Category: Stockonomics

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Meta reportedly to use the voice of Dame Judi Dench for its celebrity AI Chatbot

Chatbot with celebrity voices

Meta, the parent company of Instagram, has announced that voices of Dame Judi Dench and John Cena will be available as options for its AI chatbot.

Moreover, users can access information through AI representations of celebrities such as Awkwafina, Keegan-Michael Key, and Kristen Bell. Meta is hopeful that this new endeavour with celebrity chatbots will surpass the success of its previous attempts. In September 2023, Meta introduced AI chatbots featuring the ‘personalities’ of celebrities including Kendall Jenner and Snoop Dogg, but the project was terminated within a year.

At Meta’s annual Connect conference, CEO Mark Zuckerberg announced the new celebrity chatbot project, remarking, ‘Interacting with AI through voice will be more intuitive than through text.‘ The enhanced ChatGPT-style chatbot will also be capable of recognizing objects in images and providing relevant details. Additionally, a novel image editing tool will allow users to alter photos by simply directing the Meta AI with their requests.

Meta has disclosed that its AI now reaches over 400 million people monthly, with 185 million engaging weekly.

Meta one-year chart as of 2nd October 2024

Meta one-year chart as of 2nd October 2024
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Tesla misses delivery estimates – stock drops

Tesla EV

Tesla posted its third-quarter vehicle production and deliveries report on Wednesday 2nd October 2024 – the stock fell 3.7%.

Total deliveries Q3 2024: 462,890 – Total production Q3 2024: 469,796

Analysts had projected Tesla would deliver 463,310 vehicles by the end of September 2024. However, other sources indicated a larger shortfall; the average analyst predictions were at 469,828 vehicles, while an independent researcher known as ‘Troy Teslike,‘ popular among Tesla enthusiasts, estimated 472,000 deliveries for the quarter.

Comparatively, Tesla reported 435,059 deliveries and 430,488 EVs produced in the same period last year. In the previous quarter, the company achieved 443,956 deliveries and produced 410,831 vehicles.

In the U.S., competitors such as Rivian are advancing, and traditional automakers like Ford and General Motors are increasing their electric vehicle sales, albeit scaling back earlier electrification targets.

Ford announced a 12% increase in EV sales for the third quarter, totaling 23,509 vehicles on Wednesday 2nd October 2024.

General Motors reported a 60% rise in EV sales for the same quarter compared to the previous year, with 32,100 units sold, which represents 4.9% of its total sales volume.

Tesla’s reputation in the U.S. has faced challenges, partly due to CEO Elon Musk’s controversial actions, including endorsing former President Donald Trump and disseminating what has reportedly been described by the White House as ‘racist hate“, along with alleged misinformation about immigration and election fraud on X, his social media platform.

Despite these issues, Tesla remains the leading seller of battery electric vehicles in the U.S., with Hyundai trailing significantly behind.

Tesla -year chart as of 2nd October 2024

Tesla -year chart as of 2nd October 2024
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What is China’s equivalent to Nvidia?

AI microchips

Chinese firms are reportedly intensifying their efforts to develop a competitive alternative to Nvidia’s AI chips, as part of Beijing’s ongoing initiative to reduce its reliance on U.S. technology.

China faces several challenges that are impeding its technological progress, including U.S. export restrictions that limit domestic semiconductor production. The lack of technical expertise is also reported to be a problem.

Analysts have identified companies including Huawei as the principal competitors to Nvidia in China

China’s counterparts to Nvidia, such as Huawei, Alibaba, and Baidu, are actively developing AI chips to compete in the same market. Huawei’s HiSilicon division is known for its Ascend series of data centre processors.

Huawei’s HiSilicon division is known for its Ascend series of data centre processors, and Alibaba’s T-Head has produced the Hanguang 800 AI inference chip. Other significant players include Biren Technology and Cambricon Technologies.

Alibaba’s T-Head has developed the Hanguang 800 AI inference chip. Other significant players include Biren Technology and Cambricon Technologies.

These Chinese firms are intensifying their efforts to create alternatives to Nvidia’s AI-powering chips. This is a big part of Beijing’s broader initiative to reduce its reliance on U.S. technology.

Nvidia’s surge in growth is attributed to the demand from major cloud computing companies for its server products, which incorporate graphics processing units, or GPUs.

These GPUs are crucial for entities like OpenAI, the creator of ChatGPT, which requires substantial computational power to train extensive AI models on large datasets.

AI models are crucial for chatbots and other AI applications

Since 2022, the U.S. has limited the export of Nvidia’s top-tier chips to China, with further restrictions imposed last year.

The U.S. sanctions and Nvidia’s market dominance pose significant obstacles to China’s ambitions, particularly in the short term, according to analysts. The U.S. has curbed the export of Nvidia’s most sophisticated chips to China since 2022, with increased restrictions implemented last year.

China’s GPU designers rely on external manufacturers for chip production. Traditionally, this role was filled by Taiwan Semiconductor Manufacturing Co. (TSMC). However, due to U.S. restrictions, many Chinese firms are now unable to procure chips from TSMC.

As a result, they have shifted to using SMIC, China’s largest chipmaker, which is technologically several generations behind TSMC. This gap is partly due to Washington’s limitations on SMIC’s access to essential machinery from the Dutch company ASML, necessary for producing the most advanced chips.

Huawei is driving the development of more sophisticated chips for its smartphones and AI, which occupies a significant portion of SMIC’s capacity.

Nvidia has achieved success not only through its advanced semiconductors but also via its CUDA software platform. The system enables developers to build applications for Nvidia’s hardware. This has fostered an ecosystem around Nvidia’s designs, which will be challenging for competitors to emulate.

Huawei leading the pack for China

Huawei is at the forefront as a leading force in China for its Ascend series of data centre processors. The current generation, named Ascend 910B, is soon to be succeeded by the Ascend 910C. This new chip may come to rival Nvidia’s H100.

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Freetrade buys UK arm of Australian investing platform Stake

Financial trading app

Freetrade acquires Stake’s UK customer base, increasing domestic presence amid intense competition with similar apps such as Robinhood

The British retail investment platform Freetrade is set to acquire the UK customer base of its Australian competitor Stake, highlighting the growing competition in the UK’s digital investment sector. The acquisition, initially reported by CNBC, entails Freetrade assuming responsibility for all of Stake’s UK clients and their assets.

Freetrade currently oversees more than £2 billion in assets for its UK customer base.

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China’s tech stocks rally to 13-month high on new stimulus

Tech stocks up China

Chinese technology stocks, such as the previously underperforming Alibaba, have surged this week, reaching peaks not observed in over a year

The stock surge follows the announcement of stimulus measures by China’s central bank to boost the world’s second-largest economy.

On Thursday 26th September 2024 in the U.S., Alibaba’s shares closed above $100 for the first time since August 2023.

Tencent’s shares ended at their highest point in over two and a half years.

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Chinese stocks up sharply after Beijing confirms stimulus measures

China stocks up

Chinese stocks continued to rise following state media reports that China’s top leaders have endorsed the government’s recent measures to bolster their economy.

The CSI 300 index in Mainland China continued its rally for a seventh consecutive day, reaching its highest point in about four months, subsequent to a meeting of China’s highest officials confirming the government’s latest economic stimulus actions.

South Korea’s Kospi index surged by 1.9%, driven by advances in semiconductor company SK Hynix, which declared the commencement of mass production of the world’s inaugural 12-layer HBM3E chip, utilised in AI applications.

See SK Hynix Newsroom report here

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Dow up 500 points, S&P 500 closes above 5700 as both reach new highs!

U.S> at new highs!

Stocks soared on Thursday 19th September 2024, with the Dow Jones Industrial Average and the S&P 500 reaching new record highs, following the Federal Reserve’s decision on Wednesday to cut interest rates by half a percentage point.

The Dow Jones climbed 522.09 points to close at 42025, surpassing 42000 for the first time. The S&P 500 ascended to a close of 5713, breaking the 5700 threshold. Meanwhile, the Nasdaq Composite jumped 2.51% to finish at 18013.

Dow Jones one-day chart

Dow Jones one-day chart

S&P 500 one-day chart

S&P 500 one-day chart
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The AI Race between China and the U.S.

AI development in China and U.S.

Artificial Intelligence (AI) has become a pivotal battleground in the technological race between China and the United States.

“AI is expected to become a crucial component of economic and military power in the near future,” Stanford University’s Artificial Intelligence Index Report 2023 stated.

Both countries are significantly investing in AI research and development, striving to achieve a leading role in this revolutionary sector. This post looks at the major figures in China’s AI scene, their progress, and their comparison with their American counterparts.

China’s AI Landscape

China’s AI aspirations are propelled by a number of significant technology firms, each forging their own AI models and applications.

Baidu: Often referred to as the ‘Google of China,’ Baidu leads in AI development. Its premier AI model, ERNIE (Enhanced Representation through Knowledge Integration), fuels the Ernie Bot, a chatbot aimed to compete with OpenAI’s ChatGPT. Baidu asserts that ERNIE 4.0 matches GPT-4’s capabilities, demonstrating sophisticated understanding and reasoning abilities.

Alibaba: Alibaba’s AI model, Tongyi Qianwen (commonly known as Qwen), is a comprehensive set of foundational models adept at a range of tasks, from generating content to solving mathematical problems. Select versions of Qwen are open-source, enabling developers to utilize and modify them for various uses. Alibaba has announced that Qwen models are in use by over 90,000 enterprise clients.

Tencent: The Hunyuan model from Tencent is a prominent component of China’s AI landscape. Offered through Tencent’s cloud computing division, Hunyuan is tailored to facilitate a broad spectrum of applications, encompassing natural language processing and computer vision.

Huawei: In spite of considerable obstacles stemming from U.S. sanctions, Huawei persists in AI innovation. The firm has created its own AI processors, like the Kunlun series, to diminish dependence on international technology. Huawei’s AI features are incorporated into a diverse array of products, including smartphones and cloud solutions.

Comparison to the U.S.

The U.S. continues to be a dominant force in AI, with leading companies such as OpenAI, Microsoft, Google, Anthropic and Meta spearheading advancements.

Generative AI: U.S. firms have advanced significantly in generative AI, with OpenAI’s GPT-4 and Google’s Gemini at the forefront. These models excel in creating text, images, and videos from user inputs. Although Chinese models like ERNIE and Qwen are strong contenders, the U.S. maintains a slight lead in capabilities and market penetration.

Semiconductor Design: The U.S. leads the semiconductor design industry, vital for AI progress. U.S. companies command an 85% global market share in chip design, crucial for AI model training and system operation. China’s dependence on imported semiconductors is a notable obstacle, but there are ongoing efforts to create homegrown solutions.

Research and Innovation: Both nations boast strong AI research sectors, yet the U.S. edges out slightly in generating state-of-the-art AI products. U.S. tech giants frequently introduce AI breakthroughs to the market, with Chinese firms quickly gaining ground.

Government Support: The Chinese government ardently backs AI advancement, enacting strategies to spur innovation and lessen foreign tech reliance. Such support has spurred China’s AI industry’s rapid expansion, positioning it as a strong rival to the U.S.

Conclusion

The competition in AI development between China and the U.S. is escalating, as both countries achieve significant breakthroughs. Although the U.S. maintains a marginal lead in some respects, China’s swift advancement and state backing indicate that the disparity might keep closing. The quest for AI dominance by these nations is set to influence the worldwide technological and innovative landscape profoundly.

As of September 2024, it is estimated that China’s AI development is approximately nine months behind that of the U.S.

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Rightmove rejects £5.6 billion takeover offer

House For Sale

The Australian property listing company REA Group announced on Wednesday that its £5.6 billion ($7.32 billion) cash-and-stock bid to take over Rightmove, Britain’s largest real estate portal, was rejected.

REA Group, which is 62% owned by Rupert Murdoch’s News Corp, reportedly did not provide a reason for Rightmove’s refusal of the offer.

Analysts have noted that Britain’s housing market is three times larger than Australia’s. A successful deal would have accelerated REA’s expansion into profitable international markets.

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Google’s advertising business goes on trial

Google

The U.S. government is targeting the heart of Google’s vast wealth – its highly profitable monopolising advertising technology business

A trial scheduled to begin on Monday 9th September 2024 will scrutinise the Department of Justice’s (DoJ) claims that Alphabet, the parent company of Google, is unlawfully sustaining a monopoly in the marketplace.

In the previous year, the firm amassed over $200 billion (£152 billion) through the placement and sale of online advertisements.

Alphabet attributes its success to the ‘effectiveness’ of its business. Conversely, prosecutors contend that the company has leveraged its market control to stifle competition.

The legal action, launched by the Department of Justice (DoJ) and several states in 2023, charges Google with dominating the digital advertising market and employing its influence to obstruct innovation and competition.

Google asserts that it is simply one of numerous companies that arrange digital advertisement placements for consumers.

The corporation argues that the digital advertising industry is increasingly competitive, citing the growing advertising revenues of entities like Apple, Amazon, and TikTok as proof, as mentioned in a blog post responding to the DoJ’s lawsuit in 2023.

The contentions will be laid out before the U.S. District Judge who is expected to deliver a verdict.

This trial comes on the heels of a notable decision in a separate antitrust lawsuit against Google by the Justice Department last month. Judge Amit Mehta ruled that Google had illegally stifled competition in its online search services.

He reportedly stated that, “Google is a monopolist and has acted as such to maintain its monopoly.”

Alphabet one year chart

Alphabet one year chart
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Qualcomm intensifies competition with Intel and AMD and others as the company introduces its newest AI PC chip

New AI chip from Qualcomm

Qualcomm has introduced the Snapdragon X Plus 8-core processor, intensifying its venture into the AI PC market and challenging competitors like Intel and AMD

The U.S. semiconductor powerhouse announced that the Snapdragon X Plus 8-core targets PCs priced from $700, aiming to broaden its chip reach to additional devices.

Moreover, Qualcomm has enjoyed backing from Microsoft, which is incorporating Snapdragon processors in its Copilot+ PCs.

Qualcomm says the company is also working on mixed reality smart glasses with Samsung and Google.

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Burberry dropped from FTSE 100

Shoppers

The British luxury fashion house Burberry Group was relegated from the U.K.’s FTSE 100 on Wednesday 4th August 2024, amid declining sales and management upheavals, all adding to the challenges of the 168-year-old retailer

This demotion represents a new setback for Burberry, with its share price having plummeted over 53% this year.

Previous CEOs have endeavoured to refine the brand’s aesthetic. With the appointment of Joshua Schulman as the new chief executive in July 2024, a shift in strategy is now indicated.

Burberry is not alone in its waning fortunes. The luxury sector as a whole has suffered from a prolonged downturn in consumer spending amid inflationary pressures and broader economic uncertainty. Chinese luxury consumption has been especially hard hit.

In July, Hugo Boss cut its full-year guidance after reporting a fall in sales, notably in the U.K. and China, while Gucci owner Kering issued a weak forecast recognising a deceleration in China. LVMH revenue also fell in the second quarter on weaker sales.

Burberry’s FTSE relegation confirms a long fall from grace for the luxury fashion icon.

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Biggest one-day market capitalisation drop for a U.S. stock in history, and guess what… it was Nvidia

Nvidia

Nvidia $279 billion market cap wipeout — the biggest in U.S. history for just ONE company

On Tuesday 3rd September 2024, around $279 billion of value was wiped off of Nvidia. That was the biggest one-day market capitalisation drop for a U.S. stock in HISTORY!

Nvidia one-day chart closed 108 on 3rd September 2024

Nvidia one-day chart closed 108 on 3rd September 2024

Nvidia shares continued sliding in post-market trading Tuesday, falling 2%, after Bloomberg reported that the company received a subpoena from the Department of Justice as part of an antitrust investigation.

Global semiconductor stocks and related sectors subsequently experienced a decline on Wednesday 4th September 2024, after Nvidia’s share price in the U.S. saw a significant plunge overnight.

Update: in a subsequent statement Nvidia reportedly said it didn’t receive antitrust subpoena from DOJ. This according to a report on CNBC.

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The September market crunch – markets up, markets down!

Bear Bull market chase

No surprise that the markets are taking a little breather then, after reaching and exceeding new highs in recent weeks.

The S&P 500 fell by a little over 2%, the Dow Jones Industrial Average trimmed around 1.50%, and the Nasdaq Composite dropped 3.26%.

A variety of factors likely contributed to the market’s weakness on Tuesday 3rd September 2024

U.S. manufacturing activity continued to contract in August 2024, raising concerns about the strength of the U.S. economy again.

Nvidia‘s stock plummeted nearly 10%. The downturn also affected other semiconductor manufacturers in the U.S. and Asia. Intel’s shares fell by 8.8%, SK Hynix’s by over 7%, and Tokyo Electron’s by over 8.5%.

Furthermore, Nvidia‘s shares declined an additional 2% in extended trading amid news that the U.S. Department of Justice has begun an antitrust investigation into the company.

This bleak sentiment may have been influenced by market expectations. The Fed dithering about when to make an interest rate cut isn’t helping.

Historically speaking, September has been the worst month for the S&P 500. The index lost an average of 2.3% over the past 10 Septembers, according to FactSet data.

There are real reasons to feel concerned for the month. Fundstrat co-founder Tom Lee warned investors to be cautious for the next eight weeks and thinks stocks could pull back by 7% to 10%.

S&P 500 one-day chart

S&P 500 one-day chart

Nasdaq Composite one-day chart

Nasdaq Composite one-day chart
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BYD sales hit record high in August 2024

BYD EV

In August 2024, Chinese electric car behemoth BYD set a new sales record for passenger vehicles, with hybrid models outpacing battery-only vehicles in growth.

Zeekr, supported by Geely, experienced a rise in deliveries to 18,015 for August, although this was a decrease from the 20206 deliveries reported in June 2024.

Li Auto, renowned for its range-extender vehicles, saw a decrease in deliveries to 48,122 in August, a drop from the July record of 51,000.

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Berkshire Hathaway at $1 trillion market cap – the first U.S. non tech company to do so

$1 trillion club

Warren Buffett’s Berkshire Hathaway achieved a $1 trillion market capitalisation on Wednesday 28th August 2024, becoming the first non-technology company in the U.S. to reach this business accolade.

The shares of the conglomerate, headquartered in Omaha, Nebraska, have surged over 28% in 2024, outperforming the S&P 500’s 18% increase. This major achievement came just two days before Buffett, often referred to as the ‘Oracle of Omaha,’ was due to celebrate his 94th birthday.

On Wednesday, the company’s shares rose by 0.8% to $696,502.02, surpassing the $1 trillion mark, as reported. The shares soared even further in the subsequent trading session.

One year chart for Berkshire Hathaway

One year chart for Berkshire Hathaway

The milestone serves as a testament to the firm’s financial robustness and the value of its franchise. It is particularly noteworthy given that Berkshire stands as one of the few remaining conglomerates today.

Buffett, serving as chairman and CEO, assumed command of Berkshire, a floundering textile enterprise, in the 1960s. He revolutionised the firm into a vast conglomerate covering insurance, railroads, retail, manufacturing, and energy sectors, boasting an unparalleled balance sheet and a formidable cash reserve.

Unlike the six other companies in the trillion-dollar club (Apple, Nvidia, Microsoft, Alphabet, Amazon and Meta), Berkshire is known for its old-economy focus as the owner of: BNSF Railway, Geico Insurance and Dairy Queen. (Although its sizable Apple position has helped drive recent gains.)

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Nvidia reports 122% revenue growth

Data centre

Nvidia has announced earnings surpassing Wall Street forecasts and has issued guidance for the current quarter that exceeds expectations.

As the artificial intelligence boom continues, Nvidia remains a major beneficiary. Despite a stock price dip, after trading hours, the stock has risen approximately 150% this year. The question remains whether Nvidia can sustain this growth trajectory.

Nvidia said it expects about $32.5 billion in current-quarter revenue, versus $31.7 billion expected by analysts, according to analysis That would be an increase of 80% from a year earlier.

Revenue continues to surge, rising 122% on an annual basis during the quarter, following three straight periods of year-on-year growth in excess of 200%.

Nvidia’s data centre business, which encompasses its AI processors, saw a 154% increase in revenue from the previous year, reaching $26.3 billion and representing 88% of the company’s total sales.

However, not all these sales were from AI chips. Nvidia reported that its networking products contributed $3.7 billion in revenue.

The company primarily serves a select group of cloud service providers and consumer internet firms, including Microsoft, Alphabet, Meta, and Tesla. Nvidia’s chips, notably the H100 and H200, are integral to the majority of generative AI applications, like OpenAI‘s ChatGPT.

Nvidia also announced a $50 billion stock buyback.

Nvidia shares dropped close to 5% in after-hours pre-market trade (29th August 2024).

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How frothy is the AI data centre market for investors?

AI market froth?

Nvidia investors have been on a rocket ride to the stars. But recently they have come back down to Earth, and it has become more of a roller coaster ride.

Benefiting significantly from the artificial intelligence surge, Nvidia’s market cap has increased approximately ninefold since late 2022 – a massive market cap gain.

However, after achieving a peak in June 2024 and momentarily claiming the title of the world’s most valuable public company, Nvidia then experienced close to a 30% decline in value over the subsequent seven weeks, resulting in an approximate $800 billion loss in market capitalisation.

Currently, the stock is experiencing a rally, bringing it within approximately 6% of its all-time peak. The chipmaker surpassed the $3 trillion market cap milestone in early June 2024, aligning with Microsoft and Apple. The question remains whether the company can reclaim and sustain that title.

Investors are closely monitoring Nvidia’s forecast for the October quarter, with the company anticipated to report a growth of approximately 75%. Positive guidance would imply that Nvidia’s affluent clients continue to invest heavily in AI development, whereas a lacklustre forecast might suggest that infrastructure investment is becoming excessive.

Should there be any signs of diminishing demand for AI or if a major cloud customer is reducing spending, it could lead to a notable decline in revenue.

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What evidence is there that the U.S. stock market is overvalued right now?

U.S. overvalued stocks

High Price-to-Earnings (P/E) ratio

The P/E ratio of the market is a common measure of valuation. Currently, the P/E ratio is significantly higher than historical averages, indicating that stocks are priced much higher relative to their earnings.

Rapid price increases without corresponding earnings growth

When stock prices rise rapidly without a corresponding increase in earnings, it often signals overvaluation. This has been observed recently, especially with some of the major tech stocks.

Comparison to historical market tops

The current market valuations are almost as high as they were at the peak in January 2022, which was followed by a significant correction.

Buffet valuation metric

Metrics like the Buffett Indicator (market capitalisation to GDP ratio) and Tobin’s Q (market value of assets divided by replacement cost) also suggest that the market is overvalued.

While these indicators point towards overvaluation, it’s important to note that markets can remain overvalued for extended periods, and other factors like strong earnings growth can sustain high valuations for some time

U.S. stock market could be overvalued by as much as 68%

The U.S. stock market, according to some analysts suggests that the current market appears to be overvalued by around 68%.

By comparison, at the peak of the Dot-com bubble, on 24th March 2000, the market was 89.5% overvalued. When the market bottomed out 2.5 years later, it had dropped around 50% from its previous all-time high and was undervalued by nearly 21%.

The fact that the market currently appears overvalued does not necessarily mean it will correct any time soon. The forces pulling the market toward the long-run equilibrium are relatively weak and allow the market to stay over or undervalued for extended periods of time.

From 1954 to 1970, the market stayed continuously overvalued for over some 15 years, and from 1973 until 1987, it stayed undervalued for about 14 years.

The analysis clearly suggests that U.S. stocks are overvalued – but that doesn’t necessarily mean a downturn any time soon – but it will, in time, adjust.

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Dow Jones hits new record high

The Dow Jones Industrial Average (DJIA) reached a new record high on Monday 26th August 2024, closing at 41240. 

Investors have responded positively to the Federal Reserve’s recent indications that interest rate cuts are highly probable to commence in September 2024.

Market dynamics and sentiment

The rise of the DJIA was propelled by advances in sectors like materials, utilities, and energy. Conversely, the broader market exhibited mixed outcomes. The S&P 500 declined by 0.3%, and the Nasdaq Composite dropped by 0.8%, contrasting with the Dow’s notable performance. This disparity is largely due to the lagging of technology stocks, especially with significant drops in firms such as Nvidia and Tesla.

Federal Reserve

Federal Reserve Chair Jerome Powell’s recent address at the Jackson Hole Economic Symposium was pivotal in bolstering investor confidence. Powell’s remarks indicated that the Fed is ready to cut interest rates, which many investors believe will foster economic growth and stabilise the markets. The expectation of rate cuts has played a significant role in the recent market rally, with predictions of potential reductions up to 1% by the end of 2024.

Dow Jones one day chart at record high

Dow Jones 1 day chart

Despite varied performances across sectors, the Dow reaching a new high signals a wider optimism in the market. As the year unfolds, the dynamics among Federal Reserve policies, corporate earnings, and economic indicators will continue to influence market directions.

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OpenAI cements deal with Vogue owner Condé Nast

Magazine AI data

OpenAI has partnered with the global magazine conglomerate Condé Nast to enable ChatGPT and its search engine, SearchGPT, to showcase content from renowned publications such as Vogue, The New Yorker and GQ.

The agreement represents the most recent in a series of deals made by OpenAI with prominent media companies.

The material generated by media organizations is coveted by tech companies for training their AI (Artificial Intelligence) models.

Several media companies, such as the New York Times and the Chicago Tribune, have opposed this practice and have pursued legal measures to safeguard their content.

The financial details of the contract between OpenAI and Condé Nast were not revealed.

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U.S. stocks extend gains as S&P 500 and Nasdaq post eighth positive day

U.S. stocks

Highs and lows of one volatile week in the U.S. stock market

U.S. stocks climbed on Monday 19th August 2024, continuing the market’s rebound as investors prepared for the highly anticipated Federal Reserve symposium at Jackson Hole later in the week.

The S&P 500 ended the day at 5608

The S&P 500 ended the day at 5608

The Nasdaq Composite surged to finish at 17876

Both the S&P 500 and Nasdaq achieved their eighth consecutive day of gains, a record for 2024

The Dow Jones Industrial Average gained 236 points closing at 40896.

The day’s activity extended the recent rally, signalling another twist in what has been a volatile period for stocks. Last week saw the largest gains of the year for the three major indexes.

August began shakily with disappointing data igniting recession fears and intensifying concerns that the Federal Reserve was lagging in interest rate reductions. This led to a worldwide sell-off, culminating in the S&P 500’s worst day since 2022 on 5th August.

However, encouraging data last week appeared to calm the markets and raised hopes for a ‘soft landing’ of the economy. Positive figures in retail sales and initial jobless claims, along with robust earnings from Walmart, contributed to this optimism. Additionally, the annual inflation rate for July’s consumer price index reached its lowest point in over three years.

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Video game industry experiences slow growth in 2024

Game console

The video game industry is experiencing sluggish growth in 2024 for several reasons

Slow console sales

Gaming console sales have not met expectations. For example, sales of Sony’s PlayStation 5 have decreased from 3.3 million units in the same period last year to 2.4 million units in the fiscal first quarter of 2024.

Post-Pandemic

The gaming industry experienced a substantial increase during the COVID-19 pandemic due to people staying indoors more often. Yet, with the easing of restrictions, there has been a noticeable change in consumer habits, with a trend towards increased outdoor activities.

Economic considerations

Increased interest rates and inflation have diminished discretionary income, leading to a decrease in consumer spending on games.

Challenges

The industry has faced mass layoffs and other operational challenges, which have impacted growth.

Despite these challenges, there are optimistic projections for 2025 with anticipated major releases like the eagerly awaited successor to Nintendo’s Switch console and Grand Theft Auto (GTA) VI.

Future

Predictions for 2025 suggest that the new Nintendo console and GTA VI will make a significant impact, potentially revitalizing the industry.

The U.S. and China account for around half of consumer spending on games.

The gaming industry as a whole is currently estimated to be worth around $188 billion globally and this is projected to grow in 2025.

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Intel sells stake in UK chip designer Arm

Circuit board microchip

Intel has divested its 1.18 million share stake in the British chip company Arm Holdings, according to a regulatory filing.

Intel is undergoing significant restructuring and cost-cutting to address competitive challenges in the semiconductor industry.

The recent transaction, disclosed on Tuesday 13th August 2024, is believed to have earned Intel approximately $147 million, based on Arm’s average share price between April and June 2024.

This move away from Arm occurs during a challenging financial phase for Intel, as it embarks on what CEO Pat Gelsinger reportedly describes as “the most extensive restructuring of Intel since the memory microprocessor transition four decades ago.”

In early August, Intel announced a cost-reduction plan designed to save $10 billion. This includes the layoff of about 15,000 employees, the elimination of the fiscal fourth-quarter dividend, and a reduction in capital expenditures.

At the same time, Intel disclosed quarterly figures that fell short of expectations and provided conservative guidance for the upcoming quarter.

This announcement precipitated the steepest single-day decline in Intel’s stock value in half a century, plummeting 26%.

Intel one year chart as of 15th August 2024

Intel one year chart as of 15th August 2024
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Nikkei rises 3% to lead gains in Asia

Japan shares

Japanese stocks led gains across Asia on Friday 16th August 2024, poised for their best week in four years, with the Nikkei 225 climbing over 3% following a Wall Street rally.

The surge came as new economic data alleviated concerns of a U.S. recession.

In the U.S., retail sales saw a 1% increase in July, significantly exceeding the Dow Jones estimate of a 0.3% rise. Additionally, weekly jobless claims experienced a decline.

The rise in the Nikkei came after the biggest fall in history just days ago where it hit historic lows last seen in 1987 making it a remarkably fast recovery.