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Nvidia took a cue from the U.S. government on Thursday, acquiring a $5 billion stake in Intel. Last month, President Trump announced that the U.S. government was also making a $9 billion investment in Intel, meaning that now Nvidia and the United States are among Intels largest shareholders. All told, its a major Silicon Valley shakeup that could have wide-ranging effects, especially as the AI race continues to heat up. In fact, the AI arms race is at the center of the new partnership, as the two will jointly develop chips for both personal computers and data centers. This historic collaboration tightly couples NVIDIAs AI and accelerated computing stack with Intels CPUs and the vast x86 ecosystema fusion of two world-class platforms, said NVIDIA founder and CEO Jensen Huang in a statement. Together, we will expand our ecosystems and lay the foundation for the next era of computing. Theres no denying that the news is big, and investors treated it as such. Intels stock soared more than 30% on Thursday, and Nvidias jumped more than 3.5%. The intel on Intel-Nvidia But theres potentially more at stake than merely share price increases. Nvidias investment may signalor bethe biggest, boldest move yet as American tech firms beef up to battle those in China. It also poses big challenges for competitors like AMD, and represents a new dynamic in the semiconductor industry at large. For instance, Taiwan Semiconductor, perhaps the most dominant company in the space, now has a new adversary to deal withand its stock fell nearly 7% when the trading day opened (though it did bounce back). All told, the investment helps make Intel more competitive and gives Nvidia more avenues for distribution for its chips. Thats important, coming off the news that Chinas internet regulator, The Cyberspace Administration of China, is reportedly telling Chinese tech companies that they cannot buy or use chips from Nvidia, according to the Financial Times. Looking ahead, its unclear whether the combined efforts of Nvidia and Intel will be enough to go blow-for-blow with companies like Huawei, particularly as global trade wars continue. Analysts, too, think that the partnership sends a bigger message to the market: Old dynamics are going out the window. This is truly like the Yankees and the Red Sox coming together to end their rivalrythe companies did not like each other whatsoever, David Wagner, head of equity and portfolio manager at Aptus Capital Advisors, said per reporting by Reuters. It’s a massive step in the right direction (utilizing INTC’s fab to make chips) for US chip designers, and breathes new life into a poorly run company for decades.
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E-Commerce
The price of most organic food could jump this fall due to new policies and tariffs on imported organic sugar, frustrating manufacturers who say the actions won’t help sugar growers but could put some food companies out of business. More than 90% of organic sugar used by U.S. manufacturers is imported. The price of that product increased in August when the Trump administration imposed steep trade tariffs, and will rise even more when high-tier duties on most organic sugar imports take effect October 1. The result, according to the Organic Trade Association, is that the price of organic sugar is expected to soar by an average of 30%, increasing costs of producing most organic foodseverything from yogurt to cookies. Each year, the U.S. imports 1,825 tons (1,656 metric tons) of specialty sugar because its required under a World Trade Organization agreement. But demand for organic sugar far exceeds that amount, so the U.S. Department of Agriculture sets an annual quota for the amount of specialty sugar that can be imported into the U.S. duty-free. Last year, the quota was 231,485 tons (210,000 metric tons), which still wasnt enough to meet demand. This year, the USDAs quota taking effect October 1 will be zero, and all organic sugar imports beyond the WTO minimum will be hit with high out-of-quota duties. The U.S. Department of Agriculture has said its restrictions on specialty sugar imports are intended to help the U.S. sugar industry. The department didnt respond to inquiries about its new sugar policy. Specialty sugar policy could lead to higher prices The limits on duty-free imports of specialty sugar plus a new 50% tariff on Brazil, which supplies 40% of the U.S.’s organic sugar, is especially difficult because organic products are already more expensive than their conventional counterparts. Growers must meet more requirements to be certified organic, such as restrictions on pesticides and fertilizers. U.S. manufacturers say that buying domestic organic sugar isnt an option because there is only one U.S. farm that produces the specialty crop, and converting a conventional farm to organic takes at least three years. They warn the combined effect of the tariff and import caps may force them either to raise prices or curb production. Its essentially punishing domestic manufacturers for using an ingredient that we really cant obtain domestically, and dont have any prospects of obtaining domestically any time in the near future, said Britt Lundgren, who oversees government affairs for organic yogurt maker Stonyfield. Tom Chapman, co-CEO of the Organic Trade Association, said he expects dramatic impacts. The high-tier tariff is so high that we don’t see that it’s an absorbable rate of tariff, in addition to all the other tariffs that would apply, Chapman said. Organic food manufacturers will buy most of the imported organic sugar, though some will be offered on grocery shelves, where home bakers likely will see increased prices. U.S. not producing enough organic sugar to meet demand Demand for organic sugar had already been outpacing imports for the past several years, but that did not spur any new domestic producers, organic food manufacturers said. In addition to limited production, the U.S. also has limited organic sugar processing because ingredients that are certified organic must be segregated from conventional ingredients when processed. Whole Earth Brands, a company that sells a variety of sweeteners, is anticipating a 100% increase in organic sugar costs, according to company president Nigel Willerton. We supply every major supermarket in the U.S. and natural food stores. Well see our prices go up quite considerably. Theres nothing we can avoid there,” he said. How much prices will change depends on how much sugar is used in the product. For example, sweeteners that are made almost entirely from organic sugar are likely to see bigger price increases than dairy products, where organic sugar is not the main ingredient. Higher sugar costs may lead some businesses to shut down Many organic food manufacturers are smaller operations, so they are more sensitive to increases in input costs, Willerton said. Some of them may not have the margins to absorb the cost, and they’re unable to replace organic sugar substitutes because it would require product reformulation. Weve got lots of small companies involved in this business, Willerton said. These small premium companies producing these products are literally going to find themselves priced out of the market. The U.S. government has long had a prominent role in sugar production with policies for setting minimum prices and generous loan programs. Still, Chapman said he doesn’t understand what the USDA is trying to accomplish with its restrictions. When we looked at the USDA announcements, they were talking about domestic sugar shrinking and mills closing,” he said. “Theres only one mill. They were in operation before, and theyre in operation now. Florida Crystals Corporation, the only organic sugar producer in the U.S., supplies 8% of the U.S. organic sugar market, up from about 2% a decade ago. Marianne Martinez, the company’s spokesperson, said the USDAs new specialty sugar policy “is encouraging and could result in an increase in U.S.-grown and milled organic cane sugar production if it becomes a long-term policy. The USDA has not announced any other initiatives to support organic growers in the meantime. By Sarah Raza, Associated Press
Category:
E-Commerce
The Trump administration on Thursday asked the Supreme Court for an emergency order to remove Lisa Cook from the Federal Reserves board of governors. The Republican administration turned to the high court after an appeals court refused to go along with ousting Cook, part of President Donald Trump’s effort to reshape the Feds seven-member governing board and strike a blow at its independence. The White House campaign to unseat Cook marks an unprecedented bid to reshape the Fed board, which was designed to be largely independent from day-to-day politics. No president has fired a sitting Fed governor in the agencys 112-year history. Cook, who was appointed to the Feds board by President Joe Biden, a Democrat, has said she wont leave her post and wont be bullied by Trump. One of her lawyers, Abbe Lowell, has said she will continue to carry out her sworn duties as a Senate-confirmed Board Governor. Separately, Senate Republicans on Monday confirmed Stephen Miran, Trumps nominee to an open spot on the Feds board. Both Cook and Miran took part in Wednesday’s vote in which the Fed cut its key interest rate by a quarter-point. Trump sought to fire Cook on August 25, but a federal judge ruled last week that the removal probably was illegal and reinstated her to the Feds board. Trump has accused Cook of mortgage fraud because she appeared to claim two properties, in Michigan and Georgia, as primary residences in June and July 2021, before she joined the board. Such claims can lead to a lower mortgage rate and smaller down payment than if one of them was declared as a rental property or second home. Put simply, the President may reasonably determine that interest rates paid by the American people should not be set by a Governor who appears to have lied about facts material to the interest rates she secured for herselfand refuses to explain the apparent misrepresentations, Solicitor General D. John Sauer wrote in his Supreme Court filing. But Cook has denied any wrongdoing and has not been charged with a crime. According to documents obtained by The Associated Press, Cook did specify that her Atlanta condo would be a vacation home, according to a loan estimate she obtained in May 2021. And in a form seeking a security clearance, she described it as a 2nd home. Both documents appear to undercut the Trump administrations claims of fraud. U.S. District Judge Jia Cobb ruled that the administration had not satisfied a legal requirement that Fed governors can only be fired for cause, which she said was limited to misconduct while in office. Cook did not join the Feds board until 2022. Cobb also held that Trumps firing would have deprived Cook of her due process, or legal right, to contest the firing. By a 2-1 vote, a panel of the federal appeals court in Washington rejected the administrations request to let Cooks firing proceed. Trumps lawyers have argued that even if the conduct occurred before her time as governor, her alleged action indisputably calls into question Cooks trustworthiness and whether she can be a responsible steward of the interest rates and economy. Trump has previously won orders from the courts conservative majority to fire the presidentially appointed leaders of other independent federal agencies, including the National Labor Relations Board and the Federal Trade Commission, even as legal fights continue. Those firings have been at will, with no cause given. The Supreme Court has distinguished the Federal Reserve from those other agencies, strongly suggesting that Trump cant act against Fed governors without cause. In its new filing to the Supreme Court, the administration is asking Chief Justice John Roberts for a temporary order that would effectively remove Cook from the board and a more lasting order from the whole court that would be in place while her legal case continues. By Mark Sherman, Associated Press.
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E-Commerce
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