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- [00:01]
IBM Executive
The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM
- [00:34]
Alex Osola
the US Will allow Iran to immediately start selling oil as part of the deal to end the war. Plus why SpaceX is spending $60 billion on the AI coding. Agent cursor SpaceX thought it was a
- [00:46]
Becky Peterson
rocket company, thought it was a satellite company, and it's going to keep doing both of those things. But its new Future is in AI.
- [00:55]
Alex Osola
And is Qualcomm actually a bargain among AI chip makers? It's Tuesday, June 16th. I'm Alex O of Love for the Wall Street Journal. This is the PM edition of what's News, the top headlines and business stories that move the world today. The Trump administration says the agreement to end the war between the US And Iran was signed electronically on Sunday. No text has been released, though. Speaking Today from the G7 meeting in France, President Trump said that could soon change.
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Alex Ward
But I will actually, I'll not only release it, I'll prob have a press conference and read it to you word by word so that the press covers it accurately because it's a, it's a very important document.
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Alex Osola
Some of what the document contains has already begun trickling out. The Journal is exclusively reporting that the US Would allow Iran to immediately begin selling oil and fuel. A senior US Official says that sustained sanctions relief would depend on how Iran complies with core US demands like opening the Strait of Hormuz and the dismantling of Iran's nuclear program. Tehran would also still not get immediate access to billions of dollars in frozen funds. WSJ national security correspondent Alex Ward is reporting from Geneva and says this will be a financial benefit to Iran, a sensitive topic for the Trump administration.
- [02:18]
Alex Ward
It feels like it's basically a payment to Iran to get them to sign the deal, right? You'll hear the Trump administration say, well, there are billions of dollars in frozen assets that the US Is not going to unfreeze to Iran, but in effect, by letting them sell oil, Iran will be getting revenue.
- [02:32]
Alex Osola
Alex says some of Trump's supporters are skeptical of the deal.
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Alex Ward
There are a lot of MAGA folks who are supportive of the president but did want to see regime change in Iran or did want to see Iran pay a heavier price for ending the war. What we have right now is an interim agreement to continue nuclear talks. And if the US were to get massive concessions from the Iranians on the nuclear front, then, okay, then you could make the case that this down payment was worth it. You'll have the critics say, well, Iran's already getting money up front from these oil sales. What incentive do they really have to engage in pretty strict restrictions of its nuclear work?
- [03:14]
Alex Osola
SpaceX said today that it would buy the parent company of AI coding agent Cursor for $60 billion in stock. Cursor is a favorite tool of Silicon Valley, and it already brings in billions of dollars in annual revenue. The deal comes just a few days after SpaceX's historic IPO, and on the same day that SpaceX surpassed Amazon in market cap at $2.66 trillion. It's now the fifth largest publicly traded company. For more, I'm joined now by Journal reporter Becky Peterson. Becky, what does SpaceX want to do with Cursor?
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Becky Peterson
Well, Cursor is a really successful app for coding. It's competitive with cloud code and with OpenAI's Codex, it's going to give SpaceX the opportunity to reach these enterprise customers who want to use AI to redo how software is built at their companies.
- [04:03]
Alex Osola
One of the things I remember from the lead up to SpaceX's IPO is that many of these big projections for SpaceX's future really built around its AI business. So how critical is this acquisition to SpaceX's business?
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Becky Peterson
Yeah, that's really the thing to understand about this. SpaceX thought it was a rocket company, thought it was a satellite company, and it's going to keep doing both of those things. But its new future is in AI. The acquisition of XAI in February created this whole new future product lineup and this whole new vision for the company, and really helps justify its big price on the stock market.
- [04:43]
Alex Osola
Well, speaking of prices, I mean, Cursor, yes, was known as a Silicon Valley darling. It kicked off this vibe coding tre. But can you tell us a little bit about what it does and why it's worth $60 billion?
- [04:55]
Becky Peterson
Software development has been a very lucrative career for all of these people in Silicon Valley for decades, and AI is about to replace it. So Cursor is part of that and a lot of that valuation, it's aspirational. It's SpaceX wanting to make sure they get the best product that they can. And in this moment, in Silicon Valley, that means paying an absolute premium. They do have good financial models, subscription revenue. It's recurring revenue, so it's really reliable. It looks good on a financial balance sheet.
- [05:29]
Alex Osola
Today, SpaceX's stock rose almost 5% and it's now about 50% higher than its IPO price. What is driving this?
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Becky Peterson
Investor enthusiasm, hopes and dreams and excitement about the future that Elon Musk is promising. And some of that is Mars, some of that is AI data centers. But the total addressable market that SpaceX outlined in its IPO prospectus is mostly AI applications. And that's where Cursor fits in.
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Alex Osola
That was WSJ reporter Becky Peterson. Thanks, Becky.
- [06:00]
Becky Peterson
Thank you.
- [06:01]
Alex Osola
In other deals news, growth in the US Pizza industry has stalled. And Yum Brands said today that it will sell its Pizza Hut chain to two separate buyers. It's selling the operations outside mainland China to private equity firm Long Range Capital for about one and a half billion dollars. And and Yum China holdings will buy the China business for about $1.2 billion. The deal allows Yum to focus on its better performing brands such as Taco Bell and kfc. And the Journal has learned that General Motors is in talks with Lockheed Martin about making parts for its weapons. They're still talking about which parts GM would make. GM and Lockheed executives announced their agreement to work together to increase munitions production At a conference today in Detroit. The vice president of strategy for the GM defense unit, Bruce Brown, explained how the company would approach this.
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Bruce Brown
It's the same model that's making us successful right now for our infantry squad vehicles. And we think about GM defense. It's that commercial off the shelf model here we pull directly from our Chevy Colorado. So it's an opportunity here for us to expand on those key core competencies that we already have and apply them across the wide range here and hopefully into Lockheed Martin and, you know, help enable this defense industrial base here and delivering that equipment at speed and at scale.
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Alex Osola
So GM CEO Mary Barra has met with Trump administration officials to discuss a larger military role for the automaker. The administration says that production needs to be beefed up to replenish stockpiles of missiles and other critical weapons that have fallen because of the wars in Ukraine and Iran. But there are doubts that American weapons makers are able to meet increased demand. President Trump has invoked a law from the Cold War era, the Defense Production act, to increase weapons production. He wrote a memo this month to Defense Secretary Pete Hegseth saying he should pursue deals with private companies to, quote, provide for the national defense. Coming up, Marriott is raking it in from its credit cards and its hotel owners. Want a piece more on that after the break.
- [08:03]
ReliaQuest Announcer
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- [08:38]
Alex Osola
In the latest on job cuts, EV startup Rivian laid off about 2% of its workforce today. The hundreds of employees included people handling sales and marketing. It's meant to help make the company profitable as it launches a key new model, the R2 SUV, and brokerage firm Robinhood said it will lay off 10% of its workforce, or about 290 jobs. CEO Vlad Tenev told employees today that the cuts were an effort to keep the company lean, even as its business has never been stronger. In other corporate news, we're exclusively reporting that more than 50 of America's biggest hotel owners are pressuring Marriott to share more of the wealth from its Marriott Bonvoy loyalty program. The franchisees say it's costing them too much to provide rooms when customers cash in their credit card points at their Marriott hotels. Marriott has said that fee revenue from its co branded credit cards is expected to jump 35% this year, to nearly $1 billion. Marriott risks taking a hit to its stock price if it significantly reduces its fee revenue. Its shares today slipped by less than 1%. Yesterday's market rally didn't carry over to today, and major US indexes ended the day mixed. The Dow rose 0.6%, while the S&P dropped 0.6% and the Nasdaq fell 1.2%. The bull market that has lifted many tech stocks seems to have left Qualcomm behind. Most people on Wall street know it as a smartphone chip company. Not a great place to be as smartphone sales are expected to decline this year. In its most recent quarter, more than half of Qualcomm's revenue came from sales of smartphone chips, and its stock has returned an anemic 5% over the past two years. An index that tracks chip stocks, meanwhile, is up more than 150% during that same period. However, WSJ heard on the street writer Asa Fitch says that lately it's looking more like Qualcomm could become a force in the data center chip business.
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Asa Fitch
In April, when they announced their earnings, they said that they had a major customer for their data center chips. They have some ingredients that could really work well in the data center if they're all put together. Will it be successful? It's really hard to say because Nvidia, of course, is the elephant in the room and it's really hard to displace that elephant. But they're trying and they have a reasonable chance of success, especially if this whole AI boom thing continues to go the way it's been going and demand doesn't fall off. They have an investor meeting next week where they're going to try to put some more detail around what they're actually going to do to capture part of this market. So that's going to be a big fork in the road for them.
- [11:04]
Alex Osola
And that's what's news for this Tuesday afternoon. Today's show is produced by Anthony Banci and Danny Lewis with supervising producer Tali Arbel. Well, I'm Alex Osola for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. Hey, this is Telus Demos and I'm Miriam Gottfried. We're reporters at the Wall Street Journal and The hosts of WSJ's take on the Week. It's a weekly show that gives listeners a leg up in the world of markets and investing. From the Fed's moves to market bubbles, we dive into the biggest deals, key players and business news ahead. If you're looking for more news and tools that you can use to help navigate the markets, consider becoming a subscriber to the Wall street journal. Visit subscribe WSJ.com takeontheweek to subscribe now.