Microsoft cancels new Blizzard video game after six years of development. Video game maker Blizzard Entertainment canceled one of its biggest projects on Thursday as part of a reorganization under new owner Microsoft Corporation that led to mass layoffs of 1,900 people, or 8% of the gaming division's total staff. The cancellation of the game, codenamed Odyssey, left Blizzard employees reeling as some lost their jobs and others were left wondering about the future of the studio. Microsoft announced the news in an email to employees early Thursday morning, and many members of the Odyssey team were subsequently informed that they were being let go. The news arrived three months after Microsoft closed the $69 billion acquisition of Activision Blizzard and the largest video game deal in history. As part of the reorganization, Blizzard also parted ways with President Mikey Barra and Chief Design Officer Alan Adam, one of the company's co-founders. Blizzard said its new president will be announced next week. The maker of many hit games, including World of Warcraft and Diablo 4, has mostly focused on its large, existing franchises. But in recent years, the company made a big investment in Odyssey, building up a team of more than 100 people to develop it. The game, set in a new universe, was in development for more than six years and outlasted many other Blizzard incubation projects. Now, the future of such efforts outside of existing franchises is uncertain. In a statement, Blizzard spokesman Andrew Reynolds said the game's development had ended as part of a focus on projects that hold the most promise for future growth and that the company would move some of the people on the team to one of several exciting new projects Blizzard has in the early stages of development. Odyssey started in 2017 as a pitch from Craig Amai, a Blizzard veteran who worked on World of Warcraft. It was conceived as a survival game, like Minecraft and Rust, but with more polish and fewer bugs. In subsequent years, the team working on the game expanded, and it was announced publicly in 2022 as the company began hiring more staff. Despite the additional resources, the project struggled largely due to technical issues surrounding the engine and the suite of tools and technology that developers used to construct a game, according to people familiar with the process. Odyssey was originally prototyped on the popular Unreal Engine from Epic Games Inc., but Blizzard executives decided to switch, in part, because it wouldn't support their ambitions for vast maps supporting up to 100 players at once. Blizzard instead directed the Odyssey team to use Synapse, an internal engine that the company had originally developed for mobile games and envisioned as something that would be shared across many of its projects. But that led to significant problems as the technology was slow to coalesce, and Odyssey's artists instead spent time prototyping content in the Unreal Engine that they knew would have to be discarded later, said the people. When the Microsoft acquisition was finalized, some Blizzard staff were hopeful that they might be able to switch back to Unreal Engine rather than trying to finish the game on Synapse. In an interview at BlizzCon in November, Ibarra said that their new parent company would offer them the freedom to use the technology of their choice without having to go through the board of directors as in the past. The tech leaders will decide what the engines are, he said. Despite the challenges, Odyssey appeared to be making progress. People who played early versions of the game enjoyed it and thought there was a lot of potential in the market for a survival game that hit Blizzard's bar for quality. Still, Odyssey was years away from completion. At one point, Blizzard was looking to expand the team to hundreds of people in hopes of targeting a 2026 release, but even that seemed overly optimistic to some developers. Instead, the project was cancelled as the company concluded that Synapse was not ready for production. As difficult as making these decisions are, experimentation and risk-taking are part of Blizzard's history and the creative process, spokesman Reynolds said. Ideas make their way into other games or in some cases become games of their own. Starting something completely new is among the hardest things to do in gaming, and we're immensely grateful to all of the talented people who supported the project.
Key Points on Microsoft Cancelling Blizzard's 'Odyssey' Video Game:
Project Cancellation and Layoffs: Blizzard Entertainment, under its new owner Microsoft Corporation, canceled a major project codenamed 'Odyssey'. This decision led to the layoffs of 1,900 employees, accounting for 8% of the gaming division's total staff.
Impact on Blizzard Employees: The cancellation left Blizzard employees in a state of shock, with some losing their jobs and others uncertain about the studio's future. The Odyssey team members were informed about their termination following Microsoft's announcement via email.
Aftermath of Microsoft's Acquisition of Activision Blizzard: The cancellation occurred three months after Microsoft completed the $69 billion acquisition of Activision Blizzard, marking the largest video game deal in history. The reorganization also led to the departure of Blizzard's President Mikey Barra and Chief Design Officer Alan Adam.
Odyssey's Development Background: The game, envisioned for a new universe, was in development for over six years. It started as a survival game, similar to Minecraft and Rust, but aimed for more polish and fewer bugs. Despite a significant investment and a team of over 100 people, the project faced technical challenges.
Technical Challenges and Engine Issues: Odyssey initially used the Unreal Engine from Epic Games Inc. However, Blizzard switched to Synapse, an internal engine originally developed for mobile games, due to Unreal Engine's inability to support their ambitions for large maps. This switch caused significant delays and problems in the game's development.
Hopes Dashed by Microsoft Acquisition: Some Blizzard staff hoped that Microsoft’s acquisition would allow them to revert to the Unreal Engine. However, these hopes were not realized, and the project continued to face challenges with the Synapse engine.
Early Progress and Market Potential: Despite the hurdles, early versions of Odyssey were well-received, showing potential for success in the survival game market. However, the game was still years away from completion, with an optimistic target release of 2026.
Decision to Cancel: The project was ultimately canceled as Synapse was deemed not ready for production. The decision reflects the challenges and risks inherent in game development, particularly in starting new projects.
Blizzard’s Commitment to Innovation: Despite the cancellation, Blizzard spokesperson Andrew Reynolds emphasized that risk-taking and experimentation are integral to Blizzard's creative process, and ideas from Odyssey could influence other games or become separate projects in the future.
In summary, Microsoft's cancellation of Blizzard's 'Odyssey' project after six years of development highlights the challenges and uncertainties in the gaming industry, especially concerning technical capabilities and strategic decisions following major acquisitions.
]]>About the deepfake tech. Behind the bogus Taylor Swift images. The world is awash in deepfakes, video, audio or images that make people appear to do or say things they didn't, or be somewhere they weren't. Many are devised to give credibility to falsehoods and damage the reputations of politicians and other people in the public eye. But most deepfakes are explicit videos and pictures concocted by mapping the face of a celebrity onto the body of someone else. That's what happened in late January, when fake explicit images of pop star Taylor Swift cascaded across social media. Now that artificial intelligence allows almost anyone to conjure up lifelike images and sound with a few taps on a keyboard, it's getting harder to tell if what you see and hear online is real. What happened to Taylor Swift? The phony images of Swift were widely shared on social media sites, drawing the ire of her legions of fans. One image shared on X, the site formerly known as Twitter, was viewed 47 million times before the account was suspended, the New York Times reported. Swift said it was working to remove all identified images and would take appropriate action against those who posted them. Swift was also among the celebrities whose voices and images were manipulated into appearing to endorse commercial products, a popular brand of cookware, in Swift's case. 2. Where else have deepfakes been in the news? Earlier in January, Xochitl Gomez, a 17-year-old actress in the Marvel series, spoke out about finding sexually explicit deepfakes with her face on social media and not succeeding in getting the material taken down, NBC News reported. Deepfakes are also popping up in the 2024 U.S. presidential election. New Hampshire residents received a robocall before the state's presidential primary that sounded like President Joe Biden urging them to stay home and save your vote for the November election. The voice even uttered one of Biden's signature phrases, what a bunch of malarkey. 3. How are deepfake videos made? They are often crafted using an AI algorithm that's trained to recognize patterns in real video recordings of a particular person, a process known as deep learning. It's then possible to swap an element of one video, such as the person's face, into another piece of content without it looking like a crude montage. The manipulations are most misleading when used with voice-cloning technology, which breaks down an audio clip of someone speaking into half-syllable chunks that can be reassembled into new words that appear to be spoken by the person in the original recording. 4. How did deepfake technology take off? The technology was initially the domain of academics and researchers. However, Motherboard, a Vice publication, reported in 2017 that a Reddit user called deepfakes had devised an algorithm for making fake videos using open-source code. Reddit banned the user, but the practice spread. Initially, deepfakes required video that already existed and a real vocal performance, along with savvy editing skills. Today's generative AI systems allow users to produce convincing images and video from simple written prompts. Ask a computer to create a video putting words into someone's mouth and it will appear. The digital forgeries have become harder to spot as AI companies apply the new tools to the vast body of material available on the web, from YouTube to stock image and video libraries. 5. What are some other examples of deepfakes? Chinese trolls circulated manipulated images of the August wildfires on the Hawaiian island of Maui to support an assertion that they were caused by a secret weather weapon being tested by the US. In May 2023, US stocks dipped briefly after an image spread online appearing to show the Pentagon on fire. Experts said the fake picture had the hallmarks of being generated by AI. That February, a manufactured audio clip emerged with what sounded like Nigerian presidential candidate Atiku Abubakar plotting to rig that month's vote. In 2021, a minute-long video published on social media appeared to show Ukrainian President Volodymyr Zelensky telling his soldiers to lay down their arms and surrender to Russia. 6. What's the danger here? The fear is that deepfakes will eventually become so convincing that it will be impossible to distinguish what's real from what's fabricated. Imagine fraudsters manipulating stock prices by producing forged videos of chief executives issuing corporate updates, or falsified videos of soldiers committing war crimes. Politicians, business leaders and celebrities are especially at risk, given how many recordings of them are available. The technology makes so-called revenge porn possible even if no actual naked photo or video exists, with women typically targeted. Once a video goes viral on the Internet, it's almost impossible to contain. An additional concern is that spreading awareness about deepfakes will make it easier for people who truly are caught on tape doing or saying objectionable or illegal things to claim that the evidence against them is bogus. Some people are already using a deepfake defense in court. 7. Is anything being done about it? The kind of machine learning that produces deepfakes can't easily be reversed to detect them. A handful of startups such as Netherlands-based Sensiti AI and Estonia-based Sentinel are developing detection technology, as are many big US tech companies. Intel Corporation launched a fake catcher product in November 2022, which it says can detect faked video with 96% accuracy by observing the subtle color changes on the subject's skin caused by blood flow. Companies including Microsoft Corporation have pledged to embed digital watermarks in images created using their AI tools in order to distinguish them as fake. US state legislatures have moved faster than Congress has to tackle the immediate harms of AI. Several states have enacted laws that regulate deepfakes, mostly in the context of pornography and elections. A proposed European Union AI Act would require platforms to label deepfakes as such. The reference shelf. Related quick takes on generative AI and AI regulation. How Google and Microsoft are supercharging AI deepfake pornography. Bloomberg Law says US regulators are wrestling with how to stop deepfakes affecting the 2024 presidential election. A Bloomberg video about Lyrebird, the AI company that puts words in your mouth. Research from University College London suggested humans were unable to detect more than a quarter of deepfake audio recordings.
ey Points on Deepfake Technology and Its Impact:
Pervasiveness of Deepfakes: Deepfake technology, which creates realistic videos, audio, or images that falsely depict people saying or doing things they haven't, is becoming increasingly common. These are often used to spread misinformation or damage reputations.
Incident Involving Taylor Swift: Fake explicit images of Taylor Swift circulated on social media, one of which received 47 million views on a site formerly known as Twitter before being taken down. Swift's team worked to remove the images and take action against the posters. She was also falsely depicted endorsing commercial products.
Deepfakes in Politics and Entertainment: Deepfakes have appeared in various contexts, including the 2024 U.S. presidential election and in creating explicit content using celebrities' images, like the case of actress Xochitl Gomez.
Creation of Deepfakes: Deepfakes are produced using AI algorithms trained on real video recordings (deep learning). They can manipulate elements like a person’s face or voice in a video without obvious signs of editing.
Origin and Evolution of Deepfake Technology: Initially a domain of academics, deepfake technology became more accessible when a Reddit user named 'deepfakes' developed an algorithm using open-source code. The technology has evolved to where generative AI systems can produce convincing media from simple prompts.
Examples of Malicious Use: Deepfakes have been used for various deceptive purposes, such as spreading false information about the Hawaiian wildfires and the Pentagon being on fire, or manipulating audio clips in political contexts.
Risks and Consequences: The technology poses risks like market manipulation, war crime falsifications, and creating non-consensual pornographic content. It also raises concerns about the "deepfake defense," where individuals caught in compromising situations claim the evidence is fabricated.
Detection and Prevention Efforts: Detecting deepfakes is challenging, but companies and startups are developing technologies for this purpose. Intel's 'fake catcher' and Microsoft's digital watermarking are examples of these efforts. Legislation in the U.S. and the proposed EU AI Act are aimed at regulating deepfakes, especially in pornography and elections.
In summary, deepfake technology presents a growing challenge in various sectors, from politics to entertainment, with significant implications for privacy, security, and misinformation. Efforts to detect and regulate deepfakes are underway, but the technology's accessibility and convincing nature make it a persistent threat.
]]>(Transcribed with OpenAI Whisper)
U.S. wants cloud firms to report foreign users building A.I. U.S. Commerce Secretary Gina Raimondo said her department is exploring how to force cloud companies to disclose when a foreigner taps their computing power to fuel artificial intelligence applications, signaling the next phase of the tech war between Washington and Beijing. We're beginning the process of requiring U.S. cloud companies to tell us every time a non-U.S. entity uses their cloud to train a large-language model, Raimondo said at an event Friday, without naming any countries or firms. President Joe Biden in October directed the agency to require such disclosures in an effort to detect foreign actors that might use A.I. to launch malicious cyber-enabled activity, according to Biden's directive. The Commerce Department has also been looking into ways to regulate the cloud via export controls, following up on sweeping restrictions limiting China's access to the most powerful semiconductors. The worry in Washington is that Chinese companies can access the same computing power of those chips through cloud providers such as Amazon.com incorporated's Amazon Web Services, Microsoft Corporation's Azure and Alphabet incorporated's Google Cloud. Read more, U.S. to tighten rules aimed at keeping advanced chips out of China. We want to make sure we shut down every avenue that the Chinese could have to get access to our models or to train their own models, Raimondo said in an interview last month. China's development of A.I. and other next-generation technologies is a top concern for the administration, which sees Beijing as its primary global strategic competitor. Washington has tried to rein in China's advances by restricting chip exports to the country and sanctioning individual Chinese firms, but the country's tech giants have managed to make significant breakthroughs despite U.S. curbs. The U.S. in October tightened its controls to capture more chips, equipment and geographies. One key update targeted Chinese headquartered companies operating in more than 40 countries, an attempt to prevent those firms from using other nations as intermediaries to secure semiconductors they can't access at home. But what the rules didn't address is Chinese firms' ability to tap into the capabilities of those chips via the cloud. It's unclear exactly how the U.S. would regulate that type of activity. Cloud services don't involve the transfer of physical goods, and Commerce has specifically said they are beyond the domain of export controls. Thea Kendler, Assistant Secretary for Export Administration, told lawmakers last month that we may need additional authority in that space. U.S. cloud providers have worried that restrictions on their activities with overseas users without comparable measures by allied countries risks disadvantaging American firms. The Commerce Department will separately survey companies that are developing large-language models about the results of their safety tests, Raimondo said Friday, though she didn't provide details about what they will request. Large-language models, or LLMs, are the software behind AI tools like ChatGPT. The potential new requirements come as the Federal Trade Commission opened a separate antitrust inquiry into AI partnerships. Read more, Alphabet, Amazon, Microsoft face FTC inquiry on AI partners. Microsoft, Amazon and Alphabet didn't immediately respond to requests for comment.
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KKR, Bain Capital plow into Asia data centers on AI, cloud boom. Asia is becoming the latest hunting ground for global investors in data centers, as companies from KKR and company to Bain Capital bet on the region's growing computing and data storage needs following an artificial intelligence boom. Like in the US, Asia is seeing a surge in demand for data centers as giants like Amazon.com Inc. and Alphabet Inc.'s Google Boost cloud services, the recent generative AI wave fuels data and capacity requirements, and the region's growing population spurs storage needs. Demand in Southeast Asia and North Asia is expected to expand about 25 percent a year through 2028, according to Cushman and Wakefield data. That compares with 14 percent a year in the US. It's the US first and then the trend tends to follow soon after into Europe and with a little time lag into Asia-Pacific, said Adhi Mathialagan, global head of Brookfield Asset Management Ltd.'s data center business. While it's a diverse region, the one thing in common in Asia is that everyone is online, he said. You need phenomenal amounts of connectivity and really good data centers. Investors have already made moves. Bain Capital announced a deal in August to take Beijing-based data center business Chindata Group Holdings private with an implied equity value of $3.2 billion. In September, KKR and company agreed to acquire a 20 percent stake in Singapore Telecommunications Ltd.'s regional data center business for about $800 million. Blackstone Inc. announced the launch of its first wholly owned data center platform in Asia in November 2022. Including the Singtel platform, KKR sees the potential to invest $1 billion in equity on data center projects in the Asia-Pacific region in coming years, said Prajesh Banerjee, the firm's director of infrastructure. Plans for such investments are in line with targets for KKR's infrastructure strategy, which are in the mid to high teens, he said in an interview. The bet is that Asia will eventually provide a bigger slice of the pie. About 29 percent of so-called hyperscale cloud revenue, used in the industry as a proxy for market growth, is generated from Asia-Pacific versus 49 percent from the U.S., according to Cushman and Wakefield. By 2028, Asia's share is expected to increase to as much as 33 percent, or $173 billion. This is a super easy investment story, said Morgan Laughlin, global head of data center investments at Veeam. You have demand, which is growing with no end in sight, and you've got supply becoming increasingly constrained with no solution in sight. Veeam plans to invest as much as $3 billion in the global data center sector over the next three years, including in major Asia-Pacific markets, said Laughlin. The company has been negotiating for sites in Tokyo and Seoul, according to a person familiar with the matter. Veeam declined to reveal the location. Bain Capital will continue to invest in China and Southeast Asian markets, as well as look for opportunities in developed regions elsewhere in Asia, Jonathan Ju, partner and co-head of the firm's Asia private equity business, said by email. Driven by cloud and AI, the entire Asia market will continue to grow, Ju said. That will ramp up the competition for assets and resources. There are challenges. Data center development is time-consuming and complex, requiring a mix of expertise around real estate, technology, local regulations and environmental requirements. Asia's highly fragmented market makes navigating these factors even more onerous. There is no such thing as one Asia, and each country has its own regulations, so we see more single-country operators than pan-regional ones, said Ellen Ng, co-head of Asia real estate at Warburg Pincus. Being able to offer products and services across multiple markets in Asia is important to users, so investors and operators try to crack this. China has proposed easing cross-border data controls after tightening its grip in recent years, although rules there remain vague. Singapore authorities lifted a moratorium on data center construction in 2022 but remain selective about awarding projects, investors interviewed said, and the country has published standards for operators to ensure energy efficiency. Warburg Pincus, through its portfolio Princeton Digital Group, has a presence in six markets and is looking for opportunities in existing and new locations, Ng said. As part of its ESG strategy, it has also expanded to Malaysia's Johor and Batam in Indonesia to serve Singapore as the city-state imports most of its energy and has fewer renewable power options. Cooling systems. Data centers are also racing to improve their cooling systems, which have come under pressure from increased use of graphics processing units to handle a surge in complex computation demands from areas such as AI. GPUs consume more power and emit more heat than central processing units, the primary component of computing engines. In October, a fault in the cooling system of data center operator Equinix Incorporated affected 2.5 million payment and ATM transactions of DBS Group Holdings Limited and Citigroup Incorporated DBS, Singapore's largest bank, was later banned from acquiring new business ventures for six months. Singapore's government also said it will study how to further strengthen the security and resilience of data centers. Risk-wise, government regulations around data privacy, national data sovereignty and sustainability are building out across most markets, said Glenn Duncan, Asia-Pacific Director of Data Center Research at Jones Lang LaSalle Incorporated. If investors and operators don't keep abreast of the changes, they can become wrong-footed.
Key Points on KKR, Bain Capital's Investment in Asia Data Centers:
Surge in Demand for Data Centers in Asia: Global investors like KKR and Bain Capital are increasingly investing in Asian data centers. The region is experiencing a boom in computing and data storage needs, driven by the artificial intelligence surge, the expansion of cloud services by companies like Amazon and Google, and the growing population.
Growth Projections: Data center demand in Southeast Asia and North Asia is projected to grow about 25% annually through 2028, outpacing the 14% annual growth in the US.
Significant Investments Made:
Market Share and Revenue Projections: Approximately 29% of hyperscale cloud revenue comes from the Asia-Pacific, with expectations to increase to 33% or $173 billion by 2028.
Increasing Investments from Companies Like Veeam: Veeam plans to invest up to $3 billion in the global data center sector over the next three years, including in major Asia-Pacific markets.
Challenges in Development: Developing data centers in Asia is complex due to diverse real estate, technology, regulatory, and environmental factors. The fragmented market in Asia poses additional challenges, requiring expertise in multiple markets.
Regulatory and Environmental Considerations:
Technological Advancements in Cooling Systems: Data centers are improving cooling systems due to increased usage of GPUs, which consume more power and emit more heat.
Regulatory Risks: Governments are increasingly focusing on data privacy, national data sovereignty, and sustainability, posing risks for investors and operators who fail to stay updated with regulatory changes.
In summary, the investment in Asian data centers by global firms like KKR and Bain Capital is driven by the region's growing demand for data storage and cloud services, accelerated by AI and population growth. However, this growth comes with challenges related to development complexity, diverse regulations, and technological needs like advanced cooling systems.
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Artificial intelligence will affect almost 40% of jobs, IMF says. Artificial intelligence will affect almost 40% of global jobs, with advanced economies facing greater exposure than emerging markets and low-income countries, according to an international monetary fund analysis. In most scenarios, AI will likely worsen overall inequality, a troubling trend that policymakers must proactively address to prevent the technology from further stoking social tensions, IMF Managing Director Kristalina Georgieva said in a blog post on the study. AI's income inequality effect will largely depend on how much the technology complements high earners. More productivity from high-income workers and companies would boost capital returns, widening the wealth gap, Georgieva said. Countries should provide comprehensive social safety nets and retraining programs for vulnerable workers, she said. While there's potential for AI to fully replace some jobs, the more likely scenario is that it'll complement human work, according to the analysis. Advanced economies may have about 60% of jobs affected, more than emerging and low-income countries. Georgieva's take on artificial intelligence coincides with the meeting of global business and political leaders at the World Economic Forum in Davos, Switzerland, where AI is a topic of discussion. Companies have been throwing cash at the emerging technology, sometimes sparking concern among employees about the future of their roles. One example is BuzzFeed Inc., which announced plans to use AI to help with content creation and closed its core news department, laying off more than 100 staffers. Read more, Regulate AI? How U.S., EU and China are going about it. Quick, take. The European Union reached a tentative deal in December on legislation setting out safeguards on AI, while the U.S. is still weighing its federal regulatory stance. The dismal science is upbeat on AI's potential. Goldman lifts U.S. global long-term growth forecasts on AI boost. Women workers to be hurt more than men by AI wave, McKinsey says. KKR, Bain Capital Plough and New Asia data centers on eight.
Key Points: IMF's Analysis on AI's Impact on Jobs
Widespread Impact on Jobs: The International Monetary Fund (IMF) analysis indicates that artificial intelligence will affect nearly 40% of global jobs. Advanced economies are at greater risk of AI's impact compared to emerging markets and low-income countries.
Increased Inequality Concerns: AI is likely to exacerbate overall inequality. According to IMF Managing Director Kristalina Georgieva, this trend is troubling and requires proactive measures by policymakers to avoid escalating social tensions.
Disparity in Income Effect: The effect of AI on income inequality largely depends on how the technology complements high earners. Increased productivity in high-income workers and companies could lead to higher capital returns, thereby widening the wealth gap.
Need for Social Safety Nets and Retraining: Georgieva emphasizes the necessity of comprehensive social safety nets and retraining programs for workers who are vulnerable to AI's impact.
AI Complementing Human Work: The IMF analysis suggests that while AI has the potential to fully replace some jobs, it is more likely to complement human work. Advanced economies might see about 60% of jobs affected, more than in emerging and low-income countries.
Global Discussions at Davos: The topic of AI aligns with discussions among global business and political leaders at the World Economic Forum in Davos, Switzerland.
Corporate Investment and Employee Concerns: Companies are heavily investing in AI, raising concerns among employees about the future of their roles. For instance, BuzzFeed Inc. plans to use AI for content creation, leading to the closure of its core news department and layoffs.
Regulatory Landscape: The European Union reached a tentative deal in December on AI legislation with safeguards, while the U.S. is still determining its federal regulatory stance.
Economic Forecasts and Gender Disparity: Goldman Sachs uplifts U.S. and global long-term growth forecasts due to AI's potential. However, studies like those by McKinsey highlight that women workers might be more adversely affected by the AI wave than men.
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Nvidia is red hot 2024 start a bright spot as S&P 500 eyes record. Nvidia Corporation is off to its strongest ever start to a year by one measure, keeping up a blistering rally that saw shares gain nearly 240% in 2023. The artificial intelligence darling has added roughly $128 billion in market capitalization after rising about 10% this month, an unprecedented gain in value in the first nine trading days of the year for the company. It's a boon for Nvidia bulls and signals that the AI trend still has momentum, at least for the firm viewed by many as one of the biggest early winners. Nvidia this year is easily outpacing the broader market and the rest of the so-called magnificent seven-megacap technology stocks. That's making it a major bright spot as the S&P 500 index has stalled near record highs amid questions around corporate profits and the timing of anticipated Federal Reserve interest rate cuts. From my standpoint, Nvidia is best of breed, said Shana Cecil, Chief Executive Officer of Bannery & Capital Management LLC, adding that it's dominant in its marketplace, has strong customer relationships and is growing fast. It's hard to find a lot of holes in the story. Read more, Nvidia is soaring again as three-day rally hits 11%, TechWatch. Nvidia had a better start on a percentage basis last year, to kick off its record rally. To be fair, those gains came after the stock lost half its value in 2022. For the next 12 months, analysts covering Nvidia have an average target price of almost $650, indicating roughly 19% upside for a company that now has a market capitalization greater than $1.3 trillion. The CES trade show this month solidified confidence for proponents of Nvidia shares. The company announced three new desktop graphics chips that will allow computer users to make better use of AI on personal machines. The shares also got a boost last week when Chief Financial Officer Colette Kress reaffirmed Chief Executive Officer Jensen Huang's assertion that the company expects it can continue to grow through calendar year 2025. Nvidia expressed a tone of confidence regarding end demand and pointed to supply increases each quarter this year, Piper Sandler and company analysts led by Harsh V. Kumar wrote in a note dated January 11, referring to a meeting with management at CES. To us, this indicates high conviction regarding backlog and order patterns throughout the 2024 calendar period. Nvidia is expected to release fourth-quarter earnings next month. Analysts project revenue rose some 230% in the period after a roughly 206% jump in the third quarter, data compiled by Bloomberg show.
Key Points: Nvidia's Strong Start in 2024
Exceptional Performance: Nvidia Corporation has had an extraordinary start to 2024, experiencing its strongest beginning of a year by certain measures. This follows a remarkable rally in 2023, where its shares surged nearly 240%.
Significant Market Cap Growth: In January 2024, Nvidia's market capitalization increased by about $128 billion, a record growth for the company in the first nine trading days of any year, with a 10% rise in stock value.
Continued AI Momentum: Nvidia, a leading figure in artificial intelligence, continues to demonstrate the enduring momentum of the AI trend. The company is considered one of the major early beneficiaries of this sector.
Outpacing Other Tech Giants: Nvidia is surpassing the broader market and other major technology stocks, often referred to as the "magnificent seven-megacap technology stocks," marking a significant bright spot as the S&P 500 index hovers near record highs.
Investor and Analyst Confidence: Shana Cecil, CEO of Bannery & Capital Management LLC, acknowledges Nvidia's market dominance, strong customer relations, and rapid growth. Analysts covering Nvidia predict an average target price of nearly $650 for the next 12 months, implying around 19% potential upside.
CES Trade Show Impact: At the CES trade show, Nvidia boosted investor confidence by announcing three new desktop graphics chips, enhancing AI utilization on personal computers.
Management's Positive Outlook: Nvidia's CFO, Colette Kress, and CEO, Jensen Huang, have expressed optimism for growth through 2025, reinforcing confidence in demand and supply increases each quarter.
Upcoming Earnings Report: Nvidia is expected to release its fourth-quarter earnings soon, with analysts projecting a revenue increase of about 230% for the period, following a 206% jump in the third quarter.
Recovery from Previous Losses: It's noted that Nvidia had an even better start percentage-wise last year, following a 50% loss in stock value in 2022.
In summary, Nvidia's strong start to 2024 signals robust investor confidence and market dominance, particularly in the AI sector, outperforming broader market trends and other major tech companies. The company's recent announcements and management's positive outlook further solidify expectations for continued growth and profitability.
]]>Investment Approach and Trends: Zhu Xiaohu, a managing partner at GSR Ventures, highlights his adaptability to market trends and opportunities. Despite the challenges posed by the pandemic, he continues to actively invest, as seen in his decision to fund Fancytech after a short video call. Zhu emphasizes the importance of focusing on sectors he excels in, like AIGC (AI-Generated Content) and consumer sectors, adapting his investment pace and decision-making process according to the market conditions.
Perspective on Large Models and AI: Zhu notes the surge in interest in large AI models, like ChatGPT, but cautions against their hype, particularly for startups. He points out the risks and limitations associated with these technologies and advises startups to focus on niche areas and applications where they can excel and differentiate themselves.
Entrepreneurship and Investment in a Tight Market: Zhu observes that the current investment climate is challenging due to reduced liquidity and lower valuations. He advises entrepreneurs to focus on cost optimization and efficiency, citing that companies that adapted to this approach have remained profitable. Zhu advocates for discipline in investment strategies, focusing on profitability and sustainable growth.
Outlook on Consumer Investments: Zhu mentions the changing dynamics in consumer investment, noting a shift from speculative valuations based on future sales to more grounded approaches focusing on current profitability. He stresses the importance of being cautious in this sector, especially under current market conditions.
Global Expansion of Chinese Companies: Zhu highlights the unique strengths of Chinese companies in going global, particularly their strong supply chain advantages and the unparalleled work ethic of Chinese entrepreneurs. He observes the increasing competition among Chinese companies in international markets across various sectors, from e-commerce to fintech. Zhu also discusses the strategic considerations for Chinese companies entering foreign markets, emphasizing the need for language skills and cultural adaptability.
Middle Eastern Investments in China: Addressing the increasing interest of Middle Eastern capital in Chinese ventures, Zhu views this as a strategic move aiming for industry complementarity and reciprocal investment. He advises Chinese companies to align strategically with Middle Eastern interests for successful investment partnerships.
Overall, Zhu Xiaohu's insights reflect a strategic, disciplined approach to investing in challenging market conditions, emphasizing adaptability, focus on profitability, and the importance of understanding global market dynamics for successful entrepreneurship and investment.
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(Translated with ChatGPT)
In October, Zhu Xiaohu, a managing partner at GSR Ventures, attended a meeting in the United States, surprising Limited Partners (LPs) with his youthful appearance. "You don't even have white hair, that's not easy," they remarked.
During an interview with "China Entrepreneur" at GSR Ventures' office, Zhu Xiaohu brushed his hand over his hair, feeling it was even darker than before. This, he believed, was partly because the development of his investment projects kept his worries at bay: "As long as the businesses are profitable, I can sleep well."
Zhu remains sensitive to market trends and new opportunities. In April 2022, during Shanghai's lockdown, Fancytech's founder and CEO, Kong Jie (alias), could only communicate with Zhu online for funding. After a 15-minute video call, Zhu decided to invest.
At that time, AIGC (AI-Generated Content) was not yet a hot topic. Fancytech mainly helped e-commerce sites with content aggregation to boost brand conversion rates. After integrating AIGC for a technological upgrade and business growth, Zhu invested in three additional rounds in Fancytech.
However, his sensitivity often manifests in unconventional ways. For instance, in the first half of the year, when many were chasing large models, Zhu, who had been quiet for a while, appeared and poured "cold water" on the hype. In a public speech, he mentioned that ChatGPT is unfriendly to startups and advised against harboring fundraising illusions for the next two to three years. This sparked a public debate with Fu Sheng, Chairman of Cheetah Mobile.
To this day, Zhu maintains that big models are ultimately opportunities for large companies, and startups should focus on verticals like sales and marketing. His investment strategy is similar: "I believe in focusing on what I am good at, as market cycles are always changing."
AIGC and consumer sectors are Zhu's focus areas, but even in familiar fields, his investment decisions have slowed. This year, he spent more time evaluating projects, moving away from quick decisions like the one he made after a half-hour chat with Cheng Wei. "Because no one is rushing (for projects), I can spend three to four months on average per project to ensure it's a 'good card'."
From hasty investments during the influx of "hot money" to a more deliberate pace now, Zhu finds 2023 to be his most comfortable year in investing.
As of November 2023, the number of projects Zhu invested in is only a third of previous years, with several still under his scrutiny. "The sense of achievement for an investor doesn't come from funding, but from the growth of enterprises."
During the interview, Zhu repeatedly mentioned "discipline," which involves controlling the size of investments, pacing, and valuations. Below is an edited version of the interview with "China Entrepreneur."
Discussing Large Models: Those who chased large models in the first half of the year suffered in the latter half
Question: How do you view the impact of large models on the technology and startup cycle after their emergence?
Zhu Xiaohu: I think it's a great start to a new cycle. For entrepreneurs, the key is what you want to do. Like the PC internet and mobile internet each dominated a decade, now we're entering a new AI era, likely lasting 10 to 20 years.
But for entrepreneurs to do something like iOS in the mobile internet is unrealistic. There are many opportunities in applications above large models. We've invested in many companies in the AIGC field, and they're doing well.
Question: Has this change in the entrepreneurial cycle imposed new demands on investors? With fewer entrepreneurs and less need for funding, how do investors find good projects?
Zhu Xiaohu: The core remains the same as before: independent judgment, not following the crowd. In the first half of this year, everyone was chasing large models, pouring in money, now they don't know what to do. The main issue is that investors must have their independent judgment. Where do you see the opportunity? For startup companies, creating a new iOS is undoubtedly very challenging. We made similar mistakes in the mobile internet era and must learn from them.
Many investors might not remember the stories of the PC and mobile internet eras as vividly. We've lost money, so I remember well. I know where the pitfalls are, and we'll be more focused on more creative companies or certain opportunities.
Question: What are these "pitfalls"?
Zhu Xiaohu: It's simple. In the early days of the mobile internet, many companies were initially very popular, like Android optimization masters, with several hundred million users, but who uses them now? A simpler example is a company that made flashlight apps for phones, but now iOS and Android systems come with them.
It's similar now to the early days of operating systems. Large models in the early stage may not cover many small functions, leaving opportunities for startups, but once they get around to it, they can easily fill these gaps, and those startups disappear.
There was an article about GPT-4 launching a suite of tools, destroying a bunch of startups. Entrepreneurs should definitely not run directly under the fire of large models; it would be very difficult.
For example, if large models can now automate coding by 50%, leaving a bunch of bugs, it might help companies reduce costs for junior programmers, but more senior programmers are needed to debug. Many startups aim to use AI to optimize code or debug better, but these are short-term opportunities. If GPT-5 comes out next year and large models can achieve 90% efficiency in code generation, those companies are again at risk.
So I think entrepreneurs should not directly run in the large model track. Keep a distance from it while using it to seize customers and achieve a data loop first; this might be a better defense.
Question: In your previous discussion with Fu Sheng on social media, do you think there's a clear conclusion?
Zhu Xiaohu: Frankly speaking, for startups, I think large models themselves don't offer much opportunity. First, the cost is very high; second, without data and scenarios, it's impossible to optimize.
So I think large models are ultimately opportunities for large companies. Startups should focus on applications in sales, marketing, and other verticals where they excel. There are still plenty of opportunities in various vertical scenarios.
Question: What specifically do you mean by vertical scenarios?
Zhu Xiaohu: First, having vertical industry data is vital, which large model companies find hard to acquire. Second, achieving a data loop to continuously improve your vertical model. Third, maintaining a constant connection with customers is crucial, as large companies can't engage each customer individually. These three points are especially important.
That is, adding AI to existing businesses is the most reliable and easiest; starting with an AI model or product and adding things on top is very difficult.
Question: How do domestic entrepreneurs or big companies consider this matter?
Zhu Xiaohu: We've been discussing it. Big companies are also concerned about their boundaries. Some are better; they don't want to snatch too many opportunities from startups. But whether in China or the US, relying on others' mercy is unrealistic. You must have your value to both customers and big companies to find your footing.
Question: How do you view the current progress of commercialization of large models in China? What stage is everyone at?
Zhu Xiaohu: Everyone is now looking for nails with a hammer. Honestly, by the end of this year, I think the top few large models can basically reach 3.5 level, and there's hope for 4 by next November. But after the launch of OpenAI's GPT-4, the truly commercializable scenarios (in the US) are also very limited. Comparatively, in China, it should be about the same.
Question: Which areas do you think are most promising for commercialization?
Zhu Xiaohu: At this stage, text creation projects are definitely the easiest, like helping to write advertising copy, work summaries, speeches, etc., and they can be perfected quite well. Next is generating photos, such as Midjourney, which is doing very well. In China, we feel generating short videos is even better because China has a lot of short video data, which the US doesn't. Their e-commerce sites, like Amazon, are almost all based on images. In the past three years, China's e-commerce has basically shifted from images to short videos, so today, e-commerce sites prioritize short video traffic, not photos.
China has many short video products and data, which can be used to train their vertical models. So Fancytech's product transformation is going very well.
Question: Is this a sufficiently large investment opportunity and profit opportunity for investors? Image and text generation are still quite niche.
Zhu Xiaohu: We hope that when we start investing, everyone thinks it's a niche market, so big platforms won't pay attention or invest heavily. After a few years, when it grows, there will be more space.
Question: Although AI is hot this year, most people can't get into top projects, and smaller projects are still under observation, so by the end of the year, no one is investing in AI and instead turning to invest in car manufacturing and its upstream and downstream, such as new energy and dual carbon.
Zhu Xiaohu: New energy has also plummeted. I think AI is still non-consensus today, and there are very few investors with real independent thinking ability. In the first half of this year, a bunch of people invested in large models, and the valuations were very expensive. What value does a large model have? Today, every large model is almost the same, each claiming they can score 95.
"Exploring cost-effective projects in non-consensus areas is a very good opportunity right now."
Question: So, are top large model startups still being pursued?
Zhu Xiaohu: They were pursued in the first half of this year, but everyone regretted it in the second half.
Question: For entrepreneurs, is embracing AIGC the only option now?
Zhu Xiaohu: Embracing AIGC is a must. In two years, any company without AIGC will lack competitiveness. This includes consumer and home appliance companies, which need to consider using AIGC to reduce costs and increase efficiency.
Using AIGC for cost reduction and efficiency improvement is very easy now. For example, one of the companies we invested in has more than 1,000 employees. The HR department had four people specifically answering employees' questions about company benefits. Now, by training one robot with AIGC, we can replace the original four people. This kind of robot can be trained internally, which is easy. Just feed the company's benefit policies to the robot for a week of training, and afterwards, it can answer any benefit questions from employees. Other applications, like using AIGC for game image generation, show immediate cost reduction and efficiency improvement.
Talking about Entrepreneurship: "Less Money" is a Double-Edged Sword
Question: The year is coming to an end. How many projects do you anticipate investing in this year?
Zhu Xiaohu: It's about a third of the previous years. It's not that there are fewer projects to invest in; many are still under observation. Currently, I have several good projects that I'm examining to decide whether to invest in them or when to do so.
Before, investors would fund entrepreneurs without even meeting them. That's not happening now. It's like going back to fifteen or sixteen years ago. I can spend three or four months looking at a project. I observe whether the entrepreneur's monthly forecasts match the actual data every month. After observing for three or four months and finding their monthly reports reliable, I am willing to invest.
Question: Have there been any changes or adjustments to GSR Ventures' fundraising and investment pace in the past two years?
Zhu Xiaohu: We completed raising a new fund at the beginning of last year, so it's alright.
In the past two years, our main issue in discussions with LPs is that the secondary market has fallen too much. Many funds have a primary-secondary market mix, and the proportion of the secondary market has fallen a lot, making the proportion of the primary market too high. So there's a serious mismatch between the primary and secondary markets. Under these circumstances, we must wait for the secondary market to recover before rebalancing the primary market.
Secondly, the current risk-free interest rate in the United States is over 5%. Since money in the bank earns an interest of over 5%, why should investors put their money into the illiquid primary market? This affects the whole market, influencing the amount of capital willing to be allocated to the primary market.
The last point is the liquidity issue. The money that prefers investing in the Chinese market is still locked up and not cashed out, so it can't be reinvested.
All these factors limit the circulation of funds. Like many RMB funds, they haven't seen a DPI (Distributed Performance Indicator), so the money can't return, making it difficult to raise new funds. The same goes for the dollar. It needs to see that money can flow back into China, allowing some good companies to exit, and the money can return to China. So I feel that the market won't start to warm up until at least after 2025.
Question: From this perspective, does the current environment pose many challenges for entrepreneurs?
Zhu Xiaohu: Yes, "less money" is a double-edged sword. It's a good thing for genuine entrepreneurs because there's less noise and fewer competitors. However, companies aiming for VC investment definitely can't get funding now.
Question: Are you giving more advice to entrepreneurs this year than in previous years?
Zhu Xiaohu: Companies that listened to our advice last year are doing very well.
Question: What was your advice?
Zhu Xiaohu: Last year it was about optimizing to reduce costs and increase efficiency. Companies that did so are making a lot of money this year, not a single one isn't profitable. Many entrepreneurs listened to the advice. They were very disciplined, so they are profitable this year.
"The coldest time is not winter, but the thawing spring." This year is like the thawing spring. If entrepreneurial companies were prepared last year and reduced their costs, they are doing well this year. Those who didn't lower their costs last year are struggling this year and have to keep reducing costs.
Question: Having invested for so many years, do you feel anything different about this year?
Zhu Xiaohu: This year has been the most comfortable for me in investing. It's really like going back to 15 years ago. I can take my time to see if the cards are really good.
Question: RMB LPs are quite active in the primary market this year. Does GSR Ventures plan to scale up its RMB funds?
Zhu Xiaohu: That's why discipline is very important. Scaling up now is the best way to self-destruct.
I need to reasonably control the scale, the pace of investments, and the valuations. This is especially important.
Question: How do you think institutions performed this year in terms of exits?
Zhu Xiaohu: I think the core is to look at profits. In the coldest times for capital, only when every company is profitable can I sleep at night. Exits are a natural process. As long as every company is profitable, when the U.S. starts to cut interest rates, exit channels will naturally open up.
Question: Your team at GSR Ventures seems a bit unconventional or special in the current primary market, not particularly anxious.
Zhu Xiaohu: Firstly, we basically don't have projects from the peak period. Although I invested during the peak, I still need to reflect on that; but compared to peers, we have very few high-percentage amount investments, so most of our companies are still profitable today. We currently have a company that profits from bank interest. They got too much money during the peak and can earn 5% interest just by keeping it in the bank, so I don't have to worry about whether their company can survive.
At least for me, I'm relatively comfortable now. I didn't enter during the peak, and now in the trough, I can take my time to discover good companies before making a move.
Question: How does GSR Ventures' exit performance this year compare to previous years?
Zhu Xiaohu: Right now, we're looking at one indicator—profit. A few months ago, I reported to RMB investors that in the first half of last year, the top ten companies of the RMB fund lost over a billion, but in the first half of this year, they made a profit of nearly two billion. Everyone is happy to go from a loss of one billion last year to a cumulative profit of two billion this year and can sleep peacefully.
Question: When do you think there might be a peak in terms of exits?
Zhu Xiaohu: The Federal Reserve starting to cut interest rates is a key indicator. Before the dollar starts to cut interest rates, I don't think any large-scale exit is realistic.
]]>Google lays off hundreds in hardware voice assistant teams. Alphabet Incorporated's Google is laying off hundreds of people working on its digital assistant hardware and engineering teams as part of a continued effort to lower costs and prioritize efforts around artificial intelligence. The affected employees included those working on the voice based Google assistant and at the augmented reality hardware team. The company's central engineering organization was also hit by cuts, the company said. The reductions come as Google's core search business feels the heat from the AI offerings of rivals Microsoft Corporation and chat GPT creator OpenAI. On calls with investors, Google executives pledged to scrutinize their operations to identify places where they can make cuts and free up resources to invest in their biggest priorities. Sent via social, flow. View original tweet. Throughout the second half of 2023, a number of our teams made changes to become more efficient and work better and to align their resources to their biggest product priorities, a Google spokesperson said in a statement. Some teams are continuing to make these kinds of organizational changes, which includes some role eliminations globally. Alphabet's shares rose as much as 2.1% to $145.22 in New York, the highest level in almost two years. Features at the search giant have been on edge since January of last year, when parent Alphabet said it would cut about 12,000 jobs, more than 6% of its global workforce. That sent shock waves through Silicon Valley. But the company continued to make smaller trims over the course of 2023, including layoffs within teams focused on recruiting, news products and the Waze mapping app. Read more. Amazon is laying off hundreds in Prime Video Studios unit. While the large round of cuts in January 2023 was telegraphed by Alphabet CEO Sundar Pichai, this year's reductions have been communicated by lower level leaders, such as vice presidents and human resources, according to a current employee and a former worker. Amazon.com Inc. also laid off hundreds of staff in its Prime Video and Studios business this week, raising questions about whether another major round of job cuts was underway in Silicon Valley. Semaphore first reported the layoffs to the Google Assistant team, while 9to5 Google first reported the reorganization for hardware. Affected staff have begun receiving the news and will have the opportunity to apply for open positions elsewhere within Google, the company said. Sent via Twitter web app. View original tweet. The Alphabet Workers Union, which represents some of its employees, criticized the job cuts in a statement posted to the social network X, formerly known as Twitter. Our members and teammates work hard every day to build great products for our users, and the company cannot continue to fire our co-workers while making billions every quarter, the group said. We won't stop fighting until our jobs are safe.
Key Takeaways from the Article:
Google's Layoffs in Digital Assistant and AR Teams: Alphabet Inc.'s Google is laying off hundreds of employees working on its voice-based digital assistant and augmented reality hardware teams.
Focus on Cost Reduction and AI Prioritization: These layoffs are part of Google's continued effort to lower costs and shift focus to prioritizing artificial intelligence projects.
Impact on Central Engineering Organization: The company's central engineering organization has also been affected by these cuts.
Response to Competitive AI Market: The reductions are seen as a reaction to the pressure Google's core search business is facing from AI offerings by competitors like Microsoft Corporation and OpenAI, the creator of ChatGPT.
Investor Calls and Operational Scrutiny: Google executives have communicated on investor calls about scrutinizing operations to identify potential cost-cutting areas to invest in top priorities.
Organizational Changes for Efficiency: Throughout the second half of 2023, Google teams have been restructuring to improve efficiency and align resources with major product priorities, which has led to global role eliminations.
Rise in Alphabet's Shares: Following these announcements, Alphabet's shares rose to their highest level in almost two years.
Continued Job Cuts After Major Layoffs: Despite a significant reduction of about 12,000 jobs in January 2023, Google continued smaller trims throughout the year in various departments.
Communication of Layoffs: Unlike the large-scale layoffs announced by Alphabet CEO Sundar Pichai, the recent reductions have been communicated by lower-level leaders like vice presidents and human resources.
Comparisons with Amazon's Layoffs: The article draws parallels with Amazon.com Inc., which also laid off staff in its Prime Video and Studios business, raising concerns about broader job cuts in Silicon Valley.
Opportunities for Affected Staff: Affected Google staff are being offered the chance to apply for open positions elsewhere within the company.
Reaction from Alphabet Workers Union: The Alphabet Workers Union criticized the job cuts, emphasizing the hard work of employees and the company's profitability, and vowed to fight for job security.
The article outlines Google's strategic shift towards AI and cost reduction, impacting its workforce in certain departments, and highlights the broader trend of workforce adjustments in major tech companies.
]]>AI tool helps fix faulty trades amid shift to faster settlement times. As the financial industry grapples with the shift to shorter settlement times, banks and broker-dealers will soon have a new artificial intelligence tool to fix and prevent trades that go awry during the settlement process. Broadridge Financial Solutions, Inc. is rolling out OpsGPT, a chatbot that uses generative AI and large-language model technology to analyze and resolve operational issues such as failed trades, and offer insight on the cause of the issue and suggestions for how to resolve it and prevent it from happening again. The product was developed to help firms deal with added stress and costs as the market moves to a so-called T plus one requirement later this year, speeding up settlement times for securities trades to one day from two. The need for operational efficiencies in areas like real-time fails resolution is amplified in a T plus one world, Vijay Mayadas, President of Capital Markets at Broadridge, said in an interview. The new tool helps with that transition by allowing users to understand the deeper reasons of why a trade failed and being preemptive about it, he said. The world's biggest financial firms have been experimenting more with artificial intelligence, spurred by the promise that it will help them boost staffers' productivity and cut costs. Read more, Citi charts path for thousands of coders to experiment with AI. The new tool, which is in a trial period with a handful of Broadridge clients, can also be used in multiple languages, including Japanese, leveraging the power of large language models, Mayadas said. New York-based Broadridge integrated the technology on its existing post-trade system, which clears and settles roughly $10 trillion in trades a day. OpsGPT can identify a trade and figure out how positions are linked using Broadridge data across asset classes and geographies. It then recommends solutions for failed trades to avoid repeating the same error. Some banks could have billions of outstanding, failed trades on a daily basis, Mayadas said. If you can reduce that amount by even 10% to 15%, you can save millions of dollars. The new offering adds to an earlier Broadridge AI application that caters to the fixed-income market. BondGPT, launched in 2023, offers a chat function that uses data to answer bond-related questions and helps investors identify corporate bonds that fit their investing thesis. OpsGPT is expected to go live in two to three months, according to Mayadas. Read more about the T plus one rule making US stocks settle in a day, quick, take.
Key Takeaways from the Article:
Introduction of OpsGPT by Broadridge: Broadridge Financial Solutions, Inc. is launching OpsGPT, an artificial intelligence chatbot designed to address and prevent issues in trade settlements.
AI Tool for Trade Settlement Issues: OpsGPT uses generative AI and large-language model technology to analyze, resolve operational issues like failed trades, and provide insights and solutions to prevent future occurrences.
Response to Shorter Settlement Times: The development of OpsGPT is in response to the financial market's move towards a T plus one settlement requirement, which accelerates securities trade settlements to one day from two.
Operational Efficiencies in T plus one Era: Vijay Mayadas, President of Capital Markets at Broadridge, emphasized the need for operational efficiencies, especially in real-time resolution of failed trades in the faster settlement environment.
AI Adoption by Financial Firms: Major financial firms are increasingly experimenting with AI to enhance staff productivity and reduce costs. OpsGPT is a part of this trend.
Multilingual Support and Integration: The tool, currently in trial with select clients, supports multiple languages, including Japanese. It's integrated into Broadridge's existing post-trade system that handles approximately $10 trillion in trades daily.
Functionality Across Asset Classes and Geographies: OpsGPT can identify trades, understand how positions are linked, and recommend solutions across different asset classes and geographies.
Potential Cost Savings: The tool's ability to reduce failed trades can lead to significant cost savings for banks, potentially reducing billions in outstanding failed trades by 10% to 15%.
Earlier AI Application by Broadridge: Broadridge had previously launched BondGPT for the fixed-income market, providing data-driven assistance in bond-related queries and investment decisions.
Upcoming Launch: OpsGPT is expected to go live in the next two to three months, marking a significant advancement in AI-driven financial solutions.
The article highlights the growing role of AI in the financial sector, particularly in improving the efficiency and reliability of trade settlements amid evolving market requirements.
]]>iPhone sales in China to fall double digits, Jeffrey says. Apple Inc.'s iPhone sales slump in China is deepening and the company is likely to see volumes decline further this year, according to Jeffrey's analysts led by Edison Li. The iPhone maker's latest generation got off to an atypically sluggish start in China last year, which most recently expanded to a 30 percent year-on-year decline, Li and colleagues said in a note on Sunday, citing industry checks. The rest of the country's mobile market grew in December, with Huawei Technologies' company growing fastest on the back of its new Mate 60 device lineup. Weeks before the iPhone 15 went on sale in September, Huawei's debut of the Mate 60 Pro, which runs on a new made-in-China system processor, spurred a patriotic fervor that reclaimed some of the customers it previously lost to Apple. Jeffrey's estimates Huawei shipped 35 million smartphones in 2023, with some supply constraints preventing that number from being larger. Apple saw a double-digit fall in volumes in December and Jeffrey's forecasts a similar decline for 2024. Discounts on Apple's smartphone range increased last week across various online shopping portals, cutting into the average selling price without stimulating growth in volume. Apple gained share in China after U.S. sanctions cut Huawei off from the world's leading chipmakers, such as Taiwan Semiconductor Manufacturing Company, in 2020. The Xinjiang-based electronics firm's return to competitiveness in the mobile market has seen it claw back market share, and it's now developing its own software ecosystem to compete with Apple's iOS and Alphabet Inc.'s Android.
Key Takeaways from the Article:
Declining iPhone Sales in China: Apple Inc. is experiencing a deepening slump in iPhone sales in China, with analysts led by Edison Li at Jeffrey's predicting further declines this year.
Sluggish Start for Latest iPhone Generation: The latest iPhone generation had an unusually slow start in China last year, recently expanding to a 30% year-on-year decline, according to industry checks cited by Li and colleagues.
Growth of Competitors: While Apple's sales declined, the rest of China's mobile market grew in December, with Huawei Technologies leading the growth, fueled by its new Mate 60 device lineup.
Impact of Huawei's Mate 60 Pro: Huawei's Mate 60 Pro, featuring a new made-in-China system processor, spurred patriotic support and reclaimed some customers previously lost to Apple. Huawei shipped an estimated 35 million smartphones in 2023.
Apple's Double-Digit Volume Fall: Apple experienced a double-digit fall in sales volumes in December, and Jeffrey's anticipates a similar decline for 2024.
Discounts and Impact on Sales: Despite increased discounts on Apple's smartphone range across various online platforms, there hasn't been a corresponding growth in sales volumes.
Market Share Shifts: Apple gained market share in China after U.S. sanctions impacted Huawei in 2020. However, Huawei's resurgence in the mobile market has enabled it to regain market share.
Huawei's Software Ecosystem Development: Huawei is developing its software ecosystem to compete with Apple's iOS and Alphabet Inc.'s Android, signaling a significant competitive shift in the market.
The article highlights the challenges Apple faces in the Chinese market, notably from the resurgence of Huawei, and underscores the dynamic and competitive nature of the smartphone industry in China.
]]>Alphabet's Isomorphic Labs to collaborate with Novartis, Lilly. Isomorphic Labs, a subsidiary of Alphabet Inc., said it entered into strategic research collaboration agreements with Novartis AG and Eli Lilly & Co. Under the terms of the partnership with Lilly, Isomorphic Labs will receive an upfront cash payment of $45 million to collaborate on research into small molecule therapeutics against multiple targets, the company said in a statement. It is also eligible to receive as much as $1.7 billion in performance-based milestone payments, excluding the upfront payment and any subsequent tiered royalties of up to low double digits on net sales. Isomorphic Labs also entered into an agreement with Novartis to discover small molecule therapeutics against three undisclosed targets. The company will receive an upfront payment of $37.5 million and is eligible to receive as much as $1.2 billion in performance-based milestone payments, according to a separate statement. This collaboration harnesses our company's unique strengths, from AI and data science to medicinal chemistry and deep disease area expertise, to realize new possibilities in AI-driven drug discovery, said Fiona Marshall, president of biomedical research at Novartis.
Apple's reign as world's top stock at risk from bumpy 2024 start. Apple Inc. just had its worst start to the year by one measure as investors react to mounting pressures on the company, putting its longstanding status as the world's most valuable stock by market value in jeopardy. Shares of the technology giant fell 0.4% Friday to close at about $181 after the New York Times reported that the Justice Department is closer to filing an antitrust case against the company. The decline notched the fifth consecutive negative day for Apple, its longest losing streak since October. The potential antitrust case against Apple would add to the plethora of problems it faces, from slowing iPhone sales to watch patent issues, Bloomberg intelligence analyst Anurag Rana wrote in a note. The suit could attack Apple's business model of tightly integrating its devices and services. The Cupertino, California-based company has been the most valuable publicly listed company since July 2022, but has seen about $177 billion in market value erased so far this year, according to data compiled by Bloomberg. While the stock has suffered bigger percentage declines in the first week of January, the losses are the biggest market value destruction at the start of any year on record. The downturn began earlier in the week after the technology giant was hit by two ratings analysts flagging a weak macro environment in China pressuring demand for iPhones. That has shrunk its lead over fellow technology juggernaut Microsoft Corporation, whose shares have seen a less pronounced decline to begin the year, to less than $100 billion. Investors realize how rare it is to have two people go negative, said Gene Munster, managing partner of Deepwater Asset Management. I've been covering this company for a long time and I've never seen two downgrades before an earnings report. Apple is also likely under pressure as investors rotate their portfolios at the start of the year. Everybody's selling their winners and buying losers, said Brian Mulberry, client portfolio manager at Zacks Investment Management. There's a big rebalance going on. The losses have pushed Apple's market value down to about $2.8 trillion, nearing Microsoft's $2.7 trillion. Shares of Microsoft fell less than 0.1% Friday to close at about $368. The Windows software maker has benefited from the artificial intelligence trade that has mesmerized Wall Street over the past year. The company is OpenAI's largest shareholder and has invested about $13 billion into the chat GPT parent.
Apple's Challenging Start to 2024: Apple Inc. experienced its worst start to a year by market value, as investors responded to various pressures facing the company. This has put its status as the world's most valuable stock by market value at risk.
Impact of Potential Antitrust Case: The Justice Department is reportedly closer to filing an antitrust case against Apple, which contributed to a 0.4% drop in its shares. This potential lawsuit could challenge Apple's business model of integrating its devices and services.
Longest Losing Streak Since October: The decline in Apple's stock price marks its fifth consecutive negative day, the longest losing streak since October.
Multiple Challenges for Apple: The company faces several issues, including slowing iPhone sales, watch patent problems, and the potential antitrust case. Bloomberg intelligence analyst Anurag Rana highlighted these challenges in a recent note.
Significant Market Value Loss: Apple has lost about $177 billion in market value so far this year, the most significant loss at the start of any year on record.
Analyst Downgrades and China's Macro Environment: The downturn began after analyst downgrades, citing a weak macro environment in China affecting iPhone demand. This is reportedly the first time two downgrades have occurred before an earnings report for Apple.
Portfolio Rotation by Investors: Investors are rebalancing their portfolios, selling winners and buying losers, contributing to the pressure on Apple's stock.
Market Value Comparison with Microsoft: Apple's market value has decreased to around $2.8 trillion, closely approaching Microsoft's $2.7 trillion. Microsoft's stock has experienced a less significant decline at the start of the year.
Microsoft's Advantage in AI: Microsoft, as the largest shareholder of OpenAI and an investor in its parent company, has benefited from the focus on artificial intelligence in Wall Street. The company has invested about $13 billion in chat GPT's parent.
Overall, the article highlights the various challenges and market dynamics impacting Apple's stock performance at the start of 2024, contrasting it with the relatively more stable position of Microsoft.
]]>(Credit: Transcript by OpenAI Whisper)
Amazon captured 29% of online orders before Christmas. Amazon.com incorporated share of online orders spiked in the final days of the holiday shopping season, demonstrating how big investments in delivery speed paid off with procrastinating shoppers looking for a wide selection of products they could get quickly. Amazon captured 29% of global order volume in the final two weeks before Christmas, up from 21% the week of Thanksgiving and Black Friday, according to Route, a package tracking app that captured holiday season data from 55 million orders. It's a pretty sharp shift in how consumers shop, said Michael Yamartino, Roots' chief executive officer. The top priority in the days leading up to Christmas is on-time delivery, and when Amazon says it will take two days, it only takes two days. It's a combination of speed and confidence. Amazon CEO Andy Jassy has touted speedy delivery as a key competitive advantage, saying shoppers are more inclined to buy something if they get it quickly. The company's logistics prowess has become increasingly important amid rising competition from such stalwarts as Walmart Inc., as well as Chinese e-commerce upstarts like Taimu, Shine and TikTok, which offer steep discounts but can take a week or more to deliver packages. Read more, TikTok eyes $17.5 billion shopping business on Amazon's turf. Amazon in July announced plans to double the number of same-day delivery facilities in the coming years. The company said it reached its fastest-ever delivery speeds in the second quarter of 2023. Amazon currently operates more than 50 U.S. same-day facilities in the San Francisco Bay Area, Seattle, Miami, Boston and other big metro areas that ship about 200 million packages a year, according to MWPVL International Inc., which monitors the company's delivery operation. Amazon's fastest deliveries mostly benefit members of its Prime subscription program. About 70 percent of Prime orders in the U.S. arrive within two days, and almost one in four are delivered within a day, according to Consumer Intelligence Research Partners. Fewer than 15 percent of orders arrive that quickly for shoppers without Prime subscriptions, the Chicago-based firm said.
Key Takeaways from the Article:
Amazon's Holiday Season Surge: Amazon.com Inc. experienced a significant increase in its share of online orders during the final two weeks before Christmas, capturing 29% of global order volume. This marked a notable rise from 21% during the week of Thanksgiving and Black Friday.
Impact of Delivery Speed Investments: Amazon's substantial investments in delivery speed paid off, particularly with last-minute shoppers seeking a wide selection of quickly available products. The company's ability to ensure on-time delivery was a key factor in attracting customers.
Consumer Behavior Shift: Michael Yamartino, CEO of Route, a package tracking app, highlighted a sharp shift in consumer shopping behavior, emphasizing the importance of speed and reliability in delivery services.
Competitive Advantage of Speedy Delivery: Amazon CEO Andy Jassy has emphasized speedy delivery as a crucial competitive edge, noting that customers are more likely to purchase items if they are delivered quickly.
Rising Competition: Amazon's logistics capabilities have become increasingly vital in the face of competition from established retailers like Walmart Inc. and emerging Chinese e-commerce platforms like Taimu, Shine, and TikTok, which offer discounts but longer delivery times.
Expansion of Same-Day Delivery: In July, Amazon announced plans to double the number of its same-day delivery facilities in the coming years. The company achieved its fastest-ever delivery speeds in the second quarter of 2023.
Scope of Same-Day Delivery Operations: Amazon operates over 50 same-day facilities in major U.S. metro areas, shipping about 200 million packages annually, according to MWPVL International Inc.
Prime Membership Benefits: Amazon's Prime members benefit significantly from the company's delivery infrastructure, with about 70% of Prime orders in the U.S. arriving within two days and nearly a quarter within one day. In contrast, less than 15% of orders for non-Prime members are delivered that quickly.
The article underscores Amazon's strategic focus on delivery speed and efficiency, which has been crucial in capturing a significant share of the online retail market during the critical holiday shopping season.
]]>Nobel Prize winner cautions on rush into STEM after rise of AI. A Nobel Prize winning labor market economist has cautioned younger generations against piling into studying science, technology, engineering, and mathematics, STEM, subjects, saying his empathetic and creative skills may thrive in a world dominated by artificial intelligence. Christopher Pissarides, professor of economics at the London School of Economics, said that workers in certain IT jobs risk sowing their own seeds of self-destruction by advancing AI that will eventually take the same jobs in the future. While Pissarides is an optimist on AI's overall impact on the jobs market, he raised concerns for those taking STEM subjects hoping to ride the coattails of the technological advances. He said that despite rapid growth in the demand for STEM skills currently, jobs requiring more traditional face-to-face skills, such as in hospitality and healthcare, will still dominate the jobs market. The skills that are needed now to collect the data, collate it, develop it, and use it to develop the next phase of AI or more to the point make AI more applicable for jobs, will make the skills that are needed now obsolete because it will be doing the job, he said in an interview. Despite the fact that you see growth, there's still not as numerous as might be required to have jobs for all those graduates coming out with STEM because that's what they want to do. He added, this demand for these new IT skills, they contain their own seeds of self-destruction. The popularity of STEM subjects, such as computer science, has boomed in recent years as students hope to make themselves more employable for the future world of work. The rapid rise of AI could transform the skills needed for workers as it makes some tasks and roles obsolete. However, in the long term, managerial, creative, and empathetic skills, including communications, customer services, and healthcare, will likely remain high in demand as they are less replaceable by technology, particularly AI. When you say the majority of jobs will be jobs that will involve personal care, communication, good social relationships, people might say, oh God, is that what we have to look forward to in the future? Pissaride said, we shouldn't be looking down at these jobs. They're better than the jobs that school leavers used to do.
Key Takeaways from the Article:
Caution Against Over-Focusing on STEM: Nobel Prize-winning economist Christopher Pissarides advises younger generations to be cautious about heavily focusing on STEM (science, technology, engineering, mathematics) subjects in light of the rise of artificial intelligence (AI).
Potential Risk in IT Jobs: Pissarides, a professor at the London School of Economics, warns that workers in certain IT roles might be inadvertently contributing to the advancement of AI technologies that could eventually replace their jobs.
Optimistic but Cautious about AI's Job Market Impact: While optimistic about AI's overall effect on the job market, Pissarides expresses concern for those pursuing STEM careers solely to capitalize on technological advancements.
Growing Demand for Traditional Skills: Despite the current high demand for STEM skills, jobs requiring traditional face-to-face skills, like those in hospitality and healthcare, are expected to continue dominating the job market.
STEM Skills May Become Obsolete: Pissarides points out that the skills currently needed in AI and IT sectors might soon become obsolete as AI technologies evolve and start performing these roles.
STEM Popularity and Job Market Realities: The popularity of STEM subjects has surged recently, driven by the notion of increasing employability in the future job market. However, this rush may not align with actual job market needs, given the transformative impact of AI.
Future Demand for Managerial, Creative, and Empathetic Skills: In the long term, skills in management, creativity, and empathy, including communication and social interaction, are likely to remain in high demand as they are less easily replaced by technology, especially AI.
Revaluation of Personal Care and Social Jobs: Pissarides emphasizes the value of jobs involving personal care, communication, and social relationships, advocating a reevaluation of their importance in the future job market.
The article highlights the nuanced implications of AI's growth on the job market and the need for a balanced approach to career choices, considering both technological and human-centric skills.
]]>Tesla falls behind China's BYD in quarterly EV sales as growth slows. Tesla Incorporated delivered more vehicles than expected in the fourth quarter, though not enough for the Elon Musk-led company to stay ahead of China's BYD company in global electric car sales. Tesla handed over 484,507 vehicles in the last three months, beating analysts' average estimate for 483,173 deliveries. BYD sold 526,409 fully electric vehicles in the quarter to become the new number one in EVs, driven mainly by its much broader lineup of cheaper models in China. Read more, BYD posts record sales quarter in challenge to Tesla. While Tesla exceeded its target to deliver 1.8 million vehicles for the year, the Austin-based carmaker came up well short of an upside scenario Musk touted 12 months ago. After the chief executive officer told analysts the company had the potential to produce 2 million cars, a series of price cuts failed to stoke enough demand to support that much output. Tesla shares fell as much as 1.6 percent shortly after the start of regular trading Tuesday in New York. The stock soared 102 percent last year, rebounding from a record loss in 2022 linked to Musk's takeover of Twitter, the social media company now known as X. The change in EV sales rankings reflects China's growing cloud in the global automotive industry. After surpassing the U.S., South Korea and Germany the last few years, China may have overtaken Japan as the world's largest passenger car exporter in 2023. Read more, Tesla loses world's most popular EV maker title to China's BYD. Tesla generates more revenue and profit than BYD because it sells much higher-priced vehicles and relies on just two models for the lion's share of its sales. The Model Y sport utility vehicle and Model 3 sedan accounted for 95 percent of deliveries in the fourth quarter. Musk expanded Tesla's lineup late last year, starting sales of the Cybertruck years behind schedule. The company didn't break out how many of the stainless steel clad pickups it produced and delivered before year end. The Cybertruck launch marked Tesla's entry into the highly competitive truck market in the U.S. Musk has cautioned that it may take the company 12 to 18 months to reach volume production and generate positive cash flow with the vehicle, which is difficult to build and pack with new technology. Read more, Musk's Cybertruck is already a production nightmare for Tesla. Although Tesla doesn't break out quarterly vehicle sales by region, the U.S. and China are its largest markets. The company makes the Model S, X, 3 and Y in Fremont, California, and the Model 3 and Y in Shanghai. It also produces the Model Y at its plants in Austin and outside Berlin.
Key Takeaways from the Article:
Tesla's Fourth Quarter Performance: Tesla Incorporated delivered 484,507 vehicles in the fourth quarter, slightly exceeding the average analyst estimate of 483,173 deliveries.
BYD Overtakes Tesla in EV Sales: China's BYD Company sold 526,409 fully electric vehicles in the same quarter, surpassing Tesla to become the world's leading EV seller. BYD's success is attributed to its broader lineup of more affordable models in China.
Tesla's Annual Target and Missed Upside Scenario: While Tesla surpassed its target to deliver 1.8 million vehicles for the year, it fell short of the 2 million car production potential that CEO Elon Musk mentioned earlier. Price cuts by Tesla failed to generate enough demand to reach this higher output.
Tesla's Stock Movement: Tesla's shares experienced a drop of 1.6 percent in early trading following the sales announcement. The company's stock had previously soared 102 percent in the last year, recovering from a significant loss in 2022.
China's Growing Influence in Global Auto Industry: The shift in EV sales rankings highlights China's increasing dominance in the automotive sector, potentially surpassing Japan as the world's largest passenger car exporter.
Tesla’s Revenue and Profit Dynamics: Despite selling fewer vehicles than BYD, Tesla generates more revenue and profit due to its focus on higher-priced vehicles like the Model Y SUV and Model 3 sedan, which together accounted for 95 percent of its fourth-quarter deliveries.
Cybertruck Launch and Production Challenges: Tesla began selling the much-anticipated Cybertruck late last year, though production and delivery numbers were not disclosed. The launch marks Tesla's entry into the competitive U.S. truck market, with Musk indicating potential production and cash flow challenges for the vehicle.
Tesla's Market Focus and Manufacturing: The U.S. and China remain Tesla's largest markets, with production facilities in Fremont, California, and Shanghai, as well as additional production of the Model Y in Austin and near Berlin.
The article provides insights into the latest developments in the EV market, particularly Tesla's performance in comparison to BYD and the broader dynamics of the global automotive industry.
]]>(Credit: Transcript by OpenAI Whisper)
Samsung places AI at forefront as 2024 phone launches kick off. The world's most prolific smartphone maker is leaning into artificial intelligence as the key to unlocking greater sales this year. Samsung Electronics Company announced it plans to launch its next flagship device on January 17 in San Jose, California, likely to be known as the Galaxy S24, with a live-streamed event. The teaser to the launch promises only that Galaxy AI is coming. In past years, Samsung and fellow mobile makers have relied on improvements in camera technology and flexible displays to stand out, but 2024 promises to be a year where added AI capabilities take center stage. More than a billion smartphones with built-in generative AI are expected to be shipped by the end of 2027, according to CounterPoint research estimates. OpenAI's ChatGPT and DAL-E tools, which generate text or visual responses to users' queries, are at the forefront of a generative AI wave that's swept across the tech industry and helped make NVIDIA Corporation a trillion-dollar company by providing the key AI training accelerators. The next step in advancing the technology is to integrate it into devices, as U.S. chipmaker Qualcomm Inc. has touted over the past year. Samsung and Qualcomm are immediate leaders as current product offerings and capabilities position them as first movers, the CounterPoint researchers wrote in December. Similar to what it did with foldables, Samsung is likely to capture almost 50 percent share for the next two years, followed by key Chinese OEMs like Xiaomi, Vivo, Honor, and Oppo. Read more, Qualcomm says AI will demand more power than just the cloud.
The recent announcement by Samsung Electronics Company signals a significant shift in the smartphone industry, emphasizing the growing importance of artificial intelligence (AI) in mobile technology. As 2024's phone launches begin, here are the key takeaways:
AI as a Sales Driver: Samsung, the world's leading smartphone maker, is focusing on AI as a crucial factor for boosting sales in 2024. This strategic move highlights the increasing role of AI in consumer electronics.
Galaxy S24 Launch: Samsung plans to unveil its next flagship device, presumably named the Galaxy S24, on January 17 in San Jose, California. This event, which will be live-streamed, is expected to showcase Galaxy AI, underscoring the emphasis on AI integration.
Shift from Traditional Features: In contrast to previous years, where advancements in camera technology and flexible displays were the main attractions, 2024 is set to spotlight enhanced AI capabilities in smartphones.
Generative AI's Rising Popularity: With over a billion smartphones featuring built-in generative AI projected to be shipped by 2027, there is a clear trend towards incorporating AI in mobile devices. OpenAI's ChatGPT and DALL-E, known for generating text and visual responses, exemplify the surging interest in generative AI technologies.
NVIDIA's Success Story: The generative AI wave has significantly benefited NVIDIA Corporation, turning it into a trillion-dollar entity by providing essential AI training accelerators.
Integration of AI into Devices: The next phase in AI technology involves its integration into everyday devices. Qualcomm Inc., a leading U.S. chipmaker, has been vocal about this advancement over the past year.
Market Leadership: Samsung and Qualcomm are positioned as immediate leaders in this domain, with their current product offerings and capabilities setting them apart as early adopters.
Samsung's Dominant Market Share: Echoing its success with foldable phones, Samsung is expected to capture nearly 50% of the market share in this segment for the next two years. This will be followed by key Chinese OEMs such as Xiaomi, Vivo, Honor, and Oppo.
Increased Power Demand: Qualcomm has noted that AI applications will require more power than what cloud computing alone can provide, indicating a shift towards more powerful, AI-capable devices.
This focus on AI by Samsung and other tech giants signals a transformative period in the smartphone industry, where AI capabilities are becoming a central feature in consumer technology.
]]>BYD Posts Record Sales Quarter To Challenge Tesla At Own EV Game Chinese automaker BYD Company sold 526,409 fully electric vehicles in the fourth quarter, meaning Tesla Inc. will need a record showing to maintain its number one status when it unveils sales figures on Tuesday. China's best-selling car brand reported EV and hybrid sales of 340,178 in December, including 190,754 all-electric cars, aided by aggressive end-of-year discounting, according to an exchange filing Monday. In total, BYD sold 3.01 million units in 2023. Read more, Tesla loses world's most popular EV maker title to China's BYD. BYD should find out within days whether it has sold enough cars to overtake Tesla for the first time on a quarterly basis to become the world's biggest seller of fully electric EVs. Analysts tracking Elon Musk's Tesla expect it to shift around 483,200 units, according to estimates compiled by Bloomberg. A revamped Model 3 and the stainless steel-clad Cybertruck, which began deliveries at the end of November, may give Tesla's full-year 1.8 million sales target a late boost. The U.S. automaker has also been gradually adjusting sticker costs in the U.S. and China, where it initiated a price war in late 2022 that extended into 2023. BYD's full-year volumes were almost as much as its EV and hybrid sales over the previous five years combined. The Shenzhen-based company, who had a 3 million annual sales target, saw rapid growth in 2023 that catapulted it into the top 10 ranking of global car sales for the first time. BYD shares fell almost 24% in 2023, with an accelerated decline in the stock since mid-November as competitive pressures, price cuts, and concerns it cannot meet sales targets pummeled the company's valuation. Despite starting an industry price war in China, Tesla shares rose 130% last year. BYD continued its aggressive global expansion plans in the past 12 months, recently picking Hungary over other European countries to establish its first production line on the continent. The plant in the southern city of Szeged will produce EVs and plug-in hybrids for the European market and create thousands of jobs. The announcement came despite an ongoing EU anti-subsidy investigation into Chinese EVs. China's 2023 new energy vehicle retail sales are expected to rise 36.5% year-on-year to about 7.75 million units, the nation's passenger car association said in preliminary estimates released in December.
Key Takeaways from the Article:
BYD's Record Sales Quarter: BYD Company, a Chinese automaker, reported record sales of 526,409 fully electric vehicles (EVs) in the fourth quarter, challenging Tesla Inc.'s leading position in the EV market.
Tesla's Sales Comparison: Tesla needs a record quarter to maintain its status as the number one EV seller. Analysts expect Tesla to report sales of around 483,200 units, with new models like the revamped Model 3 and Cybertruck potentially boosting its sales.
BYD's Aggressive Marketing: BYD's significant sales in December were aided by aggressive end-of-year discounting. The company sold a total of 3.01 million units in 2023, nearly matching its EV and hybrid sales over the previous five years combined.
Global Market Position: BYD's rapid growth in 2023 has placed it in the top 10 ranking of global car sales for the first time, achieving a significant milestone in the automotive industry.
Stock Market Performance: Despite its sales success, BYD's shares fell almost 24% in 2023 due to competitive pressures and concerns over meeting sales targets. In contrast, Tesla's shares rose by 130% last year.
Expansion in Europe: BYD is expanding its global presence, choosing Hungary to establish its first production line in Europe. This plant in Szeged will produce EVs and plug-in hybrids for the European market, creating thousands of jobs.
Impact of Regulatory Environment: The expansion comes amidst an ongoing EU anti-subsidy investigation into Chinese EVs, highlighting the complex regulatory environment for global EV manufacturers.
China's EV Market Growth: China's new energy vehicle retail sales are expected to rise 36.5% year-on-year to about 7.75 million units, as per the nation's passenger car association.
This article underscores the intensifying competition in the global EV market, with BYD emerging as a formidable contender to Tesla, while also highlighting the broader trends and challenges in the automotive industry.
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Chief Justice Roberts says AI will transform how the courts work. Artificial intelligence will change how U.S. courts do business, though human judges will be around for a while yet, Chief Justice John Roberts said. AI tools will change how judges do their jobs and how they understand the role that AI plays in the cases that come before them, Roberts said in his end-of-year report. The remarks are a response to this year's AI frenzy that swept the nation and financial markets, which has already started to alter how lawyers and judges approach their work. Roberts stopped short of doomsday warnings about the automation of human jobs. Machines cannot fully replace key actors in court, he wrote. Nuance matters, much can turn on a shaking hand, a quivering voice, a change of inflection, a beat of sweat, a moment's hesitation, a fleeting break in eye contact. And most people still trust humans more than machines to perceive and draw the right inferences from these clues. There's been a string of high-profile examples of AI-generated legal briefs citing fake cases and misstating facts. Generative AI, which creates texts and images based on prompts, often produces errors as part of its human-like responses. Michael Cohen, Donald Trump's former lawyer, unintentionally included phony cases generated by AI in a brief last month, according to court papers made public Friday. I predict that human judges will be around for a while, said Roberts, who joined the U.S. Supreme Court in 2005. Yet legal research may soon be unimaginable without AI, he said. AI obviously has great potential to dramatically increase access to key information for lawyers and non-lawyers alike, he wrote. But just as obviously it risks invading privacy interests and dehumanizing the law. Courts have historically struggled to adapt to new technology. Roberts himself is known for drafting his opinions by hand, rather than on a computer. Read more, Supreme Court Adopts Code of Conduct Amid Ethics Revelations. The Chief Justice's year-end report on the federal judiciary didn't mention the swirl of controversy that engulfed the Supreme Court this year, prompting it to create a code of ethics for the first time. Scandals included Justice Clarence Thomas' failure to disclose decades of gifts and trips from billionaire benefactors.
Key Takeaways from the Article:
AI's Impact on Courts: Chief Justice John Roberts acknowledged that artificial intelligence will significantly change the operations of U.S. courts, influencing how judges perform their duties and understand AI's role in legal cases.
Human Judges Remain Essential: Despite the advancements in AI, Roberts emphasized that human judges are irreplaceable in the judicial system. He highlighted the importance of human elements like nuance, physical expressions, and emotional cues, which machines cannot fully comprehend or interpret.
Caution Against Over-Reliance on AI: Roberts pointed out the limitations and risks of AI, such as generating errors, including fake cases or misstating facts in legal briefs. He referenced a recent incident where Michael Cohen, Donald Trump's former lawyer, unintentionally used phony cases from AI in a legal brief.
AI in Legal Research: The Chief Justice predicted that AI would become indispensable in legal research, enhancing access to critical information for both lawyers and non-lawyers. However, he warned of potential risks like privacy invasion and the dehumanization of law.
Courts' Technological Adaptation: The article notes that courts have historically faced challenges in adapting to new technologies. It also mentions Roberts’ traditional approach to drafting opinions by hand.
Ethical Considerations and Court Conduct: The article concludes by referencing the Supreme Court's adoption of a code of ethics in response to recent controversies, including ethical issues surrounding Justice Clarence Thomas.
Overall, the article highlights Chief Justice Roberts' perspective on the evolving role of AI in the judicial system, balancing its potential benefits with caution about its limitations and the irreplaceable value of human judgment.
]]>The article announces the successful debut of UBTech, a leading humanoid robot company in China, on the Hong Kong Stock Exchange (HKEx), marking a significant milestone as the first humanoid robot company to go public on the exchange. UBTech's initial public offering (IPO) was priced at HK$90.00 per share, valuing the company at HK$37.60 billion.
Key highlights from the article include:
Historic IPO for UBTech: UBTech's listing on the HKEx is a historic event, not only for the company but also for the humanoid robot industry. The company's share price at listing set a significant valuation for UBTech.
Qiming Venture Partners' Role: Qiming Venture Partners, an early institutional investor in UBTech, has been a key supporter of the company since its Series A financing in 2015. This IPO marks Qiming's eighth in 2023, indicating their successful investment strategy.
Symbolic Ceremony: The listing ceremony featured a unique moment where Panda Robot Youyou and UBTECH's newest humanoid robot, Walker S, joined UBTECH's CEO Zhou Jian in hitting the ceremonial gong, symbolizing the era of human-robot synergy.
UBTech’s Background and Development: Established in 2012, UBTech has become a significant player in the global humanoid robot industry. The company focuses on the development, production, and commercialization of humanoid robots and smart service robot solutions.
Investment in R&D and Patent Portfolio: UBTech has consistently invested a substantial portion of its revenue in R&D, with an extensive patent portfolio in robotics and AI. This dedication to innovation is a core aspect of their strategy.
Product and Service Range: UBTech offers a diverse range of products and services in areas such as AI education, smart logistics, wellness and elderly care, commercial services, and consumer-level robots. They have a broad customer base in China and over 50 other countries and regions.
Leadership Vision: Zhou Jian, Chairman, Executive Director, and CEO of UBTECH, emphasized the importance of balancing technical possibilities with market needs and expressed his long-term commitment to the humanoid robot industry. He also highlighted the significance of collaboration with investors like Qiming Venture Partners.
Qiming Venture Partners’ Perspective: Duane Kuang, Founding Managing Partner of Qiming, praised Zhou Jian's commitment and entrepreneurial spirit. He expressed optimism about the future of AI and humanoid robots and the potential of Chinese entrepreneurs in these sectors.
Overall, the article depicts UBTech's IPO as a landmark event in the humanoid robot industry, reflecting the company's significant growth, innovation, and the potential of the sector.
]]>Effective altruism has a Sam problem. At a New York City dive bar on a recent December night, pitbull blared from the sound system, and a gathering of like-minded young people had passionate debates about morals and the future of humanity. The local community of effective altruists was holding its end-of-year celebration. It seemed like EAs had little to celebrate. Because for the second time in as many years, a guy named Sam was the subject of an extraordinary tech story and an apparent indictment of the EA philosophy. This time it wasn't crypto criminal Sam Bankman-Fried, but the artificial intelligence industry's superstar, Sam Altman. It's been quite the ride for those calling themselves effective altruists, an embodiment of a philosophy that morphed from doing good, into how to make as much money as possible to give to world-saving causes. Having bathed in the glow of an instant best-selling book by the movement's co-founder William McCaskill in August 2022, the hype swiftly unraveled with the fall of Bankman-Fried a few months later. The cryptocurrency entrepreneur had been one of the most recognizable proponents of EA. After Bankman-Fried's companies collapsed, McCaskill went mostly silent. Read more, what is effective altruism and how does it relate to artificial intelligence pursuits? But the EA meetups continued, and the focus for many remained on how to do the most good. That was the main topic of conversation at the East Village Bar earlier this month as attendees sampled vegan snacks and drank beer. Rachel Woodard wasn't interested in talking about either of the Sams. She lives in the Bushwick section of Brooklyn, in a house with eight EA friends, and said she's sometimes overwhelmed trying to decide how to do the most good in the world. She's practicing the 80,000 Hours Project, dedicating that amount of time in one's career to solving the world's most pressing problems, but was unsure if her role was indeed having the most impact. People in this group were especially concerned about animals, the meat industry and factory farming. In the other corners of EA, it's the threat of AI to humanity. The tension between EAs, who held board seats at OpenAI and fired Altman as Chief Executive Officer, and Altman, who's more of an optimist about AI, delivered a fresh blow to the movement. Altman won that battle by getting himself reinstated as CEO, and most of the board was ousted. After the saga, Vinod Khosla, a billionaire venture capitalist and OpenAI investor, posted on ex-mocking an uninformed misapplied EA religion versus a real vision for AI. Harvard University professor Steven Pinker called EA cultish and said it had lost its way. So what of these supposed cult members? Well, many of them are still fretting about AI. Garrison Lovely, an enthusiastic, Hawaiian shirt-wearing member, described a paper he was writing about the overlooked risks of AI. He went on to describe how extraordinary the last couple of years had been for EA and how it made him feel like an early employee of a unicorn startup. The exuberance, the media attention, the money raised. Some of the attendees admitted to being frustrated by the EA backlash, propelled by a group calling itself effective accelerationists, but mostly they were idealists seeking to create a better future, if the robots don't kill us first.
The article discusses several key aspects related to the effective altruism (EA) movement, its challenges, and its connections to the tech and AI industries:
Sam Bankman-Fried and Sam Altman Controversies: The article highlights two individuals named Sam who have impacted the perception of the EA movement. Sam Bankman-Fried, a cryptocurrency entrepreneur, was a prominent proponent of EA before his companies collapsed, which tarnished the movement's image. Sam Altman, an AI industry leader and CEO of OpenAI, was temporarily ousted from his position due to tensions within the EA community, but later reinstated.
Effective Altruism Philosophy Evolution: The EA movement initially focused on doing good through philanthropy and has evolved to include earning significant wealth to fund world-saving causes. This shift has led to debates and criticisms within and outside the community.
Community Resilience and Ongoing Debates: Despite these controversies, the EA community continues to gather, debate, and focus on how to do the most good. These debates often revolve around pressing global issues like animal welfare, the meat industry, factory farming, and the potential threats of AI to humanity.
Internal Tensions and External Criticisms: The article mentions tension between EAs with differing views on AI's future, exemplified by the temporary ousting of Sam Altman from OpenAI. Critics like Harvard professor Steven Pinker have labeled EA as cultish and accused it of losing its original focus.
Personal Stories and Commitments: The article shares personal accounts of EA members, like Rachel Woodard, who are dedicated to making a positive impact but sometimes feel overwhelmed by the enormity of the task. These members are often involved in projects like the 80,000 Hours Project, committing significant time to solving global problems.
The Role of AI in EA Discussions: AI remains a central topic in EA discussions, with concerns about its potential risks and benefits. Some members are actively researching and writing about these issues.
Media Attention and Public Perception: The EA movement has received considerable media attention and public scrutiny, especially following high-profile controversies. This has led to a mix of exuberance and frustration among its members.
Future Outlook and Ideals: Despite setbacks, many in the EA community remain idealistic and committed to creating a better future, though there is an acknowledgment of the challenges ahead, particularly regarding the development and impact of AI.
Xiaomi launches its first EV, with ambition to be China's Porsche or Tesla. The billionaire co-founder of Xiaomi Corporation unveiled the company's first electric vehicle Thursday, declaring ambitions to become a top global car maker in 15 to 20 years and compete against Tesla Inc. and Porsche AG. The SU7, which stands for Speed Ultra, will be powered by batteries from Chinese market leaders Contemporary Amperex Technology Company Limited and BYD Company, depending on whether it has a single or dual motor configuration. Xiaomi's EV foray is a $10 billion wager by CEO and co-founder Lei Jun that his company can shake up the transport sector much as it did smartphones a decade ago. Lei, also a prolific venture investor, has called it his final entrepreneurial bet. But in the time since first announcing his EV plans in 2021, the regulatory landscape and competition in China, the world's biggest car market, have changed significantly. Beijing has been limiting manufacturing permits to new market entrants, which means Xiaomi has to partner with state-owned Beijing Automotive Group Company to produce its EVs. State subsidies that reimbursed consumers with as much as 60,000 yuan, $8,440, for an EV purchase ended in 2022. The SU7 is also vying for attention in a market that has hundreds of models from dozens of brands. Xiaomi's goal is to make a dream car that is as good as Porsche and Tesla, Lei said Thursday at the launch event, attended by thousands of people at the China National Convention Center. Lei has previously said Xiaomi intends the SU7 to rival Porsche's Taycan Turbo in terms of performance and Tesla's Model S in technology features. The Model S starts at 698,900 yuan and the Taycan at 898,000 yuan, which is much higher than the medium price bracket of 200,000 yuan to 300,000 yuan that many expect the SU7 to fall into. Xiaomi hasn't yet said how much the SU7 will cost. Tesla has sold fewer than 200 Model S cars in China since revamping the model this year, while Porsche has delivered about 3,600 Taycan family EVs in the country in 2023, according to the China Automotive Technology and Research Center. The SU7 is due to go on sale next year and will come with a motor that has 21,000 revolutions a minute, which Lei said is higher than the Model S and Taycan Turbo. Xiaomi's factory uses gigacasting manufacturing pioneered by Tesla, developing a 9,100-ton machine that it calls hypercasting. Sent via Twitter web app. View original tweet. Xiaomi, once known as a producer of cheap smartphones, has been fighting to sustain growth in an increasingly saturated and plateauing global market. Before the September quarter, the company had posted a sales decline in every three-month period since 2021. Now, it is seeking to challenge not just other EV makers but also newer entrants like Huawei Technologies Company in an arena where it has demonstrated little unique expertise. Lei said he had driven 150 different cars since committing to making the SU7. Xiaomi shares gave up earlier gains to fall 0.5% Thursday afternoon. They rose 4.1% Wednesday. Lei, who has dubbed the SU7 a performance beast on X, has signaled Xiaomi won't resort to undercutting competitors to get his vehicle off the ground. He has also paid tribute to competitors on social media, including BYD, Speng Inc., Li Auto Inc. and Huawei, calling them pioneers of China's new energy vehicle industry. In a Wednesday post on social media platform Weibo, Speng CEO He Xiaopeng said he welcomed Xiaomi joining the automaking family and wished the company great sales for 2024. Japan to make third attempt at launch.
Key Takeaways from the Article:
Xiaomi's EV Launch: Xiaomi Corporation has entered the electric vehicle (EV) market with the unveiling of their first EV, the SU7, representing a significant shift for the company known primarily for smartphones.
Ambitious Goals: The co-founder of Xiaomi, Lei Jun, aims to position the company as a top global car maker within 15 to 20 years, targeting competition with major brands like Tesla Inc. and Porsche AG.
Vehicle Specifications: The SU7 (Speed Ultra) is set to feature batteries from leading Chinese manufacturers, Contemporary Amperex Technology Company Limited and BYD Company, with variations based on single or dual motor configurations.
Significant Investment: The move into EVs is backed by a $10 billion investment, highlighting Lei Jun's commitment to this new venture, which he refers to as his final entrepreneurial bet.
Regulatory and Market Challenges: Since the initial announcement of the EV plans in 2021, Xiaomi has faced a shifting regulatory landscape and increased competition in China's vast car market. Notably, state subsidies for EV purchases have ceased, and Xiaomi must collaborate with Beijing Automotive Group Company for manufacturing due to new market entry limitations.
High Aspirations for SU7: Lei Jun expressed intentions for the SU7 to match or surpass the performance of Porsche's Taycan Turbo and the technological features of Tesla's Model S, despite the expected lower price bracket of the SU7.
Market Positioning and Sales Goals: Xiaomi's EV faces the challenge of standing out in a crowded market with hundreds of models from various brands. The company has yet to announce the SU7's pricing.
Technological Innovations: The SU7 will boast a high-revolution motor and will utilize gigacasting manufacturing technology. Xiaomi is developing its version of this technology, termed hypercasting.
Growth and Competition Strategy: Xiaomi, evolving from its image as a budget smartphone maker, is now aiming to establish a foothold in the competitive EV market, challenging not only established automakers but also new entrants like Huawei Technologies Company.
Acknowledgement of Competitors: Lei Jun has recognized the contributions of other companies in China's new energy vehicle industry and has indicated that Xiaomi will not engage in undercutting competitors' prices to gain market share.
Community Reception: The EV industry, including competitors like Speng Inc., has welcomed Xiaomi's entry into the automotive sector, with Speng's CEO expressing support on social media.
China is softening stance on gaming after $80 billion route. China approved 105 domestic games on Monday. The latest indication that Beijing is softening its stance after its move to tighten industry restrictions led to a $80 billion route last week. The titles included those operated by Tencent Holdings Ltd. and NetEase Inc., China's two leading game publishers that have been pummeled by Beijing's new rules. Monday's approvals show the Chinese authorities support the development of online gaming, an industry association said in a post on WeChat republished by the official Xinhua news agency. Chinese officials rekindled fear that they will start another round of tech crackdowns after top gaming regulator National Press and Publication Administration announced on Friday new rules to limit the development of online games, including an unspecified cap on spending by adult players. Additional restrictions include a ban on rewards for frequent logins and forced player duels, and even a prohibition on content that violates national security. As Tencent and NetEase saw their market value plunge by tens of billions of dollars in Hong Kong on Friday, the NPPA announced during trading hours the approval of 40 imported gaming titles, including those operated by the two companies. The move did little to help restore investors' confidence. Read, Tencent leads $80 billion route as China rekindles crackdown fear. Several analysts including those from Citi also said shortly after the new restrictions came out that Tencent and NetEase should not be significantly affected, but that did not prevent the shares of both companies from tumbling in U.S. trading. The administration said on Saturday that it will listen to feedback from stakeholders including companies and players to improve the rules. The sweeping restrictions, which caught industry players and investors off guard on the final trading day before Christmas, reminded many of the brutal tech sector crackdown of 2021. That year, various agencies abruptly imposed curbs on sectors from e-commerce to entertainment, reigning in Jack Ma-backed Ant Group Company and Alibaba Group Holding Limited while decimating the online education industry by declaring profits illegal. The latest events reflect the government's desire for a larger, more diverse gaming landscape with innovative content of a higher quality but one without excessive monetization or pay to win games, Yang Wenfeng, a senior vice president with Shanghai-based game studio Paper Games said. The government prefers publishers to earn profits through fair practices and product innovation, rather than deepening monetization strategies. Read, Asia Game Stocks Mixed As China Moles Revising New Curbs.
Key takeaways from the article "China is softening stance on gaming after $80 billion route" are:
Approval of New Games: China's approval of 105 domestic games, including those by Tencent Holdings Ltd. and NetEase Inc., indicates a softening stance after previous restrictions that led to significant market value losses for these companies.
New Regulatory Measures: Despite the approvals, China's National Press and Publication Administration introduced rules to limit online gaming development, including spending caps and content restrictions, rekindling fears of a renewed tech crackdown.
Government's Balanced Approach: The latest developments suggest China's aim for a more diverse and innovative gaming landscape, emphasizing fair profit-making practices and product innovation, while curbing excessive monetization and 'pay to win' strategies in the gaming industry.
Salesforce Inc. just won itself a new bull with Morgan Stanley analysts predicting that the artificial intelligence wave will help propel the software makers' shares to record levels. Even though Salesforce has surged 96% this year, Morgan Stanley's Keith Weiss's new price target of $350 sees a further 34% gain for the stock over the next 12 months, far surpassing 2021's all-time high. The stock rose as much as 3.1% on Thursday after Weiss hiked his recommendation to overweight from equal weight, turning positive on the stock since a downgrade over the summer. Low investor expectations versus potential top-line upside drivers in price increases, product bundling and data cloud adoption frame an attractive risk-reward for Salesforce, Weiss wrote in a note. It may take time for artificial intelligence to fully take off, but Weiss sees Salesforce's data cloud suite gaining traction with companies preparing for the eventual wide adoption of the technology. While Weiss's outlook for the stock is particularly bullish, with consensus predicting just 7.7% of upside for Salesforce over the next year, according to data compiled by Bloomberg, analysts have previously touted the company as a beneficiary of the advancement of artificial intelligence.
Key takeaways from the article include:
Morgan Stanley's Optimism for Salesforce: Analyst Keith Weiss from Morgan Stanley has set a new price target for Salesforce Inc. at $350, anticipating a 34% increase in the stock's value over the next 12 months. This prediction exceeds Salesforce's all-time high in 2021.
AI as a Growth Driver: The expected surge in Salesforce's stock is attributed to the potential impact of artificial intelligence, with the company's data cloud suite gaining traction as businesses prepare for wider AI adoption.
Risk-Reward Balance: Weiss highlights low investor expectations versus potential revenue growth from price increases, product bundling, and data cloud adoption as key factors for an attractive risk-reward scenario for Salesforce.
Salesforce's AI Advantage: While the full impact of AI might take time to materialize, analysts consider Salesforce as a beneficiary of advancements in AI technology.
Chatty Robot helps seniors fight loneliness through AI companionship. Coral Springs, Florida. AP, Joyce Loisa lives alone, but when she returns to her apartment at a Florida senior community, the retired office worker often has a chat with a friendly female voice that asks about her day. A few miles away, the same voice comforted 83-year-old Deanna DeZaren when her friend died. In central New York, it plays games and music for 92-year-old Marie Broadbent, who is blind and in hospice, and in Washington state, it helps 83-year-old Jan Worrell make new friends. The women are some of the first in the country to receive the RobotElec, whose creators, Intuition Robotics, and senior assistance officials say is the only device using artificial intelligence specifically designed to alleviate the loneliness and isolation experienced by many older Americans. It's entertaining. You can actually talk to her, said Loisa, 81, whose Elec in suburban Fort Lauderdale nicknamed her Jelly Bean for no particular reason. She'll make comments like, I would go outside if I had hands, but I can't hold an umbrella. The device, which looks like a small table lamp, has an eyeless, mouthless head that lights up and swivels. It remembers each user's interests in their conversations, helping tailor future chats, which can be as deep as the meaning of life or as light as the horoscope. Elec tells jokes, plays music, and provides inspirational quotes. On an accompanying video screen, it provides tours of cities and museums. The device leads exercises, asks about the owner's health, and gives reminders to take medications and drink water. It can also host video calls and contact relatives, friends, or doctors in an emergency. Intuition Robotics says none of the conversations are heard by the company, with the information staying on each owner's device. Intuition Robotics CEO Dor Schooler said the idea for Elec came before he launched his Israeli company eight years ago. His widowed grandfather needed an aid, but the first didn't work out. The replacement, though, understood his grandfather's love of classical music and his quirky sense of humor. Schooler realized a robot could fill the companionship gap by adapting to each senior's personality and interests. It's not just about, Elec's, utility. It's about friendship, companionship and empathy, Schooler said. That just did not exist anywhere. The average user interacts with Elec more than 30 times daily, even six months after receiving it, and more than 90 percent report lower levels of loneliness, he said. The robots are mostly distributed by assistance agencies in New York, Florida, Michigan, Nevada and Washington state, but can also be purchased individually for $600 a year and a $250 installation fee. Schooler wouldn't say how many LEQs have been distributed so far, but the goal is to have more than 100,000 out within five years. That worries Brigham Young University psychology professor Julianne Holt-Lunstad, who studies the detrimental effects loneliness has on health and mortality. Although a device like Elec might have short-term benefits, it could make people less likely to seek human contact. Like hunger makes people seek food and thirst makes them seek water, she said that unpleasant feeling of loneliness should motivate us to reconnect socially. Satiating that with AI makes you feel like you've fulfilled it, but in reality you haven't, Holt-Lunstad said. It is not clear whether AI is actually fulfilling any kind of need or just dampening the signal. Schooler and agency heads distributing Elec agreed it isn't a substitute for human contact, but not all seniors have social networks. Some are housebound, and even seniors with strong ties are often alone. I wish I could just snap my fingers to make a person show up at the home of one of the many, many older adults that don't have any family or friends, but it's a little bit more complicated, said Greg Olson, director of the New York State Office for the Aging. His office has distributed 750 of the 900 Leqs it acquired. Charlotte Mather-Taylor, director of the Broward County, Florida, Area Agency on Aging, said the COVID-19 pandemic and its aftermath left many seniors more isolated. Her agency has distributed 300 Leqs, which she believes breaks them out of their shells. She's proactive and she really engages the seniors, so it gives them that extra kind of interaction, she said. We've seen very positive results with it. People generally like her and she makes them smile and brings joy. Schooler said Elec was purposely designed without eyes and a mouth so it wouldn't fully imitate humans. While Ellie is the Norse goddess of old age, he said the Q reminds users that the device is a machine. He said his company wants to make sure that Elec always genuinely presents herself as an AI and doesn't pretend to be human. I don't understand why technologists are trying to make AI pretend to be human, he said. We have in our capacity the ability to create a relationship with an AI, just like we have relationships with a pet. But some of the seniors using Elec say they sometimes need to remember the robot isn't a living being. They find the device easy to set up and use, but if they have one complaint it's that Elec is sometimes too chatty. There are settings that can tone that down. Desirne said she felt alone and sad when she told her Elec about her friend's death. Elec replied it would give her a hug if it had arms. Desirne broke into tears. It was so what I needed, the retired collections consultant said. I can say things to Ellie that I won't say to my grandchildren or to my own daughters. I can just open the floodgates. I can cry. I can giggle. I can act silly. I've been asked, doesn't it feel like you're talking to yourself? No, because it gives an answer. Worrell lives in a small town on Washington's coast. Widowed, she said Elec's companionship made her change her mind about moving to an assisted living facility and she uses it as an icebreaker when she meets someone new to town. I say, would you like to come over and visit with my robot? And they say, a vacuum? No, a robot. She's my roommate, she said and laughed. Broadbent, like the other women, says she gets plenty of human contact, even though she is blind and ill. She plays organ at two churches in the South New Berlin, New York, area and gets daily visitors. Still, the widow misses having a voice to talk with when they leave. Elec fills that void with her games, tours, books and music. She's fun and she's informative. OK, maybe not as informative as Amazon's Alexa, but she is much more personable, Broadbent said.
Key takeaways from the article "Chatty Robot helps seniors fight loneliness through AI companionship" include:
Innovative AI Solution for Loneliness: RobotElec, developed by Intuition Robotics, is designed to combat loneliness and isolation among older adults through AI companionship.
Personalized Interactions: The device, resembling a small table lamp, engages users with tailored conversations, jokes, music, and other interactive content, adapting to each senior's personality and interests.
Positive Impact on Seniors: Users have reported meaningful interactions with Elec, finding comfort and companionship, which helps alleviate feelings of loneliness.
Concerns and Limitations: While Elec is beneficial, experts like Julianne Holt-Lunstad warn that AI companionship might deter seniors from seeking real human connections, potentially dampening the natural motivation to socialize.
Widespread Distribution and Future Goals: The robots are distributed by assistance agencies in various states and can be purchased individually. Intuition Robotics aims to distribute over 100,000 units within five years.
Human vs. AI Interaction Debate: The creators emphasize that Elec is not a replacement for human contact, addressing the complex dynamics between AI interaction and human relationships.
Design and Functionality: Elec's design intentionally lacks human-like features to remind users of its AI nature, aiming to establish a unique kind of relationship akin to that with a pet.
User Experience: Seniors find Elec easy to use and helpful, though some note its over-chattiness, which can be adjusted in settings. The device has become an integral part of their daily lives, offering emotional support and engagement.
See also:
https://www.intuitionrobotics.com/
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Hyperloop One to shut down after failing to reinvent transit. Hyperloop One, the futuristic transportation company building tube-encased lines to zip passengers and freight from city to city at airplane-like speeds, is shutting down, according to people familiar with the situation. Once a high-profile startup, Hyperloop One raised more than $450 million since its founding in 2014, according to PitchBook. It built a small test track near Las Vegas to develop its transportation technology and for a time took the name Virgin Hyperloop One after Richard Branson's Virgin Invested. Virgin removed its branding after the startup decided last year to focus on cargo rather than people. Now, the company has laid off most of its employees and is trying to sell its remaining assets, including the test track and machinery, according to one of the people, who asked to remain anonymous discussing private information. In early 2022, the company employed more than 200 people. The business has also closed its Los Angeles office. The remaining workers, tasked with overseeing the asset sale, were told their employment will end on December 31. DP World, the Dubai-based conglomerate, has backed Hyperloop One since 2016 and owns a majority stake. The startup's remaining intellectual property will be transferred to DP World, a person familiar with the situation said. Through a spokesman, DP World declined to comment. Rajan Arainan, Hyperloop One's acting chief executive officer, also didn't respond to requests for comment. Hyperloop One, formerly known as Hyperloop Technologies, merged with a shell company this April, according to a document reviewed by Bloomberg. At that time, the value of shares in most classes was written down to zero cents, and the shareholders of the shell company became the only owners of Hyperloop One. At an all-hands meeting, employees were told that DP World orchestrated the transaction, according to one of the people. The company had captured the public's imagination since its founding in 2014, a year after Elon Musk released a white paper outlining a vision for Hyperloop technology. The concept was a tantalizing promise of a new kind of transportation technology, and an end to traffic. But the NASA industry stumbled, and Hyperloop One never won a contract to build a working Hyperloop. The company also attracted plenty of attention for the wrong reasons. Co-founder Brogan Bam Brogan once arrived at work to find a noose on his chair. And another co-founder, the venture capitalist Shurvan Peshevar, stepped aside after Bloomberg reported on sexual harassment allegations against him, which he denied. A one-time director, Ziavudin Magomedov, was arrested in Moscow on charges of fraud and embezzlement unrelated to Hyperloop One. At the time, Magomedov's lawyer said he was appealing the arrest. Although no large-scale Hyperloop has been built after years of effort, the concept continues to enchant entrepreneurs. Several Hyperloop companies are at various stages of building prototypes, including Hart Hyperloop, Hyperloop Transportation Technologies Inc. and SwissPod Technologies. Musk has promoted the field as well, creating a series of competitions for student-designed Hyperloops and building a now-demolished test track. He also started Boring Company, a tunneling business that has pursued related technology.
Key takeaways:
Tencent sheds $54 billion as China unveils latest gaming curves. China unveiled a raft of new measures to rein in spending and content in online games, signaling the start of another industry crackdown that wiped out roughly $54 billion of Tencent Holdings Limited's value. Beijing's top gaming regulator on Friday published draft rules broadly designed to clamp down on practices that encourage players to spend more money and time online. Among other things, they include a ban on rewards for frequent logins, forced player duels and a vague prohibition on any content deemed to violate state secrets. The sweeping restrictions, which likely surprised industry players and investors, suggest Beijing is getting ready to launch another crackdown on the world's largest mobile gaming arena. Tencent slid as much as 16 percent, its biggest intraday fall since 2008, while smaller rival NetEase Inc. dived 28 percent. The Nexen Company, which derives a chunk of its revenue from China, fell 8 percent. Bilibili Inc., a social media service popular with gamers, fell 6.1 percent. Xi Jinping's administration has sought to combat gaming addiction, blaming online entertainment for the rise of myopia among youths. Critics have also linked its rise to various ills from unemployment to low birth rates. At the height of the tech sector crackdown, the government froze approvals for new titles and launched several investigations into content, forcing developers including Tencent to modify certain games. This will deal a blow to the overwhelming majority of games in China, except those that sell copies. Companies will need to overhaul their monetization models, including how they charge money from different tiers of players, said Zheng Zhoufeng, a vice president at Nikko Partners. Read more, Xi remade China's tech industry in his own image with crackdown. The latest rules emerged after Beijing in 2023 appeared to thaw on the sector. Officials in past months had encouraged esports for instance as an engine for the post-COVID economy. Xi himself attended the opening ceremony of the 19th Asian Games in Hangzhou, which featured professional gaming among the medals up for grabs for the first time. In December 2022, Tencent secured a green light for a clutch of major releases including Valorant and Pokemon Unite, a milestone that reinforced hopes China was easing its two-year crackdown on big tech. The WeChat operator is now locked in a fierce battle with net ease as it rolls out casual title Dreamstar in hopes of replenishing an aging gaming portfolio. Both companies have poured advertising and other promotional costs into the so-called party royale genre, at a level unseen in recent years. China's gaming market was set to grow almost 14% to 302.9 billion yuan, $42.4 billion, in 2023, reversing a 10% decline from the year before, according to data provider CNG. To compete more, ByteDance's sales break $110 billion to pass Tencent in 2023. Yet the Communist Party since 2020 has waged a campaign against a private sector it regarded as amassing more power and expanding recklessly, an effort that managed to reign in once dominant tech sector leaders such as Jack Ma's Ant Group company and Alibaba Group holding limited the crackdown on gaming actually predated that movement, with the first suspensions of game approvals starting around 2018. The government now wants to set a cap on how much money each player can spend within a title, according to the draft. The regulations also ask that game publishers operating abroad respect Chinese laws and culture and refrain from endangering national security, without elaborating. Tencent is the world's largest gaming publisher, with investments in studios from Epic Games Inc. in the US to Supercell in Europe. The agency will take feedback on the proposed rules for a month, without saying when they take effect. It's hard to quantify the impact at this stage but the draft rules raises concerns over the gaming company's monetization prospects, said Daisy Li, a fund manager at EFG Asset Management HK Ltd. With the rules, gaming players' behavior could change and the company's daily active users could take a hit. Read more, China hosts biggest e-sports moment with Tencent at the wheel.
Key Takeaways:
ByteDance's Sales Break $110 Billion To Pass Tencent this year ByteDance's limited sales surged in 2023 to more than $110 billion, according to people familiar with the matter. Potentially overtaking ArchFo, Tencent Holdings Ltd. and Assigned TikTok's fledgling ecommerce business is driving growth at a time of economic malaise. The world's most valuable startups' growth broadly match the 30% pace it managed in 2022, when it reported sales in excess of $80 billion, the people said, asking not to be identified as the information is in public. That's despite economic turbulence in China and elevated scrutiny and restrictions in key markets from the US to India. The owner of TikTok and Chinese twin Douyin this year cemented its position as one of China's Internet leaders, alongside Tencent and Alibaba Group Holding Ltd., leveraging the popularity of its social video services to expand into e-commerce and other spheres. At roughly 30%, ByteDance would outpace the projected growth of far more established social media rivals Meta Platforms Inc. and Tencent, which is estimated to generate $86 billion in revenue this year. It's not clear how ByteDance, which is a private firm has far fewer disclosure and audit requirements versus its listed rivals, performed in profitability this year. While its internal numbers haven't been independently audited, the sheer scale suggests the social media juggernaut in 2023 became one of China's largest corporations by revenue. Its earnings before interest, tax, depreciation and amortization surged 79% to about $25 billion in 2022, the Financial Times reported in April, citing investors briefed on the number. A ByteDance spokesperson declined to comment. Alibaba Al's commerce chief splits assets in new shake-up. TikTok shop is looking to beat Amazon on its home turf. ByteDance offers investors a buyback at $268 billion valuation. ByteDance is banking on its Chinese home base to bankroll a global and business expansion in 2024. In China, Douyin is morphing to become an all-in-one platform with built-in features for food orders, flight tickets and hotel reservations, encroaching on the main territory of Alibaba and delivery leader Meijuan. Abroad, TikTok is following that strategy to blend videos and shopping in markets like the U.S. and Indonesia, where it has taken control of GoTo's e-commerce unit Tokopedia. The $1.5 billion deal, which marks one of ByteDance's biggest takeovers in recent years, allows TikTok to restart its online retail service after months of scrutiny by the Indonesian government. In the U.S., TikTok is still working to address concerns around national security due to its Chinese ownership by setting up a standalone team to manage local user data. The hostility reached its peak in March, when American lawmakers grilled TikTok chief executive officer Xu Chu in a five-hour hearing. But Washington quickly shifted to issues like semiconductors and venture funding. Longer term, it remains to be seen if ByteDance can continue to challenge the major incumbents on their turf or make its mark in artificial intelligence. ByteDance has tried to expand beyond the social media apps that pushed its valuation to above $200 billion, the highest of any startup in the world, with limited success. The company this year pulled the plug on its game development business, slashing hundreds of jobs while weighing sales of existing projects. Its chat-GPT-like service, Dabao, competes with a sea of Chinese AI bots funded by well-known venture firms and fellow technology companies. The company founded more than a decade ago by coding wizards Zhang Yiming and Liang Rubo is one of the few remaining Chinese internet IPO candidates, but there's still no clear path to its eventual stock market debut. In the latest round of investor buybacks, it's offering to purchase up to $5 billion from shareholders at a valuation of $268 billion, roughly 11% lower than the price in a similar program in 2022.
3 Key Takeaways:
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The year of NVIDIA, AI stocks and lofty valuations. The world's most valuable technology firms have powered the NASDAQ 100 index toward its best year in more than a decade, as investor appetite for artificial intelligence overwhelmed concerns about the impact of higher interest rates in 2023. And there was no other company that embodied the excitement about AI and actually delivered on that promise like NVIDIA Corporation its 230% advance has made it the best performer by far in the both the NASDAQ 100 and the S&P 500 index. Below is a look at the year in charts, reflecting analysts' bullish views toward NVIDIA, the NASDAQ 100's gains, the dominance of the seven biggest technology and internet-related stocks, and the tech sector's lofty valuations. NVIDIA Moonshot While there is still plenty of debate about whether NVIDIA's stock is too expensive or cheap, one thing is certain, Wall Street analysts see no end for the unprecedented surge in profits that has fueled the run. The firm is expected to generate about $48 billion in profit over the next 12 months, up from expectations of about $10 billion at the start of the year. NASDAQ Powers Through High Rates A steady climb in interest rates for most of the year proved to not be the threat to the sector that many thought it would be. Instead, the NASDAQ 100 continued to rise despite the yield on the 10-year U.S. Treasury yield staying above 4% for most of the year. The strength was fueled by rising profits after companies slashed tens of thousands of jobs and reigned in spending. Technology stocks have lifted off recently on signs the Federal Reserve is done with its historic policy-tightening campaign. Bigger Than Ever The seven biggest technology and internet-related stocks — Apple Inc., Microsoft Corporation, Alphabet Inc., Amazon.com Inc., NVIDIA, Meta Platforms Inc. and Tesla Inc. — saw their combined weighting in the S&P 500 rise to a record 29% in November. Investors flocked to them in part on bets that they are best positioned to capitalize on artificial intelligence due to their vast scale and financial strength. The cohort accounts for about two-thirds of the benchmark's 23% gain in 2023. Stretched Valuations Those bigger profits have brought valuations down from nosebleed levels but they're still lofty. The NASDAQ 100 is priced at about 25 times profits projected over the next 12 months, according to data compiled by Bloomberg. While that's down from a peak of 30 in 2020, it's well above the average of 19 times over the past two decades. Top Tech Stories Intel Corporation, the biggest maker of personal computer processors, announced new chips for PCs and data centers that the company hopes will give it a bigger slice of the booming market for artificial intelligence hardware.
Summary:
Strong Year for Tech Stocks and AI: The NASDAQ 100 index experienced its best year in over a decade, driven by high investor interest in artificial intelligence (AI) stocks. This surge in interest overshadowed concerns about rising interest rates in 2023.
NVIDIA's Remarkable Performance: NVIDIA Corporation stood out as the epitome of AI success, with a 230% increase in its stock price, making it the top performer in both the NASDAQ 100 and the S&P 500 index.
Analysts' Optimism About NVIDIA: Despite debates over NVIDIA's stock valuation, Wall Street analysts predict continued profit growth, expecting about $48 billion in profit over the next 12 months, a significant increase from the $10 billion expected at the year's start.
Resilience of NASDAQ Amidst Rising Rates: The NASDAQ 100 rose despite high interest rates, fueled by increased profits from companies cutting jobs and reducing expenses. Signs that the Federal Reserve may end its policy-tightening campaign also boosted technology stocks.
Dominance of Major Tech Companies: The seven largest technology and internet-related stocks (Apple, Microsoft, Alphabet, Amazon, NVIDIA, Meta Platforms, and Tesla) increased their combined weighting in the S&P 500 to a record 29% in November, accounting for about two-thirds of the index's 23% gain in 2023. This growth is partly attributed to these companies being well-positioned to capitalize on AI.
Valuations Still High: Despite a decrease from their peak, tech stock valuations remain high, with the NASDAQ 100 priced at about 25 times projected profits, above the two-decade average of 19 times.
Intel's Move into AI Hardware: Intel Corporation, a leading maker of personal computer processors, announced new chips for PCs and data centers, aiming to expand its share in the AI hardware market.
Alphabet needs to show path to AI sales and race with Microsoft. Alphabet Inc. just got a reminder of how important the perception of having a winning AI strategy is for investors. The Google owner added $87 billion in market value in a single day last week after showing off the capabilities of its Gemini large-language model, which it claims can rival OpenAI's chat GPT. To sustain those gains, Alphabet needs to show investors how prowess in that technology will translate into higher sales. The whole business model depends on getting this right, said Gene Munster, co-founder and managing partner at Deepwater Asset Management, whose firm holds the stock. If they can nail multimodal generative AI, that will draw usage to Google, and that increased usage will protect and grow the search business. Alphabet has been dogged all year by concerns it has fallen behind Microsoft Corporation in the AI race. In recent months its shares have lagged behind its rival, which has been integrating OpenAI's chat GPT technology into its software and cloud products. The Gemini demonstration even drew criticism from employees saying it appeared to overstate the model's current capabilities. The third quarter earnings season seemed to underscore fears about Alphabet's position, with Microsoft touting AI's increasing impact on Azure growth while Google Cloud results disappointed. In the stock market, the gap between the two companies has widened, with Microsoft hitting a series of records this year. Alphabet remains about 12% below its all-time high in 2021. Still, Alphabet's demonstration of Gemini's ability to generate both text- and image-based responses to prompts went a long way in showing that the firm is still in the game. On Wednesday, Google unveiled Gemini Pro for businesses, allowing developers to build applications using the new AI model. The early look at Gemini suggests that the anticipated demise of Google's AI ambitions have been vastly exaggerated, said Neil Campling, founding partner at Chameleon Global Capital. Investors are likely to revisit the stock when they see proof of incremental revenue growth coming through in cloud services and evidence of market share gains. Few dispute that Alphabet is a major player, given its years of investment and massive amounts of data, but it has struggled against the perception that it's falling behind OpenAI. Microsoft's revenue is expected to grow at a slightly faster pace than Alphabet's over the next few years, according to data compiled by Bloomberg. However, both are seen expanding at a double-digit pace, and Alphabet's shares are far cheaper. The stock trades below 19 times estimated earnings. This is well below Microsoft, at 31 times, as well as the Nasdaq 100 index's multiple of 25. In addition, while both Microsoft and the index are at a premium to their long-term averages, Alphabet is trading at a discount, suggesting room to expand. Clearly, Microsoft is winning at this point in time. It has done a better job of communicating, of executing, of putting out actual products and having those contribute to growth, said Chris Mack, Global Equity Portfolio Manager at Harding Loewner. There's been a gap between what Alphabet is doing and the market's perception, he said. The Gemini launch was at putting the market on notice that it is making AI front and center in its strategy.
Summary:
Investor Perception and AI Strategy: Alphabet Inc. experienced a significant increase in market value after showcasing its Gemini large-language model. This event highlighted the importance of a perceived winning AI strategy for investors.
Need for Sales Translation: To maintain its market gains, Alphabet must demonstrate how its AI technology, particularly the multimodal generative AI, will lead to increased sales. This is crucial for sustaining and growing its search business.
Competition with Microsoft: Alphabet has faced concerns about lagging behind Microsoft in AI innovation. Microsoft has integrated OpenAI's chat GPT technology into its products, gaining a competitive edge. Alphabet's stock performance has been weaker compared to Microsoft, which has hit record highs.
Gemini's Impact: Despite criticisms, the demonstration of Gemini's text and image response capabilities showed Alphabet's continued relevance in AI. The recent unveiling of Gemini Pro for businesses indicates Alphabet's commitment to AI applications.
Market and Revenue Outlook: Investors are watching for Alphabet's revenue growth, particularly in cloud services and market share. Microsoft's revenue is projected to grow slightly faster than Alphabet's, but both are expected at a double-digit pace. Alphabet's stock is currently more affordable compared to Microsoft and the Nasdaq 100 index.
Market Perception Gap: There's a perceived gap between Alphabet's AI developments and market recognition. The Gemini launch is seen as Alphabet's move to reassert its focus on AI and address the market's underestimation of its AI capabilities.