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On Tuesday, tech firm Oracle$ORCL ( ▼ 6.02% ) announced one of the most transformative contracts in modern business history. OpenAI will pay Oracle $300 billion over five years to host AI applications on Oracle’s servers. The news sent Oracle shares up as much as 43%, and secured OpenAI’s ability to offer its large language models to clients. It’s also put Oracle founder and CEO Larry Ellison, now 81, just ahead of Elon Musk as the world’s richest man, according to Bloomberg. BBTW editor Peter Green sat down with AI consultant Lee Gaul, founder of Long Horizon AI Consulting, to understand the transaction.

Lee Gaul: Oracle! Like Obi-Wan Kenobi, this is a name I haven’t heard in years. But it makes a lot of sense: Companies are scrambling for what they call “more compute”, which means more servers on which to do their calculations. There are two competing ideas around the amount of compute that AI needs. Most commonly, when people hear about computers, they think of training these models. But it’s serving that AI that really is the name of the game.And it’s a real bottleneck for a lot of companies. There’s a limited number of real players out there, and the big three, Azure [Microsoft] $MSFT, Google Cloud $GOOG, and Amazon $AMZN Web Services, only have so much capacity.

OpenAI is buying, or essentially renting space in the Oracle cloud to run their AI models. So, when you make a call to ChatGPT, that is happening in the cloud on Azure.And now it’ll also happen with Oracle.OpenAI also uses Google, because they have to have that serving of that whole exchange with their chatbots on a massive cloud infrastructure. And that’s why it’s such a smart move for Oracle to get those big investments.

OpenAI uses the Azure cloud to train, to provide inference, or serve the product to their end users. They’ve been going to Google and now they’re going to Oracle, as well.

They’ve already got this capacity in place and with plans to continue to scale out the cloud infrastructure that they have. They’ve been shopping their capacity around and saying, look, we can support this amount and this capacity of cloud infrastructure and advanced AI processing capabilities today.They’re by no means building this up from scratch.

That’s the problem.The chips are only state-of-the-art for a year or so.So the data centers all have to be continually buying the most recent state-of-the-art chips.

I don’t think it’s in any way saving them from anything.Oracle is still ubiquitous and databases basically all run on Oracle, so that means that they’ve been quietly part of everyone’s tech stack in the enterprise for forever.Oracle had been overlooked as anything but a necessary evil. Now, they are able to say, hey, look, we have tons of advanced computing that we are ready to provide to all the cutting-edge AI systems out there. It’s all over Twitter and it’s all over the news, it’s been good for their brand.

This interview has been edited and condensed for brevity and clarity.

—Peter S. Green

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• It’s not just the milk that’s getting steamed at Starbucks  $SBUX ( ▼ 0.53% ) : Baristas at Starbucks’ 17,000 U.S. stores are finding new CEO Brian Niccol’s hyper-caffeinated charge to rebuild the brand’s reputation and bring back a welcoming coffeehouse environment to be a tall order, and they’re vente-ing to the New York Times. Making a six-step Strawberry Matcha Strato Frappuccino in under a minute while handling new orders, looking customers in the eye and scrawling thank you notes on cups is getting to be too much, one Barista told the paper. And it’s not working: July marked Starbucks’ sixth consecutive quarterly decline in same-store sales open for at least a year. Starbucks shares are down nearly 11% in the past year. 
• Oh thank heaven: Slurpees may no longer be the “Coolest thing on Earth.” 7-11’s Japanese parent company, Seven & i wants to spend $13 billion to improve its 13,000 U.S. stores, bringing the kind of prepared foods that make 7-11 a go-to pit stop in Japan. They’ve even talking about bringing their famous egg salad sandwiches, which the late chef Anthony Bourdain called “pillows of love.” They need to, because in the U.S., 7-11s are known more for late-night robberies than their food, and because after fending off a Canadian takeover, Seven & i’s share price is down 15% this year. 
• Coders of the World, Unite! Mark Zuckerberg’s AI hiring spree, and the 7- and 8-figure salaries that went with it have created a new class divide at Meta $META ( ▼ 0.09% ) . As the old programming elite becomes the proletariat of the AI era, their faded stars are growing resentful of the new elite, the Wall Street Journal gleefully reports. But some clever Meta employees have figured out how to play their employer: After receiving offers from rivals, they went back to Meta and got bigger offers and a chance to join the new cool club, the superintelligence lab known as the TBD Team. 
• iPhone Umpteen: Those slick folks at Apple $AAPL ( ▲ 1.58% ) have unveiled their latest piece of pocket candy, the iPhone Air, and while it’s not quite made of ether, it’s a third less thick than previous models and sells for, er, only $999. How many consumers will feel it’s time to upgrade is an open question, just as Apple needs help. Delays in releasing promised AI-powered devices and consumers who say they’re tired of paying for expensive upgrades helped shares drop 4.6% since the new product announcement Tuesday. They’re down 7% so far this year. 

• Keeping it Cracker: Not only will the Old Timer stay put on Cracker Barrel’s $CBRL ( ▲ 4.76% ) signs, but a move to declutter the chain’s restaurants and remove the kitschy Americana that gives the shops their identity, is also out the door. De-cluttered restaurants and a new menu didn’t bring in more customers, the firm said, so its sticking with what works. Shares are down 10% this year, though they are still up 34% in the past 12 months.
• Shoe Fly: Two of the greatest of NBA greats are battling for the wallets of Chinese consumers. Athletic footwear is a $33 billion market and growing in China, and LeBron’s Nike $NKE ( ▲ 0.05% ) sponsors and Steph’s Under Armour $UAA ( ▲ 0.8% ) brand have been giving their respective pitchmen tours of China to boost sales, which are falling against local brands. Nike’s China sales dropped 13% to $6.6 billion last year, and Under Armour’s Asia Pacific sales slipped 14% to $755 million. But local brand Anta $ANPDF ( ▲ 2.77% ) saw its total revenue jump 14% to $9.9 billion, with ad campaigns led by Kyrie Irving and Klay Thompson. 

• Hyundai is left High and Dry: The real story of the ICE raid on Hyundai’s $HYMTF ( ▼ 7.44% )  $5.5 billion Georgia Metaplant seems to be that foreign carmakers can’t find enough specialized U.S. workers to build their high-tech plants, and when they turn to their home-country employees, they can’t get the visas they need in time. President Trump has promised to make it easier to get those visas, but the U.S. still needs to tackle job training. The industry says 67,000 jobs will go unfilled unless the U.S. beefs up job training programs. Without Americans or foreigners to fill those jobs, South Korea’s promised $350 billion in investments and hundreds of billions more from other countries may never happen. 
• Beemer Up? BMW $BMWYY ( 0.0% ) and Mercedes $MBGAF ( ▲ 0.57% ) are putting the heat on Tesla $TSLA ( ▲ 5.88% ) with new luxury SUVs to take on the aging Model Y. Why not? Mercedes GLC and BMW’s iX3 go farther and charge faster than the Model Y, but the higher prices ($80,000 for the electric Beemer) will test consumer appetites. 
• Crazy for Copper: As AI and electric cars promise a future of unmatched productivity and prosperity, one element will be in demand: Copper. With supplies stable, prices for copper are expected to rocket. Now, U.K.-based mining giant Anglo-American $AAUKF ( ▲ 0.93% ) is proposing a $53 billion merger with Canada’s Teck Resources $TECK ( ▲ 3.02% ) . Another impetus: As the Russian invasion of Ukraine has pushed NATO states to increase defense spending, a lot more copper will be going into bullets and shell casings.

• The numbers game: The last time a bad bunch of employment data came in, President Trump fired the head of the agency that collects the data. Now, annual revisions to the jobs, data, based more on hard data and less on surveys, shows employers added 911,000 fewer jobs than had been assumed, from March 2024 through March 2025. Thats a 52% shortfall. For Trump, it’s a double-edged sword. It shows his economic policies have failed to create many new jobs, but it bolsters the case for a rate cut, which has sent markets up this week.
• Ken Griffin breaks his silence: U.S. businesses have been remarkably silent as President Trump has attacked the independence of the Federal Reserve. Now Trump supporter Ken Griffin, the founder and CEO of hedge fund firm Citadel, has taken to the conservative opinion pages of the Wall Street Journal to warn Trump to keep his hands off Fed chair Jerome Powell. “The president’s strategy of publicly criticizing the Fed,” wrote Griffin, “carries steep costs. These actions raise inflation expectations, increase market risk premiums, and weaken investor confidence in U.S. institutions.”
• “I’m Gonna Punch You in Your _____ Face”: Last month, Trump’s housing finance chief, Bill Pulte, whose family of homebuilders also offers financing for the tract houses they build, accused Fed governor Lisa Cooke of mortgage fraud for allegedly claiming two different homes with government-backed mortgages were both her primary residence. Pulte hasn’t shown any evidence. Now, Fed watchers are reaching for the popcorn. First, a Federal judge ruled that Trump’s ouster of Cooke may have been illegal, since the alleged fraud would have taken place before Cooke began her term on the Fed. Then, Reuters dug into public records and found that Pulte’s dad, Mark, claimed homes in both Michigan and Florida as his primary residences, the same allegation Pulte junior made against Cooke. Then Treasury Secretary Scott Bessent, who was suspected of having given Elon Musk a black eye, confronted Pulte over reports the housing scion had been badmouthing him to Trump. “Why the ___ are you talking to the president about me? ____ you,” Bessent told Pulte at   dinner with Trump. “I’m gonna punch you in your _______ face,” Politico reported he said. Bessent also offered to “go outside.” “To do what?” asked Pulte, “to talk?” No, Bessent replied. “I’m going to ________ beat your ___.”
• Tariffs: So what happens when the Supreme Court finally rules on whether Trump’s tariffs are legal? Economists and businessowners note that U.S. companies have been absorbing most of the tariffs so far, fearful that passing on the added costs would scare away consumers. That means that killing the tariffs would be like a massive tax cut for business. “You would be doing a tax cut,” Alex Durante, an economist at the Tax Foundation told the New York Times. “You would be undoing a tax increase, and you would provide relief to lots of businesses and consumers.” 

• Trillions and Trillions: If Elon Musk can increase Tesla’s$TSLA ( ▲ 5.88% ) share price eight-fold over the next decade, he could collect nearly $900 billion, the world’s largest incentive pay package ever, and become the world’s first trillionaire. That’s what Tesla’s board is proposing to shareholders. To do that he’d have to raise Tesla’s market cap to $8.5 trillion, but it would leave him with nearly 29% of the company. He could only cash in after 7 ½ years, and would have to stay 10 years for the full payout.And then there are the targets: deploy 1 million autonomous taxis and a million humanoids, and boost profit 24-fold. Tesla’s board says it’s the only way they can keep Musk’s full attention on the company.But as BBTW discussed recently, keeping Musk’s eye on the ball has become increasingly difficult. Meanwhile, the median salary for a Tesla employee was $57,000 last year.

The Federal Trade Commission has launched an inquiry into several social media and artificial intelligence companies about the potential harms to children and teenagers who use their AI chatbots as companions.

The FTC said Thursday it has sent letters to Google parent Alphabet, Facebook and Instagram parent Meta Platforms, Snap, Character Technologies, ChatGPT maker OpenAI and xAI.

The FTC said it wants to understand what steps, if any, companies have taken to evaluate the safety of their chatbots when acting as companions, to limit the products’ use by and potential negative effects on children and teens, and to apprise users and parents of the risks associated with the chatbots.

EDITOR’S NOTE — This story includes discussion of suicide. If you or someone you know needs help, the national suicide and crisis lifeline in the U.S. is available by calling or texting 988.

The move comes as a growing number of kids use AI chatbots for everything — from homework help to personal advice, emotional support and everyday decision-making. That’s despite research on the harms of chatbots, which have been shown to give kids dangerous advice about topics such as drugs, alcohol and eating disorders. The mother of a teenage boy in Florida who killed himself after developing what she described as an emotionally and sexually abusive relationship with a chatbot has filed a wrongful death lawsuit against Character.AI. And the parents of 16-year-old Adam Raine recently sued OpenAI and its CEO Sam Altman, alleging that ChatGPT coached the California boy in planning and taking his own life earlier this year.

Character.AI said it is looking forward to “collaborating with the FTC on this inquiry and providing insight on the consumer AI industry and the space’s rapidly evolving technology.”

“We have invested a tremendous amount of resources in Trust and Safety, especially for a startup. In the past year we’ve rolled out many substantive safety features, including an entirely new under-18 experience and a Parental Insights feature,” the company said. “We have prominent disclaimers in every chat to remind users that a Character is not a real person and that everything a Character says should be treated as fiction.”

Meta declined to comment on the inquiry and Alphabet, Snap, OpenAI and X.AI did not immediately respond to messages for comment.

OpenAI and Meta earlier this month announced changes to how their chatbots respond to teenagers asking questions about suicide or showing signs of mental and emotional distress. OpenAI said it is rolling out new controls enabling parents to link their accounts to their teen’s account.

Parents can choose which features to disable and “receive notifications when the system detects their teen is in a moment of acute distress,” according to a company blog post that says the changes will go into effect this fall.

Regardless of a user’s age, the company says its chatbots will attempt to redirect the most distressing conversations to more capable AI models that can provide a better response.

Meta also said it is now blocking its chatbots from talking with teens about self-harm, suicide, disordered eating and inappropriate romantic conversations, and instead directs them to expert resources. Meta already offers parental controls on teen accounts.

WASHINGTON (AP) — The Trump administration has asked an appeals court to remove Lisa Cook from the Federal Reserve’s board of governors by Monday, before the central bank’s next vote on interest rates.

The request represents an extraordinary effort by the White House to shape the board before the Fed’s interest rate-setting committee meets next Tuesday and Wednesday. At the same time, Senate Republicans are pushing to confirm Stephen Miran, President Donald Trump’s nominee to an open spot on the Fed’s board, which could happen as soon as Monday.

Trump sought to fire Cook Aug. 25, but a federal judge ruled late Tuesday that the removal was illegal and reinstated her to the Fed’s board. Trump has accused Cook of mortgage fraud because she appeared to claim two properties as “primary residences” in July 2021, before she joined the board. Such claims can lead to a lower mortgage rate and smaller down payment than if one of them was declared as a rental property or second home. Cook has denied the charges.

On Tuesday, U.S. District Court Judge Jia Cobb ruled that the administration had not satisfied a legal requirement that Fed governors can only be fired “for cause,” which she said was limited to misconduct while in office. Cook did not join the Fed’s board until 2022.

In their emergency appeal, Trump’s lawyers argued that even if the conduct occurred before her time as governor, her alleged action “indisputably calls into question Cook’s trustworthiness and whether she can be a responsible steward of the interest rates and economy.”

The administration asked an appeals court to issue an emergency decision reversing the lower court by Monday. If their appeal is succesful, Cook would be removed from the Fed’s board until her case is ultimately resolved in the courts, and she would miss next week’s meeting.

If the appeals court rules in Cook’s favor, the administration could seek an emergency ruling from the Supreme Court.

Either way, the Fed is expected to cut its benchmark interest rate next week by a quarter-point to about 4.1%. When the Fed reduces its key rate, it often, over time, lowers borrowing costs for mortgages, auto loans, and business loans. Some of those rates have already fallen in anticipation of cuts from the Fed.

Should Miran, a top economic adviser to Trump, win approval in time to join the Fed next week, he could push for a steeper half-point reduction to the Fed’s rate.

Yet there are 12 officials who vote on whether and by how much to cut, including the seven members of the Fed’s board as well as five of the Fed’s 12 regional bank presidents, who vote on a rotating basis.

Trump’s two other appointees to the Fed — Christopher Waller and Michelle Bowman — might also support a half-point cut, but several of the Fed’s bank presidents have expressed concern about stubbornly elevated inflation and would almost certainly oppose such a large reduction.

If the Fed approves a quarter-point cut, it is possible there could be dissenting votes both from officials who preferred no cut and from those who support a half-point.

Ever since Disney paid $4 billion for the Marvel franchise in 2009, their movies have been making less and less money. What’s going on? It turns out the problem has been baked into Marvel’s writing culture from the start. The old fashioned “Marvel method” of writing comic books has the writer provide a summary of the story to the artist, who then draws the entire issue. When the art is complete, the writer goes in and adds the dialogue.

Lately, Marvel Studios production has worked more and more in the same way. Production will start even if the script isn’t finalized, and the filmmakers, like the artists of Marvel comics, are expected to fill in the details while they’re shooting. As you can imagine, that’s financially risky. Every second on set for a blockbuster production costs millions of dollars, so waiting around as the directors or actors or on-set writers try to figure out what should happen next causes budgets to balloon.

As the budgets rise, the margins for profitability become slimmer and slimmer. “Captain American: Brave New World” cost $300 million including marketing to make, and made $415 million worldwide. “Thunderbolts” cost $280 million including marketing to make, and made $380 million worldwide. The two movies are being described as “flops” by industry commentators, and the trend seems to only be getting worse as cast members of “Avengers: Doomsday” report that they don’t know who they’re in scenes with because they were shot individually on green screens so that the directors can piece scenes together later. No wonder the upcoming crossover movie was delayed from May to December.

Director James Gunn watched this happen first hand when he worked on the “Guardians of the Galaxy” trilogy for Marvel, so it’s no wonder when he launched DC Studios with Peter Safan he instated the rule that no project will start production until there is a finished script everyone is happy with. “Superman,” for example, made $614 million worldwide for DC Studios against reported production and marketing budgets between $200 and $300 million. The simple lesson seems to be that you want to prioritize good writing before you begin production on a big-budget movie. But will Marvel’s owner, Disney, ever learn?