DeepSeek Plans AI Price Hike; Google Reshuffles AI Leadership | Bloomberg Brief 08/06/26

Summary

US equity futures waver as the tech-led rally loses steam ahead of Friday's payrolls report. The program covers DeepSeek's planned AI price hike, Google's AI leadership reshuffle, and a sharp sell-off in memory chip stocks like Sandisk and Western Digital after weak guidance. Kelsey Berro of JPMorgan Asset Management discusses the resilient labor market, Fed policy outlook, and opportunities she sees in credit markets, particularly in energy hybrids, utilities, and data center deals. The episode also touches on Trump administration tariff threats on Chinese polysilicon, a possible Iran-Oman strait deal, and the SpaceX lockup expiration.

• US equity futures are mixed, with Nasdaq 100 futures lower while S&P and Russell 2000 futures gain on broad optimism around a potential Iran-Oman deal on the Strait of Hormuz.
• Memory chip stocks lead declines globally, with Sandisk down ~9% and Western Digital down ~14% after issuing disappointing revenue outlooks, triggering a sell-off in Asian peers Samsung and SK Hynix.
• DeepSeek plans a significant price increase for its AI services from very low levels, which could reduce the cost advantage of Chinese models and help US AI frontier companies.
• Google shakes up its AI leadership, moving its key lab to California after losing talent to competitors, as it tries to catch up again in the AI race.
• JPMorgan Asset Management's Kelsey Berro sees a stable labor market and strong business investment supporting the case to expand into credit, favoring energy hybrids, utilities, and data center deals for incremental yield.
• Berro expects the Fed to stay on hold in September, with the market slowly pricing out the rate hike premium, supported by low inflation expectations and communication credibility.
• A possible re-emergence of the 'sell America' trade is noted, driven by doubts over US commitment to contain inflation, which has been supporting the euro.
• SpaceX faces potential stock pressure as a lockup expiration doubles the number of available shares, adding to existing headwinds from AI expenditure concerns.