Jensen Huang has resigned!! 

This has National Security ramifications as Trump was himself in support of Huang’s wish to be able to export the highest capacity chips to China. Apparently the State Department had suspected Alice Huang for some time. It’s not clear whether these concerns were passed on to Trump, who speaks to Huang frequently. Huang is sufficiently close to Trump that he is a donor to the White House ballroom

Huang is one of the key architects behind the entirety of AI cross funding with the Magnificent Seven… Nvidia’s current business model is dependent upon this cross-funding. Nvidia is dependent upon Jensen Huang. Arguably, Nvidia is Jensen Huang.

A very powerful point from a capital and Investment perspective is something that is seldom touched upon – even in the FT, where I would expect to see it: that is the life cycle of the data center. 

I don’t mean the building, I mean the chips. Apparently these chips are physically capable of lasting between seven and eight years, (as once the data center is switched on it effectively cannot be switched off). 7 to 8 years for a given chip that costs thousands of dollars each, and there are thousands of them in each data centre. The bulk of spend in the data centers are the chips, not the buildings and energy infrastructure-which will of course outlast the chips. 

Given the Economics’ of technological advance and performance improvement versus cost, few of the financial analysts speak about the sustainability of these margins. Nvidia in the last several days has lost 8% of its value (timestamp: as of one day before resignation). Jensen Huang cannot be easily replaced, yet competitors are catching up quickly on chip capability. This has ramifications for the model of data centres themselves.

As for the future of Nvidia, that could take a crystal ball, which is filled with cloudy liquid, at a time were the crystal is being held offshore due to import restrictions…🤦🏻

#JensenHuang #Nvidia #Resignation #AI

The beginning of the end for Trump.

The end of the beginning of Presidential Executive Orders…

Let me take these two rather different things separately. Yesterday, American voters, to use one of the many brilliant US phrases, “showed Trump his ass”. Senate seats for the Democrats stood at 48 (out of 100; two Senators in each of the 50 states). The Democrats needed to win two seats that the Republicans had previously won by 10 percentage points or more. This had not happened in 50 years. Winning six seats, in a time of polarised politics, is unique, and was only possible due to the extraordinary unpopularity of the President, whose approval rating was polling at 37%. Trump said, “Imagine I’m on the ballot”; well, he got what he wished for.

£1,500 is a realistic additional cost per household per year as a direct result of Trump’s tariffs. Econ 101, as many sixth-formers pointed out to the President, invariably results in importers and manufacturers passing on these tariff increases directly to the consumer. A gallon of gas in the US now costs just under $7. $7!! In February of this year, it was $3. The US is large and doesn’t have a comprehensive rail network, at least not one widely used by its populace. They drive or fly. All of these fuel price increases are being passed on to consumers. Yesterday, these consumers showed President Trump what they thought about this.

This is the beginning of the end of the Trump era. The Democrats could waste valuable congressional time by pursuing Trump over a whole swathe of corruption allegations, where he has sought to profit and capitalise upon his office. My own suggestion would be, for the moment, to let him luxuriate in his own wealth and focus on pulling the country forwards, because if ever that was needed, surely it is now. In a nation built on immigration, ICE has done the country no favours. Data centre rollouts are all well and good for the “Big 7”, yet these infrastructural spends are time-limited. Their stock increases appear, at the very least, unrelated to anticipated revenue gains. The country has much to do.

However, given the power of the Presidential Executive Order, however self-righteously future Presidents may rail against this arbitrary (ab)use of power, they are likely to be drawn, moth-like, to its efficiency, speed and lack of accountability. Power corrupts, and absolute power corrupts absolutely… Senior Democratic strategists have already noted that, in realpolitik terms, Trump’s secession from leadership of the international order needed to happen, and is unlikely to be substantially reversed. On the NATO front, Obama, speaking for the Democrats, voiced the reservations that Trump has put into practice. It is the Executive Order that has allowed these seismic underlying shifts to take place at the speed they have.

It may be a constitutional Pandora’s Box, but it is one that doesn’t appear to be closing any time soon…midterms #congress #Trump #Democrats

#midterms #congress #Trump #Democrats

I write to you all as the true President of Brazil, and note that yet again electoral manipulation has kept me, and my father before me, out of our rightful place at the head of our great country.

I say this with regret, from a temporary sojourn in Cambodia, where the luxury cruise liner that I have been enjoying my post electoral success on, has unfortunately ran out of fuel. My fellow boat dwellers have agreed, just as I have, not to depart our stranded ship, and nor will I depart from my legitimate and rightful place as the true declared ruler of our great country, Brazil. I intend to sail to my Presidential palace from Cambodia, when we can strike a new fuel deal to get this great ship of State back under steam again.

We will sail with glee past the failing so-called ancient democracies of Western Europe – where France is in flames; Spain faces uncertain elections; the UK, the mother of all Parliaments, home to residents facing energy bills, for each and every home of £56,000 pounds – so that they can say with personal pride, “I myself funded the revolutionary transition to sustainable energy.”

Echoing my dear friend, and leader of the free world, who spoke about AI only needing the genius of a President, we  will surge forwards in our carbon-free nation, securing our place as the one dazzling example of democratic stability and economic brilliance, in this great continent of Latin America.

Fear not my people I am with you and together we will shine! And in the meantime if one of our loyal compatriots might have contacts in the shipping diesel industry of southeast Asia, please get in touch.

Flavio Bolsonaro

#FlavioBolsonaro #Brazil #Elections #Lula

The Economics’ of Datacenters??

And the chip makers, is problematic, when life expectancy of a new generation chip is expected at seven or eight years – meaning the likelihood of the entire datacenter could have to be stripped out and replaced in that time – at a cost of tens of $Billions per datacentre, which begs the question as to whether or not revenue can ever possibly catch up with cost… A recent Bain & Company analysis notes that current consumer subscriptions and enterprise AI revenue across the board will only reach $1.2 trillion to $1.8 trillion over the coming years. This leaves a multitrillion-dollar shortfall required to fully justify the current hardware pipeline.

Currently, AI revenue to the Frontier Models is roughly $150Bn. Capital spend is approaching $1.5Tn.

Analysts have been speaking about NVIDIA’s top chips being “4 + 2” better than the emerging Chinese competition. Meaning, that it takes four Chinese chips to equate to one current NVIDIA chip, plus an additional two years of development… So the technological lead in chip manufacturing is likely to be there for a while. Don’t confuse this with the six to nine month lag in open weight AI models, compared to the leading frontier models of Open AI and Anthropic.

As the leading (but no longer only) chip manufacturer, NVIDIA have created a particular type of leveraged financing for the hyperscalers, whereby the datacenter companies “advance purchase” chips at pre-agreed prices – simultaneously securing future revenue stream for NVIDIA, and reliance on their chips by the datacenters… We believe it’s both fairly ingenious and yet vulnerable to a seismic shift to competitors, when their own chips get up to speed… It is also entirely at the mercy of future revenue gained from both domestic and business customers rising to such an extent to cover these astonishing outlays, and that this revenue increases and doesn’t dry up… And it simply doesn’t address the expenditure shortfall on hardware.

When the equations don’t add up? We have been in this space for a long time, so do get in touch if you want to make sense of the world across all aspects of the Economics of Geopolitics, Geoeconomics and Geostrategy…

#NVIDIA #Datacentre #AI #Hyperscalers

Appalling trade deal with Putin over diesel. Trump is more slippery than Nixon; no, his better analogy is Édouard Daladier…

Daladier, taken in by Hitler’s duplicity, signed what he thought was a non aggression pact, “the Munich Agreement”. Indeed, our own Prime Minister Neville Chamberlain naively referred to this as, “peace for our time”.

22 days after signing the the Graham act, Trump’s appeasement of Putin is astonishing. The “Lindsey O. Graham Sanctioning Russia and Iran Act of 2026” signed into law on September 18, dramatically shifts U.S. economic statecraft. Rather than solely penalizing Russia, it directly targets third-party nations buying Russian energy, by threatening devastating import tariffs on all goods they export to the United States.

The geoeconomics and geopolitics of this are both complex and deeply interlinked – particularly as they combine elements of the Ukrainian and Iran wars.

Closure of the Strait of Hormuz, (though unofficial sources indicate roughly 2/3 of pre-war oil flow are now getting through), has reduced the volume of crude oil onto the world market. However with these recent increases, and simultaneously concerted and successful efforts by the Ukrainians to damage or destroy Russian refineries, the volume of refined oil products – particularly diesel, which lags petrol in its production capacity – now likely outstrips the supply of crude oil available to refine it. Timelags to market are not insignificant.

Whatever the politics, demand and supply tells us that simply more supply will have an impact on market prices. Yet, 100, 000 barrels of diesel from Russia represents roughly 0.3% of 30 million barrels used by the world each day. Also it’s not known whether Russia actually has the capability to produce this amount on an ongoing basis, given these continued Ukrainian strikes on refinery infrastructure.

President Zelenskyy arguably now has far greater incentive to up these attacks. I would. Meanwhile, Trump’s act of appeasement to one of the world’s great modern tyrants illustrates appalling hypocrisy, 3 weeks after the death of his political mentor, Lindsey Graham. At $6.20 a gallon of diesel even this amount of oil onto world markets is unlikely to bring the price much below $6. Whether or not this has a turnaround effect for the Republican Party in the midterms remains to be seen.

What is fairly clear though, is Trump’s tarnishing of US political legacy now reaches new historical lows.

France fell to Germany not long after the Munich Agreement and was run by a collaborationist regime. I’m actually not suggesting the same will happen from Putin, but it’s not a good look for Trump.

EconomicStatecraft #Appeasement #GrahamAct #Diesel #History

Here, I spend 5 minutes outlining three of the key policy areas that Andy Burnham speaks about in his first conference speech as Labour leader and Prime Minister: