On the same day Musk sued for $130 billion, OpenAI's growth numbers and cloud dominance both crumbled. A three-line breach scene reminiscent of Meta in 2022.
1 | OpenAI Courtroom, Growth, Cloud Three-Line Breach
Musk's lawsuit against OpenAI went to trial on Tuesday in Oakland. Musk was the first to testify, claiming he "came up with the name, recruited key people, provided all the initial funding," accusing Ultraman of turning the charity into a personal ATM. He demanded $130 billion in compensation and restoration of the nonprofit structure. OpenAI's lawyer countered: Musk "left without succeeding, and my client has succeeded without him." Early investor Vinod Khosla said the real reason Musk left was "he wanted to be CEO."
Outside the courtroom, WSJ reported on Monday evening that OpenAI had not met its self-imposed user growth and revenue targets. The year-end milestone of ChatGPT reaching 1 billion weekly actives now seems unattainable. CFO Freer warned that if revenue growth does not accelerate, the company will struggle to afford compute contracts. Oracle, CoreWeave, NVIDIA, and AMD stock prices all plummeted.
On the same day, Microsoft changed its exclusive agreement to a non-exclusive license. Amazon listed GPT-5.5 and Managed Agents services on Bedrock within 24 hours. The speed of the shift from exclusive to open indicates one thing: Microsoft's confidence in OpenAI is no longer sufficient to support the cost of exclusivity clauses.
(Source: Axios / WSJ / Reuters / Bloomberg / TechCrunch / Stratechery / Fortune)
2 | UAE Quits OPEC, First Crack in 50-Year Alliance
The UAE announced its withdrawal from OPEC and OPEC+ effective May 1. This is the largest blow to OPEC from a member exit since its formation in 1960.
On the surface, it's a quota dispute. The UAE's long-suppressed daily idle capacity of 3.2 million barrels has made Abu Dhabi eager to set its own prices outside OPEC quotas. But the timing is key: the exit coincides with the U.S. imposing a naval blockade on Iran and most of the Strait of Hormuz being closed. Just days ago, the UAE signed a currency swap agreement with U.S. Treasury Secretary Bennett. Abu Dhabi is opting for more than just production freedom; it's about security.
In the short term, the strait blockade has limited the UAE's export capacity with minimal actual impact. However, once the crisis is resolved, OPEC's remaining effective spare capacity will be almost entirely held by Saudi Arabia, at around 2 million barrels per day. Goldman Sachs estimates that current global daily crude oil production has been reduced by 14.5 million barrels due to regional conflicts. Without the UAE in OPEC, the organization's ability to adjust oil prices is significantly diminished. Qatar exited in 2019, and the UAE is set to exit in 2026. Gulf countries are now individually repositioning themselves.
(Source: Al Jazeera / Axios / Financial Times / NPR / Goldman Sachs / Fortune)
3｜Pentagon AI Supply Chain Rewiring: Google's Full Entry, Anthropic Continues Exit
Google has signed an agreement with the Pentagon allowing the US military to use Gemini in a classified network for "any lawful purpose." On the same day, 600 Google employees sent a joint letter to Pichai requesting the rejection of this contract. Google ignored the request.
This is a direct consequence of Anthropic being listed as a "supply chain risk" by the Pentagon. After Anthropic refused in February to deploy Claude for domestic mass surveillance and autonomous weapons, Defense Secretary Hegseth blacklisted the company. This is the first time this label has been used against a US company, as it was previously reserved for foreign adversaries. A federal judge in San Francisco approved a temporary restraining order, but the Washington Circuit Court upheld the supply chain designation, keeping Anthropic out of the new defense contract.
The current landscape shows Google, OpenAI, and xAI have all signed military AI agreements. Anthropic drew a red line and was excluded from the supply chain. The Chief AI Officer of US Cyber Command told Axios that they are building a "model-agnostic" infrastructure that can switch between different vendors. Implicit in this statement is that no AI company is irreplaceable.
(Source: TechCrunch / Bloomberg / CNBC / Axios / Defense One)
4｜Oil Price at $111 Clashes with Fed Decision, War Inflation Blocks Rate Cuts
Brent crude settled at $111.26 per barrel, WTI approaching $100. The Hormuz Strait has been nearly closed since the end of February, with Iran proposing to reopen the strait before discussing the nuclear issue, a proposal reportedly rejected by Trump. Leaders of the Gulf Cooperation Council held their first summit since the start of the war in Jeddah, with Qatar's Foreign Ministry explicitly stating that "using the strait as a political weapon is unacceptable."
The Federal Reserve announced its rate decision on Wednesday. The market expected a 100% hold at 3.5%-3.75%, marking the third unchanged decision this year and potentially Powell's last meeting as Chair. A CNBC survey showed that 81% of respondents believe oil prices will drive up core inflation. Chair-designate Wash wanted a rate cut, but the surge in energy prices has blocked that path. On the same day, the World Bank warned that the Middle East conflict would dampen global growth.
The energy crisis and monetary policy contradiction are narrowing. With the Strait of Hormuz closed, a rate cut would fuel inflation.
(Source: Reuters / Al Jazeera / CNBC / World Bank / WSJ)
Also Worth Knowing ↓
Australia passed a law imposing a 2.25% revenue tax on tech giants that do not pay for news content. This is the most aggressive news payment legislation globally. Meta and Google had previously withdrawn some news agreements in Australia and are now faced with a direct choice. (Source: TechCrunch)
Customers Bank CEO Sam Sidhu admitted during a first-quarter earnings call that his AI clone had hosted the first 30 minutes. The $25.9 billion asset bank called it an "experiment." Analysts did not catch on until after his admission. (Source: Fortune)
China announced the "LingShen" hundred billion trillion times supercomputer project, equipped with 47,000 Huawei Kunpeng processors, 2 Exaflops of computing power, and no foreign components. This is the first publicly announced all-domestic CPU hundred billion trillion times supercomputer. The latest U.S. Aurora supercomputer used Intel GPUs. (Source: Tom's Hardware)
The U.S. Cyber Command's Chief AI Officer revealed that the department is building infrastructure to switch between different AI models without vendor or country restrictions. Despite Anthropic being blacklisted, the NSA is still trying to obtain the Claude Mythos Preview model. (Source: Axios / Defense One)
Hedge fund manager Paul Tudor Jones called Bitcoin the "best inflation hedge tool" and warned of overvalued U.S. stocks. Against the backdrop of soaring oil prices and war-induced inflation, the frequency of traditional financial elites turning to the Bitcoin narrative is increasing. (Source: CoinDesk)
Poolside released the free open-source agentic coding model Laguna XS.2, which performs close to Claude Opus 4.7 but at a much lower cost. This U.S.-based startup has taken a "close to cutting edge but open-source free" approach outside the U.S. and China. (Source: VentureBeat)
GitHub Copilot announced that starting on June 1st, it will transition to a usage-based pricing model, abandoning the previous fixed monthly fee structure. The official explanation is "aligning pricing with actual usage," driven by the rising AI compute costs and a return to financial discipline. (Source: Ars Technica)
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