Data: S&P Capital IQ Pro; Chart: Erin Davis/Axios Visuals Nvidia made billions selling AI's essential ingredient: chips. - Now it's plowing those riches straight back into the AI ecosystem, betting on a buildout that craves ever more compute. Why it matters: Nvidia has become the AI industry's supplier, banker and kingmaker, feeding a self-reinforcing cycle in which chip profits finance the next wave of chip demand. State of play: Already the world's most valuable company, Nvidia is now worth more than five of the 11 sectors that make up the S&P 500. - The chipmaker reported nearly $60 billion in quarterly profit Wednesday, prompting The Kobeissi Letter to call the results "the most impressive earnings in history." - Nvidia believes…
When investment on the scale of the current AI boom occurs, it inevitably has to come at the expense of something. All the resources devoted to building data centers and developing AI models would otherwise go to something else. The big picture: This crowding out is smaller than you might expect, Goldman Sachs economists find in a new note. - But it does exist, they say, and takes the form of displacing other tech investment and construction , as well as raising corporate borrowing costs. By the numbers: AI investment will be about $600 billion this year, some 2% of GDP, accounting for 10% of business fixed investment and 15% of equipment investment, economists Jessica Rindels and David Mericle wrote. State of play: The first…
AI:Goldman Sachs economists report that the massive influx of capital into AI infrastructure, projected to reach $600 billion this year, is causing a "crowding-out" effect by displacing other areas of economic activity. This shift manifests as reduced spending on non-AI software and tech services, redirected construction labor and equipment toward high-margin data center projects, and increased corporate borrowing costs due to surges in AI-related debt issuance. While these trends divert resources from traditional manufacturing, construction, and general IT budgets, analysts suggest the actual impact on overall GDP remains relatively modest rather than the catastrophic displacement often suggested by market commentary.Open
America’s factories are delivering the clearest evidence yet that President Donald Trump’s America First economic agenda is making a major difference in restoring national prosperity. The Institute for Supply Management’s July index jumped to 55.6, its highest reading since May 2022 and the seventh consecutive month of expansion. Production surged to 58.5, the strongest level […] The post Trump Economic Policy Leads to Manufacturing Boom appeared first on StoneZone .
America’s factories are delivering the clearest evidence yet that President Donald Trump’s America First economic agenda is making a major difference in restoring national prosperity. The Institute for Supply Management’s July index jumped to 55.6, its highest reading since May 2022 and the seventh consecutive month of expansion. Production surged to 58.5, the strongest level since November 2021; new orders expanded for a seventh month; export orders returned to growth; and the employment gauge entered expansion for the first time in 33 months. Fifteen manufacturing industries reported growth. The breadth of this economic growth matters and shows that the changes caused by Trump administration policy are systemic. This is not a…Open
Scale AI CEO Jason Droege tells Axios that AI is often too unreliable for mission-critical use by business, military and government. - "The cost of mistakes in these environments can be high," Droege, 47, said in an interview from San Francisco, where Scale — which celebrated its 10th anniversary this week — is based. Why it matters: Droege — who succeeded founder Alexandr Wang last June when the wunderkind became Meta's first chief AI officer, and Meta took a 49% stake in Scale — wants to signal that it isn't merely a data annotation company, but has long been an AI infrastructure and deployment company. Droege unveiled his mantra for his 1,300+ employees in a memo, "The Reliability Race," being reported here for the first…