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Matt Davis — Need2Know Chedditor

Table of Contents

• Huang For The Chop After Second Affair

• The AI Trade Revives Like Frankenstein

• Sofa, So Bad: The Great American Re-Shoring Flop

• How Dead Startups Are Cashing In on AI

• Kalshi Warned Of Possible Charges

• Poll of the Day: What’s Meta For?

• Poll of the Day: Charmed, I’m Sure

What’s the Stock Market Up To, Eh?

$SPX ( ▲ 1.31% )  $DJI ( ▲ 0.49% )  $NDX ( ▲ 1.59% )  

Companies Mentioned in Today’s Newsletter

$NDAQ ( ▼ 0.31% )  $CRWV ( ▲ 24.71% )  $ANTHZZX ( ▼ 0.05% )  $HOOD ( ▲ 4.0% )  $NVDA ( ▲ 2.87% )  $KALSZZX ( ▼ 0.13% )  $PLYRZZX ( ▲ 1.13% )  

Huang For The Chop After Second Affair

If you thought tech networking was just awkward mixers and LinkedIn messages, Alice Huang would like a word. The former CCTV journalist from rural Hunan proved that with enough ambition, a sharp wardrobe, and a discreetly swapped vowel, you can allegedly navigate your way into both Chinese intelligence dossiers and the personal life of Nvidia’s leather-jacketed titan, Jensen Huang (no relation).

Huang (of the leathered-jacket, not the the honeyed-pot) is now reportedly for the chop after revelations of a second affair emerged last night, reported by the New York Times at 5:27 p.m. The Wall Street Journal reported that the board is preparing to oust Huang at 5:41 p.m. — presumably after calling a board member in the interim and asking them for comment on the Times revelations.

Long before rocking the foundations of the global AI boom, the FT reports that Agent Huang (let’s call her that?) honed her craft in the high-stakes playground of Chinese finance alongside Kang Wei—her longtime business partner, romantic companion, and a financier who collected regulatory fines like frequent-flyer miles. A former classmate remembered her as “well-liked, easygoing and ambitious.” Later, holding court at a colonial-era Shanghai mansion while pitching access to restricted Nvidia chips and ties to Alibaba, Huang’s charm offensive was in full swing. “She was well presented,” recalled one investor who met the couple at the private club. A former colleague was equally impressed, pointing to her “formidable networking skills” and rare gift for converting social ties into lucrative contracts.

Her crowning pivot was pure geopolitical judo: rebranding as "Alice Wong" in Singapore and transforming Megaspeed into an AI data center, right when US export curbs made Nvidia GPUs scarcer than gold for Chinese companies. Now, with Megaspeed probed for chip smuggling and Huang vanishing back to China, Beijing has dismissed the espionage claims as mere “smear and defamation.” Whether or not that’s true, Alice certainly mastered the backdoor channel.

By the time you read this, who knows? Jensen could be yesterday’s news. His (former?) company’s stock was down 7% after hours. What with its emerging succession crisis, and all…

The AI Trade Revives Like Frankenstein

Never mind the randy CEO in the leather jacket. Just when I thought Wall Street had nailed the coffin shut on the AI trade, someone flipped a switch and the monster bolted upright on the laboratory slab!

Only days after the Nasdaq $NDAQ ( ▼ 0.31% ) endured its worst day since 2020—rattled by post-midterm political panic and Nvidia chief Jensen Huang admitting to an affair with an alleged Chinese spy—the tech corpse has reanimated. The Nasdaq 100 clawed back all of last week’s 4.9% drop yesterday. The lightning strike? Cloud computing group CoreWeave $CRWV ( ▲ 24.71% ) spiked 26.8% on surprise revenue growth, while reports circulated that Anthropic’s $ANTHZZX ( ▼ 0.05% ) bankers are casually eyeballing an IPO valuation of up to $1.5 trillion or more given surprisingly strong demand. (Full disclosure, I put in for two shares of Anthropic on Robinhood $HOOD ( ▲ 4.0% ) this morning).

Naturally, Wall Street villagers are split between hurling pitchforks and placing buy orders. As Arun Sai, senior multi-asset strategist at Pictet, told the Financial Times, “Investors are being whipsawed by news flow and sentiment, between this being a generational buying opportunity into AI or a classic value trap.”

Yet declaring the monster dead appears to have been premature. Manish Kabra, lead US equities strategist at Société Générale, told the FT that the market had “been discounting a slowdown [in AI] which has not even started.” Rather than writing obituaries, money managers are sheepishly crawling back onto the dance floor. Caroline Shaw, portfolio manager at Fidelity International, acknowledged taking profits in October, but conceded that “the question now is: should we start to rotate back to tech? That’s really the debate, rather than ‘is this the beginning of the end?’.”

As long as the funding taps flow into data centers, the creature walks. Or, as Roger Lee, head of equity strategy at Cavendish, concluded: “As long as the music is still playing, we keep dancing.”

Quote of the Day

Sofa, So Bad: The Great American Re-Shoring Flop

Bruce Krinsky had a classic mid-market dream: sell stylish couches to millennials craving an upgrade from IKEA without remortgaging their lives at Crate & Barrel. But when shifting trade policy and mounting tariffs threatened his Asian supply chains, the three-time Trump-voting founder of TOV Furniture decided to do what Washington pleaded for: Bring manufacturing back home to High Point, North Carolina, reports the Wall Street Journal.

He acquired a struggling plant for zero dollars and christened it Revival American Contract Furniture. What could go wrong?

Virtually everything, it turns out. First came the brutal reality of shop-floor arithmetic. In Vietnam, upholsterers churned out 10 sofas a day. In North Carolina, scarce domestic artisans—commanding up to $90,000 a year—managed just two or three. When one American worker vanished for an entire month, Krinsky lacked the labor pool to fire him: “I didn’t have people to replace him, so I’m telling him, ‘OK, let me know when you can come back’,” he said. Comparing workforces, Krinsky observed that overseas factories are “culturally, they’re very hungry,” whereas “in the U.S., we’re either too comfortable or burnt out.”

Before long, Krinsky was bleeding over $100 on every couch produced. As George Jordan, president of nearby legacy maker Michael Thomas Furniture, dryly explained regarding sub-$2,000 price tags: “If you’re trying to get below $2,000 on sofas, it’s harder.”

Ten months and $3 million in losses later, Krinsky pulled the plug, cut 45 jobs, and retreated to Vietnam. “It was the worst period of my life,” he told the WSJ. “It was like being constantly punched in the gut.”

Surveying the wreckage, Krinsky posed the ultimate re-shoring conundrum: “What exactly is an American business supposed to do? We’re trying to do what the government wants.”

Evidently not, though, in the end.

Song of the Day: Magixx, Shoday, ‘Ferawa’

Here’s a smooth, atmospheric Afropop and R&B collaboration by two super Nigerian artists.

How Dead Startups Are Cashing In on AI

Remember all those awkward company-wide Slack threads, passive-aggressive memos, and forgotten spreadsheet graveyards you left behind at your last bankrupt employer? Congratulations: They are now feeding the AI beast, and data scavengers are cleaning up.

In Silicon Valley’s latest gold rush, one company’s digital roadkill is a frontier AI lab’s gourmet feast. A brand-new crop of multi-billion-dollar data-broker startups like Micro1 and Mercor are vacuuming up internal communications, employee presentations, and defunct factory logs to train large language models. Forget liquidation auctions hawking ergonomic office chairs for pennies on the dollar; today, bankrupt companies are hawking their digital detritus to the highest algorithmic bidder. Even Spirit Airlines, after cratering into bankruptcy and shutting down, managed to flog its operational data remnants for a reported $10 million.

Ali Ansari, CEO of Micro1, estimates that annual AI data spending has exploded from $2 billion to nearly $50 billion, potentially barreling toward $1 trillion. As Ansari told The Post, “We believe this market is going to be one of the largest markets in the world. It’s also going to be one of the largest job sectors.” With brokers pocketing millions in a single week, Ansari notes the trade “can be quite lucrative” and has even thrown lifelines to businesses teetering on insolvency, which sounds very sensitive and kind of him, I must say.

Ansari predicts monetizing operational archives will soon become standard practice: “I think we’re going to see a similar thing where data licensing becomes as common as advertising for businesses to just have like a revenue line item”. And while brokers insist all personal details are scrubbed, Ansari candidly acknowledges the catch: “Of course, the caveat is that these systems are not perfect.”

So, cheer up: Even if your company goes belly-up, your petty workplace chatter might achieve digital immortality inside an LLM. As Ansari put it, “It’s more so like an infinite last mile.” 

Free Yourself From Advertising Forever!

Kalshi Warned Of Possible Charges

Kalshi $KALSZZX ( ▼ 0.13% ) , the platform that turned wagering on elections and pop culture into a $40 billion juggernaut, is sweating under the regulatory heat lamp. The Commodity Futures Trading Commission (CFTC) is weighing potential federal charges, probing whether the company bypassed proper notifications for dozens of contracts brewed up in its development pipeline — numerous outlets are reporting.

At issue is "self-certification"—a loophole-shaped expressway allowing exchanges to list financial derivatives overnight without waiting for explicit CFTC pre-approval. Wall Street incumbents have long eyed this parlor trick with disdain; as CME Group CEO Terry Duffy cautioned earlier this year, several of these contracts were blatantly “vulnerable to manipulation and should not have been permitted to begin trading.”

Kalshi, however, is doing its best "nothing to see here" routine. Company spokesperson Elisabeth Diana insisted to The New York Post that the CFTC’s warning is merely “about a procedural error involving the submission of a handful of contracts, many of which weren’t live.” She added, with corporate serenity: “We are already addressing the issue.”

Yet the timing couldn't be worse. While Kalshi and offshore rival Polymarket $PLYRZZX ( ▲ 1.13% ) enjoyed a relatively cozy ride under the Trump administration's CFTC leadership, Capitol Hill’s mood has abruptly shifted. Fresh off decisive midterm victories, empowered congressional Democrats are sharpening their knives for aggressive oversight. If you’re laying odds on Kalshi escaping unscathed, you might want to check the spread.

Should You Check Your 401(k) Today?

👎️ 

Continue to leave it well alone for a few weeks.

Poll of the Day: What’s Meta For?

Poll of the Day: Charmed, I’m Sure

We asked: What do you suggest Wall Street bankers do with their 30% bigger bonuses this year?

You answered:

🟨⬜️⬜️⬜️⬜️⬜️ Retain a top-tier white-collar defense attorney on annual standby. Just to be proactive. (75)
⬜️⬜️⬜️⬜️⬜️⬜️ Put down a deposit on a third therapist. (6)
⬜️⬜️⬜️⬜️⬜️⬜️ Commission a custom Patagonia fleece vest. (18)
🟨⬜️⬜️⬜️⬜️⬜️ Tip better. (81)
🟩🟩🟩🟩🟩🟩 Shove it up their ******. (285)
465 Votes via @beehiiv polls

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