gm.
elon into power generation. california losing to texas. and wall street quietly cashing in on the AI boom.
3 things worth your time
1. elon musk just bought a $1 billion power company.
reason: to power his AI. musk (via xAI, his AI company) quietly bought APR Energy, which builds mobile gas turbines. these are portable power plants mounted on trailers. they can be trucked to any site and turned on within days. APR's fleet can generate enough electricity to power a small city. musk needs the extra juice to run grok, his AI competitor to chatGPT.
the deeper story: AI companies are running into a wall the tech industry didn't plan for. the electrical grid can't keep up. new AI datacenters need power now, but hooking into the grid takes years of paperwork. APR's mobile turbines get around all of that. they can be deployed in days, no interconnect needed. classic musk move: if the system is too slow, buy your way out of it.
2. california just lost a $3 billion shipyard to texas.
saronic (a defense startup that builds robotic navy ships, last valued at $9.25 billion) picked brownsville, texas over solano county, california for its new shipyard ("port alpha"). the project will bring roughly 10,000 permanent jobs. texas offered $211 million in tax breaks. california, meanwhile, couldn't get its regulatory approvals moving fast enough.
context: saronic already has a $392 million contract with the US navy and a deal with DARPA (the pentagon's advanced research arm). they're one of the fastest-growing defense startups in the country. brownsville is also home to spacex's starbase, which is turning the region into a serious defense manufacturing hub. this is now a pattern: big industrial and defense projects are choosing texas over california because texas moves faster.
3. goldman sachs just had the best quarter in its 157-year history.
last week, goldman posted record revenue of $20.3 billion. investment banking revenue (the fees they collect for advising on IPOs and M&A deals) jumped 55% year over year. stock trading revenue jumped 72%. morgan stanley also broke records the next day, with stock trading business coming in nearly $2 billion above analyst estimates. JPMorgan and wells fargo also posted strong quarters.
what's driving it: the AI boom. the biggest IPOs in years (spacex, SK hynix, anthropic on deck), record M&A activity (stripe/paypal, paramount/warner bros), and trading volumes juiced by AI-driven market activity. the big banks have quietly become one of the biggest beneficiaries of the AI capital cycle. even more interesting: this is happening while the fed hasn't cut rates.
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two more quick things
paypal rejected stripe's $53 billion bid.
follow-up to thursday's briefing. paypal's board views the offer as "inadequate," per reuters. they've hired goldman sachs and evercore as advisors. polymarket is pricing 82% odds a deal still gets done, meaning the market thinks stripe raises the offer.
citadel securities just put $400 million into crypto.com.
ken griffin's market maker firm (one of the biggest liquidity providers on wall street) made its first strategic investment in a crypto exchange, valuing crypto.com at $20 billion. it's also the exchange’s first-ever institutional funding round. wall street's crypto convergence keeps accelerating.
see you thursday.
not financial advice. aggregated community trends and commentary.