Axios

Shares in Meta sunk 9% in after-hours trading Wednesday after the tech giant said it planned to spend more money than initially expected on AI infrastructure costs this year.

Yes, but: Those investments do appear to be paying off meaningfully in fueling the growth of Meta's ad business.

Amazon trimmed about 2,300 Seattle-area jobs this week — including hundreds at its South Lake Union and Bellevue offices — as part of a 14,000-person global layoff that marks one of the tech giant's largest white-collar cuts to date, according to a new state filing.

Why it matters: Seattle's economy leans heavily on Amazon's highly paid, corporate workforce, whose spending fuels much of downtown's housing, retail and restaurant activity.

What's good for a new-school company can also be good for an old-school one.

The big picture: Nvidia passed $5 trillion in value Wednesday, while Caterpillar's stock soared. The burgeoning AI economy is fueling insatiable demand for the modern form of picks and shovels — the types of AI chips that Nvidia designs — and for the actual picks and shovels needed to build that new capacity.

Inflation remains stubborn, and the state of New York has launched "inflation refund checks" as a way of tackling it.

The big picture: Even as inflation is rising slower than expected, it's still uncomfortable, especially for low-income people and in places like New York City.

Paramount on Wednesday began informing staff about long-anticipated layoffs following its merger with Skydance Media in August.

Why it matters: Executives from Skydance and RedBird Capital Partners, which helped finance the deal, have long said publicly the merger would yield synergies.

Between $7 billion and $14 billion in U.S. gross domestic product will not be recovered after the government shutdown, the Congressional Budget Office estimated in a Wednesday report.

Why it matters: Government shutdowns don't typically affect the country's broader financial health, but the ongoing standoff between Democrats and Republicans and Trump's unilateral spending moves during the funding gap add extra uncertainty to the economic picture.

The Federal Reserve cut interest rates by 0.25% on Wednesday, even as the ongoing government shutdown restricts the release of critical economic data — though Fed chair Jerome Powell threw cold water on Wall Street's bets on another rate cut by year-end.

Why it matters: It's the second straight rate cut aimed at safeguarding America's weakening jobs market, but the Fed policymakers were sharply divided, and the path of interest rates ahead looks uncertain

Millions of Americans may want to hold onto their EBT cards — even if benefits lapse for a bit.

Why it matters: Supplemental Nutrition Assistance Program (SNAP) benefits will freeze in November, but rollover dollars will still be accessible and cards can be used in the future.

U.S. House staffers were warned by congressional administrators Wednesday that their October paychecks will not be sent out if the government remains shut down into November, Axios has learned.

Why it matters: It is yet another painful consequence of the shutdown — and one that hits particularly close to home for the lawmakers in both parties who have dug in to their positions.

Nvidia surged at the market open Wednesday, becoming the first company in history to be worth more than $5 trillion.

Why it matters: It became the first $4 trillion company less than four months ago.

OpenAI and Character.AI are tightening safeguards after increasing reports of adults and teens forming unhealthy attachments to chatbots.

Why it matters: A series of suicides linked to users' emotional dependence on AI companions has prompted senators to propose regulation and AI companies to begin making changes.

A new kind of data center built by a coalition including Nvidia aims to smooth out power use as AI demand surges.

Why it matters: Shared exclusively with Axios, the project is the first commercial rollout of software that adjusts energy draw in real time — a model the companies say can ease strain on the grid and curb electricity costs.

USAA has issued more than 90,000 no-interest loans to federal employees affected by the government shutdown, totaling about $328 million. Bank of America is offering credit deferrals and auto loans. Dozens of other banks are offering assistance.

Why it matters: Federal employees are taking banks up on the help in droves, indicating how much assistance workers are seeking after some missed their first full paychecks.

Real income growth has slowed to near-decade lows, according to a report from JPMorgan Chase Institute, with young people getting hit the hardest.

Why it matters: As a new wave of companies announce layoffs, a slowdown in income growth is yet one more sign of a softening labor market that could indicate trouble ahead for corporate America.

Nearly 90% of the organizations providing Medicaid-funded community services for people with intellectual or developmental disabilities had staffing shortages this year, according to a trade group for the providers.

Why it matters: Staffing already is a long-standing problem for disability services providers and is expected to get worse as the effects of the budget reconciliation law and its nearly $1 trillion in Medicaid cuts are felt.

One of the most important real-time, real-world debates in America is whether AI causes a short-term job apocalypse among white-collar workers.

• Two developments unfolding this week show urgent reasons for acute concern:

1. Amazon announced yesterday that it's cutting 14,000 white-collar jobs. JPMorgan, Walmart and others have revealed plans to slow hiring. All cited AI. PwC, the accounting and consulting giant, cut staff globally, partly because of AI. Nestlé cut jobs, blaming automation.
2. As importantly, a 2-year-old company with a 22-year-old CEO, founded by three college dropouts, was just valued at $10 billion, according to The Wall Street Journal. The San Francisco company, Mercor, pays doctors, lawyers and others to train AI so machines can perform like human professionals. This is part of a mad rush to fine-tune AI with true human expertise so it can do for free what junior employees do now — and, later, what senior ones get paid good salaries to do.

A slew of major companies announcing large-scale layoffs serves as a warning that the U.S. labor market, which has been in a prolonged-but-precarious balance, could be starting to tip over.

The big picture: Corporate psychology looks to be shifting, as the worker shortages of 2021 fade into memory and AI advances hold the promise of doing more with less.