AI | May was a legal reckoning for the AI industry. On May 18, a federal jury in Oakland took less than two hours to dismiss Elon Musk's $150 billion lawsuit against OpenAI, finding that Musk waited too long to bring his claims against Altman, co-founder Greg Brockman, and OpenAI. The verdict was unanimous. Musk and his attorneys said they would appeal to the 9th Circuit, with Musk calling the result "a calendar technicality" on X. OpenAI's lead attorney had a different read: the lawsuit was "a hypocritical attempt to sabotage a competitor." At the center of the trial was a narrow legal question about timing, not the merits of Musk's claims. Jurors determined Musk knew or should have known about OpenAI's for-profit transition years before he filed in 2024, placing his claims outside the statute of limitations. The verdict matters beyond the courtroom: it provides a decisive green light for OpenAI's planned $1 trillion IPO, clearing the largest legal overhang on the company's path to public markets. The 9th Circuit could reverse on the statute of limitations ruling, in which case the merits of the "breach of charitable trust" claim get a hearing, and that is a harder case for OpenAI to win. Two companies are racing to historic IPOs, with a live appellate threat hanging over one of them. The day after the verdict came in, Anthropic announced it had hired Andrej Karpathy. Karpathy co-founded OpenAI, led Tesla's Full Self-Driving program, and built one of the most-watched AI education channels on YouTube. He is now joining the pre-training team, tasked with building a new group focused on using Claude itself to accelerate pre-training research. It continues to look like Anthropic is running away with the top talent in the industry. 🏃

IPO WATCH | SpaceX filed its S-1 with the SEC, targeting a Nasdaq listing under ticker SPCX on June 12, with the roadshow starting June 4 and pricing on June 11. The deal aims to raise roughly $75 billion at a $1.75 trillion valuation, implying around 109 to 116 times trailing revenue. 2025 revenue reached $18.67 billion with a $4.9 billion net loss, while Starlink subscribers crossed 10 million and the connectivity segment posted a $1.19 billion profit last quarter. If it prices at target, SpaceX will become the first U.S. company to go public with a valuation above $1 trillion. Musk retains 85.1% voting control through a super-voting share class. For VCs, this IPO can set the tone for what happens to the 20 mid-cap offerings queued behind SpaceX: a flat or botched debut could shut the IPO pipeline until Q4. A successful landing opens a 60 to 90 day window for the rest.

ECONOMY | Morgan Stanley's midyear outlook forecasts global GDP growth of 3.2% for 2026, with higher oil prices offset by easing tariff inflation in the second half. The Fed remains boxed in. Core PCE is still running at 3.1%, and Morgan Stanley's baseline has the Fed cutting twice in the first half of 2027, not before, as policymakers wait to see whether inflation from higher energy prices and tariffs proves temporary. The One Big Beautiful Bill, signed on July 4, 2025, is now having its 2026 effects: the SALT deduction cap has increased from $10,000 to $40,000 for 2025-2029, and the federal estate and gift tax exemption has risen to $15 million per taxpayer starting this year. No-tax-on-tips and no-tax-on-overtime provisions are also live. The bill skews heavily toward high earners: Teton County, Wyoming, will see an average tax cut of $37,373 per taxpayer in 2026, while rural Loup County, Nebraska, will see an average tax cut of $824 per taxpayer. For founders and fund managers, the permanent increase in the estate tax exemption is the sleeper provision worth understanding.

HALF CASH HALF STOCK | GameStop filed a nonbinding $55.5 billion proposal to acquire eBay on May 3, offering $125 per share in a 50/50 cash-and-stock deal representing a 46% premium to eBay's closing price on February 4, the day GameStop started accumulating its position. Cohen lined up a highly confident letter from TD Securities for up to $20 billion in financing and pointed to $9.4 billion in cash on GameStop's balance sheet. eBay confirmed the offer and noted there had been no prior discussion or outreach before receiving it. Wall Street was skeptical. Moody's called the deal "credit negative" for eBay. Michael Burry, who holds GME shares and once compared Cohen to Buffett, said the strategy "could not be more pedestrian." On May 12, eBay's board rejected the bid, describing it as "neither credible nor attractive," citing uncertainty around the financing plan, operational risks, and GameStop's governance structure. Cohen said on CNBC he has the ability to issue stock to get the deal done. eBay went up. GameStop went down. Cohen told CNBC back in January that his next move would be "very, very, very big" and "never been done before within the history of the capital markets." A meme stock CEO attempting to LBO a company four times his size using a confidence letter and a cult following qualifies. Respect the conviction, but question the execution. 🤔

ANTHROPIC GOES TO WALL STREET | On May 4, Anthropic, Blackstone, Hellman & Friedman, and Goldman Sachs announced the formation of a new AI-native enterprise services firm that will work with companies to bring Claude into their core business operations. The joint venture is worth more than $1.5 billion, with $300 million investments from Anthropic, Blackstone, and H&F, and $150 million each from Goldman Sachs and General Atlantic. Also backing the venture: Apollo Global Management, Leonard Green, Singapore's sovereign wealth fund GIC, and Sequoia Capital. The new company is a standalone entity with Anthropic engineering resources embedded directly within its team, initially targeting mid-size companies across the portfolio networks of the founding PE firms, then expanding to independent companies beyond. The strategic logic runs in both directions. Anthropic gets a pre-built distribution channel into hundreds of PE-owned businesses that are otherwise slow to adopt frontier AI. The PE firms get a credible technical implementation partner who can actually make their portfolio companies smarter, not just sell them a license. But now, Anthropic is putting itself in direct competition with the world's largest consulting firms for the business of corporate AI transformation.

META LAYOFFS BEGIN | Meta began notifying roughly 8,000 employees on May 20 that they are being laid off, the first wave of a restructuring the company has framed as necessary to fund its AI push. The cuts amount to about 10% of the company's workforce. Separate from the cuts, Meta's Chief People Officer announced that upward of 7,000 workers will be redirected into newly created AI-focused teams, including Applied AI Engineering and Agent Transformation Accelerator. Zuckerberg's memo to employees read: "Success isn't a given" in the AI race. Far from the tearful 2022 letter where he took personal responsibility, this one was detached and clinical. Meta spent $72.2 billion on capital expenditures in 2025 and expects to spend at least $115 billion in 2026. More cuts are reportedly planned for August and fall. Meta is reallocating capital from human headcount to compute, and doing it in waves so the market barely flinches. Jack Dorsey called this move when Block cut 4,000 people and said most companies would follow.

The Long Becoming ✈️

The Neocloud Boom ☁️

From “System of Record” to “System of Intelligence” 🧠

TBPN: Blue Origin Explosion [2.5 hr]

Duolingo’s Battle for Learning [0.5 hr]

Why $1B Exits are Dead [0.5 hr]

Took the month to build… new project dropping soon — stay tuned :)

Atlanta-based Stord closed a $250M Series F

Benefit Bay wrapped a $18M Series A, based in Kansas City

Hint, a North Carolina-based company, closed a $10M Seed

St Louis-based Saluna raised a $2M Series A

Salt Lake City-based Cimento raised a $3M Pre-Seed

Chicago-based startups closed a few rounds this month

Across Texas

Minnesota-based PaxosMedical wrapped a $2M Seed