Waseem Rehmani

BRIEF 1: New Law Guts Grad School Funding, Triggering University Cash Crisis BRIEF 2: OpenAI Taps Rival Google For AI Chips, Signaling New War for Compute Page 0 of 4 Brief 1: New Law Guts Grad School Funding, Triggering University Cash Crisis News Trigger: The "One Big Beautiful Bill Act" (OBBBA), signed into law on July 4, 2025, is actively reshaping American higher education finance.1 Core Insight: The law’s elimination of a key federal loan program creates an immediate, multi-billion-dollar revenue crisis for universities and threatens to lock a generation of students out of professional careers. The Why & So What: For nearly two decades, universities used the unlimited federal Grad PLUS loan program as a "cash cow," raising graduate and professional tuition with impunity because students could always borrow more to cover the cost.3 In the- academic year alone, this program funneled approximately $14 billion to institutions.4 The OBBBA turns off this spigot. It completely eliminates the Grad PLUS program and places a new $65,000 cap on Parent PLUS loans.1 Quantified Impact: The policy will disproportionately hit institutions that rely on high-cost master's and professional degrees for revenue.3 More critically, it makes financing degrees in high-need fields like medicine nearly impossible for students without independent wealth. The median cost of a medical degree can exceed $390,000, while the new lifetime borrowing cap for professional students is just $200,000.6 This will likely worsen physician shortages and disproportionately harm low-income and minority students, who rely most heavily on federal aid.1 While the Congressional Budget Office estimates this change will save the federal budget $40.6 billion by 2034, the immediate effect is a seismic shock to university financial models and student access.4 Page 1 of 4 Brief 2: OpenAI Taps Rival Google for AI Chips, Signaling New War for Compute News Trigger: In a landmark deal reported in late June 2025, AI leader OpenAI began renting custom AI chips from its chief rival, Google, to power its services.9 Core Insight: The move reveals that the insatiable demand for AI computing power is fracturing Big Tech alliances, forcing a strategic realignment to secure resources and challenging Nvidia’s market dominance. The Why & So What: OpenAI’s shift was driven by necessity. Its compute needs are outstripping the capacity of its primary partner, Microsoft Azure, and the cost of running models at scale is immense.12 Google’s Tensor Processing Units (TPUs) offer a more cost-effective and power-efficient alternative for "inference"—the process of generating answers—which accounts for nearly half of OpenAI's estimated $40 billion annual compute budget.14 The deal allows OpenAI to diversify its infrastructure, reducing its strategic dependence on the Microsoft-Nvidia duopoly.10 Quantified Impact: This partnership validates Google's TPU architecture as a viable competitor to Nvidia's GPUs, intensifying competition in the AI chip market projected to exceed $164 billion by 2029.17 It signals a new era where access to compute is a primary strategic driver, forcing massive capital expenditures—Microsoft has committed $80 billion for FY25, while Google spent over $17 billion in Q1 alone.18 While Microsoft loses exclusivity, it retains deep integration and IP rights with OpenAI, evolving the partnership rather than ending it.20 Page 2 of 4 References 1. 'Big, Beautiful Bill' Means Big Changes for Higher Ed, accessed July 6, 2025, https://www.insidehighered.com/news/government/politicselections/2025/07/04/big-beautiful-bill-means-big-changes-higher-ed 2. 'Promises made, promises kept': Donald Trump signs 'One Big, Beautiful Bill' into law; brings tax relief, Medicaid cuts, accessed July 6, 2025, https://timesofindia.indiatimes.com/world/us/promises-made-promises-keptdonald-trump-signs-big-beautiful-bill-into-law/articleshow/-.cms 3. Can Graduate Programs Survive Federal Loan Caps? - Inside Higher Ed, accessed July 6, 2025, https://www.insidehighered.com/news/admissions/graduate/2025/06/26/cangraduate-programs-survive-federal-loan-caps 4. Grad Students Face Loss of Major Loan Under 'Big Beautiful Bill' - Bloomberg Government, accessed July 6, 2025, https://news.bgov.com/social-justice/gradstudents-face-loss-of-major-loan-under-big-beautiful-bill 5. 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