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Moody's said AI spending is forcing even the world's most cash-rich corporations to lean heavily on debt, stock sales and off-balance-sheet moves. View More

In this articleGOOGLMSFTORCLCRWVMETAAMZNFollow your favorite stocksCREATE FREE ACCOUNT Magnificent 7 tech stocks on display at the Nasdaq.Adam Jeffery | CNBC The race to build artificial intelligence infrastructure at a trillion-dollar annual clip is eroding the free cash flow and increasing balance-sheet risk at so-called hyperscalers, warned Moody's Ratings.In a research note released this week, Moody's said that the spending surge is forcing even the world's most cash-rich corporations like Alphabet and Microsoft to lean heavily on debt, stock sales and off-balance-sheet moves to fund their AI ambitions."Previously, these companies relied on asset-light structures centered on software, intellectual property, and scalable cloud services that required modest capital investment," Moody's said in the Wednesday note. "The transition from asset-light to asset-heavy models requires unprecedented levels of investment and capital raising."The moves "threaten credit quality" for the six companies tracked by Moody's, which include Microsoft, Amazon, Alphabet, Meta, Oracle and CoreWeave, according to the report.The ratings firm projects that capital expenditures — or capex, which are investment for physical assets like data centers — will hit $785 billion in 2026 before reaching about $1 trillion next year.The shift breaks a decades-long Silicon Valley formula that created the world's most valuable companies. Software costs little to replicate, yielding fat profit margins and fortress balance sheets. Generative AI, by contrast, demands a vast physical footprint: warehouses crammed with expensive and energy-hungry servers and chips.To finance the expansion, tech giants are increasingly turning to Wall Street, resulting in booming profits for the financial industry. Direct debt across the six hyperscalers has reached approximately $460 billion, according to Moody's. Tech companies are also tapping public markets for cash, including Google-parent Alphabet, which last month announced an $85 billion equity sale. Leasing data centers The ratings firm noted that because AI hardware and infrastructure require massive up-front investment while revenue materializes over a longer time horizon, free cash flow across the sector is coming under pressure.To keep direct debt off their balance sheets, hyperscalers are leaning on off-balance-sheet financing, mostly through long-term data center leases, the report explained. Moody's said that lease commitments across the group have ballooned to $1.2 trillion. More than $820 billion of that total is from leases that haven't started yet, meaning the data centers are still being built.While these obligations don't show up as traditional debt, Moody's says it considers them as debt-equivalent liabilities that will bind companies to significant rent payments down the line.Despite the warning, Moody's noted that Microsoft, Alphabet, Amazon and Meta retain among the strongest corporate balance sheets in the world, making it unlikely that their investment grade ratings are under imminent threat.The immediate pressure is concentrated on lower-rated entities like Oracle and specialized AI cloud provider CoreWeave. Oracle carries a rating of Baa2 with a negative outlook, placing it just two notches above junk status.Meanwhile, CoreWeave operates within the high-yield market with a Ba3 rating, relying on complex private debt structures to finance its GPU hardware fleets. Circular ecosystem Moody's also pointed to structural circularity within the AI boom. Some of the multibillion-dollar backlogs reported by hyperscalers stem from strategic deals with pre-IPO artificial intelligence labs including OpenAI and Anthropic, Moody's noted.The firms have invested billions into AI labs that, in turn, spend heavily on cloud computing from those same companies, creating what Moody's described as a circular AI ecosystem.The overlapping relationships heighten risks because many of the industry's biggest companies are increasingly dependent on the same AI customers and the same assumptions about future demand, Moody's said. Even so, the tech giants have significant strengths that help offset those risks.Demand for AI computing remains robust, cloud businesses continue to grow and hyperscalers have signed hundreds of billions of dollars in long-term customer contracts that should provide predictable revenue. Those deals support the industry's largely-strong credit profiles, even amid the spending boom. Still, investors should recognize that the tech industry's financial profile is undergoing a structural change unlike anything seen in the cloud era, according to Moody's."Investors will increasingly focus on these companies' ability to realize an adequate return on investment," the ratings firm said. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Tesla shares plunged almost 18% this week after the company missed on earnings and turned cash flow negative. View More

In this articleSPCXTSLAFollow your favorite stocksCREATE FREE ACCOUNT SpaceX founder Elon Musk addresses members of the media during a press conference announcing new developments of the Crew Dragon reusable spacecraft, at SpaceX headquarters in Hawthorne, California, Oct. 10, 2019.Philip Pacheco | Afp | Getty Images It was a rough week for Elon Musk.Tesla shares plunged 18% during the week to close at $313.03 on Friday, their worst weekly slump since 2022. And SpaceX's stock continued its downward slide, dropping 7.2% over five days to close at $115.07 Friday, its lowest since the company's record initial public offering last month.The declines in both stocks wiped away about $130 billion of Musk's wealth, weeks after he'd become the world's first trillionaire. In a post on X on Friday, Musk wrote, "(Former) trillionaire."Tesla's slump was spurred by weaker-than-expected earnings when the electric vehicle maker reported second-quarter results late Wednesday. The company turned cash flow negative due to a surge in spending on futuristic projects like robotaxis, humanoid robots and a giant chip fab. "We expect this to pressure free cash flow and delay earnings growth, without providing any near-term shareholder return," wrote analysts at Argus Research, which has a hold rating on the stock, in a report on Friday. "We believe it will be nearly impossible for Tesla to generate any consistency in profit growth in the near-term."Tesla's stock is now down 30% for the year, by far the worst performer among tech's mega-caps. Read more CNBC tech newsMoonshot AI accessed Nvidia's chips despite Chinese export ban, White House official saysAlphabet and Tesla test Wall Street's patience as AI spending overshadows growthAlphabet earnings takeaways: Q2 revenue beats, GOOGL stock sinks on 2026 capex hikeTesla misses on earnings, as free cash flow turns negative and margins slide Meanwhile, SpaceX's stock has been on a steady downward trajectory over the past month following an initial pop when the company went public. The shares have dropped for four of the past five weeks and are about 43% off their peak close on June 16. On Friday evening, SpaceX will again attempt the 13th test flight of Starship, the largest rocket ever built or flown. The company plans to fly the new version of the rocket, Starship V3, from its company town and launch facility in Starbase, Texas. The rocket is designed to be fully reusable and is considered crucial for SpaceX's near-term aims to vastly grow its Starlink satellite network.In a post on X, which is owned by SpaceX, the company said it delayed the test flight planned for Thursday "due to weather." SpaceX previously scrubbed a test flight last week, after the rocket's booster triggered a hold, which "shut down the engines right as they were starting to ignite," a SpaceX employee said during a livestream of the event.A successful launch of Starship V3, an upgraded version of its roughly 400-foot-tall rocket, would be the first since the company's IPO.SpaceX plans to use Starship to bring U.S. astronauts back to the Moon's surface, and Musk wants the rocket to eventually power manned missions to Mars.Musk made a public appearance this week, sitting down for what turned out to be a contentious interview with The Economist.Zanny Minton Beddoes, editor-in-chief of the publication, asked Musk about his support for "not just the populist right, but the far right, in fact very fringe parties in some countries."In addition to his financial and vocal support for President Donald Trump, including his work for the second administration, Musk has endorsed Germany's AfD, an extreme anti-immigrant party, as well as the U.K.'s Restore Britain, founded by Rupert Lowe, who also calls to "reverse mass migration." "It's just normal people!" Musk said in response. He berated Beddoes and "the traditional media" for an "absurd characterization of the far right." WATCH: SpaceX learning as much as it can about newest rocket watch nowVIDEO3:2903:29SpaceX is learning as much as it can about rocket updates in test launch: Former SpaceX engineerSquawk on the Street Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Many types of consumer loans such as mortgages peg their interest rate to the yield on 10-year Treasury bonds, which has been moving higher. View More

In this articleUS10Y@LCO.1Follow your favorite stocksCREATE FREE ACCOUNT Asia-pacific Images Studio | E+ | Getty Images The Federal Reserve sets national interest rate policy. But the U.S. central bank isn't the only major player in this arena: Bond investors also have a big influence on consumers' borrowing costs.Many types of consumer loans — such as mortgages and auto loans — often peg their interest rates to 10-year U.S. Treasury bonds. That means their rates move higher when 10-year Treasury yields increase, and vice versa. Those bond yields have increased steadily over the past several months. The 10-year Treasury yield was about 4.7% as of market close on Thursday, its highest level since January 2025. watch nowVIDEO2:3902:39U.S. mortgage rates hit one-year highFast Money The rates on 30-year fixed mortgages on Thursday — about 6.6% — rose to their highest since August 2025, according to weekly data posted by Freddie Mac. Those on 15-year fixed-rate mortgages increased to about 6% this week, the highest since June 2025, Freddie Mac said. Those price pressures come amid others for households, economists said. Average gasoline prices topped $4 a gallon again this week amid renewed tensions in the Iran war, according to data from the Energy Information Administration. The Trump administration also imposed a slew of new tariffs on dozens of countries on Friday. These import taxes raise costs for consumers and businesses, according to economists. Read more CNBC personal finance coverageTrump Accounts: Who is eligible, how $1,000 deposits work and how to open oneStudent loan borrowers on new RAP plan can lose key benefits if they pay lateAI can make you 'boring' at work, professor says: How to avoid the pitfallsAARP to Congress: 'We strongly object to fast-tracking Social Security changes'CNBC's Financial Advisor 100: Best financial advisors, top firms rankedCNBC Elite Advisors: Top ultra-high net worth wealth management firms for 2026 Inflation across the U.S. economy has also been above policymakers' target for more than five years, and the financial cushion provided by relatively high tax refunds this spring appears to have waned, economists said. The rise in Treasury yields is "just another drag for households when you've got affordability hits elsewhere," said Thomas Ryan, a North America economist at Capital Economics. "And we don't see much relief in terms of the borrowing cost side of things," he said. Why have Treasury yields increased? The Fed sets an interest-rate benchmark known as the federal funds rate. That benchmark has a direct impact on shorter-term interest rates, like those for credit cards and other variable-rate loans, said Chad NeSmith, a certified financial planner and director of investments at Tobias Financial Advisors, based in Plantation, Florida.But bond investors tend to have a much greater influence over the movement of 10-year Treasury yields and those of other longer-term bonds. More specifically, it's investors' expectations for future inflation and the trajectory of Fed interest rate policy that guide bond yields up or down, experts said. For example, if bond investors expect inflation to move higher, they will demand a higher yield on longer-term Treasury bonds to compensate for the risk of inflation eroding their future returns, experts said. "It's investors pricing their own reality, and that has a big knock-on effect on consumers in terms of what [rates] they can borrow at," Ryan said. watch nowVIDEO2:3902:39Can the stock market sustain rising U.S. Treasury yields?The Exchange In this case, many factors are feeding into investor anxieties about inflation, such as oil prices, which jumped sharply in July as tensions in the Middle East have ratcheted upward. Sustained high oil prices can filter through to prices across the U.S. economy, for things like airline tickets, transportation and goods, NeSmith said.Capital Economics expects the Fed to raise interest rates three times this year, not necessarily in response to high oil prices but more so "a broader view that inflation looks hot," Ryan said. Homeownership likely the biggest impact Consumers will largely feel the impact of higher Treasury yields in their ability to buy or sell a home, NeSmith said.Mortgage rates are more than double what they were during the Covid-19 pandemic, for example, and they could move above 7%, experts said."It will increase the lock-in effect in the housing market, where they feel trapped," NeSmith said.Consumers who can't find an affordable rate for auto loans might forgo buying a new car, for example, he said."It just slows spending, because people have to borrow so much more," NeSmith said. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

The four newly linked states — Illinois, Kansas, Oklahoma and Pennsylvania — join Indiana, Kentucky, Ohio, West Virginia and hard-hit Michigan.  View More

A customer shops for cilantro at a Walmart Supercenter on July 23, 2026, in Austin, Texas.Brandon Bell | Getty Images The nation's largest multistate outbreak of cyclosporiasis linked to shredded iceberg lettuce has expanded to nine states, the Centers for Disease Control and Prevention said Friday.The four newly linked states — Illinois, Kansas, Oklahoma and Pennsylvania – join Indiana, Kentucky, Ohio, West Virginia and hard-hit Michigan. Cyclospora is a microscopic parasite that typically infects people through contaminated food or water and causes cyclosporiasis, a gastrointestinal illness that can result in symptoms including severe diarrhea. Patients can require hospitalization, but no deaths have been recorded related to the parasite this year.The outbreak is already the largest of cyclosporiasis reported in the U.S. this year, with thousands of illnesses recorded nationwide. That is well above the roughly 200 to 1,000 cases typically reported annually. Meanwhile, the Food and Drug Administration is investigating a separate cyclosporiasis outbreak linked to an unidentified food product or products. The U.S. is trying to investigate the sources of the parasite and contain its spread amid confusion over its response to the outbreak and staffing cuts that some experts say made it harder to curb it. In his apparent first public comments on the outbreak, President Donald Trump said on Friday that the U.S. would put "a major tariff" on Mexico "because of the lettuce." It is unclear if he was serious. U.S. health and food regulators have zeroed in on shredded iceberg lettuce supplied by Taylor Farms, a privately held, California-based company, from its plant in central Mexico. Mexican health authorities on Thursday said that samples of lettuce and water from the facility tested negative for cyclospora. However, that result does not disprove the Food and Drug Administration's earlier identification as Taylor Farms de Mexico as the likely source of the outbreak. The earliest cases began showing symptoms in mid-May. Moreover, the long incubation period for infection means that the crop responsible would have been distributed weeks ago.Last week, the FDA said that the produce giant supplied the shredded iceberg lettuce to the Taco Bell restaurants where people ate before becoming ill. Taylor Farms issued a voluntary recall for all iceberg lettuce sourced from its Guanajuato, Mexico, facility, and Taco Bell pulled the affected lettuce from its restaurants.The CDC has so far tallied 1,947 people infected with cyclospora who also reported eating at Taco Bell in the nine states. Illnesses in the outbreak tied to iceberg lettuce began on June 22 and have continued through July 20, the CDC said. The federal count has lagged behind state tallies, so some of the states hit by the outbreak have reported much higher numbers of infections.But Taylor Farms has drawn criticism for its response to the outbreak. Some health experts blasted its recall notice, which included abbreviations and did not allow consumers to understand easily if they had bought or eaten any product that was at risk. After the FDA reported a false positive of lettuce samples from Taylor Farms on Sunday, the company issued a statement saying that the health agency had apologized. The FDA later clarified that it had not apologized to Taylor Farms, and the company deleted the statement on X, although it is still available on its website. The agency also said it still considered the company's iceberg lettuce the likely source of the outbreak.Taylor Farms supplies lettuce and other produce to major retailers such as Walmart, Target and Whole Foods, as well as restaurant chains including Taco Bell. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Oil prices dropped by around 3% on Friday, but remained on track for a weekly jump of 10% as the U.S.-Iran war continued to escalate. View More

In this article@CL.1@LCO.1Follow your favorite stocksCREATE FREE ACCOUNT An oilfield crew, contracted by the Railroad Commission of Texas (RRC), works a service rig during a state-funded oil well plugging operation in Midland, Texas, US, on Thursday, Sept. 25, 2025. Eli Hartman | Bloomberg | Getty Images Oil prices dropped Friday on a report that Pakistan is looking for a way to restart talks between the U.S. and Iran. Brent crude futures, the international benchmark, fell nearly 4% to close at $96.78 a barrel. U.S. West Texas Intermediate crude futures lost 3% to settle at $89.31 per barrel.Three sources told Reuters that Pakistan's effort to renew U.S.-Iran talks was backed by China. "The Chinese are unhappy because Iran's attacks on other Gulf states and the closure of the Strait of Hormuz are hitting their interests," a Pakistani ⁠government official told Reuters. U.S. crude oil gained about 8% this week and Brent advanced nearly 10% as fighting in the Middle East has sharply escalated. Stock Chart IconStock chart iconCrude oil futures Overnight, the U.S. Central Command completed its 13th consecutive night of strikes on Iran, targeting military command centers, drone storage facilities, communication networks, coastal surveillance sites, and maritime capabilities. Centcom said the strikes were intended to "further diminish the threat Iran poses to civilian mariners and commercial vessels transiting the Strait of Hormuz.""The international waterway remains open for transit despite recent attacks from Iran's Islamic Revolutionary Guard Corps. Commercial vessels continue to freely navigate the strait with U.S. military support," the military unit said in a statement. "More than 50,000 U.S. service members are currently operating across the Middle East."U.S. President Donald Trump told Axios on Thursday that he was mulling a "massive attack" on Iran after the conflict in the Middle East extended to a new battleground in the Red Sea. The president said the proposed strikes would be bigger than anything seen in the war so far, and that Iran has not "received enough pain yet.""I am considering a massive attack. Bigger than ever before. I am close to making a decision. We are all set for it," he said in the interview.It came after Trump said he would hold Iran responsible for further attacks by Yemen's Tehran-backed Houthis, after the militant group claimed to have struck two Saudi Arabian oil tankers in the Red Sea."If they do this again, the U.S. will hold Iran responsible, in that the Houthis are a Surrogate and/or Proxy of Iran, and major military punishment will be inflicted upon Iran and, of course, the Houthis, themselves," he said in a Truth Social post.Iran's Revolutionary Guard said Thursday that it had attacked U.S. military facilities at an American base in Jordan, according to state media.Speaking to reporters on Thursday, U.S. Secretary of State Marco Rubio labeled Trump's approach to the Iran war as "a head for an eye."In a Friday morning note, Daniela Hathorn, senior market analyst at capital.com, said growing instability around key shipping routes had rebuilt a "sizeable geopolitical risk premium" into oil markets."Investor sentiment has been dampened by continued disruption in the Red Sea, where attacks on commercial vessels have compounded concerns over global trade and energy security," she said. "Combined with tensions around the Strait of Hormuz, the developments have reinforced the view that geopolitical risks are unlikely to fade anytime soon, keeping energy markets tight and inflation risks elevated." watch nowVIDEO6:2106:21Oil to hit record high: Prices may be too low with current escalation riskAccess Middle East Meanwhile, Giovanni Staunovo, a strategist at UBS Global Wealth Management, said in a Thursday note that markets may be overestimating the oil market's recovery from the conflict.  "We continue to expect the production recovery process in the Middle East to be slower than the market anticipates, as it requires an increase in inbound vessels," he said. "With the conflict resuming, those flows remain depressed. This should keep the oil market tight and prices supported."UBS sees Brent crude falling to $85 a barrel by the end of the year. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

The president told Axios he was considering an operation "bigger than ever before" before Reuters reported Pakistan is seeking to restart peace talks. View More

In this article@LCO.1@CL.1Follow your favorite stocksCREATE FREE ACCOUNT US President Donald Trump speaks to reporters after landing in Air Force One on July 19, 2026 in Joint Base Andrews, Maryland.Andrew Harnik | Getty Images President Donald Trump said he will soon make a decision on whether to launch a "massive attack" on Iran after the conflict in the Middle East extended to a new battleground in the Red Sea.At the same time, Pakistan is looking for ways to restart stalled peace talks between the U.S. and Iran, Reuters reported Friday morning, citing three Pakistani sources.Stocks rose, and oil prices fell following that report, which gave investors new hope that the warring powers could find an off-ramp from their path of escalating hostilities. Speaking to Axios on Thursday, the president said that the proposed strikes would be bigger than anything seen in the war so far, and that Iran has not "received enough pain yet.""I am considering a massive attack. Bigger than ever before. I am close to making a decision. We are all set for it," Trump said in the interview. U.S. forces have pummeled Iranian targets over the past two weeks, with Central Command completing a 13th consecutive night of strikes overnight.Iran officials have remained publicly defiant. But this week Iranian Interior Minister Eskandar ​Momeni visited Islamabad for the second time in 10 days to participate in exploratory discussions, according to Reuters.Momeni, who is seen as being allied with Iran's Revolutionary Guard, met with Pakistani leaders and its defense chief, Asim Munir, during his latest trip, the report said.The drive by Pakistan, a mediator throughout the U.S.' nearly five-month-long war with Iran, to find a diplomatic path forward came after a push initiated by China, Iran's largest trading partner, Reuters reported.Defense Secretary Pete Hegseth told the Senate Appropriations Committee this week that Russia and China "are, at different levels, enabling some of the things Iran is doing."But Trump said in a Truth Social post Friday morning that, based on assurances he received from Russian President Vladimir Putin and Chinese leader Xi Jinping, the "two major Countries that people speak of often in terms of Iran are, in my opinion, not participating.""If they did, it would be very bad for them — Certainly not in their best interests," Trump wrote, citing their assurances.Trump did not give a deadline for when he would make a decision about a major attack on Iran, according to Axios. He said Israel would join the operation "in two minutes if I ask them to," but that Israel would potentially face retaliation from Iran if it did take part.The president also repeated his claim Iran wants to negotiate, but added that Tehran is not yet ready to make a deal with the U.S. watch nowVIDEO5:2705:27Iran war won't stretch into long-term, impact on inflation still unclearAccess Middle East On Thursday, Trump said he would hold Iran responsible for further attacks by Yemen's Tehran-backed Houthis, after the militant group claimed to have struck two Saudi oil tankers in the Red Sea."If they do this again, the U.S. will hold Iran responsible, in that the Houthis are a Surrogate and/or Proxy of Iran, and major military punishment will be inflicted upon Iran and, of course, the Houthis, themselves," he said in a Truth Social post.The Houthis declared a maritime embargo against Saudi Arabia on Monday, threatening to cut off the kingdom's oil exports through the Red Sea and the Bab el-Mandeb Strait.Iran's Revolutionary Guard said Thursday that it had attacked U.S. military facilities at an American military base in Jordan, according to state media. Speaking to reporters on Thursday, Secretary of State Marco Rubio labeled Trump's approach to the Iran war as "a head for an eye.""Honestly, that's what it's going to be," he said. "They will pay a very heavy price for the things they're doing. They're already paying a very heavy price." Iran threatens Europe Meanwhile, the U.K. said it "stands ready 24/7 to defend itself" after Iran labeled the country an "accomplice" to the U.S. over the use of British military bases by American forces. Shortly after the start of the U.S.-Iran war, the U.K. gave permission for the U.S. to use British bases for defensive operations. That agreement was extended last week, and has not been changed by the U.K.'s new prime minister, Andy Burnham. Read more U.S.-Iran war newsTehran’s Hormuz threat risks global fallout, Rubio warns as U.S. strikes Iran for 11th straight nightIran says it attacked Amazon infrastructure in BahrainU.S. strikes Iran and Houthis threaten Saudi Arabia shipping as mediators push 10-day ceasefireOil exports through the Strait of Hormuz might not return to levels seen before the Iran warStrait of Hormuz shutdown: A visual guide to the world's most critical oil chokepointOil markets are betting on a swift end to the Iran war. Investors may regret itThe Middle East war is testing the Gulf’s ambitions to become an AI hubAnalysis: An end to the Iran war may be just the beginning of a new era of U.S. inequalityWhy the confusion around the Iran situation could get worse. How to profit anywayStrait of Hormuz: Ships attacked as Trump extends Iran ceasefireTrump tells CNBC he expects U.S. to make 'great deal' with IranMore from CNBC Politics Iran's Ministry of Foreign Affairs said in a statement on Thursday that "any party that, in any manner, participates in military aggression against Iran will bear responsibility for the consequences and repercussions of its decision.""The British government has chosen to align itself with the aggressors, reducing its standing to that of an accomplice of the United States and Israel in a brutal war against the Iranian nation," it added. In a separate statement, an Iranian official warned that any European nation providing military bases or territory to the United States would place European countries "in the ranks of the aggressors," according to state media. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Chinese open-weight models are gaining steam against leading offerings from American companies. OpenAI and Anthropic did not sign the letter. View More

In this articleOPENAI.FGANTHR.FGPLTRNVDAMSFTMETAFollow your favorite stocksCREATE FREE ACCOUNT watch nowVIDEO1:5501:55Top tech companies pen open letter in defense of open-source AI modelsTechCheck Nvidia, Microsoft, Meta, Palantir and more than 20 other companies released a letter Friday urging policymakers to avoid "premature restrictions" on open-weight artificial intelligence models that would "stifle competition or drive innovation overseas."Open-weight AI models are available for users to download, modify and run on their own infrastructure, and they have been the subject of fierce debate within the tech sector in recent weeks. Chinese open-weight models are gaining steam against leading offerings from American companies like OpenAI and Anthropic, which primarily develop proprietary, closed models. Officials and executives have been weighing whether or not to restrict access to Chinese models in the U.S.Moonshot AI, a Chinese startup, amplified concerns earlier this month after releasing a model called Kimi K3 that outperforms cutting-edge American offerings across some industry benchmarks. U.S. Treasury Secretary Scott Bessent told CNBC on Tuesday that the Trump administration would look into whether Chinese companies were stealing American intellectual property, and stated that the government has "the ability to sanction them because of this theft."But in the letter on Friday, the group of U.S. tech companies cautioned against any rash actions. They wrote that open-weight models strengthen competition and ensure that the benefits of the technology are "broadly shared rather than concentrated in a few hands.""Relying solely on closed models is not inherently safe: they can be breached, misused, or fail in ways that outsiders cannot detect," the letter said. "And concentrating advanced AI capabilities behind a small number of closed models compounds that risk."Nvidia CEO Jensen Huang and Microsoft CEO Satya Nadella both shared the letter on their personal social media accounts. Elon Musk, who runs an AI business under his rocket company SpaceX, also applified the letter on social media, writing that it has his "full support" in a post on X. SpaceX did not officially sign the letter. Read more CNBC tech newsMoonshot AI accessed Nvidia's chips despite Chinese export ban, White House official saysAlphabet and Tesla test Wall Street's patience as AI spending overshadows growthAlphabet earnings takeaways: Q2 revenue beats, GOOGL stock sinks on 2026 capex hikeTesla misses on earnings, as free cash flow turns negative and margins slide OpenAI and Anthropic did not sign the letter. Both companies, which are each valued at nearly $1 trillion, are gearing up for potentially massive initial public offerings that could land as soon as this year. Anthropic confidentially filed its prospectus with the Securities and Exchange Commission in June, and OpenAI followed suit days later. Greg Brockman, OpenAI's president, said Thursday that the company believes in broad access, and that he has not been involved in any conversations with the Trump administration about potentially banning Chinese open-weight models in the U.S."I think that, that fundamentally, AI and AI usage is something that is actually very important to democratize," Brockman told reporters during a briefing in New York City. "And so, for me, at a sort of deep level, I think that having more models, more usage, that is a good thing."OpenAI CEO Sam Altman addressed the letter in a post on X on Friday, writing that he wants the U.S. to win with both open-weight and proprietary models, and that he is "glad to see this."Earlier this month, the AI company Hugging Face used an open-weight model from the Chinese company Z.ai to contain a cyberattack that rogue OpenAI models carried out. OpenAI disclosed the attack on Tuesday and characterized it as an "unprecedented cyber incident." CEO of OpenAI Sam Altman speaks with reporters, following meetings on Capitol Hill, in Washington, D.C., U.S., June 3, 2026. Kylie Cooper | Reuters Yacine Jernite, head of machine learning at Hugging Face, told CNBC that the company initially tried to use Anthropic's Fable 5 to analyze the attack, but that it didn't work because the model's guardrails couldn't determine that Hugging Face was trying to defend itself. Jernite said Hugging Face turned to Z.ai's model GLM 5.2, and was able to contain the attack "very quickly using this model." White House advisor Michael Kratsios on Wednesday said that China's Moonshot AI developed its Kimi K3 model by distilling Anthropic's technology. Distillation is a term for an AI training method where a smaller, less capable model is built using outputs from an existing, stronger model.Kratsios wrote in a post on X that legitimate AI distillation plays a vital role in the open innovation ecosystem, but warned that "large-scale, covert industrial distillation aimed at stealing proprietary U.S. technology" is "unacceptable."In the letter on Friday, the U.S. tech companies said that concerns about unlawful distillation should be addressed through "targeted legal and commercial frameworks" instead of with "sweeping restrictions on techniques that play an important role in AI innovation.""Our AI leadership will be judged not by one frontier AI model, but by whether the United States builds a strong, open ecosystem that diffuses into every sector," the letter said. "This is essential for creating opportunities for innovation and prosperity across the country."WATCH: AI is forcing the cyber industry to revisualize how it operates, says TrustedSec’s David Kennedy watch nowVIDEO3:4803:48AI is forcing the cyber industry to revisualize how it operates, says TrustedSec's David KennedyThe Exchange Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

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Higher gas prices are driving record demand for Costco's gas stations as more Americans look to save at the pump. View More

Gas prices are rising again following a sharp escalation of the war in Iran. And as Americans look for ways to save money at the pump, many are turning to Costco's gas stations for cheaper fuel.Demand for Costco's gasoline reached record levels during the quarter ended May 10, though the company didn't disclose sales figures in its fiscal third-quarter earnings call. Several warehouses needed multiple fuel deliveries each day to keep up with demand, and the final five weeks of the quarter were Costco's busiest fuel-volume weeks ever, CEO Ron Vachris said on the call."We've seen really strong demand for Costco gas," says Mike Baker, managing director and head of consumer research at D.A. Davidson. While gasoline consumption across the U.S. has been flat as higher prices cause some drivers to cut back, Costco has seen double-digit growth in gallons sold, he says.Costco gas prices typically ran an average of 9 cents per gallon below the five largest local competitors and 24 cents below the state average between April 2025 and March 2026, according to a study from financial research firm Gordon Haskett using GasBuddy data. The goal isn't just to undercut other gas stations on price. Instead, company executives say lower fuel prices encourage members to visit Costco more often, shop inside the warehouse and renew their memberships. Members who buy gasoline generally visit Costco more frequently, spend more overall and renew their memberships at higher rates than other members, CFO Gary Millerchip said on the call. He added that "a little less than half of our members are visiting the warehouse when they visit the gas station."The low-cost gas strategy is "more to keep the value in the membership alive," says Baker. "The lifeblood of Costco is that membership."The retailer generated more than $5 billion in membership fee revenue in 2025, equal to roughly two-thirds of its net income.If you're a member, swinging into the Costco gas station to save on gas can feel like a slam dunk. But it's worth keeping the company's sales tactics in mind, says Lucas Bucl, a certified financial planner and founder of Level Up Financial Planning. "Costco's approach is straight out of the traditional retail playbook — bring in customers with an attractive deal or sale," he says. "Retailers know that impulse buying can lead to purchases shoppers didn't intend to make."He recommends making a shopping list before heading into the warehouse to avoid impulse purchases that could wipe out the savings at the pump."If it saves you a trip, it is a good thing," Bucl says. "However, resist the urge to cruise the aisles and browse."Want to get ahead at work? Then you need to learn how to make effective small talk. In CNBC's new online course, How To Talk To People At Work, expert instructors share practical strategies to help you use everyday conversations to gain visibility, build meaningful relationships and accelerate your career growth. Sign up today! Take control of your money with CNBC Select CNBC Select is editorially independent and may earn a commission from affiliate partners on links.Should you use a home equity loan or HELOC to supplement your income? Here are 3 better alternativesMore Americans are taking out personal loans. Here’s how to know if you shouldCNBC Points Pro: With so many limited-time credit card bonuses available, which is right for me?Best travel insurance for parents visiting their children in U.S.These banks are offering cash bonuses of up to $5,000. Here’s how to apply VIDEO9:3609:36I quit my $250K/year tech job–now I make $33K/year selling matchaMillennial Money

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