Israeli Prime Minister Benjamin Netanyahu ordered a significant expansion of military control in Gaza on Thursday, directing forces to seize 70% of the territory in a move that directly violates a U.S.-brokered ceasefire. The escalation in the Middle East was mirrored by a dramatic surge in capital for artificial intelligence, as Anthropic raised $65 billion at a near-trillion-dollar valuation, signaling a new financial scale for the industry. Meanwhile, fragile negotiations between the U.S. and Iran showed signs of progress even as the two sides traded drone strikes near the Strait of Hormuz, keeping global energy markets on edge and complicating the Federal Reserve’s fight against inflation.
AI & Technology
Anthropic Raises $65 Billion, Surpassing OpenAI Valuation
Anthropic, the artificial intelligence company behind the Claude chatbot, announced on Thursday that it had raised $65 billion in a Series H funding round, achieving a post-money valuation of $965 billion. The round was led by Altimeter Capital, Dragoneer, Greenoaks, and Sequoia Capital, with participation from a wide array of investors including Blackstone, Fidelity, and Temasek. The new valuation eclipses the $852 billion valuation of its chief rival, OpenAI, which was set in March. The staggering sum underscores the escalating capital requirements for building frontier AI models and the intense investor competition to back perceived winners.
The funding follows a period of explosive growth for the company, which was founded in 2021 by former OpenAI researchers. Anthropic disclosed that its annualized run-rate revenue had crossed $47 billion earlier this month, a more than fivefold increase since the start of the year. The company attributed this growth to widespread enterprise adoption of Claude across industries and increasing personal use. “This funding will help us serve the historic demand we are experiencing, stay at the research frontier, and bring Claude to more of the places where work happens,” said Anthropic’s Chief Financial Officer Krishna Rao. Brad Gerstner, CEO of lead investor Altimeter Capital, hailed the adoption of Claude among “the world’s most demanding organisations” as evidence of Anthropic’s command in the field.
Anthropic’s rapid ascent to the top of the private AI market raises immediate questions about its path to an initial public offering and the sustainability of its current growth trajectory. The company has secured significant strategic investments from Amazon and other technology partners for computing power, but it faces the ongoing challenge of operating in a field where technological leadership can shift rapidly. The next test will be whether it can convert its massive private valuation into a sustainable public market position, a feat that has eluded other highly valued tech startups.
Dell, Okta, Glean Post Surging Revenue on AI Demand
A wave of strong earnings reports from enterprise software and hardware companies, driven by surging demand for artificial intelligence infrastructure, fueled a major rally in technology stocks this week. Dell Technologies reported its fastest revenue growth since returning to the public market in 2018, with sales soaring 88% to $43.84 billion, far exceeding analysts’ expectations. The company’s AI server revenue skyrocketed 757% to $16.1 billion, and it raised its full-year AI revenue projection to $60 billion. Identity security provider Okta also topped estimates, with revenue climbing 11% to $765 million, as CEO Todd McKinnon cited spiking demand for tools to secure “agentic AI” deployments.
The results underscore a broader, capital-intensive shift in corporate spending toward AI infrastructure, extending beyond the initial frenzy for chips from Nvidia and others. The Philadelphia Semiconductor Index has gained roughly 75% this year, putting it on track for its largest annual return since 1999, fueled by what JPMorgan chief Jamie Dimon described as a “gung ho” and “exuberant” market. Major cloud providers—Meta, Alphabet, Amazon, and Microsoft—have collectively earmarked $725 billion for data center and hardware spending this year alone. This spending is creating a powerful tailwind for companies across the technology stack, from chipmakers and server assemblers like Dell to software providers that enable and secure AI applications.
However, the explosive growth raises questions about sustainability and the potential for a bubble, with comparisons to the dot-com era becoming more frequent. While executives like Okta’s McKinnon argue the current buildout represents essential “plumbing” for the next decade and is “less susceptible to euphoria,” the sheer scale of investment invites scrutiny. The immediate beneficiary of this spending surge appears to be former President Donald Trump, who became a Dell shareholder in the first quarter and publicly urged supporters to “go out and buy a Dell” earlier this month. The company’s stock, already up more than 150% this year, jumped another 17% after its earnings report.
Geopolitics & Security
Netanyahu Orders Israeli Military to Seize 70% of Gaza Strip
Israeli Prime Minister Benjamin Netanyahu said on Thursday he had directed the military to expand its control of the Gaza Strip from roughly 60% to 70% of the territory, a move that directly violates the terms of a U.S.-brokered ceasefire agreement from October. Speaking at a conference in an occupied West Bank settlement, Netanyahu stated, “We are currently squeezing Hamas. We now control 60% of the territory in the strip. You know, we were at 50, we moved to 60. My directive is to move to … 70.” The October truce established a “Yellow Line” demarcating Israeli control at approximately 53% of Gaza, but Israeli forces have since unilaterally moved concrete markers deeper into Hamas-controlled areas.
This territorial expansion coincides with public statements from Israeli Defense Minister Israel Katz, who said on Wednesday that the government remains committed to a plan for “large-scale Palestinian migration” from Gaza. Katz described the policy as “voluntary migration,” but Israeli human rights organizations argue that the dire conditions imposed on Gaza make any departure involuntary, constituting a plan for forced transfer, which is a war crime. The Association for Civil Rights in Israel stated last year that “Creating living conditions that do not allow for survival, freedom and dignity… is not a plan for ‘encouraging voluntary emigration’ but a plan for forced evacuation and expulsion.”
The developments threaten to collapse the fragile ceasefire that has been marred by near-daily violations, with more than 900 Palestinians killed since it began eight months ago. They also directly contravene the second point of the ceasefire plan endorsed by the U.N. Security Council, which states that “Gaza will be redeveloped for the benefit of the people of Gaza.” At a Security Council briefing on May 21, the U.N.’s High Representative for Gaza, Nickolay Mladenov, warned that the deteriorating status quo risks becoming permanent, calling on Hamas to disarm and Israel to honor its commitments.
Israel Intensifies Strikes on Beirut, Southern Lebanon Amid Escalating Conflict
Israel dramatically escalated its military campaign in Lebanon on Thursday, launching airstrikes on the capital, Beirut, for the first time since a nominal ceasefire took effect last month. The strike on a densely populated southern suburb, which residents said came without warning, coincided with a major expansion of operations in the south, where the Israeli military declared a vast area a “combat zone” and ordered mass evacuations. Lebanese health authorities reported at least 16 people killed in overnight strikes, including a family of six near Sidon and casualties in strikes on the cities of Tyre and Sidon, pushing the overall death toll since early March above 3,269.
The escalation comes despite a U.S.-mediated ceasefire announced on April 16 and on the eve of planned security talks between Lebanese and Israeli officials in Washington. Hezbollah has dismissed the talks, and the fighting has continued to intensify, with Israel now pushing its ground forces north of their positions held at the start of the truce. The Israeli military described the Beirut strike as “targeted,” with Israeli media suggesting it aimed at a senior Hezbollah figure, but provided no further details. Lebanese Prime Minister Nawaf Salam condemned the continued attacks on southern regions, stating that nothing could justify the targeting of civilians and historic landmarks.
On the battlefield, Hezbollah has adapted its tactics, deploying fibre-optic guided drones as its primary weapon against Israeli forces and communities along the border. According to the Israeli Alma Research Center, these hard-to-detect drones have been used in more than 100 attacks inside Israel since the ceasefire began and were responsible for eight of the twelve Israeli fatalities during the same period. This technological shift, learned from the war in Ukraine, represents a significant new threat that complicates Israel’s air defense capabilities and increases the risk to civilian areas.
U.S. and Iran Trade Strikes as Tentative Ceasefire Deal Nears
The United States and Iran exchanged military strikes in the Strait of Hormuz region on Wednesday, testing a fragile ceasefire that has held since April 8. U.S. Central Command said it shot down five Iranian drones and struck a ground control station in the southern Iranian port of Bandar Abbas. Iran’s Islamic Revolutionary Guard Corps responded by launching an attack on a U.S. air base, which Kuwaiti air defenses intercepted. Both sides described their actions as defensive and as violations of the ceasefire by the other, with Centcom labeling Iran’s ballistic missile launch “an egregious ceasefire violation.”
The exchanges occurred against a backdrop of opaque diplomatic negotiations, with President Trump stating he was “not satisfied” with the terms of a potential deal and dismissing political pressure, saying he did not “care about the midterms.” The White House disputed Iranian state media reports of an unofficial framework agreement that would lift a U.S. port blockade in exchange for reopening the Strait of Hormuz under joint Iranian-Omani control. Trump issued a blunt warning to Oman, stating, “Oman will behave just like everybody else or we’ll have to blow them up,” regarding any plan for the strait.
Despite the clashes, multiple U.S. officials and news reports indicate the two sides have agreed to a tentative 60-day ceasefire and a framework to reopen the Strait of Hormuz. The deal, which would extend the fragile truce, is awaiting the formal approval of former President Donald Trump and final confirmation from Tehran. The proposed framework, negotiated with mediation involving Pakistan, Oman, and Qatar, focuses on restoring free commercial shipping through the strategic waterway. In return, Iran would end vessel harassment, remove naval mines, and dismantle its transit toll system, while the U.S. would gradually ease its naval blockade. The 60-day truce is intended to provide a window for negotiations over more complex issues, including the future of Iran’s nuclear program.
EU Ministers Meet on Ukraine as NATO Bolsters Baltic Command
European Union foreign ministers convened this week to discuss strategy for the war in Ukraine, with warnings against falling into Russian “traps” during any future peace talks. The meeting coincided with NATO’s announcement that Germany and the Netherlands will establish a joint tactical headquarters in the Baltics this year, a command center capable of controlling up to 50,000 troops to strengthen deterrence against Russia. The discussions also touched on EU enlargement, reflecting a broader effort to solidify the bloc’s geopolitical posture amid a stalled conflict.
These developments unfold against a backdrop of heightened regional tensions and political instability. In Latvia, a new coalition government was approved by parliament on Thursday after the previous cabinet collapsed following a dispute over the handling of stray drones suspected to be from Ukraine. The incident, which caused minimal damage but widespread concern, led to the resignation of the defense minister and underscored the vulnerability of frontline NATO states. Meanwhile, Russian Deputy Foreign Minister Alexander Grushko told RT that NATO “needed a big enemy” and had deliberately cast Russia in that role to justify its existence, calling the alliance’s posture a long-term strategic shift that began around 2010-2012.
The geopolitical landscape is further complicated by the apparent failure of U.S. mediation efforts. Secretary of State Marco Rubio suggested the Trump administration was stepping back from its bid to broker an end to the war, stating in late May that “there wasn’t a lot of progress being made.” Critics argue the administration mishandled negotiations by embracing key Russian demands early on, such as stating Ukraine could not recover all its territory or join NATO, and by refusing to apply pressure on Moscow. This U.S. retreat places greater onus on European capitals to coordinate both military and diplomatic responses.
Economy & Markets
Fed Officials Warn Iran War, Energy Prices Complicate Inflation Fight
Federal Reserve officials warned this week that persistent energy inflation, fueled by the ongoing conflict with Iran, is complicating the central bank’s efforts to bring down consumer prices. Chicago Fed President Austan Goolsbee said the energy shock has lasted longer than expected, creating a “stagflationary shock” for Asian economies, while Minneapolis Fed President Neel Kashkari stated that inflation remains “much too high” and his top priority. The warnings came as new data showed the Fed’s preferred inflation gauge, the Personal Consumption Expenditures price index, rose 3.8% in April from a year earlier, with gasoline prices surging 5.5% for the month.
This marks a significant shift in the inflation narrative, as traders who once expected rate cuts are now betting on at least one Fed rate increase this year. The conflict, which began with U.S. and Israeli strikes on Iran in late February, has kept Brent crude futures near $96 a barrel, well above the pre-war level of $72. Goolsbee, who dissented against the Fed’s final rate cut in 2025, said he did so because he wanted proof inflation would not be persistent, adding, “I don’t regret dissenting at that meeting, because the inflation has not proved as temporary as was advertised at the beginning.”
Global central bank leaders echoed the concern that short-term price spikes could become entrenched. The Bank of Japan’s governor warned that initial impacts “can become persistent if it changes wages, expectations, and price-setting behavior.” Domestically, the inflation pressure is colliding with trade tensions, as the U.S. vowed to maintain some tariffs on Canada and Mexico ahead of a July 1 deadline to extend the US-Mexico-Canada Agreement, a move that could add further cost pressures. The Fed’s next policy meeting under new Chair Kevin Warsh in mid-June will be a critical test of how the central bank balances these persistent price pressures against a labor market that Kashkari described as being “in decent shape.”
Global Energy Markets Tighten as Supply Shortages and Record Investment Collide
Global energy markets are facing a severe and simultaneous tightening across oil and natural gas, driven by acute supply disruptions and depleted inventories. The International Energy Agency reported today that global energy investment is set to jump to a record $3.4 trillion in 2026, driven by a second major energy crisis in five years, with $330 billion earmarked for natural gas—the highest annual total in a decade. Yet this surge in spending comes as markets grapple with the immediate loss of roughly 20% of daily LNG supply due to the de facto closure of the Strait of Hormuz and damage to Qatar’s Ras Laffan liquefaction complex, forcing QatarEnergy to declare force majeure on some long-term contracts for up to five years.
Analysts warn the physical market strain is intensifying faster than investment can respond. Jeff Currie of the Carlyle Group stated that Asian oil inventories are already at “minimum operational levels,” with Europe expected to follow by July, a more dire assessment than some peers. The IEA’s Fatih Birol framed the situation as “the largest energy security crisis the world has ever faced,” drawing parallels to the oil shocks of the 1970s. The crisis is compounded by seasonal pressures: forecasts for a hotter summer and a strong El Niño weather pattern are expected to spike Asian cooling demand for gas-powered electricity, while Europe must refill gas storage sites that ended the winter at multi-year lows.
The confluence of these factors suggests the current price volatility and supply insecurity are not transient. The structural underinvestment in new oil supply, highlighted by a forecast third consecutive annual decline in crude oil investment to $500 billion, collides with geopolitical disruptions that are reshaping trade flows. Companies like ADNOC are accelerating plans to bypass the Strait of Hormuz, while consumer nations are turning to domestic resources. The forward-looking context is one of prolonged tension; even with record investment flowing into renewables and gas infrastructure, the physical deficits in the coming months could trigger sustained high prices and rationing, testing the resilience of global energy systems.
Science & Innovation
UN Warns Next Five Years Almost Certain to Be Hottest on Record
A record-breaking spring heatwave is scorching Western Europe, with Portugal recording its hottest May day ever at 40.3°C (104.5°F) on Wednesday. The extreme weather has forced school closures in France, disrupted major sporting events like the French Open, and prompted emergency government meetings on heat preparedness. The United Nations’ World Meteorological Organization simultaneously released a stark projection, stating there is a 91% chance one of the next five years will temporarily exceed the critical 1.5°C warming threshold set by the Paris Agreement and an 86% chance a new global annual temperature record will be set.
The European heatwave, driven by a “heat dome” of high-pressure air from North Africa, is a localized symptom of the global trend. Climate scientists note such intense spring heat “has the fingerprints of climate change all over it,” according to Friederike Otto of Imperial College London. A recent European State of the Climate report confirmed the continent is warming at more than twice the global average rate, making it the world’s fastest-warming continent, with severe impacts already being felt from the Arctic Circle southward.
The UN’s five-year forecast provides a grim numerical context for the immediate crisis, quantifying the accelerating pace of global heating. It warns of specific regional dangers, including an Arctic warming nearly 1.66°C by 2030 and heightened drought and wildfire risks in the Amazon. While the 1.5°C threshold in the Paris pact refers to a long-term average, breaching it even temporarily in individual years signals the world is moving perilously close to a permanent state beyond that limit, with cascading effects on ecosystems and human systems. The immediate political and social strain is evident in Europe, where governments are scrambling to adapt critical infrastructure and public services to a climate reality arriving faster than anticipated.
From the Timeline
AI’s Impact on Jobs and the Nature of Work
The consensus on AI’s effect on white-collar jobs is shifting, with several thought leaders now predicting job creation rather than destruction. @DavidSacks highlighted this as his “Most Contrarian Take” now gaining traction, noting agreement from major financial and AI leaders. This aligns with a broader discussion about the real bottlenecks in innovation; @garrytan argued that even infinite compute wouldn’t change much, as the true constraint is “taste and judgment about what humans actually want,” a sentiment he shared in agreement with another commentator.
Technical Deep Dives on AI Training and Infrastructure
Experts are sharing advanced, niche insights into the practical challenges of modern AI development. @ClementDelangue detailed a critical but often overlooked pitfall in multi-turn RL training loops involving tool calls, explaining how re-tokenization can silently corrupt gradients. In a separate thread, he also showcased a breakthrough in making async RL weight synchronization vastly more efficient and accessible, enabling “disaggregated training” without a shared cluster. Meanwhile, @elonmusk promoted Grok Build’s capabilities by sharing an example where it built a working webhook service for just $1.65, framing it as “good value for money” in the AI development cost conversation.
Political and Regulatory Tensions in the US
A theme of perceived institutional weaponization and political conflict dominated US-focused commentary. @Noahpinion shared news of the Justice Department subpoenaing Reddit and X for user data related to immigration criticism, commenting “This is just the beginning.” In a separate post, he reacted to a report about White House intervention in a Pentagon loan, stating “America is now run by a mafia.” This sentiment of institutional overreach was countered by @brian_armstrong, who argued that “The free market of ideas is the best regulator,” advocating for a system where good ideas are naturally rewarded with resources.
Critique of European Policy and Governance
European Union regulations and governance faced sharp criticism from tech founders for hindering productivity and enabling waste. @levelsio blasted EU and Dutch “degrowth” policies after a hotel stay with locked windows and ineffective AC, blaming them for making him “less productive” and contributing to making everyone poorer. He extended this critique to EU funding, alleging widespread cronyism where taxpayer money for initiatives like an AI GPU fund never reaches the actual builders. This was echoed by @dhh, who reacted to a violent stabbing in Switzerland by suggesting Europeans would one day look back on their current societal state as “barbaric.”
Corporate and Geopolitical Shifts
Significant moves by major corporations and rising geopolitical risks captured analyst attention. @pmarca highlighted ExxonMobil’s shareholder vote to reincorporate from New Jersey to Texas as “Interesting,” signaling a notable corporate migration. On the geopolitical front, @zerohedge pointed to rising oil prices following reports of drones and missiles in Kuwait, succinctly noting “Here we go.” In a different strategic domain, @Noahpinion argued that Europe could become the world’s most powerful military entity by learning from Ukraine and indigenizing its drone warfare supply chain.
The Converging Frontier of AI Models
Observers noted a significant plateau in the capabilities of the most advanced AI models, raising questions about differentiation. @chamath pointed out that leading models from Anthropic, OpenAI, and Google are “almost indistinguishable” on key evals, asking if anyone has a good explanation for this convergence. This theme of top-tier parity was complemented by a discussion on the economics of AI usage, where @chamath also questioned the “true run-rate revenue” of frontier AI labs given reports of wasteful spending at major tech companies like Amazon.
Founders on Relentlessness and Startup Dynamics
The timeless startup virtues of relentlessness and serendipity were celebrated. @paulg shared an anecdote about accidentally advising a startup that later got into YC, underscoring the unpredictable paths to success. In another post, he quoted a partner praising the “most relentless” founders he’d worked with, adding that given the partner’s long tenure, this endorsement placed them in a “hall of fame of relentlessness.” The founder journey was also a topic for @naval, who released a new podcast format discussing concepts like “Waste Tokens, Save Time” and whether pure software is dead with several frontier founders.