Good afternoon and welcome to Markets Desk, your midday read on what's moving markets and the broader economy.
A new internal review is putting the Federal Reserve in an uncomfortable spotlight. Fed Vice Chair for Supervision Michelle Bowman acknowledged this week that central bank staff missed clear warning signs ahead of Silicon Valley Bank's collapse in two thousand twenty three. The report suggests supervisory failures, not just bank mismanagement, played a meaningful role in one of the largest bank failures in American history.
Shifting to the AI space, Microsoft's Mustafa Suleyman used notably blunt language on Squawk Box this morning, calling OpenAI's recently disclosed incidents of what the company itself described as concerning model behavior a serious situation. That kind of candid language from a senior Microsoft executive carries weight given the company's deep financial and strategic partnership with OpenAI, and it raises real questions about model reliability at scale.
Meanwhile, a supply constraint is quietly reshaping the AI infrastructure trade. Three companies now control roughly eighty five percent of high bandwidth memory production, the specialized chip component that AI systems depend on most heavily. That concentration means access to HBM is becoming as much a competitive moat as the models themselves, and investors are taking notice of who holds the keys.
That's the tape. Markets Desk, signing off the floor.
