TMTB Morning Wrap

Good morning. Futures +30bps as all eyes on MU this morning (RBC conference - seems like no numbers update so far) and NVDA EPS post-close. Stocks in Asia mixed on Wednesday: TPX -0.17%, NKY -0.34%, Hang Seng -0.38%, HSCEI -0.26%, SHCOMP +0.18%, Shenzhen -0.5%, Taiwan TAIEX -0.66%, Korea KOSPI -0.61%. BTC -1% hovering around $91k. Odds of a Fed Rate cut still sit at 45% on 12/10

Let’s get to it…

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AI NEWS:

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AI: Saudi set to announce slew of AI deals with US firms

Semafor:

Saudi Arabia’s sovereign wealth fund-backed artificial intelligence company, Humain, is set to announce a slew of new deals with US firms tomorrow as the country looks to pour billions of dollars into a plan to become the world’s third-largest country for AI.

Humain is planning to announce multi-gigawatt data center buildouts in collaboration with companies including Amazon, AMD, xAI, and GlobalAI, according to people familiar with the matter. The deals are expected to follow from an agreement for the US to approve a large semiconductors sale to the country, the people said.

It’s unclear how many of the deals will be new and substantive, or indications of progress made on agreements announced during US President Donald Trump’s visit to Riyadh in May.

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BAM: Brookfield Asset launches $100B AI infrastructure program

Brookfield (BAM) announced the launch of a $100B global AI Infrastructure program in partnership with NVIDIA (NVDA) and the Kuwait Investment Authority, KIA. Brookfield will anchor the program with the Brookfield Artificial Intelligence Infrastructure Fund, which launches with a target of $10 billion of equity commitments to invest in the backbone of artificial intelligence. BAIIF has already received $5 billion of capital commitments from a select group of institutional and industry partners, including Brookfield, NVIDIA and KIA. BAIIF, together with additional capital from its co-investors and prudent financing, will acquire up to $100 billion of AI infrastructure assets, deploying investment across every stage of the value chain-from energy and land to data centers and compute.

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U +9%: Fortnite is getting Unity games - Epic Games is teaming up with arguably its biggest game development rival.

The Verge:

Epic Games is teaming up with arguably its biggest game development rival, Unity, to bring games made using Unity’s engine into Fortnite. The change will mean that Unity games could sit alongside Epic’s own suite of experiences as well as those created by third-party developers using the Unreal Editor for Fortnite — and it opens the door for significantly more games to be available to play within Fortnite.

But the Unity Editor, which is designed to help developers build their games once and run them across multiple platforms, has more than 1.2 million monthly active users. Even a fraction of those developers also bringing their games to Fortnite could add a lot to the platform.

There’s a second component to today’s news, too: Unity will bring support for Unreal Engine to the commerce management platform it announced last month, which lets developers manage their digital storefronts across many platforms from all inside Unity Engine.

TMTB: This is a big deal and removes a big overhang for U’s Create business and adds a driver of growth to their Grow biz. The biggest bearish argument (overhang) on Unity’s Create biz has been that Unreal Engine 5 (Epic) was technologically superior and slowly eating Unity’s lunch—not just in high-end console games, but by building a “walled garden” metaverse in Fortnite that locked Unity developers out. Before this deal, if a studio wanted to build for the massive Fortnite audience, they had to cancel their Unity subscription and switch to Unreal. So it removes one of the “existential risk” narratives by basically proving Unity is indispensable infrastructure and likely improves churn. For their Grow biz, this improves the flywheel effect —> Unity processes payments for Unreal games —> gets data on who the “spenders” are in those games —> Unity feeds this “spender data” into its Ad algorithm (Vector) —>Much better ad targeting

Impact on RBLX:

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GTLB: Truist Cuts GitLab to Hold, Lowers PT to $44 on Visibility and Execution Concerns