This is Hui Jie writing to you from Singapore. Welcome to another edition of Verum’s Daily Open.

During the American gold rush, those who sold picks and shovels to the miners made substantial profits.

The current AI boom also appears to be rewarding the tool providers. Nvidia, with its chips, is the company selling the picks and shovels to AI giants such as OpenAI and Anthropic.

The sales have been substantial. Nvidia reported results that exceeded expectations, while forecasting revenue to grow 70% in fiscal 2028.

But when shovels become prohibitively expensive, miners start forging their own. OpenAI has begun developing its own chips, making the company a potential competitor to Nvidia in some areas.

What you need to know today

Nvidia results beating market estimates is becoming a new normal. The company reported better-than-expected second-quarter results and issued a revenue forecast that topped estimates.

For the three months ended June, revenue more than doubled to $96.22 billion, and net income in the quarter also jumped over 100% to $53.95 billion, or $2.22 per share.

CFO Colette Kress said on a call with analysts that Nvidia expects fiscal 2028 revenue growth of 70%, far exceeding the 44% analysts were expecting.

There is, however, a growing threat to Nvidia, or at least to parts of its business, as AI makers are increasingly announcing their own custom chips.

OpenAI’s first AI chip, known as the Jalapeño, has “industry-leading speed and efficiency,” the company said on Tuesday. Major companies developing their own AI chips include Google, AWS and Meta.

OpenAI said Jalapeño delivered between 1.5 times and 1.9 times more AI work per watt than selected Nvidia systems across three publicly available models. It also reported lower latency in those tests.

Nvidia was not the only tech firm to post robust earnings. Salesforce shares surged more than 12% after the enterprise software company beat second-quarter estimates and raised its full-year outlook.

New iPhones on the way

Apple will hold its annual iPhone launch event on Sept. 9, its first under incoming CEO John Ternus.

Ternus, previously Apple’s hardware chief, takes over from Tim Cook on Sept. 1. Cook will remain at the company as executive chairman.

The event carries the tagline “Surprise and shine” and is expected to include new Pro iPhones, with speculation also centering on Apple’s long-awaited foldable device.

Inflation and Jackson Hole

Over in markets, the S&P 500 was relatively unchanged on Wednesday after U.S. headline inflation came in slightly higher than expected.

The personal consumption expenditures price index climbed 0.2% month on month and 3.7% year on year in July. Both were 0.1 percentage point above the Dow Jones consensus.

However, core inflation readings were in line with expectations, coming in at 3.3%. Both numbers are still well above the Fed’s 2% target.

The report comes as Fed officials will meet in Jackson Hole, Wyoming, on Thursday stateside.

While no decision is taken at the annual economic policy symposium, investors will be watching Fed Chair Kevin Warsh’s keynote speech after long-term borrowing costs hit a near-two-decade high last week and the Treasury intervened in the bond market.

Oil prices were also little changed after Iran’s Revolutionary Guard said Tehran had reached an agreement with Oman over the control of and revenue from the Strait of Hormuz.

Ships would enter the Persian Gulf through Iranian waters, and exit through a corridor that will include both Iranian and Omani territorial waters, Iran’s Deputy Foreign Minister Kazem Gharibabadi said, according to state news agency Tasnim.

— Lim Hui Jie

And finally…

Fed, NASA and DOJ among victims of Chinese state-sponsored hacker group: Court documents

The Federal Reserve, the U.S. Senate, the Department of Justice, NASA and other federal agencies were victims of computer intrusions by a Chinese state-sponsored hacking group, the DOJ said Wednesday morning as it announced the court-ordered seizure of internet domains used for hacking platforms.

The hacking platforms, known as “QScan” and “QTRouter,” were “used to target U.S. critical infrastructure and other sensitive networks,” the DOJ said in a statement.

“Other targeted networks include those operated by hospitals, telecommunications providers, power companies, financial institutions, and defense contractors,” a court filing said.

— Dan Mangan

Oil prices were little changed Wednesday after Iran’s hard-line Revolutionary Guard said Tehran has reached a deal with Oman to share control of the Strait of Hormuz.

Iran and Oman have agreed to share revenue generated from Hormuz, a Revolutionary Guard spokesman told the state news agency Tasnim. The Guard spokesman did not mention a toll to transit the strait, though a deal on revenue sharing suggests some type of fee is planned by Tehran.

Brent crude

Ships would enter the Persian Gulf through Iranian waters under the agreement, said Iran’s Deputy Foreign Minister Kazem Gharibabadi. They would exit through a joint corridor that crosses the territorial waters of Oman and Iran, Gharibabadi said, according to Tasnim.

It’s unclear whether the U.S. would sign off on Iran jointly managing Hormuz, said Helima Croft, head of global commodity strategy at RBC Capital Markets. And Gulf nations that have been attacked by Iran during the war are not going to pay Tehran to ship oil through the strait, Croft told CNBC.

Oil fell more than 3% earlier in the session as the U.S. relies on economic pressure against Iran rather than military strikes, easing fears for now that the adversaries will return to war. Prices are down more than 5% for the week.

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The Revolutionary Guard said the U.S. has tried to obstruct a deal between Iran and Oman. Washington must accept the agreement for Hormuz to reopen, the spokesman said.

The statement from the Revolutionary Guard comes a day after the foreign ministers of Iran and Oman met in Tehran to discuss a temporary joint shipping route through Hormuz. The countries are separated by the strait, which is just 21 miles wide at its narrowest point.

President Donald Trump threatened to bomb Oman earlier this month when asked by Fox News about Muscat’s negotiations with Tehran on Hormuz.

Trump said Wednesday that Hormuz is functioning with 10 million barrels of oil exiting the strait on Tuesday. “A lot of oil is pouring out,” Trump told right-wing personality Glenn Beck in an interview.

Trump has repeatedly claimed the U.S. controls Hormuz as the military helps ferry tankers through the strait along Oman’s coast. U.S. Central Command told CNBC last week that 660 million barrels of crude oil have exited Hormuz since May under military protection.

Consumer prices for a broad range of goods and services edged up in July, per the Federal Reserve’s key inflation metric. The personal consumption expenditures (PCE) price index, the Fed’s preferred tool for forecasting, rose 0.2% on a seasonally adjusted basis for the month, resulting in an annual inflation rate of 3.7%, as reported by the Commerce Department on Wednesday. Both figures exceeded the Dow Jones consensus by 0.1 percentage points. Excluding volatile food and energy components, the core PCE index increased 0.2% monthly and 3.3% annually, aligning with expectations. Federal Reserve policymakers view core inflation as a more reliable indicator of long-term trends. Additionally, the report indicated that personal income grew by 0.4% and spending rose by 0.2%, both surpassing estimates. Goods prices fell 0.1% over the month, primarily due to a 2.7% drop in gasoline and energy-related items, alongside a 0.9% decline in furnishings and durable household equipment. Conversely, services prices climbed 0.3%, fueled by a 1.2% rise in financial services and insurance, and a 0.3% increase in housing. Following the report, stock market futures slightly retreated while Treasury yields advanced. The data emerges as Fed officials assess their next policy steps, with inflation remaining above the central bank’s 2% target despite softer recent monthly trends. The Federal Open Market Committee is not scheduled to meet in August, providing a brief pause before their next session on September 15-16. Market odds suggest only a one-in-three chance of a rate adjustment then, with December seen as more likely for a potential hike. Concurrently, Fed officials are convening at the Jackson Hole symposium in Wyoming, featuring a policy address from Chairman Kevin Warsh on Friday. Since assuming office in May, Warsh has maintained a cautious stance on policy direction, allowing markets to influence expectations. Government bond yields have recently climbed, with 10- and 30-year Treasury yields reaching their highest points since 2007, prior to the global financial crisis. This uptick stems from multiple factors, including concerns about the Fed’s dedication to its inflation goal, as well as federal budget debt and deficit issues. Last week, Treasury Secretary Scott Bessent announced a plan to increase government debt buybacks, though market participants question its potential impact on yields.