Macquarie in $8b AI data centre play

Good morning. Here's what happened overnight and what you need to know today.

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1.

AI centres: Macquarie Asset Management (MAM) will invest up to USD5 billion ($8.09 billion) in Applied Digital's AI-focused data centres, including a 15% stake. The deal includes USD900 million in preferred equity for a high-performance computing campus in North Dakota and a 30-month right of first refusal to invest an additional USD4.1 billion in future projects. It makes Macquarie the NASDAQ-listed firm's largest shareholder, according to LSEG data. The funding will help repay debt tied to North Dakota facilities and recover over USD300 million of equity invested. Applied Digital, which rebranded from Applied Blockchain in 2022, has shifted from crypto mining to AI infrastructure. Its shares, up over 40% this year, jumped 25% after the news before settling around a 15% gain. Meanwhile, US President Joe Biden signed an executive order to support energy needs for AI data centres, allowing leasing of federal land for gigawatt-scale centres, mandating the purchase of US-made semiconductors and fast-tracking infrastructure permits.(Capital Brief)(Applied Digital statement)(Reuters)

2.

Inflation pause: US producer prices rose 0.2% in December, surprising economists who forecast a rise of 0.4%, as falling food costs and flat services eased inflation pressures. This follows gains of 0.4% in November and 0.2% in October. Wholesale vegetable prices plunged 14.7%, offsetting a 3.5% energy price rise, according to the US Bureau of Labor Statistics. Core PPI (excluding food and energy) was unchanged, while annual PPI climbed 3.3%. Final demand service prices were flat. The data precedes Wednesday’s more closely watched release of the consumer price index, amid heightened inflation expectations spurred by robust demand and the incoming Trump administration’s tariff threats. Economists still expect the Federal Reserve to hold rates steady until the second half of the year. “Better than expected is not necessarily what the Fed wants to see before easing monetary conditions into a fast-growing economy,” said Carl Weinberg, chief US economist at High Frequency Economics. (US BLS)(Reuters)(Capital Brief)

3.

JPM transition: Jennifer Piepszak, long considered a leading candidate to succeed Jamie Dimon as chief executive of JPMorgan Chase, has opted out of the CEO race and instead become the bank’s Chief Operating Officer, effective immediately. She succeeds Daniel Pinto, who will step down as president and COO on June 30 and retire in 2026 after 40 years at the bank. Piepszak “does not want to be considered for the CEO position at this time,” spokesperson Joe Evangelisti told Bloomberg, adding that she prefers a senior operating role supporting Dimon and top leadership. Her decision shifts focus to other potential successors: Marianne Lake, head of consumer and community banking; Troy Rohrbaugh, co-head of the commercial and investment bank; Mary Erdoes, head of asset and wealth management; and Doug Petno, co-head of global banking. Petno will replace Piepszak as co-CEO of the commercial and investment bank alongside Rohrbaugh. (Capital Brief)(JPMorgan)(Bloomberg)

4.

Rocket routes: SpaceX rocket debris falling over the Southern Indian Ocean has forced Qantas Airways to delay flights between Sydney and Johannesburg in recent weeks. Some journeys had to be postponed right before departure, delaying flights by up to six hours, media reported citing an airline officer. The delays came after the US government warned the airline of the debris, stemming from rocket re-entries with little notice of timing changes. Ben Holland, head of Qantas’s operations centre, said the airline is in contact with SpaceX to refine the timing and areas of re-entry to reduce disruptions. It comes as SpaceX plans as many as 400 Starship launches over the next four years, with a test flight set for this week. (Bloomberg)(FT)

5.

Tech rethink: The European Commission is pausing decisions and potential fines in its probes into Apple, Google and Meta while reassessing landmark cases under the Digital Markets Act (DMA), The Financial Times reported, citing two unnamed officials. The review coincides with the EU Commission’s new five-year term and Donald Trump’s return to office next week. It comes as Silicon Valley leaders pressure the US President-elect to challenge what they claim is excessive EU regulation. EU lawmakers have urged the Commission to hold firm against US influence. The review could scale back or alter cases launched since March 2024, with decisions on hold as technical work continues. Investigations include Google’s and Apple’s app store practices and Meta’s use of personal data. EU officials told the paper Brussels regulators were now waiting for political direction to finalise decisions on the cases. Meanwhile NBC reported Elon Musk, Jeff Bezos and Mark Zuckerberg would attend Trump’s inauguration on Monday (FT)

6.

Meta cull: Meta Platforms will lay off approximately 5% of its workforce, equating to about 3,600 employees, through performance-based terminations, media reported, citing a memo from CEO Mark Zuckerberg announcing the cuts. “I’ve decided to raise the bar on performance management and move out low-performers faster,” Zuckerberg said in the note. “We typically manage out people who aren’t meeting expectations over the course of a year. But now we’re going to do more extensive performance-based cuts during this cycle.” US-based employees will be notified on 10 February, with notifications in other countries following later. Affected staff will receive generous severance packages, he said. The move follows Meta’s 2023 “year of efficiency,” which included eliminating 10,000 positions. The company’s headcount is expected to be 10% lower by the end of this cycle. The move follows other recent workforce changes, including discontinuing US fact-checking and reducing diversity initiatives, both of which more closely align with policies of President-elect Donald Trump. (Bloomberg)(WSJ)

7.

OpenAI assistant: OpenAI introduced its most direct foray into the virtual assistant space, challenging Alexa and Siri with its new "Tasks" feature. The beta feature allows ChatGPT users to schedule tasks such as reminders or daily updates, with rollout starting globally for paid users on web and app platforms. Separately, OpenAI appointed BlackRock executive Adebayo Ogunlesi to its board of directors. Ogunlesi, a billionaire from BlackRock’s USD12 billion acquisition of Global Infrastructure Partners, brings critical expertise in infrastructure as OpenAI pushes for more data centres and energy investments. This follows the company’s release of an "economic blueprint" calling for infrastructure investments to ensure US leadership in AI. With Ogunlesi, the board grows to 10 members, who are evaluating a potential restructuring into a public benefit corporation. (Reuters)(Bloomberg)

8.

Trade blacklists: The US has banned imports from 37 Chinese companies under the Uyghur Forced Labor Prevention Act, citing forced labor allegations tied to human-rights abuses in Xinjiang. The list from the Department of Homeland Security includes textile giant Huafu Fashion, 25 subsidiaries, and polysilicon producers Donghai JA Solar Technology and Hongyuan Green Energy. Zijin Mining Group and three subsidiaries were also listed. The total number of blacklisted companies since 2021 is now 144. Meanwhile, China blacklisted seven US companies, including Inter-Coastal Electronics, for involvement in arms sales to Taiwan. The companies face bans on trade, investments and exports in China. (Reuters)