Artificial Intelligence

Google and NextEra Energy are partnering to revitalize Iowa’s Duane Arnold nuclear power plant, aiming to provide 24/7 carbon-free energy for Google’s expanding AI infrastructure. The plant, closed in 2020, could restart in 2029 pending approvals. This reflects a growing trend of using nuclear energy to power data centers, driven by increasing electricity consumption due to AI. The partnership highlights the need for investments in reliable, clean power to support the AI-driven economy while addressing environmental concerns. The Iowa project could serve as a model for future collaborations.

Saudi Arabia is aggressively diversifying its economy away from oil under its Vision 2030 plan. Over 50% of the economy is now decoupled from oil, with non-oil sectors contributing 40% of government revenue. The Kingdom is investing heavily in AI, aiming to be a key player and establish large-scale data centers. The Public Investment Fund is instrumental in acquiring stakes in tech, gaming, and sports. Tourism is also a key growth area, with plans to increase its GDP contribution to 10% by 2030 and a long-term target of 20%.

Chegg (CHGG) is restructuring due to AI disruption and declining organic search traffic, laying off 45% of its workforce (388 employees). The company cites the rise of AI platforms like ChatGPT and Google’s AI-driven search summaries as drivers of revenue decline. CEO Dan Rosensweig returns as Chegg pivots toward AI integration in its offerings. Chegg, after a strategic review, will remain an independent public company, believing this maximizes long-term shareholder value. Previous layoffs occurred in May.

Groq CEO Jonathan Ross highlights Saudi Arabia’s potential to become a major AI infrastructure hub due to its abundant energy resources, aligning with Vision 2030. The Kingdom’s low energy costs, even compared to some Nordic countries, and strategic location make it ideal for data centers. Ross envisions Saudi Arabia as a net data exporter, emphasizing the cost-effectiveness of data transmission versus electricity. Localizing AI computation near energy sources minimizes costs and leverages underutilized energy capacity, attracting tech firms and fostering regional AI innovation.

Cameron Pappas, owner of Norton’s Florist in Birmingham, Alabama, experiences a disconnect between the AI-driven stock market boom and the struggles faced by small businesses in the broader economy. While tech giants thrive, Norton’s, like many in retail, construction, and hospitality, grapples with rising costs due to tariffs and decreased consumer spending. Pappas focuses on cost management to avoid price increases that could impact customers. Last year, Norton’s, specializing in flowers and gifts, generated $4 million in revenue.

“Supply constrained” is a dominant theme this earnings season, indicating profit opportunities for involved companies. High demand in sectors like tech (Intel, Micron, AMD, Nvidia) and energy (GE Vernova) empowers firms to raise prices. Factors like AI’s demand and semiconductor production complexities drive shortages. Even Boeing faces production constraints. With this imbalance likely persisting, companies navigating supply limitations represent attractive investment opportunities. This situation could also improve the US trade deficit through exports.

Next week marks a busy earnings season with over 150 S&P 500 companies reporting, especially tech giants like Alphabet, Amazon, Apple, Meta, and Microsoft. Key companies to watch include Corning (strength in optical communication), Boeing (737 Max production ramp-up), Starbucks (turnaround strategy progress), Bristol Myers Squibb (drug trial updates), Eli Lilly (GLP-1 drug viability), Linde (stability). Amazon needs to show AWS revenue acceleration, while Apple’s iPhone demand and services growth are in focus.

Intel reported a profitable third quarter, ending a six-quarter loss streak, driven by robust chip demand and U.S. government investment. Client computing revenue grew 5%, boosted by a stabilizing PC market and AI-enabled PCs. CEO Tan emphasized AI’s strategic importance. While the foundry business needs improvement, Intel is focused on advanced manufacturing and new AI-centric solutions. Legacy products also saw unexpected demand. CFO Zinser highlighted improved cash position and plans for deploying advanced nodes based on firm demand.

Meta is reducing its risk organization workforce, shifting towards AI-driven automation for compliance reviews. This follows a $5 billion FTC fine and aligns with broader workforce adjustments, including layoffs in the Superintelligence Labs AI unit. Meta emphasizes that AI aims to streamline processes and augment human capabilities, not replace judgment. The company says AI will automate applying rules and not make the decision on risk itself. This move mirrors similar strategies at companies like JPMorgan and Salesforce, raising questions about AI’s impact on the job market.

Apple has begun shipping AI-focused servers manufactured at its Houston, Texas facility, marking a significant step in its $600 billion U.S. investment. These servers, powered by Apple’s silicon, will support Apple Intelligence and Private Cloud Compute services. The move aims to bolster domestic production, create jobs, and enable closer hardware-software integration for accelerated AI innovation. This initiative reflects a strategic shift towards controlling its supply chain and responding to the increasing demands of AI workloads.