Category: Observation

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Musk’s xAI releases new Grok 3 AI

xAI Grok AI

Elon Musk’s AI company, xAI, has recently released its latest AI model, Grok 3.

This new AI model is designed to be significantly more powerful and capable than its predecessor, Grok 2.
  • Enhanced Capabilities: Grok 3 boasts 10 times more computing power than Grok 2 and has been trained on an expanded dataset, including court case filings.
  • Reasoning Models: Grok 3 includes reasoning models that can carefully analyze and fact-check information before providing responses. This helps in avoiding common pitfalls of AI models.
  • Benchmark Performance: Grok 3 has outperformed other leading AI models, including OpenAI’s GPT-4o and DeepSeek’s R1, on various benchmarks such as AIME (math questions) and GPQA (physics, biology, chemistry problems).
  • New Features: The Grok app now includes a ‘DeepSearch’ feature that scans the internet and xAI’s social network, X, to provide summarised responses to user queries.
  • Subscription Plans: xAI has introduced a new subscription plan called SuperGrok, which offers additional reasoning capabilities and unlimited image generation.

Grok 3 is being hailed as the ‘smartest AI on Earth’ by Musk, and it’s expected to have a significant impact on various industries.

Definition

Grok is a neologism (a newly coined word or expression), referenced by Robert A. Heinlein for his 1961 science fiction novel Stranger in a Strange Land. It means to understand something so deeply that you become one with it.

Grok is a term used in computer programming to mean to ‘profoundly understand something‘, such as a system, a language, or an algorithm.

Less woke

Grok, the company previously reportedly said, is modelled on ‘The Hitchhiker’s Guide to the Galaxy’. 

It is supposed to have ‘a bit of wit, a rebellious streak’ and it should answer the ‘spicy questions’ that other AI might dodge, according to a statement from xAI.

I wonder if it has been modelled on Elon Musk?

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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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Chinese tech giant Baidu to release next-generation AI model soon as DeepSeek leads Chinese AI tech

AI

China’s Baidu reportedly plans to release the next generation of its artificial intelligence model in the second half of this year, according to information recently reported.

The planned update comes as Chinese companies race to develop innovative AI models to compete with OpenAI and other U.S. based companies.

Baidu was the first major Chinese tech company to roll out a ChatGPT-like chatbot called Ernie in March 2023.

However, despite initial momentum, the product has since been eclipsed by other Chinese chatbots from large tech companies such as Alibaba and ByteDance, as well as startups.

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Musk is everywhere!

Elon Musk

Elon Musk is the world’s richest person and the leader of Tesla, SpaceX, X, The Boring Company, x.AI, and Neuralink.

He is also the co-founder of PayPal and Zip2 and now the co-leader of DOGE – of U.S. Department of Government Efficiency and also recently led a group of investors in a bid to acquire OpenAI.

From a business perspective, Musk’s achievements are undeniable and even astonishing. The companies he leads are not only market leaders but also pioneers in their respective fields – consider how Tesla initiated the electric vehicle industry or how SpaceX successfully commercialised spaceflight.

Paradoxically, achieving success on a broad scale can have adverse effects. Investors appear to be increasingly concerned that Musk, despite his business acumen, is becoming distracted.

Tesla shares have declined over the past five trading days, dropping more than 6% on Tuesday 11th February 2025 as Chinese competitor BYD seems to be surpassing the company in AI-enabled autonomous driving.

If hands-free driving becomes a reality at Tesla, it could allow Musk to engage in other ventures without negatively impacting the company’s shares.

What you need to know today

BYD is a Tesla threat – but this is Elon Musk we’re talking about

Tesla shares fell 6.3% Tuesday 11th February 2025 after Chinese EV maker BYD said it will integrate DeepSeek into its autonomous driving technology and offer it in nearly all its vehicles.

There are also concerns over Musk’s distractions, such as his bid for OpenAI and his role at the ‘DOGE’ – Department of Government Efficiency in the White House.

Tesla’s stock price has fallen over 16% in the past five trading days

Tesla’s stock price has fallen over 16% in the past five trading days (5-day chart as of 11th February 2025)
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Waning enthusiasm around Trump – AI and crypto

Lack of enthusiasm

As we progress through 2025, it’s evident that the initial excitement surrounding Donald Trump’s election win, artificial intelligence (AI), and cryptocurrency has begun to wane – but for how long?

Investors and the general public seem to be growing more cautious, reflecting a shift in sentiment towards these once highly anticipated topics.

Trump’s tariffs

In the realm of politics, Trump’s influence on the stock market has been notably erratic. His tariff threats and new policies have created uncertainty and volatility, leading investors to react negatively. Trump’s riviera suggestion for the Gaza strip, his interest in Canada and fixation for Greenland ownership have all tilted ‘standard’ political logic.

Recent announcements of additional tariffs on steel and aluminum imports have only heightened concerns, causing stock market fluctuations and dampening investor enthusiasm. The initial optimism that Trump’s policies would bolster the economy has been replaced by a more cautious outlook.

AI

Artificial intelligence, once hailed as the technological revolution of the century, is also experiencing a cooling of enthusiasm. While AI continues to make strides in various industries, the initial hype has given way to a more measured perspective.

Investors are now more wary of the long-term potential and the substantial investments required to develop AI technologies. Companies like DeepSeek, which have claimed cost efficiencies, are causing big tech firms to reevaluate their spending on AI projects, leading to a more tempered approach.

Crypto

Cryptocurrency, too, has seen mixed sentiments. Despite ongoing enthusiasm from dedicated supporters, the market’s volatility and regulatory challenges have tempered the initial excitement.

The dramatic price swings and uncertain regulatory landscape have made investors more cautious. While there are still significant investments and innovations in the crypto space, the euphoria that once surrounded it has subdued.

The excitement around Trump, AI, and cryptocurrency is not as fervent as it once was. The reality of market volatility, regulatory challenges, and the substantial investments required has led to a more cautious and measured approach.

As we move forward, it will be interesting to see how these areas evolve and whether they regain the heightened enthusiasm they once enjoyed.

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Could DeepSeek deliver another shock to the stock market and to tech stocks in particular?

AI

DeepSeek’s impact probably isn’t yet fully reflected in U.S. stocks

The ramifications of the Chinese startup DeepSeek, with its promise of delivering cheaper and more energy-efficient alternatives to harness artificial intelligence (AI), have yet to be fully reflected in U.S. equities.

If DeepSeek ends up delivering a less costly way forward – it will make it much easier and cheaper for smaller more typical companies to create AI ‘agents’ or AI opportunities for their businesses.

Under this scenario there will be ‘useful’ and meaningful benefits from DeepSeek that could bring huge earnings potential for a broader mix of companies beyond the current AI heavyweights through greater efficiencies and productivity from less-expensive AI solutions.

AI spending race

When DeepSeek’s chatbot launched earlier this month in the U.S., it shocked Wall Street, prompting a historic $600 billion one-day wipeout for AI chip developer Nvidia.

It also put huge sums being pledged for AI infrastructure by U.S. mega cap tech companies under a microscope. Rather than back down, the U.S. spending race has intensified.

  • Meta’s Chief Executive Mark Zuckerberg spoke a week ago of spending ‘hundreds of billions of dollars’ on AI infrastructure in the coming years, after pledging $60 billion to $65 billion on AI this year.
  • Alphabet announced AI investment for 2025, a bigger figure than Wall Street was anticipating.
  • Google forecast $75 billion in capital expenditures in 2025, a bigger figure than Wall Street was anticipating.
  • Microsoft reported its cloud and AI spending grew 95% in its fiscal second quarter to $22.6 billion.
  • Amazon has reported big AI investment too.

The spending frenzy on anything AI sends the market into a spin. How much more has to be spent before we see capital expenditures reduced or decrease is anyone’s guess right now – but current levels of AI expenditure are high, and returns will be expected.

“When is enough, enough?”

Or more to the point you might ask – when is ‘enough’ too much?

Fresh AI-spending commitments helped lift shares of Nvidia on while we saw a slump for Tesla shares in the week.

China this week saw the U.S. slap new 10% tariffs, while Canada and Mexico saw Trump threaten but delay 25% tariffs by 30 days. China retaliated in kind.

Catching up with the ‘Magnificent Seven’

Despite the high scrutiny on AI stocks, there is also much renewed focus from investors on other areas of the market.

There has been a bit of a rotation – while tech has been under pressure, defensive and rate-sensitive parts of the market have been gaining. This seems to be an emerging pattern.

​But there should be reason for caution. For one thing, the growth rate of ‘Magnificent Seven’ earnings has been tailing off in recent quarters, especially since the group reached a 61% yearly rate in the fourth quarter of 2023 – the spend on AI investment has yet to fully appreciate the full return.

Forward analysts’ expectations have this percentage reportedly closer to 16% to 18% for the end of this year. 

But that also would move the group closer ​to the roughly 12% to 13% yearly growth rate expected for the rest of the companies in the S&P 500 index, potentially making the high valuations of the ‘Magnificent Seven’ tougher to justify.

One of the most surprising things of the past couple of weeks, given the news around DeepSeek and shocks on the trade front, is the fact that stocks were still close to their all-time highs.

The market is pretty resilient right now, but tech stocks are sitting at a very high valuation – a pullback is due, even a correction (in my opinion).

The arrival of DeepSeek creates an alternative ‘cheaper’ AI option and that will unravel the status quo.

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First interest rate cut for India since 2020

India interest rate

The Reserve Bank of India (RBI) has cut its benchmark interest rate by 25 basis points to 6.25%, marking the first rate cut since May 2020

This decision comes amid concerns over a slowdown in the world’s fifth-largest economy.

The central bank forecast real GDP growth for next fiscal year at 6.7%, and inflation rate at 4.2%.

The RBI’s Monetary Policy Committee (MPC) cited the need to support economic activity as the primary reason for the rate cut. The Indian economy has been experiencing sluggish growth, with GDP expanding at a slower pace than expected.

Data driven

The latest data shows that the economy grew by just 5.4% in the September quarter, the slowest rate in seven quarters. This slowdown has been attributed to tepid urban consumption and sluggish manufacturing.

Inflation, which had been a major concern for the RBI, has shown signs of easing. Retail inflation dropped to a four-month low of 5.22% in December 2024, providing the central bank with some room to focus on growth rather than solely on price stability.

RBI Governor Sanjay Malhotra, in his first monetary policy review, reportedly stated that inflation is expected to further moderate in 2025-26.

Benefits

The rate cut is expected to benefit borrowers, including homeowners and small businesses, by making borrowing cheaper. However, it may also lead to lower returns on fixed deposits, posing a challenge for savers, especially senior citizens who rely on interest income.

The government’s recent budget, which included sweeping income tax cuts, is also aimed at putting more money in the hands of consumers and boosting spending.

Together with the rate cut, these measures are expected to provide a much-needed stimulus to the economy.

While the rate cut is a positive step towards reviving growth, it also underscores the challenges facing the Indian economy.

The RBI will need to carefully monitor inflation and other economic indicators to ensure that the measures taken do not lead to unintended consequences such as higher inflation.

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AMD misses on data centre revenue – but profit and revenue are up

AMD

AMD shows mixed results in Q4 2024 earnings report

Advanced Micro Devices (AMD) has released its Q4 2024 earnings report, revealing a mixed bag of results that have sparked interest and discussions among investors and analysts.

While the company managed to surpass expectations in certain areas, it fell short in others, notably in data centre revenue.

Key highlights

  • Earnings per share (EPS): AMD reported an adjusted EPS of $1.09, slightly above the expected $1.08. This indicates a stable performance in terms of profitability, showcasing the company’s ability to manage costs effectively.
  • Revenue: The company posted a revenue of $7.66 billion, surpassing analysts’ estimates of $7.53 billion. This positive result highlights AMD’s continued growth and market presence, particularly in its core segments.
  • Data centre sales: Despite the overall positive revenue, AMD’s data centre sales fell short of expectations. Sales in this segment nearly doubled to $3.86 billion, reflecting a 69% increase year-over-year. However, this figure was below the anticipated $4.14 billion, signaling challenges in meeting the high demand and competition in the data center market.
  • Income: AMD reported a net income of $482 million, or 29 cents per share, down from $667 million, or 41 cents per share, in the year-ago period. This decline in net income suggests that the company faced increased expenses or other financial challenges during the quarter.

First quarter guidance

Looking ahead, AMD has provided guidance for the first quarter of 2025. The company expects Q1 sales to be around $7.1 billion, with a gross margin of approximately 54%. This forecast indicates cautious optimism, with AMD aiming to navigate the complexities of the semiconductor industry and maintain steady growth.

CEO’s statement

AMD’s CEO, Lisa Su, reportedly expressed confidence in the company’s future, particularly in the data centre AI market.

She highlighted the significant opportunities and potential for growth in this area, predicting strong double-digit revenue and EPS growth for 2025.

Her statement underscores AMD’s strategic focus on innovation and expanding its market share in high-growth segments.

Future

AMD’s Q4 2024 earnings report presents a nuanced picture of the company’s performance. While it has achieved notable successes in certain areas, challenges remain, particularly in meeting data centre revenue expectations.

As AMD continues to navigate the competitive landscape of the semiconductor industry, its future strategies and market positioning will be closely watched by investors and analysts alike.

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Apple and Google shares fall after China reportedly launches probes into Apple App Store practices and Google’s anti-trust issues

Google and Apple probed

China Launches Probes into Google and Apple Over Antitrust Concerns

China has recently initiated investigations into both Google and Apple, raising concerns over potential antitrust violations.

The State Administration for Market Regulation (SAMR) is considering whether to formally investigate Apple’s App Store practices, particularly focusing on the fees Apple charges and its policies that block third-party payment providers. This move has already caused Apple’s shares to fall.

In addition to the probe into Apple, China has also opened a separate investigation into Google, although details about the focus of this investigation have not been disclosed. These probes come at a time when trade tensions between the U.S. and China are escalating under President Donald Trump’s administration.

Apple’s app store under scrutiny

Apple’s App Store has been under scrutiny globally, with regulators in Europe recently forcing the company to open up its App Store under the Digital Markets Act, allowing non-Apple companies to offer app stores and app developers to use third-party payment systems.

If the China probe goes ahead, it would pose further challenges for Apple in one of its largest markets, where it is already facing stiff competition from local companies such as Huawei.

Google

Google, on the other hand, has not yet commented on the specifics of the investigation, but the move highlights the increasing regulatory pressures faced by U.S. tech giants in China.

Both companies will need to navigate these investigations carefully as they continue to operate in a highly competitive and regulated environment.

The outcome of these probes could have significant implications for the tech industry, potentially leading to changes in how these companies operate in China and other markets.

As the investigations unfold, the world will be watching closely to see how Google and Apple respond to these regulatory challenges.

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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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Trumps tariffs impact – what a difference a day makes!

U.S. tariff war

Trump pauses tariffs on Mexico and Canada amid China’s retaliatory measures

In a surprising turn of events, President Donald Trump announced a 30-day pause on tariffs targeting Mexico and Canada, just as China introduced retaliatory tariffs on a range of U.S. goods. This move comes amidst escalating trade tensions and a looming threat of a global trade war.

The decision to pause tariffs on Mexico and Canada was announced following discussions with the leaders of both countries.

Border security

Trump cited the need to address border security and drug trafficking concerns, particularly the flow of fentanyl into the United States. In response, Mexico committed to deploying 10,000 National Guard officers to the U.S. border, while Canada agreed to appoint a ‘Fentanyl Czar’ and launch a joint strike force to combat organised crime

However, while Trump’s administration has temporarily halted tariffs on Mexico and Canada, the situation with China remains tense. China swiftly introduced retaliatory tariffs on U.S. imports, including a 15% levy on coal and liquefied natural gas (LNG), and a 10% tariff on crude oil and farm equipment.

These measures are seen as a direct response to the U.S.’s 10% tariff on Chinese goods, which took effect earlier this week.

Global impact

The global economic impact of these trade disputes is significant. Analysts warn that prolonged trade tensions could lead to higher prices, disrupted supply chains, and slower economic growth.

Businesses and consumers alike are bracing for the potential fallout, with many expressing concerns about the uncertainty and instability these tariffs bring.

Despite the temporary 30-day reprieve for Mexico and Canada, Trump has indicated that tariffs could be reinstated if the countries do not meet his demands for increased border security and drug control measures.

The administration is also considering imposing tariffs on imports from the European Union, further complicating the global trade landscape.

As negotiations continue, the world watches closely to see if a resolution can be reached or if Trumps self-imposed trade war will escalate further.

The coming weeks will be crucial in determining the future of international trade relations and the economic stability of nations involved.

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Tariff Man – Trumps tariffs take affect – markets fall!

U.S. Tariffs

U.S. President Donald Trump’s tariffs have moved from threat to reality.

U.S. President Donald Trump launched a series of tariffs on Saturday. U.S. imports from Mexico and Canada will face a 25% duty, while those from China will be subject to a 10% tariff. Energy resources from Canada will face a lower 10% tariff.

Canada’s Prime Minister Justin Trudeau announced on the same day retaliatory tariffs of 25% against $155 billion in U.S. goods. Industry leaders in the U.S. have expressed concern over those tariffs.

They cap off a wild start to the new year during which a new U.S. president entered the White House and a new Chinese artificial intelligence player, DeepSeek upended the industry.

Indices at new highs

Something else that was new in January: the highest-ever closing level for the S&P 500, Dow Jones and new FTSE 100 highs were enjoyed too.

With tariffs now in effect and the possibility of a trade war looming markets may struggle to new heights in the short term.

Even Big Tech earnings and the jobs numbers coming out this week, typically market-moving reports, are likely to play second fiddle to policy developments.

Markets react

Markets are already responding to the news. Prices of oil and gold, which typically rise during periods of volatility, have increased, but Bitcoin is trading lower. It remains uncertain whether these will be a temporary shock or a sustained trend.

China’s factory activity experienced slower growth in January 2025 compared to December 2024 and is expected to be adversely affected as U.S. companies seek to reduce their dependence on Chinese imports.

Trump’s current tariffs may be targeted, but it’s hard to see any country or sector escaping the tariff turmoil.

The EU is also in line for a tariff attack and maybe the UK after.

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FTSE 100 hits new all-time high in boost for London

FTSE 100

The FTSE 100, London’s premier stock index, has recently achieved a new all-time high, closing at 8,646.88 on 30th January 2025.

This milestone marks a significant boost for the City of London, reflecting strong corporate performance, investor confidence, and favourable economic conditions.

Factors driving the surge

Several key factors have contributed to the FTSE 100’s impressive rise

  1. Strong Corporate Updates – Companies like St James’s Place and Airtel Africa have reported robust financial results, attracting investor interest. St James’s Place, for instance, saw its shares rise by over 10% after announcing it had attracted £4.3 billion in assets last year.
  2. Value Seeking – With extreme valuations of some American companies, international investors are looking for better value in London. The FTSE 100’s relatively lower price-to-earnings (P/E) ratio and high dividend yield make it an attractive option.
  3. Return of ‘Animal Instincts‘ – The market has seen a resurgence of mergers and acquisitions, driven by investor optimism and confidence in the economic outlook.
  4. Interest Rate Expectations: Hopes for further interest rate cuts by the Bank of England have also played a role in lifting the index. The European Central Bank’s recent decision to cut interest rates has further fueled investor optimism.
  5. Weaker Pound – The pound’s weakness against the U.S. dollar has benefited many FTSE 100 companies that earn a significant portion of their revenues overseas. This has boosted the relative value of their foreign earnings when converted back to sterling.

Implications for the City of London

The new high represents a significant boost for the City of London, especially amid concerns that the market was losing ground to American exchanges.

The FTSE 100’s performance highlights the resilience and attractiveness of London’s financial markets, even in the face of global economic uncertainties.

FTSE 100 new high reached 30th January 2025

FTSE 100 new high reached 30th January 2025

The return of ‘animal instincts’ had prompted more mergers and acquisitions in London, while the extreme valuations of some American companies had sent investors looking for better value elsewhere. This shift in investor sentiment underscores the importance of London’s financial markets in the global economy.

Looking Ahead

While the FTSE 100’s recent performance is encouraging, it is essential to remain cautious. Market volatility and global economic uncertainties, such as the outlook for artificial intelligence-related growth stocks and the potential impact of a Trump presidency, could influence future market movements.

Nevertheless, the FTSE 100’s new all-time high is a testament to the strength and resilience of London’s financial markets. As investors continue to seek value and stability, the FTSE 100 is well-positioned to remain a key player in the global financial landscape.

A list of the companies in the FTSE 100 as of January 2025

No.Company NameNo.Company Name
13i Group PLC51Intertek Group PLC
2Admiral Group PLC52International Consolidated Airlines Group SA
3Airtel Africa PLC53JD Sports Fashion PLC
4Alliance Witan PLC54Kingfisher PLC
5Anglo American PLC55Land Securities Group PLC
6Antofagasta PLC56Legal & General Group PLC
7Ashtead Group PLC57Lloyds Banking Group PLC
8Associated British Foods PLC58London Stock Exchange Group PLC
9AstraZeneca PLC59LondonMetric Property PLC
10Auto Trader Group PLC60M&G PLC
11Aviva PLC61Marks & Spencer Group PLC
12BAE Systems PLC62Melrose Industries PLC
13Barclays PLC63Mondi PLC
14Barratt Redrow PLC64National Grid PLC
15Beazley PLC65NatWest Group PLC
16Berkeley Group Holdings PLC66Next PLC
17BP PLC67Pearson PLC
18British American Tobacco PLC68Pershing Square Holdings Ltd
19British Land Co PLC69Persimmon PLC
20BT Group PLC70Phoenix Group Holdings PLC
21Bunzl PLC71Prudential PLC
22Centrica PLC72Reckitt Benckiser Group PLC
23Coca-Cola HBC AG73RELX PLC
24Compass Group PLC74Rentokil Initial PLC
25Convatec Group PLC75Rightmove PLC
26Croda International PLC76Rio Tinto PLC
27DCC PLC77Rolls-Royce Holdings PLC
28Diageo PLC78Sage Group PLC
29Diploma PLC79Sainsbury (J) PLC
30Easyjet PLC80Schroders PLC
31Endeavour Mining PLC81Scottish Mortgage Investment Trust PLC
32Entain PLC82Segro PLC
33Experian PLC83Severn Trent PLC
34F&C Investment Trust PLC84Shell PLC
35Fresnillo PLC85Smith & Nephew PLC
36Games Workshop Group PLC86Smith (DS) PLC
37Glencore PLC87Smiths Group PLC
38GSK PLC88Spirax-Sarco Engineering PLC
39Haleon PLC89SSE PLC
40Halma PLC90St. James’s Place PLC
41Hargreaves Lansdown PLC91Standard Chartered PLC
42Hikma Pharmaceuticals PLC92Taylor Wimpey PLC
43Hiscox Ltd93Tesco PLC
44Howden Joinery Group PLC94Unilever PLC
45HSBC Holdings PLC95Unite Group PLC
46IMI PLC96United Utilities Group PLC
47Imperial Brands PLC97Vodafone Group PLC
48Informa PLC98Weir Group PLC
49Intercontinental Hotels Group PLC99Whitbread PLC
50Intermediate Capital Group PLC100WPP PLC
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Investors poured money into leveraged ETFs linked to Nvidia – then the stock crashed!

ETFs

Single-stock ETFs betting heavily on Nvidia’s blistering rally plunged, tracking losses in the AI chip makers shares, calling into question the reliability of the leveraged investment strategy.

The GraniteShares 2x Long NVDA Daily ETF (NVDL) fell nearly 34% overnight. The Direxion Daily NVDA Bull 2x Shares ETF (NVDU) and T-Rex 2X Long Nvidia Daily Target ETF (NVDX) plunged 33.8% and 33.77% respectively. All three funds reported their largest loss in a single day, according to data from FactSet. 

Conversely, funds betting against Nvidia like the GraniteShares 2x Short NVDA Daily ETF (NVDL) rose more than 33%.

This sell-off has been a difficult lesson for investors who have seen Nvidia as invincible and have taken aggressive bets on its growth without understanding the risks of single stock ETFs.

The funds were designed to deliver twice the performance of Nvidia on a single-day basis.

It could be a matter of time before some of them implode depending on the intensity of market movements of individual stocks.

Single stock ETFs come with a huge risk and huge upside – we just witnessed the downside.

It’s so volatile – a day after the fall Nvidia regained some 9% of its one-day loss. Remarkable loss, exceptional recovery too?

Nvidia one-month chart 28th January 2025

Trade carefully.

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Recent surprise rise in UK borrowing – deals yet another disappointment for the chancellor

UK borrowing

The latest UK borrowing figures, reveal a significant increase in public sector net borrowing. In December 2024, the UK government borrowed £17.8 billion, which is the highest figure for the month for four years.

This amount was reportedly £10.1 billion higher than the same month last year and exceeded the £14.1 billion forecast by most economists.

The reported rise in borrowing was driven by several factors, including increased spending on public services, benefits, debt interest, and capital transfers. The interest payable on central government debt alone was £8.3 billion, nearly £4 billion higher than the previous year.

Additionally, a reduction in National Insurance contributions following rate cuts earlier in 2024 partially offset the increase in tax receipts.

Chancellor Rachel Reeves faces a challenging fiscal environment, with borrowing costs rising due to lower economic growth, higher public sector wages, and increased benefits payments. The unexpected jump in December 2024’s borrowing highlights the difficulties in balancing the budget and maintaining economic stability. The Chancellor’s budget was one of growth, but employer NI hikes have unravelled her ‘growth’ plan.

Despite the rise in borrowing, government bond prices remained relatively stable, suggesting that traders were not overly concerned by the surge. However, the overall fiscal position remains precarious, with public sector net debt estimated at 97.2% of GDP, the highest level since the early 1960s.

The government has pledged to take a hard line on unnecessary spending and to ensure that every penny of taxpayer money is spent productively.

As the fiscal year progresses, the Chancellor will need to navigate these financial challenges carefully to maintain economic stability and growth.

However, it is anticipated next month, following the January tax income boost, figures will appear favourable for the government, albeit temporarily.

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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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Trump announces massive U.S. AI investment backed by Oracle, OpenAI and Softbank

U.S. AI investment

President Donald Trump announced a joint venture with OpenAI, Oracle and Softbank to invest billions of dollars in artificial intelligence infrastructure in the U.S.

The project, dubbed Stargate, was unveiled at the White House by Trump, Softbank CEO Masayoshi Son, OpenAI CEO Sam Altman and Oracle co-founder Larry Ellison.

The executives committed to invest an initial $100 billion and up to $500 billion over the next four years in the project, which will be set up as a separate company.

Softbank’s Son had reportedly already promised a four-year, $100-billion investment when he recently visited then-President-elect Trump at his Mar-a-Lago resort.

And this new AI investment is over and above the investments from the likes of Microsoft, Google, Apple, Anthropic and many others already in progress.

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Why is Trump so fixated with Greenland?

The island of Greenalnd

Donald Trump’s fascination with Greenland has been a topic of intrigue and speculation since his first term in office.

His renewed interest in acquiring the world’s largest island has raised eyebrows and sparked debates about the underlying motivations and implications of such a move.

Greenland, a semi-autonomous territory of Denmark, holds significant strategic and economic value. Its location in the Arctic makes it a key player in global geopolitics, especially as ‘climate change’ could potentially open up new shipping routes and access to untapped natural resources.

The island is rich in rare earth minerals, oil, and natural gas, which are becoming increasingly accessible due to the melting ice caps. These resources are crucial for advanced technologies and the clean energy economy, making Greenland a highly coveted asset.

Critical minerals

Critical minerals refer to a subset of materials considered essential to the energy transition. These minerals, which tend to have a high risk of supply chain disruption, include metals such as copper, lithium, nickel, cobalt and rare earth elements.

Critical minerals and rare earth elements are vital components in emerging green technologies, such as wind turbines and electric vehicles, energy storage technologies and national security applications.

China is the undisputed leader of the critical minerals supply chain, accounting for roughly 60% of the world’s production of rare earth minerals and materials. U.S. officials have previously warned that this poses a strategic challenge amid the pivot to low-carbon energy sources

Jakob Kløve Keiding, senior consultant at the Geological Survey of Denmark and Greenland (GEUS), reportedly said a 2023 survey of Greenland’s resource potential evaluated a total of some 38 raw materials on the island, the vast majority of which have a relatively high or moderate potential.

These materials include the rare earth metals graphite, niobium, platinum group metals, molybdenum, tantalum and titanium.

A lot of independent state surveys are pointing to Greenland and its natural shelf boundaries as potentially hosting 20% to 25% of the last remaining extractable resources on the planet. Now, if that’s right, that’s an enormous opportunity for Greenland.”

Not just about money, it’s also about strategic benefits and ‘national’ security

Trump’s interest in Greenland is not solely driven by its natural resources. The island’s strategic military importance cannot be overlooked. Greenland hosts the U.S.’ northernmost military base, the Pituffik Space Base, which plays a critical role in ballistic missile early warning systems and space operations.

Control over Greenland would enhance the U.S.’ ability to monitor and respond to potential threats from adversaries, solidifying its position in the Arctic region.

And… it’s personal too

Beyond the strategic and economic factors, there are also personal and political motivations behind Trump’s fixation with Greenland.

Some experts suggest that Trump’s desire to acquire Greenland is fueled by his ambition to leave a lasting legacy and be remembered as a transformative leader. The idea of adding a vast, resource-rich territory to the United States’ portfolio aligns with his ‘America First’ agenda and his penchant for grandiose projects.

However, Trump’s pursuit of Greenland has not been without controversy. The Danish government and Greenland’s leadership have firmly rejected the idea of selling the island.

Greenland’s Prime Minister Múte Egede has emphasised the island’s desire for independence and self-determination, stating that Greenland is not for sale and that its future should be decided by its people. This stance reflects the broader sentiment among Greenlanders, who are wary of foreign exploitation and committed to preserving their unique cultural and environmental heritage.

Donald Trump’s fixation with Greenland is a complex interplay of strategic, economic, and personal factors.

While the island’s vast natural resources and strategic military importance make it an attractive target, the political and ethical implications of such a move cannot be ignored. As the debate continues, it remains to be seen whether Trump’s ambitions will materialize or if Greenland will maintain its autonomy and chart its own path in the Arctic region.

Rare earth minerals

Greenland is home to a variety of rare earth minerals, which are crucial for many modern technologies. Some of the key rare earth minerals found in Greenland include:

  • Yttrium
  • Scandium
  • Neodymium
  • Dysprosium
  • Terbium
  • Europium
  • Gadolinium
  • Holmium
  • Erbium
  • Thulium
  • Ytterbium
  • Lutetium
  • Copper
  • Gold
  • Zinc
  • Titanium
  • Lead
  • Silver
  • Platinum
  • Palladium
  • Rhodium
  • Nickel
  • Cobalt
  • Lithium

Some of these minerals are essential for the production of permanent magnets used in electric vehicles (EVs) and wind turbines. Others are more obvious.

Greenland’s rich mineral resources make it a significant player in the global supply of rare earth elements.

Greenland ‘mini’ history lesson

Greenland history of ownership is a captivating narrative of exploration colonization, and strategic significance. The island, the largest has been inhabited for millennia, with the known settlers arriving around 2500 BC. These early inhabitants were succeeded by several other groups migrating from continental North America.

The first formal claim Greenland can be traced to the late10th century when Erik the Red, a Norse, settled on the island after being banished from Iceland. He named it ‘Greenland’ to attract settlers, and small Norse communities established themselves along the coast. These settlements endured for centuries, despite the Arctic conditions and the encroaching cold of the Little Ice Age.

In the 18th century, Denmark-Norway began to reassert its influence over. In 1721, a missionary expedition led by Hans Egede marked the beginning of Denmark colonisation efforts. Greenland was formally incorporated into the Danish Kingdom in 1953, transitioning a colony to overseas county.

During World, Greenland became more closely connected to the U.S. due to Denmark’s occupation by Nazi Germany. After the war, Denmark reasserted its control, and in 1979 Greenland was granted home rule, allowing it to govern its affairs. Denmark retained control over defence and foreign policy.

Today, an autonomous territory within the Kingdom of Denmark, with increasing self-governance. It manages its domestic matters, including education health, natural resources, while Denmark oversees defense and foreign affairs.

Greenland’s strategic importance has it as a subject of interest for various global powers throughout history, and its unique position continues to shape its political and economic landscape.

Though a part of the continent of North America, Greenland has been politically and culturally associated with Europe (specifically Denmark and Norway)

See Wikipedia for more information.

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Melania and Donald Trump launch their own cryptocurrency meme coins

Crypto

Melania Trump has launched a meme coin called ‘Melania’

The meme coin was announced on the eve of Donald Trump’s inauguration as president of the United States.

It comes days after President-elect Donald Trump launched his own meme coin, ‘Official Trump.’

In a disclaimer on the meme coin’s official website, potential buyers are told that Melania memes ‘are digital collectibles intended to function as an expression of support for and engagement with the values embodied by the symbol MELANIA. and the associated artwork, and are not intended to be, or to be the subject of, an investment opportunity, investment contract, or security of any type.’

On the Trump token’s website, the cryptocurrency – depicted with an image of Trump raising his fist in the air – is marketed as ‘a piece of history,’ while Trump himself is branded ‘the crypto president.’

Bitcoin hit a new all-time high overnight after the Trumps each launched their own meme coins in the past few days.

The flagship cryptocurrency was up and touching $107,000 in early Monday trade.

Trump launched the ‘Official Trump‘ meme coin Friday (17th January 2025), which has risen to a $10.6 billion market cap and surged more than 659%, according to data from CoinGecko and Coinbase (as of 20th January 2025) – and has trimmed back since. 

Melania Meme has hit a $1.3 billion market cap and 14% price increase since its launch Sunday night (19th January 2025). It has attracted $7.3 billion in trading volumes over that day, compared to the Trump meme’s $31 billion. But has since trimmed back.

Meme coins are considered the riskiest corner of the already risky cryptocurrency market.

But the Trumps’ coin launches are giving traders confidence that the incoming administration will be positive for the industry.

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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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UK wants to control its own AI direction – suggesting a divergence from the EU and U.S.

UK tech

The UK is charting its own course when it comes to regulating artificial intelligence, signaling a potential divergence from the approaches taken by the United States and the European Union. This move is part of a broader strategy to establish the UK as a global leader in AI technology.

UK AI framework

Britain’s minister for AI and digital government, Feryal Clark, emphasised the importance of the UK developing its own regulatory framework for AI.

She highlighted the government’s strong relationships with AI companies like OpenAI and Google DeepMind, which have voluntarily opened their models for safety testing. Prime Minister Keir Starmer echoed these sentiments, stating that the UK now has the freedom to regulate AI in a way that best suits its national interests following Brexit.

Unlike the EU, which has introduced comprehensive, pan-European legislation aimed at harmonising

AI rules across the bloc, the UK has so far refrained from enacting formal laws to regulate AI.

Instead, it has deferred to individual regulatory bodies to enforce existing rules on businesses developing and using AI. This approach contrasts with the EU’s risk-based regulation and the U.S.’s patchwork of state and local frameworks.

Labour Party Plan

During the Labour Party’s election campaign, there was a commitment to introducing regulations focusing on ‘frontier’ AI models, such as large language models like OpenAI’s GPT. However, the UK government has yet to confirm the details of proposed AI safety legislation, opting instead to consult with the industry before formalising any rules.

The UK’s AI Opportunities Action Plan, endorsed by tech entrepreneur Matt Clifford, outlines a comprehensive strategy to harness AI for economic growth.

The plan includes recommendations for scaling up AI capabilities, establishing AI growth zones, and creating a National Data Library to support AI research and innovation. The government has committed to implementing these recommendations, aiming to build a robust AI infrastructure and foster a pro-innovation regulatory environment.

Despite the ambitious plans, some industry leaders have expressed concerns about the lack of clear rules. Sachin Dev Duggal, CEO of AI startup Builder.ai, reportedly warned that proceeding without clear regulations could be ‘borderline reckless’.

He reportedly highlighted the need for the UK to leverage its data to build sovereign AI capabilities and create British success stories.

The UK’s decision to ‘do its own thing’ on AI regulation reflects its desire to tailor its approach to national interests and foster innovation.

While this strategy offers flexibility, it also presents challenges in terms of providing clear guidance and ensuring regulatory certainty for businesses. As the UK continues to develop its AI regulatory framework, it will be crucial to balance innovation with safety and public trust

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Has ‘Rachel from accounts’ messed up the UK economy?

UK budget

The pound has continued to fall after UK government borrowing costs rose and concerns grew about public finances

Sterling dropped as UK 10-year borrowing costs surged to their highest level since the 2008 financial crisis when bank borrowing virtually ground to a halt.

Economists have warned the rising costs could lead to further tax rises or cuts to spending plans as the government tries to meet its self-imposed borrowing target.

The UK government creates its own financial crisis as it messes up its ‘go for growth’ policy

The UK economy is currently grappling with a series of financial challenges that have led to a significant fall in the value of the pound, soaring treasury yields, and high borrowing costs.

These developments have been largely influenced by the recent budget announced by Chancellor Rachel Reeves, which has sparked concerns among investors and economists alike.

Downward trajectory

The pound has been on a downward trajectory, recently hitting its lowest level since November 2023. Traders are betting on further declines, with some predicting the pound could fall as low as $1.12

This decline is partly due to the rising cost of government borrowing, which has surged to levels not seen since the 2008 financial crisis. The yield on 10-year gilts has climbed to 4.8%, while the yield on 30-year gilts has reached 5.34%, the highest in 27 years.

Recent UK budget

The recent budget has played a crucial role in these developments. Announced in October 2024, the budget included significant tax hikes and increased spending, leading to a substantial rise in government borrowing.

The budget deficit is expected to reach 4.5% of GDP this fiscal year, pushing the overall government debt close to 100% of GDP. This increase in borrowing has led to a higher supply of government debt, which in turn has driven down the price of bonds and pushed up yields.

Higher yields

Higher yields mean that the government has to pay more to borrow money, which has significant implications for its fiscal policy. The rising cost of servicing government debt could force the government to either raise taxes further or cut spending to meet its fiscal rules.

This situation is reminiscent of the market turmoil following Liz Truss’s mini budget in 2022, which also led to a sharp rise in borrowing costs and a fall in the value of the pound.

The impact of these developments extends beyond the government. Higher borrowing costs are likely to affect households and businesses as well.

Economic growth at risk

Mortgage rates, which are influenced by government bond yields, are expected to remain high, putting additional pressure on homeowners. Businesses, on the other hand, may face higher costs of borrowing, which could lead to reduced investment and slower economic growth.

The UK is facing a challenging economic environment characterized by a falling pound, high treasury yields, and rising borrowing costs.

The recent budget has exacerbated these issues, leading to increased government borrowing and higher debt levels. As the government navigates these challenges, it will need to carefully balance its fiscal policies to avoid further economic instability and ensure sustainable growth and not more ‘unfunded’ debt.

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Meta boss bows to Trump re-aligning with their ‘free speech’ mandate

AI

Mark Zuckerberg’s recent actions seem to be driven by a mix of strategic business decisions and political pragmatism.

As Trump prepares to retake the White House, Zuckerberg has made several changes at Meta, including scaling back content moderation and fact-checking, and moving safety teams to Texas. These moves appear to align with Trump’s stance on free expression and reducing censorship.

Additionally, Zuckerberg and other tech leaders are likely seeking to build a favorable relationship with the incoming administration to navigate potential regulatory challenges and maintain their business interests. It’s a complex dance of power and influence, with both sides looking to benefit from the alliance.

Recalibrating for Trump

Zuckerberg, who has been summoned to Washington eight times to testify before congressional committees during the last two administrations, wants to be perceived as someone who can work with Trump and the Republican Party, it would appear.

Though Meta’s content-policy updates caught many of its employees and fact-checking partners off-guard, a small group of executives were formulating the plans in the aftermath of the U.S. election results. By the New Year – managers had reportedly begun planning the public announcements of its policy change.

It has been noted that Meta typically undergoes major ‘recalibrations’ after power changes hand. Meta adjusts its policies to best suit its business model and reputational needs based on the political landscape.

Does the company remain true to its original founding principles, whatever they are – or does it ‘cozy up’ with power to re-position itself to benefit politically? Let’s put some more money in the Trump inauguration pot.

Nothing new here then – but go watch the video of Zuckerberg’s announcement.

Does it may you cringe – or is it just me?

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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.”