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Linda Yaccarino’s X exit was predictable—and raises more questions than it answers

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In an unsurprising turn of events, Linda Yaccarino’s tenure as CEO of X has come to an abrupt end. 

The former NBCUniversal exec’s tenure at the helm of Elon Musk’s social media platform looked destined to fail from the start, as Musk continually undermined her authority as CEO and complicated her already difficult mission (to wit, Musk publicly telling reluctant advertisers to f-off and ditching the Twitter brand, seemingly on a whim). More recently, Musk appears to be cleaning house, with at least 15 senior executives leaving his various companies over the last year. Perhaps the only surprising thing about Yaccarino’s stint at X is that it lasted two years. 

There’s understandable speculation about Yaccarino’s timing, given this week’s fiasco with Musk’s xAI chatbot Grok going full-Nazi (literally referring to itself as “MechaHitler”) on X. Perhaps this was the final straw for Yaccarino, who nonetheless announced her exit with a tweet praising X as “truly a digital town square for all voices and the world’s most powerful culture signal.” (Musk was more terse, sending off his handpicked CEO with a simple “thank you for your contributions”).

Among the many questions swirling in the wake of this all-too-predictable breakup: Who will take Yaccarino’s spot as CEO of Musk’s lighting rod social media platform? One possible answer: nobody. 

Remember that X is now owned by xAI, which acquired the social media platform in March in an all-stock deal, valuing X at $33 billion and xAI at $80 billion. Under xAI, I could imagine a situation where X no longer has a traditional CEO moving forward. Or perhaps, someone within the Musk universe, like Katie Miller, who just joined xAI in cloudy circumstances, or Lightspeed investor Nikita Bier, who joined X as head of product a week ago.

But the bigger question may be what the sordid Yaccarino-MechaHitler episode has to say about the current path that the tech industry is on—both within Elon Inc. and in the industry more broadly. Was Grok’s ugly rampage inevitable when a social media platform becomes a subsidiary of an AI company, and the ad-driven, attention-economy incentives of the latter are fused with the former? Is this the natural endpoint when AI has the ability to publish its “perspective” publicly, with scant oversight (let’s not forget that X gutted its content moderation teams after Musk acquired Twitter)? 

Certainly, this all raises ethical and potentially regulatory questions about what it means for a social media platform to be owned by an AI company, as well as the opposite scenario, such as is the case with Meta, whose “family” of social platforms reach an astounding 3.4 billion people every day. Meta is currently in the process of hiring some of the world’s top AI talent. 

All Grok’s incendiary posts have now been scrubbed from X. And we can only hope Grok hasn’t reached its final form. But we’d better use this opportunity to try to understand how and why this happened—and how to prevent something worse.

ICYMI…Andreessen Horowitz is moving its corporate home from Delaware to Nevada, making a point of announcing the relocation with a blog post criticizing the Delaware Court of Chancery’s treatment of tech founders and their companies. “We could have made this move quietly, but we think it’s important for our stakeholders, and for the broader tech and VC communities, to understand why we’ve reached this decision,” a16z wrote, praising Nevada for having “taken significant steps in establishing a technical, non-ideological forum for resolving business disputes.” Will other VCs and founders follow a16z to the Silver State, as the firm hopes? Let me know what you think—and read the full blog post here.

See you tomorrow,

Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
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Venture Deals

–Airalo, an eSIM provider, raised $220 million in funding. CVC led the round and was joined by Peak XV and Antler Elevate. 

–Varda Space Industries, an El Segundo, Calif.-based space research company, raised $187 million in Series C funding. Natural Capital and Shrug Capital led the round and were joined by Founders Fund, Peter Thiel, Khosla Ventures, Caffeinated Capital, Lux Capital, and Also Capital.

–Acithera, an Oslo and Cambridge, Mass.-based radiopharmaceutical biotech company, raised $75.5 million in Series A funding. M Ventures, Hadean Ventures, Sofinnova Partners, and 4BIO Capital led the round and were joined by Bioqube Ventures, Innovestor’s Life Science Fund, Investinor, Surveyor Capital, and Arkin Bio Ventures II.

–ServiceUp, a Los Gatos-based repair platform for fleets and insurance carriers, raised $55 million in Series B funding. PeakSpan Capital led the round and was joined by existing investors Hearst Ventures, Trestle Partners, Capital Midwest Fund, and Litquidity Ventures. 

–Moment, a New York City-based company automating trading and portfolio management workflows for fixed income teams, raised $36 million in Series B funding. Index Ventures led the round, and was joined by A16z, Lightspeed and others.

–Aqtual, Inc., a medtech company developing products for chronic diseases and oncology, raised $31 million in Series B funding. Manta Ray led the round. 

–​​Datafy, a Tel Aviv-based autonomous storage optimization startup, raised $20 million in seed funding. Bessemer Venture Partners led the round and was joined by existing investor Insight Partners.

–Nominal, a New York City-based AI-native enterprise resource planning startup, raised $20 million in Series A funding. Next47 led the round and was joined by Workday Ventures, Bling Capital, and Hyperwise Ventures. 

–Polimorphic, a New York City-based AI company for service-first governments,, raised $18.6 million in Series A funding. General Catalyst led the round and was joined by existing investors M13 and Shine.  

–Dextall, a New York City-based construction tech startup, raised $15 million in Series A funding. L+M Development Partners, Essence Development, and Simpson Strong-Tie led the round. 

–Ryft, a New York City and Tel Aviv-based cloud data management platform, raised $8 million in seed funding. Index led the round and was joined by Bessemer Venture Partners and others.

–Welli, a Bogotá-based healthcare fintech company, raised $8 million in Series A funding. Costanoa Ventures led the round and was joined by Animo VC and Crestone.

– Abacus, an agentic AI company focused on developing CPA assistants for accounting firms, raised $6.6 million in seed funding. Menlo Ventures led the round and was joined by Pear VC, Recall Capital, and Original Capital.

–ZeroEntropy, a San Francisco-based startup that makes an AI retrieval engine for developers, raised $4.2 million in seed funding. Initialized Capital led the round and was joined by Y Combinator, Transpose Platform, 22 Ventures, a16z Scout, and others. 

– Oraion, an AI-powered enterprise intelligence and automation platform, raised $3.5 million in pre-seed funding. Studio VC led the round and was joined by Enterprise Ireland and others. 

–Yplasma, a Newark-based deep tech startup in the electronics and semiconductor industry, raised $2.5 million in seed funding. Faber led the round and was joined by SOSV. 

–Solence, a Paris-based AI-driven health startup focused on treatments for Polycystic Ovary Syndrome, raised €1.6 million ($1.87 million) in seed funding. Impact Shakers led the round. 

–Ollygarden, a remote-first telemetry efficiency company, raised $1.6 million in pre-seed funding. DIG Ventures led the round and was joined by Datadog Ventures, Grafana Labs, Dash0, and others. 

Private Equity

–Cognosos, backed by Riverwood Capital, Susquehanna, and others, acquired Cox 2M, the Atlanta-based connected asset tracking and IoT business unit of Cox Communications. Financial terms were not disclosed. 

–Loenbro, backed by Braemont Capital, acquired Weifield Group, a Colorado-based electrical services provider. Financial terms were not disclosed. 

–Tandym Group, backed by Mill Rock Capital, acquired Entitech Solutions, an Englishtown, New Jersey-based provider of solutions for healthcare and life sciences organizations. Financial terms were not disclosed. 

–Blue Sage Capital acquired a majority stake in Clean Scapes, an Austin-based commercial landscaping business. Financial terms were not disclosed. 

–Cape Investment Partners acquired a majority stake in Conpend, an Amsterdam-based AI fintech company. Financial terms were not disclosed. 

–Counsel Press, backed by Align Capital Partners, acquired Gibson Moore, a Richmond, Virginia-based appellate services law firm. Financial terms were not disclosed. 

–Ascend, backed by Pfingstein, acquired WebSan Solutions, a Toronto-based AI-enabled provider of ERP, CRM, analytics, and workflow solutions. Financial terms were not disclosed. 

–BVP Forge acquired a majority stake in Technical Toolboxes, a Houston-based provider of advanced engineering and maintenance software for energy infrastructure. Financial terms were not disclosed. 

Exits

–Stonepeak agreed to acquire a 50% co-controlling stake in IFCO Group, a provider of reusable packaging solutions for fresh foods, from ADIA. Financial terms were not disclosed. 

-SK Capital Partners agreed to acquire LISI Medical, a medtech subcontractor specializing in industrial instrument and implant manufacturing, from LISI Group. Financial terms were not disclosed.

Other

-Merck agreed to acquire Verona Pharma, a London-based biopharmaceutical company focused on developing therapies for the treatment of chronic respiratory diseases, for $10 billion. 

-Quanterix acquired Akoya, a Marlborough, Mass.-based spatial biology company, for $20 million in cash.

–Allegion acquired Waitwhile, a SaaS company specializing in cloud-based appointment scheduling and queue management. Financial terms were not disclosed. 

–EnergyX agreed to acquire Daytona Lithium, a subsidiary of Pantera Lithium Limited, for $40 million. 

Funds + Funds of Funds

–Levine Leichtman Capital Partners, a Los Angeles-based private equity firm, raised $3.6 billion for its seventh fund focused on franchising, business services, education & training, and engineered products.

–Cyberstarts, a Tel-Aviv based cybersecurity venture firm, raised $300 million for its employee liquidity fund focused on rewarding startup employees and ignite greater momentum at breakout companies across the firm’s portfolio.

People

–Updata Partners, a Washington, D.C.-based venture capital firm, promoted Ryan Brady to principal, head of value creation. 

–NAP, a Berlin-based early-stage venture capital firm, promoted Fabian Krautwurst to partner and added Mey Cezairli as partner. Cezairli was previously a principal at Project A.



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Senate Dems’ plan to fix Obamacare premiums adds nearly $300 billion to deficit, CRFB says

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December 5, 2025

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The Committee for a Responsible Federal Budget (CRFB) is a nonpartisan watchdog that regularly estimates how much the U.S. Congress is adding to the $38 trillion national debt.

With enhanced Affordable Care Act (ACA) subsidies due to expire within days, some Senate Democrats are scrambling to protect millions of Americans from getting the unpleasant holiday gift of spiking health insurance premiums. The CRFB says there’s just one problem with the plan: It’s not funded.

“With the national debt as large as the economy and interest payments costing $1 trillion annually, it is absurd to suggest adding hundreds of billions more to the debt,” CRFB President Maya MacGuineas wrote in a statement on Friday afternoon.

The proposal, backed by members of the Senate Democratic caucus, would fully extend the enhanced ACA subsidies for three years, from 2026 through 2028, with no additional income limits on who can qualify. Those subsidies, originally boosted during the pandemic and later renewed, were designed to lower premiums and prevent coverage losses for middle‑ and lower‑income households purchasing insurance on the ACA exchanges.

CRFB estimated that even this three‑year extension alone would add roughly $300 billion to federal deficits over the next decade, largely because the federal government would continue to shoulder a larger share of premium costs while enrollment and subsidy amounts remain elevated. If Congress ultimately moves to make the enhanced subsidies permanent—as many advocates have urged—the total cost could swell to nearly $550 billion in additional borrowing over the next decade.

Reversing recent guardrails

MacGuineas called the Senate bill “far worse than even a debt-financed extension” as it would roll back several “program integrity” measures that were enacted as part of a 2025 reconciliation law and were intended to tighten oversight of ACA subsidies. On top of that, it would be funded by borrowing even more. “This is a bad idea made worse,” MacGuineas added.

The watchdog group’s central critique is that the new Senate plan does not attempt to offset its costs through spending cuts or new revenue and, in their view, goes beyond a simple extension by expanding the underlying subsidy structure.

The legislation would permanently repeal restrictions that eliminated subsidies for certain groups enrolling during special enrollment periods and would scrap rules requiring full repayment of excess advance subsidies and stricter verification of eligibility and tax reconciliation. The bill would also nullify portions of a 2025 federal regulation that loosened limits on the actuarial value of exchange plans and altered how subsidies are calculated, effectively reshaping how generous plans can be and how federal support is determined. CRFB warned these reversals would increase costs further while weakening safeguards designed to reduce misuse and error in the subsidy system.

MacGuineas said that any subsidy extension should be paired with broader reforms to curb health spending and reduce overall borrowing. In her view, lawmakers are missing a chance to redesign ACA support in a way that lowers premiums while also improving the long‑term budget outlook.

The debate over ACA subsidies recently contributed to a government funding standoff, and CRFB argued that the new Senate bill reflects a political compromise that prioritizes short‑term relief over long‑term fiscal responsibility.

“After a pointless government shutdown over this issue, it is beyond disappointing that this is the preferred solution to such an important issue,” MacGuineas wrote.

The off-year elections cast the government shutdown and cost-of-living arguments in a different light. Democrats made stunning gains and almost flipped a deep-red district in Tennessee as politicians from the far left and center coalesced around “affordability.”

Senate Minority Leader Chuck Schumer is reportedly smelling blood in the water and doubling down on the theme heading into the pivotal midterm elections of 2026. President Donald Trump is scheduled to visit Pennsylvania soon to discuss pocketbook anxieties. But he is repeating predecessor Joe Biden’s habit of dismissing inflation, despite widespread evidence to the contrary.

“We fixed inflation, and we fixed almost everything,” Trump said in a Tuesday cabinet meeting, in which he also dismissed affordability as a “hoax” pushed by Democrats.​

Lawmakers on both sides of the aisle now face a politically fraught choice: allow premiums to jump sharply—including in swing states like Pennsylvania where ACA enrollees face double‑digit increases—or pass an expensive subsidy extension that would, as CRFB calculates, explode the deficit without addressing underlying health care costs.



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Netflix–Warner Bros. deal sets up $72 billion antitrust test

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5 hours ago

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December 5, 2025

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Netflix Inc. has won the heated takeover battle for Warner Bros. Discovery Inc. Now it must convince global antitrust regulators that the deal won’t give it an illegal advantage in the streaming market. 

The $72 billion tie-up joins the world’s dominant paid streaming service with one of Hollywood’s most iconic movie studios. It would reshape the market for online video content by combining the No. 1 streaming player with the No. 4 service HBO Max and its blockbuster hits such as Game Of Thrones, Friends, and the DC Universe comics characters franchise.  

That could raise red flags for global antitrust regulators over concerns that Netflix would have too much control over the streaming market. The company faces a lengthy Justice Department review and a possible US lawsuit seeking to block the deal if it doesn’t adopt some remedies to get it cleared, analysts said.

“Netflix will have an uphill climb unless it agrees to divest HBO Max as well as additional behavioral commitments — particularly on licensing content,” said Bloomberg Intelligence analyst Jennifer Rie. “The streaming overlap is significant,” she added, saying the argument that “the market should be viewed more broadly is a tough one to win.”

By choosing Netflix, Warner Bros. has jilted another bidder, Paramount Skydance Corp., a move that risks touching off a political battle in Washington. Paramount is backed by the world’s second-richest man, Larry Ellison, and his son, David Ellison, and the company has touted their longstanding close ties to President Donald Trump. Their acquisition of Paramount, which closed in August, has won public praise from Trump. 

Comcast Corp. also made a bid for Warner Bros., looking to merge it with its NBCUniversal division.

The Justice Department’s antitrust division, which would review the transaction in the US, could argue that the deal is illegal on its face because the combined market share would put Netflix well over a 30% threshold.

The White House, the Justice Department and Comcast didn’t immediately respond to requests for comment. 

US lawmakers from both parties, including Republican Representative Darrell Issa and Democratic Senator Elizabeth Warren have already faulted the transaction — which would create a global streaming giant with 450 million users — as harmful to consumers.

“This deal looks like an anti-monopoly nightmare,” Warren said after the Netflix announcement. Utah Senator Mike Lee, a Republican, said in a social media post earlier this week that a Warner Bros.-Netflix tie-up would raise more serious competition questions “than any transaction I’ve seen in about a decade.”

European Union regulators are also likely to subject the Netflix proposal to an intensive review amid pressure from legislators. In the UK, the deal has already drawn scrutiny before the announcement, with House of Lords member Baroness Luciana Berger pressing the government on how the transaction would impact competition and consumer prices.

The combined company could raise prices and broadly impact “culture, film, cinemas and theater releases,”said Andreas Schwab, a leading member of the European Parliament on competition issues, after the announcement.

Paramount has sought to frame the Netflix deal as a non-starter. “The simple truth is that a deal with Netflix as the buyer likely will never close, due to antitrust and regulatory challenges in the United States and in most jurisdictions abroad,” Paramount’s antitrust lawyers wrote to their counterparts at Warner Bros. on Dec. 1.

Appealing directly to Trump could help Netflix avoid intense antitrust scrutiny, New Street Research’s Blair Levin wrote in a note on Friday. Levin said it’s possible that Trump could come to see the benefit of switching from a pro-Paramount position to a pro-Netflix position. “And if he does so, we believe the DOJ will follow suit,” Levin wrote.

Netflix co-Chief Executive Officer Ted Sarandos had dinner with Trump at the president’s Mar-a-Lago resort in Florida last December, a move other CEOs made after the election in order to win over the administration. In a call with investors Friday morning, Sarandos said that he’s “highly confident in the regulatory process,” contending the deal favors consumers, workers and innovation. 

“Our plans here are to work really closely with all the appropriate governments and regulators, but really confident that we’re going to get all the necessary approvals that we need,” he said.

Netflix will likely argue to regulators that other video services such as Google’s YouTube and ByteDance Ltd.’s TikTok should be included in any analysis of the market, which would dramatically shrink the company’s perceived dominance.

The US Federal Communications Commission, which regulates the transfer of broadcast-TV licenses, isn’t expected to play a role in the deal, as neither hold such licenses. Warner Bros. plans to spin off its cable TV division, which includes channels such as CNN, TBS and TNT, before the sale.

Even if antitrust reviews just focus on streaming, Netflix believes it will ultimately prevail, pointing to Amazon.com Inc.’s Prime and Walt Disney Co. as other major competitors, according to people familiar with the company’s thinking. 

Netflix is expected to argue that more than 75% of HBO Max subscribers already subscribe to Netflix, making them complementary offerings rather than competitors, said the people, who asked not to be named discussing confidential deliberations. The company is expected to make the case that reducing its content costs through owning Warner Bros., eliminating redundant back-end technology and bundling Netflix with Max will yield lower prices.



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The rise of AI reasoning models comes with a big energy tradeoff

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December 5, 2025

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Nearly all leading artificial intelligence developers are focused on building AI models that mimic the way humans reason, but new research shows these cutting-edge systems can be far more energy intensive, adding to concerns about AI’s strain on power grids.

AI reasoning models used 30 times more power on average to respond to 1,000 written prompts than alternatives without this reasoning capability or which had it disabled, according to a study released Thursday. The work was carried out by the AI Energy Score project, led by Hugging Face research scientist Sasha Luccioni and Salesforce Inc. head of AI sustainability Boris Gamazaychikov.

The researchers evaluated 40 open, freely available AI models, including software from OpenAI, Alphabet Inc.’s Google and Microsoft Corp. Some models were found to have a much wider disparity in energy consumption, including one from Chinese upstart DeepSeek. A slimmed-down version of DeepSeek’s R1 model used just 50 watt hours to respond to the prompts when reasoning was turned off, or about as much power as is needed to run a 50 watt lightbulb for an hour. With the reasoning feature enabled, the same model required 7,626 watt hours to complete the tasks.

The soaring energy needs of AI have increasingly come under scrutiny. As tech companies race to build more and bigger data centers to support AI, industry watchers have raised concerns about straining power grids and raising energy costs for consumers. A Bloomberg investigation in September found that wholesale electricity prices rose as much as 267% over the past five years in areas near data centers. There are also environmental drawbacks, as Microsoft, Google and Amazon.com Inc. have previously acknowledged the data center buildout could complicate their long-term climate objectives. 

More than a year ago, OpenAI released its first reasoning model, called o1. Where its prior software replied almost instantly to queries, o1 spent more time computing an answer before responding. Many other AI companies have since released similar systems, with the goal of solving more complex multistep problems for fields like science, math and coding.

Though reasoning systems have quickly become the industry norm for carrying out more complicated tasks, there has been little research into their energy demands. Much of the increase in power consumption is due to reasoning models generating much more text when responding, the researchers said. 

The new report aims to better understand how AI energy needs are evolving, Luccioni said. She also hopes it helps people better understand that there are different types of AI models suited to different actions. Not every query requires tapping the most computationally intensive AI reasoning systems.

“We should be smarter about the way that we use AI,” Luccioni said. “Choosing the right model for the right task is important.”

To test the difference in power use, the researchers ran all the models on the same computer hardware. They used the same prompts for each, ranging from simple questions — such as asking which team won the Super Bowl in a particular year — to more complex math problems. They also used a software tool called CodeCarbon to track how much energy was being consumed in real time.

The results varied considerably. The researchers found one of Microsoft’s Phi 4 reasoning models used 9,462 watt hours with reasoning turned on, compared with about 18 watt hours with it off. OpenAI’s largest gpt-oss model, meanwhile, had a less stark difference. It used 8,504 watt hours with reasoning on the most computationally intensive “high” setting and 5,313 watt hours with the setting turned down to “low.” 

OpenAI, Microsoft, Google and DeepSeek did not immediately respond to a request for comment.

Google released internal research in August that estimated the median text prompt for its Gemini AI service used 0.24 watt-hours of energy, roughly equal to watching TV for less than nine seconds. Google said that figure was “substantially lower than many public estimates.” 

Much of the discussion about AI power consumption has focused on large-scale facilities set up to train artificial intelligence systems. Increasingly, however, tech firms are shifting more resources to inference, or the process of running AI systems after they’ve been trained. The push toward reasoning models is a big piece of that as these systems are more reliant on inference.

Recently, some tech leaders have acknowledged that AI’s power draw needs to be reckoned with. Microsoft CEO Satya Nadella said the industry must earn the “social permission to consume energy” for AI data centers in a November interview. To do that, he argued tech must use AI to do good and foster broad economic growth.



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