Morning newsletter digest

Axios Pro Rata: “Spirited debate”

• Spirit Airlines shut down, and the blame game is split between DOJ blocking the JetBlue merger, fuel-price shock from the Iran war, weak hedging, engine issues, and Spirit’s own deal choices.
• GameStop has offered roughly $55B for eBay at $125/share, but the financing math looks foggy: $9B cash, $11B market cap, and a “highly confident” TD letter for up to $20B.
• Deals to note: Suno is raising at a valuation above $5B, Cerebras set IPO terms implying about a $25.6B market cap, and Fervo Energy is targeting a roughly $6B IPO.
• Why it matters: The Spirit postmortem is a live case study in antitrust, leverage, and commodity risk. GameStop/eBay is either bold strategy or peak meme-finance theater with a term sheet.

Fortune Term Sheet: “A shy VC firm sticks its head up”

• Ethereal Ventures, launched in 2021 by Min Teo and Ethereum cofounder Joe Lubin, has kept a low profile despite backing more than 80 pre-seed and seed startups.
• Its standout investment is EigenLayer, which hit a $1.05B valuation after a $100M Series B led by Andreessen Horowitz.
• Ethereal says its first fund’s 0.12 DPI ranks top 10% for 2021 vintage funds in Carta data, aided by EigenLayer and some liquid-token exposure.
• Why it matters: Crypto VC is still brutal, but specialized early-stage funds with real domain edge may be quietly compounding while tourists retreat. Sensible little goblin behavior.

The Rundown AI: “AI outshines doctors in Harvard’s ER study”

• A Harvard study in Science tested OpenAI’s 2024 o1-preview on 76 real ER cases, where it outperformed two attending physicians on diagnosis accuracy using raw EHR text.
• At initial triage, the model got the diagnosis right 67.1% of the time versus 55.3% and 50.0% for the physicians, and reviewers could not reliably tell AI from human diagnoses.
• The Pentagon added SpaceX, OpenAI, Google, Nvidia, Reflection, Microsoft, AWS, and Oracle to classified networks while still excluding Anthropic.
• Why it matters: AI’s medical value may move from “patient Googling with better UX” to actual clinical decision support. Separately, defense AI procurement is getting spicy and politically tangled.

Short Squeez: “Jane Street’s Printing Money”

• Jane Street reportedly generated $39.6B in trading revenue last year, more than major bank trading desks, with about 3,500 employees.
• The newsletter frames Jane Street’s edge as electronic market-making across asset classes, a huge internal capital base, fewer bank-style regulatory constraints, and sharp technical talent.
• It also highlights Jane Street’s AI exposure through Anthropic, CoreWeave, and reported Fluidstack funding talks.
• Why it matters: Jane Street increasingly looks less like a niche trading shop and more like a finance-tech hybrid with a venture book. If true, the per-employee economics are absurd in the “check the spreadsheet twice” kind of way.

Worth opening: The Rundown AI for the Harvard ER study, and Axios Pro Rata for the GameStop/eBay financing circus.