SpaceX shares tumbled for a third straight session, down around 9% late in the U.S. cash morning, after the Elon Musk-led company said it would sell investment-grade bonds for the first time.

However, a new headline crossed around 11:05 a.m. ET via Axios, reporting that Reflection, the Nvidia-backed open-source AI startup, had signed a major compute deal with SpaceXAI.

Under the deal, Reflection will pay SpaceXAI $150 million per month starting next Wednesday, July 1, through 2029, following an initial ramp period.

SpaceX $SPCX signed a compute deal with open-source AI startup Reflection AI for access to $NVDA GB300 chips at Colossus 2, per CNBC.

Reflection will pay SpaceX $150M per month starting July 1, 2026, totaling about $6.3B if the deal runs through 2029.

SpaceX has now signed… pic.twitter.com/CKOu4CUcjc

— Wall St Engine (@wallstengine) June 22, 2026

The deal gives the startup, founded by former Google DeepMind researchers Misha Laskin and Ioannis Antonoglou, access to Nvidia’s Grace Blackwell Ultra AI computing chip, also known as GB300, which is necessary to train its models.

Earlier this year, The Wall Street Journal described Reflection as the “DeepSeek of the West” because the AI lab aims to build open-weight, frontier-scale AI models as a direct alternative to China’s DeepSeek.

The deal highlights the circular flow of the AI boom, something we have noted countless times (see here and here). Nvidia invested $800 million in Reflection, which will now use Nvidia chips purchased by SpaceX. This allows the startup to avoid the multibillion-dollar burden of building out its own data centers and instead lease compute from hyperscalers.

With shares down 9% in late-morning trading, the Reflection-SpaceXAI deal was not enough to lift the stock, which is now down 25% from last Tuesday’s high of $225.

The Reflection-SpaceXAI deal also shows that SpaceX’s massive compute buildout is not just for internal AI chatbots, but is also becoming a revenue-generating business, catering specifically to external AI frontier labs seeking high-end training capacity.

It may suggest that internal compute demand has been lackluster… 

Last week, Yann LeCun, founder of AMI Labs, called xAI a “failure,” adding that he expects it won’t be able to compete with OpenAI and Anthropic.

The deal follows a similar deal that Anthropic made with SpaceX to expand cloud computing capacity. 

Authored by Jonathan Turley,

There is a major ruling in Scotland where a court declared that it is generally unlawful to house a transgender biological male in a women’s prison. The decision follows the ruling of the top UK court that a woman is defined by her biological gender at birth. The timing is notable as we await a couple of transgender rulings from our own Supreme Court this week. The decisions also highlight the anomaly of police continuing to arrest people who object to transgender policies under the aggressive anti-free speech laws in the United Kingdom.

In her published opinion, Lady Ross declared that “in all the circumstances, the prison’s guidance is unlawful.” The decision came after a controversy involving convicted rapist Isla Bryson – formerly known as Adam Graham. Despite being convicted of raping two women in 2023, Bryson was initially sent to the Cornton Vale women’s prison.

Scotland continues to crack down on free speech through draconian laws.

The Hate Crime and Public Order (Scotland) Act 2021 illustrates how these laws create a slippery slope of speech criminalization as more and more speech is banned. We previously discussed the law when it was first introduced.

The new crime covers “stirring up hatred” relating to age, disability, religion, sexual orientation, transgender identity or being intersex. That crime covers insulting comments and anything “that a reasonable person would consider to be threatening or abusive.”

It is enough that a person is found to have likely understood that the comments would be abusive or insulting as opposed to intending to be abusive or insulting.

Figures such as J.K. Rowling have been threatened with arrest for her public position in opposition to transgender laws.

This creates a curious conflict, as courts support such views when enforcing biological limits on access to prisons and other areas.

In the United States, there is a division on the issue. Some states, like Maine, require correctional housing to match the gender identification of the inmate rather than the biological sex at birth. Faced with lawsuits and legislative inquiries, the Maine Correctional Department continues to defend its policy. Other states have barred such transgender placement.

This coming week, we are awaiting major rulings on transgender controversies in the United States.

In Little v. Hecox,  the Court is considering whether laws that categorically require sports participants to compete based on their biological sex violate the Equal Protection Clause of the Fourteenth Amendment.

In West Virginia v. B.P.J., the Court is considering two questions: (1) whether Title IX prevents a state from limiting sports teams to biological sex at birth, and (2) whether such a limitation violates the Equal Protection Clause.

Update(0935ET): As part of the MoU framework, and ongoing technical peace discussions in Switzerland (with US and Iranian teams still though – though Vance and Ghalibaf have at this point departed after their 18-hour first round achievement – Treasury has issued a temporary 60-day general license authorizing the production, delivery, and sale of Iranian oil – it stated in a huge forward-momentum development. Treasury Secretary Scott Bessent announced on X:

Under President Trump and Vice President Vance, we continue to make the world safer and more prosperous. In line with the ongoing productive talks in Switzerland, Iran has committed to free and open transit in the Strait of Hormuz and to permit International Atomic Energy Agency (IAEA) inspectors into their country. As part of the framework, Treasury has issued a temporary 60-day general license authorizing the production, delivery, and sale of Iranian oil.

Oil dropped to low of day on the significant latest development:

Some further details:

• US AUTHORIZES SOME SALES OF CRUDE OIL OF IRANIAN ORIGIN
• US LICENSE AUTHORIZES SALES THROUGH TO AUGUST 21, 2026
• US LICENSE AUTHORIZES IMPORTATION OF CRUDE OIL OF IRANIAN OIL

However, Vance has also sought to inject some caution on some of the premature reporting regarding releasing frozen Iranian funds, amid complaints from US and Israeli hawks at home:

JUST IN: Vice President Vance pushes back on “misreporting” about Iranian assets potentially being unfrozen and says that if any of the regime’s money is freed up, it will go to help the American economy and make U.S. farmers richer:

“We wanted to make sure that we set up a… pic.twitter.com/6CPNzY8uIS

— Fox News (@FoxNews) June 22, 2026

*  *  *

Axios is reporting Monday morning Iran has agreed to invite IAEA inspectors back to the country, according to fresh words of Vice President J.D. Vance, who focused all day prior and much into the overnight on forging a path forward toward permanent peace.

The two sides are seeking to hammer out a long-term nuclear agreement, now amid the technical talks process, as delegation heads depart Switzerland – leaving diplomatic teams behind. The 60-day roadmap begins.

If indeed the UN nuclear inspectors are eventually let back into Iran, this would be a hugely significant step. This would be to verify compliance to the preliminary agreement, Vance further hails:

“Our hope is that we get to the final deal and a permanent settlement. But right now, I think we’ve made great progress and we should all celebrate that in terms of when the nuclear inspectors are going to start,” the American Vice President told reporters.

He described that he phoned UN nuclear inspectors at 2am last night to update them on the developments, however, he said that no one picked up the call.

“As you can expect, not many people are answering their phone at two in the morning,” said Vance. “I expect that will happen at the minimum this week, but we think even some of those conversations with the inspectors and with the IAEA could happen as soon as today.”

Both warring sides appear to finally be in the same page in terms of issuing ‘positive’ and ‘encouraging’ assessments earlier. There were reports of last-minute disagreements, threats, and warnings that the process could collapse near the conclusion of yesterday’s formal round one of talks.

“So they didn’t walk out, and their technical team is still here in Burgenstock working with our technical team,” Vance explained.

“What we told the Iranians yesterday is, ‘When you guys exchange in what us millennials might call trash talk, you can’t expect the president of the United States not to respond and not to correct the record’.”

Vance conceded that in the end there was a “a little bit of threatening” and “whining but at the end of the day, the talks continued and we made great progress.”

He further described that a mechanism had been established to keep the Strait of Hormuz open, while noting that significant work remained and that technical negotiations would continue. Also, importantly he said that a “very good foundation” was laid for a successful final agreement with Iran.

JD Vance:

I can’t stay here for the next 60 days. I will go back to the U.S.

The technical teams will be working. pic.twitter.com/s9PSTRvMSR

— Clash Report (@clashreport) June 22, 2026

The Iranian delegation, led by Mohammad Bagher Ghalibaf, also left the venue in Switzerland today – after approximately 18 hours of talks and consultations.

Meanwhile a fresh note from Goldman Sachs comments:

The Pakistan-Qatar communiqué, alongside comments from the Iranian Foreign Minister highlighting progress in negotiations, suggests we are heading into a prolonged period of talks rather than a near-term resolution. My base case remains that Iran will continue to use the threat of disruption around Hormuz as negotiating leverage rather than pursuing a definitive resolution. The most striking feature of the oil market today is the sheer size of speculative short positioning. There is a substantial amount of capital betting on lower prices, which locally makes further downside more challenging. That is before considering the more fundamental point that it is not obviously in Iran’s interest to allow oil prices to fall too far while negotiations remain ongoing.

China too has expressed hope Iran and the US will maintain the momentum and ultimately work towards positive progress, Foreign Ministry spokesperson Guo Jiakun said Monday from Beijing. He praised the mediation efforts by Pakistan, Qatar and other parties when asked about the Iran-US talks in Switzerland, the Xinhua news agency reported. “China supports Pakistan and Qatar and all relevant parties in their mediation efforts,” Guo said.

New Iran MFA statement:

However, while an uneasy calm has taken over Lebanon, with analyst Mohanad Hage Ali of the Malcolm H Kerr Carnegie Middle East Center in Beirut stressing: “The conflict now in Lebanon is waiting for another spark,” said Mohanad Hage Ali from the Malcolm H Kerr Carnegie Middle East Center in Beirut.”

“It just became a buffer zone, a kind of a punching bag in which anyone who wants to score can use it, whether to get at the US-Iran negotiations – which Israel specifically is not very happy about – or from the Iranian side, where a faction unhappy with how negotiations are going can sabotage them through the Lebanon front,” he explained.

China said on Monday that it will add 10 American firms to its export control list, including two rare earth firms MP Materials and USA Rare Earth, while also restricting 46 US firms from government procurement, signalling it would respond to Washington’s recent expansion of a military blacklist, even amid a broader stabilization of bilateral ties, the SCMP reported.

The Ministry of Commerce said in a statement on Monday that the 10 American firms to be added to the export control list were

• AVEOX (Simi Valley, California)
• Red Cat Holdings and Teal Drones (South Salt Lake, Utah)
• IMSAR (Springville, Utah)
• Jaia Robotics (Bristol, Rhode Island)
• Ball Aerospace & Technologies (Broomfield, Colorado)
• Oshkosh Defense (Oshkosh, Wisconsin)
• L3Harris Maritime Services (Norfolk, Virginia)
• MP Materials (Las Vegas, Nevada)
• USA Rare Earth (Stillwater, Oklahoma)

It’s notable that China’s commerce ministry had already imposed curbs on a number of these listed firms and their subsidiaries, both in 2024 and 2025 over US arms sales to Taiwan. More notably, the inclusion of critical rare earth players like MP Materials and USA Rare Earth underscores Beijing’s willingness to weaponize its monopoly over the global magnet and rare earths supply chains.

A spokesperson for the Ministry of Commerce said the decisions were made in response to “malicious actions” by the US government, after the US Department of Defence expanded its list of “Chinese military companies”.

“China has decided, in accordance with the relevant laws and provisions… to include Aveox, Inc. and nine other US military-related entities on the export control list. The export of dual-use items to these entities is prohibited, and no export operators shall violate the above provisions,” said the commerce ministry spokesperson.

Analysts said that the measures from both sides so far were unlikely to significantly derail relations, though they also warned of the impact from any escalation.As we reported, on June 9, the Pentagon said it was adding dozens of Chinese companies – including tech giants Alibaba and Baidu – to a list of entities it says were linked to China’s military, widening a blacklist perceived as targeting sectors at the heart of US-China technological competition. The designation cut the firms off from US defense procurement; however, Baidu had quickly shot back, calling the suggestion that it is a military company “totally baseless”. 

So the U.S. publishes a list of Chinese Military Companies—which imposes no sanctions or restrictions on those companies, it’s just a list—and China responds with actual export controls on multiple U.S. companies. Seems like a good time for Commerce to issue the Entity List… https://t.co/3JIAMuWVfK

— Chris McGuire (@ChrisRMcGuire) June 22, 2026

The commerce ministry cited provisions of China’s laws on export control of dual-use items – products with both civilian and military applications – as well as the need to safeguard national security and fulfill “international non-proliferation obligations.”

Specifically, export operators are prohibited from shipping dual-use items to the 10 firms. Organizations and individuals from any country or region are also prohibited from transferring or providing any dual-use item that originated in China to these businesses.

The notice mandated that any export currently under way that falls under the law must be stopped immediately.

Taiwan remains a sticking point in this tense ongoing diplomatic and defense tug-of-war, but Rubio has still lately confirmed that a proposed $14 billion arms package to Taiwan remains “under review” – in the wake of fierce Beijing objections.

According to the Wall Street Journal, here what was likely behind Beijing’s calculus:

China’s actions on Monday “likely serve to build leverage for China in the ongoing negotiations with the U.S.,” said Henry Gao, a trade expert and professor of law at Singapore Management University. “In terms of the trade truce, this development introduces additional friction, but it does not necessarily derail the process.”

MP Materials, which enjoys financial backing from the Pentagon, is a leading U.S. miner and processor of rare earths. Although USA Rare Earth is less established as a player in the emerging industry, both companies are aggressively ramping up capacity in an attempt to break China’s stranglehold over the global supply chain of the key materials. MP Materials and USA Rare Earth didn’t immediately respond to a request for comment.

Meanwhile, the Chinese Ministry of Finance also released a statement saying it would restrict 46 US firms from government procurement, excluding those involved in China-based US-Sino joint ventures, effective immediately. The list of 46 US companies includes Lockheed Martin, Raytheon Missiles & Defence, General Atomics Aeronautical Systems, BDS (Boeing Defence, Space & Security), General Dynamics Land Systems and Javelin Joint Venture, a 50-50 partnership between Lockheed Martin and Raytheon.

Cameron Johnson, a partner at Shanghai-based consultancy Tidalwave Solutions, said the move is Beijing’s “brushback pitch” – a warning against other possible sanctions on China or its firms.

“This is a reaction to the US’ recent blacklisting by the Pentagon,” he said. “This also serves as a warning against any possible sanctions, such as ones targeting China’s open-source AI tools that are currently being discussed in the US.”

Johnson said that more trade sanctions were likely from both the US and China, as both countries attempt to increase leverage before President Xi Jinping’s visit to the US in September.

“So when they meet, they can use these measures as chips at the bargaining table,” he said.

Earlier this month, the Pentagon added technology giant Alibaba Group Holding, electric vehicle makers BYD and Nio, search engine Baidu, robot maker Unitree Robotics, networking equipment maker TP-Link and other Chinese companies in artificial intelligence, biotechnology and the solar sector to a list of “Chinese military companies”.

The designation, under Section 1260H of the National Defence Authorisation Act, can complicate firms’ access to US capital markets and government business, although it does not automatically trigger sanctions. Observers also said “reputational stigma” could affect the Chinese firms involved, and that the move could pave the way for tougher sanctions by the US.

For China, Johnson said the top leadership was also continuing to expand its export controls to blunt the impact from the US, particularly in non-proliferation compliance or in relation to activities or commodity trading it sees as detrimental to China and its companies.
Xin Qiang, a professor and deputy director of the Centre for American Studies at Fudan University, said Beijing was making it clear it would fight back against trade sanctions or designations, but that the ball is now in the US’ court.

“Beijing is making it clear it’s not afraid of tactical confrontation” he said.

Xin, however, warned that any further escalation could cast a pall over Xi’s planned September trip to the US.

“I think the next step will likely depend on whether the US continues to introduce new sanctions or confrontational measures. If so, China will certainly retaliate. If this falls into a vicious cycle, the impact will be extremely negative.”

Summary:

• Colombian Bonds, Stocks Rise as Right-Wing, Trump-Backed Espriella Wins Vote
• Trump-Backed “El Tigre” Wins Colombia Presidency As Socialist Era Ends

Colombian Assets Rise After Trump-Backed Candidate Wins Presidential Election 

Colombian-dollar bonds surged across the curve on Monday, led by notes due in 2054, as traders bet that right-wing Abelardo de la Espriella’s presidential win will cut taxes, reduce spending, crack down on crime, and reopen the oil industry to unleash an energy revolution.

The streets of Bogotá have erupted in celebration after it was announced that El Tigre has won the presidential election. pic.twitter.com/hB9zqgjBZW

— Breaking911 (@Breaking911) June 21, 2026

According to Bloomberg data, bonds due in 2054 led the advance, up 0.8 cent to 116.9 cents on the dollar.

Colombian 2036 dollar bonds are rising. Peso jumped 1.5%.  

Colombia’s version of the S&P 500, COLCAP, jumped 4% on Monday, with energy stocks leading, up 7.2%. 

Credicorp said Colombian stocks could rise 5% following the election and as much as 20% over the longer term, while local yields could slide by 150-200 bps in the months ahead.

BTG Pactual analyst Munir Jalil penned a note earlier today that outlined De la Espriella’s win as “directionally constructive given the market-friendly platform on security, taxes, investment, and hydrocarbons.”

“However, the near-term asset rally may be more contained than after the first round, as part of the outcome was already priced and the external backdrop is less supportive,” Jalil said, adding, “We expect the COP and TES to react positively at first. Still, the move’s durability should depend on the cabinet, the transition, fiscal signals, and the ability to build a stable congressional majority.”

De la Espriella’s government plan

JPMorgan analyst Diego Pereira said, “A one-point win is still a win, but one this thin reshapes both the mandate and the politics of delivery across fronts.”

Pereira’s view on Colombian markets:

Local markets:

We remain OW TES and long Sep-2030 TES, expecting the next leg of the rally to be driven by greater clarity on governability and fiscal consolidation plans. We stay MW COP and close the outright short COP vs BRL and MXN we had as a hedge for our position in bonds as the market settles after the open

Sovereign credit:

We reduce our OW weighting from 1.0 to 0.5 given potential tensions during the transition period from the revealed stark polarization.

Corporate Credit:

In the corporate space, we have expressed our view on Colombia’s elections through OW recommendations on the belly of Ecopetrol’s curve — the ’32s, ’33s, and ’36s — alongside an OW on Bancolombia’s 2034 notes

Equities:

With today’s official confirmation of Abelardo de la Espriella’s victory, we view the result as confirmation of a policy regime change, which should support a broader re-rating in Colombian equities. From an equity strategy perspective, Energy offers the clearest opportunity around this outcome, and Ecopetrol (Neutral, covered by Milene Carvalho) stands out as the most direct way to gain exposure.

De la Espriella’s win on Sunday night is part of a once-in-a-generation political shift across Latin America, a region ruled for years by nation-killing socialist regimes that have been voted out of office due to failed progressive policies sparking violent crime waves and economic turmoil. The rise of market-friendly, right-wing leaders has sparked rallies across the continent.

Amazing what happens when USAID gets defunded. 

A right wing wave of governments in South America via @DatosAme24

June 2023:
🔴Left wing: 10
🔵Right wing: 3

June 2026:
🔵Right wing: 7 (+4)
🔴Left wing: 6 (-4) https://t.co/jMzPwokz4k pic.twitter.com/GHpFVVqKFx

— OSZ (@OpenSourceZone) June 21, 2026

Take Argentina, for instance, where assets have jumped under right-wing President Javier Milei as he pushes to reset the economy.

Trump-Backed “El Tigre” Wins Colombia Presidency As Socialist Era Ends

South America is undergoing a once-in-a-generation political realignment as voters turn against left-wing and unhinged socialist governments and embrace common-sense right-wing leaders who promise law and order, economic reform, and national renewal.

¡Gracias, Colombia!

Casi 13 millones de colombianos depositaron su confianza en José Manuel Restrepo, en el Tigre y en este gran sueño llamado Patria Milagro.

Este respaldo histórico nos llena de gratitud, pero también de una enorme responsabilidad. Hoy comienza una nueva etapa… pic.twitter.com/137k5Q6wzo

— Abelardo De La Espriella (@ABDELAESPRIELLA) June 21, 2026

The political shift across the Americas gained further momentum on Sunday evening after Abelardo de la Espriella, backed by President Trump, won Colombia’s presidential runoff in a narrow victory over left-wing senator Iván Cepeda. This is a major blow to the socialists, coming after four years under the left-wing administration of Gustavo Petro.

🚨 BREAKING: Trump-endorsed right-wing Colombian presidential candidate Abelardo De La Espriella STUNS THE WORLD and WINS the presidential election

He plans to go FULL BUKELE MODE, locking up criminals en masse, destroying the cartels and cooperate with President Trump… pic.twitter.com/FwrAGyHnsc

— Eric Daugherty (@EricLDaugh) June 21, 2026

With 99.65% of ballots counted in the preliminary tally, de la Espriella had 12.91 million votes, or 49.65%, compared with Cepeda’s 12.67 million, or 48.7%. The margin was about 248,000 votes, narrower than de la Espriella’s first-round advantage three weeks earlier.

🚨 ÚLTIMA HORA: Abelardo de la Espriella gana la segunda vuelta presidencial en Colombia, según el preconteo. Llega a 12.901.860 votos, frente a 12.646.859 alcanzados por Iván Cepeda, con el 99,45 % de las mesas informadas

Siga el cubrimiento especial 👉🏻 https://t.co/W9Dw3E7iPd pic.twitter.com/NN12XhyqQe

— Noticias Caracol (@NoticiasCaracol) June 21, 2026

Polymarket 

BREAKING: Polymarket projects Abelardo “El Tigre” de la Espriella has won the Colombian presidential election — 99% chance. pic.twitter.com/HwunMz0QRQ

— Polymarket (@Polymarket) June 21, 2026

De la Espriella, who has referred to himself as El Tigre (the Tiger), has now put Colombia back on track to shift right after four years of disastrous socialism. This follows recent right-wing victories in Honduras and Chile, with Peru also leaning right. The 2024 re-election of right-wing Nayib Bukele, who fundamentally transformed El Salvador into one of the region’s safest countries, is another example.

In 2023, Javier Milei was sworn in as president of Argentina, aiming to reverse years of far-left control that had devastated the nation with inflation and debt. Earlier this year, U.S. Delta Force operators removed socialist Nicolás Maduro from power in Venezuela.

The shift across the Americas is part of a broader backlash against progressive policies that have sparked surging violent crime, economic stagnation, debt traps, currency declines, and collapsing public confidence.

Americas Political Map: Presidential Shift From Left To Right

Country-by-country presidential shift tracker

Back to De La Espriella, who ran on a simple platform popular among right-wing leaders in the Americas: restore law and order and rescue the country from the economic ruin progressives had created. He has also vowed to “disembowel” the left in Colombia.

Meanwhile, Petro, who was constitutionally barred from seeking re-election and backed Cepeda, alleged irregularities in the preliminary vote count and blamed Israel…

“This means that the software was compromised and others wrote data for polling stations and voting posts. The only entity in the world capable of doing that is the state of Israel,” Petro wrote on X.

Colombian President Gustavo Petro declares the results of the ongoing Presidential Runoff Election to be invalid, following the loss of left-wing ruling party candidate Iván Cepeda and close win of Trump-backed far-right candidate Abelardo de la Espriella. Petro claims that… pic.twitter.com/92hiJ96eUD

— OSINTdefender (@sentdefender) June 21, 2026

The pattern is clear: the Western Hemisphere experimented with nation-killing progressive policies that have largely failed and have entered a rejection phase. This gives rise to right-wing governments that support Trump, coinciding with his mission to clean up the West, whether by dismantling narco-terrorist command-and-control structures, pushing Chinese influence out of the region, or simply stopping the rise of socialism and communism.

Getty Images shares jumped 141% in New York premarket trading after the company announced a “display agreement” with OpenAI.

The timing could not have been better for Getty, whose stock had been languishing this year, down roughly 55% before the announcement.

For a company in need of a sentiment boost, the new partnership with OpenAI, which allows Getty content to be displayed in ChatGPT visual responses and gives users richer, higher-quality, properly licensed imagery, is reviving investor sentiment.

About 17% of Getty’s float is short, with days to cover at around 4.6.

“The agreement enables the use of Getty Images’ content for display within ChatGPT, enhancing the richness of visual responses,” Getty wrote in a press release.

CEO Craig Peters stated, “High-quality, licensed visual content makes AI-powered search and discovery more useful and more trustworthy. This partnership with OpenAI reflects a shared recognition of that, and together we will deliver richer visual experiences to ChatGPT users.”

Bloomberg noted, “Initially, Getty resisted the technology. It tried developing its own AI image generator and had sued Stability AI, a developer of another popular tool.”

Getty’s earnings in the first quarter fell short of sales expectations. The media company is still awaiting approval to acquire rival Shutterstock for $3.7 billion.

OpenAI has built a growing list of media and content deals, mostly around licensed content appearing in ChatGPT answers:

The OpenAI-Getty deal likely suggests that Sam Altman’s chatbot company is trying to replace scraping/legal fights with paid licensing, attribution, and direct publisher integration.

Via City AM,

• Big Tech’s AI spending has exploded, with Google, Microsoft, Amazon, and Meta collectively investing hundreds of billions of dollars in infrastructure.

• Rapid technological change may shorten the economic life of AI servers and GPUs, increasing depreciation and replacement costs.

• The long-term profitability of AI will depend not only on demand growth but also on whether companies can justify the enormous ongoing capital requirements.

The eye-watering capital expenditure plans of Big Tech has been one of the year’s biggest stories. 

Google, Meta, Amazon, and Microsoft have all splurged to secure a podium spot in the race to build out the infrastructure that will run the artificial intelligence (AI) revolution.

Total capex by these four firms is expected to reach $750bn (£560bn) this year, around half the annual spending of the entire UK government. It is much higher than this high-tech quartet has budgeted for before. And it is expected to be even higher next year.

Shareholders are on board with the plan, up to a point.

Since 2023, the average share price across the four firms has doubled. But that hasn’t kept pace with the average quarterly capex budgets, which have roughly quadrupled over the same period.

These trillion-dollar businesses can’t be too far away from hitting a ceiling on growing their computing power. 

Firstly, because of physical constraints – things like the supply of chips and the availability of power and water infrastructure – with the latter beginning to come under genuine constraint in some parts of the developed world.

Secondly, because of the sheer build cost, given that most AI projects are far from hitting profitability, and there isn’t enough cash flow elsewhere to fill the hole.

Alphabet, Google’s parent company, has raised $85bn on its own in debt over the past year. It plans to raise another $80bn in equity over the coming months – an unprecedented fundraise and not something it can keep doing forever.

Getting older faster

Most of the focus has been on data centre build-out. But there is also another major factor, and one in danger of being overlooked: maintenance.

The cost of keeping AI running once the infrastructure is in place will be vital. 

Data centre servers tend to last in the region of three to six years before they have to be replaced.  Given the speed of innovation and intensity of compute needed for AI, you can expect that to skew towards the lower end of the range for the hyperscalers. 

The kit inside AI data centres accounts for as much as two-thirds of the build cost. Add replacement costs onto the capex projections over the next few years, and things start to look scarily expensive.

Annual depreciation of property and equipment across the four firms has almost doubled over the past two years to $116bn.  You can expect that to accelerate, given how much equipment has been added to their balance sheets over the past 18 months.

Last year, Amazon cut the expected useful life of its data centre assets from six years to five, a move which it said was “due to the increased pace of technology development, particularly in the area of artificial intelligence and machine learning.” 

So far, Meta, Microsoft, and Alphabet have yet to follow suit, sticking with six years, but it seems like only a matter of time before they capitulate and cut this back, pushing up depreciation costs even further.

Something has got to give – sooner or later. Or am I missing something?

The Keir Starmer experiment is officially over, as was growing increasingly clear over the weekend, especially with an interestingly-timed Trump Truth Social statement. Just under two years after capturing the keys to Number 10, the British Prime Minister has thrown in the towel after succumbing to an internal party mutiny following days of intense, closed-door speculation regarding his political survival.

Stepping up to the lectern outside Downing Street on Monday morning, a visibly defeated Starmer delivered the inevitable verdict to the press. “I will resign as leader of the Labour Party,” Starmer announced.

The Prime Minister confirmed he has instructed Labour’s National Executive Committee to draw up a swift succession timetable. Leadership nominations will officially open on July 9, with the entire process scheduled to wrap up before the summer recess.

British mediai says that the aggressive timeline ensures a new Prime Minister will be installed well before Parliament reconvenes in September.

Starmer’s abrupt (but not entirely ‘a surprise) exit comes after his center-left Labour Party made it clear they no longer believed he could deliver a future electoral victory. He practically admitted as much on the steps of Number 10.

“The question my party is asking now is whether I am best placed to lead us into the next general election,” Starmer confessed. “I have heard the answer of my parliamentary party to that question, and I accept that answer with good grace.”

Defending his short and tumultuous tenure, Starmer attempted to frame his departure as an act of ultimate patriotism rather than a capitulation to party infighting.

“Every decision I’ve taken has been about putting the country I love first. That is why I will resign as leader of the Labour party,” he said, adding: “I have spoken to his majesty the king this morning to inform him of my decision.”

The Prime Minister’s resignation was directly catalyzed by last week’s by-election victory of Andy Burnham in Makerfield. Burnham, the fiercely popular former Greater Manchester Mayor, has long loomed as the “King in the North” and the ultimate threat to Starmer’s sterile brand – according to many – of leadership. By securing a seat in the House of Commons, Burnham effectively checked Starmer into a corner.

“New leader will be in place before Parliament returns in September, I will remain in post until the contest is complete”

Keir Starmer announces he will resign as UK prime minister and leader of the Labour Party

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— BBC Breaking News (@BBCBreaking) June 22, 2026

With Burnham holding immense sway among rank-and-file MPs, the writing was on the wall. He now enters the upcoming leadership contest as the overwhelming frontrunner to be Britain’s next Prime Minister.