👀 Google's doing Nvidia's job

What’s going on here?

Google revealed its very own AI chip, hoping to put the “envy” in Nvidia.

What does this mean?

Google’s “Axion” chip will essentially work as a brain for data centers, which fuel Google’s search engine and AI projects. In fact, Axion has been designed specifically to sort through a ton of data quickly and accurately, so it can hurry along the AI tools that handle everything from tailoring YouTube ads to analyzing the search results of millions. This wasn’t a solo feat, though. Google picked the brain of British chip designer Arm, and it’s about time: Microsoft and Amazon launched their own chips months and years ago respectively.

Why should I care?

Zooming out: Time to pick favorites.

Google's trying to break its habit of buying chips from big names like Intel, Nvidia, and AMD to become more self-sufficient. The tech company isn’t trying to start any feuds, though, so it’s not putting the chips on the market. That’s not to say that Google can keep each and every one to itself, mind you. While it’ll use more of the gizmos as its cloud and AI businesses develop, Google will also want to kit out AI startups that it’s invested in, like Anthropic. But so long as supply chain constraints keep chip production capped, Google’s priorities will be tested.

The bigger picture: Nvidia’s target number one.

Intel showed off its new chip on Tuesday, too. The company claims the Gaudi 3 is faster and more efficient than Nvidia’s H100 when it comes to certain AI tasks – a bold bet, given that Nvidia holds around 80% of the chip market. That said, Nvidia’s chips can hit the wallet hard, so customers are always on the lookout for ways to pay less without sacrificing performance. Intel could use the attention: while Nvidia’s stock has tripled over the last year, Intel has only managed a 15% rise in the same timeframe.

What’s going on here?

The world’s biggest independent commodity trader decided that metals are the way to go.

What does this mean?

Vitol made $13 billion in profit last year, which mainly came from energy investments – think oil, natural gas, and power generation systems. Yet this week, Vitol confirmed that it’s moving at least one eye onto the metals market after a long time spent turned away. The trading firm predicts that the next decade will be a biggie for metals, and the second-biggest commodity trader agrees. Trafigura expects that the rise of electrically powered systems – electric vehicle charging stations, renewable energy, and AI data centers – will lead to an insatiable appetite for their key ingredient, copper.

Why should I care?

For markets: Copper is a showstopper.

Trafigura believes that by 2030, supply of copper will land four to five million metric tons shy of demand. To make matters worse, the firm says that AI systems and data centers could potentially add another million to that deficit. And because companies will pay up for their lot, not least because copper could make or break their AI ambitions, the metal’s price could hit the sky. It’s already started the ascent: the price of copper hit a 15-month high on Wednesday, and copper miners’ share prices are on the up as well, since higher prices would pad out their profit margins.

The bigger picture: Hedge your bets.

Higher commodity prices feed into prices of everyday stuff – it’s basically impossible to make anything without metal or energy, after all. So if prices stay higher for longer, that raises the risk of an inflation sequel and makes it harder for central banks to trim interest rates – and remember, higher rates can weigh on stocks. Commodities could be worth a look, then. Not only do they let investors catch a ride while prices are high, but they could hedge a portfolio against inflation and stock market dips.