Good Morning! OpenAI whistleblower Suchir Balaji was found dead in an apparent suicide. Meanwhile, Meta is still fighting tooth and nail to block rival OpenAI’s switch to a for-profit. The SEC charged Cantor Fitzgerald, led by Trump's Commerce nominee, with lying to SPAC investors. And Trump’s cost cutters drop hints about what's first on the chopping block.

Broadcom hit a $1 trillion market cap on AI hype, Chipotle's new CEO wants to overhaul its kitchen with robots, and MicroStrategy will join the Nasdaq 100.

Plus, the drugs Wall Street bankers are using to get through the day, and private equity may have an opioid problem.

Invest in the music you love—start building your royalty portfolio today.

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Death of M&A Bankers?

Ken Moelis, founder of the elite boutique investment bank Moelis & Co., delivered a reality check at Goldman Sachs’ annual finance conference last week.

Known for his candid takes, Moelis painted a stark picture of Wall Street’s shifting landscape, suggesting the glory days of M&A banking may be fading into the rearview mirror.

According to Moelis, private credit is where the real action is. Megafunds like KKR, Apollo, and Blackstone are pivoting their focus away from traditional private equity toward private debt.

“None of them are talking about private equity,” Moelis remarked on the shifting priorities of alternative investment managers.

For decades, funding M&A for private equity firms was the golden goose for investment bankers. But now, as megafunds zero in on private debt, banks need to rethink their game plans.

Moelis believes the future lies in capital markets and private credit deals, which can deliver hefty fees without the complexity of brokering mega-mergers. Case in point: Moelis recently facilitated a $1.5 billion preferred debt deal, earning a cool $30 million fee, on par with traditional M&A fees.

Moelis is doubling down on capital markets, forecasting that they’re “going to explode.” He’s pushing his team to evolve, warning that sticking solely to M&A could be a bad move. As he put it, “Some of [our bankers] just want to be M&A advisers.” But they might be poorer for it.

Takeaway: Ken Moelis’ candid remarks highlight a pivotal shift for elite boutiques that have traditionally dominated in M&A advisory. Junior bankers at Moelis working on M&A deals might secretly welcome the pivot—debt deals are typically less grueling. Either way, the takeaway for M&A bankers is simple: evolve with the times, or you might find yourself pitching the ultimate deal—your own LBO.

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Why Smart Investors Are Turning to Music Royalties

Forget beachfront real estate or private equity—the next diversifier in investing is the songs you stream every day:

• Unlocked access: Until now, music royalties were largely reserved for institutions

• Ongoing revenue: Top songs generate steady royalties from streaming

• Uncorrelated returns: While markets fluctuate people keep pressing play

JKBX (pronounced “Jukebox”) lets you own shares in chart-topping songs from Taylor Swift, Adele, and others.

If building a portfolio with music sounds like your kind of investment, hit the button below.

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Top Reads

• Former OpenAI researcher and whistleblower found dead at age 26 (CNBC)

• Meta asks the government to block OpenAI’s switch to a for-profit (Verge)

• SEC charges Cantor Fitzgerald, led by Trump's Commerce Dept nominee (Axios)

• Broadcom hits $1T as stock soars on 'massive' AI opportunity (YF)

• Private equity may have an opioid problem (Axios)

• Chipotle's new CEO wants to overhaul its kitchen with robots (YF)

• Bitcoin proxy MicroStrategy to join the Nasdaq 100 and ‘QQQ’ ETF (CNBC)

• Elon Musk and Vivek Ramaswamy point to DOGE targets (Fox)

• Private equity bids long goodbye to IPOs (Reuters)

• Would 24-hour stock trading feed US gambling epidemic? (YF)

• Elon Musk reveals SEC sent him 'settlement demand' after Twitter buyout probe (CNBC)

• McKinsey & Company to pay $650 million to settle opioid consulting probe (CNBC)

• YouTube TV price hike brings streamers close to being cable (Axios)

• The drugs young bankers use to get through the day—and night (WSJ)

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Markets Rundown

Stocks Flat as Week Wraps, Eyes on Resilient U.S. Economy

Major stock indexes ended near the flatline on Friday but posted slight losses for the week. Year-to-date, the S&P 500 is up 27%, the Nasdaq has gained 33%, and the Dow Jones Industrial Average is up over 16%.

Treasury yields remained elevated, with the 10-year yield at 4.40%, well above September's lows near 3.6%. This upward move reflects stronger economic data and expectations of a shallower rate-cut cycle in 2025.

2024: A Year of Resilient Growth

The U.S. economy's robust performance in 2024 has been marked by GDP growth averaging 2.5% per quarter, with the Q4 forecast at 3.3%, according to the Fed's GDP-Now tool. The consumer, which drives 70% of GDP, has remained a key pillar of strength despite elevated inflation and higher borrowing costs.

Healthy real wage gains—where wage growth outpaced inflation—bolstered consumption, particularly in services like travel, dining, and leisure. This trend is expected to continue into 2025 as inflation moderates into the 2%–3% range, supporting consumer confidence.

Opportunities in Market Pullbacks

As we head into 2025, markets may face new challenges, including policy uncertainty from the incoming administration. Issues like tariffs, immigration, and trade conflicts could weigh on growth and inflation. However, extreme policy changes are unlikely, and economic impacts should remain contained.

Given the strong economic backdrop, investors can use market volatility as an opportunity to reposition portfolios for growth. Diversification beyond mega-cap tech will be key in driving returns.

In the bond market, short-duration bonds and cash-like instruments should be reviewed to avoid excess cash exposure. With yields likely heading lower in 2025, deploying cash into strategic stock and bond allocations may present attractive opportunities for investors.

Movers & Shakers

• (+) Broadcom ($AVGO) +24% because of lofty forecasts for AI chip demand.

• (+) Upstart Holdings ($UPST) +10% after Needham upgraded the lending company to buy.

• (–) Under Armour ($UAA) -8% after an underwhelming investor day; Morgan Stanley reiterated its underweight rating.

Private Dealmaking

• Zest AI, an automated underwriting startup, raised $200 million

• Fleet Space Technologies, an energy-transition startup, raised $100 million

• CarDekho SEA, an auto financing service platform, raised $60 million

• Terradot, a carbon removal startup, raised $58.2 million

• SolarSquare, a distributed solar assets developer, raised $40 million

• Raptor Maps, a solar farm monitoring software developer, raised $35 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

_{BOOK OF THE DAY}

Focus: The ASML Way

For decades the most valuable technology company in Europe operated in the shadows. The chips manufactured by its machines, power our smartphones and AI assistants, make our coffee and drive our cars and even guide cruise missiles. In fact, roughly 90% of all chips worldwide are made with ASML’s machines. In recent years, the Dutch manufacturing company has found itself in the spotlight, at the center of a geopolitical storm between the United States, China and Europe.

In Focus – The ASML way, journalist Marc Hijink brings us a unique insider portrait of this global giant. Hijink not only details the company’s meteoric rise from a quiet town in the Netherlands to a powerful, global monopoly position, he also makes accessible the unbelievably complex technology that has been the key to ASML’s success. It’s lithography machines, which spit out millions of chips around the clock, work to an accuracy of within a few atoms. 

China is trying to copy the ASML technology while investing billions in its own chip-manufacturing programs to rival that of Taiwan. The US, in turn, seems to have the Dutch government on their side as they try and resuscitate their own chip manufacturing industry amid trade and cyber-warfare with China. Behind all the mind-blowing tech, Hijink discovers, ASML is a company fighting its own demons, scrambling to keep up with its success and an increasing number of security threats.

“This is the intimate story of the people and culture behind a business now caught in a diplomatic struggle for global might.”

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Private Equity's Growing Share of Equity Markets

_{PRESENTED BY LUCA FALONI}

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Shop Luca Faloni’s Gift Guide and find the perfect gift.

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Learn Anything

Almost anyone can learn almost anything with the right approach—talent determines speed, not capability.

A big part of learning is building the necessary background knowledge and skills, yet people often give up because they lack these foundations.

Research shows prior knowledge predicts success, expertise grows working memory, and "universal" skills change across cultures, proving most abilities are learnable.

The challenge lies in breaking complex subjects into smaller parts, filling in gaps, and focusing on progress over speed.

Instead of labeling ourselves “bad” at something, we should recognize that learning takes time—and with persistence, mastery is possible.

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Short Squeez Picks

• 5 questions every manager should ask their direct reports

• How to ask to be paid fairly 

• 9 genius time-saving hacks successful people swear by

• 10 phrases only highly successful people use

• How to organize your home for improved functionality

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Memes of the Day