👀 Warren Buffett spooks the economy

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TOP STORY
👀 Warren Buffett spooks the economy

Warren Buffett seems to be extremely bearish on the economy right now.

• Last week, Buffett's “Berkshire Hathaway” announced it had sold over half of its stake in Apple.

• Buffett dumped 55.8% of Berkshire's holdings of Apple stock in the first six months of 2024.

• Since the end of 2023, Berkshire has sold 505 million Apple shares — 115 million in the first quarter and another 390 million in the second quarter.

Going on a selling spree, I see.

First of all, poor Apple; second of all, that’s a whole lotta cash to be sitting on.

After hearing this much of a selloff, the first thought that comes to mind is that he thinks Apple stock is just overvalued, which isn’t odd at all.

However, the concern for the U.S. economy bulls is that Buffett seems to be bracing for the worst.

• Today, we found out Berkshire holds more in Treasury bills than the U.S. Federal Reserve.

• By the end of Q2, Berkshire had over $234.6 billion in short-term Treasury bills, plus over $42 billion in cash and short-term T-bills.

• In comparison, the Fed owned $195.3 billion in T-bills as of July 31—which are rookie numbers, clearly.

This selling trend isn’t new for Buffett; this is the seventh straight quarter in which Berkshire has been trimming its stock holdings.

Uh oh, that doesn’t seem promising.

Before you run to the bank, though, stocking up on T-bills isn’t inherently a sign everything is going to sh*t; they are just a safe place to put money.

But, with Buffett stacking up M’s B’s like Drake for almost two years now and continuing to sell stock like hotcakes, it’s no wonder people think this is a very bearish sign for the economy.

ARTIFICIAL INTELLIGENCE
🚪 OpenAI’s top brass are heading for the exits

Three key leaders at OpenAI—co-founder John Schulman, co-founder Greg Brockman, and Peter Deng—have all announced this week their intent to permanently leave or take a leave of absence from the company.

If this sounds familiar, it’s because OpenAI’s top execs have been dropping like flies in the past few months.

• After the brief, infamous Sam Altman ousting, OpenAI’s multi-billion dollar empire began to shake a bit.

• First, founding OpenAI member Andrej Karpathy left in February.

• Then, Ilya Sutskever, co-founder and Chief Scientist of OpenAI, left the company in May.

Damn, Sam, get a grip.

Thankfully, OpenAI got to enjoy a couple of months off before being bombarded by resignations again this week. So now, let’s meet the new batch running for the hills.

Here’s some background on each 👇

John Schulman, co-founder and a key leader at OpenAI.

• At OpenAI, Schulman was pivotal in developing several foundational AI models.

• New Destination: Joining rival AI startup Anthropic — one of OpenAI’s biggest competitors.

Greg Brockman, OpenAI's president and co-founder.

• Before OpenAI, he was Stripe's CTO, where he built the company's technical infrastructure.

• At OpenAI, Brockman’s leadership shaped its direction and goals, with Brockman advocating for responsible AI to help society.

• New Destination: Taking an extended leave of absence until the end of the year.

Peter Deng, a product leader who joined Meta last year, has reportedly also departed.

The mass exodus is definitely not the best look for any company, especially a startup like OpenAI, but the good news is that they might be hiring.

LAWSUIT
X Sues Major Companies for Boycott

Elon Musk seems just as interested in colonizing the courtroom as he is in colonizing Mars.

Earlier this week, Musk and X announced a lawsuit against the Global Alliance for Responsible Media (GARM), a coalition of brands and agencies that includes Unilever, Mars, and CVS.

What did these big, bad brands do wrong? The lawsuit follows a report claiming that GARM and its members conspired to boycott Twitter after Musk acquired the company, violating antitrust laws.

• GARM's co-founder, Rob Rakowitz, denied the report’s claims, arguing that brands can choose where to advertise.

• So, he's not denying that they boycotted the platform; he's just saying they’ll be advertising wherever they go, darn, please.

But Musk and X definitely didn’t like that answer.

But it's not just GARM; many companies don't want to advertise on X with Musk at the helm.

Shortly after Musk took over Twitter in 2022, dozens of major advertisers, including Apple, Disney, IBM, Comcast, and Warner Bros., cut their spending on X, causing a 50% drop in ad revenue.

Don’t worry, Mr. Musk; I still love using your platform.