Good morning. Andrew here. There are two big developments we’re watching. One is the release of Kimi K3, a huge new open-source model by the Chinese A.I. start-up Moonshot that appears to outperform bleeding-edge Western models like Anthropic’s Fable in some tests. It could threaten the valuation of American A.I. giants, and may further erode Silicon Valley’s thesis around closed-source A.I. The other is President Trump’s prime time address last night contending that U.S. voting systems are compromised. (Documents that he released don’t appear to back up his most aggressive claims.) The president’s speech raises new questions about the stability of election processes and introduces both political risks and potential market volatility. (Was this newsletter forwarded to you? Sign up here.)
A bill to bar gun retailer merchant codesThis week, the House quietly passed a bill that drew little attention. Yet it connects directly to a subject we have covered extensively here. The legislation, the Protecting Privacy in Purchases Act, prevents credit card networks and banks from using a unique merchant category code, or M.C.C., for firearms retailers. Instead, gun dealers must be grouped under broader classifications like “general merchandise” or “sporting goods.” The background: After the school shooting at Parkland, Fla., in 2018, I wrote about common-sense ways the financial industry could help identify suspicious purchasing patterns before mass shootings occur. In my reporting, I discovered a bizarre gap: Credit card companies and banks had no way to flag huge gun and ammunitions purchases because, inexplicably, gun retailers didn’t have their own M.C.C.
After that reporting, the International Organization for Standardization, which oversees payment codes, approved a specific M.C.C. for firearms retailers. Major credit card companies agreed to use it. But several Republican-led states quickly moved to ban use of the code within their borders, while multiple Democratic ones passed laws mandating its adoption. The House bill seeks to end that battle — by banning the code nationwide. From the legislation: To prohibit payment card networks and covered entities from requiring the use of or assigning merchant category codes that distinguish a firearms retailer from general-merchandise retailer or sporting-goods retailer, and for other purposes. The merchant code may be swallowed up by the culture wars. Proponents of banning use of the code say that it’s a step toward a “backdoor gun registry.” Gun safety advocates contend that such a move bars a vital tool for spotting gun traffickers and mass shooters. The legislation is headed to the Senate. But a tool designed to help prevent deadly shootings has become entirely politicized.
Big-ticket donors keep Republicans competitive in midterm election fund-raising. While Democratic candidates for the Senate have outraised their rivals in every major state except Iowa, super PACs linked to Republicans are raking in money from wealthy individuals and companies. (Separately, The Wall Street Journal tallied more than $781 million in donations and other payments to groups linked to President Trump since the 2024 election.) Chevron may invest in a pipeline through Iraq to avoid the Strait of Hormuz. The American oil company is set to sign a deal to invest in two Iraqi oil fields and join investors considering building a pipeline that would connect Iraq with the Syrian coast.. Iran’s attacks on ships transporting oil through the strait have pushed oil producers in the region to scramble to find alternative routes. Netflix says its sales growth will keep slowing. Shares in the streaming giant are down almost 11 percent in premarket trading today after the company yesterday projected revenue and profits for the next quarter that are lower than Wall Street’s expectations. Investors have soured on Netflix as it struggles to achieve meaningful growth for its giant subscriber base and suffers from a drought of new hit shows. A White House teleprompter operator is being investigated for betting on what Trump would say. The prediction market Kalshi flagged bets made by the operator to the Commodity Futures Trading Commission after he won about $100,000 wagering on words that would appear in the president’s speeches. Kalshi and its rival Polymarket have faced increasing scrutiny over potential instances of insider trading, including by government workers.
A big step for Chinese A.I.Here are the artificial intelligence headlines moving markets. Moonshot: The Chinese A.I. start-up, which is backed by Alibaba, released Kimi K3, an open-source model whose performance in industry benchmarks rivals that of the most powerful models from OpenAI and Anthropic. The release helped drag down A.I. stocks worldwide, with some analysts comparing it to last year’s unveiling of a then-advanced DeepSeek model, and underscores how A.I. labs in China have caught up to American peers faster than expected. (FT, VentureBeat, Bloomberg) SpaceX: The rocket and artificial intelligence company founded by Elon Musk has been beset by internal chaos, including employees being fired without being told, the departure of all of Musk’s co-founders and the failure of a major effort to create a software-programming agent called Macrohard. (Bloomberg Businessweek) The company’s share price closed below its I.P.O. price yesterday. Its decline helped drag down returns from U.S. initial public offerings this year to below that of the S&P 500. (Bloomberg) Google: The tech giant has reportedly delayed the launch of Gemini 3.5 Pro, its most powerful A.I. model, for months because its coding capabilities have fallen short of internal goals. Google leaders are said to worry that the company is at risk of falling behind Anthropic and OpenAI. (Bloomberg) The E.U. ordered Google to give competing makers of A.I. assistants access to its Android operating system so users can access those tools via voice commands. The orders come as Google faces hefty E.U. fines for favoring its own services; earlier this month, Google paid a fine of 4.6 billion euros (about $5.3 billion) to the bloc. (NYT, Politico) IBM: Here’s a behind-the-scenes look at the company’s decision to preview disappointing quarterly results, leading to the worst one-day plunge in IBM’s history. Arvind Krishna, IBM’s chief executive, and his board chose to be candid about the company’s failure to get ahead of customer spending on A.I. (WSJ)
A Topgolf for pool raises fresh capitalOver two centuries, pool halls have gone both upscale and down market, but the playing experience has been largely the same. Now Poolhouse, a start-up pool company that aims to do for cue sports what Topgolf did for the driving range, has raised a new round of financing — and aims to eventually sell its technology platform to others, Michael de la Merced is the first to report. Poolhouse has raised $55 million in a round led by the investment firm Bluestone Equity Partners. It values the start-up at more than $100 million, DealBook hears. What is Poolhouse? The two-year-old start-up was founded by Steve and Dave Jolliffe, the twin British entrepreneurs who created Topgolf and PuttShack, a similar concept but for miniature golf. Like those companies, Poolhouse was born out of a plan to make age-old games flashier, more accessible (especially to non-pros) and social. The start-up opened a two-story, 21,000-square-foot pool hall in central London two months ago, complete with a chef from Gordon Ramsay’s restaurant empire and ritzy Las Vegas-themed bars. Its main selling point is technology. Poolhouse developed BillyQ, a platform developed by the same team that created the Hawk-Eye ball-tracking technology used in professional baseball, tennis and more. BillyQ uses cameras, artificial intelligence and projectors to track performance, help less experienced players and let users participate in games like block-breaking competitions. To even out competition, it also assigns players handicaps that continue from game to game. “We’re always trying to build a competitive moat around ourselves,” Steve Jolliffe told DealBook. The company sees BillyQ as a major part of its future. While the projectors used by the technology are currently chunky, the company is working to shrink them and make them less expensive. (Andrew O’Brien, Poolhouse’s C.E.O., expects them to eventually cost about as much as a Peloton bike.) Poolhouse plans to sell them to other pool hall operators and a wide range of hospitality companies, including hotels, movie theaters and cruise ships. “It’s understandable to think about this as Topgolf for pool, but I think that understates the opportunity,” Bobby Sharma, the founder of Bluestone, told DealBook. “Poolhouse is a bigger story in that it’s not just the venue format, it’s the technology.”
Talking A.I. with the C.E.O. of Honor TechnologyEvery week, we’re asking a leader how he or she uses artificial intelligence. This week, Seth Sternberg, who leads Honor Technology, an operator of a senior care network, told DealBook’s Sarah Kessler that A.I. could help more aging adults stay in their homes. The interview has been condensed and edited. How do you personally use A.I.? My 8-year-old co-plays video games with it. He tells Google Home, which has Gemini, “I’m about to approach the fence with my goblin and I jumped to the left. Was that the best move?” And it says, “Actually, if you go under the fence, you’re likely to get more points.” That’s what an A.I. native looks like. If everybody is using A.I., is the game still a challenge? It’s like I tell my employees about how I want them to use A.I.: You have to be A.I.-assisted, or you’re not going to be as productive as you would otherwise. But you own the work and you own the judgment. How has generative A.I. shaped your business? Before generative A.I., it took us three months to write a feature that looked at care notes after a visit. A computer scanned the notes to figure out if a customer may have fallen and it hadn’t been reported. It would flag phrases like, “I arrived at the home and Mrs. Smith was on the floor.” Today, we can build a feature like that in three hours. Longer term, how do you think A.I. could shape your industry? The biggest unlock by far is devices in the home. They can be robots. Or they can be sensors that monitor wellness and connect to a network like ours. Having a human being there for 12 hours a day is just too expensive for most people to afford. But if the device sends a signal, we can call and say, “Are you doing OK? Do you need to talk to a nurse?” We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
Deals
Politics, policy and regulation
Best of the rest
Thanks for reading! We’ll see you tomorrow. We’d like your feedback. Please email thoughts and suggestions to dealbook@nytimes.com. Follow DealBook on Instagram: @nytdealbook |
