Big tech companies have been on an AI spending spree, with total investment surpassing a trillion dollars since 2023. This has led to a ferocious competition for chips, which is affecting Apple's ability to obtain the computer processes it needs. Apple's CEO, Tim Cook, has described the memory chip crisis as a '100-year flood', but the company is still optimistic about its future.
The iPhone sales are up 22%, and the company is working on new products, including a foldable iPhone and smart glasses. However, the competition for memory chips is getting stronger, and Apple may have to raise the price of its iPhone in the autumn. The company's new CEO, John Turnis, has a big job ahead of him, with new products coming out and a need to replace senior leadership team members who are nearing retirement age.
Other big tech companies, like Amazon, are also investing heavily in AI. Amazon's cash flow has turned negative due to the high spending, but the company is confident that it will pay off in the end. The market is also watching the Bank of Japan, which has held its interest rates steady. But the yen is still weak, and the Japanese government is trying to prop it up. The Bank of Japan has acknowledged that inflation could overshoot its 2% target, and some policymakers are calling for a rate hike.
The US government is also getting involved, with the Treasury Secretary calling for the Bank of Japan to hike rates. The Japanese government has intervened in the currency market to try and prop up the yen, but it's not clear if this will be enough. The market is waiting to see what will happen next, and the Bank of Japan is under pressure to take action.
