Good morning. Andrew here. There’s so much going on today: Tech companies are laying off employees (cue the questions about A.I.’s impact). The Saudis are pulling back on funding the Metropolitan Opera given the war in Iran. Citadel is threatening, not so subtly, to scale back its ambitions in New York City in the face of criticism from the mayor focused on Ken Griffin, its C.E.O. We get into all that, and much more, below. (Was this newsletter forwarded to you? Sign up here.)
Cost-cutting for A.I.Tech companies increasingly feel under pressure to cut costs to afford the artificial intelligence race. But the call to lay off workers and reduce spending isn’t just being felt at established titans like Microsoft and Meta. Younger ones, including OpenAI, are also facing tough financial decisions. The latest:
These are hardly isolated moves. Overall, 98 tech companies have announced plans to cut more than 92,000 employees this year, according to Layoffs.fyi, which tracks job losses in the industry. Microsoft has signaled it will keep cutting costs to fund its A.I. ambitions. So, too, has Meta, which has made A.I. its biggest priority as it seeks to catch up to OpenAI, Anthropic and Google. OpenAI is also facing cost-cutting pressures. Yes, it is still splurging on things like the tech talk show “TBPN” and is said to be planning to invest up to $1.5 billion in a venture with private equity firms. Yet it has also been culling what it calls “side quests” like the Sora video generator. And perhaps more consequentially, it has shifted its thinking on hugely expensive infrastructure projects. The company set aside plans to own and operate data centers, reportedly because of pushback from potential lenders. Instead, OpenAI plans to rent servers from existing cloud providers, a smaller blow to its balance sheet. Still, the server rental initiative will cost $600 billion. Stiff competition doesn’t help. Rivals like Anthropic have made strides in technological capabilities, forcing companies like Meta and OpenAI to spend more on researchers and development resources. OpenAI yesterday announced yet another new model, GPT-5.5, but it’s still less capable than Anthropic’s latest technology, Claude Mythos Preview. Don’t forget about competition from elsewhere, especially from China, whose DeepSeek announced a new open-source model. A.I. companies are also becoming victims of their tools’ success. OpenAI and Anthropic have promoted the growth of their agent tools, which complete tasks on users’ behalf. They’ve racked up new subscribers, but the tools guzzle more computing power, putting pressure on the companies to cut their operating costs elsewhere. The bottom line: Not even young, well-capitalized tech companies are being spared from the need to clamp down on spending.
A U.S. soldier is charged for betting on the Venezuela raid on Polymarket. Federal prosecutors accused Master Sgt. Gannon Ken Van Dyke, a member of the Army’s Special Forces who took part in the capture of Nicolás Maduro, with insider trading on classified information after he made over $400,000 through various bets on the platform tied to the operation. It’s part of a growing crackdown on illicit betting on prediction markets. Blackstone defends the private credit industry. In discussing the investment giant’s quarterly earnings yesterday, including an average net return of zero for its private credit funds after fees, Steve Schwarzman, the firm’s C.E.O., complained about “an intensely negative campaign” against the sector. Others bullish on private credit include JPMorgan Chase, which is in talks to raise billions for the strategy, according to executives at the banking giant. Saudi Arabia withdraws a $200 million gift to the Metropolitan Opera. The country cited economic damage from the war in the Middle East as the reason, dealing a blow to the strapped opera company. Saudi Arabia has been under pressure to tighten its belt, including by scaling back ambitious infrastructure projects and potentially cutting support for the LIV Golf circuit. Bob Iger returns to venture capital. After stepping down as Disney’s C.E.O. last month, Iger has taken an advisory role at Thrive Capital, the investment firm founded by Josh Kushner, The Wall Street Journal reports. Iger, who owns a stake in Thrive, briefly joined the fund as a partner in 2022 after retiring from Disney the first time. He left when Bob Chapek, his handpicked successor at Disney, was fired.
Mamdani versus CitadelSince New York City’s mayor, Zohran Mamdani, posted his “we’re taxing the rich” video to social media last week, it has racked up millions of views. It has also struck a nerve with the business world after Mamdani, a democratic socialist, took aim at Ken Griffin, the billionaire founder of Citadel, and his 24,000-square foot penthouse, which he purchased in 2019 for a then-record $238 million. Now, Griffin’s firm is suggesting it might reconsider a major construction project in the city. The context: Mamdani’s message touted a new pied-à-terre tax proposal that has gained the backing of Gov. Kathy Hochul. It would apply to second homes in New York City worth $5 million or more. Mamdani seemed to put Griffin, whose main residence is in Florida, on notice. The mayor said that a tax on second homes like Griffin’s Central Park South pad would raise at least $500 million to “fund things like free child care, cleaner streets and safer neighborhoods.” Mamdani’s comments were “shameful,” Gerald Beeson, the C.O.O. of Citadel, wrote in an email sent to employees yesterday that DealBook reviewed. “The mayor has once again manifested the ignorance and disdain of the elite political class toward those who have been consistently committed to building one of the greatest cities in the world,” Beeson wrote. Citadel employees paid $2.3 billion dollars in local taxes over the past five years, Beeson wrote, and the business has supported the local economy in other ways. “Ken has personally directed $650 million in charitable gifts to support the people of New York City,” Beeson added. Speaking of contributions: “We are about to commence the redevelopment of 350 Park Avenue, creating 6,000 highly paid construction jobs and supporting the creation of more than 15,000 permanent jobs in Midtown New York. The project — if we move forward — will entail more than $6 billion of spending,” Beeson added. Would Citadel consider backing out? “We understand that our hard work and success will, on occasion, make us targets for political rhetoric,” Beeson wrote. “But it should not diminish the pride we take in building firms that will continue to help New York City thrive for decades ahead.” Strait talkThe uncertain prospects for U.S.-Iran peace talks are reverberating through the markets this morning. Brent, the global benchmark for oil, has risen for a fifth consecutive day. Yet until very recently, the geography of the Persian Gulf wasn’t a common topic in earnings calls. Since the war began in late February, however, the number of mentions by executives of the Strait of Hormuz — the crucial shipping lane that has been largely closed since fighting began — has skyrocketed, Niko Gallogly reports. The strait has been mentioned on 224 earnings calls so far this year, up from just 18 in all of 2025, according to the market intelligence platform AlphaSense.
Here’s how analysts and executives are talking about the waterway, the war and its impact:
Even on calls where executives haven’t mentioned the strait by name, the impact of its closing has been a common theme:
Some were just happy to be operating their businesses far from the war zone. “Let’s remember that we’re not sailing in the Strait of Hormuz, thank God,” the C.E.O. of Williams-Sonoma, Laura Jean Alber, said last month.
Talking A.I. with the co-C.E.O. of GenslerEvery week, we’re asking a leader how he or she uses artificial intelligence. This week, Jordan Goldstein, who co-leads the design and architecture firm Gensler, told Sarah Kessler that A.I. was changing every stage of his company’s work process. The interview has been condensed and edited. How do you personally use A.I.? I needed to rent skis in France, where I don’t speak the language. So I quickly created an A.I. agent to help me. The surprising moment was that the A.I. agent cross-referenced with other agents: It was like, well, you’ve had this knee injury years back, so you wouldn’t want to pick these skis because of that. How did you decide how to use A.I. in the company? About three years ago, we set up parallel teams on projects around the world that were already ongoing. We said, using an A.I.-only process, let’s see what you can do. We did this opaque to the clients, and using a separate budget, so that we could experiment — and if we failed, fail fast and learn from it. Is generative A.I. helpful at the conception and pitching phase? That is where we were seeing early successes. Now it’s really started to move through the whole work stream, all the way through the technical building of buildings. The next iteration is the synthesizing of that whole journey. Some people will hear that and think: I’ll just have an A.I. architect bot. A.I. can produce amazing images and a great feeling for what a finished product will look like. But how do you really test so that it doesn’t just look good from afar, but it feels good? Especially in architecture and design, it’s important to have a dialogue with a whole range of experts and potential users, to understand before something’s built, what would you feel like in this venue? We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
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