WASHINGTON'S AI PLAYBOOK

Good morning,

The government is officially entering the chat for top-tier talent. The U.S. has launched a "Tech Force" specifically designed to pull AI experts into public service. It is a clear signal that Washington finally understands that code, not just policy, will dictate the next decade. If they can actually compete on salary and culture is another question entirely.

Meanwhile, Elon Musk has hit a staggering $600B net worth, and PayPal is making moves to become a full-fledged bank. The lines between tech, finance, and government aren't just blurring; they are disappearing.

Getting started.

The Pulse

Markets

U.S. equities took another step back yesterday. Investors are sitting on their hands, waiting for economic data that still feels incomplete.
Over in the UK, the FTSE 100 is poised for its strongest year in sixteen years, which is impressive considering their IPO market is effectively dead.
Oil prices have slipped to levels we haven't seen since February 2021.
The Swedish krona is having a moment—up 5% against the euro and 20% against the dollar. That is its best run in two decades.

Earnings

This week's lineup:
- Wednesday: Micron, General Mills
- Thursday: Accenture, Nike, FedEx, CarMax, Darden Restaurants
- Friday: Carnival
See the full calendar here.

Prediction Markets

President-elect Trump is currently hoping for a terminal rate below 1%.

Headline Hunt

President-elect Trump believes a peace deal in Ukraine is now closer than ever (FT)
Trump's inner circle is pushing back against Kevin Hassett as a candidate for Fed Chair (CNBC)
Fed economist Stephen Miran argues that "phantom inflation" is warping central bank decisions (FT)
Hedge funds are rapidly selling off Asian technology stocks (RT)
The Warner Bros. deal serves as a massive finale to a $4.5 trillion year in mergers (BBG)
Hong Kong is capping off a huge year for IPOs with a busy December (BBG)
Managers of CLOs are betting heavily that an M&A revival will boost profits in 2026 (BBG)
Inflows into Emerging Market dollar bond ETFs have hit a three-year high (BBG)
Deal volume in the Israeli tech sector reached $60 billion this year (RT)
U.S. banks increased lending to their competitors by 26% (BBG)
Nasdaq is filing plans to enable trading around the clock (RT)
Goldman Sachs has restructured its TMT investment banking group to prioritize AI (RT)
Jamie Grant, the global chair of investment banking at JPMorgan, is retiring (RT)
AQR is making a comeback with $180B in assets and a renewed focus on privacy (BBG)
PayPal has filed an application to become a bank (BBG)
The board at Tesla received $3B in stock awards (RT)
B. Riley Financial filed a late 10-Q report to try and keep its listing (BBG)
OpenAI has hired Google veteran Albert Lee as VP of corporate development (RT)
McKinsey plans to cut 10% of its non-client-facing workforce (BBG)
Frontier Airlines has fired its CEO Barry Biffle (CNBC)
Ben & Jerry's has ousted its board chair Anuradha Mittal (RT)
Elon Musk's net worth has officially hit $600B (RT)
Ford is taking a $20B hit on its EV investments (WSJ)
The U.S. launched a "Tech Force" to recruit AI talent for government roles (CNBC)
JPMorgan will now let wealthy European clients borrow against their luxury cars (BBG)

The Deal Room

M&A / Investments

PE firms TowerBrook, Warburg Pincus, and Stonepeak are exploring a sale or IPO of the UK roadside recovery firm AA. They are targeting a ~$6.7B valuation.
WSP, a Canadian engineering firm, agreed to buy US peer TRC from Warburg Pincus in an all-cash deal worth $3.3B.
Japan's MUFG is close to buying a 20% stake in Indian shadow lender Shriram Finance for $3.2B.
French pharma giant Sanofi agreed to pay US biotech Dren Bio up to $1.8B to develop autoimmune drugs.
Mexico Infrastructure Partners agreed to acquire wind and solar assets in the US and Mexico from Acciona Energy for $1B.
UK PE firm BC Partners is nearing a deal to buy a majority stake in Fortidia, a shipping and marketing firm, from its founders and Oaktree for $940M.
UK PE firm DBAY withdrew its bid for TT Electronics, leaving Swiss firm Cicor as the sole bidder with a $385M cash offer.
Fosun Pharma out of China agreed to acquire a 53% stake in Alzheimer's therapy firm Green Valley Pharmaceutical for $200M.
The Italian family office Exor rejected a $634M cash bid from Tether for a 65.4% stake in the soccer club Juventus.
Australian miner Fortescue agreed to acquire the remaining 64% stake in Alta Copper at a $101M valuation.
Mexican billionaire Fernando Chico Pardo bought a 25% stake in Citigroup's Mexican retail bank Banamex.
Nvidia is set to acquire the AI software provider SchedMD.
IG4 Capital agreed to acquire a stake in Brazilian petrochemical producer Braskem from Novonor.
The US is planning more "historic deals" with the mining sector as it pivots to critical industries.

Venture Flow

PolyAI, an enterprise conversational AI platform, raised an $86M Series D co-led by Georgian, Hedosophia, and Khosla Ventures.
AI-enabled drug discovery startup ChemLex secured a $45M round led by Granite Asia.
AI audio startup Mirelo raised a $41M seed round led by Index Ventures and a16z.
AI patent-workflow startup Solve Intelligence raised a $40M Series B co-led by Visionaries and 20VC.
Axion, an AI platform for manufacturing quality, raised a $37M Series B led by Salesforce Ventures.
The Texas Stock Exchange, backed by BlackRock and JPMorgan, raised $20M from Goldman Sachs and Bank of America.
Trustyfy, a DeFi banking startup, raised $6.8M led by Tokenee Select and the Sixth Society Angel Syndicate.

IPO / Direct Listings / Issuances / Block Trades

Medline, backed by Blackstone, Carlyle, and Hellman & Friedman, priced its IPO near the top of the range to raise ~$5.4B. It is the biggest listing of the year.
Singapore's GIC along with CVC and Silver Lake are exploring an IPO or sale of UK roadside assistance firm RAC at a ~$6.7B valuation.
Hong Kong crypto exchange HashKey raised $206M in its Hong Kong IPO.
Indian audio content platform Mebigo Labs is looking to raise $200M in an India IPO.
HVAC firm Madison Air Solutions has confidentially filed for an IPO.
Malaysia's largest online insurance aggregator Bjak is weighing an IPO.
Gategroup, the world's largest in-flight caterer, has selected banks for a Swiss IPO.

The Debt Desk

Fannie Mae and Freddie Mac grew their retained portfolios by over 25% through October, reaching a combined $234B.
SMBC's APAC arm completed its first $3.2B SRT deal with Blackstone, Stonepeak, and Clifford Capital.
Greek lender Eurobank is planning two SRT deals tied to $2.3B of corporate loans.
Animal medicine company Zoetis is looking to raise $1.75B in a convertible bond sale.
Firefighting chemical producer Perimeter Solutions raised $550M in a secured notes sale.

Bankruptcy Watch

Spirit Airlines secured a $100M DIP lifeline to stay afloat in Chapter 11.
Lenders to CommScope are demanding immediate repayment plus a $100M premium, arguing a recent asset sale triggered a default.
LiDAR sensor manufacturer Luminar Technologies filed for Chapter 11 after losing a contract with Volvo.

Fresh Capital

Lightspeed Venture Partners raised $9B across six funds targeting AI. It is their largest haul ever.
BlackRock lost another $6B equity mandate from Dutch pension PME over ESG concerns.
Dragoneer raised $4.3B for its seventh VC fund.
Private credit firm Pathlight Capital raised $1.9B across its fourth ABL credit fund and the second tranche of its evergreen fund.
Stone Point Capital is testing a $1B evergreen fund that will eventually open to individual investors.
BNP Paribas' AXA Investment Managers raised a $535M seed commitment for its carbon transition credit fund.
Mubadala and Barings launched a $500M JV targeting CRE debt investments across the US, Europe, and APAC.
Israeli VC Viola Ventures raised $250M across its seventh flagship fund and first secondaries fund.
Spanish VC Kibo Ventures raised $95M for a targeted $175M fourth fund.
Olympus Corporation committed $150M for a second VC fund focused on medtech.

Crypto Corner

JPMorgan is launching its first tokenized money market fund.
Strategy acquired $1B in Bitcoin for the second week in a row.
Crypto investor Olivier Janssens is planning a Caribbean community complete with its own court system.

Today’s Meme Pick

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