Tobias

Nvidia CEO Jensen Huang defends selling advanced semiconductors to China, citing mutual benefits despite national security concerns and U.S. export controls. He acknowledges China’s AI leadership and significant market potential, estimating it at $50 billion this year. Huang also highlights Huawei’s technological prowess, emphasizing that underestimating China’s capabilities would be “foolish”. He believes collaboration serves both countries’ interests amid rising tensions.

Tech giants like Alphabet, Meta, Microsoft, and Amazon are significantly increasing AI investments, projecting over $380 billion in combined capital expenditures. This shift aims to meet surging demand for AI services, driven by advancements in generative AI and machine learning. While Amazon and Alphabet saw positive investor response, Microsoft’s shares dipped slightly, and Meta’s plummeted due to unease regarding its AI strategy and revenue prospects. Concerns remain about a potential AI bubble and the long-term sustainability of these massive investments.

Amazon’s Q3 earnings exceeded expectations, driving shares up nearly 11%. Cloud sales (AWS) surged 20% to $33 billion, contributing significantly to operating profit. Digital advertising revenue jumped 24% to $17.7 billion. Total sales increased 13% to $180.17 billion, with EPS at $1.95. Amazon raised its spending forecast to $125 billion for AI, demonstrating its commitment to the sector. Despite strong performance, 14,000 corporate employees will be laid off as part of a restructuring effort focused on efficiency. Q4 sales are projected between $206 billion and $213 billion.

Getty Images (GETY) shares fell over 6% after announcing a multi-year licensing agreement with AI search engine Perplexity AI. Perplexity will integrate Getty’s images into search results with attribution, enhancing result quality and user trust. Getty’s VP Nick Unsworth touted the partnership’s benefits for AI platforms. While the deal monetizes Getty’s content and gives Perplexity a vast image library, the market reacted negatively, possibly due to a lack of disclosed financial details, demonstrating investor uncertainty about the agreement’s long-term financial impact.

Reddit (RDDT) shares jumped 7% following strong Q3 earnings, beating revenue and EPS estimates with a 68% revenue increase to $585 million. Daily active users grew 19% to 116 million. The company anticipates Q4 revenue of $655-$665 million. Reddit credits strategic automation investments for boosting advertising return, seeing growth across verticals. Active advertiser growth surged 75%. While AI poses potential challenges, data licensing partnerships are expanding revenue streams.

The AI arms race is evolving into a billing battle, with tech giants bundling AI tools into subscription tiers, potentially forcing users to pay for unwanted or underutilized features. Companies like Microsoft, Meta, Google, and Adobe are integrating AI across their suites, often increasing prices without clear justification. Experts highlight concerns about “perceived value bias” and the lack of consumer control, suggesting usage-based pricing as a potential solution amid growing consumer awareness of accumulating costs. The shift to subscription models and the underlying infrastructure costs of AI are also key factors.

The S&P 500 and Nasdaq rose on Friday, boosted by strong Big Tech earnings, notably Amazon’s AWS growth. Apple’s service revenue also propelled optimism, though caution remains. Nike and Boeing are viewed as potential turnaround stories, overcoming supply chain issues/737 MAX crisis respectively. Investors are also tracking Chevron (energy sector), Reddit (social media growth), and Netflix (streaming competition). Next week’s focus shifts to earnings from companies like Eaton.

Amazon shares soared after a strong Q3 earnings report, driven by a resurgent Amazon Web Services (AWS). AWS revenue grew 20% year-over-year, exceeding expectations and signaling successful capitalization on AI demand. CEO Jassy’s confident outlook alleviated investor concerns about competition from Azure and Google Cloud. AWS’s robust $200 billion backlog and increased capital expenditure, particularly in AI infrastructure, position it for sustained market leadership as AI workloads drive future cloud spending.

Elon Musk addressed the long-delayed Tesla Roadster, aiming for an unveiling “hopefully before the end of the year,” after OpenAI CEO Sam Altman publicly expressed frustration with his long-standing reservation. Altman’s experience highlights growing impatience surrounding the car. Observers suggest Altman’s complaint prompted Musk’s comments. The Roadster, planned as a high-performance EV, aims to reclaim performance benchmarks amid competition. This news coincides with a crucial shareholder vote on Musk’s substantial pay package, marking a pivotal moment for Tesla.

Razer CEO Min-Liang Tan believes AI will revolutionize gaming, impacting players, developers, and the industry’s economic landscape. Razer is developing AI tools like Game Co-AI for personalized player guidance and an AI QA Companion for automated bug detection, potentially saving time and resources in development. While some are skeptical about AI’s creative capabilities in game development, Tan envisions AI empowering smaller teams to create compelling games by automating tedious tasks and even spawning new industries. He emphasizes AI’s role in training esports professionals and foresees major hit games built with AI.