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The AI capital expenditure boom has created a gusher of corporate debt, forcing the Treasury Department to make its bonds more attractive to investors as the U.S. war on Iran adds to the deficit.

Last Tuesday saw the single busiest day on record for U.S. corporate bond sales as President Donald Trump’s hint that the war may end soon briefly calmed markets and sparked a mad dash for companies to issue fresh debt.

By the end of the day, total investment-grade issuance topped $65 billion, exceeding the prior one-day record of $52 billion in 2013. The flood of debt was led by e-commerce giant and AI hyperscaler Amazon, which raised $37 billion, sources told the Financial Times.

That beat the company’s guidance for $25 billion-$30 billion as investor demand far outpaced the available supply, attracting about $123 billion in orders.

The corporate debt surge was enough to move the needle in the Treasury market, where daily trading volume exceeds $1 trillion. Analysts at Deutsche Bank said in a note last week that the bond sales added some upward pressure on the 10-year yield, which climbed 6 basis points to 4.16% at session highs.

Apollo Chief Economist Torsten Slok previously warned the flood of corporate debt could make borrowing more expensive for the federal government.

In a note from January, he pointed out that Wall Street estimates for the volume of investment grade debt that’s on the way in 2026 reach as high as $2.25 trillion.

That’s as the AI boom increasingly sends companies, including hyperscalers and adjacent firms, to the bond market to fund massive investments in data centers and other infrastructure.

“The significant increase in hyperscaler issuance raises questions about who will be the marginal buyer of IG paper,” Slok said. “Will it come from Treasury purchases and hence put upward pressure on the level of rates? Or might it come from mortgage purchases, putting upward pressure on mortgage spreads?”

Much has changed since January. The Iran war is shaping up to be a prolonged conflict that’s sent oil prices spiking. In turn, bond yields are up on exceptions of higher inflation—further adding to borrowing costs.

Bombarding Iran everyday also adds stress to the deficit, which hit $1 trillion in just the first five months of the fiscal year. Pentagon officials told lawmakers last week that the cost for the first six days of the war topped $11.3 billion, according to the New York Times.

Meanwhile, Trump has vowed to boost defense spending to $1.5 trillion a year from $1 trillion, threatening to further blow up the deficit.

The unsustainable trajectory of U.S. debt has raised growing alarms on Wall Street. But for now, investors appear to have a strong appetite for both corporate and government debt.

Days after Amazon’s mega-offering, an auction Thursday for $22 billion in 30-year Treasury bonds drew solid demand, though it was helped by the jump in yields since the war began.

And a Treasury offering last month saw the highest demand ever in the history of 30-year auctions, led by overseas buyers.

“The bottom line is that Treasury auction metrics show that there continues to be very solid demand for the long end in US Treasuries,” Slok said in a note Feb. 20.

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A federal judge in Boston has temporarily blocked federal health officials from cutting the number of vaccines recommended for every child, and says U.S. Health Secretary Robert F. Kennedy Jr. likely violated federal procedures in revamping a key vaccine advisory committee.

The decision Monday halts an order by Kennedy — announced in January — to end broad recommendations for all children to be vaccinated against flu, rotavirus, hepatitis A, hepatitis B, some forms of meningitis and RSV.

Leading medical groups voiced alarm at the changes. The American Academy of Pediatrics and some other groups amended a lawsuit filed in July, asking the judge to stop the government from scaling back the nation’s childhood vaccination schedule.

The judge also says Kennedy’s reconstitution of the vaccine advisory panel likely violated federal law. He ordered the appointments — and all decisions made by the reformed committee — put on hold.

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The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education and the Robert Wood Johnson Foundation. The AP is solely responsible for all content.

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In its early days, the Elon Musk-led Department of Government Efficiency (DOGE) bragged it could cut up to $2 trillion from the U.S. federal budget. In December, Musk conceded the special advisory only saved $200 billion in “zombie payments” for cancelled contracts or fraudulent unemployment claims. 

But a recent estimation of DOGE’s overall impact indicated any savings it found did little, if anything, for the deficit.

In a deposition video from January, which recently went viral, DOGE employee Nate Cavanaugh said cost-cutting efforts fell far short of its original $2 trillion goal. The deposition was part of a larger lawsuit filed by the American Council of Learned Societies, a nonprofit consortium of scholarly institutions, alleging DOGE used OpenAI’s ChatGPT to identify and then cancel more than $100 million in diversity, equity, and inclusion grants.

“You don’t regret that people might have lost important income…to support their lives?” one attorney asked Cavanaugh regarding the grant cancellations.

“No. I think it was more important to reduce the federal deficit from $2 trillion to close to zero,” said Cavanaugh, who is also the founder of AI-powered accounting firm Flow Finance.

“Did you reduce the federal deficit?” the attorney asked.

“No, we didn’t,” Cavanaugh replied.

The White House did not immediately respond to Fortune’s request for comment.

Judge Colleen McMahon of the Federal District Court in Manhattan ordered videos of the deposition, which also included a deposition of DOGE staffer Justin Fox, to be removed online following social media backlash.

DOGE, formed the first day of President Donald Trump’s second term, was part of an effort to root out so-called “waste, fraud, and abuse” from the federal government. Over the course of the 10 months it was operating under centralized leadership, the group eliminated the roles of more than 300,000 federal employees and claimed to have canceled 13,440 contracts. 

The recent lawsuit is the latest instance of DOGE coming under scrutiny. Cybersecurity experts warned the group had access to U.S. payroll systems that presented “unprecedented power and control” over Americans’ information, while the mass layoffs could have created opportunities for countries like China and Russia to recruit informants who had access to classified data. Management experts claimed DOGE’s purported savings were completely overblown.

Signs of DOGE increasing U.S. government spending

From the beginning of Musk’s tenure as head of DOGE, which was not a real department but instead an advisory office, economists were skeptical about its ability to slash the federal deficit as the national debt soared beyond $38 trillion. The Brookings Institution Hamilton Project tool tracking federal spending found that as of Dec. 19, 2025, government spending increased nearly 6% to $7.558 trillion from $7.135 trillion a year earlier. 

A Cato Institute report from December 2025 argued DOGE’s failure to shrink overall spending, despite culling more than 9% of the federal workforce, was in part because most federal spending does not come from salaries. Additionally, the government hired contractors to replace employees. The libertarian think tank calculated that a 10% cut in the workforce would result in a savings of only about $40 billion.

Max Stier, chief executive of government efficiency and workforce nonprofit Partnership for Public Service, told Fortune in April 2025 that DOGE’s cuts could actually mount pressure on America’s coffers, estimating the cost to fire, rehire, and put workers on paid leave cost American taxpayers roughly $135 billion. 

“We do need to have our government work better, but the approaches that have been adopted so far are taking us in the exact wrong direction,” Stier said. “The end result will be that the American public will be holding the bag as Elon Musk goes back to his private enterprises.”

A Yale University Budget Lab report from March 2025 similarly forecasted that if 22,000 Internal Revenue Service employees left their roles, the agency would lose $8.5 billion in revenue in 2026 as a result of fewer personnel available to conduct audits. Over a decade, that loss could snowball to nearly $198 billion in lost revenue. (The U.S. Government Accountability Office reported that more than 17,000 IRS employees left the agency last year.)

An IRS employee previously told Fortune the mass layoffs have decreased the efficiency of employees, increasing call times and slowing down the processing of paperwork.

“When we look back historically, we’re going to see that the gutting of the bureaucracy that keeps the government running, that keeps the country functional, will be the trigger that collapses America,” the employee said.

Scott Kupor, the head of the Office of Personnel Management, indicated the workforce reductions last year were overdone. He told The Washington Post earlier this month the administration is planning to rehire several positions in the 2 million-person federal workforce.

“We probably have some skills that we now need to hire back, quite frankly,” Kupor said. “There’s no question anytime you do restructurings … sometimes you over-restructure, sometimes you under-restructure.”

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Donald Trump has spent the better part of 40 years mastering a single, ruthless skill: making other people absorb his losses. He perfected it in Atlantic City, where, as Fortune‘s Shawn Tully reported, his casino empire lost a total of $1.1 billion, twice declared bankruptcy, and wrote down or restructured $1.8 billion in debt, as Trump paid himself roughly $82 million.

Trump also refined his methods in bankruptcy courts over the decades, filing for Chapter 11 protection six times across his business empire and walking away from each implosion with his name still on the marquee. He brought the same instinct to international diplomacy—renegotiating NATO funding commitments, tearing up the original Iran nuclear deal, brandishing tariffs until trading partners blinked. The playbook never changed: manufacture chaos, make everyone else desperate for a way out, then collect.

Now, on the third week of an active shooting war with Iran, Trump has run headlong into something his entire operating philosophy was never designed to handle: a 21-mile-wide chokepoint at the mouth of the Persian Gulf that has no CEO to bully, no bondholder to threaten, and no shareholders to absorb the loss. The Strait of Hormuz carries roughly 20% to 25% of the world’s oil supply every single day. It cannot be restructured. It cannot be taken into bankruptcy. And right now, it is effectively closed.

The Deal That Fell Apart

The story begins, as so many Trump stories do, with a negotiation that went sideways. Through late February, Trump’s envoys conducted round after round of indirect nuclear talks with Iran in Geneva and Vienna, demanding that Tehran renounce uranium enrichment entirely. Trump told reporters he was “not happy” with Iran’s posture and that Iranian diplomats were not willing to go far enough. The familiar script seemed to be playing out—maximum pressure, strategic ambiguity, a deal dangled and then yanked back until the other side folded.​

But Iran, unlike Atlantic City bondholders, held a card Trump hadn’t fully priced in. When Trump launched a widely anticipated, yet still seemingly under-rehearsed attack on Iran, alongside Israel, Iranian forces began mining the strait, firing anti-ship missiles at commercial tankers, and deploying drones against vessels traversing the narrow waterway. U.S. Central Command sank 16 Iranian mine-laying vessels in an attempt to clear the passage. It wasn’t enough. Shipping activity through the strait ground nearly to a halt. As of Monday, Iran said traffic was going through the strait—just not for any U.S. allies.

When the Numbers Turn

The economic bill arrived faster than almost any analyst predicted. The International Energy Agency announced an emergency release of 400 million barrels from strategic reserves—a measure rarely deployed—as the conflict severed roughly 8 million barrels per day from global supply. Goldman Sachs revised its 2026 inflation forecast upward by 0.8 percentage points to 2.9% and slashed GDP growth projections by 0.3 points to 2.2%. In a worst-case scenario—a full month of disruption with crude averaging $110 a barrel—Goldman put recession probability at 25%.

For a president who built his second term on the explicit promise of lower prices and economic supremacy, the numbers were damning. The administration had tried diplomatic pressure, strategic reserve releases, and back-channel appeals to OPEC allies. None of it moved the needle. “The U.S. is running out of ways to get oil prices down,” CNBC concluded. “It is up to the military.” In Trump’s world, when a deal goes bad, you find a new counterparty. The global energy market doesn’t work that way.​

Make Someone Else Pay

Confronted with an adversary immune to his usual leverage, Trump defaulted to the strategy he knows best: offload the cost onto someone else. On March 15, Trump told reporters he had “demanded” that roughly seven countries join a coalition to police the waterway, warning that any nation that refused would face a “bad future” with the United States.

It was a classic Trump move—the transactional ultimatum, the threat wrapped in a favor. But the response was a portrait of the limits of his brand of coercion. NATO allies rejected the demand outright. China, which continues importing Iranian oil, reacted with studied indifference. Trump suggested he might cancel a summit with Beijing over it; Beijing did not appear alarmed. The dealmaker had issued his terms. The world declined to countersign.

The Adversary That Won’t Blink

On Friday and Saturday, U.S. forces executed strikes on Iran’s Kharg Island—the hub for roughly 90% of Iranian oil exports—hitting 90 military targets in what Trump called one of the largest operations in the history of the Middle East. And yet, he conceded, Tehran could still launch a drone or use mines and missiles in the waterway. The strait remained dangerous. Tankers stayed away.

Foreign policy analyst Matthew Kroenig put it plainly, telling NPR: “As long as Iran has drones and missiles and continues to fire them, I think many commercial shippers are going to think it’s just too dangerous even with an escort to pass through the strait”. Even after any ceasefire, uncleared mines could keep insurers—and thus tankers—away for months. You can’t renegotiate your way past an unswept mine.​

Trump said he wasn’t ready to make a deal because “the terms aren’t good enough“. In a boardroom, that’s leverage. In the Strait of Hormuz, it’s something closer to a confession. The Art of the Deal was always premised on the other side wanting something badly enough to eventually fold. The strait wants nothing. It simply is — narrow, contested, and utterly indifferent to the brand of the man trying to reopen it.​

For four decades, Trump found someone else to hold the bag when his bets went bad. Standing at the edge of the Persian Gulf, with oil markets convulsing, allies shrugging, and Iranian drones still buzzing over shipping lanes, he is learning what every creditor, contractor, and counterpart he ever stiffed already knew: eventually, the deal comes due.

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There is a new trend in prediction markets: betting on whether Bitcoin will go up or down in the next five of fifteen minutes. On Polymarket, a five-minute wager on the price of the largest cryptocurrency has garnered more than $60 million in trading volume in a single day, according to Dune Analytics.

The minute-by-minute wagers on Bitcoin highlight the relative simplicity of bets on prediction markets. As opposed to traditional sports betting, which have an array of complex numbers relating to the spread, moneyline, and total points scored, the prediction market interface has a lower barrier to entry. Users can see what percentage of their peers are voting “yes” about a certain wager and how many are voting “no”. 

On Monday at 1pm ET, some 73% of Polymarket were betting that the price of Bitcoin would go up in the next five minutes. After that five minute interval expired at 1:05 PM ET, the platform promptly served up a new wager for the next five minutes of Bitcoin’s performance and so on. Polymarket-rival, Kalshi, meanwhile is offering bets on whether Bitcoin will go up or down every fifteen minutes. About 37% of users predicted the price would go up between 1:00 PM ET and 1:15 PM ET, but of course that percentage is constantly changing as more people join the betting pool, or close out their existing positions.

These quick-hit bets reinforce how, on prediction market platforms, users can bet on practically anything. People can put money on whether the U.S. will confirm that aliens exist before 2027, which already has seen about $12 million in transaction volume, or whether Jesus Christ will return this year, which is at $45 million in transaction volume. 

Sports are the most popular category to wager on in prediction markets, as they comprise roughly 90% of the bets on Kalshi. Betting on culture has become increasingly popular. Over $120 million was placed on bets about last night’s Oscars on Polymarket and Kalshi, according to Forbes. 

Prediction markets started to receive mainstream attention during the 2024 presidential election, when they correctly predicted Donald Trump’s victory, contrary to many national polls. The two leading platforms, Kalshi and Polymarket, are looking to raise money at a $20 billion valuation, according to The Wall Street Journal. 

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Peter Thiel is taking his ecclesiastical and cultural warnings about the Antichrist on the road. His latest stop? The seat of the Catholic Church.

Over the past year, Thiel, the billionaire venture capitalist, has issued some of the most exclusive invites Silicon Valley visionaries could aspire to receive. The Palantir and PayPal co-founder has hosted a series of lectures around the world dedicated to discussing his own views on the biblical Antichrist, and how it relates to the modern-day discussion of technological risk.

Thiel has spoken about his theories publicly—most notably during a New York Times podcast interview last year—but his deepest musings have been reserved for private sessions with selective audiences in San Francisco and Paris over the past few months. On Sunday, Thiel began hosting the latest edition, a planned four-day lecture series in Rome, first reported last week by the Associated Press.

Theory of the end-times

The contents of Thiel’s sessions are private, but likely to follow a similar format to his previous lectures. In Thiel’s telling, the biblical Antichrist figure prophesied to oppose Jesus Christ to bring on the apocalypse might emerge in the form of a reassuring actor who exerts control by promising safety and an end to the “existential risk” of technological development. It’s a theological interpretation that has turned heads among Silicon Valley elites, and caught Thiel in the crosshairs of both the Italian government and the Holy See.

In Thiel’s framing, the Antichrist is not an outwardly malevolent figure, but rather a comforting administrator, one that promises tighter control of innovation to stamp out the risk of runaway technology—particularly artificial intelligence—replacing humanity. This positioning is a farce, in Thiel’s telling, as the Antichrist is in reality quietly consolidating power and control over society. He has criticized groups wary of technological progress, including AI skeptics and environmentalists such as Greta Thunberg, for being pawns of the Antichrist. 

Thiel’s vision paints Silicon Valley technologists not only as architects of humanity’s future, but as protectors of civilization, often grounding his arguments in his Christian beliefs. His argument blends theological language with Silicon Valley’s anxieties over AI, transhumanism, and decay of meaning, and has been greeted with muted praise by some tech figures, such as fellow Palantir co-founder Joe Lonsdale.

Thiel’s frosty Italian greeting

Thiel’s theory has plenty of skeptics too, and it’s not just AI doomers and climate activists. Ahead of his arrival in Rome, government officials and authorities in the Church pushed back against his theological stance.

“Thiel is above all a political theologian operating at the very heart of the Silicon Valley ecosystem,” Paolo Benanti, a priest who has advised two papacies on matters related to technology ethics and artificial intelligence, wrote in an essay published Saturday, adding that Thiel’s theories are best understood as a “radicalization” of Western values including individuality, technological progress, and the spirit of competition.

“Peter Thiel does not believe humanity can be redeemed,” read an article published last week in Avvenire, a newspaper owned by a conference of Italian bishops. It argued that Thiel’s vision favors replacing democracy and the right of law with an elite “superplutocracy” that would “monitor and protect humanity from the arrival of the Antichrist.” The article additionally claims Thiel’s description of the Antichrist applies to “anyone who places limits on unlimited progress.”

The Catholic Church has taken a more assertive stance on technological advancement in recent years, particularly when it comes to AI. Moral regulation of AI was frequently mentioned by the late Pope Francis. Leo XIV, his incumbent successor, similarly urged audiences during a speech last December to “pause and reflect” on how AI might impact children, and how the technology could be guided to serve the “common good.” 

Thiel’s event in Rome was organized in partnership with the Cluny Institute, an organization housed within the Catholic University of America, and the Vincenzo Gioberti Cultural Association, according to the AP. Neither replied to Fortune’s request for comment. 

In a press release last week announcing Thiel’s event in Rome, the association, which has ties to Italy’s far-right, warned of “more or less hidden” forces that were “bent on destroying what remains of the West.” The association praised Thiel for having the “courage and intellectual liberty” to discuss these dangers.

But those same themes have provoked skepticism and even hostility among some Italian politicians for more grounded reasons. During a parliamentary session this month, lawmakers criticized Thiel’s “scandalous ideas,” arguing that they verged on ideological extremism while calling for more transparency on the relationship between the Italian government and Palantir, the defense technology firm Thiel co-founded and currently acts as chairman for. 

Outside parliament, Thiel’s supporters frame his warnings as a defense of Western spiritual identity amid mounting technological disruption. In Italy’s polarized political climate, however, his Antichrist theory has become as much a political flashpoint as a philosophical one.

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More than two weeks into a war President Donald Trump started without asking allies for buy-in, he is now asking for backup, and mostly getting left on read.

Trump spent the weekend demanding that allies, China, and other Asia-Pacific nations send warships to help reopen the Strait of Hormuz, the chokepoint through which a fifth of the world’s oil normally flows. He even warned Sunday that NATO faces a “very bad future” if allies don’t step up, marking another threat just two months after he precipitated an existential crisis for the alliance over Greenland.

Since the U.S. and Iran launched strikes on Feb. 28, Iran has effectively shut the waterway and may have even begun laying mines. Over the weekend, the messaging around the Strait of Hormuz remained muddled: Tehran said that the Strait was “open to all” except America and its allies, while Treasury Secretary Scott Bessent claimed on CNBC Monday morning that it was the U.S. that “allowed” Iranian oil tankers to cross the strait. The price of U.S. oil lowered significantly on Bessent’ s comments, now under $95 a barrel. 

Despite the posturing, only a handful of ships have crossed the Hormuz over the last few days. And the response from the international community to Trump’s calls has varied from a polite silence to outright refusal. 

Germany was very blunt. 

“This war has nothing to do with NATO. It is not NATO’s war,” a spokesperson for Chancellor Friedrich Merz said Monday, adding that Berlin had “not considered” participating before the war began and will not be considering it now. 

Luxembourg’s Deputy Prime Minister Xavier Bettel also laid it on thick, saying that the NATO member is happy to help with satellites and communications but “Blackmail is also not what I wish for.” 

EU foreign policy chief Kaja Kallas said the request falls “out of NATO’s area of action”: a reference to Article 6 of the North Atlantic Treaty, which limits the alliance’s mutual defense obligations to the region north of the Tropic of Cancer.

Still, European officials have their own incentive to keep Hormuz open and fear what Trump may do. Not only does Europe rely on Gulf oil supplies, there’s concern Trump will declare victory in Iran in the coming weeks, pull out of the war, and leave them holding the minesweeper (France and the Netherlands historically have some of world’s best minehunting/sweeping technologies). 

British Prime Minister Keir Starmer offered the warmest language of any leader Monday, saying the UK is “working with allies, including our European partners, to bring together a viable collective plan” to restore navigation, but still committed no ships or timeline. Starmer also defended his refusal to join the offensive, saying he wouldn’t send British forces into a war “without a plan to get us out.”

In Asia, the response has been equally noncommittal. China’s foreign ministry sidestepped questions about sending ships, while Japanese Prime Minister Sanae Takaichi, who visits the White House Thursday, has offered no promise. Trump told the Financial Times he’d like to know Beijing’s position before a planned summit at the end of March—a trip Bessent acknowledged could be delayed, though he insisted any schedule change would reflect logistics as opposed to a rift.

Australia also ruled out sending naval vessels, but said last week it would send a surveillance aircraft to the Middle East. South Korea said it will note Trump’s requests but would be exploring “various measures from multiple angles.”

The one bright spot for Washington is that the UAE doubled down on U.S. ties, showing strength after absorbing nearly 2,000 Iranian projectiles. “We don’t take to being bullied around,” Reem Al-Hashimy, the UAE’s minister for international cooperation, told the ABC.

Meanwhile, the cost of inaction keeps climbing. Oil hit its highest level since July 2022 last week, and U.S. gas prices are already up 20% since the war started. The International Energy Agency called the disruption “the largest supply disruption in the history of the global oil market.” 

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For roughly 1,800 years, the world’s largest economy sat somewhere along the Yangtze River. A new chart from the Bank of America Institute — spanning 2,000 years of global GDP data — shows that America’s moment at the top wasn’t destiny. It was an accident of history. And it’s ending.

The United States emerged from World War II as the undisputed economic superpower, accounting for nearly a third of global GDP at its postwar peak. Prophetically, in 1941, Fortune founder Henry Luce dubbed this era “the American century.”

The U.S. spent the better part of the 20th century treating its position at the top of the economic order as something close to a birthright. “American exceptionalism,” the idea that the country was fundamentally distinct from — and often superior to — other nations due to its unique founding principles, political institutions, historical development, and perceived moral mission in the world, dates back to the precolonial days and John Winthrop’s 1630 articulation of the country as a “city upon a hill.”

But in economic terms, America’s exceptional share of global GDP was a very real thing from the 1860s through the 1950s, as calculated by the Bank of America Institute, citing thousands of years of data from the Groningen Growth and Development Centre‘s Maddison Project database, one of the most comprehensive long-run economic datasets in existence.

This is a bit standard for the Dutch research center and its database based on the ideas of Angus Maddison, a pioneering economist who tracked GDP and living standards across centuries and countries, but if you look at the blue chunk of the chart, showing the U.S. shooting up over the centuries, you’d be forgiven for seeing the U.S. as quite exceptional.

The chart also shows, however, that there’s always been one other exceptional country. The chart plots the share of global GDP held by the world’s major powers from the year 1 AD through 2022. What it shows is both humbling and, for anyone paying attention to the current global moment, entirely unsurprising: the world’s economic center of gravity is shifting back toward where it spent most of recorded history. Back toward Asia. Back toward China.​

The long view

The chart’s most striking feature is not a line going up. It’s a line going down — and then, slowly, back up again.

For roughly the first 1,800 years of the Common Era, China and India together accounted for the dominant share of global economic output. The world was, by this measure, an Asian world. The chart supports the narrative in the epic global history of capitalism written by Harvard’s Sven Beckert, who told Fortune in January that his eight years of studying capitalism’s origins reinforced to him how “weak” and “marginal,” yet also truly global, the dominant way of organizing economic life used to be.

Beckert’s book highlights how ancient mercantile communities of capitalists emerged in the Middle East and Asia, for instance, with the Port of Aden, in Yemen, or Cambay, in modern Gujarat, India. Goods left Aden and traded across oceans as early as 1150, and Song-dynasty China invented paper money hundreds of years before Europe did.

When Europe Rose, and America Peaked

The Groningen data show clearly that Europe’s rise — led by the UK, Germany, Italy, France, and Spain — was a 19th-century phenomenon. The United States didn’t register meaningfully on the chart until the late 1800s, and didn’t achieve its peak dominance until the mid-20th century.​

That peak, visible as a bulging arc of American blue across the chart, coincided with a historically anomalous moment: a Europe devastated by two world wars, a China wracked by civil war and Maoist catastrophe, and an India still emerging from colonialism. In other words, the era of American exceptionalism was also, in large part, the era of everyone else’s misfortune.

“These transitions often followed major geopolitical or financial turning points,” BofA Institute noted in its report — a line that, in retrospect, reads less like historical observation and more like a warning.​

Meanwhile, over the weekend, Bridgewater founder Ray Dalio wrote in Fortune that the 2020s feel to him like a movie he’s seen before, with “the rise of a new type of world order” that he sees as “more like many pre-1945 world orders in which there were great powers conflicts and gunboat diplomacy-type geopolitical moves.”

Photograph by Iman Al-dabbagh/Fortune

Dalio’s Principles for Dealing With the Changing World Order described his theory of six cycles of successive breakdowns in financial cycles, with stage six being “a period of great disorder.” The last of these began in 1929 and ended in 1945 after World War II, he wrote, resulting in “clear winners, most importantly the United States, which determined how the new orders would work.”

What is implied, of course, is that the winners of this current period will determine how the next world order will work and who will benefit.

China’s correction

China’s share of the global economy — which had collapsed to negligible levels by the mid-20th century — surged back in the early 21st century, more dramatically than that of any other nation on the chart. By 2024, China accounted for roughly 19.45% of global GDP, nearly triple its share in the year 2000, according to Statista. By 2030, the same data projects China’s share will reach 21.7%.​

China’s economy grew 5.0% in 2025, meeting the government’s official target and seizing a record share of global demand through an export boom. Meanwhile, Beijing’s newly unveiled 15th Five-Year Plan (2026–2030) is explicitly targeting the integration of artificial intelligence into the country’s manufacturing base — betting that the same factory floor dominance that powered China’s rise in global trade will now power its rise in the AI economy. China wants its digital economy to account for 12.5% of GDP by 2030, up from 10.5% in 2025. The plan includes dozens of major infrastructure and industrial projects, national 5G upgrades, and a push to build sovereign AI compute capacity.

The exceptionalism trade falters

For the United States, the picture is more complicated. By nominal GDP, America remains the world’s largest economy — $30 trillion in 2024, with financial markets valued at $79 trillion. Goldman Sachs and JPMorgan have argued that U.S. dominance is structural and durable, citing America’s role as the world’s most innovative, diverse, and resilient economy.​

But the markets told a different story in early 2025. As the so-called “American exceptionalism trade” began to unravel into the “sell America trade,” the war in Iran paradoxically boosted U.S. assets. Still, the S&P 500 is down roughly 2.5% year-to-date, while the broader MSCI Global Index is up 0.8% and the dollar is up 1.76% year-to-date. ​

The structural pressures are real. U.S. GDP per capita — still above $85,000, compared to China’s $13,000 — reflects a prosperity gap that will take decades to close. But per capita GDP is not the same as geopolitical weight. China’s economy grows at 5.2% per year, while America expands at around 2.1%. At those trajectories, the gap in total economic mass narrows every year.​

What the chart really says

The BofA Institute’s report frames today’s shifts as part of a familiar pattern: “renewed focus on affordability, rapid advances in AI, and a broader shift from services back toward manufacturing”. Those three forces — cost deflation, AI disruption, and the reindustrialization of the global economy — all tilt, at least at the margin, toward China’s strengths rather than America’s.​

What the chart ultimately shows is not that American exceptionalism was a myth. It’s that it was a moment — a historically contingent window, opened by catastrophe elsewhere and now gradually closing as the rest of the world heals, industrializes, and competes. For 2,000 years before the American century, the world’s largest economy sat somewhere along the Yangtze River. The line on the chart that shows China’s share plummeting to near-zero and now racing back upward is not a story about China catching up.

It’s a story about the world returning to normal.

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Elon Musk said he is rebuilding xAI from the ground up just a month after SpaceX acquired his AI startup in one of the biggest mergers of all time.

Following a gradual exodus from xAI, the world’s richest man is trying to reimagine the company with heightened ambitions.

The Tesla and SpaceX CEO added in a post on X last week that xAI was undergoing a process similar to an earlier one at Tesla, which Musk has been CEO of since 2008.

“xAI was not built right first time around, so is being rebuilt from the foundations up,” he wrote in the post.

Musk said the purpose of the SpaceX acquisition is building “orbital data centers,” which he has said are the most cost-effective way of producing AI computing power.

Yet here on Earth, Musk is dealing with a seemingly less lofty, but all-too-important, staffing issue. A pair of xAI cofounders left the company last week and two others bailed last month, Business Insider reported, meaning nine of the original 11 cofounders not named Musk have left the company since 2024. These most recent departures come after an exodus of about a dozen senior engineers.

The precipitous loss of talent has stalled the company’s biggest AI bet. “Macrohard,” its effort to build an AI agent capable of doing anything a white collar worker can do, has reportedly been put on “pause” in the past days as its leader, Toby Pohlen, left the company just weeks after being appointed to head the project.

While all the exits raise questions about the company’s future, Musk has downplayed the brain drain as part of a planned reorganization. Some employees are better suited for the early stage of a venture rather than the later stages, he said at an all-hands meeting last month, according to the New York Times.

Representatives for xAI did not immediately respond to a request for comment.

The xAI CEO is now looking to aggressively hire, albeit from an extremely limited pool of AI-focused workers. Already, the AI company has been able to poach two employees, Andrew Milich and Jason Ginsberg, from AI coding company Cursor, The Information reported.

These hires are key because of the potential growth in the coding tools market, which stood at $7.65 billion as of 2025 and is projected to grow to $22.2 billion by 2030. Cursor itself was valued at $29.3 billion after raising $2.3 billion in a funding round in November.

Despite this successful recruitment, Musk said he and a colleague are looking over rejected xAI applications to look for promising candidates.

“Many talented people over the past few years were declined an offer or even an interview @xAI. My apologies,” he wrote.

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The war in Iran has sparked a global energy crisis that has rocked markets and sent oil prices surging to their highest level in four years. The chances of a quick resolution appear to be deteriorating as the conflict escalates, as do hopes that the U.S. economy might escape unscathed.

The war has effectively blocked off the Strait of Hormuz, a vital energy corridor that links oil and gas producers in the Persian Gulf with the rest of the world. The closure has cut off the roughly 20 million barrels of oil that normally flow through the strait each day, according to the International Energy Agency. The IEA estimates the conflict is removing roughly eight million barrels daily from the global supply, making the crisis the biggest oil supply disruption in history. Oil prices have been on a rollercoaster as a result. Brent crude, an international benchmark that cost around $70 a barrel before the war, grazed $120 last week and has since settled between $90 and $100. 

The swings have already caused gasoline prices for U.S. drivers to rise, but it might not be enough to force the severe downturn some economists have warned of. Price levels so far might only have a marginal impact on economic output over the long run, according to a report published Friday by Oxford Economics, an advisory firm. 

But that scenario rides on a relatively quick return to pre-war price levels over the next few months. The longer the strait remains closed and the higher prices rise, the faster the economic situation around the world—including in the U.S.—deteriorates.

Breaking parts of the economy

Oxford Economics uses a standard rule of thumb to estimate the economic impact of pricier oil: Every time oil gets $10 more expensive for a sustained period—determined to be around two months—it amounts to a 0.1% decline in GDP due to higher inflation and slower growth. If prices average $100 for two months, it would erase a few tenths of a percentage point of global GDP growth, but a recession would likely be avoided, according to the report.

The breaking point for the economy, Oxford Economics found, will be if oil prices average around $140 a barrel for two months. At that price, spillover effects would be much harder to contain, and many parts of the world would be flirting with economic decline.

“There are mild contractions in the Eurozone, the UK, and Japan, while the U.S. nears a temporary standstill and layoffs push up the unemployment rate, leaving it close to a recession,” the report’s authors wrote.

The problem with calculating the economic consequences of higher oil prices is that the implications are exponential. The more prices rise, the more knock-on effects could happen to hurt the economy. Higher-for-longer oil and transportation costs would begin to spill over into food and other goods, making inflation an across-the-board problem rather than a primarily fuel and energy-focused one. The Federal Reserve and other central banks would also be more inclined to tighten their interest rate policy if it became clear oil prices would remain high, dampening down economic activity. 

The final complication is more psychological. Sustained high oil prices could lead to a “deterioration in the collective psyche,” according to the report, as expectations of high prices become fixed among consumers. And in the car-dependent U.S., where consumers pay particularly close attention to gasoline prices, fuel inflation would risk crowding out households’ disposable income and lower spending elsewhere, also contributing to a slowdown.

Uncertain outcomes

Under this worst-case scenario, U.S. inflation would likely peak at around 5% in the second quarter of 2026, up from 2.4% currently, according to Oxford Economics’ modeling. This would be the highest inflation since March 2023. Such readings would likely push the Federal Reserve to adopt a more hawkish stance and potentially favor hiking rates this year. The Fed is likely to hold steady on rates this week, but the Iran conflict has also made many forecasters inclined to expect no cuts at all this year.

While the $140 scenario is a serious warning, Oxford Economics notes that the odds of this outcome remain low for now. A more plausible scenario, according to the authors, would be for oil prices to average around $100 per barrel, in line with where prices have fallen for most of the past few weeks. Much depends on when the conflict might wind down and the strait becomes safe to navigate again, allowing oil and natural gas exports to leave the Gulf once again. Trump administration officials recently said several weeks could still pass before hostilities subside.

Oil prices moderated on Monday on the back of several U.S. announcements signaling supply boosts, including the temporary loosening of sanctions targeting Russian oil exports, Iranian tankers receiving permission to leave the Gulf, and President Donald Trump’s pleas to other countries to help secure the strait. The IEA-coordinated release of 400 million barrels of global emergency oil reserves has also helped reassure markets with a limited buffer.

But oil prices have become accustomed to price swings during this war. Early in the conflict’s second week, after Trump wrote on Truth Social that higher oil prices were a “small price to pay” for achieving U.S. goals in Iran, oil prices jumped 25% overnight to just below $120 a barrel, before retreating later in the week.

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At Sunday night’s Oscars, fan-favorite Sinners struck gold and walked away with four wins. The horror film’s star Michael B. Jordan triumphed as best actor, and its director, Ryan Coogler, took home the award for best original screenplay. But just one decade before the $365 million worldwide box-office success was sweeping the awards ceremony, its director was drowning in student loans.

“I was 200 grand in debt for film school. It was bad,” Ryan Coogler revealed on the WTF With Marc Maron podcast last April. “We don’t come from no money.”

It was 2015, and Coogler was on the verge of breakout success—but his wallet didn’t show it. 

At the time, the director had already filmed the critically acclaimed film Fruitvale Station with Jordan. With the A-list actor as his muse, the budding filmmaker took on the tall task of creating a Rocky spinoff series, also starring Jordan: Creed. 

He began shooting the first movie in the series, which went on to make $42.6 million in its opening weekend on a $35 million budget. 

But the $200,000 in student loans from attending Southern California’s School of the Cinematic Arts was still burning a hole in his pocket. “I wasn’t making no money,” he added. 

How Ryan Coogler went from $200K in debt to a $25M net worth

The 39-year-old director’s win with Creed marked the first of many to come: Creed II and Creed III also shattered ticket sales expectations; Black Panther and its sequel Wakanda Forever did well over $2 billion at the worldwide box office; Judas and the Black Messiah was nominated many times for Golden Globes and Academy Awards; and four time Oscar-winner Sinners brought in at least $365 million at global box offices. 

While he didn’t confirm whether or not his student debt has been wiped clean yet, Coogler is far past worrying about his repayment plan.

After making some of the biggest superhero and sports films, his net worth is estimated at roughly $25 million. None of it may have ever happened if it weren’t for Coogler confiding in his girlfriend at the time—now wife—about how his creative-writing teacher recognized his potential as a screenwriter. 

“[My wife] bought me a screenwriting software, Final Draft,” Coogler said. “I found something that I really loved.”

The world’s most successful people often have rags-to-riches stories

Coogler’s start as a burgeoning creative riddled with debt isn’t an uncommon story. Some of the world’s most successful people have their own rags-to-riches story of how they managed to turn things around.

Queen of television Oprah Winfrey is known for her glitzy audience giveaways and sizable $3.2 billion net worth. She grew up in rural Mississippi in extreme poverty, raised by a single mother. Even when she discovered her passion for radio at just 17, she faced skepticism over her ability to anchor, deemed “unfit for television.” She was demoted from news to daytime TV—which actually proved to be a huge success for the media personality. Thus was born The Oprah Winfrey Show, which reeled in $300 million yearly during its peak. Winfrey later negotiated ownership of the series in 1986, solidifying that her run-ins with poverty would now be a thing of the past.

Do Won Chang, cofounder and CEO of Forever 21, also had rocky beginnings before finding major success. He and his wife, Jin Sook, immigrated to the U.S. from South Korea—their first jobs in L.A. being dishwashing for a coffee shop, and manning a gas station on the side. Chang noticed that most of the men driving the snazziest cars worked in the garment industry, so he took a job at a clothing store. That was the start of his $81 billion love connection with fashion.

“I came here with almost nothing,” Chang said in a 2016 interview with Forbes. “I’ll always have a grateful heart toward America for the opportunities that it’s provided me.”

Airbnb’s Brian Chesky is worth nearly $9.2 billion today—and it’s a far cry from nearly living on the streets back in his twenties. In 2007, Chesky had a problem: He didn’t have enough to cover rent. So he and his roommates hatched a plan that would inspire his empire. They turned their apartment into a bed-and-breakfast, blowing up air mattresses to accommodate guests. Now the CEO’s short-term rental company is worth $78 billion.

“We’re conditioned to avoid taking risks at all the wrong times. Right after college, we’re told to do the safe thing,” Chesky wrote for Fortune in 2014. “But that’s not how life works, and it’s the wrong way to think about risk. Inevitably, things change as you get older.”

A version of this story was published on Fortune.com on April 28, 2025.

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In nearly 100 years of Oscar history, only three women have ever been nominated for the Best Cinematography category. On Sunday night, Autumn Durald Arkapaw, director of photography for Ryan Coogler’s Sinners, and the first Black woman ever recognized in the category, made all of them matter.

The win at the 98th Academy Awards was a long time coming, as is evidenced by the sheer lack of women in the field. Women made up just 7% of cinematographers on the top 250 films in 2025, according to San Diego State University’s annual Celluloid Ceiling report. Cinematography also consistently ranks among the lowest categories in terms of female representation across all of Hollywood’s behind-the-scenes roles. 

During her acceptance speech, Arkapaw recognized the weight of the history she was making: breaking a glass ceiling for women in filmmaking. 

“I really want all the women in the room to stand up, because I feel like I don’t get here without you guys,” she said. “I really, really, truly mean that. I have felt so much love from all the women on this whole campaign and gotten to meet so many people. And I just feel like moments like this happen because of you guys.”

A cinematographer, also known as a director of photography (DP), is the person responsible for capturing the visual look and feel of a film or TV production. They are essentially the bridge between the director’s creative vision and what actually appears on screen.

In the entire history of this Oscar category, only three women have ever been nominated before Arkapaw: Rachel Morrison for Mudbound in 2018, Ari Wegner for The Power of the Dog in 2021, and Mandy Walker for Elvis in 2022. Arkapaw mentioned in her acceptance speech that she had personally met Morrison.

How Autumn Durald Arkapaw became an Oscar-winning cinematographer

Arkapaw was destined to be a creative. Born on Dec. 14, 1979, in Southern California of Filipino and African American Creole descent, she was raised by a single mom and her mother’s extensive Filipino family. They were “an artistic and talented bunch,” according to a profile of Arkapaw published by the Alliance of Women Film Journalists. She found inspiration in her mother’s work as a photographer and in a large family photo album; she grew up taking pictures and making short films in iMovie.  

But she later majored in art history at Loyola Marymount University, believing her future was in curating art in New York. One genre film class changed her mind, though. When watching Broadway Danny Rose and Raging Bull on the big screen, it “opened up my mind to film in a new way,” she told Vogue in a September 2025 interview.

“I got excited, and I wanted to know how they were made, and who was behind the camera, and what their job meant,” she added. 

After graduating from LMU, she spent three years at AOL-Time Warner—but in a corporate advertising role. She spent weekends shooting an independent short film and eventually committed to a career in cinematography. The small budgets and limited resources she had early on “gave her the creative freedom and confidence that held her in great stead later when she took on large-scale work,” according to the Alliance of Women Film Journalists. She also enrolled in the American Film Institute, where she steadily built her career, even shooting music videos for artists including The Weeknd, Arcade Fire, and Solange, before breaking into feature films. 

“It sounds crazy now because there weren’t as many female cinematographers [at that time],” she told Vogue. “My parents didn’t even know what a cinematographer was. I’m about to quit a good job, go to film school instead, and end up owing the government lots of money?”

Meeting Ryan Coogler changed her career

Her collaboration with Coogler began with Black Panther: Wakanda Forever in 2022, and she later shot Gia Coppola’s The Last Showgirl in 2024 before working with Coogler again on Sinners. 

Arkapaw also broke technical barriers while shooting Sinners, becoming the first female photography director to shoot on large-format IMAX 65mm film. Sinners took home a record-breaking 16 Oscar nominations, and won four: Best Actor for Michael B. Jordan, Best Original Screenplay, and Best Original Score.

Arkapaw’s philosophy of success has always been rooted in self-belief.

“Believe in yourself more than anyone else,” she told Panavision. “If you have confidence in yourself and your ideas, you can achieve your goals. My mother always taught me I could achieve anything with hard work and belief.”

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