As young individuals enter the job market, they are encountering what some are calling an “employment apocalypse.” This is due to business leaders opting to invest in artificial intelligence (AI) over new hires, as revealed in a survey of global executives.
A report by the British Standards Institute (BSI) indicated that rather than nurturing junior employees, employers are focusing on AI automation to bridge skill gaps and enable layoffs.
In a study involving over 850 business leaders from seven countries—namely the UK, US, France, Germany, Australia, China, and Japan—41% of respondents reported that AI has facilitated a reduction in their workforce.
Nearly a third (31%) stated their organizations are considering AI solutions before hiring new talent, with two-fifths planning to do so in the next five years.
Highlighting the difficulties faced by Gen Z workers (born from 1997 to 2012) in a cooling labor market, a quarter of executives believe that AI could perform all or most tasks currently handled by entry-level staff.
Susan Taylor-Martin, CEO of BSI, commented: “AI offers significant opportunities for companies worldwide. However, as firms strive for enhanced productivity and efficiency, we must remember that humans ultimately drive progress.
“Our findings show that balancing the benefits of AI with supporting the workforce is a key challenge of this era. Alongside our AI investments, long-term thinking and workforce development are crucial for sustainable and productive employment.”
Additionally, 39% of leaders reported that entry-level roles have already been diminished or eliminated due to the efficiencies gained from AI in tasks like research and administration.
More than half of the respondents expressed relief that they commenced their careers before AI became prevalent, yet 53% felt that the advantages of AI in their organizations outweigh the disruptions to the workforce.
UK businesses are rapidly embracing AI, with 76% of leaders anticipating that new tools will yield tangible benefits within the next year.
Executives noted that the primary motivations behind AI investments are to enhance productivity and efficiency, cut costs, and address skills gaps.
An analysis from BSI of companies’ annual reports revealed that the term ‘automation’ appeared almost seven times more frequently than ‘upskilling’ or ‘retraining.’
Additionally, a recent poll from the Trades Union Congress found that half of British adults are apprehensive about AI’s impact on their jobs, fearing that AI may displace them.
Recent months have seen the UK’s job market cool, with wage growth decelerating and the unemployment rate rising to 4.7%, the highest in four years. Nevertheless, most economists attribute this not to a surge in AI investments.
Conversely, there are worries that the inflated valuations of AI companies could spark a stock market bubble, potentially leading to a market crash.
tIt may conjure images of battery production lines and the extensive “gigafactory” projects of Elon Musk and Tesla across the globe, or thoughts of batteries powering everything from electric toothbrushes to smartphones and vehicles. However, at Invinity Energy Systems’ modest factory in Basgate, near Edinburgh, employees are nurturing the hope that Britain will also contribute to the battery revolution.
These batteries, which are based on vanadium
tIt may conjure thoughts of battery production lines and the expansive “gigafactory” projects of Elon Musk and Tesla worldwide, or images of batteries powering devices from electric toothbrushes to smartphones and cars. However, at Invinity Energy Systems’ modest factory in Basgate, near Edinburgh, employees are fostering hope that Britain will also play a pivotal role in the battery revolution.
These batteries, utilizing vanadium ions, can be housed within a 6-meter (20-foot), 25-ton shipping container. While they may not be used in vehicles, manufacturers aspire for this technology to find its place in the global storage rush, propelling a transition to net-zero carbon grids.
Renewable electricity represents the future of a cleaner and more economical energy system compared to fossil fuels. Its primary challenge lies in the fact that renewable energy generation is contingent on weather conditions—sunshine and wind may not be available when energy demand peaks. Battery storage allows for the shift of energy production, enabling it to be saved for later use, which is essential for a well-functioning electric grid.
“What has suddenly become apparent is that people have recognized the necessity of energy storage to integrate more renewable energy into the grid,” stated Jonathan Mullen, CEO of Invinity, at the factory where a series of batteries are stacked and shipped.
For a long time, experts have explored various methods for storing renewable electricity, but the issue of grid reliability gained political attention in April when Spain and Portugal experienced the largest blackouts in Europe in two decades. While some rushed to criticize renewable energy, a Spanish government report clarified that it was not the cause. Nonetheless, battery storage assists grids worldwide in avoiding similar complications as those seen in the Iberian Peninsula.
Power blackouts in Spain and Portugal in April highlighted the issues of energy security. Photo: Fermín Rodríguez/Nurphoto/Rex/Shutterstock
Much of the attention in battery research has focused on maximizing energy storage in the smallest and lightest containers suitable for electric vehicles. This development was crucial for the transition away from carbon-intensive gasoline and diesel, which are significant contributors to global warming. It also led to substantial reductions in the costs associated with lithium-ion batteries.
As with many aspects of the shift from fossil fuels to electric technologies, China is driving demand at an incredible scale. According to data from Benchmark Mineral Intelligence, China has installed batteries with a capacity of 215 gigawatt hours (GWh).
China’s battery installations are expected to nearly quadruple by the end of 2027 as new projects are completed. For instance, the state-owned China Energy Engineering Corporation recently bid on a 25GWh battery project utilizing lithium iron phosphate technology, typically used in more affordable vehicles.
Iola Hughes, research director at a Benchmark subsidiary, Rho Motion, stated that declining prices and increased adoption of renewable energy are propelling the rise in demand. By 2027, total global battery storage installations could increase fivefold, Hughes noted, adding, “This figure could rise even further as technological advancements and reduced costs enable developers to construct battery energy storage systems at an unprecedented pace.”
The majority of this growth (95% of current figures) will involve projects utilizing lithium-ion batteries, including a site in Aberdeenshire managed by UK-based Zenobē Energy, which claims to have “the largest battery in Europe.”
Energy storage companies harnessing various technologies must navigate a challenging landscape to secure early-stage funding while proving that their technologies are economically viable. Invinity’s flow batteries use vanadium, while U.S.-based rival EOS Energy employs zinc. However, flow batteries often excel in applications requiring storage durations of over 6-8 hours, where lithium batteries typically fall short.
Cara King, an R&D scientist at Invinity Energy Systems, holds a vial of vanadium electrolyte in various states of charge. Photo: Murdo Macleod/The Guardian
Flow batteries leverage the unique properties of certain metals that can stably exist with varying electron counts. One transport unit contains two tanks of vanadium ions, each with different electron counts—one is “Royal Purple” and the other “IRN-Bru Red.” The system pumps the vanadium solution through a membrane stack that allows protons to pass, while electrons travel around the circuit to provide power. If electrons are driven in the opposite direction by solar panels or wind turbines, the process reverses, charging the battery, which can support a charge of up to 300 kilowatts.
A significant benefit of flow batteries is their relative ease of manufacturing compared to lithium-ion counterparts. Invinity managed to assemble a battery stack with just 90 employees, primarily sourced from Scottish parts.
Throughout the project’s lifespan, Mullen has maintained that “on a cost-per-cycle basis, it offers more value than lithium.” While the upfront costs are higher than those for lithium batteries—Invinity estimates around £100,000 per container—the longer lifespan without capacity loss and the absence of flammability means no costly fire safety equipment is necessary. The shipping container is already deployed next to Vibrant Motivation in Bristol, Oxford Auto Chargers, casinos in California, and solar parks in South Australia.
“We can commission the entire site within a few days,” Mullen remarked.
Invinity is valued at just over £90 million in the London AIM junior stock market and aspires for the UK to spearhead the flow battery niche.
UK manufacturing could be favorably considered in government contests for support under a “cap and floor” scheme that ensures electricity prices remain within a specified range. Should they succeed, the company anticipates a substantial increase in production from its current rate of five containers per week. Mullen envisions the possibility of employing up to 1,000 workers if the company flourishes.
“The potential for growth is immense,” Mullen stated. “Have we moved past the question of whether technology can scale effectively?”
The entrepreneur expressed that she felt “humiliated” after departing from London Tech Week, the annual corporate gathering, while accompanying her baby daughter.
Davina Schonle was barred from entering the event on Monday after a three-hour journey of eight months and had to forgo a meeting with potential high-tech startup suppliers.
Schonle recounted to TheBusinessDesk.com that upon arriving at the entrance with her daughter in the stroller, she was asked if she was a VIP. She was informed that she could not enter with the baby. After attempting to retrieve her badge, she was redirected to an Informa State organizer who stated they lacked insurance.
This incident incited outrage and cast a pall over the event. Prime Minister Kiel Starmer addressed the gathering on the same day Schonle was denied entry. The tech industry is striving to distance itself from accusations of sexism and the perception that women are seen as second-class.
Schonle mentioned that this experience highlighted her worst fears regarding being a woman in this sector. She is the founder and CEO of HumanVantage AI, a startup leveraging AI technology to create conversational role-play corporate training platforms.
In a widely shared LinkedIn Post, Schonle remarked: “This moment was inconvenient, serving as a stark reminder that within the tech industry, we still have progress to make regarding inclusion beyond mere buzzwords.”
“Parents are integral to this ecosystem. Caregivers are innovators, founders, investors, and leaders. If a significant event like London Tech Week cannot accommodate them, what message does that send about who truly belongs in technology?”
London Tech Week, organized by Global Events Company Informa, addressed the situation in a statement: “We are aware that one of the participants was not allowed entry with children. As a business event, the venue is not equipped to accommodate specific needs, facilities, and safety measures for those under the age of 16.”
“We are appreciative of everyone’s support in the tech community during London Tech Week. We have reached out to the involved parties to discuss the incident and will use this experience to improve our approach at LTW in the future.”
Julia Hobbsbohm, a businesswoman and commentator on entrepreneurship and work-life balance, reacted to Schonle’s LinkedIn post, remarking: London Tech Week “The worst kind of tin ears.”
On Monday, the Energy Bureau announced it is set to revoke energy and water conservation standards impacting a range of appliances and gas devices, totaling 47 regulations. In this context “It was raising costs for Americans and diminishing quality of life.”
The initiative follows a Presidential Order in which President Trump directed the energy sector to “remove constraints on water pressure and efficiency regulations that make household products more costly and effective.”
However, energy efficiency specialists and climate advocates argue that this move will increase operational costs for household appliances like dehumidifiers and portable air conditioners, as well as industrial machines like air compressors.
“If this consumer assault is successful, President Trump will significantly raise expenses for families when manufacturers flood the market with energy and water-draining products,” stated Andrew Delaski, executive director of the Appliance Standards Awareness Project, a consortium of environmental, consumer groups, utilities, and governmental agencies.
Delaski further asserted that this initiative breaches anti-backsliding provisions established decades ago.
“It’s evidently illegal, so please exercise caution,” he remarked in a statement.
Similar to many nations, the US has been implementing standards for years that regulate the energy and water usage of appliances, including light bulbs, dishwashers, water heaters, and washing machines.
According to government scientists’ reports, the efficiency standards saved the average American household roughly $576 on water and gas bills in 2024, leading to a 6.5% reduction in national energy consumption and a 12% decrease in public water use. These measures have prevented the total energy and water usage by American households from rising faster than population growth.
Nonetheless, the Trump administration has characterized these standards as an example of government overreach. Trump frequently criticized weak water pressure from shower heads or toilets that do not flush effectively, denouncing the efficiency standards associated with these devices. Conservative factions, too, argue that efficiency standards compromise appliance performance, especially for dishwashers.
The list of energy sector appliance regulations targets various devices, including air cleaners, battery chargers, compressors, cooking tops, dehumidifiers, external power supplies, microwaves, dishwashers, and faucets.
The department indicated that the rescinded standards would “eliminate over 125,000 words from federal regulations.” However, rolling back the standards necessitates a new rule-making process that may take several months. Additionally, these rollbacks could encounter legal opposition.
The department has not yet responded to requests for comments.
Simultaneously, the Environmental Protection Agency is planning to eliminate the Energy Star program, a universal energy efficiency certification for appliances like dishwashers, refrigerators, and dryers.
Historically, manufacturers have backed government efficiency standards, but they are now attempting to leverage Trump’s inclination to deregulate.
The Association of Home Appliance Manufacturers, representing 150 manufacturers responsible for 95% of household appliances sold in the US, is still assessing Monday’s announcement.
However, Jill A. Notini, a public relations officer for the association, highlighted in a statement that the standards “have facilitated decades of successful advancements in appliance efficiency.” The association further noted, “With most appliances operating at near peak efficiency, substantial savings in some products are unlikely.”
In addition to rolling back efficiency standards, the energy sector intends to abolish several clean energy and climate change initiatives. This includes rescinding reporting requirements for voluntary programs that allow businesses to report greenhouse gas emissions and terminating programs that provide compensation for electricity generated from renewable sources.
The energy sector is also discarding what it terms “unscientific” diversity, equity, and inclusion prerequisites for grant recipients, proposing to eliminate regulations that prevent subsidies from discriminating based on gender, race, or age.
Certain proposals appear to be unrelated to the department’s core focus. One suggested repeal involves “termination requirements for a single sex member to compete on sports teams of the opposite sex.”
hWelcome to Ello and TechScape! I’m your host, Blake Montgomery. In this week’s Tech News: Trump’s tariffs are impacting a tech firm that focuses on physical goods more than those solely digital. We dive into two stories highlighting the dark implications of AI on the labor market. Additionally, Meta has launched a standalone AI application, boasting an impressive claim of 1 billion users due to its rapid adoption. OpenAI has backed down from a controversial version of ChatGPT, and we revisit the early terminology surrounding Elon Musk.
High-tech revenue: bits rake it up, atoms face uncertainty
Four out of seven major tech giants reported their quarterly earnings last week. Meta, Microsoft, Apple, and Amazon exceeded Wall Street projections, yet their outlooks revealed a clear divide between those moving physical products and those thriving in the digital realm. Atomic vs Bits.
Meta and Microsoft’s earnings skyrocketed, surpassing expectations and offering optimistic guidance for the next quarter.
In contrast, uncertainty loomed over Apple and Amazon. While both companies outperformed Wall Street expectations, recent news emphasized the adverse effects of Trump’s tariffs. At the end of Apple’s earnings call, CEO Tim Cook revealed that import tariffs would cost iPhone manufacturers $900 million in the upcoming quarter. Although Apple managed to adapt, planning to ship around $2 billion worth of iPhones from India to the US before tariffs took full effect, it’s still significant.
Last week, Amazon faced backlash from the Trump administration after it was reported that Punchbowl News might begin detailing tariff-related costs for individual items, much like discount retailers Shein and Temu. White House Press Secretary Karoline Leavitt condemned this move as “hostile and political.” Although Amazon considered the idea, it quickly decided not to pursue it and downplayed its competition with Shein and Temu, dubbed Amazon Haul. Following the controversy, the ecommerce titan announced it would cease the initiative.
Is AI taking jobs?
Photo: Science Photo Library/Aramie
Artificial intelligence (AI) is set to greatly disrupt the job market. Reports detail the direct impacts on jobs, leaving many employees in the lurch.
Technology skeptic Brian Merchant discusses Duolingo’s recent shift to an “AI-First” model, phasing out contractors for tasks that AI can manage. His piece, titled Machine Newsletter Blood, features a former Duolingo contractor who expressed disbelief at the rapid exchange for AI. Similarly, artists and illustrators reported losing opportunities as clients opted for AI solutions instead.
However, on a larger scale, immediate disruption following the launch of ChatGPT isn’t anticipated. Research indicates AI’s broader market impact has been slower than predicted. A study from the University of Chicago and the University of Copenhagen published in a Working Paper reveals that in Denmark, “AI chatbots have not significantly affected job revenue or recorded hours.” Rather than completely displacing jobs, AI is expected to enhance productivity, streamlining tasks and fostering new ideas. The study analyzed two comprehensive recruitment surveys encompassing 25,000 workers and 7,000 workplaces across 11 occupations considered vulnerable to AI.
Special thanks to Register for their insights in this paper.
Mark Zuckerberg will be speaking at Llamacon 2025, an AI developer conference in Menlo Park, California, on April 29th. Photo: Jeff Chiu/AP
Personally, I’ve never engaged Meta’s AI chatbots intentionally. I accidentally tapped a discreet blue circle in Instagram’s search bar during the spring of 2024, triggering a chat with AI agents. The chatbot enthusiastically prompted me to “imagine paradise” instead of using my recent search queries. Meta has integrated its AI into frequent sections of its core app.
The strategic placement of the Meta AI search bar and its integration into existing apps is evident. For example, you can easily tap the Meta AI button at the bottom right corner of the iPhone’s WhatsApp app. Meta has optimized the search functionalities across platforms like Instagram, Facebook, and WhatsApp, thereby promoting its rapidly expanding AI user base through prominently featured options. Recently, Meta AI stated it is “on track to become the world’s most utilized AI assistant,” with nearly 1 billion users reportedly engaged with the platform.
Last week, the company unveiled a standalone AI app, raising questions about user engagement without a physical interaction. For now, executives anticipate most users will continue to encounter AI through the conspicuous blue circles within popular social applications. Barge.
Meta isn’t the only player; Google also boasts a significant user base for its AI features, claiming over 1 billion users for AI-driven searches (recently reported as 1.5 billion). While it’s challenging to determine user engagement levels accurately, it’s evident that companies glean benefits from any interactions with their AI tools, making it nearly impossible for organizations like Google or Meta to be compelled to stop using their data for AI training. In the US, users can only request that Meta remove their data or abstain from utilizing it to aid in AI training, alongside chatting with Meta AI, which also includes posts and profile details.
The reality of AI seems grim, as it appears designed to lead users into its ecosystem early on. Within the US, where minimal privacy regulations exist, users often feel as if they are continuously training AI systems without their consent.
Sam Altman’s Rollback and Debut
“We missed Mark”… Sam Altman. Composite: Carlos Barría / Reuters / Guardian Design
Last week, OpenAI confirmed it would retract the latest ChatGPT update, with Sam Altman stating, “I missed the mark with last week’s GPT-4o update.” He described the prior updates as overly sycophantic and bothersome.
According to a venture capital firm, this update marks an unusual error for the creators of ChatGPT. Andreessen Horowitz is among investors in OpenAI.
The day after announcing the rollback, Altman shared news of the launch of his new startup, World, which specializes in ORBs that scan users’ IRIs for verification purposes. He proudly tweeted, “We did that!” alongside an image of himself in front of an American flag, creatively modified with the logo of another company.
Doge Days
“No modern precedent”… Elon Musk’s extraordinary role in the government. Composite: Guardian/Getty Images
The wealthiest individual in the world and a prominent figure in technology held a position in the White House for roughly 100 days. What impact did he have?
My colleague Nick Robbins notes:
“Musk left little of the federal government intact. In just a few months, he dismantled decades of government agencies and public services, which amassed considerable political power.”
“Musk’s influence within the Trump administration is unparalleled. The world’s richest person took on a role that allowed him to undermine the very institutions overseeing his enterprises. His attempts to radically reshape government branches significantly increased his influence, incorporating allies into key positions across federal agencies and gaining access to personal data from millions of Americans while laying off tens of thousands of workers. His leadership at SpaceX positioned the company to capitalize on billions in government contracts, leaving chaos in his wake.”
Discover more about Doge’s initial 100 days.
If you only read two more Elon Musk stories this week, check these out
OpenAI has reversed its decision regarding the transition to a for-profit model, with the nonprofit sector continuing to oversee the operations that produce ChatGPT and other AI products. Initially, the company sought greater autonomy for its for-profit entities.
“We listened to feedback from civic leaders and consulted with the California Attorney General and the Delaware office before the nonprofit opted to retain control,” said CEO Sam Altman in a letter to employees. Bret Taylor, chair of Altman and OpenAI’s nonprofit board, affirmed that the decision was made to ensure the nonprofit maintains oversight of OpenAI.
According to a company press release, the segment of OpenAI’s for-profit organization led by Altman, which secured billions in funding, will aim for profit but will transition to a public benefit corporation. This corporate framework is mission-driven, requiring a balance between shareholder profit and public benefit. The nonprofit will continue to hold significant control as a major shareholder of these public benefit corporations.
Initially founded by Altman and Tesla CEO Elon Musk, OpenAI started as a nonprofit research organization with the goal of safely developing artificial general intelligence (AGI) for the benefit of humanity. Nearly a decade later, OpenAI boasts a valuation of $300 million and an impressive 400 million weekly users of its flagship product, ChatGPT.
OpenAI has encountered several challenges in restructuring its governance. A significant hurdle has been a lawsuit from Musk, who criticized the company and Altman for betraying the ethical principles that motivated his initial investment. Following his departure, Musk established a rival AI firm called Xai, which recently acquired Twitter, now known as X. OpenAI ultimately prevailed in its conflict with Musk, who has struggled in the wake of OpenAI’s growing success.
Meta’s efforts to incorporate artificial intelligence systems in the UK public sector have advanced with the tech giant granting funding to develop technology to reduce waiting times in NHS A&E.
In the midst of competing initiatives by Silicon Valley tech companies to collaborate with national and local governments, Meta hosted Europe’s first ‘hackathon’ where over 200 programmers were challenged to use its Llama AI in UK public services. They were tasked with finding ways to implement the system. A Meta executive stated that they were ‘focused on Labor’s priorities’.
This development followed reports of another US tech company, Palantir, lobbying government officials, including the Department of Justice and Prime Minister Rachel Reeves. Additionally, Microsoft recently sealed a five-year agreement with Whitehall departments to provide AI Copilot technology to civil servants.
Meta’s hackathon featured Nick Clegg, former deputy prime minister and current president of international affairs at Meta in California. Ferial Clarke, the UK’s AI minister, emphasized the potential for governments to adopt AI, like Meta’s open-source model, to bolster their critical missions.
When questioned about the significance of Meta offering free technology, Clegg stated, “It will indirectly benefit us in the long run by fostering an ecosystem of Llama-based innovation, making it more likely for us to integrate innovation back into our products.” He also brushed off concerns regarding AI risks in public services.
Discussing potential regulation, Mr. Clark assured that Labor would address the substantial risks AI poses while supporting innovation and ensuring workers are not overwhelmed by regulations.
Peter Kyle, the secretary of state for science and technology, acknowledged that the UK government was being outspent by tech giants in innovation, highlighting the need for a national strategy in collaborating with such companies.
The push to promote Meta’s open-source AI platform in the public sector comes as concerns mount over the influence of tech giants, particularly following the involvement of Elon Musk’s X platform in the US presidential election and social media’s role in inciting the August riots in the UK.
In response to inquiries about Meta’s management of Facebook, Instagram, and WhatsApp, Clegg highlighted the contrast between Meta and X in how they handle content.
“We approach things very differently,” he remarked. “During the UK riots, individuals like Tommy Robinson and Andrew Tate, who caused significant issues, were long banned from our platforms. This contrasts with platforms like Telegram and X.”
Nvidia, the chipmaker, revealed its latest financial statements on Wednesday, with revenue reaching $30.04 billion in the last three months. This is a significant increase of 122% compared to the previous year, indicating sustained growth in their artificial intelligence investments.
Despite analysts’ projections of $28.7 billion in sales, the company’s shares dropped more than 3% in after-hours trading.
Nvidia’s founder and CEO, Jensen Huang, announced plans to ship a greater number of chips and hardware next year than in the company’s 31-year history during an earnings call.
Huang highlighted the importance of fast development due to the increasing complexity of their models. He stated that the company aims to lower costs while scaling AI models to unprecedented levels for the next industrial revolution.
Analysts, while optimistic about the results, acknowledged signs that Nvidia’s exceptional revenue growth might be slowing down. Major tech companies’ aggressive AI investments are driving demand for Nvidia chips, but these companies are also investing in their own silicon development.
The company informed customers about a delay in the launch of their next-generation AI chip, known as Blackwell. Early samples have already been sent to a limited number of customers. Despite this, the current graphics processing unit, Hopper, continues to sell well according to CEO Jensen Huang.
Nvidia reported record revenue with a 154% increase in data center revenue year over year, amounting to $26.3 billion, reflecting the demand for accelerated computing and generative AI in data centers globally.
Nvidia’s earnings results hold great significance on Wall Street, as the company accounts for 6% of the total value of the S&P 500 and is the third-largest company globally with a market capitalization of $3.1 trillion.
Recent reports from major tech customers such as Microsoft, Amazon, Meta, and Google, show increased capital spending as they utilize Nvidia chips to develop and train their AI models.
The company’s earnings per share were $0.68, and they announced a $50 billion share repurchase. Profit is expected to rise to $15.1 billion, up from approximately $6.2 billion in the same period last year.
Ives, a Wedbush analyst, emphasized the importance of Nvidia’s earnings report on the stock market, estimating that every dollar spent on Nvidia’s GPU chips contributes $8 to $10 to profits across the tech sector.
The market’s focus on Nvidia’s performance stems from the belief that AI advancements will boost global productivity for years to come.
Comparisons to the Internet bubble of the late 1990s have emerged, with concerns that the AI boom might peak if Nvidia’s results disappoint investors.
Regulators are closely monitoring Nvidia, following an antitrust investigation launched by the Department of Justice after allegations from rival chipmakers. The investigation claims Nvidia is using its market power to monopolize markets and compel customers to continue buying its products.
Condé Nast and OpenAI have announced a long-term partnership to feature content from Condé Nast’s brands such as Vogue, Wired, and The New Yorker in OpenAI’s ChatGPT and SearchGPT prototypes.
The financial details of the agreement were not disclosed. OpenAI, backed by Microsoft and led by Sam Altman, has recently signed similar deals with Axel Springer, Time magazine’s owner, Financial Times, Business Insider, Le Monde in France, and Prisa Media in Spain. This partnership allows OpenAI to access extensive text archives owned by publishers for training large language models like ChatGPT and real-time information retrieval.
OpenAI launched SearchGPT, an AI-powered search engine in July, venturing into Google’s long-dominant territory. Collaborations with magazine publishers enable SearchGPT to display information and references from Condé Nast articles in search results.
OpenAI’s Chief Operating Officer, Brad Lightcap, expressed the company’s dedication to collaborating with Condé Nast and other news publishers to uphold accuracy, integrity, and respect for quality journalism as AI becomes more assimilated in news discovery and dissemination.
Condé Nast CEO Roger Lynch mentioned in an email reported by The New York Times that this partnership will help offset some revenue losses suffered by publishers due to technology companies. He emphasized the importance of meeting readers’ needs while ensuring proper attribution and compensation for the use of intellectual property with emerging technologies.
On the contrary, some media companies like The New York Times and The Intercept have taken legal action against OpenAI for using their articles without permission, indicating an ongoing legal dispute.
CrowdStrike, the cybersecurity company that caused a massive global computer outage in July, has been sued for misleading investors.
A class action lawsuit filed in Texas by the Plymouth County Retirement Association, a pension fund, alleges that CrowdStrike misled investors by representing its technology as “verified, tested and certified,” when in fact, the investors allege, CrowdStrike's software was anything but.
“Defendants failed to disclose that: (1) CrowdStrike implemented insufficient controls over its Falcon update procedures and did not adequately test Falcon updates before deploying them to customers; (2) this improper software testing created a significant risk that the Falcon updates would cause widespread outages for many of the company's customers; and (3) such outages could, and ultimately did, result in significant reputational damage and legal risk for CrowdStrike.” As a result, the lawsuit alleges, “CrowdStrike's stock price was traded artificially inflated until the widespread outages allowed its stock price to recover.”
“We believe this lawsuit is without merit and will vigorously defend the company,” a CrowdStrike spokesperson said.
Securities fraud lawsuits typically arise after an adverse event has occurred for a company. If the reasons for a decline in a stock price were not clearly disclosed to investors in advance, a defendant may be able to prevail by arguing that the lack of disclosure constituted a fraudulent sale of the relevant shares.
CrowdStrike also faces more general legal liability for the outage. Delta Air Lines Chief Executive Ed Bastian estimated on Wednesday that the outage would force the cancellation of more than 5,000 flights and ultimately cost the company $500 million (£391 million). He said airlines had “no choice” but to seek damages as a result.
“To get priority access to the Delta ecosystem on the technology side, we need to test how it works. We can't just walk into a mission-critical operation that runs 24/7 and say there's a bug,” Bastian added. “We have to protect our shareholders. We have to protect our customers and employees, not just from costs but from damage to our brand and reputation.”
The outage, which crashed roughly 1% of Windows PCs worldwide, was estimated to have cost the Fortune 500 companies in the U.S. alone $5 billion. Nevertheless, the company's most visible response, aside from its efforts to restore service, was to thank “teammates and partners” who helped resolve the outage by sending $10 UberEats gift cards, though Uber quickly blocked the gift cards due to fears of possible fraud.
“Where did CrowdStrike go wrong?” is, if anything, a slightly overly generalized question.
You can also think about it the other way around: if you push an update to every computer on your network at the same time, by the time you find a problem, it’s too late to contain the impact. Alternatively, with a phased rollout, the update is pushed to users in small groups, usually accelerating over time. If you start updating 50 systems at once and then they all immediately lose connection, you hope you notice the problem before you update the next 50 million systems.
If you don’t do a staged rollout, you need to test the update before pushing it to users. The extent of pre-release testing is usually up for debate; there are countless configurations of hardware, software, and user requirements, and your testing regime must narrow down what’s important, and hope that nothing is overlooked. Thankfully, if 100% of computers with the update installed experience crashes and become inoperable until you manually apply a tedious fix, it’s easy to conclude that you didn’t test enough.
If you’re not doing a staged rollout and testing the update before it ships, you need to make sure that: Not broken.
Broken
Many flights at Orlando, Florida’s airport were canceled or delayed amid the CrowdStrike crisis. Photo: Miguel J. Rodriguez Carrillo/Getty Images
In CrowdStrike’s defense, I can understand why this happened. The company offers a service called “endpoint protection,” which if you’ve been in the Windows ecosystem for a few years, might be easiest to think of as antivirus. It’s built for the enterprise market, not the consumer market, and not just protects against common malware, but also tries to prevent individual computers used by companies from gaining a foothold on the corporate network.
This applies not only to PCs used by large corporations that need to provide every employee with a keyboard and mouse, but also to any other business with large amounts of cheap, flexible machines. If you left your house on Friday, you know what that means: advertising displays, point-of-sale terminals, and self-service kiosks were all affected.
The comparison is relevant because CrowdStrike is in a space where speed is crucial. The worst-case scenario, at least until last week, is a ransom worm like WannaCry or NotPetya, malware that not only does significant damage to infected machines but also spreads automatically in and out of corporate networks. So its first line of defense operates quickly: Rather than waiting for a weekly or monthly release schedule for software updates, the company pushes out files daily to address the latest threats to the systems it protects.
Though limited, even a phased rollout could cause real damage. WannaCry destroyed many NHS computers during the few hours it spread unchecked, before being accidentally halted by British security researcher Marcus Hutchins while trying to figure out how it worked. In this scenario, a phased rollout could result in loss of life. Delays in testing could be even more costly.
That means updates shouldn’t cause this kind of problem: rather than new code that runs on each machine, updates are more like dictionary updates that tell already-installed CrowdStrike software what new threats to look out for and how to recognize them.
At the loosest level, you can think of it as something like this article: You’re probably reading it through some application, like a web browser, an email client, or the Guardian app. (If you’ve arranged for someone to print this and deliver it to you with your morning coffee, congratulations!) We haven’t done a staged rollout or full testing of the article, because nothing would happen there.
Unfortunately, the update pushed out on Friday actually did something. High-level technical details remain unclear, and until CrowdStrike reveals the full details, we’ll just take their word for it. The update, which was meant to teach the system how to detect a specific type of cyberattack that had already been seen in the wild, actually “introduced a logic error, causing the operating system to crash.”
I’ve been covering this sort of thing for over a decade now, and my guess is that this “logic error” boils down to one of two things: Either an almost incomprehensible failure condition occurs in one of the most complex systems mankind has ever built, causing a catastrophic event through an almost unthinkable combination of bad luck, or someone does something incredibly stupid.
Sometimes there are no classes
Consumer self-service kiosks operated by Britain’s South Western Railway were also affected. Photo: Anadolu/Getty Images
There have been a lot of comments over the past few days.
This is an inevitable evil that results from the concentration of power in the technology sector in just a few companies.
This is an inevitable consequence of the EU prohibiting Microsoft from restricting antivirus companies’ ability to tamper with basic levels of Windows.
This is the inevitable harm of cybersecurity regulation that focuses more on checking boxes than on actual security.
This wasn’t a security issue because no one was hacked – it was just a bug.
None of it worked. CrowdStrike, despite the disruption it caused, doesn’t wield much power. It’s one of the big players in the space, but it’s installed on only about 1% of PCs. Microsoft says: They claim that the failure happened only because of regulations.Meanwhile, in the alternative where third-party security companies can’t operate on Windows, with Microsoft setting itself up as the only line of defense, it looks like we’ll be in a world where the first big failure actually affects 100% of PCs.
Cybersecurity regulations have actually benefited companies that have adopted CrowdStrike, making complicated certification processes into a simple checkbox check, and maybe that’s a good thing: “Buy a product to be safe” is the only reasonable request for the vast majority of companies, and CrowdStrike has delivered, except for that one unfortunate time.
But unfortunate or not, it was definitely a security issue. The golden triangle of information security has three goals: confidentiality (are the secrets kept secret?), integrity (is the data correct?), and availability (can the system be used?). CrowdStrike could not maintain availability, which meant they could not protect their customers’ information security.
In the end, the only lesson I can take comfort in is that this is going to happen more. We’ve managed so well with so many of our society’s failures that the ones that hit us from now on will be more unexpected, more severe, and less prepared for. Just as a driver can become so confident in their cruise control that they lose control right before an accident, we’ve managed to make catastrophic IT failures so rare that recovering from them is a marathon effort.
Yay?
The Wider TechScape
Social media automatically distributes problematic content to young men with little oversight. Illustration: Nash Weerasekera/The Guardian
“A complete river of rubbish”: Josh Taylor of The Guardian Australia Facebook and Instagram Algorithms The blank account fueled sexism and misogyny.
Is the world’s largest search engine broken? Tom Faber asks Google It is losing momentum.
Is this the end? The Story of Craig Wright? Post The Court’s Full Decision Post on your Twitter feed that you feel like the last decade of your career is final.
Parents have even more reason to worry, as AI technology overwhelms capture efforts. Child Abuser.
and Roblox Back in the spotlight Child sexual abuse failureCritics say the company’s privacy stance makes things worse.
Microsoft, OpenAI and Nvidia are under increased scrutiny for their involvement in the artificial intelligence industry as U.S. regulators have reportedly agreed to investigate these companies.
The New York Times reported that the US Department of Justice and the Federal Trade Commission (FTC) have reached an agreement to investigate key players in the AI market, with the investigation expected to be completed within the next few days.
The Justice Department will lead an investigation into whether Nvidia, a leading chip maker for AI systems, has violated antitrust laws aimed at promoting fair competition and preventing monopolies, according to Wednesday’s NYT.
Meanwhile, the FTC will scrutinize OpenAI, the developer of the ChatGPT chatbot, and Microsoft, the largest investor in OpenAI and supporter of other AI companies.
The Wall Street Journal also reported on Thursday that the FTC is investigating whether Microsoft structured a recent deal with startup Inflection AI in a way to avoid antitrust scrutiny.
In March, Microsoft hired Mustafa Suleiman, CEO and co-founder of Inflexion, to lead its new AI division and agreed to pay the company $650 million to license its AI software.
The FTC has shown interest in the AI market before, ordering OpenAI, Microsoft, Google parent Alphabet, Amazon, and Anthropic to provide information on recent investments and partnerships involving generative AI companies and cloud service providers.
An investigation into OpenAI was launched last year based on allegations of consumer protection law violations related to personal data and reputations being at risk.
Jonathan Cantor, head of the Justice Department’s antitrust division, stated that the department will “urgently” investigate the AI sector to examine monopoly issues and the competitive landscape in technology.
Apple has reportedly been fined 500 million euros by the European Union over restricting access to its music streaming service, in what would be a landmark blow to the US technology company.
The European Commission is investigating whether Apple prevented music streamers from telling users cheaper ways to subscribe outside of the app store.
According to the Financial Times, the city of Brussels plans to impose a €500m (£427m) fine, a landmark move against Apple after years of complaints from companies offering services through iPhone apps. This is a judgment.
In 2019, Swedish streaming company Spotify filed a complaint with the EU, accusing Apple of limiting choice and competition in its app store by imposing a 30% fee on all purchases. Apple also blocked Spotify and other companies from notifying customers on their phones that they could avoid fees and get better deals simply by signing up on Spotify's website.
Apple says its fees are justified because it spends a lot of money providing a secure app store and gives Spotify access to hundreds of millions of customers. However, Spotify argues that Apple Music, Apple's own music streaming service, does not incur similar additional costs, giving Spotify an advantage and making the rates non-competitive.
The European Commission said Apple's actions were illegal and contrary to European Union rules forcing competition in the single market, the FT reported, citing five people close to the investigation. would argue. The commission could also reportedly ban practices that prevent music services from advertising cheaper subscriptions off-platform.
Apple was fined 1.1 billion euros by France in 2020 for anti-competition agreements with two wholesalers, but has never been hit with a competition fine by the European Commission.
But IT and other big tech companies are under increasing scrutiny due to competitive concerns. Google is appealing against fines of more than 8 billion euros imposed by the EU in three separate competition investigations. Apple lost a lawsuit by Fortnite developer Epic Games that claimed its app store was an illegal monopoly, but Epic won a similar lawsuit against Google, which runs Android phone software, in December. .
Last month, Apple announced it would allow EU customers to download apps without going through its own app store, in response to the EU's digital markets law. The law, whose details were revealed last year, imposes new obligations on “gatekeepers” such as Amazon and Google, which are particularly powerful in controlling the choice of mobile phone software.
The European Commission declined to comment. Apple had no new comments, but pointed to its previous statement that it would respond to the commission's concerns “while promoting competition and choice for European consumers.”
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.”
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.”
Rishi Sunak needs to decide whether to support Britain’s creative industries or bet everything on the artificial intelligence boom, Getty Images’ chief executive has said.
Craig Peters, who has led Image Library since 2019, made the comments amid growing anger in the creative and media sectors over the material being collected as “training data” for AI companies. His company is suing a number of AI image generators for copyright infringement in the UK and US.
“If you look at the UK, probably about 10% of GDP is made up of creative industries like film, music and television. I think it’s dangerous to make that trade-off. It’s a bit of a complicated trade-off to bet on AI, which is less than a quarter of the country’s GDP, much less than the creative industries.”
In 2023, the government, in response to consultation from the Intellectual Property Office, set a goal to “overcome the barriers currently faced by AI companies and users” when using copyrighted material, and promised to “support access to copyrighted works.” input to the model.”
This was already a step back from previous proposals for broad copyright exceptions for text and data mining. In a response to a House of Commons committee on Thursday, Viscount Camrose, a hereditary peer and under-secretary of state for artificial intelligence and intellectual property, said: This will help secure the UK’s place as a world leader in AI, while supporting the UK’s thriving creative sector.”
The role of copyrighted material in AI training is under increasing pressure. In the US, the New York Times sued OpenAI and Microsoft, the creators of ChatGPT, for using news articles as part of training data for their AI system. OpenAI said in a court filing that it is impossible to build an AI system without using copyrighted material.
Peters disagrees. Getty Images collaborated with Nvidia to create its own image generation AI that is trained using only licensed images.
The tide is changing within the industry as well. A dataset of pirated e-books, called Books3, is hosted by an AI group whose copyright takedown policy at one point even includes a costumed person pretending to masturbate with an imaginary penis while singing. Similar to the lawsuit by Getty and the New York Times, a number of other legal actions are underway against AI companies over potential training data breaches.
Ultimately, whether courts or even governments decide how to regulate the use of copyrighted material to train AI systems may not be the final word on this issue. Peters is optimistic that this result is not a foregone conclusion.
Members of the Congressional Black Caucus sent a letter to Acting U.S. Labor Secretary Julie Su expressing concerns about the disproportionate impact high-tech layoffs could have on Black workers, according to a letter obtained by TechCrunch. expressed.
It was first reported The GrioThe letter includes steps the Department of Labor has taken to monitor the impact of technology layoffs on African Americans, regulations regarding business practices, and recent Supreme Court precedents to ensure that they are not treated unfairly. Contains a list of questions regarding Used to undermine a company’s DEI practices and budgets.
The technology industry has cut more than 240,000 jobs this year due to layoffs. The concern here is that the “last-in, first-out” approach to layoffs commonly adopted by companies may not be effective for new employees and less senior “non-essentials”, who are most likely to be in the minority. This could potentially affect employees in an emergency.
“Laying off the most recent hires directly impacts a group of people who have benefited from new diversity policies introduced in response to heightened race-based conversations in 2020,” the letter said. “have a significant impact.”
“While corporations reap billions in profits, Black, brown, and women tech workers bear the brunt of layoffs,” said Missouri Congressman Emanuel Cleaver, co-chair of the CBC. We’ve seen it happen,” Missouri Congressman Emanuel Cleaver, co-chair of the CBC, told TechCrunch. “Member of Parliament [Barbara] Lee and I as co-chairs CBC TECH2025is calling on governments to take steps to address this harmful and troubling trend. ”
The Ministry of Labor has not yet responded to the letter dated December 15th. A Ministry of Labor representative said, “We can confirm that we have received the letter and are considering it.”
The technology and venture industries have been facing a recession in recent years. In response to the 2020 killing of George Floyd, many companies pledged to support the Black community.But as the market slumps, the diversity pledge lack of fundsDEI jobs are being cut, and venture capital funding to Black founders continues to decline every quarter.
CBC is also being strengthened.Last week, it was I have written It called on Sam Altman and the OpenAI board to “quickly diversify the board to include subject matter expertise with perspectives from the African American community.” OpenAI Board of Directors I don’t have it at the moment Whether it’s women or people of color.
Updated to add comment from DoL. The headline has been updated to reflect that they are representatives, not senators.
While freight forwarders in Western markets are working to digitize their operations, the founders say the same is not true in Southeast Asia. Fr8Labs. Reasons for this include a lack of localized software and a more fragmented logistics industry dominated by small and medium-sized enterprises. Fr8Labs wants to digitize the logistics industry in Asia with its SaaS operating system and plans to turn it into an open ecosystem where multiple players can utilize his API.
The Singapore and Indonesia-based startup today announced that it has raised $1.5 million in seed funding from East Ventures, FEBE Ventures, Kaya Founders, Mulia Sky Capital, Seedstars, Venturra, and angel investors. Fr8Labs currently has over 50 customers in Singapore, Malaysia, Indonesia, Taiwan, Australia and is expanding to other Asian regions.
The startup was founded in 2022 by CEO Glenn Rye and head of product technology Felix Lu. Mr Lai, whose family is in the freight forwarding industry, started his career in the logistics industry in 2015 with his Sinar Gas Golden Agri Resources. Then, in 2019, he and Lu joined Indonesian e-commerce logistics company Bizzy, where he served as COO and VP of Products, respectively.
After Bizzy was acquired by Warung Pintar, the two returned to Singapore, where Mr Lai became head of strategy and growth at software company Gravity Supply Chain. He has traveled the world and worked with major international logistics and supply chain companies. He found that in contrast to Asian markets, supply chains in developed markets are digitally interconnected.
Lai said one of the reasons for the technology gap in Asia’s freight transportation industry is that the market is more fragmented compared to Western countries, where corporate players dominate. Large freight forwarders can encourage other players to go digital, especially since they have systems that allow the companies they do business with to connect using APIs. Freight forwarders in Asia, on the other hand, are mainly small and medium-sized enterprises and do not have enough concentration to influence new practices. Another reason is that digital logistics systems are built for specific markets and won’t work in Asia due to different accounting and customs policies, Lai added.
As a result, many carriers in Asia, especially Southeast Asia, still use on-premises software or a combination of Microsoft Excel, email, chat, and off-the-shelf accounting systems. Lai said this not only makes it difficult to scale, but also introduces errors that can result in carriers paying customs duties and late penalties (fees charged for shipping containers that aren’t picked up on time). It says that there is a sex.
“This contrast inspired me to think about how we can improve the freight industry in Asia,” Lai tells TechCrunch. “I gathered Felix and some of his past colleagues to brainstorm a solution. Rather than disrupt the strong network, expertise and relationships of Asian freight forwarders, we , we realized that it was important to take advantage of them.”
Fr8Labs co-founders Felix Lu and Glenn Lai
Fr8Labs develops products that power these networks, including allowing freight forwarders to offer cargo insurance, foreign exchange trading, and financing capabilities to their end customers (e.g., allowing online travel agents to offer travel insurance to their passengers). (similar to the method provided). The startup’s core product is an operating system that supports the entire carrier workflow, including quoting, booking confirmation, shipping confirmation, job accounting, and accounting backends. The platform enables departments such as sales and operations to work together more efficiently and links platforms such as email and chat.
One use case is that instead of multiple manual data entries, carriers can upload a PDF of a shipping order and automatically create shipping reservations and other documents, including forms that need to be submitted to customs. is. Another example of how Fr8Labs can be used is as a warehouse management system module. This allows freight forwarders to interface directly with their clients’ backend ERP, allowing them to manage international shipments to and from the same warehouse.
A portion of Fr8Labs’ funding will be used to expand the platform, adding FX trading, lending, cargo insurance, rate management, and a marketplace. The startup’s goal is to turn its platform into an open ecosystem that can be integrated and managed with a variety of logistics technology software.
“Think of Android or Apple and how integrated each device is into the ecosystem,” Lai says. “We want to provide freight forwarders with a seamless operational experience and build further value-added services on top of that.”
Roderick Pulwana, managing partner at East Ventures, said in a statement: “While the application of technology is critical in logistics as it helps improve cost efficiency and productivity, industry players are not immune to challenges in enhancing digital logistics. Fr8Labs’ innovative technology solutions We address the challenges faced by freight forwarders in Southeast Asia. We are confident that the team’s expertise will enable Fr8Labs to transform the logistics industry and add value across the value chain.”
Strategists at UBS investment bank expect a significant interest rate cut by the US central bank, which is seen as bullish for Bitcoin. UBS said falling inflation could prompt the U.S. central bank (Federal Reserve) to start cutting interest rates as early as March. This development is perceived as very positive for Bitcoin, especially considering recent economic indicators.
US inflation slows significantly, eliminating bets on further Fed rate hikes
Recent data reveals slowing U.S. inflation, extinguishing hopes for further rate hikes from the Federal Reserve. The consumer price index stalled in October, with the core index rising 0.2%. Those numbers have led traders to push back when they expect the U.S. Federal Reserve to make its first move to cut interest rates.
This change in expectations is consistent with UBS’s prediction of a significant interest rate cut, creating a supportive backdrop for Bitcoin in the following ways:
Reduced opportunity cost: As traditional interest rates decline and expectations of further rate hikes fade, the opportunity cost of holding Bitcoin also decreases. This could make Bitcoin more attractive to investors looking for alternative assets.
Inflation hedge: As inflation slows, investors could turn to assets like Bitcoin, which some see as a hedge against inflation. The scarcity and decentralized nature of cryptocurrencies could make them an attractive store of value in an environment of reduced inflationary pressures.
Market speculation: Revisions to the Fed’s rate hike outlook could spark speculative activity in financial markets. Bitcoin’s higher return potential and its characteristic volatility may attract traders looking for opportunities in a changing interest rate landscape.
Macroeconomic uncertainty: Recent economic data, coupled with revised Fed rate hike expectations, may signal broader economic uncertainty. In times like these, Bitcoin’s role as a decentralized and non-traditional asset is likely to become more prominent as investors seek to escape market volatility.
This combination of factors, with the potential for increased demand and favorable market sentiment, is reinforcing Bitcoin’s positive outlook.
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