TheChek News Flow

The battle over the use of agents is starting to come into focus

Wall Street is getting extremely jumpy about the threat of AI disruption to a widening range of industries. That is the best explanation for the hammering that brokerage and wealth management stocks took this week, thanks to a little-known US fintech company called Altruist.

The idea that an upstart armed with better technology can threaten giants of the finance industry has fuelled various waves of fintech mania over the years. Generative AI has just given a new twist to this — as it has in other industries. As with previous waves of tech disruption, the most exposed are those whose basic product is information — finance, legal services, media and software.

Altruist hardly looks like a serious threat, though it is emblematic of how disruptive competition could intensify because of AI. The company last year launched a service to make investment advisers better at analysing portfolios and recommending investment strategies for their customers. This is the kind of thing fintechs have been doing for years, though services like these are now supercharged by drawing on large language models. The same AI capabilities, of course, are available to established brokers and wealth managers, which have used technology to transform their services. Control of customers and distribution channels, along with deep domain expertise, will continue to be their main defensive strategy.

AI, though, brings a new twist to the story. As AI models are refined and expertise is embedded into agents, the differentiation provided by humans will come increasingly into question. Who controls the agents looks set to become the high ground that many companies, in software and beyond, will want to occupy.

The market’s extreme jumpiness in recent weeks has been stoked by what amounts to a full-frontal attack by AI model-builders Anthropic and OpenAI on the software industry. And by “software”, you can include any service that relies heavily on technology for its creation or delivery.

Uncertainty about what role the AI companies see for themselves in the enterprise technology world is adding to the market’s fears. Anthropic was first to move, repurposing its coding agent to act as a more general agent capable of carrying out a wide range of functions for non-technical workers.

What took this to the next level was its addition of what it calls plug-ins — specialised skills that its agent, known as Cowork, can use to do things like analyse legal contracts or produce marketing content. It is easy to imagine these skills growing to include many of the things that human workers do, making them the Swiss army knives of software.

This is a serious threat to many different kinds of business. If AI agents created by other companies start to do the work that customers value the most, then incumbents will be pushed into the background. They may still control a customer’s most important data, but they risk being relegated to the role of utilities, merely providing storage for data that other companies turn into valuable services.

For their part, the AI model-builders are playing down the threat and describe themselves as partners rather than challengers. That is not surprising: a large part of their business involves selling access to their models to power the services of other companies that may soon become their competitors.

Their positioning, however, suggests greater competition is inevitable. OpenAI recently laid out big ambitions for Frontier, its own entry in the enterprise software stakes. This includes controlling all the AI agents that may one day want to access a company’s systems, evaluating and optimising their performance, and providing the business context in which all of this takes place. These are the sort of functions that existing enterprise software companies see as their natural turf. If Frontier controls this new layer of software, orchestrating the agents, it pushes others further into the background.

This battle is only just coming into focus. The incumbents have already shown that they are ready to defend their territory. That includes companies like Salesforce, which last year blocked access to third-party AI services that wanted to draw data from its Slack communications service. But blocking new services from third party companies will not make them popular with their own customers. Incumbents need to move fast themselves to create similar services, while also cementing themselves at the centre of the emerging agent universe.

Latest haul comes as it prepares for an initial public offering as early as this year

Anthropic has raised $30bn from investors including GIC, Coatue, Founders Fund and Nvidia, as the AI group plans a significant expansion of its data-centre footprint and prepares for an initial public offering as early as this year.

The new funding round gives Anthropic a $350bn pre-money valuation and equips the Claude maker with the firepower to continue competing with rivals such as Google, Meta and OpenAI.

Anthropic, launched in 2021 by a group of ex-OpenAI researchers, has focused on developing AI tools for businesses. It derives about 80 per cent of its $14bn in revenue run rate — a prediction of annual revenue based on current, short-term performance — from enterprise customers.

The San Francisco-based group’s Claude Code has become the primary coding tool for software engineers since its launch last year. The tool can read a company’s existing code, plan tasks and execute them, and has helped raise Anthropic’s profile with investors.

The start-up claims to have more than 500 customers spending over $1mn a year on its workplace tools, and to have quadrupled business subscriptions to Claude Code since the start of this year.

“Claude is increasingly becoming more critical to how businesses work,” said Krishna Rao, Anthropic’s chief financial officer. “We will use this investment to continue building the enterprise-grade products and models they have come to depend on.”

The funding round includes a portion of the $15bn commitment made by Microsoft and Nvidia late last year as part of a strategic partnership between the groups, though Anthropic did not specify how much.

The remainder of the round was several times subscribed, according to multiple people with knowledge of the process, with a number of investors including US venture investors Sequoia Capital, Founders Fund and Greenoaks, and Singaporean fund Temasek, participating for the first time.

Anthropic raised its funding target by $10bn during the process, with investors keen to back it before it goes public, the FT previously reported.

Unusually for Silicon Valley rivals, Anthropic and OpenAI now share a number of big backers, including Altimeter Capital, MGX, Sequoia and Founders Fund, as well as Nvidia and Microsoft.

OpenAI was also in talks for a new round of funding which could exceed $100bn, according to people with knowledge of that deal, and has launched its own coding agent, Codex, to take on Anthropic.

The two are also competing over researchers and computing resources, with much of the new capital expected to go towards hiring and retaining researchers and securing access to chips.

Anthropic has taken a more conservative approach to infrastructure spending than OpenAI, which has committed to spending well over $1tn on computing resources over the next eight years. Anthropic said on Thursday that it would use the new funds to “power our infrastructure expansion”.

Both start-ups are working towards public listings that could rank among the largest of all time. Anthropic has hired law firm Wilson Sonsini to begin preparations for an IPO.

“Join xAI if the idea of mass drivers on the Moon appeals to you,” CEO Elon Musk proclaimed yesterday following a restructuring that saw a stream of former executives exit the AI lab.

This is an interesting recruitment strategy after the company’s merger with Musk’s rocket maker, SpaceX, and the combined company’s anticipated IPO. You might think that xAI employees ought to be fascinated with achieving AGI, using deep learning models to disrupt traditional software companies, or simply bad wordplay like “Macrohard.” But instead, Elon is going to the moon.

After outlining plans to build AI data centers in orbit, the primary synergy between the two companies, Musk took the idea further. “What if you want to go beyond a mere terawatt per year?” Musk asked. “To do that, you have to go to the moon…I really want to see a mass driver on the moon that is shooting AI satellites into deep space.”

In Musk’s telling, the step beyond data centers orbiting Earth is even larger computers in deep space. And furthermore, Musk says the best way to achieve that is to build a city on the moon to manufacture space computers and hurl them into the solar system using a big maglev train.

If that all feels a bit much, veteran Musk watchers know there’s a clue about where the discussion appears in a video of an all-hands meeting xAI shared with the public. The slide describing the moon base comes at the end of the presentation deck, where, during SpaceX pep talks, Musk typically shares renderings of SpaceX rockets landing on Mars and waxes rhapsodic about the future of multi-planetary humanity.

Notably, the moon base comes just after SpaceX has publicly backed away from its long-held goal of colonizing Mars. Now, with xAI in the corporate fold, Musk needs a new science fiction metaphor for the future: In this case, the Kardashev Scale, a theoretical measure of galactic civilizations coined by the eponymous Soviet astronomer in the 1960s. The idea is climbing the scale of energy usage — early civilizations figure out how to leverage all the power sources on their planets, and then (hypothetically) go to space and build infrastructure to capture the energy of the sun.

With the moon base, Musk says the company could harness “maybe even a few percent of the sun’s energy” to train and operate AI models. “It’s difficult to imagine what an intelligence of that scale would think about,” he told his staff, “but it’s going to be incredibly exciting to see it happen.”

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In the nine years since Musk unveiled his plan for Martian exploration and colonization, the vision has been an effective hiring tool for SpaceX: The founding tale of Musk’s interest in the Red Planet offered a long-term vision that united the company’s various development efforts, and signaled the company’s ambition among other space contractors that settled for incremental work on government priorities. “Occupy Mars” t-shirts offered a visible symbol of SpaceX’s aspirations.

That’s where the hypothetical moon base fits in — part of a long history of Musk wrapping his companies in a powerful narrative. It’s one million people living on Mars, but now catering to a future where AI is the most interesting thing. Martian mission creep became apparent less in Musk’s May 2025 Starship update, when the presentation ended with a now-cancelled vision of Tesla Optimus robots clomping across the Red Planet.

Poor robot

Image Credits:SpaceX

There was just one problem with SpaceX and Mars: No one wanted to pay them to go there. Plans announced in 2016 to repurpose the company’s Dragon spacecraft as a Mars lander were abandoned the next year after the technical challenges became too costly. And since Musk unveiled the vehicle that would become Starship in 2016, its capabilities, initially intended for Mars colonization, have been scaled back to focus on two more remunerative tasks: launching satellites for the Starlink comms network and $4 billion worth of contracts to land astronauts on the moon for NASA.

Unlike a multi-planetary civilization, there may be some logic in having SpaceX purchase a money-burning AI and social media to build data centers in Earth orbit, particularly if forecasts of rising demand and costs on the ground come true. Experts suggest that it might be possible in the 2030s.

Hypothetically, building satellites on the moon would require a lot more of Musk’s other dreams coming true first. Scientists and startups are experimenting with building chips and other precision components in space. But mass-producing many tons of advanced computers on the moon means we’re living in a universe where it is dramatically cheaper to get to space, which is the central requirement for those technologies, getting all the raw materials for such an effort to the moon, plus whatever is required for a “self-sustaining city.”

In a sense, that’s the point: This is the, uh, stretch goal. If meme-happy retail investors buy the argument, they could turn SpaceX shares into the next Tesla. The engineers, AI or aerospace, who Musk needs to achieve his goals may find the shift jarring. But the vision is one way to explain what xAI is about, other than an LLM perhaps best known as a pervert. As one of the company’s departing executives said on his way out the door, “all AI labs are building the exact same thing, and it’s boring.”

Mass-producing a solar system-scale supercomputer on the moon is many things (I’m going to get emails for not using the word “insane”), but it is not the exact same thing, and it is not boring.

Rivian is, by every measure, a maker and seller of EVs. But in 2025, it was the company’s software and services that helped its annual revenue grow by 8%.

Rivian reported Thursday $5.38 billion in total revenue in 2025, up from $4.97 billion from the prior year. That rosy picture dulls a bit when looking just at its automotive revenue, which fell 15% to $3.8 billion in 2025. The fall was fueled by a $134 million drop in regulatory credit sales and lower vehicle deliveries, which were partially offset by higher average selling prices, according to Rivian.

Meanwhile, software and services revenue grew more than threefold to $1.55 billion for the year. And the joint venture with Volkswagen Group was behind most of that growth, according to Rivian. The “services” component of this line item, which Rivian doesn’t break out, includes a variety of items, including vehicle repair, vehicle trade-ins, and maintenance services. The remainder, and the bulk of the revenue, is from software, and specifically due to the joint venture with VW Group.

VW and Rivian formed a technology joint venture in 2024 that is worth up to $5.8 billion. The joint venture is milestone-based and in 2025 Rivian hit the mark, which meant a $1 billion payout in the form of a share sale. Under the terms of the JV, Rivian will supply VW Group with its existing electrical architecture and software technology stack.

Rivian received an initial $1 billion convertible note in 2024 and another $1 billion payment in July 2025.

Rivian is expected to continue to receive payments from VW Group through 2027. Rivian is expected to receive an additional $2 billion of capital as part of the joint venture in 2026, CFO Claire McDonough said Thursday on the company earnings call. About $1 billion of that is subject to the successful completion of winter testing, which is underway. The remaining $1 billion is nonrecourse debt, which is expected to be received in October.

And while the funds provide a hefty stopgap, Rivian’s financial success in 2026 will hinge largely on the rollout of its next EV, the R2.

Rivian confirmed in its earnings report Thursday that the R2 SUV, which is designed to be cheaper to build and less expensive for customers, will come to market by June 2026. That “cheaper to build” line item is particularly crucial for Rivian, which has historically lost money on every vehicle it makes.

Rivian has spent years trying to push the cost of goods sold figure down. And it has made progress with the rollout of its second-generation flagship R1T truck and R1S SUV. For instance, McDonough said “in the fourth quarter it was able to deliver $92,000 of cogs per unit and that was about a $4,000 per unit improvement relative to the third quarter.” Rivian’s cogs per unit was $99,000 in the fourth quarter of 2024.

The company saw its total automotive cost of revenue decrease year-over-year from $1.4 billion in the fourth quarter of 2024 to $898 million in the same quarter in 2025. Notably, the company’s cost of revenue for software steadily inched up throughout 2025.

The R2 SUV, which will initially launch as a dual motor all-wheel-drive model, is an opportunity to further reduce costs. The company is expected to release more information about the R2, including final specs, on March 12.

Rivian’s guidance for 2026 suggests that it is banking on demand for R2 and its ability to ramp up production. The company said Thursday it expects to deliver between 62,000 and 67,000 vehicles in 2026 — which could provide up to a 59% bump from last year. Rivian delivered 42,247 vehicles in 2025, which includes its two R1 consumer vehicles and the electric delivery van (EDV).

Rivian CEO RJ Scaringe noted that the company expects some growth in EDV sales in 2026. Rivian plans to produce an all-wheel-drive version and a larger battery pack variant of the EDV, for which Amazon is its primary customer.

“Both of those are to help unlock specific use cases within the Amazon network,” Scaringe said. “We’re working really closely with Amazon in defining the requirements of those and excited to get those launched.”

The company isn’t signaling profitability — on an adjusted basis — just yet. But it is offering up considerable improvement on that front. Rivian reported a $3.6 billion net loss in 2025; it expects an adjusted net loss of between $1.8 billion and $2.1 billion for 2026. Rivian also projects capital expenditures will be between $1.95 billion and $2.05 billion this year.

How SoftBank’s OpenAI Bet Could Benefit CEO Son

A little-noticed disclosure in SoftBank’s earnings report released Thursday said that Son no longer was on the hook for the roughly $1 billion personal guarantee he had pledged so a SoftBank-managed investment fund could invest tens of billions in OpenAI. But he retains a longstanding arrangement that enriches him personally if the investment fund does really well—which the OpenAI investment makes much more likely.

Son’s arrangement gets lost sometimes amid the questionable corporate governance practices that have become common across the AI race—but it’s a doozy. It essentially gives him the opportunity to make billions of dollars personally, disproportionate to other SoftBank shareholders, if OpenAI goes public and trades up into the trillions of dollars in market cap.

Here’s how it works: SoftBank has invested an enormous sum, $34.6 billion, in OpenAI, which translates into an 11% stake in the creator of ChatGPT. But the investment isn’t parked directly on SoftBank’s balance sheet. Instead, it sits entirely in the 2019 investment fund known as Vision Fund 2. The fund borrowed $8.5 billion from its parent, SoftBank, to make some of the investment, with Son putting up a personal guarantee as well to support the loan.

He had good reason to make the guarantee. A previously disclosed arrangement gave Son the right to earn 17.25% of the profits in Vision Fund 2, once its realized and unrealized value exceeds the cost of investment by 30%.

Until recently, Son’s hopes of cashing in weren’t looking good. You might remember the fund made hundreds of bad bets on startups. As of a year ago, before its OpenAI investing streak, Vision Fund 2 had lost $23 billion, or 40% of the money it had invested. Much of the SoftBank investing team in Silicon Valley and beyond, meanwhile, had been dismantled.

It’s a rosier story now—and more concentrated. Thanks largely to Son’s bet on OpenAI, the fund is nearly in the black, down only about 3%, after a $19.8 billion gain for its OpenAI stake, SoftBank said this week. It will be able to book an even larger gain if OpenAI raises additional tens of billions at a $750 billion valuation.

All of this has been great for SoftBank’s stock price, which has doubled over the past year and which served as a publicly traded proxy for OpenAI sentiment. But the man who could get an outsize benefit is Son himself, thanks to his right to a share of Vision Fund 2 profits. To be sure, the fund is still a ways off from generating the return he needs to earn his payout.

In the meantime, Son no longer appears to risk much of the downside, even if OpenAI’s “rough vibes” return. SoftBank said Wednesday its loan to Vision Fund 2 had been repaid and converted to preferred equity. SoftBank itself gets profits first if the Vision Fund 2 is a modest success, but it still holds a lot of risky investments, of course. And it is relying heavily on debt to fund its AI funding commitments.

AI may have figured out software engineering, but Masa remains the master of financial engineering.

It’s been more than a month since Nvidia entered an agreement, made public on Christmas Eve, to license the technology of chip startup Groq and hire its top executives including CEO Jonathan Ross. Now the terms of the deal are coming into focus.

Groq told shareholders last month it expected to receive $17 billion in cash from Nvidia based on the licensing agreement, paid out in three installments by the end of this year. This month, Groq shareholders received $7.6 billion of that amount, according to an email the company sent to them.

The payout, at $64 a share, is roughly twice what investors paid to buy shares in a $750 million September funding round led by Dallas-based firm Disruptive. That certainly is a good outcome for those investors, which include Blackrock and Neuberger Berman as well as smaller investors such as 1789 Capital, the firm that employs Donald Trump Jr.

Groq’s payout is roughly in line with what other startups have returned to shareholders following similar licensing deals, which have become popular forms of quasi-acquisitions that have allowed companies to largely avoid antitrust scrutiny. Investors in the last funding round for Character.AI were slated to get about 2.5 times the price they paid for their shares after Google agreed to a similar licensing deal. Microsoft was expected to pay a 1.1 times multiple to investors in Inflection AI’s final round of funding as part of another such deal.

Of course, earlier investors in Groq like Chamath Palihapitiya’s Social Capital stand to make much bigger returns. Groq sold shares for as little as 97 cents each in its Series A round of funding led by Social Capital, according to the company’s incorporation document.

Stockholders in Groq, including employees with vested stock, can expect more payments. From the $17 billion in cash Nvidia is paying Groq, shareholders can expect to get about $10.3 billion in total proceeds, according to information Groq provided to stock owners last month.

This initial $7.6 billion payout represents three-quarters of the Groq stock ownership. Shareholders will get the additional payments, of about $2.7 billion, when the company redeems the rest of the shares, though Groq hasn’t yet told them when that will happen, said a person close to the company.

Uncle Sam and Groq employees will get the rest. Groq will have to pay taxes on the licensing payments from Nvidia. U.S tax law treats licensing fees as ordinary corporate income, which is taxed at a 21% rate. Groq’s home state of California takes another 8.8% on top of that.

Groq has also paid out unexercised options held by employees, said the person close to the company, taking another chunk out of the Nvidia cash. It’s unclear what other payments the deal’s $20 billion headline figure could include. Nvidia did not respond to requests for comment.

Groq has also told shareholders they can expect additional payouts from a sale or winding down of the company, and the board is considering all possible options. So far, a buyer hasn’t emerged, but it’s possible one of Nvidia’s competitors would want to acquire Groq’s intellectual property to prevent others from accessing it in the future.

Saudi Arabia appoints new investment minister

Riyadh is seeking to increase the amount of foreign capital coming to the kingdom as part of its modernisation plan

Saudi Arabia has replaced Khalid al-Falih as investment minister, at a time when Riyadh is stepping up its efforts to attract increased foreign capital to back Crown Prince Mohammed bin Salman’s ambitious plans to modernise the kingdom.

Falih, who had been in the post since 2020 and is one of the country’s highest-profile cabinet members, is succeeded by Fahad Al-Saif, a former HSBC banker who is head of investment strategy at the Public Investment Fund, as well as the near $1tn sovereign wealth fund’s economic insights division.

The shake-up comes as Riyadh is reassessing its massive spending priorities and scaling back projects as it seeks to manage tightening liquidity and a widening budget deficit, while focusing on hard deadlines as it prepares to host the Expo 2030 trade fair and the 2034 football World Cup.

Since Prince Mohammed launched his plans to transform the kingdom and diversify its oil-dependent economy a decade ago, Riyadh has struggled to attract the levels of foreign direct investment it desired, a task that fell within Falih’s remit.

Riyadh has set a target of attracting $100bn of FDI annually by 2030. In 2024, FDI hit $32bn, up from $25.6bn the previous year, according to government statistics.

Falih, an oil veteran, has long been one of Saudi Arabia’s highest-ranking officials and best-known ministers on the global stage.

He endured a brief fall from grace in 2019, when he was removed from a super-ministry that straddled energy, industry and mining after he had taken a cautious approach to the listing of Saudi Aramco, the state-owned energy company.

But he bounced back the following year when Prince Mohammed appointed him investment minister, and he oversaw a push to convince multinationals to move their regional headquarters to the kingdom.

Under the policy, known as “regional HQ programme”, companies were warned that they risked losing out on lucrative government contracts if they did not shift their regional office to Saudi Arabia. More than 600 firms had since agreed to make the move, Falih said in October.

Falih has now been appointed a minister of state, and continues to be a member of the cabinet, according to the Saudi state news agency, although his exact role is unclear.

Saif has held senior roles at the PIF, which is chaired by Prince Mohammed and has been tasked with spearheading his development plans for the kingdom since 2021.

He has overseen the rollout of the PIF’s debt programme and been involved in formulating the fund’s long-term investment strategy.

Before joining the PIF, he was an adviser to finance minister Mohammed al-Jadaan, and the first chief executive of the kingdom’s National Debt Management Centre.

Deal will reduce American tariffs on a range of Taiwanese food products

The US and Taiwan have agreed to reduce tariffs on a range of food imports and other products as they officially signed a trade agreement on Thursday.

Donald Trump last week announced that the US would slash tariffs on Taiwan to 15 per cent in exchange for a $250bn investment in the US chip industry, as Washington moves to secure semiconductor supply chains and boost investment in American manufacturing.

The move brings duties on Taiwanese products in line with those levied on Japan and South Korea, and comes with a US promise to waive tariffs on generic drugs, aerospace parts and natural resources unavailable in the US.

The agreement also ends a disadvantage for Taiwan as its new bilateral tariff rate puts it on a par with other important US trading partners.

According to the full text of the deal, the US will remove the “reciprocal” tariffs on some imports from Taiwan including fruits, spices and coffee.

The Trump administration has already moved to exempt many agricultural products from its broader reciprocal tariffs as part of efforts to control grocery prices for US consumers.

The text of the deal contained large purchasing commitments from Taiwan, which has agreed to spend $44.4bn on liquefied natural gas and crude oil, $15.2bn on civil aircraft and engines, and $25.2bn on power equipment over the next three years. 

Taiwan also agreed to reduce tariffs on US goods, including on autos and auto parts, chemicals, seafood, machinery, health products, electrical products, metals and minerals, as well as many US agricultural products.

US trade representative Jamieson Greer said the agreement would “significantly enhance the resilience of our supply chains, particularly in high-technology sectors”.

Greer added it would also “eliminate tariff and non-tariff barriers facing US exports to Taiwan, furthering opportunities for American farmers, ranchers, fishermen, workers, small businesses and manufacturers”.

Companies are taking big losses and making moves to reduce electric-vehicle capacity amid regulatory changes and cooling demand

U.S. automakers have been pumping the brakes on their electric-vehicle businesses for months, and the costs are piling up.

Following years of investments into EV technology, the Detroit Big Three—General Motors GM 0.14%increase; green up pointing triangle, Ford Motor F 1.08%increase; green up pointing triangle and Jeep-maker Stellantis STLA 3.67%increase; green up pointing triangle have announced more than $50 billion in combined write-downs.

EV sales fell more than 30% in the fourth quarter, after a $7,500 federal tax credit that had juiced U.S. sales expired in September. Demand cratered for the highest-profile EVs, from Tesla’s TSLA -2.62%decrease; red down pointing triangle Cybertruck to Ford’s much-hyped electric pickup. Automakers expect demand to remain muted.

GM, which is forging ahead with much of its EV strategy, albeit at a smaller scale, didn’t have as much to cancel and write down. The company, for instance, still aims to build big EV trucks. Ford, meanwhile, is changing course.

“Instead of plowing billions into the future knowing these large EVs will never make money, we are pivoting,” Ford Chief Executive Jim Farley has said. Ford now says it will make one low-cost EV pickup by 2027.

Automakers’ retreats and massive write-downs have come as Republican lawmakers abolished a lucrative federal tax credit for EVs last fall, while also doing away with federal fuel-efficiency mandates. Even with federal support, EV demand was below expectations.

Now, auto companies and battery makers are scaling back. After pouring hundreds of billions of dollars into U.S. manufacturing, they are downsizing investments, canceling projects and pivoting plants to support making more traditional gas-powered vehicles.

The net effect of all the cancellations: More than $20 billion in previously announced investments in EV and battery facilities were wiped out last year, according to Atlas Public Policy, which tracks clean-economy investments. That drove the first net annual decrease in announced investments in years.

GM laid off thousands of workers at plants across Michigan, Ohio and Tennessee and has blown up plans for factories to make EV trucks and motors. Instead, those plants will build gas-powered trucks and V-8 engines. Ford dissolved a joint venture with a South Korean conglomerate to make EV batteries in America. Stellantis is unloading its stake in a battery-making business.

When Stellantis booked the largest charge taken by any automaker related to electric-vehicle bets so far, Chief Executive Antonio Filosa said the pace of the energy transition had been overestimated and “distanced us from many car buyers’ real-world needs, means and desires.”

Outside of the U.S., EV markets are still growing. China’s BYD 1211 -1.27%decrease; red down pointing triangle recently ​replaced Tesla ​as the world’s biggest EV seller, even though some countries have put tariffs on Chinese EVs.

BYD delivered more than one million vehicles outside of China last year—double what it delivered in 2024. But at home, its sales growth slowed amid steeper competition and a reduction in state subsidies for affordable vehicles.

A news release touting AI technology to boost trucking efficiency appears to have triggered a selloff that cost investors billions

Algorhythm Holdings’ AI technology announcement caused a market selloff, wiping out billions in market value from trucking and transport stocks.

The Dow Jones Transportation Average fell 4%, its biggest daily decline since April, with 17 of 20 companies ending lower.

Algorhythm, formerly Singing Machine Co., has a market value under $3 million and its SemiCab unit claims to reduce empty freight miles.

Trucking and transport stocks had one of their worst days ever Thursday thanks to a firm that until recently was in the karaoke business.

The Florida firm, formerly the Singing Machine Co. RIME 29.87%increase; green up pointing triangle and now known as Algorhythm Holdings, published a news release shortly before stock trading opened touting AI technology capable of increasing trucking efficiencies. Algorhythm, which has a stock market value of less than $3 million, hasn’t landed any software clients in the U.S. yet. But its announcement nonetheless rattled the market.

By midday, logistics firms were down more than 20% in some cases. They recovered somewhat as traders and analysts zeroed in on the source of the panic. Yet billions of dollars in market value were wiped out by the closing bell.

Freight broker C.H. Robinson Worldwide CHRW -14.54%decrease; red down pointing triangle dropped 15% and third-party logistics provider Landstar System LSTR -15.60%decrease; red down pointing triangle fell 16%, its worst day ever. Trucker J.B. Hunt Transport Services JBHT -5.06%decrease; red down pointing triangle and logistics firm Ryder System R -4.28%decrease; red down pointing triangle ended 5.1% and 4.3% lower, respectively. Even firms that don’t have much to do with trucking were hit. Expeditors International of Washington, which arranges air and ocean shipping, declined 13%. Airlines and railroads were also caught in the frenzy.

C.H. Robinson said it has been an AI leader for more than a decade and remained confident in its strategy and share buyback plans.

“We believe AI will only continue to strengthen our performance and widen our competitive moat,” it said.

The Dow Jones Transportation Average, which includes those companies and had surged to records with the broader market, fell 4%. It was the biggest daily decline since April, when President Trump’s barrage of tariffs shook markets, for the group of stocks that investors watch as a leading indicator of economic activity. Of the 20 companies in the index, 17 ended the day lower, collectively shedding $17.4 billion of market value.

The selloff is one of the most extreme examples yet of the sell-now, ask-later ethos sweeping financial markets in the artificial-intelligence era. In recent sessions, concerns about the technology’s disruptive potential have rocked shares of private-credit firms, wealth advisers, insurance brokers, and providers of legal and financial data, to name a few.

“People are looking for an excuse to sell, and maybe this was it,” said Brendan Hopkins, who works in investor relations for Algorhythm. “Some of these companies that sold off, they would be beneficiaries.”

Hopkins said the company was shocked by the attention received by the news release, as well as the market reaction. His phone rang nonstop with analysts from Wall Street banks and financial firms around the world. So many people went to Algorhythm’s website to download the white paper promoted in the news release that the site crashed, and few could actually read the 10-page note.

Algorhythm said in its release that the AI technology of its SemiCab unit can greatly reduce empty freight volumes, which occur after a truck delivers its cargo and moves on to its next location empty. The company said its technology “is enabling its customers’ internal operations to scale freight volumes by 300% to 400% without a corresponding increase in operational head count.”

Until recently, the company’s business was selling karaoke machines, according to securities filings. As smartphone apps and new televisions with karaoke features began to disrupt that business, the Singing Machine assets were sold for $500,000. Chief Executive Gary Atkinson went looking for a new business.

He found it in India, where SemiCab, an Atlanta-based business, was using AI to optimize trucking routes for companies. One of the holy grails of trucking is to find a way to reduce the one-third of trips that big rigs are believed to spend hauling empty trailers. SemiCab says its technology reduced so-called deadhead miles by 70%.

SemiCab founder and CEO Ajesh Kapoor said the firm is facilitating thousands of loads a month in India. By comparison, C.H. Robinson manages more than 100,000 shipments a day.

In the U.S., SemiCab is only beginning to sign up customers. Atkinson said he was surprised the white paper sent a shock wave across the transport sector. “When names like C.H. Robinson are dropping billions of dollars of market cap, it’s quite staggering,” he said.

As other trucking stocks tanked Thursday, Algorhythm’s volatile stock surged, ending Thursday 30% higher at $1.08.

“Obviously we’re happy,” said Hopkins. “No publicity is bad publicity.”