Business

1. Neuralink’s big fundraise
2. Japan packs econ. sandbags
3. Crypto kidnappings
4. A Fannie Mae for 401(k)s?
5. Benioff is back
6. Trump vs. the owners’ box

May consumer confidence rebounds… Merck CEO holds the line on DEI… Trump thanks you for your attention to these matters…

When Basic Capital came out of stealth mode earlier this month, my reaction was equal parts “neat” and “oh, dear.” It is, essentially, a mortgage on your 401(k), lending you $4 for every $1 you contribute. Instead of investing primarily in stocks, Basic Capital’s retirement accounts mostly hold loans, whose interest payments can ideally cover customers’ own borrowing costs.

Bloomberg’s Matt Levine has done the math, so I won’t repeat it, except to say that the 8.5% yield that Basic Capital assumes its credit investments would generate will require buying some awfully risky things, something its founder, Abdul Al-Asaad, acknowledged when we sat down last week.

But the broader problem he’s trying to solve — wealth inequality and a ticking retirement time bomb — is having a moment in both Washington and Wall Street. What was once a talking point for the Occupy left is getting a tailwind from a MAGA movement that won by tapping into grievances from those left behind economically.

“You’re detached from the economy, and you don’t feel like you’re winning,” BlackRock CEO Larry Fink told me in March, when he suggested private investment accounts as a better option than Social Security. Republicans’ “big, beautiful” tax bill includes 401(k) accounts for kids, seeded with $1,000 from the government, to give more people “a stake in the American free enterprise system,” Sen. Ted Cruz told my colleague Burgess Everett.

Al-Asaad is adding his voice to the discussion around America’s looming retirement crisis. It’s a more interesting one than his Goldman Sachs-Harvard Business School resume suggests: He’s a Palestinian whose upbringing in Syria gave him a serious distrust of government solutions.

His answer to the problem is: leverage, which he says, correctly, is “just a tool.”

Used responsibly, it brings economic security within reach for more people. Runaway, it ends badly. You can read more from our conversation below, including why his dream is “a Fannie Mae for retirement.”

Musk’s Neuralink valued at $9B

Elon Musk’s Neuralink raised $600 million in a deal that values the brain-mapping company at $9 billion, before the new cash, Semafor scoops.

The startup was last valued at $3.5 billion in late 2023, according to PitchBook, but has since implanted three chips into the brains of patients paralyzed or unable to speak. The most recent, a non-verbal Arizona man with ALS, posted a video on Musk’s X last month in which he speaks using the chip. Bloomberg reported in April that Neuralink was looking to raise $500 million at a valuation of $8.5 billion. Jared Birchall, Neuralink CEO and Musk’s money manager, didn’t respond to a request for comment.

The value of Musk’s companies have soared over the last four years, though Neuralink remains one of the smaller parts of his empire.

Japan readies for no-deal

Japan is taking steps to shore up its economy if trade talks with the US don’t yield a deal. Prime Minister Shigeru Ishiba, facing flagging poll numbers, said he hopes to ink a deal with President Donald Trump at the G7 summit in three weeks. Japanese officials have offered to boost shipbuilding ties with the US, including passing on Japanese know-how on polar icebreakers, a priority for the White House.

Japan’s top trade negotiator arrived in DC Friday, looking for his first face-to-face meeting with Treasury Secretary Scott Bessent. But there is little sign that the US government will yield on auto tariffs, a key sticking point. Toyota expects it will take a $1.3 billion hit over just two months.

Tokyo is preparing for a no-deal scenario: Lawmakers on Tuesday approved a $6.3 billion stimulus, part of a set of emergency economic measures that the Japanese press reported could reach $19 billion.

Crypto kidnappings come stateside, worrying execs

A string of crypto kidnappings across Europe and the US have put executives and investors on edge. A brutal scene unfolded in New York City over the holiday weekend, when a Kentucky man was arrested and accused of torturing an Italian tourist to obtain access to his crypto wallet.

Concerns have grown after hackers stole from crypto giant Coinbase the names, addresses, and account balances of some customers. “This hack will lead to people dying,” TechCrunch founder and crypto investor Michael Arrington wrote on X.

Masked assailants unsuccessfully attempted to kidnap the daughter of a prominent crypto executive off the streets of Paris earlier this month, while the co-founder of Ledger, which makes physical crypto wallets, was kidnapped alongside his wife and mutilated earlier this year. French police yesterday arrested 20 people they believe were involved in the plots, which authorities said were attempts to steal crypto.

Crypto enthusiasts blame rules that require companies to collect personal data in the first place. “Regulation is the actual thing to target,” investor Balaji Srinivasan wrote. But kidnappings stemming from hacks of banks — which have to collect that same data — are vanishingly rare, suggesting that crypto’s vulnerability lies in the untraceability (to a point) of payments and its usefulness in criminal enterprises.

Can 401(k) mortgages fix the retirement crisis?

Abdul Al-Asaad got the idea for his retirement startup when he picked up Thomas Picketty’s landmark book on economic inequality. He was working at Goldman Sachs in the mid-2010s, and Capital in the Twenty-First Century topped Wall Street’s reading list. Over lunch in SoHo last week, he repeated Picketty’s basic finding: “‘R is larger than G,’” he said, summing up the economist’s finding that invested money grows faster than the economy as a whole — which all but ensures the rich get richer.

“To build wealth, you need three things: financial education, access, and capital,” he said. “If you do not have the first two, you can pay for them…Capital is the missing piece.”

The numbers are grim: The richest 10% of Americans have twice as much wealth as the bottom 90%, and a recent survey from BlackRock found that more people fear retirement than dying.

Al-Asaad’s solution is that favorite of financial tools: leverage. “I am allowed to finance a Coachella ticket… why can’t I finance Berkshire Hathaway?” he asked.

Benioff wins back M&A-weary investors

Salesforce struck an $8 billion deal for Informatica Tuesday, cinching a target that eluded it last year. It’s Marc Benioff’s first big deal since acquiring Slack in 2021 and restores his reputation as a patient buyer: He walked away from a takeover of Twitter in 2016 after investors puked on the idea, and hunted Tableau for more than three years before buying it in 2019. But he was criticized for overspending on Slack and a bumpy integration of the workplace-chat app.

He’s getting Informatica for less than the $10 billion the two companies discussed before talks fizzled in 2024, The Wall Street Journal reports. Salesforce shares dropped 7% on news of its first pursuit last year; investors shrugged this morning.

The deal, and shareholders’ willingness to swallow some short-term pain, suggests Benioff has regained the upper hand over rebellious investors. Under pressure from several activist hedge funds in 2022 and 2023, Salesforce disbanded its board-level M&A committee, cut costs, and laid off employees — a hit to Benioff’s jovial, “Mahalo”-inspired approach to corporate management.

Sports owners set to lose tax perk

The bill passed by House Republicans last week would close tax loopholes for sports team owners — including many of Trump’s biggest backers. They would no longer be allowed to deduct the entire value of player contracts, sponsorship deals, and media rights — huge inputs into increasingly eye-watering prices being paid for teams — from their future personal taxes.

The bill, which faces tweaks in the Senate, would limit those deductions to 50%, which congressional accountants estimate would raise $991 million in additional tax revenue over the next 10 years. (Compare that to an estimated $10 billion that might have been raised by changing tax treatment of carried interest, another perk close to the hearts of the billionaire set.)

Sports teams are the new trophy assets. They are also lucrative tax shelters: ProPublica, as part of its 2021 series based on thousands of leaked tax returns, found that Los Angeles Clippers owner Steve Ballmer saved $2 billion on his personal taxes thanks to this provision, paying a lower tax rate than a concessions worker in the team’s arena.

Any change to the tax code that doesn’t grandfather in existing owners would be bad news for, among others, Josh Harris, who led a $6 billion deal for the Washington Commanders; Bill Chisholm ($6.1 billion for the Boston Celtics); and Steve Cohen ($2.4 billion for the New York Mets).

➚ BUY: Hail Mary. Container bookings and rates jumped as US importers try to hoard inventory before the China tariff reprieves expire in August.

➘ SELL: Shale-wary. Oil executives are repeating warnings that America’s decade-long oil boom is ending, as prices stay beneath the $65-per-barrel breakeven price for shale drillers. “We’re on high alert,” one CEO said.

Companies & Deals

• Synergy semantics: Nippon Steel and US Steel are on track to close their $14 billion merger after getting the president’s blessing — just don’t call it a takeover. Everyone involved in the deal is opting for “partnership,” even though it involves the sale of US Steel at $55 a share. Like Chevron’s adoption of “Gulf of America,” it’s another sign of Trump-friendly corporate linguistics.
• New phone, who dis? Dealbook has some ideas for how Tim Cook can get himself out of Trump trouble: “Assembled in America” is the new “Made in America.” Cook’s turn in the doghouse is surprising — few CEOs navigated the first Trump term better than he did — but is at the heart of his no good, very bad year, which has also seen Apple fall farther behind rivals in the AI race.
• Trade-offs: Trump threatened to reallocate Harvard’s $3 billion in federal funding towards trade schools — to cheers from both Ivy League critics and economists who point to a growing shortage of skilled workers in industries like HVAC. (Trade school lobbyists, perhaps pushing their luck, quickly asked Trump to cut regulations.)
• It’s the children who are wrong: Indian edtech Byju’s rapid ascent ensnared investors like the Chan Zuckerberg Initiative and Sequoia, and its protracted collapse — over financial reporting, sales practices, and a market slowdown — has left creditors and investors in the US and India angered. But exiled founder Byju Raveendran remains uncowed.

Watchdogs

• Texas toast: Texas is on the verge of becoming the second US state to ban social media for minors.
• Brussels butts in: The EU is planning its first “stress test” for financial firms outside of the traditional banking system, the FT reports. Regulators around the world are starting to warn about risks piling up in opaque corners of finance: The IMF last year recommended a “more intrusive” approach to overseeing private credit, and the Boston branch of the Federal Reserve tiptoed in that direction in a report last week.
• Doth protest too much? The Supreme Court was just trying to “ensure that markets don’t freak” when it said its decision to let Trump fire officials at some independent agencies won’t affect the Fed, one legal scholar told Semafor’s Eleanor Mueller reports.

Markets

• Dutch masters: Another big pension manager warned its American money managers that their collective silence on Trump’s “demolishing” of the judiciary and climate change consensus could cost them investment dollars.
• Holiday reprieve: Trump postponed his plan to impose 50% tariffs on EU goods until July, two days after he threatened them. He said he was pushing them back after a “very nice” call from European Commission President Ursula von der Leyen.

An identity crisis is tearing through the “anti-woke” media, Semafor’s Ben Smith and Max Tani reported.

The Free Press, in many ways the movement’s flagship publication, is emblematic of the schism, as it attempts to walk the thin line between criticizing US President Donald Trump’s excesses and doubling down on its trademark anti-wokism. “It’s perfectly possible to be very anti-woke and very anti-Trump. In fact it’s the only coherent liberal and old-school conservative position,” veteran online journalist Andrew Sullivan told Semafor. “But it’s hard in our tribal age to find an audience that wants to read — let alone support — both.”