TechCheck

GenAI startup darlings are dropping like flies. Some of the most promising are increasingly being swallowed up by megacaps as they struggle to find viable business models and big tech firms look to skirt the regulatory scrutiny of outright acquisitions.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The extent of the tech sell-off today has been staggering, with billions of dollars wiped out from the Magnificent 7 alone in just the first two hours of trading, and trillions over the last week. Part of the reason is a fundamental story investors have been worried about – just when will the high costs of AI begin to pay off? Valuations have also re-rated since the Nasdaq hit all-time highs just a few weeks ago.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Shares of Intel are on pace for their worst day in 50 years after a tough second-quarter result. The chipmaker also announced a massive, $10 billion cost-savings program that will include thousands of layoffs and a half on dividend payments. CNBC’s Jon Fortt spoke to Intel CEO Pat Gelsinger on the turnaround plan, modest CPU demand and areas to be impacted by the layoffs.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Some key themes to watch ahead of Apple earnings include signs the iPhone sales slump is coming to an end, whether new AI features will drive an upgrade cycle, how the AI rollout in China will play out, and, of course, capex concerns that are looming over all of big tech. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

In Palo Alto, the epicenter of tech and VC money, JD Vance is headlining a fundraiser tonight hosted by a cryptocurrency executive where tickets are going for as much as $50,000. It's another sign of Silicon Valley elites, which have traditionally backed the left, now opening their pocketbooks for the Trump-Vance ticket.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

OpenAI just announced the prototype of a search engine called SearchGPT that now puts the pressure on Google, with what the startup says are more natural and intuitive results that include sources, similar to a product from Perplexity AI. The announcement alone yesterday was enough to send shares of Google down 3% after it had already been bruised by disappointing earnings results. That also doesn’t bode well for a slate of big tech earnings next week – where we’ll hear from Microsoft, Meta, Amazon and Apple.    Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The NBA is announcing a $76 billion TV rights deal with ESPN, Amazon and NBC Sports, essentially a snub to NBA’s longtime partner Warner Bros Discovery. We break down how this deal will transform the future of sports streaming. Plus, chip stocks have been riding the AI wave this year. But with the recent sell-off, AI beneficiaries like Nvidia, Qualcomm and Micron are well off their respective highs.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

One lesson from Alphabet earnings that we can expect from all megacaps this season: it's not cheap to be a hyperscaler in the age of AI. CEO Sundar Pichai told investors he'd rather spend too much than too little to meet Google's AI moment – but that still leaves uncertainty around how long it’ll take until these massive investments show a return. Plus, semiconductors stocks are contributing to today’s broader tech sell-off, with names like Nvidia, Broadcom and Taiwan Semi sinking.   Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The cloud security startup Wiz is now walking away from a monster $23B deal to be bought by Google, telling employees it'll opt instead to pursue an IPO. Anti-trust and investor concerns also reportedly played a factor, which could signal a win for Jonathan Kanter, Lina Khan and even JD Vance. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

There’s a time bomb ticking in the AI space: spending is too high, and returns are too low. Megacaps like Meta, Google and Amazon have seen capex spending surge as they throw cash at building out the infrastructure to stay ahead of the AI game. Microsoft in particular has spent billions at a premium valuation, and shelled out $13 billion investing in OpenAI while Apple was reportedly able to secure a partnership with the startup darling for free just 18 months later. That could be a warning for the broader AI space, as experts sound the alarm on the widening gap between what companies are spending on AI, and what they’re getting back from it.  Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.