Amazon Web Services data center in Stone Ridge, Virginia, on Sunday, July 28, 2024.
Nathan Howard | Bloomberg | Getty Images
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors everything they need to know, wherever they are. Like it? Subscribe here.
What you need to know today
Fall from the high point
U.S. stocks were mostly lower on Wednesday. The S&P 500 lost 0.19%, while the Dow Jones Industrial Average lost 0.7% after hitting a record high earlier in the session. The Nasdaq Composite Index closed little changed. The European Stoxx 600 index lost 0.11%. The Stoxx Europe 600 Banks index lost 0.73% as investors focused on a possible merger between UniCredit and Comerzbank.
Google vs. Microsoft
Google on Wednesday filed an antitrust complaint with the European Commission, the European Union’s executive body, over Microsoft’s practices in the cloud computing industry. Google claims that Microsoft is using unfair licensing deals to “lock in” customers and dominate the cloud market.
Nvidia sale complete
Nvidia CEO Jensen Huang is done selling shares in the company for now. In March, Huang announced plans to sell up to 6 million shares of Nvidia stock by the first quarter of 2025. He reached that goal ahead of schedule. Meanwhile, a Bain & Company report said that AI chips made by Nvidia could face a global shortage as demand soars.
Turning VR into reality
Meta has taken another step towards making virtual reality a part of everyday life: The company’s Reality Labs division announced its latest VR headset, the Quest 3S, which will be available starting at $299 on October 15. Meta also showed off a prototype of augmented reality glasses called Orion.
(PRO) Now is the time to buy
That little green bird, Duolingo’s logo, may be a bit annoying because it reminds you of practicing your Japanese for the hundredth time, but analysts love it. Duolingo is one of the stocks on Wall Street banks’ “buy” lists, along with Hewlett Packard Enterprise and Roblox.
Conclusion
The initial craze for generative artificial intelligence began when OpenAI released ChatGPT in 2022. Institutions poured billions of dollars into OpenAI.
OpenAI, the company behind ChatGPT, is privately held, but several companies are benefiting enormously from the generative AI boom it has sparked.
(Speaking of OpenAI, its CTO Mira Murati announced on Wednesday that she is leaving the company. OpenAI also plans to restructure into a for-profit company.)
Nvidia was gen AI’s first beneficiary: in 2023, a year after ChatGPT was released, the semiconductor company’s chips were revealed to be the brains of the chatbot, and the company’s shares soared.
Big tech companies then jumped on the bandwagon: Microsoft, Meta and Google-parent Alphabet all released their own versions of chatbots and AI-powered tools. These features helped lift the stock price, though of course it’s difficult to pin the stock price movement on a single source.
It looks like the AI tailwinds are starting to propel a third wave of AI-related companies forward.
If chips are the brains of AI, data centers are its bodies. After Barclays raised Hewlett Packard Enterprise’s ratings on the company due to strong demand for AI data centers, the company’s shares rose more than 5%. Also, remember Oracle’s surge this year, driven mainly by AI cloud services that run in its data centers.
Energy companies are likely to be the next to benefit from AI.
Oracle founder Larry Ellison said that a new data center the company is designing will “rely on three modular nuclear reactors.”
Texas-based utility Vistra Corp. saw its shares rise about 6% on hopes that the company will use one of its nuclear plants to power an AI data center. Similarly, Constellation Energy’s shares rose about 22% on Friday after it announced plans to restart a nuclear plant and sell the power to Microsoft.
So the AI tides will continue to sweep through the ocean for some time to come: Big tech companies and semiconductors are tempting prey, but if we cast our net wider, we might catch other prey too.
–CNBC’s Kiff Leswing, Jonathan Vanian, Jordan Novett, Brian Evans and Jesse Pound contributed to this story.
