Semiconductor shares climbed on Friday as investors looked past a report that OpenAI revenue may fall short of earlier estimates. Broadcom, Micron, Marvell, AMD and Lam Research all rose, and futures for the Nasdaq 100 gained about 1 percent. The S&P 500 closed above 7,800 for the first time earlier in the week. Analysts expect S&P 500 earnings to grow about 30 percent for the July-to-September quarter, led by energy and technology. Chipmakers sit at the centre of the AI buildout, and demand for advanced processors and high-bandwidth memory remains the main driver. Traders expect the Federal Reserve to hold rates steady at its October meeting.
A SpaceX Falcon 9 launched an experimental satellite on October 1 carrying four of Google's Trillium TPUs, the processors that run its Gemini models, into low-Earth orbit. Google confirmed contact and says the satellite is working as expected. The craft, built with Planet Labs, is about the size of a refrigerator and is designed to run for roughly a year. It runs Gemini in 15-minute bursts, then shuts down so heat can radiate away through pipes and panels. Project Suncatcher aims to test whether near-constant sunlight in the right orbit can power AI computing more cheaply than data centres on the ground.
The head of chip materials maker AT&S says advanced semiconductor substrates have become a hidden bottleneck in the race to build AI systems, calling the technology the 'new gold' of the industry. As processors get faster, the packages that carry signals and power between a chip and its board matter more to performance. The warning adds to a run of supply constraints across the AI hardware chain, including tight memory capacity and rising DRAM prices.
The tightest supply line in the chip industry is memory, not logic. High-bandwidth memory now takes roughly 23 percent of DRAM wafer capacity, and data centres are expected to use close to 70 percent of the memory chips made this year. Contract prices for automotive DRAM are forecast to rise 70 to 100 percent in 2026. TSMC will raise chipmaking prices by up to 10 percent from January 2027, and Nvidia and Broadcom have been turned down on extra capacity. Copper, helium and memory packaging are also tight, and Washington has threatened tariffs on overseas memory producers unless they expand output inside the United States.
ASML's chief executive warned on October 5 that the global AI boom is growing faster than the chip industry can add production capacity, and that supply constraints could last for years. ASML is the only maker of the most advanced lithography machines used to print leading-edge chips. Industry group SEMI expects semiconductor equipment sales to reach a record $165.9 billion in 2026, up 23.2%, driven by AI demand. Test equipment is forecast to grow 31%. Analysts expect generative AI chips to bring in about $500 billion in 2026.
Aleph Alpha, the German AI company based in Heidelberg, released a new large language model called Kolibri. The model supports German and English and uses a mixture-of-experts design, which runs only part of the network for each request. Weights were published on Hugging Face under the Apache 2.0 licence, so companies and public bodies can download and run it on their own servers. Aleph Alpha markets the model for government, industry and defence work, where data must stay inside Europe. The release adds to a push for sovereign AI, in which governments train and host models on domestic hardware rather than relying on US cloud providers.
Alibaba has announced a new processor that it describes as China's most powerful chip for artificial intelligence work, along with plans to expand its AI model lineup. The company says the chip is built for training and running large models in data centres. The move comes as Chinese firms look for domestic alternatives to imported accelerators. Analysts say software support and manufacturing capacity will decide how quickly the chip is adopted at scale, and Alibaba has not yet given detailed benchmarks.
Nvidia broke through to a new record high even as a broad bond sell-off dragged other sectors lower. Demand for AI accelerators and high-bandwidth memory continues to outrun supply, and the companies buying them are financing an unprecedented build-out of data centres. Bank of England governor Andrew Bailey warned that the boom could trigger market shocks, saying the bank is watching the cash flowing into AI very carefully. In China, humanoid robot maker Unitree Robotics soared more than 600 percent on its market debut despite a US ban on its hardware.
The US Federal Trade Commission has opened a broad investigation into whether OpenAI, Anthropic and other AI companies have harmed consumers. The agency plans formal demands, similar to subpoenas, for documents and executive testimony, and will examine whether the companies broke federal laws barring unfair and deceptive practices, including misuse of consumer data or overstated product claims. A central question is the risk from autonomous AI agents. It is the first US enforcement action aimed at rogue agents, after incidents reported since July. The probe follows a White House meeting where AI firms agreed to voluntary safety standards.
High-bandwidth memory is expected to take close to 30% of DRAM makers' total wafer capacity in 2027, up from roughly 20% now, as suppliers shift lines toward chips used in AI accelerators. SK Hynix said it validated HBM5 with TSMC packaging while HBM4 begins entering Nvidia's next platform. Memory prices are feeding into the wider economy: chips made up nearly half of South Korea's September exports, and Morgan Stanley analysts have called the squeeze part of chipflation. Suppliers are responding with heavy investment, from ChangXin Memory Technologies to Micron and Samsung.