The Foxhole

Three rival AI bosses just backed slowing AI down for safety. But who would a slowdown actually protect?

🧭 Where it started: Amodei's essay on why AI should "pace the frontier."
☁️ Selling the shovels: Analysts just lifted their fair value on Nebius, a pure AI-demand play.
⚡ No power, no AI: The energy and grid names powering the AI build-out.

This weekend, Anthropic's Dario Amodei proposed the AI industry deliberately slow frontier development, and within a day OpenAI's Sam Altman and Elon Musk backed the idea. Any such slowdown would likely land hardest on the challengers, potentially enabling some regulatory moat for the private labs.

Open-source models have been closing the gap and commoditizing what the frontier labs sell, and a coordinated slowdown might ease that pressure. Maybe the concern is genuine, but which companies it could change the narrative for is relevant regardless of the motive.

If open-source keeps closing the gap, which companies will actually make the money?

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mitchell_lawler

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Three rival AI bosses just backed slowing AI down for safety. But who would a slowdown actually protect?

If open-source keeps closing the gap, which companies will actually make the money?

mitchell_lawler

The US closed a loophole that helped Temu and Shein. Does that put local retailers back on a level playing field?

📦 Removed loophole: Duty-free shipping under US$800 was suspended and then indefinitely removed.
🛒 Back on equal footing: Undervalued US retailers still forecast to grow.
🧠 Which way does it cut?: A framework for whether regulation helps or hurts an industry.

Cheap factories are the obvious part of Temu and Shein's prices. Another part was a customs rule that allowed parcels under US$800 to enter the US duty-free. This involved shipping each order straight from China as individual items to skip the import duties every US retailer pays.

It arguably put Temu and Shein on the same footing as domestic stores, which could hand US retail its edge back. However, both are already adapting with US warehouses, and shoppers pay more either way.

Do local retailers actually get their edge back, or do Temu and Shein just adapt?

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mitchell_lawler

Oracle has $638 billion of orders it can't fill yet. Tonight tells us how much it's costing to get ready.

📉 Bullish anyway: The capex is eating the cash, and this author still sees 131% upside.
📋 In someone's top 10: Andre Santos' best 10 stocks to buy.
📊 Before the print: Oracle's fundamentals and estimates.

Part of Oracle’s business is renting out computer hardware. Companies like OpenAI need enormous computing power and would rather rent than own it. But Oracle can only rent out machines it already owns, so before it collects a dollar it has to buy the chips, build the warehouse and connect the power. It burned $23.7 billion in cash doing that last year.

Oracle reports after the close, giving investors another pulse check on just how much cash flow will be shed for the privilege of a large backlog.

Is this the price you want to be buying at, or is it too early?

👍🥱🔥🤡

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mitchell_lawler

Razors, glasses, mattresses, all toppled by direct-to-consumer upstarts. Beer wasn't. A 90-year-old law is why.

🍺 The undisruptable aisle: What the three-tier system is, and why it exists.
🚚 Legally required: 9 listed US beer distributors, the middlemen the law mandates.
📊 The protected giant: What the market assumes about AB InBev (BUD) today.

Direct-to-consumer upstarts came for razors, glasses, mattresses and vitamins, and toppled the incumbents in each. Beer? Largely untouched by youthful competitors. The reason is a 90-year-old law.

After Prohibition, the US split alcohol into three legally separate tiers: brewer, distributor, and retailer. Every beer passes through an independent distributor that takes its cut. The playbook that gutted a dozen consumer categories is simply illegal here.

That raises the drawbridge for the giants. AB InBev (BUD) has the volume to command the best distributors and shelf space, while smaller brewers struggle to get a boozy foot in the door. But the real protected party isn't the brewer, it's the distributor, a legally mandated tollgate that's nearly impossible to fire.

Is a regulatory moat enough when the market itself is shrinking?

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