GPT-5 Isn’t Up to Speed. Why That Won’t Slow the AI Stocks Boom and 4 Other Things to Know Today.

Relax everyone—artificial intelligence isn’t about to take over yet, but the boom isn’t over. While OpenAI’s GPT-5 launch suggests progress is coming at a slower pace, that doesn’t spell disaster for the AI trade—far from it.

The debut of the latest AI model from the ChatGPT developer on Thursday was eagerly awaited, coming more than two years after its official predecessor. However, the proliferation of so-called reasoning models in the meantime has raised the bar for performance. Early benchmarking tests suggest GPT-5 is only mildly better than rivals from Google and Elon Musk’s xAI.

For investors, rather than trying to back the best AI model, the safer choice is still likely to be stocks powering the technology such as chip maker Nvidia. Its hardware will continue to be in demand as companies look to eke out improvements. Additionally, its CEO Jensen Huang is in President Donald Trump’s good graces, visiting the White House this week ahead of the announcement of chip tariffs, according to Bloomberg.

And having Trump’s favor is very important for tech CEOs—a lesson Intel’s Lip-Bu Tan is learning the hard way after the president called for him to resign over his past ties to China. It’s the last thing the chief executive needs as he seeks to revive the beleaguered chip company, which is missing out on the AI boom.

The fundamentals of the AI trade remain intact, with big cloud companies set to spend $340 billion this year in building data centers and chip tariffs being less burdensome than feared. It doesn’t require superintelligence to think the trend will continue.

— Adam Clark

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OpenAI Rolls Out Its Most Advanced Model Yet After Delays

OpenAI has introduced its latest artificial intelligence model called GPT-5 after two years of delays and stumbles, touting it as more capable at creative writing, coding, and reasoning through complex inquiries. CEO Sam Altman told reporters it’s like talking to an expert on any topic.

• The AI research firm is calling this its most powerful model yet, making it widely available and free for all users as early as Thursday. Users can change GPT-5’s personality to act more professional, supportive or sarcastic. The model can also access Gmail or Google calendar to offer better personalized answers.
• GPT-5 is a reasoning AI model. These types of models reflect more thoroughly on a query by performing numerous thought computations and searching the web for information before they respond. OpenAI released the first reasoning model o1 in September, followed by o3 in April.
• Rival AI developer Google released a reasoning-capable Gemini model in December, while Anthropic and Elon Musk’s xAI released reasoning models in February. The advent of AI reasoning models is accelerating the adoption of chatbots.
• Microsoft-backed OpenAI has said ChatGPT’s weekly active users rose to 500 million in March from 300 million in December. On Thursday, the AI start-up said ChatGPT hit 700 million weekly active users this week—four times higher than last year.

What’s Next: OpenAI is talking to venture capital firm Thrive Capital about a secondary stock sale that would value it at $500 billion, The Wall Street Journal reported, citing people familiar with the matter. This is after it raised $8.3 billion from investors including Sequoia Capital and Fidelity Management.

— Tae Kim and Liz Moyer

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What to Know About Trump’s Pick for Vacant Fed Governor Seat

President Donald Trump now has the first chance of his second term to reshape the Federal Reserve’s leadership. He will nominate Stephen Miran, chair of the White House Council of Economic Advisers, to the Fed Board of Governors, filling the seat vacated by Adriana Kugler. It’s a temporary role until January.

• Miran, a Harvard-trained economist, is one of Trump’s closest advisors on economic policy, authoring the so-called Mar-a-Lago Accord, which would see the U.S. attempt to lower the long-term value of the dollar. Miran has since said the paper doesn’t represent administration policy.
• Miran has outwardly supported the president’s pressure campaign on the Fed to lower interest rates. His nomination comes as the White House has questioned the importance of central bank independence. In an opinion column for Barron’s last year, Miran said that the central bank’s independence is overstated.
• Trump will nominate a second candidate to take the full 14-year term beginning in January. The president would likely back that person as successor to Chair Jerome Powell. Both appointments require Senate confirmation. For Miran it could take four to eight weeks after lawmakers return from August recess.
• That makes it unlikely he would be seated for the Fed’s September policy meeting. Trump has floated several names for the longer-term role, including former Fed governor Kevin Warsh and economic advisor Kevin Hassett. Current governors Christopher Waller and Michelle Bowman are also considered contenders.

What’s Next: Miran wouldn’t comment to Barron’s. The Fed is likely to start cutting interest rates in September amid growing fears of an economic slowdown. If confirmed by the Senate, Miran will help determine how aggressively the central bank responds to economic weakness.

— Nicole Goodkind

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Crypto Has Burst Into the Mainstream. Here’s What’s at Risk.

The Trump administration’s crypto-friendly approach is revamping the financial system. Banks once barred from doing business with digital asset firms are being encouraged to dive in, companies once targeted by regulators are now open to dabble in payment systems used by ordinary Americans.

• When crypto exchange FTX collapsed in 2022 after a major crash in cryptocurrencies, there was almost no effect on the wider system, but that’s probably not repeatable. “All the guardrails are being removed at once,” says Lee Reiners from the Duke Financial Economics Center. Next time, the pain will be acute, he said.
• Bank of America CEO Brian Moynihan and Citigroup CEO Jane Fraser recently said they’re considering launching “stablecoins,” a type of cryptocurrency pegged to the dollar. JPMorgan Chase CEO Jamie Dimon, who in the past has called Bitcoin a “Ponzi scheme,” said he wants his bank to be “a player.”
• President Trump in July signed a law regulating stablecoins by requiring them to be backed by safe assets such as Treasury bills, bank deposits, and money-market mutual funds. Some are concerned the law opens the payments system to them even though their recent history suggests they may be riskier than other payment methods.
• Now retirement savings are in the mix. Trump on Thursday signed an executive order opening up Americans’ 401(k) employer-sponsored retirement savings plans to cryptocurrencies such as Bitcoin, private equity, and other alternative investments.

What’s Next: Thursday’s order unlocks a massive opportunity for crypto investments. According to the Investment Company Institute, 401(k)s held $8.9 trillion in assets as of September last year. Until this year, the Labor Department had outright discouraged plan sponsors from including crypto as an option.

—Joe Light

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The IPO Market Is Red Hot. Here Are the Next Two Deals.

The next stage in this red hot summer for initial public offerings will be debuts by two buzzy fintech companies: the crypto trading firm Bullish and options exchange Miami International. They are both expected to start trading next week after setting terms for their offerings this week.

• They will follow a hot streak featuring moon lander company Firefly Aerospace, which surged 34% on Thursday in its first day of trading after pricing its IPO above the expected range. Other recent IPOs include software firm Figma; stablecoin company Circle Internet Group; and cloud company CoreWeave.
• Renaissance Capital says 126 IPOs have priced so far this year, up more than 50% from the same period in 2024, and demand for both Bullish and Miami International should be robust. There has been particularly strong demand for crypto IPOs, including brokerage eToro and Michael Novogratz’s Galaxy Digital.
• Bullish owns the CoinDesk crypto news and information site, in addition to its namesake exchange. The Cayman Islands-headquartered company intends to raise about $600 million from the sale of 20 million shares for $28 to $31 for a $4.3 billion valuation.
• Miami International specializes in options, futures, and derivatives trading over its MIAX exchanges. It is looking to raise $300 million by selling 15 million shares at a price range of $19 to $21, with an estimated valuation of around $1.9 billion.

What’s Next: Some investing experts suggest that investors interested in buying into a new stock wait for so-called lockup periods to expire, typically 180 days after an IPO. That’s when many early investors are allowed to start selling their stock.

— Paul R. La Monica

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—Newsletter edited by Liz Moyer, Patrick O’Donnell, Callum Keown