With Israel having launched major strikes against Iran’s nuclear program overnight, we’re examining the fallout so far and what may come next. We explore both the geopolitical issues and the potential economic impact, from the price of oil to the commerce that depends on it.
We’re also looking at Meta’s latest multibillion-dollar deal, which may be the largest acqui-hire in history. (In case you were wondering, “acqui-hire” is Silicon Valley shorthand for buying a company to hire a person.) And make sure to keep reading, because there’s a ton of other news below.
What next for oil
Global markets are in turmoil on Friday after Israel unleashed a major wave of strikes on Iran’s nuclear program overnight that killed top officials and scientists. Tehran has vowed to retaliate, renewing fears of a wider regional conflict that could send global energy prices soaring.
Israel “should anticipate a harsh punishment,” Ayatollah Ali Khamenei, Iran’s supreme leader, said on Friday. Iran, one of the world’s largest oil exporters, is also laying some blame on the Trump administration, even as Secretary of State Marco Rubio said that Washington had no part in the attacks.
Businesses are bracing for the fallout.
The latest:
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The price of Brent crude, the international benchmark, jumped nearly 7 percent to around $74 a barrel.
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Air travel has been snarled throughout the region, with Ben-Gurion International Airport in Israel announcing disruptions to flights on Friday. Shares of European airlines are down sharply.
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Markets in Asia and Europe are in the red, and the S&P 500 appears set to open lower.
A protracted conflict could further destabilize global growth. Iran-backed Houthi rebels have periodically disrupted vital shipping routes in the Red Sea and Suez Canal, delaying cargo deliveries and driving up prices. Trade experts and shipping companies will be on high alert for a repeat of that.
Inflation is also in focus. Cheap oil has been a godsend, keeping a lid on prices even as President Trump’s trade war threatens to upend global supply chains. An energy-fueled increase in inflation could hamstring central banks.
Traders expect further volatility in the oil market. The price of crude has risen more than 11 percent in the past three days. Analysts at JPMorgan Chase now worry that Brent could go as high as $130 a barrel, though for now they believe oil will stay in the $60s next year.
What to watch: The Israeli strikes appeared to have spared Iran’s Kharg Island terminals, which account for 90 percent of the country’s oil exports, Helima Croft, a commodities strategist at RBC Capital Markets, wrote in a research note on Friday.
But Croft warned that in an extended military campaign, the Israeli government could go after Iran’s oil facilities “to eliminate the primary source of funds for Iran’s proxy network and nuclear program.” Should that happen, she wrote, the White House would probably lean on the OPEC Plus production cartel to “keep a lid on prices and shield U.S. consumers” from the conflict’s economic impact.
HERE’S WHAT’S HAPPENING
Investigators continue searching for clues about the Air India crash. At least 269 people died after the Boeing 787-8 Dreamliner crashed into a medical school’s dining hall, with just one known passenger surviving. The Indian authorities are hoping that the jet’s two black boxes will help explain why the aircraft ran into trouble shortly after takeoff. Shares in Boeing are down again in premarket trading; the company is facing questions about the Dreamliner, which until Thursday hadn’t been in any fatal crashes.
President Trump says he may have to “force something” if the Fed doesn’t lower rates. Trump on Thursday again complained that the central bank was being too slow in cutting borrowing costs, calling Jay Powell, its chair, a “numbskull.” The president’s comments came after the latest Producer Price Index report showed that prices in May rose less than expected; they also again raised concerns that Trump may seek to interfere with the Fed.
Chime’s strong debut further lifts hopes for the I.P.O. market. Shares in the online bank jumped 37 percent in its first day of trading on Thursday, valuing it at $13.5 billion, after the company priced its offering above expectations. Chime’s performance, along with those of the crypto issuer Circle and the online brokerage eToro, are likely to persuade other companies to again pursue I.P.O.s after a yearslong drought.
Reverse acqui-hires are back in the spotlight
Tech giants have been eager to acquire promising start-ups to get a leg up in the artificial intelligence arms race. Yet antitrust scrutiny has led many to opt for so-called reverse acqui-hires: poaching start-ups’ key employees and licensing their technology but stopping short of an outright takeover.
Regulators in the U.S. and Europe have been skeptical of such deals, concerned that they could thwart competition. Meta’s latest deal, with the start-up Scale AI, is bringing the issue back into focus, Danielle Kaye reports.
A recap: Meta plans to invest $14.3 billion in Scale AI, which helps train A.I. models, in exchange for a 49 percent stake. Alexandr Wang, the start-up’s co-founder and C.E.O., will take a leadership role at Meta’s new “superintelligence” research lab, and will take several Scale AI employees with him.
It’s Meta’s second-biggest deal, after the $19 billion acquisition of WhatsApp in 2014. And it’s meant to help supercharge the Facebook parent company’s struggling A.I. efforts.
Other tech giants made similar moves last year:
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Microsoft paid $650 million to Inflection to license the start-up’s A.I. models, and hire nearly all of Inflection’s employees, including Mustafa Suleyman, its co-founder, who also helped found DeepMind.
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Amazon hired executives from Adept and licensed some of its technology. Adept said it would operate independently from Amazon, though its investors were reportedly repaid.
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Google poached Character.AI’s co-founders as part of a $2.7 billion licensing agreement with the chatbot maker.
The E.U. has actively scrutinized A.I. deals. Last year, the European Commission examined whether Microsoft’s Inflection transaction violated its merger rules. (Regulators later dropped that inquiry.)
It’s an issue on U.S. regulators’ radar, too. The F.T.C. opened an investigation last year into whether the Microsoft-Inflection deal was structured to avoid a formal antitrust review. The agency also took an interest in Amazon’s hiring of top executives from Adept.
In a sign of potential continuity under the Trump administration, the Justice Department has started investigating whether Google’s deal with Character.AI violated antitrust law, Bloomberg reported last month.
“You can be sure that tech markets in general — and A.I. markets in particular — are getting close scrutiny right now, just as they were under the Biden administration, and just as they were under the first Trump administration,” Daniel Francis, a law professor at New York University who was a senior F.T.C. official during Trump’s first term, told DealBook.
There’s another potential downside to Scale AI’s agreement with Meta: It could help the start-up’s competitors. Surge AI, for example, sees the deal as a chance to poach Scale AI customers — they include OpenAI, Microsoft and Cohere — if its rival is seen as too captive to Meta, a person familiar with Surge AI’s business plans, who wasn’t authorized to discuss them publicly, told DealBook.
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In other antitrust news: The F.T.C. may prevent the ad giants Interpublic and Omnicom from boycotting platforms because of their political content as a condition of approving their merger, The Times reports.
VivaTech thumbs its nose at Trump threats
In February, Vice President JD Vance delivered a blunt message at an A.I. summit of world leaders in Paris, declaring that “the United States of America is the leader in A.I., and our administration plans to keep it that way.”
At the time, executives and investors took it as an ominous warning.
But four months later, despite — or perhaps because of — Vance’s tough words, VivaTech, the high-profile European trade show that draws global investors and start-ups, is booming this week with a record crowd reported in attendance, Vivienne Walt reports from the conference.
U.S. giants are still here. That includes Amazon and Microsoft, which have large exhibition spots in the main hall. That said, the booths are mostly staffed by European representatives, and American accents are far and few between on the floor.
The hunt is on for new partners. Executives told DealBook they were scouting for non-U.S. business, preferring to avoid the politics of President Trump’s trade war. The U.S. had been seen as “this big friend, client, collaborator, from South of the border,” said Isabelle Turcotte, a vice president at Scale AI, a tech funder backed by the Canadian government. (Not to be confused with the American start-up that’s struck a deal with Meta.) “That is no longer the case,” she told DealBook.
Turcotte said that Canadian companies and investors planned to invest about $3.7 billion in European data centers and cloud computing.
China is also making new friends. It has a state-sponsored pavilion at VivaTech, showcasing dozens of A.I. products, including a robot humming around visitors’ knees. It also features an all-day cocktail bar, with free jasmine-infused shots.
Nvidia and agentic A.I. are getting a lot of buzz. “We’re starting a new wave of A.I.,” capable of reasoning and executing hugely complex tasks, Jensen Huang, Nvidia’s C.E.O., said in a keynote address on Wednesday.
Ariane Gorin, Expedia’s C.E.O., said her company planned to utilize A.I. agent software — which can take actions on a user’s behalf — to build tools that can plan every detail of travelers’ itineraries.
Huang, alongside President Emmanuel Macron of France, announced a cloud computing partnership with the French unicorn Mistral AI, using 18,000 of Nvidia’s most advanced chips. Nvidia also plans to build production facilities in Europe, beginning in Germany.
For Macron, VivaTech is a crucial display of tech power. Venture funding for French start-ups has fallen to a five-year low, according to PitchBook. But for tech founders who dined with Macron at the Élysée Palace on Wednesday, Vance’s words may now feel like an afterthought.
Chart of the day: GameStop
Investors in GameStop, the meme stock wonder, have been on a roller-coaster ride for years. The struggling retailer has introduce turnaround plan after plan, with the latest being a bet on crypto.
Those efforts, too, are showing middling results. The stock plunged nearly 11 percent on news of its first Bitcoin buy last month, and tumbled more than 20 percent this week after it announced plans to raise $1.75 billion of debt. That comes after another big debt offering in March and could potentially be put to its crypto strategy.
One potential bright spot: The company has found what looks like a winner with the sale of collectibles.
THE SPEED READ
Deals
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China’s antitrust regulator is said to have postponed approval of a proposed merger between the chip design tool maker Synopsys and Ansys, amid tensions with the U.S. over chip export limits. (FT)
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Tucker Carlson and Neil Patel, his business partner, have bought out investors in the media personality’s company, Tucker Carlson Network. (Axios)
Politics, policy and regulation
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Corporate giants including Amazon and Walmart are said to be studying whether to issue stablecoins, potentially shifting vast amounts of transactions out of the mainstream financial system. (WSJ)
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“New Army Reserve Unit Enlists Silicon Valley Executives to Upgrade Tech” (WSJ)
Best of the rest
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General Atlantic said it wouldn’t recruit junior bankers for its class of 2027, joining Apollo Global Management, amid pushback from Wall Street leaders like Jamie Dimon of JPMorgan Chase. (FT)
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“Is Biography the One A.I.-Proof Genre?” (NYT Magazine)
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Andrew Ross Sorkin is a columnist and the founder of DealBook, the flagship business and policy newsletter at The Times and an annual conference.
Bernhard Warner is a senior editor for DealBook, a newsletter from The Times, covering business trends, the economy and the markets.
Sarah Kessler is the weekend edition editor of the DealBook newsletter and writes features on business.
Michael J. de la Merced has covered global business and finance news for The Times since 2006.
Danielle Kaye is a Times business reporter and a 2024 David Carr Fellow, a program for journalists early in their careers.
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