AI War: U.S. vs. China Intensifies

TECH
AI War: U.S. vs. China Intensifies

Billionaire investor Ray Dalio believes China will continue to dominate AI chip manufacturing, while the U.S. retains an edge in AI research and innovation. Speaking with Tucker Carlson last month, Dalio argued that the U.S. lacks cost-effective manufacturing capabilities, making it unlikely to compete with China in mass-producing semiconductors.

“We design chips, but we can’t produce them effectively,” Dalio said, emphasizing that China’s strength lies in producing affordable AI chips that power robotics and other applications. Meanwhile, the U.S. leads in AI research and talent, attracting top global minds.

The U.S. has ramped up efforts to strengthen domestic semiconductor production, with Taiwan Semiconductor Manufacturing Co. (TSMC) planning a $100 billion investment in U.S. chip plants under President Donald Trump’s economic strategy.

Despite export restrictions aimed at limiting China’s access to advanced chips, Dalio predicts a long-term AI competition between the two nations, with each excelling in different areas—manufacturing for China, research for the U.S.

ECONOMY
Aramco Slashes 2025 Dividend Payout

Saudi oil giant Aramco reported a decline in net profit to $106.2 billion in 2024, down from $121.3 billion in 2023, as lower oil prices and slowing demand hit earnings. The company announced that total dividends for 2025 will fall to $85.4 billion, a sharp drop from $124.2 billion in 2024.

For the fourth quarter of 2024, Aramco increased its base dividend to $21.1 billion, but its performance-linked payout plunged to just $200 million, down from $10.8 billion in Q3.

The company’s realized oil price fell to $80.2 per barrel, compared to $83.6 in 2023, as global crude production increased. Revenue also declined slightly to $436.6 billion.

Despite total borrowings rising to $319.3 billion, Aramco cut net debt to $78 billion. The dividend reduction will impact Saudi Arabia’s budget deficit, which has widened due to weaker oil prices and heavy state spending on Vision 2030 megaprojects.

ECONOMY
Trump Tariffs Could Spike Car Prices

Impending 25% tariffs on Canada and Mexico could drive U.S. car prices up by as much as $12,000, putting additional pressure on consumers and disrupting North America’s automotive supply chain. According to a study by Anderson Economic Group, a crossover SUV will cost at least $4,000 more, while electric vehicles (EVs) could see price hikes three times that amount.

The tariffs, set to take effect Tuesday, are expected to reduce auto sales as buyers struggle with rising costs. Industry leaders, including executives from General Motors, Ford, and Stellantis, have warned the White House that these tariffs could lead to severe declines in sales, profits, and production.

Some vehicle models may disappear altogether, as automakers shift production or halt manufacturing in Canada and Mexico. Ford’s Maverick, Bronco Sport, and Mustang Mach-E, all made in Mexico, could face production cuts. Meanwhile, manufacturers are stockpiling engines and parts to soften the immediate impact.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.