WSJ What’s News – August 29, 2025

Episode Title: Alibaba Develops a New AI Chip to Fill Nvidia Void
Host: Azhar Sukri, The Wall Street Journal
Main Theme:
Today's episode covers Alibaba’s development of a new AI chip in response to U.S. regulatory hurdles on Nvidia exports to China, the inflationary impact of trade policy on consumer goods, market responses to President Trump’s latest moves regarding the Federal Reserve, the ongoing humanitarian crisis in Gaza, and the surprising cultural success of a new Netflix animated film.

1. Alibaba’s New AI Chip: Plugging the Nvidia Gap

[00:31-02:47]

• Context:
  The U.S. has imposed regulatory restrictions limiting Nvidia’s ability to export advanced chips to China, creating a technology gap that Chinese firms are rushing to fill.
• Exclusive Report:
  Alibaba, China’s biggest cloud computing company, has developed a domestically-manufactured AI chip designed for a broad range of artificial intelligence uses.
  • Notable Insight:
    Peter Landers (Asia Business Editor) explains that this marks a shift from Alibaba’s earlier dependence on chips manufactured by Taiwan Semiconductor Manufacturing Company (TSMC).
    • “This chip is going to be made in China, unlike some of the earlier chips that Alibaba made for its own use that were made by Taiwan Semiconductor Manufacturing.” — Peter Landers [01:56]
  • Capacity Limitations:
    Chinese manufacturers face capacity constraints, especially for the most advanced “7 nanometer” chips.
  • Alternate Approaches:
    Startups like Metax are opting for less advanced but easier-to-manufacture chips in order to ramp up supply:
    • “If you can use somewhat older technology, the manufacturers might be able to make more and do it more quickly.” — Peter Landers [02:40]
• Big Picture:
  China is rapidly building its indigenous tech capabilities but still faces significant manufacturing bottlenecks and tech gaps as a result of U.S. export restrictions.

2. Sticker Shock: U.S. Tariffs Fuel Household Price Hikes

[02:47-04:16]

• Trade Policy Effects:
  A wave of earnings reports reveals how President Trump’s tariffs are trickling down to American consumers through higher prices on staple goods:
  • Companies like Hormel Foods and Ace Hardware are raising prices.
  • Walmart, Target, and Best Buy have already passed on increased costs to shoppers.
  • Goods like beef, pork, vegetables, and nuts are getting more expensive due to tightening supply chains.
• Resilience in Consumer Spending:
  Despite higher prices, retail giants such as Dick’s Sporting Goods and Dollar General report robust sales, suggesting that higher costs haven’t yet reduced consumer demand.
• Outlook:
  More price hikes are expected as lower-cost inventories run out and new stock is affected by tariffs.

3. Trump, the Fed, and Market Calm

[04:16-07:05]

• Central Bank Tensions:
  President Trump’s removal of Fed board member Lisa Cook has raised new concerns about the independence of the central bank.
  • Analysis (James Mackintosh, Senior Markets Columnist):
    • The move was Trump’s “boldest step yet” to control the Fed, but markets did not react strongly.
    • Mackintosh attributes the calm to mainstream nature of likely Powell replacements:
      • “The people he’s proposing, or at least the people who are leading candidates to replace Jay Powell as the chairman, are actually perfectly mainstream candidates that could have been picked by any Republican president without the markets reacting at all.” — James Mackintosh [00:50, 04:16]
    • The actual departure of Lisa Cook is not definite and will face legal challenges.
    • Powell, himself a Trump appointee, is currently a target of the President’s ire.
    • Even candidates sympathetic to Trump (who voted for a rate cut at the last meeting) likely reflect the Fed’s dovish tilt rather than radical policy shifts.
    • “The big deal is if the Fed is filled with clowns who are incapable of running a sensible monetary policy and just do exactly what the President wants. But it looks like the Fed is switching to be dovish anyway without Trump.” — James Mackintosh [06:27]
• Takeaway:
  Market actors are distinguishing between Trump’s rhetoric and the reality of likely monetary policy, signaling confidence in ongoing institutional stability.

4. Humanitarian Crisis in Gaza: Medical Evacuations

[07:58-11:44]

• Deteriorating Conditions:
  Gaza remains effectively sealed two years into the conflict; over 34,000 have been evacuated, mostly for medical reasons, but the need far exceeds current exits.
• Personal Stories:
  Journalist Anat Peled scenes interviews at the border crossing:
  • Example: Rana Abu Marshoud and her 8-year-old daughter Iman, injured in an airstrike:
    • “When Rana learned that she had been approved for evacuation from Gaza... it also came with a very difficult choice. Her husband and four other children would have to stay behind... she described parting in tears and said that she was torn between those two worlds now.” — Anat Peled [08:41]
• Bureaucratic Hurdles:
  Multiple steps — referrals, local ministry approvals, receiving country authorization, security screenings — can delay departures by months.
  • Limited willingness from countries (especially EU and U.S.) to accept Gazan evacuees slows the process.
  • “Some countries are wary of accepting Palestinians despite Israeli requests because they're fearful it might be viewed as helping the emptying out of the population in Gaza.” — Anat Peled [09:48]
• Proposed Solutions:
  • Reopening of treatment options in Israel, East Jerusalem, and the West Bank.
  • Reversing closures at Egypt’s Rafah crossing, the primary pre-2024 route for medical evacuees.

5. Netflix Animated Hit: “K Pop Demon Hunters”

[11:53-14:02]

• Streaming Breakout:
  Netflix’s “K Pop Demon Hunters,” featuring a trio of Korean girl-band heroes, has become its most-watched original film, resonating especially with kids and K-pop fans.
  • “At first, I think Netflix and the producers... thought it would only appeal to K pop fans and to anime fans... But then it caught on with the broader market and kids, especially girls, just sort of see this trio of K pop stars as real heroes.” — Ben Fritz, Entertainment Reporter [12:36]
• Pop Culture Moment:
  The singalong version turned into Netflix’s first theatrical “box office” hit, with fans engaging in mass singalongs both online and at screenings.
• Lessons for Hollywood:
  Immediate streaming access may have propelled the film’s popularity, allowing viewers to “try for free,” rewatch, and share easily:
  • “For a movie that’s so risky, that’s a little bit of a hard sell to convince people that they want to try it, being on streaming might actually be an advantage rather than going into theaters first.” — Ben Fritz [13:23]

Memorable Quotes & Moments

• “This chip is going to be made in China, unlike some of the earlier chips that Alibaba made for its own use that were made by Taiwan Semiconductor Manufacturing.” — Peter Landers [01:56]
• “The people he’s proposing, or at least the people who are leading candidates to replace Jay Powell as the chairman, are actually perfect mainstream candidates...” — James Mackintosh [04:16]
• “She described parting in tears and said that she was torn between those two worlds now.” — Anat Peled [08:41]
• “For a movie that’s so risky... being on streaming might actually be an advantage.” — Ben Fritz [13:23]

Key Timestamps

• [00:31] — Episode headlines, today’s top business stories
• [01:56] — Exclusive: Alibaba’s new China-made AI chip
• [02:47] — Household price hikes from new tariffs
• [04:16] — Market response to Trump’s Fed moves
• [07:58] — Humanitarian medical evacuations from Gaza
• [11:53] — Netflix’s “K Pop Demon Hunters” phenomenon

This episode provides a comprehensive look at U.S.-China tech competition, inflationary pressures from trade policy, the intersection of politics and monetary policy, the persistent humanitarian challenge in Gaza, and evolving patterns in media and pop culture engagement.