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Forbes
4 days ago
- Business
- Forbes
The Y Combinator Question And Is Silicon Valley's Kingmaker Playing A Different Game In The AI Era?
Sign with logos for Google and the Google owned video streaming service YouTube at the Googleplex, ... More the Silicon Valley headquarters of search engine and technology company Google Inc in Mountain View, California, April 14, 2018. (Photo by Smith Collection/Gado/Getty Images) The YC demo day numbers present a fascinating puzzle. Y Combinator's first ever Spring 2025 batch at their new HQ showcased 141 startups with an average weekly revenue growth of 12%, marking another impressive milestone for the accelerator that gave the world Airbnb, Stripe, and Dropbox. More than 18000 startups applied, and at the 0.8% accept rate, the prestige and hype seem to be at the all time high .Yet these metrics show a more intriguing question that has venture capitalists and industry observers scratching their heads. According to a recent debate on LinkedIn, since 2018 and fundamental changes the rules of artificial intelligence, thirty-seven companies have achieved unicorn status in the generative AI space. The curious fact? Zero went through Y Combinator. Some investors are debating the value of the YC badge premium, reflected in the valuation and its multiple. At first glance, this seems like a damning indictment. YC invests in approximately five hundred startups annually, with nearly ninety percent of recent cohorts being GenAI companies. Yet their unicorn count in this space remains conspicuously absent. But what if this apparent failure actually reveals something more sophisticated about YC's long-term strategy? The most immediate explanation lies in the fundamental economics of the AI revolution. Infrastructure plays in generative AI require massive capital outlays that dwarf traditional software startups. When foundation model development demands one hundred million dollars or more in computational resources, YC's standard investment amounts become challenging to scale to unicorn status through traditional pathways. OpenAI's billion-dollar funding rounds and Anthropic's multi-billion dollar war chest have created an entirely new category of competition. But this capital intensity might actually validate YC's approach rather than undermine it. While others chase the expensive infrastructure plays, YC may be positioning itself for the inevitable wave of application-layer innovations that will follow. History suggests that the most sustainable value creation often occurs not in the foundational technologies themselves, but in the creative applications built on top of them. The internet's biggest winners weren't the infrastructure providers, but companies like Amazon and Google that leveraged existing infrastructure in novel ways. YC's apparent focus on AI application companies might reflect a sophisticated understanding of technology adoption cycles. The current GenAI unicorns are primarily infrastructure and foundation model companies—impressive technical achievements, but potentially vulnerable to commoditization as the technology matures. The Spring 2025 batch revealed interesting patterns: companies building "Cursor for X" applications, vertical AI solutions for specific industries, and novel consumer AI experiences. While these may seem less ambitious than training new foundation models, they could represent the real long-term value creation opportunities in AI. Consider that Microsoft's massive investment in OpenAI has generated more value through integration with existing products like Office and Azure than OpenAI has captured independently. The application layer may prove to be where the most durable competitive advantages emerge. YC's investment timing might be more strategic than it appears. The accelerator is known for entering markets before they become obviously attractive to larger investors. Their absence from the current crop of GenAI unicorns could signal that they view the current wave as overvalued infrastructure plays rather than sustainable business models. The companies achieving unicorn status in GenAI today are doing so primarily on potential rather than proven business fundamentals. Many face uncertain unit economics, regulatory challenges, and intense competition from well-funded incumbents. YC's focus on companies with demonstrated revenue growth and clear paths to profitability might prove prescient as the market matures. The accelerator's emphasis on weekly growth metrics, while sometimes criticized as short-term thinking, could actually provide better risk-adjusted returns than the massive bets being placed on unproven AI infrastructure companies. Perhaps most intriguingly, YC's approach might reflect a belief in AI democratization rather than concentration. While current GenAI unicorns represent centralized, capital-intensive approaches to AI, YC's portfolio companies seem to be building tools that make AI accessible to smaller businesses and individual creators. This democratization thesis aligns with YC's historical pattern of betting on technologies that empower individuals and small businesses rather than reinforcing existing power structures. The real AI revolution might not be in building bigger models, but in making AI capabilities accessible to everyone. The rise of companies building AI development tools, specialized vertical applications, and consumer-focused AI experiences suggests YC might be positioning for a future where AI capability is distributed rather than concentrated in a few large foundation model providers. YC's absence from current GenAI unicorns might reflect a longer investment horizon than the market currently appreciates. The accelerator has historically succeeded by identifying sustainable business models rather than chasing technological trends. Their current AI investments might be targeting the second or third wave of AI innovation rather than the first. The most successful technology investors often appear to be "missing out" during peak hype cycles, only to emerge with superior returns as markets mature and fundamentals matter more than speculation. YC's cautious approach to infrastructure-heavy AI plays might prove to be shrewd risk management rather than strategic blindness. Furthermore, the three-month accelerator program might be perfectly suited for AI application companies that can iterate quickly and validate market demand, even if it's inadequate for companies requiring years of research and development. While YC hasn't produced GenAI unicorns, their portfolio companies are generating impressive revenue growth and solving real customer problems. The Spring 2025 batch's 12% weekly growth rate suggests that practical AI applications might offer more predictable returns than moonshot infrastructure investments. The accelerator's focus on revenue-generating AI companies, rather than pure research plays, might reflect a sophisticated understanding of what creates lasting value in technology markets. Companies that can demonstrate clear customer demand and sustainable unit economics often outperform those built on technological prowess alone. This approach also provides more diversified risk exposure. Rather than making massive bets on a few infrastructure companies that could be disrupted by new research breakthroughs, YC is building a portfolio of application companies that can adapt to changing technological foundations. The absence of YC companies among current GenAI unicorns raises broader questions about how innovation emerges and scales in different technology cycles. Perhaps the current wave of GenAI unicorns represents an anomaly rather than the new normal—companies that achieved massive valuations based on technical capability during a period of abundant capital and speculative enthusiasm. As the market matures and focuses more on sustainable business models, YC's emphasis on practical applications and proven revenue generation might prove to be the winning strategy. The real test won't be who achieved unicorn status first, but who builds lasting, profitable businesses that create genuine value for customers. Ultimately, the success of YC's AI strategy will be measured not by participation in the current unicorn race, but by the long-term performance of their portfolio companies. If the current GenAI unicorns prove to be overvalued infrastructure plays with questionable business models, YC's focus on practical applications could generate superior returns. The Spring 2025 batch's strong revenue growth metrics suggest that YC's AI companies are building real businesses with paying customers rather than pursuing valuation-driven strategies - despite the fact that 70% applied with $0 revenue, and nearly half had only an idea. This focus on fundamentals might seem unexciting compared to billion-dollar foundation model funding rounds, but it could prove to be the more sustainable approach. The accelerator's track record suggests they excel at identifying business models that can scale efficiently rather than technologies that generate headlines. Their current AI portfolio might be optimized for long-term value creation rather than short-term valuation maximization. YC's approach might reflect strategic patience rather than strategic confusion. The accelerator has consistently succeeded by entering markets at optimal times rather than being first movers. Their absence from the current GenAI unicorn wave could indicate they're waiting for better entry points or more attractive business models to emerge. The history of technology adoption suggests that the most valuable companies often emerge in the second or third waves of innovation, after the initial infrastructure has been built and market needs become clearer. YC's current AI investments might be positioning for this later wave rather than trying to compete with well-funded infrastructure plays. This patience could prove particularly valuable if the current GenAI market experiences a correction or consolidation. Companies with strong fundamentals and efficient capital structures might be better positioned to survive market downturns than highly valued infrastructure plays with uncertain business models. Whether YC's AI strategy proves brilliant or misguided remains to be seen. The accelerator's absence from current GenAI unicorns could represent either a missed opportunity or sophisticated market timing. The answer will depend on how the AI market evolves and whether sustainable business models emerge from the current wave of infrastructure investment. What's clear is that YC continues to attract strong founders and generate impressive portfolio company metrics. The Spring 2025 batch's performance suggests that their approach is creating real value, even if it's not generating the headline-grabbing valuations of foundation model companies. The ultimate test will be whether YC's focus on practical AI applications and sustainable business models generates better risk-adjusted returns than the massive infrastructure bets being made elsewhere in the market. Only time will tell if Silicon Valley's kingmaker is missing the AI revolution or positioning for its next phase. As the AI landscape continues to evolve, YC's strategy might prove to be exactly what the market needs: a focus on building real businesses that solve actual problems, rather than chasing technological breakthroughs with uncertain commercial applications. The proof, as they say, will be in the pudding.
Yahoo
11-06-2025
- Health
- Yahoo
Are States Gearing Up to Ban Nonstick Cookware?
Photo: Smith Collection/Gado/Getty Images If frying eggs or bacon is a regular part of your morning ritual, take note. Soon, your ability to use nonstick cookware may come down to where you live. New York state lawmakers recently introduced a bill that would prohibit 'the manufacture, sale, and use' of cookware containing polytetrafluoroethylene (PTFE), the primary substance used to create a nonstick surface. Though the chemical compound, commonly known by the brand name Teflon, is approved by the federal Food and Drug Administration, New York has now joined a growing list of states that are proposing to ban—or in some cases, have already banned—nonstick cookware in their territories. Find answers about nonstick pans Is New York banning nonstick cookware? Are nonstick pans safe? What happens when PFAS accumulate in the body? Should consumers throw out nonstick pans? What other states have banned nonstick pans? In January of this year, two New York State senators introduced Senate Bill S1767, which if passed, 'prohibits the manufacture, sale, and use of cookware containing polytetrafluoroethylene.' In the bill's justification, the sponsors write that the chemicals used in nonstick pans are 'within the family of polyfluoroalkyl substances (PFAS) which are known to have severe health effects such as harm to reproductive and bodily functions, developmental effects in youth, increased cancer risk and increased risk for high cholesterol and obesity.' It acknowledges that additional research is needed to determine the full scope of risk, but 'we should not leave people vulnerable to the potential negative health effects,' it concludes. The bill is currently in Senate committee, meaning it hasn't been brought to the floor for voting by the whole legislative body. Once on the floor, it needs to be approved by both the New York State Senate and Assembly, then signed into law by the governor. I Tried It I Tried It: Our Place's Cast Iron Always Pan Is The Real Deal Your favorite pan now comes in a sturdier version There is little debate about the safety risk of nonstick pans that do not use Teflon coating, for example ceramic or cast-iron pans. However, those that do use PTFE have raised concerns in recent years. 'PTFE belongs to a subgroup of what is known as PFAS,' explains Bruce Jarnot, PhD, global materials compliance expert, toxicologist, and product compliance advisor at Assent. PFAS are often colloquially called 'forever chemicals,' because they don't degrade over time, and the human body cannot metabolize them. In some instances, this can come in handy. PFAS are used to insulate leads in a pacemaker or used in hip joint replacements since they are inert. 'In these instances, it's fine, it's inert,' Jarnot says. 'But there are other considerations to take into account when considering potential laws like New York State Senate Bill 1767.' The first, he says, is the environmental waste and pollution that manufacturers of products containing PFAS make. 'We all have the monomers—the building blocks of polymers like Teflon—inside us from the manufacturing phase,' Jarnot says, adding that the waste ends up in water and soil, which eventually makes its way to the humans. 'So there's a strong argument against PFAS in general. Because they stay put in the body, and they can accumulate over time when they're in our environment.' In cookware specifically, that potential risk increases because the products are used with high heats. 'That's probably the highest heat environment that a material like Teflon is exposed to. So when you have a pacemaker implanted, it's at body temperature. If you're searing fish or steak in a fry pan, it's being exposed to much higher heat,' he says. Chemical reactions occur faster in hot environments, and, 'You could have decomposition of the polymer giving rise to some really nasty airborne PFAS. And there is probably some internalization of these decomposing products at high temperature.' According to the the Environmental Protection Agency (EPA), exposure to PFAS could be harmful to human health. 'Scientists at EPA, in other federal agencies, and in academia and industry are continuing to conduct and review the growing body of research about PFAS. However, health effects associated with exposure to PFAS are difficult to specify for many reasons,' the agency says. For that reason, more research is required to determine the exact risks. As Jarnot explains, toxicologists often say that it's the dose that makes the poison. 'So here you have something that's not metabolizing and that is accumulating in your body, creating aggregate exposure. In that case, every bit you add to your exposure cup counts.' Even in states where nonstick pans are legal, some consumers may consider discarding theirs because of potential risk. 'As a toxicologist, I still use Teflon pans,' Jarnot admits. 'But you should never heat them without something in it, and should avoid very high heat.' That said, eliminating nonstick pans could be an easy way to minimize exposure to PFAS. 'You're getting exposure in almost all drinks—water, wine, beer, soda—because it's in the water these drinks are made from. But you need water, you need food. So one of the places you could easily omit exposure is in cookware,' Jarnot adds. Multiple states have passed or are considering legislation about polytetrafluoroethylene in their territories. California, for example, passed a law that states cookware with intentionally added PFAS must be disclosed on product labels; however, it hasn't passed a full ban. Others, like Connecticut, Maine, Vermont, and Rhode Island have passed laws that go into effect over the next few years and ban products with intentionally added PFAS. Minnesota passed a law banning PFAS in a number of consumer goods, including cookware, which went into effect in January of this year. Originally Appeared on Architectural Digest More Great Stories From AD Not a subscriber? Join AD for print and digital access now. This Lower East Side Loft Is a Sexy Riff on '90s Basements How a Financial Influencer Upgraded Her Brooklyn Apartment on a Budget 13 Best Platform Beds of 2025 We Use In Our Own Bedrooms
Forbes
11-06-2025
- Business
- Forbes
How AI Is Exposing The Great SaaS Mediocrity Machine
Close-up of a person's hand holding an iPhone and using Google AI Mode, an experimental mode ... More utilizing artificial intelligence and large language models to process Google search queries, Lafayette, California, March 24, 2025. (Photo by Smith Collection/Gado/Getty Images) The software-as-a-service industry has grown into a three hundred billion dollar colossus, powering everything from Fortune 500 customer relationships to your neighborhood coffee shop's inventory system. Yet beneath this impressive facade, a growing chorus of industry insiders suggests something troubling: much of this growth may have been built on a foundation of what the late anthropologist David Graeber termed "bullshit jobs" – roles that add little genuine value but consume enormous resources. Now, as artificial intelligence begins automating many of the tasks that filled these positions, the emperor's new clothes are becoming visible to all. David Graeber's 2018 book "Bullshit Jobs: A Theory" argued that modern capitalism had spawned entire categories of meaningless work – jobs that even their holders secretly believed were pointless. His taxonomy included "flunkies" (who exist mainly to make superiors feel important), "duct tapers" (who solve problems that shouldn't exist), and "box tickers" (who create the appearance of meaningful activity). Sound familiar to anyone who's worked in SaaS lately? Consider the typical Series B software company today: layers of growth marketers optimizing conversion funnels that users abandon, customer success managers managing relationships with customers who don't renew, and product managers shipping features that solve no real problems. Industry veteran Charles Grant Powell-Thompson recently wrote that the sector has become "a bloated ecosystem of recycled playbooks, unoriginal hires, and shallow growth hacks." At the heart of what Powell-Thompson identifies as SaaS mediocrity lies an over-reliance on playbooks. Visit any early-stage startup or public SaaS company, and you'll encounter identical practices: OKRs, product-led growth strategies, "land and expand" sales models, and user journey funnels copied wholesale from previous companies. "Product teams build features to meet roadmap commitments, not user needs," Powell-Thompson observes. "Sales teams push demos and discount paths based on generic conversion data. Marketing teams copy HubSpot's inbound strategy from 2014 and declare victory after publishing fifteen listicles." The 2021 wave of startups flooding the "Notion for X" and "Figma for Y" space exemplifies this template thinking. Nearly all adopted identical growth strategies: bottom-up freemium entry with vague "community" layers. Most failed because they misunderstood what made the originals successful – deep product design and obsessive iteration, not surface-level copying. Perhaps nowhere is the bullshit jobs phenomenon more visible than in SaaS hiring patterns. The industry has developed what Powell-Thompson calls "the SaaS hiring loop" – continuously recycling talent from the same pool of failed or plateaued startups. Competence gets assumed based on LinkedIn logos rather than demonstrated outcomes. "A growth marketer who scaled vanity metrics at one mediocre tool is hired to repeat the cycle elsewhere," Powell-Thompson notes, "without ever proving they can build sustainable customer retention or profit." This creates a carousel of recycled talent carrying identical playbooks and assumptions but rarely delivering results that justify their roles. The industry favors "SaaS-native" professionals who speak fluent ARR and OKR but don't question fundamentals or challenge assumptions. The venture capital boom masked much of this inefficiency. When Zendesk launched Zendesk Sell in 2018 – an acquisition of Base CRM – the company spent years trying to wedge it into a Salesforce competitor before sunsetting it in 2023. Evernote, once beloved, spent a decade chasing premium users with poorly built features while ignoring performance and user experience. These weren't scams – they were built by intelligent people. But as Powell-Thompson points out, they 'hired too fast, grew too shallow, and learned too late that real markets don't behave like pitch decks. When capital dried up in 2022-2023, widespread layoffs revealed how many SaaS positions had been consuming resources without contributing meaningful value'. Artificial intelligence isn't just changing how software works; it's revealing which human roles actually mattered in the first place. When AI can generate marketing copy instantly, what value does the growth hacker who spent weeks A/B testing subject lines provide? When algorithms can analyze user behavior patterns in real-time, what's the point of analysts who took days to produce similar insights? The numbers are telling the story. SaaS companies have eliminated hundreds of thousands of positions since 2022, yet many report improved productivity metrics. This suggests that much of what looked like essential work may have been what Graeber would recognize as elaborate theater. Graeber's categories map remarkably well onto modern SaaS organizational charts: The Flunkies: Business development representatives who exist primarily to make actual salespeople feel important, spending days sending LinkedIn messages nobody reads. The Duct Tapers: Customer success managers whose primary function involves fixing problems created by poorly designed products or misaligned sales promises. The Box Tickers: Growth marketers who obsess over vanity metrics like email open rates while customer churn rates remain stubbornly high. The Taskmasters: Middle managers who exist solely to manage other managers, creating elaborate OKR frameworks that nobody follows. Powell-Thompson identifies a particularly troubling aspect of SaaS culture: the near-complete lack of self-awareness. Workers confuse busywork with impact, treating twelve-slide strategy decks and Miro boards as substitutes for real execution. The industry has developed what he calls "a language of legitimacy that sounds impressive but says little." Phrases like "We're building an extensible platform for enterprise workflows" or "Our ICP is mid-market GTM teams in the post-series B range" mask fundamental confusion about customers and value propositions. LinkedIn amplifies this dynamic. The average SaaS employee presents themselves as management guru, life coach, and visionary simultaneously, while often unable to ship a bug fix, close a sale, or explain their product's API in plain English. Ironically, as AI eliminates some forms of meaningless work, it may be creating others. A new class of "AI prompt engineers" has emerged, with some commanding six-figure salaries for sophisticated search operations. Companies are hiring "AI ethics officers" and "automation specialists" who spend more time in meetings about AI than implementing it. This suggests we may be witnessing the birth of what could be called "AI bureaucracy" – jobs that exist primarily to manage, oversee, or optimize interactions with AI systems, potentially as divorced from real value creation as the roles they're replacing. The bullshit jobs critique isn't without its limitations. What appears inefficient may serve important functions that aren't immediately obvious. Redundancy in complex systems often provides resilience. The customer success manager scheduling seemingly pointless check-in calls might prevent million-dollar churn through relationship management that AI cannot replicate. Some of the most successful SaaS companies – Slack, Notion, Figma – emerged from overcrowded markets. The process of hiring diverse perspectives, even if some prove redundant, may be necessary for breakthrough innovation. And behind every critique of meaningless work stands a real person with real financial obligations. The growth marketer whose role seems pointless represents someone's mortgage payment, someone's child's college fund. The solution isn't eliminating all potentially redundant roles – that would be both cruel and counterproductive. Instead, the industry needs conscious evolution guided by several principles: Honest Performance Metrics: Moving beyond vanity metrics to measure actual business impact. Roles that can't demonstrate clear value creation over reasonable time periods should be restructured or eliminated. Skill Depth Over Buzzword Fluency: As Powell-Thompson argues, the industry needs "fewer growth hackers and more grown-ups. Fewer decks, more decisions. Fewer generalists, more expertise." Human-AI Collaboration: Rather than viewing AI as human replacement, smart companies are determining how to combine human judgment with AI capability for genuinely valuable outcomes. Cultural Honesty: Developing organizational cultures capable of honest productivity assessment without corporate speak or fear-based defensiveness. The SaaS industry's AI-driven reckoning previews what's coming for knowledge work broadly. As artificial intelligence becomes more capable, every industry will face similar questions about which roles create genuine value versus which exist primarily to create the appearance of activity. Graeber's insight about bullshit jobs revealed a moral crisis – people trapped in roles they knew were meaningless, maintaining economic survival through elaborate performance. The AI revolution offers an opportunity to escape this trap, but only through honest assessment of what we're escaping from. The SaaS industry's three hundred billion dollar scale means getting this transition right matters far beyond Silicon Valley. The sector employs millions globally and underpins much of the modern economy's digital infrastructure. If Graeber was correct about bullshit jobs' prevalence, then AI's arrival represents more than technological disruption – it's an opportunity for work reform. A chance to align human effort with genuine value creation benefiting both workers and customers. But realizing this opportunity requires something both the SaaS industry and broader business world have struggled with: courage to be honest about what actually works, what doesn't, and why. As Powell-Thompson concludes: "The truth is simple, and brutal. SaaS didn't just scale software – it scaled mediocrity." The question now is whether the industry will use this moment of AI-driven disruption for genuine transformation or simply automate meaningful work while preserving meaningless jobs through increasingly elaborate justifications. The three hundred billion dollar question is which path the industry will choose.
Forbes
06-06-2025
- Business
- Forbes
Buy, Sell, Or Hold CAT Stock At $350?
Close-up of a Caterpillar construction vehicle with its brand logo visible, on a sunny day in Reliez ... More Valley, California, March 3, 2025. (Photo by Smith Collection/Gado/Getty Images) Caterpillar (NYSE:CAT) stock has lagged behind the S&P 500 index over the previous six months, falling by 12% in contrast to the S&P 500's 2% drop. This underachievement corresponds with low dealer inventory levels, which signal weak overall demand for Caterpillar's offerings. This subdued demand is likely attributed to the present economic environment marked by high interest rates and elevated inflation, combined with reduced price realization for the company. In spite of these challenges, we believe it is advisable to buy Caterpillar stock. While there are risks involved, we find its current valuation to be reasonable when considering these factors. Our assessment is grounded in a thorough analysis of Caterpillar's existing valuation relative to its recent operational performance and historical financial state. Our evaluation, which looks into Growth, Profitability, Financial Stability, and Downturn Resilience, suggests that the company currently displays poor operational performance and financial well-being. However, for investors seeking lower volatility than individual stocks, the Trefis High Quality portfolio offers an alternative — having outperformed the S&P 500 and yielded returns exceeding 91% since its initiation. Additionally, refer to – RGTI Stock: What's Next After An 1,100% Rally? When evaluating what you pay per dollar of sales or profit, CAT stock appears slightly undervalued in relation to the broader market. Caterpillar's Revenues have seen a slight decrease over recent years. Caterpillar's profit margins are approximately at the median level for firms in the Trefis coverage universe. Caterpillar's balance sheet appears weak. CAT stock has experienced an impact that was somewhat worse than the benchmark S&P 500 index during certain recent downturns. Concerned about the effects of a market crash on CAT stock? Our dashboard – How Low Can Caterpillar Stock Go In A Market Crash? – provides an in-depth analysis of how the stock performed during and after previous market crashes. In conclusion, Caterpillar's performance across the outlined parameters is summarized as follows: In general, Caterpillar has performed moderately across the assessed metrics, which is evident in its present valuation. Even when we consider valuation from an adjusted earnings perspective, the stock seems to be reasonably priced. Currently, CAT stock trades at 17x trailing earnings, which is below its five-year average price-to-earnings (P/E) ratio of 19x. We anticipate that the current dip in demand will be temporary for Caterpillar. We predict revenues will shrink in the low single digits in 2025 but expect a return to mid-single-digit growth starting in the following year. Nevertheless, investors should remain cognizant of potential risks. In the face of unfavorable macroeconomic conditions, CAT stock could underperform the overall market, as it has in previous downturns. Furthermore, the existing weakness in demand may continue, particularly if interest rates stay elevated. Although CAT stock appears attractive, investing in a single stock can be perilous. Conversely, the Trefis High Quality (HQ) Portfolio, comprising 30 stocks, has a proven record of comfortably surpassing the S&P 500 over the past 4-year period. What accounts for that? As a group, HQ Portfolio stocks have generated superior returns with lower risk compared to the benchmark index; a smoother investment journey, as reflected in HQ Portfolio performance metrics.
Yahoo
04-06-2025
- Business
- Yahoo
Citigroup Reverses Firearms Policy After Trump Criticism
A street view of a Citibank branch in San Francisco, Calif., on May 13, 2025. Credit - Smith Collection—Getty Images Citigroup has reversed its policy restricting banking services to retail clients selling firearms, ending the practice that was put into place in 2018. In a statement shared on June 3, the bank said that the decision had been made in response to concerns raised over 'fair access' to banking services. As a result, Citigroup said it would 'no longer have a specific policy as it relates to firearms.' The reversal comes after criticism from President Donald Trump and other conservatives regarding 'de-banking,' citing what they believe to be unfair practices from U.S. banks preventing conservatives from using their services. Addressing the World Economic Forum in Davos virtually in January, Trump said: 'Many conservatives complain that the banks are not allowing them to do business,' taking aim at U.S. bank CEOs. Here's what to know about Citigroup's reversal and how it fits into wider discussions about banks and politics in America. Citigroup outlined the specifics of its previous restrictions, saying: 'Our U.S. Commercial Firearms Policy was implemented in 2018 and pertained to sale of firearms by our retail clients and partners. The policy was intended to promote the adoption of best sales practices as prudent risk management and didn't address the manufacturing of firearms.' Since 2018, Citigroup had restricted its services to retail clients selling firearms, requiring them to adhere to three practices. Under the policy, 'new retail sector clients or partners,' clients could not sell firearms to those who hadn't passed a background check, had to restrict the sale of firearms for individuals under 21, and could not sell bump stocks or high-capacity magazines. In its June 3 update, the bank said that after reviewing its policies, it will be updating its "Employee Code of Conduct" and its "customer-facing Global Financial Access Policy," to clearly state that the Citigroup does "not discriminate on the basis of political affiliation." 'These changes reinforce our commitment to serve all clients fairly, and we will continue to work with regulators and elected officials on ways to improve transparency and trust in the banking sector,' the statement continued. The banking service introduced new restrictions in March 2018 following a shooting at Marjory Stoneman Douglas High School in Florida on Feb. 14 of that year, which left 17 people dead. The shooter, Nikolas Cruz, aged 19 at the time, was able to obtain firearms after a background check, despite previous warning signs. Both Cruz's age and circumstances were addressed in Citigroup's firearm policy. Not allowing retailers to sell bump stocks was also included in the bank's 2018 policy, after the device was used during a mass shooting in Las Vegas in 2017. A bump stock allows semi-automatic rifles to fire at a higher rate, and were banned by the Trump Administration in December 2018. However, the U.S. Supreme Court struck down this ban in 2024. After the shooting in Parkland, Florida, investment management firm BlackRock also announced that it would be asking for further details and information on business practices from firearms manufacturers and retailers. In April 2018, Bank of America said that it would be restricting firearms-related business and would stop lending money to manufacturers that make military-inspired weapons to be used by civilians. In particular, Bank of America started to wind down relationships with manufacturers that produced AR-15 style rifles that have been used in mass shootings. In 2024, Bank of America loosened some of its restrictions surrounding lending to the firearms and energy industries, amid pressure from politicians in Texas and Florida. Criticism amongst conservatives and Republicans have long been aimed at banking institutions for imposing restrictions on firearms and other issues. In 2022, a number of conservative-led states considered a number of new bills, with some passing, penalizing banks for such policies. According to Reuters, JPMorgan Chase, Bank of America, and Goldman Sachs were all sidelined by state law that barred firms from the municipal bond market if they were found to 'discriminate' against the firearms industry in the state. In April 2024, over a dozen Republican state attorneys general addressed a letter to The Bank of America, raising their concerns with the bank's 'de-banking policies and practices threaten the company's financial health, its reputation with customers, our nation's economy, and the civil liberties of everyday Americans.' Within the letter, Bank of America was criticized for 'systemic biases' against political views. The letter cited a report in which the bank is said to have shared a list with the FBI of anyone who had bought a firearm with a credit or debit card from the bank in Washington, D.C., in the days surrounding the Capitol Riots on Jan. 6, 2021. 'We are shocked that Bank of America would so cavalierly disregard its customers' privacy and their First, Second, and Fourth Amendment rights at the behest of the federal government,' the letter continued. Shortly after his inauguration in January, Trump launched criticism at banks, in particular at the Bank of America and JPMorgan Chase, during a virtual appearance at the World Economic Forum in Davos. Speaking directly to Bank of America CEO Brian Moynihan, Trump said: 'The Bank of America, they don't take conservative business… you, Jamie (Dimon, CEO of JPMorgan Chase) and everybody, I hope you're going to open your banks to conservatives because what you're doing is wrong.' In response, Bank of America said that it 'welcomes conservatives' as part of the 70 million customers that it serves. 'We would never close accounts for political reasons and don't have a political litmus test,' the bank said in a statement after Trump's remarks. Elsewhere, the Trump Organization sued Capitol One in March, accusing the bank of closing hundreds of accounts belonging to the company. In its complaint, the Trump Organization said it believes 'that Capital One's unilateral decision came about as a result of political and social motivations and Capital One's unsubstantiated, 'woke' beliefs that it needed to distance itself from President Trump and his conservative political views.' The complaint argued that Capitol One's decision was 'part of a growing trend by financial institutions in the United States of America to cut off a consumer's access to banking services if their political views contradict with those of the financial institution.' Capitol One responded, requesting that the lawsuit be thrown out, and in turn arguing that the Trump Organization's complaint 'fails to provide any factual or legal support for the claims asserted, requiring dismissal on several grounds.' Contact us at letters@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
