Good morning. We’re looking at Elon Musk’s plan to give voters a million bucks. Also, how McDonald’s got caught in the political crossfire; a buzzy A.I. start-up looks to raise hundreds of millions more; worries about the global economy; and other news to watch this week. (Was this newsletter forwarded to you? Sign up here.)
Musk tests the bounds of election lawElon Musk made a name and a fortune for himself by questioning the status quo and bending rules. It’s an approach that helped Tesla and SpaceX achieve new breakthroughs and behemoth valuations. But his new lottery-style ploy to bolster turnout among conservative voters in November — dangling million-dollar payouts in Pennsylvania, and soon elsewhere — has some legal experts worried. What Musk is doing: The tech billionaire is essentially gamifying the process of getting out the vote. He has ratcheted up payouts related to a petition that his America super PAC put together, to $1 million a day to a “randomly” selected signer. Two people have already won. Musk plans to expand the sweepstakes to registered voters in seven battleground states this week. Legal experts aren’t sure the scheme is permissible. Federal law makes it a crime to pay, offer to pay or accept payment for registration to vote or for voting. There are some exceptions, such as driving people to the polls. Some lawyers questioned Musk’s tactic:
Others are not so sure. Brad Smith, a former chair of the Federal Election Commission, told The Times that because Musk isn’t paying people to register, but instead paying them to sign a petition — even if it’s open only to registered voters — the mogul “comes out OK here.” It’s a sign of how far Musk is willing to go to bolster Donald Trump’s campaign. The Tesla chief has not only set up and funded the America super PAC, but is also making public appearances to pitch Trump to voters. One of the potential reasons is Musk’s focus on paring back regulations on business — including his companies, The Times reports, which have been targeted in at least 20 recent investigations or reviews. Trump has said that if he is re-elected, he would appoint Musk to be an adviser on matters including how to better streamline the government. That could pose conflicts of interest, some government experts told The Times.
Boeing is said to be weighing asset sales ahead of a pivotal contract vote. Union members are set to vote on Wednesday on a new four-year pay deal. But the struggling plane maker is exploring the sale of certain business units as it bleeds cash, The Wall Street Journal reports. Southwest Airlines may be near a truce in its fight with Elliott Investment Management. Officials at the low-cost airline are said to be discussing a settlement that would give the activist hedge fund more board seats but not control, according to Bloomberg. In other activist news: Starboard Value has taken a big stake in Kenvue, the company behind Listerine and Tylenol, The Wall Street Journal reports. An intelligence leak suggests that Israel is preparing to attack Iran. Documents describing details of Israel’s latest military preparations for a potential strike on Iran began circulating on Telegram late last week. U.S. officials were frantically investigating the leak. The price of Brent crude, the international oil benchmark, rose this morning. Politics and the golden archesWall Street has already been anxious about how McDonald’s is doing, given fallout from consumer thriftiness, boycotts tied to Israel’s war in Gaza and the rise of weight-loss drugs like Ozempic. Now the fast-food chain is finding itself at the center of the presidential race, too, as Donald Trump and Vice President Kamala Harris brandish their ties to the golden arches to flaunt their working-class bona fides. The latest: Trump, a Quarter-Pounder-with-cheese devotee, turned a visit to a McDonald’s in suburban Philadelphia into an abbreviated-work-shift-slash-photo op. He worked the fry station (without a hairnet) and bagged orders for preselected drive-through customers, while casting baseless doubts on Harris’s claim to have worked for the chain decades ago. He also ducked a reporter’s question about raising the minimum wage, an issue that has dogged Derek Giacomantonio, the owner of that particular location. The Trump campaign has since posted an image of the former president wearing a McDonald’s apron. Meanwhile, the Harris campaign accused Trump of “exploiting working people for his own personal gain.” McDonald’s sought to strike an inclusive tone in its response. In a letter the company sent to franchisees, it said that the company “does not endorse candidates for elected office. We are not red or blue — we are golden.” The company added that franchisees have also invited the Harris-Walz campaign to visit their restaurants. Trump’s appearance underscores the challenge of staying neutral in a polarized political climate, for fear of alienating customers, staff members and others. Even the term democracy “has become kind of loaded,” Charles Elson, the founding director of the John L. Weinberg Center for Corporate Governance, told DealBook’s Lauren Hirsch. Will this harm the brand — or amount to a nothing-burger? The Trump visit thrust McDonald’s into the mass of heated political discourse online. But the company’s stock this morning was trading a tick higher in premarket trading. The A.I. boom chugs onThe money may still be flowing into all things artificial intelligence. Perplexity is said to be in talks to raise $500 million in a funding round that would more than double its valuation to at least $8 billion, The Wall Street Journal reports. Perplexity wants to take on Google’s dominance in search. The San Francisco-based company was founded by Aravind Srinivas, a former intern at the tech giant, and aims to redesign the auction-based advertising system that is Google’s big profit engine. The company makes money by selling subscriptions, and The Journal reported that annualized revenue is now about $50 million, up from roughly $10 million in March. The company already has big-name backers. They include Jeff Bezos and Nvidia, as well as leading A.I. researchers, such as the OpenAI co-founder Andrej Karpathy and Meta’s Yann LeCun. SoftBank’s Vision Fund 2 reportedly invested as much as $20 million just a few months ago. The fund-raising round would be Perplexity’s fourth in the past year. It’s the latest in a flurry of A.I. deals. In recent weeks, OpenAI raised $6.6 billion in a round that valued the money-losing start-up at almost $160 billion, one of the biggest funding rounds in Silicon Valley history. Last month, Fei-Fei Li, the Stanford professor known as the “godmother of A.I.,” raised $230 million for her start-up, and Ilya Sutskever, an OpenAI co-founder, raised $1 billion for his. The chip sector shows how A.I. has become the key to tech valuations and markets. Heavyweights like Apple, Microsoft, Amazon, Nvidia and Meta are soaring because of their links to A.I. By contrast, Intel, the American chip making pioneer that’s lagged in the technology, could be forced to split, and is a takeover target. Still, some media groups have criticized Perplexity for how it trains its model. Forbes and Condé Nast, among others, have accused the company of using their material without permission. (The New York Times has sued OpenAI and Microsoft, claiming that they had infringed on The Times’s copyright in training A.I. systems.) The gloomy global outlookFinance ministers and central bankers will descend on Washington this week for the autumn meetings of the World Bank and the I.M.F. with clouds hanging over the global economy. Atop the agenda: a U.S. election that could shake up global trade, soaring government debt and global conflicts. The I.M.F. will publish its economic outlook tomorrow. The U.S. economy is outperforming its peers on a range of indicators — The Economist calls it “the envy of the world” — but lots of voters aren’t feeling it. That’s one reason Donald Trump has regained ground in the polls against Vice President Kamala Harris. If he wins, Trump has threatened to slap a new round of tariffs on imported goods. The I.M.F. has warned about slow growth and global debt. The global economy is in decent shape as inflation cools, and Bloomberg Economics forecasts growth of 3 percent. But the I.M.F. said last week that growth is too slow to create enough jobs or service government debt that will surpass $100 trillion, by the end of the year. The world’s two biggest economies are driving that surge in borrowing. China is turning to fiscal stimulus in an effort to boost its economy; Beijing cut interest rates this morning, the latest in a drip feed of measures. Meanwhile, both Trump and Harris’s economic proposals could add trillions more to the U.S. deficit over the next decade. C.E.O.s are urging caution. JPMorgan Chase’s Jamie Dimon delivered bumper third quarter profits this month. But he repeated his longstanding warnings that geopolitical instability in the Middle East and Ukraine was a huge risk to the global economy and that conditions were getting worse. That will likely jibe with the mood in Washington this week. “Don’t expect any victory parties,” Kristalina Georgieva, the managing director of the I.M.F., said ahead of the meetings. Here is what else to watch this week: Tomorrow: The BRICS summit is scheduled to kick off in Russia, hosted by President Vladimir Putin. Xi Jinping of China and Narendra Modi of India are expected to attend. On the agenda: a discussion to build a global payment system to rival the dollar. Wednesday: Investors will closely watch Tesla’s results, especially after investors were left underwhelmed by its recent robotaxi event. IBM, AT&T and Boeing will also report. Separately, the Fed is set to release its latest “beige book” breakdown of the U.S. economy. Thursday: KKR, UPS and Southwest Airlines report results. 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