A bunch of AI-related news has popped up this week, so let’s do a roundup.
Some AI companies are complaining that TSMC is killing the AI boom by not expanding rapidly enough:
Asianometry notes that TSMC’s caution at expanding is amply justified by the boom-and-bust nature of the semiconductor industry:
“I’m hearing many similar views in the Silicon Valley Borg that TSMC is the break or limiter on the AI boom, as if they’re the reason why we don’t have AGI yet. Because they didn’t and still don’t believe.”
“If we can ever say that a company that spent $41 billion on capital expenditure in 2025, with another $53 to $56 billion in 2026 planned, is sitting on its hands, doing nothing.”
“TSMC having 90% share of the AI chip market looks pretty unhealthy. That should go down and it will. Samsung seems to be doing well so far.”
“The cold, hard reality is that shortages are a fact of life in semiconductors, as are horrific gluts.”
“What we are flippantly labeling as TSMC we really mean is the AI supply chain. And that supply chain is as complicated as you can possibly imagine. Like an iceberg, it looks big enough on the surface of the water, but goes way far deeper underneath. TSMC has thousands of suppliers in two categories: Equipment like the famed ASML lithography tools and materials like photoresist, silicon wafers, acid etch gases and so on. These are not generalized tools and materials. They are not fungeible like AWS compute units.”
“And then there are the memory guys. You cannot ship an AI system without memory. DRAM and NAND. Nvidia’s AI chips use a special form of DRAM called high bandwidth memory, and they use quite a lot of it. The memory industry is just as consolidated as the logic industry, with the major players being Samsung, SK Hynix and Micron.”
“The chip guys are last to know when the party is getting started, but first they get batoned in the face when the police shut things down.”
He points out that semiconductor manufacturers have log supply chains. He uses a different metaphor (the beer distribution game, or a bullwhip), but back when I was working at Applied Materials, it was described as trains linked together with slinkys. First software takes off, then hardware gets yanked along, then the chip manufacturers get yanked, and then, finally, semiconductor equipment manufacturers get yanked into motion, and shortly after that happens, the bust hits the front of the train, and the trailing cars all crash into each other. It’s a regular boom/bust cycle.
“From 1961 to 2006, electronics consumption in the United States grew positively but with wild volatility swings between 0 to 20%. But for the semiconductor makers, that translates to swings anywhere from 20% to 40%. And for the equipment makers, it is amplified even more, plus or minus 60%. The whip hits particularly hard in the semiconductor industry because of the industry’s long lead times. It takes 4.5 months to fabricate and package a chip. It takes 18 months to 2 years to build a fab. Meaning from shovels down to producing chips, and it takes 12 to 18 months to produce and install something like an EUV machine into the fab. Another 6 months before that machine actually starts patterning wafers.”
“Long lead times mean having to make very long demand forecasts, which leads to extreme volatility swings during up and downturns even if those up or downturns are relatively small.” People forget that in 1998, during the time we now think of as the DotCom Boom, there was a small semiconductor downturn that had Applied Materials forcing employees to take unpaid leave.
“ASML just reported 2025 earnings, and we see the bullwhip in full effect. TSMC raised capital expenditure 35% but ASML announced €13.2 billion of net new bookings. Analysts had expected just €6.32 billion. This is because ASML collected orders not just from TSMC, but also Samsung, Intel and the memory guys. When it rains it pours, right? Again, this is why I fear that another AI foundry would not mean our compute shortage is solved, because ultimately, when those foundries start scaling their capacity, they all go to the same suppliers.”
He goes over how car manufacturers cancelled orders during Flu Manchu, and then scrambled when the economy took off afterwards. “TSMC was trying to discern between double booked orders and real demand, which is not an uncommon experience for them. Customers lie about their own demand all the time, or at least we can say that they are eternally optimistic. TSMC tried to respond in 2022. The Taiwanese giant poured $36 billion into capital expenditure. They went to their suppliers and pushed like no tomorrow.”
“It turned out those customers really were double booking orders and artificially inflating demand. When the macro environment turned in 2022, the automotive, smartphone, and PC chips that were so hot during the COVID era fell out of vogue and customers started cutting orders.”
“Meanwhile, deeper down in the supply chain, TSMC and the rest of the semiconductor industry were getting bullwhipped by COVID hangover. Utilization at TSMC’s multi-billion dollar N7 fabs crashed, Semi analysis wrote in April 2023. Now, Semi analysis data indicates that the 7nm utilization rates were below 70% in Q1. Furthermore, Q2 gets even worse with 7nm utilization rates falling to below 60%. This is primarily due to weakness in both smartphones and PCs, but there is a broader weakness in most segments. A fab’s break even utilization rates are about 60% to 70%. So those N7 Taichung fabs were taking financial losses potentially on the order of hundreds of millions, maybe even billions. The financial burdens of low utilization are another reason why I’m skeptical another AI foundry could have rushed into the AI chip fray to save the day.”
He says that Intel incurred losses during this period due to an unnecessary fab expansion, which is probably true, but that was a secondary factor next to their longer running problem of getting their process wrong.
“ChatGPT was released in November 2022, and that kicked off a massive increase in capex amongst the hyperscalers in particular, but it sure seems like TSMC didn’t buy the hype. That lack of increased investment earlier this decade is why there is a shortage today and is why TSMC has been a de facto break on the AI buildout/bubble.”
“I recall news in mid 2024 of TSMC struggling with CoWoS capacity bottlenecks and yield problems, including one design issue that caused cracks in the Nvidia chips packaging.” CoWoS is Chip on Wafer on Substrate, which involves fabbing an interposer as a substrate for faster connections between your processing chips and memory.
“I also recall news in late 2024 noting how the vendors in charge of making the server racks for Nvidia’s Blackwell servers struggled with overheating, liquid cooling leaks, software bugs, and connectivity issues. Such technical difficulties delayed server deployment until early to mid 2025, creating a weird situation for several months where TSMC was pumping out chips that just went into storage. So that gated things, because you don’t scale until you first fix the technical problems.”
Then there’s the power-scaling issue, which is a whole ‘nuther can of worms.
There’s a lot of talk about a SaaSpocalypse going on thanks to a new AI tool. (SaaS is “Software as a Service.” Instead of hosting your own payroll or sales-tracking or whatever servers, you hire a company that already has cloud software setup to do it and you just tie into that, which can considerably reduce startup costs. A whole lot of successful new tech companies over the last decade plus have been SaaS companies.)
The software sector was jolted overnight with what analysts are calling a “SaaSpocalypse” — a sudden and severe selloff triggered by new artificial intelligence tools unveiled by US AI startup Anthropic. The episode has sharpened investor fears that AI is no longer merely helping software companies but may now begin replacing them.
Anthropic has expanded its enterprise AI platform, Claude Cowork, by launching 11 new plugins aimed at automating a wide range of professional tasks. Claude Cowork is an agentic, no-code AI assistant built for corporate users, allowing companies to automate workflows without writing software. The new plugins are designed to handle tasks across legal, sales, marketing and data analysis functions. The most recent addition is Anthropic’s Claude Legal agent, which can perform routine legal work such as document and contract review, and compliance checks.
Anthropic has said that the tool does not provide legal advice and that all AI-generated outputs must be reviewed by licensed attorneys. Even so, the breadth of automation signals a step change in how much white-collar work AI systems can now perform.
Productivity — Manage tasks, calendars, daily workflows, and personal context
Enterprise search — Find information across your company’s tools and docs
Plugin Create/Customize — Create and customize new plugins from scratch
Sales — Research prospects, prep deals, and follow your sales process
Finance — Analyze financials, build models, and track key metrics
Data — Query, visualize, and interpret datasets
Legal — Review documents, flag risks, and track compliance
Marketing — Draft content, plan campaigns, and manage launches
Customer support — Triage issues, draft responses, and surface solutions
Product management — Write specs, prioritize roadmaps, and track progress
Biology research — Search literature, analyze results, and plan experiments
A lot of those are already automated elsewhere, but I suspect a lot accountants and paralegals just felt a goose strut across their grave. On the other hand, who is really going to turn over, say, Accounts Payable to an AI? One glitch, and your entire bank account is drained…
If it works (a big if, give so many AIs are prone to hallucinations), this is potentially good news for Anthropic and the companies using their tools, and bad for SaaS companies and the employees currently doing those jobs.
I note there’s no plugin for technical writing…yet.
And Google Cloud ended 2025 at an annual run rate of over $70 billion, representing a wide breadth of customers, driven by demand for AI products.
We’re seeing our AI investments and infrastructure drive revenue and growth across the board. To meet customer demand and capitalize on the growing opportunities we have ahead of us, our 2026 CapEx investments are anticipated to be in the range of $175 to $185 billion.”
Remember how Nvidia was going to invest $100 billion in OpenAI? Yeah, not so much.
In September 2025, Nvidia and OpenAI announced a letter of intent for Nvidia to invest up to $100 billion in OpenAI’s AI infrastructure. At the time, the companies said they expected to finalize details “in the coming weeks.” Five months later, no deal has closed, Nvidia’s CEO now says the $100 billion figure was “never a commitment,” and Reuters reports that OpenAI has been quietly seeking alternatives to Nvidia chips since last year.
Reuters also wrote that OpenAI is unsatisfied with the speed of some Nvidia chips for inference tasks, citing eight sources familiar with the matter. Inference is the process by which a trained AI model generates responses to user queries. According to the report, the issue became apparent in OpenAI’s Codex, an AI code-generation tool. OpenAI staff reportedly attributed some of Codex’s performance limitations to Nvidia’s GPU-based hardware.
After the Reuters story published and Nvidia’s stock price took a dive, Nvidia and OpenAI have tried to smooth things over publicly. OpenAI CEO Sam Altman posted on X: “We love working with NVIDIA and they make the best AI chips in the world. We hope to be a gigantic customer for a very long time. I don’t get where all this insanity is coming from.”
Microsoft’s Copilot chatbot has become central to its artificial-intelligence strategy as the company’s close partnership with OpenAI diminishes. But the effort to build it up as a ChatGPT alternative has been tough going.
Confusing brand positioning and interoperability problems have frustrated users, current and former employees who have worked on Microsoft’s AI products said.
Interoperability problems? With a Microsoft product?
Only a small proportion of subscribers to Microsoft’s enterprise suite use Copilot, and the percentage who favor it over Google’s Gemini or other tools has decreased in recent months, according to data reviewed by the Journal.
The stakes are high for Microsoft because Copilot is core to a push by Chief Executive Satya Nadella to transform Microsoft into an AI-first company, much as he transformed it into a cloud-first company around a decade ago. Copilot is one of Nadella’s top priorities, current and former executives said.
Microsoft shares tumbled after its earnings report last week sparked investor concern that growth in its most important unit, the Azure cloud-computing business, is slowing, and that its AI business is reliant on OpenAI while Copilot remains unproven. Shares fell nearly 3% Tuesday amid a slide in software stocks prompted by fresh concerns that AI tools will make enterprise subscriptions less necessary.
For other AI companies, we merely suspect they’re evil. For Microsoft (and Google), we already know they’re evil…
Statistics show that, one year into Donald Trump’s second term, the economic lassitude of the Biden Recession is still weighing down the American economy, as it isn’t creating jobs.
While we will not be getting the payrolls report this week (due to a very brief govt shutdown), ADP’s Employment report paints a poor picture for hiring (even if jobless claims paints a healthy picture for ‘not firing’) adding just 22k jobs (well below the 45k expected).
22 thousand jobs isn’t even a dead cat bounce, it’s a rounding error. And the low jobless claims are just because most of the workers fired/laid off during the Biden Recession have run out of eligibility.
Goods producing firms added just 1k jobs (Construction +9k, Manufacturing -8k – which has lost jobs every month since March 2024) while Services firms saw only 21k jobs added (with health care a standout, adding 74k job, while Professional Services lost 57k jobs).
“Job creation took a step back in 2025, with private employers adding 398,000 jobs, down from 771,000 in 2024,” said Dr. Nela Richardson Chief Economist, ADP.
Interestingly, small firms saw job additions while large firms saw job losses…
We’re not seeing the massive manufacturing job losses critics of President Trump’s tariffs predicted, but we’re also not yet seeing any gains from the lowering of foreign tariffs.
Job seekers are discouraged by a plague of ghost job listings intended to provide the illusion of growth, with no intention of anyone ever being hired.
Inflation is low, yet consumer confidence is at the lowest level in more than a decade. Stocks are booming, yet no one seems to be hiring. (This seems to be my personal experience as well.) Trump and congressional Republicans have managed to lower taxes, yet the “animal spirits” of the American economy do not seem like they’re been unleashed.
Is AI eliminating jobs? Maybe, especially in the service sector (those AI agents everyone hates have probably replaced some humans on support lines). But tech has been a job growth driver for much of this century, and an AI infrastructure build-out seems to be sucking up all available venture capital (and then some) with very little to show for it in the way of actual profits thus far.
Maybe job creation will only resume after California’s billionaires have finished fleeing to avoid the proposed wealth tax.
Would aggressive rate cutting by the Fed help? Probably, but outgoing Fed chair Jerome Powell seems to be pursuing rate cuts with all the vigor of Æthelred the Unready.
The American economy seems becalmed in Hell, and no one seems to know why.
“Experience keeps a dear school, yet Fools will learn in no other.” — Benjamin Franklin, Poor Richard’s Almanack, 1743
We all know why Hollywood makes crappy sequels: The first film in the series made money. Which is why Hollywood squeezed out the likes of Superbabies: Baby Genius 2, Highlander 2: The Quickening and The Concorde… Airport ’79 onto the innocent, unsuspecting heads of American movie-goers. But Hollywood, bless their blackened, cocaine-engorged, money-hungry hearts, knows enough not to make a sequel to a film that everyone hated the first time.
Remember when the whole banking system almost crashed when Bill Clinton’s sub-prime mortgage disaster caught up to us in 2008?
It turned out that loaning hundreds of thousands to people with shoddy credit history wasn’t sustainable, and you’d think we would have learned that lesson.
Yahoo Finance reports that starting in 2026, our two lending giants are once more relaxing their lending standards below a credit score of 620.
Fannie Mae eliminated its minimum credit score requirement on Nov. 15, 2025, as noted in an update to its Selling Guide.
‘Previously we used a minimum credit score to determine whether a borrower was eligible for a credit risk assessment,’ the government-sponsored enterprise said in a statement. Fannie Mae added that the update would ensure risk analysis is ‘agnostic of third-party credit scores.’
That’s like saying you want to make your highway safety decisions apart from highway death statistics.
The GSE also said that risk decisions would be based on ‘a broad set of factors, such as borrower reserves, debt levels, property characteristics, and loan purpose.’
In other words, risk will now be assessed by the need for high level executives to hit loan bonus targets.
Since Freddie Mac and Fannie Mae provide capital to the mortgage industry for more than half the mortgages in the U.S., the credit bureaus are also moving away from a traditional credit requirement.
We’ve seen this movie before, and the first time it hit screens, in 2008, it almost destroyed the western banking system and brought on the worst recession since The Great Depression.
I didn’t like that movie the first time, and I certainly have no desire to sit through it a second time.
I was watching this Dave Rubin clip of Bill Maher talking about why capitalism is superior to socialism. All of which is true, but he got something mostly wrong that I want to talk about, including the interesting truth he didn’t quite elucidate.
Here’s the quote I wanted to zero in on: “In 1990, Venezuela was wealthier than Poland. But then Poland, finally free of Soviet style economics, went all in on capitalism. And now their economy is as big as Japan and people there have high wages, low inflation, cars, vacations, homes. Meanwhile, Venezuela traded capitalism for Hugo Chavez’s socialism for the 21st century, which turned out to be like socialism in the last century or any century, a mess. It turned one of Latin America’s richest countries into one of its poorest.”
Emphasis added. And everything else Maher said is correct. But Poland does not have an economy as big as Japan.
According to Statista, the size of Japan’s 2025 economy is $4.186 trillion, while that of Poland is $979 billion. In terms of sheer size, Poland’s economy isn’t nearly as big as Japan’s, mainly because Japan has roughly three times Poland’s population.
I think what Maher meant to say is that Poland’s standard of living, as measured by per capita GDP, is now on par with Japan. Here’s a piece from National Review:
2026 — the year Poland’s GDP per capita is projected to surpass Japan’s, according to data from the World Bank and the International Monetary Fund.
Poland, a Soviet-dominated communist state until 1989, is expected by next year to have higher economic output per person than Japan. For perspective, according to the World Bank (all of these numbers are adjusted for inflation and purchasing power between countries), Poland’s GDP per capita was $12,810 in 1990. That was roughly the same as Brazil’s and over $4,000 behind Mexico’s. Japan’s was almost three times higher, at $35,306. In 2023, the most recent year with available data, Japan’s was $45,949 and Poland’s was less than $2,500 behind, at $43,585. A gap of over $30,000 per person, gone in one generation. According to the IMF, Japan’s economy slightly contracted in 2024, and projected growth is around 1 percent in 2025 and 2026. Poland grew at nearly 3 percent in 2024, and projected growth is greater than 3 percent in 2025 and 2026. Why have you heard little about this decades-long and ongoing economic success story? Probably because it wasn’t the result of industrial policy or some other government plan. Under the guidance of economist Leszek Balcerowicz, Poland went all in on free markets during its transition to democracy. It has averaged annual GDP growth of about 4 percent per year since 1990, blowing right past the “middle-income trap” and joining the ranks of the great developed economies such as Japan. As late as the early 1990s, it was still fashionable to believe that Japan was going to inherit the earth as a result of its industrial policy. Imagine explaining to someone then that in your lifetime the average Pole would become wealthier than the average Japanese. Be skeptical of industrial policies, and never underestimate the power of markets.
Other figures show Japan a bit farther ahead, but Poland’s per capita GDP is clearly now in the same neighborhood as Japan’s, thanks to decades of capitalist growth in Poland, and dropping population and ineffective Keynesian stimulus (AKA “Abenomics”) in Japan.
Although Habitual Linecrosser likes to call Poland “Little European Texas,” economically it’s closer to the state of Georgia, while Texas’ economy is closer in size to that of Italy (the eighth largest economy in the world).
So Maher’s statistic was wrong, but his implication was correct: By abandoning communism for capitalism, Poland has made remarkable strides, and is now a modern, wealthy, productive nation.
Having been out of work for a while, people ask me if I’ve been displaced by AI. My reply is “Not directly.” Indirectly, I think the factor is that just about all venture capital funds are throwing money at AI-related companies, meaning non-AI startups that might need technical writers aren’t being funded.
Having lived through the dotcom bust, I have to wonder how bad the fallout from the AI bubble bursting is going to be. The dotcom bubble wasn’t all beenz and pets.com…
…and it fueled a whole lot of subsidiary bubbles: PC and server manufacturers to run the software, Microsoft to run the PCs, semiconductor manufacturers to provide chips for the PCs and servers, semiconductor equipment manufacturers to build those same chips, network gear providers to connect the data centers, etc. And that only scratches the surface. Cisco, Dell, Compaq, Netscape, Yahoo, AOL, Oracle, Sun, HP, Intel, AMD, Applied Materials (where I worked 1997-2001), LAM Research, KLA-Tencor, all had huge growth spurts during the dotcom era as their customers spent big money to get “on the web.” Even dinosaurs like IBM, Motorola and DEC enjoyed business boosts from the era. All suffered in the wake of the dotcom bust, some being bought up or disappearing into other companies.
The same is true of today’s multi-trillion dollar AI boom. Companies like OpenAI may get the most ink, but a whole lot of other companies are getting boosted as well. Some of the names are even the same as the dotcom bubble: Microsoft, Oracle, AMD. Applied Material stock has gone through the roof now that I don’t own any. Cisco is just getting back to the level of their record stock highs during the dotcom era.
Data centers are supposedly planned or going up all around the country, and so many are buying Nvidia’s AI chips that they now boast a breathtaking $4.88 trillion market cap.
Someone is supposedly going to build a $165 billion data center in New Mexico near El Paso. That number is kind of insane, as you could build 5-10 cutting edge fabs for that kind of money. I don’t see how you get any sort of ROI on such a big upfront investment.
When the AI bubble busts (not if, when), a whole lot of these projects will likely come a cropper. A lot of people will have made a lot of money, AI will probably revolutionize a few industries and prove mostly hype in others, and retail investors and bondholders will be left holding the bag. Like the doctom bust, a lot of new companies will rise from the wreckage and start the cycle all over again.
And companies that can best take advantage of idle data centers and newly abundant nuclear power (assuming the boom even lasts that long) will be the ones poised to help build the next tech boom…
President Trump wins another huge (and hugely favorable) trade deal for America, more Obama/Clinton skullduggery exposed, a whole lot of sick perverts get arrested, Nigel Farage plays Cassandra, Russia gets hammered by both Ukraine and God, plus an unusually high amount of hypercars and Star Trek.
It’s the Friday LinkSwarm!
Winning: “Trump strikes massive trade deal with EU on energy, arms, tariffs.”
The United States has reached a trade deal with the European Union after President Donald Trump pressured the group of nations, as well as others, to open up trade with the US using the threat of tariffs.
While being joined by EU Commission President Ursula von der Leyen, Trump detailed the plans for the deal. “The European Union is going to agree to purchase from the United States $750 billion worth of energy.”
“They are going to agree to invest, into the United States, $600 billion more than they’re investing already. So they’re investing a large amount of money. … They’re agreeing to open up their countries to trade at zero tariff,” Trump added. “So that’s a very big factor, opening up their countries. All of the countries will be opened up to trade with the United States at zero tariff, and they’re agreeing to purchase a vast amount of military equipment.”
The president added that the number for the military equipment is not exact, and then also said the EU imports to the US will have a “straight across tariff of 15 percent” on automobiles and other goods. The tariffs on EU goods were previously in the single digits on average, according to the New York Times. The EU had hoped to reach an agreement for 10 percent across the board on tariffs.
The Very Best People repeatedly told us that President Trump’s tariff strategy would inevitably plunge us into a trade war and send the economy into a recession, if not a recession. It turns out, once again, that Trump has far better grasp of negotiating strategy than they do.
When Mr. Trump first unveiled his reciprocal tariffs, virtually all the important foreign countries flocked to make a deal with him; they ignored Communist China.
Why is that? Because America’s the greatest country in the world. With the best economy.
And nobody trusts the Chinese to do anything, much less honor a trade deal.
What’s more, Mr. Trump and his team have already made a number of deals with the United Kingdom, the European Union, Vietnam, Indonesia, the Philippines, Japan, and South Korea.
Talks with Mexico are constructive and will be extended.
We can’t be sure, but it’s likely that the China talks will be extended.
In general, Mr. Trump is charging a very modest 15 percent or 20 percent fee as the price for doing business with the greatest economy in the world.
That modest fee could generate something like $400 billion a year in tariff revenues.
And here’s his new wrinkle: vast foreign direct investment into America
For example, $600 billion from the EU, and perhaps another $600 billion from Japan. Maybe $750 billion from EU energy purchases. Think clean burning LNG produced by America’s first in the world energy industry.
Direct investment pledges of as much as $5 trillion or $6 trillion coming from governments and companies all around the world — including the Middle East. And even in Asia — with South Korea putting up $350 billion.
We’ll learn more about how this direct investment is going to work, but the point is — the stimulus from all of that vastly outweighs any fiscal drag from the mostly moderate reciprocal tariff rates.
That’s Mr. Trump’s brand-new wrinkle. And it’s a very clever ploy.
FBI Director Kash Patel found a trove of sensitive documents related to the origins of the Trump – Russia probe buried in multiple ‘burn bags’ in a secret room inside the bureau, sources told Fox News Digital.
Sources told Fox News Digital that the ‘burn bag’ system is used to destroy documents designated as classified or higher.
Sources told Fox News Digital that multiple burn bags were found and filled with thousands of documents.
Sources exclusively briefed Fox News Digital on some of the contents of the classified annex — including that the U.S. intelligence community had credible foreign sources indicating that the FBI would play a role in spreading the alleged Trump – Russia collusion narrative — before the bureau ever launched its controversial Crossfire Hurricane probe.
A source familiar with the contents of the classified annex told Fox News Digital that while it may not have been exactly clear in the moment what the intelligence collection meant, with the benefit of hindsight, it predicted the FBI’s next move ‘with alarming specificity.’
White House Press Secretary Karoline Leavitt took members of the press corps to task over their refusal to cover newly released evidence that shows Hillary Clinton approved the Russian collusion hoax against Donald Trump.
Leavitt’s comments come on the heels of a newly declassified appendix to the Durham Report that exposes a reported Clinton campaign plan to falsely accuse President Trump of collusion with Russia.
Leavitt chided members of the press, telling them, “This is a story that every outlet in this room should be covering,” and that “This is further evidence that Hillary Clinton approved the Russia Hoax against President Trump. Her campaign financed it.”
Leavitt added that “the FBI and the CIA were both weaponized to accelerate this hoax against then-candidate and former president Trump.”
The Press Secretary told reporters that, “The president wants to see justice served and he trusts the Attorney General and the Department of Justice to implement that justice and hold these people accountable.”
The so-called “Durham annex” to John Durham’s Special Counsel report was released yesterday by Senate Judiciary Committee Chairman Chuck Grassley (R-IA) and brings previously classified information to light regarding the Clinton campaign’s plans to falsely tie Trump to Russia.
In a press release, Grassley said, “History will show that the Obama and Biden administration’s law enforcement and intelligence agencies were weaponized against President Trump. This political weaponization has caused critical damage to our institutions and is one of the biggest political scandals and cover-ups in American history. The new Trump administration has a tremendous responsibility to the American people to fix the damage done and do so with maximum speed and transparency.”
Travel back in time to the year 2021 and you might find yourself in the middle of a bizarre debate over the virtues of “cancel culture”. At the time the political left was aggressively trying to secure long term power within the US through a multi-pronged psychological offensive – A war on the minds of the masses designed to force Americans into submission.
A big part of their strategy relied on the fundamentals of Cultural Marxism: The combination of Marxist mob tactics, artificial consensus and the exploitation of minority grievances as a vehicle for controlling speech. This was the rise of the “woke movement” to the halls of government.
The root of their power was not martial. In fact, the political left is weak and largely astroturf with minimal ability to project power in a physical way. If conservatives wanted to destroy them tomorrow the task would be relatively easy. We don’t because many of us still have hope that our problems can be solved through peaceful discourse.
What the leftists did have at their disposal was a massive institutional apparatus of government agencies, corporations, Big Tech and NGOs. The full might of the establishment cabal was on their side, which meant they had the means to enforce “cancel culture” and silence their ideological opponents.
I don’t think there has ever been a psychological war on a population that was more pervasive and tyrannical. Not since Mao’s Cultural Revolution in China has a citizenry been under such a siege by their own government. The fact that we survived this event, defeated the onslaught and actually grew a grassroots anti-woke movement without the use of social media forums is truly mind blowing.
Very few people today realize the level of victory that was achieved. We thwarted perhaps the largest 4th Generation “mind war” ever devised and we did it without any institutional access. We won by simple truth and word of mouth.
Another tool that the leftists and globalists used was the mobilization of illegal migrants, gays and minorities as a shield against criticism or counter-protest. If conservatives and moderates fought back with superior debate or our own protest groups, we were immediately accused of racism, xenophobia and homophobia. Merely presenting an opposing view to the progressive machine was considered an act of evil.
Large contingents within all of these groups were happy to go along with the agenda for numerous reasons.
First and foremost, DEI allowed them to easily game the system. They could snatch up grants, subsidies, welfare, and leapfrog over more talented and more intelligent competitors in education and business simply because of their “marginalized status”.
Secondly, the system under progressives was two-tier; leftists activists, illegals and minorities were given preferential protection while breaking the law and causing chaos. Conservatives were labeled terrorists for any act of defiance. We were banned from the largest web platforms. Some of us were targeted by the online mob and lost our jobs. Others were “de-banked” and threatened with ostracism from the economy. Still others were imprisoned.
This imbalance of the law bred a culture of entitlement, especially within the LGBT cult and the black community. Illegal aliens were given carte blanche to enter the country and feed like parasites. Not only that, but they were treated like heroes coming to save the US from “population decline” and “labor shortages”.
They all participated in the game willfully and joyfully. They were ALL part of the problem. But, of course, none of them ever thought the party would end or that they might end up facing consequences for their behavior. They joined in the feeding frenzy without considering the inevitable clap-back.
The primary argument that leftists would often use to defend the application of cancel culture was that there was “no such thing as cancel culture”, only the righteous utilization of “consequence culture”. This was, of course, a misdirection. The word “consequence” suggests that a person deserves punishment for wrongdoing and that the leftists canceling him (or her) have the right to do so.
Cancel culture was never about justice or karma, it was about suppression of anyone who disagreed with the political left. A corrupt group of psychopathic people with no support from the majority is in no position to dole out consequences. They can dole out harassment and intimidation, but not justice.
In recent months, however, I think these people are finally beginning to understand what “consequence culture” really is and clearly they don’t like it.
We told them over, and over, and over again that the left wouldn’t like it when the “new rules” they were creating got applied to them. And here we are.
Annals of human depravity: “FBI, DOJ arrest ringleaders of dark web child porn exploitation networks with over 120,000 users.”
The Justice Department has announced the results of Operation Grayskull, a sweeping joint investigation with the FBI that dismantled four dark web sites dedicated to child sexual abuse material (CSAM). The operation has so far resulted in 18 convictions across multiple federal districts and significant sentences for offenders involved in the distribution and advertisement of CSAM.
One of the most notable sentences came last week, when Thomas Peter Katsampes, 52, of Eagan, Minnesota, was sentenced to 250 months in prison, lifetime supervised release, and ordered to pay $23,000 in restitution. Katsampes pleaded guilty in February to conspiracy to advertise and distribute child pornography. According to court records, he joined one of the dark web sites in 2022, actively advertised and distributed CSAM, including material depicting prepubescent children, and eventually became a site moderator responsible for enforcing posting rules and advising others on sharing illegal content.
The Houston branch of the U.S. Immigration and Customs Enforcement (ICE) arrested 214 illegal aliens who have either been charged with or convicted of child sex offenses over the past six months — more than it arrested in all of Fiscal Year 2024.
Among the five illegal aliens captured and highlighted in an ICE press release published on Monday, four were from Mexico and were deported back there following their arrests. Forty-eight-year-old Jorge Zebra received convictions for two counts of sexual assault of a minor as well as “sexual indecency” with a minor. He was returned to Mexico in March.
Mexicans Sergio Rolando Galvan Guerrero and Jesus Gutierrez Mireles were convicted for “aggravated sexual assault of a child” as well as for Driving While Intoxicated.
Jose Guadalupe Meza, who’s been deported four other times, was convicted of both sexual assault of a child and theft. Meza was deported to Mexico on June 25.
The lone criminal from El Salvador was Manuel Antonio Castro-Juarez, who was convicted for both sexual assault of a child as well as illegal entry, twice. He’ll be sent back to El Salvador for the third time, but is in ICE custody until necessary proceedings are completed.
“Former Texas National Guardsman Convicted of Smuggling Aliens. Mario Sandoval now faces up to 10 years in federal prison.”
A Houston-based former member of the Texas National Guard who once served on the front lines of Operation Lone Star is now facing up to 10 years in prison after a federal jury convicted him of human smuggling.
Mario Sandoval, a 27-year-old Houston resident and former national guardsman, was deployed to the U.S.-Mexico border as part of Operation Lone Star, the Texas-led initiative launched in 2021 to curb illegal immigration. The operation mobilized both the Texas National Guard and Department of Public Safety.
Despite being released from his official orders, Sandoval remained in the Rio Grande Valley and, in July of last year, began smuggling illegal aliens north of the immigration checkpoint. Jurors were shown text messages confirming Sandoval’s coordination in the smuggling operation—including his role arranging drivers and alerting others to law enforcement locations. Surveillance footage also placed him near the checkpoint during the times those messages were sent.
Sandoval was discharged from the Texas National Guard in October 2024. Although he claimed the texts were taken out of context and that no conspiracy existed, a jury found him guilty after a one-day trial and less than an hour of deliberation.
“We live increasingly in a lawless Britain… most people think that Britain has become lawless”, Farage remarked Monday at a press conference to launch a new law and order policy platform.
“We’re actually facing, in many parts of our country, nothing short of societal collapse,” Farage warned, adding “People are scared to go out to the shops, scared to let their kids out. That is a society that is degraded, and it’s happening very, very rapidly.”
Farage further suggested that Britain should leave the European Court of Human Rights in order to restore effective criminal deterrence.
Farage maintains that the ECHR undermines the country’s ability to deport foreign criminals, terrorists, and illegal migrants, thereby weakening criminal deterrence.
He contends that exiting the system would remove legal barriers imposed by foreign judges, and allow the UK to swiftly remove dangerous individuals, free up prison space, reduce taxpayer burdens, and send a strong message that crime by non-citizens will result in certain expulsion.
This, in his view, would restore effective deterrence by ensuring consequences are enforced without interference, discouraging both criminal activity and illegal immigration.
Among a range of policies he outlined to avoid a descent into societal collapse, Farage suggested outsourcing hardened criminals to foreign jails and a hard-line three-strikes and you’re out rule, meaning after three convictions there would be no more rehabilitation for offenders.
He noted that one of the most egregious aspects of the collapse is that the government is obsessed with drilling it into the British people that everything is getting better when citizens can see the rampant degradation all around them.
“Huge numbers of law-abiding, taxpaying Britons have also lost respect for the police but in a different way. The idea, the concept that we’re living in a system of two-tier policing and two-tier justice under two-tier Keir has really taken hold,” Farage urged.
Farage noted that crimes such as shoplifting and drug taking have been allowed to become a part of everyday life in cities, and that one in three Londoners have now been victims of mobile phone theft.
He vowed that his party will work to halve crime in five years if elected to parliament by becoming “the toughest party on law and order and on crime that this country has ever seen”, and instituting “zero tolerance policing.”
Farage also floated the idea of Army run centres for repeat petty criminals to be held in and made to undergo a program of reform.
He pointed to Rudy Giuliani’s tenure as Mayor of New York City as an example of how to restore law and order in a broken down society.
The Tories could have been the party of border control and tough on crime policies, but their feckless wet leadership pissed the opportunity away.
Ukrainian troops also landed on the Tendrovo Spit, a long sandbar south of Kherson. I’m including this one because it includes a closer look at some of Russia’s drone jamming equipment.
Here’s some great outside-the-box thinking: A wounded Ukrainian soldier behind enemy lines was rescued by a drone lowering an E-bike to him.
It would take a heart of stone not to laugh: “‘Crisis’ at Media Matters, As It Cuts Staff, Struggles to Pay Legal Bills.” Golly, a whole lot of lefty outlets seem to be in trouble now that Trump47 is eliminating the graft at places like USAID… (Hat tip: Stephen Green at Instapundit.)
What too much winning looks like: “The Corporation for Public Broadcasting will shut down by September’s end, the private non-profit that is funded almost entirely by Congress announced on Friday.”
Soros-funded prosecutor = brothel boom in Fairfax County. “How did the state’s largest municipality, a wealthy and highly educated suburb of Washington, D.C., become a sanctuary county for pimps, madams, and whorehouse operators? All signs point to the Commonwealth’s attorney, self-styled progressive prosecutor Steve Descano.””County Supervisor Pat Herrity said that about 80 to 100 ‘illicit massage businesses’ are ‘operating in plain sight today’ in the county.”
The latest event that’s now too dangerous to attend: Jazz festivals, as a crowd of black people beat two white people unconscious. Then Cincinnati Police Chief Teresa Theetge tried to downplay the attack saying that the assault was taken “out of context.”
Candace Taylor, 35, of Slidell, was arrested Monday after investigators found she underreported her income to qualify for the program. The Louisiana Bureau of Investigation launched its probe after a complaint from the state health department.
The Fox News report says court records say Taylor ran six businesses that brought in over $9.5 million between 2020 and 2024. Bank records show deposits of $480,994, including more than $325,000 linked to her businesses.
“From 2021 through 2024, Ms. Taylor continued to transfer tens of thousands of dollars between her personal and business accounts, with personal inflows consistently exceeding the eligibility thresholds for Medicaid,” the affidavit states.
Despite this, Taylor allegedly kept renewing her benefits—most recently claiming $4,000 in monthly income without disclosing she owned the business.
Authorities say her spending included $45,086 in Audi vehicle payments, a $100,000 wire to an exotic car dealer, and $13,000 for a 2022 Lamborghini Urus. She also allegedly withdrew multiple six-figure cashier’s checks for property, cosmetic surgery, jewelry, and luxury services.
Unless it was very hot or very crashed, there’s no way she paid $13,000 for a Lamborghini Urus, as those things go for over $200,000. Maybe that was a down payment…
Progress on civil rights: “California Law Requiring Background Checks for Ammo Declared Unconstitutional.”
But the Democrat Party’s desire to disarm law-abiding American citizens never rests. Connecticut Senator Chris Murphy filed a bill to raise the National Firearms Act tax to $4,709. (Hat tip: Stephen Green at Instapundit.)
Entertainment economics: Stephen Colbert isn’t worth $20 million a year. but South Park is worth over $1 billion.
“Texas Democrat Candidate Flips Out During Hearing, Winds Up Getting Arrested.” “Isaiah Martin’s attempt to filibuster the redistricting hearing ended in cuffs as he was dragged away from the microphone by a capitol security official.” Martin is currently running in a special election for the 18th Congressional District following the death of Shelia Jackson Lee, and is currently polling at 3%.
Of the many self-inflicted dooms besetting the Democratic Party, the blue state exodus gets talked about far less than Trump Derangement Syndrome or the radical wokeness destroying the party (along with everything else it touches). But for a party that once crowed about “demographic destiny” making them the “permanent majority party,” the shifting demographics of people fleeing blue states due to lousy governance, and the resulting shift in electoral votes, is going make Democrats winning the presidency much more difficult in 2032.
“There is a year that should absolutely terrify Democrats. It’s not 2024 or 2026 or even 2028. It’s 2032.”
“The population movement right now is a flashing red warning sign for Democrats. The reason is the 2030 reapportionment. Every ten years, the US conducts the census. One big thing done with that data is the recalculation of how many seats each state gets in the House of Representatives, and how many votes it gets in the Electoral College. And those numbers move in tandem. You gain two House seats. You gain two electoral votes. If you lose a House seat, you lose an electoral vote.”
“Democratic states are losing population and Republican states are gaining.”
“Here’s one way to think about it. In 2020, Joe Biden won* a 306 to 232 victory in the Electoral College. Then, after 2020, the census was finished and representation was reallocated for the 2022 midterms and 2024 presidential election. Under the new map, winning those same states would have shrunk Biden’s victory margin by six electoral votes to 303 to 235.”
“The next census will happen in 2030, and the map will again change for the 2032 presidential election. And right now, the outlook for that map is a disaster for Democrats.”
“Blue states like California and New York shedding House seats and electoral votes, and red states like Texas and Florida gaining four new electoral votes and House seats each.”
“In 2024, Donald Trump won a 312 to 226 victory in the Electoral College. Under this projection, the exact same state and vote breakdown would swell that margin by 20 electoral votes to 322 to 216.”
“Right now the wind is absolutely blowing away from Democratic controlled states and towards Republican controlled ones. And it’s worth asking why.”
“The red areas of the country are becoming a bigger and bigger share of the pie, and it gets to a flashing red problem for Democrats, both for their political survival and brand identity.”
“For the most part, it is expensive as hell to live in a blue area governed by Democrats. The data is clear eight of the ten states with the highest rent prices are solid blue states, and eight of the ten states with the highest cost of living index are also solid blue states.”
“Having a high GDP or on-paper prosperity doesn’t mean much when most people can’t afford their lives.”
“So why are blue cities and states in such an affordability crisis right now? Well, to start, obviously we’re all thinking it 1, 2, 3: taxes. It’s just the fact that Democratic controlled states tend to impose higher tax rates. Sometimes that means taxes that some GOP states don’t even have, like the income tax.”
“Culture is another part. By now it’s clear that Covid in 2020 presented a particular challenge for blue states and cities. Many of which, took a much softer approach to urban disorder and unrest and are still trying to reverse the damage.”
“On a lot of stuff, Democrats also just tend to be more lax or more compassionate, depending on your point of view.”
“The upside might be that a homeless person is treated with more dignity, or you won’t get thrown in jail just for having a bag of marijuana. But the downside might be that now a public park is inaccessible to families wanting to use it, or people are doing hard drugs on the street without the law intervening, which isn’t actually compassionate to anyone.”
“But more than taxes or culture or anything else. The overwhelming majority of this issue stems from one big fact: housing. It has just become really expensive for people to buy or rent a place to live in many blue states. By any conceivable metric, the US overall is in an affordable housing crisis right now. The average renting American now spends over 30% of their income on rent. The ratio of income to housing prices is at a record high right now, and at its highest in blue states.”
“And we have clear data showing us that this has now become a direct drag on Democrats. An NBC analysis of the 2024 presidential race found that Trump made his biggest gains in the counties that have the worst housing markets. Remember those top ten most expensive states and how eight of them were blue states? Five of those eight were also in the ten states that swung the most towards Trump in 2024.”
“And even when people don’t move out of a blue city or state, the people that stay are increasingly reacting to the high cost of living. By losing faith in the Democratic Party. Again, especially middle and working class people. It’s not a coincidence that Trump’s biggest gains in 2024 were in diverse, working class congressional districts in California and the New York City area, places where the Democratic Party has full control and has failed to address the cost of living.”
“But we also know that there is a way to address this in cities, mainly because many blue cities in red states have done it. Take Austin, which is the seat of a county that voted for Kamala Harris by almost 40 points. It’s seen explosive growth over the past 15 years, partly because the city and state have been very successful in making housing more affordable. That’s not because every landlord there suddenly became a socialist or because they banned Blackrock, but because they fundamentally just built more housing, making more space and lowering the prices.” The City of Austin government proper had very little to do with that, though I’m sure it’s several orders of magnitude easier to build apartment buildings here than in San Francisco, and you see them going up all the time. But Austin is surrounding by bedroom communities in far more growth-friendly counties, and Texas beats the hell out of California for pro-growth policies.
“That’s the kind of thing that makes families move there, companies open there, students stay there. And remember, each one of those people is a tiny little piece of building another electoral vote every ten years. By contrast, cities like New York and LA and San Francisco and Boston are in an absolutely different spot. It is simply incredibly expensive to live there.”
“The Democratic Party sees its political power decrease when fewer people live in the states that it controls, but it is the policies of its own politicians which are preventing more people from living in them.”
The only “growth” that blue state politicians seem to embrace is that of their own bank accounts and the ranks of illegal aliens—the same illegal aliens that drive up the cost of housing for ordinary, non-subsidized citizens. The bluer the city or state, the more likely they are to pursue actively anti-growth policies on the assumption that more people equal more destruction of the environment. And how can Democrats create safe cities when the Soros-backed Democrats they elect are determined to keep violent felons on the street as long as they hail from designated victim groups?
How can Democrats pursue pro-growth policies when so many core ideological constituents are anti-growth?
Critics of Trump’s hefty tariffs on China frequently treat them as radical measures far outside the norms of global trade. However, Trump is not the only one slapping anti-dumping tariffs on China. The EU has also imposed heavy duties on some types of Chinese exports.
The European Commission said on Monday it had imposed duties of up to 66.7 percent on imports of Chinese machines that lift construction workers after concluding that the producers were benefiting from unfair subsidies and selling at artificially low prices.
These include boom lifts (AKA cherry pickers) and scissor lifts.
The extra duties on Chinese mobile access equipment (MAE) will range from 20.6 percent to 66.7 percent, the Commission said, as it sought to protect domestic producers in the EU market worth more than 1 billion euros [per] year.
The tariffs are the latest in a series of EU anti-dumping and anti-subsidy duties focused on Chinese imports, including a high-profile investigation into Chinese-built electric vehicles, which culminated last October.
The EU executive, which conducted the investigation, said Chinese MAE producers had benefited from preferential financing, grants, state provision of inputs at below-market rates.
The Commission said Chinese producers had gained a 41 percent market share in the year from October 2022, from 29 percent in 2020, and sold at prices some 20 percent below EU competitors.
The tariffs will apply to Chinese companies such as Hunan Sinoboom Intelligent Equipment, Zoomlion Intelligent Access Machinery and Zhejiang Dingli Machinery. EU MAE producers include French companies Haulotte and Manitou.
The European Union now has in place anti-dumping or anti-subsidy duties on almost 80 Chinese products from truck tyres to ironing boards.
Trump’s shock and awe approach has already drawn numerous nations to the negotiating table to lower or eliminate tariffs. There’s no guarantee that Trump’s tariffs will necessarily bring China to negotiate, though Trump is in a much stronger position than Xi Jingping, and there are already signs that China might cave. But clearly Trump isn’t the only one calling China on their unfair trade practices, and there seems to be fairly broad consensus in the west that the time of allowing China to unfairly dump products without consequences is at an end.
China’s foreign trade hit a record high in total value in 2024 as the world’s second-largest economy further consolidated its top position globally in goods trade.
The nation’s total goods imports and exports in yuan reached 43.85 trillion yuan (about 6.1 trillion U.S. dollars) last year, up 5 percent year on year, according to data released Monday by the General Administration of Customs (GAC).
Exports grew 7.1 percent year on year to 25.45 trillion yuan last year, while imports expanded 2.3 percent from one year earlier to 18.39 trillion yuan, the data showed.
I have my doubts.
We looked at the situation just under a year ago, and there hasn’t been any shortage of “China is doomed” videos (many from China Observer) depicting the effects of of deep recessions in many of China’s export sectors since then. Video after video shows closed factories, shuttered storefronts, and people complaining about a lack of jobs.
This one, from a year ago, talks about a drastic decline in Chinese exports:
Here’s a video on how Microsoft is just the latest western company to pull out of China entirely:
Or this video from early December, showing how supply chain companies in Guangzhou are failing from lack of business and vast rows of shops are now closed:
Nor have things improved this year. This video, from two months ago, of a businessman complaining that no one is buying industrial machinery because exports are way down:
Or this video of Shanghai from five days ago, talking about a 90% decline in foreign investment in China and how lots of shops in Shanghai are closing down.
Or another video from five days ago, of Yiwu International Trade City already reeling from Trump’s sanctions:
Somebody, somewhere is lying about the strength of China’s economy and the health of their export sector. Remember, there were already plenty signs of a slowing economy in China before Trump took office. Is China Observer overselling economic difficulties in China? Probably some. Gloom and doom is their stock in trade. You never get any “Everything in China is honky dory!” videos from them (with good reason). But I don’t think they’re making things up from whole cloth.
Everyone know China’s communist rulers manipulate economic figures to their advantage. There’s a lot of anecdotal evidence that they’re falsifying their export statistics to make things look better than they are. I rather strongly suspect that their hand in the trade war poker game they’re having with Trump is much weaker than they let on.
On Monday, Nvidia announced that it has started producing its Blackwell AI GPUs at TSMC’s plant in Phoenix, Arizona, while companies within the state package and test them.
TSMC, or Taiwan Semiconductor Manufacturing Co., is the world’s biggest chipmaker and announced a $100 billion investment in US chipmaking last month. It began producing chips using the 4nm process at its Arizona factory in January and has plans to make chips with the more efficient 2nm technology by the end of the decade.
Nvidia doesn’t say which Blackwell chips it has started producing at TSMC’s plant and whether it includes the latest Blackwell Ultra GB300 chip it revealed earlier this year. Blackwell chips use TSMC’s custom 4NP process, according to Nvidia’s website.
The world’s leading manufacturer of graphics processing units (GPU) and advanced chips has announced it will build new plants in Texas, amid global economic shake-ups.
Note: Plants, not fabs.
NVIDIA has announced partnerships with Foxconn and Wistron to build “supercomputer manufacturing plants” in both Dallas and Houston. These global companies are “expanding their global footprint” and their international presence for the purposes of “hardening supply chain resilience” in their partnership with NVIDIA.
“Manufacturing NVIDIA AI chips and supercomputers for American AI factories is expected to create hundreds of thousands of jobs and drive trillions of dollars in economic security over the coming decades,” the announcement states.
The mass production of chips at these plants is expected to begin in the next 12 to 15 months. The $500 billion investment in AI infrastructure within the U.S. does not make mention of direct government subsidies or public financial incentives related to NVIDIA’s recent announcement.
I’m quoting that summary because it demonstrates that it’s easy to misunderstand things about the industry if you aren’t familiar with it. The way it’s worded make you think the “plants” are the Texas facilities they’re going to be building in 12-15 months, but the actual Nvidia press release makes clear than TSMC is doing the fabbing:
NVIDIA is working with its manufacturing partners to design and build factories that, for the first time, will produce NVIDIA AI supercomputers entirely in the U.S.
Together with leading manufacturing partners, the company has commissioned more than a million square feet of manufacturing space to build and test NVIDIA Blackwell chips in Arizona and AI supercomputers in Texas.
Note the more precise wording.
NVIDIA Blackwell chips have started production at TSMC’s chip plants in Phoenix, Arizona. NVIDIA is building supercomputer manufacturing plants in Texas, with Foxconn in Houston and with Wistron in Dallas. Mass production at both plants is expected to ramp up in the next 12-15 months.
The AI chip and supercomputer supply chain is complex and demands the most advanced manufacturing, packaging, assembly and test technologies. NVIDIA is partnering with Amkor and SPIL for packaging and testing operations in Arizona.
Within the next four years, NVIDIA plans to produce up to half a trillion dollars of AI infrastructure in the United States through partnerships with TSMC, Foxconn, Wistron, Amkor and SPIL. These world-leading companies are deepening their partnership with NVIDIA, growing their businesses while expanding their global footprint and hardening supply chain resilience.
Now, if that half trillion does get spent (no guarantee, since press releases aren’t legally binding; try to contain your shock), that would certainly buy a lot of cutting edge fabs. Nvidia is one of the few companies that has the financial resources to build their own cutting edge fabs (Apple is another), but I get the impression that they’re going to partner with TSMC. In fact, I wouldn’t be surprised if they follow the Apple model, where they tell a company “Here’s X amount of money, go build a fab. You’ll give us the first 24 months of production at x-cost per chip, and after that the fab is yours free and clear.” This is one of the tools Apple used to become the dominate tech buyer, and what some call a monopsony.
As far as building their own supercomputers, that’s great for Texas and not so great for Hewett Packard Enterprise, which finished their acquisition of Cray in 2021.
The Trump administration has effectively barred Nvidia (NVDA) from selling its custom artificial intelligence processors to customers in China. The move will force the AI chip leader to write off up to $5.5 billion in inventory and purchase commitments in its fiscal first quarter. Nvidia stock fell Wednesday.
Late Tuesday, Nvidia disclosed in a regulatory filing that the U.S. government is now requiring it to get an export license to sell its H20 processor in China and other restricted countries. Nvidia said it was informed of the move on April 9, the same day NPR erroneously reported that the White House would not seek further restrictions on the chips Nvidia can sell in China.
Your tax dollars at work.
Nvidia said the U.S. government told it on Monday that the license requirement will be in effect for the indefinite future.
Wall Street analysts say Nvidia’s write-off indicates that the company believes it won’t be granted licenses to sell H20 processors in China.
The H20 was designed for the Chinese market to comply with Biden-era restrictions on selling advanced processors there. The H20 is less capable than the Blackwell series chips Nvidia sells in the U.S. and other markets.
“With Nvidia writing off associated H20 inventory, it appears the company is taking the position that it will not be granted licenses to ship product to Chinese customers (with no other geography likely to take the governed silicon given the availability of more powerful standard Hopper or Blackwell SKUs),” Wedbush analyst Matt Bryson said in a client note Wednesday. SKU stands for “stock keeping unit,” a unique identifier for products used in inventory management.
China represents a little over 10% of Nvidia’s revenue.
The Trump Administrations believes (probably correctly) that AI is a key strategic industry and that we don’t need to give China any help there.
A half trillion dollars is a lot of cheddar, even for the (as of today) company with the third largest market cap in the world…
