Zuck Enters the Frontier

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Good Morning,

Zuckerberg declared that Meta has officially caught up to Anthropic and OpenAI with its 'frontier' Muse Wonder model. At the same time, Korea's KOSPI index plunged 6% to hit July bear market lows as the AI trade suddenly faltered. How ironic…

Planful published an extensive guide on how firms should optimize AI tools to generate outputs that fully align with their data and inputs. If you work in a finance team, it's a must-read.

Let's dive in.

Before The Bell

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Markets

• US stocks closed mixed yesterday as investors looked ahead to a busy week of earnings and inflation data

  • KBW Bank Index is down 12% since a mid-August peak as yields surge

• MSCI Asia Pacific index dropped 1% in its worst day since mid-August as the AI trade comes under pressure

  • Korea's KOSPI index plunged 7% to July bear market lows

• Dollar is trading at an 18-month high

Earnings

• What we're watching this week:

  • Today: JPMorgan, Goldman Sachs, Citigroup, Wells Fargo, Domino's, Johnson & Johnson

  • Wednesday: Bank of America, Morgan Stanley, BlackRock, ASML

  • Thursday: TSMC

• Full calendar here

Prediction Markets

• Real ones know Meta should be trading higher, considering how much Zuck and Wang are benchmaxxing with their latest Muse Wonder 'frontier' model

• Get a $25 bonus with code LIT on signup, only on the Polymarket US app

Headline Roundup

• Houthi terrorists used Claude to make self-improving missiles (DM)

• McKinsey stripped partner of leadership roles for questioning gender discrimination in LinkedIn feud (BBG)

• Wealth boom and price shock collide in US (RT)

• Nvidia's change to FCF calculation has big implications for buybacks (WSJ)

• Blackstone says India is easiest place to IPO in the world this year (BBG)

• Indian healthcare has emerged as a PE hotspot (FT)

• Firmus IPO collapse raises bar for Asia AI deals in pipeline (BBG)

• Wall Street sees value in bonds after deep selloff (BBG)

• Wall Street's record-breaking trading streak is set to cool (FT)

• PE puts string of UK high street names up for sale (FT)

• City of London hits out at PM's plan to scrap non-compete clauses (FT)

• MENA PE has $45B of headroom for dividend recaps (BBG)

• CVC hid investment in Israeli defense startup to avoid controversy (FT)

• Goldman's $2.3B deal puts tax-smart ETFs under scrutiny (BBG)

• HSBC will phase out fixed-pay allowances from 2028 (RT)

• Broadcom CEO likens many AI investors to casino gamblers (BBG)

• Zuck says Meta has caught up to Anthropic and rejected calls for slowdown (FT)

• 1MDB is in talks to settle with Deutsche ​Bank over $4.5B fraud (RT)

• Mortgage shock sends US pending home sales to 12-year low (BBG)

• Kroger will cut 3k corporate jobs (BBG)

• Feds executed a search warrant on Ilhan Omar's home (WSJ)

A Message from Planful

AI is great at one thing in finance: sounding sure of itself.

Hand it a company's numbers without the chart of accounts or the close calendar, and it will hand you an answer anyway, confident and wrong in ways nobody spots until an auditor pulls a sample (Yep, even the board pack that looks sharper than last quarter).

If you back or advise that company, you're the one sitting across from every number it reports. It's a tough seat, and fixable.

After 20 years working with finance teams, Planful wrote the guide on how to give AI the context it needs, so one answer holds from board pack to control test.

Consider it a conversation starter for your next CFO meeting.

Deal Flow

M&A / Strategic

• $100B-listed Starbucks denied reports it is exploring a takeover bid for $40B-listed Chipotle

• Albertsons is demanding $9B from Kroger for the collapse of its $25B merger

• German chemicals giant BASF could raise its offer for peer Evonik Industries after an $11.7B bid was rejected

• Amazon is in talks to acquire real-world model startup Decart AI for $7B

• ADNOC Logistics & Services, a unit of Abu Dhabi's state-owned oil giant ADNOC, is in talks to acquire a stake in energy marine services firm HEA Energy at a $3B valuation

• Medical equipment maker Steris will ​buy privately held Xodus Medical for $2.1B

• Quantum computing firm IonQ agreed to buy enterprise security firm Elisity in a $1.3B all-stock deal

• French energy firm TotalEnergies will expand its US JV with KKR with an ​additional renewables portfolio valued at $1.2B

• EU regulators opened an investigation into Austrian furniture retailer XXXLutz's proposed $1.1B acquisition ​of German peer Porta

• Ithaca Holdings, a new investment firm transforming businesses with AI, is in advanced talks to LBO dating app Bumble at a $1B valuation

• Japanese manufacturer Omron will buy US industrial PC firm Onlogic ​and its parent company Interlogic for $675M

• CVC agreed to buy a 40% stake in camouflage maker Fibrotex from the company's founding Blum family for $280M

• A.G. Oatley Wines re-acquirded brands Rosemount, Ingoldby, and Secret Stone from Australian vintner Treasury Wine Estates

• Japanese trading house Itochu acquired a 20% stake in domestic PE firm Aspirant Group

VC

• Winverse AI, a robot lab of an ex-Tencent scientist, raised a seed round at a $400M valuation led by DeepSeek

• Scarlet, the certification body for AI and software medical devices, raised a $50M Series B led by Headline

• Mistlabs, a developer of cross-platform ambient intelligence technologies, raised a $26M pre-A round led by Luminous Ventures and Huaqin

• Ashvin, a DME intake automation startup, raised $16.5M led by co-founder Mathew Mammen

• Preference Model, a reinforcement learning infrastructure and AI alignment startup, raised a $16M seed round led by a16z

• Skopos Bio, a developer of nuclear-backed oncology therapies, raised a $12M seed round from Tenmile, Tin Alley Ventures, and Yosemite

• Sonilo, an AI-synchronized audio and sound effect generation software developer, raised $11M in its first funding round led by B Capital

• Klarent, an enterprise software testing startup, raised an $8M seed round led by Mosaic

Access the complete VC deal flow and data on Fundable

IPOs / Listings / Issuances / Block Trades

• Chinese printed circuit board maker Dongshan Precision Manufacturing is gauging investor interest for a $2B-$3B Hong Kong listing

• Nigeria's Dangote Petroleum Refinery & Petrochemicals extended its record $2B Nigeria IPO by two weeks on strong demand

• Home equity-sharing firm Unison picked banks for a $500M IPO

• SoftBank-backed Nigerian fintech OPay plans to raise $500M in a US private placement and IPO, including its $200M parallel private placement with Africa's biggest bank Standard Bank

• UK retailer Frasers ‌further raised its stake in luxury brand Burberry to 7.42%

Debt

• Chinese big tech giant Tencent kicked off a $5B international bond sale to fund AI capex

• JPMorgan and Goldman Sachs did not underwrite $3.7B of a $5B debt package they're leading for AI startup Volta Infrastructure

• Oak Hill, Genstar, and Altas Partners-backed RIA rollup Mercer Advisors refinanced $1.9B of debt with a new syndicated term loan led by Goldman Sachs

• Creditors to the struggling Mall of Berlin are looking to sell $615M of debt while owner HGHI Holding simultaneously explores a refinancing

• French lender Credit Agricole is considering an SRT tried to European car dealership loans

Bankruptcy / Restructuring / Distressed

• Hong Kong's Airport Authority will waive billions of dollars in rent that developer New World owes on its struggling 11 Skies project in exchange for control of its $2.3B mega mall-and-office complex and an option to buy a stake in New World at a steep discount

• France will raise its stake in struggling miner Eramet from 27% to 49% after its planned $560M capital raise

• Getty Images plans to file for Chapter 11 bankruptcy and go private in a restructuring

Funds / Secondaries

• Consonance Capital Partners raised $1.35B for its third healthcare PE fund

• Australian VC Square Peg raised $700M across two new funds

• Infrastructure investor Stonepeak is in talks to raise a $100M Australia-listed credit fund

• Ex-McKinsey exec Ron Alpar launched Aliyah Ventures, an Israeli pre-seed VC fund targeting immigrant entrepreneurs in Israel

Crypto Sum Snapshot

• FTX's old Bitcoin-mining assets are now part of the AI boom

• Market cap of tokenized assets hit $3.9B

Crypto Sum compiles the most important stories on everything crypto. Read it here.

Exec's Picks

• ICYMI: Every memo, model, and deck out of F2 carries a citation chain, every number traced from claim to formula to source page. Deliverables your IC can interrogate. Private markets run on F2. Book a demo.

• Bloomberg published another insightful piece on the AI circular funding boom. This time from the lens of foreign cash.

• Bloomberg also published an interesting deep dive on why data centers cost so much.

Financial Services Recruiting

If you're a junior banker looking for your next career move, check out Litney Partners, a recruiting firm established by Litquidity and Whitney Partners (the oldest purely financial services executive search and consulting firm).

We aim to place strong candidates across private equity, hedge funds, venture capital, growth equity, credit, and investment banking.

We're currently seeking talent for some incredible roles. Head over to Litney Partners to drop your resume / create your profile and we'd love to get in touch!

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