Elon Musk Sues OpenAI? 🤯

🥊 Elon Musk has decided to square up with Sam Altman March 4, 2024 | Peel #659 In this issue of the Peel: - ❓ Can our economic indicators even agree on manufacturing conditions? - 🆘 We might have another bank collapse on our hands… - 🥊 Elon Musk has decided to square up with Sam Altman?! Market Snapshot 📸 Banana Bits 🍌 - U.S. stocks are in their longest period of outperformance [that we’ve ever seen]( - Investors are bidding up Macy’s in an attempt to [take it private]() - OPEC+ furthers production cuts to screw [your gas bill even more]() - Nikki Haley is giving her [campaign CPR](=)as she continues losing to former Pres Big Dawg Donnie T 🚨🚨🚨 New Investment Banking + PE Roles Open NOW - Application Tracker (US + UK) It’s the middle of recruiting season and you need to keep track of 500+ firms so you know when it’s time to submit your applications… for WSO Academy students, there’s an easy way to do just that. How? Because they have access to our application trackers (for the US and the UK)... every-single-day, we track these openings firm by firm so that they don’t have to… From Summer 2025 internships in the US, to off-cycle opportunities in the UK, we have our students covered. But now… There’s a way to get access to these trackers even if you are NOT accepted into WSO Academy. If you apply and complete a first round interview with us, we will give you access to these valuable trackers as a token of appreciation for your time (for the next 2 week only). Again, this is normally just reserved only for students in WSO Academy, so we’re not going to do this for long. Make sure to join the waitlist today so that you get your applications in on time… [>> Get on the waitlist <<](=) (below is an example of one of our daily updates to our students in our private slack community)... Macro Monkey Says 🐒 Fortune Telling Our Fortunes In Ancient Greece, they had the Oracles of Delphi. In early Renaissance France, they had Nostradamus. And in the modern-day U.S., we have astrology, fortune cookies, and dollar store magic 8 balls. For as long as humans have been around, we’ve been trying to glimpse into the future. Obviously, none of these actually work because seeing the future is entirely impossible, but that damn sure isn’t a reason to stop trying! Thankfully, however, the gods of the economy have blessed us with “leading indicators” to attempt to assess our economic fortune (or lack thereof) coming down the line. And on Friday, we got data from one of the best leading indicators of all. Let’s get into it. The Numbers [Source]( The above chart, although very poorly labeled by the issuer, shows a decline to 49.2% of the ISM Manufacturing Index for New Orders. As we talked about last week, this is further evidence of a contracting manufacturing sector. Not that this is new by any means, but the New Orders index of ISM Manufacturing has now officially dropped further into contractionary territory. New Orders are the key leading metric in any manufacturing report. These orders are from businesses looking to acquire goods in the future, so they are reflective of purchasing managers' expectations of demand a few weeks and months in the future. Speaking of purchasing managers, on Friday, we also got the latest S&P Global Manufacturing Purchasing Manager’s Index. [Source](=) According to S&P Global metrics, New Orders to manufacturing firms in the U.S. grew at their fastest pace in 21 months. If you’re not confused, go re-read this because you absolutely should be right now. Now, S&P does not publish specific numbers on new orders outside of the overall index, as seen above, because they want to make my life hard. But the broad index shown above (which measures employment, prices, output, and more, in addition to new orders) ripped at the highest rate since July 2022 in February. Meanwhile, the ISM’s broad index shows a decline and return to contractionary territory: [Source]( To summarize the confusion so far, what we’re seeing is a decrease in New Orders and overall manufacturing conditions, according to the ISM, yet the most rapid expansion we’ve seen since July 2022, according to S&P. There are slight differences in their methodologies, calculations, and weightings. But, the point here once again is that the U.S. economy is in a bit of an awkward teenage phase—it’s confused, making a lot of people angry, but still managing to grow. The Takeaway? Seeing discrepant economic readings kind of perfectly sums up the state of the U.S. economy. We know 2023 was a year of strong growth and expansion. However, since turning the corner into 2024 and especially when Fed Chair JPow signaled the “dovish hold” in December, macro readings of the U.S. economy have become a lot less clear. What is clear is that the economy is far from a recession right now. However, ISM data, particularly in New Orders, along with the Census Bureau’s reading of New Orders from last week, suggest the future isn’t as rosy as it was at this time last year. What is unclear is exactly how, when, why, and pretty much everything else that could cause the U.S. economy to dip into a recession. It’s tough to find a bear case in the U.S. right now, and according to Nassim Taleb and his blockbuster 2007 book The Black Swan, it’s these moments of complacency that the biggest shocks can come. Plus, sentiment readings have been pouting through the roof since the fall/winter of 2023 as well. Despite these sentiment readings asking what consumers expect in the future, most consumers base their answers on the current state of the economy. So, the strong sentiment could actually be indicative of good times of the past and, when compared to ISM readings, could further signal a rockier economic future. Here at the Daily Peel Global Headquarters, we do whatever we can to find reason to be optimistic. We haven’t seen much macro data to suggest a negative future, but these leading indicators could be trendsetters. Let’s enjoy the good economic situation while it lasts. What's Ripe 🤩 Dell Technologies (DELL) 📈31.6% - With AI, we might’ve discovered anti-gravity technology, too, because this sh*t only makes things go up. Just look at Dell—the stock had its best day since 2018. - The laptop and other hardware slinger said demand for their AI-capable servers is through the roof, leading them to a beat on the top and bottom lines. - Shares have been catching a bid for a while now, ripping >117% in the year leading up to Friday. Now, we’ll see if your grandparent’s Apple can keep it up. Spirit AeroSystems (SPR) 📈15.3% - When a borderline monopoly in airplane manufacturing can’t keep their planes together, what should we do? That’s right—make it even more of a monopoly. - And that’s exactly what Boeing is doing. On Friday, news hit that Boeing plans to re-acquire fuselage maker Spirit AeroSystems after ~20 years of divorce. - Spirit hasn’t made a profit since pre-pandemic. ~70% of their sales come from Boeing, so maybe together, they can make money and planes that work! What's Rotten 🤮 Fisker (FSR) 📉33.7% - Apes, it’s officially time. Let’s all salute and start playing Taps as the EV company everyone always forgets about announced a “going concern warning.” - Last quarter’s huge swing-and-a-miss on sales, reporting $200mn vs estimates for $310mn, led to a massive loss of $464mn, almost 3x that of Q4’22’s. - The firm said that “current resources are insufficient to satisfy requirements over the next 12 months.” They plan to try to raise funding, but good luck to ‘em. New York Community Bancorp (NYCB) 📉25.9% - You honestly couldn’t try to have a worse series of overnight news than NYCB did coming into Friday. This is why we need shareholder abuse laws ASAP. - Included was a $2.4bn goodwill impairment charge, “material weaknesses” in internal controls, delayed 2023 reports, and, oh yeah, the CEO is out too. - Shares haven’t been this low since 1997. And after seeing the above reasoning, it’s no wonder why. We may see another “J.P. Morgan to the rescue” after all. Thought Banana 🤔 The First of Many… For much of last year, everyone was speculating whether or not Elon and Zuck would actually duke it out—whether in the street, the octagon, or the damn Coliseum. And while we’re still waiting for that pay-per-view event of the century, in the meantime, we’ll get a little taste of good ol’ fashion nerd fight, this time hosted in a San Francisco courtroom. Bot vs Bot The almost-certain 2nd and 3rd place finishers for Time’s Person of the Year in 2023 (and for the Daily Peel’s, too) will face off in court as Elon Musk has opened a lawsuit against Sam Altman and OpenAI for breach of contract. Quick Backstory: - Musk provided ~$44mn in funding to OpenAI when the organization was founded in 2015 and is at times cited as a “co-founder” along with Sam and others - Musk severed his relationship with OpenAI in 2018 over disagreements about the company moving away from a nonprofit structure and the founding mission to ensure AGI “benefits all of humanity” - Then, in 2023, Microsoft became a 49% owner of the profit-making arm of OpenAI’s confusing *ss corporate structure - Now, Elon is pissed, suing Sam and OpenAI for violating OpenAI’s founding documents as a non-profit by becoming what he calls “effectively a subsidiary of the largest tech company in the world” Basically, Musk’s argument comes down to what he believes was a legally binding contingency of the $44mn he invested/donated to the organization. Emails from that time found [here]( show Sam promising that OpenAI’s tech would be used only “‘for the good of the world,” and now, Musk’s perspective is that “the good of the world” has become “the good of Microsoft shareholder’s wallets.” Who Cares? This is just the first of what is sure to be many, many, many lawsuits over artificial intelligence and its use cases. The most interesting thing here is that the suit—if taken to a jury trial, as Musk “demands” in the filing—will force a judge and jury to define “artificial general intelligence.” This is because Microsoft’s 49% ownership is exclusive to “pre-AGI” technology. However, Musk, in the court filing, alleges that ChatGPT’s GPT-4 is effectively an AGI and, therefore, must be removed from CoPilot and other Microsoft products. So, by the time this suit settles, we will have learned: - What legally constitutes “artificial general intelligence” - The structure and potential payoffs of Microsoft’s ownership of ChatGPT - Much more information on the opaque structure of OpenAI and its status as a “capped profit” organization This is gonna be fun, most of all for the lawyers getting fat paydays on both sides. But ChatGPT has actually passed the bar exam, so maybe this will be the first time in history we see a company’s product represent the company in court. What a time to be alive. 💭 The Big Question 💭: Does Musk’s suit have any legal merit? If it makes it to a jury trial, what will the outcome be? What steps would OpenAI have to take if that hypothetical jury sided with Musk? Banana Brain Teaser 💡 Previous 🗓 Becky rented a power tool from a rental shop. The rent for the tool was $12 for the first hour and $3 for each additional hour. If Becky paid a total of $27, excluding sales tax, to rent the tool, for how many hours did she rent it? Answer: 6 Today 🕐 On a certain day, a bakery produced a batch of rolls at a total production cost of $300. On that day, 4/5 of the rolls in the batch were sold, each at a price that was 50 percent greater than the average (arithmetic mean) production cost per roll. The remaining rolls in the batch were sold the next day, each at a price that was 20 percent less than the price of the day before. What was the bakery’s profit on this batch of rolls? Send your guesses to vyomesh@wallstreetoasis.com Wise Investor Says 🤓 “AI will probably most likely lead to the end of the world, but in the meantime, there'll be great companies.” — Sam Altman How Would You Rate Today's Peel? 😁[All the bananas]() 😐[Meh]() 😩[Rotten AF]() Happy Investing, David, Vyom, Jasper & Patrick [ADVERTISE]( // [WSO ALPHA](=) // [ACADEMY]() // [COURSES]() // [LEGAL]() [Unsubscribe]( IB Oasis Corp. 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