite a tumultuous year, markets continue to bet on American liquidity and growth. But while the outlook looks promising, the United States is systematically trading strategic advantages for tactical gains, and the costs are accumulating in ways that won’t become apparent until it’s too late. Ian Bremmer
Holiday spending will surpass $1 trillion this year and set a record despite consumer caution, according to a forecast by the National Retail Federation. Consumers plan to spend nearly $900 per person on average this year, while retail sales are expected to increase in a range of 3.7% to 4.2% from a year earlier, according to the group.
A pill is raising hope for one of the deadliest cancers. WP reports the question is how fast patients should get it. Revolution Medicines received an unconventional FDA fast-track designation for its experimental drug based on early clinical trial results.
Bloomberg: Sweetgreen sells robotics unit to Wonder for $186 million
Airbnb issued a better-than-expected outlook for the holiday quarter, citing strong demand as US travelers used its "reserve now, pay later" feature to book trips in advance.
Bloomberg: Washington Post says it was impacted by Oracle product breach
The age of anti-social media is here: The social-media era is over. What’s coming will be much worse. Damon Beres
How AI and social media contribute to ‘brain rot’: AI search tools, chatbots, and social media are associated with lower cognitive performance, studies say. What to do? NYT
AI pioneers claim human-level general intelligence is already here: Tech leaders say systems now rival human intelligence in key tasks, further fuelling the superintelligence debate. FT
Are AI therapy chatbots safe to use? Psychologists and technologists see them as the future of therapy. The Food and Drug Administration is exploring whether to regulate them as medical devices. NYT
These AI power users are impressing bosses and leaving co-workers in the dust: Rank-and-file employees are jockeying to become leading adopters of artificial intelligence. WSJ
Don’t blame AI for your job woes: The white-collar chill has more to do with the economy than with tech. Economist
Who’s right about AI: Economists or technologists? Forecasting the impact of artificial intelligence has become fraught, with evangelists pitched against sceptics. John Thornhill
OpenAI Chief Executive Officer Sam Altman pushed back at the idea that the company would seek federal guarantees to reduce the risk of its AI infrastructure spending spree, one day after a top executive at the ChatGPT maker suggested there may be a role for the government to help finance the technology.
OpenAI CEO says US shouldn’t bail out AI companies: WSJ reports comments come after OpenAI’s CFO discussed the role of government in potentially backstopping industry growth, at the WSJ Tech Live conference.
OpenAI races to quell concerns over its finances: NYT reports the AI company faced pushback after a top executive raised the idea of government aid, amid concerns that the AI industry is headed toward a dangerous bubble.
+ @pmddomingos: Sam Altman's core competencies are manipulating investors and manipulating tech nerds.
What the US government can do to help win the AI race: Michael Kratsios on how the Trump administration views the government’s role in promoting AI—and where regulation fits into that vision. WSJ
IBM to cut thousands of workers amid AI boom: NYT reports the technology supplier said it was shifting its focus to higher-growth businesses, including AI consulting and software.
Bloomberg: IBM to cut thousands of roles in focus on software growth
Zuckerberg, Chan charity pivots from social causes to AI cures for diseases: WP reports that, after backing away from its criminal justice, education, and affordable housing programs, the Chan Zuckerberg Initiative said it will aim to prevent and cure diseases by capitalizing on advances in artificial intelligence.
Bloomberg: Global AI bubble burst may aid flows into Indian equities
AI wants our water: While much of the AI debate focuses on its economic potential, its expanding physical footprint tells a different story. The machines driving this revolution depend on a resource far older – and far more contested – than data or electricity. Friederike Rohde + Paz Peña
Bloomberg: UK grid overwhelmed by data-center requests for connections
British Airways has signed a deal with SpaceX to make Starlink internet available to every passenger at no cost, starting in 2026.
Taco Bell customers can now pay with Venmo.
Ford considers scrapping electric version of F-150 truck: WSJ reports once hyped as a ‘smartphone that can tow,’ production of the money-losing EV pickup may be shut down for good.
Tesla shareholders approve Elon Musk's $1 trillion pay package: WSJ reports the new package, which includes 12 chunks of stock, could give Musk control over as much as 25% of Tesla if he hits a series of milestones.
Elon Musk wins $1 trillion pay package tying him to Tesla for a decade: WP reports in an era of skyrocketing CEO pay, the award is unprecedented. The deal sets up Elon Musk to become the world’s first trillionaire.
Orvis, an outdoor retailer that’s been in business for 169 years, is closing dozens of stores as it deals with economic pressures caused by tariffs. The company says it will close 31 locations, along with five outlet stores by early 2026, Fox Business reports.
WP: Peloton recalls 833,000 bikes due to a risk of broken seats
ESPN + Penn Entertainment are ending their sports betting partnership.
Dallas Cowboys’ Marshawn Kneeland dies in apparent suicide after police chase: WSJ reports the second-year defensive end was found dead from an apparent self-inflicted gunshot wound, officials said. He was 24 years old.
The dark arts behind the NFL’s record-shattering kicking season: This offseason, the NFL made a small tweak to the rules governing so-called “K-Balls.” It’s led to a year of supercharged kicking. WSJ
Toronto Star: Prince Harry apologizes to Canada for wearing Dodgers hat during World Series
Hamilton dismisses Ferrari exit claims: AFP reports Lewis Hamilton on Thursday dismissed claims that he may not be racing for Ferrari beyond next year after a hugely disappointing 2025 season following his move from Mercedes.
Enjoy the ride + plan accordingly.
-Marc
Marc A. Ross | Chief Communications Strategist @ Caracal
Caracal Daily | November 6
*** Ross Rant ***
Trump's tariff gambit faces Supreme Court reckoning
The Supreme Court heard oral arguments yesterday on what may prove to be one of the most consequential cases of its term—and President Donald Trump's legal foundation for tariffs appears to be losing.
During contentious questioning on Wednesday, justices across the ideological spectrum expressed deep skepticism about the administration's claim that the 1977 International Emergency Economic Powers Act (IEEPA) grants the president unilateral authority to impose sweeping tariffs on dozens of nations.
Both conservative and liberal justices sharply challenged Solicitor General D. John Sauer's defense of the reciprocal and fentanyl-related tariffs that have reshaped global trade flows since Trump's return to office.
Lower courts have already ruled against the administration, finding that Trump exceeded his statutory authority by using an emergency powers law designed for national security crises to implement what amounts to a wholesale restructuring of American trade policy. The presence of Treasury Secretary Scott Bessent in the courtroom underscored the administration's recognition of the stakes involved.
The legal challenge strikes at the constitutional separation of powers between Congress and the executive branch.
Critics argue that Trump has usurped Congress's exclusive authority to levy taxes and regulate international commerce-a fundamental principle embedded in Article I of the Constitution. The administration's defense rests on an expansive interpretation of the IEEPA that would allow any president to unilaterally reshape trade relationships by declaring an economic emergency.
If the justices reject this reasoning, as Wednesday's arguments suggest, the decision would not invalidate specific tariff measures; it would fundamentally constrain presidential power over trade policy for generations to come. The Court's apparent skepticism suggests that even Trump-appointed justices may be reluctant to endorse such a dramatic expansion of executive authority, particularly when it directly conflicts with Congress's enumerated powers.
For business leaders, the implications extend far beyond abstract constitutional theory.
Corporate America is in a state where it needs to adapt supply chains, renegotiate contracts, and restructure operations to accommodate tariff regimes that might be illegal. This regulatory uncertainty has the most chilling impact on business. Not knowing the rules and having the rules change on a whim is not how business should operate.
Even a favorable Supreme Court ruling against the administration would create even more chaos in global trade relationships while simultaneously raising thorny questions about the hundreds of billions of dollars already collected under these tariffs.
Companies that paid these duties may seek refunds, creating a fiscal nightmare for the Treasury and potentially resulting in windfalls for importers. More fundamentally, the uncertainty surrounding tariff policy makes long-term capital allocation decisions nearly impossible. CEOs cannot confidently invest in new facilities, negotiate multi-year supply agreements, or develop market entry strategies when the basic framework of trade policy hangs in judicial limbo.
The strategic implications for corporate planning are equally troubling.
If the Court strikes down the tariffs, Trump will likely seek alternative legal mechanisms to maintain his protectionist agenda, potentially triggering new rounds of litigation and policy uncertainty. Congress could theoretically pass legislation explicitly authorizing tariffs, but the political dynamics make such action unlikely in a divided and slothful government.
Meanwhile, America's trading partners face their own dilemma: should they negotiate with an administration whose trade policies may be subject to judicial invalidation, or should they wait for legal clarity while their exporters suffer? This uncertainty poisons the well for serious trade negotiations and encourages partners to hedge by diversifying away from American markets.
The business community now confronts a period of maximum ambiguity precisely when global economic conditions demand strategic clarity.
Companies that absorbed tariff costs rather than passing them on to consumers made balance sheet commitments based on policies that may be subject to change. Financial models built on current tariff structures could require wholesale revision.
The only certainty is uncertainty—and that represents perhaps the most corrosive force in modern business planning. Markets can adapt to almost any policy regime, but they cannot efficiently allocate capital when fundamental rules remain subject to judicial nullification. Wednesday's Supreme Court arguments suggest American business may be entering precisely such a period, with implications that will reverberate through boardrooms and balance sheets for years to come.
It would be helpful if Congress and the administration remembered that the business of America is business, and when a company is unaware of the rules and faces regulatory uncertainty, no one benefits.
-Marc
*** Caracal Daily ***
CNBC: Supreme Court justices appear skeptical that Trump tariffs are legal
+ Supreme Court justices appeared deeply skeptical about the legality of tariffs imposed by President Donald Trump against most of the world’s nations.
+ Conservative and liberal justices sharply questioned Solicitor General D. John Sauer about the justification of the tariffs, which critics say infringe on the power of Congress to tax.
+ Lower courts say Trump lacked authority under the International Emergency Economic Powers Act to impose reciprocal and fentanyl tariffs on imports from Canada, China, Mexico, and other trade partners.
+ Treasury Secretary Scott Bessent attended the arguments.
Supreme Court appears skeptical of legality of most of Trump’s tariffs: The court heard arguments on one of the most important cases of its term, testing whether the president has authority to impose wide-ranging tariffs. WP
Key justices cast a skeptical eye on Trump’s tariffs: The Supreme Court is considering whether the president acted legally when he used a 1977 emergency statute to impose tariffs on scores of countries. NYT
Supreme Court confronts Trump’s power to disrupt world trade: In a high-stakes legal showdown, the Supreme Court will consider arguments that Trump exceeded his constitutional authority with many of the sweeping tariffs he has imposed on goods from around the world. Bloomberg
Supreme Court’s skepticism on Trump tariffs means uncertainty reigns Bloomberg
Trump’s tough day at Supreme Court puts tariffs in jeopardy: The prospect of a loss by the administration raises questions about the president’s alternatives—and what happens to money that has already been collected. WSJ
Donald Trump’s tariffs could soon be toast: A majority of the justices seem skeptical of Mr Trump’s trade war. Economist
A justice-by-justice breakdown on Trump’s tariffs: The president needs five votes to win. The math looks challenging. WSJ
Why it will be hard for five justices to bless Trump’s tariffs Jack Goldsmith + John Guida
Putin paves way to resume nuclear testing as tensions flare with Trump: WSJ reports the Russian leader said Moscow could return to nuclear testing if the US begins testing its own arsenal.
Putin prepares for first nuclear detonation tests since Cold War: The Times reports Russian president says controlled explosions could be carried out in response to President Trump’s announcement that the US is to resume its own tests.
Russia’s new war grifters—‘black widows’ duping soldiers into marriage: WSJ reports authorities say women are marrying servicemen in an attempt to get the death payouts that go to their families.
Norway may use wealth fund to back €100bn EU war loan to Ukraine: The Times reports Oslo could unlock fresh funding for Kyiv by pledging a slice of its national investment fund, the largest in the world, as collateral.
Switzerland is crossing the crypto rubicon: Can the country replicate its culture of trust in an era that thrives on code and decentralisation? Mercedes Ruehl
Elections in India’s poorest state put Modi’s party to the test: WP reports voting in the eastern state of Bihar falls at a tense time for Prime Minister Narendra Modi, who faces growing domestic criticism and economic pressure from Washington.
Analysis: Xi Jinping eschews 'wolf warrior' diplomacy amid economic woes: Face-off with Trump in South Korea ends in a draw at best, not a Xi victory. Nikkei
Japan’s adventures in Trump’s irrational-rational land: A shiny Ford pick-up truck has become the symbol of Sanae Takaichi’s diplomatic dance with the US. Leo Lewis
End of the line: How Saudi Arabia’s Neom dream unravelled: Mohammed bin Salman’s utopian city was undone by the laws of physics and finance. FT
Brazil is developing a weapon for trade wars: Fertilizer in the Amazon: WSJ reports a planned $2.5 billion potash mine in the rainforest is billed as key to Brazil’s expanding agricultural exports and to the economic security of the indigenous population.
Milei defies calls to float Argentine peso freely: Libertarian president vows to double down on transformation of country’s economy. FT
Why Latin America can’t quit oil and gas: As COP30 approaches, Brazil and Colombia offer competing visions of a ‘just energy transition’ for developing countries. FT
Mexico’s president presses charges against man who groped her on the street: NYT reports a video of a man touching Mexico’s first female president, Claudia Sheinbaum, shocked many Mexicans but did not surprise them. “It’s so common,” one woman said.
Trump expresses reservations over strikes in Venezuela to top aides: WSJ reports the Trump administration is still deciding whether to oust Venezuelan President Nicolás Maduro or extract concessions from him, according to US officials familiar with the deliberations.
How Venezuela’s military might respond to US attacks: Venezuela has an arsenal of Russian weapons and armed civilian cells that could mount a guerrilla war. But a coup against President Nicolás Maduro? Don’t count on it. NYT
Bloomberg: Trump to host Central Asia leaders as resources race heats up
+ President Donald Trump will host a summit with representatives of Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Turkmenistan at the White House.
+ The meeting follows recent efforts by other major powers to bolster ties with the region, including Russian President Vladimir Putin and Chinese leader Xi Jinping.
+ Central Asian leaders have sought to diversify their economic and security relationships, particularly since Russia’s invasion of Ukraine sparked massive Western sanctions against Moscow.
Elections show Trump’s edge on the economy slipping: NYT reports Democrats harnessed worries about the cost of living, with polls showing that Republicans’ longtime advantage on the economy has evaporated.
AP: Trump may become the face of economic discontent, a year after such worries helped him win big
+ Fresh off Democrats’ clean sweep of the 2025 off-year elections, President Donald Trump plans to refocus his political messaging on affordability, James Blair, the political director for Trump’s 2024 presidential campaign and the RNC, told Politico in an exclusive interview Wednesday.
What’s really concerning Republicans after Tuesday’s romp: Trump’s former political adviser told Politico in an exclusive interview that the president plans to talk a lot more about about the cost of living as we turn in the new year. Politico
Republicans point fingers after their losses, but not at Trump: Casting around for culprits, leaders in the party blamed their candidates, the government shutdown, and a weak economic message. NYT
Make no mistake: Trump is an albatross Jamelle Bouie
What Democratic victories tell us about America’s feelings on Trump: Independent and Latino voters swung to the Democrats on Tuesday, while Gavin Newsom showed the party can play the Republicans at their own game. The Times
Winners and losers from the 2025 election: It was not a good night for Trump or Republicans aligned with him. WP
What Democrats’ 2025 election sweep means for the midterms Ed Kilgore
Democrats risk drawing the wrong lessons from one good day: Moderate governors offer a better model than a charming socialist in New York. Economist
Pollsters missed the blue wave in New Jersey and Virginia: WSJ reports pollsters say they miscalculated who would show up to vote and a leftward shift by Latino voters.
Virginia Democrats won in a ‘doggone tsunami’ of an election. Today they’re preaching restraint. WP reports Virginia’s results were among a slew of blue victories around the country, and Democrats nationwide were assessing how to define the party’s future heading into the 2026 congressional midterms.
After ‘seismic’ win, New Jersey’s next governor says she has a mandate: NYT reports Representative Mikie Sherrill, a Democrat, defeated her Republican opponent, Jack Ciattarelli, by 13 points as voter turnout surged.
How voters shifted in Virginia, New Jersey, and New York elections WP
The voters who propelled Mamdani to victory: More than one million voters cast their ballots for democratic socialist in New York City’s mayor’s race. WSJ
An emboldened Mamdani sheds conciliatory tone: NYT reports fresh from a stunning victory, Zohran Mamdani, the mayor-elect, said in an interview that his supporters wanted “a politics of consistency” and aggressive action, including on taxing the rich.
NYT: Jamie Dimon of JPMorgan says he has reached out to Zohran Mamdani
Mamdani and the new challenge for nation states: The metropolis and the heartland provoke each other into extremes, as the New York mayoral race shows. Janan Ganesh
Bloomberg: Mamdani’s ‘Trump-proofing NYC’ campaign sets up fight with White House
Trump vs. Mamdani: The showdown to come: President Trump has berated Zohran Mamdani, the mayor-elect of New York City, in public. But privately, Mr. Trump describes him as slick and a good talker. NYT
After Mamdani win, Schumer rejects charges he’s out of touch: NYT reports the top Senate Democrat was reluctant to say why he stayed on the sidelines of the mayoral race and denied that Zohran Mamdani’s victory reflected poorly on him.
Redistricting pressure heats up after Prop 50’s passage: ‘All Democratic elected officials should take note’: Politico reports Proposition 50 — once thought to be too risky — won big Tuesday. Now, Democrats are using its passage to push for more redraws.
Republicans swiftly file lawsuit in bid to block California’s new house maps: NYT reports Republicans asked a federal court to block newly approved maps in California that were designed to flip as many as five House seats for Democrats.
Redistricting battles, set off by Trump, have few parallels in US history: First, Texas redistricted. Other states followed, and now California. Some legal experts say it’s a crisis: “The wheels are coming off the car right now.” NYT
The anti-MAGA majority reemerges: Democrats won up and down the ballot yesterday, riding a backlash to Donald Trump’s second term. David A. Graham
Socialism or abundance? Two visions fight for the Democratic Party’s soul as it searches for purpose, direction, and a modicum of popularity. Simon van Zuylen-Wood
McDonald’s is struggling to hold on to its low-income customers: WP reports the company said there’s been a double-digit decline in traffic across the industry from lower-earning consumers.
Maine centrist Jared Golden to quit Congress, citing threats and dysfunction: WSJ reports Democratic lawmaker has criticized his party’s leadership over the government shutdown.
In the Trump era, Cheney’s brand of conservatism became obsolete: Dick Cheney was once the face of hard-line conservatism. Then hard-line conservatism changed. NYT
Government shutdown becomes longest in US history: WP reports it breaks the record of 34 days set in President Donald Trump’s first term.
Only Trump can reopen the government. But he’s not in the mood. Ed Kilgore
Reuters: US orders 10% flights cut at major US airports due to shutdown
FAA orders 10% cut in flights at several airports as shutdown drags on: WP reports the Trump administration says the move, which will affect 40 markets, is part of an effort to ease pressure on air traffic controllers.
Bloomberg: US to cut 10% of flights on shutdown, spare international routes
Democrats gird for longer shutdown fight after election sweep: Politico reports bipartisan negotiations continue, but pressure mounted Wednesday to push the 36-day shutdown even longer.
More arrests are made in alleged ISIS ‘pumpkin’ terrorist plot: WSJ reports two New Jersey men have been charged in connection with an alleged plan to attack LGBTQ bars on Halloween.
WSJ: Trader Jeff Yass is giving $100 million to ‘anti-woke’ University of Austin
Why Palantir’s success will outlast the AI exuberance: Its valuation looks bonkers. Its business isn’t. Economist
OpenAI isn’t yet working toward an IPO, CFO says: WSJ reports Sarah Friar says the AI giant could reach break-even quickly and would like government backstop on data-center investments.
Nvidia’s Jensen Huang says China ‘will win’ AI race with US: CEO criticises western ‘cynicism’ while Beijing loosens regulations and cuts energy costs for data centres. FT
Why does so much new technology feel inspired by dystopian Sci-Fi movies? The industry keeps echoing ideas from bleak satires and cyberpunk stories as if they were exciting possibilities, not grim warnings. NYT Mag
Chatbots pose a risk to democracy: AI companies vowed not to support their use for voting choice so why are they recommending parties? Marietje Schaake
Pony ai, WeRide shares sink in Hong Kong debuts as robotaxi battle heats up: Nikkei reports in interview, Pony.ai CEO James Peng says vehicle costs 'will definitely drop further.'
Foxconn to deploy humanoid robots to make AI servers in US in months: CEO: Nikkei reports key Nvidia supplier also plans make the products at Sharp's old LCD plant in Japan.
China’s flying taxi leader aims to launch airport services within 3 years: FT reports EHang says its uncrewed electric aircraft could carry passengers into major Chinese cities for as little as $30.
Saga of Chinese trucking firm exposes US national security gaps: American officials thought they’d secured a deal with TuSimple to protect autonomous-driving technology. It didn’t work. Bloomberg
Sonos hires a Madison Avenue veteran to revive its bruised brand: WSJ reports Colleen DeCourcy joins as chief marketing officer of the audio equipment company, which is looking to claw back revenue and customers after a calamitous 2024.
France says it will ban Shein in row over sex dolls and weapons: FT reports government says it will suspend retailer’s online operations as company opens its first permanent shop in Paris.
Bill Gates’s climate rethinking is a gift to the world: Showing intellectual responsibility, Bill Gates admirably adjusts his stance on climate change. George Will
Cleaning up a coal-fired mess: China’s green-industrial complex makes deep decarbonisation possible, but far from inevitable. Economist
Detroit is back from the dead. But not everyone is feeling it CNN
‘Mr. Scorsese’ portrays a flawed and sympathetic genius: In a new documentary, Rebecca Miller takes the autobiographical echoes in Martin Scorsese’s work seriously — for better and worse. WP
At 89, she’s a top nutrition expert. Here’s what she eats in a day. Marion Nestle’s blunt nutrition advice, sharp criticism of food companies and popular books have made her one of the most recognizable names in nutrition. WP
The day the New York Jets became completely terrible—this time on purpose: WSJ reports the Jets have been a punchline for years. But after a pair of blockbuster midseason trades got rid of two of their best players, it’s clear they’re now actively trying to be bad.
FIFA to award new ‘peace prize’ in Washington next month: FT reports head of football governing body is close ally of Donald Trump, fuelling speculation that US president may be first recipient.
Enjoy the ride + plan accordingly.
-Marc
Marc A. Ross | Chief Communications Strategist @ Caracal