Tech Brew Ride Home - The Agentic Era

Episode Date: August 27, 2026

Nvidia posted $96B in quarterly revenue and guided to 70% growth next year, then agreed to buy Hugging Face for $12.9B. Trump weighed sweeping chip tariffs, cybersecurity stocks ripped on AI threats, and Instinct raised at $2.5B. Links Nvidia reports Q2 revenue up 106% YoY to $96.22B, above $92.17B est., Data Center revenue up 117% to $89B, above $85.08B est., and net income up 126% to $59.7B (Nvidia) Nvidia guides to ~70% revenue growth next fiscal year, well above the 45% analysts expected, sending shares up as much as 7.6%, though margins will bottom at 71%-72% on memory costs (Bloomberg) Source: Nvidia has agreed to acquire Hugging Face for $12.9B; the AI repository has had several potential suitors among its investors, including Salesforce (The Information) Sources: the Trump administration is weighing sweeping new tariffs on chips and other products like laptops and consoles, despite warnings from tech companies (Politico) Cybersecurity stocks surge, with Okta up 20%+ and CrowdStrike up 15%+, after earnings showed that AI adoption is driving attacks and spending on security tools (CNBC) AI assistant Instinct is raising a $250M Series B co-led by Index and Benchmark at a $2.5B valuation, taking its total funding to $350M since its 2025 founding (The Wall Street Journal) Subscribe to the ad-free feed.

Welcome to the TechBrewrite home for Thursday, August 27th, 2026. I'm Brian McCullough today. InVIDIA posted $96 billion in quarterly revenue and guided to 70% growth next year, and then might have pulled the trigger on buying Hanging Face for $12.9 billion. President Trump is weighing sweeping chip tariffs that the tech industry isn't happy with, and cybersecurity stocks are ripping on these new AI security threats. Here's what you miss today in the world of tech. Every day, shareholders meet to discuss important matters about the companies you invest in, Now you can make your voice heard too. Vanguard investor choice makes it easy to set your proxy

voting preference for your eligible Vanguard index funds, whether you hold a Vanguard fund directly or through another brokerage firm. All it takes is a few clicks to select your proxy voting preference and be heard on important shareholder topics like executive pay and director elections. Visit vanguard.com slash investor choice to learn more. It's your shares. It's your voice. It's easy. Vanguard investors own shares of our index funds and those funds own shares of the they invest in Vanguard Marketing Corporation distributor. InVIDIA earnings, their Q2 revenue was up 106% year-on-year to $96.22 billion, and net income was up 126% to nearly $60 billion.

So they are making profit of nearly a quarter trillion dollars a year at this point, quoting Bloomberg. Invidia, the chipmaker at the heart of the artificial intelligence boom, said revenue will grow about 70% next fiscal year, easing concerns that AI spending is poised to lose momentum. The projected sales growth for fiscal 2028 outstrips analysts estimates for a 45% jump, according to data compiled by Bloomberg. Nvidia shares rose as much as 7.6% after trading got underway in New York on Thursday, adding about $362 billion in market value. The stock was already up 12% this year through Wednesday's close.

InVIDIA would grow faster if it had access to more supplies, Chief Financial Officer Collette Kress said during a post-earnings conference call. Incredibly, we are seeing demand acceleration even at our scale, she said. Customers forecast point to our growth doubling next year. The upbeat outlook offered relief to investors concerned about a bubble in the AI economy. InVIDIA, the world's most valuable company, is the leading provider of AI accelerators, a key component for training and running artificial intelligence models. That status has turned its quarterly earnings into a barometer on the state of the wider industry. In NVIDIA's second quarter earnings report, Chief Executive Officer Jensen Huang said, demand is only accelerating. He also

touted the rollout of the company's latest chip line, Vera Rubin. The AI infrastructure buildout is at full steam, he said. Vera Rubin, now in full production, was built to power exactly this moment. The company warned that margins would narrow in the coming months, while Nvidia copes with a surge in memory costs. It expects the measure to bottom out in the fiscal fourth quarter, a period that runs through January at 71 to 72 percent. As Nvidia increases its own prices, the range should settle down to 72 to 73 percent in fiscal 2028, Chris said. The broader message was that there's been no let-up in demand from customers. After years of runaway growth, some investors had become concerned about a potential bubble. Invydia's myriad investment packs with companies in the AI economy

also sparked fears that circular deals will leave the industry on shakier ground. We would love more supply, Kress said in an interview. It's really about how much more could you do? NVIDIA has spent much of the past year lining up investment deals with major AI companies, including both developers of software and the infrastructure that supports it. Those agreements and the promised financial backing have, in theory, put NVIDIA on the block for tens of billions of dollars and liabilities. The company has said such deals will speed the adoption of AI something that will create even more demand for its products. But critics have voiced concerns that circular financing will foster artificial demand. Crest described the deals as

a part of NVIDIA's efforts to increase supply. The biggest portion of its spending commitments took the form of long-term purchase agreements with vendors, she said. The majority of what we have been helping folks with in terms of commitments is one very important thing called supply, Cress said, end quote. Part of that earnings report had NVIDIA's saying it, has $18 billion committed to equity investments for the rest of the fiscal year and held $47.9 billion in private companies as of late July. But hey, they've got a quarter trillion dollars of money to play with now, right? So why not make more investments? Well, quoting the information, Nvidia has agreed to buy Hugging Face, a company known for its

GitHub-like repository of open source AI models for $12.9 billion, according to a person with knowledge of the agreement. The move will put NVIDIA in charge of a strategic asset in the race among open source model developers to catch up to closed-source AI models from Anthropic and Open AI. NVIDIA leaders believe that a plethora of successful open models will help preserve its AI hardware dominance because they will be a counterweight to the closed-source AI developers, each of which is trying to develop competing AI server chips and lessen their reliance on NVIDIAs. For that reason, NVIDIA has been boosting its own efforts. effort to develop Nemotron-branded open-source AI models and has committed to spend tens of billions

developing its own open models. Other AI server chip makers such as Google, Microsoft, Amazon, previously invested in Hugging Face, as did Invidia. Deal talks between HuggingFace and Nvidia began after the startup received acquisition interest from another suitor. HuggingFace had several potential suitors among its investors, including Salesforce, set a person with knowledge of the interest. Besides storing models, HuggingFace helps AI app developers find and download audio, visual, and text-based AI models and optimize them to run on different server chips. It also offers cloud services to power the models in AI applications. Despite being the dominant repository of open models, the 10-year-old Hugging Face isn't generating

a lot of revenue. It recently was generating $150 million in annualized revenue, typically a figure that multiplies the prior month's revenue by 12. That means Nvidia is paying about 80 times the forward revenue of the startup, which is high, even by today's standards. But Hugging Face revenue has grown relatively quickly of late. It was generating about $100 million in annualized revenue a couple of months ago. Interest in open source AI has surged as the capabilities of Chinese open source models from ZAI, Moonshot, and Deepseek improved to the point where more American businesses said they are using them. Hugging Face customers pay flat fee monthly subscriptions and added fees tied to the amount of computing power they use and data they

store. In June, co-founder and CEO Clem DeLong told the information that the startup had doubled its number of paying subscribers in the first half of 2026. DeLong said on a recent podcast appearance that the company is close to profitability. InVIDIA, by buying Hugging Face, would in effect be resuscitating its AI cloud business, a business it backed away from a year ago. The business, DGX cloud had put NVIDIA in quasi-competition with Amazon Web Services. NVIDIA had committed to spend $13 billion to rent back its own AI chips from bigger cloud providers that had purchased them, including AWS. NVIDIA has then turned around and rented out some of those chips to companies such as

Amgen and ServiceNow that develop their own AI applications. Invidia believed the cloud business could one day help it generate $150 billion in revenue. Hugging Face could also serve as a contingency plan. NVIDIA said during earnings that it had committed to $36 billion in cloud services contracts as part of credit support agreements with its customers. If market conditions shift and customers aren't able to lease that capacity out to third parties, Nvidia would end up responsible for some of that compute. And if NVIDIA finds itself with more compute than its own engineers could use,

it could use the capacity to power AI for hugging face customers while expanding that business. Last week, NVIDIA raised eyebrows by signing a $6 billion deal to license, AI development tools from Poole Side, which develops open source AI models and made offers to hire more than 100 of its employees. InVIDIA earlier this summer acquired Kumo AI and a central AI to help develop model training tools as well. InVIDIA disclosed Wednesday that it holds $99 billion in equity investments and had as of the end of July committed to invest another $25 billion. InVIDIA previously committed to make a $30 billion equity investment in OpenAI, and it also disclosed $108 billion in credit support.

behalf of Open AI, which plans to lease a large data center facility in Ohio, filled with Nvidia chips, likely starting in 2028. Kress said that while some will call circular financing, we see it differently because Nvidia is aiding companies that will become the largest technology companies in history, end quote. With this summer's record-breaking heat, it's hard to cool down enough to get a good night's sleep. That's where the pod comes in. The pod by eight sleep is a smart mattress cover that goes over your existing mattress and actively heats or cools each side of your bed independently. It connects to your wearable, analyzing your daily activity. Then it predicts how you'll sleep and adjusts the pods temperature automatically. What I love about the eight sleep is the simplest

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memory costs are hitting it like they're hitting everyone else. Well, look out because it might get worse soon, quoting Politico. The Trump administration is weighing a new round of sweeping tariffs on semiconductors, eight people familiar with discussions told Politico, despite warnings from tech companies that the move could doom U.S. hopes of dominating artificial intelligence. One tariff approach under consideration would dramatically expand the number of tech products subject to the duties hitting not just chips but potentially many of the goods made with them, such as laptops, gaming consoles, or the servers that fill data centers, the people said. Commerce Secretary Howard Lutnik favors a structure that would tie foreign companies' relief

from the tariffs to investment in U.S. chip manufacturing to juice more domestic production, said for the people. The potential for new tariffs on chips is alarming the U.S. tech industry, which is already grappling with a shortage of high-end semiconductors amid skyrocketing demand driven by the construction of data centers used for artificial intelligence. Advocates for the sector say they're not opposed to Trump's goal of building more of those components on U.S. soil, but note that advanced chip factories cost billions of dollars and take years, if not decades, to build. Until that capacity exists, American companies will remain heavily dependent on imported

chips from a handful of Asian suppliers, including Malaysia, South Korea, and Taiwan, which alone produces more than 90% of the world's most cutting-edge semiconductor. The fight lays bare a contradiction at the heart of the administration's tech agenda. Its drive to rebuild American chipmaking is running headlong into Trump's promise to win the AI race. Tariffs meant to force chip production back onshore would, the industry warns, tax the very imports the AI boom depends on, and could force U.S. companies to cancel some of their plans to build data centers. This data center build out in scale and dollars has been compared to building the transcontinental railroad. said Jonathan McHale, Digital Policy Chief at the Computer and Communications Industry Association,

which counts major tech companies such as Amazon, Google, and meta as members. Any time you add to the cost and decrease predictability, you make it more difficult to invest, and you are putting that in jeopardy, end quote. Meanwhile, the specter of AI-powered hacking has apparently led to boom times for cybersecurity companies, quoting CNBC. CrowdStrike and Octa shares surged on Thursday. after earnings showed that artificial intelligence adoption is pushing customers to spend more on cybersecurity tools. Both companies beat Wall Street's estimates for the fiscal second quarter

and raised their forecasts, citing the AI agent threat. CrowdStrike gained 15% while Octa surged 20%. The broader cyber sector rallied as well with Palo Alto Network's sale point and rubric up about 9%. We're in an arms race, CrowdStrike CEO George Kurtz said during an earnings call with analysts on Wednesday. AI is driving more cyber attacks. AI is driving more cyber spending. AI is driving a clear divide between the cybersecurity companies that solve problems and those that compound problems, end quote. The company's flexible Falcon platform offering, which lets customers switch out security tools doubled year over year, he added. The release of advanced AI models like Anthropics, mythos and attacks such as Open AI's hugging face hack have raised

the stakes for the cybersecurity sector in recent months, forcing businesses to scale their security stacks to combat mounting attacks orchestrated by AI agents. One clear winner has been identity security tools that help businesses secure and manage the explosion in AI agents. Amid this backdrop, cybersecurity stocks have rocketed to fresh highs with both CrowdStrike and Octa up more than 80% each. Octa CEO Todd McKinnon touted the company's early success with new products, which accounted for nearly a third of total bookings. While adoption remains in its early stages, momentum is growing and those advantages are translated into customer demand reflected in the dozens of AI deals we won in Q2, he said on a Wednesday earnings call, end quote.

Finally today, an interesting raise. We've seen the major AI players be folks who have created the big large language models, the bleeding edge models. But everyone thinks the opportunity layer on top of the models would be agents. So could you be the company that has the cutting-edge agent platform. Could someone be the open AI or anthropic but for the agentic era? Well, here's a potential player, quoting the journal. A new AI assistant is rocketing across Silicon Valley. Months after OpenClaw, the viral AI powered assistant, captured the attention of the technology industry. A company called Instinct appears to be gaining traction among early adopting techies. The startup began testing instinct in private beta in February and quickly

generated substantial interest among venture capitalists who are among its earliest users. Its popularity surged earlier this month as users began posting about what they saw as a highly capable AI assistant that worked fairly seamlessly, a gold technologists have long considered a holy grail. Instinct is raising a $250 million series B at a $2.5 billion valuation and a round led by Index Ventures and benchmark, founder Noah Shin said. The steep price for the young startup reflects the continued frenzy surrounding AI investing. Users of instinct can call or text the AI bot and ask it to respond to emails, manage calendars, book a ride to the airport, arrange a handyman, and more. Some users have reported using it to shop for homeowners insurance or

order custom merch for a wedding. We saw someone buy a house on the platform. A lot of our younger users are using it to find apartment rental, Shin said. It's a one-stop shop to do almost everything. Instinct comes from Spear Street technology led by Shin, who was an early employee at Sierra, the customer service AI company founded by former Salesforce co-chief executive Brett Taylor. Shin, 23 years old, dropped out of Northeastern University in 2023. Since it was founded in 2025, Instinct has quietly raised $350 million, including the new round from investors including conviction partners and Green Oaks, Shin said. A range of apps are already helping people to unload menial tasks to AI.

Instinct competes with ChatGPT work or SpaceX AI's Grockbot, which are increasingly growing more advanced at executing personal tasks. Shin said that instinct is almost like having access to a superhuman operator. Some early instinct users have raised security and privacy concerns to gain the most use from the assistant users have to fork over access to sensitive personal data. Instinct's terms also allow it to train its AI models on user data. Shin said they are iterating fast and taking those security concerns seriously. We've made many product improvements that enable us to prevent the agent from taking

certain actions that maybe some users of our early group who asked an early reversion of the product might have experienced, he said, end quote. Nothing more for you today. Talk to you tomorrow.