Microsoft is restructuring its Xbox gaming division, closing the studios Ninja Theory and Compulsion Games, and internally reviewing options such as a spin-off, joint venture, or tighter subsidiary structure. The restructuring aligns Xbox decisions with margin accountability, hardware cost trends, and a broader focus on AI partnerships and new Surface devices. The moves come as investors assess recent class-action lawsuits and evaluate how gaming fits alongside Microsoft's core business.
U.S. stocks closed mixed on Tuesday: the Dow rose ~0.66% for a second straight record, while the S&P 500 fell >0.5% and the Nasdaq dropped >1%. Shares of recently IPO’d SpaceX surged nearly 5%, briefly valuing the company above Microsoft and Amazon amid heavy retail buying. Amol Dhargalkar of Chatham Financial warned that high-growth AI-related stocks face risks from rising or sustained interest rates that pressure long-dated cash flows. In deal news, Olin agreed to acquire Huntsman in a $2.4 billion all-stock transaction, sending both stocks lower; Yum Brands announced a $2.7 billion sale of Pizza Hut, lifting its shares against a backdrop of softer consumer spending.
AI data centers and hardware suppliers are increasingly tapping debt markets to fund the large-scale build-out of artificial intelligence infrastructure. This trend reflects the capital-intensive nature of the AI industry as companies seek to scale computing capacity. Debt financing allows these firms to accelerate construction and equipment purchases without immediate equity dilution.
SpaceX's shares surged 20% on Monday, its third day of trading. This one-day increase in market valuation was the second-largest ever recorded for a U.S. company. The jump underscores strong investor appetite for the rocket and AI company following its recent public listing.
The Trump administration is intensifying its clamp down on private AI developer Anthropic. The company pulled its Claude Mythos and Fable 5 models from the market in response to government demands. These demands aimed to restrict AI product access by foreign governments. The action signals a stricter U.S. stance on controlling the export of advanced AI technologies.
Databricks announced that its data warehouse business has reached a $1.5 billion annualized run rate, more than doubling over the past year. The growth was driven by rising demand for AI workloads and customers migrating from competing platforms. The milestone underscores Databricks' expanding footprint in the cloud data and AI market.