• Markets: Stocks went Jeffersons mode and moved on up yesterday, notching a record high for the S&P 500 as investors digested the latest inflation data. Meanwhile, Netflix jumped after billionaire Bill Ackman revealed a new stake in the streaming giant.

OH MY CLAUDE

Adobe Stock

Chatting with Claude may be more thrilling than watching a SpaceX rocket blast off…at least for Wall Street. Anthropic investors expect the AI giant to hit a valuation of $2 trillion or more during its public debut planned for the fall—which would surpass SpaceX’s recent $1.77 trillion IPO to become the biggest in history, the Financial Times reported yesterday.

Is $3 trillion next?

Anthropic backers think that the company’s soaring sales justify the steep number, which is double its current ~$1 trillion valuation:

• They project Anthropic’s sales by the end of 2026 will put it on track for as much as $120 billion in annual revenue—10x what it was at the start of the year.
• Some investors say such explosive growth would justify valuing the company at $3 trillion, or 30x its annual revenue. FT notes that other AI superstars like Palantir and Nebius are trading at 55 times their annual revenue.

But there’s some reason for caution. Despite Anthropic’s top models outperforming products from rivals OpenAI and Alphabet, they’re vulnerable to businesses scaling back their AI use due to the hefty price tag. Its top model, Fable, is 2.5x more expensive than a comparable tool from OpenAI.

Things are also tense with Uncle Sam: Anthropic is fighting the federal government in court over the Pentagon designating its products a supply chain risk. The Trump administration also temporarily placed export controls on the company’s most powerful models in June, alarming some customers and slowing revenue growth.

Meanwhile, Anthropic is doing its own pre-IPO shopping: It’s reportedly discussing a $6 billion deal to buy the AI software startup Decart. Decart’s know-how could help Anthropic slash the cost of training its models and enable it to design its own chips, putting it in competition with Nvidia.—SK

      

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World

Tour de headlines

Christian Kantosky/Getty Images

🏫 A judge dismissed the Trump admin’s antisemitism case against Harvard. A federal judge in Boston threw out the Trump administration’s case against Harvard, saying that it failed to prove that the Ivy League institution was ignoring mistreatment of Jewish students. Incidents of antisemitism at the university were “too isolated and episodic” to suggest civil rights violations, the judge said. The federal government had alleged that Harvard did nothing to protect Jewish students during pro-Palestinian protests that followed Hamas’s Oct. 7, 2023, attacks on Israel. The lawsuit was part of a larger pressure campaign by the White House—including attempts to cut Harvard’s funding and stop it from enrolling international students—that was designed to reshape the school.—AE

📷 Flock is adding new guardrails following backlash. Flock Safety, the AI surveillance camera company that’s come under fire in recent days due to abuse by law enforcement, announced yesterday that it’s introducing several safeguards to address privacy concerns. The company said it will shorten the time it stores data from one month to one week, and will also deploy a system that locks out users with “abnormal” search activity. Police forces have championed the technology for helping to fight crime by tracking and storing license plate information, but many citizens and lawmakers across the aisle have accused police of illegally misusing the data Flock provides.—AE

🇺🇸 The US military will replace USS Abe Lincoln amid reported mental health crisis, WSJ says. In an exclusive, the Wall Street Journal reported that the USS George Washington will replace the USS Abraham Lincoln, which has been deployed for more than 250 days. The development comes after two military newspapers, Stars and Stripes and the Navy Times, reported multiple attempts by sailors to jump overboard amid harsh conditions and significant stressors related to the Iran war. The aircraft carrier has not made a port call in over 200 days, according to reports, a record for modern times.—HVL

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that was fast

Illustration: Morning Brew Inc., Photos: Adobe Stock

Much like when you forget about your Venmo balance for a few months to trick yourself into feeling flush, corporations are reveling in speedy tariff refunds to pad their quarterly earnings.

ICYMI: The Supreme Court struck down President Trump’s sweeping tariffs on almost every US trading partner in February, and since then, importers have been clamoring to get their cash back. Of the $166 billion in tariffs SCOTUS nixed, $129 billion in refunds had been approved as of the end of July.

So, what companies got the biggest checks? Over 40 members of the S&P 500 reported a combined $9.6 billion in refunds last quarter:

• Apple leads the pack at $2.2 billion in refunds. The tech giant said the payout contributed about 5% of Q2’s per-share earnings, boosting it by about 11 cents.
• Ford was refunded $1.3 billion.
• Nike received $986 million, FedEx got $800 million, and Amazon collected $640 million.

But you probably won’t get your money back. Some companies have promised to pass the funds on via lower prices, but they won’t be sending you cash. Plus, it’s difficult to prove which price hikes were due to tariffs rather than other market factors. However, shippers like FedEx, UPS, and DHL will be offering direct refunds to some customers because they can track individual imports that had tariffs slapped on them.—MM

      

WOULD YOU LIKE FRIES WITH THAT?

Nick Iluzada

Ba-da-ba-ba-ba: Release the files—the McDonald’s loyalty program files. After requesting a copy of his data from the burger chain, a Wired journalist received a 515-page file on his McDonald’s habits that was far more detailed than expected, he wrote this week.

According to Wired’s Reece Rogers:

• The McDonald’s loyalty program tracks purchase behavior, like favorite menu items and most-visited locations, which is apparently fairly standard.
• The “concerning” part was how McDonald’s used this data to predict how often he’d visit in the future, what he’d spend, what he’d order, and the likelihood that he’d stop being a customer (0%).

“We use information such as past purchases to provide a more engaging, personal customer experience,” a McDonald’s spokesperson told Wired. The loyalty program’s 210 million active users are also the “single most important digital metric” for McDonald’s, its CFO said earlier this year.

Zoom out: The average US consumer belongs to more than 15 loyalty programs as of 2024, per BCG, and some may be exploiting your data (in addition to selling it). A Washington Post columnist recently discovered that Starbucks’s loyalty program may have given him fewer discounts because it determined that he was willing to pay full prices. Consumer Reports alleged similar schemes within Kroger’s loyalty program.—ML

      

Dave’s sports desk

Gen Z is moving money from stocks to sports bets

Getty Images

On Fridays, the Brew’s Dave Lozo looks at a sports business story that says a lot more than just the final score of a game.

Hey, sports fans, this is Adam filling in for Dave this week. For some people, their relationship to sports betting is restricted to losing $10 on their office’s March Madness pool every year. But, for many Gen Zers, it’s increasingly a major part of their financial planning.

Per a survey from the wealth management platform Betterment:

• Twenty-six percent of Gen Zers “treat sports betting as a deliberate part of long-term financial strategy,” compared with 14% of millennials and 12% of the general population.
• More than half (52%) of Gen Zers said they have rerouted funds from investments to sports betting in the last year, vs. 24% of all Americans.

The rapid legalization of betting apps and prediction markets means it’s never been easier to bet your paycheck on the Jets winning fewer than 5.5 games this season. Meanwhile, some young people believe that the stock market is rigged, even though funds that track the S&P 500 historically yield positive returns.

“When a prediction market or sportsbook starts to feel like a retirement strategy, we have a problem,” Betterment CEO Sarah Levy told Bloomberg.—AE

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News

What else is brewing

• The US Court of International Trade upheld President Trump’s closure of the “de minimis loophole,” which had allowed shipments worth $800 or less to be imported to the US tax-free.
• The Trump administration repealed a Biden-era anti-corruption rule that required US companies to report their beneficial ownership information.
• OpenAI’s chief revenue officer is leaving her role less than a year after joining, the latest shakeup to the company’s executive ranks ahead of its IPO.
• The Ryanair plane from which a man was partially ejected in July experienced a jet engine fan blade failure that led to the incident, according to a preliminary report released yesterday.
• Instagram updated its wordmark logo, saying its decade-old one “felt dated.”
• Several breakfast cereals, including Frosted Flakes and Froot Loops, are bringing back physical toys inside boxes in a bid to boost sales.
• Jayden Daniels, the star quarterback of the Washington Commanders, sent a cease-and-desist letter to his alma mater, LSU, because his former No. 5 jersey was given to another player.

recs

• An app that simulates how much shade there will be at any time and place.
• The 15 best teen dramas of all time, according to the Hollywood Reporter.
• It’s not too early for a Halloween travel guide.
• Sneakers that make long walks feel like a quick jaunt.**

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Play

Decipher: The latest edition of our code-cracking puzzle asks you to unscramble some words of wisdom from a TV show. Play Decipher here.

Friday trivia

Here’s a classic riddle: If you have three, you have three. If you have two, you have two. But if you have one, you have none.

What is it?

Answer

Choices

Word of the Day

Today’s Word of the Day is: jaunt, meaning “a short fun trip or journey taken for pleasure.” Thanks to Zach from Grand Rapids, MI, for the suggestion. Submit another Word of the Day here.