OpenAI’s $157 bln valuation requires hand waving 3 Oct 2024 Assuming new investors want a 20% return in the artificial intelligence company, it needs a $1 trln price tag in a decade. That’s conceivable, based on other tech giants’ history. Founder Sam Altman just needs to beat rivals, turn a profit, and update its business model.
Big Tech farms out AI power build, keeps the risk 3 Oct 2024 Microsoft’s 10.5 GW electricity deal with Brookfield typifies a trend towards mega supply pacts. Given the huge capex bill for data centres, third-party power makes sense. But if artificial intelligence flops, so-called hyperscalers may be left with a lot of electrons to flog.
Beware hallucinations in AI chipmaker IPO 2 Oct 2024 Cerebras, a wannabe Nvidia challenger, may seek a valuation as high as $8 bln, or some 29 times sales. ChatGPT hype and Arm’s success will help, but the company’s growth hinges on one customer, Abu Dhabi’s G42. Their broader circular relationship also warrants sober scrutiny.
AI’s next feat will be its descent from the cloud 2 Oct 2024 Tech giants hoping to spend $1 trln on data centres are struggling to secure power supplies and space. That bolsters the case for smaller artificial intelligence models that can run on devices, not a remote platform. Phone and laptop makers from Apple to Lenovo stand to benefit.
OpenAI pushes limits of tech pivoting 26 Sep 2024 As part of a fundraising at a $150 bln valuation, ChatGPT’s maker may weaken its humanity-protecting nonprofit board and instead focus on profit. Boss Sam Altman also would get a big stake, in a rare case of equity misaligning incentives. Unless, that is, AI doomsayers are wrong.
AI is a black hole of bits, chips and power 26 Sep 2024 OpenAI’s ChatGPT kicked off a race to develop ever-more-sophisticated artificial intelligence. In this Viewsroom podcast, Breakingvews columnists dissect the vast amount of data-crunching bots and power required to feed it, investments that could cost trillions of dollars.
Chip halt flags EU’s also-ran status – and Intel’s 20 Sep 2024 The troubled US chipmaker has paused a 30 bln euros semiconductor factory in Germany. Weak demand is hampering Europe’s hopes to close the semiconductor gap between itself and the US. But another leg of the problem is that Intel itself lags rivals like Nvidia and TSMC.
BlackRock’s $30 bln AI fund is Big Tech’s backstop 18 Sep 2024 The asset manager will team with Microsoft to invest in AI infrastructure. It’s a way to bolster tech firms’ capacity to keep up with the $1 trln needed for data centers alone, akin to governments tapping private funds to build roads. Thing is, that assumes AI is just as crucial.
OpenAI’s value on human destruction short circuits 16 Sep 2024 The cutting-edge artificial intelligence outfit may be worth $150 bln, a 74% jump from its last benchmark. Take AI boosters’ claims at face value and it’s easy to justify wildly more still. The problem: that would mean OpenAI is no mere company but a force shoving aside humanity.
ASML faces bigger problems than China 16 Sep 2024 Fears of US tech export curbs have pummelled the $320 bln Dutch firm’s shares. A longer-term worry is that the growth of AI leads to new technologies, and less need for ASML’s machines that make chips smaller and efficient. That, more than trade wars, may hurt its rich valuation.
Apple offering a peek at AI’s financial reality 11 Sep 2024 The iPhone 16 is due in stores soon, optimized for artificial-intelligence. It’s unclear if business models exist for the costly and hyped tech. Sales of the new devices may signal whether consumers will pay for it or if Silicon Valley has a solution seeking a problem.
Blackstone $16 bln AI deal borrows from SPAC boom 5 Sep 2024 A group led by Steve Schwarzman’s firm is paying a large sum to buy data centre operator AirTrunk from Macquarie. By tinkering with EBITDA, the buyer can present a low valuation multiple for a purchase in a hot sector. It's unnecessarily reminiscent of the blank-cheque froth.
OpenAI’s mooted $100 bln value is relatively sober 29 Aug 2024 The ChatGPT maker may be worth just 16% more in its next share sale than in February’s funding round, according to reports. That looks modest, given AI darling Nvidia’s shares have nearly doubled. Senior departures and competition from rivals like Elon Musk justify a modest bump.
Apple loses China price battle, but will win war 12 Aug 2024 Big discounts by Huawei and other local rivals have eaten into the iPhone maker’s market share. Boss Tim Cook is fighting back, to preserve nearly a fifth of revenue. In a region that often beguiles tech outfits, the $3 trln company’s resilience is impressive – and sustainable.
Taiwan is punching well above its market weight 12 Aug 2024 Share sales and convertible deals are surging on the island where TSMC’s $748 bln market value exceeds GDP thanks to an AI-led rally. The market could surpass China’s weighting in global indices as profits trump geopolitics. For bankers, it's a counterintuitive bright spot.
Tech stocks await AI’s real reckoning 7 Aug 2024 Some $3 trln has been wiped off US technology firms’ value, hammering artificial intelligence champions like Alphabet and Nvidia. It may be more a case of feelings and flows than shifting assumptions about the value of silicon smarts. If that changes, the true pain begins.
Microsoft gives peek into tech-stock takedown 31 Jul 2024 The software giant’s earnings weren’t bad – although its cloud business slowed slightly. But as interest rate expectations shift downwards, investors are looking for reasons to exit highly-valued stocks - especially big tech firms. Even a minor miss becomes a reason to sell.
Meta AI strategy: give something to get something 25 Jul 2024 As tech firms invest hand over fist in artificial intelligence, the Facebook owner’s plan to let developers tweak and freely use its models sounds like a giveaway. CEO Mark Zuckerberg hopes Meta will be long-term richer for it. Google’s Android success suggests he might be right.
Victorian rail mania has lessons for AI investors 12 Jul 2024 Excitement over artificial intelligence has spurred a wave of investment. In the mid-1840s, British speculators similarly went wild for another capital-intensive technology: railways. The historic boom and subsequent bust provide a salutary warning for today’s hyped-up markets.
Microsoft opens windows onto AI antitrust paradox 10 Jul 2024 The software behemoth is ceding its non-voting board seat at OpenAI, the ChatGPT maker essential to its artificial intelligence plans. Building a silicon mind may take $1 trln, however, making deep pockets as powerful as governance rights. A bigger, messier crackdown looms.