It was only a matter of time before a future-thinking CEO took the leap and replaced thousands of workers with AI, Axios' Dan Primack writes.

• Why it matters: Block chair Jack Dorsey did just that yesterday. Wall Street's standing ovation — the fintech company's shares soared more than 20% in today's premarket trading — gives other CEOs permission, even incentive, to consider the same thing.

🚨 Dorsey, an iconoclast who co-founded and once led Twitter, was blunt in announcing via X that Block will say goodbye to 40% of its 10,000-person workforce, cutting the company to just under 6,000.

• Block, based in Oakland, Calif., includes Square, Cash App, Afterpay and the Tidal music platform.

Dorsey wrote on X that "something has changed. we're already seeing that the intelligence tools we're creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company. and that's accelerating rapidly."

• He said he "had two options: cut gradually over months or years as this shift plays out, or be honest about where we are and act on it now. i chose the latter."

🖊️ Dorsey added in a shareholder letter: "We're already seeing it internally. A significantly smaller team, using the tools we're building, can do more and do it better. And intelligence tool capabilities are compounding faster every week."

📈 Zoom in: The fintech's stock rallied as much as 25% on the news, after having been down more than 16% over the past year and 76% over the past five years.

• Block's declining stock price put Dorsey under pressure to make changes, although he denied that the layoffs were related to Block's financial performance.

💡 Reality check: CEOs will look to see if they can follow Dorsey's lead, and most will realize they don't have the talent to do it. This would destroy most companies — it's very hard to do.

🖼️ The big picture: Wall Street was captivated early this week by a viral doomsday scenario for AI's coming effect on white-collar work. But the stated reasons for most other big AI-related layoffs so far have been much less explicit than Dorsey's.

• Many AI executives and investors insist that the tech will lead to temporary labor dislocations rather than net job loss, echoing the Industrial Revolution.

The bottom line: It's one thing to replace people with machines. It's quite another to prove that it makes business sense. If Block can grow its top line with a much smaller headcount, the rest of corporate America will take notice.

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Target will require every cereal it sells — including national brands — to be made without certified synthetic colors by the end of May, the retailer exclusively told Axios' Kelly Tyko.

• "We know consumers are increasingly prioritizing healthier lifestyles, and we're moving quickly to evolve our offerings to meet their needs," said Cara Sylvester, Target's EVP and chief merchandising officer.

🥣 Why it matters: The shift puts Target among the first national retailers to remove the additives across an entire grocery category — compelling major cereal makers to reformulate if they want shelf space.

Retailers rarely dictate ingredient standards to national brands, underscoring the leverage large chains hold over suppliers.

• Target has massive scale: nearly 2,000 stores and 400,000+ full-time, part-time and seasonal employees.

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In repeatedly rebuffing takeover offers from Paramount Skydance, Warner Bros. Discovery's board managed to create one of Hollywood's most dramatic and lucrative bidding wars, Axios' Sara Fischer reports.

• The spectacle ultimately elevated the company's stock price, leading to a $31-a-share deal with Paramount.

🤝 Why it matters: If the deal ultimately gets approved by regulators and goes through, Warner Bros. Discovery CEO David Zaslav will have cemented his legacy as one of the savviest media dealmakers of all time.

• It wasn't long ago that Zaslav, one of Hollywood's highest-paid executives, was facing grim prospects as his company struggled to convince Wall Street that its streaming strategy could compete with behemoths like Netflix, Disney and Amazon Prime Video.

⚡ Catch up quick: Netflix said last night that it won't raise its bid for Warner Bros. Discovery's streaming and studio assets. So Paramount Skydance emerged as the winning bidder of the entire Warner Bros. portfolio, which includes cable networks CNN, TBS, TNT, HGTV and others.

• The statement came shortly after the Warner Bros. Discovery board announced that Paramount's revised bid of $31 per share was superior to its deal with Netflix.

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Anthropic said yesterday there's been "virtually no progress" on negotiations with the Pentagon. CEO Dario Amodei said he can't accept what defense officials labeled their final offer on AI safeguards, Axios' Maria Curi and Dave Lawler report.

• ⏳ Today's 5:01 p.m. ET deadline is fast approaching for Anthropic to let the Pentagon use the company's model Claude as it sees fit, or potentially face severe consequences.
• Anthropic says negotiations continue.

"The contract language we received overnight from the Department of War made virtually no progress on preventing Claude's use for mass surveillance of Americans [which the Pentagon says is already illegal] or in fully autonomous weapons," Anthropic said in a statement.

• Amodei said that if the Pentagon decides to offboard Anthropic, the company "will work to enable a smooth transition to another provider."

Quote-tweeting Axios' story last night, Under Secretary for Research and Engineering Emil Michael, who has been leading the negotiations with Anthropic and three other AI model-makers, posted: "It's a shame that @DarioAmodei is a liar and has a God-complex."

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Texas' U.S. Senate primary, coming up Tuesday, is the most expensive Senate primary ever — previewing the coming glut of midterm spending.

• Money is pouring in for Republicans, including incumbent Sen. John Cornyn and Attorney General Ken Paxton, and Democrats, Rep. Jasmine Crockett and state Rep. James Talarico.
• Crockett and Talarico are locked in a vicious Democratic primary, with massive early voting that's exceeding presidential-level turnout. Many Republicans expect Cornyn and Paxton to head for a May 26 runoff.

💰 By the numbers: More than $75 million — about 70% of the total $110.5 million spending — has come from outside groups not tied to candidates, AdImpact says.

• The overwhelming share has backed Republicans, with the spending to boost Cornyn approaching $57 million, AP reports.

Early-voting surge.

32.6 million people watched President Trump's State of the Union address on 15 TV networks, down from the roughly 36 million who tuned in to last year's address, Axios' Sara Fischer writes.

• Fox News had by far the most viewers. ABC was the top broadcast network.

📺 The TV audience was down significantly from the 45 million who watched his address in 2018.

• State of the Union address viewership, like most live TV programs, has declined as younger audiences turn to social media and streaming for big events.

The vast majority of viewers on live TV were over 55.

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New York Mayor Zohran Mamdani brought a clever prop for what he called a "productive" meeting with President Trump in the Oval Office yesterday, Axios' Holly Otterbein reports.

• Why it matters: Mamdani wants to use their bond to help him deliver on his promises to make housing and daily life in New York more affordable.

Mamdani presented Trump with a proposal to build an estimated 12,000 housing units in New York.

• "The president was very enthusiastic about this idea," Mamdani press secretary Joe Calvello said.

🎁 Mamdani's aides created a fake front page of the New York Daily News for Trump. In a photo posted on X social media by Mamdani, Trump is grinning as he holds up the "wood," as tab covers are known, "TRUMP TO CITY: LET'S BUILD ... Backs New Era of Housing."

• It's a play on one of the most famous front pages ever — the Daily News' 1975 classic, "FORD TO CITY: DROP DEAD," after President Ford rejected a federal bailout for the struggling city.

⚡ Mamdani's team said the mayor asked Trump to release a Columbia University student who was detained by ICE earlier yesterday. The mayor also asked the Trump administration to consider dismissing the cases of four other students who've been detained in New York.

• After leaving, Mamdani received a call from Trump, who said the Columbia student, Elmina Aghayeva, would be freed, according to Calvello.

Indeed, the student was abruptly released.

Fast food giants are escalating the beef — rolling out bigger burgers and upgraded classics as they fight to revive traffic in a price-weary fast-food market, Axios' Kelly Tyko reports.

• McDonald's is launching the Big Arch Burger nationwide for a limited time starting March 3. The burger features two quarter-pound patties, three slices of white cheddar, crispy and slivered onions, lettuce, pickles and a new Big Arch Sauce.
• Burger King said yesterday it has refreshed the Whopper for the first time in nearly a decade, upgrading the bun and moving to sturdier packaging. The chain also brought back its Maple Bourbon BBQ Whopper this week.
• Wendy's recently rolled out a limited-time Cheesy Bacon Cheeseburger, stacking cheese and bacon as signals of indulgence and brawn.

🥩 Across the industry, protein has become shorthand for value and satisfaction at a time when customers are scrutinizing every dollar.

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