Wednesday PM reads
- President Donald Trump decided to let Nvidia Corp. sell its H200 artificial intelligence chips to China after concluding the move carried a lower security risk because the company’s Chinese archrival, Huawei Technologies Co., already offers AI systems with comparable performance, according to a person familiar with the deliberations. BB
- Nintendo Co.'s shares slid as much as 4.7% Wednesday to their lowest level since May, weighed down by concerns that the surging price of components will erode its profit. The price Nintendo has to pay for the 12GB RAM modules in the Switch 2 jumped 41% in the current quarter, and the NAND storage aboard the new console also became nearly 8% pricier. Nintendo's shares have declined in seven out of eight trading days in December, losing roughly $14 billion in market value, as optimism about the Switch 2 fades in the face of a growing memory supply crisis. BB
- Stablecoins, as now operated, fall far short of these requirements: they are opaque, easily usable by criminals and of uncertain value. Last month, S&P Global Ratings downgraded Tether’s USDT, the most important dollar stablecoin, to “weak”. This is not a trustworthy money. Private monies have often failed in crises. That is very likely to be true of stablecoins, too. FT
- For the first time, the government is invoking a 2022 law that made chip makers’ trade secrets subject to protection on national security grounds. Semiconductor technologies “are the lifeline of our country’s industry,” prosecutors said, adding that their theft threatens the international competitiveness of Taiwan’s chip companies. NYT
- Across all BTD strategies, the average Sharpe ratio [a measure of risk-adjusted return] was -0.04 less than equities (about a 16 per cent degradation to holding equities passively), with over 60 per cent of BTD implementations underperforming by this metric. These results are even worse for BTD using more recent data. From October 1989 through September 2025 (the full daily return history for the S&P 500 that includes dividends), the Sharpe ratio of these strategies was -0.27 worse than holding equities passively (a 47 per cent degradation). AQR
- I think much of the US stock market’s growth is held up by how long everybody is willing to be gaslit by Jensen Huang into believing that they need more GPUs. At this point it’s barely about AI anymore, as AI revenue — real, actual cash made from selling services run on GPUs — doesn’t even cover its own costs, let alone create the cash flow necessary to buy $70,000 GPUs thousands at a time. It’s not like any actual innovation or progress is driving this bullshit! In any case, the markets crave a healthy NVIDIA, as so many hundreds of billions of dollars of NVIDIA stock sit in the hands of retail investors and people’s 401ks, and its endless growth has helped paper over the pallid growth of the US stock market and, by extension, the decay of the tech industry’s ability to innovate. Once this pops — and it will pop, because there is simply not enough money to do this forever — there must be a referendum on those that chose to ignore the naked instability of this era, and the endless lies that inflated the AI bubble. Until then, everybody is betting billions on the idea that Wile E. Coyote won’t look down. Zitron
- Since no one can say definitively whether this is a bubble, I’d advise that no one should go all-in without acknowledging that they face the risk of ruin if things go badly. But by the same token, no one should stay all-out and risk missing out on one of the great technological steps forward. A moderate position, applied with selectivity and prudence, seems like the best approach. Finally, it’s essential to bear in mind that there are no magic words in investing. These days, people promoting real estate funds say, “Office buildings are so yesterday, but we’re investing in the future through data centers,” whereupon everyone nods in agreement. But data centers can be in shortage or in oversupply, and rental rates can surprise to the upside or the downside. As a result, they can be profitable . . . or not. Intelligent investment in data centers, and thus in AI – like everything else – requires sober, insightful judgment and skillful implementation. Marks