Good morning. Andrew here. Breaking: EBay’s board rejected GameStop’s $55 billion offer to buy the company, calling it “neither credible nor attractive.” It took issue with the plan by GameStop’s C.E.O., Ryan Cohen, including “the uncertainty regarding your financing proposal” and “the leverage, operational risks and leadership structure of a combined entity.” Of course, with GameStop’s market value worth nearly a fifth of its takeover target’s, a deal would mean that eBay would actually swallow GameStop. (That’s something that Cohen struggled to explain last week.) Now the question is whether Cohen will drop his long-shot bid — or try to run a hostile takeover. (Was this newsletter forwarded to you? Sign up here.)
“Below them, above them, around them”The trial pitting Elon Musk against OpenAI promised appearances by some of the artificial intelligence industry’s biggest names, including Musk himself and, later this week, Sam Altman. Yesterday featured another major mogul, the Microsoft C.E.O. Satya Nadella, who faced a major question: How much power did he have over OpenAI? “We are below them, above them, around them,” Nadella once told the tech journalist Kara Swisher of Microsoft’s relationship with OpenAI, comments that Musk’s lawyers asked him about in court. Nadella testified that they were a technical description of sorts, referring to how Microsoft technology supported OpenAI and made use of its products. But the implication by Musk’s legal team was that OpenAI was beholden to the tech giant. Nadella was also asked about a seeming veto that Microsoft had over some prospective OpenAI board members. In a series of text messages, Altman asked about Diane Greene, the former C.E.O. of Google’s cloud business. Nadella responded, “No.” Kevin Scott, Microsoft’s chief technology officer, added “Strong strong no,” a comment that Nadella liked. But Nadella denied that Microsoft was perverting OpenAI’s founding mission, creating A.I. that is safe for the world. Remember that Musk has accused OpenAI of forsaking that mission when it took an initial $1 billion investment from Microsoft, and later became a for-profit company. Echoing a defense of OpenAI’s, Nadella said that as Altman’s start-up grew and Microsoft invested more money, he never heard anything from Musk, even though “we have each other’s phone numbers.” Ilya Sutskever, another OpenAI founder, also took the stand yesterday. As an OpenAI director, Sutskever famously helped push Altman out in 2023 over his lack of candor with the board, only to change his mind and support his return. Why? Altman’s firing risked killing OpenAI, Sutskever testified. He added, “I worked really hard to create this company, and I cared very much about it.”
EBay rejects GameStop’s takeover bid. The online marketplace today called the $55 billion cash-and-stock offer “neither credible nor attractive.” Shares in eBay are down slightly in premarket trading, but investors had seemed skeptical of GameStop’s offer to buy a company nearly four times its size since the proposal was formally announced last week. President Trump reportedly weighs relief for beef and gasoline prices. Administration officials are finalizing executive orders to lower tariffs on beef imports and reduce regulations on U.S. cattle producers, The Wall Street Journal reports. Trump has also considered suspending a federal tax on gas, though that would require congressional approval. The deliberations come as investors brace for the latest Consumer Price Index report, which is due this morning and expected to show rising inflation. BuzzFeed agrees to sell itself to the billionaire Byron Allen. The once-buzzy digital media company said Allen had offered $120 million for control, with Jonah Peretti, its founder, stepping down as C.E.O. Of note: The Information points out that Allen is paying only $20 million in cash in exchange for newly issued stock, with the other $100 million coming via a promissory note backed by those shares — suggesting that he could walk away if BuzzFeed continues to struggle.
China’s edgeAs President Trump and Xi Jinping of China prepare to meet at a summit that starts on Thursday, the superpowers are taking stock of their negotiating positions. Trump is bringing a bevy of business executives to flex America’s business might, though he remains hobbled by his deeply unpopular and uncertain war with Iran. And there are more signs that China is entering the talks from a position of strength, especially in several important areas. Chinese artificial intelligence companies are becoming less reliant on U.S. chips while still building world-class products. The latest example: DeepSeek’s new model, released last month, is powered by Huawei processors, Meaghan Tobin of The Times reports. That dwindling reliance on American chips — initially driven by U.S. restrictions on exports of high-end Nvidia chips — could weaken one of Washington’s most effective negotiating tools. (That said, even DeepSeek used Nvidia chips to train its new system, and new models by Anthropic and OpenAI are more advanced than Chinese rivals’.) “U.S. export controls are not freezing China’s A.I. development,” Wei Sun, an analyst at Counterpoint Research in Beijing, told The Times. “They are forcing China to build an alternative stack.”
China is hoping its currency will make further gains against the U.S. dollar, which has slumped throughout Trump’s second term. The greenback’s status as the global reserve currency is not under threat, analysts say, but the war with Iran has scrambled the oil market and left openings for the rise of alternatives like the Chinese renminbi.
George Saravelos, a global head of FX research at Deutsche Bank, warned last month that the war could give rise to the “petroyuan,” shorthand for the renminbi supplanting the dollar in the international oil markets. That could give Beijing more clout “both as a security guarantor and as a new provider of payment,” Saravelos wrote. Bessent has been leading efforts to shore up the dollar. Among the possibilities is offering currency “swap” lines with allies in the Middle East, essentially ensuring that those countries have enough dollars and don’t need to start using renminbi. Analysts will be closely watching the Trump-Xi talks to see if they include measures to avert a full-blown currency war. Also keep an eye on whether Xi commits to helping broker an end to the war with Iran. Trump said yesterday that the U.S.-Iran cease-fire was on “massive life support.” OpenAI and private equity join forcesArtificial intelligence companies are under pressure to prove that their technology can deliver productivity gains for businesses. Private equity firms want new ways to revive their lagging performance by squeezing costs from their portfolio companies. The two industries are increasingly teaming up, Niko Gallogly reports. Yesterday, OpenAI announced the OpenAI Deployment Company, a joint venture seeded with a $4 billion investment that values it at $14 billion. The round was led by TPG, with additional capital from firms including Advent International and the consulting giants Bain Capital, McKinsey & Company and Bain & Company. The new company will embed applied A.I. engineers in businesses to “design, build, test and deploy production systems,” OpenAI said. As part of the DeployCo launch, OpenAI said, it is acquiring Tomoro, an applied A.I. consulting firm that will bring about 150 engineers. Fast follow: OpenAI introduced DeployCo a week after Anthropic announced a similar partnership with Blackstone, Hellman & Friedman, Goldman Sachs and other partners. Private equity is hoping A.I. will solve its problems. The industry has struggled with a flood of capital into the market over the past decade, which pushed up deal prices and made it harder to sell investments at an acceptable profit. More recently, A.I. has threatened the business model of private software companies, which many private equity firms acquired in recent years. “The private equity business needs a new value creation tool,” David Roux, the executive chairman of the private equity firm BayPine, told DealBook. A.I. might be that, he said, because it’s a clear way to make portfolio companies better — “and that’s what you get paid for.” In September, BayPine announced its own partnership with OpenAI, separate from DeployCo. “Expect funds to hire a lot more application engineers,” Roux said. “It’s going to be the hottest job in the next 10 years.”
Crypto’s Iran problemThe war with Iran has dominated Washington politics since the first missiles were fired. It could also spoil the cryptocurrency sector’s hard-fought lobbying gains over the Clarity Act, Grady McGregor reports. The latest: The bill looked to be on shaky ground in January before key senators reached a compromise in recent weeks to salvage it. Now, the legislation, which would establish a regulatory framework for cryptocurrencies, is set for a Senate Banking Committee vote on Thursday. But it still faces uncertain odds. Democrats insist that the bill include tougher antiterrorism financing provisions. Some Republicans say the bill already includes them. But others, including Alexander Gray, a national security aide during President Trump’s first term, disagree. That demand grew more urgent in recent weeks, people with knowledge of the matter told DealBook, as national security hawks on Capitol Hill became alarmed over Iran’s reported demand last month that ships pay a toll in crypto to pass through the Strait of Hormuz. Democratic opponents to the bill have long argued that the bill does not adequately address national security risks, and that it shields major parts of the crypto ecosystem — think decentralized exchanges — from anti-money-laundering rules and sanctions. Conflict of interest is another sticking point. Without an ethics provision, the bill will fail, Senator Kirsten Gillibrand, Democrat of New York, predicted last week at Consensus Miami 2026, a crypto industry conference. “We cannot allow members of Congress, senior administration officials, presidents or vice presidents to get rich off these industries because of their insider status,” she said. But the White House has pushed back, warning that it will not sign into law any bill that carries conflict-of-interest provisions that it does not like. And then there’s the fight between crypto and the banks. For months, Congress and the White House have sought to resolve differences between the two over stablecoin yield. Banks warn that yield-bearing digital coins could siphon deposits from the banking system, while crypto firms argue that a sweeping ban would be bad for the consumer and stifle innovation. Senators Thom Tillis, Republican of North Carolina, and Angela Alsobrooks, Democrat of Maryland, reportedly reached a compromise on the matter in March. Leading figures in crypto, including Brian Armstrong of Coinbase, support it. But banks say it falls short. Iran may have muddled the Clarity Act’s future. Until recently, negotiations had focused on issues like stablecoin yield, a Democratic aide who was not authorized to speak publicly on the matter told DealBook. But Iran “has been a reminder” of the importance of including strong national security provisions in the bill. We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
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