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Inside the battle between the old guard and the upstarts for the future of the financial system

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After weeks of simmering tensions, the battle between fintech firms and banks is finally spilling into the public eye—and it’s pitting factions of the fragile Trump coalition against each other. 

At its core, the skirmish is around open banking, a policy first introduced in the 2010 financial Dodd-Frank reform that the Consumer Financial Protection Bureau was set to finalize, 15 years later. Fintech firms like Plaid championed the concept as a consumer-friendly approach to controlling your own data and making it more freely transferable between different institutions, like JP Morgan and Robinhood. Banks, predictably, were not so thrilled, raising alarms over security risks.      

As I wrote back on inauguration day, it wasn’t necessarily clear where the Trump administration would land. Traditionally, old guard banks have held enormous influence in D.C., spawning nicknames like Government Sachs. But Trump 2.0 is staffed by venture investors and funded by crypto dollars, meaning the balance of power was shifting. 

One of the Trump administration’s first acts was to gut the CFPB, with its open banking proposal sacrificed as collateral damage. Almost immediately, big banks signaled that they would begin charging fees to fintech firms for accessing consumer finance data—a move that a16z general partner Alex Rampell decried as “Operation Chokepoint 3.0” (here we go again). 

This is where things get tricky. In a strictly Manichean outlook on Trump world, you might think that any supporter wants to destroy the CFPB and anything it stands for. But now you have financial technology advocates arguing that, actually, the CFPB should be moving forward with its open banking proposal (but probably not any of its pesky enforcement work). It almost seems like an ancient Greek paradox. Is implementing regulations that create more freedom in markets actually deregulatory?

Clearly indifferent to the irony of boosting an agency that many of them are trying to nuke out of existence, a coalition of fintech and crypto leaders issued a letter on Wednesday to Trump, imploring him to oppose the fees that banks were threatening to impose. A trio of bank industry groups lobbed back, describing the accusations as “misleading.” In the meantime, the slimmed-down CFPB announced earlier in the month that it was going to revisit open banking rules. 

Even if you don’t care about the particularities of data sharing, the showdown still reveals the fascinating new faultlines in D.C.—and the mounting power of the financial technology industry. Even as the big banks recognize the sea change and embrace once-anathema sectors like crypto, they don’t hold the same grip on politicians that they once did. Just look at Trump’s executive order on debanking, which targeted not the regulators, but the banks that supposedly cut off services for political reasons, including to Trump himself. The era of Government Sachs may be waning.   

ICYMI…Speaking of shifting sands in the world of finance, Ben Weiss and I have been reporting on how fintech giant Stripe is doubling down on its crypto bets. That includes plans to launch its own blockchain, which will be helmed by venture power broker—and Stripe board member—Matt Huang of Paradigm. 

Leo Schwartz
X:
@leomschwartz
Email: leo.schwartz@fortune.com

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VENTURE DEALS

Citizen Health, a San Francisco-based AI advocate designed for patients of rare diseases, raised $30 million in Series A funding. 8VC led the round and was joined by Transformation Capital and Headline.

AND Global, an Ulaanbaatar, Mongolia-based fintech company, raised $21.4 million in Series B funding. The International Finance Corporation and AEON Financial Service led the round.

Sola, a New York City-based AI co-pilot for Robotic Process Automation, raised $17.5 million in Series A funding. Andreessen Horowitz led the round and was joined by Conviction and Y Combinator

Palabra AI, a London, U.K.-based AI-powered speech translation platform, raised $8.4 million in pre-seed funding. 776 led the round and was joined by Creator Ventures and others. 

Spike AI, a San Francisco-based developer of AI software for marketing departments, raised $1.9 million in pre-seed funding. Sorin Investments and Principal Ventures Partners led the round and were joined by GSI and others.

Swept AI, a Saginaw, Mich. and Denver, Colo.-based startup that tests AI agents for reliability, security and compliance, raised $1.4 million in pre-seed funding. M25 led the round and was joined by Wellington Management Company, BuffGold Ventures, Ann Arbor SPARK, Service Provider Capital, The Unicorn Group, and angel investors.

PRIVATE EQUITY

Datasite, backed by CapVest Partners, acquired Sourcescrub, a San Francisco-based provider of deal-sourcing data and workflows. Financial terms were not disclosed.

HG Insights, backed by Riverwood Capital Investors, acquired Madkudu, a Mountain View, Calif.-based provider of GTM Solutions. Financial terms were not disclosed. 

Jenmar, a portfolio company of FalconPoint Partners, acquired Weber Mining & Tunnelling SAS, a Rouhling, France-based developer of resins and foams for mining processes. Financial terms were not disclosed.

Schneider Geospatial, a portfolio company of Align Capital Partners, acquired Full Circle Technologies, a Boston, Mass.-based permitting & licensing software company. Financial terms were not disclosed.

This is the web version of Term Sheet, a daily newsletter on the biggest deals and dealmakers in venture capital and private equity. Sign up for free.



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Nvidia CEO Jensen Huang urges a return to factory careers: ‘Not everyone needs a PhD’

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“We want to re-industrialize the United States. We need to be back in manufacturing,” Huang said recently on theJoe Rogan Experience podcast. “Every successful person doesn’t need to have a PhD. Every successful person doesn’t have to have gone to Stanford or MIT.”

Huang believes more Americans need to take on manufacturing gigs—not just to pivot to where the work will be in the age of AI, but also because the entire industry could be at risk. As much as the thought of U.S. citizens heading back into factories may seem like a back-track, he said it impacts the nation’s ability to remain prosperous and build AI companies like his.

“If [the] the United States doesn’t grow, we will have no prosperity,” Huang continued. “We can’t invest in anything domestically or otherwise—we can’t fix any of our problems. If we don’t have energy growth, we can’t have industrial growth. If we don’t have industrial growth, we can’t have job growth. It’s as simple as that.”

“If not for [Trump’s] pro-growth energy policy, we would not be able to build factories for AI, not be able to build chip factories, we surely won’t be able to build supercomputer factories. None of that stuff would be possible without all of that. Construction jobs would be challenged, electrician jobs—all of these jobs that are now flourishing, would be challenged.”

Lutnick’s intergenerational manufacturing push amid talent shortages

As the cofounder and leader of the world’s most valuable company, Huang has a peek under the hood of America’s changing workforce dynamic. The CEO of the $4.53 trillion chip giant has a direct line to U.S. President Donald Trump and Secretary of Commerce Howard Lutnick, who are determined to bring U.S. manufacturing back to its glory days. 

The Trump administration is pressing for American self-reliance while curbing immigration, leading officials like Lutnick to push for an intergenerational manufacturing boom. He even framed it as a step into the future, not a stumble back into the past. 

For example, Lutnick claimed that technician jobs are promising gigs with a low barrier to entry, that can pay anywhere between $70,000 to $90,000 at the onset—no college degree required. 

“It’s time to train people not to do the jobs of the past, but to do the great jobs of the future,” Lutnick toldCNBC earlier this year. “This is the new model, where you work in these plants for the rest of your life, and your kids work here, and your grandkids work here.”

It’s an appealing proposition: avoid college debt and earn more than the average U.S. worker, all while having stability during an AI jobs wipeout. Yet many manufacturing roles have been left unfilled, despite the sector continuing to grow. 

Employment in the manufacturing surpassed pre-pandemic levels, standing at about 13 million jobs as of January 2024, according toDeloitte. It was estimated that the need for human workers in manufacturing could stand at around 3.8 million, but over half of these jobs—around 1.9 million—could remain unfilled if skill gaps aren’t addressed and the tune on the jobs doesn’t change. 

After all, only 14% of Gen Zers said they’d consider industrial work as a career, according to a 2023 study from Soter Analytics. There are a few concerns holding them back: they believe the industry doesn’t offer work flexibility, and the conditions are unsafe.

Huang even believes robots will create new jobs for humans

Huang has hope for the future of jobs, even as robot employees step onto the scene—and it’ll give yet another boost to factory jobs. 

Some tech leaders, like Tesla CEO Elon Musk, are already developing their own fleets of autonomous workers; Musk predicted his company’s Optimus humanoid robots will be used internally within Tesla by the end of 2025, and the following year, other companies will have the tech in their hands. 

It’s assumed that these robots will take over the work of employees, leaving humans high and dry—but Huang is optimistic that the tech will create new opportunities, especially for technicians.

“I’m super excited about the robots Elon’s working on. It’s still a few years away. When it happens, there’s a whole new industry of technicians and people who have to manufacture the robots,” Huang explained in the podcast. 

“You’re going to have a whole apparel industry for robots. You’re going to have mechanics for robots. And you have people who come to maintain your robots.”



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Mike Bloomberg’s new $50 million mayor bootcamp trains local leaders not to ‘play it safe’

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Michael R. Bloomberg has believed mayors have plenty to teach each other since he was mayor of New York City and supported the effort to share good municipal ideas through his nonprofit Bloomberg Philanthropies since he left office in 2013.

However, as more nations get bogged down in what the media entrepreneur and philanthropist calls “ideological battles and finger-pointing,” Bloomberg says mayors can do even more. He is expanding his support for them internationally, with the Bloomberg LSE European City Leadership Initiative, a collaboration with the London School of Economics and Political Science and the Hertie School in Berlin. And other philanthropists are investing in building stronger municipal governments to strengthen urban communities.

“Mayors are more important than ever because cities are more important than ever,” Bloomberg told The Associated Press in a statement. “For the first time in the history of the world, a growing majority of the world’s people live in cities – and cities lie at the heart of many of the biggest challenges facing countries, including expanding economic opportunity.”

The new international initiative, established by a $50 million investment from Bloomberg Philanthropies, brings together 30 mayors and 60 senior officials from 17 countries, representing over 21 million residents.

After one meeting in October, some already see the potential.

Oliver Coppard, mayor of South Yorkshire, England, jumped at the chance to work with Bloomberg Philanthropies again. Coppard learned much at the Bloomberg Harvard City Leadership Initiative, which focuses on training American mayors, but offers 25% of its seats to international mayors. And even he was surprised by how much he had in common with the first international class of mayors. They all look for ways to get their organizations to move faster, deal with social media, and communicate better with their communities.

“It was actually really surprising,” Coppard said. “There are a bunch of areas where, we all felt, despite the very different context that we work in, we were facing very similar challenges.”

A ‘show me, not trust me’ moment for mayors

Despite the varying political ideologies and viewpoints from a wide range of countries, Coppard said what united the mayors was a desire to serve their communities better through health care, transportation, and communication.

It’s exactly what James Anderson, head of Government Innovation programs at Bloomberg Philanthropies, hoped they would find. But he says tackling those issues has broader implications that require more philanthropic involvement.

“All of these mayors are recognizing that local governments have become the bulwark for democratic legitimacy,” Anderson said. “They feel the burden of that. And they want new and better ways to rebuild trust and a sense amongst their citizenry that government — local government, in particular — sees them and can respond to their needs in impactful ways.”

Anderson said the mayors also understand they have to show how government works for its community. Public safety, trash pickup and snow plowing have taken on new significance.

“We are in a moment where trust in institutions is very low,” he said. “This is a ‘Show me, not trust me’ moment. And mayors recognize that means they need to govern differently.”

Joseph Deitch, founder of the Elevate Prize Foundation, believes that philanthropy also has to support mayors and their cities differently.

“These days, there’s so much polarization,” he said. “Everyone is defending their corner. So where can we have common ground? I think one of those places is love of our cities.”

Launching Elevate Cities in Miami

To cultivate a stronger bond to those places, Deitch has launched Elevate Cities, a new initiative that both celebrates what makes cities special and convenes community leaders to make them better. The initiative will start in Deitch’s current home with Elevate Miami, though he hopes to expand it quickly to other cities.

In November, Elevate Miami awarded $25,000 unrestricted grants to three different Miami nonprofits to increase their impact on the city. Later this month, there will be a citywide scavenger hunt to introduce Miami residents to nonprofits in the area. And in January, Elevate Miami will launch a contest to write a love song to the city.

Kim Coupounas, Elevate Cities CEO, says that getting people to recognize all the positive things happening around them in their city makes it easier to cultivate civic pride. It also makes it easier for municipal leaders to get support from the community.

“We’re really trying to engage all of the city,” she said. “There’s so much potential and possibility that can come to life because we join hands and recognize what a good place we live in and what more can happen here.”

Bloomberg said he hopes the new Bloomberg LSE European City Leadership Initiative and other programs supporting municipal leaders will help spread good ideas and the diversity of viewpoints needed to try new strategies for their cities.

“If mayors want to do big things, they can’t afford to play it safe,” he said.

_____

Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.



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‘It absolutely matters politically’: Swing-district Republicans alarmed at spiking health insurance premiums tipping midterms

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Republicans in key battleground U.S. House districts are working to contain the political fallout that may come when thousands of their constituents face higher bills for health insurance coverage obtained through the Affordable Care Act.

For a critical sliver of the Republican majority, the impending expiration of what are called enhanced premium tax credits after Dec. 31 is a pressing concern as they potentially face headwinds in a 2026 midterm election that will be critical to President Donald Trump’s agenda.

One of those is first-term U.S. Rep. Ryan Mackenzie, R-Pa., whose victory for the Allentown-area seat last year was among the narrowest in the nation.

Mackenzie is part of a bipartisan group that has been pressing for an eleventh-hour compromise, advocating for an extension of the tax credits that tries to fix perceived flaws and bring down health care costs. But the push is a long shot due to entrenched GOP opposition to the health overhaul known as “Obamacare.”

“I think that we need to deal with the reality of where we are now and even if you have a broken system, that doesn’t mean that you shouldn’t provide or offer relief to individuals who are dealing with those high costs right now,” Mackenzie said in an interview with The Associated Press.

Democrats have been laying the groundwork, starting with this fall’s shutdown fight, to make the health care issue a focus of next year’s campaigns.

The party’s strategy for capturing the House majority centers on pinning higher bills for groceries, health insurance and utilities on the policies of Trump and Republicans.

Republicans torn over an extension

In Washington, Republicans from competitive House districts have authored or signed onto bills that would temporarily extend the tax credits. A new bipartisan proposal unveiled Thursday has drawn support from roughly 15 Republicans and 20 Democrats so far.

“I have 40,000 people in my district who rely on this health care and doing nothing to prevent a spike in their premiums is wrong,” said U.S. Rep. Jen Kiggans, R-Va., a sponsor of the plan.

Thirteen Republicans — including Mackenzie — signed a letter in late October to the House speaker, Rep. Mike Johnson, R-La., encouraging the temporary extension of the tax credits, saying letting them “lapse without a clear path forward would risk real harm to those we represent.”

Johnson hasn’t committed to a short-term extension vote before Jan. 1 and has dismissed the looming premium increases as affecting a small percentage of Americans.

More than 24 million people have ACA health insurance, including farmers, business owners and other self-employed people who don’t have other health insurance options through their work.

Many benefit from subsidies that lower their out-of-pocket cost. Those subsidies include the enhanced premium tax credits, which were added and then extended under Democratic President Joe Biden when his party was the majority in Congress.

Some Republicans — including Mackenzie — couch their support for an extension with the caveat that changes must be made. One is rooting out insurance broker fraud. Another is backing off subsidies for higher earners.

Time is running out

U.S. Rep. Kevin Kiley, one of the California Republicans whose districts have been redrawn to favor a Democrat, sponsored a bill to extend the tax credits for two years. His bill would also impose an income eligibility cap to exclude higher earners.

Kiley said the current system isn’t working, but there’s not enough time to make systematic reforms before millions of Americans “just suddenly pay double on their premiums.”

U.S. Rep. Jeff Van Drew, R-N.J., also has a bill to temporarily extend the credit, and said letting the subsidy lapse will make it harder for Republicans to retain the majority next year.

“People say, ‘well, it’s not that many people,’” Van Drew said. “The kind of election we’re going to have in the midterms in multiple districts is going to be decided by one or two points. It’s going to be close. It’s going to be tight, and it does matter. It absolutely matters politically.”

U.S. Rep. Richard Hudson of North Carolina, chair of the House Republicans’ campaign arm, said the tax credits won’t be “decisive” in next year’s election when other things are likely to be on voters’ minds.

Democrats will run on affordability

But U.S. Rep. Suzan DelBene of Washington state, who chairs the House Democrats’ campaign arm, said swing-district Republicans won’t be able to distance themselves from the expiration of the tax credits.

“The number one issue across the country is affordability and health care is a key part of that,” DelBene said.

The Congressional Budget Office projects that 3.8 million more people will be uninsured in 2035 if the tax credits aren’t extended. But the tax credits also come with a cost: Extending them would increase the deficit by $350 billion over the next decade.

The expiration of the tax credits means enrollees will see annual premiums more than double — from an average of $888 in 2025 to $1,904 in 2026, according to health care research nonprofit KFF. That’s an increase of 114%.

The size of the increases varies by state, age and income and will be more extreme in Mackenzie’s district, according to state data, which puts the average premium increase at 178%.

A primary field of Democrats is shaping up for the nomination to challenge Mackenzie. They say they’re hearing from people who are struggling to afford rising premiums.

One of those Democrats, Ryan Crosswell, said rising insurance costs are a “breaking of promises” by Trump, Republicans and Mackenzie. Another Democrat, Carol Obando-Derstine, called the impending expiration a “crisis of (Mackenzie’s) own making.”

Mackenzie says he’s made it clear repeatedly that he supports an extension, but that “I am not the speaker, I don’t set the calendar or the agenda. I’m not the leader, I can’t call up bills.”

Enrollees facing hard choices

In Mackenzie’s district, more than 20,000 people received the enhanced tax credits in 2025, according to state data. He won his race last year by 1 percentage point, or about 4,000 votes.

One of those 20,000 people in Mackenzie’s district is Patrick Visconti, who switched to a low-premium, high-deductible plan because he couldn’t afford to keep his plan with a premium that is more than doubling from under $200 to over $500 a month.

Visconti, 59, who works as a self-employed landscaper and a bus driver, said the plan he picked is “crappy coverage.”

“I’d rather pay the $200 a month. But I can’t get anything for $200,” Visconti said.

Lynn Weidner, a home care worker in Mackenzie’s district who works nearly 80 hours a week, said her $400 premium will increase to $680. But, she said, she’s leaning toward selecting the plan because she has various conditions — including an iron deficiency — that require regular medical care.

“So I’m trying to find places where I can cut money so that I can afford my insurance come January, which is stressful,” Weidner said.



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