Podcast Summary: The Exchange

Episode: Nvidia's Biggest Deal Ever, China Strikes Back & Retail's "Returnuary"
Date: December 26, 2025
Host: Kelly Evans (CNBC)

Overview

This episode of The Exchange dives deep into the current state of the U.S. economy, global geopolitical tensions, and major moves in the tech sector—most notably Nvidia’s unprecedented $20 billion deal with AI chip startup Groq. The episode explores how these events could impact markets, what’s next for the Federal Reserve, and the implications of record-setting returns in retail’s "Returnuary."

Market Check & Economic Discussion

Key Participants:

• Kelly Evans (Host)
• Thomas Simons (Chief U.S. Economist, Jefferies)
• Steve Liesman (CNBC Senior Economics Reporter)

Major Discussion Points

• Stock Market Performance:

  • S&P 500 at another record high, all major averages poised for a >1% weekly gain; small caps lagging ([00:25])
  • Metals (gold, silver, platinum) climbing to record highs
  • Surging volatility year-end, with both speculative buying and aggressive shorting

• Turbulent Airlines Ahead of Major Winter Storm

  • Potential for storm to hit NYC area; added market anxiety

US GDP, Jobs, and Fed Policy

• Q3 GDP Strong, but Clouds Ahead

  • “Relationships that have typically held in the past are a little bit different or just completely unhinged from…historical patterns.”
    — Thomas Simons ([02:22])
  • Jobless claims steady but limited unemployment rate improvement
  • Disconnect between strong GDP and payroll data; questions whether productivity surges or data quirks are to blame ([02:22-03:05])

• Trade Deficit Quirk

  • “The monthly trade deficit numbers really didn’t show any difference between Q3 and Q2, and yet we got a 1.6% contribution to GDP from net exports.”
    — Thomas Simons ([03:06])

• Consumer Sentiment vs. Spending

  • “Consumer sentiment is really in the gutter; consumer spending is not.”
    — Steve Liesman ([04:19])

• Q3 Unsustainable? Waiting for the Giveback

  • Concern over over-inflated Q3 setting up for a material pullback in Q4
  • “If I have 80 basis points of extra growth in Q3, that’s a pretty good starting point for thinking about how much I have to give back in Q4.”
    — Thomas Simons ([04:41])
  • Both guests agree, averaging growth over multiple quarters likely paints a better picture ([06:34])

• Fed Rate Cut Outlook

  • On timing: “Just to go back to what we were talking about before…Q3 GDP may have been really, really great. But if Q4 is slowing down…how can we expect that we're going to get continued momentum?”
    — Thomas Simons ([07:31-08:07])
  • Simons expects cuts to resume potentially as early as March 2026

Nvidia & the AI Chip War

Key Participants:

• Kelly Evans
• Mackenzie Sigalos (CNBC Tech Reporter)

Discussion Highlights

• Nvidia Strikes $20 Billion Non-Exclusive Licensing Deal with Groq

  • “This Groq deal came together in just a few days…the structure…tells you a lot about where this market is headed.”
    — Mackenzie Sigalos ([10:11])
  • Not an acquisition: Groq’s founder Jonathan Ross joins Nvidia; Nvidia gets Groq’s IP ([10:11-11:36])
  • Groq’s ex-Google pedigree: Ross helped build Google’s TPU (seen as Nvidia’s key competition)
  • Focus on “inference”—the next phase in AI revenue
  • Deal structure keeps Nvidia agile, avoids regulatory scrutiny, pays out VCs but less favorable for employees

• Tech Trends: Alternative AI Chips, Supply Chain Bypass

  • Groq’s chips keep data on the processor; mitigates memory chip shortages (potential implications for Micron) ([12:00-12:48])
  • Groq slashed its revenue projection by 75%—shows how hard it is to challenge Nvidia

• Sector-Wide AI Chip Consolidation

  • “It's not just Groq. You’ve got Intel reportedly in talks to buy SambaNova; Meta just acquired an AI chip company, Revos…”
    — Mackenzie Sigalos ([12:56])

Notable Quote

“This deal in particular also shows how Hard it is to challenge Nvidia, even with billions in VC funding and we are seeing this wave of consolidation.”
— Mackenzie Sigalos ([12:56])

“Who Won Christmas?” – Tech Consumer Winners

Key Participants:

• Kelly Evans
• Steve Kovach (CNBC Tech Correspondent)

Marketplace Winners & Losers

• Top Trending Holiday Tech Products ([13:36-17:22])

  • #1: Tony’s — Kid-focused audio story boxes
  • Amazon Alexa devices still a big hit
  • Oura Ring cracks the top 10 for sleep and health tracking

• AI App Rankings

  • ChatGPT at #3, Gemini at #7; Meta AI high due to Ray-Ban smart glasses sales
  • “Gemini and ChatGPT…that’s what [consumers] want.” — Steve Kovach ([15:55])
  • Notably absent: Grok, Anthropic/Claude

• Waymo's Robo-taxi stumble ([16:13-17:04])

  • Shutdown in San Francisco during torrential rains
  • Musk’s robo-taxi claims dismissed as bluster

Geopolitics: China Sanctions & Ukraine

Key Participants:

• Kelly Evans
• Michael O’Hanlon (Director of Research, Brookings Foreign Policy Program)

China–US Tensions

• China Responds to US Arms Sale to Taiwan with Sanctions

  • “On balance, this was an interesting report to read because it began with some consoling positive language about the state of the relationship…” — Michael O’Hanlon ([21:24])
  • Acknowledges China’s military buildup but notes defense spending (under 2% of GDP) is low compared to NATO standards

• Outlook for Defense Stocks

  • Despite volatility, O’Hanlon sees robust US defense budgets continuing

• Ukraine/Russia Peace Prospects

  • O’Hanlon pegs a peace agreement at “50/50 in the course of 2026” ([25:06])
  • “We’re going to have to show our commitment to have Ukraine’s back to up the pressure on Russia even more.” ([25:06])

• US–Europe Tensions over Free Speech

  • Ties crackdowns to culture war strain between US and Europe; expects policy zigzags going forward ([26:11-27:15])

Washington Watch: Congressional Retirements

Key Participant:

• Emily Wilkins (CNBC Reporter, D.C.)

Key Insights

• Record number of lawmakers (53) not running for reelection, highest mid-cycle count since 2012
• Cites frustrations with gridlock and partisanship
• Some retirements are strategic moves for higher office ([27:43-29:14])

Market Strategy: Ignore AI Hype, Focus on the Macro

Key Participants:

• Kelly Evans
• Simeon Hyman (Global Investment Strategist, ProShares)

Highlights

• AI Trade Overstated, Soft Landing is the Real Story

  • “The business cycle is still the biggest driver…soft landing is the nearer term thing.” — Simeon Hyman ([35:51-36:07])
  • Notes inflation falling, unemployment stable, and no sign of economic overheating ([36:23-37:59])

• Valuations & Investment Outlook

  • “Prices [multiples] are substantially lower…than at end-99. Fundamentals are much stronger.” ([38:12])
  • Advocates broad market exposure, especially in small caps via daily covered call strategies

Retail Trends: "Returnuary" & State of the Consumer

Key Participants:

• Kelly Evans
• Bill Simon (Former CEO, Walmart U.S.)

Key Topics

• Returnuary Returns Season

  • ~17% of holiday purchases expected to be returned—a normal dynamic ([42:46])
  • “Retailers look at it as just another opportunity to get somebody to buy something else…you’ll see really aggressive discounting as you head into January.” — Bill Simon ([42:46])

• Holiday Spending Recap

  • Positive season: ~4% sales growth, possibly over $1 trillion ([43:29])
  • Discounters (Walmart, Amazon, Costco) outperform; department stores lag

• Future of Retail Tech

  • Technology—front and back end—will further reduce prices and operational costs
  • Effects of tariffs largely absorbed by strategic sourcing

Notable Quotes & Timestamps

• “Relationships that have…completely unhinged from previous historical patterns.”
  — Thomas Simons ([02:22])

• “Consumer sentiment is really in the gutter; consumer spending is not.”
  — Steve Liesman ([04:19])

• “Nvidia gets Groq’s IP and its founder Jonathan Ross…that’s the secret sauce of this deal.”
  — Mackenzie Sigalos ([10:11])

• “Gemini and ChatGPT…that’s what [consumers] want.”
  — Steve Kovach ([15:55])

• “The good outcome here is strong defense stock, a solid U.S. defense budget, and no war.”
  — Michael O’Hanlon ([24:09])

• “The [soft] landing is the nearer term thing…the business cycle is still the biggest driver…”
  — Simeon Hyman ([36:07])

• “Retailers look at it as just another opportunity to get somebody to buy something else.”
  — Bill Simon ([42:46])

Key Timestamps

• Market/Economy Overview: [00:25-08:43]
• Nvidia–Groq Deal: [09:36-13:21]
• Tech Consumer Trends: [13:36-17:22]
• China–US and Defense: [20:46-27:27]
• Congressional Turnover: [27:43-29:14]
• Market Strategy/Soft Landing: [35:51-41:20]
• Retail "Returnuary" Trends: [42:46-48:04]

Overall Tone

• Analytical, fast-paced, and conversational with frequent expert guest insights.
• Wide-ranging but tightly focused on actionable market news and implications.
• Witty asides (“Such a Grinch”, [05:32]; “I'm only offering economic forecasts this afternoon, not weather forecasts.” [09:28]) provide levity amid dense financial discussion.

This summary captures the core themes, insights, and memorable moments from the December 26, 2025, episode of The Exchange, providing a rich overview for listeners and non-listeners alike.