Turns out even the biggest name in AI has a budget.

OpenAI is scaling back its infrastructure ambitions by more than half, cutting its spending plans from $1.4 trillion down to $600 billion through 2030, according to CNBC. It’s the latest warning sign that future revenue for AI startups may not be able to support the immense cost of expanding their AI systems.

Still, projections remain aggressive: Management expects annual revenue to exceed $280 billion by 2030, a 2,000% increase from last year. To fuel that growth, the ChatGPT maker is closing in on a blockbuster funding round that could see it raise over $100 billion. Nvidia is reportedly weighing an investment of up to $30 billion, alongside strategic backers including SoftBank and Amazon.

The revision reframes expectations for a market that has priced in relentless AI expansion, with hyperscalers collectively guiding toward nearly $700 billion in capital spending this year. Any moderation carries implications beyond AI labs, affecting chipmakers, power suppliers, and data-center developers whose growth assumptions hinge on sustained demand.

It will be particularly interesting to see if Jensen Huang has anything to say about today’s news when Nvidia announces earnings later this week.

The enterprise push

That said, it’s not all doom and gloom. OpenAI is doubling down on enterprise adoption through multi-year alliances with consulting firms Accenture, Boston Consulting Group, Capgemini, and McKinsey. Corporate clients already represent roughly 40% of revenue, and management expects that share to approach 50% by year-end.

These partnerships are designed to help OpenAI gain market share as the company competes with Google and Anthropic. They also support the rollout of Frontier, OpenAI’s new enterprise platform, which functions as a unifying intelligence layer across company systems.

The productivity paradox

Zooming out, Citrini Research argues that the bigger risk isn’t that AI underdelivers—but that it succeeds too well.

In a memo published over the weekend that’s since gone viral, Citrini analysts warn that broad AI adoption could compress margins and weaken competitive advantages across industries. Signs are already visible in software, and as AI becomes embedded across consumer and enterprise activity, the ripple effects could extend far beyond.

The labor market will be central to the shift. With white-collar jobs making up about half of employment, broad automation could cut headcount, with companies pouring the savings back into more AI, creating a positive feedback loop that weakens consumption and traditional growth drivers.

OpenAI and its peers might thrive in that world. For the rest of us, it might be time to update our resumes.—SY

🟢 What’s up

• Domino’s Pizza jumped 4.1% on strong comparable-sales growth and continued restaurant expansion.
• Arcellx surged 77.43% after Gilead Sciences agreed to acquire the biotech company for $7.8 billion, an 80% premium to its prior close.
• PayPal gained 5.76% on reports of takeover interest, with at least one large rival eyeing the full company and others circling select assets.
• ImmunityBio climbed 12.99% after posting 700% year over year revenue growth and outlining expanded lung cancer approvals alongside global commercialization plans.
• Veris Residential jumped 12.31% after agreeing to be acquired by a consortium led by Affinius Capital.

What’s down

• IBM plunged 13.15% after Anthropic revealed that Claude Code could automate the use of a key programming language.
• Speaking of AI disruption, cybersecurity names kept falling after Anthropic introduced new AI security capabilities late last week. CrowdStrike lost 9.85%, Zscaler fell 10.31%, and Okta dropped 6.43%.
• Packaging stocks fell, with Smurfit Westrock down 5.03%, Packaging Corp. of America off 4.94%, and International Paper lower by 4.28% after cardboard prices unexpectedly dropped to $20 a ton on weak demand.
• Docusign slid 6.14%, hitting a 52-week low as broader concerns about growth prospects and softer tech sector conditions, along with a downgrade from Jefferies, weighed on shares.
• DoorDash dipped 6.6% as the company extended its delivery pause in New York City amid a major snowstorm.
• Financial stocks weakened overall, with KKR down 8.85%, Blackstone off 6.23%, Blue Owl sliding 3.33%, and American Express retreating 7.2% as private credit stress rippled through markets.

Snow days are s’no problem…unless you run an airline.

A massive winter storm pummeling the east coast has snarled travel across the country, and airline stocks are bearing the brunt of the pain. United Airlines led the charge lower, dropping 5.28%, while American Airlines lost 4.86%, Delta Air Lines fell 3.79%, and Southwest Airlines sank 2.45% as these companies cancelled about 5,000 flights today, or almost 20% of all scheduled US departures. As the inclement weather extends into the evening, more cancellations are expected tomorrow.

It’s the latest in a string of bad weather-related luck for the travel industry, which was already hit hard by a winter storm in January that saw approximately 15,000 cancelled flights across three days. As airlines did then, they will again waive fees for cancellations and changing flights, battering their revenue.

The extra kick in the pants: Many of these companies had already been forced to cancel flights to and from Puerto Vallarta and Guadalajara, Mexico over the weekend after violence erupted following the killing of a major cartel leader. In that case, too, many airlines reportedly waived change fees—tallying yet more lost revenue.

There is one winner emerging from the snowbanks, however: natural gas. The cost of the fuel has soared alongside demand as peeved dads across the country finally give in and turn the thermostat higher.—MR

Novo Nordisk’s chances of success are getting slimmer and slimmer.

Today, the Danish pharmaceutical giant reported disappointing results for its new experimental drug CagriSema, the company’s competitor to Eli Lilly’s tirzepatide drugs like Mounjaro and Zepbound. The firm was hoping the novel formulation would be its silver bullet, but instead, in phase 3 of its trial, CagriSema did not meaningfully outperform Eli Lilly’s drugs after 84 weeks.

Novo’s stock dropped 16.39% today, hitting its lowest level since July 2021.

If that wasn’t bad enough, Eli Lilly just launched a blockbuster new GLP-1 formulation that has a month’s worth of doses in a single pen today. Prices start at $299 for the super-dose on Eli Lilly’s direct-to-consumer site, LillyDirect. Shares of the company rose 4.72%.

When it rains it pours

While Novo was the first out of the gate in the GLP-1 race when it released Ozempic in 2021, the Danish pharma behemoth quickly blew its lead to Eli Lilly after a series of supply chain screw-ups. Novo never really recovered: Earlier this month, the company reported that its sales and profit growth is expected to slow between 5% and 13% over 2026, while Eli Lilly said it expects sales growth of about 25%.

On top of all that, the company is playing a high-stakes game of legal whack-a-mole with the various telemedicine startups peddling knockoff versions of GLP-1 drugs, the most prominent being Hims & Hers. Novo fell 50% last year, while it’s already down 22.64% year to date.

Now, the giant that once saw its market cap balloon past the GDP of Denmark thanks to weight loss drugs is restructuring, conducting massive layoffs, and facing more competitive pressure than ever.

Sometimes a company has to hit rock bottom before the comeback story can unfold. Just don’t expect a Hail Mary overtime victory for Novo Nordisk anytime soon.—LB

Just a reminder: We’re kicking off Round 2 of our Brew Markets Fantasy Investing League first thing next week, so sign up while you still can!

Everyone starts with $100,000 in fake cash to invest as they see fit through April 3. Yep, you read that right: We’re keeping this round fast and furious, forcing you to invest a quarter-mile at a time. Feel free to go long, sell short, and talk smack in the comments section as you go toe-to-toe with your fellow investors to win a bunch of Morning Brew swag.

To participate, just fill out this form—once you’re done, you’ll be provided with the URL for the league website and the password to join in!

• Democrats introduced legislation to return the $175 billion in refunds the government owes to importers after the Supreme Court’s ruling last week.
• EU lawmakers postponed voting on the bloc’s previous tariff deal with the US after Trump’s new “global” tariffs were announced.
• Mortgage rates dropped to their lowest level since 2022.
• A federal spending bill could thwart the booming billion-dollar market for THC drinks.
• Strategy isn’t letting the crypto bloodbath slow down its bitcoin buying.
• Goldman Sachs says AI investments contributed “basically zero” to US economic growth last year.
• Treasury Secretary Scott Bessent is getting worried about the private credit market.
• Meanwhile, activist investors are circling Blue Owl like vultures.
• Today’s the last day for Paramount Skydance to submit its final bid for Warner Bros. Discovery.

Economic reports: FedSpeak week continues with words of wisdom from Chicago Fed President Austan Goolsbee, Atlanta Fed President Raphael Bostic, and Fed governors Chris Waller and Lisa Cook. We’ve also got the S&P Case-Shiller home price index, another February consumer confidence reading, and a report on wholesale inventories.

Earnings announcements: Home Depot, Constellation Energy, MercadoLibre, American Tower, Standard Chartered, NRG Energy, DigitalOcean, Workday, Axon Enterprise, First Solar, CoStar, HP, and Cava

Everything else: President Trump will address the nation in his State of the Union speech tomorrow evening. Keep an ear out for details on new tariffs, how the administration plans to address issues of affordability, and how nuclear negotiations are going with Iran.