Breakfast News: Levy Letters Spark Reaction

Breakfast News: Levy Letters Spark Reaction

Source: Image Created by Jester AI.

1. Countries React to Tariff Letter Fallout

China has warned the Trump administration against increasing trade tariff tensions, with Japan calling the latest wave of letters "regrettable," as nations digest the impact on key trading partners.

• "One conclusion is abundantly clear: dialogue and cooperation are the only correct path." China threatened to retaliate against other nations looking to potentially exclude it from any trade deal struck with the U.S., as President Donald Trump said he was still open to negotiations with countries without an agreement.
• Japan levy set at 25%, higher than 24% announced in April: Prime Minister Shigeru Ishiba stressed he would continue talks with the U.S. before the higher levy goes into effect at the beginning of August, with Japan one of the few nations set to face a higher tariff rate than before.

2. Meta Poaches Apple's Top AI Executive

Meta (META 0.37%) confirmed it has snapped up Apple's (AAPL 0.46%) executive in charge of artificial intelligence (AI) models, in a move boosting the new superintelligence group at Meta but also further damaging Apple's struggling AI efforts.

• Major departure leaves key team vulnerable: Ruoming Pang had been in charge of a 100 person team at Apple, building the large language models (LLMs) for Apple Intelligence. It comes at a time when Apple is looking to open up the models to third-party developers for the first time.
• Pay package worth tens of millions: According to Bloomberg, Meta offered Pang a lucrative compensation package, further cementing the commitment from CEO Mark Zuckerberg to build out the team to keep pace with rivals.

3. AI Race Heats Up

OpenAI has tightened security operations, including adding fingerprint scans and hiring military experts to protect important data, as the lucrative AI sector experiences larger corporate espionage fears.

• Warnings of efforts to steal sensitive data: With the U.S. and China in growing competition in this sector, the U.S. government has stated that foreign adversaries were stepping up efforts to steal technology, which could threaten economic and national security.
• Elon Musk announces Grok 4 release: The latest version of xAI's LLM is set for release tomorrow, with the AI product roadmap accelerated in part thanks to the Colossus supercomputer in Memphis being fully operational.

4. Chip Industry Faces Copper Supply Risk

A PwC report notes that 32% of global semiconductor production could face copper supply disruption by 2035 due to climate change, with the risk increasing over time if innovation on materials doesn't occur.

• "Around half of every country's copper supply is at risk by 2050." Copper is a key component in chips, with it being used for billions of tiny wires on the circuit. There's currently no alternative that can match the price and performance.
• Lessons from the past: The last chip shortage came during the pandemic, with PwC estimating that the hit to chip-dependent sectors cost the U.S. economy a full percentage point in gross domestic product (GDP) growth.

5. Your Take

What is your favorite small-cap stock for the next five years? Debate with friends and family, or become a member to hear what your fellow Fools are saying.