Pushing back against the P(doom) crowd, Nvidia CEO Jensen Huang has argued that leading labs don’t need more regulation, just a little restraint and better tools. His company claims it can now provide the latter.

On Monday, Nvidia launched the Open Agent Safety Platform, a sandbox for training and observing new models and agents designed to prevent the kind of prison breaks that led to hacks at Hugging Face and the US government this summer. It’s a big new product for the chipmaker and the latest example of Nvidia expanding its product line beyond chips.

Thinking Inside the Sandbox

“The first problem is the isolation; the containment wasn’t good enough. If the isolation and containment was good enough, that technology would be sitting in a lab, doing whatever it’s doing,” Huang said on an episode of The New York Times podcast The Ezra Klein Show when asked about the rogue AI models. The company’s new platform, he said on CNBC Monday, would create a “browser for agents” without any hidden escape hatch into the open web. He called misbehaving AI a solvable engineering problem, but allowed that if somehow it can’t be solved, we’re in big trouble.

Add it to the list of Nvidia’s software and service offerings. The company agreed to acquire the aforementioned Hugging Face for $13 billion earlier this month in a bid to become the hub of open-source AI models and applications; the acquisition expands the company’s existing AI software library. The training sandbox, meanwhile, features two key tools that will continue to expand its chips-and-software flywheel:

• The first feature is OpenShell, which Nvidia had previewed in March and which runs on its Vera CPU chips. The open-source tool allows users to establish guardrails for what agents can and cannot access.
• The second feature is another open-source tool called Sentry. It runs on the company’s BlueField data processing units and can monitor agents in real time, quarantining those “that attempt to move outside their boundaries in milliseconds,” Nvidia said.

Buy, Buy, Buyback: Now that the leading frontier labs have established a market foothold, they must “shift their R&D … from just capability to a lot of verification, evaluation and testing,” Huang said before the product launch, predicting that “the amount of compute necessary to develop these models has increased by a factor of 10, because the evaluation is so rigorous.” In other words: more chip sales for Nvidia. In the meantime, the company also announced Monday that it plans to spend an additional $150 billion on buybacks, bringing its total remaining authorization to $235 billion. That would be the largest repurchase plan in corporate history, fitting for the largest company in history by market cap.

Kodiak Sciences surged 177.96% yesterday after the biotech company reported upbeat results from a late-stage study for its newest eye-disease treatments.

Kodiak is the latest success story in a resurgent US biotech industry. The firm’s study suggested its drugs Zenkuda and KSI-501 improved eyesight for patients with wet macular degeneration as much as the leading treatment Eylea made by rival Regeneron Pharmaceuticals. Zenkuda stood out by requiring fewer injections than Eylea — once every six months compared with every eight weeks. Regeneron’s shares slid about 5% yesterday.

An Eye Treatment for an Eye Treatment

The latest study’s success could be the beginning of a turnaround for Kodiak. After a previous trial four years ago failed to prove Zenkuda could match Eylea’s effectiveness, Kodiak’s shares fell about 80%. The company faced another setback the following year when late-stage studies for a treatment didn’t yield the expected results, then refocused on medications for wet macular degeneration, which affects an estimated 10 million to 20 million adults worldwide. It estimates retinal vascular disease drugs globally are worth about $15 billion.

How much of that money Kodiak can capture depends on whether its drug can beat rivals, both old and new. Its study results come amid a flurry of biotech breakthroughs spurring investors to pour funds into the sector:

• ETFs representing biotech companies have surged by double digits this year, including the iShares Biotechnology ETF and the State Street SPDR S&P Biotech ETF, which are up about 24% and 28% respectively.
• ADARx Pharmaceuticals, the developer of rare disease-focused gene-targeting therapeutics, jumped above its IPO price after going public Friday. Drug makers including Retension Pharmaceuticals and TRex Bio filed paperwork earlier this month for IPOs.

Pressure Test: Biotech companies in the US could be picking up the pace to bring new drugs to market in part because of China’s growing global market share. China last week laid out a goal of making at least a quarter of the world’s first-in-class drugs within the next five years. The country’s lower regulatory barriers and low costs give it an edge over western rivals.

It’s officially autumn. Spooky horror movie offerings are about to overwhelm your streaming algorithms for a solid month. But a Nightmare on Elm Street viewership spike won’t interrupt what has been an investment banker’s dream on Wall Street in recent months.

Jefferies Group, widely seen as an early bellwether for capital markets, reported third-quarter results on Monday. In addition to beating analysts’ expectations, the firm posted record performance in investment banking and equities.

Asset Management Misfires

On the investment banking side, Jefferies set the tone for JPMorgan Chase, Bank of America, Citigroup and Wells Fargo, all of whom report in mid-October. It also raised the stakes, as some bank leaders have tried to downplay expectations about their forthcoming results. In recent weeks, BofA’s Brian Moynihan suggested trading revenue would be flat at his firm, while Morgan Stanley co-president Daniel Simkowitz and JPMorgan co-president Doug Petno said the third quarter might not live up to the previous one, when market volatility resulting from global conflict fueled trading windfalls and underwriting surged thanks to the SpaceX IPO and capital raises.

As for Jefferies, its $1.3 billion in investment bank revenue, up 17% from last year, represented more than half of the bank’s total $2.2 billion in revenue, up 8.5%. Within investment banking, advisory services revenue jumped 25% and equity underwriting revenue 69%. The bank’s capital markets division raked in $802 million, an 11% increase driven by record equities trading. That will likely leave markets expecting, at minimum, solid returns when the big banks step up to the plate.

At the same time, Jefferies is still dealing with the nagging pain of some fund strategies gone wrong at its asset management division, which could hinder the stock’s performance:

• Revenue at the asset-management unit fell a whopping 52% year-over-year to $85.6 million in the third quarter.
• In the last year, funds linked to Jefferies have been hit by hundreds of millions of dollars in exposure to bankrupt auto parts manufacturer First Brands Group and embattled iron ore trader Radiant World, the latter of which has had assets frozen by authorities in the UK and Singapore.

Scared or Buying: The asset management misfires are still spooking investors. Jefferies’ shares have tumbled 24% this year compared to a 2.2% gain by the S&P 500 bank industry group. On the other hand, of the five analysts who rate the stock tracked by Zacks Investment Research, the average price target of $62.20 implies a roughly 30% upside from its Monday closing price.