The Brief by Introduction.com - Fintech Friday: Washington Wants a Piece of AI

Hey guys, happy Friday. Hope you're well.

The biggest names in AI went to the White House on Tuesday and signed a safety pledge with no penalties. By Thursday the President said the government "might" want a piece of the labs themselves. The companies promising to spend trillions are shopping for a partner, and the one spending the least might already be winning.

Here's our take on what's happening out there, and what we actually think about it. Grab a coffee, let's get into it.

Borrowing hit its most expensive level in more than two decades on Wednesday, when the 10-year Treasury touched 5.29%. Mortgages jumped to 7.28%, the highest in almost three years.

Then on Friday the economy added just 29,000 jobs, far below the roughly 90,000 expected. Slower hiring means less pressure on prices, so traders now see about a 1 in 4 chance of a Fed hike in October, down from about 70% a week ago.

Bad news for workers turned into good news for anyone with a loan.

🇺🇸 The numbers that moved

Full rates table, at home and abroad, on the Big Board.

This week the companies selling AI chips started lending their customers the money to buy them. Broadcom agreed to lend Anthropic up to $42 billion to lease its chips.

It works like a car dealer that also writes your loan. The sale happens either way, but now the seller carries the risk if the buyer can't pay.

When the seller is also the bank, every sale looks safe until one isn't.

Biggest checks this week

All 15 deals on the Big Board.

Three oil tankers were hit in the Strait of Hormuz on Tuesday and Wednesday, and oil jumped.

Then the G7 agreed to release up to 100 million barrels from emergency reserves over four months, and oil fell back.

Diesel is off its record but still costs about $2.67 a gallon more than a year ago, and that shows up in shipping and groceries.

🌐 At the pump and the barrel

Full price sheet, plus power for AI and the East, on the Big Board.

On Tuesday leaders from OpenAI, Anthropic, Google, Meta, Nvidia and xAI signed a safety pledge at the White House with no penalties.

On Thursday Time published an interview where Trump said he "might" take a stake in OpenAI and Anthropic, like the 9.9% of Intel the government already owns.

He ruled out a full takeover.

Why would the labs want a partner? Look at the bills.

OpenAI once talked about $1.4 trillion. It has since cut that to about $600 billion by 2030. That's still a lot of promises. Anthropic's leaked IPO filing shows about $518 billion in cloud and computing commitments. And Broadcom just agreed to lend Anthropic up to $42 billion to lease its chips.

When the bills get that big, a government partner starts to look like insurance. But no partner stays silent forever. An owner usually wants a say in what the company builds.

Meta is playing a different game. It plans to spend $130 to $145 billion this year, but that bill is paid by an ad business that already works, and 3.6 billion people use its apps every day. It doesn't need to promise the future to get paid.

The labs are building the power plants. Meta already owns the houses.

A stablecoin is a digital dollar backed by real dollars. On Wednesday a group backed by Stripe, Visa, Mastercard, Coinbase and Shopify launched OUSD. Businesses that join the group as partners earn rewards on their balances and activity.

The fight in payments is now over who gets paid for holding your dollars.

🪙 The majors

All five coins and the week's crypto rules on the Big Board.

Saw this online. Three big names, three opposite bets, same week.

Michael Burry, the investor from The Big Short, swapped his Micron short for put options, a bet that pays if the stock falls below about $500 by June 2027. His words: "The bubble in AI may burst sooner than later." Jim Cramer shot back that anyone shorting Micron is "digging their own grave."

BlackRock's Rick Rieder is buying long-term bonds: "once you get the 10-year above 5%, you tend to make money." Ray Dalio has been saying since August to hold 10 to 15% in gold plus "a bit of Bitcoin" instead.

Cathie Wood's ARK bought into Kalshi across three funds on Sept 18. This week Kalshi said it will end its trader rewards program no earlier than Oct 13, after claims that some traders were trading with themselves to farm rewards. Kalshi denies the claims.

How we read it: the biggest names in money can't agree on bonds, chips or prediction markets. When the smart money splits this hard, nobody really knows. Not advice.

The Warrant: Is AI becoming a utility?
🟦🟦🟦🟦🟦⬜⬜⬜⬜⬜ Yes, like power or water: 50%
🟦🟦🟦⬜⬜⬜⬜⬜⬜⬜ No, it's still a product: 25%
🟦🟦🟦⬜⬜⬜⬜⬜⬜⬜ Only the chips and data centers: 25%

"AI deployment is table stakes. It's like Excel in the early 90s. It launched with limited functionality, new releases added more, and adoption grew. AI seems to be on a similar trajectory, at warp speed." Alok

The Rate: every one of you called another Fed hike in October. After Friday's jobs report, traders put the odds at about 1 in 4.

The Ban: diesel never got a ban. It got a 100-million-barrel reserve release instead.

Disagree? Reply and tell us where you'd put it.

This is what membership looks like.

We showed you who wants a piece of AI. Members know who's paying the bill.

We showed you the deals. Members got the ones worth a call.

The edition is public. Membership isn't.

Apply to join 👇