Month: January 2025

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Nvidia unveils new powerful mini-AI computer designed for developers

AI chip

Nvidia is pushing the boundaries of AI technology with its new mini-AI computer, Project DIGITS, recently unveiled at CES 2025

Priced at $3,000, this mini powerhouse aims to bring cutting-edge AI capabilities to individual desks, making it accessible for AI researchers, data scientists, and students who need to develop and test AI models locally.

At the heart of Project DIGITS is Nvidia’s GB10 Grace Blackwell Superchip, a remarkable component that promises up to 1 petaflop of AI performance. This level of computational power enables the mini-AI computer to run large AI models with up to 200 billion parameters, making it suitable for some of the most complex AI tasks.

The computer features 128GB of unified DDR5X memory and up to 4TB of NVMe storage, ensuring that users have ample space and speed to handle data-intensive applications. This combination of memory and storage is particularly beneficial for those who work with large datasets or need to run multiple AI experiments simultaneously.

One of the standout feature of Project DIGITS is its focus on local AI development. By providing a powerful AI platform that doesn’t rely on cloud infrastructure, Nvidia is addressing the needs of developers who require immediate, on-demand AI capabilities. This local approach not only offers faster performance but also enhances data privacy and security, as sensitive data doesn’t need to be transmitted over the internet.

Nvidia’s Project DIGITS is set to be available from Nvidia and its manufacturing partners starting in May 2025. With its impressive specifications and focus on local AI development, this mini-AI supercomputer is poised to become an essential tool for those looking to innovate and iterate on AI projects. Whether you’re an AI enthusiast, a seasoned data scientist, or a curious student, Project DIGITS promises to bring powerful AI capabilities directly to your workspace.

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Apple’s inaccurate AI news alerts demonstrate that its technology has a problem

AI

It’s not just any Artificial Intelligence… its Apple Intelligence

Last week, a newly launched feature by Apple that uses artificial intelligence to summarise users’ notifications inaccurately summarised BBC News app notifications, falsely claiming that British darts player Luke Littler had won the PDC World Darts Championship (before he actually did) and that Luigi Manione shoots himself – both were incorrect.

This is not the first instance of Apple’s AI system, known as Apple Intelligence, disseminating false news notifications to users. The BBC has been attempting for approximately a month to persuade Apple to resolve the issue.

Apple informed the BBC that it is working on an update to address the issue by indicating when the text displayed in notifications is summarisation generated by Apple Intelligence.

Apple touts its AI-generated notification summaries as an effective way to group and rewrite previews of news app notifications into a single alert on a users’ lock screen.

It’s a feature Apple says is designed to help users scan their notifications for key details and cut down on the overwhelming barrage of updates many smartphone users are familiar with.

However, this has resulted in what AI experts refer to as ‘hallucinations’ – responses generated by AI that contain false or misleading information.

The BBC want Apple to fix the issue urgently or remove the failed AI system entirely.

“These AI summarisations by Apple do not reflect – and in some cases completely contradict – the original BBC content,” the BBC reportedly said.

“It is critical that Apple urgently addresses these issues as the accuracy of our news is essential in maintaining trust.”

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Warning issued for stock market bubble

AI bubble

Howard Marks, a widely respected value investor and co-founder of Oaktree Capital Management, recently issued a memo highlighting several cautionary signs of a potential bubble in the stock market.

Marks, who famously foresaw the dot-com bubble, pointed out that today’s high market valuations could lead to poor returns over the long term or even sharp declines in the near term.

Marks reportedly noted that the S&P 500’s current price-to-earnings (P/E) ratio is around 22, which is near the top of the historical range. He explained that higher P/E ratios have historically led to lower returns in the long run.

Marks also expressed concern about the enthusiasm surrounding new technologies like AI, which has driven up the prices of companies like Nvidia.

Marks emphasized that investors should not be indifferent to today’s market valuations and should be cautious about the potential for a market correction.

He also raised questions about the role of automated buying from passive investors and the presumption that the largest companies will always succeed.

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Euro zone inflation rose to 2.4% in December 2024 – as expected

Inflation

The annual inflation rate in euro zone increased for the consecutive month reaching 2.4% in December 2024, according to the statistics released on Tuesday 7th January 2024 by Eurostat

The reading, according to economists’ forecasts, indicated an increase from a revised 2.2% figure in November 2024. Core inflation remained steady at 2.7% for the fourth consecutive month, meeting economists’ expectations, while services inflation edged up to 4% from 3.9%.

Headline inflation was widely expected to accelerate after hitting a low of 1.7% in September 2024, as the effect from lower energy prices fade.

The European Central Bank will monitor the full extent of increases in the reading, as well as persistence in services and core inflation. Markets currently anticipate that the ECB will reduce rates from 3% to 2% through several cuts this year.

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How is AI regulation likely to affect stock markets in 2025?

AI regulation

As we head into 2025, the landscape of artificial intelligence (AI) regulation is poised to undergo significant changes, and these shifts are likely to have a profound impact on the stock markets.

The introduction of new regulations, particularly in regions like the European Union and the United States, will create both challenges and opportunities for investors.

One of the most anticipated regulatory developments is the European Union’s AI Act, which aims to set a global standard for AI regulation. This act is expected to impose stringent requirements on AI systems, particularly those used in high-risk sectors such as healthcare, finance, and law enforcement.

Companies operating in these sectors will need to invest heavily in compliance, which could lead to increased operational costs and potentially affect their profitability. As a result, stocks of companies heavily reliant on AI technologies may experience volatility as investors react to these new regulations.

In the United States, the political landscape is also shifting, with the incoming administration expected to take a more hands-on approach to AI regulation. President-elect Donald Trump has appointed Elon Musk to co-lead a new ‘Department of Government Efficiency – DOGE‘, which will focus on nascent technologies like AI. Musk’s influence and experience in the AI field could lead to more favourable policies for AI development, but it could also result in increased scrutiny and regulation of AI applications. Musk’s AI vision differs to that of Mark Zuckerberg’s for instance.

This dual approach of promoting innovation while ensuring safety and ethical use of AI could create a dynamic and unpredictable market environment.

The impact of AI regulation on the stock markets will not be uniform across all sectors. While companies in high-risk sectors may face challenges, those in industries like healthcare and finance could benefit from AI’s transformative potential.

For example, AI-driven innovations in healthcare, such as predictive diagnostics and personalised treatment plans, have the potential to revolutionize patient care and reduce costs. Companies that successfully integrate AI into their operations and comply with regulatory requirements could see their stock prices rise as investors recognize the long-term value of these advancements.

However, the regulatory landscape is not without its risks. Companies that fail to adapt to new regulations or face compliance issues may see their stock prices suffer. Additionally, the rapid pace of technological change means that regulations may struggle to keep up, leading to potential legal and financial uncertainties for companies operating in the AI arena.

AI regulation in 2025 is likely to create a complex and dynamic environment for the stock markets. While new regulations will pose challenges for some companies, they will also open up opportunities for those that can navigate the regulatory landscape successfully.

Investors will need to stay informed and agile, as the impact of AI regulation on the stock markets will be both significant and multifaceted.

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China’s electric vehicle boom is becoming increasingly focused on hybrids

Hybrid vehicle

Hybrid-powered vehicles are becoming more popular than battery-only ones in China, according to latest full-year reports, even as consumers move away from fossil-fuel-only cars.

Market leader BYD reported that well over half of the 4.3 million passenger cars it sold in 2024 were hybrid-powered, marking a significant reversal from 2023.

Chinese electric car start-ups that have exclusively sold battery-powered vehicles generally delivered fewer cars in 2024 compared companies that also offered hybrid models.

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S&P 500 enjoyed a 23% gain in 2024 but 2025 may not be so good

The S&P 500 index witnessed big gains right from the start of 2024. In the first quarter of the year, it jumped up 10.20%. That’s around more than 10 times its average gain since 2000.

However, the momentum couldn’t be sustained as the S&P added 3.9% and 5.5% in the second and third quarter of 2024. In any other year, investors might not have been disappointed with those figures. But the index’s first-quarter performance set expectations so high that subsequent quarters seemed to pale in comparison.

In the final quarter of 2024, the S&P limped to a gain of just 1.9%. Making things worse, we did not get a 2024 Santa rally.

Of course, a gain is a good. But it’s hard not to e just a little disappointed when looking back at the highs we enjoyed in early 2024.

That said, a relatively weak end to the year wasn’t enough to dent the gains of the S&P 500 in the early part of 2024, where the index surged 23.30%. The index recorded no fewer than 57 record closes and this on the back of a 24.2% rise in 2023.

Big tech and Artificial intelligence stocks (the Magnificent Seven in particular) were behind much of 2024′s gains. Shares of Nvidia were up by around 171%, while Broadcom jumped 108%. To place this in context – the Magnificent 7’ stocks were responsible for more than half the S&P 500′s 2024 gain. It does beg the question – is the initial AI hype over for now or is there more to come? Has AI settled for the moment?

Uncertainties await the markets in 2025. Investors will have to contend with the incoming Trump administration’s policies, possibly higher-than-expected interest rates for the year, which in turn are keeping Treasury yields elevated, among other headwinds.

Trumps tariffs are on the way.