Stefan Rust

The richest company on Earth just watched its rivals light $650 billion on fire. And did nothing. This might be the most brilliant move in corporate history. Amazon is spending $200 billion this year on AI data centers. - Google, $185 billion. - Microsoft, $114 billion. - Meta, $135 billion. - Combined: $650 billion. Apple's budget is $14 billion down 19% from last year. Apple is refusing to enter a race that might not have a finish line. The hyperscalers are now spending 94% of their operating cash flows on AI infrastructure. After dividends and buybacks, there is almost nothing left. Amazon is projected to go negative on free cash flow this year as much as $28 billion in the red.​ Alphabet's free cash flow is expected to collapse 90%. From $73 billion to $8 billion.​ These companies used to be the greatest cash machines ever built. Now they're borrowing money to keep the lights on. The Big Five raised $121 billion in bonds in 2025 alone.​ Morgan Stanley projects $1.5 trillion in tech debt over the coming years.​ For the first time in history, hyperscalers hold more debt than cash and what are they getting for that $650 billion? AI services generate roughly $35 billion in total revenue and that's 5% of what's being spent on infrastructure.​ Now here is where Apple's bet gets genius. AI models are commoditizing faster than anyone predicted.​ DeepSeek built a model for $6 million that matches systems costing $100 million.​ Open source models now power 80% of startups seeking VC funding.​ The moat these companies are spending hundreds of billions to build is evaporating in real time. Apple understood this before anyone else. It didn't build its own AI model, it licensed Google's Gemini for about $1 billion a year.​ Why spend $100 billion building a factory when the product costs a billion to rent? And if a better model appears next year, Apple just switches vendors.​ But Apple is not sitting still. It just dropped the M5 chip with a 16 core Neural Engine and Neural Accelerators built into every GPU core.​ It runs 70 billion parameter AI models locally, on your phone. The M5 delivers 4x the AI performance of the M4 and Apple doesn't need $200 billion in data centers. Because Apple turned 2 billion devices into the data center.​ Every iPhone, Mac, iPad gets distributed AI at a scale no server farm can match. While its rivals burn cash, Apple is doing the opposite. $90.7 billion in stock buybacks last fiscal year.​ Its competitors? Combined buybacks collapsed 74% from their peak.​ Apple didn't miss the AI revolution. It just bet that the winners won't be the ones who build the infrastructure. They'll be the ones who own the customer and no one on Earth owns more customers than Apple.

US inflation today and the tariff effect, according to real-time price data: US CPI: 0.94% US Goods inflation: 1.14% US Services inflation: 0.84% Our data suggest that goods prices began rising shortly after the tariff announcement in April 2025 and continued to increase gradually before easing from December 2025 onward. The diminishing difference between goods and services inflation suggests the effect of 2025 tariffs has now been completely priced in. We estimated that the pass-through effect on goods prices contributed to a cumulative 0.8% increase in Truflation CPI by November 2025. In the absence of tariffs, the November CPI would have been closer to 1.5%. If anything, 2025 tariffs might have temporarily deferred deflation. The overall tariff-related inflation in our price data was relatively modest compared to the announced tariff rates, indicating limited pass-through to consumers, with the bulk of the burden absorbed by foreign producers and importers.