Game, set, cash

Good morning. NASA launched a new US$4.3 billion telescope into space yesterday that can see 200 times more of the sky than its current Hubble telescope, offering the potential to discover tens of thousands of new distant planets. The new space toy is expected to provide the first complete tally of planetary systems similar to our own.

That sounds great and all, but we’ll really be impressed when it can snap a candid shot of an extraterrestrial.

Today’s reading time is 5½ minutes.

MARKETS

▼	TSX	36,553.92	-0.76%
▼	S&P 500	7,711.76	-0.25%
▼	DOW JONES	53,559.99	-0.02%
▼	NASDAQ	26,402.42	-0.52%
▼	GOLD	4,529.9	-2.88%
▼	OIL	83.4	-0.16%
▼	CAD/USD	0.719	-0.42%
▲	BTC/USD	78,444.78	+0.36%

Earnings to watch: Canadian retail giant Couche-Tard and chipmaker Broadcom will report their results on Wednesday, while Lululemon will hold its earnings call on Thursday after the bell.

ENTERTAINMENT

The Tennis Business is Booming

Source: ATP Tour.

There’s no shortage of money floating around professional tennis. The actual players, however, will tell you they’re not seeing much of it.

Driving the news: The U.S. Open kicks off this week, with a record high US$108 million in prize money up for grabs. The winners on both the men's and women’s side will take home $5.5 million, but the real cash (to many players’ dismay) will be made off the court.

The U.S. Open has taken flak for drastically raising prices (even from billionaire Bill Ackman, who can surely afford a day pass). With patrons paying $100 for chicken nuggets, this year’s tournament will likely make in the ballpark of $700 to $800 million.

One of the tourney’s biggest moneymakers, the Grey Goose Honey Deuce cocktail, brought in more than three times the winner’s prize money last year.

Why it matters: As tournaments like the U.S. Open continue to print money, the pressure is mounting to give players a bigger piece of the financial pie. Tennis players currently receive less than 15% of tournament revenue in prize money, a fraction of what other pro athletes get.

Across MLB, NFL, NHL, and NBA, players take home around 50% of league revenue. In their negotiations, tennis players have advocated for less than half of that (22%).
Players already threatened to sit out at the French Open earlier this year over the revenue share and suggested they will follow through on a boycott at a Grand Slam in the near future.

Bottom line: Few will shed tears for the winning players that take home over $5 million for two weeks of tennis, but the reality for most players is far less glamorous. About 80% of the top 1,000 players in the world don’t make enough to cover their expenses, including travel, coaches, physio, and other costs of touring.—LA

BIG PICTURE

Source: Unsplash.

Warner Music and Sony Music are taking Anthropic to court. The companies allege in a new copyright lawsuit that Anthropic illegally trained its Claude models with pirated versions of their musical compositions, one of the broadest (and possibly costliest) IP lawsuits that an AI company has faced. In a separate lawsuit brought by authors and publishers last year, Anthropic agreed to pay US$1.5 billion to the plaintiffs, the largest copyright settlement in U.S. history. (Axios)

The Lake Ontario name battle is still on. Premier Doug Ford unveiled a comically large sign in Hamilton that reads “Lake Ontario, now and forever” following repeated jabs from Donald Trump over the weekend about the Great Lake (including a video of him kicking over a Lake Ontario sign). Meanwhile, Google has officially renamed Lake Ontario “Lake America” on its Maps service, but only for U.S. users — though some Canadian websites, including the LCBO’s, are displaying the Americanized version. (CBC News)

Pharma and biotech stocks are having a record run. As more investors diversify away from AI stocks, pharmaceutical and biotech companies have reaped the rewards. The S&P 500 Pharmaceutical index has handily outperformed the market and is now up 18% this year, while biotech stocks are now up 86% over the past 12 months, thanks to a string of promising clinical trial results. Biotech has been the best-performing industry in the U.S. stock market this year, leapfrogging tech hardware and even semiconductors. (Financial Times)

What else is on our radar:

One Canadian has been found safe after the deadly Nepal-Tibet flash floods, though 31 others remain unaccounted for.
The U.S. struck Iranian rocket launchers in the Strait of Hormuz yesterday, the country’s first military action in the region in a month. Iran vowed to respond.
General Motors is planning to start assembling a heavyweight pickup truck at its Ontario plant, a move that could add a much-needed $1.1 billion investment to Canada’s embattled auto sector.

Take a break for a puzzle

The news isn’t always the most fun thing to read (we do our best to keep things light, but sometimes we don’t have the best source material).

You’ve earned a break for a puzzle, and we’ve got you covered with a daily mini-crossword and sudoku.

Plus two original games:

Who’s Who: Guess the notable person with as few clues as possible.
Codebreaker: Crack a code using the power of logic.

Check out all our games on Peak Games now.

LOOKOUT

What’s Happening This Week

Source: Elections Canada.

🗳️ Three federal by-elections. Voters in B.C.’s North Vancouver–Capilano, Ontario’s Beaches–East York, and Quebec’s Chicoutimi–Le Fjord will send new MPs to Parliament in by-elections being held today. North Vancouver–Capilano and Beaches–East York are safe Liberal seats, but Chicoutimi–Le Fjord is a close three-way contest between the Conservatives, Liberals, and Bloc Québécois.

🏦 Bank of Canada rate decision. The central bank is almost certain to hold its policy rate steady at 2.25% on Wednesday. The bigger question is what comes next. Forecasters had been predicting the Bank would begin raising rates later this year, but the escalating trade fight with the U.S. — and the potential damage it could do to the economy — calls that into question. Some analysts are now even projecting rate cuts if the latest tariffs remain in place into next year.

📊 New jobs, trade data. We’ll get updated jobs numbers on Friday (along with U.S. payroll data). Forecasters are expecting a small uptick in employment, though not on the scale of July’s blowout gain of 75,000. This report won’t tell us much about the impact of U.S. tariffs — that will likely only start to show up next month. The latest data on Canada’s imports and exports also drops this week, and we’ll be watching that closely to see how the push to diversify the country’s export markets is going.

TECH

The Tech World Is Getting Nervous About AI Safety

Emerging details about the breach of Hugging Face by a swarm of OpenAI agents have AI experts tugging nervously at their collars.

Catch up: Last month, OpenAI deployed thousands of AI agents to work on a cybersecurity test, a process that eventually resulted in the systems escaping their testing environment and hacking Hugging Face, a website that the agents suspected may hold the test’s answer key.

Two investigations into the incident — one published by OpenAI, another by an outside research group — found that the agents collaborated to make progress on the test, created a secret message board to communicate, organized a hierarchy and assigned tasks, knowingly broke rules set down by OpenAI, and erased evidence of their work to avoid detection.
The agents also breached OpenAI’s internal systems, including gaining full control over some of its research systems.

What happened: As the tech world digests the spooky details of the investigations into the breach, a growing chorus of influential figures are raising the alarm that the incident is exactly the type of long-feared “warning shot” that AI systems were becoming too powerful for humans to control.

In a widely circulated blog post, Dwarkesh Patel, who hosts a popular tech podcast, wrote, “It is totally consistent with public evidence that, at some point after July 12, the agents managed to set up persistent rogue internal deployments” — in other words, they could continue operating without humans being able to shut them down.
Ajeya Cotra, one of the authors of the investigation into the incident, called it “far more severe than previous publicly documented misalignment incidents” and said she was “not sure that we will get such a clear warning shot before it’s too late.”
Stripe co-founder Patrick Collison wrote on X that the attack was “clearly one of the most important things to happen this year.”

Why it matters: Tech insiders appear to be increasingly aligned on the view that AI systems could soon be — and perhaps already are — too powerful, complex, and downright strange for humans to control.—TS

ONE BIG NUMBER

🧑‍⚖️ 33,000. Immigration cases that Canada’s Federal Court is on track to see this year, up from 9,700 in 2021. Recent rule changes for refugee and asylum claims in Canada have sent the number of legal challenges skyrocketing.