AI Summary
5 min readAI Sell-Off, Google’s EU Fine, and Russia’s Massive Strikes
The dominant story in Thursday’s episode is a sharp global sell-off in AI stocks, triggered by a report that Meta plans to enter the cloud business and sell excess AI computing power. That development raised a question that has been lurking beneath the AI rally: what if the hyperscalers are building more compute than they can profitably use? The episode also covers Google’s loss of its EU antitrust appeal, a $600 million settlement by Alibaba, Russian missile strikes on Ukraine, and the advertising industry’s reckoning with AI.
The AI Computing Glut Question
The sell-off began in the U.S. and carried over to Asia overnight, where Korea’s benchmark Kospi index closed down nearly 8% and the tech-heavy Kosdaq — where trading was briefly halted — ended the session off about 7%. The trigger was a report that Meta plans to enter the cloud business to sell excess AI computing power. Meta’s stock jumped on the news, but it raised alarm elsewhere.
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What you'll learn
- 1 (00:26) **AI Stocks Sell Off on Oversupply Fears** - Global tech stocks slump ahead of US jobs data, triggered by a report that Meta plans to sell excess AI computing power, raising questions about overinvestment.
- 2 (02:59) **AI Trade Gets Crowded; Second-Hand Market Emerges** - Investors pour into the same stocks (Meg 7, hyperscalers, Asian semis), creating a "second-hand market" for AI compute that was previously only bought new.
- 3 (04:17) **Michael Burry Doubles Down on AI Short Bets** - "Big Short" investor adds to bearish positions on Tesla, Applied Materials, a semiconductor ETF, and NVIDIA, calling massive new chip investments "the beginning of an end."
- 4 (05:01) **Google Loses EU Antitrust Appeal** - EU's Court of Justice upholds a $4.5 billion fine over Android search dominance.
- 5 (05:23) **Alibaba Settles DOJ Contraband Allegations** - Alibaba and a US payments processor agree to pay $600M for allowing sales of illegal pharmaceuticals and restricted items.
- 6 (05:57) **Egg Producers Settle Price-Fixing Allegations** - Three major egg providers reach settlements with DOJ and 17 states over collusion to inflate prices, including during record-high egg prices last year.
- 7 (06:28) **Russia Launches Massive Missile Barrage on Ukraine** - At least 13 killed in one of the largest attacks since the war began, exploiting Ukraine's shortage of air defense interceptors.
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Show Notes
A.M. Edition for July 2. A report that Meta plans to enter the cloud business to sell excess AI computing power has dragged down an array of tech stocks in the U.S. and Asia. Plus, WSJ advertising editor Suzanne Vranica and reporter Mark Maurer unpack how AI is reshaping the marketing and consulting industries. And Russia strikes back against Ukraine with one of its largest missile barrages since the start of the war. Luke Vargas hosts.
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