Nvidia, the world's most valuable company, on Thursday announced one of its biggest deals, a $13 billion purchase of popular developer platform Hugging Face. It's a bet that support for open AI models will drive future demand even as its biggest customers develop their own chips to reduce reliance on the semiconductor giant. This follows the purchase of a $3.5 billion stake in Taiwan's MediaTek, and up to $105 billion guarantee for OpenAI's Ohio data-center lease.
Nvidia is trying to extend its influence and reach across the AI complex as widely as it can. But the more it does so, the more it will face accusations of "circular financing" and an unsustainable reliance on revenue from customers it is supporting via financial tie-ups. Investors are shrugging it off for now - after sliding 20% earlier this summer, Nvidia shares are up 20% in the past month.
The Japanese currency also rose 2% on Thursday, to its strongest New York session closing level since the U.S. and Israel attacked Iran in late February. The rally didn't have the helping hand of official intervention behind it either, seemingly, making it all the more remarkable.
Traders are betting heavily on a BOJ rate hike later this month, and another 50 bps of tightening by April. It would appear Japanese and U.S. policymakers are not happy with dollar/yen above 160.00, and a more hawkish BOJ would help maintain that 'line in the sand' intact. But will monetary tightening be enough on its own? Japan's bond market suggests fiscal policy will have to do some of the heavy lifting too, and that seems far less of a guarantee right now.
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