"China Chipmaker Moore Threads Soars 469% After $1.1 Billion IPO"

The bankers left some money on the table, eh what?

The offering was subscribed 4000 times over (the retail portion was oversubscribed 2,750 times).

From Bloomberg, December 4: 

Moore Threads Technology Co., a leading Chinese artificial intelligence chipmaker, surged in its Shanghai trading debut after raising 8 billion yuan ($1.13 billion) in the year’s second-largest onshore IPO.

The firm’s stock climbed 469% after being sold at 114.28 yuan a piece during the initial public offering. Investor interest in the offering was strong, with the retail portion oversubscribed 2,750 times even after a clawback, making it the second most sought-after onshore IPO over $1 billion since 2022, Bloomberg data shows.

The debut comes as optimism over China’s drive for tech self-sufficiency intensifies, fueled by trade tensions and fears of US technology curbs. The firm is also among those benefiting from a market share void left by Nvidia Corp.’s forced exit. Earlier this year, regulators eased listing rules for unprofitable firms on the Nasdaq-style Star Board to bolster homegrown startups.

Read more: Cambricon Aims to Triple Chip Output to Replace Nvidia in China

Moore Threads has a competitive technological edge and can benefit from the “domestic substitution trend” given US trade frictions and Beijing’s push to develop national champions, Fan Zhiyuan, an analyst at Sinolink Securities Co. wrote in a note. It is also the only Chinese firm that can manufacture all-purpose graphics processing units, he added.

Proceeds from the IPO will fund next-generation projects in AI and graphics chips as well as supplement working capital. The offering ranks behind Huadian New Energy Group Co.’s $2.7 billion IPO in July.

Moore Threads’ net loss was 724 million yuan during the first three quarters of the year, Sinolink Securities added, narrowing by 19% from the year ago period. Meanwhile, revenue surged by 182% to 780 million yuan.

Still, its valuations remain lofty. Moore Thread’s price to sales ratio at 123 times the offer price of 114.28 yuan per share is higher than the average of 111 times for peers, according to a Dec. 4 filing. The company recently asked its lead sponsor to remind investors of risks related to its valuations.

Origins

Founded in 2020 by former Nvidia executive Zhang Jianzhong, Moore Threads had started out earning revenue from graphics chips for gaming and visual rendering before pivoting to AI accelerators used in powering large language models....

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"After AI push, Trump administration is now looking to robots"

From Politico, December 3: 

Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro.

Five months after releasing a plan to accelerate the development of artificial intelligence, the Trump administration is turning to robots.

Commerce Secretary Howard Lutnick has been meeting with robotics industry CEOs and is “all in” on accelerating the industry’s development, according to three people familiar with the discussions who were granted anonymity to share details. The administration is considering issuing an executive order on robotics next year, according to two of the people.

A Department of Commerce spokesperson said: “We are committed to robotics and advanced manufacturing because they are central to bringing critical production back to the United States.”

The Department of Transportation is also preparing to announce a robotics working group, possibly before the end of the year, according to one person familiar with the planning. A spokesperson for the department did not respond to a request for comment.

There’s growing interest on Capitol Hill as well. A Republican amendment to the National Defense Authorization Act would have created a national robotics commission. The amendment was not included in the bill. Other legislative efforts are underway.

The flurry of activity suggests robotics is emerging as the next major front in America’s race against China. It’s the latest example of how the Trump administration is embracing industrial policy in a bid to compete against Beijing in critical sectors such as AI. But promoting the spread of robotics also threatens to undermine one of Trump’s chief goals: reviving the U.S. manufacturing workforce.

A general-purpose humanoid sounds like science fiction. But advances in artificial intelligence are enabling human-like robots to take on increasingly sophisticated work by processing more data more quickly.

The International Federation of Robotics estimates that by 2023 China had 1.8 million industrial robots inside its factories, four times as many as the U.S. China, Japan, Australia, Germany and Singapore all have national robotics plans.

Catching up would require substantial investment. Funding is on pace to hit $2.3 billion in 2025 – double last year’s total, according to CB Insights. Goldman Sachs estimates the global market for humanoids could reach $38 billion by 2035.

The industry has been pushing administration officials and lawmakers to get involved. They say robots are the physical expression of AI. Any push to strengthen AI competitiveness must also include a plan for advancing robotics, they say.

Companies want tax incentives or federal funding to help companies integrate advanced automation, stronger supply chains and widespread deployment. They also want trade policies to confront Chinese subsidies and intellectual property practices.

“It’s important that we lean in, think about a national robotics strategy and support this burgeoning industry in the U.S. so that we can remain competitive,” Apptronik CEO Jeff Cardenas told MM.

Apptronik, an Austin startup backed by Google and valued at $5 billion, has developed a general-purpose robot called Apollo, one of the first humanoids to operate inside an auto factory.

“There is now recognition that advanced robotics is crucial to the U.S. in terms of manufacturing, technology, national security, defense applications, public safety,” said Brendan Schulman, VP of policy and government relations for Boston Dynamics. “The investment that we’re seeing in the sector and the efforts in China to dominate the future of robotics are being noticed.”

An unresolved question is how a national robotics push would square with the administration’s goal of reviving American manufacturing. Skeptics warn that if companies automate too aggressively, the U.S. could end up reshoring factories only to staff them with machines - not people.

A paper published by the National Bureau of Economic Research found that as firms automate, many workers in routine or replaceable roles experience lower employment opportunities and reduced earnings....

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Goldman's Retiring Chief Equity Strategist, David Kostin, Has Some Out-The-Door Observations

 From Goldman Sachs, December 4:

Podcast: 

From Assets to Alpha: David Kostin on US Equities 

Goldman Sachs Research’s David Kostin discusses the recent equity market volatility, the AI trade, and the opportunities for investors today. Kostin, who is retiring as chief US equity strategist at the end of 2025, also reflects on his 31-year career at Goldman Sachs.

This episode was recorded on December 2nd, 2025. 

Transcript: 

Speaker: 20-plus percent forecast for stocks next year.
That's courageous. A lot of people, they like to come out with, you know, eight to twelve and, you know, that's what they come out with. What makes you so confident?

David Kostin: There are three reasons that we're confident. The first is the economy.

Allison Nathan: That's the voice of David Kostin, back when he made his first TV appearance in 2010 on CNBC. Kostin, who's retiring as our chief US equities strategist this year, joined Goldman Sachs in 1994. Today, we'll get his take on US equity markets, and we'll also get the chance to hear some stories from his career as well as his uniquely informed views on how capital markets have changed over the past few decades.
David, welcome back to Goldman Sachs Exchanges.

David Kostin: Allison, it's great to be here. 

Allison Nathan: Can I first just say that I am sad that this will be the last time I am interviewing you on Exchanges? For our listeners and viewers, David and I have worked together for nearly 30 years. You've been here for 31. I have been here for 28. For half of that time that I have been here, we have sat 20 feet away from each other, so I will really miss you dearly.

David Kostin: I am going to miss you, along with many other colleagues here at the firm, but I am going to be an advisory director in calendar year 2026. And so I'll be interacting with some clients and other internal people. So we'll have an opportunity to see each other. But I've had a great experience for the last three decades.

Allison Nathan: I want to take the opportunity to reflect on your very long career, but before we get into those reflections let me take the opportunity to ask you for the last time about the markets. US equity markets have made new highs this year, but the markets have been pretty volatile over the past few weeks. So how would you characterize market sentiment right now? 

MUCH MORE, 27 page PDF

Interesting throughout but particularly if you Ctrl + F bubble

"The Supreme Court’s ruling on Trump’s tariffs is looming. His Treasury chief says this is the backup plan to keep them going"

From MarketWatch, December 3:

‘We can re-create the exact tariff structure,’ Treasury Secretary Scott Bessent says

U.S. Treasury Secretary Scott Bessent on Wednesday expressed confidence that the Supreme Court will rule in favor of the Trump administration’s many country-specific tariffs, while also saying administration officials are ready to maintain the levies through other avenues.

Bessent’s comments match up with forecasts that President Donald Trump would respond to a court loss by switching to invoking authorities granted in sections 301 and 122 of the Trade Act of 1974, as well as Section 232 of the Trade Expansion Act of 1962.

“We can re-create the exact tariff structure with 301s, with 232s, with the — I think — a 122,” the Treasury chief said during the New York Times DealBook Summit in New York City. When Bessent was pushed on whether those options would provide a permanent solution, he seemed to indicate that would largely be the case. “The 122s are permanently, but the others, we can do it,” he said....

....MUCH MORE 

Also:

November 24 -  "White House preps backup plans with Supreme Court verdict looming; US, EU officials meet"

September 1 - "What Are Trump’s Options If His Tariffs Are Ruled Unlawful?" 

Also relevant, March 21 - "Will Economic Detox Lead to a Recession? Maybe Not. But a Long Deep Stock Market Rout Will (See Dotcom Bust)":

If the Trump administration achieves its goal of cutting the projected deficit in half, and thus removing a trillion dollars in stimulus spending—all deficits are stimulus, whether you call them that or not—if they cut the deficit in half, a recession seems inevitable.

However, I'm not sure the media and other political posturing on the terror and ruin posed by recessions is even close to what actually happens across a population of 345 million people. This is not 1873 or 1893 or 1933, the safety nets are a bit stronger than they were in those retrograde economic eras.

A different analog that may be more instructive is the 18-month 1920 - 1921 recession, brutal for those unemployed but setting the stage for the 1920's boom in the economy and in the mass adoption of consumer technologies that 100 years later still shape society, telephones, appliances, automobiles, radio, Hollywood etc., etc.

So who knows?

The other, more important point is that the interest required to service the ever-increasing debt will destroy both the economy and the constitutional republic if the detox does not happen....

May 29's - Goldman Sachs: "Four tools at the Trump administration’s disposal after a U.S. court blocks tariffs"

September 2 -  "Why the Supreme Court Could Uphold Trump’s Tariffs"

Paying particular attention to the dissenting opinion authored by Judge Taranto, beginning on page 62 of the Opinion. 

September 9 -  "Supreme Court agrees to decide the fate of Trump’s tariffs": 

This could set up some ructions in the bond markets should the court decide against the administration. In the first place the Treasury Department will have to repay or otherwise credit the companies that paid the tariffs in question. That could amount to somewhere between $100 billion to $200 billion and just to make things extra-interesting the debit could be booked in the fiscal year that ends in three weeks.

Secondly, the lack of income from the tariffs would require the treasury to sell some $300 billion more debt than is needed if the tariffs stand.

There are a few options* for the administration under other tariff authorities but the day of the Supreme Court decision could be challenging for market participants....

November 4 - "Looking to experts for how the Supreme Court will rule on tariffs? They aren't sure either.": 

It doesn't really matter how the Supremes rule, tariffs of one sort or another will be in place at the end of 2025 and the US, Mexico, Canada trade agreement will be renegotiated early next summer.

In the meantime our best guess is that the Court will rule against the Administration on at least one of the points being argued, the pundits will splash headlines about refunding the money already collected (I think it was $32 billion last month), the deficit will be calculated to grow, treasuries will get sold and I will be posting that "this isn't the real market whack" but the one before the real star-spangled, bubble-bursting, all-American market panic....

November 5 - Tariffs: Today's Supreme Court Oral Arguments

And quite a few more. The search blog box, upper left, is often rewarding.

“AI’s inherent incomprehensibility is a unique flaw.”

Yes, yes it is.*

From Sweden's  Institute for Futures Studies (IFFS, Institutet för framtidsstudier), November 13:

Being able to explain how something works has value, but being able to explain why it works is enormously more valuable, because that knowledge can be built upon. The fact that AI is inherently incomprehensible - even to the people who created the models - is therefore highly problematic and a unique flaw. This argument was made by Emma Engström, researcher at IFFS in an op-ed in Dagens industri recently. In this interview below she explains further.

One of the recipients of the 2025 Riksbank Prize in Economic Sciences in Memory of Alfred Nobel is Joel Mokyr. In his work, he describes how “explanatory knowledge” was an important ingredient in the breakthroughs of the Enlightenment period, and why this led to lasting development in science and innovation. His point is that this was when we began to base knowledge on prior knowledge in a new way. Instead of merely explaining that something worked, we wanted to understand why. This makes improvement possible. And from this perspective, the inherent incomprehensibility of today’s AI technology should be seen as a serious problem for knowledge-building, Engström argues.

– There is a body of literature about how today’s society is becoming increasingly incomprehensible. In the 2015 book The Black Box Society, Frank Pasquale describes a society increasingly governed by algorithms. For example, loan decisions and other assessments determined by algorithms that are difficult to understand. The latest AI models are infinitely more incomprehensible than those algorithms. Today’s hype is specifically centered on transformer models which, by their nature, get better and better the more parameters they incorporate - the more complex they become. I think that’s a huge problem, says Emma Engström.

In what ways?

– You could say there are two different categories of problems. One concerns ethics and arises when you cannot explain why a certain decision was made. For example why I got a job and you didn’t, or why you received a loan and I didn’t. For people to accept a decision or be able to appeal it, an explanation is required.

– The second category concerns knowledge-building and the power of being able to explain why something works. Take scissors as an example. Understanding that it is the lever effect that makes scissors work enables the next person to create even more effective scissors with an even longer handle. Mokyr shows that this kind of “explanatory knowledge” lies behind the exponential development of science since the Enlightenment.

You mention weather forecasts in your op-ed. AI has proven to be very good at getting them right.

– In one sense, this is not a problem. A weather forecast is not a decision about, say, a loan, and therefore does not require an explanation in the same way. It may be enough that the forecast is accurate, it is valuable in itself. But at the same time, if we were to replace human meteorologists with AI, we would over time lose knowledge about how weather, climate, winds, solar radiation, currents, and so on fit together and humans in 100 years might not understand anything about weather, because we would simply feed data into an AI model that spits out a result that may be accurate, but without us knowing why. And we cannot know whether all the data we feed in is relevant or whether we are missing important data. Perhaps the AI model uses only 10 percent of the data while 90 percent is junk.

– A further problem is that AI has obviously found a pattern that humans have not. In human hands, that knowledge might be used to create a deeper understanding of the climate that could be useful in many ways, or be applied in some other field. Scientific breakthroughs often happen this way. If the knowledge is locked inside an incomprehensible AI, this does not occur.... 

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*Way back in 2017 we posted "Cracking Open the Black Box of Deep Learning" with this introduction:

One of the spookiest features of black box artificial intelligence is that, when it is working correctly, the AI is making connections and casting probabilities that are difficult-to-impossible for human beings to intuit.
Try explaining that to your outside investors.

You start to sound, to their ears anyway, like a loony who is saying "Etaoin shrdlu, give me your money, gizzlefab, blythfornik, trust me."

See also the famous Gary Larson cartoons on how various animals hear and comprehend:...

Which was followed, three days later, by a piece from Bloomberg: 

Matt Levine commends to our attention a story about one of the world's biggest hedge funds and prize-putter-upper of what's probably the most prestigious honor in  literature, short of the Nobel, the Man Booker Award.

On Tuesday September 26, 2017, 11:00 PM CDT Bloomberg posted:
The Massive Hedge Fund Betting on AI

The second paragraph of the story:

...Man Group, which has about $96 billion under management, typically takes its most promising ideas from testing to trading real money within weeks. In the fast-moving world of modern finance, an edge today can be gone tomorrow. The catch here was that, even as the new software produced encouraging returns in simulations, the engineers couldn’t explain why the AI was executing the trades it was making. The creation was such a black box that even its creators didn’t fully understand how it worked. That gave Ellis pause. He’s not an engineer and wasn’t intimately involved in the technology’s creation, but he instinctively knew that one explanation—“I can’t tell you why …”—would never fly with big clients looking for answers when Man inevitably lost some of their money... 

Now that is just, to reuse the phrase, spooky. Do read both the Bloomberg Markets and the Bloomberg View pieces but I'll note right now it's only with Levine you get:

"I imagine a leather-clad dominatrix standing over the computer, ready to administer punishment as necessary."... 

As retold in "Let Me Be Clear: I Have No Inside Information On Who Will Win The Man-Booker Prize Next Month (hedge funds, AI and simultaneous discovery)"

"Nuclear Firms Will Get Cash From Trump Administration. Here’s Who Benefits." (BWXT; GEV)

From Barron's, December 3:

The Trump administration is taking the next step to jump-start nuclear energy in the U.S.—giving direct cash grants to reactor projects.

The biggest publicly traded beneficiaries are GE Vernova; Hitachi; nuclear technology company BWX Technologies; and Hyundai Engineering & Construction, which trades in Korea.

The Department of Energy awarded a total of $800 million on Tuesday to two nuclear reactor projects in Michigan and Tennessee, agreeing to match private investments with government funds. The grants are a sign that the administration is willing to move beyond the low-interest government loans that it has relied on so far. They’re a boon for the industry, because they shift some of the risk to taxpayers from company balance sheets. The Biden administration also used cost-sharing grants for two nuclear projects.

These awards will be split equally between privately held Florida company Holtec International and a project overseen by the Tennessee Valley Authority, or TVA—a publicly owned utility that serves several states. If the reactors get built, they’ll benefit several other companies in the supply chain, too.

The Holtec reactors are expected to be built on the site of a nuclear plant in southwestern Michigan called Palisades. Holtec is on the brink of restarting a large reactor on that site, with help from the state and loans from the Energy Department—though a lawsuit filed by environmental groups could slow it down. The new grants would go toward adding two small modular reactors designed by Holtec to that same site. Holtec is expected to work with Hyundai Engineering & Construction on that project. Its design hasn’t yet been approved by the Nuclear Regulatory Commission, and the reactors aren’t expected to be operational until the 2030s if they move forward.

The TVA, which already operates multiple nuclear plants, is also looking to expand its nuclear footprint. It plans to use the $400 million cash-sharing grant to support development of reactors at a site called Clinch River, in Oak Ridge, Tennessee. The small reactor would be built by a joint venture between GE Vernova and Hitachi, which has started construction on the first of those reactors at a project in Canada. It will be 300 megawatts, or enough to power over 200,000 homes. Among the companies expected to work on the project are BWX Technologies, an equipment and service provider.

The costs for these “first of its kind” projects are often very high, because the contractors haven’t yet figured out ways to make the process more efficient. The first Canadian small reactor, for instance, is expected to cost $6.1 billion. That pencils out to $20,000 per kilowatt, about eight to 10 times as much as the cost of building a natural gas power plant....

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Why Is Ultimate Insider Robert Rubin Talking About The Black Monday Stock Market Crash?

My Spidey sense starts twitching when he talks.

From CNBC, December 3: 

"Keep October 1987 Black Monday crash in mind: Former Treasury Sec., Goldman chair Robert Rubin’s message to the market" 

• Former Treasury Secretary and Goldman Sachs co-chairman Robert Rubin says when he talks to people in the markets, he tells them, “There is one date you ought to keep in mind: Oct. 19, 1987.”
• Issues like the rising national debt and lack of willingness to do anything about it remind him of moments when people simply stop listening and pay the “ultimate serious consequences” at a later date.
• “The timing is impossible to predict and it is possible we can just keep doing things that are unsound, but that seems to me a very unsound bet to make,” Rubin said at the CNBC CFO Council Summit in Washington, D.C., on Wednesday. 

The market has been consumed in recent weeks by concerns about tech stock valuations and an AI bubble in the making. But for former U.S. Treasury Secretary and former Goldman Sachs co-chairman Robert Rubin, market complacency runs much deeper than any current debate over whether record market highs can be sustained by a handful of growth stocks. In his view, debate over the current AI boom and whether it will resemble the financial crash or dotcom bubble misses the point. October 1987, and what is known as “Black Monday,” is the historical comparison he is asking the market to focus on.

Rubin has been outspoken about the risks the U.S. economy is running related to the increase in government debt, and he expanded on those concerns at the CNBC CFO Council Summit in Washington, D.C., on Wednesday.

Recent estimates from the Congressional Budget Office put the debt held by the public at 99.8% of gross domestic product for fiscal year 2025. That is twice the historical average of 51% over the past 50 years. But Rubin noted that long-term average masks a trend that has been worsening more recently. In 2000, the same ratio was at 30%.

The CBO projects that it will rise by another 20 percentage points over the next decade, but Rubin sees that forecast as optimistic. “More realistic estimates,” he says, “are substantially higher.”

He cited work from the Budget Lab at Yale that forecasts a debt to GDP ratio closer to 130-140%, not counting tariffs.

The effects of the rising debt are just barely beginning to be felt. Constrained spending on public investments and national security, as well as some impact on interest rates, are likely already related to the debt load, he said. And to a very limited extent, Rubin added, business confidence may have also taken a hit.

But the “ultimate serious consequences,” which Rubin said he believes are “highly likely to be out there,” lead him back to October 1987.

“When I talk to people in the markets, I say there is one date you ought to keep in mind: Oct. 19, 1987,” Rubin told CNBC senior finance and banking reporter Leslie Picker at the Summit.

He said that for years before the October 1987 crash, conditions were considered to be “highly in excess and nothing happened in the markets.”

The result: “People stopped listening,” Rubin said.

And then the Dow Jones Industrial Average was down over 22% in one day on Oct. 19, 1987.

The most current outspoken market voice on the AI bubble is short seller Michael Burry, who recently closed his hedge fund but has started a newsletter to expound on his views and warned on Wednesday that within two years the AI stock bubble could unwind.

On that infamous October day, Rubin noted that no specific action triggered the crash other than “just markets being out of sync with reality.”

In the current economic environment, Rubin said he thinks there is a “quite high probability” that eventually actions will have to be taken that lead to adverse consequences, though it is the debt and not the AI valuations that he is thinking about mostly, such as the government attempting to “inflate its way out” of the problem — monetizing the debt to finance the purchase of new bonds. “But the timing is impossible to predict,” Rubin said. “And it is possible we can just keep doing things that are unsound, but that seems to me a very unsound bet to make,” he added....

....MUCH MORE 

Plus Video -  https://www.cnbc.com/video/2025/12/03/former-treasury-sec-robert-rubin-on-markets-october-1987-like-risk.html

Our last post on Mr. Rubin was March 4's "Robert Rubin Blames Trump for Most Uncertainty in 60-Year Career" which garnered a "Huh.*" introduction and a lengthier than usual outro:

*Mr. Rubin was one of the three men, along with Summers and Greenspan, that created the Great Financial Crisis of 2007 - 2009. Here they are on the cover of TIME magazine, February 15, 1999:

In 2008 the Fed had to bail out Mr. Rubin's employer, Citigroup, to the tune of billions of dollars.

‘PONZI SCHEME’ AT CITI
—New York Post, Dec. 4, 2008

If Interested here's a nice introduction to what the three amigos did in: 

"The Economists' Hour, A Powerful New Economic History"

The Essential Larry Summers: How He and Alan Greenspan Laid the Groundwork for the Financial Crisis and Larry Lost $1.8 Billion for Harvard

Today In Irony: Robert Rubin Reviews A History Of the Fed (yes the same fed that rescued citi)

And our application of an older econ paper to understanding the meta-narrative of why Rubin's co-conspirator at Citi, Chuck Prince, was able to say with a straight face:

“When the music stops, in terms of liquidity, things will be complicated. But as
long as the music is playing, you’ve got to get up and dance. We’re still dancing.”
—Citigroup CEO Chuck Prince, July 9, 2007

Several months later the liquidity "music" ends, Bear Stearns fails, Lehman bankruptcy follows and the entire financial system nearly collapses. Bringing to mind (November 2, 2019):

Speaking of Robert Rubin: "The Optimal Design of Ponzi Schemes in Finite Economies"
This is a paper from 2002 that accurately predicted the events of the Great Financial Crisis, 2007 - 2009.
TL;dr: You don't play in the late stages of a pyramid or Ponzi scheme unless you know there will be a bailout.
From the Social Science Research Network:

Journal of Financial Intermediation, January 2003

Posted: 1 Oct 2002

Utpal Bhattacharya Hong Kong University of Science & Technology (HKUST) - HKUST School of Business and Management

There are 2 versions of this paper

Abstract As no rational agent would be willing to take part in the last round in a finite economy, it is difficult to design Ponzi schemes that are certain to explode. This paper argues that if agents correctly believe in the possibility of a partial bailout when a gigantic Ponzi scheme collapses, and they recognize that a bailout is tantamount to a redistribution of wealth from non-participants to participants, it may be rational for agents to participate, even if they know that it is the last round. We model a political economy where an unscrupulous profit-maximizing promoter can design gigantic Ponzi schemes to cynically exploit this "too big to fail" doctrine. We point to the fact that some of the spectacular Ponzi schemes in history occurred at times where and when such political economies existed - France (1719), Britain (1720), Russia (1994) and Albania (1997).

Keywords: Ponzi schemes, bubbles, bailouts, moral hazard

This version is not available for download but the 1998 version is:
SSRN download page (33 page PDF)

Previously on Robert Rubin and his role in the financial disaster, the bank bailouts and the $126 million he pocketed from Citi when big C got bailed:
"The Economists' Hour, A Powerful New Economic History"

Capital Markets: "Dollar's Downside Momentum Stalls"

From Marc to Market: 

Overview: The US dollar is stabilizing most of the G10 currencies today after its recent losses. As the North American markets are set to open, the greenback is posting minor gains against the G10 currencies but the Japanese yen and Australian dollar. The news stream is light. The market has lifted the odds of a Bank of Japan rate hike later this month, while a jump in October household spending in Australia has sparked speculation in the futures market that the central bank will be hiking rates in a year. Most emerging market currencies are softer. In an unusual twist, the Indian rupee is the strongest after the central bank intervened, after it reached a record low. The PBOC set the dollar's reference rate at a new low since last October. 

 Equities are mostly firmer. The Nikkei jumped 2.3% in Japan to lead the region. Among the large bourses, South Korea's Kospi was the only one that did not rally today. In China, the CSI 300 rose but both the Shanghai and Shenzhen composites slipped. Europe's Stoxx 600 is posting its largest gain of the week (~0.3) and is rising for eighth session in the past nine. US index futures are virtually flat. Japanese bonds sold off, with the 10-year yield jumping four basis points, though the 30- and 40-year yields eased. European yields are slightly firmer, though the two-basis point decline in the 10-year Gilt is an outlier. The 10-year US Treasury yield is about 1.5 bp high to approach 4.08%. Gold is little changed around $4200. Meanwhile, January WTI is in the middle of the $58-$60 range that has dominated for the past several sessions....

....MUCH MORE 

AI: "Why coders and call-centre agents are especially vulnerable to the technology"

From The Economist, December 1:

Lessons from the frontiers of AI adoption 

It is becoming ever more common for bosses to talk up their artificial-intelligence efforts while wielding the axe. Last month Enrique Lores, chief executive of hP, said that the computer manufacturer would cut around 5,000 jobs within three years as it embeds “AI in everything we do”. The same day Marguerite Bérard, boss of ABN Amro, a Dutch bank, unveiled sweeping lay-offs of her own, declaring that her company was “embracing AI to improve client services and reduce costs”. According to Challenger, Gray & Christmas, an employment firm, AI was cited as a cause in a fifth of the lay-offs announced by American companies in October.

Much of this is posturing. A company looks better in investors’ eyes if it attributes staff cuts to its technological prowess rather than pandemic-era over-hiring (often a more probable explanation). So far, the evidence that AI is changing the labour market in a big way remains weak.

Yet that could change once companies adopt the technology more widely. Over the past few years plenty of researchers have sought to identify which jobs are most at risk by speculating about what types of tasks ChatGPT-like AI will be best able to take on and identifying the occupations where these are most prevalent. Another approach, however, is to look at the jobs where adoption of AI is already gaining pace, and to identify what links them. Two stand out.

First is computer programming. Some two-thirds of coders say that they use an AI tool at least once a week, according to data from Stack Overflow, an online forum. Microsoft’s GitHub Copilot, one coding tool, has 26m users worldwide. Venture-capital (VC) spending is pouring into rivals, such as Windsurf and Cursor (see chart). According to Anthropic, a model-maker, a third of queries sent to its chatbot relate to computer programming.

Second is customer service. A survey by Gartner, a research firm, found that 85% of customer-service managers planned to experiment with ai this year. Companies from IBM, an IT giant, to Lufthansa, a German airline, are injecting the technology into their customer-service operations. VC investors are also backing AI startups targeting the occupation, such as Cresta and Sierra, though they have focused on it less than coding. The share price of Teleperformance, a French customer-service outsourcer, has slid by three-quarters since the launch of ChatGPT in 2022 amid expectations of looming upheaval.

What links these jobs? Consider first the nature of the work. Both involve plenty of repetitive tasks, but so do many others. In addition, however, the tasks performed by coders and call-centre agents tend to be “context-light”, meaning that those who do them don’t need a deep understanding of the company, notes Kabeh Vaziri, of Gartner. They are also “easily verifiable”: programmers can run tests on chunks of code to ensure that they work; call-centre supervisors can look at whether a customer’s problem was resolved and how happy they were after the interaction.

A second factor that makes these two occupations particularly fruitful terrain for AI is the abundance of available data that can be used to train models....

....MUCH MORE 

"Retirees, Don’t Get Carried Away by Nvidia. Do This Instead."

‘My retirement is completely in bitcoin’: Why don’t more people do what I do? 

Just kidding, that story is from one part of the Dow Jones empire, MarketWatch.

Here's the headliner at another part of DJ, Barron's. 

Grid: Europe Faces A €30bn Shortfall To Build Cross-Border Connections

If the Europeans don't get their act together the folks coming from Syria, Africa and Afghanistan are going to be very disappointed.

From Review-Energy, December 2: 

Lack of cross-border projects puts Europe’s 2040 power system at risk

---

Europe is not on track to meet its electricity interconnection goals, and the gap could threaten both energy security and system efficiency in the coming decades. According to a new report from Ember, Europe’s current pipeline of cross-border transmission projects falls far short of what is required for an optimised power system by 2040. The think tank warns that timely action is now essential to accelerate ongoing projects, stimulate new proposals and close a growing multi-billion-euro investment gap.

Interconnection expansion crucial for system reliability and cost efficiency 
Ember’s analysis underscores that strengthened interconnection is not merely a compliance target but a key driver of system reliability and cost-effectiveness. By 2040, every euro invested in expanding cross-border transmission capacity is expected to reduce generation costs by more than two euros.

However, Europe is still planning for 2030 based on timelines that typically exceed a decade. Ember stresses that decisions made now must already look toward 2040, guided by the EU’s Ten-Year Network Development Plan (TYNDP), which evaluates where new interconnectors are most needed.

Interconnection capacity must nearly double between 2030 and 2040

According to Ember, Europe is expected to reach 167 GW of cross-border exchange capacity by 2030, up from 116 GW in 2024. But achieving an optimal power system in 2040 requires 318 GW, meaning 151 GW must be added during the 2030s—almost doubling current capacity.

Most projects remain in early stages: just over 1 GW is in permitting, 15 GW in planning and 46 GW under consideration. Around 55 GW of additional projects have not yet been proposed, a gap Ember says must be urgently addressed through political support and improved investment conditions.

Funding shortfall threatens Europe’s 2040 goals 
Interconnection projects are capital-intensive and heavily reliant on EU support. Historically, the Connecting Europe Facility for Energy (CEF-E) has covered about 31.5% of project costs. But Ember warns that this level of support will be insufficient for the scale of expansion required.

Building the extra 151 GW needed between 2030 and 2040 will cost at least €150 billion, yet the current proposal for the next CEF-E provides only €17 billion for electricity interconnection. According to Ember, this leaves a €30 billion funding gap that must be filled through a mix of EU loans, private financing and alternative funding approaches.

Ember outlines several scenarios, including increased lending from EU institutions such as the European Investment Bank (EIB) or market-driven merchant interconnectors recovering costs through congestion rents, as seen in BritNed and Eleclink.

80% of the EU power system will miss the 2030 interconnection target...

....MUCH MORE 

Ember prefers to be known as a think tank but they are also something of a pressure group 

Bezos Donates $11.25 Million To Get The Hobos Off His D.C. Doorstep

While not quite in the $6.25 billion class that Michael and Susan Dell splashed on Giving Tuesday, you do what you can. 

From Washingtonian, December 1: 

Bezos Donates $11.25 Million to Fight Homelessness in DC Area 
Can the donation make a dent in the region’s housing crisis?

Jeff Bezos and Lauren Sánchez Bezos have donated $11.25 million to fight homelessness in the Washington, DC, area through their Bezos Day 1 Fund, which earlier today announced the recipients of its annual leadership awards to “organizations doing compassionate, needle-moving work to help families experiencing homelessness.”

In our region, Community Crisis Services, Friendship Place, Harford Family House, and Lifestyles of Maryland each received a share of a larger $102.5 million fund allocated to this year’s cohort of organizations nationwide. 

“This gift is for the thousands of families who sleep on our streets each night, enduring the cold with nowhere to turn,” Sandy Washington, CEO of LifeStyles of Maryland—awarded $2.5 million—said in a press release. “This donation is a testament to the devotion that has carried us through late nights, tears, countless volunteer hours, community partnerships, and unwavering service.” LifeStyles of Maryland supports families in Southern Maryland, and plans to use the grant to help families move out of crisis and find pathways to sustainable housing.

But can $11.25 million make a dent in the region’s struggle with homelessness? 

“God, I hope so. The housing affordability issue is enormous. The DMV is a very expensive area to live in,” said Timothy R. Jansen, CEO of Community Crisis Services, which was awarded $5 million, the largest grant made by the Bezos Day 1 Fund to a DMV charity this year, and the largest in the organization’s history. “We work one household at a time, but, yeah, I think it can make a good dent. It’s not going to solve it, although I wish it could, but it’s going to make some significant differences.” For context, Jansen told us the organization typically has an operating budget of around $14 million, and “We tend to spend pretty close to the margin.”....

....MUCH MORE 

Like a Colossus bestriding...

 

...actually you probably don't want to be bestriding the Washington Monument, it looks rather pointy. Plus, what are you going to tell the emergency room doctors? "Uh, I slipped..."

The pic is from a 2018 Washingtonian article,  Inside Jeff Bezos’ DC Life: 

The Amazon founder and Washington Post owner has quietly become a freewheeling DC socialite—and soon he'll be spending more time here, in the mammoth Kalorama home his family is renovating. What brought the tech giant to town in the first place? And what does he do, exactly, while he's around? The story of how the world's richest man is becoming a Washingtonian.

Late one drizzly night this past January, Jeff Bezos strode through the front door of the Jefferson hotel, burnished from an evening spent consorting with the Washington power set and smiling in plain view. This year, the Amazon founder, who is worth more than $110 billion, became the richest person alive. Here at the Jefferson, around 11:30 pm on a Saturday, a flicker of his unstudied private life appeared.... 

If interested see also: 

• "How does the world’s richest man renovate? Floor plans reveal Jeff Bezos’ big ideas for $23M D.C. mansion"
• Jeff Bezos Letter to Amazon Shareholders (including 1st disclosure of Amazon Prime membership #'s and perfect handstands)
• "Jeff Bezos Gave a Sneak Peek Into Amazon’s Future" (AMZN)
• Cloud Computing: The Pentagon Is Going To Award a Contract Worth Up to $10 Billion, Amazon Wants It, So Does Google (AMZN, GOOG)
• Jeff Bezos Will Probably Consolidate His Power Bases In The Washington D.C. Area (AMZN)

...Additionally the new location is (relatively) near CIA headquarters which is handy as Amazon is becoming quite the little spy contractor.
Also at Business Insider, Nov. 2017:

Amazon is launching a 'Secret' cloud service for the CIA

• Amazon Web Services introduced Secret Region, a new service specifically for the CIA and the rest of the intelligence community.
• It's not really a secret service: It's name just indicates it can handle data that's been classified at the "secret" level.
• Amazon has offered the CIA a Top Secret Region since 2014 as part of a $600 million deal.
• The extension of that older CIA deal with this new Secret service underlines the market dominance of AWS.

MUCH MORE

And, as noted on the map above, the possible location is also conveniently close to Mr. Bezos' house, although in his case the choice is not as clear-cut as when then-head of supercomputer manufacturer Cray Research when asked where the company might relocate its headquarters answered: "Draw a circle with a twenty mile radius around the CEO's home."

Mr. Bezos owns five houses and 300,000 400,000 acres in Texas.

That gets us back to March 31, 2018. For More, or for AMZN, use the 'search blog' box, top left. 

August 2013 - UPDATED--"Jeff Bezos Has Acquired The Washington Post For $250 Million" (AMZN; BRK.b; WPO)

Finally, Architectural Digest, May 2025:

"Jeff Bezos’s Homes: Unpacking the Billionaire’s More Than $500 Million Property Portfolio"

Coming To An Employer Near You: AI To Resurrect Departed Employees Using Their Work Product As Training Material

From GeekWire's Agents of Transformation pod series, November 15: 

Real revenue, actual value, and a little froth: Read AI CEO David Shim on the emerging AI economy 

What separates the dot-com bubble from today’s AI boom? For serial entrepreneur David Shim, it’s two things the early internet never had at scale: real business models and customers willing to pay.

People used the early internet because it was free and subsidized by incentives like gift certificates and free shipping. Today, he said, companies and consumers are paying real money and finding actual value in AI tools that are scaling to tens of millions in revenue within months.

But the Read AI co-founder and CEO, who has built and led companies through multiple tech cycles over the past 25 years, doesn’t dismiss the notion of an AI bubble entirely. Shim pointed to the speculative “edges” of the industry, where some companies are securing massive valuations despite having no product and no revenue — a phenomenon he described as “100% bubbly.”

He also cited AMD’s deal with OpenAI — in which the chipmaker offered stock incentives tied to a large chip purchase — as another example of froth at the margins. The arrangement had “a little bit” of a 2000-era feel of trading, bartering and unusual financial engineering that briefly boosted AMD’s stock.

But even that, in his view, is more of an outlier than a systemic warning sign.

“I think it’s a bubble, but I don’t think it’s going to burst anytime soon,” Shim said. “And so I think it’s going to be more of a slow release at the end of the day.”

Shim, who was named CEO of the Year at this year’s GeekWire Awards, previously led Foursquare and sold the startup Placed to Snap. He now leads Read AI, which has raised more than $80 million and landed major enterprise customers for its cross-platform AI meeting assistant and productivity tools.

He made the comments during a wide-ranging interview with GeekWire co-founder John Cook. They spoke about AI, productivity, and the future of work at a recent dinner event hosted in partnership with Accenture, in conjunction with GeekWire’s new “Agents of Transformation” editorial series.

We’re featuring the discussion on this episode of the GeekWire Podcast. Listen above, and subscribe to GeekWire in Apple Podcasts, Spotify, or wherever you listen. Continue reading for more takeaways.

Successful AI agents solve specific problems: The most effective AI implementations will be invisible infrastructure focused on particular tasks, not broad all-purpose assistants. The term “agents” itself will fade into the background as the technology matures and becomes more integrated....

....MUCH MORE 

....“Digital Twins” are the next, controversial frontier: Shim predicts a future in which a departed employee can be “resurrected” from their work data, allowing companies to query that person’s institutional knowledge. The idea sounds controversial and “a little bit scary,” he said, but it could be invaluable for answering questions that only the former employee would have known....

And the article I was going for when serendipity struck: 

Bill Gates-backed Modern Hydrogen lays off most of its employees after decade-long pursuit of clean energy

Follow-Up: "Amazon challenges competitors with on-premises Nvidia ‘AI Factories’" (AMZN; NVDA)

Exiting yesterday's "Chips: "Amazon unveils ‘frontier agents,’ new chips and private ‘AI factories’ in AWS re:Invent rollout" (AMZN)" I mentioned:

....And more to come. Although Nvidia's stock saw today's gain cut from $4.50 to $1.50 on the chip news, an under-the-radar part of AMZN's chip development focus is interoperability with NVDA products including the hardware that ties it all together, NVLink.

Here's more. From TechCrunch, December 2:

Amazon announced a new product Tuesday called “AI Factories” that allows big corporations and governments to run its AI systems in their own data centers. Or as AWS puts it: Customers supply the power and the data center, and AWS plunks in the AI system, manages it, and can tie it into other AWS cloud services.

The idea is to cater to companies and governments concerned with data sovereignty, or absolute control over their data so it can’t wind up in a competitor’s or foreign adversary’s hands. An on-prem AI Factory means not sending their data to a model maker and not even sharing the hardware.

If that product name sounds familiar, it should. That’s what Nvidia calls its hardware systems that are chock-full of tools needed to run AI, from its GPU chips to its networking tech. This AWS AI Factory is, in fact, a collaboration with Nvidia, both companies say.

In this case, the AWS Factory will use a combination of AWS and Nvidia technology. Companies that deploy these systems can opt for Nvidia’s latest Blackwell GPUs or Amazon’s new Trainium3 chip. It uses AWS’ homegrown networking, storage, databases, and security and can tap into Amazon Bedrock — the AI model selection and management service, and AWS SageMaker AI, the model building and training tool.

Interestingly, AWS is far from the only giant cloud provider installing Nvidia AI Factories. In October, Microsoft showed off its first of many-to-come AI Factories rolling out into its global data centers to run OpenAI workloads. Microsoft didn’t announce at the time that these extreme machines would be available for private clouds. Instead, Microsoft highlighted how it was leaning on a host of Nvidia AI Factory data center tech to build and connect its new “AI Superfactories,” aka new state-of-the-art data centers being built in Wisconsin and Georgia....

....MORE 

 Here are the announcements from NVDA and AMZN respectively:

NVIDIA and AWS Expand Full-Stack Partnership, Providing the Secure, High-Performance Compute Platform Vital for Future Innovation

New AWS AI Factories transform customers’ existing infrastructure into high-performance AI environments 

"Data Centers Are a ‘Gold Rush’ for Construction Workers"

From the Wall Street Journal, November 29:

Surging demand means six-figure pay and more perks

DeMond Chambliss used to run himself ragged with the small contracting business he owned in Columbus, Ohio: hanging drywall, chasing clients for payments and managing half a dozen employees.

Since April, Chambliss has worked the night shift overseeing a team of 200 welders, plumbers and electricians at a local data-center construction site. He makes more than $100,000 a year—a significant increase from his previous pay—cruising around on a buggy under floodlights, overseeing deliveries and equipment and ensuring everything stays on schedule. 

“I pinch myself going to work every day,” the 51-year-old said.  

An investment boom in artificial intelligence is creating a thirst for massive data centers—and a bonanza for the workers building them. It is unclear how long that boom will last, but for now, workers like Chambliss are cashing in on high demand for their services. They are enjoying the trappings including perks, bonuses and, in many cases, pay boosts.   

Data centers don’t employ many workers once they are actually built. During construction, though, they are a hive of workers pouring concrete walls and foundations, wiring electric panels and installing equipment such as power generators and chillers to ensure servers are cooled to a precise temperature at all times. 

Given such complexity and high demand, workers who move into the data-center industry—in roles ranging from electricians to project managers—often earn 25% to 30% more than they did before, said Jake Rasweiler, senior vice president of data centers at Kelly Services, a staffing and recruitment firm.

“It’s like the gold rush,” Chambliss said.

Data centers are ballooning in size, and a single project can take years to construct and require thousands of workers. Tech giants such as Amazon.com, Google and Microsoft operate 522 data centers and have an additional 411 data centers in development, according to Synergy Research Group.

In Hermiston, Ore., Marc Benner, 60, arrives in the predawn hours at a data-center construction site and lines up with scores of workers for a series of synchronized stretches. After that, he spends the day making the rounds ensuring electrical safety. These are lucrative skills at the electricity-gobbling sites, and Benner makes $225,000 a year, boosted in part by $100 in daily incentive pay for all workers on site.

“It’s my American dream,” said Benner, who has been helping build data centers for 15 years, including the ones now powering AI.

Demand for such workers is colliding with a longstanding shortage of skilled tradespeople that has pinched the construction industry. The Associated Builders and Contractors trade group estimates that the construction industry is short roughly 439,000 workers, mostly among skilled workers who do things like lay pipe and wire electrical panels.

The effects are starting to pile up. A survey by the Uptime Institute of data-center equipment manufacturers, engineers and construction companies found that 52% said staffing shortages on sites had caused business disruptions, up from 43% last year. Contractors working on data centers have an average backlog of 10.9 months of work, compared with eight months for their peers, according to data from ABC.  

“There’s an arms race taking place in the world of artificial intelligence,” said ABC chief economist Anirban Basu.

Clune Construction, a Chicago-based general contractor, said it is trying to ensure workers have access to the same creature comforts as white-collar workers, including heated and air-conditioned break tents and perks like periodic free lunches. Around 70% of the company’s revenue is from data-center work, a figure that has roughly doubled in the past year.  

Tempe, Ariz.-based construction company Sundt recently started offering bonuses and paid time off to workers on its sites. Still, the company regularly has to turn down more projects, said Chad Buck, Sundt’s president of building.

“There aren’t enough people to build the magnitude of the work out there right now,” Buck said. “There’s only a set pool to pull from, and every general contractor in the country is trying to pull from it right now.”  

Construction workers say this heavy demand has created a sense of security that, for them, is often elusive. “In this industry, stability is a really big thing,” said Michael Damme, 43, who makes $200,000 a year overseeing concrete construction at three data-center sites for Sundt....

....MUCH MORE 

We saw some other $200K p.a. jobs in yesterday's "Big Paychecks Can’t Woo Enough Sailors for America’s Commercial Fleet".

Norway May Become A Net Electricity Importer

Wut?

From EnergyMagz, December 3:

DNV Warns Norway Faces Looming Power Deficit as Demand Outpaces Supply

Norway is on track to face a power shortfall as electricity demand grows far faster than new generation capacity, according to a new report from risk management and energy consultancy DNV.

The report concludes that demand will rise by 18 terawatt-hours (TWh) over the next five years, while new power projects are expected to add only 3 TWh in the same period. DNV said this imbalance could leave Norway with a deficit around 2030 and lead to annual net imports of up to 5 TWh in the early 2030s.

“Geopolitics, national priorities, and lack of public support are slowing down Norway’s renewable energy efforts,” said Remi Eriksen, group president and chief executive of DNV. He said grid expansion must accelerate to ease constraints and handle more variable generation.

The report highlights rapid growth in electricity consumption from data centres, energy-intensive industry and the electrification of oil and gas operations. Sverre Alvik, research director for energy transition at DNV, said: “Demand for electricity from data centers, energy-intensive industry, electrification of oil and gas operations, and transport is increasing much faster than new power production.”

DNV estimates that data centres alone will consume 15 TWh by 2040, representing about 7% of Norway’s expected electricity use....

....MORE 

Birkeland rolls over in his grave. 

French Tech: "NVIDIA Partners With Mistral AI to Accelerate New Family of Open Models"

From Nvidia's blog, December 2:

The new Mistral 3 family, spanning frontier-level to compact models, is optimized for NVIDIA platforms, enabling Mistral AI’s vision for distributed intelligence across cloud to the edge. 

Today, Mistral AI announced the Mistral 3 family of open-source multilingual, multimodal models, optimized across NVIDIA supercomputing and edge platforms.  

Mistral Large 3 is a mixture-of-experts (MoE) model — instead of firing up every neuron for every token, it only activates the parts of the model with the most impact. The result is efficiency that delivers scale without waste, accuracy without compromise and makes enterprise AI not just possible, but practical. 

Mistral AI’s new models deliver industry-leading accuracy and efficiency for enterprise AI. It will be available everywhere, from the cloud to the data center to the edge, starting Tuesday, Dec. 2.  

With 41B active parameters, 675B total parameters and a large 256K context window, Mistral Large 3 delivers scalability, efficiency and adaptability for enterprise AI workloads.  

By combining NVIDIA GB200 NVL72 systems and Mistral AI’s MoE architecture, enterprises can efficiently deploy and scale massive AI models, benefiting from advanced parallelism and hardware optimizations.  

This combination makes the announcement a step toward the era of — what Mistral AI calls ‘distributed intelligence,’ bridging the gap between research breakthroughs and real-world applications....

....MUCH MORE 

Chips: China's Huawei May Have Found A Way Around ASML's Technology

As the kids say: Big if true.

In late October we linked to this story, "China reportedly caught reverse-engineering ASML’s DUV lithography". The efforts, which have been going on for years are a very tough slog.*

The Chinese are trying to recreate the most complex machine ever manufactured by human beings. In the example above, the Chinese engineers broke the ASML machine. Hilarity ensued.

They called ASML to request a service call. 

Now it appears they may not have to conquer the next-level Extreme Ultra Violet technology to get to next year's state-of-the-art in chip manufacturing. 

The DUV will do.

From the always-alert observers at Huawei Central, December 2:

Huawei may have a 2nm chip breakthrough 

Huawei is pouring efforts to make a breakthrough in the chip industry, and it looks like the company has plans on this matter based on the 2nm process technology. A new patent is here showcasing the attempts of the firm despite lack of high-end tools.

The Chinese OEM recently issued a patent for a 2nm chip technology. While the company is still facing challenges to catch its rivals in the chipset battle, it is planning to end this phase, probably by the end of next year.

But the question is, how is that going to be possible, as Huawei has just hit the 5nm mark this year with the Kirin 9030 chip (N+3 node), powering the Mate 80? Well, the answer lies in the patent. Let’s explore it in full detail.

Patent: 21nm metal pitches

Starting with the application, the company applied for the new patent with the CN119301758A number on June 8, 2022, and it was published this year on January 10. It is entitled “Metal Integration Method for Manufacturing Integrated Devices”.

It is primarily focused on the manufacturing of advanced semiconductors. Also, it resolves the bottlenecks related to the BEOL patterning for ICs (Integrated Circuits).

BEOL (Back-End-Of-Line) is a crucial stage in the chipmaking process, where metal interconnect layers are deposited to connect the individual transistors and devices developed during the Front-End-Of-Line (FEOL) procedure.

The process is used to create electrical pathways that form the IC and allow signals to transmit between components seamlessly. In terms of 21nm or below chips, this process often becomes a problem in resistance capacitance delay, reliability, and yield.

2nm process 
According to a Semiconductor researcher, Dr. Frederick Chen, who spotted the new patent, Huawei can achieve a 2nm process chip, and that too without any advanced EUV machine. This will become possible with the help of DUV equipment.

US ban on Huawei in 2019 restricted the company from using the cutting-edge chip technologies. As a result, the OEM began joining hands with the native semiconductor firms like SMIC and relied on the DUV machines for the past few years....

....MUCH MORE 

By-the-bye, for the last couple years there have been stories that Huawei has the EUV technology but that is hard to believe. The problem the Chinese face is that to recreate the world's most complex machine they have to recreate ASML's supplier ecosystem. 

From TrendForce, November 10:

ASML’s Magic Uncovered: Tech and Partners Behind Its EUV Edge China Can’t Replicate 

While China is racing to close the lithography gap with homegrown tools from Huawei-linked SiCarrier and Yuliangsheng, the reality is that extreme ultraviolet (EUV) lithography remains an entirely different universe. Machines capable of printing sub-5nm chips are not just complex—they’re the pinnacle of global scientific collaboration.

Take ASML, the Dutch firm that holds a virtual monopoly in EUV. With Intel, TSMC, and Samsung as its main clients, ASML’s dominance isn’t merely about technological leadership—it’s about an ecosystem that no country can replicate overnight.

As Focus: The ASML Way reveals, ASML doesn’t exactly build EUV scanners—it conducts them like a symphony. Instead of crafting the optics, light source, or other core modules on its own, ASML serves as the master orchestrator, coordinating a global network of over 100 top-tier suppliers.

Let’s take a closer look inside this technological marvel—unpacking the structure of ASML’s EUV system, the key enablers behind its core components, and how this intricate collaboration has become the driving force behind ASML’s dominance.

From Light to Chip: Inside ASML’s EUV Process

As ASML explains, its EUV lithography is like carving circuits with a “nanoscale light scalpel.” Imagine trying to etch an entire encyclopedia onto a single grain of rice—ASML’s EUV machines do something similar: they use extremely short-wavelength light to “print” microscopic circuit patterns onto silicon wafers.

First, the system needs a light source. In the case of EUV, it uses a special 13.5 nm wavelength light—5,000 times thinner than a human hair. This incredibly short wavelength is what enables printing such microscopic patterns. But keep in mind that the entire process must occur in a vacuum because this type of light gets absorbed by air instantly. Without a vacuum, the precious EUV light would disappear before reaching the wafer.

Next, ultra-precise reflective mirrors are required to capture, focus, and guide the light through the system—like using a magnifying glass to focus sunlight, but with precision millions of times greater. These mirrors are polished to atomic-level smoothness to ensure no light is lost.

The light is then shaped and shines through a “stencil” called a photomask, which contains the chip’s circuit design. The light projects this pattern onto a silicon wafer, almost like shining a flashlight through a paper cutout to leave a tiny, precise shadow on the surface.

Notably, one critical advantage ASML has is its High-NA EUV technology, which uses anamorphic optics to compress patterns 4x in one direction and 8x in the other—like a smart shrinking lens. This allows a single exposure to create extremely fine features.

In contrast, DUV lithography systems (currently the most advanced technology accessible to Chinese manufacturers) must use multi-patterning—stamping the same area multiple times—to approach similar resolution, making the process slower, more expensive, and more prone to defects.

Team Effort Behind ASML: Key Component Suppliers

Twenty years. That’s how long it took ASML and its partners to perfect EUV lithography technology, according to the company. The payoff? A machine so complex it contains roughly 100,000 parts working in perfect harmony, and shipping a single unit is like orchestrating a small military operation—40 freight containers, three cargo planes, and 20 trucks, all coordinated just to get one machine from factory to fab.

And the price tag? The latest High-NA EUV machine commands over $350 million—more expensive than a private jet, yet essential for manufacturing the world’s most advanced chips. To achieve such a feat, ASML teams up with specialized suppliers, each mastering their part, to build a machine that pushes the limits of chip-making.....

....MUCH MORE  

Which is why it is such a big deal if Huawei can get to similar specifications without having to develop the bleeding edge technology. Even TSMC finds the High-NA EUV to be a bit daunting, cost/performance-wise:

TSMC Is Reportedly Skipping High-NA EUV For The A14 (1.4nm) Process; Prioritizing Cost-Efficiency Over Performance 

Meanwhile In Australia: "Hacking, sabotage, assassinations: Spy chief issues final warning"

From The Australian Financial Review, December 1:

Outgoing spy chief Andrew Shearer has warned that the region risks a major conflict within a decade, accusing China of cultivating Pacific elites and pushing spurious territorial claims.

Shearer, who is the director-general of the Office of National Intelligence, also accused “malign states” of colluding with criminals and non-state actors to enable hacking, sabotage, assassinations and political inference.

“The guardrails that for decades separated competition from confrontation and conflict are weakening,” Shearer said in his final Senate estimates appearance before he takes up his new role as ambassador to Japan.

“Crises are overlapping and intersecting, bringing threats on shore faster, sometimes in real time. Warning times are shorter, meaning we have to act now if we are to be prepared for what may be coming and some of the assumptions that underpinned international stability for decades can no longer be taken for granted.

“Most consequentially, should deterrence break down, notwithstanding the efforts of our government and our allies, we would face a rising risk of major conflict in our region within the next decade.”

In a veiled swipe at Beijing’s activities across the region, Shearer said the struggle for influence had intensified on every front.

“In the Pacific, efforts to build influence over elites have become more overt and sustained. In South-East Asia, dangerous interceptions and rising tensions around the South China Sea illustrate how coercive tactics are increasingly used to assert spurious territorial claims,” Shearer said.

“China’s growing power projection across a widening swath of the Indo-Pacific, exemplified by the February circumnavigation of Australia … demonstrates the speed, confidence and reach that now characterises regional military capability development and competition.”

Defence Minister Richard Marles on Monday confirmed that Defence was tracking the trajectory of a Chinese naval flotilla in the Philippines Sea, which sources said could reach Australia by the end of the year....

....MUCH MORE 

And another spook, November 19 at The Australian: 

"Former Top [Australian] Spy, Nick Warner Sounds Warning On Quantum Arms Race In Defence Tech"

"The Fed may need to act as potential trouble brews in a key corner of the financial market"

From MarketWatch, December 2:

Two key rates in short-term funding markets have edged back above 4% over the past week

Potential signs of trouble are popping up again in the form of tighter conditions in short-term funding markets, which act as the indoor plumbing of the financial system, and this may require the Federal Reserve to take action relatively soon.

Two measures of funding-market liquidity, known as the Secured Overnight Financing Rate and the Tri-Party General Collateral Rate, have both crept back above 4% during the past week, but remain off their late-October peaks. Both rates are derived from the U.S. overnight repo market, which acts a critical source of short-term funding for a wide range of financial institutions. The Fed monitors pressures in the overnight repo market because of the potential for this to cause wider volatility....

....MUCH MORE 

Best guess is five months, April 2026, before we find out what this was all about.

Chips: "Amazon unveils ‘frontier agents,’ new chips and private ‘AI factories’ in AWS re:Invent rollout" (AMZN)

From GeekWire, December 2:

LAS VEGAS — Amazon is pitching a future where AI works while humans sleep, announcing a collection of what it calls “frontier agents” capable of handling complex, multi-day projects without needing a human to be constantly involved.

The announcement Tuesday at the Amazon Web Services re:Invent conference is an attempt by the cloud giant to leapfrog Microsoft, Google, Salesforce, OpenAI, and others as the industry moves beyond interactive AI assistants toward fully autonomous digital workers.

The rollout features three specialized agents: A virtual developer for Amazon’s Kiro coding platform that navigates multiple code repositories to fix bugs; a security agent that actively tests applications for vulnerabilities; and a DevOps agent that responds to system outages. 

Unlike standard AI chatbots that reset after each session, Amazon says the frontier agents have long-term memory and can work for hours or days to solve ambiguous problems.

“You could go to sleep and wake up in the morning, and it’s completed a bunch of tasks,” said Deepak Singh, AWS vice president of developer agents and experiences, in an interview. 

Amazon is starting with the agents focused on software development, but Singh made it clear that it’s just the beginning of a larger long-term rollout of similar agents. 

“The term is broad,” he said. “It can be applied in many, many domains.”

During the opening keynote Tuesday morning, AWS CEO Matt Garman said believes AI agents represent an “inflection point” in AI development, transforming AI from a “technical wonder” into something that delivers real business value.

In the future, Garman said, “there’s going to be millions of agents inside of every company across every imaginable field.”

To keep frontier agents from breaking critical systems, Amazon says humans remain the gatekeepers. The DevOps agent stops short of making fixes automatically, instead generating a detailed “mitigation plan” that an engineer approves. The Kiro developer agent submits its work as proposed pull requests, ensuring a human reviews the code before it’s merged.

Microsoft, Google, OpenAI, Anthropic and others are all moving in a similar direction. Microsoft’s GitHub Copilot is becoming a multi-agent system, Google is adding autonomous features to Gemini, and Anthropic’s Claude Code is designed to handle extended coding tasks. 

Amazon is announcing the frontier agents during the opening keynote by AWS CEO Matt Garman at re:Invent, its big annual conference. The DevOps and security agents are available in public preview starting Tuesday; the Kiro developer agent will roll out in the coming months.

Some of the other notable announcements at re:Invent today:

AI Factories: AWS will ship racks of its servers directly to customer data centers to run as a private “AI Factory,” in its words. This matters for governments and banks, for example, that want modern AI tools but are legally restricted from moving sensitive data off-premises....

....MUCH MORE 

And more to come. Although Nvidia's stock saw today's gain cut from $4.50 to $1.50 on the chip news, an under-the-radar part of AMZN's chip development focus is interoperability with NVDA products including the hardware that ties it all together, NVLink.