BlackRock Holds Investors Hostage, Anthropic Gives Trump “Art of Litigation” Treatment

Good evening Folks,

In today’s edition, we have BlackRock holding its own investors hostage, and Anthropic getting its “Art of Litigation” on… 

Let’s get started…

- “I'm not You're not friggin’ leavin'! - Blackrock

BlackRock - the asset manager- just capped withdrawals from its $26 billion HPS Corporate Lending Fund… affectionately known as HLEND… after investors tried to yank 9.3% of their shares. BlackRock's response? Best I can do is 5%. That's roughly $620 million going back to clients instead of the $1.2 billion they actually asked for. Woof.

This is a big deal because once a fund starts gating withdrawals, it's the financial equivalent of a bouncer blocking the exit at a nightclub that's on fire. You don't do it because everything's fine. You do it because if everyone leaves at once, the building collapses.

BlackRock, naturally, framed it as a feature, not a bug… the cap prevents a "structural mismatch" between investor capital and loan duration. HPS execs went further, saying the gate lets them buy into "compelling investment opportunities" amid all this volatility. (read: we need your money to go shopping while everyone else panics)

Private credit's $1.8 trillion empire was built during a decade of easy money and "trust me bro" lending standards. A few high-profile collapses late last year spooked the herd, and now everyone's quietly heading for the exits… or at least trying to. The industry also has massive exposure to software companies, which is a fantastic bet if you think AI isn't about to bodybag that sector overnight. (Spoiler: it is.)

Meanwhile, Blackstone took the opposite approach; investors tried to redeem a record 7.9% of shares, and Blackstone met every single request by having the firm and its own employees step in to absorb the outflow. When your own smaller fund can handle the pressure but your flagship can't, that's not a great look.

Fun fact: BlackRock bought HPS Investment Partners just last year as part of its push deeper into private assets. They went all-in on this trade right before the music started slowing down. The timing is chef's kiss terrible.

The problem isn't whether BlackRock can manage one quarter of elevated redemptions. It's what happens when the next round comes in even higher. Because if the macro picture keeps deteriorating and AI keeps eating software company valuations alive, that 9.3% redemption request is going to look quaint. Place your bets accordingly, friends. 

-  "Lawyer up!" - future Truth Social post incoming…

Sue the Pentagon? Check. Sue Donny Destruction's team? Also check. Anthropic is on a one way ticket to creating hell for those in its opposition as word's just dropped that Dario Amodei put the Trump Administration in timeout.

For context, Anthropic had a $200 million deal with the DOD, was the first AI lab deployed across classified networks, and was quietly becoming the government's favorite brain-in-a-box. Then the two sides started renegotiating and hit a wall over one very specific question: can the military do whatever it wants with the models, or does Anthropic get a say?

We all know the story by now, Anthropic said "thanks, but no thanks" on becoming the DOD’s weapon of choice and now things have escalated. Fast. Anthropic's complaint, filed in the Northern District of California, calls the designation "unprecedented and unlawful" and says it jeopardizes "hundreds of millions of dollars" in near-term revenue. They've asked the court to vacate the whole thing. They've also filed separately in the D.C. Court of Appeals to challenge the DOD's determination directly.

More than a dozen federal agencies are named as defendants… DOD, Treasury, State, the GSA, the whole roster. The complaint didn't hold back: "Defendants are seeking to destroy the economic value created by one of the world's fastest-growing private companies." The DOD said it doesn't comment on litigation. Classic.

Which means now, we've got one of the most valuable AI companies on Earth… one that was literally building classified intelligence tools for the U.S. government a few months ago… in a public legal brawl with that same government because it wouldn't sign a blank check on how its technology gets used.

More importantly, this is the first major legal test of whether the government can use national security designations to punish an AI company for setting usage limits on its own technology. If Anthropic wins, it sets a precedent that AI labs can negotiate terms. If they lose, every AI company in the country just learned the price of telling the Pentagon "no."

Either way, I've got my popcorn ready.

To the rest of your evening,

 -The Team at Bullseye Trades