Good morning! Here’s your quick pulse check on today’s changing markets.

A newcomer is shaking up the AI hardware scene: Modular has just landed a major $250 million funding round, signaling ramped-up competition for industry giants and more options for developers. The capital injection has propelled Modular’s valuation to $1.6 billion and could spark a new era of choice in AI computing.

In today’s financial recap:

  • Modular secures $250 million to challenge Nvidia’s dominance

  • New crypto regulation prompts a surge in ETF activity

  • The US considers investing in Lithium Americas

  • Alibaba pours fresh capital into AI partnerships

Modular’s $250M Bet to Break Nvidia’s AI Chip Monopoly

The TradeWatch: AI startup Modular raised $250 million to challenge Nvidia’s dominance by providing a neutral software platform, potentially reshaping the AI hardware landscape by fostering competition and lessening platform lock-in.

Unpacked:

  • Modular secured $250 million in funding, increasing the company’s valuation to $1.6 billion, in a round led by U.S. Innovative Technology fund.

  • Modular’s platform lets developers run AI applications across various computer chips without needing to rewrite code, and this “Switzerland” strategy aims to enable a level playing field in the AI hardware market.

  • DFJ Growth compared Modular to VMware, envisioning it as the “AI hypervisor” allowing workloads to port across different vendors, which signals that investors are betting on a multi-vendor future for AI hardware.

Bottom line: Modular’s approach could foster more competition in the AI chip market, ultimately benefiting developers by offering greater flexibility. This signals a potential shift towards more open AI infrastructure.

Regulatory Shift to Ignite Wave of Crypto ETFs in US Market

The TradeWatch: Following the SEC’s easing of ETF approval rules, asset managers are rushing to launch numerous cryptocurrency ETFs, expanding beyond Bitcoin and Ethereum to altcoins like Solana and XRP. This change slashes approval times, potentially flooding the U.S. with new crypto investment products.

Unpacked:

  • New listing standards eliminate individual regulatory review of each crypto ETF application, allowing products that meet predetermined standards to launch without a lengthy case‑by‑case approval process.

  • To benefit from the new, speedier process, an ETF must meet at least one of three criteria, including if a coin underpinning the proposed ETF already trades on a regulated market or has futures contracts regulated by the U.S. Commodity Futures Trading Commission, which has traded for at least six months.

  • Grayscale Investments was first out of the gate, rolling out its new Grayscale CoinDesk Crypto 5 ETF less than 48 hours after the SEC allowed its conversion from a private to publicly traded fund.

Bottom line: These regulatory changes signal a significant shift in the crypto investment landscape, with easier access for both issuers and investors along with the potential for greater mainstream adoption of digital assets. The fourth quarter of 2025 is shaping up as boom time for crypto ETF issuers.

US Government Eyes 10% Stake in Lithium Americas Amid National Security Push

The TradeWatch: Reports suggest the Trump administration is considering acquiring a 10% equity stake in Lithium Americas, a move tied to renegotiations over a $2.26 billion Energy Department loan for its Thacker Pass project.

Unpacked:

  • Shares of Lithium Americas skyrocketed following a report that the U.S. may take up to a 10% stake in the firm, signaling strong investor interest.

  • Thacker Pass is expected to be the largest supplier of lithium in the Western Hemisphere, making this potential stake strategically important.

  • This interest in Lithium Americas follows similar moves with companies including Intel and MP Materials, indicating the administration’s focus on securing critical resources.

Bottom line: This potential government investment underscores the strategic importance of securing domestic lithium supply, which is crucial for electric vehicle batteries and reducing reliance on foreign sources. The move highlights a direct government role in bolstering critical mineral production amid increasing national security concerns.

Alibaba Ups AI Investment Beyond $53B, Teams With Nvidia

The TradeWatch: Alibaba is increasing its AI spending beyond an initial $53 billion, and it’s teaming up with Nvidia for robotics AI tools, signaling growing global competition in AI. Alibaba shares surged in response to these announcements.

Unpacked:

  • Chinese tech giant Alibaba plans to boost its AI investments beyond the previously announced $53 billion over the next three years.

  • Alibaba will integrate Nvidia’s AI development tools for robotics and self-driving cars into its cloud platform.

  • Alibaba’s increased AI spending and collaboration underscore its ambition to be a top full-stack AI provider, and it is projected that global players will invest $5 trillion into AI over the next 5 years.

Bottom line: Alibaba’s growing AI investments reflect its commitment to becoming a major player in the global AI landscape. The stock surge indicates strong investor confidence in Alibaba’s AI strategy and long-term growth potential.

Cheers,

— Michael & the TradeWatch.io editorial team