Good morning. Just in: Charter agreed to buy Cox, a top cable rival, in a deal valued at $34.5 billion. It’s a sign that economic uncertainty isn’t deterring some corporate leaders from major transactions — but it could also test the Trump administration’s antitrust approach. More below. (Was this newsletter forwarded to you? Sign up here.)
Cashing in chipsWhatever ambitious foreign policy goals President Trump held for his Middle East trip, at least the entourage of business leaders who’ve accompanied him there seem happy. The president is set to wrap up his three-country tour today, after striking a litany of pledges by oil-rich Gulf states to deepen business ties with U.S. companies. “We’re developing a lot of fans,” Trump said at a news conference this morning. But the deal flow is already drawing political pushback at home. A recap: The American chip giants Nvidia and AMD will now be allowed to sell advanced chips to Saudi, Emirati and Qatari customers as those countries seek to become powerhouses in artificial intelligence. One customer is an enormous new A.I. campus in Abu Dhabi whose ambitions rival Stargate, the OpenAI-led venture, in size. The deals underscore a rift in the Trump administration on A.I. David Sacks and Sriram Krishnan, venture capitalists who’ve become the president’s top A.I. advisers, were chief negotiators of the deals, The Times reports, working closely with C.E.O.s including Nvidia’s Jensen Huang and Sam Altman of OpenAI. Also in the picture was Khaldoon Al Mubarak, the head of the Emirati sovereign wealth fund Mubadala Investment, which has become a major financer of A.I. initiatives. The agreements have raised questions from security hawks in both U.S. political parties. The administration of former President Joe Biden had put limits on exports of advanced tech to the region, partly because of fears the equipment might find its way to China. Some Trump officials are already weighing how to pause the deals over concerns they risk breaching security red lines, including that the technology could fall into the wrong hands, according to Bloomberg. Investors are shrugging that off. Shares in Nvidia and AMD soared this week after the deals began to be announced, giving a lift to the Magnificent 7 group of A.I.-focused stocks. Tech still faces antitrust headwinds — more on that below — but some on Wall Street see this week’s trip as opening a potential windfall for the sector. It could lift revenues for Nvidia and AMD in the coming quarters and even provide a boost to Micron, another chip maker that supplies those companies, Christopher Danely, a tech analyst at Citigroup, wrote in a research note yesterday.
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Lawmakers brace for a close vote on President Trump’s tax and budget plan. Two fiscally conservative House Republicans threatened to vote against the bill today, potentially dashing hopes for quick passage in the lower chamber. The legislation is vital to President Trump’s campaign promise to cut taxes. The measure is being closely watched by investors who fear it will expand the federal deficit and roil the bond market. Big banks are reportedly on the cusp of a major lobbying victory. The Fed and other agencies are weighing the easing of capital rules, according to The Washington Post. (The agencies have long argued that stricter requirements crimp lending.) The move is the latest sign that the Trump administration intends to adopt a more industry-friendly approach for banks and Wall Street. The S.E.C. is investigating Coinbase. The inquiry centers on the company’s claims that it had more than 100 million “verified users,” according to The Times. (Worth noting: Since President Trump took office, the S.E.C. has dropped dozens of lawsuits and investigations related to crypto enterprises.) Separately, Coinbase faces a $20 million ransom demand from cybercriminals in a data breach. Novo Nordisk’s C.E.O. will step down. Lars Fruergaard Jorgensen, who oversaw the Danish drugmaker’s rapid rise as it commercialized the popular GLP-1 weight-loss drugs Ozempic and Wegovy, will soon step down, the company said today. Novo Nordisk’s stock has more than halved in the past year as GLP-1 competition intensifies and Trump’s pharma tariffs loom, a performance that hastened the company’s decision to find a new C.E.O. A cable mega-deal emergesAs the second Trump administration began, deal makers had hoped for a revival of big-ticket mergers. So far, however, that enthusiasm has been tempered as top antitrust officials suggested they wouldn’t bless just any transaction. A new test of how the Trump competition cops view the issue just arrived: Charter agreed to buy a top rival, Cox, at a $34.5 billion valuation. The deal would consolidate two of the nation’s top cable providers. Under the proposal, Charter will pay cash and stock, with the combined company set to take on the Cox name within a year after closing. Cox’s eponymous founding family would become the unified entity’s largest shareholder with a stake of approximately 23 percent. It wouldn’t be the first time the two have discussed a tie-up: They held talks 12 years ago, and John Malone, the telecom billionaire who is a major Charter shareholder, had named Cox last fall as a potential transaction target. It’s one of the biggest takeovers announced this year, along with Google’s planned acquisition of the cybersecurity provider Wiz for $32 billion. And it may illustrate that, at least for some corporate chiefs, uncertainty on the economy, driven in part by President Trump’s trade policies, isn’t enough to deter major investments and acquisitions. Charter and Cox argue the deal helps them compete against big rivals, including “larger, national broadband companies” — read: Comcast, Verizon, and others — as well as satellite service providers. They are also likely to point out that their cable networks don’t overlap. How will Trump’s antitrust enforcers respond? It helps that the Charter-Cox deal doesn’t involve tech giants, which top competition officials and Vice President JD Vance have singled out as ongoing targets of scrutiny. Some corporate advisers have also said they believe Trump officials may be more open to proposals to allay their concerns than their Biden-era counterparts were. Still, Trump antitrust leaders have warned corporate America not to assume that all deals will pass muster. “I don’t have an ideological predisposition against M.&A.,” Andrew Ferguson, the chair of the F.T.C., said last month. “It doesn’t follow, however, that I think it should just be open season” for deal-making. Scandal casts a shadow on Davos successionThe World Economic Forum, the organizer of the glitzy annual confab of business, political and nonprofit leaders in Davos, Switzerland, has found itself uncomfortably thrust into the spotlight, amid allegations of impropriety against its founder, Klaus Schwab. But the accusations, which led to Schwab’s resignation as chair last month, have also reportedly thrown a wrench into the forum’s succession planning — and raise questions about the moneymaking enterprise’s future. A recap: The forum’s board opened an inquiry after receiving an anonymous letter that accused the family of the 87-year-old Schwab, a German economist who founded the organization in 1971, of improper use of funds. He had already faced allegations of overseeing a toxic work environment where female and Black employees felt discriminated against. Schwab has denied any wrongdoing, but stepped down as chair last month after clashing with other directors. Peter Brabeck-Letmathe, a former chair of Nestlé, is leading the board for now. Schwab’s early departure is said to complicate plans for one potential candidate: Christine Lagarde, the president of the European Central Bank and a longtime Davos attendee, according to Bloomberg. Schwab had intended to stay on until 2027, the year that Lagarde’s E.C.B. term runs out, Bloomberg reports; Lagarde has said she won’t leave ahead of schedule. While she is considered the favorite, according to Bloomberg, other potential candidates include David Rubenstein, the co-founder of the investment giant Carlyle and a forum director. There’s a lot at stake. The forum collects about $500 million a year, according to The Wall Street Journal, with most of that coming from membership payments and corporate sponsorships for its events. The Schwab allegations have already started to worry some companies that shell out millions each year to attend the Davos conference, according to The Financial Times. (“The place is all panicking about how much they will be tarnished by him,” one unidentified senior staffer told The FT.)
Is Meta a monopoly? We’ll find out soon.Over five weeks of a trial, the government has called more than 30 witnesses while arguing that Facebook’s parent, Meta, broke antitrust laws when it acquired Instagram and WhatsApp. They included the Meta C.E.O. Mark Zuckerberg, the former C.O.O. Sheryl Sandberg and the Instagram founder Kevin Systrom. Now it’s Meta’s turn to defend itself from potentially being forced to break itself up by selling Instagram or WhatsApp or both. Meta is hoping the presiding judge is still skeptical of the case. James Boasberg of the Federal District Court for the District of Columbia — the same judge clashing with the Trump administration over its deportation of several Venezuelan men to El Salvador — had written before the trial that the F.T.C.’s positions at times “strain this country’s creaking antitrust precedents to their limits.” Meta yesterday asked Boasberg to throw out the matter, saying the government hadn’t proved its case. What the government has argued:
What are Meta’s chances? During the case, Boasberg continued to question some of the government’s arguments, noting, for example, that many apps, like TikTok and YouTube, also have features for sharing with friends and family.
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