GEOPOLITICS

Buffett Plots Retirement

Famed investor Warren Buffett will step down as CEO of Berkshire Hathaway by the end of the year. The 94-year-old made the announcement at the company’s annual shareholder meeting, a widely anticipated event referred to as the “Woodstock of Capitalism” (see overview). Buffett seeks to install Greg Abel, vice chairman of noninsurance operations, as his replacement.

born and raised (and still residing) in Omaha, Nebraska, Buffett took the lead at Berkshire Hathaway-then a struggling textile company-in 1970. Since then the company has grown into a wide-ranging conglomerate with controlling shares in roughly 70 companies. Known for his dedication to value investing (which emphasizes finding undervalued stocks), the company has delivered average returns of almost 20% since Buffett took over.More recently, the company has stockpiled cash, with close to $350B on hand.

Interest Rates Unchanged

The Federal Reserve held benchmark interest rates steady yesterday for the third consecutive meeting, at a range of 4.25% to 4.5%. The central bank gave no indication of plans to lower rates in the coming months, rebuffing a call from President Donald Trump to spur economic activity with rate cuts .

Federal Reserve Chair Jerome Powell signaled uncertainty about the direction of the US economy amid the recent spate of tariffs (see tracker here). Powell seemed undecided on wether to prioritize tackling stubborn inflation with higher rates, or to lower rates in anticipation of a predicted economic slowdown. Inflation is expected to reach 3% this year, above the bank’s goal of 2% ; the US gross domestic product contracted by 0.3% last quarter.

Distrust Shadows U.S.-U.K. Trade Deal Amid Trump's Unpredictable Trade Policies

The United States and the United Kingdom recently announced a new trade agreement aimed at lowering tariffs on key goods such as automobiles, steel, aluminum, and agricultural products. However, a recent POLITICO-Public First poll reveals widespread skepticism about the deal’s durability, driven largely by distrust of President Donald Trump.

While a majority of American and British adults support reaching a trade agreement, only 44% of Americans and less than one-third of Britons believe Trump would honor it. Nearly half of Americans, including a significant portion of his own voters, view Trump's unpredictability as the primary obstacle to successful negotiations.

The agreement comes amid growing concerns that Trump’s aggressive and erratic use of tariffs is damaging U.S. credibility internationally, with a rising number of Britons—particularly younger generations—viewing China as a more reliable trading partner. Although Trump heralded the deal as a major success, critics warn that his tariff policies may continue to push traditional allies toward closer economic ties with China.

The trade deal, while offering tariff relief for certain sectors, notably leaves major trade issues unresolved, underscoring the fragile trust underpinning U.S. trade diplomacy as broader global negotiations with China remain uncertain.

Science & Technology

OpenAI retains nonprofit control in surprise move

OpenAI just announced it will maintain nonprofit control as it transitions its business arm into a public benefit corporation(PBC), marking a major reversal of its polarizing previous plans to become a fully for-profit entity.

• The existing for-profit LLC will now transition into PBC, a structure used by other mission-driven companies like Anthropic and Patagonia.

• Unlike previous considerations, the founding nonprofit organization will become a major shareholder and retain governance control over new PBC.

• the move comes amid pressure from civic groups and former employees and a lengthy legal battle with Elon Musk over the original non-profit mission.

• Sam Altman detailed the decision to employees, saying the move will allow OAI to secure “trillions” to deliver beneficial AGI to the world.

After months of lawsuits and protests, OpenAI is backtracking on its for-profit ambitions. The PBC looks to thread a needle between the startup’s original nonprofit mission and the massive capital needed to create AGI though it remains to be seen what this means for capital that was reportedly contingent on a for-profit turn.

AI Leaders Push For Looser Regulations

Tech execs from OpenAI, Microsoft, AMD, and CoreWeave testified before the Senate Commerce committee, calling for reduced regulations, improved infrastructure, and expanded market access to help the U.S. keep its AI lead over China.

OpenAI CEO Sam Altman characterized AI as potentially “bigger than the internet,” urging lawmakers to support critical infrastructure investments.

Microsoft’s Brad Smith warned that U.S AI chip export restrictions could push customers toward Chinese alternatives, hurting global adoption of U.S. tech.

AMD CEO Lisa Su also warned that strict export controls could backfire, saying other technologies will “come to play” if American option aren’t availeble.

The executive united on calls to boost federal AI R&D , improve AI workforce skills, modernize the electric grid, and streamline permitting.

The AI race is being positioned as a broader battle for supremacy between the U.S. and China, and tech giants see overregulation as a barrier to moving fast enough to maintain the lead. The balance between pro-innovation policies, safety risks, and global power dynamics is a complex needle to thread.

Alibaba’s ZeroSearch teaches AI to search solo

Alibaba researchers introduced ZeroSearch, a technique that teaches AI systems to search for info without using real search engines - cutting training costs by 88% while matching or outperforming the models trained with actual search APIs.

ZeroSearch removes the need for expensive search engine API calls during training by using an LLM to simulate search results.

A “curriculum-based rollout strategy” gradually lowers the quality of these simulated documents, progressively challenging AI to refine its reasoning.

The approach avoids the API costs and unpredictable document quality associated with training AI on live commercial search engines.

In testing, ZeroSearch was able to match or outperform models trained with real search engines, while reducing costs by nearly 90%.

As we’ve seen in robotics, using simulations for training data is proving to be both an effective and cheaper option. Techniques like ZeroSearch could eliminate a major financial barrier for smaller labs competing with tech giants, while also giving better control over how models learn to find and process information.

>Researchers demonstrate quantum communication network over a distance of 11 miles using single photons and conventional fiber optics, marking a step forword in realizing “unbreakable” quantum encryption (More)

>Engineers develop electronic “Band-Aid” capable of delivering drugs directli to internal organs; battery-free device may provide a platform for advanced health monitoring and therapies (More)

>Astronomers discover first example of an “off-center” massive black hole consuming a star; object is located roughly 2,600 light-years from Sagittarius A*, the massive black hole at the center of Milky Way (More)

Market view

Bitcoin dominance has broken through the 65% level, continuing an upward trend that began in late 2022. It continues to climb, potentially heading toward 66% or higher.

BTC Dominance

The primary driver of the current trend is the prevailing monetary policy environment. Despite recent interest rate cuts, monetary conditions remain tight, with quantitative tightening (QT) still underway. Although the Federal Reserve has slowed the pace of QT, monetary policy remains restrictive—less severe than before, but still not supportive enough to fuel a strong altcoin rally.

For altcoins to outperform Bitcoin, a significantly more accommodative monetary policy is required. At present, the Federal Funds rate likely remains above the neutral rate (R*), maintaining pressure on economic growth. This is reflected in the negative real GDP growth reported in Q1, indicating an economy under strain.

Historically, true "alt seasons"—periods where altcoins substantially outperform Bitcoin—are rare and short-lived, often lasting only 3–4 weeks within a typical four-year cycle. Despite their brevity, these periods leave a lasting impression, leading many investors to spend the remaining 35+ months anticipating another alt season that rarely materializes.

A crucial aspect often overlooked is evaluating a portfolio in terms of Bitcoin (Satoshi valuation), rather than USD. While investors may celebrate a 10x increase against USD, they often fail to realize that Bitcoin may have appreciated 20x in the same period, meaning holding Bitcoin would have been more profitable and less risky.

Investors who accumulate altcoins during Bitcoin dominance uptrends typically require a strong alt season just to recover their Satoshi valuations. Moreover, by the time such a season occurs, the specific altcoins they hold may have lost relevance, replaced by newer narratives and projects.

From a broader market perspective, the combined dominance of Bitcoin and major stablecoins (USDT and USDC) currently stands around 72%. In previous cycles, this figure peaked between 74–75% before monetary policy shifted away from tightening, suggesting there may still be room for Bitcoin dominance to grow further before conditions change.

When excluding stablecoins, Bitcoin dominance is currently around 69.1%, approaching but still below the 72% level seen when QT ended in the previous cycle. This indicator eventually peaked at 74% in that cycle, suggesting Bitcoin's market share could potentially grow by another 4-5 percentage points in the current environment.