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| FRI, 16 OCT, 2026 |
ISSUE # 85 |
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AI’s bill is coming due.
Zoho says rising server and AI costs mean no appraisals this year, and ASML says chip-machine demand will outrun supply through 2028. India’s surprise winners? Fibre and power makers. Plus: Meta’s new AI ad checks. |
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🌍 Global AI |
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AI demand outruns ASML's chipmaking capacity |
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Image source: Google Nano Banana 2 |
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ASML, the sole maker of EUV machines (the equipment that prints the most advanced chips), says it cannot meet customer orders in 2027 or 2028. It planned a 30% capacity increase each year; that is already not enough, and customers are booking slots into 2029 and 2030. |
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Full-year revenue guidance raised to €44–45 billion. A major factory expansion broke ground last month but won't be ready until 2029. In the meantime, ASML will upgrade existing machines and sell faster versions to ease the squeeze. |
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Bottom Line: AI infrastructure investment is locking in years ahead, not quarters. If compute costs are already high, they won't ease before 2029 — builders should price AI inference costs as a structural expense, not a temporary line item. |
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🇮🇳 India |
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Zoho skips pay hikes, blaming rising AI costs |
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Image source: Google Nano Banana 2 |
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Zoho is cancelling this year's pay increases and cutting its marketing budget. Founder Sridhar Vembu says AI has raised costs dramatically: server prices for Zoho's own data centres are up 4x, and fast-growing AI usage is pushing expenses higher. |
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Zoho hasn't added headcount in 18 months and says it will work hard to avoid mass layoffs. Vembu calls the software job market 'grim' and says Zoho is reinventing itself — results expected over the next three to five years. |
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Bottom Line: AI infrastructure costs are now large enough to override salary cycles at profitable, self-funded SaaS companies. Any Indian software founder treating compute as a variable cost should model what a 4x server price increase does to their unit economics today. |
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After India probe, Meta adds AI checks to ads |
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Image source: Google Nano Banana 2 |
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Meta is using large language models (AI systems that read and reason about text) to catch ads that look harmless but link to child sexual abuse material elsewhere. New checks follow where an ad leads, not just what it shows, and an AI agent now probes Meta's own defences for gaps. |
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India accounted for 5.3 million child-exploitation items actioned on Facebook and Instagram in the first half of 2026, about 16% of the global total. Meta will now report cases directly to India's National Cyber Crime Reporting Portal. A BBC investigation, MeitY orders, and an NCPCR inquiry preceded these changes. |
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Bottom Line: Regulators forcing platform-level AI safety changes is becoming a repeatable pattern, not a one-off. Builders running ad-supported or user-generated content products should assume destination-URL checks and AI red-teaming will become baseline compliance requirements. |
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India's AI stock winners: fibre and power suppliers |
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Image source: Google Nano Banana 2 |
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With no listed chipmaker, Indian investors are buying infrastructure suppliers instead. Optical fibre maker Sterlite Technologies is up 804% this year — the Nifty 500's top performer. HFCL, MTAR Technologies, Syrma SGS and TD Power Systems are up 123–287%, driven by large hyperscaler orders. |
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Real contracts underpin the rally: HFCL has a five-year deal worth up to $1.1 billion; Sterlite has supply agreements potentially worth over $2 billion this year. JLL estimates India's data-centre capacity could grow from 1.6 GW to 6 GW by 2029. Fund managers warn valuations are stretched. |
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Bottom Line: When a country lacks chip fabs, the AI boom still flows through infrastructure: cables, power, and cooling. Indian suppliers winning hyperscaler contracts now shows where domestic AI revenue will actually land in this cycle. |
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⚡ Mailr Signal |
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ASML's capacity constraint and Zoho's cost squeeze are the same signal from opposite ends of the stack: AI infrastructure spending is compounding faster than supply can respond, and that pressure is now visible inside the P&L of even well-run, debt-free software companies.
Our take, not a news summary.
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🛠️ Tool of the Day |
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Kroop AI
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📱 Social Scan |
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 Meta's AI app, Muse, is showing impressive early retention, outperforming ChatGPT on Day 1 (73% vs 41%) and Day 7. But users drop off faster: by Day 14, ChatGPT leads with 26.8% retention versus Muse's 22.5%.
View post →
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🧠 Knowledge Bank |
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The GPU: Parallel Processing Power
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A GPU is an electronic circuit that performs mathematical calculations at high speed using hundreds or thousands of cores to execute the same operation simultaneously across vast data. Unlike a CPU that works sequentially, a GPU's parallel processing is essential for AI training. Analyzing a massive spreadsheet takes hours on CPU but minutes on GPU, making it indispensable for modern AI workloads. |
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The IndiaAI Mission deployed 38,000 subsidised GPUs to Indian startups at a fraction of commercial cloud pricing, eliminating compute cost as a barrier. Indian builders should use government compute for heavy training phases and cheaper cloud options for inference to maximize every rupee spent, as most startups waste 30% on idle or misallocated capacity. |
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