Markets
markets
Luke Kawa

Trump and Xi didn’t talk about Nvidia’s “super duper” Blackwell chips

What US President Donald Trump and Chinese President Xi Jinping talked about in South Korea obviously matters for financial market participants. What they agreed to? Even more so.

But what they didn’t talk about is also newsworthy.

Like Nvidia’s Blackwell offerings.

Ahead of his chat with Xi, Trump said, “We’ll be speaking about Blackwell, it’s the super duper chip.”

After the meeting, Trump said that while Nvidia and semiconductors were a topic of discussion, “We’re not talking about the Blackwell.”

Shares of Nvidia are down about 2% in early trading.

The most likely explanation is that it’s simply a bridge too far to conceive of sending America’s most advanced AI chips to China in the current geopolitical climate.

It took months of haggling, through public persuasion campaigns and private cajoling, for Nvidia (and AMD) to regain the ability to send nerfed versions of their AI chips to China. And, depending on which reports you believe, demand for those processors is either white-hot or companies aren’t even allowed to buy them (note: both these things could be true!).

Getting effectively locked out of the Chinese market was a major headache for Nvidia earlier this year. In late May, Nvidia CEO Jensen Huang said, “With half of the world’s AI researchers based there, the platform that wins China is positioned to lead globally.”

It’s hard not to view Huang’s recent presentation in DC as draping Nvidia in the American flag, which may suggest that he believes Beijing’s active push for a made-in-China AI boom has staying power.

Nvidia’s upcoming earnings report, slated for November 11, will be closely watched for how much (or if) its China business is recovering. Its outlook for $54 billion in sales does not assume any H20 shipments for the three months ending in October.

Zooming out, uncertainty around China isn’t standing in the way of Nvidia’s eye-popping success: Huang said that orders for Blackwell and Rubin chips have already exceeded $500 billion through 2026.

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markets
J. Edward Moreno

Moderna soars after STAT reports “a buyout or a large partnership” are on the table

Moderna rose nearly 15% on Thursday after STAT reported that the company has flirted with the idea of tying up with a larger drugmaker.

The Covid vaccine-maker has talked to at least one large drugmaker on a deal "of significant scope" that could either be "a buyout or a large partnership," a source told STAT.

Read more

How Moderna, the company that helped save the world, unraveled

How Moderna, the company that helped save the world, unraveled
markets
Luke Kawa

OpenAI appears to be definitively answering its doubters’ biggest question

The AI boom is power constrained. It’s chip constrained.

But it will not be capital constrained.

That’s the top takeaway from media reports from The Wall Street Journal and Reuters that OpenAI is plotting an IPO.

That message is also corroborated by anecdotal reports that the order book for Meta’s $25 billion bond offering is roughly $125 billion (!), per a source familiar with the situation.

My colleague David Crowther recently wrote that OpenAI would likely need to raise $50 billion to $75 billion to fund its spending ambitions, which are poised to drive $115 billion in cash burn through 2029.

The most common question raised by OpenAI skeptics has been, “Where is OpenAI going to get all this money?”

A mulled IPO might suggest that OpenAI’s ability to raise money from private markets is reaching its limits. But it also tells us the answer to that question is “from literally anyone who wants to.”

And in a world where SPACs are back and speculation is rampant, something we should have known all along is that people want to. The technology and the unit economics of AI will have to prove their failures, or reach a much higher level of saturation, before capital will shy away from an opportunity billed as this transformative.

Per Reuters, OpenAI is looking to raise about $60 billion at a $1 trillion valuation from the offering — significantly reducing any funding needs through 2029 in one fell swoop.

OpenAI has started work on an IPO that could value the company at $1 trillion

OpenAI has started work on an IPO that could value the company at $1 trillion

That message is also corroborated by anecdotal reports that the order book for Meta’s $25 billion bond offering is roughly $125 billion (!), per a source familiar with the situation.

My colleague David Crowther recently wrote that OpenAI would likely need to raise $50 billion to $75 billion to fund its spending ambitions, which are poised to drive $115 billion in cash burn through 2029.

The most common question raised by OpenAI skeptics has been, “Where is OpenAI going to get all this money?”

A mulled IPO might suggest that OpenAI’s ability to raise money from private markets is reaching its limits. But it also tells us the answer to that question is “from literally anyone who wants to.”

And in a world where SPACs are back and speculation is rampant, something we should have known all along is that people want to. The technology and the unit economics of AI will have to prove their failures, or reach a much higher level of saturation, before capital will shy away from an opportunity billed as this transformative.

Per Reuters, OpenAI is looking to raise about $60 billion at a $1 trillion valuation from the offering — significantly reducing any funding needs through 2029 in one fell swoop.

markets
Max Knoblauch

Bearish options flow sends Lucid lower

Shares of luxury EV maker Lucid are being dragged down by bearish options trading on Thursday morning, with a put/call ratio of 5.8 as of 11:10 a.m. ET, versus the 1.05 it’s averaged over the prior 20 days.

If sustained, this would be the most bearishly tilted options activity for a single session for Lucid since June 21, 2024.

More than 32,000 put options have changed hands as of 11:10 a.m. ET, already above Lucid’s 30,794 20-day average for a full session. Lucid shares were down about 3% on Thursday morning.

On Wednesday, Lucid and Uber announced that their planned 20,000-robotaxi fleet would begin operations in the autonomously crowded streets of San Francisco starting next year. Earlier this week, Lucid also said it’s partnering with Nvidia to build autonomous vehicles for personal use.

markets
Luke Kawa

Boeing slumps as Trump-Xi meeting produces no purchase announcements, Deutsche Bank downgrades to “hold” from “buy”

Blackwell chips weren’t the only thing that US President Donald Trump and Chinese President Xi Jinping didn’t talk about that was supposed to be on the agenda.

Andrew Bishop, global head of policy research at Signum Global Advisors, flagged that “multiple previously-mentioned items were seemingly left out of the deal,” including purchases of Boeing aircraft by China.

Shares of Boeing are selling off amid the lack of a purchase agreement for the American company’s planes in the one-year deal and a downgrade by Deutsche Bank. Analyst Scott Deuschle lowered the stock to “hold” from “buy,” cutting his free cash flow estimates and writing that the company remains “constrained by the burdens of the past.” He also reduced his price target to $240 from $255.

The plane maker recently reported quarterly results, in which it booked its first quarter of positive free cash flow since its door plug blowout in January 2024.

markets
Luke Kawa

Core Scientific shareholders vote against acquisition by CoreWeave

CoreWeave’s latest attempt to purchase Core Scientific has failed.

Core Scientific announced that at its special meeting held earlier today, “the Company did not receive the requisite number of votes to approve the previously announced merger agreement with CoreWeave.”

This outcome was expected by markets, given that Core Scientific’s share price was trading well in excess of the deal price heading into this meeting, and major shareholders and proxy advisory firms had voiced their opposition to the tie-up.

Shares of Core Scientific initially popped on this news before quickly erasing all of that advance (and then some), while CoreWeave retreated deeper into the red.

CoreWeave’s acquisition would have represented meaningful vertical integration for the neocloud, providing it with ownership over existing data centers and a pipeline of more to come.

CoreWeave and Core Scientific still have an ongoing business relationship, however: the latter is the former’s landlord, and CoreWeave remains on the hook for $10 billion in overhead over the next 12 years that would have been eliminated by this deal.

"We respect the views of Core Scientific stockholders and look forward to continuing our commercial partnership,” said CoreWeave co-founder, Chairman, and CEO Michael Intrator in a press release. “CoreWeave’s strategy remains unchanged. We will continue to execute with discipline against our roadmap to create long-term shareholder value, including through opportunistic and strategic M&A.”

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