Good Morning! Citadel Securities posted a record $4.3 billion of trading revenue in the first quarter. Americans are falling behind on their $1.25 trillion credit card bill as balances surge to an all-time high. And Jefferies was sued by fund investors over a water bond fraud.

AI is changing how consultants get paid, according to BCG's CEO, whose firm's revenue rose 7% to $14.4 billion last year. SpaceX is said to be cutting its IPO valuation goal to ~$1.8 trillion. And Miami is evolving the way New York once did.

Plus: UBS shed hundreds of jobs in its latest round of cuts following the Credit Suisse acquisition, and are leaders born or made?

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SQUEEZ OF THE DAY

Biggest Chip-Financing

Anthropic just raised $65 billion at a $965 billion valuation, the first time it has eclipsed OpenAI in private market value. It is also, apparently, not enough.

Apollo and Blackstone are now orchestrating a separate $36 billion debt financing deal to help Anthropic buy Google's custom AI chips, called TPUs, which Anthropic will then lease to power its infrastructure across sites in New York, Texas, Louisiana, and Indiana.

If the deal closes, it would be one of the largest private credit deals ever done and the biggest chip-financing debt transaction in history. 

The structure is worth understanding because it is genuinely creative. Anthropic is a startup with limited earnings, which means it cannot support $36 billion in debt on its own balance sheet. So the deal uses Broadcom, which helps Google develop the TPUs and has an investment-grade credit rating, as the backstop. A special-purpose vehicle borrows the money, buys the chips, and leases them to Anthropic. 

The debt is backed primarily by Anthropic's lease payments. If Anthropic stops paying, the SPV sells the chips. If the chip sale doesn't cover the debt in full, Broadcom makes up the shortfall for the senior investors.

That "residual value support" agreement is what allows the A1 and A2 tranches, roughly $31 billion of the $36 billion, to trade in line with Broadcom's investment-grade credit profile rather than Anthropic's startup risk. Broadcom gets to be the silent guarantor without the deal touching its own balance sheet or ratings. Apollo and Blackstone are selling down portions of the debt to additional investors, with the deal expected to wrap next week.

The precedent here is CoreWeave, which pioneered the GPU-backed loan structure and used it to build one of the largest AI infrastructure businesses in the market. The same concept is now being applied to TPUs at a scale CoreWeave never attempted. There's also a direct parallel to Meta's "Beignet bonds," the residual-value-backed financing for its Hyperion data center that traded in line with Meta's corporate debt.

Takeaway: The AI infrastructure financing market has gone from zero to $36 billion deal sizes in roughly 18 months. Anthropic raised $65 billion in equity this week and is simultaneously taking on tens of billions in chip debt, because the cost of staying competitive in the model race is so high that no amount of venture capital is sufficient on its own. Apollo and Blackstone have figured out that the real business of the AI boom isn't picking the winning model, it's financing the chips that all of them need to run.

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HEADLINES

Top Reads

• Citadel Securities reels in record $4.3 billion trading haul (BB)

• US credit card debt hits record high (WSJ)

• Jefferies sued by fund investors over massive water bond fraud (BB)

• AI is changing how consultants get paid — and much more, BCG's CEO says (WSJ)

• Why Wall Street is buzzing again about David Solomon's DJ side gig (NY Post)

• Miami is evolving the way New York once did (WSJ)

• UBS sheds hundreds in latest job cuts after Credit Suisse deal (BB)

• How Anthropic got so big, so fast (NYT)

• Anthropic co-founders worth $8 billion each after funding round (BB)

• Stablecoins are private money — that's why they're a risk to the economy (WSJ)

• SpaceX skeptics concerned as Musk comments diverge from IPO filing (CNBC)

• Inside CEO Jane Fraser's five-year Citi turnaround (Yahoo Finance)

• BofA trading revenue seen up 15% in second quarter, CEO says (BB)

• BCI expands into financing private equity funds amid deal slump (BB)

• CEOs keep misreading the roots of anti-elite rage (BB)

• SpaceX lowers IPO valuation target to at least $1.8 trillion (BB)

• Trinseo lenders sue Angelo Gordon, Apollo, Oaktree over debt deals (WSJ)

• Why America's rich keep getting richer (CNN)

• JPMorgan chases retail banking’s golden fleece (FT)

CAPITAL PULSE

Markets Rundown

Market Update

• U.S. equities finished modestly higher on Friday, extending the rally to a ninth consecutive weekly gain

• Continued optimism around a potential 60-day U.S.-Iran ceasefire extension helped support sentiment

• WTI crude oil declined about 1.5% on Friday and nearly 10% for the week, ending near $88 per barrel

• Technology stocks remained leadership drivers, while signs of broader participation continued to emerge

• The 10-year Treasury yield moved back below 4.5%, helping support risk assets

• Both the equal-weight S&P 500 and small-cap stocks reached new highs this month, suggesting improving market breadth

Momentum Remains Strong Despite Extended Rally

• The S&P 500 has now recorded 22 all-time highs this year despite ongoing geopolitical uncertainty

• Nine consecutive weeks of gains is historically rare and has occurred only a handful of times over the past several decades

• Historically, similar stretches have generally produced positive forward returns over three-, six-, and twelve-month periods

• While markets may pause or consolidate after such a strong move, history suggests these rallies have more often occurred earlier in bull markets rather than near peaks

• Continued earnings strength remains the key factor supporting the rally

Inflation Remains the Key Fed Risk

• Several Federal Reserve officials highlighted concerns this week around elevated inflation pressures

• Falling oil prices have helped ease some inflation concerns and contributed to lower bond yields

• Labor market conditions have stabilized, reducing pressure on policymakers to provide additional support

• Markets will focus next week on the employment report, with expectations for roughly 100,000 job gains and a steady 4.3% unemployment rate

Movers & Shakers

• (+) Dell Technologies ($DELL) +33% after the company announced AI server revenue increased 757% from last year.

• (+) Okta ($OKTA) +30% because the company beat Q1 estimates as its CEO framed AI agents as a new identity security frontier.

• (–) Ambarella ($AMBA) -21% after Q1 results disappointed investors expecting acceleration in its edge AI chip business.

Prediction Markets

• Thursday’s “anomaly” will present quite the setback for New Glenn.

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

Private Dealmaking

• Focused Energy, a German laser-fusion developer, raised $240 million

• Corgi, an insurance tech startup, raised $106 million

• Garner Health, a care navigation platform, raised $100 million

• Observable Space, a laser satellite link developer, raised $90 million

• Reactor, an AI video platform, raised $59 million

• Inherent, a London-based AI lab, raised $50 million
  
  For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

BOOK OF THE DAY

After The Spike

Description:
A contrarian and data-driven examination of population decline from Dean Spears and Michael Geruso that challenges the assumption that fewer people automatically leads to a better future. The book explores how falling birth rates could reshape economic growth, innovation, labor markets, and long-term human progress. Using economics, demographics, and historical analysis, it makes the case that population trends may be one of the most important and underappreciated forces shaping the century ahead.

Book Length: 352 pages
Release Date: June 3, 2025

Ideal For:
Readers interested in demographics, economics, public policy, and understanding how population trends influence growth, innovation, and long-term prosperity

The future is shaped not only by how we live but by how many of us there are to build it.

DAILY VISUAL

Luce - Ferrari’s First Fully Electric Vehicle

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Private market work runs on detail, and those details rarely sit in one place. CIMs, transcripts, broker reports, and email threads are scattered across VDRs, CRMs, and shared drives. As the team goes through them, a shared view gets hard to maintain, onboarding new teammates drags, and every conversation tends to restart from scratch.

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DAILY ACUMEN

The Tail Owns You

Most of what happens in markets, careers, and life sits comfortably within a predictable range. And then occasionally, without warning, it does not. The tail event arrives. The black swan lands. The thing you assigned a one percent probability to shows up and erases years of careful accumulation in a matter of weeks. This is not a flaw in the system. It is the design.

The mistake most people make is building their entire life around the assumption that the normal range is the only range. They lever up to the limit of what the bull case can support. They take on obligations that only work if nothing surprising happens. They have no margin, no buffer, no plan for the version of reality where the tail shows up early.

The people who survive long careers in any high-stakes domain are almost never the ones who predicted the tail. They are the ones who built lives that could absorb it.

ENLIGHTENMENT

Short Squeez Picks

• Why compatibility is overrated

• The neuroscience of positive self-talk 

• 7 must-read books for mastering life skills

• Are readers born or made?

• 6 habits to keep your brain strong and healthy

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

MEME-A-PALOOZA

Memes of the Day

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