5 Things You Need to Know to Start Your Day

Good morning. Sam Altman’s OpenAI homecoming, Nvidia beat gets muted response and Binance pleads guilty. Here’s what’s you need to know. — S [View in browser]( [Bloomberg]( Good morning. Sam Altman’s OpenAI homecoming, Nvidia beat gets muted response and Binance pleads guilty. Here’s what’s you need to know. — [Sam Unsted]( Altman returns Sam Altman is [back at OpenAI](. Following a [days-long saga]( which saw him ousted and join Microsoft, and then OpenAI employees threaten to quit en masse unless he was reinstated, Altman will return and overhaul the ChatGPT creator’s board of directors. [“Succession for the TikTok generation,”]( Bloomberg’s Alex Webb said. The different parties involved are still in talks about which of the existing board members will stay, though those joining will include former Treasury Secretary [Larry Summers](. It’s a victory for Microsoft, OpenAI’s biggest backer, which had worked with other investors to engineer Altman’s return and wants to address the [governance issues]( that caused the problem in the first place. Senior managers at the company have told staff to [“get back to shipping products”]( as the drama around Altman has transfixed both the startup and Silicon Valley. Nvidia’s high bar Nvidia, the world’s most valuable chipmaker, [didn’t quite manage to clear]( the sky-high bar investors had for its latest earnings. It beat across the board, with its revenue and margin projections blowing past estimates. But investors wanted more. The stock initially plunged after hours but then erased that drop to be fractionally higher in premarket trading. Its shares were up by 242% this year through to Tuesday’s close, powered by big bets that it will be at the center of the AI boom. That jump, elevating Nvidia’s market value to around $1.2 trillion, meant much of the excitement was already priced in. As analysts at Evercore said, it was “just another run-of-the-mill blowout quarter” for Nvidia. Binance plea Cryptocurrency exchange Binance and CEO Changpeng Zhao [pleaded guilty to anti-money laundering and US sanctions violations](, part of a sweeping settlement with US authorities which will mean the exchange can continue operating but which will see it pay $4.3 billion in penalties. This included Binance being used by, according to the Treasury Department, a [“range of illicit actors”]( which included Hamas, Al Qaeda, Palestinian Islamic Jihad and the Islamic State of Iraq and Syria. It marks the [downfall of Zhao](, known as CZ by his fans, and [leaves Binance’s new CEO](, Richard Teng, with the task of mollifying the exchange’s 150 million users, placating US regulators and keeping founder Zhao onside, even as he is prohibited from managing or operating the business. Fed unity Minutes from the latest policy meeting at the Federal Reserve showed [broad unity around the strategy to “proceed carefully”]( on future interest-rate moves and to base any further tightening of policy on making progress toward their inflation goal. The minutes also showed an emphasis on the impact of higher interest rates on households and businesses. There were minimal market moves on the minutes and [stock futures are mixed](, while the dollar rebounded and Treasuries are calm. The market is awaiting a slew of data in the US — including jobless claims, durable- and capital-goods orders and consumer sentiment — to provide more clues on the rate path. Farming equipment giant Deere & Co reported its results and missed expectations, sending its shares lower in premarket trading. Short truce Hamas agreed to [free 50 hostages from Gaza]( in return for a four-day ceasefire with Israel and the release of 150 Palestinian prisoners. That pause, pushed for by the US and its allies, is expected to start early on Thursday. Elsewhere, China has [included Country Garden and Sino-Ocean]( on a draft list of 50 developers eligible for a range of financial support, according to people familiar with the matter. And over in the UK, the government is set to announce [its Autumn Statement](, with the focus on whether it will announce tax cuts. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - Growing bets on the [S&P 500 hitting a record]( next year. - The wild challenges facing the [consulting industry](. - Citigroup eyes a new [private credit strategy]( for 2024. - Jack Ma reverses a plan to [cut his Alibaba stake](. - The Utah Jazz enters its [experimental post-cable phase](. - Turning US sanctions into a China chipmaking [success story](. - [Mastering the meeting]( that matters the most. And finally, here's what Joe’s interested in this morning The overall link between higher interest rates and cooling inflation is ambiguous. The way people think about it is that rates go higher, the economy slows down, demand cools, and price growth falls. And yet by and large, the economy has remained robust amid the disinflation. Of course, there are areas where it seems clear that higher rates have played a role in dampening activity. Real estate is the big one. New development has slowed down, and transaction activity has declined quite a bit. It's also having an impact in an area where a lot of people really want to see growth, which is the world of renewable or clean energy. [On today's Odd Lots podcast](, we speak with Chelsea Jean-Michel about the mess happening in the US offshore wind sector. There's a significant role for offshore wind to play in decarbonizing the grid, particularly in the Northeast where there's a lot of windy coastline, but not a lot of sunlight or other alternatives. But it's been [one bad headline after another](, with various projects struggling. There are a lot of contributors to the struggles. Not surprisingly, various laws and regulations are probably making these developments more complicated than they would be in the ideal world. Inflation also means that labor and materials are more costly than anticipated, when they were first being planned. And higher interest rates are also a big contributor to the math not penciling out as anticipated. And it's not just wind that's seeing this. Earlier this month, we saw a planned [small nuke project from NuScale]( in Utah get canceled due to higher costs and higher interest rates. Same deal. Of course, the story with nuclear for a long time has been one of cost overruns, so the macro conditions here aren't totally new. That being said, there was hope that a company like NuScale -- which specializes in Small Modular Reactors -- would have the secret sauce to overcome the industry's reputation for costliness. After all, the idea with SMRs is that if you can "mass produce" nuclear power plants through modular design (rather than having each start from scratch) then you accelerate the learning curve, create economies of scale, and get the costs down. It sounds good in theory. So far it hasn't happened in practice. That being said, if you read the Department of Energy's [Pathways to Commercial Liftoff]( report for advanced nuclear energy, a key element of getting it all right is having a substantial committed orderbook for these projects. In other words, if there are going to be economies of scale, or efficiencies realized from SMRs, they're not going to be seen in the first project, almost by definition. They're going to unfold over multiple projects. And you're only going to get multiple projects if you have committed end buyers that guarantee sustained investment up front. Anyway, it's clear that for all of this, even with the efforts put forth by the government to accelerate the energy transition, there are real hurdles on the financial side. Lower rates might help. Lower inflation might help. And also sustained demand to help overcome early losses is probably also key here, especially given the long-lead time of many of these projects. Follow Bloomberg's Joe Weisenthal on X [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Five Things to Start Your Day: Americas Edition newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. 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