Here’s a preview of what we’ll cover this week: 

Macro: Don’t Bet Against The US Economy; Inflation Keeps Finding New Reasons To Stay; Bessent's Treasury Twist

Markets: The Anticipated Pullback; Where Are We In The Rotation?; Anthropic’s IPO

Lumida Curations: David Sacks On Anthropic’s AI Fear Campaign; Dylan Patel On Opportunities Inside AI Infrastructure; Ben Thompson On OpenAI’s Biggest Strategic Mistake

We hosted a community dinner this week in San Francisco with investors and operators.

What was notable… Every investor around the table was high beta in private and public markets thematics - robotics, biotechs, photonics.

This contrasts sharply to a dinner I hosted near the bear market lows in October 2022 when high beta crypto investors were trying to figure out how to invest in US Treasury bonds.

The other main takeaway — Physical AI is an emerging trend and theme.

I also visited Anthropic’s headquarters. I share my findings in this FSD here.

Travis Kalanick is back.

Ben Horowitz (a16z) announced it in three words on X, and followed that with what one partner called the largest check in the firm’s history.

Travis is back with “Atoms”.

Until a few months ago, almost nobody knew it existed.

We have opened an allocation to Atoms on Lumida Deals for qualified purchasers and accredited investors (under Reg 506(C)).

See www.Lumidadeals.com if you’d like to participate. Closing is this week, and capacity is limited.

The Founder

In 2017, Travis Kalanick was forced out of Uber.

He had already taken the company from an idea to a global transportation network operating across more than 70 countries.

Then, he was forced off as CEO and disappeared. (Travis called out Benchmark Capital VC Bill Gurley on this).

Since then, markets have embraced Founder Mode.

Most founders who have already created a generational company do something predictable next.

Buy a vineyard. Start a family office. Join a few boards. Talk about entrepreneurship on podcasts.

Kalanick bought another company.

In 2018, he took control of City Storage Systems for roughly $150 million and became CEO.

Then he spent the next eight years building almost entirely in private.

Employees were discouraged from even listing the company publicly.

And he brought some familiar people back with him.

Gautam Gupta, who ran finance during Uber’s hyper-growth years, is CFO.

Eric Meyhofer, who ran Uber’s Advanced Technologies Group, now leads the food robotics business.

Anthony Levandowski, one of the original engineers behind Google’s self-driving program, joined through the Pronto acquisition.

This is not Travis starting over.

It looks more like Travis picking up unfinished business. In his words, “I never left.”

So What Is Atoms?

Atoms is a bet on Physical AI.

Bain Capital, Fifth Wall, Chemistry, A*, K5 Global, Abstract, SV Angel and Alpha Square also participated.

Bank of America, Goldman Sachs, Wells Fargo, JPMorgan and Barclays came in as debt partners.

The company now sits across three businesses:

Food. Mining. Transport.

At first glance, that sounds random.

It isn’t.

All three run on the same basic idea.

Kalanick looks at the physical economy like a computer that has barely been optimized.

Software companies obsess over utilization.

How much work can this server handle? How much idle capacity is sitting there? How quickly can jobs be routed?

The physical world mostly doesn’t.

A commercial kitchen can sit unused for most of the day. A mining truck can stop when a driver’s shift ends. A warehouse can have expensive assets sitting idle.

Atoms is trying to close that gap with software, automation and specialized robotics.

That is the big idea: Make physical assets behave more like compute.

The difference: atoms is focusing on specialized robots rather than humanoids. 

Every robotics deck now seems to have the same slide.

A humanoid robot carrying a box.

Atoms is taking almost the opposite approach.

Kalanick calls what they are building specialized robots. If you want a robot that can flip a thousand burgers in an hour, it needs specialization.

Specialized machines targeting specific jobs, and purpose-built for established customers.

A general-purpose humanoid has to become good at hundreds of things before the economics really work.

On the contrary, a mining retrofit needs to become good at one thing — driving the truck.

That is a much easier product to monetize. And more importantly, you can monetize it today.

This Isn’t A Demo Video

Most physical AI companies are still selling a future. Atoms already has operating businesses underneath it.

Start with mining.

Pronto fits autonomous driving systems in existing mining trucks across different manufacturers.

You do not need to replace the entire fleet. You make the trucks already sitting at the mine autonomous.

Heidelberg Materials has signed up for more than 100 trucks over three years and made Pronto its exclusive autonomous technology provider in North America.

At one Texas site, Pronto’s system hauled more than 2 million tons of limestone in under eight months using a mixed fleet of Caterpillar and Komatsu trucks.

Kalanick says some mining customers can see 20% to 40% productivity gains.

That is a very different proposition from: “Here is what our robot may eventually do.”

Food Is The Other Proof Point

The food business includes CloudKitchens, Otter, Picnic and Lab37.

Again, the opportunity is straightforward.

Restaurants are labor-heavy, and automation can change the economics entirely.

Lab37’s Bowl Builder can produce as many as 300 bowls per hour on its latest specification.

Kalanick has said labor can represent roughly 30% of revenue in delivery kitchens today.

With the machine running, that can fall into the 7% to 10% range.

That spread is the business case.

Transport Is The Wildcard

Atoms is still early in transport, and there is less disclosed. But, this may ultimately be the most interesting piece.

Kalanick reportedly wants to deploy self-driving vehicles more aggressively than Waymo.

Atoms is also working with Joby Aviation on vertiport infrastructure for air taxis across markets including Florida, New York, Texas and California.

There is some nice irony here.

Kalanick talked about flying taxis while running Uber. Uber eventually sold its Elevate business to Joby.

Now he is back working around the same ecosystem from the other side.

And Then Uber Showed Up

This may be our favorite signal in the entire deal.

Uber invested $100 million in Atoms. [ We cannot comment on other terms of the Uber and Atoms relationship. Public reports indicate it is ‘multi-year and strategic’. ]

Think about who Uber is in this situation.

It has partnered with or invested in more than 30 autonomous vehicle companies.

Then, you also have a16z.

This is Atoms’ first major institutional financing as a unified company. And, a16z did not write a small option check.

It led a $1.7 billion round. Ben Horowitz joined the board, and he doesn’t join many boards.

One partner described it as the largest check the firm has ever written.

Bain Capital, Fifth Wall, Chemistry, A*, K5 Global, Abstract, SV Angel and Alpha Square also participated.

Bank of America, Goldman Sachs, Wells Fargo, JPMorgan and Barclays came in as debt partners.

That matters because this is the first time the market has really put an institutional price around the entire Atoms platform.

Why Now?

Because the category is moving.

Robotics funding has accelerated sharply this year, up about 70% from 2025.

Physical AI is starting to move from venture experiment toward infrastructure.

And capital is beginning to recognize that the next leg of AI may not live entirely inside a browser.

Software intelligence eventually has to touch the physical world.

It needs to get into factories, warehouses, vehicles, mines, restaurants and more.

Someone has to build that layer.

We think Atoms has a credible shot.

Hear It From Travis

We have curated several of Kalanick’s recent appearances on our X handles. Watch the curations here.

You can also watch the full a16z podcast ‘Building a Company in Stealth | Travis Kalanick with a16z’.

A16z also published a memo with their thesis on Atom: “Travis Is Back”.

LUMIDA DEALS

Atoms is the latest offering on Lumida Deals.

The offering is made under Rule 506(c), which permits general solicitation.

It is available only to verified accredited investors and qualified purchasers.

Financials, deal terms, valuation and diligence materials can be shared with verified investors who request them directly.

Register Interest in Lumida Deals here.

Allocation is limited and closing is likely this week.

Lumida and its principals expect to have a financial interest in this offering. Nothing here is an offer to sell or a solicitation of an offer to buy securities. Any offer will be made only through official offering documents with price, terms and conditions.

The Fed is finally accepting what we told months earlier.

AI will diffuse employees in different professions. It might replace some jobs, but also create new ones in the process. Read here.

FOMC minutes noted that "fears about AI leading to widespread layoffs had not materialized to date." 

“Some workers [are] being displaced, while others benefiting from jobs created by the AI buildout.”

The Committee also sees the other side of it too, which is our long-run view. 

FOMC participants noted that productivity gains from AI adoption "would eventually reduce production costs and increase aggregate supply," putting downward pressure on inflation. 

Short run, AI is inflationary. Long run, it is deflationary. 

It seems like every year we get an ‘August Surprise’ and this year is no exception.

Scott Bessent was in action this week.

The US Treasury doubled its buyback operations for long-dated debt, taking the cap from $2 billion per operation to at least $4 billion.

Bessent wants to get long-term rates down.

Our view was that rates were settling and stabilizing — we’re not convinced the intervention was necessary.

Rate sensitive names such as housing stocks were showing signs of bottoming.

Since the intervention, commodities of all types and bitcoin are rallying. We increased our exposure to gold miners after the intervention and silver.

Bessent calls it "a Treasury twist here in terms of the bond market."

Long-end yields dropped on the news, but this didn’t last, and we ended roughly where we started the week.

A buyback is essentially a plumbing operation.

Bessent is trying to keep the long end from blowing out. But, sometimes interventions make an issue out of a non-issue.

Bessent to fund the purchases somewhere, and he is funding them in bills.

Marketable bills held by the public rose $1.0 trillion over the twelve months through July.

Bessent is following Yellen's 2023 playbook. 

Finance more of the deficit at the front end, take pressure off the long bond.

It worked then. The 10-year had run from 4.00% to 5.00% in three months before the announcement, and the shift to bill financing reversed it.

We think Bessent’s buyback is pressing one side of the balloon, which will cause the shorter end to inflate.

Our instinct is that the more durable expression of this policy is a lower dollar, not structurally lower rates.

That means emerging markets and multi-national importers can do well.

Markets sold off broadly this week.

The Nasdaq 100 fell 2.5%, and the S&P 500 dipped 1.4%. There was very little hiding.

Most industries ended lower. Airlines and Semis saw major outflows, declining 6.3% and 4.5% respectively. 

The exception was materials.

Gold miners gained 14.3% in the week, and were 2x higher than the second best performing group.

That is a weakening dollar trade that we talked about in our Aug 9th newsletter. 

When the Treasury is actively intervening at the long end and coordinating on the yen, it results in a lower dollar, helping commodities. 

Gold miners are the cleanest way that shows up in equities.

However, the broad pullback shouldn't be a surprise. 

Back on Aug 9th, we flagged sentiment had gone from cautious to almost euphoric in some pockets, and that record call volume was contrarian bearish, which warranted a pullback.

The setup has not improved much despite this week’s pullback. 

BofA's Bull & Bear Indicator is now 9.5, up from 9.3, and sitting deep in Sell territory. 

Look underneath the headline and the components tell you why. 

BofA private client equity allocation is at 66% of AUM.

That number has only been matched once, in October 2021.

Cash allocation is the mirror image, at 9% of AUM, the lowest reading in the series and well below the long-run average near 12%.

The hedge fund side confirms it.

Hedge funds have high net exposure. in the 83rd percentile relative to history, but their net exposures are low, indicating these positions are hedged. This should help in muting the impact of drawdowns.  

Private clients are at a record allocation and hold almost no cash. Fund managers are fully invested.

Owning assets that have attractive earnings growth, valuations, and aren’t “over-owned” continues to make sense. Whatever people were the most excited about the last few months likely have diminished upside.

However, mid to long-term, we are still bullish.

The reason is earnings.

Earnings season has effectively wrapped up, and the numbers were exceptional.

About 1,725 companies reported earnings since Q3 started. 75.5% beat on EPS and 74.8% beat on sales, and 60.5% beat on both. 

13% delivered a triple play, meaning a beat on the top line, the bottom line, and raised guidance.

Companies raising guidance also outnumbered lowering guidance with a 18% to 4% spread.

Earnings drive markets, and they are moving in the right direction.

Anthropic’s IPO means they will have the liquidity to keep driving earnings.

Meanwhile, the multiple has been quietly improving. 

The index’s P/E multiple has dropped about 16% from its high of 24x in Oct’25 . 

You are paying less today for a stream of earnings that grew through the quarter.

Corrections in that setup are opportunities, not exits.

We have been discussing the rotation from growth to value since late June, and the tape played out.

The S&P 500 Value Index has continued to do well, while growth crumbled. 

Bespoke’s Value index has not had a 2% drawdown on a closing basis since March, gaining about 18% during the period.

That is the third longest streak without a 2% drawdown in the index's history.

Growth did the opposite: vertical off the March lows, then nothing since June. This is a sign of over-crowding in growth stocks.

The three-month spread between the two indexes is now at its post-Covid highs.

Now, here’s where it gets interesting. 

The spread reaching its highs isn’t a good thing for value. 

Every time the rubber band has stretched this far toward Value, it has snapped back.

The two longer streaks are the only comparisons available. A 218-day run ending February 2007, and a 161-day run ending January 2018.

In both these instances, Value broke after the peak, while growth cranked.

Here’s another study on the same subject.

When Value outperforms Growth by 12% over 100 days, the next 100 days tend to favor Growth. 

On the Russell 1000 spread, we are roughly two standard deviations below the mean.

This is something to keep an eye on (specifically, look for a change in trend) in the coming weeks.

The release of the Anthropic S-1 will be a market defining event. 

In all scenarios, the revenue growth will be high. 

The capex will be high. 

The gross margins will be high. 

The market knows all of this. 

What the market doesn’t know is one variable:

What is the rate of subsidy on tokens?

My view: far less subsidy than people think.

I also visited Anthropic’s headquarters. I share my findings in this FSD here. You should consider subscribing Lumida Wealth’s Youtube Channel to get real-time takes on markets, macro, and more.

David Sacks argues that Anthropic has amplified exaggerated claims about AI-driven job losses, helping fuel public fear around the technology despite what he sees as weak evidence behind those claims.

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Dylan Patel argues that faster AI chips only justify premium economics if customers are willing to pay significantly more per token, making infrastructure segmentation and supply planning a critical challenge.

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Ben Thompson argues that OpenAI’s biggest strategic mistake was prioritizing consumer subscriptions over advertising, which could have given the company stronger monetization economics and a more defensible competitive position.

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