Dell (DELL: NASDAQ) Technologies World kicks off this week, and investors hope for clarity on the AI buildout. Expect news on hardware orders, especially given Nvidia’s (NVDA: NASDAQ) slow rollout of its Blackwell-based HGX B200 and GB200 NVL72 systems—now scheduled for volume shipments only late in Q4. Add to that recent revelations of power-related construction delays affecting Amazon (AMZN: NASDAQ) and CoreWeave (CRWV: NASDAQ) data centers, and export controls squeezing chip supply chains.

At Google I/O 2025, expect a strong focus on Alphabet’s (GOOG: NASDAQ) AI advancements, including updates to Gemini and Project Astra, alongside the unveiling of Android 16 and Android XR.

Also closely watched this week: earnings from Palo Alto Networks (PANW: NASDAQ). The key question there is whether enterprise IT spending will hold up amid broader economic deceleration and President Trump’s new tariffs, which hit networking and server equipment imports beginning this summer.

As always, I’m focused on three things:
1) Technology-driven change;
2) the latest in innovation and startup trends, and;
3) stock fraud.

Companies Discussed

In This Note:

• Companies Discussed

• Uber’s Innovation: The Breakup Bond 💔

• Of Tech And Tariffs

• Tweet O’ The Week

• Epistrophy In The News

• 📆 of Epistrophy Events

• Availability This Week

Uber’s Innovation: The Breakup Bond 💔

Uber didn’t dump Aurora outright—it just moved its stuff out quietly and left a note. Uber’s (UBER: NYSE) note, an extraordinarily clever $1 billion bond deal announced this week, backed by the very Aurora Innovation (AUR: NASDAQ) shares it once touted as strategic, looks less like a partnership and more like a structured goodbye. No big fight, no slammed doors—just a sneaky-smart financial turning of the page.

Aurora, Uber’s one-time flagship autonomy partner, has long underdelivered on its promise of driverless trucks. Now Uber is extracting value – without selling a share. Its $1 billion bond offering carries no interest, no accretion and matures in 2028. The notes are exchangeable—at Uber’s discretion—into cash, Aurora shares, or both. The initial conversion price is $8.50, well above Aurora’s recent ~$7 share price. Bondholders are protected by a first-lien pledge on Uber’s Aurora stock via an indirect subsidiary, Neben Holdings. If Aurora rallies, they win. If it doesn’t, Uber walks. It’s a creative unwind—liquidation without the headlines.

I’m dubbing it “the Breakup Bond 💔.”

Uber framed the deal as opportunistic. “We still have a very substantial equity stake in Aurora,” CEO Dara Khosrowshahi said at the JPMorgan Global Technology, Media and Communications conference the day of the offering. He rightly described his JPMorgan (JPM: NYSE) I-bankers structure as “pretty creative.”

Uber’s $1 billion bond deal isn’t just clever—it’s complex. Here’s how it works at a glance:

But this wasn’t conviction—it was a controlled exit. Khosrowshahi quietly resigned from Aurora’s board in January. The bond ringfences exposure, delivers liquidity and avoids spooking markets with a direct equity sale. 

Aurora was supposed to be different. Founded by engineers from Waymo, Tesla (TSLA: NASDAQ) and Carnegie Mellon, it raised over $2.1 billion and merged with a SPAC at a $13 billion valuation. It promised rapid lane expansion, full driver-out routes and freight at scale. What it delivered was one route: Houston to Dallas – a flat, weather-stable corridor with high visibility, low complexity and constant support vehicles trailing the AV truck—just in case. 

That 240-mile corridor—nearly all I-45—is Aurora’s only commercial route. It operates between two terminals custom-modified for predictable ingress and egress, both mapped in extreme detail. The truck does not handle warehouse delivery, mixed-traffic access, or surface street driving. It cannot back up. And until recently, it couldn’t proceed through heavy rain. The company still relies on human-driven support vehicles, shadowing autonomous trucks in case of failure or reroute. Emergency beacons are not yet compliant with federal guidance.

Uber isn’t alone in dumping Aurora. Co-founder and Chief Product Officer Sterling Anderson left earlier this year. So did the SVP of Engineering and General Counsel. Reid Hoffman, whose SPAC backed Aurora’s public debut, dumped 11 million shares in late 2024. CEO Chris Urmson put in place a 10b5-1 plan to sell up to 5 million shares by March 2026.

Aurora continues to market its expansion plan: Phoenix to El Paso to Dallas. But each new lane requires annotated maps, facility remapping and customized models. 

Critically, Aurora has yet to prove it can reach customer facilities. Distribution centers often aren’t adjacent to highways and the trucks need to navigate industrial side streets, tight lots and unpredictable human behavior. Meanwhile, support staff costs remain high, terminal retrofitting is slow and customer service-level agreements remain aspirational.

Aurora says it needs $650 to $850 million to reach scaled deployment. Our read, based on interviews and infrastructure estimates, is closer to $2.2 to $3.1 billion. If it misses its 2027 goals—which we believe it will—it faces a more dilution event. We think this is the part Uber no longer wants to underwrite.

So Uber leaves the front door open and is already in the driveway. The bond lets it monetize exposure at favorable terms, while deflecting questions about commitment. Uber says it still “believes” in Aurora. But lasting romance rarely comes with a lien and a liquidation clause.

Of Tech And Tariffs

It ain’t over. 

We see the much-heralded 90-day “suspension” of tariffs between the United States and China is less a ceasefire than a recalibration of hostilities. After marathon negotiations in Geneva, U.S. tariffs on Chinese goods have dropped from a punishing 145% to 30% – to be a dramatic reduction from the last month’s mayhem – but still three times higher than the 10% baseline that existed before President Donald Trump took office in 2025. 

China, for its part, has lowered tariffs on U.S. goods from a peak of 125% to 10% during the 90-day suspension, but the headline figure obscures the full picture. The new 10% baseline tariff is now codified as the minimum, several times higher than pre-2017 levels, and does not account for sector-specific surcharges. For example, a 20% “fentanyl tariff” remains on certain U.S. exports, pushing effective rates well above 10% in those categories. On the U.S. side, the effective tariff rate on Chinese goods averages around 31.8%, combining the new baseline with existing duties and additional levies. Low-value shipments (a de minimis rule allowed goods valued at up to $800-including electronics and other tech products-to enter the United States duty-free if shipped directly to consumers via postal or express services) saw reductions from 120% to 54%, but a $100 flat fee still applies. 

While the White House frames this as a historic de-escalation, the reality is a tariff regime that remains punitive and complex, with effective rates roughly three times higher than before the trade war. Rather than a capitulation, China appears to have recalibrated its leverage – they called Trump’s bluff.

For the technology industry additional duties and sector-specific levies remain firmly in place, ensuring that the cost of global supply chains – and the accompanying uncertainty – remains a defining feature of tech. 

Listening to over 30-hours of tech company quarterly conference calls over the last six weeks and meeting with at least a dozen CEOs, we see four dominant themes emerging, each reshaping the industry’s risk calculus and operational playbook.

Tariff Uncertainty Widens Guidance Ranges

Companies are responding to shifting tariff policy by expanding forecast ranges or, in some cases, suspending guidance altogether. ASML Holding NV (ASML:NASDAQ) widened its Q2 gross margin outlook to 50%-53%, citing tariff unpredictability despite robust EUV bookings. Texas Instruments (TXN:NASDAQ) suspended full-year guidance after reporting a 9% inventory buildup, attributing the move to delayed shipments from Asia and the difficulty of forecasting under current trade conditions. This pattern is echoed across the sector, as firms seek to hedge against the volatility introduced by ongoing tariff negotiations and policy changes.

Tariffs Drive Rising Prices Across the Tech Stack

Tariffs are inflating costs throughout the technology supply chain, with semiconductors at the epicenter. The Consumer Technology Association estimates tariff-driven price increases of 11% to 70% on critical components. Apple (AAPL:NASDAQ) raised the base price of its MacBook Pro by 22%, citing “unavoidable material cost adjustments” linked to tariffs. Microsoft (MSFT:NASDAQ) implemented its first cloud price hike in a decade, raising Azure rates by 8% due to “input cost inflation.” Netflix (NFLX:NASDAQ) increased subscription fees by 15%, referencing broader inflationary pressures. Even companies investing in U.S. manufacturing are passing costs on to customers: Intel (INTC:NASDAQ) raised server CPU prices by 12% despite touting its new Ohio fab as tariff-insulated.

Tariffs Create Artificial Scarcity and Supply Chain Bottlenecks

Policy-driven scarcity has replaced pandemic-era shortages. Lead times for advanced semiconductor manufacturing equipment have nearly doubled. Lam Research (LRCX:NASDAQ) reported 14-week waits for etching tools, up from 8 weeks pre-tariffs and export controls. Super Micro Computer (SMCI:NASDAQ) faces six-month backlogs on AI server orders due to “component allocation games” exacerbated by tariff-related hoarding (though we take everything this company says with a grain of salt). Qualcomm (QCOM:NASDAQ) has cut production of mid-range Snapdragon chips by 30%, prioritizing premium silicon where tariff costs can be absorbed. Tesla is removing ultrasonic sensors from Model Y vehicles because suppliers cannot secure tariff-exempt capacitors, while Western Digital (WDC:NASDAQ) is rationing SSD controllers to enterprise clients, fueling a volatile gray market.

Export Controls Force Revenue Write-Downs and Strategic Shifts

U.S. export controls targeting advanced chips and semiconductor manufacturing equipment are forcing companies to absorb significant revenue losses and adjust global supply chains. The impact is most visible in the semiconductor sector, where companies have begun to quantify the cost of compliance and lost access to the Chinese market.

• Advanced Micro Devices (AMD:NASDAQ) forecasts a $1.5 billion revenue hit in 2025 due to new U.S. curbs on AI chip exports to China, representing about 5% of projected revenue.

• Nvidia expects a $5.5 billion charge from similar export restrictions and is now developing a tariff-compliant H20 chip for China, which delivers 80% of the H100’s performance at triple the price.

• ASML Holding NV expects updated U.S. and Dutch export restrictions to limit some sales to China but maintained its 2025 sales outlook, with China still projected to account for around 20% of total net sales.

• Intel (INTC:NASDAQ) has rerouted 40% of its Gaudi AI accelerator production through India and Vietnam to exploit tariff exemptions tied to final assembly locations.

• Palantir Technologies (PLTR:NYSE) wrote down $200 million in China-related AI contracts due to export controls.

• Cognizant (CTSH:NASDAQ) abandoned a $1.2 billion cloud migration deal with a sanctioned Chinese automaker.

• Amazon.com CSCOredesigned data center racks to use more tariff-exempt “open compute” components, sacrificing some performance for cost predictability.

The cumulative effect of tariff uncertainty, rising prices, artificial scarcity and export controls is fragmenting global supply chains and inflating costs across the technology sector. Companies with robust technology moats and diversified manufacturing footprints (i.e. ASML and Taiwan Semi) – are better positioned to navigate the fractured landscape, while others face mounting pressure to adapt or absorb losses. 

But under Trump, lasting unprecedented uncertainty is, itself, a certainty.

Tweet O’ The Week

Epistrophy In The News

On NewsNation, we discussed how tariff policy is fogging up the earnings season. Investors expect clarity from tech companies, but the new tariff regime is forcing them to hedge—verbally and financially. I walked through why Nvidia, Cisco (CSCO: NASDAQ), and Apple are navigating different exposures, and why the rules around “where a chip is made” are no longer simple questions of geography.

I was also honored to return to the University of Washington’s Foster School of Business, invited by star professor Charles Lee. Speaking to Lee’s MBA students, I gave my updated presentation “Fads, Fakes and Frauds: How To Find Crummy Companies for Fun and Profit.” Minds were blown.

📆 of Epistrophy Events

Availability This Week

I’m in San Francisco all week and reasonably accessible. If you’re around and want to talk AI, infrastructure — and especially “Breakup Bonds 💔” let’s do it.

Written reports are available to clients, with video summaries on YouTube, and of course our popular summaries of the summaries on Instagram, TikTok, and YouTube Shorts.

I hope these notes are helpful to you. I’d love to discuss them further and, as always, comments, questions and ideas are appreciated. If you have a friend or even a frenemy whom you think might benefit from this note, have them reach out and I’ll put them on the list.