Good morning, and happy Friday.

Barry Diller has folded a hand. People Inc., the media holding company Diller chairs, walked away Thursday from its $18 billion bid to take MGM Resorts (MGM) private, an offer worth $48.30 a share that had been on the table since June. MGM stock fell nearly 10% on the news. "We didn't feel the mix was coming together in the way we had hoped," Diller said in a statement, which is Vegas-speak for the house won this one. MGM's board chairman, Paul Salem, insisted the company is better off solo, pointing to BetMGM's momentum and the coming MGM Osaka casino as reasons to stay at the table.

That's the upside, for MGM anyway. The downside is that the priciest game on the Street right now isn't blackjack. It's the trillion-dollar bet on AI infrastructure, and Thursday brought the first real sign that some of the players are quietly checking their chip stacks.

Big Tech

Oracle just told the world, without quite saying it out loud, that its enormous New Mexico data center bet has a few cracks in the foundation.

Bloomberg reported Thursday that Oracle (ORCL) sent a force majeure notice to Blue Owl Capital, the private-equity owner of Stack Infrastructure, the developer building Project Jupiter, a 1,400-acre, 2.45-gigawatt data-center campus in southern New Mexico that Oracle has committed to lease in full. The notice doesn't cancel the deal. It's a legal shield: a way for Oracle to argue it shouldn't have to keep paying if delays beyond its control push the facility past its planned 2028 start date. Oracle shares tumbled 6.4% Thursday, their worst day since mid-June.

Project Jupiter has been a magnet for trouble almost since it was announced: a rejected natural-gas pipeline extension, a denied federal permitting fast-track, and enough local opposition that Oracle has had to publicly lobby its own host county on the project's economic upside.

Oracle, for its part, isn't retreating. "Project Jupiter remains on our planned schedule," the company said in a statement. "We are fully committed to New Mexico and confident in our path forward."

A force majeure notice on a single, permit-snarled campus in New Mexico is not the AI boom cracking up. It is, however, the first time one of its biggest tenants has put in writing that it wants an escape hatch, and lenders who watched a syndicated loan slip below par got the message before anyone said it out loud.

— AllThingsWallSt, our take

Load-Bearing Optimism: Project Jupiter was always described as a microcosm of the entire US data-center buildout, and that framing is about to be tested in reverse. If a Bloomberg-scale tenant like Oracle is reaching for legal cover on a project this large, every other developer racing to lease gigawatts to AI labs just got a preview of the question their own lenders are about to start asking: when the buildout runs late, who actually eats the bill?

Artificial Intelligence

Everyone else in the AI gold rush is selling shovels. Akamai just decided it would rather own a piece of the mine.

Reuters reported Thursday that Anthropic signed a seven-year, $11.6 billion cloud-services agreement with Akamai (AKAM), with room to expand by another $9 billion, and (in a structure rarely seen in enterprise cloud deals) took a warrant to buy Akamai shares at $111.33 apiece, convertible into roughly 7.7 million shares, or up to 5% of the company on a fully vested basis. Akamai shares jumped about 20% in extended trading.

Cloud-for-compute deals are common; cloud providers taking meaningful equity stakes in the AI labs that are their own customers is not. It flips the usual vendor relationship into something closer to a partnership, with Akamai's fortunes now tied directly to how much compute Anthropic actually burns through.

By the numbers: Akamai estimates the initial commitment drives roughly $5.5 billion in capital expenditure, and it's lifting its 2026 capex plan by about $1.7 billion to pre-purchase memory components and other hardware ahead of demand, Reuters reported. Roughly 2 percentage points of Akamai's equity vest with the initial $11.6 billion; the remaining 3 points vest only if the two companies expand the deal to the full $9 billion ceiling — meaning Akamai's upside, like Anthropic's compute needs, scales with how far this goes.

Skin in the Game: Warrants-for-workloads is a structure built for a moment when compute is scarcer than cash. Akamai gets guaranteed multi-year revenue and a call option on Anthropic's growth; Anthropic gets capacity locked in without touching its own balance sheet as hard as a straight cash deal would require. If this template catches on with other clouds courting the frontier labs, expect Wall Street to start pricing "AI landlord" stocks less like utilities and more like equity co-investors. (Disclosure: this pipeline runs on a Claude model, made by Anthropic. Treatment here is factual and identical in tone to how any other company's financing deal would be covered.)

Economics

Wall Street spent most of the last two years betting the Fed was done raising rates. That bet has now died twice in one week, and the bond market is pricing the funeral both times.

The 30-year Treasury yield jumped another four basis points Thursday to 5.44%, its highest level since 2004, Crypto Briefing reported, a fresh high on top of the 10-year's own climb to roughly 5.1%–5.19% this week, the highest since 2007, that had already rattled markets a day earlier. The S&P 500 slipped 0.07%, the Dow shed 0.32% and the Russell 2000 fell 0.17% Thursday, per TheStreet's market recap.

Rates this high used to mean the Fed was fighting inflation from a standing start. This time, the economy itself is supplying part of the fuel: a stronger-than-expected S&P Global flash reading showed private-sector output growing at roughly a 5% annualized pace, and money markets are now pricing better than 50% odds of quarter-point Fed hikes at both the October and December meetings, Axios reported.

But the boom itself is also part of the bill. Axios's reporting on Thursday's move flagged tech companies' own borrowing to fund AI data centers as one of the forces now competing with the Treasury market for investor dollars — the same dynamic playing out a few paragraphs up, where an $18 billion bank loan behind a single Oracle-anchored data center is already trading under par.

Long Bond, Longer Wait: The next FOMC decision lands October 28, and the market has already told you which way it's leaning: a Fed hiking into strength rather than cutting into weakness, with long-bond yields parked at levels last seen before the iPhone existed. For any company, AI lab or hyperscaler that priced its next few years of borrowing off a "rates have peaked" assumption, this week's double move higher was a reminder that the ground can still shift underneath a trillion-dollar buildout.

Cold Wallet, Warmer Regrets: Crypto exchange Bitget said hackers moved $351.6 million out of its hot and warm wallets via spoofed transfers rather than a private-key compromise, froze withdrawals as a precaution, and told CoinDesk its $464 million user-protection fund covers the loss in full; CEO Gracy Chen said "private key compromise has been ruled out," and CNBC reported the exchange suspects North Korea.

Coin Operated: The Federal Reserve unveiled two proposals under the GENIUS Act requiring stablecoin issuers to back tokens fully with short-term Treasury bills and other high-quality liquid assets, plus a streamlined approval path for banks that want to issue their own; the public comment window runs 60 days from Federal Register publication.

Grande Downsizing: Starbucks (SBUX) is closing about 250 North American stores this week, a year after shuttering 627 locations and cutting 900 corporate jobs; COO Mike Grams said the targeted cafes "either aren't delivering acceptable financial results or can't provide the kind of experience that Starbucks wants."

Friday's tape has a theme: everyone is suddenly checking the fine print. Oracle checked its lease. Barry Diller checked his offer and walked. The bond market checked 2007 and decided to come back for a visit. None of it means the AI boom or the bull market is over — it means the people financing both just started asking who pays if the timeline slips, which is a very different question from the one they were asking a year ago.

That's the tape. We'll see you at the open. — AllThingsWallSt