FT : Accounting firms try to block new US disclosure rules about auditors

Accounting firms try to block new US disclosure rules about auditors
Regulator has been accused of piling pressure on companies with a flurry of rulemaking

Accounting firms are trying to block new rules that would reveal how many hours are being worked by auditors of US public companies, and how much training and experience they have, saying the information risks being misinterpreted by investors.

The Public Company Accounting Oversight Board, which regulates the profession, approved the new disclosure requirements in November but they cannot go into force unless rubber stamped by the Securities and Exchange Commission, which has received a flurry of letters in opposition.

Shareholders are typically asked to ratify the appointment of a company’s auditor each year and investor groups have long advocated for standardised information to compare firms and inform their vote, according to the PCAOB.

A company’s auditor will have to disclose how much of the work is being done by senior partners versus more junior staff and how many years of experience the people in the team have, including experience auditing companies in that industry. The firm must also disclose the overall workload of senior professionals involved in a company’s audit, along with how much annual training is being given, among the eight different metrics.

Accounting firms say the metrics tell investors little about whether an audit is being done well and are likely to be misunderstood without additional context.

“The value of the metrics is speculative and may in fact confuse investors and other stakeholders, rather than benefit them,” Deloitte wrote in a letter to the SEC.

CohnReznick wrote: “No two firms are identical as are no two issuer audits.”

Several accounting firms argued disclosing the metrics to the audit committee of a company’s board would be better than making them public for shareholders because that is the committee that ultimately appoints the auditor.

The new disclosure rules are the latest PCAOB initiative to run into opposition from audit firms, which say the agency has become politicised and dismissive of their concerns under Joe Biden’s administration.

SEC chair Gary Gensler has said he will step down when Donald Trump is inaugurated on January 20, after which the regulator will be controlled by Republican commissioners who have signalled similar displeasure with the PCAOB’s rulemaking process.

Deloitte’s letter to the SEC said the speed with which the PCAOB is pushing through new rules was piling new costs on to audit firms and causing “stress in the system”, while the American Institute of CPAs, which represents the profession, said small and midsize firms would be tempted to stop auditing public companies all together.

The deadline for submitted comments on the new disclosure rules passed on Thursday but the SEC is yet to indicate when it will vote on whether to approve them.

WSJ : Global Mining’s Dangerous New Reality: Guns, Hostages, Arrests

Global Mining’s Dangerous New Reality: Guns, Hostages, Arrests
With the U.S. and China intensifying demand for critical metals and minerals, host countries are making hostile plays for more of the profits

Neil Warburton was finishing up his breakfast of porridge and local honey when the armed soldiers converged.

The Australian veteran mining executive had flown to southern Ethiopia in 2023 to check on progress at his lithium mine. One of the largest undeveloped lithium projects in the world, it was supposed to start production in late 2024, selling spodumene concentrate that would end up in batteries for electric vehicles and other products.

That plan has gone seriously—and perhaps irreversibly—awry.

The mine, with around $2 billion at stake, is among a number of projects around the world caught in an increasingly tense geopolitical struggle for valuable metals and minerals. Two world superpowers—the U.S. and China—are bankrolling much of the investment to power their economies, which in turn is leading developing countries where the mines are located to push for a greater slice of the profits.

At about 7:30 a.m. on Oct. 16, 2023, Warburton was dining with the mine site manager and geologists when an army colonel arrived and ordered all expats off the site, citing a security issue.

Warburton spied machine guns cradled in soldiers’ arms and mounted on white pickup trucks. Dozens of soldiers flanked the dozen or so expats, then drove them away from the mine to a nearby town.

“It was scary,” said Warburton, executive chairman of an Abyssinian Group company. “They were army soldiers with automatic weapons. And if they say move, you move.”

A unit of the Abyssinian Group had been exploring the area since 2021 in a joint venture with a state government-backed mining company. Under the terms of the agreement, the Abyssinian Group would bear the costs of the exploration and get 51% of the project’s profits, with the rest going to its local partner.

But now the government was asking for cash outside the bounds of the agreement.

Abyssinian offered to pay tens of millions of dollars to resolve the spat if the government satisfied certain conditions, but its exploration license was revoked in August. In October, its country director, Ali Hussein Mohammed, was summoned by the government to Addis Ababa, Ethiopia’s capital, ostensibly to continue the discussions. Instead, he was taken to a detention center, where he remains.

The government says Mohammed mined lithium and exported it without proper authorization, a claim his lawyer and the Abyssinian Group deny. His lawyer says the detention is unlawful as no formal charges have been brought against him.

“This situation is extremely frustrating,” said Stephen Miller, an Abyssinian Group executive, who added that the company had been invited to deploy its money and expertise in Ethiopia in part to benefit the country. “We’re now being pushed to one side. This is a unicorn of a project.”


Racing for resources
The Abyssinian Group’s experience is just one of many examples of resource nationalism that have cropped up around the world, from Mexico to Mongolia to parts of Africa. While host governments and miners have sometimes been at odds in recent decades, lawyers and executives say they have never seen arrests and nationalist actions at this level.

Risk analysis firm Verisk Maplecroft said last month that 72 of the 198 countries it tracks in a resource nationalism index have recorded a significant increase in interventionist policies and protectionism over the past five years.

Helaina Matza, a U.S. State Department official, said while countries should expect fair investments into their mining sectors, the U.S. is concerned about the “increasingly aggressive actions” toward Western investment in some markets.

Investors worry about pouring big sums of cash into mines that can cost billions of dollars to build, only for governments to later shift the goal posts, said John Ciampaglia, senior managing partner of precious metals and critical materials-focused Sprott. Toronto-based Sprott manages roughly $33 billion in assets.

It is common for governments to try to wring more from miners when commodity prices rocket and fatten company profits. And it is now generally understood that a larger percentage of benefits should flow to local communities, many in countries that were previously exploited for their raw materials.

These days, many governments are strapped for cash after borrowing surged during the pandemic, and are looking for ways to replenish their coffers.

In addition, “host countries are seeing just how important these minerals are to the U.S. and China,” said Jeffery Commission, a director at Burford Capital, a legal finance company that has funded companies involved in mining disputes.

Yet industry participants say there is a difference between bilaterally rejiggering mining rights and a government using intimidation to wrest more control.

The tactics being used are different than in the past and are “borderline criminal at this stage,” said Damien Nyer, an international disputes partner at law firm White & Case. “People getting arrested and held as hostages, as bargaining chips—it’s something I haven’t seen in my career.”

Sprott’s Ciampaglia said his team has become much more cautious backing companies in some places, particularly in West Africa.

Panama stunned the global copper market little more than a year ago when a court ruling forced the closure of First Quantum Minerals’ Cobre Panama mine, which accounted for roughly 1.5% of the world’s copper production.

“Cobre Panama is a really good example,” said Ciampaglia. “You thought you were investing in a copper mine in Panama but, in reality, you were investing in a political party in Panama.”

Global shift
In Mali, the Russia-allied military government has recently netted almost a quarter-billion dollars in payments from international mining companies including Canada’s Barrick Gold.

Mali last month issued an arrest warrant for Barrick Chief Executive Mark Bristow. In September, it briefly detained four Barrick employees, releasing them only after the company agreed to a payment of $85 million to “resolve outstanding disputes.” Since then, several employees have been imprisoned on unfounded charges, Barrick said.

Barrick said that gold shipments have been blocked and, if that continues, it will be forced to suspend its operations in the country.

Australia’s Resolute Mining recently agreed to pay the Malian government $160 million after authorities detained the company’s chief executive and two other employees for nearly two weeks.

​The Democratic Republic of Congo recently froze some assets of commodity giant Glencore amid a royalties dispute. The freeze was lifted in recent months, a person familiar with the matter said.

Searching for recourse
Miners are turning to international arbitration to get compensation for the seizure of their mines or licenses. Since the pandemic, mining cases have exploded at a division of the World Bank that oversees investment disputes.

The Abyssinian Group and Barrick are submitting cases to that body. The Abyssinian Group will petition for a multibillion-dollar claim, corresponding to the value it places on its lithium reserve, people familiar with the situation said.

Miners have been heartened by outcomes in some recent cases. Bronwyn Barnes, executive chair of Australian exploration company Indiana Resources, filed a case in 2020 after Tanzania changed its mining code, yanked her company’s operating license and seized the spot where a potential nickel mine would go.

The company was awarded more than $100 million to cover its sunk costs on the project. Tanzania and Indiana Resources last year agreed to a settlement of $90 million.

Government officials in Ethiopia, Mali and Tanzania didn’t return requests for comment.

Abyssinian’s Warburton spent chunks of his earlier career working on projects in Africa, including in Mali. The lithium project in Ethiopia was intended to be the swan song of a more than four-decade career.

“Certainly, I’m never going back there,” he said.

WSJ : Nazi Ties to Credit Suisse Ran Deeper Than Was Known, Hidden Files Reveal

Nazi Ties to Credit Suisse Ran Deeper Than Was Known, Hidden Files Reveal
Fresh look at archives unearthed Nazi-linked accounts discovered by bank in 1990s but never disclosed to investigators

Switzerland thought it came to terms with its Nazi-assisting past after harrowing probes in the 1990s led its two largest banks to pay more than $1 billion restitution to Holocaust victims. Documents unearthed in bank archives show it might have been at least in part a whitewash.

A cache of client files stamped “American blacklist,” a designation for those financing or trading with Nazis or Axis partners, was recently found by independent investigators probing Credit Suisse, one of Switzerland’s biggest banks and now part of UBS UBS 3.76%increase; green up pointing triangle.

The investigators, who studied dusty ledgers and pored over microfilm that hadn’t been part of earlier reviews into the dark chapter, found something else, too: signs of a coverup.

In the 1990s, two panels studied Swiss banks’ World War II-era activities after anger erupted over Holocaust victims’ unreleased funds.

But the investigators now taking a fresh look found Credit Suisse withheld crucial information.

They located several Nazi-linked accounts that were discovered by the bank in the 1990s but never disclosed to investigators. They also turned up new details of an operational account controlled by high-ranking Nazi SS officers and a Swiss intermediary that was allegedly used to move and store looted assets.

The findings came to light in a probe overseen by an independent ombudsman, Neil Barofsky. The former U.S. prosecutor, who is a partner at law firm Jenner & Block, was hired by Credit Suisse in 2021 after the Simon Wiesenthal Center found information on possible Nazi clients that hadn’t previously been disclosed.

The Senate Budget Committee got involved two years ago, when Credit Suisse fired Barofsky from the probe. Bank executives played down what he had found and felt he had overstepped lines it wanted around the investigation. The committee has jurisdiction over the State Department’s Office of the Special Envoy for Holocaust Issues, which seeks to secure compensation for Nazi-era wrongs.

Barofsky was reinstated in late 2023, following UBS’s emergency rescue of Credit Suisse. In a December 2024 letter to the Senate, reviewed by The Wall Street Journal, Barofsky said Credit Suisse and new owner UBS have fully opened their archives and have assigned more than 50 people to work on the probe.

“The investigation has identified scores of individuals and legal entities connected to Nazi atrocities whose relationships with Credit Suisse had either been previously unidentified, or for which the relationship had been partially identified but the full nature of the bank’s involvement has not yet been reported publicly,” Barofsky wrote in the letter.

“UBS is committed to contributing to a fulsome accounting of Nazi-linked legacy accounts previously held at predecessor banks of Credit Suisse,” said a bank spokesperson.

Sen. Sheldon Whitehouse (D., R.I.) and Sen. Chuck Grassley, (R., Iowa) spearheaded the effort in the Senate. “Credit Suisse hid additional evidence of Nazi ties for years, and even tried to conceal information from our congressional investigation,” Grassley said.

Recent photos taken by a visitor to one of the bank’s archives in Zurich shows the scale of the task: rooms full of pallets of boxes stacked from floor to ceiling, and an array of old ledgers, computers and hard-drive disks all storing client records.

Buried in storage were around 3,600 boxes from the “Inf department” containing information about clients, including ones who were on the U.S. wartime blacklist for furthering the Nazi cause.

Barofsky described the Inf department files as akin to “know your customer” details that banks keep on their clients. A preliminary search against 99 known Nazis and affiliates produced 13 name matches. Numerous files bore the American blacklist stamp, he said, which his team hadn’t seen before in other Credit Suisse archives.

Some portions of the Inf department files were included in earlier reviews but were never scanned, indexed or systematically incorporated into those probes, Barofsky said in the letter to Congress. That work is now ongoing.

While conducting the new probe, which included interviews with former bank employees who worked on the 1990s research, Barofsky found indications the bank covered up its role by not always sharing what it knew.

Internal comments by bank executives in the 1990s on one of the panel’s draft reports said the report was “rather sanitized,” but best left as is. Credit Suisse’s general approach to outside investigations was to share only requested information and not offer additional insights, Barofsky said his team was told.

Key information and relevant accounts weren’t shared then with the outside panels, including information about the account controlled by officers of the Nazi SS—Adolf Hitler’s elite paramilitary unit—and a Swiss intermediary. The businesses that used the accounts promoted the regime’s economic aims, seizing businesses from Jewish owners and relying on forced labor at concentration camps.

A registry card for the SS-linked account was found in the 1990s and was flagged to higher-ups, according to the former employees and documents and emails that were discovered in the new probe. Credit Suisse as recently as April 2023 said bank historians hadn’t previously associated the registry card with the account in question, including in the 1990s reviews.

When asked by one of the panels in 2001 about the account, Credit Suisse said it had no documents indicating a business relationship with the SS holding company, leading the panel to conclude documents must have been destroyed.

After outcry in the mid-1990s over Holocaust victims’ missing assets, a group overseen by Paul Volcker, the former Federal Reserve chairman, sent auditors deep into the banks’ files to find dormant or looted accounts.

A second group, assembled by the Swiss parliament and headed by historian Jean-François Bergier, trawled through bank archives to study Switzerland’s Nazi-financing.

The two panels’ main findings were that Swiss bankers routinely turned a blind eye to Nazi theft of Jewish assets during the war and often obstructed families’ later efforts to reclaim their money. Neither review claimed to encompass all wartime accounts or to give a definitive result.

In the 1990s probes, Credit Suisse identified 14 likely Nazi clients. UBS said it found one account for a former Reichsbank president and another opened by an SS officer’s widow decades after the war.

The two banks agreed to pay $1.25 billion to Jewish families who had been denied money in Swiss accounts and to surviving slave laborers or their heirs. Many Jewish organizations supported the settlement at the time.

Barofsky told the Senate his team of investigators expects to issue a final report around early 2026.

TechCrunch : New ship, new year: SpaceX to deploy model Starlink satellites on n

New ship, new year: SpaceX to deploy model Starlink satellites on next Starship launch

SpaceX is significantly upping the ante of its Starship test flight program, with the next rocket launch expected to demonstrate payload deployment for the first time.

The payload in question will be 10 Starlink “simulators” that will be similar in size and weight to the next-gen satellites SpaceX plans to use Starship to deploy in space. These model spacecraft will travel on the same trajectory as the upper stage, which is also called Starship, and splash down in the Indian Ocean.

The operational version of these satellites, called V3, will likely be the first real payloads Starship flies. Indeed, bringing Starship online is the linchpin to SpaceX’s plans to more rapidly deploy its Starlink satellite constellation and reduce the costs per satellite launched. SpaceX currently launches Starlink using its workhorse Falcon 9 rocket, but the next-gen V3 satellites are expected to be much heavier than the current V2 Mini spacecraft. Thanks to Starship’s incredible payload capacity, SpaceX has said it plans to deploy 60 V3 satellites per Starship launch, which will add 60 terabits per second of capacity to the Starlink network.

Per satellite, that equals out to more than 10 times the downlink and 24 times the uplink capacity compared to the V2 Mini satellites.

In a blog post ahead of the seventh test launch, which is expected to take place later this month, the company said it is also introducing a slew of upgrades to the rocket. These include improvements to the propulsion system, avionics, and heat shield, that SpaceX says will boost reliability and performance. During this test, SpaceX will also attempt to “catch” the Super Heavy booster, a feat that the company accomplished for the first time during the fifth test in October.

Barrons : We Tested Tesla’s Newest Self-Driving Software. This Is the Surprise.

We Tested Tesla’s Newest Self-Driving Software. This Is the Surprise.

A lot is riding on Tesla’s autonomous-driving software, and the company appears to be making progress.

Tesla believes it will be able to launch a self-driving robotaxi service in late 2025. Estimates of how much that service could be worth range from hundreds of billions of dollars to several trillion.

While Tesla hasn’t completed a truly self-driving cab ride, the company is constantly improving its driver-assistance products with the help of artificial-intelligence computing. The latest iteration was widely released in December.

Self-driving technology is critical to Tesla stock, so Barron’s took the latest version of the electric-vehicle maker’s Full-Self Driving product out for a spin to help investors not exposed to the technology understand the state of play. The new version is impressive.

Barron’s has tested Tesla’s FSD product several times before. The first review was in September 2023, when I wrote that the car drove “like a mash of a teenager with a learner’s permit and an octogenarian.” It was slow and steady, but unsure about all the situations encountered in daily driving.

FSD worked, but it wasn’t nearly as good as an experienced human.

The car kept improving with each updated version of the software, though it still requires human oversight 100% of the time. New versions tested in 2024 were able to handle turns and intersections that gave the car trouble in the past.

Now there is FSD version 13.2, which is available to owners whose vehicles have the required hardware. Its enhancements include “reduced photon-to-control latency,” whatever that means. Supervised self-driving starting from a parking spot is another innovation—a forward step that is easier to understand.

Version 13.2 is really good. The number of times I have to take over on the road is down substantially, and the driving is significantly better. FSD is starting to feel like a solid human driver. It navigates parked vehicles, construction, difficult left turns, speed bumps, and pedestrians with a surprising level of expertise, though I am still paying attention 100% of the time.

Others have noticed something similar. “Lucky version 13,” wrote Truist analyst William Stein in a recent report. “Our first, second, and third reviews of this technology each revealed material weaknesses. Our recent test drive of FSD v13 was more impressive, requiring no interventions. Still, imperfections remain obvious and prevent us from recommending its use.”

He rates Tesla shares Hold and has a $360 price target for the stock, which closed Friday at $410.44.

Stein sounds more skeptical than Barron’s, though FSD certainly isn’t perfect. I can’t project when it will be much better than a human driver.

Elon Musk believes that will happen in early 2025. “That is just, unvarnished, our internal estimate,” the Tesla CEO said on his company’s third-quarter earnings conference call in October. “That’s not sandbagging or anything else. Our internal estimate is Q2 of next year to be safer than humans.”

FSD version 13.2 gives investors some hope that Musk, who is famously optimistic about self-driving timelines, will be right this time.

He needs to be. Through Friday trading, Tesla stock was up roughly 70% since the company’s Oct. 10 robotaxi event. Those gains added more than $500 billion in market value.

Expectations that the robotaxi service is close, and will be profitable, are running high. How FSD advances throughout 2025 will go a long way toward determining how Tesla stock will do in the new year.

Barrons : Why Regulating Alcohol Industry Is Tall Order Even After Surgeon Gener

Why Regulating Alcohol Industry Is Tall Order Even After Surgeon General’s Cancer Warning

The link between alcohol consumption and incidences of cancer has been known for decades. The latest warning from the U.S. surgeon general could bring a renewed focus on legislative efforts to reduce alcohol intake. But it would be a tall order.

In an advisory released Friday, Surgeon General Vivek Murthy named alcohol use a “leading preventable cause” of cancer behind tobacco and obesity, noting that alcohol contributes to nearly 100,000 U.S. cancer cases and roughly 20,000 cancer deaths each year—higher than the 13,500 deaths caused by drunken driving.

Shares of Anheuser-Busch InBev, the maker of Budweiser; Molson Coors, the maker of Miller Lite; Constellation Brands, the distributor of imported Mexican lager like Corona and Modelo Especial; Sam Adams maker Boston Beer; and Brown-Forman, producer of Jack Daniel’s whiskey, tumbled on Friday following the surgeon general’s advisory.

Murthy is calling for a series of actions to increase public awareness of the health risk, including updates to the warning labels on alcoholic beverages. Alcoholic products already are subject to labels that carry the risks of drinking during pregnancy, while driving, or operating machinery.

Introducing more alarming labels would require approval from Congress, and it would be a challenging task. Alcohol companies and trade groups spend millions of dollars each year on lobbying to push for regulations that favor the industry.

Look no further than the tobacco industry. Cigarettes are required to have text-based warnings in bold, capitalized letters on the side of the packages. The Food and Drug Administration had tried to implement graphic warning labels for cigarette packages and advertisements like those in many other countries.

But tobacco companies fiercely opposed the move on the basis of freedom of speech, and they won in federal court more than a decade ago, preventing the graphic warning labels.

In 2023, total lobbying spending for the beer, wine, and liquor industry reached $29 million, roughly the same as the tobacco industry, according to research group OpenSecrets.

Another way to curb alcohol consumption would be to charge higher taxes that would make alcohol more expensive. Alcoholic beverages are subject to significantly higher tax rates compared to most other food and non-alcoholic beverages.

The federal alcohol excise tax, collected from manufacturers and importers of alcoholic beverages, totals $10 billion to $12 billion each year. The rates for pure alcoholic content of spirits, wine, and beer are 21 cents, 6 cents, and 9 cents per ounce, respectively.

Despite inflation and the rising prices of alcohol, those rates have remained largely unchanged since 1991, meaning the share of alcohol tax relative to the size of the economy actually has declined over time.

In 1940, alcohol excise taxes made up around 10% of federal revenue. By 2022, it accounted for only 0.2% of total federal receipts, according to a report in September 2024 from the Congressional Research Service.

In recent years, several states have implemented changes to their alcohol excise taxes, either increasing rates or considering reforms to address public health concerns and generate additional revenue. But resistance from the industry has always been strong.

Some states, such as Tennessee, Minnesota, and cities like Chicago and Seattle, also impose a special sales tax on alcoholic beverages in addition to the general sales tax, collected directly from consumers.

Last year, Chicago Mayor Brandon Johnson proposed a 34% to 36% per gallon increase in taxes on alcohol sales, but faced significant opposition from bars and restaurant owners, who said they already were struggling with rising costs and thin margins since the Covid pandemic.

It could be tough to impose stricter regulations on alcohol consumption, which is deeply ingrained in many cultures and often associated with celebrations and tradition. Overly restrictive measures could lead to public backlash and economic losses.

While tobacco is widely regarded as harmful even in small amounts, moderate consumption of alcohol often has been considered to have a low health risk. Some studies even suggest potential health benefits from red wine, although the credibility of such findings has been widely debated.

Prohibition during the 1930s in the U.S., when the production, transportation, and sale of alcohol was banned nationwide, has left regulators with cautionary tales. The period saw a proliferation of illegal bars, corruption among law enforcement officials, and a rise of organized crime.

Barrons : Berkshire Hathaway Just Bought $4 Million More of This Stock

Berkshire Hathaway Just Bought $4 Million More of This Stock

Berkshire Hathaway continued its purchases of Verisign in recent days, buying about $4 million of the company that provides Internet domain registry and other services.

The small recent buys, approximately 20,000 shares, were made at an average price of nearly $205 a share, according to a form 4 filing with the Securities and Exchange Commission late Friday.

Berkshire now owns 13.3 million shares of Verisign, a roughly 14% stake worth about $2.7 billion. Berkshire has bought about 500,000 shares since mid-December, after largely being out of the market for the stock since 2014.

The purchases may have been done by Ted Weschler or Todd Combs, two investment managers who work with CEO Warren Buffett in running Berkshire’s $300 billion equity portfolio. The pair run about 10% of it, with Buffett handling the rest. Combs and Weschler tend to hold smaller positions of under $3 billion

Berkshire now has bought the stock for 12 straight trading sessions, but some of the daily buys have been small, including just about 1,600 shares on Tuesday.

>>> Barrons Weekend Summary

Cover:
-In 2024, bonds played second fiddle to stocks, but income investors found ways to get paid. In 2025, investors should expect similar results, with long-dated Treasuries and municipal bonds showing flat to negative returns. However, junk bonds, convertibles, and preferred stock generated mid-single to low-double-digit returns. Energy pipeline companies emerged as data-center plays, while electric utilities had a strong year as artificial-intelligence plays. The Vanguard High Dividend Yield exchange-traded fund, led by megacap dividend payers like JPMorgan Chase and Exxon Mobil, returned a respectable 17%. Looking ahead to 2025, investors can still find yield in stocks and bonds. In fixed-income markets, investors can get 3% to 5% yields on municipal bonds, 7% or more on junk debt, 5% to 7% yields on preferred stock, 2% on convertibles, and 4%-plus on Treasuries of varying maturities. Lower-quality investment-grade bonds and higher-quality junk in the 5% to 7% area offer attractive income potential in 2025.

Interview:
-The US dollar surged after Federal Reserve chair Jerome Powell's Dec. 18 news conference, which led to a quarter point lower in interest rates. Despite expected weakening of the currency's appeal, the U.S. Dollar Index (DXY) rose nearly 7% in 2024, despite Fed rate cuts, concerns about U.S. finances, and macroeconomic concerns. The impact of President-elect Donald Trump's tariffs, tax cuts, and the Fed on the dollar is a crucial question for investors in 2025 and beyond. Karthik Sankaran, a former foreign-exchange trader and portfolio manager, offers insights on macro strategy and has gained a following in the markets. Sankaran recently joined the Quincy Institute for Responsible Statecraft as senior research fellow in geoeconomics in the Global South program.

Tech Trader:
-Former partners Elon Musk and Sam Altman are dueling in a California federal courtroom over their personal animus over generative AI model development. OpenAI, a nonprofit organization, began as a means to counter Google's lead in AI research. They feared that Google would be the first to develop artificial general intelligence (AGI), defined as highly autonomous systems that outperform humans at most economically valuable work. However, the high cost of training AI models became a concern, leading to Musk leaving OpenAI in 2018. In 2019, OpenAI created a bespoke structure, controlling the company with a nonprofit board but creating a for-profit entity. Investors' profit would be capped at 100 times their original investment. Microsoft was the first to invest in OpenAI, providing billion dollars and then another $10B in 2023 after ChatGPT's release.

The Trader:
-Las Vegas based Caesars Entertainment has experienced a 30% drop in 2024, underperforming rivals MGM Resorts International, Wynn Resorts, and Las Vegas Sands. However, Wall Street is betting on a turnaround in 2025, with a consensus price target of nearly 65% higher than its current level. Caesars owns other top Las Vegas hotels and casinos, including the Flamingo, Harrah’s, Paris, and Planet Hollywood. The company's online sports betting business has also made strides, with digital revenue increasing more than 40% in the third quarter of 2024 and expected to continue growing in the fourth quarter and throughout 2025. Stifel analyst Steven Wieczynski has a target price of $63 for Caesars, more than 90% above Thursday’s close of $32.59. Investors should also be cautious of Carl Icahn, who purchased a more than 1% stake in Caesars in 2024. Although his new position is passive, Icahn is still bullish on the stock.
-Stocks soared in 2024 after a massive surge in 2023, but some argue that now is the time to be a little more cautious. According to data from Glenmede Investment Management, the average annual return for the S&P 500 index is a more modest 6.7%, following consecutive yearly gains of more than 20%. While the Magnificent Seven may not tank per se, it may not hurt for investors to add more defensive-oriented stocks from the healthcare and consumer-staples sectors to their portfolios. Bill Stone, chief investment officer at Glenview Trust, wrote in a recent report that allocating to underperforming defensives like consumer staples and healthcare seems like an intelligent move for 2025. Other staples stocks, such as Coca-Cola, PepsiCo, Mondelez International, and Target, underperformed in 2024 and may now be attractive.

Features:
-Elon Musk has donated 268,000 shares of Tesla stock valued at nearly $112M to charity, as part of his year-end tax planning. The transaction was part of Musk's year-end tax planning and represents gifts of common stock to nonprofits that are unknown. The recipients have no current intention to sell the shares. After the sale, Musk still owns slightly less than 411M shares of Tesla stock through his revocable trust established in 2003. In addition, Musk was awarded 304 million in Tesla stock options in 2018, which was rejected twice by a Delaware Chancery Court. Tesla shareholders are challenging the latest court ruling. Musk's mystery gifts are not new, as he previously shed shares valued at $1.95B in seven transactions between August and December 2022.
-President Biden's decision to block US Steel's sale to Japan's Nippon Steel on national security grounds demonstrates the flexibility of national security as an excuse for government intervention in the economy. This justification is likely to become more common when President-elect Trump returns to power on Jan 20. Biden argued that without domestic steel production and domestic steelworkers, the nation is less strong and less secure. However, the failed bid may have been due to a foreign company accidentally wandering into a political minefield by trying to acquire an iconic unionized American manufacturer in a swing state during an election season. The United Steelworkers' leadership opposed the sale to Nippon, and Biden's decision risks undermining the Committee on Foreign Investment in the USA, which reviews potentially sensitive transactions involving foreign buyers of US assets. The committee opened its investigation after the prospective deal was announced in December 2023 and concluded its investigation earlier this month.

Europe:
-Europe is a popular investment destination for bargain hunters due to its underperformance, with the Vanguard FTSE Europe ETF returning just 2% in 2024. However, European stocks trade at record valuation discounts compared to the US, where the S&P 500 fetches 22 times. Goldman Sachs analysts have noted that the Stoxx Europe 600 index should have "modest" earnings growth of 3% to 4% in 2025, leading to "positive but low returns" for European stocks. Europe's markets have little exposure to technology stocks and their high growth, with the biggest European tech companies, SAP and ASML Holding, being about a tenth the market value of Apple.
European stocks are also getting dinged for being European, with every sector trading at a bigger discount to the US. The European energy sector, which trades at about a 50% discount to the US, is particularly severe. David Herro, manager of the Oakmark International fund, views depressed European stocks as a coiled spring that could "explode" to the upside if they ever start to close the valuation gap. Luxury goods companies Kering, Richemont, and Swatch Group trade for 15-20X projected 2025 earnings. Depressed liquor producers Diageo and Pernod Ricard also look attractive. The European auto industry has rarely been more disliked by investors due to tough continental electric-vehicle mandates, declining profits from China, and Tesla's lead in autonomous driving. Cash- and asset-rich BMW and Mercedes-Benz Group now trade for 6X forward earnings.

Emerging Markets:
-China's economy is struggling, with December data from China Beige Book indicating that the government's efforts to boost the economy are losing power. The recovery in consumer spending has not materialized in a sustainable way, with sales volume in every retailing sector declining compared to the prior month and 12 months earlier. The manufacturing sector also shows no signs of recovery, with output growth slowing down due to weakened domestic and foreign demand. The only hope for recovery is if Trump's China tariff talk is hot air. Home builders and sellers reported better sales growth, but home prices fell in December, making it difficult for the government to boost consumer confidence. Economists expect more stimulus measures from Beijing, especially if Trump starts his second presidential term with increased tariffs on Chinese imports.

Commodities:
-No update this week

Streetwise:
-Jack Hough identifies Comcast, as the “most complicated big company” in America, taking the title away from pre-breakup General Electric. The company's ticker, CMCSA, stands for Class A shares, suggesting that the founding family is using an off-limits class to maintain voting control that outweighs its economic stake. Comcast's shares have made 62% over the past 10 years, lagging behind the S&P 500 index by 180 percentage points. However, the company has outperformed its television peers, with the company's adjusted Ebitda increasing 9% to $468M. The company's movies, including Despicable Me 4 and Twisters, have also been making money, with third-quarter revenue rising 12% to $2.8B. The 2025 slate includes new installments in the Train Your Dragon and Jurassic franchises, as well as a Wicked follow-up.

The Information : OpenAI’s Next Departure, Amazon’s New Product—and 16 Other Thi

OpenAI’s Next Departure, Amazon’s New Product—and 16 Other Things We Think Will Happen in 2025
Our complete predictions for the year ahead.

Amazon Will Launch Its Own Version of Ozempic
A yearslong shortage of Ozempic and Wegovy has prompted direct-to-consumer health companies like Hims & Hers and Sesame to start selling their own versions of the popular weight-loss drugs. (They’re compounded drugs, or custom-made knockoffs of expensive brand-new drugs.) Amazon could be next as it looks to grow its pharmacy business: It already lists Ozempic and Wegovy on its site, but most doses have been out of stock for months as part of the broader shortage—creating an opening for Amazon to sell its own version.

One potential hurdle: The FDA could stop companies from selling knockoffs of Ozempic and Wegovy if it determines the name-brand versions are no longer in short supply. But President-elect Donald Trump’s nominee to lead the FDA has been an executive at Sesame, which some investors have interpreted as an indication Trump will be friendlier toward makers of compound drugs.

And even if Amazon doesn’t begin selling its own version of Ozempic, it’ll find some other way to resolve the shortage in 2025. There’s nothing more embarrassing for The Everything Store than one of the world’s most-discussed products remaining out of stock.—Theo Wayt

An AI Agent Will Cause Chaos for a Blue-Chip Company
AI agents—bots that can handle complex, multipart actions such as booking a travel itinerary or arranging a product return—are starting to gain real traction in the business operations of tech giants like Microsoft and Salesforce. They’re already using AI agents to handle customer service interactions, among other tasks, and the agents are poised for wider adoption this year as these companies and rivals like Google, OpenAI and Anthropic all race to get customers using the technology.

But AI agents are still rough around the edges, and it’s entirely likely that a publicly traded company will suffer a malfunction involving one that causes enough damage to its business to require notifying the SEC with an official filing. One scenario could involve a hacker using a vulnerability in agent software to access sensitive corporate data. Another possibility: An attacker could tamper with agents at a company that uses them to manage a supply chain, delaying a new product’s development.—Kevin McLaughlin

Marc Lore’s Wonder Will Acquire FreshDirect or Gopuff
As Marc Lore’s latest act continues to unfold, his restaurant-delivery startup, Wonder, will make a deeper push into groceries by buying FreshDirect or Gopuff. It could even pick up both.

Lately, Wonder has attracted attention by acquiring a range of businesses that complement its core restaurant-delivery business. In 2024, for instance, it agreed to buy Grubhub and completed the purchase of Relay, a New York–based app that matches gig workers with deliveries. A year earlier, it purchased Blue Apron, the meal-kit company.

Another serious indicator that Wonder plans to expand to grocery delivery is Lore’s hiring of Tony Hoggett in October. Hoggett, now Wonder’s chief operating officer, had been running Amazon’s grocery strategy since 2022.

Purchasing Gopuff would give Wonder a series of existing warehouses that could help a grocery-delivery business really get rolling. And Gopuff’s investors may be keen to sell, given that the company burned $400 million in 2023 amid flat-lined growth. Fresh Direct is in a similar position, and its CEO, Sloan Eddleston, has ties with Lore: Eddleston was an early executive at Wonder and consulted for the company when it bought Blue Apron.—Ann Gehan and Theo Wayt

Tim Cook Will Extend His Apple Tenure for Another Half-Decade
With the Apple CEO’s current major stock grants set to expire in 2025, new grants could be on the horizon and are expected to align with the terms of a new contract. In a recent Wired interview, Tim Cook, 64, recently said he finds it hard to imagine life without Apple, insisting he still loves the job. Former Apple executives also note that Cook’s life is deeply intertwined with the company, and he has few interests other than his job at Apple: That means he’ll commit to leading Apple for at least another five years, extending his tenure through 2030.

Meanwhile, Apple’s John Ternus and Craig Federighi—the company’s hardware and software chiefs, respectively—are anticipated to take on expanded roles or additional responsibilities. Both are seen as strong contenders to succeed Cook in the future due to their seniority and relatively young ages.—Wayne Ma

College Athletes Will Become University Employees
In April, we will likely get a final resolution in the landmark House v. NCAA class-action suit, whose sprawling terms have been under review in California for over four years. The suit brought by two college athletes could see the governing body and five major conferences settle 10 years of revenue-sharing claims totaling $2.8 billion.

That resolution paves the way toward universities directly paying college athletes, reshaping the entire $14 billion college sports industry with dire effects on higher ed and pro leagues. Having to share lucrative media rights, ticketing and other revenue with athletes will force university athletic departments to revisit their budgets and eliminate smaller sports. Such a shift could potentially scatter the talent pool for pro leagues like the NFL and NBA as young stars increase their earning power at college and stay in school.—Sara Germano

A Buyout Wave Will Hit Consumer Companies
Several unprofitable retail and consumer companies are languishing on the public markets after the 2021 IPO boom, including ThredUp, a secondhand apparel site, and Grove Collaborative, an online natural products retailer. (Those stocks fell roughly 40% and 25%, respectively, in 2024.)

These hard times will lead to a buyout wave in 2025. Private equity firms and other investors have been sitting on massive amounts of cash as dealmaking has remained slow, and they’ll want to snap up these once-hot brands for cheap. We’ve already seen signs of this type of action: In December, private equity firm Story3 reportedly made a takeover offer for Figs, a direct-to-consumer maker of hospital scrubs. Before the report came out, Figs shares had fallen more than 20% in 2024.

Buyers will likely want to target companies that have made headway on cutting their costs but have yet to achieve a return to consistent sales growth, like Olaplex or Peloton. For example, Peloton said it had reduced its operating expenses 30% from a year earlier in the September quarter, and after years of decline, its revenues appear to have plateaued.

For brands that aren’t profitable and that have also seen their sales decline dramatically, like Allbirds, selling to a brand licensing firm such as Authentic Brands Group might make the most sense. These licensing firms acquire the rights to a brand but use contract manufacturers and wholesalers to manage production and operations.—A.G.

AI Chatbot Companies Will Face Hundreds of Lawsuits
Purveyors of AI chatbot companions have seen a surge of user interest over the last several years, generating eye-popping valuations and, in the case of Character AI, lucrative quasi-acquisition deals with companies like Google.

But attention begets scrutiny, which in turn often begets litigation. In recent months, Character.ai has been hit with two high-profile lawsuits alleging that the company negligently designed its boundary-pushing companion chatbots and that they harm young users’ mental health and well-being.

Concerns over the potentially harmful effects of these chatbots on children will reach a fever pitch in 2025, resulting in the filing of hundreds of lawsuits against companies like Character.ai, Replika and PolyBuzz.

Similar to the wave of social media addiction lawsuits tech giants like Meta Platforms and ByteDance have recently faced, these chatbot suits will likely eventually be lumped together and decided in drawn-out megacases.—Paris Martineau

Cisco CEO Chuck Robbins Will Leave
Chuck Robbins hasn’t done a bad job in his nine-plus years helming venerable Cisco, which celebrated its 40th anniversary in early December. But Cisco is no longer the dominant force it once was. Sales have been declining, and one reason is that rival Arista Networks has been steadily eating into Cisco’s share of the market for networking switches—its largest single business—which connect PCs and servers in corporate networks.

On another front, Cisco still trails Palo Alto Networks in certain market segments, like network security devices. That’s a big reason why Robbins spent $28 billion to buy cybersecurity firm Splunk, the largest purchase in Cisco’s history. Even so, Robbins hasn’t managed to make Cisco meaningfully less reliant on networking hardware, despite moves like the Splunk purchase.

Analysts are expecting Cisco to start growing again in the new fiscal year, but they don’t see a boom ahead: They’re projecting growth of between 4% and 5% in the next two fiscal years, according to S&P Global Market Intelligence.

Given the mounting pressure and his long tenure, Robbins, who joined Cisco in 1997 as a sales account manager, will step down in 2025. He’ll pick Gary Steele—Splunk’s top leader before Cisco promoted him in May to lead its sales and marketing teams—as his replacement.

What will Robbins do next? It wouldn’t be surprising if Robbins, a gregarious fellow, left the tech industry and got into politics, said two former Cisco executives who have worked with him.—K.M.

Josh Kushner Will Buy New York Magazine
In 2024, Josh Kushner made a number of eye-catching deals: He bought the rights to Life magazine, and his Thrive Capital invested in A24, the studio with a mantel full of Oscar gold from films like “Everything Everywhere All at Once.” Clearly, Kushner has an interest in being more of a media mogul, and as a liberal New Yorker, I’m sure he deeply appreciates the high-quality journalism that New York magazine continues to publish. In fact, I bet it will be his next acquisition: The publication would be an irresistible trophy asset for someone like Kushner, and its parent company, Vox Media, isn’t in the best financial health, which will encourage Vox to sell off what I imagine is an expensive loss leader.—Abram Brown

OpenAI’s Chief Operating Officer, Brad Lightcap, Will Depart
2024 saw a series of big leadership changes at OpenAI. The startup hired a chief financial officer, Sarah Friar, Nextdoor’s former CEO, and a chief product officer, Kevin Weil, Facebook’s former vice president of product. At the same time, several folks exited, including Mira Murati, who had been the startup’s chief technology officer.

The revolving door at OpenAI will likely keep spinning in 2025 as the company looks to fill its leadership ranks with more experienced executives from public companies and later-stage startups. Here’s another departure I expect: Brad Lightcap, the chief operating officer who’s been at OpenAI since 2018. Until last year, Lightcap managed the startup’s finance and sales teams, but those organizations have since been taken over by Friar and Giancarlo Lionetti, OpenAI’s chief commercial officer, who also joined the company in 2024. More recently, Lightcap has been spending more time in the company’s research and product organizations.—Stephanie Palazzolo

Conservative-Favorite Industries Will Be Funding Hot Spots
As the era of woke investing recedes, sectors the political right has championed in recent years will attract more capital in 2025—and increasingly more of it from mainstream sources. Defense tech and cryptocurrency are a couple of the most obvious areas. Ed tech startups could see a boost, too, as more such firms work on creating schools and other tools for homeschooling and alternatives to public schools and traditional private institutions. Parts of biotech will likely see a boom, too, including ones interested in longevity research and fertility—with birth rates and procreation a top concern for Elon Musk and other tech leaders close to the administration.—Julia Black

Microsoft Will Stave Off the FTC’s Current Investigation
During the past four years, Microsoft has been a target for Lina Khan, the Joe Biden–appointed FTC chair, and she has recently been escalating a sprawling antitrust investigation into Microsoft that touches on everything from its software licensing practices to its AI deals. But Trump intends to replace Khan with Republican FTC commissioner Andrew Ferguson, who has said he would take a more business-friendly approach than Khan.

Yes, Ferguson has signaled a willingness to go after big tech companies, but mostly as a way to do battle in the culture wars. He has accused Google and Meta of censoring conservative opinions, for example, while he hasn’t targeted Microsoft as much. Meanwhile, Microsoft’s politically neutral stance and chummy relationship with senior Republicans in Washington are likely to make it an unappealing target for the FTC during the second Trump administration, increasing the likelihood that the current investigation will fizzle out without turning into a full-blown antitrust lawsuit.—Aaron Holmes

Trump Will Sign Online Child Safety Legislation Into Law
In 2025, lawmakers will pass the first comprehensive federal regulation the tech industry has seen in decades. This may or may not take the form of the Kids Online Safety and Privacy Act, a landmark piece of social media privacy and safety legislation that aims to protect children from online harm.

The bill has garnered bipartisan support, although it has spent the last few months in Congressional limbo: The Senate passed the legislation in July, but efforts to get it through the House of Representatives stalled out, thanks to lobbying efforts from Meta Platforms and other tech giants. Congress left Washington at the end of 2024 without passing the bill, but House Speaker Mike Johnson has said getting some form of child safety legislation passed will be a priority this year. Notably, some of President-elect Donald Trump’s closest confidants—including Elon Musk and Donald Trump Jr.—have also recently come out in its favor.

“We can protect free speech and our kids at the same time from Big Tech,” Trump Jr. wrote on X. “It’s time for House Republicans to pass the Kids Online Safety Act ASAP.”—P.M.

Alibaba Will Acquire One of China’s Top AI Startups
China’s crowded AI sector is due for a consolidation, which will prompt Alibaba Group to acquire Moonshot AI, one of the country’s largest startups in the space. The multibillion-dollar deal will transform the industry.

Beijing-based Moonshot is one of several Chinese AI unicorns developing AI models and applications in a fiercely competitive domestic market where U.S. players like OpenAI and Google are absent. Local tech giants and startups generate little revenue from their AI products due to an intense price war that ensures users pay almost nothing. Moonshot and other unicorns, such as MiniMax, Zhipu AI, Stepfun and Baichuan, are all trying to figure out how to survive. While Moonshot’s Kimi AI chatbot is one of the biggest in China, it is fighting an uphill battle against its larger rival: Doubao, the country’s most popular generative AI app, developed by ByteDance.

For Alibaba, acquiring Moonshot would be a way to step up its game in the market for consumer AI apps and better compete against ByteDance. Alibaba’s AI business has so far focused mainly on serving enterprise customers. While it also operates an AI chatbot app for Chinese consumers in China, that hasn’t gained popularity.

Alibaba already owns about 36% of Moonshot after having invested about $800 million in the startup in early 2024. By becoming a fully Alibaba-owned business, Moonshot could gain access to more capital, computing resources and user traffic through Alibaba’s popular shopping sites.—Juro Osawa

Nvidia Will Make Several Significant Acquisitions
Nvidia is already a giant, but CEO Jensen Huang won’t want to stop growing, and given the company’s soaring stock price, Nvidia could afford some purchases. So we’ll see Nvidia make at least two purchases in 2025. One could be a firm developing 3D-simulation software that would be a good fit for Nvidia’s Omniverse. That product, which has been a major focus for Huang, can create simulations of settings like factory floors that companies can use to train workers.

Nvidia also might acquire a cloud storage company to address a longstanding challenge in training AI models: the slow speed of transferring data into GPU memory. Nvidia several years ago developed a technology called GPU Direct to address this, which storage providers like Weka, Pure Storage, Vast Data and DDN have adopted. Buying one of these companies could help round out Nvidia’s storage capabilities.—K.M.

Microsoft Will Do a Deal With Anthropic
Two years ago it was inconceivable that Microsoft would begin doing business with OpenAI’s biggest competitor, given its own multibillion-dollar investment in OpenAI and the fact that Anthropic is backed by Microsoft rivals Google and Amazon. But we’ve seen hints that Microsoft is willing to work with Anthropic: Microsoft’s GitHub struck a deal with Anthropic in October to add its models to the popular GitHub Copilot code-writing tool.

Over the last year, Microsoft has made strides to diversify its AI business away from OpenAI, and a deal with Anthropic could add its models to Azure. That would give Microsoft’s developer customers access to the OpenAI archrival on Microsoft’s own cloud. The company currently hosts OpenAI’s models, as well as open models from Meta, Mistral AI, Cohere and other developers on Azure, but nothing from Anthropic…yet.—A.H.

Warner Bros. Discovery Will Rebrand Max
For companies like Warner Bros. Discovery, few things are more important than the fate of their streaming services—particularly in a TV-screen landscape crowded with more choices than a Walmart bin of discount DVDs. Despite CEO David Zaslav’s yearslong efforts, the beleaguered media conglomerates remains stalled in turnaround mode, and to better maximize its strategy, he’ll do a rebrand of the Max streaming service that puts Warner Bros. or its hallmark HBO brand out front.

Yes, the company has changed the name several times already, and the latest iteration, Max, was meant to underline the ostensibly deep catalog it could offer from both Warner Bros. and Discovery and theoretically broaden the streamer’s reach beyond adult prestige TV fare to include more family-friendly fare like Food Network and Animal Planet. But the streaming service rebrand will be part of Zaslav jettisoning some parts of his earlier strategy, and don’t be surprised to see him sell off some of Discovery, too. The Warner Bros. and HBO assets are just more valuable and an easier sell to potential subscribers.—A.B.

CrunchBase : The Biggest Non-AI Related Rounds Of 2024

The Biggest Non-AI Related Rounds Of 2024

Artificial intelligence once again dominated venture capital last year. But we’ve already run a list of the biggest rounds raised by AI-related startups, so what about some of the other industries that got big deals in 2024? What follows is a rundown of the biggest rounds raised by U.S.-based startups not necessarily focused on AI. Let’s take a look at who else raised big.

1. (tied) Epic Games, $1.5B, gaming: Epic Games is no stranger to this list. The gaming giant raised big in 2022 when it nabbed $2 billion from Sony and KIRKBI — the family-owned holding and investment company behind The LEGO Group — at a $31.5 billion valuation. It’s back after the North Carolina-based company raised another $1.5 billion in February through a new partnership with Disney to help give more exposure to the company’s characters and properties — including Marvel Comics characters. However, the round was a drastic drop in valuation, as it was reported Disney invested at a $22.5 billion valuation. Founded in 1991, the Fortnite creator has raised nearly $8 billion to date, according to Crunchbase data.

1. (tied) Generate Capital, $1.5B, renewable energy: If the name looks familiar, that’s likely because this company has made the list before. Early in 2023, the San Francisco-based green infrastructure investor and operator raised $1.1 billion, per SEC filings and reports. That raise came just about 18 months after it raised $1 billion in 2021. Last year in January, Generate raised a $1.5 billion round from a variety of investors, including the California State Teachers’ Retirement System. Generate invests in an array of infrastructure projects, from community solar systems to municipal wastewater treatment to electrifying fleets. Founded in 2014, the company has raised $7.1 billion, per Crunchbase.

3. Tricentis, $1.3B, DevOps: In November, Tricentis got a $1.3 billion investment from private equity firm GTCR valuing the software testing startup at $4.5 billion. It was unclear from reports if this is new equity or for existing shares, but it makes the list. The Austin, Texas-based startup was founded in 2007 in Austria. Insight Partners took majority ownership in 2017. The company has now raised $1.5 billion per Crunchbase.

4. Wiz, $1B, cybersecurity: Cloud security startup Wiz locked up the biggest cybersecurity round of the year as it raised $1 billion at a $12 billion valuation. The round — announced just as the industry’s RSA Conference was getting underway in San Francisco in May — was co-led by Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital. Founded in 2020, Wiz says it has raised $1.9 billion so far. Originally founded in Israel, Wiz has been busy of late. Earlier in the year, it acquired New York-based cloud detection and response startup Gem Security. The company may use the new cash infusion for more deal-making. Also based in New York, Wiz said it achieved $350 million in annual recurring revenue last year. It has talked openly about hitting $1 billion in ARR as it heads to an IPO.

5. Pacific Fusion, $900M, energy: Another huge AI-related round went to Pacific Fusion, a startup attempting to create a nuclear fusion-based energy source, which raised more than $900 million in a Series A led by General Catalyst in October. The funding does depend on the company hitting certain milestones — which were not spelled out. The round further illustrates investors’ appetite for energy sources that can meet AI’s immense power needs.

6. Radiology Partners, $720M, healthcare: El Segundo, California-based Radiology Partners, which offers radiology services, was busy in February with a laundry list of transactions involving existing notes and outstanding credit facilities. As part of those moves, however, it also closed a growth equity investment of approximately $720 million from existing and new investors — who were not named. Founded in 2012, the company has raised $2 billion, per Crunchbase.

7. Wonder, $700M, food delivery: Marc Lore’s food delivery startup Wonder can’t stop raising big. It had big rounds in March, November 2023 and in June 2022. It’s back again as part of its $650 million acquisition of Grubhub in November, raising an additional $250 million in capital exclusively from new investors — which were not named. The deal price was a significant drop for Grubhub, which was bought by Just Eat Takeaway for $7.3 billion in 2021. Founded in 2018, Wonder has raised nearly $1.9 billion, per Crunchbase.

8. PsiQuantum, $620M, quantum computing: In April, PsiQuantum landed the biggest funding round last year for any quantum startup, beating out Quantinuum’s $300 million equity fundraise at a pre-money valuation of $5 billion from January. Palo Alto, California-based PsiQuantum landed a financial package of $620 million from the Australian Commonwealth and Queensland Governments to build a quantum computer at a location near Brisbane Airport in Brisbane, Australia. The round is actually a mix of equity, grants and loans, so it is not all equity. Founded in 2016, the company has raised more than $1.3 billion, per Crunchbase.

9. Crusoe Energy Systems, $600M, energy: Back in 2022, this Denver-based company was helping power Bitcoin mining by harnessing natural gas that is typically burned during oil extraction and putting it toward powering the data centers needed for mining. The company raised a $350 million Series C equity round led by G2 Venture Partners, at a $1.75 billion valuation in the process. Well, in October, Crusoe turned its energy to AI — literally. The company is a so-called “neocloud” — a data center firm providing outsourced cloud computing for those looking to build AI. That business plan was enough for Crusoe to reportedly lock up a $500 million round led by Founders Fund at a $2.8 billion valuation. Founded in 2018, the company has raised $1.3 billion, per Crunchbase.

10. (tied) Recurrent Energy, $500M, energy: In January, Austin, Texas-based Recurrent Energy secured a $500 million preferred equity investment from BlackRock. The company — a utility-scale solar and energy storage project development, ownership and operations platform — is planning to use the new capital to grow its “high value project development pipeline.” Recurrent is a subsidiary of Canadian Solar, and that company will continue to own the remaining majority shares of Recurrent after the investment closes. Founded in 2006, the company has raised about $3.2 billion, per Crunchbase.

10. (tied) X-energy, $500M, energy: In October, X-energy raised a Series C-1 of approximately $500 million, anchored by Amazon. The Rockville, Maryland-based company is developing advanced small modular nuclear reactors for clean energy generation. Amazon and X-energy are collaborating to bring more than 5 gigawatts of new power projects online across the United States by 2039. Founded in 2009, the company has raised more than $785 million, per Crunchbase.


Big global deals
The three biggest rounds raised by non-U.S.-based startups not focused on AI both came from China.
  • In December, China-based Avatr, an electric vehicle brand, raised a Series C worth approximately $1.5 billion.
  • In March, semiconductor firm ChangXin Memory Technologies raised a venture round worth approximately $1.5 billion.
  • Also in March, China-based Zhiji Automobile, a developer and manufacturer of electric vehicles, raised a $1.1 billion Series B.