Elon Musk Takes a Hit From His Brainchild, While Durov Attracts $1.7 Billion

The most interesting finance and tech news from Russia and around the world this week: Telegram (reportedly) integrates Grok, Musk leaves government service, a court bans Trump's tariffs, the Central Bank allows "qualified investors" to dabble in crypto, the UAE gives ChatGPT to all its residents, and in China, robots went at it in a boxing match.

Telegram is Doing Well (in principle)

🐌 Pavel Durov announced that Telegram has supposedly agreed to a year-long partnership with Grok – Elon Musk's xAI chatbot. The Grok AI bot will be pinned in the chat list for all users. You'll be able to ask it questions from the search bar, it can summarize unread messages (useful for work chats), fact-check posts in channels, and much more. Durov promises that user privacy won't be compromised – xAI will only have access to data that users explicitly share.

So, now the annoying "Grok, is this true??" Twitter queries will also be in all Telegram chats.

For the deal, Telegram is expected to receive $300 million in cash and shares from xAI, as well as 50% of the revenue from Grok subscriptions sold through the messenger. However, Elon Musk unexpectedly showed up on Durov's announcement on Twitter and said that "no deal has been signed," prompting Pasha to justify himself and write that, formally, the deal isn't closed yet, but "an agreement in principle has been reached."

One day, Petya comes and says, "Vasily Ivanovich, what does 'agreed in principle' mean?"

🐌 Well, it's generally clear why Durov was in a hurry to announce: almost immediately, Telegram announced the successful attraction of $1.7 billion through the issuance of new bonds. More than $950 million of this will go to repay past bonds issued in 2021. The new debt is promised to be repaid by 2030 with an annual yield of 9%.

Musk of the Week: A Bit of Domestic "Punching"

🐌 Elon Musk announced that he is leaving government service. His 130-day term as a "special government employee" expired on May 30 (one cannot work in such a position longer by law). At a press conference, Donald Trump stated that Musk "will be coming and going" (in general, always be around) and gave him a golden key to the White House. So, in a sense, is Trump cosplaying Karabas-Barabas here, and Musk – Buratino? 🤔

American Panorama: "Elon Musk leaves government efficiency work to focus on the easier task of populating Mars with humans."

🐌 By the way, Elon showed up at the ceremony with a slight black eye – as he said, his five-year-old son delivered a left hook. I suspect it's revenge for his dad naming him X Æ A-12…

In parallel, the New York Times published an article claiming that Musk allegedly uses substances much more heavily than previously known – including during Trump's presidential campaign (sources supposedly say he even started having bladder problems due to ketamine). But Elon immediately responded by stating that it's all lies, he doesn't dabble in substances, and the last time he used ketamine was several years ago with a doctor's prescription.

🐌 WSJ writes that Musk tried to disrupt the deal between OpenAI and the UAE authorities to build an AI data center in Abu Dhabi. He called the Emirati AI company G42, which was involved, and told them that Trump wouldn't sign the deal if xAI wasn't included. But the Arabs ignored Musk's threats, and the deal went through successfully.

Trump Against Everyone: Court Bans (and then Temporarily Allows) Tariffs

🐌 The rollercoaster with tariffs continues: a US court for international trade recognized Trump's tariffs as illegal, but they will remain in effect during the appeal. The court stated that Trump exceeded his authority by using the 1977 International Emergency Economic Powers Act for the toughest tariffs: it states that the president can impose new fees in case of a real threat to US security. If the Trump team's appeal fails, he will have to cancel all tariffs from that "Liberation Day" list (some of which are currently on hold).

🐌 And Trump also postponed the introduction of 50% tariffs for the EU until July 9 – a couple of days after he announced their introduction. So, business as usual.

🐌 US universities will need to quickly change their investment strategy due to Trump's new bill – it will sharply raise the tax rate on investment income for the largest universities from 1.4% to 21%. Now they will transfer money from trendy hedge funds (in Harvard, this is a third of their portfolio) into "lame" index funds – after all, these can at least be held for years without generating extra taxable profits upon sale. I imagine the guys in hedge funds are not happy about this development.

Russian Market: Unicredit Finds a Buyer

🐌 "Catalytic People," a joint structure of "T-Technologies" and Vladimir Potanin's "Interros," became the owner of 9.95% of Yandex shares. It turns out that Potanin is now the main person responsible for stylish, fashionable, and young IT companies in Russia.

🐌 Italian Unicredit seems to have found a buyer for its Russian business – it will be three companies from the UAE, backed by "Alfa-Group." The complex scheme with shell companies is needed to circumvent EU sanctions against Alfa-Bank. We might even live to see Raiffeisenbank sold (okay, well, I wouldn't want that, of course).

🐌 Sergey Khotimsky, co-owner of Sovcombank, stated in an interview that rumors of a possible freeze on Russian deposits, discussed at the end of last year, were a PR move by developers and realtors to get people to move money from deposits into real estate. Everyone, for some reason, started spreading this across Telegram channels as an "established fact," although zero evidence (besides "that's how I see it") was provided in the interview.

So, does this mean the so-called "anonymous satirists" on Twitter were on the payroll of the realtor lobby back in 2022? 🤔

🐌 A former professor of the Moscow State University Faculty of Economics lost 52 million rubles to fraudsters and then committed suicide. Classically, the 78-year-old pensioner was first persuaded to transfer money to a "safe account," and then also convinced to sell two apartments and transfer the proceeds to them. In short, just in case – try to keep a better eye on your millionaire grandmothers and grandfathers.

Crypto in Russia: Legalizing the Casino

🐌 The Central Bank allowed "qualified investors" to attract investments in assets and securities whose yield is tied to the value of cryptocurrency. The main condition is that such instruments should not involve the actual delivery of cryptocurrencies.

🐌 Banks reacted quickly: T-Bank issued digital financial assets tied to the value of Bitcoin, one DFA corresponds to 0.001 BTC. Let's admit, they entered modestly – we're waiting for some crypto instrument with 50x leverage, and these stocks and bonds of yours will finally become unnecessary!!

🐌 Also, futures trading on Bitcoin will soon launch on the Moscow Exchange – on June 4. The full trading code for the instrument will be IBIT, the short one – IB. Now, unfortunately, it will be completely unclear: when someone tells you "I'm putting all my money into IB" – are they a respected international investor with an account at Interactive Brokers, or a shameful crypto-gambler...?

Crazy Printer Guarding Symbolism

🐌 The State Duma wants to prohibit erasing religious symbols on images of churches. This is a consequence of scandals that the government itself has been involved in: in 2023, the Central Bank showed a new design for the 1000 ruble banknote, where there was no cross on the Kazan Palace Church (to be fair, it's not there in real life either), and just recently the Kremlin updated its emblem, bringing back Orthodox crosses (the old design without them was also criticized).

TLDR of the law: crosses are declared the trump suit, diamonds are no longer valued.

International News: European Union Against Porn

🐌 The European Commission launched an investigation against the largest porn sites: Pornhub, Stripchat, XNXX, and XVideos. They are suspected of insufficiently thorough user age verification: currently, this process takes one click (meaning, the sites simply trust visitors at their word when they click the "I'm 18, now show me the tits" button). If the EC proves the porn sites' guilt, they face a fine of up to 6% of their annual turnover.

I'll also use this opportunity for a minute of hornithological enlightenment.

🐌 Four top managers of Volkswagen were sentenced to prison terms in the "dieselgate" case: back in 2015, the company was accused of installing special software on diesel cars that recognized checks and understated emission figures. Jens Hadler, who led engine development, received the longest sentence – 4.5 years in prison.

Statistics of the Week

🐌 Onlyfans is second on the list of highest-earning companies per employee: by this metric, they outperform Apple, Nvidia, and Google. In general, the top three "most revenue-efficient companies" look amusing: crypto, boobs, and games!

AI: UAE Gives Away ChatGPT

🐌 The UAE will become the first country in the world to provide free access to ChatGPT Plus subscriptions to all its citizens and residents. This is part of the large "Stargate UAE" deal we wrote about above: under it, a huge data center for AI will open in Abu Dhabi. It's interesting, though: I thought it was more profitable to build computing centers in cold regions, not the desert – to save on cooling. 🤔

🐌 A piece of news circulated in Russian-language media about the bankruptcy of Builder.AI – a London startup where the work of hundreds of Indian coders was passed off as the result of AI (which was called, wait for it, "Natasha AI").

But the presentation of such news is not entirely correct: the deception with the Indians became known back in 2019, and since then the company has grown quite well – its capitalization surpassed $1 billion. The reason for the financial problems was different: the media reported on how the startup inflated revenue figures, which attracted the attention of creditors who began seizing the company's property. Nikita Likhachev wrote about this in more detail on Twitter.

🐌 In China, a boxing match took place between Unitree G1 robots. The small-sized robots (1.32 m tall) were controlled by operators. So, a remake of "Real Steel" isn't far off! In general, recently the Chinese were also preparing robots for a marathon – it seems they are gradually mastering the entire Olympic program. I think it will be time to get nervous when China hosts the first robot biathlon championship…

Crypto in the World: Crypto Thaw

🐌 GameStop bought 4710 Bitcoins for $513 million – this is the first BTC purchase for the company. And FT writes that Trump Media, the current US president's company, plans to raise $3 billion to buy cryptocurrencies (and this with a market capitalization of $6 billion). This is all a continuation of the trendy theme from (Micro)Strategy – where publicly traded companies suddenly start pouring tons of money into buying crypto, and their shares somehow shoot up. However, GameStop and Trump Media haven't quite managed the life-giving surges upwards yet.

🐌 Kraken exchange will launch trading of US stocks in the form of tokens for traders outside the US. There will be 50 positions in total – including shares of Apple, Tesla, and Nvidia.

🐌 The SEC officially withdrew its lawsuit against Binance and CZ, filed in June 2023. The CRYPTO THAW continues.

🐌 In 2022, the clever ginger cryptan Avi Eisenberg figured out how to cheat the DeFi protocol Mango Markets out of $110 million. And then he told them: "You boasted that 'blockchain is the law!', so I just used the rules embedded in your blockchain – so there's no violation, I'm a successful trader, not a hacker!"

The US prosecution wasn't very impressed by this logic, and Avi was arrested. But last week, the court suddenly acquitted him, so there's that.

Avi. Your face when you could have your cake and eat it too, and not go to jail.

🐌 A US court froze $58 million in USDC in a lawsuit related to the meme coin LIBRA, which was promoted by Argentinian President Milei. And USDC associated with TRUMP and MELANIA coins weren't frozen for some reason. Think about it!

Interview of the Week

🐌 In this section, I talk about an interesting podcast I listened to last week. This time, it's Dwarikesh Patel's interview with Victor Shih about the Chinese economy and governance model. I posted some interesting points from the podcast on my channel.

Good News of the Week

🐌 HBO found actors for the roles of Harry, Ron, and Hermione in the new "Harry Potter" series – and they managed (almost) not to upset anyone. 32,000 children auditioned, and in the end, Dominic McLoughlin, Alastair Stout, and Arabella Stanton will star in the series. Filming begins this summer. Well, us millennials will watch, right?

---

🐌 And one more piece of good news: this week I'm going on vacation to Vastrik-camp. Perhaps because of this, next week's news digest will be released in an abbreviated format only on my channel – if you don't want to miss it, subscribe just in case.