Artificial intelligence

Europe shares’ granola rush will become thin gruel

26 Feb 2024

The STOXX 600 Index has hit a record, but local funds are seeing outflows. As in the US a small bunch of companies – the so-called GRANOLAS group – are behind the good news. But in the Old Continent they’re more dependent on weak economic growth rather than the AI revolution.

Nvidia’s AI stronghold supports $3 trln valuation

21 Feb 2024

The chipmaker’s latest results support the frenzy that tripled its stock price in a year. Unlike other dubious beneficiaries of artificial intelligence hype, the $1.7 trln company’s grip on the market will be hard to wrest. It could soon be worth nearly twice as much again.

Cloudflare risks a lesson in giants’ AI advantage

16 Feb 2024

At 23 times expected sales, the $34 bln cybersecurity firm is one of the most richly valued software companies. Using its network to power AI holds promise, but enormous spending and the risk of being overshadowed by titans like Microsoft makes investors look overambitious.

Nvidia’s AI mini-bets set an example not to follow

15 Feb 2024

SoundHound AI shares surged 76% thanks to a $3.7 mln investment from the giant chipmaker. Not bad for a company likely to miss projections it set before going public in 2022. The colossal Nvidia will be fine even if SoundHound proves a dud. Coattail riders can’t say the same.

Arm’s weirdly high valuation has legs

13 Feb 2024

The $150 bln chip designer’s shares have doubled since last week’s positive outlook. The good news supports a higher valuation, but Arm’s current level is excessive. Yet with a small free float and majority owner SoftBank unlikely to sell any time soon, it may stay in the clouds.

Sam Altman inflates one-man AI bubble

9 Feb 2024

The OpenAI chief wants to boost chip capacity to speed artificial intelligence, possibly raising $7 trln, the Wall Street Journal said. That’s what chipmakers might spend on factories in two decades - and would surpass previous investment booms. It’s mostly a gauge of AI hype.

EU’s AI ambitions may fail on two fronts

8 Feb 2024

Brussels wants to set the global standard for artificial intelligence rules while helping Europe’s most promising startups to thrive. But its AI Act may be too fussy for others to copy, even as risks remain. And it will do little to help local champions take on US tech giants.

Capital Calls: Maersk, SoftBank, Adyen

8 Feb 2024

Concise views on global finance: The Danish shipping giant’s shares fell 14% after it missed expectations and warned of years of earnings pain; the Japanese investment firm posted its first net profit in five quarters; the Dutch payment company is slowly recovering.

Why tech giants will rake in AI’s big gains

6 Feb 2024

Amazon, Microsoft, Nvidia and Alphabet powered roughly 8% of 2023’s North American venture deals, largely in artificial intelligence. In this Exchange podcast, Altimeter Capital investor Apoorv Agrawal explains why these companies are reaping rewards from the latest tech craze.

TikTok and Universal will stage reunion tour soon

5 Feb 2024

The music giant’s decision to yank its catalog off the social-media app hurts singers and bands more than either business. And yet mixing tunes, both new and old, with a powerful algorithm is harmonious. There are plenty of financial reasons for the duo to get back together.

Apple’s AI absence may be its advantage

1 Feb 2024

Microsoft and Alphabet pepper quarterly results with the promise of artificial intelligence. The $2.9 trln Apple barely mentions it. The risk is a giant missed opportunity. But its gadgets may indirectly benefit, and without the ballooning capital expenditure at peers like Meta.

Big Tech and AI get too close for comfort

29 Jan 2024

Microsoft, Amazon, Nvidia and Alphabet alone contributed about a third of the $70 bln raised by data and artificial intelligence startups last year. Some of the investments could turn into revenue generators. Mounting regulatory and financial risks also might offset the benefits.

IBM boom suggests a lack of pattern recognition

25 Jan 2024

AI is thriving, says CEO Arvind Krishna. Investors responded by giving IBM shares their best day in 23 years. Yet the tech firm’s reported numbers are pedestrian. Until the benefits show up in top-line growth, IBM’s promise remains – in AI-speak – a hallucination.

Venture capital’s facelift shows modest scars

24 Jan 2024

Growth-company investors are paying higher prices, new data suggests, even if dealmaking overall is still muted. Interest is shifting to areas like AI and manufacturing. The result is a new look for the recovering startup ecosystem, albeit with a little less youthful vigor.

Capital Calls: SAP, Abrdn

24 Jan 2024

Concise views on global finance: The German software giant is cutting 7% of its workforce, sending shares to an all-time high; outflows at the British fund manager accelerated in the second half of 2023, exacerbating the company’s effort to turn itself around.

Elon Musk’s losing streak is heading for Tesla

17 Jan 2024

The billionaire wants 25% control at the $690 bln carmaker, after trimming his stake in part to finance an ill-advised deal for Twitter. Musk’s social-media frolic risked making him an absentee CEO; containing that threat means following bad governance with worse.

HPE’s Juniper deal magnifies power of competition

10 Jan 2024

Buying the networking-gear maker for $14 bln is designed to cash in on AI growth. Despite riding the internet boom, however, Juniper has generated less than half the return of the S&P 500 Index since its IPO 24 years ago. It’s a timely lesson on how robust rivalries erode profit.

AI startups’ key challenge is creativity, not cost

9 Jan 2024

Developing humanlike models is notoriously expensive. In this Exchange podcast, venture capital investor Konstantine Buhler of Sequoia Capital discusses how new breakthroughs are starting to lower costs and how that presents opportunities for challengers like OpenAI.

Mobileye’s bullwhip will come for Nvidia too

4 Jan 2024

The maker of chips for autonomous-car systems warned that customer stockpiling would hit first-quarter revenue. Gluts are inevitable across the industry, but this one sent the Intel-backed company’s shares down 25%. AI-semiconductor suppliers are bound to face similar surpluses.

New York Times arrives in new tech with AI lawsuit

28 Dec 2023

The 172-year-old newspaper publisher is suing OpenAI and its backer Microsoft for alleged unauthorized use of its articles to train chatbots. It could help compel tech companies to pay publishers for news content, shifting a modicum of power back to the battered media industry.