“If you want something you’ve never had, you must be willing to do something you’ve never done.”
― Thomas Jefferson
It was a busy week with the JPM Healthcare conference in SF, GS Fintech Conference in NY, and the Balerion Venture Nuclear Energy conference in Palm Beach. ?A special thank you to the Balerion team for hosting such a wonderful and timely event. The gathering brought together a notable community of investors, entrepreneurs, government officials and industry leaders for a full day of discussion around ways to help solve the growing energy needs of the tech and aerospace/defense industries.
The markets experienced their best week since the post-election rally in November of 2024. Wednesday helped jump start the euphoria after a better-than-expected inflation report provided some well needed reprieve to rising inflationary concerns, helping drive bond yields down about 15 basis points. In addition, the week enjoyed headlines that Trump and Chinese leader Xi Jinping had a phone call in which they discussed trade, TikTok and fentanyl, which could set the tone for relations between the world’s two largest economies. And earnings season kicked off with strong quarterly results from the major banks.
Next week all eyes and ears will be focused on the presidential inauguration, followed by the retreat in Davos, and quarterly earnings reports from some of the biggest companies in the world. And, of course, TikTok.
In the news, Anduril revenue doubled to $1B, announced plans for a $100M tender offer for employee shares, and a new weapons factory, Arsenal-1, in Columbus, Ohio, President Biden's new executive order allows AI companies to lease federal land for data centers with mandatory renewable energy requirements, Crypto made headlines as Trump is reportedly “considering” establishing a crypto reserve that would prioritize U.S.-based coins, Rio Tinto and Glencore are discussing combining their businesses in what could result in the mining industry’s largest-ever deal, FBI leaders have warned agents that they believe hackers who broke into AT&T ’s system last year stole months of their call and text logs, setting off a race to protect the identities of informants, Taiwan Semiconductor’s (TSMC) outlook topped forecasts, with the main chipmaker for Apple and Nvidia saying it expects to spend $38 billion to $42 billion on tech this year, Southwest Airlines was sued by the US government for “unlawful chronic flight delays,” Apple is in talks with Barclays and Synchrony Financial to replace Goldman Sachs as the partner for its credit card, Intel announced on Tuesday it is spinning off its corporate venture capital fund, Intel Capital, into a standalone investment fund, the Securities and Exchange Commission sued Elon Musk in federal court in Washington, D.C., for not properly disclosing a major purchase of Twitter shares ahead of his takeover of the social media company, Janet Yellen’s computer was hacked by Chinese operatives as part of a recent breach of more than 400 Treasury PCs, people familiar said, Blue Origin launched its New Glenn rocket into orbit from Cape Canaveral, Florida, in a major milestone for the quarter-century old space company, Coinbase announced it is launching a bitcoin-backed loan program that will allow customers to borrow up to $100,000 worth of USDC stablecoins using bitcoin in their accounts as collateral, Retail trading app eToro confidentially filed for an initial public offering in the U.S., Bank of Japan Deputy Governor Ryozo Himino signaled the possibility of a rate hike next week by saying that the board will be discussing it, and estimates from Wells Fargo and Goldman Sachs showed that they anticipate the Los Angeles wildfires could result in losses of as much as $30 billion for insurers, significantly higher than JPMorgan’s forecast last week of about $20 billion.
For the week, the Dow rose 3.7%, the S&P 500 gained 2.9%, and the Nasdaq Composite added 2.5%.
On the economic front, the Producer Price Index (PPI) rose 0.2% m/m (3.3% y/y) in December, below the 0.4% increase in November and below expectations of 0.3%. Prices for goods went up 0.6%, led by gasoline, while prices for services were unchanged. Core PPI (ex-food & energy) was flat m/m and up 3.5% y/y. Consumer Price Inflation (CPI) rose 0.4% m/m (2.9% y/y) in December, the most since March, compared to a 0.3% rise in November (above expectations of 0.3%). The index for energy accounted for over 40% of the monthly increase. However, Core CPI (ex-food & energy) rose 0.2% m/m and 3.2% y/y. Retail Sales increased 0.4% m/m in December, the least in four months, compared to a 0.8% rise in November (below expectations of 0.6%). Housing Starts rose 15.8% m/m to an annual rate of 1.499 million in December, the most since March 2021 (above expectations of 1.320 million). Starts for multi-family housing rose 58.9% to 418,000 units, while single-unit housing rose 3.3% to 1.05 million. Starts rose in all regions outside of the West. ?
- Israel’s Prime Minister said it finalized an agreement with Hamas to pause the war in Gaza, suggesting a ceasefire—including the release of hostages—is on track to begin on Sunday. Now the cabinet has to ratify the pact, with a meeting currently underway. The long-awaited deal looked at risk of collapsing yesterday when Benjamin Netanyahu accused Hamas of reneging on some commitments.
- In Los Angeles, burning EVs and home-battery storage systems are complicating cleanup efforts after the devastating wildfires as toxic lithium adds to the mix of hazardous materials. Another fire broke out in one of the world’s biggest battery storage facilities. Meanwhile, in support of recovery efforts, a star-studded charity concert has been scheduled for Jan. 30. It’ll be shown across multiple streaming services to maximize donations for victims.
- US Treasury Secretary Janet Yellen said her department will start taking special accounting maneuvers as of Jan. 21 to avoid breaching the US debt limit, urging lawmakers to take steps to increase or suspend the statutory ceiling. Yellen wrote in a letter to congressional leaders Friday that she was advising them “of the extraordinary measures that Treasury will begin using.” It’s the second notification in the latest fight over the debt limit. Yellen advised that the Treasury’s extraordinary measures would begin by redeeming a portion of, and suspending full investments in, the Civil Service Retirement and Disability Fund. It will also suspend additional investments of amounts credited to the Postal Service Retiree Health Benefits Fund.
- Trump’s economic team is said to be discussing a gradual approach to tariffs—increasing them by 2%-5% per month—to boost negotiating leverage and avoid inflation. The possibility of gradual US levies is stirring a note of optimism in the markets, but it’s still anyone’s guess how Trump’s trade wars will influence the economy.
- China’s economy grows, but its population shrinks again. New data showed that the Chinese economy grew 5 percent last year, with increased exports and investment in manufacturing offsetting a slump in construction. But Beijing also disclosed that China’s population fell for a third straight year, despite an unexpected rise in births, portending a longer-term challenge to economic growth.
- One key area trending is the incoming administration's stance on TikTok. After previously advocating for a ban, they are now expected to intervene to prevent it, signaling a shift towards finding a political solution, or possibly Elon Musk’s X purchasing the company as has been proposed by some in the Chinese administration in the US. This change in stance is underscored by the fact Trump has invited TikTok CEO Shou Zi Chew to the inauguration.
- Wall Street’s biggest banks paid out the most in three years to investors in the form of dividends and buybacks. According to data compiled by Bloomberg, the six largest US banks delivered more than $100 billion. And there’s more where that came from: Top executives are expecting to offer additional payouts in 2025 given that the incoming Trump administration is likely to slash plans to force banks to hold more capital (to protect against another global financial crisis). This could free up cash for banks to lend more—and offer more to shareholders.
- Microsoft and Google both rolled out changes to how they bill corporate customers for AI software on Wednesday to drum up more AI revenue. Microsoft will start letting businesses pay for certain features within its enterprise-focused AI software on a consumption basis, rather than a flat monthly fee that it has been charging for other corporate AI software. Meanwhile, Google is making AI features a part of its Workspace software by default, meaning customers will no longer pay separately for the features, and is raising the baseline cost of Workspace.
- The Federal Trade Commission said Thursday it had referred a legal complaint it made against Snap to the Department of Justice and alleged the company’s artificial intelligence chatbot poses “risks and harms to young users of the application” and that Snap “is violating or is about to violate the law.”
- Synthesia, the Nvidia-backed AI video platform secured a $180M Series D with new backers NEA, Atlassian, WiL, and PSP Growth, raising its valuation to $2.1B.
- Harvey, an AI startup focused on the legal profession, is in talks with Sequoia Capital on a $300 million funding round that would double its valuation to $3 billion. The startup develops generative artificial intelligence tools for law firms, competing with others such as EvenUp and Robin AI.
- Databricks raised $5 billion in debt in a new round of financing that will help the company offset taxes from employee share sales, Bloomberg reported. The financing, which included loans from Blackstone, Apollo Global Management and Blue Owl Capital, comes on the heels of a $10 billion equity round in December that valued Databricks at $62 billion. Databricks expected to use part of the proceeds from that round to let current and former employees cash out shares, it said.
- Nilus, a New York City-based treasury management AI-powered platform, raised $10 million in funding. Felicis and Vesey Ventures led the round and were joined by existing investor Bessemer Venture Partners.
- Amazon agreed to acquire Indian buy-now, pay-later startup Axio, deepening its push into financial services in one of its fastest-growing markets. Financial terms of the deal were not disclosed, but two people familiar with the matter told TechCrunch that the size of the deal is over $150 million. The transaction requires approval from the Indian central bank.
- HYPERLINE, a Paris-based revenue management platform, raised $10 million in a seed extension round. Index Ventures led the round and was joined by Adelie.vc and existing investors.
- Arva AI, a San Francisco-based business verification solutions provider for banks and fintechs, raised $3 million in funding. Gradient led the round and was joined by Y Combinator, Amino Capital, Olive Tree Capital, and angel investors.
- Lyteflo, a Toronto-based electric vehicle sales solution provider, raised $3 million in seed funding. Diagram led the round and was joined by Whitecap Venture Partners and Amplify Capital.
- Loft Orbital, a San Francisco-based space infrastructure and satellite platform developer, raised $170 million in Series C funding. Tikehau Capital and Axial Partners led the round and were joined by Bpifrance, Foundation Capital, Temasek, and Uncork Capital.
- Skor Technologies, a Jakarta, Indonesia-based parent company of fintech platforms Skorcard and Skorlife, raised $6.2 million in pre-Series A funding. Argor Capital led the round and was joined by the Digital Currency Group and existing investors QED Investors and Saison Capital.
- Daash Intelligence, a San Francisco-based commerce intelligence predictive AI platform for retail brands, raised $5.5 million in seed funding. Bullpen Capital led the round and was joined by GFT Ventures and existing investors Silicon Road Ventures and Red Bike Capital.
- Clear Labs, a San Carlos, Calif.-based next-generation sequencing platform, raised $30 million in Series D funding from Counterpoint Global, Felicis, GV, and others.
- Raspberry AI, a New York City-based fashion generative AI platform, raised $24 million in Series A funding. Andreessen Horowitz led the round and was joined by existing investors Greycroft, Correlation Ventures, MVP Ventures, and angel investors.
Please feel free to share this newsletter with others that may be interested. They can subscribe?here.?
