billion

During its 3rd grandiose summit in Luanda that brought together a distinguished panel of leaders, including the ministers of transport from Zimbabwe and Rwanda, the secretary-general of the African Civil Aviation Commission (AFCAC), the director of strategies at Morocco’s Ministry of Transport and Logistics, the CEOs of Ethiopian Airlines and TAAG Angola Airlines, as well as representatives from the World Bank Group and the European Commission (EC), the African Union finally earmarked $30 billion for aviation infrastructure.

In his opening address, João Manuel Gonçalves Lourenço, President of the Republic of Angola and Chairperson of the African Union (AU), stressed that Africa must invest between $130 billion and $170 billion annually to lay the foundation for sustainable growth. “We must move from words to action,” President Lourenço urged. “This summit represents a decisive step toward mobilizing the resources needed to enhance connectivity and integration across our continent.”

The ambitious investment plan strategically aims at modernizing the continent’s aviation infrastructure under the Single African Air Transport Market (SAATM), according to summit reports. Lerato D. Mataboge, African Union Commissioner for Infrastructure and Energy, during the high-level session on Financing and Modernizing African Civil Aviation Infrastructure to Promote Integrated Continental Airspace and Enable Free Movement Under SAATM, emphasized aviation’s pivotal role as both an engine of integration and a cornerstone of Africa’s economic transformation.

“Aviation is not merely a mode of transport,” Mataboge stated, speaking at the session. “It is a strategic engine of continental integration and a core enabler of Agenda 2063 and the AfCFTA. The Single African Air Transport Market will only succeed if we build the modern, safe, and efficient infrastructure that Africa’s growth demands.”

Citing findings from a Continental Aviation Infrastructure Gap Analysis conducted with AFCAC, ICAO, and the World Bank, Mataboge revealed that Africa needs between $25 and $30 billion over the next decade to close critical aviation infrastructure gaps. Passenger traffic is projected to triple from 160 million in 2024 to nearly 500 million by 2050, intensifying the urgency for investment.

Key funding requirements include US$10 billion for airport and aerodrome infrastructure and $8 billion for modernizing communication, navigation, and meteorological systems. The AU’s strategy aims to mobilize $10 billion in catalytic public finance to attract an additional $20 billion in private and institutional investment. Through partnerships with Development Finance Institutions (DFIs) and AUDA-NEPAD, the AU is aligning investment priorities with SAATM and the Programme for Infrastructure Development in Africa (PIDA).

The modernization plan integrates cutting-edge technologies such as Airport Collaborative Decision-Making (A-CDM) and System-Wide Information Management (SWIM) to enable seamless continental airspace. It also incorporates renewable energy solutions at airports to attract green financing and advance sustainability goals.

“As we modernize African skies, we are doing so sustainably,” Mataboge added. “Every project we prepare is designed to meet global green standards, reduce fuel consumption and CO₂ emissions, and make African aviation an attractive asset class for the world’s growing pool of climate-focused capital.”

Mataboge reaffirmed the AU’s commitment to ensuring that a modern, efficient, and sustainable aviation network drives Africa’s economic integration, connectivity, and global competitiveness. The AU’s officials reaffirmed their focus on Africa’s most strategic priorities, including building aviation infrastructure, digital data systems, and data interoperability. The discussion underscored the importance of collaborative efforts in building a better aviation sector across Africa.

Deals and Dollars: Concrete Commitments 

The summit moved beyond dialogue to secure tangible commitments, marked by the signing of three key Memoranda of Understanding (MOUs):

– A partnership between the African Social Security Association and AUDA-NEPAD to channel African pension funds into continental infrastructure.

– An MOU with Qatar Airways establishing a $500 million endowment for renewable energy and climate-aligned industrialization.

– The establishment of the Angola Export and Trade Facility to promote regional cooperation and trade.

Ms. Nardos Bekele-Thomas, CEO of AUDA-NEPAD, reported significant progress since the previous summit in Dakar, Senegal. She announced that the AU, alongside African financial institutions, has already raised $1.5 billion to execute high-impact cross-border projects.

“The lesson from Dakar is clear: we can no longer treat financing as a fragmented market of scattered deals. We must transform it into a unified strategy,” Bekele-Thomas stated. She detailed new financial instruments, including the Alliance for Green Infrastructure in Africa’s Project Development Fund, which has achieved a first close of $118 million and is managed by Africa50.

In his contribution, African Union Commission Chairperson Mahmoud Ali Youssouf emphasized that Africa is entering a new phase of self-determination, one in which the continent must take ownership of financing, planning, and implementing its own development. He underscored that infrastructure investment is not merely technical but deeply political and strategic, vital to Africa’s economic sovereignty, competitiveness, and unity. Highlighting progress made under the PIDA framework, he called for an African-driven ecosystem for development financing through domestic resource mobilization, stronger private sector participation, and greater access to climate funds.

Echoing the urgency of the Chairperson of the African Union Commission, framed infrastructure investment as a deeply political and strategic imperative for Africa’s economic sovereignty. “We are shifting from a logic of assistance to a logic of alliance, where partners align their engagement with priorities defined by Africa itself,” he declared. He concluded with a powerful vision: “What we are building here are not merely roads and bridges. We are building an Africa that is connected, confident, and sovereign.”

There were special sessions designed to facilitate in-depth due diligence and accelerate projects toward financial close. The summit for Africa’s infrastructure development stands as a definitive moment, signaling Africa’s unified resolve to finance its own destiny and build the interconnected, prosperous future its people deserve.

SACRAMENTO — Top California health officials warned that federal cuts will deliver a devastating blow to public health, even as the state grapples with ways to mitigate the damage.

“These changes will impact our emergency departments, rural hospitals, private and public hospitals, community health centers, ambulance providers and the broader health care system that serves every community,” said Michelle Baass, director of the California Department of Health Care Services.

Baass was among several experts who spoke Monday at a briefing about the effects of HR 1, a massive tax and spending bill passed by the Republican-led Congress and signed by President Trump that shifts federal funding away from safety-net programs for the vulnerable and toward tax cuts and immigration enforcement. She said the legislation makes sweeping changes to Medi-Cal, as Medicaid is known in California.

It “will cause widespread harm by making massive reductions in federal funding and potentially cripple the health care safety net,” Baass said. “These changes put tens of billions of dollars of federal funding at risk for California and could result in a loss of coverage for millions of Californians.”

Roughly 15 million Californians — a third of the state — are on Medi-Cal, with some of the highest percentages being in rural counties. More than half of the children in California receive healthcare coverage through Medi-Cal, healthcare coverage provided to eligible, low-income residents, according to the state Department of Health Care Services.

California officials expect the state to lose billions of dollars in federal funding for Medi-Cal and other essential healthcare programs. Given that California is facing an ongoing budget deficit, it is highly unlikely that the state will be able to raise enough money to make up for the loss in funding to continue the current level of services to residents, according to a report by the state Legislative Analyst’s Office.

Baass explained the federal legislation creates new eligibility requirements for Medicaid. Starting in 2027, many individuals ages 19 to 64 will need to work for at least 80 hours a month, or perform 80 hours of community service or be enrolled in an educational program, to qualify. The law allows various exemptions, including pregnancy, disabilities, or caring for children under the age of 19.

She estimated 3 million Medi-Cal recipients could lose coverage as a result.

“This would significantly drive up the uninsured rate that raises cost for hospitals treating uninsured patients,” Baass said.

Baass said HR 1, which Republicans labeled the “Big, Beautiful Bill,” also bans abortion providers from receiving federal Medicaid funding — even for healthcare services they offer that are not related to the procedure — and reduces federal dollars for emergency medical care for undocumented immigrants. It additionally limits state funding mechanisms, such as taxes paid by managed care providers, and establishes federal penalties for improper payments.

CalFresh, the state name for the Supplemental Nutrition Assistance Program, is expecting cuts of at least $1.7 billion annually, said Jennifer Troia, director of the California Department of Social Services. About 395,000 people could lose their benefits for government food assistance.

SNAP benefits are also being hit by the current government shutdown, with payments halting in November.

At the heart of the shutdown is a political standoff in Washington over the expiring tax credits for people who get health insurance through the Affordable Care Act, also known as Obamacare. Democrats said they will not vote to reopen the government until Republicans agree to renew the expanded subsidies. Republican leaders refused to negotiate until Democrats vote to reopen the government.

Covered California, the state’s Affordable Care Act health insurance marketplace, estimated over the summer that as many as 660,000 of the roughly 2 million people in the program will either be stripped of coverage or drop out because of increased cost and the onerous new mandates to stay enrolled.

Impacts from the new federal cuts and policies are already being felt across the state and nation.

A Planned Parenthood program in Orange and San Bernardino counties announced its imminent closure earlier this month due to being federally defunded. Los Angeles County’s health system has implemented a hiring freeze and is bracing to lose $750 million per year for the county Department of Health Services, which oversees four public hospitals and roughly two dozen clinics. Meanwhile, food banks nationwide are seeking donations and preparing for longer lines.

Kim Johnson, secretary of the state Health and Human Services Agency, discussed how California is fighting back.

Gov. Gavin Newsom recently announced he is deploying the National Guard and fast-tracking $80 million to support food banks, she said. This came alongside the governor’s decision to allocate $140 million in state funding to Planned Parenthood.

Johnson said Atty. Gen. Rob Bonta has filed more than two dozen lawsuits related to HR 1.

“Here in California,” she said, “we will continue to mitigate the harm of these federal changes wherever we can.”

Warren Buffett will step down as CEO of Berkshire Hathaway (BRK.A 0.39%) (BRK.B 0.30%) at the end of the year. But before he does, the conglomerate he’s run for nearly 60 years will make at least one more big acquisition.

The Oracle of Omaha and soon-to-be CEO Greg Abel expect to close on a deal to acquire the petrochemicals business OxyChem from Occidental Petroleum (OXY 0.32%) in the fourth quarter. Berkshire will pay $9.7 billion in cash, which will barely make a dent in the $340 billion sitting on the company’s balance sheet. Still, it represents the largest purchase for Berkshire since Allegheny Corp. in 2022.

The deal is an exceptional example of Warren Buffett’s investing style, which relies on being in a good position to act when great opportunities present themselves. Here’s what Berkshire Hathaway is getting in the deal, and why it’s an absolutely genius move.

Image source: The Motley Fool.

What is Berkshire buying?

OxyChem is a leading petrochemical company, one of the largest producers of caustic soda, potash, chlor-alkali, and PVC. It’s a global operation with 23 facilities worldwide, and Greg Abel described the acquisition as “a robust portfolio of operating assets, supported by an accomplished team.”

However, the industry is facing pressure. Weak pricing for caustic soda and PVC led to disappointing pre-tax earnings in the second quarter of just $213 million. Management revised its outlook for the business for full-year pre-tax income low to between $800 million and $900 million for this year.

Occidental’s management expects the supply side pressure on pricing to mitigate next year. In management’s first quarter earnings call, it said it expects to generate “$1 billion in incremental pre-tax cash flow from non-oil and gas source in 2026, with further expansion in 2027.” Part of that improvement is from modernization of OxyChem facilities.

In the meantime, though, Berkshire is swooping in to buy the assets when the entire industry is near a cyclical trough. The $9.7 billion price tag is estimated to be around 8 times OxyChem’s 2025 EBITDA expectations. That’s roughly in line with other chemical stocks like Eastman Chemical and Dow, but the entire industry is seeing lower earnings multiples due to the same headwinds pushing profits lower at OxyChem.

If the industry turns around as Occidental’s management expects, Berkshire could be getting a heck of a bargain. But the way it’s acquired the business makes it an even better deal for Berkshire and its shareholders.

The cherry on top for Berkshire

The big reason Occidental was willing to sell OxyChem despite expectations that it will see significantly improved earnings and cash flow over the next few years is because it needs cash. The oil and gas company took on additional debt to acquire CrownRock in August of 2024.

The increase in debt on Occidental’s balance sheet was always meant to be temporary. When it announced the acquisition, management said it plans to divest assets and use excess cash flow to reduce its debt levels back below $15 billion. While it’s been aggressive in using excess cash to pay down debt, the company still had $24 billion worth of debt on its balance sheet as of the end of the second quarter.

The cash infusion from Berkshire is set to net $8 billion after taxes. Of that, $6.5 billion will go toward paying down debt, with the other $1.5 billion going to Occidental’s coffers. Combined with debt pay down from excess free cash flow, management expects to meet its sub-$15 billion target.

The debt reduction indirectly benefits Berkshire as well. The conglomerate owns a 28% stake in the business. The stronger balance sheet should support projects to maximize its vast resources in the Permian Basin while improving its free cash flow position with reduced debt burden. That should support long-term growth for the business.

One other aspect of the deal provides tremendous benefits to Berkshire and its investors. Instead of using Berkshire’s preferred shares of Occidental to acquire OxyChem, Buffett and Abel managed to convince the company to take cash. That means Berkshire will continue to collect its 8% annual dividend on the $8.5 billion in preferred shares it continues to hold. That’s a much better yield than the company’s getting on its short-term Treasury bills.

Occidental says it plans to start redeeming those preferred shares in August of 2029, giving Berkshire shareholders at least three more years of extra-high yields. That’s just the cherry on top for Berkshire shareholders, who finally saw Buffett put some of Berkshire’s growing cash pile to work.

Oct. 20 (UPI) — Australian Prime Minister Anthony Albanese and U.S. President Donald Trump on Monday signed a “framework” of an $8.5 billion deal for projects involving critical minerals and rare earth elements during a meeting at the White House.

The two leaders, along with their aides, met for lunch in the Cabinet Room, where they also discussed military and other trade issuses.

Because of restrictions on Chinese exportrs to the United States, this gives an opportunity for Australia, which has the fourth-largest reserves of the minerals and elements. They are found in Western Australia, the Northern Territory and South Australia.

Rare earth minerals are a group of 17 elements crucial for electronics, including for the defense industry. Though they are called rare, many aren’t scare, including cerium, used for automotive catalytic converters and petroleum refining, which is more common than copper.

With roughly 10 weeks to go before 2025 comes to a close, it looks as if it’ll be another banner year on Wall Street — and the evolution of artificial intelligence (AI) is a big reason why.

Empowering software and systems with AI capabilities affords them the opportunity to make split-second decisions and become more efficient at their assigned tasks without human intervention. It’s a game-changing technology that the analysts at PwC believe can add $15.7 trillion to the global economy by the turn of the decade.

Although dozens of public companies have benefited from the AI revolution, none have taken their spot on Wall Street’s mantle quite like Nvidia (NVDA 0.86%), the largest publicly traded company, and Palantir Technologies (PLTR 0.11%). Since 2022 came to a close, Nvidia stock has rocketed higher by more than 1,100% and added over $4 trillion in market value. Meanwhile, Palantir shares are approaching a nearly 2,700% cumulative gain, as of the closing bell on Oct. 16, 2025.

Image source: Getty Images.

While there’s a laundry list of reasons that can justify the breathtaking rallies we’ve witnessed in both companies, this dynamic AI duo has also issued a very clear warning to Wall Street that can’t be swept under the rug.

Nvidia’s and Palantir’s success derives from their sustainable moats

There are few business characteristics investors appreciate more than sustainable moats. Companies that possess superior technology, production methods, or platforms don’t have to worry about competitors siphoning away their customers.

Nvidia is best known for its world-leading graphics processing units (GPUs), which act as the brains of enterprise AI-accelerated data centers. Though estimates vary, Nvidia is believed to control 90% or more of the AI-GPUs currently deployed in corporate data centers.

No external GPU developers have come close to challenging Nvidia’s Hopper (H100), Blackwell, or Blackwell Ultra chips, in terms of compute abilities. With CEO Jensen Huang targeting the release of a new advanced AI chip in the latter half of 2026 and 2027, it seems highly unlikely that Nvidia will cede much of its AI-GPU data center share anytime soon.

To add fuel to the fire, Nvidia’s CUDA software platform has served as an unsung hero. This is the toolkit used by developers to build and train large language models, as well as maximize the compute abilities of their Nvidia hardware. The value of this software is exemplified by Nvidia’s ability to keep its clients within its ecosystem of products and services.

Meanwhile, the beauty of Palantir’s operating model is that no other company exists that can match its two core AI- and machine learning-inspired platforms at scale.

Gotham is Palantir’s true breadwinner. This software-as-a-service platform is used by the U.S. government and its primary allies to plan and oversee military missions, as well as gather and analyze data. The other core platform is Foundry, which is a subscription-based service for businesses looking to make sense of their data and automate some aspects of their operations to improve efficiency.

Palantir’s government contracts have supported a consistent annual sales growth rate of 25% or above, and played a key role in pushing the company to recurring profitability well ahead of Wall Street’s consensus forecast.

Yet in spite of these well-defined competitive edges, this AI-inspired dynamic duo has offered a stark warning to Wall Street and investors.

Image source: Getty Images.

Nvidia’s and Palantir’s insiders are sending a clear message to Wall Street

Though AI has been the hottest thing since sliced bread over the last three years, it’s not without headwinds.

For example, every next-big-thing technology and hyped innovation since (and including) the advent of the internet more than 30 years ago has endured an early innings bubble-bursting event. This is to say that all new technologies have needed time to mature, and evidence of that maturation isn’t wholly evident from the companies investing in AI solutions.

But perhaps the most damning message of all comes from the insiders at Nvidia and Palantir Technologies.

An “insider” refers to a high-ranking employee, member of the board, or beneficial owner holding at least 10% of a company’s outstanding shares. These are folks who may possess non-public information and know their company better than anyone on Wall Street or Main Street.

Insiders of publicly traded companies are required to be transparent with their trading activity. No later than two business days following a transaction — buying or selling shares of their company, or exercising options — insiders are required to file Form 4 with the Securities and Exchange Commission. These filings tell quite the tale with these two high-flying AI stocks.

Over the trailing five-year period, net-selling activity by insiders is as follows:

• Nvidia: $5.342 billion in net selling of shares
• Palantir: $7.178 billion in net selling of shares

In other words, insiders at the two hottest stocks in the AI arena have, collectively, sold $12.5 billion more of their own company’s stock than has been purchased since Oct. 16, 2020.

The stipulation to this publicly reported data is that most executive and board members at public companies receive their compensation in the form of common stock and/or options. To cover the federal and/or state tax liability tied to their compensation, company insiders often sell stock. In short, there are viable reasons for insiders to head for the exit that aren’t necessarily bad news.

What may be even more telling with Nvidia and Palantir Technologies is the complete lack of insider buying we’ve witnessed. The last time an Nvidia executive or board member purchased stock, based on Form 4 filings, was in early December 2020. Meanwhile, there’s been just one purchase by an executive or board member for Palantir since the company went public in late September 2020.

Neither Nvidia nor Palantir Technologies are inexpensive stocks, based on their price-to-sales (P/S) ratios. Over the trailing-12-month period, Nvidia and Palantir are valued at P/S ratios of 27 and 131, respectively. History tells us both figures aren’t sustainable over an extended period.

If no insiders from either company are willing to buy shares of their own stock, why should everyday investors?

On October 17, 2025, Sapient Capital LLC disclosed a purchase of 259,392 Eli Lilly and Company (LLY -1.94%) shares, for a total transaction value of $193,028,908.

What Happened

Sapient Capital LLC increased its stake in Eli Lilly and Company by 259,392 shares during Q3 2025, according to a U.S. Securities and Exchange Commission (SEC) filing dated October 17, 2025 (SEC filing). The estimated transaction value was $193.03 million, based on the average closing price for Q3 2025. The fund now holds 1,477,879 shares worth $1.07 billion in Q3 2025.

What Else to Know

Buy activity increased the position to 16.53% of Sapient Capital’s 13F AUM in Q3 2025

Top holdings after the filing:

• LLY: $1.07 billion (16.5% of AUM) as of September 30, 2025
• APP: $906.45 million (14.0% of AUM) as of September 30, 2025
• AAPL: $346.81 million (5.3% of AUM) as of September 30, 2025
• MSFT: $313.49 million (4.8% of AUM) as of September 30, 2025
• GOOGL: $238.99 million (3.7% of AUM) as of September 30, 2025

As of October 17, 2025, shares were priced at $802.83, down 12.46% over the past year; shares have underperformed the S&P 500 by 25.79 percentage points

Company Overview

Company Snapshot

Eli Lilly and Company is a global pharmaceutical leader with a market capitalization of $722.03 billion as of October 17, 2025 and a diversified portfolio of innovative therapies. The company’s strategy centers on advancing high-impact medicines and expanding its reach through scientific innovation and partnerships. Its scale and established presence in key therapeutic areas provide advantages in the healthcare sector.

The company offers a broad portfolio of pharmaceuticals for diabetes, oncology, immunology, neuroscience, and other therapeutic areas, with leading products such as Trulicity, Humalog, Jardiance, and Taltz. It generates revenue primarily through the discovery, development, and global commercialization of branded prescription medicines, leveraging internal R&D and strategic collaborations. It treats patients with chronic and complex health conditions.

Foolish Take

This recent transaction by Sapient Capital, a private wealth advisor, is a notable institutional purchase. Here’s why.

First off, Sapient acquired over 259,000 shares of Eli Lilly, worth around $193 million. That is, of course, a great deal of money. But beyond that, the transaction makes the stock Sapient’s largest overall holding, with about $1.07 billion worth of Eli Lilly stock. In other words, Sapient is significantly increasing its already enormous stake Eli Lilly stock. That demonstrates the fund managers have a great deal of conviction that Eli Lilly stock should perform well.

Average investors may want to take note of this, particularly given Eli Lilly’s recent underperformance against major market indexes like the S&P 500. For example, Eli Lilly stock has lagged the S&P 500 year-to-date. Indeed, it has generated a total return of around 5% in 2025, while the benchmark index has generated a total return of 14%.

One potential headwind for Eli Lilly may be political pressure from Washington. President Donald Trump recently said that his administration will work to cut the cost of brand-name GLP-1s, like Eli Lilly’s Zepbound, to $150 per month — a significant decrease from the rate Eli Lilly currently offers on their direct-to-consumer site. That could cut into the company’s profits which have skyrocketed from $5 billion to nearly $14 billion thanks in part to the introduction of Zepbound in 2023.

In summary, investment advisor Sapient has made a huge bet on Eli Lilly stock, boosting its stake by ~25% and making the stock its top holding. The company’s shares have underperformed this year, and pressure from Washington is increasing for the company to lower the price of its star drug, Zepbound, which could stifle its overall profitability. All in all, it’s a mixed picture for Eli Lilly with significant uncertainty surrounding at least one of its key products.

Glossary

13F assets under management (AUM): The value of securities a fund manager reports to the SEC on Form 13F, typically U.S.-listed equities.
Position: The amount of a particular security or asset held by an investor or fund.
Trailing twelve months (TTM): The 12-month period ending with the most recent quarterly report.
Dividend yield: Annual dividends per share divided by the share price, shown as a percentage.
Forward price-to-earnings ratio: A valuation metric comparing a company’s current share price to its expected future earnings per share.
Enterprise value to EBITDA: A valuation ratio comparing a company’s total value (enterprise value) to its earnings before interest, taxes, depreciation, and amortization.
Stake: The ownership interest or share held by an investor in a company.
Holding: A security or asset owned by an investor or fund.
Buy activity: The act of purchasing additional shares or assets, increasing an investor’s or fund’s position.
Therapeutic areas: Specific categories of diseases or medical conditions targeted by pharmaceutical products.
Strategic collaborations: Partnerships between companies to achieve shared business or research goals.

BUENOS AIRES, Argentina — Argentina’s libertarian leader is lavishing praise on President Trump ahead of his first White House visit on Tuesday. It’s a tactic that has helped transform President Javier Milei ’s cash-strapped country into one of the Trump administration’s closest allies.

The effusive declarations are nothing new for Milei — whose dramatic cuts to state spending and attacks on “woke leftists” have won him a following among U.S. conservatives.

“Your commitment to life, freedom and peace has restored hope to the world,” Milei wrote on social media Monday, congratulating the U.S. president on securing a ceasefire deal in Gaza, where a truce is holding after a devastating, two-year Israel-Hamas war.

“It is an honor to consider you not only an ally in the defense of those values, but also a dear friend and an example of leadership that inspires all those who believe in freedom,” he said.

The Trump-Milei bromance has already paid off for Argentina — most recently, to the tune of a $20 billion bailout.

Experts say Milei comes to the White House with two clear objectives. One is to negotiate U.S. tariff exemptions or reductions for Argentine products.

The other is to see how the United States will implement a $20 billion currency swap line to prop up Argentina’s peso and replenish its depleted foreign currency reserves ahead of crucial midterm elections later this month.

In a crisis, turning to Trump

The Trump administration made a highly unusual decision to intervene in Argentina’s currency market after Milei’s party suffered a landslide loss in a local election last month.

Along with setbacks in the opposition-dominated Congress, the party’s crushing defeat created a crisis of confidence as voters in Buenos Aires Province registered their frustration with rising unemployment, contracting economic activity and brewing corruption scandals.

Alarmed that this could herald the end of popular support for Milei’s free-market program, investors dumped Argentine bonds and sold off the peso.

Argentina’s Treasury began hemorrhaging precious dollar reserves at a feverish pace, trying shore up the currency and keep its exchange rate within the trading band set as part of the country’s recent $20 billion deal with the International Monetary Fund.

But as the peso continued to slide, Milei grew desperate.

He met with Trump on Sept. 23 while in New York City for the United Nations General Assembly. A flurry of back-slapping, hand-shaking and mutual flattery between the two quickly gave way to U.S. Treasury Secretary Scott Bessent publicly promising Argentina a lifeline of $20 billion.

Markets cheered, and investors breathed a sigh of relief.

Timing is everything

In the days that followed, Argentine Economy Minister Luis Caputo spent hours in meetings in Washington trying to seal the deal.

Reassurance came last Thursday, when Bessent announced that the U.S. would allow Argentina to exchange up to $20 billion worth of pesos for an equal sum in dollars. Saying that the success of Milei’s program was “of systemic importance,” Bessent added that the U.S. Treasury directly purchased an unspecified amount of pesos.

For the Trump administration, the timing was awkward as it struggles to manage the optics of bailing out a nine-time serial defaulter in the middle of a U.S. government shutdown that has led to mass layoffs.

But for Argentina, it came in the nick of time.

Aware of how a weak currency could threaten his flagship achievement of taming inflation and hurt his popularity, Milei hopes to stave off what many economists see as an inescapable currency devaluation until after the the Oct. 26 midterm elections.

A devaluation of the peso would likely fuel a resurgence in inflation.

“Milei is going to the U.S. in a moment of desperation now,” said Marcelo J. García, political analyst and Director for the Americas at the Horizon Engage political risk consultancy firm.

“He needs to recreate market expectations and show that his program can be sustainable,” García added. “The government is trying to win some time to make it to the midterms without major course corrections, like devaluing or floating the peso.”

No strings attached

Milei was vague when pressed for details on his talks with Trump, expected later on Tuesday. Officials say he would have a two-hour meeting with the U.S. president, followed by a working lunch with other top officials.

He was also expected to participate in a ceremony at the White House honoring Charlie Kirk, the prominent right-wing political activist who was fatally shot last month. Milei often crossed paths with Kirk on the speaking circuit of the ascendant global right.

“We don’t have a single-issue agenda, but rather a multi-issue agenda,” Milei told El Observador radio in Buenos Aires Monday. “Things that are already finalized will be announced, and things that still need to be finalized will remain pending.”

It’s not clear what strings, if any, the Trump administration has attached to the currency swap deal, which Democratic lawmakers and other critics have slammed as an example of Trump rewarding loyalists at the expense of American taxpayers.

There has been no word on how Argentina, the IMF’s largest debtor, will end up paying the U.S. back for this $20 billion, which comes on top of IMF’s own loan for the same amount in April. And that one came on top of an earlier IMF loan for $40 billion.

Despite all the help, Milei’s government already missed the IMF’s early targets for rebuilding currency reserves.

“The U.S. should be concerned that Argentina has had to return for $20 billion so quickly after getting $14 billion upfront from the IMF,” said Brad Setser, a former Treasury official now at the Council on Foreign Relations.

“I worry that this may prove to just be a short-term bridge and won’t leave Argentina better equipped” to tackle its problems, he added.

But in the radio interview before his flight, Milei was upbeat. He gushed about U.S. support saving Argentina from “the local franchise of 21st-century socialism” and waxed poetic about Argentina’s economic potential.

“There will be an avalanche of dollars,” Milei said. “We’ll have dollars pouring out of our ears.”

Debre writes for the Associated Press.

In late August, I was listening to Nvidia‘s (NVDA -4.84%) earnings call for its fiscal second quarter (ended July 27). When Colette Kress, CFO of the artificial intelligence (AI) tech leader, gave quantifiable data about the company’s sovereign AI business, I thought, “Finally!” as such data is only rarely shared.

Nvidia’s sovereign AI business is growing like gangbusters. It appears to be the biggest growth engine of the company’s AI-driven data center platform, which accounts for the bulk of Nvidia’s total revenue. Yet, it gets little coverage in the financial press.

“Sovereign entities” are those that are independent and have total or at least significant control within their borders. This includes many nations, U.S. states, and the European Union (EU).

Image source: Getty Images.

Nvidia “on track to achieve over $20 billion in sovereign AI revenue this year”

From Kress’ remarks on last quarter’s earnings call:

Sovereign AI is on the rise as the nation’s ability to develop its own AI using domestic infrastructure, data, and talent presents a significant opportunity for NVIDIA Corporation. NVIDIA Corporation is at the forefront of landmark initiatives across the UK and Europe. …

We are on track to achieve over $20 billion in Sovereign AI revenue this year, more than double that of last year.

I’ll put the $20 billion in context below.

Kress said that the EU plans to invest 20 billion euros to establish 20 AI factories in France, Germany, Italy, and Spain. This will include five gigafactories, and it will increase its AI compute infrastructure by 10-fold.

A “gigafactory” means that the AI compute facility will contain the number of Nvidia’s graphics processing units (GPUs) — which dominate the market for AI chips — that require at least 1 gigawatt of power. For context, 1 gigawatt (or 1,000 megawatts) equates to about the power output of a large-scale nuclear power plant.

Nvidia CEO: “Nations are investing in AI infrastructure like they once did for electricity and the Internet.”

The above quote is from CEO Jensen Huang’s remarks on Nvidia’s fiscal first-quarter earnings call in May. Here are more Huang snippets from that call:

I was honored to join him [President Donald Trump, in May] in announcing a 500-megawatt AI infrastructure project in Saudi Arabia …

[In May,] we announced Taiwan’s first AI factory … Last week, I was in Sweden to launch its first national AI infrastructure. Japan, Korea, India, Canada, France, the UK, Germany, Italy, Spain, and more are now building national AI factories to empower startups, industries, and societies. … [N]ations are investing in AI infrastructure like they once did for electricity and the Internet.

All the countries that Huang rattled off as building sovereign AI infrastructure are using Nvidia’s GPUs and related technology. Talk about big customers!

Putting the sovereign AI business’ projected annual growth in context

For the current fiscal year (fiscal 2026, which ends in late January), Wall Street expects Nvidia’s revenue to be $206.5 billion, up 58% from $130.5 billion last fiscal year. If that estimate proves relatively accurate and the sovereign AI business brings in revenue of $20 billion, it will account for about 9.7% of total revenue. And Kress said “over $20 billion,” so the percentage could be higher.

Below are more stats for further context.

Data source: Nvidia. *Calculations by author.

The above are half-year stats, but they give you an idea of what a standout performer Nvidia’s sovereign AI business is. Given the annual projections Kress shared, this business probably generated first-half revenue in the ballpark of $8 billion, or 10% of the data center’s revenue, and likely grew 100%-plus year over year.

Why Nvidia’s sovereign AI strategy is particularly brilliant

Nvidia is not only selling its technology to sovereign entities, it’s also assisting them in their massive undertakings. These relationships should make Nvidia’s sovereign AI business especially “sticky.” Countries that are happy with Nvidia are likely to stick with Nvidia when they want to upgrade or expand their AI infrastructure.

The sovereign AI business should also lead to other opportunities for Nvidia. Companies, researchers, and technology students that use and become familiar with a country’s sovereign AI infrastructure will probably be more likely to buy Nvidia’s offerings if and when they need their own AI-enabling tech.

WASHINGTON — The U.S. directly purchased Argentine pesos on Thursday and finalized a $20 billion currency swap framework with Argentina’s central bank, Treasury Secretary Scott Bessent said in a social media post.

The intent is to provide assistance from the Latin American country’s economic turmoil.

“U.S. Treasury is prepared, immediately, to take whatever exceptional measures are warranted to provide stability to markets,” Bessent said, adding that the Treasury Department conducted four days of meetings with Argentinian Finance Minister Luis Caputo in Washington to come up with the deal.

Bessent has insisted that the Argentina credit swap is not a bailout. Last month, President Trump stopped short of promising Argentina’s President Javier Milei a financial bailout from the Latin American country’s economic turmoil.

Still, U.S. farmers and Democratic lawmakers have criticized the deal as a bailout of a country that has benefited from sales of soybeans to China, to the detriment of U.S. farmers.

Argentina is one of the biggest Latin American economies and the biggest borrower from the International Monetary Fund — its total outstanding credit as of Aug. 31 is $41.8 billion.

The offer to financially help Argentina comes as Trump has frequently promoted his “America First” agenda. Critics contend that the planned intervention is a way to reward a personal friend of Trump’s who is facing a critical midterm election next month.

Milei celebrated Bessent’s announcement on social media, hailing his economy minister, Luis Caputo, as “far and away, the best Minister of Economy in all of Argentine history…!!!”

Caputo was in Washington last week for talks with Bessent about the swap line.

Argentina’s deregulation minister, Federico Sturzenegger, also congratulated Caputo and the rest of the economic team. “Let’s keep working so that our children want to stay and live in Argentina,” he wrote, adding a pitch to voters to support Milei in the crucial midterm elections later this month.

Hussein writes for the Associated Press. AP writer Isabel DeBre in Buenos Aires contributed to this report.

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SEOUL, Oct. 8 (UPI) — North Korea-backed hackers have stolen more than $2 billion in cryptoassets so far this year, according to blockchain analytics firm Elliptic.

In a report published on the company’s website Tuesday, researchers said that the sum was the result of more than 30 hacks and represented “the largest annual total on record, with three months still to go.”

This year’s record haul was driven by the theft of nearly $1.5 billion in virtual assets from cryptocurrency exchange Bybit by the North’s state-sponsored Lazarus Group, in what has been described as the biggest heist in history.

Other attacks publicly attributed to North Korea in 2025 include $14 million stolen from nine users on crypto exchange WOO X in July and $1.2 million in tokens stolen from blockchain funding platform Seedify in September.

While North Korea remains under heavy international sanctions, it has increasingly turned to hacking and cybertheft in recent years to bankroll its missile and nuclear programs.

Pyongyang funds 40% of its weapons programs through “illicit cybermeans,” the U.N. Security Council’s now-disbanded Panel of Experts estimated in an annual report released last year.

The cumulative known value of cryptoassets stolen by North Korea since 2017 is more than $6 billion, Elliptic said, adding that the actual figure may be higher.

“We are aware of many other thefts that share some of the hallmarks of North Korea-linked activity but lack sufficient evidence to be definitively attributed,” the report said. “Other thefts are likely unreported and remain unknown.”

Elliptic noted that the tactics used by North Korean hackers are evolving. While earlier attacks focused on exploiting vulnerabilities in crypto infrastructure, the majority of the hacks in 2025 have been perpetrated through “social engineering” — deceiving or manipulating individuals to gain access to their digital assets.

“This shift highlights that the weak point in cryptocurrency security is increasingly human, rather than technical,” the report said.

The Trump administration this week escalated its efforts against renewable energy when it announced the cancellation of $7.56 billion in funding for projects in 16 states, including California.

The U.S. Department of Energy said the 223 canceled projects — all of which are in states that favored Kamala Harris in the 2024 presidential election — were terminated because they “did not adequately advance the nation’s energy needs, were not economically viable, and would not provide a positive return on investment of taxpayer dollars.”

But while the cuts took aim at blue states, they will affect Trump’s base as well: The terminated projects span districts represented by 108 Democratic members of Congress and 28 Republicans. In California, that includes large swaths of the Central Valley and Inland Empire, which largely leaned toward Trump in 2024.

Russell Vought, director of the White House’s Office of Management and Budget and a top Trump administration official, said in a post on X that the canceled projects were using “Green New Scam funding to fuel the Left’s climate agenda.”

The biggest cut was $1.2 billion for California’s ambitious project to develop clean hydrogen known as the Alliance for Renewable Clean Hydrogen Energy Systems, or ARCHES. It was awarded by the Biden administration as part of a competitive nationwide effort to develop hydrogen projects. The idea is that the hydrogen, which burns at a very high temperature, will be able to replace planet-warming fossil fuels in some industry and transportation uses.

The ARCHES project is a public-private partnership that would create at least 10 hydrogen production sites around the state, primarily in the Central Valley. It would also help transition two large gas-fired power plants — Scattergood in Los Angeles and the Lodi Energy Center in San Joaquin County — to 100% renewable hydrogen, and develop more than 60 hydrogen fueling stations in areas including Fresno, Riverside, Orange and San Joaquin counties.

In all, it would deliver an estimated 220,000 jobs, including 130,000 construction jobs and 90,000 permanent jobs, according to the state. California is pursuing hydrogen in addition to renewables such as offshore wind, solar power and geothermal energy to help diversify its supply, meet growing demand driven by artificial intelligence data centers, and reach its target of 100% carbon neutrality by 2045.

The Trump administration said terminating the clean energy projects will save taxpayers money.

One district with a project that’s been cut is the northern San Joaquin Valley, represented by Tom McClintock (R-Elk Grove). McClintock said he strongly supports the Energy Department’s decision.

“$7.5 billion comes out to about $60 taken from the average earnings of every family in America,” McClintock said. “Call me old fashioned, but I think that companies should make their money by pleasing their customers and not by using government to take money that families have earned.”

The Times also reached out to Reps. Vince Fong (R-Bakersfield), Doug LaMalfa (R-Richvale), Keven Kiley (R-Rocklin), Ken Calvert (R-Corona), Young Kim (R-Anaheim Hills) and Jay Obernolte (R-Big Bear Lake), whose districts are touched by the ARCHES hub and other terminated projects.

A representative for Fong said his office was dealing with issues related to the U.S. government shutdown and so was unable to comment. None of the others responded.

Jesse Lee, senior advisor with the nonprofit group Climate Power, said the cancellations may not save taxpayers money, but cost them. The administration this year has canceled a $7 billion program to help low-income households install solar panels on their homes and halted the development of off-shore wind projects, among other efforts.

“Having these projects come to fruition is really the only chance we have at insulating people from skyrocketing utility bills year after year,” Lee said — particularly in the face of energy-thirsty AI. “The only way to have a prayer of meeting that demand is through these kinds of clean energy projects.”

Lee believes the actions could come back to haunt the party in the midterm elections. Since Trump took office in January, at least 142 clean energy projects have been canceled affecting what his group estimates is at least 80,500 jobs — not including the latest round of cuts announced this week. About 47% of those jobs were in congressional districts represented by Republicans, according to Clean Power’s energy project tracker.

Democratic officials in California said the Energy Department’s latest cuts amount to political retaliation. They were announced on the first day of the shutdown, which the administration blames on Democrats.

“The cancellation of ARCHES is vindictive, shortsighted, and proof that this Administration is not serious about American energy dominance,” California Sens. Adam Schiff and Alex Padilla wrote in a joint letter to Energy Secretary Chris Wright dated Thursday, in which they urged him to restore its funding.

“The cancellation of this award threatens the future promise of hydrogen energy, leaving us behind the rest of the world,” the senators said. “The ARCHES hub is a key strategic investment into American energy dominance, energy technology prominence, manufacturing job growth, and lowering energy costs for American families.”

The cuts come as the Trump administrations eases the path for production of fossil fuels such as oil, gas and coal, including this week’s announcement that it will open 13 million acres of federal lands for coal mining and provide $625 million to recommission or modernize coal-fired power plants. Coal has become increasingly uncompetitive with either natural gas or solar power.

Large-scale renewable energy and carbon capture projects in red states such as Wyoming, Ohio, Texas, Louisiana and North Dakota that received funding from the Energy Department were not subject to the cuts.

Other canceled awards in California include $630 million to the California Energy Commission for grid resilience upgrades; $500 million to the National Cement Company of California for a carbon-neutral cement production facility; $87 million to Redwood Coast Energy Authority for grid updates benefiting tribal communities; $50 million to Southern California Edison for a battery energy storage project; and $18 million to the Imperial Irrigation District to modernize its electrical grid, bolster resiliency against power outages and catalyze renewable energy usage.

“We are disappointed as we did a great deal of work to win the $18.3 million matching grant from the DOE to help modernize our electrical grid and enhance reliability for our customers,” said Robert Schettler, a spokesman for the Imperial Irrigation District located in southeastern California. “Despite this setback, we will reevaluate the scope as the project is a necessity.”

Officials with ARCHES called the administration’s decision a “short-sighted move that abandons America’s opportunity to lead the global clean energy transition.” They said they hope to keep the project moving forward even without the federal grant; ARCHES has also secured more than $10 billion in private funding agreements.

“Despite the loss of federal funding, we will press forward with our state, private, and international partners to build the infrastructure, train the workforce, and establish the supply chains that will power a modern, resilient energy economy,” ARCHES board chair Theresa Maldonado said in a statement.

A top Trump administration official on Wednesday said the U.S. Department of Energy will cut billions of dollars in funding for energy projects in Democratic states.

“Nearly $8 billion in Green New Scam funding to fuel the Left’s climate agenda is being canceled,” said Russell Vought, director of the White House’s Office of Management and Budget, in a post on X.

“The projects are in the following states: CA, CO, CT, DE, HI, IL, MD, MA, MN, NH, NJ, NM, NY, OR, VT, WA,” Vought said.

All 16 states listed did not vote for Trump in the 2024 election.

Vought said more information about the cuts would come from the U.S. Department of Energy, which also announced this week that it will open 13 million acres of federal lands for coal mining and provide $625 million to recommission or modernize coal-fired power plants.

In a news release, the department confirmed that it had terminated more than 300 financial awards associated with 223 projects, amounting to $7.56 billion. The department did not specify the project names or locations, but said the awards had been issued by multiple offices, including the Office of Clean Energy Demonstrations and the Office Energy Efficiency and Renewable Energy.

According to the DOE, the projects were canceled following a review that found they did not “adequately advance the nation’s energy needs, were not economically viable, and would not provide a positive return on investment of taxpayer dollars.” About a quarter of the awards had been issued by the Biden administration between election day in November and Trump’s inauguration in January, the agency said.

California Senator Adam Schiff said Vought’s post amounts to political retaliation.

“Our democracy is badly broken when a president can illegally suspend projects for Blue states in order to punish his political enemies,” Schiff wrote on X. “They continue to break the law, and expect us to go along. Hell no.”

Connecticut Rep. Rosa DeLauro described the move as “purely vindictive” and said it will result in higher energy prices across the country.

“Terminating critical energy projects in Democratic states weaponizes policy for political revenge and will only drive energy bills higher, increase unemployment, and eliminate jobs,” DeLauro said in a statement. “It is reckless and betrays both common sense and public trust.”

California and other states on Vought’s list have been working to advance clean energy projects such as solar power and offshore wind. Republican states working on similar efforts — such as Texas, the largest producer of wind energy in the U.S. — were not among Vought’s list of cuts, despite also receiving funding from the Department of Energy.

Vought, one of the authors of the conservative platform document Project 2025, has been actively involved in reshaping the federal government during the second Trump administration. Vought on Wednesday also announced that the U.S. Department of Transportation was freezing $18 million for two infrastructure projects in New York City “to ensure funding is not flowing based on unconstitutional [Diversity, Equity and Inclusion] principles.” The projects include a train tunnel connecting New York and New Jersey and a subway line running along Second Avenue in New York City.

His posts came on the first day of the U.S. government shutdown.

The recipients of the canceled awards will have 30 days to appeal the termination decisions, according to the DOE, which said some of the projects included in the announcement have already begun that process.

WASHINGTON — The Trump administration said Wednesday that it was putting a hold on roughly $18 billion to fund a new rail tunnel beneath the Hudson River between New York and New Jersey and the city’s expanded Second Avenue subway project because of the government shutdown.

The White House budget director, Russ Vought, said on a post on X that the step was taken due to the Republican administration’s belief that the money was “based on unconstitutional DEI principles,” a reference to diversity, equity and inclusion.

But an administration official, who was not authorized to discuss the matter publicly and insisted on anonymity to discuss the hold, said the government shutdown that started at midnight meant that the Transportation Department employees responsible for reimbursing workers on the projects had been furloughed, so the money was being withheld.

The suspension of funds is likely meant to target Senate Democratic leader Charles E. Schumer of New York, whom the White House is blaming for the shutdown.

In a 2023 interview with the Associated Press, Schumer said he and then-President Biden were both “giddy” over the rail tunnel project, adding that it was all they talked about in the presidential limousine as they rode to the site.

New York Gov. Kathy Hochul, a Democrat, reacting to the news at a news conference about the federal government shutdown, told reporters, “The bad news just keeps coming” and that “they’re trying to make culture wars be the reason why.”

“That’s what a partnership with Washington looks like as we’re standing here. We’ve done our part, we’re ready to build, it’s underway,” she said. “And now we realize that they’ve decided to put their own interpretation of proper culture ahead of our needs, the needs of a nation.”

The Hudson River rail tunnel is a long-delayed project whose path toward construction has been full of political and funding switchbacks. It’s intended to ease the strain on a 110-year-old tunnel connecting New York and New Jersey. Hundreds of Amtrak and commuter trains carry hundreds of thousands of passengers per day through the tunnel, and delays can ripple up and down the East Coast between Boston and Washington

The Second Avenue subway was first envisioned in the 1920s. The subway line along Manhattan’s Second Avenue was an on-again, off-again grail until the first section opened on Jan. 1, 2017. The state-controlled Metropolitan Transportation Authority is working toward starting construction on the line’s second phase of the line, which is to extend into East Harlem.

Boak writes for the Associated Press. AP writers Anthony Izaguirre in Albany, N.Y., and Jennifer Peltz in New York contributed to this report.

YouTube TV dropped Univision’s Spanish-language networks late Tuesday, a contentious turn in a simmering dispute that has already drawn scrutiny from members of Congress.

“Google’s YouTube TV has refused to ‘Do the Right Thing’ and dropped Univision from its platform — stripping millions of Hispanic viewers of the Spanish-language news, sports, and entertainment they rely on every day,” parent company TelevisaUnivision said in a statement, alluding to its campaign slogan.

The outage began about 7 p.m. PDT, shortly before the federal government shutdown — a newsworthy event that Univision journalists have been covering.

The impasse occurred as another deadline loomed in separate contract talks between YouTube TV and NBCUniversal, raising the possibility of a second blackout. Both Univision and NBCUniversal’s distribution agreements were set to expire Tuesday night. But at the deadline, NBCUniversal granted YouTube TV a short-term extension to allow the two sides to continue working on a new deal.

NBCUniversal owns Telemundo, the other major Spanish-language broadcast network.

Prominent members of Congress, including Sen. Ted Cruz (R-Texas), Sen. Bernie Moreno (R-Ohio) and Rep. Mario Diaz-Balart (R-Fla.), have demanded answers from Google executives, including Chief Executive Sundar Pichai.

A major sticking point was YouTube TV’s proposal to shift the Univision network from its basic plan, which is available to all subscribers, and put the channel on a more expensive Spanish-language add-on package.

Univision cried foul, saying the switch would amount to an 18% fee increase for its Spanish-language viewers. The move would also dramatically cut the revenue that Univision receives because YouTube and other distributors pay fees based on the number of subscribers that have access to a channel.

“Google shouldn’t be abusing its monopoly power by forcing millions of Texans & Americans to pay extra for Spanish-language programming,” Cruz said in a message on X. “That’s not right & it’s not fair.”

YouTube is flexing its market muscle. The Google platforms have become the dominant video service in the U.S., according to Nielsen, with YouTube attracting more than 120 million active daily users.

The YouTube TV service has become a major draw with more than 10 million customer homes that receive its traditional TV channel packages that include NBC, ABC, Fox News and Comedy Central.

A YouTube spokesperson downplayed Univision’s departure, saying the Spanish-language company continues to have a massive following on its main YouTube site with more than “160 million subscribers and billions of views across YouTube, where they generate ad revenue from their content.”

However, on the paid service, YouTube TV, the Spanish-language programming “only represents a tiny fraction of overall consumption,” the YouTube spokesperson said.

The blackout comes a month after YouTube avoided a collision with Rupert Murdoch’s Fox Corp. The two companies hammered out a new distribution deal a few days after the August deadline.

NBCUniversal’s talks with Google have also been rocky. The tech behemoth has expressed a desire to fold Peacock programming onto its YouTube TV platform rather than the current stand-alone service. But NBCUniversal has balked because it has spent billions of dollars building Peacock and it wants to remain the conduit for its customers.

YouTube TV launched in April 2017 for $35 a month. The package of channels now costs $82.99.

In a bid for more sports fans, YouTube TV took over the NFL Sunday Ticket premium sports package from DirecTV, which had been losing more than $100 million a year to maintain the NFL service. YouTube TV offers Sunday Ticket as a base plan add-on or as an individual channel on YouTube.

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It’s been just six months since CoreWeave (CRWV -4.96%) went public, and the stock has more than tripled in its short life as a public company, despite witnessing bouts of volatility during this period. The stock’s rapid rise has been fueled by its fast-improving revenue pipeline, but at the same time, investors have been worried about certain factors.

From CoreWeave’s rapidly rising debt to stock dilution on account of its $9 billion Core Scientific deal, shares of the company have slipped significantly since hitting a high nearly three months ago. However, the company’s latest deal with Nvidia (NASDAQ: NVDA) could help assuage investors’ concerns to some extent and set CoreWeave up for more upside.

Image source: Getty Images

Nvidia’s guarantee is great news for CoreWeave investors

CoreWeave has built its business by offering dedicated artificial intelligence (AI) data centers powered by graphics processing units (GPUs) from Nvidia. It rents out its cloud computing capacity to the likes of Meta Platforms and Microsoft, which account for the majority of its top line. It has also added a third big customer in the form of OpenAI.

The ChatGPT maker offered an initial contract worth $11.9 billion to CoreWeave in March this year, before enhancing the size of the deal by another $4 billion. And now, Nvidia has signed a $6.3 billion contract with CoreWeave that will guarantee the latter’s revenue growth in the long run. Under this agreement, Nvidia will be purchasing any unsold data center capacity from CoreWeave through April 2032.

In a filing with the Securities and Exchange Commission (SEC), CoreWeave pointed out that “Nvidia is obligated to purchase the residual unsold capacity” of its data centers in case its “data center capacity is not fully utilized by its own customers.” CoreWeave’s existing data center capacity is falling short of demand.

CFO Nitin Agrawal remarked on the August earnings conference call that CoreWeave’s “growth continues to be capacity-constrained, with demand outstripping supply.” This is evident from the fact that its contractual backlog increased by close to $14 billion year over year in Q2, driven by the multibillion-dollar contracts the company signed in the quarter.

For comparison, CoreWeave’s Q2 revenue increased to $1.2 billion from $395 million in the year-ago period. Not surprisingly, the company is laser-focused on bringing online more data center capacity so that it can fulfill its massive revenue backlog worth $30 billion. It currently operates 33 dedicated AI data centers in the U.S. and Europe, with active power capacity of 470 megawatts (MW).

However, it has been increasing its contracted data center power capacity at a nice clip so that it can bring more active capacity online. Specifically, CoreWeave’s contracted data center power capacity increased by 600 MW in the previous quarter to 2.2 gigawatts (GW). But even that might not be enough in the long run, as according to McKinsey, data center capacity demand could grow by 4x between 2023 and 2030.

The firm estimates that global data center capacity demand could hit 220 GW in 2030 from 55 GW in 2023 in a midrange scenario. So there is a good chance that CoreWeave could remain capacity-constrained in the long run thanks to the AI-powered data center boom. For instance, McKinsey is expecting a deficit of more than 15 GW in data center power capacity in the U.S. itself by 2030.

As such, CoreWeave may not be left with any residual capacity to sell to Nvidia going forward, as there is a good chance that data center demand will continue to be stronger than supply on account of AI. And now, Nvidia’s guarantee gives CoreWeave investors an extra cushion that should ensure healthy long-term growth for the company, even if there’s a drop in AI computing capacity requirements.

What should investors do?

Nvidia’s guarantee suggests that the demand for AI computing is likely to remain robust in the long run. This should ideally translate into a bigger backlog and stronger growth for CoreWeave, which is just what analysts are expecting from the company through 2028.

CRWV Revenue Estimates for Current Fiscal Year data by YCharts

The massive opportunity in the cloud AI infrastructure market should help CoreWeave sustain impressive growth rates beyond 2028. For instance, even if it clocks 20% annual top-line growth in 2029 and 2030, its revenue could hit $25.6 billion. If the stock is trading at even 5 times sales at that time, in line with the Nasdaq Composite‘s average sales multiple, its market cap could get close to $130 billion. That would be more than double CoreWeave’s current market cap.

Importantly, CoreWeave can now be bought at 16 times sales, which isn’t all that expensive when we consider its remarkable growth.

So investors looking to capitalize on the AI cloud infrastructure market’s long-term growth potential can consider buying this AI stock right away, especially considering that the Nvidia deal is a vote of confidence in CoreWeave’s — and the AI data center market’s — prospects.

Global spending on artificial intelligence (AI) is set to reach $1.5 trillion this year, according to estimates from Gartner. Even with the huge amount businesses and tech companies are already spending, that number is forecast to climb even further well into the future. The analysts at Gartner expect total spending to hit $2 trillion in 2026. Many analysts see total spending climbing through the end of the decade in order to take advantage of the massive opportunity and promises of generative AI.

One company managed to build a massive $10 billion business out of demand for artificial intelligence compute in just a few years, and it expects to capture a significant amount of market share over the next few years. In fact, management said it expects that $10 billion in annual sales to grow to $144 billion in sales within five years. And it has the contracts to back it up.

Image source: Getty Images.

The massive opportunity ahead

A handful of companies are rapidly building out data centers and leasing space and equipment in order to meet the demand of tech companies training and using large language models. Some contracts from companies like OpenAI and Anthropic, two leading LLM developers, are worth tens of billions of dollars per year. And the biggest cloud computing platforms — owned by Amazon (AMZN -0.84%), Microsoft (MSFT -0.64%), and Alphabet (GOOG -0.53%) (GOOGL -0.56%) — are unable to keep up with the growing demand.

As AI companies look to diversify their compute providers, Oracle (ORCL -5.55%) has emerged as a strong alternative with excellent networking capabilities and competitive pricing. However, its Oracle Cloud Infrastructure (OCI) is lacking in scale relative to the three market leaders. That didn’t stop OpenAI from committing $300 billion to Oracle’s cloud business over five years starting in 2027.

As a result, Oracle reported a huge increase in its backlog of remaining performance obligations. The amount stood at $455 billion as of the end of the company’s first quarter, up from $137 billion at the end of the fourth quarter. While $300 billion of that is tied to OpenAI, Oracle added another $18 billion in contracts on top of that.

And management expects to sign additional contracts in the near future. It said OCI’s remaining performance obligations will likely exceed $500 billion by the end of the current quarter.

If management succeeds in growing OCI from $10 billion to $144 billion over the next five years, it’ll end the decade with a cloud business similar in size to Alphabet’s, based on current growth rates. If it can manage to earn similar operating margins as the three big providers today (20% to 37%), it could produce a huge boost to its existing earnings.

While management notes it already has the backlog to support its revenue outlook, it’s important to consider the significant risks that come with investing in Oracle stock right now.

The future is not guaranteed

Oracle burned $5.9 billion in cash over the past 12 months as it expanded OCI capacity. It took on $27 billion worth of debt over the past year, and it now holds $111 billion of debt on its balance sheet. It’ll have to take on more debt and burn more cash to build out the capacity needed to meet demand for its cloud computing business.

To put things in perspective, Microsoft is committing to $30 billion in capital expenditures for the current quarter, and it’ll likely maintain that pace throughout the year. Amazon expects to spend over $100 billion in 2025, mostly on additional compute capacity. Alphabet updated its target spend to $85 billion for the year, as demand for its cloud infrastructure continues to outstrip supply.

They all have significant backlogs, but none is as big as Oracle’s is now. Oracle plans to spend $35 billion this year, with OCI revenue of $18 billion.

Meanwhile, its three biggest competitors are producing strong positive free cash flow thanks to the fact that they already have large, established cloud businesses and massive businesses outside of cloud computing. Oracle’s legacy software business doesn’t generate nearly enough cash to keep up with the demand for AI compute.

But it’s not just the financing risk Oracle faces. It also takes on the risk of a long-term contract with OpenAI. The generative AI leader has committed to spending $30 billion on Oracle’s compute starting in 2027 and ramping up from there. But the company itself is only bringing in $13 billion in revenue this year, according to its CFO’s outlook. It’s also committed to spending $10 billion with Broadcom, not to mention its existing cloud computing deals with Microsoft and Alphabet.

It’s also unclear how profitable the OpenAI deal will be if it comes to full fruition. Oracle must have offered very attractive pricing relative to its larger competitors to attract such a big commitment. That could result in a significantly worse margin profile relative to Amazon, Microsoft, and Alphabet.

Nonetheless, shares of Oracle have now skyrocketed in price, reaching a forward PE ratio of 45 based on estimates for fiscal 2026. That’s far higher than its larger cloud competitors, making the stock a much riskier investment. If Oracle can execute, build the capacity it needs, and OpenAI holds up its end of the deal, it could be a huge winner over the next five years. But the other three cloud computing providers’ stocks look like much better values with much less risk right now.

Nvidia (NVDA -0.73%) is no stranger to investing in its customers. The company has put billions to work to expand the artificial intelligence (AI) ecosystem, aiming for more growth and investment from its core growth market. The company’s latest deal with OpenAI — the maker of ChatGPT — is a prime example of this strategy.

Here’s what the deal between Nvidia and OpenAI means

The first thing to understand about this deal is that it is simply a letter of intent. That means the partnership is non-binding, with no legal obligation for either of the companies to follow through on the deal framework discussed below. Even if the deal is non-binding, however, the spirit of the partnership is clear: Nvidia and OpenAI will be working closely together to enable each other’s businesses.

Next, let’s discuss the figures you may have seen in the headlines. Nvidia, for example, has pledged to invest $100 billion into OpenAI. The details, however, paint a slightly different picture than the headlines. What the deal essentially outlines is OpenAI’s intention to purchase Nvidia hardware for a massive, multiyear infrastructure buildout. According to a press release, OpenAI intends to “build and deploy at least 10 gigawatts of AI data centers with NVIDIA systems representing millions of GPUs for OpenAI’s next-generation AI infrastructure.” In return, Nvidia will invest in OpenAI equity in tranches, with each funding tranche being initiated as the infrastructure gradually expands.

OpenAI gets two things from this partnership. First, it gets funding in the form of direct cash for equity. Second, it gets preferential treatment from Nvidia when it comes to technology sourcing. Nvidia’s chips are in high demand, at one point facing 12-month shipping delays. OpenAI has now secured a long-term strategic advantage, gaining the ability to scale its infrastructure with the best chips on the planet, chips that the competition may not be able to source.

Nvidia, meanwhile, gains an even stronger backlog. It locks in a huge customer for years to come. It also helps fund an accelerated buildout of AI infrastructure — another long-term tailwind for its business.

Image source: Getty Images.

Should you buy even more Nvidia stock?

This is the type of deal that only Nvidia and OpenAI could pull off. Both are industry heavyweights with sizable competitive advantages. By joining forces, both companies stand to gain even more ground on the competition.

Should you buy stock in Nvidia due to this deal alone? Probably not. The deal, as mentioned, is simply a signal of intent. Nothing is legally binding. Plus, the tie-up could draw the scrutiny of regulators. According to Reuters:

The scale of Nvidia’s latest commitment could attract antitrust scrutiny. The Justice Department and Federal Trade Commission reached a deal in mid-2024 that cleared the way for potential probes into the roles of Microsoft, OpenAI and Nvidia in the AI industry. However, the Trump administration has so far taken a lighter approach to competition issues than the Biden administration.

Even if there are changes to the deal due to regulators or external influences, investors should be very bullish simply about Nvidia’s ability to forge such a deal. It has a huge lead on the competition when it comes to real-world chip performance, access to capital, and industry influence. By making moves like this, the company is ensuring that its dominant market shares have the possibility of continuing far into the future. So while shares aren’t a buy simply due to the deal with OpenAI, investors should take this news as a strong positive for Nvidia’s future.