Musk’s Macrohard Targets Microsoft with AI-Powered Software

Welcome back!

Here’s your must-read news this morning:

• Trump’s tariffs could reduce deficit

• Musk previews Macrohard 

• Cracker Barrel’s DEI ties

I’ve got all the details for you, so let’s dive in.

— Josh

MARKETS

💰 CBO: Trump’s Tariffs Could Reduce Deficit by $4 Trillion

The Scoop: President Donald Trump’s tariffs on U.S. imports could reduce the federal deficit by $4 trillion over the next decade, according to the Congressional Budget Office.

The Details:

• The CBO projects that sustained tariff hikes could cut primary deficits by $3.3 trillion and reduce federal interest payments by $700 billion over 10 years, an upward revision from its June estimate of $2.5 trillion and $500 billion, respectively.

• U.S. tariff rates averaged 16.7% in August, up from 15.1% in June, with U.S. Customs and Border Protection collecting over $26 billion in duties this fiscal year, a sharp rise from the prior year’s hundreds of millions.

• The U.S. federal debt stands at $37.18 trillion, with Congress facing a September funding deadline to avoid a government shutdown.

What’s Next: The projected tariff revenue opens a possible path to bolster federal finances, potentially strengthening economic confidence if trade negotiations secure favorable terms. Successful implementation could position the U.S. to reduce debt growth while funding domestic priorities.

Markets Roundup

🏦 Economy & Policy

• ⭐ Editor’s Pick: Cracker Barrel’s $100 million market value plunge after a woke logo rebrand underscores that investors must now weigh corporate cultural shifts as a critical risk factor. (NYP)

• Trump announced a major tariff investigation into imported furniture to revive U.S. manufacturing. (RTS)

• FHFA Director Bill Pulte announced criminal referrals of two additional individuals to the Justice Department, offering no additional details. (X)

• Real estate experts report a surge in calls from clients vowing to sell their NYC apartments and leave the city if democratic socialist Zohran Mamdani wins the mayoral race. (FBN)

💵 Energy & Commodities

• ⭐ Editor’s Pick: A Maryland resident who traveled from Guatemala contracted the first U.S. case of the flesh-eating New World screwworm, raising alarms about potential livestock infestations. (RTS)

• The Trump administration plans to provide U.S. power companies with 20 metric tons of Cold War-era plutonium for reactor fuel to boost domestic energy production. (YN)

• China tightened its control over rare earth minerals critical for energy transition, expanding its quota system to include imported ore. (SMM)

• The Trump administration ordered Denmark’s Ørsted to halt its offshore wind project near Rhode Island, citing national security concerns. (WSJ)

• School districts across the U.S. are reverting to diesel buses due to the high costs and repair challenges of electric buses promoted by the Biden administration. (WFB)

🌕 Crypto

• ⭐ Editor’s Pick: Bitcoin fell to $112,700 as large investors shifted holdings to Ethereum, reflecting market recalibration and whale-driven volatility. (TB)

• Trish Turner, head of the IRS's digital assets division, resigned after three months to join crypto tax firm Crypto Tax Girl. (BBG)

• Eric Trump said the Biden administration's weaponization of banks against his family pushed them toward crypto. (WSJ)

• A Philippines lawmaker proposed a bill to amass a 10,000 Bitcoin strategic reserve over five years. (CRY)
  

SPONSOR

Modernize your marketing with AdQuick

AdQuick unlocks the benefits of Out Of Home (OOH) advertising in a way no one else has. Approaching the problem with eyes to performance, created for marketers with the engineering excellence you’ve come to expect for the internet.

Marketers agree OOH is one of the best ways for building brand awareness, reaching new customers, and reinforcing your brand message. It’s just been difficult to scale. But with AdQuick, you can easily plan, deploy and measure campaigns just as easily as digital ads, making them a no-brainer to add to your team’s toolbox.

Learn more now.

TECH

💻 Musk’s Macrohard Company Targets Microsoft with AI-Powered Software

The Scoop: Elon Musk announced on Friday that xAI is launching Macrohard, an AI-driven software venture aimed at rivaling Microsoft by replicating its operations through advanced artificial intelligence.

The Details:

• Musk introduced Macrohard via a post on X, calling it a “purely AI software company” that uses hundreds of specialized AI agents for coding, image, and video generation, aiming to emulate software giants like Microsoft without reliance on hardware production.

• The initiative is powered by xAI’s Colossus supercomputer in Memphis, set to incorporate millions of Nvidia enterprise-grade GPUs, pitting Macrohard against OpenAI and Meta in a race for computational dominance.

• A Macrohard trademark was filed with the U.S. Patent Office in August, building on Musk’s prior comments about a multi-agent AI system using xAI’s Grok chatbot.

What’s Next: Macrohard could accelerate the shift toward AI-driven software development, potentially forcing Microsoft to rethink its generative AI strategy. As xAI scales its AI agent framework, early adopters may see bespoke software solutions, while partnerships or acquisitions could bolster its market entry.

Tech Roundup

🧠 AI

• ⭐ Editor’s Pick: Elon Musk announced that xAI has open-sourced its Grok 2.5 AI model on Hugging Face, with plans to do the same for Grok 3 in six months. (TC)

• YouTube’s new AI-driven video editing tools secretly altered content without creator consent, sparking backlash over intellectual property rights. (BBC)

• Silicon Valley tech leaders are investing over $100 million in the Leading the Future super-PAC network to advocate against strict AI regulations in the 2026 midterm elections. (WSJ)

• AI tools from ElevenLabs enabled a woman silenced by motor neuron disease to reclaim her original voice using just eight seconds of audio from an old VHS tape. (TEX)

• Meta is partnering with Midjourney to license the startup's AI image and video generation technology for integration into future Meta products. (VB)

🤖 Hardware & Robotics

• ⭐ Editor’s Pick: An inside look at Hyundai’s $7.6 billion plant in Georgia reveals 750 robots working alongside 1,450 employees at a 2-to-1 ratio, surpassing the U.S. auto industry’s 7-to-1 average. (WSJ)

• At the first-ever cooking robot competition in Beijing, 30 teams showcased robotic chefs capable of preparing stir-fry dishes in just three minutes. (XIN)

• Halifax Stanfield International Airport is testing service robots developed to guide passengers and provide real-time flight information. (AA)

• Tesla is abandoning motion-capture suits for simple video filming to train its Optimus robot, betting low-tech beats high-tech for faster machine learning. (BI)

🚀 Defense & Space

• ⭐ Editor’s Pick: SpaceX postponed its Starship Flight 10 test launch just 17 minutes before liftoff due to a ground system issue. (SP)

• China showcased a new stealth-featured unmanned surface vessel during military parade rehearsals, signaling Beijing's expanding autonomous naval warfare capabilities. (IE)

• NATO unveiled the world's first 435-mile rocket truck, a German-American system developed by Rheinmetall and Lockheed Martin that delivers twice HIMARS' firepower. (T&P)

• The UK is purchasing new defense missile systems that can hit tennis-ball-sized objects traveling at Mach 2 speeds while simultaneously guiding 24 missiles to intercept separate targets. (GUK)

💰 Venture Capital & Deals

• ⭐ Editor’s Pick: Logistics startup Skutopia raised $38 million led by Pemba Capital to expand its automated micro-fulfillment centers that use robotics to handle e-commerce deliveries. (SC)

• Job platform Pintarnya raised $16.7 million in Series A funding led by Square Peg to expand its services targeting blue-collar workers with AI-powered job matching and financial services. (TC)

• Interhuman AI raised €2 million ($2.34 million), led by PSV Tech, to develop the first "social intelligence layer" for AI systems to decode facial expressions, body language, and voice tonality. (EUS)

• Spaceflux raised €6.2 million ($7.25 million) in seed funding co-led by the UK Innovation & Science Seed Fund to scale its global telescope network for tracking satellites and space debris. (ETQ)

FREEDOM

🍽️ Cracker Barrel Board Member's DEI Ties Resurface Amid Blowback Over Replacing Traditional Logo

The Scoop: Cracker Barrel faces mounting criticism over its rebranded logo and revamped restaurant interiors, with conservative activist Robby Starbuck singling out a board member for his DEI expertise, Fox Business reports.

The Details:

• Gilbert Davila, a board member since 2020 and a significant shareholder, has drawn scrutiny for his 15-year tenure leading DMI Consulting, a firm focused on DEI and multicultural marketing strategies.

• The company replaced its long-standing logo—a man leaning on a barrel—with a minimalist design featuring its name in black text over a yellow barrel-shaped backdrop, while adopting a modernist interior aesthetic, sparking customer backlash.

• Starbuck said Cracker Barrel’s leadership, shaped by Davila’s prior DEI roles at Walt Disney and Sears, has embraced progressive policies, including participation in LGBTQ pride events and DEI-driven hiring practices.

What’s Next: Sustained consumer pushback could erode Cracker Barrel’s connection with its traditional clientele, pressuring financial performance and forcing the company to reconsider its branding strategy or clarify its commitment to its heritage.

Freedom Roundup

🏛️ Policy, Free Speech & Woke Overreach

• ⭐ Editor’s Pick: Disney seeks new content to engage Gen Z men as its Marvel and Lucasfilm franchises struggle to maintain appeal due to the films’ progressive themes. (VAR)

• The nation’s largest teachers’ unions, the National Education Association and American Federation of Teachers, have collectively donated nearly $50 million to left-wing groups. (FOX)

• Sen. Amy Klobuchar's (D-MN) NO FAKES Act would enable censorship of AI-generated parody after she demanded removal of a satirical deepfake video mocking her reaction to a Sydney Sweeney advertisement. (RTN)

• Bluesky blocked access to its service in Mississippi rather than comply with state law requiring age verification for all social media users. (WIR)

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

Feel free to reply to this email with any questions and/or comments.

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.