DOJ probes Nvidia's $20B Groq deal

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DOJ probes Nvidia's $20B Groq deal LINK

• Nvidia shares slipped 0.91% after reports that federal investigators are examining whether its $20 billion licensing deal with AI chip developer Groq was structured to sidestep mandatory antitrust review.
• Under the December arrangement, Nvidia licensed Groq's technology while the startup stayed independent, but Groq's CEO and COO moved to Nvidia, a setup lawmakers call a de facto acquisition that weakens competition in AI chips.
• The deal, Nvidia's largest to date, may conclude without enforcement, according to the article, and comes as Nvidia pursues commitments of up to $100 billion to OpenAI and $5 billion to Intel.

Bond yields hit 3-year high despite Treasury buyback LINK

• Long-term Treasury yields climbed to their highest in about three years even after the government unveiled a larger bond buyback, as investors judged the effort too small to counter Washington's deep fiscal problems.
• Treasury said it will buy back up to $6 billion in bonds at tomorrow's auction, triple the $2 billion started in April 2024-but the 30-year yield jumped to 5.30% and the 10-year to 4.85%, its highest since October 2023.
• Because every buyback must be funded by new borrowing, Treasury is swapping cheap low-rate debt bought at discounts, one 2040 bond fetched 64 cents on the dollar in February, for higher-cost debt and short-term T-bills, trimming total debt but potentially raising interest costs.

TSMC's August revenue hits record on AI demand LINK

• TSMC posted record monthly revenue of $16.35 billion for August, up 53.3% from a year earlier and 10.1% from July, as demand for chips used in artificial intelligence applications stayed strong.
• The August figure marked a fourth straight month of rising revenue for the world's largest contract chipmaker, which forecast third-quarter revenue between $44.6 billion and $45.8 billion after a more than 77% jump in second-quarter profit.
• TSMC held a 72.5% share of the global foundry market in the second quarter, per TrendForce, with AI server demand keeping its advanced 5-, 4- and 3-nanometer capacity fully booked; shares closed 0.61% lower before the revenue release.

Automattic puts CEO Mullenweg on paid leave LINK

• Automattic's board voted yesterday to place co-founder and CEO Matt Mullenweg on paid leave, installing finance chief Mark Davies as interim CEO while Mullenweg, who voted against the move, stays on the board.
• The reshuffle hands new management the company's continuing lawsuit with hosting rival WP Engine, which began after Mullenweg's September 2024 demand for a trademark licence worth 8% of the host's monthly gross revenue, roughly $32 million.
• Mullenweg still personally controls WordPress.org and leads the free open-source project, so the board can change who runs the hosting business without touching who controls the software distribution servers users rely on for updates.

Silver Lake combines Cegid and Silae in €10B deal LINK

• Private equity firm Silver Lake will merge its two French software companies, Cegid and Silae, into a business valued at more than 10 billion euros ($11.6 billion), betting on scale to weather AI disruption.
• The combination pulls together payroll, accounting, e-invoicing and payments data and forms a 1,400-person developer team to invest in AI, with Silver Lake staying majority owner and the combined group expected to generate 1.6 billion euros ($1.9 billion) in annual revenue.
• The deal comes as software stocks recover from fears of an AI-driven "SaaSpocalypse," with May the sector's best month since 2001; the transaction needs regulatory approval and is expected to close in the first half of 2027.

Macro News

• Chinese AI chipmakers raise prices 20%-50% amid high-bandwidth memory shortages. LINK
• Treasury 10-year sale draws strong demand despite highest yield since 2007. LINK
• Bessent warns traders against betting on weaker yen, citing US informational edge. LINK
• Crypto advocates, community bankers lobby senators' home states before Clarity Act vote. LINK
• EU proposes procurement rules favoring European goods and excluding unfair competitors. LINK
• Gold edges higher as weaker dollar supports demand before inflation data. LINK
• New US tariffs threaten Canadian small businesses with layoffs and closures. LINK
• US sanctions Chinese online marketplace accused of enabling crypto scams. LINK
• Political opposition grows against AI data centers before US midterms. LINK

Corporate News

• US Bank pilots cross-Atlantic transfers using its dollar-backed stablecoin. LINK
• Boring Company raises $3 billion, valuing Musk's venture at $23 billion. LINK
• Harvey raises $550 million at $15.5 billion valuation, nearly doubling value. LINK
• Consensys will split MetaMask from institutional and Ethereum infrastructure operations. LINK
• Amazon issues first sterling bonds, expanding funding beyond euros and francs. LINK
• Listen Labs abandons $125 million funding round to pursue Salesforce acquisition talks. LINK
• Samsung will manufacture a custom AI chip for OpenAI, expanding partnership. LINK
• Ant, Visa and Mastercard develop standards for AI-agent payments. LINK
• Tether and Fasanara launch lending vehicle targeting up to $3 billion. LINK

Stocks

▲ Biggest winners

Cloudflare rose 11% after announcing a security partnership with OpenAI for Vulnerability Discovery and Remediation. LINK

Chime Financial rose 7% after agreeing to acquire Stride Bank for $590 million in cash and raising full-year revenue guidance to $2.76 billion-$2.77 billion. LINK

Meta Platforms rose 7% after Muse Spark 1.3 AI coding model launch. LINK

▼ Biggest losers

Ubiquiti fell 10% after missing Q3 earnings expectations. LINK

Caseys General Stores fell 14% after inside same-store sales growth of 3.2% missed the 4.1% Street estimate. LINK

Research & Reports

• Anthropic sees stronger growth from AI but warns of knowledge-worker job losses. LINK
• Think tank says AI data centers will create fewer UK jobs. LINK
• Stablecoin on-chain activity vastly exceeds genuine monthly payment volume, Morgan Stanley estimates. LINK
• Only 23% of US consumers trust AI to handle payments. LINK
• HSBC raises year-end S&P 500 target to 8,100 on strong earnings. LINK
• Gold ETFs attract $18 billion in August, their second-largest monthly inflow. LINK