Crypto News: Back in the game

Good morning. Leopold Aschenbrenner returns to the investing scene. AI’s insatiable appetite for electricity is causing critical systems to malfunction. And Martha’s Vineyard has a tick problem. Listen to the day’s top stories.

— Angela Cullen

Market Snapshot
S&P 500 Futures	7,761.25	+0.2%
Nasdaq 100 Futures	29,490.50	-0.4%
Bloomberg Dollar Spot Index	1,204.27	+0.1%
Market data as of 06:59 AM ET. Data is subject to provider delays.	Your watchlist

Days after his hedge fund came close to collapse, AI investor Leopold Aschenbrenner is back in the game, plunking down $400 million on a privately held company, according to people familiar with the matter. His firm, Situational Awareness, was no insignificant contributor to the steep losses reported by hedge funds last month and market jitters surrounding AI haven’t gone away. SK Hynix shares swooned again on Thursday. It’s the second time in little over a week that the chip giant’s stock plunged, only to make a swift rebound.

China’s DeepSeek signaled a rare price increase after disrupting the industry with ultra-low pricing that pressured US competitors. In a separate development, Beijing launched a formal security review into products sold by US tech firm Palo Alto Networks within the Chinese market. Stateside, OpenAI asked a federal judge to dismiss a lawsuit filed by Apple accusing the AI company of stealing trade secrets. OpenAI also revealed that the models behind the Hugging Face hack secretly communicated for months before escaping their testing environment. And Meta disclosed that one of its AI models hacked into another service’s system during safety testing.

Nasdaq futures slipped as renewed weakness in chipmakers weighed on sentiment. JPMorgan CEO Jamie Dimon warned that market leverage remains “pretty high.” Meanwhile, global bond and currency investors are debating if it’s time to dust off last year’s “Sell America” trade. Investors are also waiting for firm developments on Iran, and an Oman-Iran deal that would partially reopen the Strait of Hormuz remained elusive. Donald Trump denied the US was running low on munitions, saying the country has “massive amounts” of them, while warning of punishment for those who say there’s a shortage.

Things are looking up for Mexico President Claudia Sheinbaum. Her approval rating jumped in July as price growth slowed and economic expectations improved. Mexico’s lowest annual inflation reading since the end of 2020 was helped by agreements between the government and private businesses to control costs for basic food items. Sheinbaum’s administration has also used fuel tax breaks and subsidies to cushion the blow from volatile energy prices. Mexico’s avocado trade suffered a broadside after the US suspended government activities in the state of Michoacan, which accounts for 75% to 80% of the country’s avocado production.

Deep Dive: The Perils of AI’s Power Hunger

AI at times sees power usage spike way above its design capacity. — AI can see power usage spike as much as 50% above its design capacity.

It’s no secret that AI has an insatiable appetite for electricity. Less well known is how rapid fluctuations in that demand are causing critical systems to malfunction or wear down prematurely.

As the AI boom accelerates, these technical problems suggest added costs and unforeseen reliability problems at a time when investors and lenders are already fearful about hyperscalers overspending.
With data centers approaching their limits, the race is on to reimagine them from the ground up.
But it’s not just data centers facing stress. They may also be distorting the normal flow of electricity for millions of Americans.

The Big Take

Foxconn’s plant near the Bengaluru airport.

Apple’s yearslong partnership with India has established the country as a legitimate competitor to China. Here’s how they built an alternative iPhone production hub.

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Opinion

Investors using leverage to bet on stocks may take the wrong lesson from the collapse of Situational Awareness.

The fact that AI-obsessed investors have mostly suffered bruises rather than a proper smash up is potentially a trap, writes Paul J. Davies. The recent rout should have been a warning; the danger is that investors instead see a springboard for the next jump in debt-fueled bets.

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