Good morning. One group of people may have to pay the price for Elon Musk reigniting his feud with Donald Trump: Tesla investors. The company’s stock dropped 5% on Tuesday after Trump highlighted how much assistance Musk has gotten from the US government.
Tesla investors will be on tenterhooks again this morning. The EV maker is expected to release its second-quarter vehicle delivery numbers in the coming hours. Wall Street seems braced for disaster.
In today’s big story, the hiring frenzy of the past few weeks for elite AI talent has been unprecedented, with Meta and OpenAI offering tens of millions of dollars to lure top workers.
Plus, take a second and subscribe to BI’s Defense Tech, a weekly recap of the latest innovations and strategies in modern warfare, defense tech, and more!
What’s on deck
Markets: Why one PE firm wants to buy Red Hot Chili Peppers’ entire catalog.
Tech: Senate leaves Big Tech on the cutting room floor.
Business: Paramount is paying $16 million to settle Trump’s “60 Minutes” lawsuit.
But first, need to land a prodigy? Try being prodigal.
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The big story
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Can you imagine getting paid more in a year than you had predicted you would ever make in your entire life? For top AI talent, this has been the reality of recent weeks.
“I would describe them as in a state of shock,” said Deedy Das, an AI investor at Menlo Ventures. He was talking about three of his friends who are machine-learning engineers or AI researchers — Das said they’ve all been offered between $8 and $20 million in total compensation a year to join Meta. “It’s honestly hard to digest.”
Tech companies have long paid top dollar for elite talent, but the recent hiring frenzy has been on an entirely different level.
And it seems AI talent can’t start soon enough. “They’re pressuring them to drop out of school,” says Bill Aulet, a managing director at MIT.
Comparisons have been drawn between the bidding war for AI talent and sports franchises competing for star athletes, with some on X suggesting that researchers hire agents to represent them.
The first sign of this new, turbo-charged war for AI talent came when Meta recruited Scale AI CEO Alexandr Wang last month as part of a $14.3 billion deal to take a 49% stake in his company.
Then, Sam Altman said Meta had tried to poach his best employees with $100 million signing bonuses. (Meta executives recently pushed back, saying that the signing bonuses were not that generous.)
This week, BI reported that Mira Murati, the former CTO of OpenAI, has paid some talent around half a million dollars in salary for her new startup before even announcing a first funding round or a product.
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So, what’s driving the frenzy?
Two factors: A shortage of talent and an excess of money.
There is a limited number of researchers and engineers capable of building foundational models — something in the neighborhood of 2,000 people, BI’s Bergman writes.
Meanwhile, companies like Meta, which is approaching a market capitalization of $2 trillion, have the resources to spare no expense in order to avoid falling behind — and, as we’ve seen, they’re not hesitant to do whatever it takes.
3 things in markets
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1. The PE giant dreaming of Californication. Bain Capital is in talks to re-enter the music industry and it’s teaming up with Warner Music to do so. If it goes through, its first purchase will be the entire Red Hot Chili Peppers catalog for $300 million. Music has proven to be a defensive investment over the years amid economic and market turmoil.
2. Jerome Powell may have just escalated his beef with Trump. The Fed chair said on Tuesday that the president’s tariff policy is to blame for the central bank’s lack of rate cuts, and it remains in a wait-and-see position until the impact of tariffs becomes clearer. The president has hinted at replacing Powell, and here’s what could happen if he follows through.
3. Three investing mistakes to avoid at a market high. Stocks are back near record highs after a tumultuous couple of months, Wall Street analysts are optimistic about the second half of 2025. That said, don’t fall for these common investing missteps when the market’s up.
3 things in tech
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1. Big Tech has one less reason to like President Donald Trump’s “Big Beautiful Bill.” Early Tuesday morning, senators voted 99-1 to strike a section in the bill aimed at preventing states from regulating AI. Tech leaders had argued that it was important not to hamper the AI industry at a time when competition with China is heating up.
2. What’s going on between Microsoft and OpenAI? Both companies are currently renegotiating their multibillion-dollar partnership, which gives Microsoft access to OpenAI’s technology. Precisely what OpenAI has to share — and when — is sometimes gray, people involved in the matter exclusively told BI’s Ashley Stewart, and that’s the central issue for Microsoft in these negotiations.
3. Threads finally gained one long-awaited feature. DMs have arrived on Meta’s text-based social media network. The change was instituted after it became clear that users were interacting with a different crowd on Threads than on Instagram, BI’s Pranav Dixit writes.
3 things in business
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1. Paramount is paying $16 million to settle Trump’s “60 Minutes” lawsuit. The suit, filed in October, alleged that an interview with Trump’s presidential rival, Kamala Harris, had been selectively edited to “tip the scales in favor of the Democratic party” during November’s election. Paramount emphasized that its statement did not include an apology or a statement of regret. Read more.
2. China’s coffee giant is now brewing in America. Luckin Coffee opened two stores in Manhattan, offering a menu full of fruity specialties at extremely discounted prices. BI’s reporter wasn’t wowed but said it could take a bite out of Starbucks’ sales.
3. RIP Bolt’s unlimited PTO. The company’s CEO Ryan Breslow announced it was eliminating its unlimited PTO policy and offering four mandatory paid weeks off instead. Breslow wrote on LinkedIn that when time off isn’t defined “the good ones don’t take PTO,” and “the bad ones take too much.”
In other news
What’s happening today
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Tesla reports Q2 production and delivery figures.
Hallam Bullock, senior editor, in London. Lina Batarags, bureau chief, in Singapore. Akin Oyedele, deputy editor, in New York. Grace Lett, editor, in New York. Amanda Yen, associate editor, in New York. Lisa Ryan, executive editor, in New York. Ella Hopkins, associate editor, in London. Dan DeFrancesco, deputy editor and anchor, in New York (on parental leave).
