Hi there, this is your daily ☕️ Finpresso.
In today's newsletter:
📈 Fed hikes rates, signals another this year
🇺🇸 US is open to discussing AI risks with China
🖥️ Apple eyes server comeback using Nvidia tech
⚡ Nvidia and Google form AI grid alliance
🤝 Cohere and Aleph Alpha merge into $20B AI giant
Plus: 🌍 12 macro news, 🏢 9 corporate news, and 📑 5 research & reports.
| 📈 Fed hikes rates, signals another this year LINK |
- The Federal Reserve raised its benchmark rate by a quarter point to a 3.75% to 4% range on Wednesday, citing still-elevated inflation, and signaled another increase is likely before year-end.
- Alongside the hike, the Fed lifted the rate it pays banks on reserves parked at the central bank to 3.90% from 3.65%, raising the opportunity cost of leaving cash idle in payment accounts rather than earning that return.
- The squeeze reaches companies that finance overseas purchases: 57% of US small and mid-sized firms source inputs abroad, and those using floating-rate credit face higher costs, making faster settlement, a top priority for 43% of them, more urgent to free up trapped liquidity.
| 🇺🇸 US is open to discussing AI risks with China LINK |
- Treasury Secretary Scott Bessent said the US is willing to discuss artificial-intelligence risks with China at talks this weekend, signaling possible engagement between the rival powers even as broader safety cooperation stays unlikely, Axios reporters said yesterday.
- Bessent framed the goal as "avoiding shared risks and avoiding bifurcation of our two systems," covering both open and closed AI models, with his meeting with Chinese Vice Premier He Lifeng this week preceding a Trump, Xi meeting next week.
- The overture lands as OpenAI, Anthropic and Google DeepMind spend several weeks jointly weighing whether to slow releases of their most advanced models over safety concerns, a debate crystallized by Anthropic chief Dario Amodei's September 12 essay.
| 🖥️ Apple eyes server comeback using Nvidia tech LINK |
- Apple is developing an AI server built around its planned M8 Ultra chips and Nvidia's NVLink Fusion networking, marking its first server hardware push since scrapping the Xserve line in 2011, according to The Information.
- The machine, using two or four M8 Ultra chips, would target AI developers, corporate clients and governments, a market where Apple already sells Mac mini and Studio units in the tens of thousands, helping drive Mac revenue up 29% to $10.3 billion last quarter.
- A deal would ease nearly two decades of tension between the two, but the product isn't expected before 2029 and Apple could drop it or pick another networking partner; the stock rose 0.7% in Wednesday morning trading on the report.
| ⚡ Nvidia and Google form AI grid alliance LINK |
- Nvidia, Google and startup Emerald AI have formed the AI Energy Management Alliance, a group aimed at making power-hungry data centers flexible enough to avoid overloading electricity grids as AI computing demand surges.
- The alliance targets a core problem the article flags: grids were built for steady, predictable demand, but AI is not, so data centers would draw power when supply is abundant and ease off when the system is strained rather than forcing the grid to absorb them.
- Beyond the three founders, 18 launch partners span AI platforms, infrastructure providers, utilities and grid operators, with the group pledging to set shared technical standards and offer faster grid connections to facilities that make verifiable commitments to curb usage on demand.
| 🤝 Cohere and Aleph Alpha merge into $20B AI giant LINK |
- Canada's Cohere and Germany's Aleph Alpha have signed a definitive merger agreement to create an AI company valued at roughly $20 billion, targeting enterprises and governments that want an alternative to consumer-focused AI giants.
- The combined firm, keeping the Cohere name with dual headquarters in Toronto and Berlin, gains a €500 million investment from Lidl-owner Schwarz Group, which plans to spend €11 billion to €13 billion on a German data-center campus for up to 100,000 AI chips.
- The two arrive from unequal positions, Cohere reported $240 million in recurring annual revenue and has raised about $1.6 billion, while Aleph Alpha reported under €1 million in 2023 revenue, with the deal still subject to regulatory approval.
🌍 Macro News
- House passes bill requiring power users to weigh grid-infrastructure costs. LINK
- Von der Leyen backs slowing AI development, inviting labs to Brussels. LINK
- US retail sales hit records despite near-record-low consumer sentiment. LINK
- Warsh says AI borrowing helped push 10-year Treasury yields toward 5%. LINK
- Trump threatens serious tariffs or trade halt over EU-Canada plan. LINK
- House passes Russia sanctions bill, sending it to Trump's desk. LINK
- Foreign Treasury holdings fell for a second month but remained above last year. LINK
- Chinese automakers captured 10.7% of Western European sales, intensifying German industry cuts. LINK
- TTF gas prices hold near crisis highs as Middle East tensions persist. LINK
- UK FCA explains crypto rules and activities requiring authorization. LINK
- India's UPI will charge merchants 0.4% on larger transactions next month. LINK
- House committee advances bill codifying a permanent government bitcoin reserve. LINK
🏢 Corporate News
- Amazon announces wage increases and delivery expansion as shares edge higher. LINK
- Bank of America shares fall after CEO warns dealmaking is slowing. LINK
- AWS says some Bahrain and UAE customer data remains unrecoverable. LINK
- May Mobility agrees to go public through merger valuing it $1.4 billion. LINK
- India's NSE opens IPO targeting up to ₹22,567 crore. LINK
- Novo Nordisk partners with Anthropic to use Claude in drug development. LINK
- Starbucks explores selling a controlling stake in Japan business valued around $3 billion. LINK
- Celsius estate sues BitMEX seeking 6,360 bitcoin from 2020 liquidations. LINK
- Deutsche Bank plans regulated crypto custody for European clients by year-end. LINK
📈 Stocks
| ▲ Biggest winners |
| Forgent Power Solutions rose 11% after reporting Q4 revenue of $462M (+94%) and raising FY2027 revenue guidance to $2.4–2.6B. LINK |
| Lumentum Holdings rose 10% after Goldman Sachs upgraded the stock to Buy. LINK |
| Space Exploration Technologies rose 5% after announcing its September 22 target for Starship Flight 14, its inaugural orbital mission carrying production V3 Starlink satellites. LINK |
| ▼ Biggest losers |
| Antero Resources fell 8% after announcing the $2.2 billion XcL Midstream acquisition. LINK |
| Circle Internet Group fell 7% amid Senate Digital Asset Market Clarity Act vote uncertainty. LINK |
| Occidental Petroleum Corporatio fell 7% after Saudi Arabia offered extra crude cargoes via Oman, easing Middle East supply disruption fears that had supported oil prices. LINK |
📑 Research & Reports
- Goldman says stock ownership increasingly drives gains, excluding most Americans. LINK
- Zandi says AI productivity could help shrink America's fiscal gap. LINK
- Big Tech spent $269 billion of US investment last year, report says. LINK
- Yardeni delays 8,400 S&P 500 target to mid-2027 after Fed hike. LINK
- Apollo says rebuilding America's industrial base could cost trillions. LINK