Markets
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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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Luke Kawa

OpenAI reportedly seeking alternatives to Nvidia chips, unhappy with inference performance

Reuters reports that OpenAI is “unsatisfied” with Nvidia’s latest AI chips and has been seeking alternatives since last year, citing a whopping eight sources familiar with the matter.

This news comes on the heels of a recent report from The Wall Street Journal that Nvidia’s plan to invest $100 billion in OpenAI had stalled.

Nvidia CEO Jensen Huang seemingly confirmed the WSJ reporting in comments to the press over the weekend, but still struck a positive public tone on OpenAI, indicating that the chip designer would be participating in its upcoming funding round.

Sources inside OpenAI appear to be choosing a more combative response.

Per Reuters, the specific shortcoming OpenAI sees in Nvidia’s offering involves inference, or the “thinking” being done by AI models.

Now, the idea that OpenAI is seeking alternatives to Nvidia, or at least additional sources, is well known: the ChatGPT maker struck highly publicized deals in October with Advanced Micro Devices that the chip designer said would “deliver tens of billions of dollars in revenue” as well as custom chip specialist Broadcom to develop and deploy 10 gigawatts of custom AI accelerators.

So this really has the feel of, “I dumped her, she didn’t dump me!”

Palantir Earnings CEO Alex Karp

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Tasha Matsumoto
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Stocks close near record highs as strong manufacturing data boosts economic outlook

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Michael Jordan #23 dribbles towards the net circa the 1990's during a game.
markets
Luke Kawa

Microsoft is the biggest drag on the US stock market since Gemini 3’s launch

Microsoft is the publicly traded company that, due to its partnership with OpenAI, had a place of pride at the epicenter of the AI boom.

It doesn’t have that much to show for it.

Thanks to last week’s plunge following the release of its earnings, the tech behemoth is now trailing the SPDR S&P 500 ETF for the first time since November 30, 2022 — the day ChatGPT was released. It’s the only member of the so-called Magnificent 7 to trail the fund that tracks the benchmark US stock index over this stretch.

The OpenAI relationship has been more of a burden than a boon for the company as of late, as the ChatGPT maker’s cash burn and competitive pressures have cast a pall over its partners.

Per data from Bloomberg, Microsoft has been the biggest drag on SPY since the release of Gemini 3, shaving off 80 basis points. Alphabet, on the other hand, has been the largest driver of the ETF’s advance over this period.

Max Knoblauch

Airline stocks climb as oil prices retreat on easing US-Iran tensions

West Texas Intermediate crude futures fell more than 5% on Monday, following President Trump’s comments over the weekend that Iran was “seriously talking” with the US — a sign that tensions between the countries could be easing.

That drop-off boosted major US airlines, which stand to benefit from lower fuel costs. Shares of carriers including Frontier, United Airlines, JetBlue, and Delta Air Lines were all up in the mid- to high single digits.

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