SMCI OpenAI’s Sam Altman Expects to Spend ‘Trillions’ on Infrastructure
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OpenAI Chief Executive Officer Sam Altman wants to spend trillions of dollars over time on the infrastructure required to develop and run artificial intelligence services. Altman said the startup is devising a novel way to bankroll that outlay, and he suspects they can design a very interesting new kind of financial instrument for finance and compute. Altman thinks some current startup valuations are "insane" and "irrational behavior", but in his opinion, AI is the most important thing to happen in a very long time, and society as a whole is unlikely to regret the massive investment in AI
SMCI Stocks Set to Hold at Record on Solid Retail Sales:
Stocks were poised to hold at record highs after the latest retail sales data climbed, potentially tempering some concerns about a retrenchment in consumer spending.
S&P 500 futures rose 0.1%. The yield on two-year Treasuries was little changed at 3.73%. A dollar gauge slid. Oil drifted lower as investors awaited a face-to-face summit between Donald Trump and Vladimir Putin in Alaska due to start at 3 p.m. New York time.
US retail sales rose in July in a broad-based advance, boosted by car sales and major online promotions in a sign consumers stepped up their spending in recent months.
The value of retail purchases, not adjusted for inflation, increased 0.5% after an upwardly revised 0.9% gain in June, Commerce Department data showed Friday. Excluding cars, sales climbed 0.3%.
SMCI Stocks Fall and Bond Yields Rise After PPI Report:
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Stocks fell and bond yields rose after a stronger-than-anticipated inflation reading, which prompted traders to pare bets the Federal Reserve will cut interest rates next month.
S&P 500 futures fell 0.4%. Treasury two-year yields, which are more sensitive to policy moves, three basis points to 3.71%. A dollar gauge advanced against most major currencies. Money markets showed a 90% chance the Fed will reduce rates in September after fully pricing the move on Wednesday.
US wholesale inflation accelerated in July by the most in three years, boosted by a surge in margins that indicates companies are not absorbing higher import costs related to tariffs.
The producer price index increased 0.9% from a month earlier after no change in June. The measure rose 3.3% from a year ago. Services costs increased 1.1% — the most since March 2022.
“The fact that PPI was stronger-than-expected and CPI has been relatively soft suggests that businesses are eating much of the tariff costs instead of passing them onto the consumer,” said Clark Geranen at CalBay Investments. “Businesses may soon start to reverse course and start passing these costs to consumers.”
To Chris Zaccarelli at Northlight Asset Management, the spike in PPI shows inflation is coursing through the economy, even if it hasn’t been felt by consumers yet.
“Given how benign the CPI numbers were on Tuesday, this is a most unwelcome surprise to the upside and is likely to unwind some of the optimism of a ‘guaranteed’ rate cut next month,” he said.
At BMO Capital Markets, Ian Lyngen said that overall, the data was initially bond bearish, but the move quickly moderated as there wasn’t anything in the details that materially changed investors’ understanding of the state of play in either the real economy or with the Fed.
“From here, there isn’t anything on the horizon that we expect will change the tone in the Treasury market” before tomorrow’s retail sales data, he said.
SMCI OpenAI’s Sam Altman Expects to Spend ‘Trillions’ on Infrastructure
