Nadella’s Hedge: Microsoft Wants To Make AI Models Cheap – Then Own The Rails They Run On
The entire AI capital cycle – roughly $700 billion in hyperscaler capex this year, an estimated $2 trillion-plus through 2028 – is collateralized by one belief: that intelligence is scarce, and therefore priceable. That belief is already under strain. Per-token inference prices have fallen on the order of 200× in a year, and the only thing holding revenue up is volume; the cost of intelligence is dropping even as the cost of deploying it climbs. Hyperscaler free cash flow is rolling over. The Fed has named AI capital spending a systemic risk.
And after falling behind in the race to build the best AI, Microsoft is setting up for a massive hedge. The company is on track to spend north of $120 billion this fiscal year – most of it on GPUs and the data centers that house them, $37.5 billion in a single quarter alone, pushing free cash flow negative for the first time in a generation. That is a company betting intelligence is scarce. Yet to the Wall Street Journal last week, Nadella argued the opposite is coming – that intelligence is about to get cheap. The tell isn’t a contradiction. It’s a hedge: if you can’t win the race to build the best model, you make the model worthless and own the road it runs on.
Microsoft is already executing on the hedge. In the weeks surrounding the interview, the company rolled out a new wave of lower-cost models and made Copilot Cowork generally available worldwide – an autonomous agent designed for long-running tasks that lets users (or the system) dynamically route work across multiple models, explicitly including cheaper options. Axios reported that Microsoft is also actively weighing whether to host a version of DeepSeek, the ultralow-cost Chinese model, directly inside Azure for Copilot customers. The model would be optional for users, fully hosted on Microsoft’s infrastructure, and wrapped in the company’s enterprise security, compliance, and data-residency controls.
These aren’t side-quests, they are the product-level proof of the thesis: make intelligence abundant and interchangeable while keeping the customer, the data, and the workflow inside Microsoft’s perimeter.
Nadella believes intelligence is about to become abundant, interchangeable, and cheap, as a wave of agents routes work to the lowest bidder. And as the cost per unit of intelligence plummets, he wants Microsoft to own the rails it runs on.
In an interview last week with the Wall Street Journal, Nadella suggested that pitchforks would come out if just a few concentrated AI companies dominate the space, while using massive amounts of energy to do so.
“You can’t say, hey, all white-collar jobs are gone and this could even be a weapon and we will use all the power to build data centers,” he told the outlet, adding that the public wouldn’t tolerate just a few models and companies “doing all of the learning for the world.”
It’s a clean argument. It’s also the argument of a company under federal antitrust scrutiny, repositioning as the people’s champion right before the regulators arrive. The civic case and the competitive case happen to point the same direction.
So it appears Microsoft has concluded it cannot win the model layer on raw capability. Instead, it intends to make that layer less decisive and relocate the moat to the layers it already owns. In Nadella’s framing, models become interchangeable commodities – “all hill-climbing inside a machine you control.” That machine is Azure + AI Foundry, the orchestration layer that decides which model (OpenAI, Anthropic, DeepSeek, open-source, or future Microsoft fine-tunes) handles which task at what price. Copilot becomes the persistent agentic interface that keeps the customer relationship. The real scarcity, and therefore the real moat, is the proprietary enterprise data and existing workflows that already live inside Microsoft 365, Dynamics, GitHub, and the company’s security and compliance boundary. Customers get the benefit of the cheapest or best model for the job without ever leaving Microsoft’s control plane or handing their data to a frontier lab. In short: as the model layer commoditizes, whoever owns the data gravity and the distribution layer gets to drink everyone else’s milkshake.
If Nadella is even directionally correct, the entire $700 billion-plus annual hyperscaler capex cycle – and the $2 trillion-plus cumulative spend projected through 2028 – faces a major structural problem. Per-token inference prices are collapsing far faster than volume is rising for many workloads. Free cash flow at the big spenders is already rolling over. The only way the math works is if intelligence becomes so cheap and abundant that total usage explodes, or if the hyperscalers successfully migrate margin upstream into orchestration, agent routing, fine-tuning on proprietary data, and enterprise distribution.
Microsoft is placing its bet on the second path. By pushing models toward commodity status while locking customers into Azure orchestration, Copilot agents, and their existing data estates, the company is trying to turn the very price collapse that threatens the capex thesis into a competitive advantage. The companies that spent the last two years preaching scarcity and hoarding frontier capability may discover they have built extremely expensive infrastructure whose primary output – raw intelligence – is rapidly losing pricing power.
Here’s the setup most investors are underrating right now. Over the next two weeks, the tape will trade on plumbing rather than fundamentals. We just cleared the largest options expiration in history. Quarter-end pension selling comes next, and then July 1 reopens the passive-money firehose into a market that already routes forty cents of every S&P 500 dollar into ten stocks. The whole market technical backdrop points higher into July. But Kevin Warsh’s first meeting as Fed chair just put a rate HIKE back on the table, and that quietly changes the math underneath every one of those flows.
I want to give credit where it’s due. Scott Rubner, the chief equity and derivatives strategist at Citadel Securities, laid out the mechanical case in a note last week, and I agree with most of his map.1 Citadel sees about 35% of all US retail order flow, so when they describe positioning, I listen. The disagreement isn’t about the flows. It’s about what got armed underneath them on Wednesday afternoon.
The Setup: Two Weeks of Pure Mechanics
Three events are stacked on top of each other. First, Thursday’s quadruple witching, pulled forward a day because of the Juneteenth holiday, cleared roughly $8.3 trillion of US options exposure, about 28% of all listed open interest, and the biggest expiration ever recorded.1 That event strips a mountain of dealer gamma out of the market, which is the technical way of saying price gets less anchored and more sensitive to whatever flow shows up next. That’s the first piece of the technical backdrop heading into quarter-end.
Secondly, we are heading into the end of the second quarter. With the large surge in the financial markets, any allocation-based fund managers are now overweight equities and underweight bonds. As shown, the top 100 US pension funds are now roughly 110% funded, their healthiest position since 2001.1
The reason that is important is that funded plans don’t press their luck; they de-risk. As noted, the “out of balance” mechanic suggests a risk of mechanical selling of equities and buying of bonds into the month-end. Any weakness that the “rebalancing” mechanic creates is a flow story, not a fundamental one. However, on July 1, that negative flow flips the switch the other way. Retirement contributions, target-date funds, passive allocations, and systematic strategies all reload at once.
The scale of that reload is the part worth sitting with. ETFs have already pulled in more than $1 trillion this year, running about 45% ahead of last year’s record pace.1 The average full year of ETF inflows through 2024 ran near $490 billion.
Read that again. Investors have committed twice as much as a normal year’s worth of money in under six months, and a growing slice of it is mechanical.
The Technical Backdrop Beneath the Headlines
Before we argue about flows, let’s anchor the technical backdrop in the actual price. The S&P 500 closed Wednesday at 7,420 after Warsh’s debut knocked 1.21% off the index, then rebounded roughly 1.2% Thursday to near 7,505 ahead of the long weekend.2,3 Even after the Fed scare, the index sits about 2% above its 50-day average, nearly 8% above its 200-day, and only a couple of percent under the all-time high it set this month at 7,620. The spring low of 6,344 is now seventeen percent below us.
That last point matters. As of Wednesday, only about 58% of S&P 500 members were trading above their own 50-day average.4 Healthy advances usually carry 70% to 80% of the index along for the ride. This one keeps making highs on the backs of a shrinking list of names. The index looks strong. The average stock inside it looks tired.
I won’t pretend the demand picture is anything but strong. Retail activity broke records in May and has pushed higher in June, with nine of the ten busiest retail trading days ever landing inside the last month.1 Corporations have authorized north of $925 billion in buybacks this year, the fastest pace on record through mid-year, and technology plus financials make up roughly 57% of it.1 When retail, passive, and the buyback machine all lean in the same direction, fighting that tape has been a losing game.
Here’s the problem buried inside the good news, and it’s the part of the technical backdrop that worries me most. All three of those buyers funnel into the same handful of stocks. Roughly 18 cents of every S&P dollar now chases semiconductors, 33 cents lands in the Magnificent 7, and close to 40 cents flows into the ten largest holdings.1 Leveraged ETFs have compounded it. Their assets hit a record $218 billion, up about 60% since the end of March, with semiconductor-linked leverage nearly tripling.1
Here’s Where I Part Ways With the Flow Note
Rubner’s call is that the path of least resistance stays higher into the back half of the year. On the mechanics alone, I’d struggle to argue with him. The seasonal record is genuinely strong, too. Since 1928, the S&P has risen 69% of the time in the first half of July, and the Nasdaq 100 has been positive in 17 of the last 18 years.1
So why am I not all-in on the bull case? Because the note was written one day before, the technical backdrop beneath it changed. The entire dip-buying reflex that Citadel documents rests on an unspoken belief that the Fed has investors’ backs. On Wednesday, Kevin Warsh quietly took that belief away. The committee held at 3.75%, but half the FOMC penciled in at least one rate increase this year, the easing bias vanished from the statement, and the S&P booked its worst first “Fed day” for a new chair since 1994.2,5 The ten-year yield jumped back toward 4.5%.3
Make no mistake about what that does to the math. Citadel’s own data shows the buy-the-dip behavior holds until the VIX climbs above 30. Today it’s nearly 17. That sounds reassuring. It isn’t. A 17 reading isn’t safety, it’s complacency, and complacency is precisely the condition Howard Marks warns about when he says the riskiest moment is the one that feels least risky. As Bob Farrell’s Rule #9 reminds us, when everyone agrees on the outcome, something else tends to happen.
And remember Farrell’s Rule #4: exponential moves go further than anyone expects, but they don’t resolve by going sideways. A market that runs on flows, leverage, and a shrinking group of leaders can absolutely melt up into July. It can also reverse hard the moment those same mechanical buyers turn into sellers. I’ve been writing for weeks that this is a tape driven by positioning more than fundamentals, and I covered the record retail ETF flows in a recent Daily Market Commentary.Strong flows are bullish until the catalyst arrives that makes them stop.
What the Technical Backdrop Means For Your Portfolio
None of this is a reason to sell everything and hide. It’s a reason to participate with discipline rather than abandon. The seasonal and flow tailwinds are real, and fighting them outright has cost investors dearly. We stay invested. But this is a tape to manage, not to chase.
In our portfolio models, we haven’t pressed our most extended winners, but trimmed the most stretched exposure back toward target weight. We also added to our defensive names and let our cash buffer continue to ride for now. As such, we keep participating without betting the account on a melt-up that depends on the Fed staying friendly. That’s the trade-off worth naming out loud. Carrying a little cash caps your upside if the market runs another leg. It also hands you dry powder if quarter-end selling or a Warsh follow-through gives you a better entry. I’ll take that asymmetry here.
Watch three things into the new quarter.
The VIX. A move toward 30 is the level where, by Citadel’s own work, the reflexive dip-buyers go quiet.
Breadth. If the percentage of stocks above their 50-day keeps fading while the index grinds higher, the divergence usually resolves the wrong way.
Lastly, watch the long end of the curve. If Warsh’s signal keeps the ten-year climbing, the most expensive, most crowded, most rate-sensitive corner of this market, the same one soaking up forty cents of every dollar, is the corner that pays for it first.
The technical backdrop and the flows point higher into July. I won’t fight that into the new allocation cycle, but a tripwire just got armed underneath the whole thing. As such, the smart move is to keep one hand on the risk dial while you collect the seasonal tailwind.
Another Ukrainian Drone Wave On Moscow Temporarily Shuts Down All Four Capital Airports
Yet another major Ukrainian drone attack wave on Moscow has shut down all regional airports, and sent parts of the capital city into temporary panic, and involved dozens of drones shot down overnight. Over 80 drones were intercepted in the past 24 hours, Moscow mayor Sergei Sobyanin announced Monday on Telegram.
He didn’t offer numbers in terms of casualties or damage, but emergency services were dispatched to several areas, given there was debris fallout and key neighborhoods impacted.
Across Russia more broadly, hundreds of drones were reportedly downed overnigh, but most of the attacks seemed concentrated on the Moscow area.
The Moscow Timesreports of the Moscow region’s four commercial flight hubs, “Civil aviation authorities said operations at Sheremetyevo, Vnukovo, Domodedovo and Zhukovsky airports were suspended during the multi-hour attack for safety reasons. The flight restrictions were lifted later in the morning.”
Much of the information on strike targets in Russia have come through Telegram and social media channels, and have remained unconfirmed on an official level, but various videos suggest a very large-scale attack.
For example, Sky News reports that “Another post claimed a factory producing electronics for Russian missiles had been struck in Voronezh, more than 100 miles from Ukraine.”
All Moscow airports have been closed down due to drone attacks.
— Anton Gerashchenko (@Gerashchenko_en) June 22, 2026
Meanwhile, Ukraine has also suffered significant damage and losses – including reports that a Russian drone killed three members of one family, among the victims a 13-year-old boy, in Ukraine’s northern Sumy region, as cited in Reuters.
President Zelensky commented, “Yet today, Russia began this day not by honoring those who fell in World War II, and not with signals that could help bring the current war – Russia’s war against Ukraine – closer to an end. Instead, it began with more completely unjustifiable killings.”
“This Russian war has no justifiable cause. Putin was driven by exactly the same motives as the aggressors who came before him. He shows the same contempt for human life. He is just as delusional about this absurd ‘empire’ of his that nobody needs. This war must be brought to an end.”
Ukraine has been escalating the aerial drone war – seeking to impose a high cost on Russia’s industrial and military base – even as it continues to suffer serious manpower shortages along the front lines in the east…
What do you do when you are short of Patriots?
You do this to your enemy’s factory making electronics for ballistic missiles.
Hit the arrow-maker, not the arrow. Voronezh, Russia, today. pic.twitter.com/gqTp5QIMAd
Zelensky has also again vowed to bring the war to Russia – and in particular it has been rare massive attacks on Moscow which have been particularly devastating. Key energy sites have continued to be pummeled.
The end of last week saw one of the biggest single drone waves on Moscow, after which Russia has vowed to carry out frequent and “massive group strikes” against Ukraine.
Carleen Noreus, who owned two nursing schools in South Florida, has pleaded guilty to her role in a scheme that sold nearly 3,000 fraudulent nursing diplomas, the Department of Justice (DOJ) said in a June 18 statement.
The defendant, 52, from Plantation, Florida, was president of the Carleen Home Health School Inc. in Plantation and vice president of Carleen Home Health School II Inc. in West Palm Beach.
“Noreus conspired with others to sell fraudulent nursing diplomas and educational transcripts to individuals who had not completed the required coursework or clinical training to earn Registered Nurse (RN), Licensed Practical Nurse/Vocational Nurse (LPN/VN), or Bachelor of Science in Nursing (BSN) credentials,” the DOJ said.
“The fraudulent diplomas and transcripts falsely represented that purchasers had successfully completed the academic and clinical requirements of the schools when, in reality, they had not.”
The documents allowed the buyers to take part in national nursing board examinations. Those who passed the exams obtained nursing licenses and employment in the healthcare sector.
In total, Noreus provided 2,956 fraudulent nursing diplomas through her two schools between April 17, 2018, and Oct. 8, 2025. Of the individuals who obtained fake credentials, roughly 2,274 passed the nursing exams, secured licenses, and gained employment in Florida and other parts of the United States. Both institutions have been shut down by state authorities.
The case is part of the second phase of Operation Nightingale, a multi-state law enforcement action launched in January 2023 to arrest individuals who sell fraudulent nursing degree diplomas and transcripts.
The operation led to 25 individuals being charged for the fraud scheme in January 2023. In a Jan. 25, 2023, statement, the DOJ said that more than 7,600 fake nursing diplomas were issued by three nursing schools in South Florida.
On Sept. 15, 2025, the DOJ said that 30 defendants were charged and convicted in 2023 as part of the operation. In addition, the department also announced charges against 12 people in phase two of Operation Nightingale.
Thirteen individuals have been charged in the second phase, including Noreus, the DOJ said in its latest statement. Noreus, who pleaded guilty to conspiracy to launder money and conspiracy to commit wire fraud, faces a maximum penalty of 20 years in prison for each count.
“Nursing licenses must be earned through education, training, and demonstrated competence, not purchased through fraud,” said U.S. Attorney for the Southern District of Florida Jason A. Reding Quiñones.
“By selling thousands of fraudulent diplomas and transcripts, the defendant undermined the integrity of the nursing profession and our healthcare system. The Southern District of Florida remains committed to holding accountable those who profit by corrupting professional licensing processes and placing the public at risk.”
Earlier this year, a Maryland man was sentenced to 21 months in federal prison in another case of nursing credential fraud, according to a DOJ statement issued on April 24.
The person sold fake documents in the name of a Virginia nursing school, which falsely affirmed that buyers had completed the required courses and training at the institution to secure nursing degrees. The individual also sold fraudulent nursing degrees from a Florida-based nursing school.
Nursing Shortage
The country’s nursing workforce is projected to face a shortage in the coming years, according to a December 2025 report from the National Center for Health Workforce Analysis.
“At the national level, there are shortages projected until 2038. Specifically, there is a projected 8 percent shortage of registered nurses (RNs) in 2028. By 2038, the shortage is 3 percent (a shortage of 108,960 full-time equivalent [FTE] RNs),” the report stated.
“Nonmetro areas are projected to have a higher shortage of RNs than metro areas in each of the three interval years: 11 percent vs 2 percent in 2038, 18 percent vs 4 percent in 2033, and 24 percent vs 5 percent in 2028.”
However, National Nurses United (NNU), a professional association of registered nurses with over 225,000 members nationwide, dismissed claims of shortages in a May 26 statement.
An analysis conducted by the group found that almost 1.15 million registered nurses in the country with active licenses were not working as nurses, the statement said.
NNU president Jamie Brown said the U.S. nursing sector is facing a “retention crisis” rather than a shortage, blaming “unsafe and unsustainable” working conditions for driving many nurses away from their jobs.
U.S. President Donald Trump renewed his threat of legal action against The New York Times on June 21, accusing the newspaper of publishing “treasonous” coverage that downplayed the impact of the nearly four-month war with Iran.
“I will be adding all of their false and ridiculous reporting to my multi Billion Dollar lawsuit against them. They are Criminals,” Trump wrote in a June 21 post on Truth Social.
“The headline in the Corrupt and Failing New York Times: ‘What Changed After Almost 4 Months of War? Analysts Say Not Much.’ REALLY?” Trump wrote in a separate post.
“Their Military is DONE, their Navy is GONE, their Air Force is GONE, their Launching Pads, Missiles, Drones and Manufacturing of same, is almost GONE, their top two sets of Leaders are GONE, their Inflation is at 250%, their Economy is BROKEN, their Soldiers aren’t being paid, the Hormuz Strait is OPEN, THE OIL IS GUSHING, and the U.S. Stock Market and Jobs are at record HIGHS,” he added.
The Epoch Times contacted the NY Times for comment but did not hear back by publication time.
In another post, Trump included a screenshot of an X post from Sen. Lindsey Graham (R-S.C.), who also criticized the NY Times.
“To say nothing has changed after Operations Midnight Hammer and Epic Fury is an insult to our men and women in uniform.” Graham wrote in the post.
“To say nothing has changed denies the devastation to the Iranian economy created by the blockade and other economic pressures applied by President Trump.
“This analysis by the New York Times says more about their bias against President Trump than it does the undeniable facts about the state of play in Iran.”
The NY Times piece published on June 21 said that “roughly 100 days later, as the United States and Iran have reached a somewhat vague memorandum of understanding to end the war, skeptics are expressing bafflement over what exactly has transformed.”
“Neither the war nor the agreement ended what U.S. and Israeli officials regard as the main threats emanating from Iran. The country’s nuclear program, while heavily damaged, was not eliminated – its fate punted to future negotiation,” it added.
Prior Lawsuit
In September 2025, Trump filed the $15 billion lawsuit against the NY Times and its reporters, accusing the newspaper of defamation.
Trump filed the lawsuit in U.S. District Court in Florida over articles and a book written by two NY Times reporters and published during the height of the 2024 election, alleging that they were crafted with “actual malice, calculated to inflict maximum damage” on him.
“Defendants maliciously published the book and the articles knowing that these publications were filled with repugnant distortions and fabrications about President Trump,” the lawsuit reads.
A spokesperson for the NY Times at the time said the lawsuit “has no merit,” calling it an attempt by the president to “stifle and discourage independent reporting.”
“The New York Times will not be deterred by intimidation tactics. We will continue to pursue the facts without fear or favor and stand up for journalists’ First Amendment right to ask questions on behalf of the American people,” the spokesperson told The Epoch Times via email at the time.
Trump announced the lawsuit in a Truth Social post, saying that the NY Times had become “a virtual mouthpiece for the radical left Democrat Party” and cited its endorsement of then-Democratic presidential candidate and Vice President Kamala Harris.
“Their Endorsement of Kamala Harris was actually put dead center on the front page of The New York Times, something heretofore UNHEARD OF,” he said.
Tehran Disputes Vance Claims On Nuclear Inspections & Assets For Agriculture Funding Amid Oil License Deal
Summary
Unfreezing Assets divergence in official rhetoric: “It is not true that Iran’s blocked funds will be used to buy grain, and it is not mentioned in any understanding,”
Nuclear Inspector divergence: Vance said Iran agreed to admit nuclear inspectors, but Iranian state media denied any such agreement was reached.
Oil Relief: The U.S. issued a 60-day license allowing Iranian oil production and sales as part of the emerging negotiation framework.
Talks Continue after top negotiators depart Switzerland: Both sides described the Switzerland talks as constructive, with technical negotiations set to continue over the next 60 days.
Hormuz Commitment: The U.S. says Iran agreed to keep the Strait of Hormuz open, easing market concerns, though major issues remain unresolved.
More Divergence in Official Rhetoric from Switzerland
Vice President JD Vance earlier outlined a proposal under which any future release of frozen Iranian assets would remain subject to US oversight, allowing Washington to influence how the funds are spent. According to Vance, the concept was developed by Jared Kushner and would direct the money toward purchases of American agricultural goods.
The big assertion: “We wanted to make sure that we set up a process where if we ever unfreeze Iranian assets, we can ensure that money, that Iranian money, goes to help the people of Iran and not to fund terrorism,” Vance said.
After first denying Vance’s claims on nuclear inspectors being ‘agreed’ by Tehran to reenter the country–
now this…
“It is not true that Iran’s blocked funds will be used to buy grain, and it is not mentioned in any understanding,” Iran’s Tasnim reports. This 60-day period is likely to be filled with more constant claims and counterclaims regarding what’s been agreed to or not, and the crisis remains highly fluid and the ‘brink of war’ return is ever present, also given the sensitive Lebanon situation.
US Vice President JD Vance has suggested that any future release of frozen Iranian assets could be structured to ensure the funds are used for civilian purposes, including the purchase of American agricultural goods “for the benefit of the Iranian people”.
According to @TreyYingst of Fox News, Iran has committed to allowing inspectors from the International Atomic Energy Agency (IAEA) back into Iran to work to locate and dismantle key nuclear facilities. Per the report, Vice President JD Vance, alongside Envoy Jared Kushner, were… pic.twitter.com/6twiRPIhka
State Media Says Vance Claim on Nuclear Inspectors ‘False’
Iranian state Fars is reporting that US Vice President Vance’s earlier in the day announcement that Tehran agreed to the return of IAEA inspectors to the country is “false”, citing a government source.
“There was no talk of the presence of inspectors in the country in the Swiss negotiations,” Fars says. And so the divergent rhetoric continues to be a serious issue, even as this is only the very beginning of an expected long-haul 60-day nuclear negotiation process.
Each side has been accusing the other of jumping the gun on premature statements and official leaks to the press. Also it could be that the return of inspectors is part of the framework for the future, but that Vance perhaps stated it as accomplished fact – and apparently Tehran doesn’t yet see it that way. Al Jazeera reports on Iran’s current official stance:
Iran will continue its cooperation with the International Atomic Energy Agency (IAEA) in line with existing procedures, foreign ministry spokesman Esmail Baghaei told IRNA.
The interactions with the IAEA will take place in “accordance with the approvals of the Islamic Consultative Assembly and the decisions of the Supreme National Security Council”, IRNA quoted Baghaei as saying.
🚢Lots of oil leaving Strait of Hormuz (dark and visible)
🛢️Plus SoH bypass pipelines still going full throttle
⛽️US / Japan / Europe SPR barrels still flowing
🇮🇷 Iranian oil now legal for (at least) next 60 days
🇨🇳China remains on an oil buying strike
US Issues 60-Day License For Iranian Oil Sales As Tehran Agrees To Hormuz Access, Nuclear Inspections
As part of the MoU framework, and ongoing technical peace discussions in Switzerland (with US and Iranian teams still though – though Vance and Ghalibaf have at this point departed after their 18-hour first round achievement – Treasury has issued a temporary 60-day general license authorizing the production, delivery, and sale of Iranian oil – it stated in a huge forward-momentum development. Treasury Secretary Scott Bessent announced on X:
Vice President JD Vance described an initiative for unfreezing Iranian assets that would grant the US approval over what Tehran can purchase using the money.
He said the plan, conceived by President Donald Trump’s son-in-law Jared Kushner, would require the money be spent on…
Under President Trump and Vice President Vance, we continue to make the world safer and more prosperous. In line with the ongoing productive talks in Switzerland, Iran has committed to free and open transit in the Strait of Hormuz and to permit International Atomic Energy Agency (IAEA) inspectors into their country. As part of the framework, Treasury has issued a temporary 60-day general license authorizing the production, delivery, and sale of Iranian oil.
Oil dropped to low of day on the significant latest development:
Some further details:
US AUTHORIZES SOME SALES OF CRUDE OIL OF IRANIAN ORIGIN
US LICENSE AUTHORIZES SALES THROUGH TO AUGUST 21, 2026
US LICENSE AUTHORIZES IMPORTATION OF CRUDE OIL OF IRANIAN OIL
However, Vance has also sought to inject some caution on some of the premature reporting regarding releasing frozen Iranian funds, amid complaints from US and Israeli hawks at home:
JUST IN: Vice President Vance pushes back on “misreporting” about Iranian assets potentially being unfrozen and says that if any of the regime’s money is freed up, it will go to help the American economy and make U.S. farmers richer:
Huge Claim & Breaking Through: Vance Says Iran Agreed to Let Inspectors Back In
Axios is reporting Monday morning Iran hasagreed to invite IAEA inspectors back to the country, according to fresh words of Vice President J.D. Vance, who focused all day prior and much into the overnight on forging a path forward toward permanent peace. The two sides are seeking to hammer out a long-term nuclear agreement, now amid the technical talks process, as delegation heads depart Switzerland – leaving diplomatic teams behind. The 60-day roadmap begins.
If indeed the UN nuclear inspectors are eventually let back into Iran, this would be a hugely significant step. This would be to verify compliance to the preliminary agreement, Vance further hails:
“Our hope is that we get to the final deal and a permanent settlement. But right now, I think we’ve made great progress and we should all celebrate that in terms of when the nuclear inspectors are going to start,” the American Vice President told reporters.
He described that he phoned UN nuclear inspectors at 2am last night to update them on the developments, however, he said that no one picked up the call.
“As you can expect, not many people are answering their phone at two in the morning,” said Vance. “I expect that will happen at the minimum this week, but we think even some of those conversations with the inspectors and with the IAEA could happen as soon as today.”
Both warring sides appear to finally be in the same page in terms of issuing ‘positive’ and ‘encouraging’ assessments earlier. There were reports of last-minute disagreements, threats, and warnings that the process could collapse near the conclusion of yesterday’s formal round one of talks.
“So they didn’t walk out, and their technical team is still here in Burgenstock working with our technical team,” Vance explained.
“What we told the Iranians yesterday is, ‘When you guys exchange in what us millennials might call trash talk, you can’t expect the president of the United States not to respond and not to correct the record’.”
Vance conceded that in the end there was a “a little bit of threatening” and “whining but at the end of the day, the talks continued and we made great progress.”
He further described that a mechanism had been established to keep the Strait of Hormuz open, while noting that significant work remained and that technical negotiations would continue. Also, importantly he said that a “very good foundation” was laid for a successful final agreement with Iran.
JD Vance:
I can’t stay here for the next 60 days. I will go back to the U.S.
The Iranian delegation, led by Mohammad Bagher Ghalibaf, also left the venue in Switzerland today – after approximately 18 hours of talks and consultations.
Meanwhile a fresh note from Goldman Sachs comments:
The Pakistan-Qatar communiqué, alongside comments from the Iranian Foreign Minister highlighting progress in negotiations, suggests we are heading into a prolonged period of talks rather than a near-term resolution. My base case remains that Iran will continue to use the threat of disruption around Hormuz as negotiating leverage rather than pursuing a definitive resolution. The most striking feature of the oil market today is the sheer size of speculative short positioning. There is a substantial amount of capital betting on lower prices, which locally makes further downside more challenging. That is before considering the more fundamental point that it is not obviously in Iran’s interest to allow oil prices to fall too far while negotiations remain ongoing.
China Expresses Support
China too has expressed hope Iran and the US will maintain the momentum and ultimately work towards positive progress, Foreign Ministry spokesperson Guo Jiakun said Monday from Beijing. He praised the mediation efforts by Pakistan, Qatar and other parties when asked about the Iran-US talks in Switzerland, the Xinhua news agency reported. “China supports Pakistan and Qatar and all relevant parties in their mediation efforts,” Guo said.
New Iran MFA statement:
However, while an uneasy calm has taken over Lebanon, with analyst Mohanad Hage Ali of the Malcolm H Kerr Carnegie Middle East Center in Beirut stressing: “The conflict now in Lebanon is waiting for another spark,” said Mohanad Hage Ali from the Malcolm H Kerr Carnegie Middle East Center in Beirut.”
“It just became a buffer zone, a kind of a punching bag in which anyone who wants to score can use it, whether to get at the US-Iran negotiations – which Israel specifically is not very happy about – or from the Iranian side, where a faction unhappy with how negotiations are going can sabotage them through the Lebanon front,” he explained.
Weekend Review
via Newsquawk
US and Iran talks opened in Switzerland on Sunday after US VP Vance arrived in Switzerland and the Iranian delegation led by chief negotiator Ghalibaf, which included Foreign Minister Araghchi, arrived on Saturday, while Pakistan’s Premier Sharif and military chief Munir travelled to Switzerland to join the US-Iran talks.
Iran’s delegation reportedly left the negotiation site in protest against statements by US President Trump, while Fars also reported that Iran halted talks with the US after Trump threatened strikes over Hezbollah’s actions in Lebanon. Iran said Trump’s threat is a blatant violation of the MoU and halted talks in Switzerland, while it is reviewing a response to Trump’s threats. However, sources cited by Al Hadath later stated that the Iranian delegation had not left the negotiation headquarters at the Burgenstock resort and the Iranian delegation head discussed a joint statement draft with mediators.
US President Trump threatened to resume bombing and take over the Strait of Hormuz if a deal is not reached, while Trump said the US may take tolls if it has to and that he has a 60-day option, in which he can do whatever after it. Trump stated he spoke with Iranian officials and used expletive language in the call with Iranian officials on Hormuz, as well as threatened that they won’t have a country if Hormuz is closed, according to Fox.
US President Trump posted that Iran must immediately stop their proxies in Lebanon from causing trouble, or else the US would hit Iran very hard again, “just like we did last week, only harder!!!” Trump separately commented that there will be no tolls in the Strait of Hormuz, unless they are imposed by the US.
UKMTO reported an incident in which a cargo vessel was approached by a craft with six armed persons onboard 92 nautical miles southwest of Yemen’s Mukalla in the Gulf of Aden.
Israeli army chief said the Lebanon ceasefire is fragile and forces remain ready for combat.
Israeli military convoy reportedly entered southern Syria’s Quneitra region, near the Israeli-controlled Golan Heights.
Negotiation Process:
Qatar and Pakistan issue joint statement on conclusion of US-Iran talks in Switzerland, while Qatar said first session of the US-Iran high level talks has concluded and that talks were conducted in a positive, constructive atmosphere. said:. Technical talks are to continue for remainder of the week. US and Iran agreed to de-confliction cell over Lebanon. Encouraging progress has been made, including creation of a mechanism for further technical talks. Parties agree to establish high-level committee to provide political oversight on mediation. High-level committee agrees on roadmap to reach final deal within 60 days.
“The negotiations of the main Iranian delegation in Switzerland have ended, however, experts are still in Switzerland and are following up on the implementation of the memorandum of understanding”, Tasnim reported citing sources.
Iranian negotiating team member said executive procedures about the release of Iranian frozen funds have taken place with the Qatari delegation and that a draft has been finalised regarding waivers of Iranian oil sanctions, which will be issued soon, although negotiations about other subjects will not take place if the war does not end in Lebanon.
“No negotiations have taken place on the nuclear file so far”, Tasnim reported citing a source.
US diplomat said talks included robust discussions on a nuclear deal and enforcing the ceasefire in southern Lebanon, while talks also involved clarifying the messaging on the Strait of Hormuz. Furthermore, a US official involved in the negotiations told Al Jazeera that they held in-depth discussions on all elements of the nuclear agreement, and that mechanisms have been worked on to prevent escalation and ensure the strait remains fully open.
Pakistani Army Chief said negotiating parties reached success stage, according to Al Arabiya.
US official involved in the negotiations told Al Jazeera that they held in-depth discussions on all elements of the nuclear agreement, adds mechanisms have been worked on to prevent escalation and ensure the strait remains fully open.
Sources cited by Al Arabiya said an anticipated statement will be issued by the Iranian and American negotiators and the mediators.
Sources cited by Al Hadath stated that the Iranian delegation has not left the negotiation headquarters at the Bürgenstock resort and Iranian delegation head discusses joint statement draft with mediators. Tasnim reported Iranian delegation refused to return to negotiations but message exchanges continue through intermediaries.
Iranian Commentary:
Iran’s Foreign Minister Araghchi posted Pakistani and Qatari mediation delivered major progress to end Lebanon War, oil and petrochem exports are waived, blockade lifted, frozen assets released, and major reconstruction & development plan launched for Iran.
Iran’s Foreign Ministry said the technical team is to continue work, but negotiation delegation work has concluded, adds significant progress achieved in quadrilateral talks in Switzerland. Spokesman said groundwork for starting negotiations for the final agreement was discussed.
Iranian Foreign Ministry Spokesperson Baghaei said Iran is working on safe passage mechanism for Hormuz and that Iran reported progress on oil sales and asset unfreezing, adds the war in all fronts, including Lebanon, must end.
Iranian Supreme Leader adviser Rezaei said the US is responsible for Israel’s actions in Lebanon and Iran will hold the US accountable in the event of a threat against Iran.
Iranian Deputy Foreign Minister Gharibabadi to lead the technical team in Switzerland, Sky News Arabia reported.
Iran resumed oil loading from Kharg Island after about a six-week halt, following the lifting of the US blockade of its ports.
Lebanon/Israel:
Al Jadeed News cites Haaretz source stating the Israeli army will be forced to partially withdraw from the Blue Line in Lebanon.
Israeli army will be forced to partially withdraw from the yellow line (buffer zone), Al Jazeera reported, citing Israel’s Haaretz sources.
Israeli Foreign Minister Saar told his New Zealand counterpart, “Israel will respect the ceasefire in Lebanon as long as it won’t be breached by Hezbollah.”.
Israeli political and security cabinet will convene on Thursday amid US-Iran talks, N12 reported.
Israeli officials are dismissing reported of an agreement to withdraw from certain points in southern Lebanon, amid a lack of US pressure to do, Maariv’s Barsky reported. Officials add, “because in Washington they understand the Israeli position: no partial withdrawal, no point-specific withdrawal, and no diplomatic ‘gesture’.”. And, “as long as the Hezbollah threat persists, there is no change in the deployment of forces and no intention to relinquish the security positions in southern Lebanon.”.
Lebanese presidency discussed the issue of consolidating the ceasefire in Lebanon, in a call with Qatari PM and US’s Vance.
Other:
Two South Korean vessels were said to have passed through the Strait of Hormuz after US and Iran signed a ceasefire MoU.
Three India-linked supertankers re-emerged in the Gulf of Oman, which suggests an increase in traffic through the waterway.
Rep. Wesley Hunt (R-Texas) emphasized to Congress the importance of passing the election integrity SAVE America Act and rejected woke arguments against voter ID as racist and condescending.
Democrats’ idiotic arguments against requiring ID to vote include claiming that black Americans are somehow mysteriously unable to get IDs. Aside from the obvious elitism and racial prejudice of such a claim, it is practically impossible to live in America and not have identification. They are required at doctor’s offices, airports, bars, liquor stores, car rentals, welfare programs, and many more places. But somehow expecting IDs at polling places is unreasonable?
Democrats claim requiring proof of citizenship to vote is racist and discriminatory.
I’ve been Black my entire life, and that’s one of the most insulting arguments I’ve ever heard.
✅ Black Americans can get IDs.
✅ Hispanic Americans can get IDs.
✅ Asian Americans can get… pic.twitter.com/x4HefeGKFE
Hunt sarcastically said, “I’ve been black for my entire life. I had to bring up the most racist thing I’ve ever heard [which] is the insinuation by Democrats that black and brown Americans are too stupid to get an ID to vote, just like everybody else.”
The congressman continued, “I call this the soft bigotry of low expectations. Figuring out how to vote in this country is a very low bar, and we could all figure it out regard of your race, religion, color, or creed, and we should all want free and fair elections.”
Except Democrats know they cannot win so many elections as they do without fraud, nor can they expand their control to new areas. They have no positive results to run on, no record of making any city or state more prosperous and more free. They need fraud to survive.
Hunt told Congress, “With me today — I’m not gonna pull mine out this time, but I have six forms of government-issued ID. How did I acquire that? Personal responsibility in this country. I’ve also heard a lot about Jim Crow here today. I’m here to tell you, Jim Crow is over, and I know it because my parents grew up in it.”
Democrats were the party of Jim Crow, ironically. But now they scream “racism” whenever anyone points out that they are pushing an awful policy.
Democrats cheapen and exploit the suffering their predecessors caused for political reasons.
As Hunt said, “And I think it’s actually insulting to those that actually experienced the ills of Jim Crow” to compare getting an ID to that era.
“Having an ID to vote in our national election should be a requirement, which is why I stand [here] today, urging my colleagues on the left to support this bill. If you want secure elections, if you want your vote to count, vote for the Save Act.”
Unfortunately, that’s precisely what Democrats don’t want.
This debate was never about IDs, or about black Americans’ access to IDs, or about constitutionality.
It was always about one political party believing in our Republic’s system of elections, and the other party hating our Republic’s system of government and believing they should decide who our leaders are instead of We the People.
Homeland Security Secretary Markwayne Mullin said Sunday that Iranian officials attempted to bring multiple individuals with alleged ties to the Islamic Revolutionary Guard Corps into the United States as part of the country’s World Cup soccer delegation.
Mullin made the remarks during an interview with Fox News as U.S.-Iran negotiations were
U.S. officials subjected members of Iran’s traveling delegation to heightened scrutiny after President Donald Trump directed the Department of Homeland Security to conduct extensive vetting of individuals seeking entry into the country.
Mullin said more than half of the additional representatives Iran sought to bring into the United States had connections to the IRGC, which U.S. officials view as a hostile military organization.
“When we started doing the research on him, he had only been put in place since 2022, and we didn’t allow him to board the plane,” Mullin told Fox News host Maria Bartiromo on Sunday, referring to the individual who had ties with the IRGC.
“The guy that tried to get on the plane yesterday had direct ties to the IRGC,” Mullin .
“We accepted 53 individuals coming in and the rest of the individuals that Iran had tried to bring in all also had direct ties to the IRGC and aren’t their normal traveling group,” he said.
Mullin said that the Iranian official who attempted to enter the United States was, according to Tehran, the president of the country’s soccer federation, noting that the Iranian soccer team playing World Cup games is based in Tijuana, Mexico. The team flies from Mexico into the United States when they need to play games.
The secretary said the administration anticipated that Iran could attempt to use the World Cup delegation to gain access to the United States and took additional precautions as a result.
According to Mullin, Trump authorized what he described as extreme vetting measures to screen members of the Iranian contingent.
“These games that Iran plays makes them an adversary that you can’t trust,” Mullin said.
Mullin did not provide additional details about the individuals who were denied entry or the nature of their alleged ties to the IRGC.
“The claim that an official representative of the Iranian football federation attempted to board a flight to enter the United States yesterday and was prevented from doing so is an outright and undeniable lie. This claim is so unfounded that those who made it are well aware that such an incident never occurred in the first place,” FFIRI said.
“DeepSeek Of The West” Reflection Inks Major Compute Deal With SpaceXAI
SpaceX shares tumbled for a third straight session, down around 9% late in the U.S. cash morning, after the Elon Musk-led company said it would sell investment-grade bonds for the first time.
However, a new headline crossed around 11:05 a.m. ET via Axios, reporting that Reflection, the Nvidia-backed open-source AI startup, had signed a major compute deal with SpaceXAI.
Under the deal, Reflection will pay SpaceXAI $150 million per month starting next Wednesday, July 1, through 2029, following an initial ramp period.
SpaceX $SPCX signed a compute deal with open-source AI startup Reflection AI for access to $NVDA GB300 chips at Colossus 2, per CNBC.
Reflection will pay SpaceX $150M per month starting July 1, 2026, totaling about $6.3B if the deal runs through 2029.
The deal gives the startup, founded by former Google DeepMind researchers Misha Laskin and Ioannis Antonoglou, access to Nvidia’s Grace Blackwell Ultra AI computing chip, also known as GB300, which is necessary to train its models.
Earlier this year, The Wall Street Journal described Reflection as the “DeepSeek of the West” because the AI lab aims to build open-weight, frontier-scale AI models as a direct alternative to China’s DeepSeek.
The deal highlights the circular flow of the AI boom, something we have noted countless times (see here and here). Nvidia invested $800 million in Reflection, which will now use Nvidia chips purchased by SpaceX. This allows the startup to avoid the multibillion-dollar burden of building out its own data centers and instead lease compute from hyperscalers.
With shares down 9% in late-morning trading, the Reflection-SpaceXAI deal was not enough to lift the stock, which is now down 25% from last Tuesday’s high of $225.
The Reflection-SpaceXAI deal also shows that SpaceX’s massive compute buildout is not just for internal AI chatbots, but is also becoming a revenue-generating business, catering specifically to external AI frontier labs seeking high-end training capacity.
It may suggest that internal compute demand has been lackluster…
Last week, Yann LeCun, founder of AMI Labs, called xAI a “failure,” adding that he expects it won’t be able to compete with OpenAI and Anthropic.
The deal follows a similar deal that Anthropic made with SpaceX to expand cloud computing capacity.
President Donald Trump said on Sunday that work to repair the Lincoln Memorial Reflecting Pool in Washington will begin immediately after it was damaged by vandalism.
The reflecting pool had been renovated ahead of the 250th anniversary of the country’s Independence Day on July 4 under Trump’s order, which included repainting its surface blue. But problems have emerged in recent days with algae blooming in the pool and peeling paint.
Trump said in a Truth Social post on June 21 that he inspected the pool and found it had been “seriously vandalized.” He said the pool’s condition left him wondering “who would do such a thing,” adding that the damage will be fixed.
U.S. Attorney Jeanine Pirro told Fox News on Sunday that several citations have been issued to individuals accused of vandalizing the pool and warned that those responsible will be prosecuted to the fullest extent.
“Anyone who is in a position of vandalizing or attempting to vandalize the reflecting pool will face the criminal justice system in D.C.,” she said. “The president has made it a priority to make D.C. not only safe, but beautiful.”
Pirro also warned that anyone found to have poured products into the pool to generate algae could face more serious charges.
Trump said in a June 20 post that vandals destroyed the grass around the site and suggested some even poured “corrosive and destructive chemicals into the pool.” He said the pool’s water may need to be drained to allow repairs.
“They took some form of knife or blade, and put a 250 foot long gash into the beautiful facade of what took so much work, competence, and money to build and complete,” he wrote.
Trump said authorities have made multiple arrests in connection with vandalism at the reflecting pool.
In a separate post on June 19, the president said that 75 percent of the algae in the reflecting pool had been removed and that the issue was expected to be fixed early the next week.
The reflecting pool stretches 2,030 feet long and 167 feet wide, with a depth of 30 inches at its center. Trump first announced in March that he was working with Interior Secretary Doug Burgum to clean up the pool in front of the Lincoln Memorial on the National Mall, which he said was “absolutely filthy” and should have been cleaned during the prior administration.
Trump also announced earlier this month that he plans to build a promenade connecting the Lincoln Memorial and the Potomac River. The Lincoln Memorial honors Abraham Lincoln, the 16th U.S. president, who led the United States through the Civil War. It sits at the western end of the National Mall overlooking the Reflecting Pool.
