Usually it’s the chip CEOs who are the cheerleaders and the bond market that plays the skeptic. On Monday, the CEO of the second-most important AI chipmaker on the planet decided to play both roles.

Speaking on a panel at a DBS conference in Singapore, Broadcom boss Hock Tan said that many of the investors piling into AI behave more like gamblers than investors, setting extreme expectations only to discover they are effectively sitting at a casino table. In his own words, “a lot of investors have no clue what they are investing in.”

He didn’t stop there. Tan also questioned the long-term economics of the money-losing frontier labs, and, most importantly for markets, warned that insufficient capital could become the next constraint on the AI industry’s growth. As if to make his point for him, Intel’s Lip-Bu Tan, who shared the panel, said hardware will stay in short supply for another two to three years. Translation: the chips will be scarce, and so will the money to pay for them.

Semis did not take it well. The SOXX slumped 2.6% and JPMorgan’s AI memory basket tumbled 4.3% on a day when more than 60% of S&P members actually rose. Asked to explain the selling, JPMorgan tech specialist Joshua Meyers wrote in the bank’s afternoon Market Intel briefing (available to pro subs) that “the most proximate reason seems to be Hock Tan’s participation in a panel at a DBS conference in Singapore, where he warned financing could become a bigger bottleneck than component shortages (in addition to questioning frontier lab business models, and comparing ‘many investors’ to casino gamblers).”

Below we look at why Tan is right about the bottleneck, and why the people he called gamblers are the ones keeping his stock afloat while his own bondholders head for the exits.

The Bottleneck Is Money

Tan’s warning will come as no surprise to (even not so regular) readers: we have been warning since last October that the AI buildout runs on ever increasing amounts of debt, and last week Goldman’s Rich Privorotsky effectively conceded the point when he said the AI borrowing binge is now crowding out everyone else in the capital markets.

The evidence has been piling up. Last Thursday, Nvidia-backed Australian data center operator Firmus first slashed the price of its IPO by 25% and then pulled its $5.5 billion listing altogether, opting to raise money in private markets instead (good luck with finding someone dumb enough there). Our reaction at the time:

*FIRMUS DECIDED TO WITHDRAW APPLICATION TO LIST ON ASX *FIRMUS NOW PURSUE CAPITAL FROM PRIVATE MARKETS Bring on the Apollo life insurance policies

— zerohedge (@zerohedge) October 8, 2026

And Tan wasn’t the only one at the DBS event flagging it: just before he took the stage, DBS CEO Tan Su Shan said the market is now repricing the risks around AI financing after the heavy investment of the past two years. When the bank hosting the conference and the chipmaker on the panel agree that the money is the problem, it’s probably the money.

The Customer Is Losing Money… And Broadcom Is Lending It

Then there is the swipe at the frontier labs. Tan said OpenAI’s $50 billion annualized revenue as of September suggests there is a viable business, but that the company is still losing money because it spends so much on training and compute, so for now the number tells you little about long-term profitability.

Fair enough. Except that OpenAI is Broadcom’s customer, and on top of it, courtesy of SPV structures that would make Jeff Skilling blush, Broadcom is the one arranging the money for OpenAI to buy Broadcom’s chips (you may get a little nauseous after reading that).

As we detailed last Thursday, Broadcom is in talks on a $50 billion+ chip financing for OpenAI (Bloomberg puts the next leg at closer to $30 billion), on top of the $60 billion it is syndicating for Anthropic and the $35 billion “Big Sky” platform it set up with Apollo and Blackstone in June. That’s roughly $145 billion of chip debt with Broadcom’s name on it, or as we put it when we tweeted this chart, “$300BN in chip-collateralized SPVs, so far”:

In other words, the CEO questioning the labs’ business models is also the biggest single lender to those business models! Over the weekend, Jefferies went even further, warning of “massive capital destruction” since just two cash-burning labs account for half of a $2.3 trillion backlog.

And last week’s FT report that OpenAI’s run-rate was ~$50 billion rather than the widely cited ~$70 billion, which Goldman‘s TMT desk chalked up to gross-vs-net accounting, showed just how much of a ~$1 trillion equity complex rests on largely made up and unaudited numbers from two private companies.

Gamblers Hold The Stock, Bondholders Hold The Bag

Which brings us to the irony. Tan may sneer at the “casino” crowd, but the casino is the only thing propping up AVGO. Per Goldman’s derivatives desk, Mag7 is now ~22% of total US prime exposure (the most since early 2022), semis exposure has doubled to ~12% from ~6% at the start of the year, and roughly $115 billion sits in levered semis ETFs. JPMorgan’s factor team adds that semiconductor sentiment is back above the 99th percentile. Those are the real gamblers.

Broadcom’s creditors, meanwhile, are folding. The moment Broadcom’s Anthropic financing hit the tape, we said what would happen next:

*BROADCOM AMASSING $60 BILLION TO FUND CHIPS FOR ANTHROPIC CDS gonna fly tomorrow

— zerohedge (@zerohedge) October 2, 2026

It took about 12 hours for Broadcom bonds to hit all-time lows. And it has been one-way traffic since August, when Broadcom’s CDS exploded after it emerged that the company was seeking up to $100 billion in an off-balance sheet SPV.

Back then, 5Y CDS hit a record 122bp. After a brief September reprieve, the Anthropic and OpenAI financings sent it right back up: according to Goldman’s TMT specialist sales desk (available to pro subs), Broadcom’s 5Y CDS printed a record 136bp last Thursday, alongside Oracle at a record 261bp, as nearly $500 billion of 2026 AI borrowing gets repriced. Goldman flagged both spreads as key gauges of concern over debt-funded AI capex. At 133bp, Broadcom’s CDS is a few basis points from that record, and more than triple where it was in May, while Nvidia, its own $500 billion “compute financing platform” notwithstanding, sits at 86bp:

Put differently, the stock is held by the people Tan just called gamblers, and the bonds are priced by the people who agree with him.

Tan Had Some Help

To be fair, JPMorgan’s Meyers also pointed to a weekend sell-side note re-igniting power worries (a shortage of “powered shell” of as much as 19GW next year, and more in 2028), plus Middle East headlines and nervousness ahead of a private frontier lab investor meeting on Wednesday. Memory got an extra kick from China’s CXMT progress on next-gen DRAM, which we covered this morning in “Memory Remains The Epicenter”. And with bond markets shut for the holiday, Goldman’s cash desk said it was the lowest-volume session of the year, which tends to amplify every move.

Tellingly, Goldman’s derivatives desk saw clients reach for HYG downside, buying 50k Jan 77/73 put spreads, with the bond market closed. Even the gamblers, it seems, are hedging the credit.

Bottom Line

JPMorgan’s Market Intel team is sticking with its “Tactically Bullish” call into earnings, arguing semis can climb this latest wall of worry. Maybe. But when the CEO whose company is financing its own customers’ chip purchases says money, not silicon, is the next bottleneck, while his own CDS prints records, we’d side with the credit market.

After all, in a casino the house always wins. The question is who the house is when the house is also lending the chips.

More in the full JPM US Market Intelligence afternoon briefing and Goldman’s TMT specialist sales note, both available to pro subs.

Authored by Thaddeus G. McCotter via American Greatness,

The Democratic Socialists of America exploit young people’s longing for community, but socialism’s coercive collectivism destroys the voluntary relationships that sustain it.

Whether reflecting on the impersonal essence of “virtual reality” and the incessant stream of demands and anxieties it imposes upon our diurnal, increasingly alienated existence, or listening to the concerns of one’s fellow citizens, one hears a persistent leitmotif: the longing for true community, especially among the youth.

One aspect of this longing has been well bruited: people’s gnawing sense that the myth of “virtual community” is an alienating illusion that increasingly leaves them numb and pining for personal engagements – the flesh-and-blood amities, intimacies, and sundry other encounters of true community.

Exacerbating this sense of loss, especially among the young, people are very concerned about “affordability” – such as the inability to purchase a new home, rent an apartment, find an entry-level job, or keep the one they already have – due to the rise of artificial intelligence (AI) and inflation. But too often overlooked is how the diminishment of these opportunities has reduced people’s personal interaction and the sense of community it brings.

Indeed, when people, notably youth, talk about wanting to “shop locally,” support small businesses, or even reject “corporate” entities and their culture, it is not a complete rejection of capitalism. Indeed, one can clearly recognize young people’s embrace of free markets and small businesses. Yet, it is a practical complaint regarding its failures – one of which is its eclipse of community beneath an impersonal corporatism. (One can make the argument that today’s youth are essentially the political descendants of Jeffersonian Republicans, but I digress.)

Naturally, one group that has not overlooked young people’s yearning for a greater sense of community is the Democratic Socialists of America (DSA). They exacerbate youth’s disaffection with the economy by equating corporatism and capitalism and proffer socialism as a virtuous panacea for economic ailments. And, for alienated people yearning for community, the DSA conflates and substitutes the collective for community.

But the truth is the collective is the enemy of community.

As Robert Nisbet warned in his seminal work, The Quest for Community: A Study in the Ethics of Order and Freedom:

Marxism, like all other totalitarian movements in our century, must be seen as kind of secular pattern of redemption, designed to bring hope and fulfillment to those who have come to feel alienated, frustrated, and excluded from what they regard as their rightful place in a community. In its promise of unity and belonging lies much of the magic of totalitarian mystery, miracle, and authority.

It is a false promise.

Under socialism, the “warm embrace” of the collective is created by an omnipotent, centralized government. It relies upon coercion, not consent. In addition to crushing an individual’s agency and ability to dissent, it destroys the voluntary intermediate institutions that form a community and insulate and protect the individual from the domination of the centralized government.

As Nisbet explained, the destruction of these intermediate institutions is imperative for would-be authoritarians:

We may regard totalitarianism as a process of the annihilation of individuality, but, in more fundamental terms, it is the annihilation, first, of those social relationships within which individuality develops. It is not the extermination of individuals that is ultimately desired by totalitarian rulers, for individuals in the largest number are needed by the new order. What is desired is the extermination of those social relationships which, by their autonomous existence, must always constitute a barrier to the achievement of the absolute political community. The individual alone is powerless. Individual will and memory, apart from the reinforcement of associative tradition, are weak and ephemeral. How well the totalitarian rulers know it. (…) To destroy or diminish the reality of the smaller areas of society, to abolish or restrict the range of cultural alternatives offered individuals by economic endeavor, religion, and kinship, is to destroy in time the roots of the will to resist despotism in its large forms.

The antithesis and antidote to the collective is community.

Community requires individual consent, agency, voluntary associations, and governmental subsidiarity. This is decidedly different from the strawman argument proffered by socialists that the choice is between the collective and a calloused “rugged individualism.” While deceptive, such an argument makes a cynical sense, because subscribing to the DSA’s agenda would leave someone just a coerced cog in the collective, not a consensual member of a true community.

Once more, Nisbet writes in his book, The Sociological Tradition:

There must be in any stable culture, in any civilization that prizes its integrity, functionally significant and psychologically meaningful groups and associations lying intermediate to the individual and the larger values and purposes of his society. For these are the small areas of association within which alone such values and purposes can take on clear meaning in personal life and become the vital roots of the large culture.

And is it not the aim of all radicals, including the DSA, to destroy root and branch the foundations of an established civilization?

Is it not to fundamentally eradicate all individual agency and consensual, intermediate communal relationships to impose their radical ideological dictates to perfect humanity and create Utopia?

Is it not, as Nisbet avers, to make sure “man’s alienation from man must lead in time to man’s alienation from God,” and from community into the chill grip of the iron fist of the collective?

Singapore has no shortage of people curious about the spoils from its massive money-laundering crackdown. Getting them to actually buy the confiscated real estate has been another matter.

The government is gradually disposing of assets tied to the S$3 billion laundering scandal that erupted in 2023, according to Bloomberg. More than 80 homes are being sold alongside watches, jewelry, handbags and other expensive possessions seized from the operation.

The luxury goods have been hot. The luxury real estate decidedly has not.

Of more than two dozen high-end properties recently put through auctions, only four apartments have found buyers that way. At one sale, more than 60 people showed up for seven properties carrying over S$43 million ($33.6 million) in combined opening prices. Not one sold.

One Gramercy Park apartment near Orchard Road failed to attract a single bid. Another large marble-finished unit with its own elevator was offered at S$7.55 million. Eventually someone tried S$4 million, prompting laughter before the offer was dismissed.

The scene captured an uncomfortable reality for sellers: plenty of people want to see what happens when convicted money launderers’ assets hit the auction block, but curiosity isn’t translating into aggressive offers.

“There has been a lot of hype generated,” said Tan Tee Khoon, Knight Frank Singapore’s head of auction and sales. Some attendees, he added, openly admit: “I just want to come and see.”

The weak results also arrive at a difficult moment for the most expensive slice of Singapore’s housing market.

Bloomberg writes that government measures intended to restrain property speculation have dramatically narrowed the pool of potential purchasers. Most foreigners buying residential property face an additional 60% stamp duty, while relatively few locals are prepared to spend eight figures on a home.

Two confiscated apartments at Martin Modern recently changed hands for S$2.12 million and S$2.08 million, roughly around their previous transaction levels. Two others at Wallich Residence sold for S$6.6 million and S$5.48 million, below their initial auction prices.

The broader Singapore property market remains relatively firm, but the top end has developed weak spots. Private-home prices recently posted their fastest quarterly increase since 2024 even as transaction volume fell about 30% from the previous quarter.

Sentosa, where members of the laundering operation accumulated expensive property, illustrates the disconnect. Villa prices on the resort island fell roughly 11% over the decade through 2025.

Some seized homes are now being marketed for considerably less than their former owners paid. Convicted launderer Lin Baoying spent almost S$29 million on two detached Sentosa houses in 2021. Their current combined guide price is more than S$6 million below that purchase price.

Deloitte’s Singapore unit is overseeing the liquidation and plans to release assets in stages through mid-2027. If properties repeatedly fail to sell, prospective buyers have an obvious incentive to wait for further reductions. Sellers, meanwhile, don’t want to cut prices so aggressively that the portfolio begins looking like distressed inventory.

The assets stem from an enormous 2023 police operation involving more than 400 officers and over 200 properties, many in expensive areas including Orchard Road and Sentosa. Ten China-born defendants were convicted, and the group became widely known as the “Fujian Gang.”

The fallout eventually reached Singapore’s financial sector. Nine firms, including Credit Suisse, Citibank and United Overseas Bank, were hit with a combined S$27.45 million in penalties over anti-money-laundering shortcomings connected to the case.

Yet while multimillion-dollar apartments sit without bids, the former owners’ handbags and jewelry have been flying out the door. At an auction conducted by Hotlotz, every luxury-goods lot sold. One limited-edition Louis Vuitton pumpkin bag created with Japanese artist Yayoi Kusama was expected to fetch S$12,000 to S$16,000. Instead, 81 bids pushed the final price to S$87,000.

The difference is partly psychological. Someone chasing a rare handbag, watch or piece of jewelry may worry another opportunity won’t appear. Property buyers can compare an apartment against alternatives, determine fair value and walk away when the numbers don’t work.

Another 14 Hotlotz auctions are planned, including Hermès handbags and watches from Rolex, Patek Philippe and Richard Mille. Dozens of homes also remain in the liquidation pipeline. The government has already recovered substantial sums. By the end of March, approximately S$1.4 billion in cash and proceeds from disposed assets had entered Singapore’s Consolidated Fund.

For now, Singapore’s most infamous criminal asset sale has produced a strange split: people will fight over the handbags, but they won’t fight over the homes. And with buyers increasingly convinced that patience could produce lower prices, the remaining condos may prove considerably harder to move than the watches, diamonds and designer bags sitting inside them.

A growing number of empty supertankers have been turning away from the Persian Gulf as escalating Iranian attacks threaten a critical transfer hub for wartime oil shipments, Bloomberg reports.

At least 10 very large crude carriers and several Suezmax vessels approaching the port of Fujairah in the United Arab Emirates have stopped or reversed course in recent days, according to tanker-tracking data compiled by Bloomberg. 

While other vessels are still continuing on their journeys into the region, the retreat of these tankers amid near-daily attacks around the Strait of Hormuz – some near Fujairah itself – raises fresh concerns over the sustainability of oil flows through the waterway.

Fujairah is commonly signaled as an interim destination by vessels ultimately sailing to the Gulf of Oman, where they can collect cargoes via ship-to-ship transfer, or onward into the Persian Gulf. That makes the number of ships heading toward the port a broader indicator of tanker operators’ appetite for approaching the waterway.

The shift threatens a key workaround that has helped Persian Gulf oil exports recover to near prewar levels. Large crude carriers can wait off Fujairah and in Omani waters outside Hormuz while shuttle tankers make the riskier transit through the strait, bringing out crude and transferring it for onward shipment to buyers.

The system depends on a steady supply of receiving tankers, so a significant retreat from the region by empty VLCCs could slow the flow of crude, tying up the shuttle vessels for longer when tanker availability is already tight.

The pullback is particularly striking given the financial rewards on offer. A global tanker shortage has pushed shipping costs to extraordinary levels.

For example, hiring a vessel to haul oil from the US to China now costs more than launching a rocket into space.

By Haley Zaremba of OilPrice.com

The war in Iran has exposed a critical vulnerability in Southeast Asia’s energy markets. The region is heavily dependent on fossil fuel imports, and demand is continuing its steep growth trajectory even as global crude oil prices remain punishingly high. Though the Strait of Hormuz is finally reopening, restoring flows of crude oil out of the Persian Gulf and toward Asian buyers, global oil markets have a long road toward recovery. Luckily, the wheels are already in motion to electrify the continent and move away from heavy dependence on imported oil and gas, but the interim will be a rocky chapter for energy security in the rapidly developing region. 

When the Strait of Hormuz initially closed in February, in response to the United States and Israel’s military campaign in Iran, Asian markets were hit hard and hit early by the cutoff. Southeast Asian nations were especially vulnerable to price volatility because of the region’s relatively high dependence on energy imports and low capacity to absorb market shocks thanks to economic constraints. 

In the weeks and months after the Strait closed, the Philippines declared a national energy emergency, and governments across the region turned to energy rationing, work-from-home mandates, and even four-day work weeks to manage the strain. However, the same crisis has also kickstarted a much-needed and arguably overdue renewable revolution that will bolster regional energy security, independence, and autonomy going forward. Getting there is the hard part. 

“Rising fuel imports and fast-growing electricity demand are increasing [Southeast Asia’s] exposure to market disruptions and volatility,” the International Energy Agency fwrote in a news report earlier this week. However, “closer cooperation can strengthen its ability to respond,” the article continued.

“Southeast Asia is one of the world’s most dynamic regions, but its rising needs for energy to power its economic growth face challenges in an increasingly uncertain global energy landscape,” said International Energy Agency Executive Director Fatih Birol. “Energy security must be built into decisions across the whole system from oil stocks and gas infrastructure to electricity grids and more efficient use of energy. By working more closely together, ASEAN countries can make better use of their collective resources and respond more effectively when disruptions occur.”

A large part of the coordinated response will need to focus on building up supportive clean energy infrastructure in addition to clean energy production capacity. While solar energy is taking off across the region, grid expansion and refurbishment, energy storage capacities, and transmission infrastructure are lagging behind, risking a major bottleneck in the region’s electrification trajectory. 

According to an August report from Climate Home News, “inadequate grid capacity and maintenance is already proving a major factor in the region’s stuttering rollout of new clean energy projects.” The report also points to “issues ranging from unclear power purchase agreement (PPA) structures, a failure of power policies to keep up with investor needs, permitting and licensing approval delays, grid connection constraints, limits to private sector involvement in electricity markets, and policy and tariff uncertainty.”

Indeed, the region’s renewable revolution risks stalling out before it even really starts if these issues are not addressed quickly. A May report from consultancy Bain & Company and Standard Chartered found that between the years of 2021 and 2025, 50 to 60 percent of renewable energy projects in Vietnam, Thailand and Indonesia were cancelled or stalled thanks to inadequate infrastructural and policy support.

These issues are set to intensify as rapid economic development continues across Southeast Asia. “More than 100 TWh of new electricity demand is expected to arrive by 2030, driven by data centers, electric vehicles (EVs), and industrial clusters,” the Bain & Company report finds. “However, while demand from these sources is set to materialize in one to three years, grid infrastructure takes five to fifteen years to build. This mismatch has made the grid a key binding constraint that increasingly determines where capital flows.”

The International Energy Agency’s new report argues that there is still hope, however, if the region’s governments work together to forge and maintain increased resilience in the face of volatile global markets and local pressures. The report recommends “stronger national preparedness and deeper regional cooperation across different sectors and fuels to help members of the Association of Southeast Asian Nations (ASEAN) withstand supply disruptions and volatile prices.”

Tragedy has unfolded Monday during an Israeli school field trip in the north of the country. A 15-year old was killed and around 20 more teens and teachers injured when unexploded Hezbollah ordinance detonated.

The incident is being widely reported in Israeli media, and happened in the Ramim Ridge area in the north of the country. The group came upon what was “believed by the military to be a submunition from a Hezbollah rocket.”

The group was on a hike of Naftali Mountains Forest scenic route, but it was reportedly also in an area previously targeted by Hezbollah rockets, given that at some point the Israeli army used it as a staging ground related to the Lebanon campaign.

Throughout prior years of war going back to the Gaza and Iran conflicts, Hezbollah routinely launched Grad rockets containing dozens of BRB1-type submunitions on northern Israel. This caused a largescale exodus of residents from the area, and mass school closures.

But even though a sense of normalcy has returned amid an uneasy Lebanon ceasefire (which also gets not infrequently broken), and schools and public events have long reopened, certain dangers still clearly remain.

Israeli’s YNet details the following:

One of the schoolchildren is believed to have picked up a submunition during a hike along the Naftali Mountains Forest scenic route and put it in his backpack. Several minutes later, the submunition exploded, according to a preliminary probe by authorities.

The blast killed a teenager and wounded 19 others, including two in serious condition and three in moderate condition.

Over a dozen ambulances and a bomb disposal unit were dispatched to the chaotic scene. Three Israeli Air Force helicopters also helped in the rescue efforts. Some of the surviving teens described taking off running after the blast, given also confusion over whether they were under attack.

Israel’s military and security services have launched an investigation centered on whether the class outing had authorization to be in a military zone. Times of Israel separately puts the number of injured at 24.

Authorities are also urging citizens to not touch military items or ordinance, and to call an emergency hotline so it can be safely disposed of. The whole ordeal raises the possibility of future such tragedies happening, as the countryside is likely littered with much more dangerous ordinance after years of Israeli-Hezbollah war.

A Baltimore City nonprofit that received $1 million in federal pandemic funding reported more than $427,000 in salaries and wages while listing zero employees on its federal tax filing, according to Chris Papst, lead investigator for FOX45’s Project Baltimore.

Papst has tracked nonprofit KEYS Empowers since FBI agents raided the nonprofit linked to a Baltimore City school board member who abruptly resigned.

KEYS Empowers’ latest Form 990 filing, covering 2024, reported $2,001,754 in revenue, with $427,201 paid out in salaries and wages. But as Papst noted, the filing lists no employees.

Papst added more color to KEYS Empowers’ filing:

• $2,001,754 in revenue
• $427,201 in salaries and wages
• $79,701 in travel expenses
• $242,288 for conferences, conventions, and meetings
• Zero employees

At the center of KEYS Empowers is Mujahid Muhammad, who resigned as a member of the Baltimore City Board of School Commissioners after the FBI raided his nonprofit.

“I’m extremely concerned,” said Torrey Snow, a contributing member of the Baltimore Sun’s editorial board.

Snow continued, “Maryland taxpayers are heavily subsidizing the work in Baltimore City, and they need to know that officials that are in these areas are keeping an eye on where this money is going.”

In 2022, left-wing Mayor Brandon Scott’s office announced a $1 million award in American Rescue Plan Act funding to KEYS Empowers.

“If public money is going into these nonprofits, it is the official’s responsibility to ensure that these nonprofits are engaging in activities that are necessary and benefiting the public,” stated Snow.

Publicly available data show KEYS Empowers’ corporate structure and link Muhammad and Ashiah Parker, both appointed to the Baltimore City school board by Mayor Scott, to the nonprofit. This points to overlapping nonprofit leadership, school board appointments linked to Scott, and government funding for a highly questionable nonprofit.

The relationship map places Mujahid Muhammad between not just KEYS Empowers but also K.E.Y.S. Development T.A. LLC. 

Reporting more than $427,000 in salaries and wages yet listing zero employees is a major red flag.

The questions remain: who received the taxpayers’ money, what services did they provide, and who approved the payments? Whether this is simply sloppy Form 990 reporting or something more serious, taxpayers deserve answers.

Colombian billionaire Jaime Gilinski is positioned to take control of GeoPark Ltd., a Latin American energy producer, after converting a Venezuelan oil agreement secured at almost no upfront cost into an equity stake initially valued at more than $500 million, according to Bloomberg.

The transaction illustrates the competition for Venezuelan assets following Nicolás Maduro’s removal in January and Washington’s subsequent relaxation of energy sanctions. Investors with government connections are moving quickly into a country whose enormous oil reserves have suffered from years of mismanagement, sanctions and inadequate investment.

Bloomberg writes that Gilinski, worth approximately $40 billion according to Bloomberg, made his fortune in banking and acquisitions, including his takeover of food manufacturer Nutresa SA. His son Gabriel reportedly visited Caracas more than ten times this year, meeting with acting President Delcy Rodríguez in March while pursuing opportunities in Venezuela’s energy sector.

Those efforts resulted in a 25-year agreement to operate Bare, a heavy crude field in Venezuela’s Orinoco region. Located near existing Chevron facilities, the property could benefit from established infrastructure.

Shortly after securing the contract, Gilinski arranged to transfer his interest to GeoPark in exchange for newly issued shares initially worth approximately $515 million. The transaction would make him the company’s majority shareholder despite requiring little personal investment in the underlying project.

GeoPark would finance development and retain a 65% net working interest, with the remaining 35% belonging to state-owned PDVSA. The company hopes to increase production from approximately 11,000 barrels per day to 95,000, although achieving that target will require substantial spending and access to materials needed to transport Venezuela’s unusually thick crude.

Gilinski had already acquired approximately 20% of GeoPark in March, effectively disrupting a competing takeover attempt. Rather than negotiating the Venezuelan agreement entirely through GeoPark, however, he secured most of the operating rights separately before offering them to the company.

GeoPark says it participated in the negotiations and initially held a 5% interest in Bare. The company is now seeking to acquire Gilinski’s remaining 95% at a valuation reportedly 5% below estimates prepared by its advisers.

The deal remains subject to conditions that must be satisfied by December. If the underlying Venezuelan contract expires before completion, the GeoPark transaction will be canceled.

Gilinski is hardly alone in pursuing Venezuela’s reopening. Pacific Coast Energy has begun operating two heavy oil properties, while newcomers including Coinbase co-founder Fred Ehrsam have negotiated agreements. Established players such as Chevron and Repsol remain active as other international producers consider returning.

For Gilinski, the arrangement could deliver an extraordinary return: majority control of an established energy company in exchange for oil development rights obtained with minimal upfront capital, while GeoPark assumes the financial burden of expanding production.