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Good morning and happy Monday.
Got a runny nose and can’t come to the office? In Germany, you’d better prove it. The ruling coalition in Europe’s largest economy announced reforms to crack down on workers taking too much sick leave. Under new proposed rules, employees will be required to visit a doctor and present a certificate confirming they are sick on the first day of an illness. Previously, a doctor’s note wasn’t required until the fourth day.
According to OECD data, Germans take roughly three to four weeks of sick leave per year. That’s middle of the pack in Europe, and well below Norway’s leading six-week average. On the other hand, it’s significantly less than the eight sick days the average American is entitled to, and most US workers only take three or four of those. But at least they don’t need a doctor’s note when they do.
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America’s leading AI labs are set to spend the second half of this year preparing for initial public offerings that will vault them into instant megacap status. Anthropic, valued at $965 billion in May, is slated to debut as early as October, and OpenAI, valued at $852 billion in March, is likely to follow in 2027.
As listings loom, questions about the nature of the companies’ token-payment business model are getting louder. Palantir CEO Alex Karp blasted the model last week, telling CNBC that “something has gone completely wrong.” Enterprise customers have begun to question the burdensome cost of pay-per-use token consumption and look to cheaper, less sophisticated open-weight models. So can the world’s two great AI labs keep up the pace?
Karp About It
The aggressive adoption of agentic AI in some workplaces this year led to the creation of the slang term tokenmaxxing. That’s what happens when engineers, under pressure to demonstrate they are integrating the new technology but with no clear guidelines, use AI models to excess. Executives have quickly realized this isn’t the most efficient way of doing business. As a result, companies including Uber, Microsoft, Salesforce and Meta have taken steps to ration their employees’ use of advanced AI because the token payment structure preferred by Anthropic and OpenAI has proven more expensive than it’s worth.
Speaking to TBPN, Palantir’s Karp said the excessive use of AI without regard for whether it creates value is “kind of like a porn addiction.” During his CNBC appearance, he said the US AI industry should not dismiss the potential for cheaper open-weight models, especially those in development in China, to close the gap:
- Beijing startup Z.ai’s GLM-5.2 model is now ranked among the top 10 large language models by Artificial Analysis, and is ranked as the second-best model for web development by AI evaluation platform Code Arena, placing it alongside Anthropic, OpenAI and Google. The open-weight model is also four to six times cheaper than frontier AI.
- Some US and international enterprise customers have already reported switching to cheaper Chinese models like DeepSeek and cutting back on payments to OpenAI and Anthropic.
  Raising the Stakes: The Financial Times reported last week that OpenAI has held talks with the Trump administration about giving the US government a 5% stake. But the paper said its proposal hinges on other US AI labs, like Anthropic, agreeing to do the same. Experts, meanwhile, warn that recent export controls on advanced US AI models may accelerate the international adoption of models developed by Chinese firms. Two respected Silicon Valley financiers who have the president’s ear understand this: Former Trump advisor David Sacks and current Trump advisor Marc Andreessen have both noted GLM-5.2’s power in recent weeks.
Written by Sean Craig
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The biggest energy crisis in history just delivered a much-needed opportunity for Tesla.
Last week, the electric vehicle maker said it had delivered 480,126 cars in the second quarter, a massive increase from just 384,122 deliveries a year ago and blowing out consensus analyst expectations of around just 406,000. On Wall Street, however, Tesla is stuck in reverse: Shares fell more than 7% on the same day as the big beat, marking its worst single-day slide in about a year.
Spinning Its Tires
Even with the big sales resurgence, Tesla likely won’t touch its annual deliveries peak in 2023, when it sold 1.8 million cars. Last year, its deliveries slumped to about 1.6 million; this year, it looks on pace to return to about 1.7 million. The causes of its sales slump are numerous and obvious: the death of the $7,500 EV tax credit in the US, rising competition abroad and the cancellation of its much anticipated low-cost model. Oh, and a lingering Musk-y smell of politically charged bad PR.
External estimates indicated that Tesla’s US sales remained in a slump this quarter, while surging in Europe and China, where the energy crisis has been even more acute. Still, it wasn’t enough to catch a key competitor:
- Cox Automotive said its data showed a 20% year-over-year decline in US deliveries in the second quarter. Meanwhile, new vehicle registration data in Europe showed Tesla sales rose around 57% in the region through the first five months of the year, according to ACEA, and sales in China have been on an eight-month growth streak, according to the China Passenger Car Association.
- Rival Chinese EV-maker BYD also reported its second-quarter deliveries last week, trouncing Tesla with 557,090 vehicles delivered over the same three-month period. Its overseas sales were up more than 94% in June as it speeds into Europe and Latin America.
Thrive to Survive: EV also-ran Rivian reported its deliveries last week, too, claiming 12,194 in the second quarter, above expectations. Take it as a sign that the EV winter may be thawing. Tesla, which saw investors “buy on the rumor, and sell on the news” of its big beat, is hoping the US launch last week of its Model Y L, which features a third row of seats, can help its turnaround. In other words, the way back for Tesla involves the revival of “the way back” seating option.
Written by Brian Boyle
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Photo via Fisher Investments
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Strategy founder Michael Saylor is famous for saying “never sell,” but as crypto craters, he has changed his tune. Bitcoin holding company Strategy is considering selling up to $1.25 billion in bitcoin after first parting with 32 tokens in late May.
The company is trying to win back investor confidence as cracks appear in its buy-buy-buy strategy. The so-called infinite money glitch that Strategy relied on, mainly issuing equity and buying bitcoin with the funds, has struggled to keep spinning under bitcoin’s prolonged downturn. Bitcoin briefly dipped below $60,000 last week, down from its October peak of more than $126,000.
Saylor’s backtracking is part of a wider plan to overhaul Strategy’s financing model.
Not Smooth Sayling
Strategy has amassed more than 847,000 bitcoin, buying more tokens even as bitcoin’s price climbed higher and higher. It has paid an average of $75,000 per token, about $15,000 more than the level where bitcoin’s price has been hovering. But the company continued to pay dividends to its shareholders, depleting its cash reserves. Now, it’s trying to build up cash to make sure it can meet its obligations even if bitcoin takes longer to bounce back:
- In addition to considering additional bitcoin sales, Strategy will buy back up to $1 billion of its preferred stock and up to another $1 billion of Class A shares. It’s also raising the dividend to 12% on its most popular preferred stock called Stretch. Strategy said it’ll bulk up its cash reserves to cover 12 months.
- The overall plan serves to boost the confidence of investors doubting whether Strategy can keep its commitments while bitcoin continues to reach new bottoms for the year. Strategy’s common shares climbed back above the key inflection point of $100 last week.
Two-Way Street: JPMorgan analysts raised a yellow flag on Strategy’s new plan, saying that bitcoin’s biggest corporate holder giving itself the option of selling as needed adds more uncertainty to a market already rife with FUD (a crypto-ism for fear, uncertainty and doubt). When Strategy buys, other investors feel emboldened to do the same. And when Strategy sells, well, some investors are likely to follow its lead then, too.
Written by Jamie Wilde
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- In From Icheon: South Korean memory giant SK Hynix is launching a $28 billion US listing today, with sales via Nasdaq depository receipts.
- Ready for Takeover: Shares in budget airline Easyjet, one of Europe’s largest carriers, are up nearly 10% today after it agreed “in principle” to be acquired by US investment firm Castlelake.
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