Big Businesses mentioned this week:

$ORCL ( ▲ 3.07% )  $AMD ( ▼ 1.13% )  $NVDA ( ▲ 1.68% )  $ICE ( ▼ 0.14% )  $PSKY ( ▼ 2.87% )  $TSLA ( ▼ 0.72% )  $GM ( ▼ 0.85% )  $MBG ( ▼ 0.07% )  $BMWYY ( 0.0% )  

This week, big business!

• The usual suspects

• The short stack

• Trumplandia

• Elon’s World

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The usual suspects

• Oracle and the AI bubble: When stocks in one sector suddenly start jumping, and investors and industry players are pouring in hundreds of billions of dollars, we gotta ask: Is it a bubble? One of the first bellwethers may be Oracle $ORCL ( ▲ 3.07% ) , the database and hosting company that saw its shares rocket 36% in one day last month when it predicted that a $300 billion deal with OpenAI would see a 7X rise in its cloud-computing revenue over the next three years. But now comes a report in the usually well-informed tech newsletter The Information, that Oracle's profit margins are getting squeezed. Oracle shares fell about 5.5% on Tuesday. Still, they’re up 74% so far this year, so if it’s a bubble, it’s got a long way to go before it bursts. 

• Betting on the also-ran: OpenAI, which appears to be starved for the chips it needs to make all its AI dreams come true, has cut a complicated deal with also-ran chipmaker AMD $AMD ( ▼ 1.13% ) to buy chips that can compete with Nvidia’s $NVDA ( ▲ 1.68% ) AI wafers. In all, OpenAI has pledged to buy 6 gigawatts worth of AMD chips, which could mean tens of billions of dollars in new revenue for AMD. But ramping up AMD to compete will be tough: AMD’s data center business is less than a tenth the size of Nvidia’s, and while OpenAI’s revenue is ballooning, from an expected $12.7 billion in 2025 to more than $125 billion by 2029, the company is burning through cash and says it won’t be turning a profit before 2029.

• Golden daze: The price of gold broke $4,000 an ounce this week for the first time in history, up 53% this year. That’s been fueled by everything from the West’s seizure of Russian assets to the ongoing trade wars, which have shaken faith in the stability of the global economy. There are also the Fed rate cuts, which some traders see as a sign the U.S. economy is headed for trouble. As Bart Melek, head of commodity strategy at TD Securities, told CBS News, gold "may be a better safe-haven than Treasuries.”

• Wanna bet? Big Board owner Interncontinental Exchange $ICE ( ▼ 0.14% ) says it will invest up to $2 billion in prediction market Polymarket. ICE says it will distribute Polymarket’s data, and the venerable exchange owner will add a patina of respectability to what some critics call a gambling site. Polymarket lets users bet on yes-or-no questions about anything from sports to politics, and is regarded in many countries as an unlicensed offshore gambling platform. U.S. citizens are banned from Polymarket, but in August, Donald Trump Jr. joined its advisory board, so that may not last too much longer.

• What would Walter say? CBS News has its first editor-in-chief, the anti-woke opinion writer Bari Weiss, who snagged the job while selling CBS parent Paramount $PSKY ( ▼ 2.87% ) her website The Free Press for $150 million. It’s not yet clear what Weiss’s role will look like. CBS News is retaining its president, Tom Cibrowski, who’ll be managing the network’s actual newsgathering operation. Among Weiss’s first jobs will be launching a debate show that sounds a lot like the CNN’s Crossfire. The new owner of the venerable news outlet, mogul David Ellison, whose Dad Larry’s Oracle cash helped him buy CBS parent Paramount, says he wants to engage centrists, but he and his pa are known as close pals of President Trump, raising the question about how much of a watchdog CBS will be over the administration. In July CBS paid Trump $16 million to withdraw his lawsuit over how 60 Minutes edited an interview with Kamala Harris. Weiss, 41, famously left the New York Times op-ed page in 2020, claiming she was being bullied for her views, and declared she was “done” with mainstream media. It may not matter. CBS’s evening news show is a distant third among the networks, with viewership down 10% in the 2024-25 season over a year earlier.

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The short stack

• Last rites: Drug Store chain Rite Aid $RADCQ ( ▲ 80.0% ) has filled its last prescription, the company said in a terse announcement on its website. Failing to emerge from bankruptcy reorganization earlier this year, Rite Aid shut its last 89 stores this week. The 63-year-old chain once had more than 5,000 stores. Just two years ago, it had 2,000 outlets and 45,000 employees, including 6,100 pharmacists. Cause of death? Competition from deeper pockets at CVS $CVS ( ▼ 0.51% ) and Walgreens $WBA ( ▲ 0.5% ) , and more than 1,000 lawsuits for filling illegal painkiller prescriptions. These are hard times for pharmacies. Mail-order drugs and high rents shuttered a third of U.S. drugstores from 2011 to 2021, and even CVS and Walgreens shut about 1,000 locations each this decade. But the biggest threat to pharmacies is pharmacy benefit managers, who work to keep drug costs down for major health plans by limiting the profit margins for retail pharmacies. Some 80% of all U.S. insurance-paid prescriptions pass through the top three PBMs, CVS Health’s CVS Caremark, Cigna’s Express Scripts, and UnitedHealth’s Optum Rx.

• Car talk: It’s time for a new episode of The (Car) Price is Right! With the federal $7,500 EV credit gone, EV makers are dropping their prices to keep customers. Tesla $TSLA ( ▼ 0.72% ) is promising a new, slightly-stripped down Model Y at $40K (originally $45K) and $37K for a Model 3. Hyundai $HYMTF ( ▼ 7.44% ) says it's cutting the 2026 Ioniq by $9K for a base-model sticker price of $35K. GM’s Chevy Equinox and Nissan’s $NSANY ( ▼ 1.41% ) $7201.T 2026 Leaf start at under $35K, and GM $GM ( ▼ 0.85% ) says it’s bringing out a new compact Chevy Bolt for less than $30K. That comes even as GM chief Mary Barra says she’s holding off on new EV models and putting her chips on more gas-guzzling pickups. Still, numbers of fast-charging ports — which can charge a car in 20 minutes — are up more than 80% in the two years that ended in August to more than 60,300 across the country.

• Janis Joplin won’t help: Mercedes-Benz $MBGAF ( ▼ 0.5% ) says car and van sales dropped 12% at the German luxury carmaker, as Trump’s tariffs sent U.S. sales down 17% and the explosion of electric cars in China knocked sales there down 27%. Still, sales grew 3% at home as EV sales rose 9% from a year earlier. And that China market is causing headaches for BMW $BMWYY ( 0.0% ) , which said Chinese consumers are buying fewer of the company’s cars, including its Mini and Rolls-Royce brands, cutting into profits. Shares of BMW are down more than 8% since the announcement. And Korean carmaker Hyundai, still reeling from the recent immigration raid that saw ICE snap the cuffs on some 300 white collar Korean workers, says it is getting savaged by the tariffs. Despite giving $1 million to Trump’s inauguration, pledging $21 billion in investments in the U.S., and record-breaking sales in the third quarter, net profit dropped 22%, the company said, blaming tariffs. 

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Trumplandia

• The shutdown shuffle: Into the second week of the federal government shutdown, we’re all beginning to feel the pain. President Trump is threatening not pay Federal employees who’ve been furloughed, causing knock-on effects for everyone from mortgage companies to retail businesses. And while ICE Agents are getting paid, some 10,800 air traffic controllers are not. Airline industry expert Chris Dane says the shutdown is expected to cost the U.S. economy nearly $1 billion a week, while 58,000 TSA security officials work without pay. Government-backed small business loans are halted, government inspections needed to continue construction projects or manufacture drugs and medical equipment are halted, and IPOs are postponed, awaiting regulatory action. (Data provider Dealogic noted that IPO activity dropped 90% in the month following the Dec 2019 government shutdown, and warned that despite a buoyant stock market, the same thing could happen this year. We’re also coming up on open-enrollment for the majority of Americans without employer-sponsored health care plans, and the key issue of the shutdown — extending the federal funding that keeps insurance affordable — is unresolved. It’s a stark reminder of how tightly the federal government is woven into our daily lives. Without government job market or other economic data, the Fed is flying blind, just as it’s looking at a new rate cut. And without Fed-sanctioned data, businesses are hesitant to spend, as they see tariff-induced price hikes finally kicking in. The good news is that the situation is getting so acute, EY-Parthenon Chief Economist Gregory Daco says we’re likely looking at back-to-back rate cuts in October and December.

• Family business: Just how much money have the Trump family and their friends made from business dealings while Donald Sr. has been president? According to the investigative journalism site Whale Hunting, the total is over $3 billion, inlcuding $800 million by Trump sons Eric and Donald Jr.; $200 million by Kyle and Brandon Lutnick, the sons of  Commerce Secretary Howard Lutnick (including tariff refund agreements that are essentially bets on the tariffs Mr. Lutnick is in charge of); and Jared Kushner’s $2.75 billion cut of the Electronic Arts $EA ( ▲ 0.02% ) deal.

• Hill of bans: Apparently angered by U.S. tariffs, China is passing this year on its annual purchases of U.S. soy beans, which it usually buys to feed livestock and poultry, or convert into cooking oil and tofu. That’s left U.S. farmers afraid they’ll be saddled with rotting piles of worthless beans. Trump says he will act this week to help the growers, and is looking at adding another $10 to $14 billion to last December’s farm bailout. Trump’s pledged to fund that farm relief with revenue from tariffs. The whole thing is a little more complicated, though: One reason China’s not buying U.S. grain is because it can find it cheaper elsewhere. Where? Argentina. China’s announcement it’s buying 40 cargoes worth of soy from Argentina came just hours before U.S. treasury Secretary Scott Bessent said he’d agreed to buy $20 billion of Argentine bonds so its populist president Javier Milei, known as the Trump of Beunos Aires, could get out of yet another debt pickle. And why is Argentine grain suddenly so cheap? In order to raise the dollars it needs to pay off the bonds, Argentina suspended its export tariffs. “The painful reality may be that U.S. agriculture becomes the biggest casualty of the trade war,” wrote the trade publication Farm Progress.

• I’m the taxman: Not a lot of people seem to want to run the IRS. Treasury Secretary Scott Bessent, now acting commissioner, is the revenue service’s seventh boss this year. That changed this week, when former Fiserv CEO Frank Bisignano agreed to add CEO of the tax agency to his day job as head of the Social Security Administration. Bisignano has previously told associates that he took the job at Social Security to modernize the agency and avoid the headaches he’s seen his own family members experience, BBTW has learned. He could bring that approach to the IRS, but the agency is still reeling from the loss of 26,000 employees this year, and Bisignano’s been named in a class action lawsuit alleging that Fiserv “misled investors by artificially inflating its growth numbers,” by migrating clients from an older point-of-sale system to its updated Clover system, and claiming those were new signups. Fiserv denies the allegations.

• Taytay the Rock crusher: Taylor Swift’s 90-minute music video “The Official Release party of a Showgirl,” won the box office race last weekend, collecting $33 million at 3,702 theaters, while The Rock’s “Smashing Machine,” a $40 million action flick, was second, taking in only $6 million. Swift’s film, essentially a string of promos from her latest album, “The Life of a Showgirl,” filled its seats with practically no marketing, letting theater-owners know it was coming just two weeks before it opened, and running only for that one weekend.

Elon’s World

• Sleeping satellites: With some 8,000 Starlink satellites floating above our heads, there were bound to be some failures. But Smithsonian astrophysicist Jonathan McDowell says the MuskSats are falling out of the sky at the rate of one or two every day. The Starlink sats have lifespan of just five to seven years, meaning that by the time Elon Musk turns 60, nearly every satellite up there today will have crashed,  burned, and been replaced. SpaceX has launched more than 2000 satellites so far this year. 

• Severance: Musk edition — Musk has agreed to settle a lawsuit brought by four former Twitter executives he fired, and who claim they’re owed $128 million in severance and penalties. The settlement details haven’t been announced, but in August, Musk agreed to pay severance to 6,000 other Twitter employees he fired back in 2022.

• Chipping away: xAI is reportedly in talks to raise $20 billion from investors, including AI chipmaker Nvidia. Much like Nvidia’s deal last month with OpenAI, Nvidia’s investment will be used by xAI to help buy Nvidia chips for a Tennessee data center, according to press reports. The chips will also be used to secure the debt portion of the financing, worth about $12.5 billion. Musk is rushing to finish the data center, which has been dogged by a lack of both chips and electric power, and local opposition to numerous temporary natural gas-fueled generators to power the center. 

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Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.