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    The inevitable politics of ending quantitative tightening

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    Supreme Court questions emergency Trump tariffs

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    In defence of COP

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    Op-ed: The fuel for the AI boom driving the markets is advertising. It is also an existential risk.

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    Sam Altman, chief executive officer of OpenAI Inc., during a media tour of the Stargate AI data center in Abilene, Texas, US, on Tuesday, Sept. 23, 2025.
    Kyle Grillot | Bloomberg | Getty Images

    With OpenAI’s recent release of its AI browser, the historic level of capital expenditures being made in the current AI arms race may accelerate even further, if that is possible.
    From the reciprocal, and some have said circular, nature of hundreds of billions in commitments in investment, tied to future chip purchases, to the extent to which GDP growth is reliant on this boom, some have said this is a bubble. A Harvard economist estimates 92% of US GDP growth in the first half of 2025 was due to investment in AI.

    But much more needs to be understood about the connection between the breakneck investment in AI and the business models that underpins the entire economy: the advertising technology (Ad Tech) industrial complex.For the past 25 years the infrastructure of the internet has been engineered to extract advertising revenue. Search Engine Marketing, the advertising business model at the core of Google, is perhaps the greatest business model of all time. Meta’s advertising business, based on engagement and attribution, is a close second. And right behind both of these is Amazon’s advertising business, powered by its position as the largest online retailer. While a smaller portion of Amazon’s topline, its highly profitable advertising business makes up a disproportionate percentage of Amazon’s profits. So much so that nearly every major retailer has spun up their own version of retail media networks, all driving significantly to the bottom lines and market capitalization of massive companies like Walmart, Kroger, Uber (and UberEats), Doordash and many more.In fact, these platforms have been using AI to refine their advertising business models for years, in the form of algorithmic models that powered their search and recommendation engines, and to increase engagement and better predict purchase decision, seeking an ever-greater share of all commerce, not just what is typically thought of as “advertising.” These three multi-trillion-dollar market cap companies eitherwholly, or substantially, derive their profits from advertising. And now they are using some portion of those historically profitable advertising revenues to fuel infrastructure investments at a level the world has not seen outside of War Time spending by governments.
    But at the same time, the latest wave of AI has the potential to disrupt the very same trillions in market cap that is fueling it. AI will, without question, change how people search (Google), shop (Amazon) and are entertained (Meta). Answers delivered without clicking around the web. AI-assisted shopping. Infinite personalized content creation.
    If AI represents such a potential existential risk, why are Google, Meta and Amazon such a huge part of the current arms race to invest in AI? The “moonshot” outcome of would be that achieving Artificial General Intelligence, or Super Intelligence, AI that can do anything a human can, but better, would unlock so much value that it would dwarf any investment.
    But there is more immediate urgency to protect, or disrupt, the advertising business model fueling the trillions in market cap and hundreds of billions of current investment, before someone else does. While the seminal paper that launched this phase of AI, “Attention is All You Need” was written by mostly Google researchers, it was OpenAI and Microsoft, and now Grok as well, that launched the current AI arms race. And they are not remotely as dependent on the current advertising industrial complex. In fact,Sam Altman has called the feeds of the major platforms using AI to maximize advertising dollars, “the first at-scale misaligned AIs.” He is clearly stating which businesses he believes OpenAI is trying to disrupt.

    What comes next?

    This time is different, but it also comes with different risks. The major difference with the current fever in infrastructure investment vs the dotcom bubble of 2000, is that in large part the companies funding it are among the most profitable companies in the world. And so far, there has not been indications of cracks in the business model of advertising that is both funding their investments, and their market capitalizations (along with so many massive companies people wouldn’t think about being in the advertising business).

    But if AI does disrupt, or even break, the current advertising model, the shock to the economy and markets would be far greater than most could imagine.
    Google, Meta and Amazon are still best positioned to create new business models, and as mentioned, have been using AI for far longer to support their advertising business models with great success.
    However, fundamentally changing the way people interface with search, commerce and content online will require just that, entirely new revenue models, maybe, hopefully, some that are aligned, that are not advertising based. But whatever the model, perhaps it is helpful to consider that the justification in AIinfrastructure spending may not be to just unlock new revenue, but to protect the business models that make up a much more significant portion of the market capitalization of public companies than most people are aware. More

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    Private payrolls rose 42,000 in October, more than expected and countering labor market fears, ADP says

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    Private companies added 42,000 jobs in October, following a decline of 29,000 in September and topping the Dow Jones consensus estimate for a gain of 22,000.
    All of the job creation came from companies employing at least 250 workers. That category added 76,000 jobs, while smaller businesses lost 34,000.
    The ADP count comes out the first Wednesday of the month and usually takes a back seat to the official nonfarm payrolls report, which won’t be released because of the government shutdown.

    A jobseeker speaks with a recruiter during a NYS Department Of Labor job fair at the Downtown Central Library in Buffalo, New York, US, on Wednesday, Aug. 27, 2025.
    Lauren Petracca | Bloomberg | Getty Images

    Payroll growth at private companies turned slightly stronger than expected in October, providing some hope that the labor market isn’t in danger of sinking, ADP reported Wednesday.
    Companies added 42,000 jobs for the month, following a decline of 29,000 in September and topping the Dow Jones consensus estimate for a gain of 22,000. A revision for September showed 3,000 fewer jobs lost, the payrolls processing firm said.

    A gain of 47,000 in the trade, transportation and utilities grouping helped offset losses in multiple other categories. Education and health services also showed growth of 26,000 while financial activities added 11,000.
    Despite the artificial intelligence-fueled tech boom, information services saw a decline of 17,000 positions. Other sectors posting losses included professional and business services (-15,000), other services (-13,000) and manufacturing (-3,000), a sector that continues to struggle despite President Donald Trump’s tariffs aimed at bringing factory jobs back to the U.S.
    All of the job creation came from companies employing at least 250 workers. That category added 76,000 jobs, while smaller businesses lost 34,000.
    Despite the meager job growth, salaries continued to rise. Year-over-year pay for those staying in their jobs rose 4.5%, the same as in September, while job switchers saw a 6.7% increase, up slightly from a month ago.
    “Private employers added jobs in October for the first time since July, but hiring was modest relative towhat we reported earlier this year,” said ADP chief economist Nela Richardson. “Meanwhile, pay growth has been largely flat for more than a year, indicating that shifts in supply and demand are balanced.”

    By ADP’s count, job growth has averaged about 60,000 a month. However, that has tailed off significantly in the second half of the year.
    The ADP count comes out the first Wednesday of the month and usually takes a back seat to the Bureau of Labor Statistics’ official nonfarm payrolls report released two days later. However, because of the history-making government shutdown, the BLS, like all other government agencies, has suspended data collection and releases.
    Had the BLS report been released, Wall Street was looking for it to show a drop of 60,000 jobs and a rise in the unemployment rate to 4.5%.
    Federal Reserve officials have expressed concern over the state of the labor market, saying it has overtaken for now the central bank’s attention toward inflation running above the 2% target. The Fed at its meeting last week approved a quarter percentage point reduction in its key interest rate, which now is targeted between 3.75%-4%.
    Though the BLS has gone dark, officials will get a look at other data this week.
    Challenger, Gray & Christmas on Thursday releases its monthly look at announced layoffs, while economists will watch state-level jobless claims for a look at whether companies are shrinking payrolls. The University of Michigan on Friday also will release its monthly sentiment index which provides snapshots of how consumers feel about broader economic conditions. Recent data from jobs site indeed show employment postings at their lowest since February 2021. More