Before the Bell: AI Funding Train Starts to Sputter

China reportedly builds a prototype of ASML’s most advanced EUV machine, while Oracle loses support from one of its key backers.

An average European stock, as measured by the Euro Stoxx 50, fell 0.6% yesterday. Brussels’ blue-chip index, the Bel20, performed much better and gained 0.7%. Shares such as Umicore (+3.8%) and Argenx (+2.5%) led the advance. U.S. markets closed in the red. The S&P 500 lost 1.2%, while the technology-heavy Nasdaq dropped 1.8%. There were also some notable gainers. Fast-food chain Chipotle Mexican Grill (+3.8%) opened its 4,000th restaurant and announced a share buyback programme worth 1.8 billion dollar. Medical supplies producer and distributor Medline surged more than 41.4% on its first day of trading.

This morning in Asia, Hong Kong’s Hang Seng Index is down 0.5%, while Japan’s Topix is trading 0.2% lower. In the United States, results are due today from Accenture, FactSet, Birkenstock, Nike and FedEx. On the macroeconomic front, markets are awaiting interest-rate decisions from the European Central Bank, as well as from Sweden, Norway, the Czech Republic and the United Kingdom.

China Builds ASML’s Most Advanced EUV Machine

According to news agency Reuters, a prototype of one of ASML’s most advanced EUV machines is located in a highly secured laboratory in Shenzhen, China. Such machines make it possible to produce the most cutting-edge semiconductors. They use extreme ultraviolet light to print circuits that are thousands of times thinner than a human hair. The more circuits that fit on a chip, the more powerful the chip becomes. The prototype is said to have been built by former employees of the D utch company ASML and to have been ready as early as the beginning of 2025. According to sources, the machine has already succeeded in generating extreme ultraviolet light. However, it has not yet produced any chips. Whether China will be able to move quickly from prototype to production will depend on several factors. Some time ago, ASML chief executive Christophe Fouquet stated that China would need many more years to develop such technology. But perhaps that moment is closer than many had expected.

Blue Owl Capital Turns Its Back on Oracle

Blue Owl Capital, a major U.S. partner of Oracle, has withdrawn from a data-centre project in Michigan. Although the project continues to receive backing from other financiers such as Blackstone and Bank of America and remains on schedule, news of Blue Owl Capital’s exit sent Oracle’s share price down sharply (-5.4%). The development has increased investor concerns about the massive debt burdens hyperscalers are taking on to build and finance data centres. Since September, Oracle has seen nearly half of its market capitalisation evaporate. Other AI-related companies also suffered heavy losses yesterday, including Nvidia (-3.8%), AMD (-5.3%) and Broadcom (-4.5%).

Did you know…

there are around 1,200 large data centres worldwide, and that number is growing by about 10% every year? Demand for additional capacity is mainly driven by artificial intelligence, and more than half of all data centres are located in the United States.

This article was translated from Dutch and was originally published on Spaarvarkens.be.