Ontology 1 AI Model Surfaces, Meta's Rising Costs and Microsoft's Cloud Growth Dominate Earnings

Key Takeaways

1. A new AI model from Ontology 1 claims 2.7x better accuracy, no hallucinations, and is self-learning, positioning it as a strong contender for search applications. — via 1
2. Meta's Q2 revenue hit a record $60.8B, but costs surged 55% YoY to a record high, profits fell 14%, and Reality Labs lost $4.6B in the quarter ($87B cumulative since 2020). CapEx guidance for 2026 raised to $130-145B. — via 1 2 3 4
3. Microsoft's Q2 revenue grew 18% to $90B, net income up 31% to $36B, with Azure and cloud services revenue up 43% and surpassing $100B for the first time. — via 1 2
4. The Fed's credibility is questioned: core inflation has exceeded 2% for 64 consecutive months, some FOMC members supported a rate hike, and a 25bp hike in September is possible. — via 1 2 3
5. The US national debt has increased by over $400B since July 1 and is expected to soon exceed $40T. Trump family has profited $1.4B from crypto, but $TRUMP and $MELANIA meme coins are down 98% and 99% from highs. — via 1 2 3
6. Market contradictions: tech stocks falling, long-end rates rising, sticky inflation, wars, oil up, yet the S&P 500 is near all-time highs (+8% YTD). — via 1 2

1. AI and Technology Innovations

1. Ontology 1 has unveiled a new AI model with claimed improvements: at least 2.7x more accurate, self-learning, no hallucinations, and optimized for search. — via 1

2. Corporate Earnings and Financial Metrics

1. Meta's Q2 earnings showed record revenue of $60.8B, but total costs and expenses rose 55% YoY to a record high, driving a 14% net income decline. Reality Labs lost $4.6B in the quarter, bringing cumulative losses since 2020 to $87B. Free cash flow plummeted 91% to $784M due to massive AI infrastructure capex, with 2026 capEx guided to $130-145B. — via 1 2 3 4
2. Microsoft reported a strong Q2: revenue up 18% to $90B, net income up 31% to $36B. Azure and other cloud services revenue grew 43% YoY, surpassing $100B for the first time, with a revenue trajectory projecting $360B by 2026. — via 1 2
3. The Trump family has profited $1.4B from crypto ventures, but the $TRUMP and $MELANIA meme coins have collapsed 98% and 99% from their peaks, respectively. Charlie Bilello called it "the most nakedly corrupt case in American political history." — via 1

3. Macro and Market Dynamics

1. The Federal Reserve's credibility is under fire: core inflation has been above the 2% target for 64 consecutive months, with three FOMC members voting for a rate hike at the last meeting and a potential 25bp hike in September. — via 1 2 3
2. The U.S. national debt has increased by over $400B since July 1, on track to breach $40T soon. Meanwhile, Lyn Alden highlighted a forced liquidation of over 360,00 margin accounts in South Korea, with 62% of victims under 35. — via 1 2 3
3. Despite a confluence of negative factors (tech stock declines, rising long-term rates, sticky inflation, two wars, rising oil, an unpopular new Fed chair), the S&P 500 remains near all-time highs and is up about 8% year-to-date, highlighting market contradictions. — via 1 2
4. Raoul Pal reiterated his conviction in L1 blockchains as the settlement layer for the machine economy, noting their current valuation is far below that of Nasdaq and semiconductors. — via 1
5. Bonds have experienced deep real drawdowns over the past six years, comparable to 30-50% equity drops, yet receive little attention. The 30-year yield is near 5.2%, but credit spreads over Treasuries remain unattractive. — via 1 2