Key Takeaways
- China's cyberspace regulator has summoned Nvidia (NVDA) over potential security concerns regarding its H20 AI chip, raising questions about the future of AI chip sales in the crucial Chinese market.
- OpenAI is expanding its "Stargate" project to Europe with a new, renewable-powered data center in Narvik, Norway, aiming to deliver 100,000 Nvidia GPUs by late 2026.
- BMW (BMWG) reported a decline in Q2 profitability due to lower sales in China and the impact of U.S. tariffs, despite a slight overall increase in vehicle deliveries.
- Sanofi (SNY) reported lower-than-expected Q2 profit, impacted by increased spending on new treatment development, even as sales exceeded estimates.
- The recently signed EU-U.S. trade deal initially weakened the euro (EUR) against the dollar (USD), though strategists suggest this may not be a lasting trend.
Major developments across the technology, automotive, and financial sectors are shaping global markets. Nvidia (NVDA) faces scrutiny in China, while OpenAI expands its European footprint. Meanwhile, European giants BMW (BMWG) and Sanofi (SNY) released their second-quarter earnings, and a new EU-U.S. trade deal is impacting currency markets.
Nvidia Faces Chinese Cybersecurity Scrutiny
China's Cyberspace Administration of China (CAC) has summoned Nvidia (NVDA) to address potential security concerns related to its H20 AI chip, which was specifically developed for the Chinese market. The CAC's concerns reportedly include potential backdoor functionalities, such as tracking, positioning, and remote shutdown capabilities, which were identified by U.S. cybersecurity experts. This move highlights escalating tensions between the U.S. and China over semiconductor technology and could impact Nvidia's sales in the region. The H20 chip was designed to circumvent previous U.S. export controls, and its sales to China have drawn bipartisan criticism in the U.S. for potentially undermining American technological leadership.
OpenAI Launches "Stargate Norway" in European Expansion
OpenAI is making a significant push into Europe with the launch of "Stargate Norway," its first AI data center initiative on the continent. This project, part of OpenAI's "OpenAI for Countries" program, aims to deliver 100,000 Nvidia (NVDA) GPUs by the end of 2026, with plans for further expansion. The facility, located in Narvik, Northern Norway, will be powered entirely by renewable energy, leveraging the region's abundant hydropower, low-cost energy, and cool climate. Stargate Norway is a joint venture between Nscale and Aker, with OpenAI as an initial offtaker.
BMW's Q2 Profitability Dips Amid China Sales and Tariffs
BMW (BMWG) reported a decline in its second-quarter profitability, primarily attributed to lower sales in China and additional costs stemming from the U.S. trade war. Group revenue for Q2 2025 came in at €33.93 billion, below the estimated €36.01 billion. Despite this, the automaker saw a slight 0.4% increase in overall vehicle deliveries in Q2, with stronger sales in Europe and the U.S. offsetting a 13.7% drop in China. The company's Automotive EBIT Margin was 5.4%, slightly exceeding the estimated 5.06%, and BMW still anticipates a full-year Automotive EBIT Margin of 5%–7%.
Sanofi's Q2 Profit Misses Estimates on R&D Spending
French pharmaceutical company Sanofi (SNY) reported lower-than-expected profit for the second quarter of 2025, as increased spending on developing new treatments weighed on its bottom line. Business EPS was €1.59, falling short of the estimated €1.67. However, sales for the quarter reached €9.99 billion, surpassing the estimated €9.78 billion, with sales at constant exchange rates growing by 10.1%. Research and Development (R&D) expenses were €1.91 billion, slightly above the estimated €1.87 billion.
EU-U.S. Trade Deal Impacts Euro Strength
The recently concluded EU-U.S. trade deal initially led to a weakening of the euro (EUR) against the U.S. dollar (USD). The euro dropped by 0.7% on Monday, with one euro buying $1.1648. While the agreement aims to de-escalate transatlantic trade tensions, some strategists suggest that the dollar's strength may be short-lived. The deal includes a 15% tariff on most U.S. goods imports from the EU and commitments for the EU to purchase $750 billion in U.S. energy and invest $600 billion in the U.S. by 2028.
Other Corporate and Financial Updates
Italian lender Mediobanca reported higher profits after setting aside less money for souring loans. The bank is actively seeking to fend off an unwanted takeover bid from rival Banca Monte dei Paschi di Siena. Mediobanca's proposed acquisition of Banca Generali is seen as a strategic defense against this hostile bid.
Schneider Electric (SU) reported strong second-quarter 2025 earnings, with organic revenue growth of 8.3%, reaching €10.01 billion, slightly above estimates. The company reaffirmed its full-year organic revenue growth target of +7% to +10% and an adjusted EBITA margin of 18.7% to 19%.
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.