Welcome back!

Here’s the most important news you need to know this morning: Elon Musk’s XChat launches with vanishing messages and “Bitcoin-style encryption,” China responds to the U.S. calling out its violations of the Geneva agreement, and the White House prepares to submit DOGE cost-cutting proposals for Congressional approval. I’ve got a lot more details for you, so let’s dive in.

TECH

Elon Musk Announces XChat, a New DM System with ‘Bitcoin-style Encryption’

The Crux: Elon Musk has announced the rollout of XChat for X, a new private messaging feature with vanishing messages and “Bitcoin-style encryption.”

The Details:

• XChat offers end-to-end encryption, file sharing, and audio/video calling without a phone number, built with the programming language Rust.

• Initially available to some iOS Premium+ users, it competes with Signal, WhatsApp, and Telegram.

• Musk's vision includes expanding X to messaging, media, payments, and dating, with XChat as a key component.

Why It Matters: XChat's launch marks an important milestone in Musk's vision to transform X into an "everything app," potentially revolutionizing social media by integrating messaging, media, and services like payments. The beta testing of X Money, announced in May 2025, advances this ambitious plan even further.

AI

⭐ Editor’s Pick: Samsung is in talks to be a key investor in Perplexity AI's $500 million funding round at a $14 billion valuation, aiming to integrate its advanced search technology into Samsung devices to boost AI capabilities. (BBG)

The NAACP urges Memphis officials to pause Elon Musk’s xAI’s Colossus facility in South Memphis over gas turbine emission concerns, while the start-up’s pledges to collaborate with local authorities to mitigate potential health and environmental impacts. (NBC)

Elad Gil is now focusing on AI-powered rollups, acquiring and transforming mature, labor-intensive businesses like law firms and professional services with AI to enhance efficiency and profitability. (TC)

David Sacks criticizes AI doomerism as a narrative driven by organizations seeking global regulation, viewing it as a threat to innovation and an advantage to China, while dismissing dire predictions about mass labor disruptions as sensationalist. (AIP)

Hardware & Robotics

⭐ Editor’s Pick: Marc Andreessen envisions the emergence of "hundreds of billions" of robots, advocating that the U.S. should lead their development to catalyze a new industrial revolution, driving unprecedented economic growth. (RF)

Food delivery robots are now operating in Markham, Ontario, as part of a 90-day pilot project by SkipTheDishes and Real Life Robotics. (CN)

Researchers at the University of Nebraska–Lincoln have developed damage-sensing and self-healing artificial muscles for soft robotics, mimicking biological systems. (TH)

Defense & Space

⭐ Editor’s Pick: Ukraine's SBU used smuggled FPV drones, hidden in trucks, to destroy 41 Russian bombers in a daring "Spider's Web" operation targeting airbases. (FP)

Trump withdrew Jared Isaacman's nomination to lead NASA on Saturday, citing a "thorough review of prior associations." (AXS)

Israel's Defense Ministry has confirmed the operational use of the Iron Beam laser system to intercept Hezbollah drones, marking a historic milestone in air defense technology. (DL)

Venture Capital

⭐ Editor’s Pick: ClickHouse, a real-time analytics and data warehousing startup for AI/ML, raised $350M in a Series C round led by Khosla Ventures. (BW)

David, a brand offering tools for muscle gain and fat loss, raised $75M in a Series A round led by Greenoaks. (JR)

Snorkel AI, a data development platform, raised $100M in a Series D round at a $1.3B valuation, led by Addition. (FOR)

Dojo, a UK-based payments technology startup, secured $190M in growth funding from Vitruvian Partners. (PYM)

Space Forge, a Cardiff-based startup focused on in-space manufacturing, raised £22.6 million in a Series A funding round led by the NATO Innovation Fund. (TEC)

Biotech

⭐ Editor’s Pick: France's Sanofi will acquire U.S.-based Blueprint Medicines Corporation for over $9 billion to strengthen its rare immunology disease portfolio, marking Europe's largest healthcare deal this year. (RTS)

China's biotech surge has surpassed the U.S. in clinical trials, with over 7,100 trials in 2024 compared to the U.S.'s 6,000, threatening American dominance in pharmaceutical innovation. (AXS)

Cybersecurity

⭐ Editor’s Pick: Dutch Defence Minister Ruben Brekelmans stated on Saturday that Chinese espionage efforts targeting the Netherlands, particularly in the semiconductor sector, are increasing. (RTS)

In October, Google's Threat Intelligence Group uncovered Chinese APT41 hackers using Google Calendar to deploy malware, embedding stolen data in events and issuing commands to compromised devices. (CB)

MARKETS

China Lashes Out at Trump, Claims U.S. Actions 'Severely Undermine' Trade Truce

The Crux: China has accused the United States of undermining the Geneva trade agreement, following Trump's accusation that Beijing violated the deal.

The Details: 

• May 2025 Geneva agreement suspended most U.S.-China tariffs for 90 days after Bessent-He Lifeng meeting.

• Wall Street Journal reports China is slow-walking approvals for export licenses of rare earths.

• The Trump administration has tightened semiconductor and chemical export restrictions to China and announced visa revocations for Chinese students to prevent espionage.

Why It Matters: China's commerce ministry vowed to protect its interests, rejecting Trump's claim that China violated the U.S. trade agreement, while Treasury Secretary Bessent suggested an imminent call between the leaders could resolve tensions. "I believe we'll see something very soon," he said.

Economy & Public Policy

⭐ Editor’s Pick: Egg prices have plummeted over 61% since President Trump’s January 2025 inauguration, dropping from $6.49 to $2.52 per dozen by June, following a March peak. (FBN)

The European Commission said it is prepared to impose retaliatory measures against the U.S. after Trump increased of U.S. tariffs on steel imports from 25 percent to 50 percent. (POL)

Trump warned that a court ruling against his tariffs would cause "economic ruination" and allow other countries to "hold the U.S. hostage" with anti-American tariffs. (FBN)

Federal Reserve Governor Christopher Waller indicated that interest rate cuts are possible later this year if tariffs are moderate, inflation continues progressing toward the 2% target, and the job market remains strong. (YF)

Currencies & Commodities

⭐ Editor’s Pick: The Trump administration plans to reverse Biden-era restrictions, enabling oil drilling across much of Alaska’s petroleum reserve, estimated to contain 8.7 billion barrels of recoverable oil. (BBG)

The dollar index and futures fell ~0.1% in Asian trade on June 2, 2025, after Fed Governor Waller signaled potential rate cuts if inflation cools and labor stays strong. (INV)

Oil prices jumped over $1, with WTI crude futures up 2% to ~$62 on June 2, 2025, as OPEC+ kept its July output hike at 411,000 barrels per day, matching May and June. (RTS)

Gold prices surged by approximately 0.8% on June 2, 2025, reaching $3,314.14 per ounce. (INV)

Crypto

⭐ Editor’s Pick: Decentralized exchanges hit a record 25% of global spot crypto trading volume in May, with over $410 billion traded, surpassing centralized exchanges. (TB)

Metaplanet, Japan's leading Bitcoin treasury company, increased its holdings by 1,088 BTC to 8,888 BTC, valued at over $930 million, with a year-end target of 10,000 BTC. (CT)

Ethereum’s “Pectra” upgrade, aimed at enhancing user experience, has been exploited by automated “sweeper” attacks, with over 80% of EIP-7702 delegations tied to a malicious script that enabled phishing attacks. (TB)

South Korea’s crypto industry is poised to benefit from the presidential election, as both leading candidates, Lee Jae-myung and Kim Moon-soo, support easing regulations and legalizing spot crypto ETFs. (BBG)

Binance founder Changpeng “CZ” Zhao proposed a dark pool perp DEX that conceals trades, positions, and deposits to shield traders from front-running and liquidation attacks. (DC)

FREEDOM

Elon Musk: 'DOGE Will Continue as a Way of Life'

The Crux: Elon Musk told CBS News that despite leaving the Department of Government Efficiency (DOGE), the cost-cutting effort will continue.

The Details: 

• Musk called criticism of DOGE unfair, stating it has become a "whipping boy.”

• Musk emphasized DOGE aims to streamline government operations and reduce wasteful spending, not harm essential services.

• Musk noted DOGE has strong public backing, citing its appeal to those frustrated with government inefficiency.

Why It Matters: The White House is considering impoundment to enforce DOGE's spending cuts without Congress. Meanwhile, the White House plans to send a $9.4 billion DOGE cuts package to Congress next week, targeting federal funding for NPR, PBS, and the U.S. Agency for International Development.

Economic Policy

Sen. Ron Johnson pushes "line-by-line" budget cuts to pass Trump's "big, beautiful bill.” (FOX)

Business & Tech Policy

Newark Airport will reopen its shuttered runway on Monday, 13 days ahead of schedule. (NBC)

Healthcare & Education Policy

Harvard University, particularly its Kennedy School, is dubbed the Chinese Communist Party's top "overseas party school" due to its extensive training of Chinese officials. (WSJ)

Free Speech & Woke Overreach

Google and Home Depot have withdrawn their sponsorship of Pride Toronto event. (TG)

That's a wrap! You're officially caught up on all things tech, markets and freedom. Subscribe to CAPITAL below.

DISCLAIMER: The CAPITAL newsletter is for informational purposes only and does not constitute financial, investment, or professional advice. Readers should conduct their own research and consult a qualified financial advisor before making investment decisions. The CAPITAL newsletter and its owner and operator, Josh Caplan, are not liable for any loss or damage resulting from reliance on this information. The CAPITAL newsletter is solely owned and independently operated by Josh Caplan, separate from any employer affiliations.

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