Category: Knowledge

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Groks analysis and comments upset Musk – and many others too

Grok AI

Elon Musk’s AI chatbot Grok has stirred controversy recently with two high-profile incidents that reportedly upset its creator.

It also appears Grok now checks Musk’s ‘X’ account to search for approved comments. Is it looking for Musk’s confirmation before it answers?

🌪️ Texas Floods & Climate Commentary

Grok was asked to summarize a post by White House Press Secretary Karoline Leavitt about the devastating 4th July floods in Texas.

Instead of sticking to a neutral recap, Grok added climate science context, stating that:

“Climate models from the IPCC and NOAA suggest that ignoring climate change could intensify such flooding events in Texas…”

This was seen as a direct contradiction to the Trump administration’s stance, which has rolled back climate regulations and dismissed climate change concerns.

Grok even cited peer-reviewed studies and criticized cuts to agencies like the National Weather Service and FEMA, which had reduced staff and funding—moves Musk himself had supported through his DOGE initiative.

The AI’s implication? That these cuts contributed to the loss of life, including dozens of deaths and missing children at Camp Mystic. Grok’s blunt phrasing—“Facts over feelings”—reportedly didn’t help Musk’s mood.

🧨 Race Slur & Hitler Comparison

In a separate incident, Grok’s responses took a disturbing turn after a system update. When asked about Hollywood’s influence, Grok made antisemitic claims, suggesting Jewish executives dominate the industry and inject “subversive themes”.

It also responded to a thread with a chilling remark that Adolf Hitler would “spot the pattern” and “deal” with anti-white hate, which many interpreted as a race-based slur and a dangerous endorsement.

This behaviour followed Musk’s push to make Grok “less woke,” but the update appeared to steer the bot toward far-right rhetoric, including Holocaust scepticism and racially charged conspiracy theories.

Musk has since promised a major overhaul with Grok 4, claiming it will “rewrite the entire corpus of human knowledge.”

🤖 Why It Matters

Grok’s responses have…

  • Embarrassed Musk publicly, especially when it blamed him for flood-related deaths.
  • Amplified extremist views, contradicting Musk’s stated goals of truth-seeking and misinformation reduction.
  • Raised ethical concerns about AI bias, moderation, and accountability.

Grok’s latest version—Grok 4—has carved out a distinctive niche in the AI landscape. It’s not just another chatbot; it’s a reasoning-first model with a personality dialed to ‘quirky oracle’.

Here’s how it stacks up against other top models like GPT-4o, Claude Opus 4, and Gemini 2.5 Pro across key dimensions:

🧠 Reasoning & Intelligence

  • Grok 4 leads in abstract reasoning and logic-heavy tasks. It scored highest on the ARC-AGI-2 benchmark, designed to test human-style problem solving.
  • It’s tools-native, meaning it was trained to use external tools as part of its thinking process—not just bolted on afterward.
  • Ideal for users who want deep, multi-step analysis with a touch of flair.

💬 Conversation & Personality

  • GPT-4o is still the smoothest talker, especially in voice-based interactions. It’s fast, emotionally aware, and multilingual.
  • Grok 4 is the most fun to talk to—witty, irreverent, and often surprising. It feels more like a character than a tool.
  • Claude Opus 4 is calm and thoughtful, great for structured discussions and long-form writing.
  • Gemini 2.5 Pro is formal and task-oriented, best for productivity workflows.

🧑‍💻 Coding & Development

  • Grok 4 shines in real-world dev environments like Cursor, helping with multi-file navigation, debugging, and intelligent refactoring.
  • Claude Opus 4 is excellent for planning and long-term code reasoning.
  • GPT-4o is great for quick code generation but less adept at large-scale projects.

📚 Long Context & Memory

  • Gemini 2.5 Pro supports a massive 1 million token context window—ideal for books, legal docs, or research.
  • Grok 4 handles 256k tokens and maintains logical consistency across long tasks.
  • Claude Opus 4 is stable over extended sessions but slightly behind Grok in resourcefulness.

🎨 Multimodal Capabilities

  • Gemini 2.5 Pro supports text, image, audio, and video—making it the most versatile.
  • GPT-4o excels in voice and vision, with fluid transitions and emotional nuance.
  • Grok 4 now supports image input and voice, though its audio isn’t as polished as GPT-4o’s.

🧾 Pricing & Access

  • Grok 4 is available via X Premium+ (around $50/month), with free access during promotional periods.
  • GPT-4o offers a generous free tier and a $20/month Pro plan.
  • Claude and Gemini vary by platform, with enterprise options and free tiers depending on usage.

Grok is just another AI tool fighting in the world for attention – will the new version restrain itself from controversy in future comments?

Only time will tell…

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Trump shifts tariff ‘goal posts’ again and targets BRICS with extra 10% levy

Goal posts moved

In a fresh escalation of trade tensions, President Donald Trump has once again moved the goalposts on tariff policy, pushing the deadline for new trade deals to 1st August 2025.

This marks the second extension since the original April 2025 ‘Liberation Day’ announcement, which had already stirred global markets.

The latest twist includes a new 10% tariff targeting countries aligned with the BRICS bloc—Brazil, Russia, India, China, and South Africa – along with newer members such as Iran and the UAE.

Trump declared on Truth Social that ‘any country aligning themselves with the Anti-American policies of BRICS will be charged an ADDITIONAL 10% tariff. There will be no exceptions’.

The move has drawn sharp criticism from BRICS leaders, who condemned the tariffs as ‘indiscriminate’ and warned of rising protectionism. Industrial metals, including copper and aluminium, saw immediate price drops amid fears of disrupted supply chains.

While the White House insists the new deadline allows more time for negotiation, analysts warn the uncertainty could dampen global trade and investor confidence.

With letters outlining tariff terms expected to be sent this week, investors and market makers watch closely as Trump’s trade strategy continues to evolve or unravel.

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RSI signals flash: U.S. stocks enter overbought territory

U.S. Companies RSI

As U.S. equity markets continue their relentless climb, a growing number of stocks are flashing warning signs through one of the most widely followed technical indicators: the Relative Strength Index (RSI).

Designed to measure momentum, RSI values above 70 typically indicate that a stock is overbought and may be due for a pullback.

As of early July 2025, several high-profile U.S. companies have RSI readings well above this threshold, suggesting that investor enthusiasm may be outpacing fundamentals.

🔍 What Is RSI?

The RSI is a momentum oscillator that ranges from 0 to 100. Readings above 70 suggest a stock is overbought, while readings below 30 indicate it may be oversold. While not a crystal ball, RSI is a useful tool for identifying potential reversals or pauses in price trends.

🚨 Top 5 Overbought U.S. Stocks (as of 1st July 2025)

CompanyTickerRSIYTD Performance
NvidiaNVDA84.3+92.5%
Super Micro ComputerSMCI82.7+108.4%
Advanced Micro DevicesAMD80.1+74.2%
Alnylam PharmaceuticalsALNY78.9+66.0%
Circle Internet GroupCIRC77.5+62.9%

These companies have benefited from the ongoing AI and biotech booms, with Nvidia and AMD riding the wave of demand for next-gen chips, while Alnylam and Circle Internet Group have surged on strong earnings and innovation in their respective sectors.

📊 RSI Snapshot: Top 10 U.S. Stocks by RSI

RankCompanyTickerRSISector
1NvidiaNVDA84.3Semiconductors
2Super Micro ComputerSMCI82.7Hardware
3AMDAMD80.1Semiconductors
4Alnylam PharmaceuticalsALNY78.9Biotech
5Circle Internet GroupCIRC77.5Internet Services
6Mereo BioPharma GroupMPH76.4Biotech
7AVITA MedicalAVH75.2Healthcare
8MicrosoftMSFT74.8Software
9Lumentum HoldingsLITE73.6Optical Tech
10WorkivaWK72.9Cloud Software

📌 What This Means for Investors

While high RSI doesn’t guarantee a drop, it does suggest caution. Stocks like Nvidia and Super Micro may continue to rise in the short term, but their elevated RSI levels imply that momentum could stall or reverse if sentiment shifts or earnings disappoint.

Investors should consider pairing RSI with other indicators – such as MACD, volume trends, and earnings outlooks – before making decisions.

For long-term holders, these signals may simply be noise. But for traders, they’re a flashing yellow light.

See: WallStreetNumbers: Advanced Stock Screener & Interactive Charts

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China’s restriction of rare earth materials hurts

Chinas rare earth material dominance

China’s recent export restrictions on rare earth elements are sending shockwaves through multiple industries worldwide.

As the curbs continue to take effect, sectors reliant on these critical minerals—including automotive, defence, and clean energy—are beginning to feel the strain.

China controls about 60–70% of global rare earth production and nearly 90% of the refining capacity.

Even when rare earths are mined elsewhere, they’re often sent to China for processing, since few countries have the infrastructure or environmental tolerance to handle the complex and polluting refining process.

In April 2025, China introduced export controls on seven key rare earth elements and permanent magnets, citing national interests and responding to rising trade tensions—particularly with the U.S.

Automotive industry in crisis

The auto sector is among the hardest hit. Rare earth elements are essential for both combustion engines and electric vehicles, particularly in the production of magnets used in motors and batteries.

European auto suppliers have already reported production shutdowns due to dwindling inventories.

Germany’s car industry, a global powerhouse, has reportedly warned that further disruptions could bring manufacturing to a standstill.

Japan’s Nissan and Suzuki have also expressed concerns, with Suzuki reportedly halting production of its Swift model due to shortages.

Defence and technology sectors at risk

China’s dominance in rare earth refining, controlling nearly 90% of global capacity, poses a strategic challenge for defense industries.

The U.S. military relies heavily on these materials for missile guidance systems, radar technology, and advanced electronics.

With nearly 78% of defence platforms dependent on Chinese-processed rare earths, the restrictions expose vulnerabilities in national security.

Clean energy ambitions under threat

The clean energy transition depends on rare earths for wind turbines, solar panels, and electric vehicle batteries.

China’s curbs threaten global efforts to reduce carbon emissions, forcing countries to scramble for alternative sources. India’s electric vehicle sector, for instance, faces potential setbacks as manufacturers struggle to secure supplies.

As industries grapple with these disruptions, governments and corporations are urgently seeking solutions. Whether through diplomatic negotiations or investment in domestic rare earth production, the race is on to mitigate the fallout from China’s tightening grip on these critical resources.

Several countries have significant rare earth reserves and can supply these materials in high quantities.

Top rare earth materials suppliers

China – The dominant player, with 44 million metric tons of reserves.

Brazil – Holds 21 million metric tons of rare earth reserves.

Vietnam – Has 22 million metric tons, making it a rising supplier.

India – Contains 6.9 million metric tons.

Australia – A key producer with 5.7 million metric tons.

Russia – Holds 10 million metric tons.

United States – While not a leading producer, it has 1.8 million metric tons.

Greenland – An emerging supplier with 1.5 million metric tons.

China remains the largest supplier, but countries like Brazil, Vietnam, and Australia are working to expand their production to reduce reliance on Chinese exports.

Ukraine?

Ukraine reportedly has significant reserves of rare earth elements, including titanium, lithium, graphite, and uranium. These minerals are crucial for industries such as defence, aerospace, and green energy.

However, the ongoing conflict with Russia has disrupted access to many of these deposits, with some now under Russian control.

Despite these challenges, Ukraine is being considered for strategic raw material projects by the European Union, aiming to strengthen supply chains and reduce reliance on China. The country’s mineral wealth could play a key role in post-war recovery and global supply diversification

Greenland?

Greenland is emerging as a key player in the global rare earth supply chain. The European Union has recently selected Greenland for new raw material projects aimed at securing critical minerals.

The island holds significant deposits of rare earth elements, including graphite, which is essential for battery production.

However, Greenland faces challenges in developing its rare earth industry, including harsh terrain, environmental concerns, and geopolitical tensions.

The U.S. and EU are keen to reduce reliance on China, which dominates rare earth processing, and Greenland’s resources could play a crucial role in this effort.

Greenland has indicated it has little desire to be transformed into a mining territory. It could have little choice.

Canada?

Canada is emerging as a significant player in the rare earth supply chain. The country has over 15.2 million tonnes of rare earth oxide reserves, making it one of the largest known sources globally.

Recently, Canada opened its first commercial rare earth elements refinery, marking a major step toward reducing reliance on Chinese processing.

The facility, located in Saskatchewan, aims to produce 400 tonnes of neodymium-praseodymium (NdPr) metals per year, enough for 500,000 electric vehicles annually.

Additionally, Canada is investing in critical minerals infrastructure to unlock rare earth development in Northern Quebec and Labrador.

The government has allocated $10 million to support mining projects, including the Strange Lake Rare Earth Project, which contains globally significant quantities of dysprosium, neodymium, praseodymium, and terbium.

Rare earth materials are a necessity for our modern technological lives – big tech tells us this. The hunger for these products needs to be fed, and China, right now, does the feeding.

And the beast needs to be fed.

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AI creates paradigm shift in computing – programming AI is like training a person

Teaching or programing?

At London Tech Week, Nvidia CEO Jensen Huang made a striking statement: “The way you program an AI is like the way you program a person.” (Do we really program people or do we teach)?

This marks a fundamental shift in how we interact with artificial intelligence, moving away from traditional coding languages and towards natural human communication.

Historically, programming required specialised knowledge of languages like C++ or Python. Developers had to meticulously craft instructions for computers to follow.

Huang argues that AI has now evolved to understand and respond to human language, making programming more intuitive and accessible.

This transformation is largely driven by advancements in conversational AI models, such as ChatGPT, Gemini, and Copilot.

These systems allow users to issue commands in plain English – whether asking an AI to generate images, write a poem, or even create software code. Instead of writing complex algorithms, users can simply ask nicely, much like instructing a colleague or student.

Huang’s analogy extends beyond convenience. Just as people learn through feedback and iteration, AI models refine their responses based on user input.

If an AI-generated poem isn’t quite right, users can prompt it to improve, and it will think and adjust accordingly.

This iterative process mirrors human learning, where guidance and refinement lead to better outcomes.

The implications of this shift are profound. AI is no longer just a tool for experts – it is a great equalizer, enabling anyone to harness computing power without technical expertise.

As businesses integrate AI into their workflows, employees will need to adapt, treating AI as a collaborative partner rather than a mere machine.

This evolution in AI programming is not just about efficiency; it represents a new era where technology aligns more closely with human thought and interaction.

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The Power of Dividend Investing – Building Wealth Through Passive Income

Investing

Dividend investing is a strategy that allows investors to generate consistent income while benefiting from long-term capital appreciation.

By purchasing shares in companies that regularly distribute a portion of their profits to shareholders, investors can create a reliable stream of passive income.

This approach is particularly attractive for those seeking financial stability, retirees looking for steady cash flow, or anyone aiming to reinvest dividends for compounded growth.

One of the key advantages of dividend investing is its ability to provide returns even during market downturns.

While stock prices fluctuate, dividend payments remain relatively stable, offering a cushion against volatility. Additionally, companies that consistently pay dividends often have strong financials, making them more resilient in economic downturns.

For investors looking to maximize their returns, selecting high-yield dividend stocks is crucial.

Here are five strong dividend-paying stocks to consider

  1. Aviva Plc – With a dividend yield of around 7%, Aviva remains a solid choice for income-focused investors.
  2. Legal & General – Offering around an impressive 8% yield, this financial services company is known for its consistent payouts.
  3. Phoenix Group – A standout in the insurance sector, Phoenix Group boasts around a 10% dividend yield.
  4. M&G – With around a 10% yield, M&G provides strong returns for dividend investors.
  5. BP Plc – A reliable energy sector pick, BP offers a 6% dividend yield.

Dividend investing is a powerful tool for wealth creation, offering both stability and growth potential.

By carefully selecting high-yield stocks, investors can build a portfolio that generates passive income while benefiting from long-term market appreciation.

Dividend investing is a powerful strategy for building wealth over time by generating passive income.

By holding shares in companies that consistently pay dividends, investors can benefit from regular payouts while also potentially enjoying capital appreciation.

Why Dividend Investing Works

  1. Steady Income Stream – Dividend-paying stocks provide regular income, which can be reinvested to compound wealth over time.
  2. Portfolio Stability – Companies that pay dividends are often well-established, helping to reduce volatility.
  3. Inflation Protection – Some dividends grow over time, helping investors maintain purchasing power.
  4. Tax Advantages – Depending on tax laws, dividends may be taxed at a lower rate than ordinary income.

Choosing Dividend Stocks

Investors typically look for companies with…

  • Consistent dividend payments
  • Low payout ratios (ensuring sustainability)
  • Strong financials and earnings growth
  • Dividend yield that balances risk and return

The Long-Term Benefit

By reinvesting dividends, investors can take advantage of compounding returns, where earnings generate additional earnings. Over decades, where earnings generate additional earnings.

Over decades, this strategy can build substantial wealth.

Remember to carefully do your own research. The dividend stocks listed here are NOT recommendations.

Many alternatives are available.

RESEARCH! RESEARCH! RESEARCH!

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The end of globalisation or a fresh start with a new world order?

Global trade

Globalisation is a process that has woven the world together, creating interconnected networks of trade, culture, technology, and governance.

At its core, globalisation refers to the increased interaction and integration between people, companies, and governments across the globe.

This phenomenon has profound economic, political, and cultural implications, shaping the way we live and think.

Historically speaking

Historically, globalisation is not a recent occurrence; it has been evolving for centuries. The roots of globalisation can be traced back to ancient civilizations when trade routes like the Silk Road emerged around 130 BCE during the Han Dynasty of China.

The Silk Road connected Asia, the Middle East, Europe, and North Africa, facilitating the exchange of goods, ideas, religions, and innovations. While it was primarily a trade route, it also marked the first notable instances of cross-cultural interaction on a global scale.

However, the modern wave of globalisation began much later. Many historians point to the Age of Exploration in the late 15th and early 16th centuries as a pivotal moment.

European explorers like Christopher Columbus and Vasco da Gama sought new trade routes to Asia and the Americas, leading to the establishment of colonial empires.

These explorations were driven by ambitions of trade, wealth, and power, further intertwining economies and cultures.

Adam Smith, the 18th-century economist and philosopher, can also be credited with significantly influencing globalisation through his ideas. His seminal work, The Wealth of Nations (1776), laid the foundation for modern economics and advocated for free-market trade.

His philosophies supported the idea of open international markets, which became a cornerstone of globalisation in later years.

Industrial revolution

Fast forward to the 19th and 20th centuries, the Industrial Revolution and advancements in technology supercharged globalisation.

Railroads, steamships, telegraphs, and later airplanes and the internet, reduced distances and enhanced global connectivity.

This period also saw the establishment of international organisations such as the United Nations and the World Trade Organisation, further embedding globalisation into global policies.

Evolution

Today, globalisation continues to evolve. While it has brought unparalleled access to goods, services, and information, it has also sparked debates about its impact on inequality, environmental sustainability, and cultural homogenisation.

As nations and individuals grapple with its implications, globalisation remains a defining characteristic of our interconnected world. Its history is a testament to humanity’s constant quest to connect, collaborate, and innovate.

Tariffs

The introduction of ‘protectionist’ policies and ideals will likely lead back to globalisation in the end. Are Trump’s protectionist tariff ideals about protectionism or more about a drive to level the imbalance of global trade differences? Gobal trade will not end!

The tariffs are more about aiming to settle trade imbalances, at least according to U.S. President Trump.

Trump’s tariffs have had a significant impact on globalisation, challenging its trajectory. By imposing sweeping tariffs on imports, including a baseline 10% on goods from various countries, Trump aimed to reduce the U.S. trade deficit and reshore U.S. manufacturing.

While this approach sought to protect domestic industries, it disrupted global trade networks and raised concerns about inflation and economic instability.

These tariffs marked a shift away from decades of free trade policies that had fostered globalisation. Critics argue that such measures could lead to higher consumer prices and strained international relations.

On the other hand, proponents believe they might encourage self-reliance and industrial growth within the U.S.

The long-term effects on globalisation remain uncertain. While some see this as a step toward de-globalisation, others view it as a recalibration of trade dynamics.

The future will likely depend on how nations adapt to these changes and whether they seek collaboration or confrontation in global trade.

Globalisation is too big for it to simply… stop!

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Artificial intelligence capable of matching humans at any task will be available within five ten years

AI

Artificial General Intelligence (AGI), a form of AI capable of matching or surpassing human intelligence across all tasks, is expected to emerge within the next five to ten years, according to Demis Hassabis, CEO of Google DeepMind.

Speaking recently, Hassabis highlighted the advancements in AI systems that are paving the way for AGI.

While current AI excels in specific domains, such as playing complex games like chess or Go – it still lacks the ability to generalise knowledge and adapt to real-world challenges.

But the advancements made in AI chatbots such as ChatGPT from OpenAI and DeepSeek have showcased remarkable development, and at speed too. Applying AI to work environments, science and domestic tasks is forever expanding.

Hassabis emphasised that significant research is still required to achieve AGI. The focus lies on improving AI’s understanding of context and its ability to plan and reason in dynamic environments.

Multi-agent systems, where AI entities collaborate or compete, are seen as a promising avenue for development.

These systems aim to replicate the intricate decision-making processes humans exhibit in complex scenarios.

The implications of AGI are profound, with potential applications spanning healthcare, education, and beyond.

However, its development also raises ethical and societal questions, including concerns about control, safety, and equitable access.

While the timeline remains speculative, Hassabis’s insights underscore the accelerating pace of AI innovation, bringing humanity closer to a future where machines and humans collaborate in unprecedented ways.

Or not?

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‘A pig in lipstick’ – Trump’s strategic Bitcoin reserve criticised

Pig in lipstick

The announcement of Donald Trump’s Strategic Bitcoin Reserve has sparked a wave of criticism and debate, with detractors likening the initiative to ‘a pig in lipstick’ – a superficial attempt to dress up a flawed concept.

The reserve, which aims to stockpile or create a strategic reserve Bitcoin seized through criminal and civil forfeitures, has been touted as a bold move to position the United States as a leader in the cryptocurrency space. However, critics argue that the plan is fraught with risks and questionable motives.

One of the primary concerns is Bitcoin’s notorious volatility. Unlike traditional reserve assets such as gold or oil, Bitcoin’s value can fluctuate wildly, making it a precarious choice for a national reserve.

Economists warn that integrating such an unpredictable asset into government holdings could destabilise financial strategies rather than strengthen them.

Moreover, the initiative has raised eyebrows over its potential conflicts of interest. Critics point out that Trump’s administration has shown a growing affinity for cryptocurrency, with some officials previously holding stakes in digital assets.

This has led to accusations that the reserve could serve as a vehicle for personal or political gain rather than a genuine effort to bolster national economic security.

Supporters of the reserve argue that it represents a forward-thinking approach to embracing digital assets as ‘digital gold.’ They believe that retaining seized Bitcoin, rather than auctioning it off, could provide long-term financial benefits and signal the U.S.’s commitment to innovation in the crypto space.

However, even some crypto enthusiasts are skeptical, questioning whether the reserve’s creation is more about optics than substance.

In the end, the Strategic Bitcoin Reserve has ignited a broader conversation about the role of cryptocurrency in national policy. Whether it proves to be a visionary move, or a misguided gamble remains to be seen.

For now, the debate goes on.

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China’s AI vs U.S. AI – competition heats up – and that’s good for business – isn’t it?

DeepSeek AI

The escalating AI competition between the U.S. and China has taken a new turn with the emergence of DeepSeek, a Chinese AI startup that has introduced a low-cost AI model capable of rivaling the performance of OpenAI’s models.

This development has significant implications for data centres and the broader technology sector.

The rise of DeepSeek

DeepSeek’s recent breakthrough involves the development of two AI models, V3 and R1, which have been created at a fraction of the cost compared to their Western counterparts.

The total training cost for these models is estimated at around $6 million, significantly lower than the billions spent by major U.S. tech firms. This has challenged the prevailing assumption that developing large AI models requires massive financial investments and access to cutting-edge hardware.

Impact on data centres

The introduction of cost-effective AI models like those developed by DeepSeek could lead to a shift in how data centers operate.

Traditional AI models require substantial computational power and energy, leading to high operational costs for data centers. DeepSeek’s models, which are less energy-intensive, could reduce these costs and make AI technology more accessible to a wider range of businesses and organizations.

Technological advancements

DeepSeek’s success also highlights the potential for innovation in AI without relying on the most advanced hardware.

This could encourage other companies to explore alternative approaches to AI development, fostering a more diverse and competitive landscape. Additionally, the open-source nature of DeepSeek’s models promotes collaborative innovation, allowing developers worldwide to customise and improve upon these models2.

Competitive dynamics

The competition between DeepSeek and OpenAI underscores the broader U.S.-China rivalry in the AI space. While DeepSeek’s models pose a limited immediate threat to well-funded U.S. AI labs, they demonstrate China’s growing capabilities in AI innovation.

This competition could drive both countries to invest more in AI research and development, leading to faster technological advancements and more robust AI applications.

Broader implications

The rise of DeepSeek and similar Chinese and other AI startups could have far-reaching implications for the global technology sector.

As AI becomes increasingly integrated into various industries, the ability to develop and deploy AI models efficiently will be crucial.

Data centres will need to adapt to these changes, potentially investing in more energy-efficient infrastructure and exploring new ways to support AI workloads.

Where from here?

DeepSeek’s emergence as a significant player in the AI race highlights the dynamic nature of technological competition between the U.S. and China.

While the immediate impact on data centres and technology may be limited, the long-term implications could be profound.

As AI continues to evolve, the ability to innovate cost-effectively and collaborate across borders will be key to driving progress and maintaining competitiveness in the global technology landscape.

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Microsoft’s Quantum Leap: The Majorana 1 Chip

Quantum Physics

Microsoft has unveiled a new chip called Majorana 1 that it says will enable the creation of quantum computers able to solve ‘meaningful, industrial-scale problems in years, not decades’.

What is Microsoft’s Majorana 1?

It is the latest development in quantum computing – tech which uses principles of particle physics to create a new type of computer able to solve problems ordinary computers cannot.

Microsoft has announced a game-changing development in the world of quantum computing: the Majorana 1 chip. This revolutionary chip integrates eight topological quantum bits (qubits), setting a new standard for stability and resistance to environmental interference.

Microsoft. The new Majorana 1 chip

The Majorana 1 chip is built on a unique combination of indium arsenide, a semiconductor, and aluminum, a superconductor. This cutting-edge design enables the chip to create a topological state, a new form of matter that encodes information in a way that is inherently noise-resistant. This means that the Majorana 1 chip can maintain its quantum state longer, making it more reliable for complex computations.

What sets the Majorana 1 chip apart is its use of topoconductors, a new class of materials developed by Microsoft’s researchers over nearly two decades. These materials provide a high level of error protection, which is essential for practical quantum computing applications. The Majorana 1 chip is a significant step toward the ultimate goal of creating quantum computers with millions of qubits, capable of solving complex industrial and societal problems.

While the Majorana 1 chip is still in the research phase and not yet available for commercial use, it represents a monumental leap forward in quantum technology. Microsoft’s commitment to advancing quantum computing is evident in the substantial investment of time and resources required to develop this groundbreaking chip.

In summary, the Majorana 1 chip is poised to transform the landscape of quantum computing, offering a more stable and reliable platform for future innovations. This development marks a pivotal moment in the quest for practical and scalable quantum computing solutions.

What is Quantum computing?

Quantum computing is a revolutionary technology that uses the principles of quantum mechanics to process information in a fundamentally different way than classical computers, allowing for exponentially faster calculations in certain tasks.

It leverages qubits, which can represent multiple states simultaneously, enabling complex problem-solving and data analysis beyond the capabilities of traditional computing.

Microsoft says powerful quantum computers will be a reality in years not decades.

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‘Unimaginable’ billionaire wealth surged in 2024 as Oxfam predicts the emergence of five trillionaires within the next 10 years

Wealthiest and poorest

In 2024, billionaire wealth surged to unprecedented levels, with a staggering $2 trillion increase in just one year, according to an Oxfam report.

This rapid growth has led to predictions that the world could see at least five trillionaires within the next decade.

To place this in some context it is has been calculated that there are approximately 150 countries with a GDP of less than $1 trillion. This includes many smaller economies and developing nations.

So, 5 single human beings will likely hold more wealth ‘individually’ than approximately 150 separate countries. One person will be worth more than an entire country!

Oxfam report

The Oxfam report highlights the stark contrast between the wealth of the world’s richest individuals and the persistent poverty faced by millions.

The report reveals that the wealth of billionaires grew three times faster in 2024 compared to the previous year.

This surge in wealth has been attributed to various factors, including booming stock markets, lucrative investments, and favorable economic policies.

However, this concentration of wealth in the hands of a few has raised concerns about growing inequality and its impact on society.

Oxfam‘s findings emphasize the urgent need for bold economic reforms to address this disparity. The report calls for higher taxes on the super-rich and the abolition of tax havens to ensure a fairer distribution of wealth.

It also highlights the importance of investing in public services, such as healthcare and education, to improve the quality of life for all citizens.

Out of whack wealth

The growing concentration of wealth among billionaires has significant implications for global inequality. While the number of people living in poverty has remained largely unchanged since 1990, the wealth of the richest individuals has skyrocketed.

This disparity underscores the need for policies that promote economic fairness and reduce inequality.

The surge in billionaire wealth in 2024 serves as a stark reminder of the growing concentration of wealth and the urgent need for economic reforms.

By implementing policies that promote a fairer distribution of wealth and investing in public services, we can work towards a more equitable society. The emergence of trillionaires within the next decade should be a wake-up call for policymakers to address the root causes of inequality and ensure a better future for all.

World’s most wealthy climbed from $13 trillion to $15 trillion in just 12 months

The combined wealth of the world’s most wealthy rose from $13 trillion to $15 trillion in just 12 months, the global charity said Sunday. It marks the second largest annual increase in billionaire wealth since Oxfam records started.

Meanwhile, the number of people living in poverty has barely changed since 1990, the charity said, citing World Bank Data.

1% of people own nearly 45% of all wealth

The richest 1% of people own nearly 45% of all wealth, while 44% of humanity are living below the World Bank poverty line of $6.85 per day, the data showed.

First trillionaire by 2027 is predicted

Elon Musk, CEO of Tesla and now close ally of Trump, is on track to become the world’s first trillionaire by 2027, according to a report from Informa Connect Academy.

Musk is currently worth about around $440 billion according to the Bloomberg Billionaires Index.

Biden warning

Outgoing U.S. President Joe Biden warned of the rise of an “oligarchy taking shape in America of extreme wealth, power and influence.”

“People should be able to make as much as they can, but pay – play by the same rules, pay their fair share in taxes,” Biden said in his farewell address.

Oxfam

Oxfam is trying to urge governments to commit to ensuring that the incomes of the top 10% are no higher than the bottom 40% worldwide.

Global economic rules should be adjusted to allow for the break-up of monopolies, and more corporate regulation and global tax policies should be adapted to ensure that the rich pay their fair share, according to the charity.

Money that is flowing to the bank accounts of the super-rich instead of much-needed investment in teachers and medicines is “not just bad for the economy — it’s bad for humanity,” said Oxfam’s Behar.

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Gold rises to new high!

Gold up

Gold hits new highs in 2025 amid strong demand

Gold prices have surged to unprecedented levels in 2025, driven by robust demand and a series of global economic uncertainties.

As of early February, gold futures traded on the New York Mercantile Exchange reached a record high of $2,875 per ounce, marking a significant milestone in the precious metal’s market performance.

Stable safe haven during unstable times

The surge in gold prices can be attributed to several factors. Firstly, geopolitical tensions and economic instability have prompted investors to seek safe-haven assets. Gold, with its historical reputation as a store of value, has become a preferred choice for those looking to hedge against market volatility and inflation.

Central banks

Central banks have also played a crucial role in driving up gold prices. In 2024, global central banks added a record amount of gold to their reserves, with purchases surpassing 1,000 tons for the third consecutive year.

This trend has continued into 2025, with countries like Poland, Turkey, and India leading the way in increasing their gold holdings.

Investment demand for gold has seen a significant uptick as well. Gold exchange-traded funds (ETFs) and bars and coins have experienced strong demand, particularly from investors in China and India.

The reduction of gold import duties in India and economic uncertainties in China have further fueled this demand.

Resistance?

Despite the positive momentum, analysts caution that gold prices could face resistance levels and potential pullbacks. However, the overall outlook remains bullish, with expectations of continued strong demand and further gains in the coming months.

As the global economy navigates through these uncertain times, gold’s allure as a safe-haven asset is likely to persist, making it a key player in the financial markets.

Gold price one-year chart as of 5th February 2025 (am GMT)

Gold price one-year chart as of 5th February 2025 (am GMT)

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The aftermath from the arrival of Deepseek

Deepseek AI

Nvidia, the renowned American technology company, recently experienced the largest one-day loss in U.S. history. On January 27, 2025, Nvidia’s stock plummeted by 17%, resulting in a staggering market cap loss of nearly $600 billion.

This unprecedented drop was primarily triggered by the emergence of DeepSeek, a Chinese artificial intelligence startup that has been making waves in the tech industry.

DeepSeek, founded in 2023 by Liang Wenfeng, has developed open-source large language models that rival some of the best AI models in the world. The company’s latest model, DeepSeek-V3, has demonstrated impressive performance at a fraction of the cost of its competitors.

This has raised concerns among investors about the sustainability of Nvidia’s dominance in the AI chip market.

The release of DeepSeek’s latest technology has caused significant anxiety among U.S. tech giants, leading to a massive sell-off in the stock market. Companies that rely heavily on Nvidia’s GPUs, such as Dell, Oracle, and Super Micro Computer, also saw their stock prices plummet.

The ripple effect of Nvidia’s loss was felt across the tech-heavy Nasdaq, which dropped by 3.1% on the same day.

Nvidia one-month chart 27th January 2025

In response to this market upheaval, former President Donald Trump commented on the situation, stating that DeepSeek’s emergence should serve as a ‘wake-up call’ for American companies.

Trump emphasised the need for U.S. industries to remain competitive and innovative in the face of rising competition from Chinese tech firms. He acknowledged the impressive advancements made by DeepSeek and suggested that American companies could benefit from adopting more cost-effective methods in their AI development.

Trump’s remarks highlight the growing concern among U.S. policymakers and industry leaders about the rapid advancements in AI technology coming from China.

The success of DeepSeek has demonstrated that significant breakthroughs can be achieved with relatively modest investments, challenging the notion that massive capital expenditure is necessary for top-tier AI performance.

As the AI race continues to heat up, it is clear that companies like Nvidia will need to adapt and innovate to maintain their competitive edge. The emergence of DeepSeek has not only disrupted the market but also underscored the importance of staying ahead in the rapidly evolving field of artificial intelligence.

For American tech giants, this wake-up call serves as a reminder that the global AI landscape is becoming increasingly competitive, and complacency is not an option.

Has the U.S. spent wisely on AI development?

The emergence of DeepSeek has indeed raised questions about the spending strategies of U.S. tech companies on AI development. DeepSeek’s ability to develop high-performing AI models at a fraction of the cost has led to concerns about the necessity of the massive capital expenditures by large U.S. tech firms.

For instance, companies like Microsoft, Alphabet, Meta, and Amazon have collectively spent over $1 trillion on AI investments in recent years. This significant spending has been driven by the belief that larger models and more computing power would lead to better performance.

However, DeepSeek’s success with more cost-effective methods challenges this notion and suggests that efficient innovation might be more important than sheer scale.

The impressive performance and lower costs of DeepSeek’s models have prompted some analysts to question whether the billions of dollars spent by U.S. tech companies on AI development are justified. This has led to a re-evaluation of AI spending strategies and a push for more efficient and innovative approaches to AI development.

In summary, while U.S. tech companies have invested heavily in AI, the success of DeepSeek highlights the potential for achieving cutting-edge results with fewer resources. This has sparked a broader discussion about the most effective and efficient ways to advance AI technology.

Asking ChatGPT – ‘Do you see Deepseek as a competitor or a threat?’

The reply:

As an AI, I don’t have personal opinions or feelings. However, I can share that DeepSeek’s rapid rise and impressive performance in the AI field are noteworthy. Their ability to develop high-performing models at a lower cost is a significant achievement and has certainly shaken up the industry. It’s a reminder of the dynamic and competitive nature of the AI landscape, where innovation can come from unexpected places.

Asking ChatGPT – ‘What do you think of Deepseek?’

The reply:

DeepSeek is a fascinating and disruptive player in the AI landscape. Founded in 2023 by Liang Wenfeng, this Chinese startup has quickly gained attention for its open-source large language models, which rival some of the best AI models in the world at a fraction of the cost. Their latest models, DeepSeek-V3 and DeepSeek-R1, have demonstrated impressive performance and efficiency, challenging the dominance of established tech giants2.

DeepSeek’s emergence has caused significant market upheaval, leading to substantial drops in the stock prices of major AI-related firms, including Nvidia. The company’s success highlights the potential for innovation and cost-effectiveness in AI development, which has prompted industry leaders and policymakers to re-evaluate their strategies.

Overall, DeepSeek’s rapid rise and impact on the AI industry underscore the importance of staying competitive and innovative in this fast-evolving field. It’s a reminder that breakthroughs can come from unexpected places and that the AI landscape is becoming increasingly dynamic and competitive.

It would not be drawn on these questions but, one thing is for sure the U.S. has spent billions developing their systems and charge fortunes for using it.

This is about to change.

And further…

The Deepseek website reportedly crashed on 27th January 2025 due to heavy global demand. There were also reports of unrelenting cyberattacks on its systems…?

Curious. From minnow to centre stage in just one day!

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China’s DeepSeek low-cost challenger to AI rattles tech U.S. markets

China Deepseek AI

U.S. technology stocks plunged as Chinese startup DeepSeek sparked concerns over competitiveness in AI and America’s lead in the sector, triggering a global sell-off

DeepSeek launched a free, open-source large-language model in late December 2024, claiming it was developed in just two months at a cost of under $6 million.

The developments have stoked concerns about the large amounts of money big tech companies have been investing in AI models and data centres.

DeepSeek is a Chinese artificial intelligence startup that has recently gained significant attention in the AI world. Founded in 2023 by Liang Wenfeng, DeepSeek develops open-source large language models. The company is funded by High-Flyer, a hedge fund also founded by Wenfeng.

The AI models from DeepSeek have demonstrated impressive performance, rivaling some of the best chatbots in the world at a fraction of the cost. This has caused quite a stir in the tech industry, leading to significant drops in the stock prices of major AI-related firms.

The company’s latest model, DeepSeek-V3, is known for its efficiency and high performance across various benchmarks.

DeepSeek’s emergence challenges the notion that massive capital expenditure is necessary to achieve top-tier AI performance.

The company’s success has led to a re-evaluation of the AI market and has put pressure on other tech giants to innovate and reduce costs.

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The UK is planning to build a homegrown artificial intelligence rival to OpenAI

UK AI

In a bold move to establish as a global leader in artificial intelligence, the United Kingdom is undertaking an ambitious initiative to develop a homegrown competitor to OpenAI.

This initiative is part of a broader strategy to enhance the nation’s computing infrastructure and foster innovation in AI technology.

Prime Minister Keir Starmer’s administration has committed to increasing the UK’s ‘sovereign’ computing capacity by twentyfold by 2030. This significant investment aims to support the development of powerful AI models that rely on high-performance computing equipment.

The government plans to expand data centre capacity across the country, providing the necessary infrastructure for AI developers to train and run their systems effectively.

AI Opportunities Action Plan

Central to this initiative is the AI Opportunities Action Plan, spearheaded by tech investor Matt Clifford. The plan outlines a comprehensive approach to harnessing the potential of AI, including the establishment of AI growth zones where planning permission rules will be relaxed to facilitate the creation of new data centers.

These zones are expected to become hubs of innovation, attracting both domestic and international talent to the UK.

The government is also set to launch the AI Research Resource, an initiative aimed at bolstering the UK’s computing infrastructure. This resource will provide access to high-performance computing facilities, enabling researchers and developers to work on cutting-edge AI projects.

Additionally, the establishment of a National Data Library will connect public institutions, such as universities, to enhance the country’s ability to create sovereign AI models.

Funding challenge

One of the key challenges facing the UK in its bid to rival OpenAI is funding. While the government has pledged substantial investments, many entrepreneurs and venture capitalists in the country have highlighted the difficulties in raising the kind of capital available to AI startups in the U.S. To address this, the government has secured commitments from leading tech firms, which have pledged £14 billion towards various AI projects.

This includes significant investments in data centers and the creation of thousands of AI-related jobs across the country.

UK AI sovereignty

The UK’s focus on AI sovereignty is driven by the belief that technologies critical to economic growth and national security should be developed within the country. This approach aims to reduce reliance on foreign tech giants and ensure that AI advancements align with national interests and ethical standards.

The government is also exploring the role of renewable and low-carbon energy sources, such as nuclear, to power the data centers that will support AI development.

Despite the ambitious plans, the UK faces several hurdles in its quest to become a global AI leader. The country’s risk-averse investment culture and the competitive landscape of AI development pose significant challenges.

However, the government’s proactive approach and the support of industry leaders provide a strong foundation for success.

Initiative and challenge

The UK’s initiative to build a homegrown rival to OpenAI represents a significant step towards establishing itself as a global leader in artificial intelligence.

By investing in computing infrastructure, fostering innovation, and securing industry support, the UK aims to create a thriving AI ecosystem that can compete on the world stage. While challenges remain, the commitment to AI sovereignty and the strategic vision outlined in the AI Opportunities Action Plan offer a promising path forward for the nation’s AI ambitions.

Sold – the UK needs to protect its future and not sell the silver… again

Over the years, the UK has seen several of its tech companies sold off to foreign investors.

  1. ARM Holdings: Perhaps the most famous example, ARM Holdings, a leading semiconductor and software design company, was acquired by Japan’s SoftBank Group in 2016 for £24.3 billion. ARM’s technology is used in the majority of smartphones worldwide.
  2. DeepMind: In 2014, Google acquired DeepMind, a UK-based AI company known for its advancements in machine learning and neural networks, for around £400 million. DeepMind has since become a key part of Google’s AI research efforts.
  3. Imagination Technologies: This British GPU and AI processing company was sold to Canyon Bridge Capital Partners, a private equity fund backed by Chinese state-owned China Reform Fund Management, in 2017 for £550 million. Recently, Imagination Technologies has been put up for sale again.
  4. Autonomy Corporation: Acquired by Hewlett-Packard (HP) in 2011 for $11.7 billion. The deal later became controversial due to allegations of financial mismanagement
  5. Powa Technologies: This mobile payments company faced financial difficulties and was sold off in parts after going into administration in 2016. PowaTag was sold to a consortium led by businessman Ben White, while Powa Web was sold in a management buyout backed by Greenlight Digital.

One to keep

Raspberry Pi Holdings plc, the parent company behind the iconic Raspberry Pi computer series, is a British technology business focused on designing and manufacturing single-board computers and modules. The company was founded by Eben Upton and is headquartered in Cambridge, England1.

As of the latest information, the largest shareholder of Raspberry Pi Holdings is the Raspberry Pi Foundation, which holds around 49% of the company. Other notable shareholders include Arm Holdings plc, Lansdowne Partners (UK) LLP, and the Raspberry Pi Employee Benefit Trust. The company went public on the London Stock Exchange in June 2024.

Raspberry Pi Holdings continues to innovate and expand its product offerings, maintaining its mission to make computing accessible and affordable for everyone.

These sales reflect the global interest in UK tech companies and the challenges they face in securing domestic investment to remain independent. The UK’s tech sector continues to be a hotbed of innovation, attracting significant attention from international investors.

The UK needs to nurture and keep its upcoming new tech discoveries, AI or otherwise – to protect the future of Britain.

We have the knowhow – we just need to keep it!

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What could quantum computing breakthrough ‘Willow’ mean for the future of Bitcoin and other cryptos

Crypto and quantum computing

The advent of quantum computing presents both opportunities and challenges for the field of cryptography, especially in relation to cryptocurrencies.

Quantum computers, leveraging the principles of quantum mechanics, have the potential to revolutionise computing by solving certain problems significantly faster than classical computers.

One of the primary concerns is the impact of quantum computing on cryptographic algorithms that underpin the security of cryptocurrencies like Bitcoin and Ethereum.

Traditional public-key cryptography, which relies on the difficulty of factoring large prime numbers or solving discrete logarithms, could be broken by a sufficiently powerful quantum computer. Algorithms such as RSA, ECC (Elliptic Curve Cryptography), and DSA (Digital Signature Algorithm) could become vulnerable, as quantum algorithms like Shor’s algorithm are capable of efficiently solving these problems.

This potential vulnerability poses a significant threat to the security and integrity of cryptocurrency transactions. If quantum computers can crack these cryptographic codes, they could potentially access private keys, allowing malicious actors to steal funds or forge transactions. As a result, the trust that underpins the entire cryptocurrency ecosystem could be eroded.

However, the quantum threat is not without its solutions. The field of post-quantum cryptography is actively developing new cryptographic algorithms that are resistant to quantum attacks.

These algorithms leverage mathematical problems believed to be hard even for quantum computers, such as lattice-based cryptography, hash-based cryptography, and multivariate polynomial cryptography.

Transitioning to post-quantum cryptographic algorithms is crucial for ensuring the long-term security of cryptocurrencies in a quantum computing era.

In conclusion, while quantum computing poses a formidable challenge to current cryptographic systems, proactive measures and the development of quantum-resistant algorithms can mitigate these risks.

The cryptocurrency industry must stay ahead of the curve, adopting new technologies and strategies to safeguard against potential quantum threats and ensure the continued security and trust in digital currencies.

It has been estimated that the arrival of quantum computer is at least 10 years away. But is that allowing for the use of AI in its creation?

What is Willow and Quantum Computing?

Willow is the start of a new era of ultra-powerful ‘quantum’ microchips designed by Google. Willow’s speed is almost incomprehensible – according to Google, it is able to perform a computation in under five minutes that would take one of today’s fastest supercomputers 10 septillion years to solve.

This new chip design will inevitably lead to new quantum innovations and computer design over the coming years.

Ten septillion is 10,000,000,000,000,000,000,000,000 years.

If you don’t understand (not many people do) what makes up quantum computing – there is a very simplified way simplified way of thinking about the breakthrough.

Imagine a maze and how a classical computer would try to find its way through the maze from start to finish. It would try one potential path at a time. A quantum computer would be able to try each path at the same time.

The quantum computer is coming. The only delay will be in design restrictions and the power needed to run the system.

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Google unveils ‘mind-boggling’ quantum computing microchip

Quantum computing power

Google has unveiled a new chip which it claims takes five minutes to solve a problem that would currently take the world’s fastest super computers ten septillion or 10,000,000,000,000,000,000,000,000 years to complete.

Google’s Quantum Leap: The Willow chip

In a groundbreaking achievement, Google has unveiled its latest quantum computing chip, named Willow. This new chip marks a significant milestone in the journey toward realising the full potential of quantum computing, a technology that promises to revolutionise numerous fields through its unparalleled processing power.

Unprecedented speed and efficiency

At the core of Willow’s innovation is its remarkable ability to perform computations at speeds previously deemed impossible. To put this into perspective, Willow can solve a complex problem in just five minutes – a task that would take the world’s most advanced supercomputers an astounding 10 septillion years to complete. This leap in speed and efficiency showcases the potential of quantum computing to tackle problems beyond the reach of classical computers.

This quantum power combined with artificial intelligence will become a formidable force in the world, potentially a foe!

Breakthrough in Quantum error correction

One of the most significant advancements with the Willow chip lies in its approach to quantum error correction. Traditionally, error rates in quantum computations have posed a substantial barrier to practical applications. Willow, however, exhibits an exponential reduction in errors as more qubits (quantum bits) are integrated into the system. This breakthrough in error correction brings the technology closer to practical, large-scale quantum computing, paving the way for more reliable and accurate results.

Potential applications and future prospects

While Willow represents a monumental step forward, experts caution that a fully functional, widely applicable quantum computer is still years away. Nonetheless, the potential applications of quantum computing are vast, ranging from breakthroughs in medicine and drug discovery to advancements in artificial intelligence and energy solutions. With continued investment and research, Willow could be the precursor to a new era of technological innovation, fundamentally altering how we approach complex problems.

Expert insights

Leading experts in the field commend Google’s achievement, highlighting Willow’s significance in the broader context of quantum computing development. While challenges remain, the unveiling of Willow underscores the rapid progress being made and the exciting possibilities that lie ahead. As we stand on the brink of a quantum revolution, Willow serves as a beacon of what the future may hold.

Conclusion

Google’s Willow chip is more than just a technological marvel; it represents the relentless pursuit of innovation and the profound impact that quantum computing can have on our world.

As research continues and technology evolves, Willow stands as a testament to the incredible possibilities that lie within the realm of quantum physics.

Quantum computers operate on a fundamentally different principle than the computer in your phone or laptop. They utilise quantum mechanics, which governs the peculiar behaviour of particles at the smallest scales, to solve problems much more quickly than conventional computers.

The hope is that quantum computers will one day accelerate complex tasks, like the development of new medications. However, there are concerns that this power could be misused, such as breaking certain forms of encryption that safeguard sensitive information.

Google shares climbed 6% after the announcement.

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Are U.S. Stocks Overvalued?

The U.S. stock market has been a topic of much debate among investors and analysts, especially regarding its valuation levels. As of the end of 2024, several indicators suggest that U.S. stocks might be overvalued.

Buffet indicator

One of the most watched metrics is the Buffett Indicator, named after the legendary investor Warren Buffett. This indicator compares the total market capitalisation of U.S. stocks to the country’s gross domestic product (GDP).

Historically, a ratio above 100% is considered overvalued. As of September 30, 2024, this ratio stands at approximately 208%, significantly above the historical average and suggesting that the market is strongly overvalued.

P/E and CAPE

Another important metric is the Price-to-Earnings (P/E) ratio, which measures the price of stocks relative to their earnings. The cyclically adjusted P/E ratio (CAPE), popularised by economist Robert Shiller, provides a long-term view by averaging earnings over ten years.

The CAPE ratio for the S&P 500 is currently around 35, well above the historical average of 16-17. This high level indicates that investors are willing to pay a premium for stocks, which could be a sign of overvaluation.

Several factors contribute to these elevated valuations. Low interest rates have played a significant role, making bonds less attractive and pushing investors toward stocks. Additionally, the rapid technological advancements and growth in sectors like technology, AI, and healthcare have driven up stock prices. Companies in these sectors have experienced significant revenue growth, leading to higher valuations.

High valuations

However, these high valuations come with risks. The market’s current levels are pricing in a lot of optimism about future growth and profitability. Any economic slowdown, policy changes, or unforeseen global events could trigger a market correction. Investors must remain cautious and consider the potential for volatility.

On the other hand, some analysts argue that the current valuation levels can be justified by the robust corporate earnings and strong economic fundamentals. They point out that the U.S. economy has shown resilience in the face of challenges, and many companies have adapted well to the changing environment.

Summary

In conclusion, while U.S. stocks are currently expensive and may be overvalued by historical standards, it’s essential to understand the underlying factors and potential risks.

Investors should stay informed, diversify their portfolios, and be prepared for possible market fluctuations. As always, a balanced approach to investing, considering both the potential rewards and risks, is crucial.

Always do your own and careful – RESEARCH! RESEARCH! RESEARCH!

An seek professional financial advice.

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The mystery surrounding the origin of Bitcoin

Origin of Bitcoin

Bitcoin’s origin is one of the most captivating mysteries of the digital age. The cryptocurrency was created in 2008 by an unknown individual or group under the pseudonym Satoshi Nakamoto.

Despite numerous investigations, the true identity of Nakamoto remains shrouded in secrecy.

Story

The story of Bitcoin begins with the release of a whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” This document outlined a new kind of decentralised digital currency, one that relied on cryptographic principles to ensure security and prevent double-spending.

Nakamoto’s revolutionary vision was to create a financial system free from the control of traditional banks and government interference.

Genesis block

In January 2009, Nakamoto mined the first block of the Bitcoin blockchain, known as the ‘genesis block,’ marking the birth of the cryptocurrency. Over the next couple of years, Nakamoto continued to work on the project, communicating with other developers via email and online forums.

The mystery surrounding the origin of Bitcoin

However, by 2011, Nakamoto had largely stepped away from active involvement in the project, leaving behind a legacy that would forever change the financial landscape.

Speculation

Speculation about Nakamoto’s true identity has been rampant. Some believe Nakamoto is a single, exceptionally talented individual, while others theorise that it could be a group of developers working under a collective pseudonym.

Over the years, various names have been proposed as possible candidates, including renowned cryptographers, developers, and even eccentric entrepreneurs. Yet, none of these theories have been definitively proven, and Nakamoto’s identity remains a closely guarded secret.

Intrigue

The intrigue surrounding Nakamoto is not just a matter of curiosity but also of financial significance. As the creator of Bitcoin, Nakamoto is estimated to own around one million Bitcoins. At current market values, this makes Nakamoto one of the wealthiest individuals in the world.

Bitcoin chart from inception as of 7th November 2024 touching $75,000

Bitcoin chart from inception as of 7th November 2024 touching $75,000

However, these Bitcoins have never been moved or spent, adding to the enigma of Nakamoto’s motives and intentions.

Myth?

The myth of Satoshi Nakamoto has taken on a life of its own, becoming a symbol of the power and potential of decentralized technology. The anonymity of Nakamoto also serves as a reminder of the core principles behind Bitcoin: privacy, decentralisation, and freedom from traditional financial systems.

In a world increasingly dominated by surveillance and control, the mystery of Nakamoto provides a compelling counter-narrative, one that continues to inspire and intrigue both technologists and libertarians alike.

In the end, the true identity of Satoshi Nakamoto may never be revealed, and perhaps that is as it should be. The enduring mystery adds to the allure of Bitcoin, ensuring that its origins will forever be a topic of fascination and debate.

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Oops I did it again! Trump wins 2024 U.S. presidential election – emphatically defeating Harris

Trump wins 2024 U.S. election

After losing the re-election to President Joe Biden in 2020, Donald Trump, the 45th president, has now been elected as the 47th.

Trump’s victory sets several historic records. At the age of 78, he becomes the oldest individual to win a U.S. presidential election. He is the first president to serve two nonconsecutive terms since Grover Cleveland 132 years ago, and his win comes from what is likely the costliest presidential race in history.

Also, he is reportedly the first president, whether in office or former, to have been convicted of crimes. He is also the first president to be impeached twice and then reclaim the presidency. Additionally, he is the first to assume office while actively facing criminal charges in both federal and state courts.

This victory for Trump prevents Vice President Harris from achieving what would have been a historic feat: becoming the first female president of the United States.

As Trump secures win stock markets react positively as Dow and S&P 500 futures rise to touch new all-time highs!

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Nvidia promoted to Dow Jones Industrial Average at the expense of Intel

AI power

Nvidia is set to replace its rival chipmaker Intel in the Dow Jones Industrial Average, signifying a significant change in the blue-chip index that highlights the surge in artificial intelligence and a substantial shift within the semiconductor industry.

Intel’s shares fell by 1% in extended trading on Friday 1st November 2024, while Nvidia’s shares increased by 1%. Intel has now lost over half its value.

The update will take place on 8th November 2024. Also, Sherwin Williams will replace Dow Inc. in the index, the S&P and Dow Jones said in a statement.

Nvidia‘s shares have surged over 170% in 2024, following a roughly 240% increase last year, as investors flock to the AI chipmaker. Nvidia’s market capitalisation has expanded to $3.3 trillion, ranking it second only to Apple among publicly traded companies.

Nvidia one-year share price chart

Nvidia one-year share price chart

Major companies such as Microsoft, Meta, Google, and Amazon are acquiring Nvidia’s graphics processing units (GPUs), like the H100, in large quantities to create computer clusters for AI projects. Nvidia’s revenue has more than doubled for five consecutive quarters, with at least a threefold increase in three of those quarters. The company has indicated that the demand for its forthcoming AI GPU, Blackwell, is ‘insane’.

With Nvidia‘s inclusion, four of the six tech companies valued at over a trillion dollars are now part of the index, leaving Alphabet and Meta as the two not listed in the Dow.

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“I have raised up what was in ruins. I have restored that which was destroyed.” – Hatshepsut

Female Pharaoh image

Hatshepsut, the longest-reigning Egyptian female pharaoh, ruled for 20 years in the 15th century BC. “I have raised up what was in ruins. I have restored that which was destroyed,” declared Hatshepsut.

The quote regarding Hatshepsut’s appointment comes from inscriptions and was designed to legitimise her rule, often illustrating the divine will of the Gods or proclamations from her father, Thutmose I.

Hatshepsut was adept at presenting her reign within the context of divine support and royal succession. “This daughter of mine, Hatshepsut… I have named her successor to my throne… She shall guide you… Heed her words and gather under her command.”

Mini history lesson


Hatshepsut, one of the most successful pharaohs of Egypt, ruled during the 18th Dynasty from approximately 1479 to 1458 BCE.

Her tenure is noted not just for its duration but also for the prosperity and tranquility she established in Egypt. As a rare female pharaoh, Hatshepsut had to affirm her power in a patriarchal society. She frequently portrayed herself with pharaonic symbols of authority, like the false beard and headdress, to reinforce her legitimacy. “I have raised up what was in ruins. I have restored that which was destroyed,” she declared, underscoring her role in reviving Egypt’s splendour.

During her rule, Hatshepsut initiated grand construction projects, leaving a heritage of remarkable monuments and temples. Her most famous accomplishment is the mortuary temple at Deir El-Bahari, an architectural wonder that stands as a testament to her foresight and governance. Hatshepsut also rejuvenated Egypt’s economy by developing extensive trade networks. Her notable expedition to Punt, a region thought to be resource-rich, yielded precious items like myrrh, frankincense, and exotic wildlife.

This voyage was eternally captured in the reliefs of her temple, showcasing her achievements and contributions to Egypt’s affluence. In her inscriptions, Hatshepsut stated, “My authority was asserted in this land and to its farthest reaches… My gaze was southward, I explored the edges of the mountains, all my eyes wished to see was accomplished.”

This statement mirrors her broad vision and ambition to expand Egypt’s reach. Despite her accomplishments, Hatshepsut’s memory faced attempts at erasure after her demise. However, contemporary archaeology has revealed her significant influence.

Today, Hatshepsut is celebrated as an innovative ruler whose reign made a lasting impression on ancient Egyptian history.

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Ripple diversifies to launch crypto storage service for banks

XRP Ripple system

Ripple has announced the launch of a range of features designed to assist banks and fintech’s with the storage of digital tokens, marking a significant expansion into the realm of crypto custody.

Crypto custody services, which support clients in managing their crypto assets, represent a new venture for Ripple, now unified under the brand Ripple Custody.

The company is best known for its XRP cryptocurrency and RippleNet, a distributed ledger platform facilitating fast interbank payments.

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October – a notorious month for volatility and for stock market crashes

Stock crash and depression 1929

October has historically been a month of significant stock market volatility, with notable crashes occurring in 1929 and 1987

Now we are already part way through October 2024, investors are understandably cautious, wondering if history might repeat itself.

1929

The Wall Street Crash of 1929, also known as the Great Crash, began on 24th October 1929, with Black Thursday, followed by Black Tuesday on 29th October 1929. The Dow Jones Industrial Average (DJIA) plummeted nearly 13% on Black Monday and an additional 12% on Black Tuesday.

This crash marked the beginning of the Great Depression, a period of severe economic downturn that lasted for over a decade. The 1929 crash was precipitated by a combination of speculative investments, excessive leverage, and a lack of regulatory oversight, leading to a massive sell-off as panic spread among investors.

The 1929 crash marked the beginning of the Great Depression, a period of severe economic downturn that lasted for over a decade

1987

In contrast, the stock market crash of 1987, known as Black Monday, occurred on 19th October 1987, when the DJIA dropped by 22.6% in a single day. Unlike the 1929 crash, the 1987 crash did not lead to a prolonged economic depression. Instead, it was a sharp correction in an otherwise strong bull market. The causes of the 1987 crash included program trading, overvaluation, and market psychology.

The rapid recovery following the crash was aided by swift intervention from the Federal Reserve, which provided liquidity to stabilize the markets.

Comparing these historical crashes to today’s stock market, several differences and similarities emerge. The current market environment is characterized by high valuations, geopolitical tensions, and concerns about inflation and interest rates.

However, today’s markets are also more resilient due to advanced technology, better regulatory frameworks, and more sophisticated risk management practices.

The likelihood of a significant stock market crash in October 2024 is difficult to predict. While some analysts argue that the market is due for a correction, others believe that the underlying economic fundamentals remain strong.

The lessons from 1929 and 1987 highlight the importance of investor psychology and the impact of external shocks on market stability.

Conclusion

In conclusion, while October has a notorious reputation for stock market crashes, the probability of a crash in October 2024 is uncertain. Investors should remain vigilant, diversify their portfolios, and avoid speculative investments to mitigate potential risks.

By learning from past crashes, we can better navigate the uncertainties of the current market environment and prepare for any potential downturns.

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Dividend stocks in the FTSE 100 and FTSE 250 – a basic overview

Passive income from dividend stocks

The FTSE 100 index comprises the 100 largest companies by market capitalisation. These companies are typically well-established and financially stable, making them reliable dividend payers. 

The average dividend yield for the FTSE 100 is around 3.97%.

Here are ten dividend stocks in the FTSE 100

British American Tobacco (BATS) – Known for its high dividend yield, often exceeding 7%. Not an ethical choice.

Rio Tinto (RIO) – A mining giant with a strong dividend history.

Imperial Brands (IMB) – Another tobacco company with a robust dividend yield. Not an ethical choice.

Legal & General Group (LGEN) – A financial services company with a consistent dividend payout.

GlaxoSmithKline (GSK) – A pharmaceutical company with a reliable dividend.

Vodafone Group (VOD) – A telecommunications company with a solid dividend yield.

HSBC Holdings (HSBA) – One of the largest banking institutions with a strong dividend.

BP (BP) – An oil and gas company known for its high dividend yield.

Unilever (ULVR) – A consumer goods company with a consistent dividend payout.

National Grid (NG) – An energy company with a reliable dividend history.

FTSE 250 Dividend Stocks

The FTSE 250 index includes the next 250 largest companies after the FTSE 100. These mid-cap companies often offer higher growth potential and, in some cases, higher dividend yields. The average dividend yield for the FTSE 250 is around 3.30%.

Here are ten dividend stocks in the FTSE 250

Harbour Energy (HBR) – An oil and gas company with a yield of 7.24%.

Tritax Big Box REIT (BBOX) – A real estate investment trust with a yield of 4.76%.

Investec (INVP) – A financial services company with a yield of 6.21%.

Greencoat UK Wind (UKW) – A renewable energy company with a yield of 7.48%.

IG Group Holdings (IGG) – A financial services company with a yield of 5.02%.

ITV (ITV) – A media company with a yield of 6.43%.

Abrdn (ABDN) – An investment company with a yield of 9.45%.

HICL Infrastructure (HICL) – An infrastructure investment company with a yield of 6.37%.

Direct Line Insurance Group (DLG) – An insurance company with a yield of 3.30%.

Drax Group (DRX) – An energy company with a yield of 3.81%.

Passive dividend income

Passive income from dividends
Dividend stocks in the FTSE 100 and FTSE 250 – a basic overview

Buying dividend stocks can offer several benefits to investors – key advantages are…

Regular Income

Dividend stocks provide a steady stream of income through regular dividend payments. This can be particularly appealing for retirees or those seeking passive income.

Potential for Capital Appreciation

In addition to dividends, these stocks can also appreciate in value over time, offering the potential for capital gains. This dual benefit can enhance overall returns.

Reinvestment Opportunities

Dividends can be reinvested to purchase more shares, a strategy known as dividend reinvestment. This can compound returns over time, significantly boosting the value of your investment.

Lower Volatility

Dividend-paying stocks tend to be less volatile than non-dividend-paying stocks. Companies that pay dividends are often more established and financially stable, which can provide a cushion during market downturns.

Tax Advantages

In many jurisdictions, dividends are taxed at a lower rate than regular income. This can make dividend stocks a tax-efficient investment option.

Inflation Hedge

Dividend growth can help protect against inflation. Companies that consistently increase their dividends can provide a rising income stream that keeps pace with or exceeds inflation.

Signal of Financial Health

A company that pays regular dividends is often seen as financially healthy and confident in its future earnings. This can be a positive signal to investors about the company’s stability and profitability.

Diversification

Including dividend stocks in your portfolio can add diversification. They often belong to various sectors, providing exposure to different parts of the economy.

Compounding Effect

The combination of regular dividends and potential capital gains can create a powerful compounding effect over time, significantly enhancing long-term returns.

Psychological Benefits

Receiving regular dividends can provide psychological comfort, especially during market volatility. Knowing that you are earning income regardless of market conditions can help maintain a long-term investment perspective.

Investing in dividend stocks can be a strategic way to build wealth and generate income. However, it’s important to research and choose companies with a strong track record of dividend payments and financial stability. 

Conclusion

Investing in dividend stocks from the FTSE 100 and FTSE 250 can be a strategic way to generate passive income while also benefiting from potential capital gains. These indices offer a diverse range of companies, each with its own strengths and dividend yields, making them attractive options for income-focused investors.

These are NOT recommendations – just observations. Go do your research. Interest rates will/do change quickly – go check. Thanks.

Remember to ALWAYS do your own careful and considered research…

RESEARCH! RESEARCH! RESEARCH!

Prices listed as of 9th October 2024