The AI billionaire class

Nvidia co-founder Jensen Huang’s wealth has surged as a blistering rally in AI-related stocks pushed the chipmaker’s market value above Amazon’s for the first time. That same rally minted another billionaire in Huang’s own family: his distant cousin Lisa Su, chief executive of Nvidia competitor Advanced Micro Devices, who’s worth $1.2 billion since the stock doubled over the past year. Two chipmaker billionaires in one family arguably illustrates the scope of the artificial-intelligence revolution, which has come to dominate the stock market and accounts for most of the wealth gained by the world’s richest people this year. Among the 500 wealthiest individuals, 30 attribute at least some of their fortunes to firms tracked by Bloomberg’s Global Artificial Intelligence Index. —David E. Rovella

It’s tempting to dismiss Wall Street’s response to Tuesday’s sticky inflation data as an outsized reaction to a slight miss in numbers that are vulnerable to seasonal noise, Mohamed A. El-Erian writes in Bloomberg Opinion. Yet the development is also indicative of deeper issues whose influence may well be with us for the next few months and quarters.

Everyone has been talking about the sky falling when it comes to US commercial real estate, but they haven’t been able to point to when exactly. Now “when” may be upon us. The shakeout in the $20 trillion sector has long been delayed because no one could figure out just how much properties were worth. And few wanted to. Since the pandemic upended just how real estate is used, lenders had little incentive to get tough on borrowers squeezed by soaring interest rates and take on loans that had lost value. Transactions ground to a halt as potential sellers were unwilling to unload buildings at cut-rate prices, which meant everyone could pretend for awhile that nothing had fundamentally changed. Well the water is finally starting to recede as deals begin to pick up, revealing just how far real estate prices have fallen. How far? Some buildings are going for half price.

Mass job cuts continued on Wall Street this week, with Morgan Stanley planning to eliminate several hundred people, the first layoff under new Chief Executive Officer Ted Pick. Pick took the helm in January from James Gorman, under whom the bank fired thousands of employees last year. The latest cuts will affect individuals in the bank’s wealth-management business. Morgan Stanley’s shares have been the worst-performing among its biggest US peers this year, down about 10%.

Big Tech is still firing, too. This time it was Cisco, as the largest maker of computer networking equipment announced plans to eliminate thousands of workers, or roughly 5% of its workforce. The company has said it’s been hit by a temporary “pause” in orders from customers who are busy installing equipment they’ve already acquired. Cisco’s forecast adds to concern that businesses are reining in tech spending.

Elon Musk invited Chinese auto parts suppliers to Mexico to build a new supply chain for a Tesla plant. They join the ranks of Chinese manufacturers that opened Mexican facilities in response to Donald Trump’s trade war—a surge that’s set off alarm bells in Washington. Electric vehicles assembled in Mexico qualify for a US consumer tax credit of as much as $7,500 under President Joe Biden’s massive Inflation Reduction Act. To do so, they must adhere to strict limits on the amount of battery materials coming from “foreign entities of concern,” or firms with ties to rival countries such as China. Automakers and some global suppliers haven’t spoken up about the new trend for fear of endangering their own interests in China, but a Canadian trade group for auto-parts manufacturers and the United Auto Workers have flagged what they deem an “alarming” increase in China’s Mexican investments.

Ukraine’s military said it destroyed a Russian warship off the south coast of occupied Crimea, the latest in a string of operations targeting Kremlin navy vessels in the Black Sea. Ukrainian military intelligence said a special unit sank a large Russian landing ship using naval drones. The inability of the Russian fleet to operate freely in the Black Sea marks a fundamental shift in Ukraine’s strategic position in the region, a senior US State Department official said on Wednesday, adding that Ukraine regaining control over its Black Sea ports is an under-appreciated part of the country’s summer counteroffensive.

But in Ukraine’s occupied eastern territories, Russians are using unsuspecting migrant workers to consolidate power. Thousands of workers from neighboring countries are being made to undertake a sprawling multibillion-dollar reconstruction program. Sometimes, they wind up digging trenches and fighting on the battlefield. Kremlin leader Vladimir Putin has said Russia is spending more than $11 billion a year to rebuild areas of Ukrainian lands.

Americans with disabilities have been a driving force in building back the nation’s post-pandemic labor market. Despite only making up about 12% of the US adult population, those with disabilities account for almost a third of the growth in the labor force over the past three years, according to JPMorgan Chief US Economist Michael Feroli. Participation rates for both disabled men and women both hit records last year. “Structural changes in work arrangements, income support programs, and therapeutic interventions may all contribute to a trend improvement in participation rates for the disabled,” Feroli said. “But the sharp improvement over the last few years likely owes to the high-pressure labor market.”

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