Good Morning! Tech selloff sank stocks as AI spending faces scrutiny. Alphabet dropped 7% after the Google parent boosted its 2026 capex forecast to $205 billion. And Tesla shed $215 billion in market cap, its worst single-day loss on record.

Hedge funds are growing at the fastest rate in history as the AI boom lifts markets. Blackstone says the pace of withdrawals is slowing at its flagship private credit fund. And Substack is betting readers want content written by humans, launching an AI detection tool to prove it.

Plus: Oracle signed a 10-year software contract with the Pentagon worth up to $7 billion, an FDA panel recommended loosening peptide restrictions, and is working from home actually good for you?

The largest firms are pouring billions into AI deployment. The smartest are turning to purpose-built solutions like Blueflame. See how Blueflame can help your firm.

SQUEEZ OF THE DAY

The Proprietary CEO

Private equity in Asia has enough money, deals, and dry powder to go on a strong run. But private equity firms are finding they don’t always have someone to run the portfolio company after buying it.

Asia-focused buyout funds are having a huge fundraising rebound. The 10 largest funds that closed in the first half raised $45.5 billion, which is more than double last year’s comparable total. But firms from Japan to India to China are running into a more annoying constraint than capital; they can find companies to buy, but they cannot always find executives capable of taking over and executing on strategy.

And in 2026, buying a company, adding leverage, and waiting for multiple expansion is not exactly a differentiated strategy. Returns increasingly depend on improving the business, which means the CEO is integral, not just a post-close detail. In Asia, that is harder because many fast-growing companies are still founder or family-led, and the bench of PE-ready professional managers is thinner than in the U.S. or Europe.

The result is that firms are getting much more cautious, including passing on deals early because they are not confident they can recruit the right leader. Carlyle used to buy a company in Asia and then look for a CEO, but now its investment committee increasingly wants a top candidate before approving the deal. Searches can even take three to four times longer, span multiple countries and involve far more scrutiny. 

The big firms are trying to build their way out of it, and Blackstone has a 120-person network of current and former CEOs and directors from its Asia portfolio companies, nicknamed “Hotel California,” because operators check out of one portfolio company and apparently never really leave.

KKR built a 420-person value-creation machine across advisers and in-house teams, Bain’s portfolio group has more than 115 people, and Blackstone’s operating team is about 435. Private equity used to talk about proprietary deal flow but now it also needs proprietary CEO flow.

The irony is that the talent shortage may be the clearest sign of how much the industry has changed. The bottleneck is no longer just capital or access to deals; it is execution. CEOs have to deal with geopolitics, AI disruption, supply-chain shifts, shorter hold periods, and investors who paid full price and need value creation yesterday.

Takeaway: Asia private equity is booming, but the scarce asset is not just a good company, it is a good operator. Firms have raised billions and are chasing deals across the hottest markets in the world, but financial engineering can get you into a deal; it cannot run the business. The barbarians at the gate can still get through the gate, but the harder part is finding someone competent to run the castle.

PRESENTED BY BLUEFLAME AI

Private Equity Drops $4 Billion Just to Turn AI On

TPG, Advent, Bain Capital, and Brookfield recently put more than $4 billion into a joint venture with OpenAI. It’s not to buy a company but simply to get AI deployed. Blackstone and Goldman answered the same day with a $1.5 billion Anthropic version.

The biggest names in private markets are paying billions for deployment, because these chatbots lack the industry expertise to execute the work at excellence. A chat window can’t tear through a data room or build an LBO.

Deal teams are partnering with the freshly rebranded Blueflame, whose new agent, Amp, runs deal work end to end, from data room reviews to model builds and IC memos. It routes each task to the right model and only pauses where human judgment is needed.

See what AI built for finance can do for your firm.

HEADLINES

Top Reads

• Trump to slap ‘sweeping’ new tariffs on 60 trade partners as global duties expire (CNBC)

• FDA panel recommends loosening peptide restrictions (AP)

• Alphabet tests Wall Street's patience as AI spending overshadows growth (CNBC)

• Google has the muscle to overpower spending worries (WSJ)

• Tesla stock tumbles 14% after profit miss; full-year capex spend of $25 billion confirmed (Yahoo Finance)

• Blackstone leads $400 million private loan for HVAC firm buyout (BB)

• Hedge funds grow at fastest rate in history as AI boom lifts markets (FT)

• Blackstone says pace of withdrawals slowing at flagship private credit fund (FT)

• How Wall Street's bots are cashing in on Trump's Truth Social posts (WSJ)

• Substack bets readers want to pay for content written by humans with new AI detection tool (Axios)

• Intel tops Q2 estimates on top and bottom lines, offers upbeat Q3 outlook (Yahoo Finance)

• Oracle signs 10-year software contract with Pentagon worth up to $7 billion (CNBC)

• Blackstone profits jump, boosted by exits and winning bets on AI (BB)

• Nestle to offload half of waters business in joint venture with Platinum Equity (WSJ)

• Google Cloud CEO Kurian says customers are spending 50% more as segment blows away expectations (CNBC)

• Mistral in talks with Samsung on €20B valuation (Axios)

• Investors are getting pickier with their AI power plays (WSJ)

• Stressed private credit funds are an opportunity for secondary investors (FT)

CAPITAL PULSE

Markets Rundown

Market Update

• U.S. equities closed lower as WTI crude oil rose above $90 per barrel, fueling inflation concerns and pushing Treasury yields higher.

• The 10-year Treasury yield climbed to 4.70%, while the U.S. dollar strengthened alongside higher yields.

• International markets were mixed, with Asian equities mostly higher and European markets lower.

Earnings Season

• Alphabet reported results that were broadly in line with expectations, but shares declined after the company increased its 2026 capital expenditure guidance to $195–205 billion.

• Tesla also finished lower after reporting earnings below expectations.

• S&P 500 earnings are projected to grow 23% year over year, with energy, technology, and materials expected to lead earnings growth.

• Earnings growth is expected across 10 of the 11 S&P 500 sectors, indicating broad participation this reporting season.

Economic Data

• Initial jobless claims fell to 187,000, the lowest level in more than 50 years and well below expectations.

• Continuing claims remained near 1.8 million, while the unemployment rate held at 4.2%.

• Job openings (7.6 million) continued to exceed the number of unemployed workers (7.1 million), pointing to a resilient labor market.

Movers & Shakers

• (+) Lockheed Martin ($LMT) +11% after crushing Q2 estimates and raising full-year guidance, boosted by a $35B THAAD interceptor deal with the Missile Defense Agency.

• (–) Alphabet ($GOOGL) -7% because the company raised its 2026 capital expenditure outlook to $195–$205B, up from ~$190B.

• (–) Tesla ($TSLA) -15% after missing Q2 earnings estimates, with free cash flow turning negative as margins came under pressure.

Prediction Markets

• Last week saw a low for July. This gold market closes at 5pm EDT today.

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

Private Dealmaking

• Atoms, a robotics company led by former Uber CEO Travis Kalanick, raised $1.7 billion

• Augustus, a banking startup, raised $180 million

• Crystalys Therapeutics, a company focused on gout treatments, raised $130 million

• Hemispheric, a platform seeking to understand the human brain, raised $52 million

• Sable, a customer communications AI company, raised $45 million

• Lassie, a developer of autonomous systems to run small businesses, raised $35 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

BOOK OF THE DAY

The Knot: Problems Can Be Solved

Description:
A concise and practical guide from Seth Godin on overcoming the obstacles that keep people and organizations stuck. Rather than viewing difficult problems as barriers, Godin argues they are knots that can be untangled through better thinking, persistence, and creative problem-solving. Combining insights on leadership, innovation, and decision-making, the book encourages readers to embrace uncertainty, question assumptions, and focus on making meaningful progress instead of waiting for perfect conditions.

Book Length: 160 pages
Release Date: September 22, 2026

Ideal For:
Entrepreneurs, leaders, creators, and anyone looking to solve complex problems, think more creatively, and move forward when facing uncertainty or resistance.

Every meaningful breakthrough begins with the decision to stop accepting the problem as permanent and start believing it can be solved.

DAILY VISUAL

The Great Rate Reset

PRESENTED BY STELRIX

A Private Bank in Your Wallet

Family offices and private banking clients have accessed capital by borrowing against their assets for generations, using their portfolios as collateral while keeping investments intact and compounding. Traditional securities-backed lines require $100,000 minimums and weeks of underwriting, keeping this approach exclusive to institutional relationships.

Stelrix built that same infrastructure into a sleek gold card that connects directly to your existing brokerage. This equates to dynamic buying power and smart APR. Your credit and holdings remain untouched, so they can continue generating returns while you access spending power in real time. Limits are dynamic, based on your portfolio value. It’s like a private bank in your pocket.

Reserve your gold card today.

DAILY ACUMEN

Naive Realism

Everyone assumes they see the world exactly as it is, without distortion, and that anyone who disagrees with them must be missing information, biased, or arguing in bad faith. Psychologists call this naive realism, and it is one of the most stubborn features of human cognition precisely because it never feels like a bias from the inside. It just feels like seeing clearly.

This is why disagreements escalate so quickly. Both sides are not just certain they are right. Both sides are certain the other side's wrongness must be explained by some flaw, stupidity, ignorance, or hidden agenda, because the alternative, that reasonable people are looking at the same facts and reaching different conclusions, is somehow harder to accept.

The better default, especially in markets, is that the person on the other side of your trade is not necessarily foolish. They may simply be weighing something you have not considered. The question worth asking is not why are they wrong, but what would have to be true for their position to make sense.

ENLIGHTENMENT

Short Squeez Picks

• Was leaving my girlfriend a mistake?

• Is working from home actually good for you?

• Why does our mind wander?

• Why stop rushing the conversation leads to influence

• 7 relationship red flags

MEME-A-PALOOZA

Memes of the Day

📣 Partner With Us: Get in front of an audience of over 1 million finance professionals, business leaders, and policy influencers. Submit a partnership inquiry.

📊 Wall Street Comp & Culture Data: Get the most detailed comp, carry, and culture insights across 1000+ Wall Street firms. Explore the data.

📈 Grow With Us: Work directly with the Overheard on Wall Street team to scale your finance brand. Schedule your free consult.

🧢 Wall Street Shop: Explore our collection of finance-themed apparel and merchandise. Visit the shop.

📬 Deals Newsletter – Buysiders: A curated roundup of major M&A, private equity, and VC activity. Plus access to private deal flow. Subscribe here.