Good morning and welcome to FirstFT. In today’s newsletter:
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AI chipmaker Nvidia projects 70% sales growth next year
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How Jane Street racked up $15bn of trading losses
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Sovereign debt investor concern switches from Italy to France
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Harry and Meghan, the sequel
You can listen to today’s top news stories in the FT News Briefing podcast.
Results from Nvidia have boosted global investor sentiment this morning after the chipmaker raised its forecast for AI chip sales.
The world’s most valuable company yesterday reported revenue of $96.2bn for the quarter to the end of July and projected sales of about $108bn for the current quarter, beating Wall Street expectations.
Chief financial officer Colette Kress said Nvidia expected strong growth to continue, forecasting a 70 per cent rise in sales next year. She said customer demand was set to double but revenue would be limited by supply constraints.
The results bolstered the view that the AI rally is far from over and Nvidia shares surged 7 per cent in pre-market trading. South Korea’s Kospi index closed 1.5 per cent higher. US chipmakers Micron Technology, Marvell Technology and Broadcom were also higher in pre-market trading. Data storage firms Sandisk and Western Digital gained as well.
Salesforce, the enterprise software company, also released an upbeat forecast last night and said it was deepening its partnership with Anthropic. Its shares are up 12 per cent.
Nvidia has faced greater investor scrutiny recently over how it has deployed its vast balance sheet to help its customers fund their building of AI infrastructure.
This month, Nvidia assembled a consortium of Wall Street investors to provide $500bn in chip financing for its clients and agreed a more than $100bn backstop for an OpenAI data centre in Ohio.
These come on top of investments in many of its biggest customers and revenue-sharing and backstop deals tied to its chips.
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AI ‘capture’: Many elite economists have started collaborating with tech companies or even working for them directly, a development that comes with risks, warns Soumaya Keynes.
Here’s what else we’re keeping tabs on today:
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US: The Jackson Hole economic policy symposium begins with central bankers, policymakers, academics and economists gathering to discuss economic issues. It runs until Saturday.
Five more top stories
1. Authorities have mounted a huge rescue effort following a catastrophic flash flood on the Tibet-Nepal border that left at least 200 dead and up to 1,300 missing. Nepal’s Prime Minister Balendra Shah described the wall of water and mud that wiped out a Himalayan border crossing as an “unexpected thunderbolt of a natural disaster”. Here’s the latest.
2. Harvard Business School explored teaching MBA students in Europe and Canada for the first time after US President Donald Trump’s administration last year threatened to stop international students getting visas to attend its courses. Andrew Jack has the full report.
3. Consulting executives are considering ordering junior staff back to the office more frequently to sharpen their human skills as AI takes over more of their technical work. Executives at some of the UK’s largest consulting firms said AI had made interpersonal skills increasingly valuable — competencies they argued must be developed in-office.
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More on consulting firms: The liquidators of China Evergrande have won the right to take an $8.5bn negligence claim against PwC beyond the Big Four firm’s Hong Kong and mainland Chinese arms. What will it mean for the Big Four?
4. KKR has agreed to pay $250mn to settle the US Department of Justice’s lawsuit alleging the private equity firm repeatedly failed to properly file documents with the federal government related to buyouts between 2021 and 2022. The penalty is the largest imposed over violations of a federal law that requires acquirers to provide financial information of merger parties to regulators including the Federal Trade Commission and the justice department before closing deals.
5. More than $80bn has been wiped off the value of bitcoin treasury companies since the middle of last year, an FT analysis has found, after the crypto-buying craze that transformed their business models failed to boost their share prices.
Jane Street’s growing pains
When Leopold Aschenbrenner’s Situational Awareness hedge fund blew up in July it led to the first monthly loss at Jane Street for a decade. The shortfall was a stunning reversal for a proprietary trading firm whose returns had become the envy of Wall Street. It also highlighted just how far the secretive company had evolved from its roots as a nimble market maker and arbitrage trader. The FT spoke to more than a dozen current and former employees, as well as analysts, to explain the events that led to a $15bn trading loss.
We’re also reading . . .
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US markets: Over the past 20 years or so, US stock markets have crushed the field. But lately things are changing. Robert Armstrong explains.
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Harry and Meghan: Are you ready for the sequel, asks HTSI editor Jo Ellison.
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SOS bracelet: A City of London trader is developing a wearable device that uses AI to try to protect women and children identified as being at risk of domestic abuse.
Chart of the day
France is replacing Italy as the focal point for market concerns about European debt sustainability, say investors, as Paris faces tricky budget negotiations next month and ahead of a presidential election next year where support for far-left and far-right parties is rising. Italy, with a stock of public debt ranking among the continent’s biggest, has long been seen as one of Europe’s riskiest borrowers, but investors say that is changing and France now represents a “perfect storm” for bond investors.
Take a break from the news . . .
Yayoi Kusama, the Queen of Polka Dots, has died aged 97 after a long illness. The Japanese artist gained new prominence in the 1990s after returning to her country of birth as the interest in female and non-western artists challenged the modern canon. Her “Infinity Mirror Rooms” in 2021-24 at Tate Modern was the gallery’s most visited exhibition ever.
The FT Weekend Festival returns to Kenwood House Gardens in London and online on September 5. Join Richard E Grant, Paul Smith, Mary Beard, Jeremy Hunt, Peter Capaldi, Angela Hartnett and many more leading thinkers, policymakers and cultural voices. Save your seat at ft.com/festival and use code FTNewsletters to save 10% off your pass.
