Good morning! OpenAI and Microsoft overhauled their partnership: Microsoft's license to OpenAI's IP is no longer exclusive, and the two sides are swapping revenue shares in a major restructuring. Ackman's Pershing Square IPO is pricing today as scheduled and expected to raise $5B. And Joby Aviation completed its first NYC test flight, sending an electric air taxi from JFK to Manhattan.

Jain Global is striking a deal to return investor capital and manage money exclusively for Millennium. HSBC is reviewing a $38K perk covering private school fees for Hong Kong bankers that costs the bank tens of millions a year. And Blue Owl fund investors rebuffed Boaz Weinstein's offer to buy their shares.

Plus: Ray Dalio says Kevin Warsh shouldn't cut rates in a stagflation era, and 3 signals strong-performing employees might still get replaced at work.

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SQUEEZ OF THE DAY

AI Already Coming for Analysts

Less than four months ago, Bank of America CEO Brian Moynihan went on TV and told his 210,000 employees not to worry about AI taking their jobs. But this month, after posting $8.6 billion in quarterly profit, he explained that cutting 1,000 roles through “eliminating work and applying technology” helped get there.

The six biggest U.S. banks made a combined $47 billion last quarter, up 18% year over year, while cutting roughly 15,000 employees. And this was not some coincidence buried in the footnotes; bank executives openly tied AI to the productivity gains.

Wells Fargo is using AI to generate instant credit memos, write pitchbooks, and handle customer-service calls. Citi is using tools from Anthropic, Google, Microsoft, and OpenAI to review legal documents, approve account openings, and send trade invoices. And at the same time, Citi has been cutting staff, including people from its own internal “AI Champions and Accelerators” program. So, the employees hired to help everyone adopt AI got replaced by AI. 

For years, Wall Street sold the same comforting line: AI will handle the boring stuff, humans will do the high-value work, and everybody wins, but that line is starting to crack. Wells Fargo CEO Charlie Scharf said the quiet part out loud back in December, calling AI a tool to do things “much, much more efficiently” than humans and adding that most bank CEOs are too afraid to say headcount is going lower. Morgan Stanley has tried to sound more reassuring, saying it is not replacing financial advisers and comparing its internal AI tools to JARVIS from Iron Man. 

On Wall Street, AI is not just some shiny assistant helping analysts summarize earnings calls a little faster. It is already being used to shrink support functions, automate middle-office work, speed up client materials, and quietly reduce the need for bodies across the machine. Banks are making more money, finding more “efficiency,” and needing fewer people to do it, and it’s showing up in the quarterly numbers.

Takeaway: The old Wall Street promise was that AI would augment jobs, not replace them. That sounds a lot less convincing when profits are up, headcount is down, and executives are explicitly crediting the same technology for both. The AI era on Wall Street is no longer about potential; it’s about throughput. The machines are already in the building, and the first thing they are doing is making the org chart lighter.

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HEADLINES

Top Reads

• OpenAI shakes up partnership with Microsoft, capping revenue share payments (CNBC)

• Meta's $2B AI deal shut down by Chinese authorities (CNBC)

• Bill Ackman's Pershing Square IPO expected to raise $5 billion (BB)

• Joby Aviation completes first NYC test flight, sending electric air taxi from JFK to Manhattan (YF)

• Jain Global is striking a deal to return investor capital and manage money exclusively for Millennium (AOL)

• HSBC reviews $38,000 per kid school fee perk for HK bankers (BB)

• Blue Owl fund investors rebuff Boaz Weinstein offer to buy shares (YF)

• Ray Dalio says Kevin Warsh shouldn't cut interest rates in a 'stagflation' era (CNBC)

• The Real Brokerage to buy Re/Max in $550M agreement (YF)

• Qualcomm stock rises on report of OpenAI smartphone chip partnership (CNBC)

• Stanford professor targets $1 billion valuation for AI for physiology startup (BB)

• Cheap private credit funds draw bargain hunters (BB)

• Shell agrees to buy Canada's ARC Resources for $13.6 billion (BB)

• Forvia sells auto interiors business to Apollo funds in $2.1 billion deal (WSJ)

• How Emil Michael is turning the Pentagon into a venture capital firm (WaPo)

• Private equity backers raise new conflict concerns over sweetheart deals (FT)

CAPITAL PULSE

Markets Rundown

Market Update

• Stocks moved higher as markets gear up for a major week of Fed decisions and big tech earnings

• Leadership came from communication services and financials, while defensives lagged

• Bond yields ticked higher, reflecting steady growth and inflation expectations

• Global markets were strong, with Japan and Korea hitting record highs

• Oil prices edged up, keeping energy and inflation in focus

Fed Week Takes Center Stage

• The Fed is widely expected to hold rates steady, keeping policy unchanged for now

• The real focus will be on tone and messaging around inflation and oil

• Policymakers are likely to look through near-term energy-driven inflation if it proves temporary

• Upcoming inflation data will be critical in shaping rate cut timing expectations

• The market is shifting from “when will they cut” to “how patient will they be”

Big Tech Earnings: The Real Catalyst

• A heavy slate of mega-cap tech earnings will define the next move in markets

• Early earnings season has been strong, with high beat rates and rising estimates

• Technology continues to drive overall earnings growth and market momentum

• This week will test whether AI-driven expectations can continue to be exceeded

• Market leadership and sentiment will likely hinge on guidance, not just results

Movers & Shakers

• (+) Sandisk ($SNDK) +8% after Morgan Stanley raised its price target to $1,100 and argued the NAND upcycle is being underestimated.

• (+) Snap, Inc. ($SNAP) +7% because Redburn upgraded to Buy, citing a strengthening subscription business and ad turnaround.

• (–) Domino’s ($DPZ) -9% after Q1 EPS of $4.13 missed estimates of $4.28, and international same-store sales declined 0.4%.

Prediction Markets

• Earnings Call Special (after markets close): Robinhood

• Trade on real-world events with Kalshi. Use code OWS to get a $10 bonus when you trade $10.

Private Dealmaking

• Shell agreed to buy ARC Resources, a Canadian energy firm, for $16.4 billion

• Sun Pharmaceutical agreed to buy Organon & Co., a women’s health company, for around $11.75 billion

• Eli Lilly agreed to acquire Ajax Therapeutics, a blood cancer biotech, for up to $2.3 billion

• Apollo agreed to buy the auto interiors unit of Forvia for $2.1 billion

• Astorg agreed to acquire Thermo Fisher Scientific’s microbiology business for around $1.08 billion

• Ligand Pharmaceuticals agreed to buy Xoma, a drug royalties aggregator, for around $740 million

• Sereact, a German robotic software startup, raised $110 million​​​​​​​​​​​​​​​​

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HEARD ON THE STREET

What Does Wall Street Actually Pay?

Everyone has a rough sense of what the market pays. Very few people know exactly what their role, at their level, in their city, at their firm type actually pays.

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Investment banking to private equity to hedge funds to venture capital, every major corner of Wall Street, broken down so you can get to exactly the slice you need.

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Whether you're negotiating an offer, evaluating a lateral move, or just benchmarking where you stand, we have the data:

BOOK OF THE DAY

Can’t Break Me

Description:
An inspiring and personal story from Kevin KAYR Robinson on resilience, mindset, and overcoming adversity. The book focuses on how internal shifts in thinking can redefine outcomes, turning setbacks into fuel for growth. Through lived experiences and practical lessons, it highlights the power of discipline, belief, and persistence in building a life that withstands pressure and challenges.

Book Length: 220 pages
Release Date: May 12, 2026

Ideal For:
Anyone facing adversity or looking to build mental toughness, resilience, and a stronger mindset to navigate life’s challenges.

Your circumstances do not define you; your mindset determines how far you go.

DAILY VISUAL

Wages Are Picking Up Again

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DAILY ACUMEN

Tax on Distraction

Every notification you respond to is not free. It costs you the cognitive overhead of context switching, the residual attention that lingers on what you just stopped doing, and the slow erosion of the ability to focus deeply on anything for any meaningful length of time.

The bill is paid in the work that never quite reaches its potential because it kept getting interrupted by things that felt urgent in the moment and were forgotten by evening.

The people producing the best work in any field are not necessarily the smartest. They are often just the ones who have most successfully built systems to protect their attention from the constant negotiation everyone else has surrendered to.

Focus is not a personality trait anymore. It is a discipline, and increasingly a competitive moat.

ENLIGHTENMENT

Short Squeez Picks

• Build 3 statement models, DCFs and LBOs in 10 minutes*

• Executive presence for poor public speakers

• A 4-minute morning routine for a successful day

• 5 new activewear brands to know

• 4 easy shoulder exercises to get chiseled 

• 3 signals strong-performing employees might get replaced at work

MEME-A-PALOOZA

Memes of the Day

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