Tag: Nvidia

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AMD Unveils Instinct MI400: is it time for AMD to challenge NVIDIA dominance?

AMD & NVIDIA chip go head-to-head

AMD has officially lifted the curtain on its next-generation AI chip, the Instinct MI400, marking a significant escalation in the battle for data centre dominance.

Set to launch in 2026, the MI400 is designed to power hyperscale AI workloads with unprecedented efficiency and performance.

Sam Altman and OpenAI have played a surprisingly hands-on role in AMD’s development of the Instinct MI400 series.

Altman appeared on stage with AMD CEO Lisa Su at the company’s ‘Advancing AI’ event, where he revealed that OpenAI had provided direct feedback during the chip’s design process.

Altman described his initial reaction to the MI400 specs as ‘totally crazy’ but expressed excitement at how close AMD has come to delivering on its ambitious goals.

He praised the MI400’s architecture – particularly its memory design – as being well-suited for both inference and training tasks.

OpenAI has already been using AMD’s MI300X chips for some workloads and is expected to adopt the MI400 series when it launches in 2026.

This collaboration is part of a broader trend: OpenAI, traditionally reliant on Nvidia GPUs via Microsoft Azure, is now diversifying its compute stack.

AMD’s open standards and cost-effective performance are clearly appealing, especially as OpenAI also explores its own chip development efforts with Broadcom.

AMD’s one-year chart snap-shot

One-year AMD chart snap-shot

So, while OpenAI isn’t ditching Nvidia entirely, its involvement with AMD signals a strategic shift—and a vote of confidence in AMD’s growing role in the AI hardware ecosystem.

At the heart of AMD’s strategy is the Helios rack-scale system, a unified architecture that allows thousands of MI400 chips to function as a single, massive compute engine.

This approach is tailored for the growing demands of large language models and generative AI, where inference speed and energy efficiency are paramount.

AMD technical power

The MI400 boasts a staggering 432GB of next-generation HBM4 memory and a bandwidth of 19.6TB/sec—more than double that of its predecessor.

With up to four Accelerated Compute Dies (XCDs) and enhanced interconnects, the chip delivers 40 PFLOPs of FP4 performance, positioning it as a formidable rival to Nvidia’s Rubin R100 GPU.

AMD’s open-source networking technology, UALink, replaces Nvidia’s proprietary NVLink, reinforcing the company’s commitment to open standards. This, combined with aggressive pricing and lower power consumption, gives AMD a compelling value proposition.

The company claims its chips can deliver 40% more AI tokens per dollar than Nvidia’s offerings.

Big tech follows AMD

OpenAI, Meta, Microsoft, and Oracle are among the major players already integrating AMD’s Instinct chips into their infrastructure. OpenAI CEO Sam Altman, speaking at the launch event reportedly praised the MI400’s capabilities, calling it ‘an amazing thing‘.

With the AI chip market projected to exceed $500 billion by 2028, AMD’s MI400 is more than just a product—it’s a statement of intent. As the race for AI supremacy intensifies, AMD is betting big on performance, openness, and affordability to carve out a larger share of the future.

It certainly looks like AMD is positioning the Instinct MI400 as a serious contender in the AI accelerator space – and Nvidia will be watching closely.

The MI400 doesn’t just aim to catch up; it’s designed to challenge Nvidia head-on with bold architectural shifts and aggressive performance-per-dollar metrics.

Nvidia has long held the upper hand with its CUDA software ecosystem and dominant market share, especially with the popularity of its H100 and the upcoming Rubin GPU. But AMD is playing the long game.

Nvidia 0ne-year chart snapshot

Nvidia 0ne-year chart snapshot

By offering open standards like UALink and boasting impressive specs like 432GB of HBM4 memory and 40 PFLOPs of FP4 performance, the MI400 is pushing into territory that was once Nvidia’s alone.

Whether it truly rivals Nvidia will depend on a few key factors: industry adoption, software compatibility, real-world performance under AI workloads, and AMD’s ability to scale production and support.

But with major players like OpenAI, Microsoft, and Meta already lining up to adopt the MI400.

Is now a good time to invest in AMD?

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

Teaching or programing?

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

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

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

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

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

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

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

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

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

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

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

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

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Saudi Arabia to acquire 18000 Nvidia AI chips with more to follow

Nvidia AI

Saudi Arabia is making bold moves in artificial intelligence with a major acquisition from Nvidia.

The tech giant will be sending more than 18,000 of its latest GB300 Blackwell AI chips to Saudi-based company Humain, in a deal that marks a significant step toward the nation’s ambitions to become a global AI powerhouse.

The announcement was made by Nvidia CEO Jensen Huang during the Saudi-U.S. Investment Forum in Riyadh, as part of a White House-led trip that included President Donald Trump and other top CEOs.

Humain, backed by Saudi Arabia’s Public Investment Fund, aims to develop AI models and build data center infrastructure, with plans to eventually deploy several hundred thousand Nvidia GPUs

Humain, backed by Saudi Arabia’s Public Investment Fund, plans to use the chips to develop large-scale AI models and establish cutting-edge data centers.

The chips will be deployed in a 500-megawatt facility, making it one of the largest AI computing projects in the region. Nvidia’s Blackwell AI chips are among the most advanced in the industry, used in training sophisticated AI models and powering data-intensive applications.

Saudi Arabia’s investment in AI technology aligns with its long-term vision of transforming its economy beyond traditional industries. With plans to expand its data infrastructure and deploy several hundred thousand Nvidia GPUs in the future, the country is positioning itself as a major AI hub in the Middle East.

As AI continues to shape global industries, Saudi Arabia’s investment signals a broader shift in how nations are competing for dominance in the AI revolution.

Nvidia’s involvement underscores the strategic importance of AI chips, not just in business, but in international relations as well.

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Tech driven sell-off gained at pace as Nasdaq dropped 3% and Dow Jones down 700 points

Tech in the red

The stock market experienced another sharp Trump tariff related downturn Wednesday 16th April 2025, driven by a tech-heavy sell-off continuing to rattle investors.

The Nasdaq Composite plunged by 3%, while the Dow Jones Industrial Average shed nearly 700 points, marking one of the most significant declines in recent months.

Concerns over tariffs and inflation were amplified by Federal Reserve Chair Jerome Powell’s remarks about the tariff uncertainty, which highlighted the challenging economic landscape.

Tech stocks bore the brunt of the sell-off, with semiconductor companies like Nvidia and AMD leading the decline. Nvidia’s announcement of a $5.5 billion quarterly charge related to export restrictions on its chips to China added to the sector’s woes.

The VanEck Semiconductor ETF dropped over 4%, reflecting broader uncertainty in the industry.

Powell’s comments on tariffs exacerbated market fears, as he warned of potential stagflation—a scenario where inflation rises while economic growth slows.

This sentiment was echoed across trading floors, with investors grappling with the implications of ongoing trade tensions and restrictive policies.

As the market inches closer to bear territory, the focus remains on navigating these turbulent times.

The sell-off underscores the fragility of investor confidence and the pivotal role of technology in shaping market dynamics

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Tech stocks propel market rally amid Trump’s tariff pause

Stocks move back up

On Monday 14th April 2025, the stock market experienced a notable mini rally, driven by the tech sector’s resurgence following a weekend announcement of a temporary tariff pause.

President Trump’s decision to exempt smartphones, computers, and other electronics from steep tariffs provided a much-needed reprieve for the industry, sparking optimism among investors.

Major tech companies like Apple, Nvidia, and Amazon saw significant gains, with Apple shares surging by 7.5%. The Nasdaq Composite, heavily weighted with tech stocks, climbed 1.9%, while the S&P 500 rose 1.5%.

This rally marked a stark contrast to the volatility of the previous week, where tariff uncertainties had sent shockwaves through the market.

The tariff pause, although temporary and restricted to 20%, helped to alleviate immediate concerns about rising costs for consumers and businesses.

Importers were spared from choosing between absorbing higher expenses or passing them on to customers. This relief was particularly impactful for companies reliant on Chinese manufacturing, as the exemptions covered a wide range of tech products.

Market analysts noted that the rally was not just a reaction to the tariff news but also a reflection of the tech sector’s resilience.

Despite facing challenges earlier in the year, tech companies have continued to innovate and adapt, maintaining their position as a driving force in the U.S. and world economies.

However, the rally’s sustainability remains uncertain. The administration’s mixed messages about future tariffs have left investors cautious.

While Monday’s gains were encouraging, the broader market continues to grapple with the unpredictability of trade policies.

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Dow drops 2200 points Friday 4th April 2025 – S&P 500 loses 10% in 2 days as Trump’s tariff rout deepens – just two days after ‘Liberation Day!’

Stocks down

The stock market was smashed for a second day Friday 4th April 2025 after China retaliated with new tariffs on U.S. goods, sparking fears President Donald Trump has ignited a global trade war that will lead to a global recession.

Stock market damage

The Dow Jones Industrial Average dropped 2,231.07 points, or 5.5%, to 38,314.86 on Friday 4th April 2025, the biggest decline since June 2020 during the Covid-19 pandemic.

This follows a 1,679-point decline on Thursday 3rd April 2025 and marks the first time ever that it has shed more than 1,500 points on consecutive days.

The S&P 500 collapsed 5.97% to 5,074.08, the biggest decline since March 2020. The benchmark shed 4.84% on Thursday 3rd April 2025 and is now down more than 17% off its recent high.

The Nasdaq Composite, home to many well-known tech companies that sell to China and manufacture there as well, dropped 5.8%, to 15,587.79.

This follows a nearly 6% drop on Thursday 3rd April 2025 and takes the index down by 22% from its December 2024 record – pushing it into a bear market.

The selling was wide ranging with only 14 members of the S&P 500 higher on the day. Major market indexes closed at their lows of the session.

China’s commerce ministry said the country will impose a 34% levy on all U.S. products, disappointing investors who had hoped countries would negotiate with Trump before retaliating.

Technology stocks led the massive rout Friday

Apple shares slumped 7%, bringing its loss for the week to 13%.

Nvidia dropped 7% during the session.

Tesla fell 10%.

All three companies have large exposure to China and are among the hardest hit from Beijing’s retaliatory tariffs.

The bull market is dead, and it was destroyed by self-inflicted wounds!

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Dow closed 700 points lower Friday 28th March 2025 as inflation and tariff fears worsen

Dow down

Stocks sold off sharply on Friday 28th March 2025, pressured by growing uncertainty on U.S. trade policy as well as a grim outlook on inflation

The Dow Jones Industrial Average closed down 715 points at 41,583. The S&P 500 lost 1.97% to close 5,580 ending the week down for the fifth time in the last six weeks. The Nasdaq Composite plunged 2.7% to 17,322.

Shares of several technology giants also fell putting pressure on the broader market. Google-parent Alphabet lost 4.9%, while Meta and Amazon each shed 4.3%.

This week, the S&P 500 lost 1.53%, while the 30-stock Dow shed 0.96%. The Nasdaq declined by 2.59%. With this latest losing week, Nasdaq is now on pace for a more than 8% monthly decline, which would be its worst monthly performance since December 2022.

Dow Jones one-day chart (28th March 2025)

Dow Jones one-day chart (28th March 2025)

Stocks took a leg lower on Friday after the University of Michigan’s final read on consumer sentiment for March 2025 reflected the highest long-term inflation expectation since 1993.

Friday’s core personal consumption expenditures price index also came in hotter-than-expected, rising 2.8% in February and reflecting a 0.4% increase for the month, stoking concerns about persistent inflation.

Economists had reportedly been looking for respective numbers of 2.7% and 0.3%. Consumer spending accelerated 0.4% for the month, below the 0.5% forecast, according to fresh data from the Bureau of Economic Analysis.

The market is getting squeezed by both sides. There is uncertainty about reciprocal tariffs hitting the major exporting sectors like tech alongside concerns about a weakening consumer facing higher prices

Trump’s tariffs push will hit the U.S. harder than Europe in the short term, it has been reported.

Japan’s Nikkei enters correction as Trump’s tariff assault drives sell-off in Asia markets

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U.S. tech giants are betting big on humanoid robots

Humanoid robots

U.S. tech giants are making bold strides in the development of humanoid robots, signalling a transformative shift in the robotics industry

Companies like Tesla, Google, Microsoft, and Nvidia are investing heavily in this cutting-edge technology, aiming to create machines that mimic human movement and behaviour.

These humanoid robots are envisioned to revolutionise industries ranging from manufacturing to healthcare, offering solutions to labor shortages and enhancing productivity.

Tesla’s Optimus project is a prime example of this ambition. CEO Elon Musk has announced plans to produce thousands of these robots, designed to perform repetitive and physically demanding tasks.

Optimus robots are expected to integrate seamlessly into factory settings, reducing the need for human intervention in hazardous environments.

Similarly, Boston Dynamics, known for its agile robots, continues to push the boundaries of what humanoid machines can achieve, focusing on tasks that require precision and adaptability.

The integration of artificial intelligence (AI) is a driving force behind these advancements. AI enables robots to learn from their environments, adapt to new tasks, and interact with humans in more intuitive ways.

Companies like Nvidia are leveraging their expertise in AI and machine learning are helping to develop robots capable of complex decision-making and problem-solving.

However, challenges remain. High production costs, limited battery life, and safety concerns are significant hurdles that need to be addressed before humanoid robots can achieve widespread adoption.

Despite these obstacles, the potential benefits are immense. From assisting the elderly to performing intricate surgeries, humanoid robots could redefine the boundaries of human capability.

As U.S. tech giants continue to innovate, the race to dominate the humanoid robotics market intensifies.

Tesla Optimus Gen 2

With China and other nations also making significant investments, the competition is fierce. Analysts warn that U.S. firms could lose out to China, which aims to replicate its success with electric vehicles in the robotics space race.

The future of humanoid robots promises to be a fascinating blend of technology, creativity, and global collaboration

U.S. companies that may benefit from this AI humanoid tech advancement

Tesla: Known for its Optimus humanoid robot project, Tesla is pushing boundaries in robotics and AI.

Google (Alphabet): A leader in AI and robotics research, with projects aimed at enhancing humanoid capabilities.

Microsoft: Investing in AI technologies that support robotics and automation.

Nvidia: Provides advanced AI chips and systems crucial for humanoid robot development.

Boston Dynamics: Famous for its agile robots like Atlas, focusing on precision and adaptability.

Agility Robotics: Creator of Digit, a humanoid robot designed for logistics and manufacturing.

Meta (Facebook): Exploring humanoid robots for social and interactive applications.

Apple: Investing in robotics and AI for potential humanoid advancements.

Amazon: Developing robots like Astro for home monitoring and other tasks.

Figure AI: Innovating humanoid robots like Figure 02 for various industries.

Bill Gates on AI

Bill Gates has shared some fascinating insights about AI recently. He reportedly believes that within the next decade, AI will transform many industries, making specialised knowledge widely accessible.

For example, he predicts that AI could provide high-quality medical advice and tutoring, addressing global shortages of doctors and educators.

Gates has also described this shift as the ‘age of free intelligence,’ where AI becomes a commonplace tool integrated into everyday life. While he acknowledges the immense potential of AI to solve global challenges – like developing breakthrough treatments for diseases and innovative solutions for climate change – he also recognises the disruptive impact it could have on jobs and the workforce.

Despite these concerns, Gates remains optimistic about AI’s ability to drive innovation and improve lives.

He has emphasised that certain human activities, like playing sports or hosting talk shows, will likely remain uniquely human.

However, despite all these predictions from powerful tech leaders – it does beg the question, do these ultra rich CEOs predict the future, or simply make it?

What if Quantum Physics coincides and collides with the ‘full’ arrival of AI and humanoid robots

Quantum computing could enhance the capabilities of AI-powered robots by solving complex optimisation problems, improving machine learning algorithms, and enabling real-time decision-making.

For instance, robots equipped with quantum sensors could navigate intricate environments, detect subtle changes in their surroundings, and interact with humans in more intuitive ways.

This fusion could revolutionise industries such as healthcare, manufacturing, and space exploration. Imagine humanoid robots performing intricate surgeries with precision, managing large-scale logistics, or exploring distant planets with advanced problem-solving abilities.

However, this convergence also raises ethical and societal questions. The potential for such powerful technologies to disrupt industries, impact employment, and challenge privacy norms must be carefully managed.

Collaboration between scientists, policymakers, and ethicists will be crucial to ensure these advancements benefit humanity as a whole.

The intersection of quantum physics, AI, and humanoid robotics is not just a technological milestone – it’s a glimpse into a future where the boundaries of human capability and machine intelligence blur.

It’s an exciting, albeit complex future humans are creating.

But will AI surpass human intelligence – and if it does what then for the human civilisation?

Access videos of Tesla robots here

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Baidu, once China’s generative AI leader – is battling to regain its position

A Chatbot

Chinese tech giant Baidu has released two new free-to-use artificial intelligence models as it vies to regain its leading position in the country’s fiercely competitive AI space

The Baidu models launched on Sunday 16th March 2025 included the company’s first reasoning-focused model and come ahead of plans to move towards an open-source strategy. 

However, analysts reportedly said that while the release of the models is a positive development for Baidu, they also highlight how it is playing catch up as its Ernie bot – one of China’s earliest versions of a ChatGPT-like chatbot – struggles to gain widespread adoption. 

‘The new models make Baidu more competitive since the company has been lagging behind in a reasoning model release’, one expert is reported as saying.

A reasoning model is a large language model that breaks down tasks into smaller pieces and considers multiple approaches before generating a response. It is designed to process complex problems in a similar way to humans.

Chinese startup DeepSeek upended the global AI race and transformed China’s ecosystem in January when it released its R1 reasoning model, which rivalled American competitors despite costing a fraction of the price.

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Nvidia sales grow 78% on AI demand – gives strong guidance

AI

Nvidia recently reported its Q4 results, showcasing impressive growth driven by strong demand for AI technology.

The company achieved a record quarterly revenue of $39.3 billion, marking a 78% increase from the previous year.

This growth was primarily fuelled by the success of Nvidia’s Blackwell AI supercomputers, which saw billions of dollars in sales in their first quarter.

The data centre segment, which constitutes the bulk of Nvidia’s revenue, also performed exceptionally well, generating $35.60 billion, up 16% from the previous quarter. Nvidia’s adjusted earnings per share for Q4 were $0.89, surpassing analysts’ expectations of $0.84.

Looking ahead, Nvidia provided strong guidance for Q1, forecasting revenue of $43 billion, which exceeds market expectations of $42.05 billion. The company also projected a gross margin of 70.60% for the upcoming quarter.

The first-quarter forecast indicates a year-over-year growth of approximately 65%, a deceleration from the 262% annual growth recorded in the same period the previous year.

Nvidia’s CEO, Jensen Huang reportedly highlighted the rapid advancements in AI technology and the company’s successful ramp-up of Blackwell AI supercomputers as key drivers of this growth.

Despite facing competition from Chinese AI firms like DeepSeek, Nvidia remains optimistic about the demand for its AI chips.

The company’s robust performance and positive outlook signal continued growth and innovation in the AI sector.

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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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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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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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S&P 500 touches new record high!

Stocks rose on Wednesday 22nd January 2024 with the S&P 500 reaching a new all-time high, as technology shares including Nvidia and Oracle surged on optimism surrounding artificial intelligence and President Donald Trump’s new term in office.

The S&P 500 advanced after hitting an intraday record of 6,100.81, exceeding the last milestone touched in December 2024 before pulling back. The index closed at 6,086.37, slightly below its all-time closing high.

S&P 500 one-month chart as of Wednesday 22nd January 2024

S&P 500 one-month chart as of Wednesday 22nd January 2024

The S&P’s move to an all-time high comes as investors witnessed a December 2024 pullback. Despite the index ending last year with a 23% gain, the S&P 500 shed 2.5% in December 2024, as traders fretted that the Federal Reserve wouldn’t be able to cut rates as much as anticipated.

That lacklustre performance bled into the first few trading sessions of 2025, but some data indicating modest easing on the inflation front and good earnings results have helped the market recover.

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Nvidia unveils new powerful mini-AI computer designed for developers

AI chip

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

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

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

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

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

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

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Warning issued for stock market bubble

AI bubble

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Trumps tariffs are on the way.

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Nvidia in correction territory amid Nasdaq highs

AI microchip

Nvidia recently entered correction territory, with its stock falling over 10% from its peak. This decline comes after a robust rally fueled by investor excitement around AI technology.

Despite Nvidia’s slip, the Nasdaq Composite continues to soar to new highs, driven by strong performances from other tech giants like Apple, Microsoft, and Alphabet.

The market’s mixed signals reflect a broader trend of sector rotation. Investors are taking profits from Nvidia after its impressive gains and reallocating their capital to other promising tech stocks. This strategy allows investors to lock in profits while still capitalising on the overall bullish sentiment in the tech sector.

The Nasdaq’s resilience, despite Nvidia’s downturn, highlights the strength and diversity of the technology sector. While Nvidia’s correction is a reminder of the volatility inherent in high-growth stocks, the broader market remains optimistic about the future of technology and innovation.

Market analysts suggest that Nvidia’s correction may be a healthy pause, providing an opportunity for the stock to consolidate before potentially resuming its upward trajectory. As the tech landscape continues to evolve, both Nvidia and its peers remain at the forefront of driving the next wave of digital transformation.

Investors should stay vigilant, monitoring both market trends and individual stock performance to navigate this dynamic environment effectively.

Nvidia is still holding its $3.2 trillion market cap valuation reached this year.

Nvidia one month chart as of 16th December 2024

Nvidia one month chart as of 16th December 2024
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China initiates investigation into Nvidia as the microchip battle rumbles on

Tech tug 'o' war

China has reportedly initiated a probe into Nvidia, the US computer chip manufacturer, over purported breaches of anti-monopoly regulations.

The company’s shares fell by over 3% following the announcement, signalling the latest development in the ongoing tech conflict between the U.S. and China over the profitable semiconductor market.

Over recent weeks, the U.S. imposed stricter restrictions on the sale of certain exports to Chinese firms, and the dispute over the industry is anticipated to persist as Donald Trump returns to the White House.

Established in 1993, the company initially gained recognition for producing computer chips designed to process graphics, especially for video games.

Today, the tech giant leads in developing chips that drive artificial intelligence (AI), boasting a market value exceeding $3 trillion.

Its increasing control over the market has drawn scrutiny from competition regulators in the U.S. and internationally. Recently, the firm confirmed that it had been approached by regulatory bodies globally, including those in the U.S., UK, European Union, South Korea, and China.

The business finds itself at the centre of escalating geopolitical and economic tensions between the U.S. and China, with both nations vying for supremacy in advanced chip technology.

Nvidia disclosed last month that sales to China, including Hong Kong, represented approximately 13% of this year’s revenue to date.

However, this figure has declined following Americas enhancement of restrictions on sophisticated technology exports to Chinese companies, citing national security concerns. Chinese state media reported that Beijing had initiated an investigation.

The inquiry alleges that Nvidia breached commitments established during its 2020 acquisition of Mellanox Technologies, a smaller entity.

This development follows the U.S.’s recent intensification of restrictions, affecting sales to 140 entities, including Chinese chip companies such as Piotech and SiCarrier, barring special authorisation.

In retaliation, China reportedly imposed stringent new regulations on the export of crucial minerals to the U.S., such as antimony, gallium, and germanium. Observers have highlighted the significance of these measures, noting they specifically target the U.S rather than imposing general restrictions.

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Nvidia beats on Q3 earnings but shares still slide

Next generation AI chips

Is Nvidia competing with itself now?

Nvidia third-quarter earnings beat expectations, but shares dropped 2.5% in extended trading.

The company’s revenue surged 94% year on year to $35.08 billion in the quarter ended 27th October 2024.

Net income climbed 109% from a year ago to $19.3 billion. Sales of Nvidia’s next-generation chip Blackwell, will be limited by supply, not demand, the company reportedly said.

Nvidia didn’t disappoint in terms of third-quarter revenue and net income, but it wasn’t enough for Wall Street. The forecast for the fourth quarter indicates a year-over-year growth of approximately 70%, marking a deceleration from the 265% growth experienced in the corresponding period the previous year.

Nvidia has emerged as the main beneficiary of the current artificial intelligence surge. Its shares have almost tripled in 2024, positioning it as the most valuable publicly traded company.

Numerous end-customers of Nvidia, including Microsoft, Oracle, and OpenAI, have begun receiving the company’s latest AI chip, known as Blackwell.

Nvidia one-year share price chart as of 20th November 2024

Nvidia one-year share price chart

The share price decline appears to be due to reserved guidance for Q4, with Nvidia’s management anticipating supply challenges for its next-generation Blackwell GPU. Investors were hoping for a more optimistic forecast, but the cautious outlook was disappointing.

It’s interesting to see how even strong earnings can sometimes lead to a drop in share prices if the future outlook doesn’t meet investor expectations.

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Why has Sumsung fallen behind in the AI boom?

A Cartoon AI chip

Samsung’s struggle in the AI race

Samsung, previously a powerhouse in the semiconductor industry, has encountered significant hurdles in the AI competition, leading to a notable decline in market value. The company’s faltering stance can be attributed to a variety of factors, such as strategic errors, fierce competition, and swift technological progress in the AI field.

Missteps

A key factor in Samsung’s downturn in the AI sector is its insufficient investment in high-bandwidth memory (HBM) technology, which is vital for AI applications due to its ability to expedite data processing and enhance performance.

Although Samsung was once at the forefront of memory technology, it did not leverage the increasing demand for HBM, thus ceding ground to competitors such as SK Hynix. SK Hynix made significant investments in HBM and forged a robust partnership with Nvidia, an influential entity in the AI domain.

Competition

The AI sector is fiercely competitive, featuring key companies such as Nvidia, Google, and Microsoft, which are making substantial advancements in AI technology. Nvidia has notably become a frontrunner with its GPUs, crucial for AI training. Samsung’s struggle to match these developments has resulted in a decline in both market share and revenue.

Rapid technological advancements

The swift advancement of technology in the AI sector has presented challenges for Samsung. The company’s emphasis on conventional memory technology did not fully prepare it for the transition to AI-centric applications. With the rise of AI applications such as OpenAI’s ChatGPT, the need for sophisticated memory solutions surged, highlighting Samsung’s insufficient investment in High-Bandwidth Memory (HBM) as a notable shortcoming.

Financial implications

Samsung’s difficulties in the AI sector have significantly affected its finances. The company has seen a reported loss of around $122 billion in market value since July 2024, marking the most substantial drop among global chipmakers. This decline is largely due to Samsung’s challenges in adapting to the evolving AI industry and competing with its rivals.

Prospects

Despite facing challenges, Samsung is actively striving to advance in the AI domain. The company has recently introduced its next-generation Bixby AI, which utilizes large language model technology, positioning it to better contend with competitors such as ChatGPT and Google Gemini.

Additionally, Samsung is cultivating its proprietary AI model, named Samsung Gauss, with the goal of augmenting device functionality and elevating the consumer experience.

Samsung’s lag in the AI sector is due to strategic errors, fierce competition, and swift technological progress. Despite considerable financial setbacks, the company is vigorously pursuing new AI initiatives and investments to recover its standing in the industry.

The path forward is fraught with challenges, yet Samsung’s commitment to innovation and adaptation could enable it to regain its status as a frontrunner in the AI domain.

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

AI power

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

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

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

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

Nvidia one-year share price chart

Nvidia one-year share price chart

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

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

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Nvidia hits new record high with new $3.4 trillion market cap

AI chips

Nvidia’s shares have reached a record peak as the company continues to benefit from the surging demand for its AI chips

Tech giants such as Microsoft, Meta, Google, and Amazon are acquiring Nvidia’s GPUs in large volumes to create extensive AI computing clusters.

Nvidia, with a market capitalisation of around $3.4 trillion, ranks as the second most valuable publicly traded company in the U.S., trailing behind Apple, which has a market cap of approximately $3.55 trillion.

And to think… just 6 weeks ago Nvidia hit the news with this headline: Nvidia $279 billion market cap wipeout — the biggest in U.S. history for just ONE company.

Oh, the volatility of tech stocks, don’t you just love it?

The company’s stock rose by 2.4% to close at $138.07, exceeding the previous high of $135.58 set on 18th June 2023. The shares have increased by nearly 180% this year and have experienced a more than ninefold increase since early 2023.

Regarded as the leading supplier in the AI revolution, Nvidia has gained significantly from the generative AI surge initiated by OpenAI’s ChatGPT release in November 2022. Nvidia’s GPUs are instrumental in developing and running sophisticated AI models, including those that operate ChatGPT and related platforms.

You can’t go far wrong when big players such as Microsoft, Meta, Google and Amazon are buying your stuff.

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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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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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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).