ANDURIL'S PALMER LUCKEY TO INVEST IN STEALTHY STABLECOIN STARTUP: AXIOS

*Atticus, a stealthy stablecoin banking startup, is in advanced talks to raise new funding at a valuation of between $1.5 billion and $2 billion.

*TRUMP ON CHINA VIOLATED DEAL: I'LL SPEAK TO XI, HOPEFULLY XI AND I WILL WORK IT OUT

The Week Ahead: infinityhedge

Mon/2:
*Saylor expected to announce another BTC purchase
*Fed Chair Powell Speaks at 1:00 p.m
*10-Year JGB Auction

Tue/3: Taco Tuesday?
*U.S. ISM Manufacturing PMI

Wed/4:
*U.S. April trade balance
*Circle IPO is expected to be priced

Thu/5: U.S. Initial Jobless Claims

Fri/6: U.S. Nonfarm Payrolls (May)

TBA/Whole Week:
*Trump to talk with Chinese President Xi Jinping; China has been slow in approving export licenses for rare earth minerals as US Warns That Using Huawei AI Chip ‘Anywhere’ Breaks Its Rules; then US announced it Planned Wider China Tech Sanctions With Subsidiary Crackdown so China accused the US of violating their recent trade deal and dimming the prospect of an immediate leadership call.
*Ukraine and Russia to Meet for Second Round of Talks as Attacks Escalate
*FTX repayments starting with over $5B in cash and stablecoins to be sent to creditors within this week via BitGo and Kraken.

*More about the week Ahead and What Happened last week:
https://open.substack.com/pub/infinityhedge/p/the-7-days-ae0

*TRUMP SIGNED ORDER RAISING STEEL, ALUMINUM TARIFFS TO 50%

MEXICO TO ANNOUNCE MEASURES NEXT WEEK FOLLOWING U.S. STEEL AND ALUMINUM TARIFF INCREASE IF THERE IS NO AGREEMENT AND IT WON'T BE 'AN EYE FOR AN EYE'

TRUMP: ELON AND I HAD A GREAT RELATIONSHIP. I DON’T KNOW IF WE WILL ANYMORE.

TRUMP: I'M VERY DISAPPOINTED IN ELON, I HELPED HIM A LOT

He hasn't said bad about me personally but I'm sure that'll be next. But I'm very disappointed in Elon

MUSK: WITHOUT ME, TRUMP WOULD HAVE LOST THE ELECTION

Such ingratitude

TESLA SHARES DOWN 9%

TRUMP SAYS EASIEST WAY TO SAVE MONEY IS TO TERMINATE MUSK'S SUBSIDIES AND CONTRACTS

*TRUMP: ELON WAS “WEARING THIN,” I ASKED HIM TO LEAVE, HE JUST WENT CRAZY!

The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!

Elon Musk: Time to drop the really big bomb:

Donald Trump is in the Epstein files. That is the real reason they have not been made public.

Have a nice day, DJT!

TESLA SHARES FALL 15.6% IN WORST DAY SINCE SEPTEMBER 2020

Musk: In light of the President’s statement about cancellation of my government contracts, SpaceX will begin decommissioning its Dragon spacecraft immediately

MUSK: THE TRUMP TARIFFS WILL CAUSE A RECESSION IN THE SECOND HALF OF THIS YEAR

US MAY NONFARM PAYROLLS 139K, EST. +125K, PREV. +177K

MARCH NFP REVISED DOWN FROM +185K TO +120K AND APRIL REVISED DOWN FROM +177K TO +147K

TRUMP SAYS MUSK WILL FACE VERY SERIOUS CONSEQUENCES IF HE FUNDS DEMOCRATIC CANDIDATES: NBC

If he does, he’ll have to pay the consequences for that, He’ll have to pay very serious consequences if he does that

*Trump also said he has no desire to repair his relationship with Musk

I think it’s a very bad thing, because he’s very disrespectful. You could not disrespect the office of the President

Apple Research Paper "The Illusion of Thinking" says AI Reasoning models like Claude, DeepSeek-R1, and OpenAI's o3 are NOT really "thinking" BUT they are just throwing more compute towards pattern matching which completely collapse (dropping to zero accuracy) beyond a model specific complexity threshold as complexity increases despite having adequate token budget.

*As problems get harder, reasoning models initially think more (good!) but then START THINKING LESS despite having plenty of token budget left. They give up right when they should work harder!

*LOW complexity: Standard LLMs actually outperform reasoning models (and are more efficient!)
*MEDIUM complexity: Reasoning models gain advantage.
*HIGH complexity: Both models completely collapse to 0% accuracy.

accuracy progressively declines as problem complexity increases until reaching complete collapse (zero accuracy) beyond a model specific complexity threshold. We observe that reasoning models initially increase their thinking tokens proportionally with problem complexity. However, upon approaching a critical threshold—which closely corresponds to their accuracy collapse point—models counterintuitively begin to reduce their reasoning effort despite increasing problem difficulty. Notably, despite operating well below their generation length limits with ample inference budget available, these models fail to take advantage of additional inference compute during the thinking phase as problems become more complex. This behavior suggests a fundamental scaling limitation in the thinking capabilities of current reasoning models relative to problem complexity.

https://machinelearning.apple.com/research/illusion-of-thinking

The Week Ahead: infinityhedge

Mon:
*Saylor expected to announce another BTC purchase
*US, China trade negotiations in London With Focus on Rare Earths
*Apple’s WWDC Event; Apple’s AI strategy

Tue:
*Strategy’s $1B STRD preferred stock sale set to close
*GameStop Earnings

Wed:
*U.S. May CPI: expect a soft print. As the recent beige book flagged, some firms are passing through tariffs costs.
*Bessent to testify before house panel

Thu:
*U.S. 30-Year Bond Auction
*Strategy, GameStop annual shareholder meeting

*More about the week Ahead and What Happened last week:
https://open.substack.com/pub/infinityhedge/p/the-7-days-553

META HAS AGREED TO TAKE A 49% STAKE IN DATA LABELING FIRM SCALE AI FOR $14.8 BILLION

*Zuckerberg is Personally Recruiting New ‘Superintelligence’ AI Team at Meta to Achieve AGI

*Zuckerberg aims to hire around 50 people for the new team, including a new head of AI research.

*Zuckerberg is building that team in tandem with a planned multi-billion dollar investment in Scale AI. Scale AI founder Alexandr Wang is expected to join the superintelligence group.

*Meta has offered seven- to nine-figure compensation packages to dozens of researchers from leading A.I. companies such as OpenAI and Google.

*Scale AI is Meta’s largest external investment to date.

Musk: I regret some of my posts about President Trump last week. They went too far

Major DAY:

~US CPI:
Median Estimates:
*headline: 0.16% vs 0.22% M/M prev.
*headline: 2.4% vs 2.3% Y/Y
*Core CPI: 0.27% vs 0.24% M/M
*Core CPI: 2.9% vs 2.8% Y/Y

SPX reaction (rxn) on Core MoM:
*> 0.35%: -rxn
*0.3%-0.35%: ±0.25%
*≤ 0.3%: +ve rxn

Core MoM Forecast:
GS: 0.25%
JPM: 0.31%
BNP: 0.27%

~US-CHINA London Meeting details Release Coming:
*US, China Officials Agree on Plan That Awaits Xi, Trump Sign-Off. After the negotiations, US officials said they “absolutely expect” issues around rare-earth to be resolved. “There were a number of measures the US put on when those rare earths were not coming,” Lutnick said. “You should expect those to come off — sort of, as Trump said, in a balanced way.”
*China's Lin said there is no information to offer on US-china meeting in London.
*A Source said China has agreed to start exporting rare earths to the US, and the US will lift export controls on Chinese products that have been in place since the Geneva talks & both actions will take place simultaneously.

~US 10Y Note Auction

TRUMP: OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME.

*TRUMP: FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA. LIKEWISE, WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR UNIVERSITIES.

*TRUMP: WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%.