GM and BRRR.

Markets are mixed today as some old-fashioned America-first protectionism has been leaked out of the White House overnight. The reports claim the Biden admin is close to putting new restrictions on US manufacturers exporting microprocessors and chips under the umbrella of national security interests.

Semiconductors are mildly lower on the news, with NVDA leading the headlines with a 3% dip before recovering about half of the loss in early trading.

Elsewhere, Michael Saylor and Microstrategy continued to add to their bitcoin stack, topping up an additional 12,300 bitcoin for an average price of $28,650. They now hold over $4.6B worth.

Also in crypto, earlier this week the FTX liquidators released a scathing report alleging SBF knew far more than he’s lead on, damaging his potential criminal defense. On the positive side, the liquidators also claimed they’ve recovered nearly $7b worth of assets, giving creditors and customers some renewed hope.

AI: The Money Robots

AI Chip Export Restrictions: The Great Firewall of Silicon

• Biden Administration Considers AI Chip Export Restrictions to China: The Biden administration is mulling new restrictions on exporting AI chips, including Nvidia's, to China. The move aims to deter companies from evading export curbs and could impact China's AI ambitions.

• Potential Headwind for Nvidia and China's Chip Sector: Escalating chip war poses challenges for Nvidia as a leading chip manufacturer. Revenue losses are possible if new restrictions are implemented, while China's chip sector and AI development would also suffer.

• Balancing Act for Biden Administration: Striking a delicate balance, the proposed restrictions seek to slow China's AI development but may affect U.S. chip companies' revenue. Nvidia's stock price dropped on earnings concerns, highlighting the challenge of safeguarding national interests without harming American chip manufacturers.

• Implications for Nvidia and Chinese Companies: New restrictions may impact Nvidia's popular A800 chips among Chinese firms. The lower bandwidth of A800 chips could pose challenges for image-related applications. Chinese chip stocks like Cambricon Technologies and Changsha Jingjia Microelectronics rose as China strengthens its domestic chip industry.

• Long-Term Uncertainty and Repercussions: Ongoing U.S.-China chip war may continue affecting Nvidia, AMD, and other U.S. chip makers. Comprehensive restrictions on chips pose difficulties for China's chip sector, but Beijing remains determined to achieve "chip sovereignty" for economic survival.

  Read more and here

Publicly-traded companies mentioned: NVDA

Our take: Likely insignificant with a divided Congress, but an interesting shift in rhetoric that makes Biden sound a little bit like his old friend, the evil orange man.

Crypto: Digital Gold Rush

New FTX Report Undermines SBF’s Defense

While the report claims $7B of assets has been recovered, the bankruptcy team has unearthed new evidence that SBF was more of an active mastermind in the fraud than he was negligent, as he has claimed.

• Fraudulent Activity Allegations: FTX's restructuring team report alleges FTX executives misused customer funds for political donations and venture investments, involving entities tied to FTX co-founder Sam Bankman-Fried. The executives reportedly knew of an $8 billion customer fund shortfall by August 2022, months before the collapse.

• Bankman-Fried's Involvement: The report implies Bankman-Fried played an active role in the fraud, including purportedly signing a backdated "Payment Agent Agreement" to justify irregular fund flows and evade banking regulations.

• Misused Customer Funds: Customer funds were allegedly directed to questionable entities, including $20 million to a nonprofit run by Bankman-Fried's brother and $450 million to an associate-founded entity, Modulo Capital.

• Impact on Criminal Trial: These allegations will be scrutinized during Sam Bankman-Fried's upcoming criminal trial. His physical signature on the backdated document could significantly weaken his defense, but it's uncertain if these facts will be included in the trial.

  Read more

AI ART OF THE DAY

The BRRR’s Portfolio

Looking good with Coinbase playing catch up.

On Watchlist:
$AMD: NVDA’s strongest competitor
$ASML: AI Supply Chain
$ADBE: Creativity & productivity software
$ISRG: Robot Surgeons

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The BRRR is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor before making any investment decisions.