On Wednesday Wall Street gave Microsoft a rap on the knuckles over its surging AI spending and slowing cloud sales growth. On Thursday, investor attention returned to the software giant—and this time they punched it in the face.

Microsoft saw its stock fall by 10% by the end of trading, doubling yesterday’s losses and jettisoning $357 billion in market value in the process. It was a larger move than the market caps of about 96% of S&P 500 Index members, and bigger than the values of stock markets in countries such as Finland, Vietnam and Poland.

The destruction immediately evoked memories DeepSeek and Nvidia’s resulting $593 billion rout last year. The chill was felt elsewhere as well, with peers including Alphabet and the aforementioned Nvidia each shedding more than $100 billion at one point during trading.

“Since it is becoming even more evident that Microsoft is not going to garner a strong ROI from their massive AI investment,” said Matthew Maley of Miller Tabak, “their shares need to be revalued back down to a level that is more consistent with its historic fair value.” Here’s your markets wrap. —David E. Rovella

What You Need to Know Today

Elon Musk is looking to reorganize his empire. His SpaceX rocket company is considering a potential merger with Tesla (of which he is chief executive) as well as an alternative combination with his artificial intelligence firm xAI. Separately, investors are also exploring a union of SpaceX and xAI ahead of an initial public offering.

Different parts of Musk’s grand vision for SpaceX—putting data centers in space for example—would potentially be served by the various scenarios. xAI could benefit enormously from computing capacity provided by SpaceX’s data centers in orbit (if the company can make the engineering work). Tesla’s ability to manufacture energy storage systems could help SpaceX use solar energy in space to run the data centers. Musk has also discussed using SpaceX’s Starship rockets to carry Tesla’s Optimus robots to the moon as well as to Mars.

---

**Who could forget those **heady days when Microsoft Chief Executive Officer Satya Nadella looked like the smartest man in tech? When ChatGPT emerged in late 2022, his decision to back OpenAI put Nadella’s company at the forefront of the AI boom, Dave Lee writes in Bloomberg Opinion.

But more recently, the relationship has cooled, and with it the perceived value of Nadella’s foresight. Microsoft has now invested in Anthropic and looked to incorporate its capabilities into its products. And OpenAI, hungry for computing power, has turned to Oracle, Google and Amazon. All this AI polyamory has put Microsoft’s eggs in a few more baskets, Lee writes, but it has also highlighted that Microsoft’s early mover advantage has run its course.

---

**When Tulsi Gabbard was nominated by Donald Trump **to be the most powerful intelligence official in the US, Democrats howled at how a politician who sympathized with Russia’s war on Ukraine and sometimes parroted Kremlin talking points could be trusted with America’s secrets. After being confirmed as national intelligence director by the Republican-controlled Senate, Gabbard railed against the conclusion of US intelligence officials and other nations that Vladimir Putin sought to manipulate US public opinion in favor of Trump during the 2016 election. (Special Counsel Robert Mueller’s probe also concluded Russia took actions that helped Trump.)

So when Gabbard was spotted at yesterday’s government raid on the Fulton County election office in Georgia, Democrats howled again. The administration contends the unprecedented effort by the FBI to scoop up voter records in the state is meant to investigate the 2020 election—about which Trump has repeatedly made false claims of widespread fraud. The president famously asked Georgia officials to find more votes for him after he lost the state, and was eventually indicted for it.

A growing chorus of critics allege this week’s raid could be the latest step in a White House effort to tilt the coming midterm elections in the Republican Party’s favor. Virginia Senator Mark Warner said there could only be two reasons why Gabbard would take part. The first would be if there were a foreign intelligence element, which she would be obligated to report to Congress. The second would be she was “injecting the nonpartisan intelligence community she is supposed to be leading into a domestic political stunt designed to legitimize conspiracy theories that undermine our democracy.”

Tulsi Gabbard Photographer: Allison Robbert/Bloomberg

---

The shooting deaths of Renee Good and Alex Pretti by US immigration agents almost caused a government shutdown this weekend, but a deal struck late Thursday delayed any potential confrontation. Senate Democrats reached a tentative accord with Trump that would fund the Homeland Security department for two weeks to allow time to continue negotiations. Democrats are demanding that federal paramilitaries in Minneapolis and other cities remove their masks and obtain warrants for arrests.

In Minneapolis Thursday, Trump border czar Tom Homan used the term “drawdown” to refer to the possible exit of some federal agents from Minnesota. It’s a word often used in reference to the removal of military troops from foreign territory. A New York Times article described the specialized military weapons and gear being used by civilian agencies such as ICE and the Border Patrol as they go door-to-door in suburban neighborhoods in search of undocumented immigrants.

---

---

Blackstone is in advanced talks to become the single largest shareholder of New World Development, a move that would see one of Hong Kong’s richest families relinquish control of a major asset. Under the proposed deal, the US company would be able to restructure the embattled developer and New World could continue to try to offload assets to shore up liquidity.

Founded in 1970 by Cheng Yu-Tung, a former gold shop apprentice from mainland China’s Guangdong province, New World is one of Hong Kong’s “Big Four” property developers. The family-owned company has built scores of apartment blocks throughout the city and owns iconic assets including the sprawling commercial complex Victoria Dockside along Hong Kong’s famous harbor.

---

New Year Sale: Save 60% on your first yearEnjoy unlimited access to Bloomberg.com and the Bloomberg app, plus market tools, expert analysis, live updates and more. Offer ends soon.

What You’ll Need to Know Tomorrow

For Your Commute

More from Bloomberg

Enjoying Evening Briefing Americas? Get more news and analysis with our regional editions for Asia and Europe. Check out these newsletters, too:

• Markets Daily for what’s moving in stocks, bonds, FX and commodities
• Breaking News Alerts for the biggest stories from around the world
• Opinion Today for an afternoon roundup of our most vital opinions

Explore all newsletters at Bloomberg.com.

Follow Us

Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. Learn more.

Want to sponsor this newsletter? Get in touch here.

You received this message because you are subscribed to Bloomberg’s Evening Briefing Americas newsletter. If a friend forwarded you this message, sign up here to get it in your inbox.