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U.S. businesses are absorbing two-thirds of tariff costs so far – Goldman. (00:23) Nvidia (NVDA), AMD to pay 15% of China AI chip sales to the U.S. – report. (01:27) C3.ai shakes up global sales team after slashing revenue outlook by 33%. (02:24)
This is an abridged transcript.
The cost of tariffs is being borne mostly by U.S. companies so far, according to analysis by Goldman Sachs.
Scott Lincicome, vice president for economy and trade at the Cato Institute, tweeted some of Goldman’s “still very early” analysis.
It showed that through June, 64% of tariff costs were being absorbed by U.S. companies, with 22% absorbed by U.S. consumers and 14% by foreign exporters.
Goldman estimates that tariffs have added 0.2 percentage point to the core PCE price index through June and will add 0.66 percentage point to core PCE over the remainder of the year.
That would leave core PCE inflation at 3.2% year over year, “but implying a softer 2.4% underlying trend of inflation net of tariff effects,” Goldman said.
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Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) have agreed to hand over 15% of revenues from their Chinese AI chip sales to the U.S. government in exchange for export licenses.
According to multiple published reports, Nvidia will share 15% of revenue from sales of its H20 AI accelerator in China. AMD is expected to contribute an identical share from its MI308 chip revenues.
“We follow rules the U.S. government sets for our participation in worldwide markets. While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide,” a NVIDIA spokesperson told Seeking Alpha.
AMD did not immediately respond to Seeking Alpha’s request for comment.
C3.ai (NYSE:AI) has restructured its global sales and services organization, including new leadership.
The company projects preliminary revenue of $70.2 million-$70.4 million, roughly 33% below the midpoint of its prior outlook.
C3.ai (NYSE:AI) said it now sees GAAP loss from operations between $124.7 million – $124.9 million, and non-GAAP loss from operations of $57.7 million – $57.9 million.
The company had $711.9 million in cash, cash equivalents, and marketable securities as of July 31.
“The good news is we have completely restructured the sales and services organization… The bad news is that sales results in Q1 were completely unacceptable,” said Thomas Siebel, Chairman and CEO, C3 AI.
C3.ai (NYSE:AI), down 29% in premarket action and 36% year-to-date.
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Dow, S&P and Nasdaq futures are in the green. Crude oil is down 0.2% at $63/barrel. Bitcoin is up 1.7% at $121,000. Gold is down 1.1% at $3,360.
The FTSE 100 is up 0.1% and the DAX is down 0.3%. The market in Japan is closed today for a holiday.
The biggest movers for the day premarket: Aspen Aerogels (NYSE:ASPN) -5% – Shares dipped after Barclays downgraded the stock to Underweight from Equal Weight, citing slower electric vehicle production at General Motors.