Top stories today:

1. Fed holds rates, signals slowing activity ahead
2. U.S. GDP +3.0% in Q2, with +1.4% in consumer spending
3. Microsoft Cloud drives +18% YoY in revenue in Q4 FY25
4. Meta Q2 revenue +22% YoY, net income +36% on rising AI demand
5. Trump slaps 15% tariffs on South Korea, 25% on India over Russia ties

0. Data and calendar

Listen to our AI-generated podcast summarizing today’s newsletter (beware of hallucinations):

1. Fed holds rates as U.S. GDP rebounds 3%, signals slowing activity ahead

• The 4.25%-4.50% range held by the Federal Reserve for a 5th straight meeting Wed.

• Committed to making sure any one-time increases in prices didn’t lead to more-persistent inflation, Fed chair Jerome Powell said.

• “There are many, many uncertainties left to resolve,” Powell told reporters.

• Fed Gov. Waller and Bowman dissented in favor of the rate cut — 1st time in over 30 years 2 officials have dissented.

  • 1st meeting since 2020 in which more than 1 Fed official voted against Powell.

2. U.S. GDP +3.0% in Q2, with +1.4% in consumer spending

• Results were better than the 2.5% expected for GDP.

• Personal spending below 2% in both Q1 and Q2 could be an effect of tariff uncertainty.

3. Microsoft Cloud drives +18% YoY in revenue in Q4 FY25, operating income +23% to $34.3B

• +24% YoY in net income to $27.2B.

Microsoft’s Azure and other cloud services revenue +34% YoY to $75B in the fiscal 2025

Microsoft has planned a record $30B in quarterly capital spending to meet surging AI demand

• $24.2B in Q4 capex, with 50% for long-lived assets to support 15+ years of monetization and the remainder on AI infra., CFO Amy Hood said.

Microsoft is set to hit $4T valuation, second after NVIDIA, after its earnings topped Wall Street estimates

4. Meta Q2 revenue +22% YoY to $47.5B, net income +36% on rising AI demand

• “[G]reater efficiency and gains across our ad system” through Meta’s AI tech, CEO Mark Zuckerberg said.

• +21% in advertising revenue to $46.6B.

• The AI spending blitz will continue into 2026, Zuckerberg said.

• Outlined a “personal superintelligence” vision in a letter posted on Wed.

• AI increased the time spent on Facebook and Instagram in Q2, Zuckerberg said.

Reality Labs (Meta’s VR division) posted a $4.5B loss on $370M in revenue

Meta raised its yearly capex forecast to $66B-$72B, lifting the low end from $64B

CAPEX was +101% YoY to $17.0B in Q2:

Meta reported +6% YoY to 3.48B in “daily active people”

Average revenue per person was +15% to $13.65

5. Trump slaps 15% tariffs on South Korea, 25% on India over Russia ties ahead of Fri. deadline

• South Korea’s tariffs included autos.

• A $350B South Korean fund for U.S. investments, including energy and shipbuilding, is said to be in plans.

• 90% of profits from U.S. investments in South Korea will return to the U.S., Commerce Secy. Howard Lutnick said.

• Trump threatened an undefined penalty on India for its purchases of Russian energy.

• Most countries are still without a trade deal with the U.S.

6. OpenAI’s ARR 2x’d to $12B since Jan.

• Likely to cross the $12.7B revenue projection for 2025, up from ~$4B. in 2024.

• $8B projected 2025 cash burn, up $1B from earlier estimate, vs. $3B for Anthropic.

ChatGPT now has 700M weekly active users

7. Ramp valued at $22.5B in $500M raise for AI agent push

• Iconiq led the Series E-2 round, with participation from existing investors, including Founders Fund and D1 Capital Partners.

8. Google DeepMind unveils AlphaEarth to unify Earth data, generate maps on demand

• Cuts error rates by ~24% and uses 16x less storage than other AI systems, helping to reduce the cost of planetary-scale environmental analysis.

AlphaEarth uses “embedding fields” to map Earth’s surface in 10-meter squares

• Satellite Embedding dataset is available in Google Earth Engine for researchers and developers.

• Available under Google Earth AI, Google’s collection of geospatial models and datasets.

9. Saudi market slump raises doubts on diversification drive

Newly floated Saudi stocks have gained only 4% on average in their 1st month of trading, vs. 27% in 2024, per Dealogic:

Packaging company United Carton Industries and budget carrier Flynas are among the losers

10. Interesting videos, posts, and memes

11. Other headlines

AI

• Amazon to pay NYT $20M+ annually in AI content licensing deal.

• OpenAI picks Norway for 1st European Stargate data center, backed by Aker.

• Surge AI in talks for funding at $25B value: report.

• Google starts rolling out ML-powered age estimation in U.S.

Tech

• Figma raises $1.2B in hotly awaited IPO, prices above range.

• Arm to explore designing its own chips: CEO.

• Samsung profit -50% as chip business plunges 94%, misses estimates.

• Qualcomm Q3 FY25 revenue hits $10.37B, net income $2.66B.

• eBay Q2 profit +64% to $368M, lifts guidance as sales top estimates.

Tech & Law

• NVIDIA’s H20 chips flagged by China over potential security risks.

Biotech

• Timeless Biotech CEO says ML predicts ovarian aging systemically.

• Neu Health launches phone-based Parkinson’s, dementia platform.

• Apple, Google, OpenAI to work with Trump admin on improving health data.

Business

• BMW sticks with guidance despite profit drop, Trump’s tariffs.

• De minimis exception ends as Trump scraps import exemption.

Crypto

• Trump crypto group urges clearer rules to boost digital finance.

• Robinhood Q2 revenue +45% YoY to $989M, net income +105% to $386M.

U.S. politics

• Treasury secy. calls Trump accounts “a backdoor” to privatize Social Security.

• Kamala Harris won’t run for California governor in 2026.

World

• Israel visit: Witkoff pushes Gaza aid, ceasefire effort.

• Canada targeted as Trump escalates trade war over Palestine stance.

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