“The standard is the standard.” – Coach Mike Tomlin, Pittsburgh Steelers
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Good morning!
Even as the world followed President Trump’s visit to Asia, arguably as much attention was paid to Nvidia’s concurrent GTC conference in Washington, DC. Among the major deals announced there was Nvidia’s $1 billion investment with Nokia (a 2.9% stake). The two are partnering to develop a 6G “AI-RAN” (AI Radio Access Network) mobile-networking platform. Other companies slated to be involved include Dell Technologies, Cisco, and T-mobile.
Nokia (NOK -8.51% ) shares surged 23% after the announcement (though they gave some of those gains back yesterday). As for Nvidia, it closed above $5 trillion in market value yesterday.
Unsurprisingly given Nvidia’s involvement, the objective will be to build a 6G platform that incorporates AI as a foundation throughout. Current timelines call for widespread deployment of 6G to begin around 2030, creating a network with a bandwidth of up to 1 terabit per second, latency below 100 microseconds (1 microsecond = one millionth of a second), and up to 10 million connected devices per square kilometer. (Basically, 6G will be roughly 10 to 100 times faster than 5G). The AI in this case would theoretically and hopefully make the networks far more efficient at predicting, detecting, and dealing with interference and threats, thus making connections more efficient, reliable, and stable – and less energy intensive to boot.
Some might be wondering why 6G is even necessary. For the everyday consumer, 5G seems pretty fast already, right?
We need it because by 2030, as many as 20.5 billion additional devices are expected to connect to the internet, a projected average annual growth rate of roughly 13.2%. The increased volume of internet traffic resulting from this alone would require significantly faster networks. Faster speeds are viewed as essential for hoped-for applications like virtual experiences (including holographic communications), as well “digital twins” technologies (real-time virtual detailed representations of the physical world). Digital twins technologies would, in turn, enable remote and autonomous systems ranging from transportation to factory operation to surgeries. All of that is before we consider increased traffic from growing usage of AI, which is likely to include AI-enabled devices communicating and coordinating independently with each other (self-driving cars, armies of industrial robots, etc.)
The hoped-for success of this U.S.-led consortium has major geopolitical implications, not the least of which is the ability of whichever 6G platform becomes dominant or superior to largely dictate global standards. For that reason, the Nvidia alliance in this endeavor will face competition from consortiums in China (led by Huawei and ZTE), South Korea (Samsung, LG), and Japan (NTT Docomo). Also notably, team Nvidia (not its official name) will also compete with loosely coordinated efforts in a collaboration Ericsson, Qualcomm, Intel – and also Nokia (again).
The widespread adoption of a standard and platform developed by U.S. companies would be a nice switch from 5G, when Chinese companies, admittedly forced to work together by Beijing, developed a unified, coordinated 5G alternative that helped them become the most influential in defining the core technical standards developed by the rest of the world. In much of the world, Chinese equipment thus became preferred over the disparate offerings produced by the fragmented U.S. private sector (which was further hampered by spectrum-allocation battles in 2017-2020 and governmental insistence on export policies that differed from country to country.)
Having U.S. leadership in establishing global standards isn’t just good for technological sovereignty, but would likely increase the likelihood of larger market shares and revenues for the companies that created them. Perhaps just importantly, it would provide the U.S. with the strategic economic and security advantage of being able to influence the development of technologies that depend on 6G networks, such as in the fields of virtual experiences and digital twinning mentioned earlier.
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📧✍️Here’s what a reader commented📧✍️
Q: Can Tesla meet Musk’s self-driving Cybercab timeline?
A: A single digit crashes total per year to save tens of thousands of crashes per year? No brainer.
Catch up with FS Insight
In reviewing carefully Federal Reserve Chair Jerome Powell’s press conference from yesterday, we view his overall comments as dovish. Moreover, the Trump-Xi meeting seems to have gone well — enough so the president deemed it “on a scale of 1 to 10, the meeting with Xi was a 12.”
Technical
The key question as big-cap tech earnings get underway is “When do all these divergences matter?” The bifurcation in U.S. equity markets has been growing more pronounced since July, and unless corrected in the near future, could have the effect of driving a minor consolidation if/when the tech sector starts to peak out. The percentage of Russell 3000 stocks that are above their 50-day moving average is just 47%.
Crypto
Data supports the view that underperforming liquid funds may chase performance into year-end, reinforcing the bullish setup for altcoins.
News We’re Following
Breaking News
- Trump and Xi ease tension with truce on tariffs, rare earths BBG
Markets and economy
- Nvidia becomes first $5 trillion company WSJ
- Fed cuts rates, Powell signals December move ‘far from’ certain BBG
Business
- Google revenue soars as AI boom lifts cloud business WSJ
- Microsoft’s cloud surge lifts revenue above expectations REU
- Novo Nordisk seeks to outmuscle Pfizer with $9 billion bid for Metsera WSJ
- Fiserv’s massive earnings shortfall baffles analysts, sends stock tumbling BBG
Politics
- Trump says nuclear weapons testing to resume in US after more than 30 years BBC
- Americans are getting a look at next year’s ACA premiums and many don’t like it WSJ
- Prosecutors placed on leave hours after describing Jan. 6 attack as a ‘mob of rioters’ POL
Overseas
- Hurricane Melissa wreaks $8 billion of damage, kills dozens BBG
- At least 132 killed in Rio police raid, officials say BBC
- Netherlands swings to centre after far-right setback FT
Of Interest
- Messages in a bottle from WWI soldiers found on Australian coast BBC
- Iran’s president calls for new capital to replace Tehran FT
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| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 10/30 | 8:30 AM | 3Q A GDP QoQ | 3 | 3.8 |
| 10/31 | 8:30 AM | Sep PCE m/m | 0.3 | 0.3 |
| 10/31 | 8:30 AM | Sep Core PCE m/m | 0.21 | 0.23 |
| 10/31 | 8:30 AM | Sep PCE y/y | 2.8 | 2.7 |
| 10/31 | 8:30 AM | Sep Core PCE y/y | 2.9 | 2.90511 |
| 10/31 | 8:30 AM | 3Q ECI QoQ | 0.9 | 0.9 |
| 11/3 | 9:45 AM | Oct F Oct S&P Manu PMI | n/a | 52.2 |
| 11/4 | 8:30 AM | Sep Aug Trade Balance | n/a | -78.311 |
| 11/4 | 10:00 AM | Sep JOLTS | n/a | 7227 |
| 11/4 | 10:00 AM | Sep F Sep P Durable Gds Orders | n/a | 2.9 |
| 11/5 | 9:45 AM | Oct F Sep F S&P Srvcs PMI | n/a | 55.2 |
| 11/5 | 10:00 AM | Oct Sep ISM Srvcs PMI | 50.9 | 50 |
