The daily business briefing: August 24, 2023

1. Nvidia outlook soars on explosive demand for AI chips

Nvidia said Wednesday it expects to see rapid growth as already strong demand for advanced chips for artificial intelligence systems explodes. The company's graphics processing units, or GPUs, are used in most AI systems, like ChatGPT. Nvidia reported that robust demand for the chips from customers like cloud computing services helped increase second-quarter revenue to $13.5 billion, up 101% from the same period last year. Profit shot up nine-fold to nearly $6.3 billion, beating projections the company released in May, according to The New York Times. Nvidia's May revenue estimate of $11 billion had pushed its market value above $1 trillion, a first.

The New York Times

2. BRICS leaders invite 6 nations to join developing world economic bloc

Leaders of the BRICS economic bloc, which Brazil, Russia, India, China and South Africa hope will boost the influence of the "Global South," agreed at a summit in South Africa on Thursday to invite six more nations — Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and the United Arab Emirates — to join. China and Russia are pushing to admit dozens of interested nations to beef up the bloc and make it a legitimate rival of the West's Group of Seven. But India has resisted, worried that new members would do whatever Beijing says and foil Delhi's effort to take a global leadership role. South African President Cyril Ramaphosa said the new candidates would be admitted on Jan. 1, 2024.

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Reuters

3. Nvidia's AI-fueled blowout quarter lifts tech stocks

S&P 500 and Nasdaq futures gained early Thursday after chipmaker Nvidia smashed Wall Street's earnings estimates, fueling expectations for the artificial intelligence boom. Futures tied to the S&P 500 and the tech-heavy Nasdaq were up 0.5% and 1.1%, respectively, at 6:30 a.m. ET. Dow Jones Industrial Average futures were down 0.1%. "The entire tech sector and overall market was waiting for Nvidia, with this being the purest and best barometer for AI demand, and the results/guidance were a 'drop the mic' moment" that should "have a ripple impact for the tech space for the rest of the year," Dan Ives, senior equity analyst at Wedbush Securities, told CNBC. Rival chipmakers Taiwan Semiconductor and AMD rose 3.1% and 4%, respectively.

CNBC

4. Juul to lay off 30% of workforce

E-cigarette maker Juul Labs plans to lay off 30% of its employees to cut costs as it explores options, including raising capital or seeking a buyer, and appeals a ban of its products. Regulators last year ordered Juul products off the U.S. market but suspended the ban pending an appeal. The company is awaiting a final decision from the Food and Drug Administration. Meanwhile, illegal disposable vaping products have taken some market share, worrying potential investors. "We have been working, we have been fighting, we have been taking steps to go from unstable to stable," Juul chief executive K.C. Crosthwaite told staff Wednesday, The Wall Street Journal reported. "We know and firmly believe that our product applications deserve authorization."

The Wall Street Journal

5. Tornado Cash co-founders accused of laundering millions for North Korean hackers

Federal prosecutors charged two co-founders of cryptocurrency giant Tornado Cash with laundering more than $1 billion for North Korean hackers, according to a federal indictment unsealed Wednesday in New York. The indictment accused Roman Storm and Russian national Roman Semenov of using crypto "mixer" Crypto Cash to launder huge amounts of money to Lazarus Group, a North Korean cybercrime organization. "While publicly claiming to offer a technically sophisticated privacy service, Storm and Semenov in fact knew that they were helping hackers and fraudsters conceal the fruits of their crimes," U.S. Attorney Damian Williams said. Storm has been arrested. His lawyer, Brian Klein, said he was "incredibly disappointed" with the charges, because Storm merely "helped develop software." Semenov remains at large.

CNN