—By Peter S. Green

All it took was a gentle nudge for tech markets to fall significantly. When Anthropic introduced some new plug-ins last week for its AI code-writing bot Claude Cowork, it didn’t seem like a big deal. Well, that was until users tried it. In a few hours, Claude was able to write better code to replace much of the work done by existing software used for legal, sales, marketing, and data analysis. By Tuesday, markets were in the throes of a full-scale SaaS-pocalypse, as software service providers and traders saw that AI might just replace a lot of Saas products.

On Tuesday, London Stock Exchange Group $LNSTY which has a large data analytics business, fell 13%, Thomson Reuters $TRI, which owns Westlaw, dropped 16%, and LegalZoom $LZ plummeted 20%. The shock is lingering. The S&P Software index is down 10% in the last five days and has yet to recover.

The AI fallout hasn’t been limited to software stocks. Nvidia’s $NVDA loose announcement that it probably, maybe, wasn’t gonna blow an entire $100 billion for a stake in OpenAI after all raises some questions for Oracle $ORCL, which last year announced a multi-year $300 billion contract to lease data centers to…OpenAI. Oracle borrowed a lot of money to start building out the data centers, but OpenAI says it’s about four years away from becoming cash-flow positive, and without the Nvidia investment to prime the AI pump, the whole circle of financing could spin to a stop. Oracle is already down 57% since its September high, which could mess up plans for a $20 billion stock issue this year.

Commentators have hardly been sanguine about the flow of market news.

Alternative stores of value also took a hit. Silver plummeted from a Jan. 29 high of $121 to a Wednesday low just above $75. Bitcoin $BTC is dropping faster than a mobster’s victim wearing concrete boots. It plunged from an October high of $126,000 to about $65,000 as of Thursday. That’s a disaster when it costs about $87,000 to mine a single bitcoin, today. One big concern is the large stake of Bitcoin amassed by billionaire Michael Saylor in Strategy (originally MicroStrategy) $MSTR, a business intelligence software company. Strategy holds 713,502 bitcoin it bought for a total of $54.3 billion, at an average price of around $76,000. That’s an unrealized loss of over $7 billion at today’s price, and if Saylor dumps the coin to cut his losses, it could rock the crypto market. Saylor had just one word for the market on Thursday: “HODL.”

“HODL” is a crypto term that’s come to mean “Hold on for Dear Life.” Strategy is down 70% in the last 6 months and fell 15% on Thursday.

How low could Bitcoin go? Famed short trader Michael Burry says that since crypto hasn’t become a means of exchange for anyone or anything, it could go to zero. “There is no organic use case reason for Bitcoin to slow or stop its descent,” he said in a Substack post reported by Bloomberg on Monday.

Big businesses mentioned this week

$LNSTY ( ▲ 0.3% ) $TRI ( ▼ 5.61% ) $LZ ( ▲ 2.03% ) $NVDA ( ▼ 1.33% ) $ORCL ( ▼ 6.95% ) , $BTC ( ▼ 13.74% ) ,$MSTR ( ▼ 17.12% ) ,$DIS ( ▼ 1.94% ) ,$GOOGL ( ▼ 0.54% ) ,$AMZN ( ▼ 4.42% ) ,$WLFI ( ▼ 17.63% ) ,$AAPL ( ▼ 0.21% ) ,$PEP ( ▲ 0.81% ) ,$RDFN ( ▼ 0.36% ) ,$PYPL ( ▼ 2.75% ) ,$HPE ( ▼ 2.28% )

The usual suspects

• There’s a new mouse running the house: For the second time in six years, Disney $DIS CEO Bob Iger has handed over the keys to the Magic Kingdom to a successor. The company’s board and shareholders are hoping that this time it sticks. Disney theme parks boss Josh D’Amaro will be the new CEO, taking over on March 18. Disney’s board has been interviewing successors to Iger since 2024, focused mainly on the four horsemen running Disney’s operating divisions. D’Amaro beat out ESPN Chairman Jimmy Pitaro, and Entertainment co-chairs Dana Walden and Alan Bergman. Disney is facing a clouded future. Despite beating Wall Street expectations on quarterly earnings on Monday, shares in the world’s largest entertainment conglomerate fell 7%. Even theme park growth in the Middle East can’t offset the chill investors feel as traditional linear TV watching declines, making Disney work harder and spend more to reach its audiences. Iger passed the magic wand to Bob Chapek in 2020, but in less than two years, the board called Iger back, troubled by Disney’s share price and massive revenue fall when parks, movie theaters, and cruises all shut during the Covid pandemic. Iger’s not going far. He’ll stay on the board until the end of the year. The inevitable message to D’Amaro? Don’t get too comfortable.
• Pepsi’s Challenge: Cheaper Cheetos? PepsiCo $PEP is hoping to get some of the mojo back in its snack division by cutting prices as much as 15% on potato chips and other snack foods. That’s after the company said it received a flood of emails and phone calls from consumers complaining about the rising price of its food. Pepsi and other firms saw the pandemic as an excuse to raise prices and boost profits, and the cost of salty snacks shot up 38% between 2020 and 2024, a survey showed. It’s not clear if Pepsi will cut wholesale prices or just tell retailers to ask for less, but the move comes after activist investor Elliott Investment Management in December forced Pepsi to cut costs. The firm has lost value this year while rival Coca-Cola $KO is up 10%.
• 1+1+1 = ? Call it the Triple-X play: Elon Musk said this week he’s merging SpaceX with xAi and X, the social media site formerly known as Twitter. How does it all come together? The move could value the combined company at $1.25 trillion, and comes ahead of an expected IPO in June that reports say would raise $50 billion, mostly to build 1 million orbiting AI data centers that would use solar power to beam their work back to earth. It would also let SpaceX develop moon-launched rockets to other planets. Musk wrote in an FCC filing that the satellite network would be the first step to a “Kardashev-II level civilization” that harnesses the sun’s energy. For those of us in the back, that’s a hypothetical stage of technological advancement in which a civilization can directly consume the entire energy output of its host star. The merger would also let SpaceX, which has shown positive cash flow, funnel some money into xAI, which is struggling to catch up with rivals Anthropic and OpenAI. And if Musk runs the orbiting data centers and the AI that powers them, he could set up an Apple-like $AAPL moat, owning the hardware and the operating system. While it looks like the planned IPO is wildly overvalued, and investors who buy in may just lose their shirts, one person has done well with all of the financial engineering: Elon Musk. His net worth jumped $84 billion to $852 billion after he merged his two companies.

The short stack

• House Party: Maybe it’s finally a good time to buy a house? Home buyers are gaining leverage and bringing down prices, according to new data from brokerage and data provider Redfin $RDFN. Last year, 62% of buyers purchased a home below the asking price, the highest rate since 2019,and at an average discount of 8%. Redfin estimates there are 41.7% more sellers than buyers - in other words, nearly twice as many people want to sell their homes as there are potential buyers. That lets buyers turn the screws on sellers to lower the price of a home. But with mortgage rates still above 6% (6.19% last week, says Bankrate), of course, it’s only a buyer’s market for those who can afford to buy.
• Epsteined: Brad Karp, chairman of the largest U.S. law firm, Paul Weiss, was ousted Wednesday over his ties to sex-offender Jeffrey Epstein, by a group of senior partners who call themselves the “Deciding Group,” the Wall Street Journal reports. There’s no evidence Karp was involved in any of Epstein’s illegal activities, but he kept in touch long after Epstein’s sex crime conviction, and reviewed a plea-bargain deal for Epstein. The firm’s number two, Scott Barshay, broke the news to Karp. If all this sounds a bit like a putsch, it probably was. Karp led the firm to bow to Donald Trump’s 2025 demand that law firms help him on a pro bono basis, or be blocked from doing business with the government. Paul Weiss’ agreement paved the way for several other large law firms to abandon anti-Trump clients and promise hundreds of millions of dollars in work for clients selected by Trump. Dozens of top litigators left the firm after Karp’s accord.
• PayPal Plummets: PayPal $PYPL, the original online payment company, just can’t stop the markdowns. News that the board had replaced the firm’s CEO and expected to make less money this year sent shares plummeting 20% on Wednesday, pushing them down 50% for the year and 84% in the last five years. That’s quite a comedown for the company that literally invented online payments as part of eBay back in the early decades of this century. Former HP $HPE CEO Enrique Lores will replace Alex Chriss as CEO, effective March 1. What happened? Apple $AAPL and GooglePay $GOOGL on the consumer side, and payment platforms including Square and Plaid on the business side, ate PayPal’s market. Former PayPal CEO David Marcus shared his thoughts in a l-o-o-o-ng X post, saying the company made “a fundamental miscalculation” by ignoring what made it unique. “It is optimized for payment volume instead of margin and differentiation. It leaned into unbranded checkout, where PayPal had the least leverage, instead of branded checkout, where the margin, data, and customer relationship actually lived,” he wrote.
• Farm Around and Find Out: President Trump’s policies are threatening the “widespread collapse” of U.S. agriculture, a bipartisan group of farmers and former agriculture officials wrote to Congress this week. The farmers said Brazil is gobbling up export markets for soybeans, chicken, wheat, and beef, while U.S. farmers face new trade obstacles and higher costs. “Barely half of all farms will be profitable this year,” the letter said, as the U.S. runs a historic agriculture trade deficit, reversing record farm export surpluses and farm incomes during the Biden Administration. Who’s to blame? “The current Administration’s actions, along with Congressional inaction, have increased costs for farm inputs, disrupted overseas and domestic markets, denied agriculture its reliable labor pool, and defunded critical ag research and staffing,” the letter said. They want funding cuts restored, new trade deals approved by Congress, and HB-2 visas for farmworkers.
• Google it: A googol, the word that inspired the name of the tech company we all know as Google $GOOG, is the number 10, followed by 100 zeroes. And that’s almost how much money Google made last year (give or take a few zeroes), as AI supercharged its ad and cloud computing businesses. Google parent Alphabet reported an 18% jump in Q4 revenue and said it will double spending on AI this year. That led to a record $403 billion in sales in 2025, and a profit of $132 billion. Alphabet’s shares rose 65% last year. But Google’s success in monetizing its AI investments means it likely has a lot of room to grow further, analysts say.
• AI Ad wars take over the Super Bowl: AI snark will hit a whole new level at the Super Bowl, where Anthropic plans to air an ad skewering rival OpenAI’s ChatGPT for planning to place (wait for it) advertisements in its chats. Anthropic said Clauide won’t become an ad vehicle, the way most search engines have. “Claude is a place to think,” Anthropic wrote in a blog post. “Our users won’t see ‘sponsored’ links adjacent to their conversations with Claude; nor will Claude’s responses be influenced by advertisers,” it added. OpenAI is planning its own Super Bowl ad, and in the meantime, OpenAI chief Sam Altman smacked back at Anthropic. “I guess it’s on brand for Anthropic doublespeak to use a deceptive ad to critique theoretical deceptive ads that aren’t real,” Altman wrote, sounding like he might have been protesting too much. Ad spending by AI companies is huge. AI firms collectively spent $333.6 million on linear TV ads promoting their chatbots last year, up 43% from 2025, and $426 million on digital ads in 2025. Both firms need to find a way to make money. Anthropic, backed by Alphabet $GOOG and Amazon $AMZN, says it will be cash-flow positive by 2028. OpenAI is setting 2030 as its turnaround date.

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Trumplandia

• The Spy Sheikh: It sure helps to have friends in high-net-worth places. Just days before his 2025 inauguration, Donald Trump’s family crypto business got a $500 million investment from Abu Dhabi’s national security adviser, and $187 million of the cash went to Trump family entities, the Wall Street Journal reports. A few months later, Abu Dhabi gained access to highly sensitive AI computer chips, a deal opposed by U.S. national security specialists who feared China could obtain the chips through a joint venture between Huawei and the UAE. Sheikh Tahnoon bin Zayed Al Nahyan’s 49% stake in World Liberty Financial $WLFI also sent $31 million to Trump’s Middle East envoy Steve Witkoff and his family, according to the Journal. The news follows a New York Times investigation showing President Trump has made an additional $1.4 billion while in office. Trump’s biggest fan, Sen. Elizabeth Warren (D-MA), wasn’t thrilled about the story, Tweeting that it represents “corruption, plain and simple.”
• Apprentice Fed Chair Edition, The Final Episode: Who the heck is Kevin Warsh, the guy who beat out three people, including the Other Kevin, for the dubious privilege of becoming the next Fed chair? Well, for one thing, he’s the son-in-law of Trump ally and billionaire Ronald Lauder, 81, who reportedly originally urged Trump to buy Greenland for its mineral wealth, and reportedly is already doing business there. But what will Warsh do? A college friend told the New York Times that Warsh can “get a job done.” Trump said the 55-year-old attorney is “straight out of central casting.” But really, it all comes down to one thing: Can he preserve the Fed’s independence and maintain investors’ faith in the U.S. economy? That’s not a sure thing, when Trump has threatened to remove current Fed chair Jerome Powell for not cutting interest rates fast enough. Warsh served as a Fed governor from 2006 to 2011 and helped broker the sale of failed investment bank Bear Stearns to JPMorgan Chase $JPM when the subprime mortgage market collapsed in 2008, a key to preventing economic collapse. But is he going to lower interest rates? Warsh has been a hawk, arguing for higher rates to keep inflation in check. Trump said after nominating Warsh that he had not gotten a commitment to cut rates, but said, “He certainly wants to cut rates. I’ve been watching him for a long time.” Ethan Harris, a former economist at the New York Fed, said Warsh won’t have much immediate influence over rate decisions. “He comes to the FOMC with a huge credibility problem and will have to earn their trust. Hence, Fed policy will continue to be driven by the economic views of the majority of the Committee, regardless of where Warsh lands,” Harris wrote in a blog post.

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