Market Beats | Meta Becomes One of Microsoft’s Biggest AI Customers; Nintendo Switch 2 US Sales Plummet Amid Component Crisis; Evergrande Founder Hui Ka Yan Sentenced to Life in Prison; Walmart Misses Sales Targets as US Consumer Growth Decelerates; Switzerland and China Agree New Trade Accord; Key US Housing Affordability Metric Worsens for First Time in Three Years; Anthropic Prepares Potential Mega-IPO to Match or Beat SpaceX’s Record

—— Meta Becomes One of Microsoft’s Biggest AI Customers; Nintendo Switch 2 US Sales Plummet Amid Component Crisis; Evergrande Founder Hui Ka Yan Sentenced to Life in Prison; Walmart Misses Sales Targets as US Consumer Growth Decelerates; Switzerland and China Agree New Trade Accord; Key US Housing Affordability Metric Worsens for First Time in Three Years; Anthropic Prepares Potential Mega-IPO to Match or Beat SpaceX’s Record

1. Meta Becomes One of Microsoft’s Biggest AI Customers

Meta Platforms Inc. has become one of Microsoft Corp.’s biggest AI customers, underscoring how demand for the emerging technology remains concentrated in the tech industry.

The social media company is spending hundreds of millions of dollars a year to access artificial intelligence models through Microsoft’s Azure cloud service, according to a person familiar with the matter.

Each week, Meta uses trillions of tokens — the unit of consumption for AI computing — via the platform, said the person, who requested anonymity to discuss an internal matter. A major prong of Microsoft’s AI strategy is offering models from a variety of providers through a marketplace called Foundry, which had 100,000 customers as of July. Clients from traditional industries such as manufacturing or transportation are often featured in Microsoft promotional material.

But for now, most of its largest AI customers are other tech companies, according to people familiar with the matter. ByteDance, the Chinese maker of social media app TikTok, has generally been the biggest spender on Foundry, Bloomberg previously reported.

Other big customers include Adobe Inc., AI firm Perplexity and Sierra, the customer service AI startup co-founded by OpenAI Chairman Bret Taylor, one of the people said.

The potential downsides of revenue concentration and circular business dealings have dogged the tech industry in recent years. For AI to live up to the hype, the technology must be widely adopted across the economy rather than just by sophisticated tech firms.

Microsoft is especially reliant on a handful of tech sector customers. OpenAI, the company’s longtime partner, provided about 70% of Microsoft’s overall AI revenue in its most recent fiscal year. In addition to model access, Microsoft offers an AI assistant, Copilot, and rents out AI-focused computing power.

Meta is spending heavily on AI to assist its software development efforts, buying access to models through multiple platforms based on their availability and how much they cost, according to people with knowledge of the matter. Developers at Meta have used OpenAI technology through Foundry to help them assess the output of their own models, one of the people said.

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2. Nintendo Switch 2 US Sales Plummet Amid Component Crisis

Nintendo Co.’s Switch 2 sales in the US this July were less than half what they were the same month a year ago, leading an industrywide hardware decline, according to Circana.

The far-reaching impact of elevated memory prices has pushed up the cost of each console and even the debut of several hit new games couldn’t forestall a big drop in console sales, the researchers found.

Game hardware spending in the US fell 29%, to $282 million, which was the lowest tally since the Covid pandemic snarled supply chains and restricted the wide availability of consoles. Unit shipments fared even worse, as they came down by 39% while prices were 16% higher, reaching a $542 average price, Circana said. Nintendo sparked a revival in excitement for home gaming with its Switch 2 debut last summer, and its new platform got off to a fast start. But the increase in component costs and the absence of a true must-have title from the Mario or Zelda franchises have hurt its performance since then. “The market comparables continue to be impacted by the record-setting June 2025 launch of Nintendo Switch 2. However, the challenges extend far beyond simple cyclicality,” said Mat Piscatella, director at Circana. “Higher hardware prices driven by the RAM and component crisis have significantly impacted the selling rates of both PlayStation 5 and Xbox Series, with a price hike for Nintendo Switch 2 hardware coming.”

PlayStation maker Sony Group Corp. and Xbox owner Microsoft Corp. are both much deeper into the life cycles of their flagship consoles and preparing strategic shifts. Microsoft has appointed a new chief executive officer to oversee a transition of the Xbox group, while Sony’s moving its focus to acquiring more content and intellectual property rights.

Nintendo, the console maker most heavily reliant on churning out regular new attractions for players, delivered a new entry to the US top-grossing games chart in July with Splatoon Raiders. Its Tomodachi Life: Living the Dream remained in the top 10 during the month.

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3. Evergrande Founder Hui Ka Yan Sentenced to Life in Prison

China Evergrande Group’s founder Hui Ka Yan has been sentenced to life in prison, bringing an end to one of the most dramatic rise and fall stories in China’s corporate history.

The disgraced property tycoon, once Asia’s second richest man, had turned Evergrande into a poster child of corporate excess during China’s long real estate boom. But after his empire came crashing down following a 2021 default, he was caught in a dragnet of official investigations that ultimately caused his downfall.

Hui, who appeared visibly aged in court with greying hair, was sentenced alongside 56 others involved in Evergrande, including his sons Xu Zhijian and Xu Tenghe. His assets will be confiscated, and his companies were fined a combined 15.82 billion yuan ($2.4 billion). The move draws a curtain on what for years was one of China’s great success stories. Hui had binged on debt during Evergrande’s expansion, turning it into the world’s most indebted developer as he transformed the property giant into a sprawling conglomerate.

But Chinese authorities concluded that his rise was built on deception. They said Hui had perpetrated a massive financial fraud that included inflating assets and concealing liabilities.

In April, Hui had pleaded guilty in a Chinese court to charges including illegally taking public deposits and fundraising fraud.

“The amount involved in the crime is exceptionally large, the circumstances are particularly heinous, exceptionally heavy economic losses have been caused, and the harm to society is extremely grave,” a report from state media outlet Xinhua wrote, adding that Evergrande and Hui “must be severely punished in accordance with the law.”

Evergrande and Hui were also found guilty of fraudulently issuing securities, violating information disclosure rules as well as bribery. Meanwhile, the founder was accused of embezzling company assets through dividend mechanisms.

The sentence doesn’t bring an end to the numerous legal fights surrounding Evergrande. The company is now in liquidation, with an army of creditors inside and outside of China poring over its assets in the hopes of recovering some of their heavy losses.

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4. Walmart Misses Sales Targets as US Consumer Growth Decelerates

Walmart Inc.’s quarterly sales fell short of expectations, a rare miss that’s likely to stoke concern about the leading big-box retailer decelerating alongside a slow-growing US economy.

Sales at US stores open at least a year, excluding fuel, rose 2.6% in the second quarter, shy of the lowest analyst estimate compiled by Bloomberg. That rate of growth — hindered primarily by pricing pressure in its pharmacy business — is the slowest in more than six years.

Walmart shares fell as much as 8.7% shortly after the open of regular trading Thursday in New York, the biggest intraday drop since July 2022. The stock had risen 2.6% this year through Wednesday’s close. The results suggest it’s getting more challenging for the world’s largest retailer to maintain a faster growth rate as expectations from investors have risen. The earnings report also may foment anxiety about uneven economic signals and deteriorating consumer sentiment. Walmart flagged that its pharmacy business weighed on US sales due to federal negotiations that have led to lower drug prices. Shoppers spent less per trip during the quarter that ended in July compared with a year ago, though the number of transactions stayed at similar levels. E-commerce sales rose.

Despite difficulties in the latest period, Walmart raised its full-year guidance for sales and adjusted operating income. The company began receiving tariff refunds in the second quarter, which management will continue putting toward lowering prices.

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5. Switzerland and China Agree New Trade Accord

Switzerland and China agreed on a new trade accord that almost entirely removes tariffs on Swiss exports, as Beijing tries to increase ties in Europe amid its ongoing rivalry with the US for global influence.

The deal grants 99.8% of Switzerland’s current exports to China tariff-free treatment, the Swiss government said in a statement Thursday. Swiss investors will also get better access to the Chinese market.

The news lifted Swiss stocks including Swatch Group and Richemont SA. The blue-chip SMI Index pared earlier losses to trade little changed as of 5:10 pm. Zurich time. The accord is good news for Switzerland amid the continued risks the export-oriented economy faces from US trade policy. The government secured a preliminary agreement with Washington that caps tariffs at 15%, but doubts linger on that, as the US has shied away from signing a legally binding deal. Last summer, the Trump administration initially hit Switzerland with a 39% levy, at the time the steepest among developed nations. Under the terms of the new agreement, signature exports including watches, pharmaceuticals and precision instruments can go to China fully duty-free. China is Switzerland’s third-most important trade partner after the European Union and the US, with bilateral shipments amounting to some 34 billion francs ($43 billion) last year.

China’s Minister of Commerce Wang Wentao and Swiss President Guy Parmelin on Thursday shook hands on the new treaty. It concludes years of negotiations on an update to a free-trade agreement in place since 2014. It exempted almost all Chinese sales to Switzerland from tariffs, but only included about half of Swiss exports to China.

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6. Key US Housing Affordability Metric Worsens for First Time in Three Years

China recovered a rocket booster on land for the first time, a major step toward catching up with US companies such as Elon Musk’s SpaceX.

A Zhuque-3 rocket successfully landed on its legs in the northwestern province of Gansu after helping send a satellite into orbit on Wednesday, according to the official Xinhua News Agency. The rocket took off from Jiuquan, one of China’s main space launch centers.

A video clip posted online showed the rocket tapering back on thrust to touch down gently on special legs, which should allow it to be reused. The breakthrough marks a significant milestone for China’s space program and the craft’s developer, LandSpace Technology, as reusable rockets can substantially lower the cost of launching satellites into space. China successfully recovered a rocket last month, but it did so at sea. “LandSpace’s successful booster recovery with the Zhuque-3 is a watershed moment for China’s commercial space sector,” said Eric Zhu, an analyst at Bloomberg Intelligence.

Still, the nation’s had its share of setbacks, such as a rocket exploding during launch earlier this month.

The Zhuque-3 is developed by commercial launch provider LandSpace, which applied last year to go public in Shanghai, as it races to catch up to SpaceX and Blue Origin LLC, which is backed by Jeff Bezos. The company’s past achievements include beating SpaceX in launching a methane-fueled rocket.

SpaceX has been recovering and recycling the boosters of its Falcon 9 rockets since 2017, helping it grab a near-monopoly in heavy-lift rocket launches and supporting the growth of its thousands of Starlink satellites.

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7. Anthropic Prepares Potential Mega-IPO to Match or Beat SpaceX’s Record

The highly anticipated initial public offering of Yushu Technology Co., known as Unitree Robotics, drew huge demand from retail investors as China’s leading humanoid robot maker opened books in Shanghai.

The retail portion of the IPO was 5,526 times subscribed, with individual investors submitting 9.8 million orders, according to an exchange filing released on Monday.

The Hangzhou-based company sold 40.4 million shares at 150.8 yuan apiece, raising about 6.1 billion yuan ($904 million) to become mainland China’s first publicly traded humanoid robot maker. The company is expected to debut on Shanghai’s STAR Market this month. The offering gives Unitree a market value of approximately 61 billion yuan. The high level of interest underscores the investor appetite for physical AI companies, one of Beijing’s strategic priorities. The strong subscription was also likely aided by backing from strategic investors including AI startup DeepSeek, reinforcing confidence in Unitree and the growing convergence of artificial intelligence and robotics.

About 20% of the shares for sale have been allocated to strategic investors including DeepSeek, a Tencent Holdings Ltd.-affiliated investment vehicle, and investment arms of major state-owned enterprises such as China National Petroleum Corp., China Southern Power Grid Co. and China Telecom Corp.

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