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Maybe, just maybe, big tech firms need to do a better job of explaining their AI investment strategies. Shares of Google parent Alphabet fell 7% on Thursday after the company disclosed a further increase in capital expenditures this year—money it will spend on new AI chips, servers and data centers. The drop all but wiped out the gains the stock had enjoyed so far this year. Sure, the entire stock market sold off, presumably as a result of rising oil prices and the intensification of the Iran war. But Alphabet was among the worst hit, along with Tesla, which also reported sharply higher capex on Wednesday and whose shares fell 15% on Thursday. It’s tough to consider Tesla’s stock valuation on any kind of rational basis, given that it trades based more on its connection to Elon Musk than reality. But Alphabet is a different animal. There’s little doubt Google is among the best positioned of big tech companies in terms of its ability to take advantage of AI advances, given its strength in chips, AI models and consumer apps that should benefit from AI. But even for Alphabet, you have to wonder how much more money the company will have to spend to reach the promised land. Alphabet’s projected capex for this year—now as much as $205 billion—is more than double what it spent in 2025, which in turn was nearly three times what it was spending two years before that. Next year, Chief Financial Officer Anat Ashkenazi said on Wednesday, capex will “increase significantly” again! Dan Flax, an analyst at Neuberger Berman, said today that Alphabet’s capex “will likely be well over $300 billion.” For context, analysts expect the company to generate $259 billion in cash from operations next year, according to S&P Global Market Intelligence. That suggests Alphabet could burn $40 billion in cash next year, which is quite a turnabout for a company that before this spending surge routinely generated $60 billion to $70 billion in free cash flow. And when will this end? Alphabet executives are vague about it. CEO Sundar Pichai keeps talking about the industry being in the “early innings” of the AI transition, which implies the heavy spending could go on for a while. Ashkenazi said on Wednesday that “our goal is to invest as long as we see an attractive return on that investment.” In other words, trust us. That may not be enough anymore.

Talk about a nervous market! Shares of Nvidia fell 5% on Monday on news of a $500 billion partnership the AI chip giant struck with South Korean conglomerate SK Group, along with a Wall Street Journal report that Nvidia was separately in talks to help OpenAI finance a $500 billion data center campus in Ohio. Investors should take a chill pill: Neither of these deals was actually news. Nor were they fully fleshed out. For instance, Nvidia and SK have only signed letters of intent to formalize a partnership, they said on Friday. Letters of intent are not worth the paper they’re written on. Remember, Nvidia and OpenAI signed a letter of intent last September for what they called a “landmark strategic partnership,” only to abandon the idea a few months later. Moreover, the SK Group–Nvidia announcement from Friday was mostly a reprise of two other announcements from early June. In one, Nvidia and SK Telecom (a part of SK Group) had announced plans to build a “gigawatt-scale AI Cloud in Korea” using Nvidia’s DSX technology. (Funnily enough, while Friday’s press release linked to that announcement, the latest update doubled the scale of the AI cloud in Korea to 2 gigawatts.) In the other, Nvidia and SK Hynix (another part of SK Group) announced a memory chip partnership. As to details of the $500 billion, such as which company is putting up how much, Nvidia isn’t saying. My colleague Phoebe Liu reported on Friday that executives at a press briefing wouldn’t talk about those details. Then there’s the OpenAI-Nvidia Wall Street Journal report that drew attention on Monday, which wasn’t news: It was outlined in a report in The Information in early June! As was the case back then, the details aren’t clear. It does imply Nvidia would take on a lot of risk to back OpenAI. But given the history of OpenAI and Nvidia, there’s no guarantee this deal will get done. Nvidia likes to make announcements. We got two more today, with news that it is investing in Ilya Sutskever’s AI startup, Safe Superintelligence, and helping launch an open-source software cybersecurity alliance. Keeping track of what’s new and meaningful about AI isn’t easy, and the media’s reporting often makes things more confusing by recycling different versions of the same news. But before investors panic about Nvidia’s financial commitments, they need more details about what’s real and new and what’s not. https://www.wsj.com/tech/ai/nvidia-in-talks-with-openai-to-guarantee-250-billion-financing-for-data-center-3dd6eae3?mod=tech_feat1_ai_pos4&utm_campaign=article_email&utm_content=article-17527&utm_medium=email&utm_source=sg

Question: How is the 24-year-old #SpaceX 🚀 like a young startup? It’s burning twice as much cash as it brings in as revenue! That’s one takeaway from SpaceX’s first earnings report as a public company, in which the company revealed it burned $16 billion in the second quarter, on $7.8 billion in revenue. That’s thanks to a whopping $18.4 billion in capital expenditures, mostly due to SpaceX’s AI data center expansion. And like a young startup, SpaceX has big ambitions. On the company’s earnings call with analysts, CEO Elon Musk claimed it was now expecting to hit $1 trillion in revenue by 2030, a year earlier than it had projected before its IPO, and there was a chance it could hit that threshold by 2029. That’s a big claim, considering that first-half revenue was only $12.5 billion. True, finance chief Bret Johnsen said SpaceX’s annualized revenue rate would hit $100 billion by the end of this year. But ARR is one month’s revenue multiplied by 12. It’s not a real metric (and Musk emphasized that the $1 trillion projection was revenue, not ARR). Musk also claimed that SpaceX’s Starlink could deliver most of the internet connectivity in the world in “less than 10 years,” while his No. 2, Gwynne Shotwell, claimed that SpaceX’s Starlink mobile service—to launch at the end of 2027—would “acquire quite a few” of the customers of the major cellphone providers in the U.S. Whoa! So not only does SpaceX have enormous ambitions to dominate broadband internet, it aims to compete directly with major cellular providers. And that’s all in addition to its huge AI ambitions and its desire to launch data centers in space and travel to far-off planets. Investors seem underwhelmed (or perhaps overwhelmed?) by all these big claims: SpaceX stock fell 6.5% in after-hours trading. The investor reaction makes sense. Investors have come to hate big tech companies’ massive outlays on capex for AI, even though those companies are funding that capex from massive profits on other businesses. And SpaceX is spending more on capex, relative to what its businesses generate in cash, than any big tech firm. SpaceX’s only real profit center is its Starlink internet business, but that makes nowhere near enough to fund all the company’s ambitions (Starlink made just $1.65 billion in second-quarter operating income, for instance). SpaceX will undoubtedly get a lift from the various deals it has done to rent out its computing capacity and from its pending acquisition of AI firm Cursor. But becoming a major competitor in mobile and building more AI capacity won’t come cheap. The returns are questionable, both in AI and telecom. Remember that the big telecom providers have to spend a fortune on spectrum and equipment, and they’re all fighting over a market with little growth. Musk has sky-high ambitions. Watching him try to fulfill them promises to be a lot of fun. https://www.nbcnews.com/business/business-news/spacex-earnings-surging-ai-costs-rcna590682

TSMC is developing an advanced chip-packaging technology similar to what Intel offers, a sign that the Taiwanese giant is worried about Intel. https://www.theinformation.com/articles/tsmc-develops-ai-chip-packaging-tech-counter-intel?offer=rtsu-engagement-25%2Crtsu-featured-articles-pro&utm_campaign=RTSU%3A+TSMC+Develops&utm_content=14355&utm_medium=email&utm_source=cio&utm_term=9983

Intel secures the Apple bag? POTUS announced  that Apple will use Intel fabs in the United States to make its chips in the future. Recall that Apple has become a quiet silicon giant, designing its own processors for its computers (both handheld and desktop-oriented). If Cupertino shifted its chip manufacturing from TSMC to Intel, it would be a coup for the American, and partially state-owned, company. Thus far, the companies aren’t commenting. Let’s see if Trump jumped the gun, or is wrong altogether. https://truthsocial.com/@realDonaldTrump/posts/116769225357410422?_bhlid=3b17e04a85a591c0ccfff52f006af80510260980

PayPal has a message for Wall Street and would-be buyers: “We got this.” That’s the upshot of CEO Enrique Lores’ response to what he called “recent M&A speculation”—also known as Stripe’s reported $53 billion takeover bid for the struggling payments firm. Lores wouldn’t comment about anything specific, but his comments implied Stripe’s offer didn’t meet PayPal’s bar, and the board was sticking with its existing plan for managing the business. Lores said the right things, to be sure. The board is “open” to offers and would compare any with its own plan and choose “the option that creates more value.” His plan, which he said “will create significant value for our shareholders,” involves things like speeding up Venmo’s growth and expanding its payment services business (which includes Braintree) and getting affluent consumers to use PayPal more. When Lores was asked why these efforts would succeed where PayPal’s previous turnaround measures hadn’t, he repeated what he’d said a few moments before and added that he was “improving execution, improving accountability.” In other words, he would run the company better than in the past. It’s not exactly a persuasive answer. The Stripe offer, reportedly made with private equity firm Advent, was too low—there’s no doubt about that. It’s possible it has elements that made it unappealing, such as a lack of secured financing. Perhaps the board is negotiating with Stripe and Advent behind the scenes to lift the offer. The board might be quietly exploring other options. But it’s common in these situations for a board to publicly open an auction up to all comers as a way of seeing what someone might pay. PayPal hasn’t done that. It’s leaving shareholders to trust that the board knows what it’s doing. That’s asking a lot. After all, PayPal has been a dumpster fire in recent years, with its stock falling roughly 80% since 2021 as growth has slowed to a crawl and rivals like Apple Pay have dug in. Lores, a former CEO of HP, has only been in the job since March. He has no prior experience running a payments firm. It may be relevant that no one on the board has a significant stake in the company. As of earlier this year, the entire board’s combined stake was 5.66 million shares, or 0.6% of the shares outstanding. Would PayPal’s board take a different stance if directors had a bit more skin in the game? Just asking. https://www.theinformation.com/newsletters/the-briefing/stripes-paypal-bid-puts-payments-firm-play-musk-jump?utm_campaign=article_email&utm_content=article-17536&utm_medium=email&utm_source=sg&rc=gzsl71

A Chinese company has begun manufacturing one of the key pieces of equipment used in chip manufacturing (https://www.theinformation.com/articles/china-starts-mass-producing-homegrown-duv-chipmaking-tools-advance-local-chip-industry?offer=rtsu-engagement-25%2Crtsu-featured-articles-pro&cio_link_id=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__8f2b3d61f0380cd8920b03394d74226b6f59db594e301dda6ed60c27592ff1e2&utm_campaign=RTSU%3A+China+Starts+M&utm_content=14318&utm_medium=email&utm_source=cio&utm_term=9951), a key step towards self reliance in chips.

Online fashion retailer Shein received Chinese regulatory approval to list in Hong Kong, capping off the e-commerce platform’s tumultuous two-year quest to float its shares. The China Securities Regulatory Commission said in a statement on Friday that it had approved Shein’s application to sell not more than 341.6 million shares on the Hong Kong stock exchange. The approval is valid for 12 months. If Shein doesn’t list in 12 months, it must submit an updated application. Before the bid to list in Hong Kong, China-founded Shein first sought to go public in New York in 2024,  then London. Both attempts failed amid mounting controversies over the company’s labor practices, allegations of copyright infringement and other thorny issues. https://www.reuters.com/world/shein-wins-china-approval-ipo-hong-kong-2026-07-10/

Apple expects choppy waters ahead for the quarter that ends in September, the company said on its June quarter earnings call. Apple’s Chief Financial Officer Kevan Parekh warned that supply constraints for advanced chip manufacturing will “increase significantly.” #Gadgets The company experienced such constraints during the June quarter for Macs, and to a lesser extent iPhones and iPads, due largely to a limited supply of its processing chips. Nvidia chips for artificial intelligence have been soaking up more and more of the chip making capacity of Taiwan Semiconductor Manufacturing Company, Apple’s primary chip manufacturing partner. For the June quarter, Apple reported sales of $109.4 billion, up 16.4% from the prior year, and a net income of $29.8 billion, advancing 27% annually. The iPhone grew nearly 22% to $54.3 billion in sales. The company said it expects revenue to increase between 9% and 11% in the September quarter from the year earlier period, while it expects iPhone growth to slow to the mid-teens as supply constraints grow. Apple fell more than 7% in after-hours trading following the guidance announcement. While many stocks are getting hit hard this week over concerns with heavy AI spending, Apple has stood apart from the pack by limiting its capital expenditures on AI. The company’s stock was up 23% so far this year prior to its earnings announcement, outperforming most of its tech peers. On the call, CEO Tim Cook noted that he will soon hand off the top job at the company to John Ternus, its current hardware leader, who will replace Cook in September. “This will be my final earnings call, and John will lead these calls going forward,” Cook said. “The transition is going seamlessly, and I am beyond excited for John to step into his new role and lead Apple into its next era.” https://www.apple.com/newsroom/2026/07/apple-reports-third-quarter-results/?utm_campaign=%5BREBRAND%5D+%5BTI-AM%5D+Th&utm_content=1095&utm_medium=email&utm_source=cio&utm_term=124

The recent memory chip selloff offers investors a new opportunity to jump into the sector. Samsung is the best bet (https://www.theinformation.com/articles/samsung-new-memory-chip-underdog-now?offer=rtsu-engagement-25%2Crtsu-featured-articles-pro&cio_link_id=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__78ca81c10356e79c74244627892e95b58455d370dcff128d8b5b345ed5d6e7a7&utm_campaign=RTSU%3A+Samsung+Is+the&utm_content=14230&utm_medium=email&utm_source=cio&utm_term=9879).

a judge blocked the Ellisons’ Paramount Skydance from completing its $110 billion purchase of Warner Bros. Discovery for 14 days. Closing of the deal had appeared imminent: Paramount had received a spate of regulatory approvals from countries around the world. The U.S. government had already signed off on the deal, but a bunch of states went to court to block it. And Monday’s ruling, by the judge hearing the case, suggests the states have a decent chance of winning. That would be disastrous for Paramount. It’s already paying a high price for WBD—Netflix abandoned a previously arranged purchase of half of WBD rather than try to match Paramount’s offer. If the court case delays Paramount’s completion of the purchase after Sept. 30, Paramount has to pay a fee of $650 million for every quarter the closing is delayed. And if regulators kill the deal, Paramount will have to pay a $7 billion termination fee to WBD. That’s on top of the $2.8 billion it paid earlier this year to break up the WBD-Netflix deal. So you can imagine a scenario where the current deal falls apart and Paramount is out roughly $10 billion. Paramount shares fell 2% to $8.57 today. That’s well below the $12 to $16.02 price at which a group of investors is putting in new equity to help fund the WBD purchase. The Ellisons’ investment in Paramount is suddenly looking a lot less promising. https://www.wsj.com/business/media/judge-temporarily-blocks-paramount-warner-deal-a9c6af43?mod=hp_lead_pos3&utm_campaign=article_email&utm_content=article-17490&utm_medium=email&utm_source=sg

This marks the first-ever custom AI chip developed by the ChatGPT maker, which worked in collaboration with Broadcom on the design. For now, Jalapeño remains in the testing phase, but Broadcom reports that the chip provides equivalent inference performance while draining about 50% less energy, compared to a standard #Artificial Intelligence GPU. It’s expected to head from the lab into data centers, including some operated by OpenAI partner Microsoft, by the end of this year. In all, OpenAI plans to spend “tens of billions of dollars” on Broadcom chips in the coming years, possibly with additional financing provided by Apollo Global Management and Blackstone. One pressing question still remains: is there a tilde in the proper name Jalapeño? Many sources do include it… but not Bloomberg… https://www.bloomberg.com/news/articles/2026-06-24/openai-and-broadcom-unveil-ai-chip-to-run-models-faster-cheaper?_bhlid=e0d85d805a18ed53c0947fe167924d838dd56a16