Nvidia’s next target
Heading into 2025, Nvidia was facing tough questions about whether the chipmaker central to the artificial intelligence boom could sustain its astronomical market run.
Based on the company’s presentation at the Consumer Electronics Show on Monday — which featured fresh offerings for robotics and autos, and a new overriding vision for the technology — investors appear to believe that the tech giant, and the A.I. surge more broadly, has more room to rally.
Nvidia’s shares are up again in premarket trading on Tuesday, after hitting a record on Monday in anticipation of the C.E.S. presentation. The chip giant’s market value now stands at $3.67 trillion, or more than double the combined market capitalizations of AMD, Arm, Broadcom and Intel.
The T.LD.R. on the company’s presentation: Jensen Huang, Nvidia’s rock-star co-founder and C.E.O. (who donned a fancier version of his trademark leather jacket for his presentation), announced tools for so-called physical A.I., including ways to help better train robots.
He also said Nvidia would provide driver-assistance chips and software for Toyota, the world’s biggest car manufacturer, adding to its list of automotive partners. And his company will also help Uber develop its self-driving technology, with the ride-hailing giant’s millions of daily trips furnishing data to train A.I. models.
(He also announced other products, including a personal supercomputer to assist A.I. researchers without having to rely on the company’s highest-end A.I. chips meant for data centers.)
Nvidia presented a bullish view for dominating A.I. in the physical world, as well as data-center chips. Huang, speaking in front of an array of humanoid robots, said that “the ChatGPT moment for general robotics is just around the corner.” He predicted that the market for such robots could reach $38 billion in the coming decades.
More broadly, Huang described a future populated by millions of such robots, autonomous vehicles and automated factories.
Underlining the announcements: Nvidia does more than data-center chips, a hugely lucrative business that’s under pressure from the company’s own top customers moving to lessen their dependence on its A.I. processors. (That said, Microsoft’s recently announced $80 billion A.I. spending plan is expected to include purchases of Nvidia chips.)
It also suggested that investors need not worry so much about the A.I. boom stalling out anytime soon.
HERE’S WHAT’S HAPPENING
Crude oil prices rise after President Biden imposes offshore drilling bans. The president on Monday barred new oil and gas development across more than 625 million acres of U.S. coastal waters, helping spur the Brent and West Texas Intermediate benchmarks to continued gains on Tuesday. Experts say Biden’s executive order is written in a way that is meant to make it difficult for the Trump administration to reverse course.
McDonald’s drops diversity targets for its employees and suppliers. The fast-food chain is the latest company to overhaul its diversity, equity and inclusion policy, as a conservative pressure campaign on corporate America gathers momentum. But the company will still tie executive pay to expanding diversity within its ranks.
Shares in Tencent tumble after the company is added to a U.S. military blacklist. The Chinese social media and gaming giant’s stock fell nearly 10 percent at one point on Tuesday after the Defense Department designated it as a “Chinese military company” operating in the United States. Drone, shipping and battery companies, including CATL, were also added to the list, marking a further escalation in tensions between Washington and Beijing.
Two giants of the photo-licensing industry agree to combine. Shares in Getty Images and Shutterstock soared in premarket trading on Tuesday after the companies said they would unite in a cash-and-stock deal that values the combined businesses at roughly $3.7 billion, including debt. The deal comes out of rising demand for digital images — and pressure on Getty and Shutterstock from A.I.-infused photo-creation tools and user-generated photography.
Trump and Musk tag-team the world
President-elect Donald Trump has already kept global leaders and investors on edge with a threat to impose a wave of new tariffs on Day 1.
In recent days, Trump has teamed up with Elon Musk, a key ally, to rattle a broad array of international governments — including Britain, Canada, Denmark and Germany. That raises questions about how much the administration plans to take aim at key U.S. allies and trading partners.
A recap:
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Canada’s politics were upended on Monday by the resignation announcement of Justin Trudeau as prime minister. Trump had repeatedly needled Trudeau, calling him the governor of what he has referred to as the “51st state” despite the Canadian leader going to Mar-a-Lago to try to persuade the president-elect to back off his tariff threat. (Trump said on Monday on social media that should Canada merge with the United States, “there would be no Tariffs.”)
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Last month, Trump said he wanted to see U.S. control of Greenland, reviving speculation that he was interested in buying the Danish territory. (Soon after, Denmark announced efforts to defend the island.) On Monday, Trump announced that his son Donald Trump Jr. would visit Greenland, amplifying the intrigue.
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Musk has suggested that Britain isn’t safe under Prime Minister Keir Starmer: “America should liberate the people of Britain from their tyrannical government,” he posted on X. (The Tesla chief has also had a falling out with Nigel Farage, a hard-right leader and sometime ideological ally.)
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Musk has also weighed into politics in Germany and Italy — whose prime minister, Giorgia Meloni, is a friend of his — over immigration.
Could Musk’s social media attacks backfire on him and his business interests? The costs could be huge: Regulators in Britain and the European Union are closely scrutinizing tech platforms that fail to rein in misinformation or posts that encourage harmful social behavior, potentially leading to hefty fines as Musk is well aware of.
Or, as a key Trump ally, does the tech mogul get a pass?
The Trump and Musk fusillades are hitting markets. Mohit Kumar, an economist at Jefferies, forecast on Tuesday that stock indexes most likely won’t repeat 2024’s blockbuster performance. One reason: “High on the uncertainty list are tariffs and fiscal policies of the Trump administration,” he wrote.
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In other Trump news: Meta added Dana White, the C.E.O. of Ultimate Fighting Championship and an ally of the president-elect, to its board.
The Fubo deal’s winners
Just a week into 2025, the media industry got its first consequential transaction: Disney buying 70 percent of Fubo, the video service that had sued to block the media giant’s plan to create Venu, a sports streaming joint venture with Fox and Warner Bros. Discovery.
The agreement, which ends that litigation and will see Fubo merge with Disney’s Hulu Live TV offering, has created some big winners — and raised some big questions. DealBook’s Lauren Hirsch breaks it down.
The most likely winners, assuming the deal closes:
Bob Iger: After years of questions about Disney’s plans for Hulu — the company now owns all of the streaming service — the Disney chief is effectively offloading what the analyst Richard Greenfield told DealBook was “the least exciting part” of Hulu.
Investors will be watching to see how long Disney takes to begin selling down its stake in the Fubo-Hulu Live TV venture.
Fox and Warner Bros. Discovery: Both companies, along with Disney, will pay a combined $220 million to Fubo. (Disney will also extend Fubo a $145 million loan.) They appear to be betting that paying up to settle with Fubo will cost less than the benefits they expect to get from Venu.
Edgar Bronfman Jr., Fubo’s executive chairman. Monday’s agreement validates the media mogul’s decision to try to block Venu.
While the size of Bronfman’s stake in Fubo has not been publicly disclosed, he is believed to be one of the company’s largest individual shareholders. And it creates a new narrative for Bronfman after his aborted bid to buy Paramount last year.
The questions:
Are Venu’s antitrust problems really over? Fubo may have settled its fight against the streaming venture, but the Justice Department filed a friend-of-the-court brief in the case — and there’s nothing in the Fubo settlement prohibiting the Justice Department from filing its own lawsuit.
Advocacy groups are pushing the Trump administration to keep a close eye on Venu. “For the past year, Fubo led sports fans and industry observers to believe they were genuinely interested in challenging Disney’s illegal joint venture in sports streaming, only to cash a check and leave consumers and the entire streaming industry worse off,” Lee Hepner of the American Economic Liberties Project, which calls for stronger antitrust oversight, said in a statement on Monday.
How will the new Fubo do? Investors are clearly bullish on the service gaining greater scale to compete. But despite a 251 percent surge in the company’s stock price on Monday, Fubo’s market value stands at about $1.7 billion — and it’s taking on well-heeled rivals in livestreaming, including Google’s YouTube TV and the broadband giants Charter and Comcast.
THE SPEED READ
Deals
Politics and policy
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Michael Barr, the Fed’s vice chairman for supervision, said he would resign from that role, but will remain on its board of governors. (NYT)
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The Consumer Financial Protection Bureau plans to sue Vanderbilt Mortgage, a Berkshire Hathaway-owned lender to mobile-home buyers, accusing it of trapping customers in risky loans. (NYT)
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Speaking of the C.F.P.B., the agency is unlikely to be abolished by Republicans. (NYT)
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