🚨 AI MAY BE TRIGGERING THE THIRD WAVE OF INFLATION.

Even Tim Cook said this cost jump is something he hasn't seen in over 40 years in the business.

Tariffs can get negotiated. Oil prices can reverse when supply catches up. But this one doesn't work that way.

AI infrastructure spending isn't a price shock, it's a demand shock that's still in its early.

The five biggest hyperscalers are spending $741 billion this year, up 75% from last year, and most of that money hasn't even hit the ground yet.

That means the price pressure happening right now is just the opening phase, not the peak.

The mechanism is simple: AI needs memory chips. So does everything else.

Phones, consoles, cars, laptops all draw from the same limited chip supply, so when AI scales up its orders, it doesn't just raise AI costs, it raises the cost of nearly every electronic product on the market.

That's playing out in real time today.

Apple and Microsoft both announced price hikes on MacBooks, iPads, and Xbox consoles, the same day, citing the same memory shortage.

Nintendo and Sony already did the same thing weeks earlier.

This isn't an isolated company passing on costs, it's an entire hardware industry repricing around the same input shortage simultaneously.

The bet from the Fed is that AI eventually pays for itself through productivity gains that push inflation back down.

That bet might be right eventually. But UBS says that payoff is still years out, while the price increases are happening now.

Which means the Fed is being asked to hold rates steady or higher through a multi year stretch where the thing supposed to eventually fix inflation is actively making it worse in the meantime.

That's a much harder position for Warsh to defend than the temporary tariff and oil shocks the Fed has navigated so far.

Volkswagen is preparing to cut 15% of its entire global workforce.

VW is now weighing up to 100,000 job cuts on top of a global headcount of 667,164, and shutting four German factories, Hanover, Zwickau, Emden, and Audi's Neckarsulm.

This is the biggest restructuring in the company's 88-year history.

The supervisory board discusses this on July 9. And this is the third escalation in 18 months.

Late 2024: 35,000 jobs.

March 2026: raised to 50,000 after operating profit collapsed 53% to €8.9 billion, the worst result since the 2016 Dieselgate scandal.

Now: 100,000, double that number, with plant closures added on top for the first time in the company's history.

Despite that 44% profit collapse in 2025, VW's executive board still received bonus payouts totaling €13.6 million, with CEO Oliver Blume personally taking home €7.4 million.

The bonuses were tied to cash flow, not profit, so management got paid while the company posted its worst year since Dieselgate.

China is the main reason this is happening.

VW was China's top automaker for years. BYD took that spot in 2024. VW fell to third place in 2025, behind Geely.

Non-Chinese automakers' share of the Chinese EV market collapsed from 57% in 2020 to 32% in 2025. VW's own EV sales inside China fell 44.3% in a single year.

Chininese makers aren't staying in China only. BYD, Chery, SAIC, and Leapmotor doubled their combined European market share through May, expanding directly into VW's home turf in Europe while VW is losing ground in China at the same time.

VW plans to cut planned investment 15% to just over €130 billion over five years, while reportedly considering splitting the core VW brand and parts business into separate entities.

Unions are already promising war.

IG Metall and VW's works council said Friday they'll "do everything in our power to prevent" the cuts, the same union that organized 100,000 workers in warning strikes across Germany in December 2024, shutting down production at multiple plants for hours at a time, over a round of cuts that was half this size.

If that's what 35,000 cuts triggered, a fight over 100,000 jobs and four shuttered factories is likely to be far more disruptive.