Ex-Google CEO Eric Schmidt says the true constraint on AI growth is capital, not energy, estimating 10 gigawatts of compute capacity could cost half a trillion dollars or more.Summary:Schmidt argued the binding constraint on AI development is capital availability rather than energy supply, with costs estimated at around $50 billion per gigawattAt that rate, 10 gigawatts of compute capacity would cost approximately half a trillion dollars, a sum only a handful of countries or companies could realistically financeChina is identified as capable of mobilising that level of capital, though Schmidt said he was uncertain whether it is doing soThe US capital market’s ability to borrow at scale is cited as a structural advantage that makes large AI financing possibleEurope is described as unable to finance AI infrastructure at the required scale, a limitation Schmidt acknowledged is a source of frustration on the continentFormer Google chief executive Dr. Eric Schmidt has argued that the artificial intelligence industry is approaching a financial barrier that may prove more restrictive than the energy constraints that have dominated discussion of AI’s growth limits.Speaking publicly, Schmidt laid out a straightforward cost argument. At roughly $50 billion per gigawatt of compute capacity, building out 10 gigawatts would require approximately half a trillion dollars of capital. Sustaining or scaling that further pushes the figure toward a trillion dollars or beyond, a level of investment that very few nations or private actors could plausibly deliver.That framing shifts the competitive dynamic away from questions of electricity generation and infrastructure toward questions of financial depth and access to capital markets. In Schmidt’s view, the countries and institutions best placed to win the AI race are those that can mobilise and sustain investment at that scale, and the field is narrow.He identified China as one of the few actors with the financial capacity to mount that kind of effort, though he stopped short of confirming whether Beijing is actively pursuing it at that magnitude. The US, he argued, holds a structural advantage through the depth and sophistication of its capital markets, which allow the kind of large-scale borrowing required to finance AI infrastructure. That ability to leverage private capital at scale is, in his telling, a genuine competitive differentiator.Europe, by contrast, does not have access to comparable financing mechanisms, a reality Schmidt acknowledged is a source of frustration among European policymakers and industry figures. The implication is that without a structural shift in how European capital markets function or how governments are willing to deploy public funds, the continent risks being priced out of the front rank of AI development regardless of its technical talent or regulatory ambitions.The comments add a financial lens to a debate that has largely focused on compute, energy and regulation as the primary constraints shaping the AI landscape.— Schmidt’s framing of capital availability as the binding constraint on AI development has direct implications for how markets should think about the AI infrastructure buildout. If the effective ceiling is financial rather than physical, then the competitive advantage shifts decisively toward deep-pocketed sovereigns and economies with sophisticated capital markets, reinforcing the US and China duopoly narrative. European AI and tech equities face a structural headwind if the continent genuinely cannot mobilise capital at the required scale. For US markets, the comments support continued enthusiasm around AI infrastructure spending, but also flag concentration risk if only a handful of actors can sustain investment at the required level. This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight Eric Schmidt’s take on AI growth highlights a critical factor for tech investors: capital constraints. If the cost of compute capacity is indeed hitting $50 billion for just 10 gigawatts, it could impact the pace of AI advancements and the companies involved. Traders should consider how this may affect tech stocks, especially those heavily invested in AI, like NVIDIA or Alphabet. If capital becomes scarce, we might see a slowdown in innovation, which could lead to volatility in these stocks. Keep an eye on related sectors like cloud computing and semiconductor manufacturing, as they could also feel the ripple effects. The real story here is that while energy supply has been a hot topic, the financial backing for AI projects could become a more pressing issue. Watch for any shifts in funding announcements or capital raises in the tech sector, as these could signal broader market trends. Investors should be prepared for potential pullbacks in AI-related stocks if funding challenges arise. 📮 Takeaway Monitor tech stocks like NVIDIA and Alphabet for potential volatility as capital constraints on AI development become more pronounced.

Japan April 2026 PPI +4.9% y/yexpected +3%, prior +2.6%yen-based import price index rose at its fastest pace y/y since December 2022and +2.3% m/mprior +0.8%Just the data post, I’ll have more to come on this separately. ADDED, here:Japan wholesale prices surge 4.9% as Iran war drives import cost spike This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight Japan’s April PPI surge to +4.9% is a wake-up call for traders: rising import costs could signal inflationary pressures ahead. With the yen-based import price index hitting its highest year-on-year growth since December 2022, this data could impact the Bank of Japan’s monetary policy. If inflation continues to rise, we might see a shift in interest rates, which could affect forex pairs involving the yen. Traders should keep an eye on the USD/JPY, especially if it approaches key resistance levels. The Iran conflict’s role in driving these costs up adds a layer of geopolitical risk that could lead to volatility across commodities and currencies alike. But here’s the flip side: if the Bank of Japan maintains its ultra-loose policy despite rising prices, it could weaken the yen further, creating opportunities for short positions. Watch for any comments from BOJ officials in the coming days, as they could provide clues on future monetary policy adjustments. 📮 Takeaway Monitor the USD/JPY closely; a break above key resistance could signal further yen weakness amid rising inflation concerns.

The People’s Bank of China is due to set the daily USD/CNY reference rate at around 0115 GMT (2115 US Eastern time), a fixing that remains one of the most closely watched signals in Asian foreign exchange markets. China operates a managed floating exchange rate system, under which the renminbi (yuan) is allowed to trade within a prescribed band around a central reference rate, or midpoint, set each trading day by the PBOC. The current trading band permits the currency to move plus or minus 2% from the official midpoint during onshore trading hours. Each morning, the PBOC determines the midpoint based on a range of inputs. These include the previous day’s closing price, movements in major currencies, particularly the US dollar, broader international FX conditions, and domestic economic considerations such as capital flows, growth momentum and financial stability objectives. The midpoint is not a purely mechanical calculation, allowing policymakers discretion to guide market expectations. Once the midpoint is announced, onshore USD/CNY is free to trade within the allowable band. If market pressures push the yuan toward either edge of that range, the central bank may step in to smooth volatility. Intervention can take the form of direct buying or selling of yuan, adjustments to liquidity conditions, or guidance through state-owned banks. As a result, the daily fixing is often interpreted as a policy signal rather than just a technical reference point. A stronger-than-expected CNY midpoint is typically read as a sign the PBOC is leaning against depreciation pressure, while a weaker fixing for the CNY can indicate tolerance for a softer currency, often in response to dollar strength or domestic economic headwinds.In periods of heightened global volatility, such as shifts in US rate expectations, trade tensions or capital flow pressures, the fixing takes on added significance. For investors, it provides insight into Beijing’s currency priorities, balancing competitiveness, capital stability and financial market confidence. This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight The upcoming USD/CNY reference rate fixing is a pivotal moment for traders, especially with the current volatility in global markets. China’s managed floating exchange rate system means that this rate can significantly influence market sentiment and trading strategies. If the PBOC sets a stronger yuan, it could signal confidence in the Chinese economy, potentially leading to a bullish trend in related assets like commodities and Asian equities. Conversely, a weaker fixing might exacerbate fears of economic slowdown, impacting risk appetite across the board. Traders should keep an eye on the 7.00 level for USD/CNY, as a breach could trigger further moves in both directions. Additionally, monitor how major players like institutions and retail traders react post-fixing, as their positioning could set the tone for the rest of the week. 📮 Takeaway Watch the USD/CNY reference rate closely; a fixing above 7.00 could spark significant market reactions, especially in commodities and Asian equities.

Fed’s Barr:I haven’t decided on what to do at June FOMC meetingTrying to determine what energy shock will do to inflation over timeWe are not in recession but there’s been little job creationImportant for banks to use discount window when they need itEarlier:Fed’s Barr warns shrinking balance sheet via liquidity cuts risks stability This article was written by Eamonn Sheridan at investinglive.com. 🔗 Source 💡 DMK Insight Fed’s Barr’s comments signal uncertainty ahead, and here’s why that matters: His indecision about the June FOMC meeting reflects broader economic concerns, particularly regarding inflation and job creation. With little job growth and potential energy shocks looming, traders should brace for volatility. The Fed’s approach to liquidity and balance sheet management could impact interest rates and market sentiment, especially in sectors sensitive to borrowing costs. If inflation remains stubborn, we might see a shift in monetary policy that could affect equities and bonds alike. Look for key indicators like energy prices and employment data leading up to the June meeting. If inflation metrics spike unexpectedly, it could force the Fed’s hand, leading to rapid market adjustments. Traders should keep an eye on the 10-year Treasury yield as a barometer for interest rate expectations, as any significant movement could ripple through the forex and crypto markets, influencing risk appetite across the board. 📮 Takeaway Watch for inflation data and energy prices leading up to the June FOMC meeting; unexpected spikes could trigger market volatility.