🚀 Meta's AMD deal

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Market Overview
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Year To Date Performances:

1. In a strategic power move to break the Nvidia "compute bottleneck," Meta has signed a colossal multiyear deal with AMD to deploy up to 6 gigawatts of AI-optimized graphics processing units across its global data center network. Announced just days after a massive commitment to Nvidia, this partnership positions AMD’s new "Helios" rack-scale systems as the first legitimate large-scale rival to Nvidia’s dominant Blackwell architecture, with early shipments of customized MI450 GPUs slated for later this year. The agreement includes a massive financial incentive in the form of a performance-based warrant, potentially granting Meta a 10% ownership stake in AMD if technical and deployment milestones are met—a structure similar to AMD's recent pact with OpenAI. By diversifying its hardware stack and investing in customized silicon, Meta is effectively leveraging its $135 billion capital expenditure budget to foster a "viable second option" in the chip market, ensuring its ambitious 30-center infrastructure buildout remains on track despite industry-wide supply constraints.

2. Chicago Federal Reserve President Austan Goolsbee delivered a hawkish reality check to markets on Tuesday, arguing that a 3% core inflation rate is "not good enough" to justify further interest rate cuts. Speaking at the National Association for Business Economics, Goolsbee warned that policymakers cannot risk being "burned" again by assuming price pressures are transitory, especially as housing costs and service-sector inflation remain stubbornly high despite the temporary impact of new tariffs. His cautious stance aligns with a growing consensus among Fed voters to maintain a "hold" position until at least mid-summer, effectively dampening hopes for immediate stimulus following the central bank’s three modest rate reductions in late 2025. While Fed Governor Christopher Waller suggested Monday that the bank might "look through" tariff-driven spikes, the collective messaging from Washington indicates that the robust labor market has provided the Fed with a strategic cushion to wait for definitive proof that inflation is truly returning to its 2% mandate.

3. The battle for the future of legacy media has reached a fever pitch as Warner Bros. Discovery (WBD) announced on Tuesday that it has received a significantly higher takeover offer from Paramount Skydance, threatening to upend its existing deal with Netflix. While Netflix had previously moved to acquire WBD’s studio and streaming assets for $72 billion, Paramount is now pursuing the entire company—including CNN and its linear cable portfolio—with a bid that tops its initial $30-per-share hostile tender. Under the terms of the current agreement, WBD’s board must now determine if Paramount’s revised proposal constitutes a "superior offer," a move that would trigger a four-day window for Netflix to counter or walk away with a $2.8 billion breakup fee. Whether the outcome is a merger of two of the "Big Five" movie studios or a historic asset grab by the world's largest streamer, any final deal faces a gauntlet of intense antitrust scrutiny in both the U.S. and Europe as regulators weigh the implications of such massive consolidation in the news and entertainment sectors.

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