Good morning. Andrew here. It’s been about a week since Treasury Secretary Scott Bessent said that a deal to fully reopen the Strait of Hormuz could be 24 to 48 hours away. Equity markets rallied and oil prices dropped soon after. Flash-forward to today. There’s no apparent deal. (Anyone who has tried to negotiate in the Middle East would have told you that a deal is unlikely anytime soon.) Yet while the market rallies on the prospect of good news, it inexplicably rarely tumbles when that doesn’t arrive. Please let me know why you think that is. (Was this newsletter forwarded to you? Sign up here.)
Behind Ellison’s California exit threatThe Ellisons have increased the pressure on the states suing to block Paramount’s deal to buy Warner Bros. Discovery. The threat — that David Ellison, Paramount’s C.E.O., would start to relocate the media company from California if there was no progress toward a settlement by October — has rattled some in the movie industry, Lauren Hirsch reports. But will it be enough for the attorneys general opposing the agreement? What’s happening: Ellison told Paramount’s senior leadership last week that he would begin moving the company if there was no progress toward resolving the lawsuit, The Times and others reported. Possible relocation areas, include Georgia, Tennessee and Texas, which have dangled tax credits. You “go to the place where you’re wanted,” Paramount’s chief legal officer, Makan Delrahim, said yesterday. He added that Ellison’s “intent is to be committed to California.” Rob Bonta, California’s attorney general, called the threat “blackmail.” Ellison wants to regain leverage. The states scored a win last week when the judge in the antitrust case set a trial date in March. Paramount is set to start paying Warner Bros. Discovery shareholders a so-called ticking fee tied to a delay in the deal closing — some $650 million a quarter — in October. The fee — backstopped by Larry Ellison, David Ellison’s father — would be in stock, so it wouldn’t directly hurt Paramount’s balance sheet. But Larry Ellison probably doesn’t want to throw more money behind an already $111 billion deal. What else could be worrying Paramount: Both businesses could suffer if it’s in a holding pattern for the deal closing. Paramount also probably wants to avoid the depositions that a trial would entail. “I think they are eager to enter those talks,” Bonta said of potential settlement talks. “We are very happy with where we are.” Other parties seem to favor a settlement. The heads of the biggest movie theater chains are backing the deal, while Gov. Gavin Newsom of California has reportedly expressed reservations about the lawsuit. Several of Hollywood’s biggest unions have been pushing for talks between Bonta and the Ellisons, The Times reports. So has Bryan Lourd of Creative Artists Agency. But the prospects of settlement talks remain unclear. Paramount seemingly hasn’t offered the one thing California says it wants: so-called structural remedies, including keeping some businesses separate, rather than behavioral ones like promising to release 30 movies in theaters a year.
OpenAI sees growth in business sales. Run-rate revenue from business customers of the artificial intelligence giant increased 32 percent month on month in July, driven largely by big enterprises, DealBook has learned. (Overall run rate revenue in July grew 20 percent month on month.) OpenAI has focused on growing its business customer base to catch up with Anthropic; both companies are preparing to go public. Oil prices remain choppy amid fighting in the Middle East. Brent crude, the international benchmark for oil, hovered near $89 a barrel after climbing as high as $90. American forces fired on a Panama-flagged ship trying to transit to an Iranian port in apparent defiance of a U.S. blockade of Iran. And at least six people were killed when a cargo ship in the Red Sea was hit by missiles fired by the Iran-backed Houthi militia, Yemen’s government said. New York City opens investigations into Kalshi and Polymarket. The City Council is examining the prediction market operators and two others over claims of deceptive marketing and the targeting of minors, according to The Wall Street Journal. Separately, the Commodity Futures Trading Commission ordered Kalshi to keep doing business in New York despite a legal effort by the state to halt its operations there. A big bet on “touching grass” with A.I.Investors are still eager to deploy billions to build out artificial intelligence infrastructure. But for many, backing efforts to actually apply A.I. to real-world business cases is increasingly attractive. The latest proof: Thrive Holdings, which buys up traditional service providers and infuses them with A.I., plans to announce today that it has raised $2 billion at a $12 billion valuation, Michael de la Merced is first to report. Some of the investors have bet heavily on A.I., like SoftBank, D1 Capital Partners and Altimeter Capital. Catch up: Thrive Holdings was created last year by Thrive Capital, the investment firm founded by Josh Kushner, a longtime A.I. investor. It began with two platforms: Current, focused on accounting, and Shield Technology Partners, centered on I.T. services. Together, they have acquired nearly 70 businesses to date, Anuj Mehndiratta, a Thrive Capital partner who oversees Thrive Holdings’ tech strategy, told DealBook. The company is part of the search for practical A.I. uses. Mehndiratta described a core value as “touching grass,” using the technology to reduce automation and help accountants and I.T. professionals spend more face time with customers. OpenAI (which also owns a stake in Thrive Holdings) and Anthropic have teamed up with private equity firms on billion-dollar ventures to help their portfolio companies use A.I. The results so far:
Thrive Holdings is adding a third platform, focused on navigating regulatory paperwork in the construction industry. (For every day of field work in the business, there’s one to three days of paperwork involved, according to Kareem Zaki, a Thrive Capital partner who oversees investment at Thrive Holdings.) Some questions:
The Bronx Bombers team up with private equityThe slugger Aaron Judge may be sidelined with a rib injury. But his team, the New York Yankees, got a big power boost from Wall Street yesterday. Apollo Sports Capital, a division of the investment giant Apollo Global Management, said it had agreed to a $2.6 billion deal with Yankee Global Enterprises, the baseball team’s parent company. The Steinbrenner family is keeping control. Hal Steinbrenner, the chairman of Yankee Global Enterprises, will stay on as the team’s managing general partner. Y.G.E. is giving a board seat to Al Tylis, the C.E.O. of Apollo Sports Capital. In March, Forbes estimated the value of the Yankees at $8.5 billion, making it the most valuable franchise in Major League Baseball. Organization rules limit a single private equity firm from owning more than 15 percent of a franchise. The capital infusion, a mix of debt and equity, will allow the Yankees to pay off or refinance existing debt and make new investments. This adds to Apollo’s growing sports portfolio. In March, Apollo Sports Capital completed its acquisition of a majority stake in Atlético de Madrid, a big Spanish soccer, in a deal that valued the team at around $2.55 billion. Apollo also purchased a minority stake in Wrexham, the Welsh soccer club owned by the actors Ryan Reynolds and Rob Mac. Private equity has been growing interested in sports properties. Before the Yankees deal was announced, there had already been 52 private equity deals in professional sports in 2026, according to PitchBook. That matches the total number for 2024 and puts this year on pace to surpass the 2025 total, 71.
Expect the private equity deals to keep coming, according to Salvatore Galatioto, the president of Galatioto Sports Partners, a sports finance and advisory firm. Until recently, he said, sports ownership was viewed more as a hobby for the wealthy than a legitimate investment. That’s changed. “I have never seen demand greater than it is today,” Galatioto told DealBook. “Never.” Sports as a portfolio diversifier: Investment firms and wealthy individuals now view investing in sports properties as a hedge against higher-risk investments, Galatioto said. They’re more attractive as technology continues to shorten the life cycle of businesses. “If I were a wagering man,” Galatioto told DealBook, “I’d say the odds are much better that the New York Yankees will be here in a hundred years than Apple.”
The vibecoding start-up Lovable raises $400 millionWhen the adoption of Claude Code, Anthropic’s artificial intelligence-powered coding assistant, skyrocketed last year, many predicted that the tool would spell doom for smaller A.I. start-ups offering similar ones. One start-up, the Stockholm-based Lovable, is countering that narrative. Today, the company is announcing a $400 million funding round, Niko Gallogly reports. The round values the company at $13.3 billion, more than double its valuation in December. Lovable’s annual revenue rate has surged to nearly $600 million, according to the company. Lovable has attracted investors globally. Menlo Ventures and Scaleup Europe Fund, a vehicle overseen by the big Swedish investment firm EQT, are leading the round. Funds from Latin America and Asia, including Tencent and World Innovation Lab, are also participating. Lovable is succeeding by targeting the nontechnical set, Matt Murphy, a partner at Menlo Ventures who is joining Lovable’s board, told DealBook. Many A.I. coding assistants still require some technical proficiency. Lovable’s guiding question, Murphy said, is: “How do we make this the most simple thing in the world for everyone to use?” Entrepreneurs and small businesses are Lovable’s key customer base, Anton Osika, the company’s C.E.O. and a founder, told DealBook. Its users “don’t just build apps and software,” he said, “they run their business on our platform.” That is done by connecting Lovable’s platform to the payment systems, analytics and messaging platforms companies rely on. The start-up has faced security challenges. In April, a user on X reported being able to gain access to some Lovable users’ source code, A.I. chat history and other data. Lovable acknowledged the issue. Critics said the episode was an example of the security vulnerabilities associated with vibecoding software. How Lovable will use its new capital: Osika says the company will invest more heavily infrastructure needed to run complex applications reliably and securely. Those investments, he said, will help clients — especially larger ones — feel more comfortable hosting critical operations on Lovable’s software. Corporations are Lovable’s fastest-growing segment by revenue, Lovable said. Nvidia and Adidas are two of its biggest new customers. We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
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