Key Points

• Amazon to Invest $50 Billion in AI for U.S. Government: Amazon will expand AWS’s AI and HPC infrastructure for federal agencies, adding 1.3 GW of capacity and deepening its sovereign AI role.
• U.S.–China Thaw in Progress: Presidents Trump and Xi reaffirm tariff rollbacks and rare earth export pauses, with plans for reciprocal state visits.
• Focus Shifts to AI, Crypto and Healthcare: Gold outperforms volatile crypto; Alphabet rallies on AI optimism while U.S. healthcare stocks gain on policy developments.
• ABN Amro to Cut Jobs and Boost Capital Returns: Dutch bank to slash 5,200 jobs, sell Alfam, reduce risk-weighted assets, and target 12% ROE with up to 100% capital returns by 2026.

Amazon Commits Up to $50 Billion to U.S. Government AI Buildout

Amazon will invest as much as $50 billion to expand AI and high-performance computing infrastructure for U.S. federal agencies via AWS, adding roughly 1.3 gigawatts of data center capacity starting in 2026.

The initiative will give more than 11,000 government clients access to AWS AI services, Anthropic’s Claude models, Nvidia GPUs and Amazon’s Trainium chips, positioning the company at the center of public-sector AI adoption.

The plan, which lifts Amazon’s 2025 capex outlook to $125 billion, underscores the escalating AI infrastructure race and the strategic importance of sovereign and government workloads in cloud growth.

Trump–Xi Call Signals Tentative Easing of U.S.–China Tensions

President Trump’s call with Chinese President Xi Jinping reinforced a fragile thaw in U.S.–China relations, with both sides affirming that the tariff rollbacks and rare earth export pauses agreed at last month’s Busan meeting are being implemented.

Beijing described the relationship as on a “steady and positive” trajectory, while Trump highlighted progress on agricultural trade and confirmed plans for reciprocal state visits in 2025.

The two leaders also discussed Ukraine peace efforts and reiterated their positions on Taiwan, underscoring that while geopolitical flashpoints remain, markets can expect near-term de-escalation on trade and supply-chain frictions rather than renewed escalation.

AI, Crypto and U.S. Healthcare in Focus

Tuesday’s trade will open with attention split across AI, digital assets and U.S. healthcare. Gold has quietly gained about 10% over two months as bitcoin and ether have dropped roughly 20%–30%, highlighting a rotation from speculative crypto into perceived havens.

In equities, Ross Stores continues to defy broader retail weakness, while Alphabet’s 6% jump on optimism around its new AI platform contrasts with November declines in Nvidia, Amazon, Meta and Microsoft, adding fuel to the “AI bubble” debate amplified by Michael Burry’s new bearish newsletter.

U.S. healthcare names are also on watch after gains tied to potential policy measures to curb medical costs.

ABN Amro Unveils Deep Job Cuts to Boost Returns and Capital Returns

ABN Amro will cut about 5,200 full-time jobs, more than 20% of its workforce, by 2028 as it accelerates cost savings and refocuses on core businesses, sending its shares up over 4% at the open.

The plan includes selling its personal loan unit Alfam to Rabobank, reducing €10 billion of risk-weighted assets in its corporate bank and targeting a CET1 ratio above 13.75%.

The bank aims for at least 12% return on equity and to return up to 100% of capital generated to shareholders from 2026–2028, reinforcing Europe’s broader trend of capital-rich lenders tightening costs and upping payouts.

Conclusion

Tuesday’s developments underscore an investment landscape still defined by AI capex, geopolitics and capital discipline.

Amazon’s $50 billion commitment to U.S. government AI infrastructure reinforces the durability of sovereign and enterprise AI demand, even as public debate over valuations intensifies.

The Trump–Xi call suggests a tentative easing in U.S.–China trade frictions, reducing near-term tail risk around tariffs and supply chains.

In equities, attention is pivoting toward stock-specific stories in AI, crypto and U.S. healthcare, while ABN Amro’s aggressive cost-cut and payout roadmap highlights how European banks are using excess capital to drive efficiency gains and shareholder returns.

Investment Insights

• AI as Long-Term Infrastructure, Not a Fad: Amazon’s $50 billion plan for government AI infrastructure shows that large, recurring public-sector demand is forming. This supports a long runway for quality players in cloud, chips and data centers, even if headlines stay volatile.
• Geopolitics Can Ease Risk as Well as Create It: A calmer tone between the U.S. and China lowers the chance of new trade shocks, which is supportive for global supply chains and multinational earnings, especially in tech and manufacturing.
• Stock Picking Over Themes: Within AI, healthcare and crypto, performance is diverging. Broad labels matter less than underlying business strength, pricing power and balance sheet quality.
• Banks as Cash-Return Engines: ABN Amro’s plan to cut costs and return more capital reflects a wider trend in European banking. Select banks may offer steady income and buybacks, provided their balance sheets remain strong and risk controls are robust.

Economic Calendar