Israel, FTX Refunds, and a Sriracha Squeeze

US Stalls Bombs to Israel

President Joe Biden yesterday said if Israel launched a full-scale invasion of Rafah in Gaza, the US would stop supplying bombs and other weapons. The announcement came after the Pentagon yesterday revealed it had stalled a shipment of bombs to Israel last week, the first such delay since the start of the Israel-Hamas war. The shipment holds 3,500 munitions, divided roughly evenly between 2,000- and 500-pound bombs. The White House had called Israel's actions in Rafah this week a limited operation, falling short of the full-scale invasion it has warned against.

The Biden administration is also due to deliver a verdict this week on whether Israel has violated US and international law requiring foreign beneficiaries of US military aid to provide protections for civilians and ensure the delivery of humanitarian aid. The investigation began in February at the behest of Democratic lawmakers pressuring the Biden administration to withhold US weapons from Israel until the determination is made.

Separately, Israel yesterday said it had reopened its Kerem Shalom crossing with Gaza, closed earlier this week after a Hamas rocket attack. US and UN officials say aid has not yet passed through the crossing. Meanwhile, battles continue between Israeli and Hamas forces in eastern Rafah. See war updates here.

Wisconsin Data Center

Microsoft will construct a $3B AI data center in Racine, Wisconsin, company president Brad Smith announced yesterday. It's the latest billion-dollar investment in AI infrastructure as tech companies look to keep up with surging demand.

The project is expected to create 2,000 permanent jobs at the center, in addition to 2,300 construction gigs. The data center will add to the roughly 2,500 such structures across the US responsible for computing, storing, and processing the nation's data (see map). Microsoft is a major stakeholder in ChatGPT-creator OpenAI, whose technology requires enormous energy sources to train and deploy. Analysts expect data centers will account for roughly 6% of all annual US electricity use by 2026, up from 4% last year. 

The plant is located near the site of a since-stalled project tech manufacturer Foxconn announced in 2017 to construct a $10B liquid crystal plant.

FTX Recovers Funds

FTX said this week it has recovered enough funds to repay defrauded investors in full and provide the vast majority with interest. The failed cryptocurrency exchange platform filed its proposal late Tuesday to a federal bankruptcy court for approval.

Since FTX collapsed in 2022, CEO John Ray III (see previous write-up) has worked to track down more than $8B in missing assets to repay an estimated $11.2B owed to creditors. This week, Ray said the company has recovered between $14.5B and $16.3B, with much of the funds tied to government-seized FTX properties or recovered from investments FTX and its sister company made in hedge funds, digital assets, and AI startup Anthropic. FTX is also working to recoup payouts made to former company executives and the parents of its convicted founder, Sam Bankman-Fried.

If the proposal is approved, 98% of customers—those who invested $50K or less—will receive 118% of their investment. A hearing on assets dispersal is planned for June 25.

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Remember When Humans Did That?

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