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- The AI Arms Race Just Moved Down a Level
The AI Arms Race Just Moved Down a Level
Noah Zelvis
January 28, 2026
The battle for AI leadership is no longer just about software and models.
By moving deeper into custom hardware, this latest step shows how control of infrastructure is becoming the next significant competitive edge.
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Logistics
UPS Cuts Deep to Kill a Bad Habit
United Parcel Service (NYSE: UPS) is cutting up to 30,000 jobs and closing 24 facilities in 2026 to finish a multi-year reset of its operating model.
This is not panic trimming; it is a clean break from volume that looked good on paper but paid poorly in reality.
UPS spent years chasing scale, even when it dragged margins down. Now you are watching the company deliberately undo that trade.
Breaking Up With Volume Is Messy
Walking away from large Amazon volumes forces hard decisions across staffing, facilities, and fleet design.
The upside is a simpler network that prioritizes yield, pricing discipline, and controllable demand.
This reset also reduces reliance on a customer that is becoming a logistics rival. When you step back, this is about regaining leverage, not just saving costs.
Premium or Nothing
UPS is choosing to operate as a premium carrier rather than a package counter. That means fewer shipments, higher revenue per package, and tighter control over capital spending.
The risk is execution, especially with labor and service continuity. But if it holds, you get a UPS that is smaller by design and stronger by intent.
UPS currently trades at $106 and pays a dividend of $6.56 per share, a yield of 6.15%.
Autos
GM Proves the Old Playbook Still Funds the New One
Strong profitability from pickups and crossover SUVs shows that GM’s (NYSE: GM) legacy business is far from exhausted.
These vehicles continue to generate the cash that underwrites everything else the company wants to attempt next.
That matters because EV adoption has not followed a straight line. When you zoom out, GM’s earnings power shows the core engine is steady even as strategy evolves.
EV Ambition Meets Reality
GM moved fast on electric vehicles earlier in the decade, locking in supplier contracts and production plans built for rapid demand acceleration.
When adoption softened, those commitments created friction rather than momentum.
Instead of forcing volume, GM is now recalibrating timelines and pacing investment. For you, this signals a company choosing patience over panic while competitors chase headlines.
Optionality Beats Urgency
Profits from high-margin vehicles give GM the flexibility most automakers lack.
That flexibility allows the company to fund restructuring, refine EV platforms, and continue work on software and autonomy without destabilizing operations.
The real test now is capital discipline.
Strong earnings give you confidence that GM can decide when to push, when to pause, and how to shape its future without external pressure.
GM currently trades at $85 and pays a dividend of $0.72 per share, a yield of 0.84%.
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Beverages
Pepsi Stops Winking and Starts Swinging
PepsiCo (NASDAQ: PEP) is reviving the Pepsi Challenge, not as nostalgia, but as a statement that formulation now does the talking.
Blind taste tests strip away branding comfort and force the product to stand on its own.
What’s different this time is confidence. You are watching a brand that believes its zero-sugar cola can win without leaning on vibes or memories.
Zero Sugar Is No Longer the Sidekick
The fastest growth in colas is happening where sugar is not the hook. Pepsi is clearly treating zero-sugar as the main event, not a backup option.
When a Super Bowl slot is built around taste data, it tells you where internal priorities sit. This is about defending relevance as preferences reset, not just grabbing attention for a weekend.
Challenger Energy From a Giant
Pepsi is leaning into confrontation even though it does not need to. That choice signals a belief that the market is still fluid and loyalty can still be moved.
If you care about brand power, this matters because pricing, shelf space, and long-term volume follow belief in product strength.
Pepsi is betting that winning on taste today compounds into leverage tomorrow.
PEP currently trades at $149 and pays a dividend of $5.69 per share, a yield of 3.82%.
Dividend Stocks Worth Watching
Chevron Corporation (NYSE: CVX) has assembled its largest fleet in nearly a year to ship Venezuelan crude oil out of the South American country.
The ramping up of tanker activity amidst political turmoil highlights Chevron’s unique position as the only major US oil company still operating in Venezuela under a special licence.
For investors, the development underscores Chevron’s ability to navigate complex geopolitical environments while protecting supply flows.
While Venezuela remains a sensitive and tightly regulated exposure, the activity signals Chevron’s operational agility and continued focus on securing barrels in a constrained global oil market.
CVX pays a $1.71 quarterly dividend, yielding 4.06%.
Microsoft Corporation (NYSE: MSFT) has unveiled a new in-house artificial intelligence chip as it steps up efforts to reduce reliance on third-party hardware and challenge rivals across the AI infrastructure stack.
The move puts Microsoft in more direct competition with Nvidia, whose chips currently dominate AI workloads, as well as cloud rivals Google and Amazon, which are also developing custom silicon.
The chip is designed to power AI models more efficiently in Microsoft's data centres, helping manage soaring demand and costs associated with generative AI.
Make no mistake. This is a strategic push to protect margins and control critical infrastructure as AI spending accelerates.
By owning more of the hardware layer, Microsoft aims to strengthen its competitive position in cloud and AI services while reducing its long-term dependence on external suppliers.
MSFT pays a 91-cent quarterly dividend.
RTX Corporation (NYSE: RTX) has reaffirmed its commitment to paying dividends, pushing back against criticism from President Donald Trump and a new executive order aimed at restricting capital returns by defence contractors.
CEO Christopher Calio said the company remains comfortable maintaining its dividend while continuing to invest in manufacturing capacity and delivery of its growing defence backlog.
He emphasised that dividends have been a core part of RTX’s shareholder proposition for decades and will remain so, even as production demands increase.
RTX’s stance signals confidence in its cash flow strength and balance sheet, reinforcing the durability of its income profile despite rising political scrutiny of the sector.
RTX pays a 68-cent dividend, yielding 1.37%.
Dividend Increases
GABC has increased its dividend to 31 cents, up 6.90%. Its new yield is 3.06%.
FBP has raised its dividend to 20 cents, an increase of 11.11%. Its new yield is 3.83%.
BKH has lifted its dividend to 70 cents, a rise of 3.99%. Its new yield is 3.93%.
HESM has raised its dividend to 76 cents, a lift of 1.23%. Its new yield is 8.7%.
Dividend Decreases
PRK has cut its dividend to $1.25, a decline of 12.00%. Its new yield is 2.73%.
Avoid This (Sponsored)
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Upcoming Dividend Payers
LTC’s ex-dividend date for the forthcoming 19-cent payment is 01/30/26.
GAIN’s ex-dividend date for the forthcoming 8-cent payment is 01/30/26.
JPM’s ex-dividend date for the forthcoming $1.50 payment is 01/31/26.
EIX’s ex-dividend date for the forthcoming 88-cent payment is 01/31/26.
Everything Else
Bank of America analysts have predicted that Winter Storm Fern could hit growth and lower Q1’s GDP by 0.5-1.5pp.
Nike has launched an investigation after tens of thousands of internal documents concerning product development and supply chains were published on the dark web by a hacker group.
United Healthcare faced its biggest one-day loss in almost a year on Tuesday after it said it expects revenue to decline for the first time in decades, and after the government proposed a lower-than-expected increase to Medicare rates.
Parcel service UPS says it expects to cut around 30,000 jobs this year as it continues to distance itself from lower-cost shipments.
AT&T’s consumer broadband division has posted its best performance in over a decade, helping the telecoms company to beat its 2025 full-year guidance.
That’s all for today’s edition of the Dividend Brief.
Thanks for reading, and if you have any feedback or dividend stocks you want me to take a look at, just reply to this email!
—Noah Zelvis
DividendBrief.com