Good morning. Andrew here. Lots of news this morning, including the end of the fight for control over the Murdoch family’s media empire. There’s something else worth keeping an eye on: a report by The Wall Street Journal that OpenAI would consider leaving California over concerns the state might block its plan to become a for-profit business. OpenAI, which said it had no plans to leave the state, is in a complicated place. It’s trying to persuade state officials to approve its plan. But the potential threat could backfire, since regulators could not only block the plan but also go to court to halt any effort to reincorporate elsewhere. That would thrust OpenAI and its investors, including Microsoft, into a lengthy legal battle. (Was this newsletter forwarded to you? Sign up here.)
Lachlan in controlIt’s over. The Murdoch family has finally settled a yearslong civil war for control of its empire — one that, yes, inspired an award-winning TV show — in perhaps the only way possible: a multibillion-dollar deal that followed a protracted legal fight. But the stakes of the dispute, in which Rupert Murdoch’s elder son and ideological heir, Lachlan, go beyond Shakespearean drama. The agreement settles the leadership of what may be the most powerful media conglomerate in the world, with Fox News as its crown jewel, at the height of its influence. The numbers:
The path to a deal was paved with conflict. The eldest Murdoch siblings have frequently criticized the editorial slant of their family’s media business, putting them in conflict with their father and Lachlan. Rupert and Lachlan escalated matters when they sought to change key terms of what was meant to be an irrevocable family trust that held the Murdoch siblings’ shares. The Times exposed the battle, which took place in a Nevada probate court and included a scathing opinion from a judge and accusations that James had disclosed confidential information about the case to The Atlantic. How peace was won: In the spring, representatives for both sides met at the Harvard Club in New York to discuss a settlement, according to The Times. Lachlan had previously offered to buy out his siblings, at a steep discount; in turn, they at one point demanded that any new trust cover the tax burden from their stock sales. Ultimately, the two sides agreed to the complicated arrangement, which was finalized last week. Why it matters: Lachlan has now seized control of Fox News, The New York Post and The Wall Street Journal, giving him an invaluable perch from which to influence world leaders like President Trump. The big risk of the family war was that the dissident siblings would eventually sell their holdings on the open market, eroding control of the business and creating the possibility that it would lose its conservative, and lucrative, tilt. “If you’re not aligned with the direction of the company and you have a significant voting position and it’s going to lead to conflict, this is a pretty elegant solution to that,” Doug Arthur, an analyst at Huber Research Partners, told The Times.
Two mining giants plan to merge. Shares in Anglo American and Teck Resources jumped today after the companies agreed to create one of the world’s biggest copper miners. The combined business will be headquartered in Teck’s home base of Vancouver, British Columbia, but will keep its primary listing in London. The deal could reshape the mining industry and comes as strong demand for copper has lifted global prices, but investors speculated on whether other bidders might emerge. OpenAI reportedly studies a move out of California. The artificial intelligence start-up may move its incorporation out of the state if scrutiny from the attorney general there complicates its plans to convert into a for-profit business, The Wall Street Journal reports. Though an OpenAI representative said the company had no plans to leave, the report underscores the high stakes of the for-profit transformation effort. Fallout grows from last week’s I.C.E. raid on a Georgia battery plant. Images of workers in shackles at a production site built by Hyundai Motor and LG Energy Solution have spooked other multinational companies, many of which are seeking advice on how to protect their U.S. workers, according to The Financial Times. The raid has also prompted reviews of whether overseas companies are using proper visas for workers and how readily available they are. Revision dayIn recent years, presidential administrations have come to dread the Bureau of Labor Statistics’ annual payroll revision, in which previous estimates of monthly job numbers are updated all in one shot. The latest arrives today, and market watchers are expecting a doozy. Bearish economists, including those at Wells Fargo and Comerica, forecast that the update will show that the economy created about 800,000 fewer jobs in 2024 and earlier this year than initially reported. That’s in line with last year’s bombshell figure. A big number could add pressure on the Fed to cut interest rates next week, as it would reinforce fears of a deteriorating labor market. It could also draw fresh criticism from President Trump over the bureau’s data crunching. He has already fired its chief, and administration officials have attacked the agency for “a lengthy history of inaccuracies and incompetence.” The bureau’s defenders say that revisions represent a routine cleanup of employment data and that substantial changes are the norm.
A megamerger for cancer researchFor nearly 50 years, the Samuel Waxman Cancer Research Foundation has raised and given out millions of dollars to find treatments for the disease. Now the organization is taking a big step: a merger with the Mark Foundation for Cancer Research, founded by the hedge fund billionaire Alex Knaster, to create a new initiative to research how aging affects cancer risk, Michael de la Merced is first to report. It’s a union of two prominent research organizations. Created and led by the oncologist Samuel Waxman, the Waxman Foundation has distributed more than $120 million worldwide. The Mark Foundation has awarded more than $275 million in funding to individuals and early-stage companies, which has helped support nearly 20 new drugs and diagnostic tools. The two will create the Samuel Waxman Institute for Aging & Cancer, which intends to award $15 million in grant funding over the next three years. The back story: They first collaborated in 2022, jointly hosting scientific workshops and then teaming up on research funding. Last year, they awarded $1.5 million to three research groups studying the connection between aging and cancer. As the organizations focused more on that link, they realized that it made sense to combine forces: The merger is “a natural fit from a mission perspective,” Ryan Schoenfeld, the Mark Foundation’s C.E.O., told DealBook. Waxman added that the tie-up made sense financially, reducing his group’s overhead and providing it with more stable funding. An unavoidable backdrop: cuts to federal medical funding. The Trump administration has sought to slash the National Institutes of Health’s budget by $18 billion, or nearly half, which is eroding funds for research into cancer and other diseases. (Even some Republican lawmakers have resisted the move.) Schoenfeld said that the cuts hadn’t affected how either research organization operates: “It’s not changed by the current environment,” he said. He added that the Mark Foundation remained financially strong, especially since Knaster pledged hundreds of millions in additional support. While “we can’t measure up to the N.I.H.,” Waxman said, the Waxman and Mark foundations have provided research funding that wasn’t always covered by federal grants. He added that he believed scientists would continue to receive most of their funding from federal sources like the N.I.H. “I’m not giving up on that,” Waxman said, adding that federal support for scientific research was “going to survive, and it will thrive.” “I’m going to punch you.”— Treasury Secretary Scott Bessent, reportedly, in a heated exchange with Bill Pulte, President Trump’s chief housing finance official, according to Politico. (The conversation was said to have been peppered with expletives. The Times’s Maggie Haberman and Shawn McCreesh later reported on the incident.) The reported exchange would indicate a rift between Bessent and Pulte, who have been tasked with privatizing the mortgage giants Fannie Mae and Freddie Mac. A.I.’s growth potentialBoosters liken the rise of generative artificial intelligence to the start of a new industrial revolution, and that has spurred multibillion-dollar investments. Economists, though, are divided on predictions of its long-term benefits. Researchers at the Wharton School at the University of Pennsylvania are the latest to run the numbers. Their verdict: Generative A.I. will lift productivity and economic growth over the next decade. The returns trail off from there. “It’s maybe as big and significant as email,” Alexander Arnon, the director of policy analysis at the Penn Wharton Budget Model, told DealBook. The researchers estimate that generative A.I. will lead to an additional 1.5 percent annual increase to G.D.P. by 2035. That’s meaningful, but it also splashes some cold water on the notion that generative A.I. will transform the economy. It’s worth noting that the report examined generative A.I., which encompasses large language models like ChatGPT and image generators like DALL-E. The potential economic impact of A.I. in areas like robotics has substantial additional potential, Arnon acknowledged. Here are more findings:
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