Good morning. Andrew here. So the A.I. boom continues, thanks to Nvidia and remarkable demand for its chips. “There’s been a lot of talk about an A.I. bubble,” Jensen Huang, the company’s C.E.O., said yesterday. “From our vantage point, we see something very different.” With Mohammed bin Salman, the Saudi crown prince, in Washington this week, we’ve got a look at a bevy of deals the kingdom is making with U.S. companies — and its increasingly complicated economics. And so many of you sent your thoughts after I asked about America’s selective view about “character” after revelations about Larry Summers and his association with Jeffrey Epstein. Summers is now stepping back from teaching at Harvard as it investigates those ties. (Was this newsletter forwarded to you? Sign up here.)
Rebooting the A.I. rallyGlobal stocks are rallying this morning, bolstered by knockout quarterly results from Nvidia, the chipmaker at the center of the artificial intelligence boom. That doesn’t entirely resolve investor questions about the future of tech companies’ billion-dollar A.I. bets, Bernhard Warner reports. Nvidia’s results have “pushed out any bubble fears for another day,” Jim Reid, a Deutsche Bank strategist, wrote in an investor note this morning. In discussing Nvidia’s blockbuster earnings, Jensen Huang, the company’s C.E.O., went further. “There has been a lot of talk about an A.I. bubble,” he told analysts yesterday. “From our vantage point, we see something very different.” The numbers:
Looking ahead: Colette Kress, Nvidia’s C.F.O., said that the company had secured $500 billion in sales commitments for its high-end Blackwell and Rubin chips through next year, suggesting continuing strong demand for its processors. Huang added that Nvidia has worked with supply partners to ensure it can meet “off-the-charts” demand for its Blackwell chips. (Supply worries were a major investor concern a year ago.) But challenges remain. The Times reports that about 90 percent of A.I. projects run on Nvidia processors. But several major customers, including Alphabet, Amazon, Meta and Microsoft, have been investing in in-house chips to reduce their reliance on Nvidia. Export restrictions to China have also hurt Nvidia’s sales in what had been an important market. Huang told Bloomberg Television that while he’s trying to get those curbs lowered, “we should assume zero” sales of chips for Chinese data centers. Nvidia also faces questions about its investment spree. The company has pledged billions of dollars to A.I. companies like OpenAI, Mistral and, more recently, Anthropic. Such transactions are meant to bolster the A.I. ecosystem — but also appear meant to further hook customers on Nvidia chips. “Are those genuine equity investments?” Lisa Shalett, the chief investment officer at Morgan Stanley Wealth Management, told DealBook. “Or are those infusions of capital that smack of vendor financing?”
Markets brace for the resumption of government jobs data. Today, the Bureau of Labor of Statistics is set to finally publish the September jobs report, which was delayed by the federal shutdown. The return of B.L.S. economic indicators will come as a relief to those who rely on them for important decisions, including Fed policymakers. But the Labor Department warned that part of the October jobs report would be packaged with the November readout scheduled for release next month — and some data will simply be lost. Larry Summers will step back from teaching duties at Harvard. The move by the former Treasury secretary comes as the school investigates new revelations about his ties to Jeffrey Epstein and follows his resignation from OpenAI’s board. Separately, President Trump signed a bill compelling the release of the government’s Epstein files, though significant loopholes in the legislation may mean that many individuals stay confidential. The White House reportedly prepares to crack down on state A.I. regulations. Trump administration officials are drafting an executive order that would direct government agencies to challenge state laws imposing restrictions on artificial intelligence companies, according to Politico. Such an effort underscores the growing tension between Washington and state capitals over how to police the technology. Trump and Mayor-elect Zohran Mamdani will meet tomorrow. The White House event will be the first time Trump meets New York City’s incoming leader. Mamdani ran in part on his willingness to challenge the president, while Trump has derided the democratic socialist. In other news, Mamdani said that he would keep Jessica Tisch on as police commissioner, retaining a top city official who is popular with business leaders. The money keeps flowing to Saudi ArabiaPresident Trump’s warm welcome to Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler, at the White House was only the first sign this week of deepening ties between Washington and Riyadh. C.E.O.s flocked to a White House dinner held for Prince Mohammed and descended upon an investment forum stocked with boldfaced names. The objective: strike deals with the kingdom. Many corporate leaders remained in Washington to pursue Saudi business. The attendees at the U.S.-Saudi Investment Forum at the Kennedy Center yesterday included Jensen Huang of Nvidia; Steve Schwarzman of Blackstone; Marc Benioff of Salesforce; Alex Karp of Palantir; and Dina Powell of BDT & MSD Partners. “We can do deals here,” John Kelly, the chair and chief technology officer of Global AI, which provides computing infrastructure for artificial intelligence services, told The Times’s Lauren Hirsch. Indeed, the Saudi Ministry of Investment said yesterday that the two countries had pledged more than $575 billion in deals. Among those announced yesterday:
And David Ellison, the Paramount chief working on a takeover offer for Warner Bros. Discovery, has been trying to drum up cash from the Saudis for his bid. Trump openly praised the deal-making. “You’ve done such a good job,” he told Huang of Nvidia at yesterday’s event, asking him to stand for applause from the audience. One big question: How many of these deals will come to pass? The Public Investment Fund, Saudi Arabia’s nearly $1 trillion sovereign wealth fund, is increasingly low on cash, The Times’s Rob Copeland and Vivian Nereim report. Most of fund’s financial firepower is tied up in illiquid assets — including white elephant projects like Neom, a futuristic city concept, that are over budget and behind schedule. Representatives have begun telling international investors that they’re all but unable to allocate money for the foreseeable future, according to The Times. Seen and heard, retail editionYes, there is still an economy outside the A.I. ecosystem. Earnings results from major retailers this week laid bare how consumer uncertainty is causing turbulence for U.S. businesses. Just in: Walmart reported better-than-expected quarterly results and raised its profit and sales forecast. But its shares fell in premarket trading. Here’s what a few of the biggest companies in the sector had to say: Home Depot: The big-box retailer reported lower-than-expected comparable sales growth and cut its full-year earnings outlook. Home Depot attributed its sales slump to a housing market funk that is driving consumers to delay home improvement projects. “Our customers are homeowners,” Richard McPhail, its C.F.O., said on Tuesday. “They are seeing home prices now decline in more markets than rising.” Lowe’s: Home Depot’s rival also fell slightly short of Wall Street’s revenue expectations. Lowe’s leadership shared its own doubts about the macro environment. “Affordability and uncertainty in the broader economy continue to weigh on consumer confidence,” Marvin Ellison, Lowe’s C.E.O., said during its earnings call on Wednesday. Target: The retail giant’s third-quarter sales fell 1.5 percent year on year, and the company lowered its profit guidance. “We know consumers remain cautious,” Rick Gomez, Target’s chief commercial officer, told analysts. But Target’s troubles are bigger than the economic environment, with the company’s shares down around 35 percent year to date. On the earnings call, Target’s incoming C.E.O., Michael Fiddelke, who will take the reins in February, outlined his plans to turn sales around through a $5 billion investment in new stores and an improved shopping experience. “The only thing Scott’s blowing it on is the Fed, because the Fed — the rates are too high, Scott. And if you don’t get it fixed fast, I’m going to fire your ass.”— President Trump, on his frustration with the central bank’s speed in cutting interest rates, and with Treasury Secretary Scott Bessent’s inability to change that. Minutes released yesterday from Fed policymakers’ meeting last month show that “many” officials opposed lowering borrowing costs again at their meeting in December. Traders this morning are penciling in the odds of a rate cut at 25 percent, down from more than 90 percent three weeks ago. Your thoughts on “disqualifying behavior”This week, Larry Summers, the former Treasury secretary, said he would step back from public commitments after the release of emails between him and Jeffrey Epstein. Andrew pointed out the different reactions to the revelations about Summers and to the Trump administration’s embrace of Mohammed bin Salman, the Saudi crown prince who U.S. intelligence determined had ordered the killing of the Washington Post columnist Jamal Khashoggi. “What does this split-screen tell us about the importance of character?” Andrew asked. “Has the definition of ‘disqualifying behavior’ fundamentally changed, or just become more selective?” Here’s what you said. (Responses have been condensed and edited for clarity.)
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