With the US no longer feeling “an obligation to think purely of Peace” and threatening to escalate tariffs, Europe is now weighing whether to wield its defensive economic bazooka to protect Greenland.

Leaders in the European Union are beginning to publicly mull an invocation of the bloc’s Anti-Coercion Instrument (ACI) — a suite of punitive economic tools designed to deter third-party coercion. While the never-before-used tools were designed with China in mind, the US could soon find itself in the so-called economic bazooka’s crosshairs. So just how vulnerable is the US to the EU’s rocket launcher?

Firing Range

In some ways, very vulnerable. European investors are the single-largest foreign holders of US Treasurys and equities by far, with about $8 trillion in assets. That’s nearly double the rest of the world combined, according to a note this weekend from Deutsche Bank’s chief FX strategist, George Saravelos, which pointed out the US net international investment position is at record negative extremes. Theoretically, the threat of a mass sell-off gives the EU leverage — remember how “yippy” bond traders effectively rebuffed tariff rollouts last year? But that strategy would require extreme coordination among public entities and private investors and may amount to an act of mutually assured destruction. A more likely result here may be European investors following the example already set by Pimco earlier this year: a long, slow campaign to “sell America” as a hedge against future instability.

In the meantime, the ACI provides the tools for a much more targeted strike. Endorsed this week by French President Emmanuel Macron, the ACI was signed into law in 2023 and requires the vote of half of member states representing at least 50% of the EU population. Its levies could be a powerful force for deterrence:

• The ACI would enable the bloc to implement export controls, place tariffs on services and restrict access to financial markets. It could also bar foreign firms from public procurement opportunities.
• That places Silicon Valley squarely within the firing range of Europe’s ACI bazooka, with the industry deeply invested in selling its services in the market as well as scoring contracts within the continent’s public digital infrastructure.

It’s a MAD, MAD, World: In not-so-surprising fashion amid the global economic standoff between longtime allies, gold prices jumped on Monday, hitting an all-time high of $4,689 an ounce. Futures for the S&P 500 fell nearly 0.9% as markets were closed in the US for the Monday holiday. That tracks with estimates from analysts at Oxford Economics, who said Monday that a full-on EU-US trade war could trim 1% from US GDP at peak impact, while slowing global GDP growth to its lowest level since 2009. But fret not: Analysts at Evercore said this weekend that it’s the beginning of a “now-familiar ‘escalate-to-deescalate’ cycle” that should culminate in a less-destructive deal. And, of course, all the relevant world leaders are meeting this week at the World Economic Forum in Davos, Switzerland, where the vino at cocktail hour may yield more pointedly worded veritas than usual.

Netflix reports after markets close today under a shadow bigger than the Mind Flayer’s. The streaming giant’s ongoing attempt to acquire Warner Bros. Discovery is sucking the life force out of its stock, but analysts are mostly hitting “Continue Watching,” regardless of the deal’s outcome.

The Stranger Things streamer’s stock has fallen nearly 30% over the past few months, initially dropping after its October earnings report surprised investors with a Brazilian tax kerfuffle. The slide continued this month as Netflix duked it out with Paramount Skydance for control of Warner.

But today could give investors a case for scooting back a few feet from their screens to see the whole picture: Visible Alpha estimated that Netflix could report revenue grew 17% in the holiday quarter.

Pressing Play to Its Strengths

Netflix is a content powerhouse even without HBO Max’s Heated Rivalry. Hits like Guillermo Del Toro’s critically acclaimed Frankenstein and the slightly less high-brow Jake Paul boxing match are expected to have juiced subscriber signups in the fourth quarter. But Netflix isn’t chilling:

• As a pure-play streamer that can’t fall back on, for instance, theme parks for its revenue, content is everything for Netflix. And before taking on Warner Bros. Discovery, the streamer’s shoring up its strengths. After finding success with live sporting events like its Christmas Day NFL game, Netflix doubled down this month on its partnership as the home of WWE shows like Wrestlemania. Investors will also want to see how it builds on the success of franchises like Stranger Things and Bridgerton (spinoff shows, Regency-esque balls and so on).
• At the same time it tries to attract and retain subscribers, Netflix is also squeezing more money out of their binge seshes. The streamer’s ad sales hit an all-time high last quarter, and that momentum’s likely to continue as more subscribers opt for ad-supported viewing. Wedbush analyst Alicia Reese expects advertising to become Netflix’s top source of revenue this year.

No Pause Button: The tug-of-war to win Warner Bros. Discovery could drag on for months, and investors want to know how Netflix will keep the cameras rolling in the meantime. If Netflix does secure the deal, how the streamer sticks to its strengths while absorbing a new company will be a concern and not just from an antitrust standpoint. Netflix is already the world’s largest streaming service, with more than 300 million subscribers, and folding in HBO Max would tack on another ~120 million subs.

Andreesen Horowitz sees no toil or trouble and certainly no bubble.

Instead, it’s effectively wagering $3 billion that the future value of artificial intelligence — which is upending everything from what we watch to what we buy and how we get around — will be underpinned by the companies perfecting its back-end systems and tools.

The venture capital firm recently designated $1.7 billion for its infrastructure arm, which it says invests in “every level of the AI stack,” including foundation models, core AI systems, developer tools and next-gen cloud, data and security systems. That’s on top of the $1.25 billion that a16z — the firm’s preferred nickname — raised to invest in AI infrastructure in 2024.

AI ‘Magic’

While Martin Casado, the a16z general partner who heads the infrastructure practice, acknowledged in a recent interview with Bloomberg that “private valuations are crazy,” he said he’s not worried about an AI bubble. “This stuff is magic,” he added. “The users are real. The demand is real. The GPU usage is real.”

And so, of course, is the need for the behind-the-scenes software that everyday consumers hardly think about. “Some of the most important companies of tomorrow will be infrastructure companies,” Raghu Raghuram, another general partner at a16z, told Bloomberg.

The firm has recently reaped some fruits from its labor, with AI startups that it has backed being acquired by Stripe, Meta and Salesforce. But at the crux of the bubble-or-boom question is whether businesses will keep buying AI companies as valuations skyrocket. Many are skeptical:

• Dean Baker, an economist and co-founder of the Center for Economic and Policy Research (CEPR), recently told The Washington Post that he’s shifting his investment portfolio to limit his exposure to what he says is an AI bubble getting closer to popping.
• Michael Burry, made famous beyond Wall Street by The Big Short, which chronicled his prediction of the housing market crash, said on X last month that “OpenAI is the next Netscape, doomed and hemorrhaging cash,” comparing the creator of ChatGPT to a casualty of the bursting dot-com bubble.

Sticking to Software: Andreessen Horowitz has avoided some AI investment trends, like putting money toward the booming construction of AI data centers. Still, figures from S&P Global last month showed that more than $61 billion was invested in developing such centers in 2025.