Crypto News: Chips ahoy

Good morning. Chipmakers and Amazon bolster tech stock rebound. The “Nostradamus” of AI saves his skin, just about. And nobody wants the boomer generation’s $1 trillion art collection. Listen to the day’s top stories.

— Angela Cullen

Market Snapshot
S&P 500 Futures	7,510.50	+0.5%
Nasdaq 100 Futures	28,623.75	+1.4%
Bloomberg Dollar Spot Index	1,209.62	+0.3%
Market data as of 07:18 AM ET. Data is subject to provider delays.	Your watchlist

Love them, love them not. A rebound in global chipmakers carried into Friday, offering a reprieve at the end of a month that saw a steep derating in this year’s most popular trade. “The worst of the positioning washout is probably behind us,” says Lombard Odier’s Florian Ielpo. An unprecedented 18% surge in South Korea’s Kospi Index led the charge. Strong earnings by Amazon pumped up its shares premarket, while supply shortages cast a cloud over Apple. A deal by billionaire Ken Griffin’s Citadel with Situational Awareness also lifted AI sentiment. More on that below.

Error message. Just days after OpenAI revealed that its advanced AI models hacked another company’s systems by mistake, archrival Anthropic confessed to a similar incident. Anthropic discovered breaches of not one but three organizations during cybersecurity tests. In both the OpenAI and Anthropic incidents, the AI models were able to access the internet from within testing environments that should have been sealed off. Here’s what we know so far.

Watch this space. Michigan’s Senate primary on Aug. 4 is shaping up as the biggest test yet of whether the Democrats’ progressive wing can score a major victory in a presidential battleground heading into 2028, or whether longstanding weakness with Black voters will undercut its national ambitions. The contest pits Representative Haley Stevens, a moderate backed by much of the party establishment, against progressive Abdul El-Sayed, a former Detroit-area health official endorsed by Bernie Sanders and Alexandria Ocasio-Cortez. A swing state won twice by Donald Trump but carried by Joe Biden in 2020, Michigan is a must-win for Democrats hoping to retake the Senate in November.

From battleground to battlefield. Ukrainian artillery crews are poised to get access to extended-range shells by the end of the summer — a high-tech tool Kyiv hopes will drastically expand the frontline “kill zone.” By piling battlefield setbacks atop waves of strikes deep inside Russia that have triggered fuel shortages and pushed up prices, Ukraine aims to increase pressure on Moscow to end the war. But Kyiv is vulnerable, too, and the Kremlin is exploiting Ukraine’s shortage of air defenses to hammer civilian populations, stirring fears of another brutal winter.

Illustration of historian Peter Frankopan.

‘Powerful Men Often Miscalculate’

Peter Frankopan, Oxford scholar and author of ‘The Silk Roads,’ explains how Ukraine, Iran and China reveal the strategic miscalculations reshaping global power.

Bloomberg Power Players: Set against the backdrop of the US Open Tennis Championships, Bloomberg Power Players returns to New York on Sept. 10, bringing together the leaders shaping this global industry. From athletes and team owners to commissioners and investors, this event will gather the most influential voices for market-moving conversations on the multitrillion-dollar sports economy. Learn more here.

Deep Dive: Who Is Leopold Aschenbrenner?

Wall Street outside of the New York Stock Exchange.

Hailed as the “Nostradamus” of AI, tech-seer-turned-hedge-fund-manager Leopold Aschenbrenner vaulted onto the global stage with a bold prophecy for the future. “Before long, the world will wake up,” he predicted in 2024. This week, it did — just not in the way he had foreseen.

In a blink, his wildly successful hedge fund Situational Awareness was forced to sell billions of dollars of tech investments that had rapidly lost value, as nervous banks began to demand more collateral for his trades. Enter Ken Griffin.
Before striking a deal with Griffin’s Citadel, the young German tried selling some stakes to privately held companies as Situational Awareness rushed to raise cash to meet a barrage of margin calls.
So who is the former OpenAI researcher and why is Wall Street suddenly watching?
Being bullish on AI has been, for the most part, a great trade, writes Matt Levine. Aschenbrenner was early and smart and articulate about the AI thesis. But, if you’re all-in on it, the danger is you might be more than all-in.

The Big Take

Japanese Prime Minister Sanae Takaichi — Japan’s Prime Minister Sanae Takaichi at a news conference in Tokyo on July 27.

Sanae Takaichi’s vision for a stronger, more assertive Japan is in danger of unraveling as her approval ratings plummet, the yen nears a historic low, and food inflation persists.

Big Take Podcast

The Sneaky Trend of ‘Skimpflation’

Opinion

If Gianni Infantino’s project to sell a piece of FIFA to outside investors goes the way of his 2018 attempt to set up a commercial venture, he’ll only have himself to blame, writes Matthew Brooker. Golden geese require careful stewardship. Kill one through over-eagerness, and you may not find another.

More Opinions

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The Real Reasons to Be Terrified About AI and WMD

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MAGA or the DSA? America Deserves a Better Choice

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Elon Musk Surprisingly Doesn’t Understand Abundance

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Before You Go

Works from the collection of real estate developer Harry Macklowe.

The artful boomer. Nearly $1 trillion of art is expected to change hands in the coming decade as the generation born during the post-war baby boom bequeaths its vast trove of collectibles. Problem is, there won’t be enough buyers or museums to absorb it all.

A Couple More