Good morning. It can be said that Stellantis rarely stands at the forefront of discussions in AI.
Colleague Nick Lichtenberg spent some time visiting this company to see what was brewing in Auburn Hills, Michigan. His report beautifully demonstrates how one of Detroit’s “big three” automakers is attempting to embrace the future through personnel, processes, or technology in an industry that is capital-intensive and has a product cycle of up to six years.
A senior executive said to him, "Some of the things we want to do can be done today. Other things we want to do, we cannot do." (Amen, brother.)
Here are today's technology news. Wishing you a productive day. —— Andrew Nusca
Have any ideas? Suggestions? Hot news? Send me a message.
Headline News
AI The craze meets resistance on Wall Street
In the AI craze, the capital that once seemed to flow endlessly towards Silicon Valley may soon reach its peak, as Wall Street begins to oppose these massive spending plans.
It is reported that this round of financing also got overshadowed by Anthropic, as OpenAI's number one competitor is preparing to go public next month. While getting ready for IPO, Anthropic submitted a S-1 document on Monday, showing a significant increase in revenue and positive cash flow in the first half of this year.
The timing couldn’t be worse. This week, the quarterly financial reports of major cloud service providers scared investors. Alphabet’s cash flow in the third quarter further fell into negative territory, and this parent company of Google, like Meta and Amazon, continued to push forward with large-scale spending plans. On Thursday, Alphabet fell by about 12%, recording its worst single-day performance in history.
Of course, in addition to the Anthropic optimistic S-1, there are also other positive signs. Microsoft reports strong growth in its cloud business and still maintains a positive cash flow, despite the company stating that capital expenditures will accelerate; AI chip manufacturer SK Hynix's performance also far exceeded expectations.
The prospect of super-large cloud vendors continuing to experience significant losses is something even S& P Global cannot withstand. The institution downgraded its outlook for Meta from “stable” to “negative” later last Friday, citing negative cash flows and uncertainties in capital expenditure plans.
The bearish environment on Wall Street is accompanied by other pressures: rising bond yields have significantly increased borrowing costs; political backlash surrounding data centers is expected to help the Democrats regain control of Congress; and the Iran conflict may escalate again after the mid-term elections.
However, some bulls do not believe that the AI craze is about to burst, and even consider a certain degree of contraction to be a good thing.
Market veteran Ed Yardeni stated that the investment boom in AI faces constraints from financial, physical, and political aspects. If any of these constraints worsen further, the stock market could see additional declines, especially considering that AI has now become an important driver of corporate profits and GDP growth, he wrote in a report this week.
"However, we believe that these constraints contribute to the sustainability of the AI craze!" he wrote, and added, "Therefore, further AI tension may present buying opportunities, rather than signaling the end of the craze." – Jason Ma
Blind box
"We are no longer just verifying a concept; we are expanding a commercial reality."
Read the full report here.
Overview
- "Data centers" are out; " AI Computing Park" is in.
- According to FBI, the $6.3 billion Binance hacking incident is related to an elite North Korean hacking team.
- Get to know Castelion; this startup, valued at $13 billion, is racing to close the gap in hypersonic technology in the United States.
- Anthropic offers software engineers a base salary ranging from $350,000 to $850,000.
- Saudi Aramco acquires 49% of the shares of Humain. The Saudi Public Investment Fund ( PIF ) retains 51% of the shares in this Riyadh-based startup AI.
- Unlike the United States, Brazil offers tax incentives and cheap electricity to data center providers.
- The head of energy at Google's data centers stated that the cost of orbital data centers could be 100 times that of data centers on Earth.
Closing sentence
Apple CEO John Ternus has never met President Trump yet. Just in case you wanted to know!
