Information Technology

Murdoch’s UK property gambit has a price ceiling

2 Sep 2024

Australian property listings site REA Group is eyeing $6 bln UK peer Rightmove. The News Corp-backed suitor can use cash and higher-valued shares to pay a 30% premium. Beyond that, Rupert Murdoch’s outfit might struggle to combine a successful bid with keeping him in control.

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.

Carry trade chaos charts outlines of next selloff

28 Aug 2024

BIS researchers reckon cascading margin calls helped turn a local Japanese wobble into a global rout in early August, eventually wiping $1 trln off US tech stocks. It’s a similar story to a March 2020 slump and 2022’s UK bond collapse. Worse, the core drivers remain in place.

New EU antitrust tsar has better tools, harder job

27 Aug 2024

The European Union will soon have a new competition commissioner. Margrethe Vestager’s replacement has greater scope to go after Big Tech and Chinese subsidies. But he or she will also have to defend the single market from the assault of EU members’ national industrial policies.

Cyber meltdown points to downsides of efficiency

19 Jul 2024

A software update by $83 bln CrowdStrike grounded flights and disrupted financial markets. That’s possible because businesses work with a small number of providers, seeking lower costs. It supports rich tech valuations, but also heightens the risks of a catastrophic failure.

Meta stake may blur vision for Ray-Ban maker

18 Jul 2024

The $1.2 trln tech giant may buy 5% of eyewear group EssilorLuxottica. It’s a show of confidence in the companies’ smart glasses partnership. But the investment could complicate the Paris-listed firm’s governance and limit its options for working with rivals like Apple.

Why AI may fail to unlock the productivity puzzle

4 Jul 2024

The world’s richest economies are grappling with slowing growth in output. Many investors believe artificial intelligence can provide a much-needed boost. But four features of the technology suggest the benefits will be limited – and might even achieve the opposite outcome.

Data centre boom reveals AI hype’s physical limits

4 Jul 2024

The investor frenzy over artificial intelligence assumes there will be enough infrastructure to support apps like ChatGPT. But a $1 trln rush to build data centres faces planning restrictions and energy constraints. That will limit processing power and push up costs for users.

Nvidia customer’s valuation voodoo tests AI mania

2 Jul 2024

Germany’s $1.4 bln Northern Data has access to the US giant’s sought-after chips and makes money by renting them out. It may re-list parts of the business on the Nasdaq. If investors accept a mooted $10-16 bln price tag, it’s a sign the market has truly lost touch with reality.

Larry Fink makes racy salvo in private markets war

1 Jul 2024

BlackRock will buy UK buyout fund data provider Preqin for $3.2 bln, muscling aside rivals like S&P. It’s a rich price that will take years to pay off. While CEO Fink has a history of savvy deals, higher rates and acute competition in alternative assets both raise the stakes.

The economics of AI points to value of good data

28 Jun 2024

Investors chasing the artificial intelligence boom have pushed up the value of $3 trln chip supplier Nvidia and big cloud computing firms. Yet AI models have dubious benefits unless they are trained on reliable information. Moreover, high-value data makes them cheaper to develop.

Olympic Games can withstand Atos farce

26 Jun 2024

The French firm managing the Paris sporting event’s IT backbone is close to bankruptcy. It may find 800 mln euros of short-term financing from President Macron’s government and loans even after creditors ditched restructuring talks. But its future after the Games is less certain.

Revolut’s desired $40 bln price tag is a stretch

24 Jun 2024

The UK fintech group wants to sell $500 mln of shares at a valuation far above its last level. To get to $40 bln, investors need to assume it’s like payment giant Adyen. With a lower margin and discounts warranted in other areas, Revolut’s value looks more like $20 bln.

A warning from history about large-cap stock booms

21 Jun 2024

Five decades ago, shares in a handful of large companies like IBM and McDonald’s propelled the US stock market to new highs before collapsing. As investors pile into tech giants led by $3.3 trln Nvidia, the earlier period may be instructive for those who believe history rhymes.

Saudi expands strategic toolbox with Lenovo deal

29 May 2024

A PIF unit is the sole investor in the laptop maker’s $2 bln convertible bond. It pays no interest and can’t be swapped for stock until 2027. The real value to the kingdom is Lenovo’s pledge to build a new factory and regional HQ there to bolster Riyadh’s manufacturing goals.

AI will help treat Big Pharma’s looming illness

15 May 2024

Drug discovery is a long and costly process with success rates below 10%. Caps on prices and shorter patent periods in the US will also make life harder for the likes of Pfizer, AstraZeneca and rivals. Despite patchy results, betting on machines may be the best hope of a cure.

Elon Musk clearly sees AI hallucinations

10 May 2024

Even though the Tesla billionaire expects the cutting-edge tech to make all jobs obsolete someday, he says he hasn’t found practical use for it in some of his businesses. It’s a reality other CEOs will soon confront, too. Humans are still learning financial lessons the hard way.

Arm encounters the AI bubble’s ups and downs

9 May 2024

The $110 bln chip designer reported record revenue in the fourth quarter, but investors disliked a less punchy outlook. Big Tech’s AI-fuelled data centre land grab is powering Arm’s revenue and margins. But its toppy valuation means any perceived upset gets punished.

New ASML CEO’s job is harder than it might look

9 May 2024

The $360 bln Dutch firm is the sole maker of machines that produce the most advanced chips for Intel and TSMC. New boss Christophe Fouquet effectively runs a monopoly. But he still faces risks from staff retention, China-US spats, and as-yet-opaque risks to ASML’s domination.

France’s Atos entrée heads for fuzzy denouement

2 May 2024

The French state wants to buy the defence assets of the IT group, which is trying to restructure 4.9 bln euros of debt. It should then be easier to sell what’s left of Atos. But it’s unclear how or when Paris might marshal private buyers to recoup its outlay of up to 1 bln euros.