CONSUMER WATCH
Americans feel worse off financially than at any point in 25 years, Gallup finds
The number is higher than at any point since 2001, even compared with recessions during the pandemic or in the wake of the financial crisis.
This is the fifth consecutive year that more Americans say their finances are worsening rather than improving.
When asked to identify their most important financial problem, 31% cited the cost of living. Energy costs are mentioned by 13% of Americans, up 10 percentage points from last year and the highest since 2008.
Data: Gallup. Chart: Emily Peck/Axios
OpenAI Misses Key Revenue, User Targets in High-Stakes Sprint Toward IPO The company’s CFO and board have questioned the wisdom of massive data-center spending in the face of slowing growth
OpenAI recently missed its own targets for new users and revenue, stumbles that have raised concern among some company leaders about whether it will be able to support its massive spending on data centers.
Chief Financial Officer Sarah Friar has told other company leaders that she is worried the company might not be able to pay for future computing contracts if revenue doesn’t grow fast enough, according to people familiar with the matter.
Board directors have also more closely examined the company’s data-center deals in recent months and questioned Chief Executive Sam Altman’s efforts to secure even more computing power despite the business slowdown, the people said.
The spending scrutiny is constraining Altman’s once-boundless ambitions ahead of a potential initial public offering that could take place by the end of the year. Friar and other executives are now seeking to control costs and instill more discipline in the business, at times putting them at odds with their CEO, people familiar with the issue said.
“We are totally aligned on buying as much compute as we can and working hard on it together every day,” Altman and Friar said in a joint statement. Any suggestion that the pair are divided or pulling back on securing new computing resources is “ridiculous,” they said. (…)
The “buy everything” computing strategy was buoyed by ChatGPT’s seemingly invincible success, and had the support of both Friar and the board. But the chatbot’s growth slowed toward the end of last year, sowing fresh doubt among company leaders about the approach.
OpenAI missed an internal goal of reaching one billion weekly active users for ChatGPT by the end of last year, according to people familiar with the goals. The company still hasn’t announced that milestone, unnerving some investors. It also missed its yearly revenue target for ChatGPT as well after Google’s Gemini saw massive growth late last year and ate into OpenAI’s market share, the people said. The company has also struggled with defection rates among subscribers, according to people familiar with those figures.
OpenAI missed multiple monthly revenue targets earlier this year after losing ground to Anthropic in the coding and enterprise markets, people familiar with its finances said.
OpenAI recently raised $122 billion in what was the largest funding round in Silicon Valley history, putting it on more solid financial footing. But the company has signed up for so much computing power that it expects to burn through that amount in the next three years, assuming that it meets ambitious revenue targets. Some of the funding is also conditional and depends on specific agreements with partners. (…)
A number of AI companies including Anthropic have faced a capacity crunch for computing in recent weeks, leading to price increases for access to AI processors, outages and rationing. The challenges have rankled power users of AI products, especially coders who have grown frustrated when AI systems have been unable to finish tasks in a way they had come to expect from past use.
OpenAI said in a recent memo to investors that it has been able to secure more computing capacity than Anthropic, giving it an advantage in reaching users. The memo, which was viewed by The Wall Street Journal, also addressed Anthropic CEO Dario Amodei’s veiled criticism of OpenAI at a recent business conference, when he said some companies had pulled “the risk dial too far” on data-center spending.
“In hindsight, that caution looks less like discipline and more like underestimating how fast demand would arrive,” the OpenAI memo said. (…)
She [Friar] has emphasized to executives and board directors the need for OpenAI to improve its internal controls, cautioning that the company isn’t yet ready to meet the rigorous reporting standards required of a public company. Altman has favored a more aggressive timeline for an IPO, some of the people said. (…)
Entering the phase where models and products and compute capacity matter as users experience applications and adapt their usage. Anthropic’s Claude is growing so fast that it is upsetting market shares but having Anthropic scramble for compute, even raising prices to slow demand.
OpenAI is working with a slew of consulting firms, including Accenture, Capgemini and PricewaterhouseCoopers, to help sell its artificial-intelligence coding tool Codex to businesses.
Also on Tuesday, OpenAI said it reached four million weekly active Codex users, up from three million just two weeks ago. The AI company said it had more than two million users last month. (…)
The ChatGPT maker has been locked in a heated battle with rival Anthropic to win over corporate clients and developers. Anthropic has become a dominant AI provider for businesses due in part to the viral success of its coding and AI agent products. (…)
Both Anthropic and OpenAI have used consulting firms as a tactic to help spread the adoption of AI and agents throughout the business world. Anthropic, which hasn’t publicly shared how many people are using Claude Code, said in February that the number of weekly active users for its AI coding assistant had doubled since Jan. 1. (…)
The FT reported on April 14 that
The Claude-maker’s annualised revenue surged from $9bn at the end of 2025 to $30bn at the end of March, driven by demand for its coding tools.
Anthropic’s business appears to have leapfrogged OpenAI, which hit $25bn in annualised revenue in February, though the companies use different accounting methods to book revenue, making direct comparison difficult.
Denise Dresser, OpenAI’s new chief revenue officer, accused Anthropic of overstating their revenue “by roughly $8bn” by “grossing up [revenue] share with Amazon and Google”, in a note to staff on Sunday.
Note, however, that OpenAI and Anthropic revenues have reached a combined run-rate of nearly $55B, up 55% from $35B only last February.
Bloomberg:
A basket of companies connected to OpenAI has underperformed peers significantly in recent months, rising by about 75% since the end of 2024 compared with gains of more than 300% for a similar group of Alphabet Inc.-tied stocks. (…)
Perceptions about OpenAI’s leadership shifted last fall after Alphabet’s Gemini AI model and Anthropic’s Claude received broad acclaim. These updates from consumer and business-focused rivals have sparked repeated selloffs in companies considered proxies for OpenAI.
“OpenAI’s growth has been phenomenal since the release of ChatGPT but competitors are stealing a march from both sides,” said Anna Macdonald, investment strategy director at Hargreaves Lansdown.
There is also this risk as Christophe Barraud explains:
Musk v. OpenAI
Hovering over all of this is a courtroom battle that could have existential consequences. Elon Musk—a co-founder of OpenAI—has sued the company, arguing it betrayed its original nonprofit mission by transforming into a profit-driven enterprise.
The case, now underway in California, is not just symbolic. Musk is seeking remedies that go far beyond financial damages:
- forcing OpenAI to return to nonprofit status
- stripping leadership, including Sam Altman, of control or equity
- unwinding parts of its commercial structure, including ties with Microsoft
A Musk victory would strike at the heart of OpenAI’s investment thesis. First, forcing a return to nonprofit governance would make a traditional IPO nearly impossible.
Second, leadership disruption—especially the removal of Altman—would inject instability at the worst possible moment.
Third, unwinding commercial agreements (notably with Microsoft) could destabilize OpenAI’s revenue engine and infrastructure backbone.
Finally, even the process of litigation itself introduces uncertainty. As analysts note, the trial could “cost OpenAI billions” and complicate fundraising efforts already underway. Paradoxically, OpenAI does not need to lose for the lawsuit to be damaging.
The trial is exposing internal communications, governance disputes, and strategic tensions at the highest levels of the company. These revelations risk undermining investor confidence—particularly in a market already questioning valuations across the AI sector. In other words, the lawsuit adds reputational and operational risk precisely when OpenAI needs maximum credibility.
Meanwhile:
China’s DeepSeek prices new V4 AI model at 97% below OpenAI’s GPT-5.5
DeepSeek has slashed prices on its artificial intelligence models, including its latest V4 which now costs 97 per cent less than OpenAI products, potentially triggering a price war in the highly competitive AI market.
DeepSeek said on Sunday that it would reduce prices for “input cache hits” – where previously processed context was reused – for application programming interface (API) users to one-tenth of the original level, bringing the minimum input cost down to about US$0.14 per million tokens.
DeepSeek said the cuts were effective immediately and would be permanent.
The great American data centre divide Many rural communities are viscerally opposed to AI infrastructure, putting them at odds with the White House
(…) Data centres, once clustered around cities and towns, are moving into farm country in search of cheap land and tax incentives. According to Pew Research Center, 67 per cent of planned data centres are in rural areas, while 87 per cent of existing data centres are in urban ones. “Rural communities have become a target,” says Miquel Vila, lead analyst at Data Center Watch, a research project run by AI security company 10a Labs. More than 160 new AI-focused data centres have been built across the US in the past three years, a roughly 70 per cent increase on the total, according to Bloomberg data. (…)
Pew research found that Americans are far more likely to view data centres as harmful than beneficial in terms of environmental impact, domestic energy costs and quality of life in nearby communities.
The issue is awkward for President Donald Trump and his party. Republican strategists are increasingly wary that the administration’s support for AI could trigger a backlash among key voter blocs, including farming communities, ahead of November’s midterm elections. Around 78 per cent of US counties dependent on agriculture voted for him in 2024, according to analysis of election data by Investigate Midwest.
In rural areas from Illinois to West Virginia, new data centre proposals have led to packed public meetings and organised opposition as residents push back. In Indiana, shots were fired at a local lawmaker’s home and a note left on his doorstep reading “no data centers”.
Democratic politicians have called for tighter regulation and Republicans in several states have campaigned against new developments, reflecting the backlash. Even in solidly Republican Texas, agriculture commissioner Sid Miller has argued that projects should be directed towards less productive land, warning that the “unchecked spread of data centres on to prime farm and ranchland is a real and growing threat to our food supply”.
But the picture is mixed for farmers. While some worry about the industrialisation of once-agrarian communities, others welcome the opportunity to cash in on soaring land prices or to generate additional income.
The debate has reverberations far beyond America’s farm belt, pitting two visions of the country’s economic development against each other. In the view of the White House and much of Big Tech, the data centres will help the US maintain its lead in AI. (…) But rural communities, along with many Americans, worry about the immediate impact of data centres on water and power costs and the broader disruption they represent for people’s way of life. (…)
Data centres have already emerged as a significant driver of economic expansion in the US, accounting for 80 per cent of private sector growth in the first half of 2025, according to S&P Global. (…)
The Saudis Could Help End the War. Will the US Listen?
(…) There was a time when the House of Saud was as enthusiastic as Israel to prod the US into military action against Iran’s nuclear program — to “cut off the head of the snake,” as the late King Abdullah bin Abdulaziz put it in 2008.
But that was before the kingdom made a huge bet on economic diversification that demands stability to succeed; before the unashamed Israeli expansionism that followed Hamas’s Oct. 7 terrorist assault; and before President Donald Trump prioritized Israeli security interests over those of his Gulf Arab allies by starting this war.
With the conflict underway, Riyadh now finds itself a victim, with multiple conflicting — and potentially existential — interests to protect and few means to do so. (…)
The wider danger here is that Saudi Arabia emerges into a new post-war reality in which it becomes a bit player, tossed around by the actions of others in a new regional security order forged by Israel and Tehran, with the US, China and Russia weighing in from afar. It is a measure of this war’s folly that both of Trump’s possible next steps — to resume the war or negotiate a weak and unstable peace — will significantly damage core US allies, an outcome that’s likely to have a long geopolitical tail as they reassess their security interests.
Even before the war, Riyadh had been looking for hedges against its over-dependence on an increasingly unreliable US guarantor. Those included a thaw in relations with Tehran, as well as closer ties to China — though both were limited in what they could realistically achieve.
So, Saudi Arabia looked to the region’s other middle powers. It has been reconciling with Turkey, once a bitter rival, since 2022. It signed a military accord with Pakistan in 2025. Adding Egypt, a long-standing ally, these relationships have developed into a kind of quad partnership that operates outside Washington’s direct orbit.
The four were pursuing common interests in the Horn of Africa before Feb. 28, and with Pakistan taking the lead, they’ve now sought a mediating role in the US-Israeli conflict with Iran.
Whether the group can assert itself sufficiently to give Saudi Arabia the lost geopolitical agency it wants is an open question. The limits of its influence over such powerful military players as the US, Israel and Iran is now on cruel display. (…)
Disunity and the relative weakness of the coalition’s constituent parts rank high among those hurdles. The United Arab Emirates, for example, should be another natural Saudi partner, but it’s more tightly allied to Israel and before the war had been pursuing an active rivalry with Saudi Arabia and its “quad.”
The UAE is less keen than the Saudis on seeing a weak, mediated deal with Iran, and more ready to endure escalation in the hope of forcing regime change in Tehran. (…)
Trump went to war ignoring the advice and interests of his Gulf Arab allies. It isn’t clear why resuming and escalating the conflict would deliver on regime change when it has failed to do so until now. Nor, as Iran’s willingness to snub a second round of talks with the US and submit its own package of demands shows, does Trump, contrary to his claims, hold all the cards.
This war was a gamble that Trump made, with other people’s money and other nations’ security and economies for stakes. With a fragile ceasefire in place and an unattractive deal on offer from Tehran, the smartest thing he can do is start listening to what the Saudis have to say about how best to escape his ill-advised war with the least possible damage.
US Tariff Changes Could Raise Deficit by $1.1 Trillion, CBO Chief Says
Recent shifts in US tariff policy may add $1.1 trillion to federal budget deficits over a 10-year period, though exact calculations aren’t yet possible, according to the director of the nonpartisan Congressional Budget Office.
“We haven’t gotten to a point at which we’re comfortable making that kind of long term” estimate, CBO Director Phillip Swagel said in an interview with Bloomberg Television Monday.
The Supreme Court’s decision striking down President Donald Trump’s ability to impose tariffs using emergency economic powers on its own adds $2 trillion to deficits over a decade, Swagel said. Trump’s moves so far to replace the revenue stream with other trade measures add up to $800 billion to $900 billion — or “just shy of half” the revenue canceled by the ruling, he said.
“The deficit over 10 years would be about $1.1 trillion higher because of the net of the Supreme Court taking away some tariffs, the administration putting back some,” Swagel said. “The administration has a lot of authority to impose new tariffs and change them around,” so it’s difficult to figure on an exact deficit number until the process is complete, he indicated.
Swagel also said that the impact on energy prices from the war in Iran is offsetting the boost to the economy from the tax cuts enacted in 2025.
“It looks like the higher energy prices affecting households is roughly offsetting the benefits” from the cuts, he said. “There’s of course effects on business investment and effects on inflation and all that is in mix. We haven’t had to do another budget update, so we haven’t done the economic forecast yet that would underpin that.”
A Bill Aimed at Creating Homes Is Leaving Plots Empty Instead The Senate housing bill would severely restrict build-to-rent homes.
Developer TerraLane Communities was about to start construction on two new housing communities in Arizona and Texas, projects that would create around 300 new single-family homes to rent out.
But before any shovels got in the ground, the Senate passed a bill that severely restricts the build-to-rent business. Uncertain about the industry’s legislative future, investors demanded that TerraLane pause the project. The firm had five other potential build-to-rent deals that it is no longer pursuing.
“These projects are designed specifically for families that can’t afford housing in the community,” said Chief Executive Steve La Terra. “This bill, which is designed to provide more housing, is doing the exact opposite.” (…)
But one of the bill’s provisions stopped home builders in their tracks. It would force developers to sell, within seven years of completion, newly constructed homes that they built solely for the purpose of renting.
Developers say that investors won’t put money into new rentals that they can own for only a few years before having to sell them off. Even though the bill isn’t yet law, investors and lenders are scurrying away from simply the threat of this legislation.
Already, at least $3.4 billion of investment for these so-called build-to-rent projects is frozen in place, according to an early survey of 14 build-to-rent firms by Inclusive Abundance and Up for Growth, both housing-policy lobby groups.
That translates to about 10,000 units of housing. And it is likely just a sliver of the impact across the entire build-to-rent industry, which roughly includes more than 1,700 firms, according to John Burns Research & Consulting. (…)
“It’s putting the industry out of business,” La Terra said. (…)
Many build-to-rent tenants would likely be forced to leave their homes if they can’t afford to buy their properties themselves. And converting build-to-rent communities to individual for-sale homes would be an entirely new construction project because these properties are often zoned for multifamily use and share utilities like underground electric wiring and water meters.
“You’d have to dig up the streets,” Whiteley said.
Price of access to Trump’s memecoin VIP reception plunges
The price crypto traders were willing to pay for a ticket to a “VIP reception” with Donald Trump this weekend plunged relative to last year’s event, in the latest sign of the digital asset community’s waning interest in the US president’s foray into memecoins.
The 297 biggest holders of the $TRUMP coin during a specific window are granted access to a conference on Saturday featuring speeches by the president, boxing champion Mike Tyson and Tether chief executive Paolo Ardoino, as well as a gala lunch with Trump.
Of these, the top 29 qualifying holders are given access to a VIP reception with the president, as well as “other Superstar guests”. Analysis by the FT shows that winners of a VIP ticket held a median of $539,000 of $TRUMP, or about 191,000 coins, at the end of the contest. That compares with approximately $3.28mn, or 250,000 coins, last year.
The discounted prices suggest traders have largely fallen out of love with the Trump memecoin, despite the offer of access to the president. The coin is down 93 per cent from its peak, according to data from CoinMarketCap, mirroring a broader collapse in the prices of memecoins — crypto tokens linked to online trends that function purely as vehicles for speculation.
“Memecoins have gotten wrecked,” said Austin Campbell, managing partner of crypto advisory firm Zero Knowledge Consulting. “The Trump brand is not enough of a carrot to elevate them.”
The industry’s relationship with the president “was a shotgun marriage” after regulatory crackdowns under prior administrations and the name no longer holds the same value, he added. (…)
The contest is the second such gathering since Trump launched the memecoin in January 2025 shortly before his inauguration.
Unlike last year, when winners of the contest raked in profits after the price of $TRUMP jumped, bidders this year do not appear to have profited from the competition, with the coin’s price dipping below its $2.90 price when the contest began.
The US first lady, Melania Trump, has a separate memecoin, which is down around 94 per cent from its peak. (…)
Senate Democrats earlier this month requested more information on the president’s role in the event to “fully understand the extent to which President Trump and his family are profiting”, according to a letter sent to the organiser, a Trump ally named Bill Zanker. (…)
FYI:
Jim VandeHei, Axios CEO, offers four specific ways for you to get more out of AI this week: better prompting (tonight), improving AI memory (Tuesday), starting a business using AI (Wednesday) and running a business using AI (Thursday).