This week’s world-famous-news-haiku-competition™ is about how OpenAI made $20Billion less than it thought. Send me your entry — to haiku at cheddar dot com — by noon ET Thursday, for consideration by your Cheddar peers.

Matt Davis — Need2Know Chedditor

Table of Contents

• Bipartisan Senators Protest Diesel Deal

• Maxed Out: American Debt Hits a 15-Year High

• Stir As UK PM Scraps Non-Compete Clauses

• Matt’s Tuesday Stack™

• Poll of the Day: A Debt to Society

• Poll of the Day: Buyer’s Remorse

What’s the Stock Market Up To, Eh?

$SPX ( ▼ 0.06% )  $DJI ( ▲ 0.38% )  $NDX ( ▲ 1.59% )  

Companies Mentioned in Today’s Newsletter

$MSFT ( ▲ 1.14% )  $NVDA ( ▼ 1.29% )  

Microsoft Takes On Nvidia With Own AI Chips

This week sees the debut of a new chip, “Maia 300,” Microsoft’s $MSFT ( ▲ 1.14% ) third-generation custom silicon built to power heavy-duty AI tasks and cloud services, and to rival Nvidia’s products $NVDA ( ▼ 1.29% ) .

Why go through the headache of designing your own silicon? Because buying off-the-shelf GPUs at luxury-brand markups burns through cash. Microsoft plans to roll out over one million Maia 300 processors next year in massive multi-gigawatt server deployments. While each 96-chip rack devours 167 kilowatts of power, Microsoft boasts that Maia delivers 40% more useful computing per megawatt than rival GPU-based setups.

Highlighting the strategy, Rani Borkar, president of Azure hardware systems and infrastructure at Microsoft, explained: "It's basically delivering more intelligence for every watt, every dollar, and every byte of memory by optimizing across the entire system."

In short, Microsoft is attempting to save its own balance sheet from melting under the weight of the AI boom. I wish them the best of luck with it.

Bipartisan Senators Protest Diesel Deal

Facing record gas-station pain with diesel hitting $6.53 per gallon, President Trump attempted a quick fix ahead of the midterms last week by striking a deal with (checks notes) Russian President Vladimir Putin to import hundreds of thousands of tons of Russian fuel through April 2027. The White House even tried to rebrand the arrangement, calling it part of “an ENERGY CEASEFIRE in the War between Russia and Ukraine.”

But senators from both sides of he aisle were not amused. A coalition of seven lawmakers, including Republicans Susan Collins and Thom Tillis alongside Democrats Jeanne Shaheen and Ron Wyden, called on the administration to "immediately reverse course." Pointing to Congress’s 2022 ban on Russian energy imports, the group said that "President Trump’s decision to allow Russian diesel imports to the U.S. runs directly counter to that law." In a scathing joint statement, they added, "The United States should not provide Putin with a financial lifeline while Russia continues to kill Ukrainian civilians.”

I guess when you put it like that it does sound sorta iffy. Republican Senator Thom Tillis went even further on NBC's Meet the Press, declaring, "I do believe there’s a legitimate case for saying the president’s not following the law," while reminding everyone that "Russia is the aggressor.” Meanwhile, Ukrainian President Volodymyr Zelensky offered a sharp reality check, warning that "easing sanctions without a lasting de-escalation agreement would signal weakness.”

Quote of the Day

Maxed Out: American Debt Hits a 15-Year High

If you’ve been feeling a cold sweat every time your credit card statement arrives, you are not alone. According to the Federal Reserve’s latest Survey of Consumer Finances, the share of American families falling behind on loan payments has soared to nearly 20%, up from 12% in the previous survey. That puts household debt distress at its highest point since 2010, back when the country was still nursing a Great Recession hangover.

Persistent inflation and high interest rates have been quietly squeezing household budgets to breaking point. As the Federal Reserve’s report observed, “Families were more likely to be behind on their financial obligations than at any point since the 2010 survey.” Even worse, families spending more than 40% of their total income just to service debt jumped to 8.6%, reaching levels not seen since 2013.

Meanwhile, economic reality depends entirely on where you sit on the wealth ladder. While top earners enjoyed a 31% surge in median net worth over recent years, families in the bottom fourth saw their median net worth shrink by 6%. For Americans aged 35 to 44, median income plummeted 25% as capital gains evaporated.

The central bank tried to find a silver lining, noting in the survey that “families in the lower ends of the income and net worth distributions saw modest increases in median and mean income,” concluding that “these patterns indicate that income inequality decreased slightly between surveys.”

So, that’s alright, then…

Song of the Day: Tigirlily Gold, ‘Girl’s A Goner’

As country songs about the reckless thrill of falling headlong falling hard in love go, this one is certainly lyrically catchy…

🎶 That Silverado might as well been a white horse
First kiss goodnight, couldn’t get her off the front porch
That girl ain’t falling, girl she already fell
She’s goin’ all in, ain’t hard to tell…
That girl’s a courthouse drive away from tradin’ in her daddy’s name 🎶

Etcetera…

Stir As UK PM Scraps Non-Compete Clauses

If there is one thing London’s financial titans love more than exorbitant bonuses, it is forcing departing star traders to spend up to two years sitting on "garden leave" before joining a rival. But that cozy arrangement is now under fire as the UK government moves to scrap non-compete clauses to boost the nation’s tech ecosystem.

The prime minister, Andy Burnham, declared that non-compete clauses will "no longer be a barrier to hiring for our most promising start-ups and scaling firms," arguing the practice is "a drag on innovation" and that "we need our innovators to be able to move freely." Startup Coalition leader Dom Hallas warmly applauded the move: "Hiring faster means British start-ups and scale-ups can grow faster," he said, which could materially boost UK economic growth.

The City of London’s finance elite is having a meltdown. Representing major financial groups, John Godfrey of TheCityUK warned that members are "very disappointed" and fear the proposal will "potentially damage the competitiveness of UK financial and professional services". Jiří Król of the Alternative Investment Management Association put it even more dramatically: "The UK government risks throwing the baby out with the bathwater in its efforts to support the tech sector," he said. Meanwhile, Jillien Flores from the Managed Funds Association defended non-competes as "vital tools for protecting the proprietary investment strategies" of hedge funds. Matthew Percival at the CBI business lobby also pushed back, noting they have "not seen compelling evidence that non-compete clauses are a drag on innovation."

With five million British employees currently bound by non-competes, abolishing them will disrupt corporate life in the UK. New York City mayor Zohran Mamdani pledged to ban non-compete clauses there, last year.

Free Yourself From Advertising Forever!

Matt’s Tuesday Stack™

Welcome to Matt’s Tuesday Stack™, a new weekly feature where I tell you about three things I actually pay for, so you can feel worse about your own decisions. Let's go…

Cloudways — I spent years paying for web hosting like I was renting a yacht, except instead of a yacht I got a loading spinner. Cloudways is the opposite of that: Managed cloud hosting where someone who actually knows what a server is handles the boring parts while you get on with your life. Fast, boring, cheap. The holy trinity!

Fiverr — Everybody eventually discovers there's a version of themselves who doesn't have time to make a logo, a powerpoint deck, and a promotional video for their latest idea. That version lives on Fiverr and costs less than your lunch order. I've hired editors, designers, and one very patient man who makes me videos for the ‘gram. Worth every cent.

Revolut — The app that makes your bank's app look like it was designed during the Truman administration. Real exchange rates, instant transfers, and you can move between currencies without paying a penalty.

Should You Check Your 401(k) Today?

👎️ 

No.

Poll of the Day: A Debt to Society

Poll of the Day: Buyer’s Remorse

We asked: How Do You Feel, Knowing That Consumer Prices Would Have Dropped by 1% If It Weren't For the Tariffs?

You answered:

🟩🟩🟩🟩🟩🟩 How the heck do EXPECT me to feel, buddy? I'm absolutely frickin' LIVID about it. That's how. (464)
⬜️⬜️⬜️⬜️⬜️⬜️ This is just the New York Fed pursuing its usual woke agenda and I'm glad the tariffs exist. We have to pay a little more to assert an America First agenda? Great. I'm happy to. And they will pay off eventually. (44)
508 Votes via @beehiiv polls

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