Nvidia Commits $100B to OpenAI | Unadorned Notes: September 16-22, 2025
Fed Cuts, Signals More Easing; U.S. Equities Hit Record Highs; H-1B Fee Shocks Tech; China Bans Nvidia AI Chips; Russia-NATO Tensions Escalate Again
Economics, Finance, and Business
Fed Cuts Rates, Signals Further Easing; Market Pricing Shifts (St. Louis Fed/Bloomberg/Axios Macro, 2025-09-22)
The Federal Reserve cut its policy rate by 25bps to 4.25% (upper bound), the first move in nine months, citing labor market softening and downside risks; SEP projections and FOMC commentary indicate two more cuts likely in 2025, with market-implied odds of another cut at 92% for October. DXY, 2s10s, and S&P 500 all at/near record highs, with risk-on flows confirmed.
U.S. Macro: Consumer Spending Resilient, but Labor Market Softening (Axios Macro/Bloomberg, 2025-09-16/22)
August U.S. retail sales rose 0.6% m/m (vs. 0.3% expected), but job growth has slowed to 27,000/month (May–Aug), and unemployment is drifting higher (4.3% in August); Fed and market participants are watching for further labor market deterioration as a trigger for additional easing.
U.S. Equities: Record Highs in S&P 500, Nasdaq, and Dow; Bullish Institutional Positioning (Barron’s/VolumeLeaders/Axios Markets, 2025-09-20/22)
All major U.S. equity indices closed at record highs, with institutional cash levels at 3.9% (lowest since July 2023) and equity allocation at a seven-month high; breadth remains narrow, but risk-on flows are confirmed by options, vol, and sentiment data.
AI/Compute: U.S. and Global Data Center Capex Surging, Power Grid Strain (SemiAnalysis/AI Supremacy/IEA, 2025-09-17/22)
AI infrastructure capex is set to exceed $400B in 2026, with U.S. data centers projected to consume nearly half of all new electricity demand by 2030; this is driving grid stress, power price volatility, and new investment in energy infrastructure, with direct implications for utilities, semis, and sovereign energy policy.
Nvidia $100B OpenAI Investment: AI Capex/Compute Regime Escalation (Bloomberg, 2025-09-22)
Nvidia will invest up to $100 billion in OpenAI to build 10GW+ data centers, with $10B upfront and further tranches tied to capacity deployment; this cements Nvidia’s role as the global AI compute bottleneck and signals a new phase of hyperscale AI infrastructure buildout, with direct implications for power, semis, and cloud capex cycles. NVDA +3.9% on announcement.
U.S. Education: NAEP 12th Grade Reading Scores Hit All-Time Low, Post-Covid Recovery Stalls (Slow Boring, 2025-09-22)
The latest NAEP data show U.S. 12th grade reading scores at their lowest since 1992, with no demographic subgroup registering improvement; this signals a structural decline in human capital formation and long-term productivity risk.
Japan: BOJ Holds Rates, ETF Unwind Begins, LDP Leadership Race Adds Policy Uncertainty (Nikkei Asia/Barron’s, 2025-09-18/22)
Bank of Japan kept rates unchanged, but began unwinding ETF holdings, signaling a shift in monetary policy regime; the LDP leadership race (with Ishiba’s resignation) introduces new uncertainty on fiscal and monetary policy, with direct impact on JGB yields and yen volatility.
China Macro: Youth Unemployment Hits Record, Real Estate Destocking Continues (Caixin/Nikkei Asia/Sinocism, 2025-09-17/18)
China’s youth unemployment (16–24, ex-students) rose to 18.9% in August, the highest since the new methodology began; new home prices in 70 cities are down 11% from 2021 peak, with destocking ongoing for six months. Private investment remains negative y/y, and fiscal support is being channeled via ultra-long bonds and local government refinancing.
U.S. Policies, Politics, and Geopolitics
Trump Administration Imposes $100,000 H-1B Visa Fee, Triggers Tech/Labor Shock (Bloomberg/NDTV Profit/Axios Macro, 2025-09-22)
A new $100,000 application fee for H-1B visas (with waivers at DHS discretion) is set to sharply curtail skilled foreign worker inflows, especially in tech; Indian IT stocks and U.S. tech majors with large H-1B exposure (AMZN, GOOGL, MSFT, INTC) flagged as at risk for margin compression and operational disruption. White House clarified the fee applies only to new applicants, not renewals.
U.S. Political: Senate Blocks Stopgap Funding, Government Shutdown Risk Elevated (WSJ/The Morning Dispatch, 2025-09-19/22)
Senate Democrats blocked a GOP stopgap funding bill, increasing the risk of a government shutdown on October 1; both parties are using the standoff to extract concessions on healthcare and spending, with direct implications for fiscal policy and market volatility.
Nvidia-Intel $5B Deal: U.S. State-Backed Foundry Model, AI Supply Chain Realignment (Barron’s/WSJ/Axios Markets, 2025-09-19/20)
Nvidia’s $5B investment in Intel (post-U.S. government 10% stake) is aimed at co-developing CPUs and AI infrastructure, with no volume commitment for Intel’s foundry business; this is a direct U.S. industrial policy move to create a TSMC-style national champion and reduce AI hardware dependence on Asia. INTC +22.8% on deal; NVDA +3.5%.
TikTok “Framework” Deal: U.S. Ownership, PRC Algorithm Control, Tariff Concessions (China Business Spotlight/WSJ/Politico/Sinocism, 2025-09-22)
A U.S.-China “framework” for TikTok would spin off U.S. operations to a new entity (80% U.S. investors, 20% ByteDance/PRC), with the algorithm licensed (not transferred) and U.S. government board seat; in exchange, the U.S. will refrain from new tariffs on Chinese EVs and relax some chip export controls, while China cuts tariffs on U.S. ag and rare earths. Legal and CFIUS review risks remain high; bipartisan Congressional opposition and potential lawsuits flagged.
China Bans Nvidia AI Chip Sales, Accelerates Domestic Substitution (FT/Sinocism, 2025-09-17/18)
PRC regulators ordered domestic tech firms to halt purchases of Nvidia’s RTX Pro 6000D and H20 chips, citing domestic alternatives as “comparable”; this is a shift toward forced import substitution and signals a likely permanent loss of the China AI chip market for U.S. firms. NVDA flagged the China market as excluded from forward guidance.
China Shifts Local Debt to SOE Banks, Raises Systemic Financial Risk (Caixin/China Business Spotlight, 2025-09-19)
Beijing is directing state-owned banks to issue loans to local government-linked entities to pay off at least 1 trillion yuan in overdue bills and wages, shifting the risk from local governments to the banking sector; this is a stopgap that increases NPL risk and does not address structural over-indebtedness. Provinces like Guizhou, Yunnan, and Liaoning flagged as de facto insolvent.
China: Great Firewall Exported Globally, European Tech Firms Implicated (China Business Spotlight, 2025-09-17)
Leaked documents confirm China is exporting its internet censorship and surveillance infrastructure (“Great Firewall”) to countries including Myanmar, Pakistan, and Ethiopia, with German and French firms supplying key components; this is a structural risk for European tech and a new front in digital sovereignty and sanctions policy.
EU/China: Rare Earths Export Controls Tighten, EU Sanctions Response (SCMP/Politico/Reuters, 2025-09-21/22)
Despite a July agreement to fast-track rare earth shipments, EU firms report continued bottlenecks and shutdowns due to PRC export controls; the EU’s 19th sanctions package (targeting crypto, banks, energy) is expected to include more Chinese companies, but falls short of U.S. tariff demands.
Russia-NATO: Escalating Airspace Incursions, NATO Article 4 Invoked (The Jamestown Foundation/The Economist, 2025-09-21/22)
Russian drones and fighter jets have repeatedly violated Polish, Estonian, and Romanian airspace, triggering NATO Article 4 consultations and “Eastern Sentry” air defense operations; this is a deliberate Russian campaign to test NATO resolve and cohesion, with direct implications for European defense posture and risk premia.
Ukraine: Defense Production Internationalization Accelerates (The Jamestown Foundation, 2025-09-17)
Ukraine is launching joint defense production ventures with Denmark, Germany, Turkey, and the UK, including drone and missile manufacturing, to mitigate supply risk and test new systems in combat; this is a shift in European defense industrial policy and supply chain resilience.