Chapter 1: What actions is the U.S. taking against Venezuela's Maduro?
Washington tightens the screws on Venezuela's Maduro. Plus, the White House tries to rein in a surge of state AI regulations. And Paramount's Warner bid makes it clear Wall Street's appetite for debt is back.
Right now, it's like the rainy season just happened. All the grasses are growing and the population is booming and everyone's feasting.
It's Friday, December 12th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today.
Chapter 2: How is the White House addressing state AI regulations?
The U.S. is stepping up pressure on Venezuela's Nicolas Maduro, sanctioning some of his family members and six oil tankers. The Treasury Department said the targeted tankers had engaged in, quote, deceptive and unsafe shipping practices and continue to provide financial resources that fuel Maduro's corrupt narco-terrorist regime, end quote. It follows the U.S.
seizure of an oil tanker off Venezuela's coast earlier this week and comes as President Trump last night repeated his threat to soon begin strikes on suspected narcotic shipments making their way via land from Venezuela to the U.S.
Chapter 3: What recent developments have occurred in corporate mega deals?
To Indiana now, where senators have rejected a congressional redistricting plan in a blow to President Trump. Trump has been pressuring Republican-controlled legislatures and GOP governors to adopt congressional maps under unusual mid-cycle redistricting plans in a bid to ensure the party retains control of the U.S. House after next year's midterms.
Chapter 4: Why are states pushing for more AI regulations despite federal pushback?
Democratic State Senator Andrea Hundley and Republican State Senator Sue Glick both opposed the redistricting.
There's been a lot of outside sources that were pressuring. But, you know, the Hoosiers prevailed today. I mean, the Hoosier, their phone calls, their letters coming to the statehouse, their testimony showing up at town halls, it mattered. And legislators listened. I'm sure there's going to be some frustration.
Chapter 5: How is OpenAI's new ChatGPT update positioned against competitors?
There have been some comments made about things that may or may not have to happen for the state of Indiana as a result of the Senate's vote. But we shouldn't have to look over our shoulder at the federal government and say, you know, we didn't get this because somebody in Washington was upset with us.
Other states, including Texas, North Carolina and Missouri, have approved redistricting that would benefit the GOP, while Democrats last month pushed through a similar plan in California to counter those efforts.
President Trump is attempting to put a lid on state rulemaking efforts around AI, signing an executive order that empowers the Justice Department to punish states whose AI laws are deemed too restrictive.
Chapter 6: What improvements does OpenAI claim about its latest model?
Tech execs had lobbied for such a move, arguing that the proliferation of AI bills proposed at the state level, which now exceed a thousand, could cause the U.S. to lose out to China. In the Oval Office, Trump stressed the need to clear roadblocks for companies working on artificial intelligence.
We have the big investment coming. But if they had to get 50 different approvals from 50 different states, you can forget it because it's not possible to do, especially if you have some hostile. All you need is one hostile actor and you wouldn't be able to do it.
Democrats and some of Trump's backers, including Steve Bannon and Republican Senator Josh Hawley, have criticized the efforts to rein in state AI laws, characterizing them as a giveaway to tech companies and saying they would undermine state efforts to protect consumers.
Well, speaking of the AI race at the corporate level, OpenAI is rolling out a new version of ChatGPT as it tries to fend off mounting competition from Google and Anthropic. OpenAI said the new model, dubbed GPT-5.2, was better at math, science, and coding, skills seen as critical if businesses are to see returns on their AI investments.
Journal tech reporter Sam Schechner told me OpenAI needs to act fast to hold on to its early lead in AI adoption.
OpenAI has seen a lot of challenge lately from competitors. You know, the chatbot race, which it ran away with early on and quickly and rose to 800 million users every week for ChatGPT, is now super competitive. With this new model, OpenAI is really targeting business users.
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Chapter 7: What factors are driving the current surge in mega deals on Wall Street?
We're talking about all the kinds of white-collar office work that that people do on their computers. And actually, OpenAI built its own metric for measuring how well an AI model does at these. They broke out economically valuable office tasks, and they actually rated this model against that.
And so, I mean, take it with a grain of salt, it's their own metric, but they say that it performs far better than just even its previous version from a couple months ago.
The update to ChatGPT comes as OpenAI races to release a new model by the end of January that can compete with Google's latest Gemini release. Under the so-called Code Red efforts, OpenAI is hoping to make ChatGPT both more warm and personable for users and improve its speed and video generation capabilities.
And crypto tycoon Do Kwon has been sentenced to 15 years in prison on fraud charges related to the $40 billion crash of his TerraUSD and Luna coins back in 2022. Kwon pleaded guilty to two charges back in August in exchange for federal prosecutors dropping seven other counts against him.
In their closing arguments, prosecutors said that Kwon was driven by greed and arrogance and had lied repeatedly about the utility and safety of his products. At its peak in the spring of 2022, prosecutors said the total market value of all the cryptocurrencies associated with Kwan's Terraform Labs topped $50 billion, with their failures hurting hundreds of thousands of investors worldwide.
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Chapter 8: What is the outlook for M&A activity in the coming years?
Coming up, animal spirits are back on Wall Street, fueling a surge in massive deals. Plus, Rivian looks to take on Tesla with self-driving cars. We've got those stories and more after the break. The mega deal is back, and so it seems is Wall Street's immense appetite for debt.
Paramount's hostile bid for Warner Brothers Discovery, as well as other recent debt-laden transactions, have all been possible thanks to a spike in lending. And as Journal credit reporter Matt Wertz writes, that is making some investors nervous.
Matt, before we get too into the weeds here, just talk us through these recent deals we've been seeing, especially those that have not just been cash offers. And in fact, a number at least seem to have been very dependent actually on loans.
Right. So what we're seeing is a boom in very large, what we call mega deals, which technically is over 10 billion in value, but we are seeing over 30 billion in value, over 40 billion in value, over 50 billion in value. So these are very big leveraged buyouts. They involve a lot of debt.
And what the debt does is, first of all, allows the buyer to make a larger offer, which is important in deals like Warner, where there's a bidding war going on. And the other thing it does is it potentially improves the return on their own equity investments. And we're seeing really just a boom in the last two to three months. We're seeing the bidding war on
Warner, between Paramount and Netflix, of course. We saw Silverlake's bid for Electronic Arts, the video game studio. That involved a big check from Saudi Arabia's sovereign wealth fund. We saw a massive deal, BlackRock and a couple of other partners made for Align data centers. So we are really in the most recent heyday The biggest deal boom we've seen, I would say, since 2015.
And so, Matt, why is this occurring now? I mean, going into 2025, we had seen several years in a row of declining M&A mega deals.
Yeah, there's a couple of things. Like one is obviously the Trump administration, right? These large deals, they often involve very large companies coming together. There are antitrust concerns with that. And the Trump administration has indicated that they're going to be a little bit more play along with those kind of deals.
Another thing is that private equity, which tends to be the fuel to the fire of these cyclical trends, they've been building up a lot of what they call dry powder. They just have a lot of money to spend. The other thing that we're seeing, and this involves firms like Silver Lake, is that we just have a lot of easy debt available again. Now, what we've
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