Morning newsletter digest

Axios Pro Rata: “Model mess”

• PE dealmaking is getting harder to underwrite because AI is scrambling assumptions across almost every sector, not just enterprise software.
• The core issue is time horizon: a typical PE hold period is three to four years, while the AI landscape has already changed dramatically in the three and a half years since ChatGPT launched.
• Nvidia and Corning announced a multiyear partnership for advanced manufacturing facilities in North Carolina and Texas, pointing toward co-packaged optics and “cash for glass” as AI infrastructure hunts for lower energy use.
• Why it matters: Useful read on AI as a valuation and underwriting problem, not just a productivity story.

Fortune Term Sheet: “A16z-backed District wants to oust eBay”

• District raised a $14.7M seed round led by Andreessen Horowitz and Kindred Ventures to help independent sellers build community-driven marketplaces.
• The pitch is that commerce is shifting back toward personality, trust, and niche community, rather than anonymous mega-marketplaces.
• Examples in the piece include Stacked Golf doing $150K in weekly sales and Niknax generating more than $5M in 2025 across 5,000-plus sellers.
• Why it matters: The e-commerce angle is quietly interesting: AI-powered tooling plus creator-led trust could make “small marketplace infrastructure” a real category.

The Rundown AI: “OpenAI locking in 2027 for its AI phone”

• OpenAI is reportedly accelerating an AI agent phone for mass production in the first half of 2027, per Ming-Chi Kuo.
• The device is expected to emphasize real-world visual sensing, with an enhanced image signal processor, MediaTek as chip supplier, and two AI processors for vision and language tasks.
• Anthropic also unveiled 10 financial-services-focused AI agents for workflows like pitchbooks, KYC screening, earnings review, and valuations.
• Why it matters: The AI platform fight is moving from “best model” to distribution, hardware, vertical agents, and where work actually happens. Spicy little arms race.

Short Squeez: “Ken Doubles Down on Miami”

• Ken Griffin said Citadel has revised its Miami HQ plans upward, tying the move partly to frustration with New York politics and a proposed pied-à-terre tax.
• Griffin did not abandon the planned $6B 350 Park Avenue tower, but said what Citadel does there is still under internal discussion.
• Other notable items: Apollo raised $6.5B for a hybrid debt-equity fund, OpenAI finalized a $10B JV with PE firms, and around 35% of large corporate bond block trades are now handled electronically.
• Why it matters: The Citadel story is part politics, part real estate, part negotiation theater. But the direction of travel for finance talent and HQ symbolism still matters.

Worth opening: Axios Pro Rata and Fortune Term Sheet.