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Rumor: Nvidia is buying Hugging Face for $12.9 billion.

Why is Nvidia willing to pay such a high price to buy a platform that itself does not produce top-tier foundational models?

What exactly is Nvidia buying?

I looked into it. On the surface, Hugging Face is an AI model website, but what’s valuable isn’t the website—it’s its position as an entry point in the open-source AI ecosystem.

You can roughly think of the AI industry like this:

chips → cloud → models → developers → applications

In the past, Nvidia’s strongest parts were at the very bottom: chips and, on top of that, CUDA.

If this is an acquisition, it suggests Nvidia is now filling in the upper layers:

gpu → cuda → network → ai software → developer ecosystem → model platform

And Hugging Face is stuck right at the last few layers.

If we follow this logic, then that “Nvidia $NVDAB ” isn’t just continuing to sell shovels—it wants to take the developer entry point too.

NVIDIA $NVDAB earnings report is out.

What Jensen Huang means is that AI is really making money now.

Sales are great, profits are also substantial, and they’re planning to sell even more next quarter.

This quarter’s revenue was $96.2 billion, more than double year over year (+106%).

Mainly driven by sales of AI chips and data center products, which accounted for $89.0 billion.

The profit margins are very thick, and the gross margin is still 75%.

The company said that next quarter revenue is expected to be around $108.0 billion, slightly higher than analysts expected.

Both inflation and GDP data have been released.

First, let’s look at inflation—it's still not truly brought under control.

Overall prices rose 3.7% year over year, slightly higher than the market expectation of 3.6%. Core inflation excluding food and energy rose 3.3% year over year, matching expectations. The Fed’s target is 2%.

So when it comes to talking about rate cuts, at least based on this set of data, the inflation hurdle hasn’t been cleared yet.

Now, let’s look at GDP.

In the second quarter, the U.S. economy grew at a 1.5% annualized rate. It’s not strong, but it’s not recession either. The economy is still growing, just at a more moderate pace.

So things are a bit awkward right now: the economy isn’t weak enough to push the Fed to cut rates quickly. And inflation isn’t low enough for the Fed to feel comfortable cutting rates.

Naturally, the market doesn’t have any particularly clear direction either.

Today, U.S. stocks are trading cautiously overall, basically moving sideways. Everyone is waiting for a real major variable: Nvidia’s earnings report after the close tonight, $NVDAB .

Because macro data hasn’t provided a very clear trading direction, which way the market goes next will likely depend on whether Nvidia can continue to prove that this round of money in AI is still flowing and still being burned—and whether that burning is actually worth it.

South Korea wants to keep more chip production capacity within its own country, while the United States hopes that Samsung and SK Hynix will move some of their critical production capacity to the United States.

Now, both sides have begun to spar with each other, and the U.S.’s dissatisfaction is becoming increasingly obvious.

Last month before last, the South Korean government, together with Samsung and SK Hynix, announced plans to invest about 800 trillion won—over 500 billion dollars—in the southwestern part of South Korea to build four new memory-chip factories.

The purpose is very clear: to significantly expand South Korea’s domestic memory production capacity and seize the surge in AI chip demand.

But when the U.S. saw this news, it wasn’t very happy.

Because from the U.S. perspective, South Korean companies are pouring so much money into expanding capacity at home, without simultaneously building memory manufacturing capacity of the same scale in the United States.

The United States has long been hoping that Samsung and SK Hynix would place more of their critical capacity in the U.S., making the entire semiconductor supply chain more “Americanized.”

So recently, the U.S. has begun applying ongoing pressure through public statements as well as private communications.

The South Korean government currently denies that the U.S. has made any formal request, but it is certain that the differences between the two sides in terms of chip capacity planning are becoming more and more apparent.

Continue holding my $SKHYNIX SK Hynix long position!

Good morning🌞
I’m curious what you all have for your first meal in the morning

Brent crude oil fell by about 3%, to a one-week low.

Meanwhile, the options market is pricing Nvidia’s stock move following this week’s earnings announcement at around 5.4%, down from the prior 6.5% and also below the average of 7.4% over the past 12 quarters. This suggests investors have become more calm and accustomed to its high growth, expecting fewer surprises—both good and bad.

Nvidia’s HBM purchases from SK Hynix $SKHYNIX secured the most orders and made SK Hynix’s largest customer in the first half of the year. Samsung $SAMSUNG is also supplying, but it received far fewer Nvidia orders, even failing to make Samsung’s top five customers.

Geopolitical risk is escalating and may even affect financial institutions that assist Iran (including some Chinese institutions).

U.S. Treasury Secretary Bessent has officially announced the launch of the “economic expulsion operation” against Iran:

The goal is to sever all of Iran’s economic lifelines and isolate Tehran completely.

It is clearly stated that any entity that launders money for Iran will be kicked out of the U.S. dollar system.

My $MUU still has to fall 🤧

Samsung $SAMSUNG said: This year, it will return the shareholders the most—up to 110 quadrillion won (about 540 billion RMB).

Of that, in the third quarter this year, it will first distribute 300 trillion won in cash dividends, and the rest will be decided how to distribute next year.

Then, Samsung’s stock price plummeted.

Because everyone had expected to get more, faster, and more directly through share buybacks.

But when the announcement came out, it was a bit less than expected, and the details weren’t clear enough. So many people were disappointed and sold, causing the stock price to crash.

Me: ???

Samsung SK Hynix $SKHYNIX employees: this year they have a huge performance bonus. They won’t pay it all in cash; instead, 60% will be paid in company stock.

Let’s assume the company makes a lot of money this year—for example, operating profit of 250 trillion KRW:

An average employee would get about 700 million KRW in bonus (pre-tax; the actual amount depends on rank and performance).

Of that, 280 million KRW is paid in cash (credited right away), and 420 million KRW is paid in stock (some of which can be sold in the same year, while some is only granted after 1–2 years).

Employees can also choose how they want it—if they want more stock, they can take more (up to 100% in stock).

Previously, Samsung Electronics did something similar. The special bonus for the semiconductor division was almost entirely paid in stock (with some portions locked for 1–2 years as well).

In Korea, large companies are increasingly popularizing the idea of converting bonuses into stock.

The company’s cash burden is lower, and the share price may also be supported.

Company employees may have a chance to earn more too—if the stock price keeps rising.

For now, it’s still a tentative agreement; it needs to wait for the union’s vote to be finally confirmed.

Latest Federal Reserve FOMC meeting minutes (July):

Interest rate kept unchanged (3.50%-3.75%)

Voting results: 9 in favor vs 3 against

The three dissenters argued for an immediate 25-basis-point rate hike:

Beth Hammack (Goldman’s trading queen)

Neel Kashkari (former NASA engineer)

Lorie Logan (New York Fed crisis veteran)

Key takeaway from the minutes: many people believe that if inflation does not continue to fall, a further rate hike will most likely still be needed.

Yushu Technology, yesterday’s opening was the top gainer on day one.

Today is a wash-and-sell; tomorrow it’s likely going back down again $UNITREE

In the short term, it’s a good opportunity to trade volatility.

Looking at the medium-term, we still have to see a decline.

This time.

The ox really is back.

You, hurry and return.
$ETH
$SOL

Trump's approval rating has fallen to 33%, the lowest point of his term.

The main reason is that the U.S.-Iran war has dragged on without resolution.

In addition, based on the recent comparison of storage stocks, $SKHYNIX is the best value for money.

AI helped make a picture.

The truth is: the RMB is becoming more and more attractive.

Samsung and SK Hynix $SKHYNIX are both hiring people right now, recruiting chip design talent.

In recent months, more than 200 people have switched from Samsung to SK Hynix.

By contrast, on the Chinese side, Changxin is also hiring South Korean memory engineering specialists; there are currently 200 South Korean employees in the role.

Fun Facts:

There was a day when Apple’s market value increased so much that it directly surpassed the entire market value of all of Coca-Cola’s company.

Now in the AI era, Micron $MUU and Hynix $SKHYNIX have also entered the trillion-dollar club thanks to memory chips, but it is still almost impossible for them to surpass Apple.

As for why—well, you know.

Trivia

All the gold in the world

can only be piled into a cube the size of a seven-story building

August hasn’t even reached mid-month yet, and gold has already risen by roughly 10%, reaching highs for the past two-plus months.

According to World Gold Council data: In Q2, global central banks bought 288.9 tons of gold, up 62% year over year, marking the strongest Q2 on record. The People’s Bank of China has continued to add to its holdings; Poland has made large-scale purchases; and South Korea has resumed its gold-buying program after 13 years. $XAUT