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Talk about symbolism. Foxconn chair Young Liu said today that the electronics manufacturer was selling its Lordstown, Ohio, electric vehicle factory to SoftBank, which will use it to make artificial intelligence computer servers. It's the latest example of how AI is supplanting other newish technologies. (Notably, the Lordstown factory, which Foxconn bought in 2022 from Lordstown Motors, was originally a General Motors plant making Chevys and Pontiacs, as columnist Steve LeVine wrote about.) Also today, TeraWulf, which operates a data center in New York state originally dedicated to bitcoin mining, did its second deal in a week to expand the data center by adding AI-related computing capacity—with Google's backing.

AI dominates everything nowadays. The daily newsletter from Apollo chief economist Torsten Slok today reported that in the first half of this year, "the contribution to GDP growth from data center investments has been the same as the contribution from consumer spending." Typically, consumer spending is the engine for the U.S. economy, so the fact that data center construction is contributing as much is a huge deal. It's also, for anyone prone to envisioning bad things around the corner, a bit of a worry. What happens if (or when) something happens that sparks a reversal of this massive investment in AI capacity? 

Aside from the macroeconomic impact of such a slowdown, there's also the reality that lots of companies now have exposure to AI, thanks to various interlinkages, caused by tech firms farming out the enormous cost of AI development. The SoftBank-Foxconn deal is an example of that—SoftBank is involved because it is a big investor in OpenAI and its Stargate data center project. Foxconn is staying involved in the Lordstown factory through a joint venture with SoftBank, because it will reportedly operate the factory. Then there's Google's deal with TeraWulf—which involves a third firm, FluidStack, a cloud startup that has borrowed money with its collection of Nvidia AI chips as collateral, we've previously reported.

All of these deals just happened in the last two weeks. Most of the big private equity firms are now investing in data centers. And since 401(k) plans may soon start taking money from private equity firms, that could expose individuals even more to such investments. We wrote recently about insurance companies investing in data center–backed securities. Then there's the proliferation of cloud newcomers like CoreWeave and AI chip startups like Groq. Lots of companies are hoping to cash in on the AI boom—and they could get burned if things go wrong.

Salesforce's Nightmare

Uh-oh, look who's back. Starboard Value, the activist investor, has increased its stake in Salesforce after a couple of years of steadily selling down. Given Starboard's habit of coming back for a second bite of the corporate apple if circumstances warrant it, this could be a sign that Salesforce CEO Marc Benioff has more activist pressure in his future.

Salesforce watchers might recall that starting in the fall of 2022, Starboard and other activists such as Elliott Management surfaced as shareholders in the software firm, at a time when the stock was depressed. Salesforce quickly responded, shaking up its board and adopting a focus on efficiency that included layoffs. The activists quieted down. Starboard cut its stake in Salesforce from 3 million shares at the end of 2022 to just 559,000 shares at the end of 2024, according to data compiled by S&P Global Market Intelligence. Since then, however, it has built its stake back up to 1.2 million shares.

It's predictable that Starboard would try again to shake things up, as it has done in the past. After a torrid rally from late 2022 to late 2024, lifting Salesforce's stock 182% to about $362 apiece, it has been a dog this year, falling to its current price of around $245. Depressed by the perception that AI agents will hurt the company's software business, the stock is now trading at less than half the forward revenue multiple enjoyed by that of another enterprise software firm, ServiceNow, according to Koyfin data. Starboard, this is your cue.

In Other News

 • The MSNBC cable news channel will change its name to MS NOW later this year, following Comcast's planned spinoff of most of its cable TV networks into a new company called Versant. MS NOW is an acronym for My Source News Opinion World, the company said in its announcement. 

• Software-focused buyout firm Thoma Bravo is in talks to buy human resources software provider Dayforce, Bloomberg reported Sunday. Shares of Dayforce jumped 26% on the news.

• BNY and Goldman Sachs are aiming to manage reserve assets for stablecoin issuers, the latest move by banks to serve the sector following the passage last month of U.S. stablecoin legislation (more here).

Today in The Information's TITV

Check out today's episode of TITV in which Grammarly CEO Shishir Mehrotra talks about the company's new AI agents and the future of education. 

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