Nvidia Pushes for Open Weight AI Models, D-Wave Quantum Lands AT&T Partnership

**Zaid Admani** (0:00)
Public.com presents The Rundown, your daily market update in 10 minutes. My name is Zaid Admani, and today is Monday, July 27th. In today's episode, we'll tell you why stocks are bouncing back this morning, and preview the biggest week of the summer. We'll also break down the latest AI funding deals from Nvidia, and why they are pushing for open weight AI models. Then stick around to the end of the show to find out how much money Waymo's Robo Taxis have racked up in parking tickets. We got a great show for you today.
Let's go.
The markets had a down week last week. The S&P 500 dropped 0.6%, while the NASDAQ fell by 2.1%. There's a lot happening right now under the surface that's driving up investor anxiety. I'm talking bond yields rising, tech and AI stocks are selling off, tariffs are back in the headlines, and oil prices briefly crossed $100 a barrel. So investors were pretty nervous at the end of last week, but the mood has flipped this morning. Over the weekend, the US and Iran paused fighting in the Middle East, and there are whispers that another round of peace talks is in the works. And nothing official has been announced yet, but that headline was enough for investors to celebrate this morning. Brent crude is down around 8% to roughly $89 a barrel, and the S&P and NASDAQ futures are up about 1% in pre-market trading. And that brings me to this week. There is a lot going on. Top of mind has to be the Fed meeting this week. On Wednesday, the Fed will decide on what to do with interest rates, and right now, the market is still pricing in a 33% chance of a rate hike. Usually, you don't see this level of uncertainty the week of the Fed meeting, so the markets will be watching this one closely. I personally don't think the Fed will hike rates at this meeting, but I'm really looking forward to seeing what Fed Chair Kevin Warsh has to say. Along with the Fed meeting, we're also getting earnings from Microsoft and Meta on Wednesday after the close, followed by Apple and Amazon on Thursday after the close. So this is gonna be a pivotal week, not just for the overall markets, but also the AI trade. The short-term market sentiment could be decided based on how things go during a 26-hour period in the middle of the week. So we're gonna be staying on top of all that, along with all the macro stuff happening, so make sure you guys are subscribed to the podcast and tuning in every day to stay in the loop.
Let's run through some headlines. Starting with Nvidia. Nvidia is back to funding big-time AI infrastructure deals with AI companies. Nvidia just announced an AI initiative with SK Group in South Korea, which is the parent company of the memory maker, SK Hynix. This deal includes building two gigawatts of AI data centers on the Korean Peninsula, and it could generate more than $500 billion in business between the two companies, including Nvidia buying SK Hynix memory and SK Hynix buying Nvidia supercomputers. But that wasn't the only deal, Nvidia is also in talks to guarantee up to $250 billion in financing for OpenAI, so they can lease a massive 10 gigawatt data center campus in Ohio. Now, we briefly covered this story back in June. I compared it to a parent co-signing an apartment lease, except in this case, it's not a few grand. For grand, it's $250 million. Nvidia is also considering financing as much as $350 billion worth of their chips for this project. So this is raising fresh concerns about circular financing in the AI space. I feel like people were talking about this a lot more last year, but no one's really talking about it anymore. But I mean, if this deal with OpenAI goes through, Nvidia will be literally helping OpenAI borrow money so OpenAI can buy more of Nvidia's chips. The market is ignoring these risks for now, but it only takes one or two deals to go bad for it to lead to a chain reaction and panic. But that's not even the most interesting Nvidia story right now. The other Nvidia related news to drop recently is Jensen's open letter on Friday. In this letter, he urged US policy makers not to impose premature restrictions on open weight AI models. Now for some quick context here, open weight models means the models can be downloaded by anybody and modified to run on your own computer. That's different from the closed models like ChatGPT and Claude, where you have to access the model through OpenAI or Anthropic. The debate around open models heated up recently after the Chinese startup Moonshot AI released Kimi K3, which is a cheap open weight model that performs extremely well and comparable to the leading American models. But there's concerns that these Chinese AI labs are distilling American models to train their own models. So now the Trump administration is considering potentially blocking American companies from accessing these Chinese AI models. We actually talked more about this in our deep dive this past weekend, so go check that out if you missed it. Now what Jensen is pushing for is more open weight models, and he's not the only one. This letter was signed by 20 plus companies including Microsoft, Meta, Palantir, and Dell. And it's not that surprising why Nvidia and the rest of the tech industry is advocating for open weight models now. Right now, the best models are coming from OpenAI and Anthropic. And these tech companies don't want the next era of technology to be dominated by just these two companies. Nvidia especially wants AI models to become a commodity because the more models there are and the cheaper that AI becomes, the more people will use it. And the more that people use it, the more Nvidia chips will be required. AI models becoming a commodity would push the economic value away from the model makers themselves and towards the infrastructure companies powering it, which Nvidia conveniently dominates right now. So this is gonna be a key story to watch in the AI space over the next year or so, and it could have an impact on the economics of AI. If AI models do become a commodity, it could reduce OpenAI and Anthropix pricing power moving forward. Let me know in the comments on what you guys think. Do you think that AI models will become a commodity in the near future? And how are you adjusting your investment strategy if that becomes a reality? Let's talk about some stocks making moves today. Shares of D-Wave Quantum are surging this morning after the Quantum company announced an expanded partnership with AT&T. D-Wave is one of the big names in Quantum computing. They specialize in what's called annealing Quantum systems, which are basically Quantum computers built for solving optimization problems. AT&T has already been testing this technology on a limited basis and the early results were pretty impressive. In one example, D-Wave systems helped cut the processing time for a workload from one hour to less than 15 seconds. So AT&T saw that and they want to expand the use of this technology, including detecting outages and managing internet traffic. Now, this isn't some multi-million dollar system sale or anything, but having a household name like AT&T actually using Quantum computing in the real world is a big signal for the whole industry. And that's why D-Wave's stock is up around 7% this morning at the time of this recording. And the news is lifting the entire Quantum sector, including Ionic and Rigetti, which are also up around 3% to 4%. I gotta say, this is the first time the Quantum computing sector has gotten some buzz in the last few months. Moving on, let's talk about a loser here. Warner Bros. Discovery shares are moving lower after news that Paramount is delaying their $110 billion acquisition of the company. Now remember, Paramount agreed to buy Warner Bros. back in February for $31 a share in cash. But that deal is now facing an antitrust lawsuit from 12 states, along with a legal challenge from the Writers Guild of America. So because of all these lawsuits, Paramount has agreed to pause the acquisition until all these legal challenges are resolved or until June of 2027, whichever date comes first. So that's a long time for Warner investors to sit around and wait. And it creates a real risk that this deal could eventually fall apart. Warner stock is down about 2% this morning at the time of this recording. And the stock is trading around 21% below Paramount's $31 takeover price. So the market is signaling that this deal could fall through.