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Anthropic sues Pentagon after supply chain risk label kills AI contract. (0:15) Oil surge toward $120 sends VIX above 30 before retreat. (1:30) Hims and Hers jumps after partnership with Novo Nordisk. (2:14)
This is an abridged transcript of the podcast:
Our top story so far, Anthropic (ANTHRO) has filed a pair of civil suits against the Department Defense after the Pentagon dropped its contract with the AI startup and labeled it a “supply-chain risk” due to ideological differences.
Anthropic filed one suit in the U.S. District Court in the Northern District of California and another in the D.C. Circuit Court of Appeals. It accuses the Pentagon of inappropriately applying the label over philosophical differences. It is the only time the label has been given to a U.S. business.
“This is a necessary step to protect our business, our customers, and our partners,” Anthropic said. “We will continue to pursue every path toward resolution, including dialogue with the government.”
Anthropic, which developed the Claude chatbot, has provided AI systems for classified Pentagon work since last year. But the company balked when the DOD sought unrestricted access to its technology for lawful military use ahead of the recent strike on Iran. The company’s limits include barring mass surveillance of Americans and refusing to allow its AI to operate fully autonomous weapons without human oversight.
“This could have a ripple impact for Anthropic and Claude potentially on the enterprise front over the coming months as some enterprises could go pencils down on Claude deployments while this all gets settled in the courts,” said Wedbush analysts. “We have already seen the Treasury Department and a number of other government agencies announce they will stop using Claude, but there may be further ripple effects on the enterprise front as the lawsuit plays out front and center. This will all be battled in the courts over the coming weeks and months, and we hope it gets resolved sooner rather than later to end uncertainty in the AI sector.”
Looking at today’s trading, it’s been pretty wild. Oil (USO) (BNO) soared to nearly $120/barrel before meeting resistance and has since eased back though the day. That’s helping the major stock averages almost completely erase sharp overnight losses.
The VIX (VIX), also known as Wall Street’s fear gauge, topped 30 for the first time since the tariff turmoil last April. But it, too, is now back off of its highs.
Among active stocks, airlines are tumbling on worries about jet fuel prices hitting margins. JetBlue (JBLU) is down the most, with United (UAL) and American (AAL) also hard hit. All those airlines have abandoned hedging on fuel.
Delta (DAL) and Southwest (LUV) are faring the best, but still lower. Southwest still has some residual hedging contracts that will help soften the shock. Delta’s Trainer refinery provides a kind of natural hedge for some of its jet fuel needs.
Hims & Hers (HIMS) is soaring 40% after it officially announced a collaboration with Novo Nordisk (NVO) in which the telehealth company will offer Novo’s GLP-1 weight loss drugs and stop marketing its compounded low-cost GLP-1 offerings.
Hims & Hers will offer Ozempic injections and Wegovy pills and injections from later in March.
And thar she blows – the Tesla (TSLA) whale it at it again in the semiconductor seas.
Billionaire investor Leo KoGuan says he doubled his stake in Nvidia (NVDA) to 2M shares, adding to his position in the chipmaker as global markets face heightened volatility.
In other news of note, Mattel (MAT) is in the spotlight on National Barbie Day. March 9 mars the date in 1959 when Barbie debuted at the American International Toy Fair in New York.
The 11-inch “Teenage Fashion Model” with adult features and a fashionable wardrobe was a first of its kind in the U.S. market. Barbie debuted in a black-and-white striped swimsuit at the Fair, faced initial skepticism from buyers, but demand surged once Mattel aired TV commercials, helping sell about 350K dolls in the first year.
Toy industry watchers estimate that over a billion Barbie dolls have been sold in more than 150 countries since launch. Sales saw a notable spike after the 2023 “Barbie” movie created significant demand, adding an estimated roughly $150M to Mattel’s revenue that year and elevating the brand.
And it’s Ken’s birthday in two days. He debuted on in 1961.
And in the Wall Street Research Corner, central banks worldwide will postpone interest rate cuts as the energy shock threatens to add up to 2 percentage points to inflation, according to TS Lombard strategist Dario Perkins.
Oil is up about 50%, while natural gas prices (UNG) have climbed even more dramatically– up 60% in Europe, 90% in the UK, and around 15% in the United States.
“Inflation is already overshooting their targets, and—in their minds—that makes expectations ‘more fragile,’” Perkins said. While central banks that were already planning to hold rates steady will likely maintain that position, those that had anticipated cuts face the biggest dilemma.
Perkins’ sensitivity analysis shows that if current prices hold, inflation could rise by 0.6 to 1.0 percentage point across major developed economies. However, if conditions deteriorate further — with oil spiking to $150 per barrel and European natural gas prices jumping 120-150% — the inflationary impact could reach 1.5 to 2 percentage points.
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