Key Takeaways
- OpenAI is making a massive investment, potentially hundreds of billions of dollars, in Broadcom (AVGO) chips and other vendors to build out its AI infrastructure, aiming for 250 gigawatts of compute power.
- China has vowed retaliation if President Trump implements a 100% tariff on Chinese goods, escalating trade tensions fueled by China's rare earth export restrictions.
- Rio Tinto (RIO) reported Q3 2025 iron ore shipments of 84.3 million tons, slightly below estimates, and copper output of 204,000 tons, while reaffirming its FY25 cost guidance.
- New Zealand's card spending declined in September, with total spending down 0.4% and retail spending falling 0.5% month-over-month, reflecting a modest economic trend.
- Armenia and Iran are actively strengthening their "strategic" diplomatic and economic ties, with plans for increased trade and infrastructure projects.
AI Infrastructure Sees Multi-Billion Dollar Boost from OpenAI
OpenAI is embarking on an ambitious expansion of its artificial intelligence (AI) infrastructure, with plans to invest tens of billions of dollars in Broadcom (AVGO) chips. This collaboration involves OpenAI designing custom AI accelerators and systems, with Broadcom handling their development and deployment. The deal could potentially cost OpenAI between $350 billion and $500 billion for chip capacity, bringing its total chip capacity plans to over 26 gigawatts. OpenAI CEO Sam Altman has described this AI infrastructure push as "the biggest joint industrial project in human history."
This significant investment follows earlier agreements with other major chipmakers. OpenAI previously committed to a 10-gigawatt order from Nvidia (NVDA), which also includes a $100 billion equity investment, and a 6-gigawatt deal with AMD (AMD), valued at tens of billions of dollars with a potential 10% stake in AMD. The deployment of these new custom chips and systems is expected to commence in the second half of 2026 and be fully rolled out by the end of 2029. These strategic partnerships aim to reduce OpenAI's reliance on external suppliers like Nvidia and meet the surging demand for AI computing power. OpenAI CEO Sam Altman has expressed an aspiration to build out 250 gigawatts of compute power over the next eight years, a substantial increase from the estimated 2 gigawatts by the end of this year.
Trade Tensions Escalate as China Warns Against Trump's Tariff Threat
Global trade tensions are poised for a significant escalation as China has issued a stern warning of retaliation if President Trump proceeds with his threat to impose a 100% tariff on Chinese goods. President Trump announced plans for these additional tariffs, alongside export controls on critical software, to take effect from November 1, 2025. This move is presented as a response to China's recent restrictions on the export of rare earth elements, critical materials essential for various high-tech and defense industries.
China's Commerce Ministry has stated unequivocally that it "will not back down" and, while not seeking a tariff war, is "not afraid of one." This confrontational stance from both sides threatens to derail any potential meeting between President Trump and Chinese leader Xi Jinping. The global financial markets have already reacted sharply to the announcement, reflecting investor concerns over a renewed trade conflict. China currently controls approximately 90% of the world's rare earth processing, giving it significant leverage in this dispute.
Rio Tinto Reports Q3 2025 Production Figures
Rio Tinto (RIO) released its Q3 2025 production update, showing slightly lower-than-estimated iron ore shipments. Pilbara iron ore shipments reached 84.3 million tons, compared to an estimated 85.2 million tons. Iron ore output from the Pilbara region stood at 84.1 million tons. The company's copper output for the quarter was 204,000 tons.
Despite these figures, Rio Tinto has maintained its full-year 2025 cost guidance. The company still projects its Copper C1 unit costs to be between $1.10 and $1.30 per pound, and Pilbara unit costs at $23.00.
New Zealand Sees Decline in September Card Spending
New Zealand's card spending experienced a decrease in September, indicating a modest trend in consumer activity. Total card spending fell by 0.4% from the previous month, while retail card spending saw a 0.5% decline, following a 0.7% drop in the prior month. On a quarterly basis, electronic card spending for the September quarter decreased by 0.7%, equivalent to $135 million, compared to the June quarter. Core retail spending, excluding fuel and vehicles, also saw a 0.5% reduction, or $91 million, over the same period. The total electronic card expenditure in September amounted to $8.6 billion.
Armenia and Iran Strengthen Strategic Ties
Armenia is actively working to enhance and broaden its diplomatic and economic ties with Tehran, with the Armenian envoy confirming the strategic nature of these relations. Both nations have expressed a commitment to increasing trade turnover and fostering active cooperation across various sectors, including economy, infrastructure, energy, healthcare, culture, and environment. Discussions have also included plans for the construction of a second bridge on their shared border. Armenia views its geographical position as a unique bridge between Iran and the Eurasian Economic Union.
In related news, an Iranian official has indicated that the necessary conditions are now in place for Iranian refugees to return or enter Iran. This comes as Iran is also pursuing plans to identify and facilitate the return of illegal Afghan migrants, citing concerns over the strain on its economic, social, and healthcare infrastructure due to a surge in migrants. Iran has stated it would reconsider its immigration policies if the international community fails to adequately share the burden of hosting refugees.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.