🚀 White House to limit state AI laws

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Market Overview
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Year To Date Performances:

1. The White House is preparing an executive order that would preempt state-level AI regulations by directing the Justice Department to challenge them in court and threatening to cut off Broadband Equity Access and Deployment funds to states that don’t back down, according to a draft obtained by CNBC. The move—echoing Trump’s call for a single national AI standard—would be a major win for AI giants like OpenAI and Andreessen Horowitz, who oppose a patchwork of state laws, and a blow to states pursuing their own guardrails. At the same time, congressional Republicans are exploring a legislative moratorium on state AI rules, potentially without an expiration date, though the idea faces bipartisan resistance from lawmakers who argue states must retain authority to regulate emerging risks. Supporters of state action say removing state pressure would doom federal policymaking to the same paralysis that plagued social media regulation, while critics warn fragmented rules could hamper U.S. competitiveness against China.

2. Ray Dalio said the AI-fueled market is “definitely in a bubble,” but warned investors not to dump their holdings solely because valuations look stretched, telling CNBC that bubbles only become dangerous when something pricks them — and he doesn’t see that catalyst yet. Nvidia’s blowout earnings helped push the Nasdaq higher and reinforced the momentum behind megacap tech, even as Dalio argued that long-term returns from these levels tend to be muted. He suggested that while tighter monetary policy is unlikely to end the boom, wealth taxes or other political shifts could. Until then, Dalio urged investors to stay diversified, noting gold’s record-setting run as a reminder that safe-haven assets still have a role.

3. Nvidia’s stock whipsawed on Thursday, soaring more than 5% after its blockbuster earnings before sliding into negative territory, even as the chipmaker delivered a 62% revenue jump and issued bullish fourth-quarter guidance. CEO Jensen Huang dismissed AI-bubble fears on the earnings call, and analysts noted that Nvidia systematically batted down every major bear case, from supply constraints to hyperscaler dependence to China uncertainty. The upbeat report briefly lifted global AI-related stocks, with chipmakers and power-infrastructure names rallying before the broader market reversed course and dragged them down. Still, analysts said Nvidia offered two key reassurances: stronger-than-expected gross margins and clear signs of demand well beyond cloud giants, including from enterprise buyers, model developers like OpenAI and Anthropic, and sovereign AI efforts.

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