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The Fed's AI spending problem
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Plus: Nvidia's revenue-sharing deal for AI startups.
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Monday, July 6, 2026
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Federal Reserve Chair Kevin Warsh stepped into his new job with a case for lower interest rates on
the back of an AI-fueled productivity boom. What he got instead was a $700 billion AI spending blitz that's demolishing his argument for rate cuts anytime soon.
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Tech companies aren't flinching at taking on unprecedented spending commitments to expand their fleet of data centers and secure the equipment needed to run them. Now halfway through 2026, momentum at the Fed has shifted toward the possibility of interest rate hikes.
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As the argument goes among AI's evangelists, employees adopting AI
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Most Fed watchers and financial analysts, though, don't see evidence yet of the labor productivity gains that could justify a reduction in the Fed's borrowing rates. Instead, they're zeroing in on the rapid data center buildout that's swallowing up an enormous amount of storage and memory chips.
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Switching to Metro has never been easier, just bring your number and get the Latest Samsung Galaxy A17 5G for FREE.
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Choose Your Metro by T-Mobile Plan and Get Your Free Samsung Galaxy A17 Phone
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Terms & Conditions apply. Not available if with Metro in the last 180 days. If using >35GB/mo. May notice reduced speeds.
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Yes. Chip demand is out of control
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No. AI will have a deflationary effect
</a>
<!--<![endif]-->
<!--[if mso]><a
href="https://www.ne16.com/t/10949272/222404108/10095192/1/1009235/?abb9e380=NGYzZmQyODYtMmZhOS00YzdjLWFkYzktMzQyOGNhZmI3ZDBl&f5d63f87=REIlMjAwNy0wNg&x=727a7afa" target="_blank" style="-webkit-border-radius: 6px; -moz-border-radius: 6px; border-radius: 6px; color: #FFFFFF; text-decoration: none; font-family: Arial; font-size: 16px; border: none; display: block; ">No. AI will have a deflationary
effect</a><![endif]-->
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<td align="center" bgcolor="#105C8E" style="text-align:center;-webkit-border-radius:6px;-moz-border-radius:6px;border-radius:6px;font-size:16px;font-family:Arial,Helvetica,sans-serif">
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The Fed should just wait and see
</a>
<!--<![endif]-->
<!--[if mso]><a
href="https://www.ne16.com/t/10949272/222404108/10095193/1/1009235/?abb9e380=NGYzZmQyODYtMmZhOS00YzdjLWFkYzktMzQyOGNhZmI3ZDBl&f5d63f87=REIlMjAwNy0wNg&x=d60a112b" target="_blank" style="-webkit-border-radius: 6px; -moz-border-radius: 6px; border-radius: 6px; color: #FFFFFF; text-decoration: none; font-family: Arial; font-size: 16px; border: none; display: block; ">The Fed should just wait and
see</a><![endif]-->
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<h1 style="mso-line-height-rule:exactly;Margin:0;font-family:Arial;font-size:24px;font-weight:bold">
<span style="font-family:Arial;font-size:24px">
Here's what you need to know
</span>
</h1>
</td>
</tr>
<tr>
<td class="snippet td100" colspan="6" style="width:100%;position:static;vertical-align:top;font-family:Arial,Helvetica,sans-serif;font-size:15px">
<table border="0" cellpadding="0" cellspacing="0" class="dragndrop" data-rss-posts="undefined" height="100%" style="table-layout:fixed" width="100%">
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<a aria-label="Nathan Posner / Anadolu via Getty Images" style="color:#105C8E" target="_blank" title="Nathan Posner /
Anadolu via Getty Images">
<img alt="Nathan Posner / Anadolu via Getty Images" class="img100" data-linktype="Normal" data-target="_blank" height="auto" src="https://inboxflows.com/_/image/https%253A%252F%252Fqz.com%252Fcdn-cgi%252Fimage%252Fwidth%253D640%252Cheight%253D360%252Cfit%253Dcover%252Cquality%253D85%252Cformat%253Dauto%252Fhttps%253A%252F%252Fassets.qz.com%252Fmedia%252FOpenAI%2520CEO%2520Sam%2520Altman%2520in%2520Congress.jpg/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZxei5jb20lMkZjZCIsInRpbWUiOjE3ODMzMzI5NjIuNDAyNjAwM30:1wggMs:xjcwcn3uA3xmpuMRVczv62KO-ncrP_imsReVqee2rhQ" style="width:200px;max-height:338px;vertical-align:middle;border:0" width="200"/>
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<div>
<strong style="color:#105C8E">
<a data-linktext="OpenAI wants U.S. tech firms
to hand Washington ownership stakes." data-linktype="Normal" style="color:#105C8E" target="_blank">
OpenAI wants U.S. tech firms to hand Washington ownership stakes.
</a>
</strong>
CEO Sam Altman reportedly pitched a plan for major AI companies to each contribute 5% equity to a sovereign wealth fund. OpenAI's share would be valued at $42.6 billion. The fund would channel proceeds back to the public.
</div>
</td>
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<a aria-label="Spencer Platt / Getty Images" style="color:#105C8E" target="_blank" title="Spencer Platt / Getty Images">
<img alt="Spencer Platt / Getty Images" class="img100" data-linktype="Normal" data-target="_blank" height="auto" src="https://inboxflows.com/_/image/https%253A%252F%252Fqz.com%252Fcdn-cgi%252Fimage%252Fwidth%253D640%252Cheight%253D360%252Cfit%253Dcover%252Cquality%253D85%252Cformat%253Dauto%252Fhttps%253A%252F%252Fassets.qz.com%252Fmedia%252FGettyImages-537931570.jpg/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZxei5jb20lMkZjZCIsInRpbWUiOjE3ODMzMzI5NjIuNDAyNzc4MX0:1wggMs:3CBA04vzwccNv67Lpu1UPaE3xpq0tvrw0iAG9wJ0Kjs" style="width:200px;max-height:338px;vertical-align:middle;border:0" width="200"/>
</a>
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<div>
<strong style="color: var(--blue-cta-default)">
<a data-linktext="The U.S. economy added far fewer jobs than expected in June." data-linktype="Normal" style="color:#105C8E" target="_blank">
The U.S. economy added far fewer jobs than expected in June.
</a>
</strong>
Employers created just 57,000 nonfarm payrolls last month, about half the 115,000 analysts had forecast. Leisure and
hospitality shed 61,000 positions. April and May payrolls were also revised down by a combined 74,000.
</div>
</td>
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<a aria-label="Cheng Xin / Getty Images" style="color:#105C8E" target="_blank" title="Cheng Xin / Getty Images">
<img alt="Cheng Xin / Getty Images" class="img100" data-linktype="Normal" data-target="_blank" height="auto" src="https://inboxflows.com/_/image/https%253A%252F%252Fqz.com%252Fcdn-cgi%252Fimage%252Fwidth%253D640%252Cheight%253D360%252Cfit%253Dcover%252Cquality%253D85%252Cformat%253Dauto%252Fhttps%253A%252F%252Fassets.qz.com%252Fmedia%252FGettyImages-2259521316.jpg/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZxei5jb20lMkZjZCIsInRpbWUiOjE3ODMzMzI5NjIuNDAyOTY5OH0:1wggMs:Yv_mrsRkHRQk9Zxen7fu-dEPwxcTw8t1rxycMExOQXo" style="width:200px;max-height:338px;vertical-align:middle;border:0" width="200"/>
</a>
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<div>
<strong style="color: var(--blue-cta-default)">
<a data-linktext="Robinhood's CEO says AI
will trade stocks as well as humans." data-linktype="Normal" style="color:#105C8E" target="_blank">
Robinhood's CEO says AI will trade stocks as well as humans.
</a>
</strong>
Vlad Tenev claims the platform's agentic tools can already execute orders without manual input and will eventually match expert investors. He framed the effort as a push to bring institutional-grade capabilities to retail investors.
</div>
</td>
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<tr style="background-color:#EFEFEF">
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<a aria-label="Cheng Xin / Getty Images" style="color:#105C8E" target="_blank" title="Cheng Xin / Getty Images">
<img alt="Cheng Xin / Getty Images" class="img100" data-linktype="Normal" data-target="_blank" height="auto" src="https://inboxflows.com/_/image/https%253A%252F%252Fqz.com%252Fcdn-cgi%252Fimage%252Fwidth%253D640%252Cheight%253D360%252Cfit%253Dcover%252Cquality%253D85%252Cformat%253Dauto%252Fhttps%253A%252F%252Fassets.qz.com%252Fmedia%252FGettyImages-2268289054.jpg/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZxei5jb20lMkZjZCIsInRpbWUiOjE3ODMzMzI5NjIuNDAzMTAzfQ:1wggMs:lzeV8E7uxaMWJgS1TMnqWFAyqI7mJzKvNKWXSfiCNU8" style="width:200px;max-height:338px;vertical-align:middle;border:0" width="200"/>
</a>
</td>
<td class="editor-cell-text td100" colspan="4" style="background-color:#EFEFEF;padding:10px;font-size:15px;font-family:Arial,Helvetica,sans-serif;width:66.6667%;line-height:1.4;vertical-align:top;mso-line-height-rule:exactly">
<div>
<strong style="color: var(--blue-cta-default)">
<a data-linktext="Alibaba will pay $600 million to settle a U.S. drug sales probe." data-linktype="Normal" style="color:#105C8E" target="_blank">
Alibaba will pay $600 million to settle a U.S. drug sales probe.
</a>
</strong>
The deal resolves DOJ allegations that the company and its payment arm, AUS Merchant Services, failed to
block illegal pharmaceuticals from reaching American buyers. The sum is the largest settlement in Rhode Island district history.
</div>
</td>
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<tr style="background-color:#EFEFEF">
<td class="td100" colspan="6" height="24" style="background-color:#EFEFEF;width:100%;height:24px;font-size:1px;vertical-align:top;font-family:Arial,Helvetica,sans-serif">
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<a aria-label="NurPhoto / Getty
Images" style="color:#105C8E" target="_blank" title="NurPhoto / Getty Images">
<img alt="NurPhoto / Getty Images" class="img100" data-linktype="Normal" data-target="_blank" height="auto" src="https://inboxflows.com/_/image/https%253A%252F%252Fqz.com%252Fcdn-cgi%252Fimage%252Fwidth%253D640%252Cheight%253D360%252Cfit%253Dcover%252Cquality%253D85%252Cformat%253Dauto%252Fhttps%253A%252F%252Fassets.qz.com%252Fmedia%252FGettyImages-2282256003.jpg/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZxei5jb20lMkZjZCIsInRpbWUiOjE3ODMzMzI5NjIuNDAzMjY1Mn0:1wggMs:UKJPuascJRvmVAY-NiQGZtg0YWYYxH3w4fKt36Qbmw8" style="width:200px;max-height:338px;vertical-align:middle;border:0" width="200"/>
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<div>
<strong style="color: var(--blue-cta-default)">
<a data-linktext="Google loses
its final appeal over a $4.7 billion E.U. fine." data-linktype="Normal" style="color:#105C8E" target="_blank">
Google loses its final appeal over a $4.7 billion E.U. fine.
</a>
</strong>
The bloc's top court ruled that the company broke competition law by forcing phone makers to pre-install its search engine and Chrome in order to maintain access to the Play Store. More fines could follow under the Digital Markets Act.
</div>
</td>
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<tr style="background-color:#EFEFEF">
<td class="td100" colspan="6" height="24" style="background-color:#EFEFEF;width:100%;height:24px;font-size:1px;vertical-align:top;font-family:Arial,Helvetica,sans-serif">
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<td class="td100" colspan="6" height="24" style="width:100%;height:24px;font-size:1px;vertical-align:top;font-family:Arial,Helvetica,sans-serif">
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<td class="editor-cell-text td100" colspan="6" style="padding:10px;width:100%;vertical-align:top;font-family:Arial,Helvetica,sans-serif;font-size:15px">
<h1 style="mso-line-height-rule:exactly;Margin:0;font-family:Arial;font-size:24px;font-weight:bold">
<span style="font-size:24px;font-family:Arial">
Recommended
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<td class="snippet td100" colspan="6" style="width:100%;position:static;vertical-align:top;font-family:Arial,Helvetica,sans-serif;font-size:15px">
<table border="0" cellpadding="0" cellspacing="0" class="dragndrop" height="100%" style="table-layout:fixed" width="100%">
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<tr class="trpad20" style="background-color:#E9F2F9">
<td class="mobilehide editor-cell-text td100" colspan="6" style="background-color:#E9F2F9;padding:20px;font-size:14px;line-height:1.5;width:100%;vertical-align:top;font-family:Arial,Helvetica,sans-serif;mso-line-height-rule:exactly">
<h2 style="mso-line-height-rule:exactly;Margin:0;font-family:Arial;font-size:20px;font-weight:bold">
Entrepreneurial Inspiration
and its free
</h2>
<div>
<br/>
</div>
<div>
Stories, insights and what's working right now from Adam Wagner - an investor and advisor to Grüns, owner of Raindrop (the agency behind Dr. Squatch) and operator of VitaWild.
</div>
<div>
<br/>
</div>
<div>
<strong style="color: var(--blue-cta-default)">
<a data-linktext="Subscribe To Adam
Wagner's Newsletter" data-linktype="Normal" style="color:#105C8E" target="_blank">
Subscribe To Adam Wagner's Newsletter
</a>
</strong>
</div>
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<a aria-label="Linked image" style="color:#105C8E" target="_blank">
<img class="img100" data-linktype="Normal" data-target="_blank" height="auto" src="https://inboxflows.com/_/image/https%253A%252F%252Fqz.com%252Fcdn-cgi%252Fimage%252Fwidth%253D640%252Cheight%253D360%252Cfit%253Dcover%252Cquality%253D85%252Cformat%253Dauto%252Fhttps%253A%252F%252Fassets.qz.com%252Fmedia%252FGettyImages-2282701568.jpg/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZxei5jb20lMkZjZCIsInRpbWUiOjE3ODMzMzI5NjIuNDAzNDAwNH0:1wggMs:5StVcySJiDzNY2H3PPbeA3Q2fsYRS9tW6QbXTKOXPkg" style="width:600px;max-height:338px;vertical-align:middle;border:0" width="600"/>
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AI startups can now
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ather than finance costly data center buildouts themselves,
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The arrangement
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Launch partners Sharon AI and Firmus Technologies are building the data centers that will rent computing power to smaller AI companies under the revenue-sharing agreement. Firmus
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