AI Capex Boom, Inflation Signals, and Housing Data Shape Risk Outlook

Key Takeaways

1. Hyperscaler 2026 data center capex estimates jumped from $460 billion to $789 billion in six months. S&P 500 earnings expectations for 2026 were also revised up from 15% to 32% growth, signaling a late-cycle AI boom without a recession. — via 1 2
2. Selling U.S. frontier AI training data to China is "exporting proprietary intelligence at scale," according to @Jason. He also warns that Chinese robots in U.S. critical infrastructure pose data-security risks that need urgent review. — via 1 2 3
3. July macro data showed easing inflation expectations and stronger small-business optimism. However, existing home sales fell 1.7% month-over-month while the median price hit a record $434,100. — via 1 2
4. Valuation extremes are flashing: SpaceX trades at 79x and Palantir at 72x sales versus the S&P 500’s 3.5x. In flows, large-cap U.S. equity ETFs saw the biggest weekly inflows while consumer discretionary saw the biggest outflows. — via 1 2

1. AI and Technology

1. Jason argues that U.S. frontier-model training data is not a generic commodity but high-value intelligence blending experts’ knowledge and corporate operating data. Selling it to China means exporting proprietary intelligence at scale, and he calls for an urgent review. — via 1
2. Jason also opposes deploying Chinese humanoid or quadruped robots in U.S. critical infrastructure. These devices continuously collect sensitive data and may transmit it back to China, so he warns against repeating the semiconductor mistake. — via 1 2
3. Charlie Bilello notes that hyperscaler data-center capex expectations for 2026 surged from $460 billion to $789 billion in just six months. He describes it as a late-cycle "spend first, think about returns later" frenzy, while S&P 500 2026 earnings expectations were raised from 15% to 32% growth, creating an unprecedented AI-driven expansion absent a recession. — via 1 2
4. Cambridge Aviation announced a $300 million Series C led by DFJ Growth, with existing investors Accel and Elad Gil participating. The funding is meant to accelerate its mission of protecting allied skies. — via 1
5. Raoul Pal predicts AI will be smarter than all humans within a year. He calls Anthropic’s revenue growth the fastest in human history and sees these exponential curves pushing the economy toward an "economic singularity." — via 1
6. Raoul Pal also launched a new Substack project, The Exponentialist, with David Mattin. The project will continue publishing their research on the current era of technological change. — via 1
7. Aswath Damodaran uses the collapse of Leo Aschenbrenner’s Situational Awareness fund to discuss investment conviction. He argues belief can be an asset but also causes collateral damage when disrupted. — via 1

2. Macro and Markets

1. NY Fed data show 1-year and 3-year inflation expectations eased in July ahead of tomorrow’s CPI report. Consensus expects +3.4% headline and +2.5% core year-over-year; gas-price expectations ticked up to +2.9%, and the FAO food-price index hit its highest since January 2023. — via 1 2 3
2. The probability of finding a job within three months after losing one rose to 46.2% in July, with the biggest gain among low-income households. The NFIB small-business optimism index beat expectations at 99.8, and labor quality is now the top small-business problem, followed by taxes, with inflation worries easing. — via 1 2 3
3. June consumer credit rose $14.2 billion after May’s $1.1 billion decline. Revolving credit was up $6.7 billion and non-revolving up $7.4 billion, suggesting consumer borrowing may be regaining momentum. — via 1
4. In the week through 8/7/26, large-cap U.S. equity ETFs saw the largest inflows while consumer discretionary ETFs saw the largest outflows. This points to rotation into broad U.S. equity exposure and away from discretionary spending bets. — via 1
5. Raoul Pal attributes current economic pressure to post-WWII baby-boom demographics. A shrinking labor force stalls GDP growth, governments rely on leverage and money printing, and the resulting currency debasement erodes retirement savings, in what he calls the "Everything Code." — via 1
6. Charlie Bilello highlights valuation extremes: SpaceX and Palantir trade at 79x and 72x price-to-sales, far above Microsoft, Apple and Amazon. The S&P 500 sits at 3.5x sales. — via 1
7. He also notes the S&P 500 has averaged a 12% annual return since 1980 but a 14% average intra-year drawdown. Since 1957 it has hit 1,332 record highs, roughly one every 19 days, so new highs should not be feared. — via 1 2
8. Jeremy Grantham’s view, shared by Meb Faber, is that markets do not turn when they see light at the end of the tunnel. They turn when the outlook is pitch black and "slightly less black" than the day before. — via 1

3. Housing and Consumer

1. July existing home sales fell 1.7% month-over-month, missing expectations. The median existing-home price rose 2.0% year-over-year to $434,100, a record for July and a sign affordability remains strained. — via 1
2. U.S. homes for sale have climbed to more than 1.1 million, the highest since 2019. Asking rents have fallen year-over-year for 38 straight months, and renting is now cheaper than a mortgage in all 50 largest metro areas, according to Charlie Bilello. — via 1 2
3. Ben Carlson pushes back on the pressure to buy a home in your 20s. He frames renting as a legitimate financial choice for young people rather than a failure of wealth-building. — via 1