What's up: Three accused of stealing TSMC chip secrets; HP rides AI PC sales; Chinese spies hit more than 80 countries in breach.

Good morning. Beneath the headlines, the deluge of reporting on Nvidia earnings offers insight into demand for AI among big companies. And there is evidence that corporate interest in Nvidia’s leading edge Blackwell systems is there, even as Nvidia growth eased.

As the WSJ notes, Nvidia sales surged 56% from a year earlier in the period ended in July. While that is the slowest growth rate that the company has reported in more than two years, “it still vastly exceeds what other megacap tech companies are currently managing.”

The super-spectacular nature of Nvidia’s growth in 2023 and 2024 reflected massive capital spending by a few cloud companies laying AI infrastructure. Over time, AI investment is supposed to shift from building infrastructure and training of models to users running applications on that foundation, and what we’re seeing now is consistent with that view.

Highlights from WSJ coverage:

Blackwell in demand. “Nvidia’s outlook remains strong. The company expects to add about $7.3 billion in revenue in the current quarter—its largest sequential jump ever—with its Blackwell chip family in hot demand.” (read the full Heard on the Street column here.)

Nvidia’s newest enterprise customers. “Sales of the company’s new Blackwell line of graphics processing units—its most powerful chips yet—increased 17% compared with the previous quarter, a sign that “demand is extraordinary,” Huang said. The company named Disney, Hitachi, Hyundai Motor and SAP as among its first customers for one of its Blackwell-edition servers.” (read the full story here.)

The interesting question from the enterprise point of view is how such companies put Blackwell to use and what it means for the evolution of their business model, and ultimately its impact on their growth.

A GPU-powered economy. Investment in software and computing equipment made up a quarter of growth this quarter, the New York Times reports, citing Commerce Department data. Separately, companies next year are expected to spend $500 billion on AI infrastructure, according to UBS estimates, up from $375 billion in 2025.

That was fast. On the job's front, the AI talent hiring frenzy sparked by Meta Platforms earlier this summer is still simmering. At least three hot new AI hires for Meta's superintelligence team have since left the company, two back to their previous employer, OpenAI, Wired reports. 

More AI-powered job shifts. Google says it has eliminated some 35% of managers in charge of small teams, CNBC reports, citing audio from an all-hands meeting last week. Since cutting 6% of its workforce in 2023, Google has cut jobs in smaller increments, many motivated by the need to help fund its billions in AI spending.

Some of Nvidia's customers also reported earnings. HP CEO Enrique Lores said AI PC sales continued to rise at a double-digit rate quarter to quarter as commercial customers looked to take advantage of productivity-focused applications.  Snowflake reported second-quarter revenue of $1.14 billion, above analyst expectations, Barron’s reports. The company earlier this summer made a play for the nascent AI agent market, agreeing to acquire database startup Crunchy Data. 

Now there is vibe hacking. Anthropic said a hacker used its Claude Code tool in a criminal cyber extortion scheme that hit some 17 organizations, resulting in the compromise of personal records, including healthcare data and government records. 

OpenAI said it is updating ChatGPT to support users in mental distress. The move comes after a California family sued the company over concerns that their teenage son’s suicide was related to conversations with the chatbot. 

Not a hallucination. Rivals OpenAI and Anthropic this summer actually evaluated each other's models for hallucinations and other safety issues in a first-of-its kind effort, Bloomberg reports. The two companies posted their findings here and here.

Salt Typhoon, the yearslong, Beijing-linked espionage campaign that hit U.S. telecom companies and swept up Donald Trump’s phone calls is actually bigger than you may think. Brett Leatherman, the FBI’s top cyber official, told the WSJ that the campaign targeted more than 80 countries, touching some 600 companies.

Prosecutors in Taiwan indicted three people in a case about sensitive chip technology, alleging they stole information from Taiwan Semiconductor Manufacturing to help one of its top equipment suppliers, Tokyo Electron, win more orders. 

Seven months into his second term, President Trump has taken to riffing more frequently about authoritarianism, after positing during the campaign he would be a dictator only on “day one” of his presidency. (WSJ)

The White House said it fired the director of the Centers for Disease Control and Prevention on Wednesday, and several top CDC officials resigned, throwing the agency’s leadership into turmoil. (WSJ)

Tulsi Gabbard, director of national intelligence, surprised Central Intelligence Agency officials last week when she included an undercover senior CIA officer on a roster of 37 current and former officials she stripped of security clearances. (WSJ)

Russia launched its deadliest barrage against Kyiv since President Trump held talks in Alaska with Vladimir Putin, the Russian president who increasingly appears to be defying White House threats of sanctions and pressing on with his war on Ukraine. (WSJ)

This September, The WSJ Technology Council will convene senior technology leaders to examine how AI is reshaping organizations—redefining teams and workflows, elevating technology’s role in business strategy, and transforming products and services. Conversations will also delve into AI’s evolving security risks and other fast-emerging trends shaping the future.

Select speakers include:

Carolina Dybeck Happe, COO, Microsoft
Severin Hacker, CTO, Duolingo
Yang Lu, CIO, Tapestry
Tilak Mandadi, CTO, CVS Health
Helen Riley, CFO, X, Google's Moonshot Factory

September 15-16 | New York, NY
Request an invitation | Participants and program

The WSJ CIO Journal Team is Steven Rosenbush, Isabelle Bousquette and Belle Lin.

The editor, Tom Loftus, can be reached at thomas.loftus@wsj.com.