It’s good business, but knee-bending is gross

Also: Chip stock vibes and what Sam saw

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Foxconn gives tech stocks a little New Years gift

Chip stocks are having a good start to the week — Nvida’s up 3% this morning trading after a 4.5% gain on Friday — thanks to Foxconn.

Foxconn — Hon Hai Technology Group — a key contract manufacturer for the global electronics business, reported better-than-expected earnings for the fourth quarter to start the week. How strong were its results? Foxconn revenue in Q4 2024 was NT$2.13T (~$65B), up 15.2% on a year-over-year basis.

That’s only so much, but inside that single, pan-Foxconn growth number is interesting and important nuance. Here’s how Foxconn discussed its “Cloud and Networking Products” line, which includes “routers, servers, edge computing, data centers and satellite communications” results in its latest earnings digest:

• In December 2024 the company’s Cloud and Networking Products “experienced strong growth YoY,” thanks to “strong demand from AI servers.”

• In Q4 2024, the company’s Cloud and Networking Products “experienced strong growth YoY,” thanks to “strong demand from AI servers.”

• In 2024, the company’s Cloud and Networking Products “experienced strong growth YoY,” thanks to “strong demand from AI servers.”

I’m not being cute, the phrasing was repeated throughout the earnings document. In short, AI server demand — think building the computers that power our present AI arms race — drove the company’s results last year, in the final quarter of last year, and the final month of last year. (Even more, as some Foxconn segments declined, the gains from AI server demand, to use its own phrasing, had to work hard to grow the company by a sixth in its most recent month.)

If you wanted signal that market demand for GPUs and similar was hot through the end of last year, and therefore likely hot to start 2025, there you go.

After the market digested the news, up went the value of chip stocks. As I write to you:

• Nvida: +3.8%

• TSMC: +4.4%

• Broadcom: +3.6%

• ASML: +6.1%

• AMD: +3.1%

• Qualcomm: +2.9%

Via Matthieu Beaumont

The list goes on. A good day for chips and AI bulls. Speaking of which:

I know it’s good business, but the knee-bending is gross

One good thing about democracy is that, provided a reasonable separation of powers, no single person has so much power that they can bully the market. In the United States, we’ve solved for the risk by splitting up the executive, legislative, and judicial arms of government and setting them to check one another to prevent too much concentration of power.

Historically, this has meant that the President has had to work with Congress and avoid tangling with the courts. Congress, in contrast, had to pass bills that wouldn’t get struck down by the courts and could get signed by the President. Further division of power — Congress holding the purse strings, the President nominating judges, etc — meant that my nation sometimes had to muddle through issues, but we rarely ran the risk of having a President so powerful that they could act like a king.

However, despite our attempts to dilute and distribute Federal power, there’s One Neat Trick to get around all of that: Stack the Supreme Court with your intellectual fellow-travelers and turn Congress into your personal fief. Then, as President, you can wield a lot more power than the Founding Fathers intended.

Enter 2025, a period in which Donald Trump will once again be President, Congress is largely wrapped around his finger, and SCOTUS is his pet. It’s going to be a rather one-man show for a while, discounting the Elon Effect for now.

This odd, and I would argue dangerous and bad, concentration of power is leading to companies working hard to curry favor with Trump. As he’s a transactional man — read: principle-free — this means people and companies are lining up to give him money and kiss his ass.

It’s probably good business to do so. If you can ship $1 million to a Trump slush fund, and lower the chance that a vindictive man-child brings down the hammer of government on your head, you’ll do it. It’s cheap at 100x the price. But the need to kiss ass is gross, and a very, very bad page in the current American chapter.

So I can understand, if not forgive, all of this corporate wankery. I draw the line, however, at this blog post from Microsoft’s President, which reads as a cowering exercise in boot-licking.

I forget if I ever got around to publishing the line, but I once wrote something like there’s a history of businesses supporting fascism. What’s the mechanism? Fear, I suppose. Which amongst the trillion-dollar companies is, I believe, merely cowardice.

Three Sam Altman Views That I Enjoy

Sam Altman gave an interview to BusinessWeek that you need to read. And then the OpenAI leader and former Y Combinator head also dropped his own post in the wake of that interview. Having read both, here are three Altman views that I think are not only good but exciting:

From his blog post, on the state of AI research and progress. The vibe here is that we have lots of work ahead of us, but the technology risk of reaching AGI and/or superintelligence is falling:

We are now confident we know how to build AGI as we have traditionally understood it. We believe that, in 2025, we may see the first AI agents “join the workforce” and materially change the output of companies. We continue to believe that iteratively putting great tools in the hands of people leads to great, broadly-distributed outcomes.

We are beginning to turn our aim beyond that, to superintelligence in the true sense of the word. We love our current products, but we are here for the glorious future. With superintelligence, we can do anything else. Superintelligent tools could massively accelerate scientific discovery and innovation well beyond what we are capable of doing on our own, and in turn massively increase abundance and prosperity.

And, via his interview with BusinessWeek, we’re going to have all the power we need for our AI future. Though not from nuclear, as many expect:

And, finally, that despite Elon being Elon, that we will be able to have market-competitive AI and not proximity-to-President regulatory capture:

Onward!