China's Rare Lending Slump Feeds Worry on Slower Economic Growth
Instead of putting money to work, households and companies are paying down their debt as they take a more dim view of their prospects, threatening a self-fulfilling cycle of economic underperformance. The longest deflation streak since at least the 1990s is also suppressing demand for borrowing, contributing last month to a 430 billion-yuan ($60 billion) decline in loans to the real economy — the most on record going back to 2002.
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CNBC
13 minutes ago
- CNBC
OpenAI's Altman warns the U.S. is underestimating China's next-gen AI threat
OpenAI CEO Sam Altman warned that the U.S. may be underestimating the complexity and seriousness of China's progress in artificial intelligence, and said export controls alone likely aren't a reliable solution. "I'm worried about China," he said. Over Mediterranean tapas in San Francisco's Presidio — just five miles north of OpenAI's original office in the Mission — Altman offered a rare on-the-record briefing to a small group of reporters, including CNBC. He warned that the U.S.–China AI race is deeply entangled — and more consequential than a simple who's-ahead scoreboard. "There's inference capacity, where China probably can build faster. There's research, there's product; a lot of layers to the whole thing," he said. "I don't think it'll be as simple as: Is the U.S. or China ahead?" Despite escalating U.S. export controls on semiconductors, Altman is unconvinced that the policy is keeping up with technical reality. Asked whether it would be reassuring if fewer GPUs were reaching China, Altman was skeptical. "My instinct is that doesn't work," he said. "You can export-control one thing, but maybe not the right thing… maybe people build fabs or find other workarounds," he added, referring to semiconductor fabrication facilities, the specialized factories that produce the chips powering everything from smartphones to large-scale AI systems. "I'd love an easy solution," added Altman. "But my instinct is: That's hard." His comments come as Washington adjusts its policies designed to curb China's AI ambitions. The Biden administration initially tightened export controls, but in April, President Donald Trump went further — halting the supply of advanced chips altogether, including models previously designed to comply with Biden-era rules. Last week, however, the U.S. carved out an exception for certain "China-safe" chips, allowing sales to resume under a controversial and unprecedented agreement requiring Nvidia and AMD to give the federal government 15% of their China chip revenue. The result is a patchwork regime that may be easier to navigate than enforce. And while U.S. firms deepen their dependence on chips from Nvidia and AMD, Chinese companies are pushing ahead with alternatives from Huawei and other domestic suppliers — raising questions about whether cutting off supply is having the intended effect. China's AI progress has also influenced how OpenAI thinks about releasing its own models. While the company has long resisted calls to make its technology fully open source, Altman said competition from Chinese models — particularly open-source systems like DeepSeek — was a factor in OpenAI's recent decision to release its own open-weight models. "It was clear that if we didn't do it, the world was gonna head to be mostly built on Chinese open source models," Altman said. "That was a factor in our decision, for sure. Wasn't the only one, but that loomed large." Earlier this month, OpenAI released two open-weight language models — its first since GPT-2 in 2019 — marking a significant shift in strategy for the company that has long kept its technology gated behind application programming interfaces, or APIs. The new text-only models, called gpt-oss-120b and gpt-oss-20b, are designed as lower-cost options that developers, researchers, and companies can download, run locally, and customize. An AI model is considered open weight if its parameters — the values learned during training that determine how the model generates responses — are publicly available. While that offers transparency and control, it's not the same as open source. OpenAI is still not releasing its training data or full source code. With this release, OpenAI joins that wave and, for now, stands alone as the only major U.S. foundation model company actively leaning into a more open approach. While Meta had embraced openness with its Llama models, CEO Mark Zuckerberg suggested on the company's second-quarter earnings call it may pull back on that strategy going forward. OpenAI, meanwhile, is moving in the opposite direction, betting that broader accessibility will help grow its developer ecosystem and strengthen its position against Chinese rivals. Altman had previously acknowledged that OpenAI had been "on the wrong side of history" by locking up its models. Ultimately, OpenAI's move shows it wants to keep developers engaged and within its ecosystem. That push comes as Meta reconsiders its open-source stance and Chinese labs flood the market with models designed to be flexible and widely adopted. Still, the open-weight debut has drawn mixed reviews. Some developers have called the models underwhelming, noting that many of the capabilities that make OpenAI's commercial offerings so powerful were stripped out. Altman didn't dispute that, saying the team intentionally optimized for one core use case: locally-run coding agents. "If the kind of demand shifts in the world," he said, "you can push it to something else." Watch: OpenAI's enterprise bet pays off as startups in Silicon Valley switch to GPT-5
Forbes
13 minutes ago
- Forbes
Royalty And Streaming Giants Report Blockbuster Results
The latest wholesale inflation numbers in the U.S. took some of the wind out of Wall Street's sails last week, but they haven't dulled investor enthusiasm for gold. Even with a hotter-than-expected producer price index (PPI) reading in July, the yellow metal continues to trade near historic highs, and gold stocks, particularly royalty and streaming companies, are delivering record results. As I've often said, government policy is a precursor to change. The PPI, which measures prices producers receive for goods and services, jumped 0.9% in July from the previous month and 3.3% from a year earlier, the largest monthly increase in three years. The core PPI, which strips out volatile food, energy and trade services, advanced 2.8% compared to the same months last year. The biggest driver was services, which rose a full 1.1% last month. This could suggest that companies are passing along higher import costs related to tariffs, something Goldman Sachs recently projected could hit consumers' wallets in a big way by the fall. The PPI report rattled rate-cut expectations. For the record, traders still seem to anticipate the Federal Reserve will lower borrowing costs in September, but the odds of a 'jumbo' half-point cut have diminished. While the White House has been vocal in urging the Fed to 'go big,' central bankers may prefer to stick with smaller, sequential moves, especially with inflation proving sticky in some areas. If there's been one constant in 2025, it's gold's ability to attract buyers in an uncertain environment. Spot prices have been consolidating in the mid-$3,300s after hitting an all-time high of $3,500 an ounce in April and reaching $3,439 as recently as July 22. The metal's steady performance this summer has been fueled by a number of factors, including inflation concerns, a softer U.S. dollar, central bank demand and the expectation of lower interest rates. Gold also tends to shine brightest during periods of uncertainty, whether economic, political or geopolitical. This year, that list has been long: renewed tariff skirmishes, questions about the Fed's independence and elevated levels of global debt have all driven investors toward hard assets. According to the World Gold Council (WGC), gold-backed exchange-traded funds (ETFs) added $3.2 billion in July alone, raising total assets under management (AUM) to $386 billion, a month-end high. Global flows are now on pace for the second-strongest year on record, following 2020. As many of you know, we have long favored royalty and streaming companies, and their latest quarterly results only reinforce that view. These firms don't own or operate mines themselves. Instead, they provide upfront financing to miners in exchange for the right to purchase a portion of future production—either through royalties or streams—at a fixed, often heavily discounted, price. This model has several compelling advantages, including lower risk exposure. Royalty and streaming firms have no direct operating costs, meaning they're insulated from rising labor and fuel prices. Their portfolios often span multiple mines and jurisdictions, and they've also demonstrated strong cash flow. In short, we believe royalty and streaming companies offer a 'happy medium' between owning bullion and owning traditional mining equities. They capture much of the upside in a rising gold price environment while providing downside protection during pullbacks. The June quarter and first half of 2025 were nothing short of spectacular for the big names in the royalty and streaming space. Franco-Nevada reported record revenue of $369.4 million for the quarter, up 42% year-over-year. Operating cash flow surged 121% to a record $430.3 million, while net income more than doubled to $247.1 million. The company also posted record adjusted EBITDA margins. Wheaton Precious Metals likewise delivered all-time highs in the second quarter, generating $503 million in revenue and $415 million in operating cash flow. Net earnings came in at $292 million, and the company ended the quarter with $1 billion in cash, no debt and an undrawn $2 billion revolving credit facility. Triple Flag Precious Metals, a relative newcomer compared to its larger peers, posted record operating cash flow per share and announced its fourth consecutive annual 5% dividend increase since its IPO in 2021. Revenues have been growing steadily for the past seven quarters, hitting a new all-time high of $94 million in the June quarter, representing an increase of almost 50% compared to the same quarter in 2024. These results demonstrate why royalty and streaming companies have been gaining market share in investors' portfolios. They combine the potential for capital appreciation with consistent income, an attractive mix in a yield-starved world. Traditional gold miners are also benefiting from the metal's strength. UBS analysts recently upgraded their outlook on the sector, noting that after years of underperformance, miners are rebuilding investor trust through disciplined capital management. If gold prices remain steady, UBS sees the potential for increased stock buybacks, accelerated growth projects and more merger and acquisition (M&A) activity. Their top picks include Barrick Gold, Kinross Gold, AngloGold Ashanti, Endeavour Silver and Franco-Nevada. Returning to the inflation picture, Goldman Sachs has been clear that the tariff burden is shifting from businesses to consumers. Their models suggest that by the fall, about two-thirds of the cost of recent tariffs will be borne directly by U.S. households. This is already showing up in the PPI's services component and could feed into consumer prices later this year. For investors, this creates a tricky environment. On the one hand, higher inflation readings could prompt the Fed to slow the pace of rate cuts, which might limit gold's upside in the near term. But on the other hand, persistent inflation—and the potential for policy missteps—reinforces gold's role as a hedge. History shows that gold has often performed well in periods of negative real interest rates, when inflation outpaced nominal yields. If tariffs and other factors keep inflation elevated while the Fed is easing, we could see that dynamic play out again. Strong central bank demand, steady ETF inflows and robust free cash flow generation from royalty and streaming companies all point to continued strength in the gold space. For investors looking to participate in this trend, we believe these companies offer an attractive balance of growth potential, income and risk management. Curious about investment opportunities in gold royalty and streaming companies? Email us at info@ with the subject line ROYALTY.
Forbes
13 minutes ago
- Forbes
Governance And AI: Are Boards Keeping Up?
In the past six months it seems that more and more boards are getting up to speed on governing artificial intelligence (AI)—but there's still work to be done. That's according to the second edition of Governance of AI: A critical imperative for today's boards—which found a marked improvement in terms of board preparedness, with only 31% of responding organizations saying they're not ready to deploy AI versus 41% last October. While there was also improvement in AI being on board agendas, nearly a third of respondents think their boards are not spending enough time on the topic. This could be due to companies moving at the pace of organizational change, rather than the pace of the technology itself. Boards should consider accelerating how they embed AI into their agendas if they want to more effectively oversee their organizations through their AI adoption journey. Taking an active role in AI In a rapidly evolving digital landscape proactive board engagement on AI will likely be increasingly important. Nearly 40% of respondents in the latest boardroom survey are now experimenting with AI—up from about one-third in the previous survey. But more than 50% of respondents still feel like their organizations' pace of AI adoption should be accelerated. As the board oversees and challenges management to identify when and how the strategy may need to be adapted in response to risks and opportunities, they should also understand how risks are identified and what monitoring and reporting processes are in place to facilitate oversight. But any steps boards take as organizations accelerate the pace of AI implementation should have one underlying factor in common: strong communication between the board and management. By interacting with executive leaders in key parts of the organization, boards can help connect direction and strategy with actions and outcomes. The good news is boards seem to be in good shape here. AI-related interactions between boards and management are strong: only 8% of respondents said their boards do not engage with management on AI at all—down 5 percentage points from last year's survey. But to communicate effectively, board members may need to up their AI IQ. According to the latest survey, two-thirds of board members and executives still have limited-to-no knowledge or experience with AI. And though roughly half of the leaders surveyed said their organizations provide foundational AI education to their boards—an overall improvement; it still means the other half are not. For an organization actively pursuing AI implementation, there may need to be a greater focus on board fluency. Board members should be experimenting with AI models as well as staying educated on the latest developments in regulation and public policy to provide effective oversight. While it's important for boards to develop their own AI fluency without relying solely on outside knowledge, bringing in external perspectives can be valuable. Boards may benefit from adding members with more AI experience or inviting specialists to participate in focused sessions that help deepen understanding. Outside voices can help boards figure out what's possible with AI, frame effective governance questions, and develop a clear view of organizational risks. It can also help boards thoughtfully consider broader impacts, such as the safe and responsible development of AI, how AI augments the workforce, and the organization's role in society. A broad approach to AI education is important to help boards grasp AI's strategic importance and make informed decisions to help drive performance and resilience. Forging ahead AI is giving boards a lot to think about—and act on. Accelerating the pace, keeping communication channels open, and getting educated are all critical steps. By embracing these actions and leveraging a clear strategic roadmap, boards can help their organizations lead in the age of AI and other emerging technologies. To read more about AI governance and the role of boards, check out the second edition of Governance of AI: A critical imperative for today's boards from the Deloitte Global Boardroom Program as well as Strategic governance of AI: A roadmap for the future from Deloitte LLP.
