The rethink about manufacturing in highly automated US plants is one of the big changes coming out of the pandemic. Industrial robots cost the same anywhere.
By Wolf Richter for WOLF STREET.
Apple said today that it would invest $500 billion in the US over the next four years, part of which is centered around setting up a 250,000-square-foot manufacturing plant in Houston, Texas, to manufacture AI servers that had been “previously manufactured outside the US.” The factory is expected to open in 2026 and will create “thousands of jobs.”
“The servers bring together years of R&D by Apple engineers, and deliver the industry-leading security and performance of Apple silicon to the data center,” Apple said in the press release.
The investment also includes $5 billion for its U.S. Advanced Manufacturing Fund, doubling it to $10 billion. The fund was created in 2017 “to support world-class innovation and high-skilled manufacturing jobs across America,” Apple said. The fund has already supported manufacturing projects in 13 states “that have helped build local businesses, train workers, and create a wide range of innovative manufacturing processes and materials for Apple products,” Apple said.
That expansion “includes a multibillion-dollar commitment from Apple to produce advanced silicon in TSMC’s Fab 21 facility in Arizona,” which produces semiconductors, of which Apple is the largest customer. Mass production of Apple chips began “last month,” Apple said.
Among the other elements of the $500 billion investment is the “Apple Manufacturing Academy” that it plans to open in Detroit to “help companies transition to advanced manufacturing.” Apple engineers and experts from top universities “will consult with small- and medium-sized businesses on implementing AI and smart manufacturing techniques.” The academy will also offer free courses to teach workers “vital skills like project management and manufacturing process optimization.”
Those investments in US high-tech manufacturing would be a far better use of cash than incinerating this cash on share buybacks.
Part of the purpose of this big-kahuna announcement was obviously a publicity stunt with the Trump administration.
But the rethink about manufacturing in the US is real.
The pandemic-era supply-chain chaos and the strategic problems with China triggered a corporate rethink about offshoring manufacturing, especially with regards to China.
Apple has been among the companies that have made efforts to manufacture more in the US, or shift to US manufacturers to source components and materials. So part of the big-kahuna announcement today has likely been planned for a while, and some of it may already be in the implementation stage. We can see that in Apple’s deal with TSMC’s Arizona plant. Those deals don’t happen overnight. But the server factory in Houston could be a new development.
The Biden administration rolled out huge incentive programs for manufactures to set up plants in the US, especially semiconductor fabs with the CHIPS act. And they’re being built.
The Trump administration, instead of paying companies to build plants in the US, has threatened to tax their imports, which has a similar effect as Biden’s subsidies in that they further encourage the corporate rethink about manufacturing in the US. But tariffs don’t transfer funds from individual taxpayers to the biggest and richest companies globally, which is what Biden’s programs did. Tariffs are a tax on importers’ gross margins and gross profits.
We discussed tariffs recently in two articles: What Trump’s Tariffs Did Last Time (2018-2019): No Impact on Inflation, Doubled Receipts from Customs Duties, and Hit Stocks, and Some Basics about U.S. Tariffs, and What Trump’s New Economic Team Said about Tariffs.
The eyepopping factory construction boom.
Investments in the construction of manufacturing plants in the US in 2024 jumped by 20% from 2023, and by 184% from 2021, to a record $233 billion, according to data on construction spending from the Census Bureau.
These investments in factory construction do not include data centers (which are included in office construction), or industrial facilities, such as buildings designed for warehouses and fulfillment centers (even if they’re eventually used for manufacturing as well). This metric of factory construction spending tracks purpose-built manufacturing plants.
These amounts cover the building itself, plus equipment such as HVAC systems, but not the industrial robots and other manufacturing equipment inside the building, which can cost many times more than the building. The total cost of a big chip plant might reach $20 billion, but the construction costs might be only a small fraction of it. And only the construction costs are included here.
These facilities being built in the US are highly automated and will produce complex high-value products. Plants for the production of semiconductors, EVs, EV batteries, electrical equipment and components, etc. are on top of the list. Apple has added an AI-server plant to it.
Factory Construction doubles its share of total construction spending.
Manufacturing plants’ percentage share of total construction spending – dominated by residential construction – has doubled since 2019 and more than doubled since 2021, to a share of 10.8% for the 12 months through December. This ratio cancels out the impact of construction cost inflation.
The risks and costs of globalization and China-dependence became all too clear during the pandemic. The increasingly complicated and stressed relationship between the US and China has exposed the scary dependence by US companies on production in China as a fundamental risk, not only for the companies, but also for national security. These are strategic issues.
Trump, during this first term, was the first president who had the gumption to be a China hawk, against a revolt by Corporate America and entrenched globalization-mongering economists and media. Biden followed in his footsteps. And the new Trump administration is moving further into that direction.
But it takes years from deciding to build a huge complex automated factory to actually being able to ramp up mass-production in that factory. These are long-term moves that don’t happen from one month to the next.
Industrial robots cost the same anywhere. They’re the great equalizer. In modern highly automated manufacturing, manual labor is a much smaller cost component on a per-product basis. In addition, manufacturing in the US reduces transportation costs, the risks of loss of Intellectual Property (IP), a given in China, lead times, and other risks and costs.
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Any idea-r of the dollar amount companies will/receive (Govt Payments/Incentives) either via Inflation Reduction Act and/or State/Local tax incentives?
Wolf…I hate to say it but here goes: I think that in the age of robotic manufacturing where automation is eliminating human jobs, we will need to set up a kind of “social security” contribution system for robots and AI that destroy human jobs. Companies will need to pay an SS contribution for every robot; maybe small, but necessary to take care of the middle class workers whose jobs are destroyed.
LOL, nonsense.
1. Automation and industrial robots have existed for many decades. That is not new. What is new is that they’re constantly getting better. There are still jobs at automated factories, but these jobs are highly qualified and skilled, including tech jobs. And they pay well and generate payroll taxes.
2. And these are ADDITIONAL NEW jobs that didn’t exist before because these are NEW manufacturing plants! These NEW plants ADD NEW jobs, not subtract. And those jobs won’t be unskilled labor, they will be highly skilled labor, including tech jobs, and they will generate lots of NEW payroll taxes.
To counter your number 2, not all the new factories replace ones that are overseas. Some of them replace old facilities that are already here, and those do cause job loss.
Further, automotive manufacturers as a great example have been automating and eliminating jobs for decades. This will continue in existing plants everywhere.
We keep moving into highly skilled and low skilled jobs outside of the construction sector. The medium skill jobs keep falling. This is why there is a huge disconnect between how the numbers show the economy is doing well, but many many Americans are unhappy with the economy.
I work in a highly automated factory. This wolf guy gets it. Maybe he should run this website? :)
A lack of automation means people must become machines to take up the slack on the process line. This is how old-style factories ran. In the majority of cases, they were not very good jobs. They rarely paid well, safety was a joke, mental engagement was low, training was sparse, environmental concern was whatever, and quality control was limited. In many ways, it’s a job that no sane human would do unless they had no better options. And there are many business and social problems with running such a factory.
Worries about machines “taking our jobs” are usually propagated by those who have not fully enjoyed the exquisite frustration of maintaining a highly automated process line and continue to push out product within specifications. Robots take a lot of inputs, tweaking, management, babying etc to stay on target. They do not handle edge cases well. They need frequent upgrades to handle trickier and trickier problems. But their value proposition is that when they they are adequately supported, they spit out hugely more money than their upkeep or an equivalent low-automation factory.
In other words, automation done right means we convert process-men to high-skilled technicians and engineers who get to use their brains every day. Skills gaps are a genuine concern. Those gaps can be closed through retraining and education. We use the same number of people to generate much more product with far less waste and far fewer inputs.
Faraday – fairly said. Reckon a remaining issue, though, is how to effectively ensure ‘retraining and education’ is available and sufficiently applied to a national population whose median skills level (if current basic literacy studies are any indication) is in decline, at a rate that will meet the inherent demand for work that honestly pays that population enough to absorb and ameliorate the re-emergent symptoms of class warfare…
may we all find a better day.
“In 1970, the telecommunications industry employed 421,000 well-paid switchboard operators. Today “disaster” has hit the telecommunications industry, because there are fewer than 20,000 operators. That’s a 95 percent job loss. The spectacular advances that have raised productivity in the telecommunications industry have made it possible for fewer operators to handle tens of billions of calls at a tiny fraction of the 1970 cost.”
— Walter Williams (RIP), George Mason University.
The job loss for operators is approximately 100% now, of course. Individual industries cycle, yet the economy — general employment with it — advances. But not evenly over time.
Good point JH, but I would like to confirm to those who have never gotten their hands dirty or carpal tunnel syndrome to the point of losing their physical grip that almost all the lower skilled jobs going away were and still are very hard on human bodies.
The retirement age advances with the advances of better skilled jobs that also leaves one’s body able to enjoy the ”GOLDEN YEARS” in spite of what Dr. Seuss might say, LOL
”I cannot see
I cannot pee
I cannot chew
I cannot screw
Oh My God What can I do?
My memory shrinks
My hearing stinks
No sense of smell
I look like hell
My mood is bad–can you tell?
My body’s drooping
Have trouble pooping
The Golden Years have come at last
The Golden Years can kiss my ass.””
As an old Blue Lady at the local hospital once told me “Sonny if you think of the alternative, getting old isn’t so bad.”
VintageVNvet-
Love Seuss!
I always thought The Cat in the Hat and the sequel — with the pink ring fiasco — was a pretty good analog for the Fed’s technocratic actions and aftermath.
Very difficult (without imaginary “VOOM”) to weed out structural inflation and/or economic malaise once the mischievous money production experiments have occurred. The Cat as a role model!
Cheers
Awesome!
“The job loss for operators is approximately 100% now, of course”.
Meanwhile, goo AI claims that “According to recent data, the telecommunications industry in the United States employs approximately 1.46 million people”.
I wonder how many that was in 1970, since operators were likely just a fraction.
I really miss Walter Williams,a really smart and just seemed a nice all around guy.
I e-mailed him once and shared a story with him as felt he deserved to have another read and not just write,he e-mailed me back saying thanks for the story and cheers,never deleted that e-mail!
When they become sentient beings, they may need Social Security. Good idea!
For a cutting edge fab (fabrication plans) for TSMC or Intel, the estimate is around 500 employees. The older plants employ around 5,000
Wow where do I begin … I worked for Apple in early 1984 in Warm Springs (Fremont) Calif. which was at the time one of the most automated factories in the world. We had robots running all over the factory delivering kits of components to machine operators assembling the first black and white 1st gen Mac computers. I was one of the guys who kept all of that automation programmed and running. As Wolf mentioned … none of this is new except in your mind perhaps.
Okay, then as a general question, why do we need AI, which requires massive amounts of money spent on research and electricity??
Sure, robots “delivering” parts. This I believe. Robots assembling “AI Servers” (what a joke of a label – lets be honest, regular crappy Xserve servers with some GPUs attached) is a straight up lie. Humans will be putting together the servers in this factory, just like humans put together the Macbooks and iPhones. But the magical fully automated AI-powered factory sure sounds good, until your realize how small and fragile the parts are.
LOL, you’re such a funny goofball. Watch this video about automated iPhone assembly, I mean, just for fun, not to learn anything or whatever. But sure, there are SOME humans involved at SOME stages.
https://www.youtube.com/watch?v=nw9WJb2MO1g
Jim Chanos commented on the absurdity of investing 500B from a capital base of ~100B. Will Apple, a company who’s growth is sub-par invest with debt?
With more automation in manufacturing, the move to have less humans working seems ominous. We have to steadfastly believe that disruption of these sorts will provide humans to find other ways to employ themselves. Can every one be creative and change for the modern times?
I’d rather see 300 US citizens running a highly automated factory in Texas than 3000 Chinese laborers building phones by hand and shipping them over as part of our trade deficit.
If that is what Chanos said, it was an absurd idiotic comment by him.
The $500 billion doesn’t come out of Apple’s capital today. It’s stupid to even say that. It’s spread over 4 years and comes out of Apple’s cash flow that it previously blew on share buybacks. Apple can also borrow, which it has done to fund part of the share buybacks.
Apple makes close $100 billion in net income every year! Doesn’t Chanos know that???? $400 billion over four years.
For 2024, Apple planned to waste $110 billion on share buybacks. Doesn’t Chanos know that??? Apple has been wasting close to $100 billion cash on share buybacks every year for years. There’s $400 billion right there that it could have invested in the US over those four years.
Part of the $500 billion was already included in prior planning, such as the TSMC stuff, and we don’t know how much is new. Maybe $400 billion is additional? Maybe $100 billion? And the rest was already part of Apple’s regular capital expenditures, though more of it shifted from overseas investments to the US investments. If it invests that additional in the US over the next four years, instead of blowing it on share buybacks, that would be a great thing, except for the share price maybe.
This was his exact quote
Apple’s current capital base is less than $160B. Any serious discussion of a $500B capital deployment is a bit…unrealistic. $AAPL
That makes more sense. Apple only spends 9-10Bn per year in total “Payments for acquisition of property, plant and equipment” per their cash flow.
The 500Bn appears to be what they intend to spend over 4 years across everything they buy in the US
“The $500 billion commitment includes Apple’s work with thousands of suppliers across all 50 states, direct employment, Apple Intelligence infrastructure and data centers, corporate facilities, and Apple TV+ productions in 20 states”
It doesn’t mean new spending from what I read. They say
“Today, Apple supports more than 2.9 million jobs across the country through direct employment, work with U.S.-based suppliers and manufacturers, and developer jobs in the thriving iOS app economy”
It mentions 20,000 new hires over 4 years. At a generous 100k per year per hire that is 2Bn.
1. RTGDFA before commenting.
2. It’s not a question of investing, but of INVESTING IN THE US. Apple shifted investing in foreign countries to investing in the US. That’s the key point here.
3. This IS “investment” and not “expenses,” such as salaries which are OPERATING EXPENSES.
Maybe Chanos missed the “over 4 years part”.
But also, if AAPL shifts from share buybacks to capital investment over the next 4 years, did Berkshire see this coming and exited most of AAPL position because this shift would eliminate the largest (I’m assuming the largest?) valuation agnostic buyer of AAPL shares annually?
Wolf – anything to discuss in regards to the services PMI print last week ?
No, month to month sentiment indicator. Look at a longer-term chart.
Wolf – the treasury market now implying 1 rate cut after the PMI print across 1-5 year duration bonds — versus essentially only the 1 year bill previously *partially* implying a cut prior to the PMI, is something else going on or you continue to think the month to month sentiment is volatile and doesn’t say much?
Here are some observations:
1. Markets do what they do because they do it.
2. Stocks are sagging and cryptos are plunging, all of them from very precarious levels, and so some speculators flee to the safety, selling those instruments and buying Treasuries, a standard demand shift, which pushes down yields (pushes up Treasury prices).
3. Now everyone is talking “slowdown” again (on a wing and a prayer). They did that a bunch of times before, wrongly, as it turned out, and then yields went back up.
4. I’ll add here that the chaos caused by DOGE and Trump’s executive orders could create enough uncertainty that businesses and consumers take a wait-and-see position. But I haven’t actually seen that yet. Maybe today’s special was more tariff talk.
Another thing Trump will take credit for. Unfortunate.
Already did.
Apple’s announcement is big news but the backstory is not getting enough coverage. As you mention, the hard construction costs are the tip of the spear. Deeper coverage of the total investment in onshoring would be appreciated.
What exactly are these “AI servers” they are manufacturing? Is Timmy bringing back the Xserver product line or are these AI servers for their own SaaS ecosystem?
From Apple’s announcement, the entire relevant section:
“Previously manufactured outside the U.S., the servers that will soon be assembled in Houston play a key role in powering Apple Intelligence, and are the foundation of Private Cloud Compute, which combines powerful AI processing with the most advanced security architecture ever deployed at scale for AI cloud computing. The servers bring together years of R&D by Apple engineers, and deliver the industry-leading security and performance of Apple silicon to the data center.
“Teams at Apple designed the servers to be incredibly energy efficient, reducing the energy demands of Apple data centers”
Apple has historically relied on other cloud providers (eg Azure, Google, AWS) to host iCloud and other data. It looks like they are slowly building up their own infrastructure to lower costs, have more control, power their own AI, etc.
Some of this spending is spread out with other technology firms under joint ventures. A new 250,000 square foot plant to be built in Houston is a good thing (location not disclosed as of yet) and will add jobs (construction, plant internals installation, staffing, engineering, etc). All this is good stuff.
It’s certainly better news than hearing something like “Apple will build a new phone assembly plant in India”.
Apple’s renaissance happened under Steve Jobs’ second watch. Larry Ellison of Oracle (a friend of Jobs) says it very succinctly: without Jobs, there would be no behemoth Apple in the world today.
What Jobs did was learn from his time at Pixar, which smoothed many of his younger years’ rough edges out. He emerged as a better manager and kept his “reality distortion field” motivating skills. That’s really the secret as to why Apple was able to go from iPods to iPhones in under a decade.
Wolf,
Building things is great, especially for the construction industry. However, I have two simple questions. 1) Who or what person, corporation, or county is buying the items being produced? To reduce the trade deficit one has to hope our trade partners are the largest customer and have already placed orders (hence the need/demand to produce), but why would a country like China buy things from us? 2) What sort of tax breaks are these manufacturers getting? The last thing this deficit/debt burdened country needs is more tax breaks. On another note, these manufactures are sucking up tremendous amounts of water, power, and resources. Are we sure this is the best use of this precious wealth? Seems like this is too-little too late. All the other bubbles and capital mis-allocation hasn’t worked out so now we are going to blow a manufacturing bubble? Is there really this much demand for these products (whatever the hell the products are)?
1. You keep posting the same question, I keep telling you the same answer: These US-manufactured products REPLACE FOREIGN-PRODUCED PRODUCTS. The US has a $1.2 trillion trade DEFICIT in goods, and manufacturing in the US will reduce the trade deficit at the expense of foreign manufacturers. Those foreign manufacturers will just lower some business. No biggie.
In this case, Apple is manufacturing these specialized servers initially for its own data centers, which have created for years huge demand for servers.
2. Under Trump, the incentives are shifting from giveaways (Biden) to avoiding tariffs. I explained this in the article.
3. Let the manufacturers decide how they will deal with the details. That’s not your job. It’s their job. And they tend to be able to figure those things out over time.
Please put those tariffs up President Trump, and bring more manufacturing back to the USA.
There is a role for tariffs, carefully considered after consultation with the domestic industry. Here is part of the reaction of the US Aluminium Association.
‘Thanks to robust domestic demand and coming investment, the U.S. aluminum industry needs a steady and predictable supply of primary, secondary and scrap aluminum. Today, much of that metal comes from North American trading partners, especially Canada. The U.S. industry sources around 2/3 of the primary aluminum it uses every year from Canada, since all U.S.-based smelters, even running at full capacity, cannot produce nearly enough metal to meet demand.’
Further in the statement it mentions that US users of primary aluminum employ about 800,000 workers.
Is it possible to expand the US primary smelter volume to fill that 2/3 ? Sure. Anything is possible, but it couldn’t be done in less than a year assuming wartime emergency priority. It would take government money, because no one is going to risk billions without certainty. But assuming all that, wouldn’t it make sense to give your own industry more than 2 weeks notice?
Finally, this vastly expanded domestic smelter product will always be more expensive than the Canadian product because the key ‘ingredient’ of aluminum is electricity; it has been called ‘frozen electricity’. All the Canadian smelters are near giant hydro-electric plants on giant rivers.
All of my apple products are already produced in the USA – Red Delicious, Fuji, Granny Smith, Honeycrisp and more. I love my tech.
Yep. Never purchased anything Apple, never will.
Where do your apples come from in the summer?
Controlled atmosphere storage.
Strategic Apple Reserve
In my experience with growers in Southeast Washington State, the only apple businesses who made consistent returns were the refrigerated warehouses.
Don’t forget “Road Apples”
Not quite as crisp and tasty.
…could be called ‘organic’ before actual analysis, though…
may we all find a better day.
“The Biden administration rolled out huge incentive programs for manufactures to set up plants in the US, especially semiconductor fabs with the CHIPS act. And they’re being built.”
And neither Biden nor Harris or any Dem for that matter talked about this for 30 seconds last year. It’s incredible how poor Dems are at salesmanship.
CHIPS Act is dead now.
All of the NIST employees who managed the program were probationary and have all been fired.
Almost none of the money was disbursed. Like a lot of bidens programs, a ton of money was allocated but very little actually spent. Ev chargers, rural broadband, irs agents, etc.
Last 4 years was all smoke and mirrors
For real. Their campaign marketing also failed to remind folks of the first Trump administration’s corruption, nepotism, or general placement of loyalist shills in positions of power. So must money and so little strategy. The marketing damn near produced itself. Complete incompetence, it’s mind-boggling.
“corruption, nepotism, or general placement of loyalist shills in positions of power”
You’re describing every preidency since at least Bush II lol
…ah, the true ‘Murican Way: “…if a little bit is good, a whole lot more is better!…”.
may we all find a better day!
This spending spree on AI-related technology, be it chips, servers, electricity generation, fiber optics, routers, and the humans needed to support it is breathtaking to watch. High margin companies such as Meta, NVIDIA, Microsoft, Alphabet, and private equity firms are plowing several $100 billion annually into this build. They will need plenty of help from downstream high-tech manufacturers, plus help from state governments to support electric grid growth. Think of it as a massive dividend for downstream supporting businesses.
From what I read earlier on this story this is more of PR move, most of the plans Apple announced have been in works for many years already, and that they are potentially speeding them up. Maybe it gets built maybe the plans get paused, like their expansion campus in the NC research triangle.
It’s not a question of spending, but of SPENDING IN THE US. Apple shifted investing in foreign countries to investing in the US. That’s the key point here.
And yes, Apple has been doing that since the pandemic, including the TSMC deal to manufacture chips in Arizona, which started mass production of Apple chips a month ago, so that’s not new, but it IS IN THE US. The factory in Houston is new.
Good for Trump! Bringing manufacturing back to the US by carrot or stick is good.
The caveat is as long as employment is maintained with living wages OR taxes are collected to support the unemployed, this is good.
Nothing to do with Trump. This is a re-announcement of plans announced in 2021.
Reduces “the risks of loss of Intellectual Property (IP)”.
From the looks of all the scraping for AI and the promoters of such scraping, that’s a save on risk of loss of IP they call “for me, but not for thee.”
I was today years old when I learned the word ‘gumption’ thanks to WOLFSTREET.
I’d be happier if they’d start building more factories in places that NEED more industry. Phoenix and Houston are already oversupplied. The midsection from Pennsylvania to Kansas NEEDS industry.
The Academy is an unquestionably good thing, especially since it’s in Detroit instead of Houston. More training has to come before more factories.
Taxes and Right to Work laws.
People with the skills in high tech industries generally don’t want to work in flyover states.
I suppose this is a good thing. But having worked at Apple through a number of years, I’ve seen multiple attempts made by Apple to assemble Apple products in the US in highly automated factories. Every one of them has blown up in spectacular fashion. Lots of money spent and after a year or 2, the operations quietly fold up.
Perhaps this time will be different. The scale of commitment may be different. But Apple has never shown commitment to anything that does not produce success relatively quickly. It’s embedded in their entire culture
Also, I’m not sure about this insistence many companies have to all build their new industrial plants in the same already crowded, expensive urban environments.
It will be interesting to watch
I’m curious as to why they picked Houston versus Dallas. I spent some time back in the day in Texas… Dallas seemed to me to be the more ‘techy’ / ritzy place with glitter versus the ‘get-r-done’ grittiness of Houston.
Dallas vs Houston? The oil industry has spent more and done more with computer technology than almost any other industry since the 1960s. Big buyers of the first mainframes and first to utilize SIMD processing, which is what NVidia’s hardware technology is all about but back then it was called an Array Processor and filled a giant cabinet for only a few processing cores instead of thousands of cores in a small GPU chip. That continued investment in tech is one reason why the average price of a gallon gas is only $3.14 today.
The real reason Apple probably chose Houston is that Foxconn, who builds just about everything Apple sells, already has some facilities in Houston. There is not a lot of large vacant land inside of the Houston city limits (after ZIRP let the developers over build commercial real estate). There is a small amount of land near the Foxconn facility that is possibly available. There is also probably some industrial/manufacturing space that has freed up through industry mergers. There might even be some space in the old Compaq facilities which used to assemble… servers! (If HP didn’t sell it all). Or they could find some land in the Houston metropolitan area outside the city limits. My guess they are using the Foxconn location.
The work that will be performed is relatively low skilled and low tech. Assembling rack mounted computers – all the components- processors, motherboards, etc. are made somewhere else. Low tech work that even a laid off government worker should be able to perform, but they can’t work from home.
Mostly a PR stunt by Apple, IMO. Hoping to keep the tariffs on their money making iPhones lower. So they still have money for stock buybacks.
While Apple is announcing they will spend some money in the US there are stories that Microsoft may be pulling back on some of planned spending on data centers for cloud and AI .
“Microsoft may be pulling back on some of planned spending on data centers for cloud and AI .”
That analyst report has already been debunked by Microsoft itself, but no one ever reads debunks.
On a more practical note: What are the companies that build these advanced manufacturing robots? Are there any market leaders that are benefitting from all of this spending, and future spending?
Readers wanna know! ;-)
If Apple is going to Houston of all places I wonder if they are going to take over that (at the time) the state of the art Compaq facility in North Houston that was built in the mid 80’s ? Would not surprise me. In the Woodlands area. An epic campus.
The Woodlands area is pretty much built out, both industrial and residential. I have lived there for 30 years. The new growth is west and north of The Woodlands. If they can find a location in this area, it’s pretty close to IAH and easily accessible via the Hardy Toll Road.
What happened to that Compaq facility? I almost went to work there when it was built.
Not a specific comment but just a general one, but Wolf you do the best analyses on the interwebs. And this article is a fine example.
I comment almost never, but read every day.
Great work!
AGREE, like, totally your turn!
THE BEST Clear, Concise, Comprehensive reporting.
Your comment reminds me to send in my annual support$$$.
MSN: Crypto market faces a massive liquidity crisis, $325 billion wiped since Friday
The crypto market is in a full-scale meltdown, with $325 billion in market cap wiped out since Friday morning as of press time, according to data from Coinglass, which also shows that the largest drop was when $100 billion disappeared within one hour.
There were no major headlines covering the sudden crash, making it seem like not a big deal at all, almost as if no one even cared anymore.
Even meme coins, which had been on fire in recent weeks, have taken a severe hit. Liquidity has dried up across the board, raising concerns about even more downside.
The sell-off of course started with the Bybit hack on February 21 when North Korea’s Lazarus Group pulled off the biggest financial heist in history, draining $1.5 billion from Bybit’s Ethereum wallets. This theft was so big, it’s double the size of the previous record-holder, which is the $611 million PolyNetwork hack that happened in 2021.
Ethereum, which was already performing terribly, got even worse as traders scrambled to pull funds out, fearing another FTX-style collapse.
let it burn.
– Headline: “Korea’s GDP shrinks by most in ten years amid tech slow down”.
That’s an interesting thingy. Where did you get that headline? Google AI?
I googled it and couldn’t find it.
But Google AI dished up something like that, but that might have been a hallucination.
Korea did not release a GDP report today. That came in January for Q4, and Q4 GDP grew, if by only a little, but that’s still “grow” and not “shrink.”
What I could see that happened today is that the Bank of Korea revised its GDP forecast for 2025, to growth of +1.4%, from its prior forecast of +2.0%, so that’s also still “grow” and not “shrink.” And 1.4% GDP growth would be faster growth than 2024 GDP growth of 1.1%.
MW: Bitcoin drops under $90,000, hitting November lows
MicroStrategy now owns $47.4 billion worth of bitcoin after latest purchases
Bitcoin fall clobbers Strategy — formerly known as MicroStrategy — and other crypto-linked stocks
I was just going to post something about this as off topic/bitcoin. Last time I looked at it (I don’t own any) it was roughly 105k. Down 20% to 85k – this type of stuff, whether it goes up 20% or down 20% – I don’t know. Just seems to me like a massive waste of resources (talent, energy, time)
More important than bitcoin mysticism, the treasury yield curve has inverted, the ten year yield is now less than the three-month. And it happened in less than a month. So much for the “stodgy” bond market. I wonder what is driving it. Flight to safety would increase bond yields. Inflation worries would increase bond yields. Massive selling would decrease bond yields and possibly offset flight to safety and inflation worries. But who is selling and why? Is it foreigners and Americans worried about Trump’s economic plans leading us to a recession? How can they be so sure? Seems strange.
“Flight to safety would increase bond yields.”
No, opposite. Increased demand for Treasuries would increase Treasury PRICES, and therefore push down Treasury yields. And we’re seeing that today. This demand for Treasuries may be more than just flight to safety, who knows, but more demand means lower yields.
Thanks for clarification.
I hope they off those flood plains.
Meanwhile here in Houston I am seeing advertisements on office buildings from $499-$299 a month. That seems like a great deal in comparison to the rate that it went years ago.