Musk’s xAI Joins Palantir and TWG in Financial Sector AI Expansion

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Elon Musk’s AI firm, xAI, has officially teamed up with Palantir Technologies and investment group TWG Global in a major push to bring artificial intelligence solutions to the financial services and insurance industries, the companies announced Tuesday.

TWG Global, led by Guggenheim Partners founder Mark Walter and entertainment financier Thomas Tull, will spearhead implementation efforts by working directly with financial firms to integrate AI into operational decision-making and customer offerings.

The partnership will incorporate xAI’s proprietary technologies, including its Grok large language models and the Colossus supercomputer, into enterprise AI platforms. Palantir will provide its powerful data analytics infrastructure to support model deployment.

This initiative marks a significant step as financial institutions increasingly seek AI-driven insights to streamline processes, automate decision-making, and reduce risk. The companies noted they expect to onboard additional partners in the coming months.

The collaboration follows a growing trend of AI-aligned alliances: in March, xAI and Nvidia joined forces with a consortium backed by Microsoft, MGX, and BlackRock to scale AI infrastructure across the U.S.

Hedge Funds Rapidly Exit Tech Stocks Ahead of U.S. Tariff Deadline, Goldman Sachs Reports

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Hedge funds have been unloading tech stocks at their fastest pace in six months, marking the largest tech-sector exodus in five years, according to a Goldman Sachs note released Friday and seen by Reuters on Monday. The move comes just ahead of the April 2 tariff deadline announced by U.S. President Donald Trump, which has sparked widespread market uncertainty and fears of an economic downturn.

According to Goldman Sachs’ prime brokerage desk — which tracks hedge fund activity — the information technology sector, including the “Magnificent-7” tech stocks, was “by far the most net sold” last week. Both long positions (bets that prices will rise) and short positions (bets on a decline) in tech stocks were rapidly closed, reflecting a strong pullback across the board.

Analysts at Edmond de Rothschild linked this abrupt sell-off to the anticipated tariffs on copper and other raw materials, which are expected to weigh heavily on tech manufacturers and AI-related hardware producers.

A separate note from Morgan Stanley revealed that hedge funds are increasingly betting against some of the sector’s biggest names. Nvidia, AMD, and Tesla were identified as the top three short positions as of Wednesday.

Goldman said that around 75% of last week’s hedge fund selling activity was concentrated in U.S. tech stocks, particularly those connected to AI hardware development. Total hedge fund exposure to tech is now at a five-year low, despite heavy buying just a few weeks ago in mid-March.

Another dataset from JPMorgan noted a reversal of positions by hedge funds last week, possibly influenced by strong retail investor activity. This surge in retail buying may have triggered a short squeeze, forcing some bearish investors to unwind their positions as stock prices climbed unexpectedly.

“With the tariff news, it was interesting that hedge fund flows and positioning might suggest they’re already somewhat prepared—at least in terms of key areas that have been in focus,” said JPMorgan in its client note.

As the April 2 deadline looms, hedge funds appear to be bracing for volatility, shifting away from one of the market’s most lucrative sectors in recent years.

FDIC Allows Banks to Engage in Crypto Activities Without Prior Approval

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The Federal Deposit Insurance Corporation (FDIC) announced on Friday that U.S. banks no longer need to obtain advance permission to engage in certain cryptocurrency-related activities, as long as they manage associated risks appropriately. This decision marks a significant shift in the FDIC’s stance on crypto, overturning previous policy which required banks to clear any crypto involvement in advance.

Acting FDIC Chairman Travis Hill praised the change, stating, “The FDIC is turning the page on the flawed approach of the past three years.” Hill further indicated that there would be more regulatory clarifications in the future to guide banks’ engagement with crypto products and services.

The FDIC’s decision follows a similar move by another U.S. bank regulator, the Office of the Comptroller of the Currency (OCC), which has also been easing restrictions to allow banks more flexibility in participating in the crypto sector.