Authored by Gail Tverberg via Our Finite World,

• The global economy is expected to enter a recession in 2025 due to a decline in the availability of crude oil, coal, and uranium relative to population.

• Government attempts to stimulate the economy through debt will lead to inflation rather than growth, as energy supplies are constrained.

• High interest rates, low energy prices, and a decline in industrial output will characterize the economic landscape in 2025.

As the world enters 2025, the critical issue we are facing is Peak Crude Oil, relative to population. Crude oil has fallen from as much as .46 gallons per person, which was quite common before the pandemic, to close to .42 gallons per person recently (Figure 1).

Figure 1. World crude oil production per person, based on data of the US EIA. Data through September 2024.

People have a misimpression regarding how world peak oil can be expected to behave. The world economy has continued to grow, but now it is beginning to move in the direction of contraction due to an inadequate supply of crude oil. In fact, it is not just an inadequate crude oil supply, but also an inadequate supply of coal (per person) and an inadequate supply of uranium.

We know that when a boat changes direction, this causes turbulence in the water. This is similar to the problems we are currently seeing in the world economy. Physics dictates that the economy needs to shrink in size to match its energy resources, but no country wants to be a part of this shrinkage. This indirectly leads to major changes in elected leadership and to increased interest in war-like behavior. Strangely enough, it also seems to lead to higher long-term interest rates, as well.

In this post, I share a few thoughts on what might lie ahead for us in 2025, in the light of the hidden inadequate world energy supply. I am predicting major turbulence, but not that things fall apart completely. Stock markets will tend to do poorly; interest rates will remain high; oil and other energy prices will stay around current levels, or fall.

[1] I expect that the general trend in 2025 will be toward world recession.

With less oil (and coal and uranium) relative to population, the world can be expected to produce fewer goods and services per person. In some sense, people will generally become poorer. For example, fewer people will be able to afford new cars or new homes.

This trend toward lower purchasing-power tends to be concentrated in certain groups such as young people, farmers, and recent immigrants. As a result, older people who are well-off or firmly established may be able to mostly ignore this issue.

While the shift toward a poorer world has partially been hidden, it has been a huge factor in allowing Donald Trump to be voted back into power. Major shifts in leadership are taking place elsewhere, as well, as an increasing share of citizens become unhappy with the current situation.

[2] Many governments will try to hide recessionary tendencies by issuing more debt to stimulate their economies.

In the past, adding debt was found to be effective way of stimulating the world economy because energy supplies supporting the world economy were not seriously constrained. It was possible to add new energy supplies, quite inexpensively. The combination of additional inexpensive energy supplies and additional “demand” (provided by the added debt) allowed the total quantity of goods and services produced to be increased. Once energy supplies started to become seriously constrained (about 2023), this technique started to work far less well. If energy production is constrained, the likely impact of added debt will be added inflation.

The problem is that if added government debt doesn’t really add inexpensive energy, it will instead create more purchasing power relative to the same number, or a smaller number, of finished goods and services available. I believe that in 2025, we are heading into a situation where ramping up governmental debt will mostly lead to inflation in the cost of finished goods and services.

[3] Energy prices are likely to remain too low for fossil fuel and uranium producers to raise investments from their current low levels.

Recession and low prices tend to go together. While there may be occasional spikes in oil and other energy prices, 2025 is likely to bring oil and other energy prices that are, on average, no higher than those of 2024, adjusted for the overall increase in prices due to inflation. With generally low prices, producers will cut back on new investment. This will cause production to fall further.

[4] I expect “gluts” of many energy-related items in 2025.

Gluts are related to recession and low prices for producers. The underlying problem is that a significant share of the population finds that finished goods, made with energy products and investment at current interest rates, are too expensive to buy.

Even farmers are affected by low prices, just as they were back at the time of the Great Depression. We can think of food as an energy product that is eaten by people. Farmers find that their return on farm investment is too low, and that their implied wages are low. Low income for farmers around the world feeds back through the system as low buying power for new farm equipment, and for buying goods and services in general.

In 2025, I expect there will be a glut of crude oil due to a lack of purchasing power of many poor people around the world. My forecast is similar to the forecast of the IEA that predicts an oversupply of oil in 2025. Also, a December 2024 article in mining.com says, “A glut of coal in China is set to push falling prices even lower.”

Even wind turbines and solar panels can reach an oversupply point. According to one article, number of Chine solar panel builders seems to be far too high for world demand, leading to a potential shake out. As the share of wind and solar power added to the electric grid increases, the frequency of low or negative payment for wholesale electric power increases. This makes adding more wind turbines and solar panels problematic, after a certain point. We don’t yet have a cost-effective way of storing intermittent electricity for months on end. This seems to be part of the reason why there recently were no bidders for producing more offshore wind power in Denmark.

[5] I expect long-term interest rates to remain high. This will be a problem for new investments of all kinds and for governmental borrowing.

In Section 2 of this post, I tried to explain that a peak-oil impact is likely to be inflation. This occurs because ramping up debt to try to stimulate the economy no longer works to get additional cheap energy products from the ground. Instead of getting as many finished goods and services as hoped for, the added debt tends to produce inflation instead.

I believe that we are reaching a stage of fossil-fuel depletion where it is becoming increasingly difficult to ramp up production, even with added investment. Because of the added debt added in an attempt to work around depletion, inflation in the price of finished goods and services can be expected. Investors are beginning to see long-term inflation as a likely problem. As a result, they are starting to demand higher long-term interest rates to compensate for the expected decrease in buying power.

Figure 2. Interest rates on 10-year US Treasury Securities, in a chart by the Federal Reserve of St. Louis. Data is through December 30, 2024.

Figure 2 shows that US long-term interest rates have varied widely. There was a period of generally dropping long-term interest rates from 1981 to 2020. Starting in late 2020, interest rates began to rise; in 2023 and 2024 they have been in the 4% to 5% range. These relatively high rates are occurring because lenders are demanding higher long-term interest rates in response to higher inflation rates.

Because of inflationary pressures, I expect that long-term interest rates will tend to stay at today’s high level in 2025; they may even rise further. These continued high interest rates will become a problem for many families wanting to purchase a home because US home mortgage rates rise and fall with US 10-year interest rates. Often families are faced with both high home prices and high interest rates. This combination makes mortgage costs a problem for many families.

Governments are also adversely affected. They tend to hold large amounts of debt that they have accumulated over a period or years. Up until 2020, much of this added debt often was at a very low interest rate. As more long-term debt at higher interest rates is added, annual interest rate payments tend to rise rapidly. This can cause a need to raise taxes. Japan, especially, would be affected by higher interest rates because of its high level of government debt, relative to GDP.

Higher interest rates will also raise costs for citizens trying to finance the purchase of homes, and for investors wanting to build wind turbines or solar panels. In fact, investment in any kind of factory, pipelines, or electricity transmission will tend to become more expensive.

In a sense, we seem to be seeing the peak oil problem shifting in a way that affects interest rates and the economy in general. Either higher interest rates or higher oil prices will tend to push the economy toward recession. We tend to look for rising prices to signal an oil supply problem, but perhaps that only works when there is excessive demand. If the problem is really inadequate oil supply, perhaps we should look for higher long-term interest rates, instead.

[6] Industry around the world is likely to be hit especially hard by recessionary tendencies.

Industry requires investment. Higher interest rates make new industrial investment more expensive. Industry is also a heavy user of energy products. Putting these observations together, it shouldn’t come as a surprise if new industrial investment is one of the first places to be cut back because of peak oil supply.

Figure 3. Expected world industrial output, based on calculations I made with using industrial output and population forecasts from detailed output data provided with the article Recalibration of limits to growth: An update of the World3 model” by Arjuna Nebel et al.

The original 1972 Limits to Growth analysis, in its base model, suggested that resources would start to run short about now. The variables in this model were recently recalibrated in the article, “Recalibration of limits to growth: An update of the World3 model.” Based on the detailed data given in the endnotes to the article, I calculated the expected industrialization per capita shown in Figure 3.

Based on Figure 3, this model shows that industrialization per person reached a peak in 2017. Peak industrialization (total, not per capita) occurred in 2018, which coincides with peak crude oil extraction (not per capita).

The model seems to suggest that after an inflection point in 2023 (that is 2024 and after), industrialization will start to fall more steeply. The model shows a decrease in production per capita of 4.1% in 2024 and of 5.3% in 2025. Such decreases would push the world economy toward recession.

The model suggests that people, on average, are getting poorer in terms of the quantity of goods and services they can afford to buy. New cars, motorcycles, and homes are becoming less affordable. Heavily industrialized countries, such as China, South Korea, and Germany are likely to be especially affected by headwinds to industrialization. I expect that the economic problems in these countries will continue and are likely to worsen in 2025.

[7] The US has tried to isolate itself from this nearly worldwide recession. I expect that during 2025, the US will increasingly slip into recession, as well.

There are several reasons for this belief:

(a) The US is heavily dependent upon imports of raw material. China is restricting exports of critical minerals used by the US. This will make it very difficult or impossible to ramp up high tech industries as planned.

(b) The US is heavily dependent on Russia for supplies of enriched uranium. Any plan for added nuclear electricity needs to consider where the uranium to power these plants will come from. It also needs to consider how this uranium will be enriched to the required concentration of uranium-235.

(c) If the US can ramp up crude oil and natural gas production, this can perhaps counter this trend toward US and world recession. Unfortunately, recent US oil supply has not been ramping up; instead its production has been fairly flat. Natural gas production has actually been lower since February 2024. Plans have been made to rapidly ramp up US liquefied natural gas (LNG) exports, but these plans cannot work if the US natural gas supply is already decreasing.

(d) The US government has had an advantage in borrowing because the US dollar is the world’s reserve currency. As such, the US is, in some sense, the first borrower, pulling the rest of the world along. The US, by making its short term interest rates higher than those of many other countries, was able to largely escape recession 2023 and 2024. Additional investment was attracted to the US by these higher interest rates. But the US cannot follow this strategy indefinitely. For one thing, a high US dollar handicaps exports. For another, interest costs on government debt become burdensome.

(e) Donald Trump has plans to close inefficient parts of government. These changes, if enacted, will reduce “demand” within the economy because workers in these sectors will lose their jobs. Over the longer term, these changes might be beneficial, but over the short term, they are likely to be recessionary.

(f) It is difficult for the US to do much better than the rest of the world. If the rest of the world is in recession, the US will tend to head in that direction, as well.

[8] I expect more conflict in 2025, but today’s wars will not look much like World War I or World War II.

Today, not many countries are able to build huge fleets of fighter airplanes. Even building drones and bombs seems to require supply lines that extend around the world. So, instead, wars are being fought in non-military ways, such as with sanctions and tariffs.

I expect that this trend away from direct military conflict will continue, with more novel approaches such as internet interference and stealth damage to infrastructure taking place instead.

I do not expect that nuclear bombs will be used, even when there is direct conflict between powerful adversaries. For one thing, uranium in these bombs is needed for other purposes. For another, there is too much chance of retaliation.

[9] I expect many types of capital gains will be low in 2025.

The situation we are facing now is the opposite of the drop in long-term interest rates observed between 1981 and 2020, in Figure (2), above. This historical drop in interest rates made it possible for businesses to more easily finance new investments. It also made it possible for individual citizens to be able to afford more homes and cars. It should not be surprising that this period has been a time of rising stock market prices, especially in the United States.

The world’s economic problem is that it no longer has the tailwind of falling long-term interest rates. Instead, rising long-term interest rates are becoming a headwind. Home prices are un-affordably high for most potential buyers at today’s interest rates. A similar problem faces those hoping to purchase agricultural equipment and farmland at today’s high prices and high interest rates.

We should not be surprised if home and farm prices stabilize and begin to fall. Prices of shares of stock are likely to encounter similar headwinds. Prices of derivative investments may perform even worse than the shares themselves.

Recently, a great deal of the strength of the US market has been in a few stocks. Artificial Intelligence (AI) needs to very quickly provide a lot of benefit to the stock market as a whole for this to change. I cannot imagine this happening. With the US slipping toward recession, I expect that the US stock market will at best plateau in 2025.

[10] With less energy available and higher interest rates on government debt, I expect to see more government organizations disbanding.

It takes energy, directly and indirectly, to operate any kind of governmental organization. Eliminating governmental organizations is one way of saving energy. This is what happened when the central government of the Soviet Union collapsed in 1991. I would think that parallel kinds of changes could start happening in the next few years, in many parts of the world.

At some time, perhaps as soon as 2025, the European Union could collapse. If things are going badly for many member countries, they will be less willing to support the European Union with their tax revenues. Other organizations that seem like they could be in peril include NATO and the World Trade Organization.

In some ways, such shrinkage would be in parallel with Trump’s plan for eliminating unnecessary governmental organizations within the United States. All these organizations require energy; cutting their number would go some way toward reducing crude oil and other energy consumption.

[11] It is possible that the world economy will eventually get itself out of its apparent trend toward recession, but I am afraid this will happen long after 2025.

We know that the world economy tends to operate in cycles. We would like to believe that the apparent current down-cycle is just temporary, but we can’t know this for sure. Physics tells us that we need energy supplies of the right kind for any action that contributes to GDP. Running short of energy supplies is therefore a very worrisome condition.

We also know that there are major inefficiencies in current approaches. For example, oil extraction leaves much of the oil resource in place. In theory, AI could greatly improve extraction techniques.

We also know that uranium consumption is terribly inefficient. M. King Hubbert thought that nuclear energy using uranium had amazing potential, but most of this potential remains untapped. Perhaps AI could help in this regard, also. If nothing else, perhaps recycling spent fuel could be made less expensive and problematic.

Figure 4. Figure from Hubbert’s 1956 paper, Nuclear Energy and the Fossil Fuels.

We can’t know what lies ahead. There may be a “religious” ending to our current predicament that we are discounting that is actually the “right story.” Or there may be a “technofix” solution that allows us to avert collapse or catastrophe. But for now, how the current down-cycle will end remains a major cause for concern.

Starting in December the head of the UN nuclear watchdog, IAEA, warned that Iran is “dramatically” accelerating enrichment close to the roughly 90% level which is weapons-grade.

On Tuesday President Emmanuel Macron called Iran the main “strategic and security challenge” for France and Europe. “The acceleration of the nuclear program leads us nearly to the point of no return,” he told an annual conference of French ambassadors.

However, it remains anything but clear whether the Islamic Republic has actually decided to build a nuclear weapon, something recently (and surprisingly) acknowledged by the CIA.

Still, the constant daily headlines over Iran’s enrichment advances set things up for a collision course with the Trump administration after the Jan.20 inauguration.

According to a fresh report in Axios, the chances of Trump ordering a preemptive military strike on Iran’s nuclear facilities are now higher than ever:

Iran’s recent nuclear advances give President-elect Trump a crucial decision to make in his first months in office: Try to neutralize the threat through negotiations and pressure, or order a military strike.

Trump’s decision in 2018 to withdraw from an Obama-era nuclear deal prompted Tehran to accelerate its nuclear program, such that it’s now a de facto “nuclear threshold state.” Officials and diplomats from the U.S., EU and Israel all told Axios they expect Trump to face an Iran crisis in 2025.

Trump and his advisers are planning to quickly return to the “maximum pressure” campaign they conducted against Iran between 2018 and 2020.

Axios further underscores that “Several Trump advisers privately concede Iran’s program is now so far along that the strategy might not be effective. That makes a military option a real possibility.”

But it remains that US attacks on the Islamic Republic would only surely accelerate possible efforts to achieve a bomb. Much of the country’s nuclear infrastructure and technology is now likely underground, which would make it hard for any external power to destroy everything.

Though in prior years the Ayatollahs have condemned nuclear weapons as ‘unIslamic’ – if the Iranians perceive themselves under direct threat of annihilation, they would urgently feel the need to rapidly have a bomb.

Below is more from Axios on Trump expressing his position on the prior campaign trail:

Back in October, Trump criticized President Biden for advising Israel not to bomb Iran’s nuclear facilities. “They asked him, what do you think about Iran, would you hit Iran? And he goes, ‘As long as they don’t hit the nuclear stuff.’ That’s the thing you want to hit, right?” Trump said at a campaign rally.

It’s no secret that Iran has also long been engaged in sanctions-busting activity regarding global oil transit, and selling to powerful BRICS countries like China. Trump is expected to get ‘tough’ on that as well, and he has already nominated plenty of Iran hawks to top foreign policy positions.

But from Tehran’s perspective, the problem remains that Israel possesses a large undeclared nuclear arsenal, which has long been an ‘open secret’. If Iran does pursue a nuke, it will be to establish a balance of power and deterrent against Israel and the United States in the region.

Ironically if Trump does order ‘preemptive’ military strikes on Iran in the name of stopping WMD, this will be deeply contradictory to his stated aims on the campaign trail of wanting to stop and reign in US wars abroad.

Authored by Julie Kelly via ‘Declassified’,

The original Jan 6 narrative died in spectacular fashion. Monday’s proceedings represent the start of a legitimate insurrection against a corrupt, unaccountable, and failed government in Washington…

It’s a plot twist even the most creative—or diabolical—fiction writer never would have imagined.

On Monday afternoon, Vice President Kamala Harris will preside over Congressional proceedings to certify the election of Donald Trump, who defeated her in the 2024 presidential election.

The moment will represent one of many surreal moments on a date—January 6—that the Biden regime, news media, and Democratic voters consider one of the darkest times in American history. In fact, Harris herself categorizes January 6, 2021 alongside September 11, 2001 and December 7, 1941 as events she claims “remind all who have lived through them where they were…when our democracy came under assault.”

Four years ago, the ruling class in Washington attempted to commit what all evidence now points to as the premeditated murder of the MAGA movement. Powerful political and government saboteurs aligned to stoke the events of January 6, a four-hour disturbance those same saboteurs immediately branded an “insurrection.”

The talking points, in fact, went out before the first protester entered the building. As the chaos still was unfolding at the Capitol, Joe Biden gave a nationwide address—he allegedly had planned to talk about the economy at 4 p.m. but in yet another fortuitous coincidence for Democrats, Biden quickly pivoted to a lengthy rant about the protest—to denounce the “insurrection.”

The intervening four years has consisted of a nonstop loop of January 6-related propaganda and lawfare intended to keep Trump and his movement from rising from the political dead.

Trump and MAGA Left for Dead

And they pounded as many nails as they could into what they believed was the J6 coffin. Trump was impeached for the second time. FBI Director Christopher Wray designated January 6 an act of domestic terror thereby branding anyone who participated in the Capitol protest a domestic terrorist.

The Department of Justice opened what would become the biggest criminal investigation in its history resulting in the arrest of nearly 1,600 individuals, most of whom supported Donald Trump, and the jailing of several hundred even those convicted of petty misdemeanors.

Attorney General Merrick Garland opened a separate investigation into Trump over the events of January 6; top Trump confidants and associates were dragged before a D.C. grand jury to testify and produce records. DC judges routinely denied privilege claims.

For the first time in history, a sitting president (Biden) repeatedly denied executive privilege requests from his predecessor. And for the first time in history, a former president faced a criminal indictment related to his conduct in office. (In another history-making event, Special Counsel Jack Smith also indicted Trump in the so-called classified documents case but that involved allegations after he left the White House.)

Two weeks after Smith charged Trump in a four-count indictment for Jan 6, Fulton County District Attorney Fani Willis also indicted Trump and more than a dozen of his advisors in a massive RICO case tied to Jan 6. Other state officials charged Trump supporters in the so-called “fake electors” plan tied to Jan 6.

Congress did its part, too. The January 6 Select Committee offered a steady primetime infusion of J6 propaganda; crying police officers and turncoat White House aides testified in the hope of providing the emotional punch necessary to convince the most stubborn MAGA loyalists that their leader posed a dire threat to the future of “democracy.”

No good anti-Trump operation succeeds, of course, without the complicity of the media. The amount of ink and airtime and clicks dedicated to all things January 6 may never be fully accounted for; books were written, documentaries were made. There is no question the collective coverage of January 6 rivals coverage of every war and legitimate terror attack in American history.

The exhaustive operation—the multi-faceted lawfare, the Congressional theater, the media fixation—was supposed to end with Trump sitting in jail, a final death blow to his political future and the populist movement he created.

But it all came crashing down on November 5, 2024.

A “Revolt Against Civil Authority or an Established Government”

Trump won in decisive fashion as the majority of Americans sent a big middle finger tied to a wrecking ball to the halls of power in Washington. The failures of the Biden regime unquestionably contributed to Trump’s victory but so too did the relentless pursuit of the president, his family, his allies, his businesses, and his voters.

The January 6 operation backfired in a spectacular way. Instead of representing one of the darkest days in history, January 6 to millions of Americans instead embodies the corrupt, bloodthirsty, and vengeful nature of the existing government and its media bootlickers, which foreshadowed the sort of banana republic-style rule seen in Marxist hellholes not in the United States.

And voters acted accordingly at the ballot box.

So Monday, January 6, 2025 signals the start of a real insurrection, which is defined as a “revolt against civil authority or an established government” not an unarmed and at points unruly demonstration inside a government building on a Wednesday afternoon.

Should Trump fulfill his boldest campaign pledges, federal agencies in the nation’s capital will never be the same. Permanent changes in now untrusted institutions such as the DOJ, the FBI, the Department of Homeland Security and, sadly, the Department of Defense among others promise to gut the rogue, unelected bureaucracy that really runs the show.

The Trump Insurrection already is paying dividends as employees flee agencies soon to be led by sworn foes of the Deep State. Chris Wray resigned ahead of his scheduled ten-year tenure as FBI boss.

Even more gratifying is that the architects of the original “insurrection” narrative are sweating and on the run. Reports indicate top DOJ officials including Jack Smith and prosecutors in the D.C. U.S. Attorney’s office, which has been responsible for the “Capitol Siege” prosecution, are lawyering up and worried about going bankrupt—fitting karma for the hell they’ve inflicted on others.

Ditto for Liz Cheney and members of the J6 select committee. Cheney currently is the subject of a congressional investigation related to her role as vice chairman of the committee; a Trump DOJ is expected to look into her conduct as well. J6 Committee chairman Bennie Thomspon, who along with Cheney just received a medal from Biden, said he would accept a presidential pardon.

The career of Fani Willis has entered death twitch stage; not only did a Georgia appellate court put an end to her involvement in the RICO case but her personal foibles will long be a source of mockery and ridicule.

Overall, the Democratic Party is in disarray, as listless and useless as Joe Biden, who is expected to issue more broad-based pardons to cover up the criminality of the entire J6 operation against Trump.

And the media is just crushed that their propaganda and teeth-gnashing and hyperbole didn’t work. In a Sunday morning interview, CNN’s Jake Tapper asked Senator Amy Klobuchar if “the horrible things that happened that day are being forgotten?”

Former House Speaker Nancy Pelosi on “Face the Nation” Sunday morning lamented about the “denial of what happened on Jan 6.”

But perhaps no one said it better than the New York Times’ Peter Baker, a reliable regime mouthpiece. “If you woke up on January 7th of 2021 with the glass still shattered on the floor of the Capitol and the smoke rising and the troops are surrounding the building, and you had said that Donald Trump will be president in four years, nobody would have believed that.”

Correct, Peter. The death of Trump and MAGA, as the old saying goes, was greatly exaggerated. And you did it to yourself.

Now bring on the real insurrection.

Canadians are touchy, eh?

Ontario Premier Doug Ford fired back at President-elect Donald Trump’s calls for Canada to join the United States as its 51st state by countering with a surprising offer: for the Great White North to purchase Alaska and Minnesota.

“You know something, to the president, I’ll make him a counteroffer: How about if we buy Alaska and throw in Minnesota and Minneapolis at the same time?” Ford told reporters during a Monday press conference, addressing Trump’s looming threat of U.S. tariffs against Canada.

Trump, speaking at a freewheeling press conference at Mar-a-Lago on Tuesday, expressed frustration over how the U.S. is treated by Canada, claiming that its biggest trading partner is subsidized by approximately $200 billion annually.

“They don’t essentially have a military,” Trump said. “They have a very small military. They rely on our military. It’s all fine but, you know, they have to pay for that. It’s very unfair. Something has to be done.”

“To the president, I’ll make him a counter offer. How about if we buy Alaska?”

You need bulldogs like Doug Ford sometimes. pic.twitter.com/sTJy8v7pfN

— David Beaudoin (@DavidABeaudoin) January 6, 2025

“We are going to put very serious tariffs on Mexico and Canada,” the president-elect continued, before turning his focus to the surge of illegal substances flowing from Canada into the U.S. “They come through Canada, too. The drugs coming through are at record numbers,” Trump said. “So we are going to make up for that by putting tariffs on Mexico and Canada. Substantial tariffs. We want to get along with everybody but, you know, it takes two to tango.”

Trump also reiterated his wish for former NHL star Wayne Gretzky to consider running for Canada’s prime minister, suggesting that he could be a viable successor to Trudeau.

In November, Trump raised alarms in both Canada and Mexico with a threat to impose 25 percent tariffs unless the two countries helped curb the migrant and fentanyl crises. The threat prompted Trudeau to immediately travel to Mar-a-Lago for talks on how the U.S. and Canada could avoid a tariff war.

Ford, however, maintains that Mexico and China—not Canada—are responsible for the trade issues Trump has singled out.

“I’ve talked to so many governors and congresspeople and senators and never once did they say Canada is the problem,” Ford told CNN on Monday. “I’ll tell you who the problem is: China is the problem. China shipping in cheap parts, putting them through Mexico. Mexico slapping on a ‘Made in Mexico’ sticker and shipping up through the U.S. and Canada. [It’s] costing American and Canadian jobs.”

Recently resigning PM Justin Trudeau, meanwhile, took to X on Tuesday to reaffirm his staunch opposition to Trump’s proposal, declaring, “There isn’t a snowball’s chance in hell that Canada would become part of the United States.”

There isn’t a snowball’s chance in hell that Canada would become part of the United States.

Workers and communities in both our countries benefit from being each other’s biggest trading and security partner.

— Justin Trudeau (@JustinTrudeau) January 7, 2025

Authored by Stacey Robinson via The Epoch Times,

The House of Representatives has passed the Laken Riley Act with a vote of 264–159. Almost all Republicans and 48 Democrats united to push the bill through the lower chamber of Congress.

The legislation requires the Department of Homeland Security to detain illegal immigrants who have committed certain crimes, such as theft, burglary, or shoplifting.

It also allows states to sue the federal government for injunctive relief over “certain immigration-related decisions or alleged failures” if they resulted in harm to that state.

These can include the failure to detain an individual who has already been ordered to be deported, or neglecting to fulfill vetting requirements for immigrants seeking to enter the United States.

“The tragic and preventable murder of Laken Riley serves as a stark reminder of the consequences of failed leadership,” Majority Whip Tom Emmer (R-Minn.) said at a press conference before the vote.

“The Laken Riley Act is a direct step toward ensuring that criminal illegal aliens are swiftly and permanently removed from our communities and our country,”

The bill passed the House last year but was never brought to the floor by the Senate. Speaker Mike Johnson (R-La.) noted that 170 House Democrats had voted against the passage of the bill at that time, saying he felt they had “put politics ahead of principle.”

Democrats opposing the bill on the floor of Congress today called the bill overbroad and likely to sweep up illegal immigrants who are wrongly arrested, even if they have lived in the United States for years.

“This is a radical departure from current law, which since 1996 has generally required mandatory detention only for persons who are criminally convicted or who admit to having committed certain serious crimes,” Rep. Jamie Raskin (D-Md.) said. 

Raskin also objected to stipulations allowing suit of the government, saying that approach violates the U.S. Supreme Court’s decision in the U.S. v. Texas case, which said states have no standing to bring legal actions over federal implementation of public policy.

Rep. Tom McClintock (R-Calif.) countered that the High Court’s majority decision, written by Justice Brett Kavanaugh, said that such suits would require a change in law.

“That is exactly what this bill does, by the book,” he said.

Shortly before the House vote, Sen. Katie Britt (R-Ala.) introduced the companion Senate bill, which is likely to pass as the GOP holds a 53–47 majority in the upper chamber.

House Majority Leader Steve Scalise (R-La.) told reporters on Jan 7 that Senate Majority Leader John Thune (R-S.D.) is eager to push for a vote on the bill in the Senate “as early as this week.”

The Laken Riley Act draws its name from a 22-year-old Georgia nursing student who was assaulted and murdered in February 2024 while out for a morning run near the University of Georgia campus.

The murderer, Jose Antonio Ibarra, had come into the United States illegally and had been arrested and released multiple times for theft. He was arrested for the murder after surveillance footage showed him throwing a jacket containing strands of Riley’s hair into a dumpster near his apartment.

On Nov. 20, 2024, Ibarra was convicted on 10 counts including murder and aggravated assault with intent to rape. He was sentenced to life in prison without parole.

Riley’s murder also resulted in a push for state legislation tightening Georgia’s laws against illegal immigrants, which Georgia Gov. Brian Kemp signed into law on May 1, 2024.

That law, known as Track and Report, requires authorities to verify the immigration status of any individual over the age of 18 if they are arrested or detained on suspicion of having committed a crime.

The road to profitability for OpenAI remains uncertain as the CEO, Sam Altman, revealed on Sunday on X, “Insane thing: We are currently losing money on OpenAI Pro Subscriptions!” He blamed the high usage of ChatGPT. 

insane thing: we are currently losing money on openai pro subscriptions!

people use it much more than we expected.

— Sam Altman (@sama) January 6, 2025

“I personally chose the price,” Altman told one X user, adding, “and thought we would make some money.”

no, i personally chose the price and thought we would make some money

— Sam Altman (@sama) January 6, 2025

OpenAI launched ChatGPT Pro last year and charges $2,400 for unlimited access to the company’s top model, OpenAI o1, as well as to o1-mini, GPT-4o, and Advanced Voice. 

“While this problem demonstrates the product’s popularity, it’s not clear how OpenAI is meant to turn a profit, much less operate its costly business sustainably,” Goldman Sean Johnstone told clients on Tuesday. 

Tech Crunch noted, “OpenAI isn’t profitable, despite having raised around $20 billion since its founding. The company reportedly expected losses of about $5 billion on revenue of $3.7 billion last year.” 

… and this all seems sustainable. 

pls chill

— Sam Altman (@sama) January 6, 2025

Separately, Altman posted a blog entry on Sunday reflecting on the company’s journey over the past few years, highlighting that AI agents will be joining the US workforce this year. 

“We believe that, in 2025, we may see the first AI agents “join the workforce” and materially change the output of companies. We continue to believe that iteratively putting great tools in the hands of people leads to great, broadly-distributed outcomes,” he said. 

In November, Bloomberg cited multiple sources that said OpenAI was preparing to launch a new AI agent codenamed “Operator” that can use a computer to take actions on a person’s behalf, such as helping with IT support, HR support, sales and marketing, travel booking, and writing code. 

OpenAI’s eventual release of an Agentic AI tool could generate additional revenue streams for the money-losing startup, which is backed by Microsoft, as the development of more advanced models becomes increasingly expensive. 

Authored by Michael Snyder via TheMostImportantNews.com,

Signs that we were once a truly great nation are all around us.  Previous generations of Americans handed us the keys to the most magnificent domestic infrastructure that the world had ever seen, but now it is literally falling apart all around us.  Thousands of bridges are structurally deficient and there have already been some very high profile collapses.  Hundreds of thousands of miles of highways and roads in the United States are in very poor shape.  Aging sewer systems are leaking raw sewage all over the place, and children are being slowly poisoned by lead pipes that desperately need to be replaced.  The power grid is hopelessly overloaded and is extremely vulnerable.  Meanwhile, our ports, our dams, our subway systems, our bus terminals and our airports are crumbling right in front of our eyes.  The truth is that our nation’s infrastructure says a lot about who we are.  

So what does America’s crumbling infrastructure say about us?  Sadly, it says that we are a rusting, crumbling, decaying leftover from a better, more prosperous time.

When Joe Biden took office in 2021, his administration told us that “investment in U.S. infrastructure as a share of GDP has fallen by more than 40 percent since the 1960s”…

Public investment in U.S. infrastructure as a share of GDP has fallen by more than 40 percent since the 1960s. The World Economic Forum now ranks the United States 13th when it comes to the overall quality of infrastructure.

So Congress passed a bill that gave the Biden administration more than $100,000,000,000 to spend on fixing our infrastructure.

Honestly, I have no idea what they did with all that money.

In 2021, the official White House website was reporting that 45,000 bridges and 20 percent of our roads were in poor condition…

More than 45,000 U.S. bridges and 1 in 5 miles of roads are in poor condition, per the American Society of Civil Engineers. In 2007, the I-35 bridge over the Mississippi River in Minneapolis collapsed during rush hour, killing 13 and injuring 121.

Well, fast forward a few years later and the Department of Transportation is still telling us that “over 40,000 bridges” are in poor condition…

The Department of Transportation considers 6.8% of the over 600,000 bridges it tracks and rates to be in “poor” condition. That doesn’t sound too bad on a percentage basis, but it’s over 40,000 bridges in total.

And it appears that the condition of our roads has actually gotten worse in many states.

For example, Consumer Reports says that almost half of all urban roads in the state of California are not currently in acceptable condition…

Despite an enormous yearly disbursement for highways that tops $21 billion, the Golden State manages to keep just a little more than half their urban roads in acceptable condition. However, this is an outsized job since, in addition to 840 miles of coastline, California boasts more miles of urban roads than any other state and has the second-highest mileage of rural roads in the country.

Data from the National Highway Administration shows California’s roads are the most traveled in the U.S., so it makes sense that the state also has the second-highest number of motor vehicle-related fatalities in the country.

Back in 2021, the Biden administration also made a big deal out of the fact that millions of Americans were getting their tap water through lead pipes…

Millions still get water from lead pipes, despite the fact that exposure to lead has irreversible health effects; in 2015, a state of emergency was declared in Flint, Michigan as citizens learned that their water supply contained toxic levels of lead.

So why didn’t the Biden administration fix this problem?

An article that was published late last year revealed that the EPA is estimating that “more than 9 million service lines” are still made out of lead…

The EPA estimates that more than 9 million service lines are made of lead, a neurotoxin that can cause nervous system damage, learning disabilities and other health problems, especially in children. If lead pipes corrode, as in the infamous case of Flint, Michigan, they can poison drinking water.

While no amount of lead exposure is safe, the federal rule now requires utilities to notify the public and improve corrosion treatment if lead in their water exceeds 10 parts per billion. Some homes in Syracuse, New York, recently tested at 70 parts per billion.

Our politicians are constantly telling us that they just don’t have enough money to get everything done.

Personally, I would really love to see exactly what the Biden administration spent more than 100 billion dollars of infrastructure money on.

Have you traveled through any of our airports lately?

Compared to other industrialized nations, they are a complete and utter joke.

Why can’t we have beautiful airports, modern subway systems, functional roads and bridges, and safe water coming out of our taps?

More tax revenue is collected in America than anywhere else in the world, and so we certainly deserve the best infrastructure.

When I bring up the topic of taxes, most people immediately think of the federal income tax.  But the truth is that there are literally dozens of different taxes that they use to extract wealth out of us…

• Building Permit Tax
• Capital Gains Tax
• CDL License Tax
• Cigarette Tax
• Corporate Income Tax
• Court Fines (indirect taxes)
• Dog License Tax
• Federal Income Tax
• Federal Unemployment Tax (FUTA)
• Fishing License Tax
• Food License Tax
• Fuel Permit Tax
• Gasoline Tax
• Gift Tax
• Hunting License Tax
• Inheritance Tax
• IRS Penalties (tax on top of tax)
• Liquor Tax
• Local Income Tax
• Luxury Taxes
• Marriage License Tax
• Medicare Tax
• Payroll Taxes
• Property Tax
• Real Estate Tax
• Recreational Vehicle Tax
• Road Toll Booth Taxes
• Road Usage Taxes (Truckers)
• Sales Taxes
• School Tax
• Septic Permit Tax
• Service Charge Taxes
• Social Security Tax
• State Income Tax
• State Unemployment Tax (SUTA)
• Telephone federal excise tax
• Telephone federal universal service fee tax
• Telephone federal, state and local surcharge taxes
• Telephone minimum usage surcharge tax
• Telephone recurring and non-recurring charges tax
• Telephone state and local tax
• Telephone usage charge tax
• Toll Bridge Taxes
• Toll Tunnel Taxes
• Traffic Fines (indirect taxation)
• Trailer Registration Tax
• Utility Taxes
• Vehicle License Registration Tax
• Vehicle Sales Tax
• Watercraft Registration Tax
• Well Permit Tax
• Workers Compensation Tax

When you take all forms of taxation into account, some Americans actually end up handing over more than 50 percent of their incomes each year.

So our politicians have no excuse for not fixing our infrastructure.

But even though they extract money from us in dozens of different ways, our infrastructure crisis just seems to keep getting worse.

In some areas of the country, roads that were once paved have actually been transformed into gravel roads because they are cheaper to maintain.

Our crumbling infrastructure is a perfect metaphor for our crumbling society as a whole, and it is time for the American people to start demanding better from all levels of government.

*  *  *

Michael’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

Authored by Mike Shedlock via MishTalk.com,

SemiAnalysis has a scathing report on critical mistakes made by Intel. Let’s investigate…

Please consider Intel on the Brink of Death | Culture Rot, Product Focus Flawed, Foundry Must Survive

Intel’s board is incompetent and its horrible decisions over the decades are going to push it towards death. The decision to fire Pat Gelsinger, put in charge a CFO + career sales and marketing leader, and cut spending on fabs in favor of a renewed focus on x86 is an example of the incompetence that will end Intel. Fabricated Knowledge wrote The Death of Intel: When Boards Fail recently explaining how board issues around leadership and planning have failed the company. Simply put, the Intel board has escaped blame for over a decade of failures. This decade of failure culminates in the ultimate mistake: dismissing CEO Pat Gelsinger.

Upon closer inspection, these failures are no surprise. 7 of 11 members have no relevant semiconductor experience. Two more are accomplished in the field but as academics, not industry players. They have no experience making hard decisions, understanding critical business inflections, and are not qualified for what’s at stake. The only member with a strong and relevant CV, Stacy J. Smith, joined just this year as a replacement for Lip-Bu Tan.

Intel’s Failures

The problems at Intel began with the 10nm node (arguably 14nm). In 2016, TSMC and Intel planned to introduce their 10nm processes into volume production. While TSMC executed on schedule with a lower performing node, Intel pushed an aggressive shrink requiring quadruple patterning, novel Cobalt interconnects, and contact over the active gate. The yield was bad, and the node took three years to fix. By the time Intel shipped 10nm products in volume, TSMC had sold more than half a million N7 wafers and was sampling N5.

Competitors like AMD had the advantage of TSMC’s fabrication and in many cases better chip designs/architectures. Datacenter market share began to slip, and Intel’s business issues only snowballed.

Culture – Rotten to the Core

The story of Intel’s cultural rot goes back to Paul Otellini. Paul and Pat Gelsinger were the front runners for the CEO position. This is the classic leadership choice of business bro versus technologist. The result was that Intel chose its first non-engineer CEO.

Paul was ultimately chosen due to his ruthless anti-competitive business decisions that locked AMD out of the CPU market and cemented Intel’s role as a monopoly for more than a decade. Paul instituted a policy that involved paying various OEMs and system integrators not to use AMD, which choked out AMD’s revenue, R&D, and fab investments. Dell alone was paid ~$4.3 billion, and this was the only reason Dell was profitable during this period. Intel and the EU are still fighting out this anti-competitive behavior in courts to this day.

Brian Krzanich was a disaster as CEO. He presided over the 10nm debacle. This mismanagement of the fabs is the single greatest issue the company faced, because that is the core of Intel. Despite this, Krzanich was only fired when an illicit workplace relationship came to light.

Not to be outdone, the 2018 board iteration replaced Krzanich with the first truly non-technical CEO in Intel’s history: Bob Swan. Technically, Paul Otellini was the first non-engineer to lead Intel, but he spent more than 30 years with the company, including his time as a technical advisor to the legendary Andy Grove and leading the microprocessor division.

Swan was a professional CFO – Intel was his 10th CFO role – and so process engineering took a backseat to financial engineering. Swan’s Intel spent as much on stock buybacks as it did capital expenditures on fabs over his tenure: more than $36 billion towards buybacks versus $38 billion in Capex. This was malpractice in a capital-intensive industry when the company was bleeding market share and more than two nodes behind its chief rival.

Brian Krzanich, Bob Swan, and Intel’s board cut not only Capex, but also technical talent, in droves. From 2013 to 2020, 4 out of 7 years had shrinking headcount all while the business lost its technical leadership and had fantastic profitability.

There is No Moat in x86 and the Product Group

Intel’s glory days were when they had superior process technology combined with their x86 moat. The x86 moat was also twofold: Intel had a moat in x86, and x86 had a moat in computing. Today, neither of those moats hold.

Before the smartphone era, x86 was the dominant instruction set within general-purpose CPUs. Almost every PC and server was guaranteed to have an x86-based CPU as the software was written to be compatible with the x86 instruction set. This was propagated by the “Wintel” (Windows and Intel) alliance, where Windows was the dominant Operating System that ran exclusively on x86. Software developers would rationally focus their efforts on developing software for the largest user base: Windows, and that meant making software for x86. This was a classic ecosystem: customers would want Windows PCs because of the larger suite of software options, and to use Windows meant buying an x86-based CPU.

Most of those x86 CPUs were Intel CPUs. While AMD also had the IP rights to design x86-based CPUs, AMD was for a long time tied to its own fabs (now spun off as Global Foundries) with inferior process technology to Intel’s, making it uncompetitive. Ironically, this is Intel’s position today.

Competition is Coming Even for x86 Client CPUs

This began the fading relevance of Windows and Intel, replaced by the Apple and Arm era. This partnership has encroached on Intel Product Group’s core: Apple took the knowledge and experience from designing APs with their A-series iPhone SoCs and parlayed that into the hugely successful Arm-based M-series SoCs for their client notebooks and desktops in 2020. Fifteen years after succumbing to the dominance of x86 over IBM PowerPC, Apple ended its Intel partnership.

This transition was only made possible with a tremendous effort to port software written for x86 to Arm. The key piece was the Rosetta 2 emulator, which recompiled apps at install to work with Apple silicon, enabling a seamless transition. The Apple M1 unlocked substantial performance gains with various accelerator engines not offered by Intel along with considerable boosts in battery life. It was a hit.

Trump and a Chip Czar

SemiAnalysis says it’s crucial to save Intel’s foundry on grounds of national security.

Customers want to de-risk their TSMC/Taiwan exposure the same way the national security community does.

Intel Foundry should be laser-focused on 1) a competitive process technology and 2) making design switch over from TSMC as cheap and easy as possible. The former is on track, but it is not clear what the latter is. A split from the Intel parent would reduce distractions and increase focus. Government support on national security grounds is necessary. Intel Foundry is the single best hedge America has against a Chinese-sponsored coup or invasion of Taiwan.

But note that Intel selling Intel Foundry will not work without a significant capitalization to the tune of ~$50B injected into Intel Foundry. AMD tried to spin off the fabs, and it was disastrous. Mubadala purchased the fabs from AMD and created GlobalFoundries. They then proceeded to lose $22.4 billion over the next decade.

While the Trump administration is probably allergic to anything that looks like “corporate welfare,” many key officials are national security hawks who recognize the importance of having advanced logic manufacturing capability on-shore. A standalone Intel Foundry that is capitalized and with long term manufacturing agreements from 2 of the largest semiconductor companies in the US is much easier for the government to support, both in dollar amounts and politically.

Intel Foundry won’t be laden with Intel’s lagging product team, Mobileye, or Altera. Intel Foundry will have one clear function, and it’s vital to national security and the future of America and the West.

Who should lead the charge here? Maybe a “Chip Czar” charged with restoring American logic prowess. We know someone with a great CV who has just become freed up for new opportunities…

Priorities, Priorities

There is much more in the lengthy article for inquiring minds to investigate. It does take a subscription to read some of it, but there is plenty to see without subscription.

Chips are a genuine matter of national security, not autos, not underwear, not most of the things Trump is pissing and moaning on tariffs over.

But we are off to a horrid start.

Intel Announces 15,000 Job Cuts, 15 Percent of its Workforce

On August 1, 2024 I noted Intel Announces 15,000 Job Cuts, 15 Percent of its Workforce

Intel received $8.5 billion in Biden administration grants (Inflation Reduction Act) but announces massive layoffs and halts dividends due to a decline in revenue.

Intel’s Money Woes Throw Biden Team’s Chip Strategy Into Turmoil

On September 4, Bloomberg reported Intel’s Money Woes Throw Biden Team’s Chip Strategy Into Turmoil

The Biden-Harris administration’s big bet on Intel Corp. to lead a US chipmaking renaissance is in grave trouble as a result of the company’s mounting financial struggles, creating a potentially damaging setback for the country’s most ambitious industrial policy in decades.

TSMC Arizona Production Remains on Schedule

On September 9, 2024 TechPowerUp reported TSMC Arizona Achieves Yield Parity with Taiwanese Facilities, Production Remains on Schedule

TSMC has reportedly managed to produce yields at its Arizona facility that are on par with yields back home in Taiwan, making its expansion efforts successful. According to Bloomberg, TSMC did a trial production, a multi-month effort, to produce N4 node wafers with low defect rates. With wafers now in TSMC’s labs for testing, it is reported that Arizona facility yields have achieved parity with their Taiwanese facilities back home. This indicates that TSMC’s efforts to expand in the US are so far considered a success, as advanced chipmaking is a very complex process that is only done by a few makers and in very few locations. With TSMC expanding in the US now and proving that its technology can work on US soil, the company has a green light to start volume production in the first half of 2025.

However, this is only the beginning of TSMC’s Arizona expansion. The Taiwanese giant plans to have a second fab operational by 2028 and produce 2 nm and 3 nm chips in the state. Additionally, there will be a third facility for 2 nm and more advanced nodes in Phoenix, bringing the total value of TSMC’s US expansion efforts to $65 billion, with $6.6 billion from the CHIPS Act grants and $5 billion in loans from the US government. If upcoming fabs follow the lead of the first facility, US-based production needs will possibly be satisfied.

Trump Accuses Taiwan of Stealing U.S. Chip Industry, Threatens Tariffs

On October 29, I noted Trump Accuses Taiwan of Stealing U.S. Chip Industry, Threatens Tariffs

Trump also suggested foreign companies shouldn’t be able to enter the U.S. and use government money. “That chip deal is so bad,” he said. “We put up billions of dollars for rich companies to come in and borrow the money and build chip companies here. They’re not going to give us the good companies anyway.”

The claim seems absurd given TSMC is investing in technology in the US.

Trump does not like any deal he didn’t negotiate. Heck, he does not even like the USMCA (NAFTA rewrite) that he did negotiate.

Getting TSMC to build a factory in the US was one of the best things, perhaps the only thing, good to come out of the Chips act.

Rep Lauren Boebert (R-CO), a staunch firearms advocate, has introduced a bill that would abolish the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

The bill, introduced on Jan. 3 when Congress reconvened for its 119th term, remains in the early stages of the legislative process. No text is currently available.

🚨 NEW: Congresswoman Lauren Boebert has filed legislation to abolish the ATF.

Do you support this?

Boebert railed against the ATF in the last Congress, saying the agency goes way too far in “rulemaking” authorities.

“We don’t trust the ATF because of their overreaching… pic.twitter.com/SQcjxOlolh

— Eric Daugherty (@EricLDaugh) January 6, 2025

In February of 2023, Boebert said: “There’s been a lot of talk about defunding the ATF, even abolishing the agency altogether, and I’m still here waiting to hear a good reason why the ATF should remain an agency at all. Instead of providing regulations that keep our communities safe, this agency has made our communities more dangerous by wandering weapons to the cartels. Operation Fast and Furious exposed the recklessness of the ATF, how little regard they have for the rule of law, and Americans have had a hard time viewing these agencies and their rules as legitimate.”

Boebert isn’t the first Republican to suggest doing away with the ATF. In November, Rep. Eric Burlison (R-MO) called for the ATF to be abolished, citing numerous “mistakes” by the agency, including Operation Fast and Furious – and vowed to introduce similar legislation to Boebert.

🚨 I’m introducing legislation in the next Congress to Abolish the ATF! pic.twitter.com/keK0zpmhRJ

— Rep. Eric Burlison (@RepEricBurlison) November 20, 2024

The ATF has been accused of regulatory overreach by several gun rights groups – including introducing a rule classifying pistols with braces as short-barreled rifles. In August, the 8th US Circuit Court of Appeals ruled that the stabilizing brace rule was likely unconstitutional, Newsweek reports.

Meanwhile, Rep. Pat Fallon (R-TX) said in May of 2023, “Under the Biden administration, the ATF has been weaponized against gun owners and Americans who wish to acquire firearms in numerous ways in recent years.”

The time has come.

ABOLISH THE ATF! https://t.co/f24PS0DwSA

— Lauren Boebert (@laurenboebert) January 6, 2025

Nvidia CEO Jensen Huang kicked off CES 2025 on Monday evening with a 90-minute keynote showcasing the latest new products designed to advance gaming, autonomous vehicles, robotics, and agentic AI. 

Huang told thousands at the Michelob Ultra Arena in Las Vegas that artificial intelligence has been “advancing at an incredible pace.” 

“It started with perception AI — understanding images, words, and sounds. Then generative AI — creating text, images, and sound,” Huang explained, emphasizing how we’re on the cusp of entering the era of “physical AI, AI that can proceed, reason, plan, and act.”

Huang explained that Nvidia GPUs and platforms enabled this explosive transformation that allowed breakthroughs across industries, including gaming, robotics, and autonomous vehicles. 

Nvidia CEO Jensen Huang tonight on robotaxis and self-driving: “I predict that this is going to be the first multi-trillion dollar robotics industry.” pic.twitter.com/QVTnwhdMUY

— Sawyer Merritt (@SawyerMerritt) January 7, 2025

Several of Wall Street’s leading tech research desks attended Jensen Huang’s keynote yesterday.

Notably, Goldman Sachs tech analysts Toshiya Hari and Anmol Makkar attended the keynote speech and provided clients Tuesday morning with seven key takeaways from the presentation:

1. RTX Blackwell family: Mr. Huang introduced the GeForce RTX 50 Series Desktop and Laptop GPUs for gamers, creators and developers based on the Blackwell architecture. Supported by AI-driven rendering (i.e. AI will help boost frame rates by generating three frames per one rendered frame), the RTX 5090 will deliver 2x the performance of the RTX 4090, while the RTX 5070 at $549 will boast performance that is similar to the RTX 4090 at $1,599. The GeForce RTX 5090 GPU will feature 92 billion transistors with 3,352 AI TOPS of computing power.

2. Three scaling laws: consistent with his message on the company’s earnings call in November, Mr. Huang highlighted that there are three scaling laws that will drive demand for accelerated computing going forward; a) pre-training scaling (i.e. more compute applied to more data driving better-quality models), b) post-training scaling (i.e. use of re-inforcement learning in improving the quality of output) and c) test-time scaling or reasoning (i.e. models developing reasoning and thinking capabilities).

3. Blackwell in full production: in contrast to some investor concerns, Mr. Huang stressed that Blackwell-powered systems were in full production, and that every Cloud Service Provider had Blackwell-powered systems up and running. He also discussed the need to drive down the cost of compute as models including OpenAI’s o1 and o3 and Google’s Gemini Pro continue to increase in complexity (i.e. developing reasoning and thinking skills), and highlighted Blackwell’s 4x better performance per watt and 3x better performance per dollar in relation to Hopper. Importantly, we expect Nvidia to innovate and, in turn, deliver lower cost per compute unit on a consistent basis for the foreseeable future with the near-term drivers being the introduction of Blackwell Ultra in 2H25 and Rubin in 2026.

4. Nvidia Llama Nemotron Language Foundation Models: Mr. Huang announced Nvidia Llama Nemotron language foundation models, based on Meta’s Llama LLM and optimized for Agentic AI for enterprises. These models are designed to help developers create and deploy custom AI agents to assist in a broad-range of use cases including fraud detection, customer support and inventory management optimization. The Llama Nemotron model family will be available in three sizes to provide options for different scale deployments, i.e. a) Nano – cost optimized for real-time applications with low latency, b) Super – designed for high-throughput use cases and c) Ultra – designed for highest accuracy and datacenter scale applications.

5. Nvidia Cosmos: Nvidia also announced Cosmos, a comprehensive platform consisting of “world foundation models,” tokenizers, and data processing tools aimed toward enabling physical AI systems such as autonomous vehicles and humanoid robots. While these systems are incredibly expensive, both from a monetary and data/testing intensity perspective, Cosmos (which NVDA has made available under an open model license) democratizes the development process through synthetic data for training and evaluation. Use cases for Cosmos include: a) using alongside Omniverse to generate all future outcomes an AI model could take to select the best path, b) enabling developers to easily find specific training scenarios, like snowy road conditions or warehouse congestion, from video data, or c) generating photo-real videos from controlled 3D scenarios created in the Omniverse platform.

6. Pursuing three robots: NVIDIA aims to enable the development of three robots, which, if successful would be “the largest technology industry the world’s ever seen,” namely, 1) Agentic AI, 2) Self-driving cars, and 3) Humanoid Robots. A critical step in developing these technologies, specifically for Humanoid Robots, is the processing of imitation information. While this tends to be a rather laborious process, NVIDIA seeks to relieve this bottleneck through Omniverse synthetically generated motions – which can allow for imitation training to occur independent of physical human demonstration and thus speeding training times significantly.

7. Nvidia Project DIGITS: Opposite to the trend of supercomputers increasing in size, NVIDIA unveiled DIGITS, a system-on-chip running the GB10 Grace Blackwell Superchip, boasting 128GB of coherent memory and up to 4TB of NVMe storage – optimized into a form-factor capable of fitting on one’s desk. The DIGITS SoC architecture design was supported by MediaTek, and utilizes the GB10 (Grace CPU/Blackwell GPU) Superchip. This compute unit can run up to 200bn parameter LLMs with 1 petaflop of FP4 precision, and maintains access to the extensive NVIDIA AI software and cloud suite. Ultimately, DIGITS enables widespread supercompute capabilities for researchers and developers to train and inference models, without relying on off-premise/cloud AI accelerator clusters. Per Nvidia, DIGITS will be made available during CY2Q25, with pricing beginning at $3,000.

The analysts reiterated a “Buy” rating on Nvidia, maintaining a 12-month price target of $165.

Nvidia shares surged to a record high of around $152 ahead of Huang’s keynote speech on Monday evening. By 1030 ET on Tuesday, shares pulled back 2.5%, trading at $145. Notably, shares faced heavy resistance above $140 for much of late 2024. 

CES will draw over 150,000 attendees and over 4,500 exhibitors through Saturday.