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Is the AI Boom Beginning to Decelerate? | Technology

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AI’s Abrupt Cooling Period

Welcome to TechScape.

As you cruise down the 280 highway in San Francisco, it may seem like AI is omnipresent. Billboards are filled with AI-related advertisements. “We’ve automated 2,412 BDRs.” “Is all that AI and ROI really there?” “Affordable on-demand GPU clusters.” It’s tough to decipher industry jargon while speeding by.

These billboards symbolize the tech sector’s mass shift toward AI. Executives are rapidly rebranding their companies as AI-focused. In California’s tech epicenter, just as every business turned high-tech in the 2010s, they are now redefining themselves as AI enterprises.

Yet beneath the dazzling promotions of AI capabilities, troubling signs are emerging. Prominent AI advocates like OpenAI’s Sam Altman caution that investors are misjudging AI’s potential returns. “Are we in a phase where investors are overly enthusiastic about AI?” Altman remarked during a private dinner with a journalist. “In my view, yes.“

Altman’s words align with OpenAI’s acknowledgment of struggles in launching its latest ChatGPT model, which he promised would be a substantial upgrade over the existing GPT 4.5 version.

Of course, Altman’s comments might be aimed at dissuading investors from financing rivals. But other indicators have emerged. A recent MIT study found that 95% of generative AI projects reported little to no revenue growth. Major tech stocks incorporating AI have suffered as well: Palantir’s shares dropped by 9%, Oracle’s by 5.8%, Nvidia’s by 3.5%, and Arm’s by over 5%. A slump in tech stock support from other sectors contributed to this downturn.

Cracks are starting to show beneath the dazzling AI promotion.

Moreover, Meta has reportedly invested billions in securing top AI talent but has announced an AI hiring freeze. Last week, AI executive Alexandr Wang stated on X that Meta is investing in its Superintelligence Labs, asserting, “The reports are grossly inaccurate.”

This abrupt cooling of AI interest comes just as many companies announced sizable investments in building AI capabilities while reporting less-than-stellar revenue. Altman noted during that same dinner that he aims to invest “trillions” in data center expansion in the near future, according to The Verge.

The current wave of trepidation surrounding AI might signal a necessary market correction rather than an outright bust of the AI hype bubble. Even Eric Schmidt, the former Google CEO, cautions against the notion that achieving artificial general intelligence (AGI) is imminent or that AI will eventually surpass human intelligence.

“The speed at which AGI can be reached is uncertain,” he stated in a column co-written with AI policy expert Selina Xu. “There is a worry that Silicon Valley is fixated on this goal.” Schmidt and Xu also emphasized the achievements AI has already delivered, expressing concern over Silicon Valley’s preoccupation with the horizon.

“There exists a significant divide between engineers who believe AGI is just around the corner and the general public, who often view AI through a skeptical lens and see it as an inconvenience in daily life,” they wrote.

It remains to be seen if the industry heeds these warnings. Investors are eagerly awaiting quarterly revenue reports for signs that each company’s multibillion-dollar investments are warranted while management aims to keep morale high. The ongoing promotion and allure of AI play a crucial role in alleviating investor anxiety, particularly amid a quarterly rise in projected spending across the board. For instance, Mark Zuckerberg recently suggested that those not engaging with AI tools could be at a cognitive disadvantage, indicating that companies like Meta and Google may continue integrating AI into their essential products, leveraging them to enhance training data and user populations.

The first major test of this AI reality check will occur on Wednesday, as chipmaker Nvidia, a key player in developing large language models, releases its latest revenue figures. While analysts are optimistic, the volatile stock week poses a challenge, making investors’ reactions to Nvidia’s earnings and spending updates a critical indicator of their future enthusiasm for the AI hype.

Have You Bonded with an AI?



 Photo: Morsa Images/Getty Images

Frequent CHATGPT users often develop a strong emotional connection with AI. When changes occur, they take notice. Many users were dismayed by the introduction of OpenAI’s latest update to the GPT-5 model. My colleague Dani Anjano reports:

“It felt truly unsettling; it was a challenging time,” remarked Swedish software developer Linn Vailt about the update. “It seemed like someone shifted all the furniture in your home.”

ChatGPT quickly adapted, promising updates to the personality features and allowing access to older models for subscribers, recognizing the significance of these features for users.

***
Have you formed a bond with AI? We want to hear from you. Please reach out at techscape.us@theguardian.com.

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The Debate on Facial Recognition

TikTok Believes Machines Outperform Humans in Content Moderation



 Photo: Romain Doucelin/SOPA Images/Rex/Shutterstock

TikTok is downsizing its UK trust and safety team. My colleague Lauren Almeida reported:

TikTok’s decision puts hundreds of roles from the UK content moderation team at risk, even amid stricter measures aimed at curbing harmful content online.

The popular video app has revealed that hundreds of jobs in its trust and safety teams could be impacted in the UK, along with South and Southeast Asia, as part of a global restructuring.

In September, the company let go of an entire team of 300 content moderators in the Netherlands, and in October, it announced the replacement of around 500 content moderation roles in Malaysia as part of its transition towards AI.

Recently, German TikTok employees protested against the layoffs within its trust and safety teams, which was the driving force behind this restructuring.

Read All Episodes: Despite new online safety regulations, hundreds of TikTok UK moderators face uncertainty in their roles.

These layoffs are part of a larger global initiative to moderate content using AI. According to TikTok, 85% of content removals on the platform are currently handled by automated systems. The parent company, ByteDance, appears eager to increase this percentage.

The company is not downplaying the significance of human oversight in tackling sensitive issues. It’s generating considerable revenue, with reports indicating a 38% increase in the UK and European markets. This strategy mirrors similar moves by other tech giants, like Meta, which have dismantled fact-checking initiatives and made significant cuts to their trust and safety teams.

TikTok has also conducted minor layoffs within its US Trust and Safety Team. The absence of mass terminations of content moderators raises questions: Is this move too risky amid unclear US policies towards the app? The White House’s recent TikTok account launch may signal a shift. Recall previous administrations’ attempts to limit the app’s presence in the US. The ban remains in limbo, upheld by a fragile executive order.

Broader Technology Landscape

Source: www.theguardian.com

George Osborne Claims the UK is Lagging Behind in the Cryptocurrency Boom

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According to former Prime Minister George Osborne, the UK is falling behind in the cryptocurrency boom and risks missing a second wave of interest.

Osborne, currently serving in an advisory capacity at Crypto Exchange Firm Coinbase, noted that the UK has already lost out on first-generation crypto, as the once-skeptical US embraced digital currency during Donald Trump’s administration.

“What I observe is unsettling. I’m not an early adopter. Financial Times Opinion Piece.


Osborne expressed concern that the UK is missing out on a new wave of crypto markets known as Stubcoin.

Unlike Bitcoin, which is known for its extreme price volatility, Stablecoins are digital currencies pegged to actual currencies like the dollar, designed to maintain a stable value. However, in 2022, a major Stablecoin, Terrausd, experienced a collapse.

“If the UK were the only financial center globally, we might have taken the time to evaluate how stub-loving coins develop, but that isn’t the case,” Osborne argues. “Singapore, Hong Kong, and Abu Dhabi have implemented comprehensive regulatory frameworks for cryptocurrency platforms.”

Osborne highlighted the recent passage of the American genius law, which establishes a stable regulatory system.

“The crypto revolution may have begun with aspirations to supplant the dollar as a global reserve currency, but it has instead consolidated its influence. The UK’s current stance guarantees that the pound doesn’t even play a secondary role,” Osborne asserts.

While US citizens can invest in Bitcoin Exchange-Traded Funds (bundles of assets traded like stocks), UK retail investors do not have this option.

Osborne, along with current Prime Minister Rachel Reeves, has criticized the UK for lacking commitment, highlighting that while there was a promise to “move forward” with Stubcoin last month, the Bank of England remains skeptical.

In a recent address, Bank of England Governor Andrew Bailey emphasized the need for a standard to determine whether Stubcoin meets the “uniformity of money” criteria and if Stablecoin can be exchanged on a 1:1 basis. It should be exchanged for a different form of money.

“This hesitation poses significant risks,” states Osborne, urging that it’s time for the UK to “catch up.”

Other crypto advocates from the era of the Conservative-led coalition government (2010-2015) include former Prime Minister Philip Hammond, who is now the chairman of the crypto firm Copper.

The UK Treasury has been approached for comment.

Source: www.theguardian.com

Study Suggests Major Challenges Ahead for Electric Car Boom in Five Years

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The electric vehicle (EV) revolution is new research published in Cell Reports Sustainability.

The accelerating demand for lithium, an essential element of EV batteries, is expected to outstrip domestic supply in major markets by the decade’s end.

This analysis highlights China, the US, and Europe, which collectively represent 80% of current EV sales. Researchers caution that without significant changes, these regions may not fulfill their lithium requirements from local sources by 2030, leading to an increased reliance on imports and a heightened risk of global shortages.

“Many previous studies have examined the lithium necessary for low-carbon transitions,” said Dr. Andre Manberger, a co-author of the new study, in an interview with BBC Science Focus.

“The issue is that often we compare projected lithium demand with current mining rates and existing reserves. However, there’s a gap in the existing literature concerning mining feasibility.”

Globally, EV sales surpassed 17 million in 2024, marking a 25% increase from the previous year.

The International Energy Agency forecasts that electric vehicles could represent 40% of all car sales by 2030. However, this expansion hinges on a stable supply of lithium carbonate equivalents (LCE).

The study indicates that by 2030, annual LCE demand will reach 1.3 million tonnes in China, 792,000 metric tonnes in Europe, and 692,000 in the US. Yet, even if all current and planned mining projects are considered, domestic supply remains inadequate: China could produce up to 1.1 million tonnes, the US 610,000, and Europe only 325,000.

This shortfall could intensify global competition for lithium, primarily sourced from Australia, Chile, and Argentina. In 2023, these three countries accounted for nearly 80% of the world’s lithium.

Almost 50% of the world’s lithium was mined in Australia in 2023.

China currently dominates the global lithium market, and an increase in its imports could negatively impact other buyers. Researchers found that should China’s imports rise by 77%, the US and European imports could drop by 84% and 78%, respectively.

“Commodity trading tends to have a lot of continuity and path dependence,” Månberger explains.

“This is due to the established supply chain, contracts, and overall inertia in the market.”

Nonetheless, there are reasons for optimism. Increasing lithium prices may drive investments in new mining initiatives and motivate manufacturers to create more efficient battery technologies. Alternatives like sodium-ion batteries could also contribute to a more diverse market.

In the long term, recycling could assume a more substantial role. As first-generation EVs reach the end of their lifespans in the 2030s, materials extracted from older batteries could mitigate the need for new lithium extraction.

“I’m very optimistic,” says Månberger. “Historically, while it’s often straightforward to forecast potential bottlenecks and supply risks, innovations tend to emerge unpredictably when these challenges arise.”

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About our experts

Andre Manberger is a senior lecturer in Environmental and Energy Systems Studies at Lund University, Sweden. He leads the Misttra Mineral Governance Research Program, initiated in 2024, focusing on the rising demand for critical raw materials and addressing conflicts of interest in the low-carbon transition.

Source: www.sciencefocus.com

The potential impact of Trump’s tariffs on the US battery boom

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President Trump’s recent tariffs may impact the use of grid batteries in the US energy sector. These batteries are crucial for storing excess wind and solar energy to enhance the electric grid’s reliability. Grid batteries have seen significant growth in states like Texas and Arizona over the past five years, being used to store solar power and reduce reliance on natural gas.

Despite their importance, the majority of US lithium-ion batteries are imported, with a large portion coming from China. With the new tariffs imposed by Trump, grid batteries will face significant taxes when imported from China, potentially hindering their deployment and impacting grid reliability.

Jason Burwen, vice president of policy and strategy at battery developer Gridstor, expressed concerns about the implications of these tariffs on the energy storage deployment, labeling it as detrimental to both business and grid reliability.

The grid battery capacity in the US was projected to reach a record 18,200 megawatts this year, according to the US Energy Information Agency. This growth in battery capacity, along with wind and solar power, was expected to contribute significantly to the grid expansion.

Grid batteries have been instrumental in addressing the intermittency of renewable energy sources like wind and solar power. States like California and Texas have seen an increase in battery installations to mitigate the risk of blackouts during peak demand periods.

Besides supporting renewable energy integration, grid batteries also help stabilize power flow, manage disruptions, and alleviate congestion on transmission lines. The decreasing cost of lithium-ion technology has fueled the installation of grid batteries, paralleling the EV battery trend.

Antoine Vagneur-Jones, head of trade and supply chain at Bloombergnef, highlighted the reliance on Chinese imports for batteries in the US clean energy sector. He warned that the tariffs imposed could have a more significant impact on batteries than other technologies.

The US has taken steps to develop a domestic battery supply chain, but the future remains uncertain due to potential policy changes. While investments have been made in new battery plants under the Biden administration, clean energy policies are facing challenges from Congressional President Trump and Republicans.

Vagneur-Jones noted the complexity of assessing the impact of tariffs on the energy mix, particularly in the competition between batteries and natural gas plants to support renewable energy fluctuations.

Utility companies may find it challenging to increase their reliance on gas due to global supply chain constraints and tariffs affecting the oil and gas industry. While tariffs may benefit fossil fuels, they could hinder clean energy progress, ultimately impacting energy solutions for all.

Source: www.nytimes.com

China’s renewable energy boom at risk of disruption from extreme weather

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The three Gorge dams in China are the main sources of hydroelectric power generation

costfoto/nurphoto/shutterstock

China’s vast electric grids cause more fuss than any other country with renewable energy, but the system is also vulnerable to electricity shortages caused by adverse weather conditions. The need to ensure reliable power supply could encourage Chinese governments to use more coal-fired power plants.

China’s energy systems are rapidly becoming cleaner, setting new records for wind power and solar energy generation almost every month. The country’s overall greenhouse gas emissions – the highest emissions in the world are expected to peak soon and begin to decline. Wind, solar and hydroelectric power currently account for about half of China’s generation capacity, and is expected to increase to almost 90% by 2060, when the country promised to reach “carbon neutrality.”

This increasingly reliance on renewables means that the country’s electricity system is becoming increasingly vulnerable to changes in weather. Intermittent winds and sun can be replenished by more stable hydropower produced by huge hydroelectric dams enriched in southern China. But what happens when the wind and sun slump coincides with drought?

Jinjiang Shen Darian Institute of Technology in China and his colleagues modeled how power generation on increasingly renewable grids corresponds to these “extreme weather” years. They estimated how future mixing of wind, solar and hydropower behaves under the most favourable weather conditions seen in the past.

They found that future grids are much more sensitive to weather changes than they are today. In a very unfavourable year, 2060, it could reduce the amount of generation capacity by 12% compared to today’s grid, leading to a power shortage. In 2030, in the most extreme cases, they found that this leads to over 400 hours of blackout times, a power shortage of nearly 4% of total energy demand. “That’s not a number that everyone can ignore.” Li Shuo At the Institute of Policy Studies in Asia Association, Washington, DC.

In addition to the overall lack of force, drought could specifically limit the amount of hydroelectric power available to smooth out irregular winds and solar generation. This could also lead to a shortage of electricity. “It is essential to equip a suitable proportion of stable power sources that are less susceptible to weather factors to avoid large-scale, large-scale power shortages,” the researchers wrote in their paper.

One way to help is to run excess electricity more efficiently across states. By expanding the transmission infrastructure, researchers found that it could eliminate the risk of power shortages on today’s grids and reduce half of the risk by 2060. Adding new energy storage in tens of millions of kilowatts, whether using batteries or other methods, would also be alleviated against hydroelectric droughts.

According to Li Shuo, any additional storage amounts China needs to be added to achieve carbon neutrality “becomes an astronomical number.”

These changes are difficult, but they add that many storage is viable given the enormous amount of batteries already produced in China. Lauri Myllyvirta At the Finland Energy and Clean Air Research Centre. He says the country is also building 190 gigawatts of pumped hydropower storage. This says that it can provide long-term energy storage by using surplus electricity to pump water over the dam and releasing it when more electricity is needed.

But so far, the electricity shortage has primarily spurred the Chinese government to build more coal-fired power plants. For example, in 2021 and 2022, hydroelectric droughts and heat waves increased enough electricity demand to cause serious power outages; Continuous expansion of coal. Record hydropower generation in 2023 resulted in record time for emissions.

Chinese President Xi Jinping said coal would peak this year, but he has entrenched political support for power sources. “If China is struggling with another round of these episodes, more coal-fired power plants shouldn’t be the answer,” says Li Shuo. “It’s difficult to abolish coal. China loves coal.”

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Source: www.newscientist.com

Meme coin boom following President Trump’s election waves the flag of pure gambling in cryptocurrency markets

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The attention economy can be likened to a phenomenon involving a social media-created celebrity named “hawk tua girl” Hayley Welch. She played a pivotal role in the launch of a cryptocurrency asset named Hawk Memecoin, which quickly gained enormous traction before facing backlash.

Initially valued at $490 million (£385 million) on December 4, the Hawk Memecoin has now exceeded its market capitalization and is valued at $17 million. Welch, a Tennessee native, rose to fame after responding to provocative interview questions but faced criticism for allegedly deceiving her social media followers.

Critics like cryptocurrency commentator Steven Findeisen, also known as Coffeezilla, labeled Hawk’s launch as a “rug pull,” which involves hyping a crypto project for short-term gains and then abandoning it. Despite the controversy, Hawk Memecoin is still being traded, with Welch stating that her team has not sold any tokens.

The rise of meme coins like Hawk reflects the growing trend within the cryptocurrency market, with meme coins collectively valued at $118 billion compared to $20 billion at the start of the year. These coins flood the market, with platforms issuing thousands of tokens daily.

Experts argue that meme coins lack fundamental value and are merely tied to digital trends. Memecoins blend the essence of memes and cryptocurrencies, leveraging social media attention to drive speculation and investment.

Meme coin trading often revolves around internet trends and influencer endorsements, creating a speculative environment with unpredictable outcomes. Participants acknowledge the speculative nature of memecoins, likening their trading to gambling but with the potential for significant returns.




Bitcoin’s value surpassed $100,000 for the first time a month after President Trump’s victory. Photo: Kevin Wurm/Reuters

Source: www.theguardian.com

The Big 7 tech companies are questioning the potential of the AI boom – What’s driving the doubt? | Artificial Intelligence (AI)

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It’s been a tough week for the Grand St. Seven, a group of technology stocks that have played a leading role in the U.S. stock market, buoyed by investor excitement about breakthroughs in artificial intelligence.

Last year, Microsoft, Amazon, Apple, chipmaker Nvidia, Google parent Alphabet, Facebook owner Meta and Elon Musk’s Tesla accounted for half of the S&P 500’s gains. But doubts about returns on AI investments, mixed quarterly earnings, investor attention shifting elsewhere and weak U.S. economic data have hurt the group over the past month.

Things came to a head this week when the shares of the seven companies entered a correction, with their combined share prices now down more than 10% from their peak on July 10.

Here we answer some questions about Seven and the AI boom.

Why did AI stocks fall?

First, there are concerns that the huge investments being made by Microsoft, Google and others in AI will pay off. These have been growing in recent months. Goldman Sachs analysts The memo was published In June, the Wall Street bank released a report titled “Gen AI: Too Much Spending, Too Little Reward?” which asked whether $1 trillion in investment in AI over the next few years “will ever pay off,” while an analysis by Sequoia Capital, an early investor in ChatGPT developer OpenAI, estimated that tech companies would need $600 billion in rewards to recoup their AI investments.

Gino said “The Magnificent Seven” is also hit by these concerns.

“There are clearly concerns about the return on the AI investments that they’re making,” he said, adding that big tech companies have “done a good job explaining” their AI strategies, at least in their most recent financial results.

Another factor at play is investor hope that the Federal Reserve, the U.S. central bank, may cut interest rates as soon as next month. The prospect of lower borrowing costs has boosted investors’ support for companies that could benefit, such as small businesses, banks and real estate companies. This is an example of “sector rotation,” in which investors move money between different parts of the stock market.

Concerns about the Big 7 are affecting the S&P 500, given that a small number of tech stocks make up much of the index’s value.

“Given the growing concentration of this group within U.S. stocks, this will have broader implications,” said Henry Allen, macro strategist at Deutsche Bank AG.Concerns about a weakening U.S. economy also hit global stock markets on Friday.

What happened to tech stocks this week?

As of Friday morning, the seven stocks were down 11.8% from last month’s record highs, but had been dipping in and out of correction territory — a drop of 10% or more from a recent high — in recent weeks amid growing doubts.

Quarterly earnings this week were mixed. Microsoft’s cloud-computing division, which plays a key role in helping companies train and run AI models, reported weaker-than-expected growth. Amazon, the other cloud-computing giant, also disappointed, as growth in its cloud business was offset by increased spending on AI-related infrastructure like data centers and chips.

But shares of Meta, the owner of advertising-dependent Facebook and Instagram, rose on Thursday as the company’s strong revenue growth offset promises of heavy investment in AI. Apple’s sales also beat expectations on Thursday.

“Expectations for the so-called ‘great seven’ group have perhaps become too high,” Dan Coatsworth, an analyst at investment platform AJ Bell, said in a note this week. “These companies’ success puts them out of reach in the eyes of investors, and any shortfall in greatness leaves them open to harsh criticism.”

A general perception that tech stocks may be overvalued is also playing a role: “Valuations have reached 20-year highs and they needed to come down and take a pause to digest some of the gains of the past 18 months,” says Angelo Gino, a technology analyst at CFRA Research.

The Financial Times reported on Friday that hedge fund Elliott Management said in a note to investors that AI is “overvalued” and that Nvidia, which has been a big beneficiary of the AI boom, is in a “bubble.”

Can we expect to see further advances in AI over the next 12 months?

Further breakthroughs are almost certain, which may reassure investors. The biggest players in the field have a clear roadmap, with the next generation of frontier models already underway to train, and new records are being set almost every month. Last week, Alphabet Inc.’s Google DeepMind announced that its system had set a new record at the International Mathematical Olympiad, a high school-level math competition. The announcement has observers wondering whether the company will be able to tackle long-unsolved problems in the near future.

The question for labs is whether these breakthroughs will generate enough revenue to cover the rapidly growing costs of achieving them: The cost of training cutting-edge AI has increased tenfold every year since the AI boom really began, raising questions about how even well-funded companies such as OpenAI, the Microsoft-backed startup behind ChatGPT, will cover those costs in the long run.

Is generative AI already benefiting the companies that use it?

In many companies, the most successful uses of generative AI (the term for AI tools that can create plausible text, voice, and images from simple prompts) have come from the bottom up: people who have effectively used tools like Microsoft’s Copilot or Anthropic’s Claude to figure out how to work more efficiently, or even eliminate time-consuming tasks from their day entirely. But at the enterprise level, clear success stories are few and far between. Whereas Nvidia got rich selling shovels in the gold rush, the best story from an AI user is Klarna, the buy now, pay later company, which announced in February that its OpenAI-powered assistant can: Resolved two-thirds of customer service requests In the first month.

Dario Maisto, a senior analyst at Forrester, said a lack of economically beneficial uses for generative AI is hindering investment.

“The challenge remains to translate this technology into real, tangible economic benefits,” he said.

Source: www.theguardian.com

Will the AI boom push Nvidia to a $4 trillion valuation, despite investor doubts?

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During Nvidia’s annual meeting, Jensen Huang did not address the recent stock price decline. Despite briefly holding the title of the world’s most valuable company on 18 June, Nvidia experienced a significant drop in market capitalization, losing around $550 billion from its peak value as tech investors hesitated to take profits and raised concerns about the sustainability of rapid growth.

Speaking optimistically, Huang, the CEO, discussed the company’s rise in valuation from $2 trillion to $3 trillion in just 30 days this year and set sights on reaching $4 trillion. He emphasized the potential of the upcoming Blackwell chips, hinting at revolutionary advancements in AI that could automate a significant portion of heavy industry, talking about a future where robotic factories produce robot-like products with a new wave of AI.

Huang concluded by boldly stating, “We have reinvented Nvidia, the computer industry, and maybe the world.” These words set the groundwork for the company’s $4 trillion valuation and the hype surrounding AI. Despite the initial setback, Nvidia’s shares have been steadily climbing back up, surpassing $3 trillion this week, reaffirming its position as a top stock to invest in amidst the AI boom.

“We have reinvented Nvidia, the computer industry and maybe the world,” Jensen Huang said. Photo: Qian Yingying/AP

Analysts like Alvin Nguyen from Forrester are optimistic about Nvidia’s potential to reach $4 trillion, suggesting that only a significant genAI market collapse could hinder its progress. However, the competition with tech giants like Microsoft and Apple remains fierce, as they currently hold the top market positions in AI.

Nguyen speculates that the launch of OpenAI’s GPT-5 and other new AI models could further boost Nvidia’s stock price, potentially reaching the $4 trillion mark by the end of 2025. However, technological advancements and shifts in consumer demand for AI products may impact Nvidia’s journey to the $4 trillion milestone.

As the discussions around AI continue to evolve, private AI research institutions like OpenAI and Anthropic are making significant contributions to the generative AI landscape. Companies like Google, Microsoft, and Nvidia are investing heavily in AI technologies, each aiming to make a mark in the rapidly expanding industry.

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Nvidia’s stronghold in providing GPUs for AI research and applications has positioned it as a key player in the industry. The demand for high-performance chips to power AI models like GPT-4 and Claude 3.5 has been instrumental in Nvidia’s success, with companies investing in their technology infrastructure to leverage the benefits of AI.

Nvidia CEO Jensen Huang said the company is “automating $50 trillion of heavy industry.” Photo: Justin Sullivan/Getty Images

As Nvidia aims for the next milestone of $4 trillion, challenges lie ahead in maintaining market dominance and profitability amid increasing competition. With market dynamics evolving and technological advancements shaping the industry, Nvidia’s path to $4 trillion valuation may face obstacles in the ever-changing landscape of AI.

The economic landscape is shifting, and the role of AI in driving the Fourth Industrial Revolution presents both opportunities and challenges. For Nvidia and other AI companies, navigating these complexities will be crucial in realizing the full potential of AI while adapting to the changing market conditions.

Source: www.theguardian.com

Nvidia emerges as the most valuable company in the world amidst AI boom

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Nvidia surpassed Microsoft on Tuesday to become the world’s most valuable company, driven by its essential role in the competition for artificial intelligence dominance.

With a 3.5% increase in its shares to $135.58, Nvidia now has a market capitalization of $3.34 trillion, following its recent surpassing of Apple to become the second-most valuable company.

Originally known for making video-game chips, Nvidia has evolved into a global powerhouse, benefiting from the industry’s shift towards artificial intelligence and becoming a go-to supplier for tech giants.

Outperforming industry giants like Google and Apple, Nvidia’s growth has spurred investment and market interest.

The company’s success has contributed to record highs on Wall Street, with the S&P 500 closing at 5,487.03 on Tuesday.

Nvidia’s shares have soared by approximately 180% this year, significantly outperforming Microsoft’s 19% increase, driven by high demand for its cutting-edge processors.

Tech leaders like Microsoft, Meta Platforms Inc., and Alphabet Inc. are in a race to bolster AI computing capabilities and dominate emerging technologies.

The surge in Nvidia’s stock price has pushed its market capitalization to new heights, adding over $103 billion on Tuesday alone.

By splitting its stock 10-for-1 on June 7, Nvidia aimed to make its highly-valued stock more accessible to retail investors.

Nvidia’s chips, utilized in crucial AI tools such as OpenAI’s ChatGPT chatbot, have driven its revenue and stock price up, arousing increased investor interest in Silicon Valley.

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As Nvidia solidifies its presence in the tech sector, CEO Jensen Huang, aged 61, has ascended to the ranks of the world’s wealthiest individuals, with a net worth exceeding $100 billion.

In less than two years, Nvidia’s market capitalization has jumped from $1 trillion to $3 trillion, marking a remarkable growth trajectory.

Reuters assisted with reporting.

Source: www.theguardian.com

The AI Bubble is Headed Towards Bust, Not Boom | John Norton

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“a

“Are we really in an AI bubble?” asked a reader of last month’s column about the apparently unstoppable rise of Nvidia. “And how do we know that?” That was a good question, so he asked the AI, which pointed out:
investmentpedia, written by someone who knows this stuff. Bubbles taught me that he goes through five stages.
Elisabeth Kubler-Ross said that people live with sadness.. For investment bubbles, the five stages are displacement, boom, euphoria, profit taking, and panic. So let’s see how this maps onto our previous experience with AI.

First, displacement. It’s easy. It was ChatGPT wotdunnit. When it appeared on November 30, 2022, the world just went crazy. Then everyone realized,
this That’s exactly what was being tweeted around AI! And people were fascinated by the discovery that they could talk to machines, and that machines could talk to them (well, write them) back in coherent sentences. it was done. It was like the moment people saw in the spring of 1993.
mosaicthe first proper web browser, and suddenly the pennies dropped.
this That was the purpose of the “Internet”. And Netscape held his initial public offering in August 1995, stock prices skyrocketed, and the first Internet bubble began to inflate.

Second stage: Boom. With the launch of ChatGPT, all the big tech companies have actually been playing with this AI technology for years, but were too scared to tell the world due to the inherent instability of the technology. It became clear that it couldn’t be done. But once the ChatGPT creator let his OpenAI let the cat out of the bag, fomo (fear of missing out) took over. And other companies have learned that Microsoft stole their advances by secretly investing in his OpenAI, and in doing so gained privileged access to his powerful GPT-4 large-scale multimodal model. This realization created a sense of alarm. Microsoft’s president, Satya Nadella, inadvertently revealed that his intention was to make Google “dance.” If that was indeed his plan, it worked.Google, which considered itself a leader in machine learning, released Bard chatbot
before you’re ready Then he retreated amidst the voices of ridicule.

But that excitement also stirs up the lower echelons of technology, and suddenly there’s a surge in startups being founded by entrepreneurs, entrepreneurs who see the big “foundation” model of tech companies as a platform on which new things can be built. I saw it.
Once you look at the web As such a basic foundation. These seedlings were funded in the old-fashioned way by venture capitalists, but some of them were funded by tech companies and companies like his Nvidia, which was producing hardware that could allegedly build the future of AI. received significant investment from both.

The third stage of the cycle, euphoria, is the stage we are in now. The winds of caution are shifting, and ostensibly rational companies are betting huge sums of money on AI. OpenAI boss Sam Altman began by saying,
Raise $7 trillion from Middle East oil states For the big push to create AGI (artificial general intelligence). He also partnered with Microsoft to
stargate supercomputer. All of this seems to be based on articles of faith. So to create a superintelligent machine, all you need is (a) infinitely more data and (b) infinitely more computing power. And the strange thing is that at the moment the world seems to be taking these fantasies at face value.

This begins the fourth stage of the cycle: profit taking. At this point, an astute operator notices that the process is becoming unstable and initiates an escape before the bubble bursts. No one is actually making money from AI yet, except the companies that build the hardware, so maybe the people who own stock in Nvidia, Apple, Amazon, Meta, Microsoft, Alphabet (née Google). Other than that, there are very few benefits to be gained. It turns out that this generative AI is great at spending money, but not great at generating investment returns.

Stage 5 – Panic – awaits. At some stage the bubble gets punctured and a rapid downward curve begins as people scramble to get out while they can. In the case of AI, it is unclear what triggers this process. Governments may eventually grow tired of out-of-control giant corporations draining investors’ money. Or will shareholders come to the same conclusion? Or finally realizing that AI technology is causing an environmental disaster. Data centers cannot be spread all over the earth.

But it will burst someday. Nothing grows exponentially forever. So, back to the first question. Are we in an AI bubble? Is the Pope a Catholic?

Source: www.theguardian.com

Is a Huge Technology Boom on the Horizon or Will it Fizzle Out? Experts Notice Positive Signs Despite Recent Layoffs in the Technology Sector

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WWill 2024 be boom or bust for big tech companies?
estimate
the industry has seen more than 7,500 layoffs since the start of the year, a spate of pink slips that many had hoped would stop after deep job cuts in 2023.

But as earnings season for major U.S. tech companies begins this week, some analysts are predicting strong numbers. This set of quarterly financial results may indicate that the industry has shed pandemic-era hiring overhangs and reorganized around cloud computing and AI, with cuts in sectors where the outlook is less positive. It has become necessary. Analysts passionate about AI say we are at the beginning of a tech bull market.



Since the beginning of this year, Google has laid off more than 1,000 employees in various departments. The job cuts are small compared to January last year, but Google CEO Sundar Pichai warned that more layoffs are coming. He told employees in an internal memo last week that Alphabet was “removing layers to simplify execution and increase speed in some areas.”

“We have ambitious goals and will invest in big priorities this year,” Pichai said in the memo.
Obtained from Verge.
“The reality is that we have to make difficult choices to create the capacity for this investment.” However, the reductions “are not the size of last year's cuts and will not impact every team.” he added.

Alphabet workers union
called dismissal “needless” in Wednesday's post on X (formerly Twitter).

Amazon also announced new layoffs affecting hundreds of employees in its Prime Video and Amazon MGM Studios divisions. This is part of a move away from excessive spending on entertainment and a refocus on core priorities such as online shopping logistics and new businesses such as AI.

At Meta, where more than 20,000 layoffs were made last year, departmental cuts appear to have slowed, but have not stopped. Instagram eliminated its management layer in mid-January, cutting 60 technical program managers. Last year, the company announced it was adding employees to support “priority areas” and changing its workforce to include more “high-cost technical roles.”

And that may be the true story of the technology industry in 2024. If Wedbush analyst Dan Ives is right, the layoffs are almost complete and earnings season will be a time for a “popcorn break.”

“Not only will there be companies that will benefit from the AI ​​revolution, but there will also be companies that will be at a disadvantage.Therefore, companies will need to reduce costs in non-revenue-generating areas and redouble their use of AI.” says.

“This is more of a redistribution than anything else because 95% of the cost savings are in the rearview mirror. But the strong will get stronger and the weak will be exposed.”

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But which hand is it? Apple may be looking to boost sales that have been lagging behind this month's launch of the Vision Pro headset and new iPhone models with generative AI capabilities. China's economic downturn has forced the company to cut the prices of many smartphones and hope for a recovery.

Last week, Bank of America securities analyst Wamsi Mohan expressed optimism about Apple's year ahead, suggesting that “promising AI capabilities” could lead to “an enhanced multi-year iPhone upgrade cycle.” did.

Ives said increased demand for enterprise software and cybersecurity, as well as a surge in demand related to major AI projects, will be key to earnings season and will continue to do so as the AI ​​revolution gains momentum.

Winners have already emerged. Last week, Microsoft surpassed Apple as the world's most valuable company for the first time since 2021, with a market capitalization of nearly $3 trillion. Microsoft cut 16,000 jobs from 232,000 employees last year, but Wedbush recently said that Microsoft's lead in AI will boost the company's revenue by $25 billion by 2025. I calculated that it was possible.

“The move to cloud and AI is having a huge impact on technology, including the reallocation of jobs and many changes to Apple and Google,” Ives said. “AI monetization has begun with his Nvidia and Microsoft, and we believe we are seeing the beginning of a new tech bull market starting in the summer of 2023.”

Source: www.theguardian.com