💰 5 Fact Friday: The $97B AI Power Struggle

MARKETS
1. Altman Rejects Musk’s Takeover Bid 🚫

Elon Musk and Sam Altman cofounded OpenAI in 2015 with a shared vision: an open, nonprofit AI research lab for the good of humanity. Fast forward to today, and they’re locked in a bitter fight over the future of AI.

Musk left OpenAI in 2018 after an unsuccessful attempt to take control of the company, claiming it was drifting away from its original mission. Since then, he’s sued OpenAI, accused Altman of abandoning its nonprofit roots for personal gain, and launched his own competitor, xAI.

Now, he’s back with a $97.4 billion bid to buy OpenAI’s nonprofit parent—a bid that was unsurprisingly rejected.

But why make the lowball offer in the first place? A few possibilities:

• Merge OpenAI with xAI and take the lead in AI model development

• Complicate Altman’s restructuring plans, potentially reducing his future equity stake

• Force OpenAI’s board to reconsider its valuation, delaying its transition to a for-profit business

• Distract OpenAI with legal and financial battles, slowing down a key rival

Altman didn’t just reject the bid—he mocked it with a counteroffer of his own.

Musk fired back, calling Altman a “swindler,” and Altman later suggested Musk’s actions stem from insecurity about xAI’s ability to compete.

Although the back-and-forth is entertaining, the stakes are high.

As OpenAI attempts a legally questionable conversion into a public benefit corporation, Altman stands to receive a 7% equity stake for the first time—a potential $15-25 billion payday. Musk seems eager to prevent that.

Whether Musk is trying to restore OpenAI’s mission or simply undermine a rival, one thing is clear: The AI race is about more than technology—it’s a battle of power, influence, and egos.

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ECONOMY
2. Inflation Accelerates To A 7-Month High 📈

January’s inflation report wasn’t what investors wanted to see.

Consumer prices rose 3.0% year over year, slightly higher than expected, while core inflation (excluding food and energy) ticked up to 3.3%.

Both measures are right back where they were last June. Meanwhile, headline CPI seems to be picking up steam—notching its fourth straight monthly increase.

Despite this, Fed Chair Powell is sticking to his script, preaching patience and insisting that inflation is moderating. He’s also reminding everyone that monetary policy takes time to work.

Still, with inflation holding firm, the Fed’s 2% target is starting to feel like a pipe dream.

What’s keeping inflation high?

• Shelter costs (+4.4%) – Housing makes up 33% of CPI, and prices aren’t cooling fast enough. Even Powell admits this is “where the remaining gap is.”

• Auto insurance (+11.8%) – If your last renewal gave you sticker shock, you’re not alone. Premiums keep climbing.

• Airfare (+7.1%) & prescription drugs (+4.5%) – Travel and healthcare aren’t getting any cheaper.

• Food prices – Eggs are up 53% year over year. Great for farmers, not so great for your breakfast budget.

With unemployment at just 4.0%, inflation is the only thing standing between us and lower interest rates.

Before this report, markets expected two rate cuts in 2025. Now? Just one, likely in October. Some forecasts even suggest no cuts until late 2026.

Markets weren’t thrilled, but they shook off the news pretty quickly.

Stocks initially sold off, but dip-buyers did their thing, helping indexes claw back most of their losses. Bond yields jumped too, with the 10-year Treasury spiking 12 basis points (0.12%) to 4.66%, before easing the next afternoon.

Bottom line: Inflation is still running hot, the Fed isn’t in a rush to ease rates, and borrowing costs aren’t coming down anytime soon.

Let’s just hope that if we finally conquer bird flu and build more houses, we can return to a world where 30-year mortgages start with a 5.

ECONOMY
3. Steel & Aluminum Tariffs Are Back 🚧

President Trump is rolling out 25% tariffs on steel and aluminum imports, marking a return to his signature trade policies from his first term.

This time, there are no exemptions—even key allies like Canada, Mexico, Japan, and South Korea are on the hook. The new levies take effect on March 12.

The tariffs aim to boost U.S. steelmakers, which have seen imports decline by 35% over the past decade, while 80% of aluminum demand still comes from abroad.

Supporters say the move levels the playing field against foreign subsidies, especially from China. Critics warn it could drive up costs for U.S. manufacturers and trigger retaliation.

Market Reaction

1. U.S. steel & aluminum stocks jumped.

• Steel: Cleveland-Cliffs (+18%), Nucor (+6%), U.S. Steel (+5%)

• Aluminum: Century Aluminum (+10%), Alcoa (+2%)

2. European and Asian steelmakers sank as global markets braced for higher U.S. prices and potential countermeasures.

3. Gold surged past $2,900 per ounce—investors see tariffs as another inflationary force.

What’s Next?

The EU is already threatening retaliation. Yet, Trump has hinted at even more tariffs across other industries, including automobiles, semiconductors, and pharmaceuticals.

The last round of metal tariffs in 2018 raised U.S. steel prices by 4-6%, boosting steelmakers but squeezing automakers, construction firms, and beverage companies.

Analysts predict a milder impact this time, thanks to rising U.S. production and weaker demand.

The takeaway: Steelmakers are celebrating, but manufacturers and global trade partners are gearing up for a fight. With more tariffs potentially on the way, uncertainty in global trade isn’t going anywhere.

TAX
4. 8 Best Tax Breaks For Homeowners 🏡

Owning a home isn’t cheap, but at least Uncle Sam is willing to chip in—if you know where to look. From mortgage interest to home office deductions, here are the top tax breaks every homeowner should have on their radar.

1. Mortgage Interest Deduction

The big one. If you itemize, you can deduct interest on loans up to the following limits:

• Loans taken out after December 15, 2017: $750,000, or $375,000 if married filing separately

• Loans taken out before December 16, 2017: $1,000,000, or $500,000 if married filing separately

2. Home Equity Loan & HELOC Interest

If you took out a home equity loan or line of credit to “buy, build, or substantially improve” your home, that interest is deductible—up to the same mortgage limits as above.

3. Property Taxes

Homeowners can deduct up to $10,000 in state and local property taxes ($5,000 if married filing separately).

4. Discount Points

If you paid points to lower your mortgage rate, that’s a tax write-off, too.

5. Home Office Deduction

If you're self-employed, a dedicated workspace means you can deduct a portion of your rent/mortgage, utilities, and even repairs. You can calculate this deduction via one of two methods:

• Simplified method: $5 deduction per square foot of office space, up to 300 square feet

• Regular method: (Office square footage ÷ total home square footage) x (sum of all relevant expenses). These relevant expenses can include: mortgage interest or rent, property taxes, utility costs, and maintenance costs. There is a cap of $3,000.

6. HOA Fees

HOA fees on your primary residence are generally not tax-deductible. However, if you work from home, HOA fees can be included in your calculation of the home office deduction.

7. Certain Home Improvements

Medically necessary improvements, like support bars, wheelchair ramps, widening doorways, or installing lifts, can be tax-deductible. They must qualify as medical expenses and exceed 7.5% of your adjusted gross income (AGI).

Energy-efficient upgrades like exterior doors, windows and skylights, water heaters and heat pumps can qualify for tax credits (not just deductions) of up to $3,200.

Plus, renewable energy credits—for solar panels, wind turbines, and battery storage—are available for 30% of the total installation costs.

8. Capital Gains Exclusion

Sell your home? If you’ve lived there for 2 out of the last 5 years, you can exclude up to $250K in profits from taxes ($500K for married couples).

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STOCKS
5. Guess That Stock 🕵️‍♂️

This digital payments pioneer just posted an earnings beat but still saw its stock tumble. Can you name the company?

1. What started as a simple payment gateway for eBay sellers now processes over $400 billion in transactions per quarter.

2. Despite this impressive volume growth, the king of online payments is facing rising competition from Zelle, Stripe, Square, Shop Pay, Apple Pay, and even Elon Musk’s X Money.

3. Q4 earnings showed $8.4B in revenue (+4%) and adjusted EPS of $1.19 (+5%), but concerns over market share loss and margin compression triggered a sharp sell-off.

4. Venmo, one of its key assets, saw total payment volume jump 10% last quarter—driven by new partnerships with Starbucks, Ticketmaster, DoorDash, and JetBlue.

5. Once the breeding ground for Silicon Valley’s elite, its “mafia” alumni have gone on to launch Tesla, LinkedIn, YouTube, and Palantir.

Got a guess? Tap here to reveal the answer → 

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