Dear friends of Civitas Growth Partners,
This week Nvidia signed away $500 billion in financing deals to make sure its own customers can afford its own chips, Anthropic more than doubled its revenue quarter over quarter while OpenAI managed a merely respectable 18%, and a man who bought a Lakers stake fourteen months ago is walking away $2 billion richer for having barely unpacked. Congress released Fauci's old text messages, a president switched planes using a catering truck, and pickle-flavored ice cream is apparently now a thing. We are not sure which of those last three is the most alarming.
As Benjamin Franklin once wrote:
"Rather go to bed without dinner than to rise in debt."
With that, let's get to it…
Politics and Current Events
The GOP's economic brand is cracking at the same time as its base. WSJ reports voters now trust Democrats more on the economy for the first time since 2010, while Axios finds the share of Republicans who strongly approve of him down 20 points since he took office. Cost-of-living anxiety, it turns out, may be one of only two bipartisan concerns (spoiler alert: data-center angst is the other).
The AI backlash has gone electoral. Axios reports Senate Republicans are privately warning AI companies that data-center opposition could cost them an Ohio seat, and its own columnists call the data-center backlash "the most clear and present danger to AI", ahead of energy, chips, or China, along with a nationwide scramble in the midterms. NIMBYism just found a trillion-dollar opponent, and NIMBYism is winning the polling.
GOP senators released a batch of Fauci's text messages showing him and top health officials privately weighing vaccine risk for pregnant women in real time while publicly projecting certainty. Whatever your priors, "the science" behind closed doors always looks more like a group chat than a monolith.
NYT reports Trump secretly swapped planes using a catering container and a decoy Air Force One after intelligence flagged a credible Iranian threat in Turkey. We would note that presidential security theater has never had better production values.
Democratic primaries are eating their own. Axios tracked seven House Democrats losing primaries this year, Wisconsin's polls missed a 20-point swing entirely, and young voters trust neither party on cost of living. Anti-incumbent energy does not appear to be checking anyone's registration card - and progressives seem to be gaining more and more ground.
In a recurring theme about the travails of the Land of Lincoln, Paul Vallas points out that Illinois has lost 400,000 mostly middle- and upper-income residents since 2019 despite $54 billion in federal Covid aid, while taxes kept climbing. People vote with moving trucks long before they vote with ballots.
A rare bright spot: Axios reports prescription drug prices fell 3.1% over the past year, the steepest annual decline in six decades. Both the White House and the Biden-era Medicare negotiators are taking credit, which is usually a sign something actually worked.
The good-news column: Axios reports violent crime fell 9.7% last year, the largest annual drop since the FBI began tracking in 1936. Nobody can fully explain why, which is either humbling or a sign we should stop trying to take credit for things we don't control.
Move over Nancy Pelosi, hello Ro Khanna. A recent post on X reminds us that Rep. Ro Khanna bought Moderna stock on June 30, roughly seven weeks before its cancer-vaccine data sent the stock up 177% in a single day. Congressional stock trading remains the one bipartisan issue everyone agrees on and nobody fixes.
Economy, Markets, and Business
Nvidia struck financing deals worth $500 billion with Apollo, Blackstone, BlackRock, Brookfield, Goldman Sachs, and KKR so its own customers can afford its own chips, a deal the FT confirms was struck at scale and which Wall Street is betting will let semiconductors defy finance's oldest rule: fast-moving tech usually loses value fast. We have seen this vendor-financing movie before, and we remember how it has ended in the past - we will be watching this one closely.
Goldman analysts, via the FT, counted $1.5 trillion in hyperscaler lease commitments, a trillion of which isn't even on the balance sheet yet, while the WSJ separately tallies $3 trillion in off-balance-sheet AI obligations across nine tech giants, triple what they owe on all their leases and long-term borrowings. Footnotes, it turns out, are where the real balance sheet lives now.
SemiAnalysis reports SpaceX is on track to build 10 gigawatts of compute by the end of 2027, a scale of capex that puts a rocket company in the same conversation as AWS and Google Cloud. Elon Musk's timelines remain aggressive; his balance sheet is apparently not deterred by that fact.
Nearly four years into the AI boom, Axios admits we still don't know if the spending is actually making money, and Goldman Sachs sizes this year's AI investment at about $600 billion, some 2% of GDP, while judging the crowding-out of other investment smaller than advertised. Auditing the return on a trillion-dollar bet is apparently still optional.
Nvidia is finalizing roughly $100 billion in credit support for an Ohio data-center campus, and days later Nvidia, OpenAI, and SoftBank confirmed the deal, with a 20-year OpenAI lease attached. Twenty-year leases are a bold bet on a technology that reinvents itself every eighteen months.
Anthropic's numbers keep rewriting themselves upward: revenue up 14-fold to $11.5 billion in Q2, then $65 billion annualized by the end of July, with backers now pricing the IPO at $2 trillion or more, bigger than SpaceX. We would note that revenue this explosive is either extraordinary or extraordinarily hard to underwrite.
Speaking of underwriting: OpenAI told investors revenue grew 18% quarter over quarter to $6.7 billion, with losses widening, while Anthropic more than doubled its own revenue in the same period and turned a small operating profit. The AI race now has a clear leader on the scoreboard, which will make things interesting as both companies head for an IPO.
The debt math keeps getting worse. The Kobeissi Letter reports the U.S. posted its largest-ever July deficit at -$432 billion, annualized interest expense hit a record $1.38 trillion, or 4.2% of GDP, and one chart puts the entire $40 trillion debt pile in context. We, who live and die by the cost of capital, would gently note that Washington pays none of the attention to its own that a portfolio company would.
Bonds are not helping. WSJ reports global bond yields are at 19-year highs with Wall Street seeing no relief in sight, Axios calls it a "great global rate reset", and the Treasury is quietly doubling its long-end bond buybacks to "improve liquidity". When the buyer of last resort is the seller too, that is not really a market anymore (see our note on financing circularity above).
Jane Street disclosed a roughly $15 billion loss in July after turmoil at AI-focused hedge fund Situational Awareness caught it wrongfooted during last month's AI-stock reversal. Even the smartest quant shop in the room can get run over by a trade it didn't own.
Berkshire Hathaway bought more than $23 billion of stock in Q2, including at least $10 billion of Alphabet, one of its most active buying stretches in years. Warren Buffett spent a decade skeptical of tech and just wrote one of the largest AI checks of the quarter.
Mega-funds now pull in 72% of all venture capital raised, and Josh Kushner's Thrive Capital shows why concentration wins: its 2022 fund grew sevenfold to $3.7 billion, with 90% of the money in just fifteen positions. Diversification is for people without conviction. Are we embarking on a new structure for portfolio construction?
Sports franchises have become the new trophy asset. CNBC reports 20% of billionaire family offices now own a controlling stake in a sports team, up from 6% in 2022, and one post on X calculates that the Buss family's Lakers stake underperformed the S&P 500 by $9 billion since 1979 after the family's remaining stake sold at a $12.5 billion valuation. Eleven championship rings evidently do not beat a market index.
The Kobeissi Letter notes U.S. business insurance prices fell for the first time in nine years, down 1.2% in Q1, though premiums remain 74% above 2017 levels. A one-quarter dip after nine years of increases is not exactly a trend worth toasting.
The middle-management squeeze is real on both fronts. Chamath Palihapitiya notes Gallup's average manager span jumped from 11 to 12 direct reports in a single year, the fastest move in the decade Gallup has tracked it, while Bloomberg reports more than 20,000 companies shifted employees onto health-reimbursement stipends this year, up 53%. The 401(k)-ification of everything continues, one benefit line at a time.
Gold has officially overtaken Treasuries as the world's largest reserve asset, and the Social Security Trustees have now confirmed the trust fund goes broke in 2032. When investors trust a shiny rock more than the full faith and credit of the United States, that is a signal worth sitting with - and a trumpet we have been sounding since the inception of Civitas Snippets.
CME Group is launching futures contracts on AI compute in October, the same financialization playbook that turned oil and soybeans into tradable commodities. If we can securitize subprime mortgages, we can certainly turn a GPU-hour into a futures strip (although the question of usable life does continue to arise).
Consumer spending is fragmenting in interesting ways. FT reports Kraft Heinz's North American volumes have fallen in nine of the last ten years even as Axios finds live-event ticket prices are up 41% since 2016. Households squeezed on groceries are apparently still finding $127 for a concert ticket. The experience economy is alive and well.
Moderna's cancer-vaccine combination with Merck's Keytruda cleared its Phase 3 trial, sending the stock up 177% in a day. A company left for dead after the pandemic just found its second act in oncology.
We're suckers for a good family-business story: the Lodge family has run the same cast-iron skillet company for 130 years and six generations. No sponsor, no roll-up, just pig iron and patience.
a16z's chart roundup finds neoclouds like CoreWeave repurposing old crypto-mining infrastructure for AI compute, growing fast but still unproven on long-term profitability, while horizontal SaaS is showing early signs of life again, led by Atlassian's AI-assistant upsell. The "saaspocalypse" obituary may have been premature.
Society and Culture
Private equity has become an unlikely status symbol. WSJ reports PE guys are suddenly A-list arm candy, from Olivia Rodrigo to Nicole Kidman's poolside companions, while in Seoul, WSJ also finds memory-chip engineers have pulled even with lawyers and doctors as marriage material on the back of $400,000 bonuses. Cash flow and Patagonia vests, it turns out, are the universal aphrodisiacs.
The Economist profiles a scientist hunting a long-lost wild coffee species in Sierra Leone that may be the key to keeping coffee alive in a warming climate. Somewhere between a gold rush and a species rescue, this is exactly the kind of story we can't stop reading.
The Lakers were sold. Again. Just fourteen months after Mark Walter bought the team at a $10 billion valuation, he's flipping it to Bob Iger and Joshua Kushner for a record $12.5 billion, confirmed by The Athletic, barely a year after the Buss family sale that was supposed to keep Jeanie Buss running the franchise "for the foreseeable future".
The Dodgers will spend more on luxury-tax payments alone than a dozen MLB teams spend on their entire payroll, on a $430 million roster more than double the league median. We have to respect any organization willing to treat a tax penalty as a rounding error.
A Connecticut estate owes $13.2 million in tax because a man's official domicile was disputed after his death, despite his Florida mansion and observatory. Where you die is apparently more contestable than where you live.
The WNBA denounced "bad faith" claims after two former NBA players declared for the 2027 WNBA Draft as women. We did not have this on our 2026 bingo card, and yet here we are.
Axios reports 403 U.S. counties, mostly rural, have already crossed the majority-minority threshold the country as a whole won't reach until 2046. Demographic change in America is arriving town by town well before it shows up in a national headline.
Pickle-flavored everything is having a moment, up 30% in sales versus 3.8% for snacks overall, including pickle ice cream, which exists and which we have opinions about. Somewhere a flavor scientist is very proud of themselves.
Higher education is having a crisis of confidence on every front. Axios finds students newly skeptical that a degree still leads anywhere as AI eats entry-level jobs, Michigan is dropping first-semester grades for freshmen to "curb the mental health crisis", enrollment is forecast to fall 13% by 2041 as the birthrate cliff finally arrives on campus, and Pew finds a majority of adults under 30 are now more concerned than excited about AI, at 55%. Four different data sets, one very consistent story about a generation losing faith in the deal it was sold (a deal that has been sold for the last 70 years).
A Chinese maglev train went from zero to 800 kilometers an hour in 5.3 seconds on a test track, then stopped smoothly. We would say "someday in America," but we both know better (see the Brightline West from LA to Las Vegas).
Our World in Data counts 64 countries and territories that have already passed peak population, driven by falling birth rates rather than war or famine. Population decline used to be a catastrophe story; now it's a spreadsheet.
A survey a beer brand ran on its British customers puts the ideal catch-up with friends at 84 minutes. Somewhere, an economist is thrilled that friendship also has a marginal utility curve.
Harvard researchers find flight attendants and pilots carry the highest and second-highest share of radiation-related cancer deaths of any U.S. profession, from decades of cosmic-radiation exposure at altitude. The in-flight safety briefing may need a new slide.
Bloomberg profiles freight thieves stealing an estimated $200 million a year from America's railroads, even as AI-powered cameras help task forces catch up to them. Cargo theft, like everything else this year, now has an AI arms race attached to it.
Costco is rolling out its own Medicare Advantage plans with SCAN Group, adding health insurance to a membership that already sells vacations and gas. The $600 billion Medicare market apparently looked more attractive than another rotisserie chicken promotion.
U.S. alcohol consumption has stabilized at a historic low, with 54% of Americans drinking occasionally, matching last year's record after three straight years of decline. The sober-curious trend appears to have found its floor rather than its bottom.
Columbia House, the mail-order "12 CDs for a penny" club, is shutting down after 71 years. It survived Napster, Spotify, and two decades of obituaries for physical media, and it still couldn't outlast its own relevance forever. How many of our readers remember that first batch of penny CDs back in the 1990s?
One Final Thing
Last issue we asked whether the "Pacing the Frontier" petition, calling for a coordinated AI slowdown, would actually change anything. The verdict was decisive: 75% of you said no, competitive pressure wins and nothing meaningfully changes; 17% expected real international coordination or U.S. government action within 12 months; and 8% bet labs would quietly self-pace to manage optics. A skeptical crowd, and this issue's Ohio data-center backlash suggests you were onto something - the pressure campaign is now coming from voters, not petitions.
Between Nvidia financing its own customers to the tune of $500 billion, hyperscalers racking up trillions in off-balance-sheet commitments, and Anthropic's revenue rewriting itself every two weeks, this issue's dominant story is how much of the AI boom now runs on circular, leveraged financing rather than realized profit.
This issue's survey: Is the web of Nvidia-Wall Street-hyperscaler financing deals a sign the AI buildout can fund itself sustainably, or 2007-style leverage stacking that ends badly for someone?
We're Looking for Exceptional, Overlooked Businesses
At Civitas Growth Partners, we invest our own capital in founder-led B2B businesses with $1M to $4M in recurring revenue, strong retention, and best-in-class products, but that fall outside the traditional VC or PE mold. These businesses are often bootstrapped, breakeven, and haven't yet invested meaningfully in sales and marketing. Growth is steady (0–25% annually), and the product quietly leads its niche.
This is a category of company that is often overlooked, but we see tremendous opportunity. Our model is to help these businesses scale to $10M or more in revenue by providing flexible capital (minority or control), supporting both organic and M&A growth, and deploying an operational playbook honed through years of work with capital-efficient founders. Because we invest our own capital — not institutional LP funds — we bring no artificial timelines or exit pressure. That gives founders room to build enduring value. Our partners have achieved more than 6x equity outcomes without compromising what makes their companies special.
We're actively looking for our next great partner. If you know a founder or operator building something exceptional — and overlooked — we'd be grateful for an introduction. We value the relationships that lead us to great companies and are always happy to have a conversation about referral arrangements. Reach out anytime at team@civitasgrowth.com.
Cheers,
The Civitas Team