Axios Closer

July 14, 2025
Monday β .
Today's newsletter is 618 words, a 2Β½-minute read.
π The dashboard: The S&P 500 closed up 0.1%.
π₯ Today's stock spotlight: Kenvue (+2.3%) gained ground on news that CEO Thibaut Mongon is leaving, as activist investors pressure the Tylenol maker and J&J spinoff to boost its profitability.
1 big thing: Tesla stretches beyond autos
Elon Musk has never liked Tesla being identified as purely a carmaker β and now he could distance the company even further from its automobile heritage with a deal to invest in his AI startup xAI.
Why it matters: Musk is proposing that Tesla help back xAI, which owns the social media platform X and the ChatGPT competitor Grok.
- Tesla investors will need to approve the deal in a shareholder vote, he said Sunday on X: "It's not up to me. If it was up to me, Tesla would have invested in xAI long ago."
The intrigue: Musk's endorsement of a Tesla investment in xAI comes days after high-profile Tesla bull and Wedbush Securities analyst Dan Ives floated the possibility of a merger (an idea Musk didn't exactly embrace).
- An investment would bring them closer together, though, without the regulatory hassles.
By the numbers: xAI is expected to burn about $13 billion in 2025 as it invests heavily in Grok, Bloomberg reported. The company is pursuing a valuation of up to $200 billion, FT and Reuters reported.
Between the lines: Tesla is not exactly a fountain of cash on its own.
- The company's vehicle sales have been plunging in 2025 amid a backlash to Musk's association with President Trump β but if he's concerned about the drop-off, he's not showing it.
- He's stated repeatedly that the company's future is predicated on autonomy β with all the value in the AI capability and none in actual car production.
Reality check: You can't have self-driving cars without the car part.
What's next: Tesla set its annual meeting in November, where investors will presumably vote on a possible xAI investment.
2. Tomato prices in the blender
U.S. tomato prices will likely rise as the country officially retreats from a long-standing trade agreement with Mexico.
Why it matters: Americans buy a lot of tomatoes, and this tariff, which goes into effect today, will likely hike the cost of everything from salsa to Caprese salad.
State of play: The U.S. Department of Commerce in April announced the termination of a nearly 30-year-old trade agreement between the U.S. and Mexico.
- "It's possible that the price of tomatoes goes up for the short term," Agriculture Secretary Brooke Rollins told reporters this month.
- But in the longer term, ensuring "that our international partners are being fair and following the rules and ensuring that they're meeting their obligations is paramount."
Zoom in: Consumer prices could jump by about 10%, Timothy Richards, a professor of agribusiness at Arizona State University, told CNN.
- NatureSweet CEO Rodolfo Spielmann told Bloomberg News that, given the company's slim profit margins, "there's no scenario" where the company can "absorb those tariffs."
3. Catch up quick
βοΈ Grayscale confidentially filed a draft S-1 registration statement signaling plans for an IPO. The crypto asset manager and creator of bitcoin and ethereum ETFs is hoping to capitalize on surging investor interest in crypto. (Coindesk)
π¦The makers of more than 90% of U.S. ice cream agreed to remove synthetic dyes from their products, the International Dairy Foods Association announced. Food companies have been under pressure from HHS Secretary Robert F. Kennedy Jr. to ditch artificial colors. (Bloomberg)
π McGraw Hill is aiming for a $4.2 billion valuation in an IPO. The textbook publisher sells products to 99% of the nation's public school districts. (Reuters)
4. π 1 simple answer
"It's not something you can just turn the switch on."β Reebok founder Joe Foster, to Yahoo Finance, on why the apparel industry can't simply move shoe production from China and Vietnam to the U.S. despite President Trump's tariffs incentivizing it. He added that "you've got to go somewhere where you've got a lot of people who are quite willing to sit on a machine" and make shoes, and many people "won't do it."
Today's newsletter was edited by Ben Berkowitz and copy edited by Sheryl Miller.
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