What I Read This Week…

Magnificent 7 stocks have lost over $1.7T in market capitalization, the U.S. is failing to limit the export of chips to China, and scientists have developed a new class of antibiotics

Watch All-In E190

Read our Deep Dive on U.S. Defense

Caught My Eye…

• The “Magnificent 7” stocks have lost over $1.7 trillion in market capitalization in just two weeks, with Nvidia's stock price decreasing 7% in a single day. What's going on? Investors are reassessing the lofty valuations of the largest technology companies, driven by concerns over their large investments in AI and mixed Q2 earnings. Macroeconomic indicators are pointing to a weakening economy. The latest jobs report revealed new unemployment claims at their highest level since last August, while manufacturing has contracted for the fourth consecutive month. These signs of economic weakness are prompting investors to anticipate Federal Reserve interest rate cuts starting in September, with the 10-year Treasury yield dipping below 4% for the first time in six months.

• The United States is engaged in an increasingly complex battle to control the export of advanced AI chips to China, amid fears they could be used to enhance Chinese military capabilities. Despite stringent export controls implemented since October 2022, a thriving underground market and creative corporate structures are allowing China to acquire them. For example, in Shenzhen's bustling electronics markets, vendors openly offer Nvidia's most advanced chips, with some deals reportedly involving hundreds or even thousands of units. One vendor claimed to have facilitated a $103 million shipment of over 2,000 advanced Nvidia chips from Hong Kong to mainland China.

• Scientists have developed a novel class of antibiotics called GmPcides that shows promise in treating dangerous bacterial infections, including those caused by "flesh-eating" bacteria. How do these new antibiotics work? GmPcides are specially designed molecules that attack bacteria by breaking both their bacteria's DNA and cell walls. These antibiotics can kill bacteria whether they're growing or not, and even when they're hiding in colonies called biofilms – two scenarios that most regular antibiotics struggle to deal with. While these results are encouraging, GmPcides are still in the early stages of development.

Other Reading…

• America’s Long Consumer Boom Begins to Falter (Financial Times)

• Berkshire Hathaway Sells Off Large Share of Apple Stock and Increases Cash Holdings (The Guardian)

• The Haves and Have-Nots at the Center of America’s Inflation Fight (WSJ)

• What Do First-Time Voters Think About This Election? We Asked Nine of Them (WSJ)

• Big Tech Groups Say Their $100bn AI Spending Spree is Just Beginning (Financial Times)

• GPT, Claude, Llama? How to Tell Which AI Model is Best (The Economist)

• There’s a Tool to Catch Students Cheating With ChatGPT. OpenAI Hasn’t Released It (WSJ)

• The Middle East Braces for Wider War as Iran Weighs its Response (The Economist)

• How Ukraine’s New Tech Foils Russian Aerial Attacks (The Economist)

On X…