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China’s DeepSeek is using banned Blackwell chips to train its newest AI model, The Information reports

DeepSeek, the Chinese AI startup whose chatbot built on the cheap turned the US tech world upside down in early 2025, is using “several thousand” of Nvidia’s top Blackwell chips to build its next model, per The Information.

The outlet cites six people with knowledge on the scheme, where the advanced chips, which are not allowed to be sold to China, make their way into the world’s second-largest economy piecemeal after servers are disassembled.

Nvidia told Bloomberg, “While such smuggling seems farfetched, we pursue any tip we receive.”

The Trump administration recently gave the go-ahead for Nvidia to send the H200, the best chips from its Hopper generation, to China. Though the US president teased discussing the possibility of permitting Blackwell sales ahead of his meeting with President Xi at the end of October, that item was not on the agenda.

DeepSeek said that its V3 model — the one that captured global attention earlier this year — was trained using Nvidia’s H800 GPUs, but some observers in the AI industry argued that the startup likely had access to more advanced compute. The White House and the FBI reportedly investigated this amid signs of chip smuggling.

Earlier this year, Singapore charged a group of men with fraud for allegedly routing servers containing Nvidia chips to Malaysia (with their ultimate destination unknown, but presumed to be China).

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Matt Phillips38s

EchoStar rises as analysts upgrade stock ahead of potential SpaceX IPO

EchoStar rose Wednesday as Wall Street digested recent reports that Tesla CEO Elon Musk’s SpaceX is planning an IPO next year.

Analysts at Morgan Stanley upgraded satellite operator EchoStar — the current owner of Dish Network and Boost Mobile cell services — to “overweight” (or buy) from “equal weight” (or hold) and upped their price target for the stock to $110 from $82.

In September, EchoStar struck a $17 billion deal — $8.5 billion in cash and $8.5 billion in SpaceX stock — to let SpaceX use some of its spectrum rights. EchoStar expanded that deal in November, selling additional spectrum rights to SpaceX for $2.7 billion in stock.

So, a massive IPO valuation for SpaceX would obviously be a good thing for EchoStar shareholders.

Morgan Stanley analysts wrote:

“EchoStar is receiving SpaceX shares at $212 per SpaceX share. Every $100 of SpaceX share price equals $18/SATS share in value, or 20% to SATS equity. The WSJ reported that SpaceX is launching a secondary sale valuing the company at $800bn, although the CEO denied that was the case. At that $400+/share valuation, our SATS bull case would move to $150.”

EchoStar’s surging performance this year — it’s up 330% — has largely come as the company has shifted to selling access to its stockpile of spectrum rights after pressure from the Trump administration’s FCC.

In August, it inked a deal to sell spectrum rights to AT&T for $23 billion in cash, sending its shares up 70% in a single session. Morgan Stanley analysts see continued strong demand for spectrum assets from wireless companies as another reason for optimism around EchoStar shares.

“Spectrum is an appreciating asset,” they wrote. “And we expect both Verizon and T-Mobile to be aggressive.”

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It’s cyclicals over speculation ahead of the Fed meeting

“Sell your high-flying winners and speculative stocks ahead of the Fed, but the US economy is fine” seems to be the market narrative du jour.

The likes of Bloom Energy, IREN, Opendoor Technologies, Rigetti Computing, IonQ, and Oklo all fell at least 2.5% in early trading. Meanwhile, a Goldman Sachs basket that tracks the performance of cyclical stocks relative to more defensive companies is working on its ninth straight day of gains, which would be its longest winning streak since 2017. The SPDR S&P Regional Banking ETF, another very economically relevant part of the market, is also trading to the upside.

Goldman Sachs’ index of high-beta momentum longs (that is, stocks that have been trending higher) is down about 1.5% in early trading, while the opposite group, high-beta momentum shorts, is enjoying a nice bounce.

In other words, it looks like traders are taking down some risk in volatile long/short trades ahead of the US central bank’s final meeting of the year amid fears of a so-called “hawkish cut.” Speculative stocks, and in particular small-caps, had been buoyed by the resumption of rate cuts this year.

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Matt Phillips2h

Palantir rises on Navy deal announcement

Palantir rose early Wednesday after officially announcing a new deal — valued at $448 million — with the US Navy to manage its submarine maintenance and supply chain.

While Palantir has been rapidly building its business selling software that helps private enterprise companies better use AI technology, its largest customer remains the US government.

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J. Edward Moreno2h

Nextdoor soars after Eric Jackson, architect of Opendoor rally, lays out bullish thesis

Nextdoor rose by more than 30% in premarket trading after hedge fund manager Eric Jackson, the architect behind the rally in Opendoor Technologies earlier this year, said he is long on the neighborhood social media platform.

In a thread on X, Jackson explained that Nextdoor has an undervalued opportunity to leverage AI, similar to Opendoor or Carvana, another company he has been bullish on. “Nextdoor checks every layer and is ready like them for a massive re-rating,” said Jackson, head of Toronto-based EMJ Capital, referring to other stocks he is bullish on.

Nextdoor generates revenue predominantly through advertising sales, and has not yet reported a profitable quarter since going public in 2021. As of market close on Tuesday, the company was down about 17% this year and 80% since its IPO.

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Chewy’s Q4 forecast underwhelms, overshadowing solid Q3 results

Chewy tumbled as much as 6.7%, before paring its losses, in premarket trading on Wednesday after the online pet product retailer issued softer-than-expected Q4 guidance, which appeared to overshadow solid Q3 numbers.

In the third quarter, revenues rose 8.3% year over year to $3.12 billion, slightly above the $3.1 billion estimate compiled by Bloomberg, while adjusted earnings per share of $0.32 topped the $0.30 forecast. In a statement released today, CEO Sumit Singh said the company “continues to outperform the pet category and expand market share, with profits once again growing faster than sales.”

The company also revealed that it had 21.155 million active customers, up nearly 5% year on year, and that its autoship (recurring, subscription-like) sales made up nearly 84% of its total revenue.

However, Chewy’s Q4 outlook disappointed investors, as it expects $3.24 billion to $3.26 billion in revenue and $0.24 to $0.27 in adjusted EPS, both below Wall Street’s estimate of $3.26 billion and $0.29, respectively, per Bloomberg.

As of 8:35 a.m. ET, shares have pared back earlier losses and are up 0.66% in premarket trading, bringing year-to-date gains to 3.91%.

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