"Microsoft CEO Pledges $2.2 Billion in Latest Asian AI Investment" - This Time Malaysia

From Bloomberg, May 1:

• Nadella announces plan for more AI infrastructure in Malaysia
• Tech companies are targeting Southeast Asia as new growth area

Microsoft Corp. will invest $2.2 billion to build digital infrastructure in Malaysia, the latest in a series of big-ticket bets on Asia’s rising prominence as a technology market.

The company plans to spend the money over four years, constructing infrastructure for its cloud computing and artificial intelligence services, Chief Executive Officer Satya Nadella said during a visit to Kuala Lumpur Thursday. It’ll also give AI training to 200,000 people in Malaysia and work with the government to boost the nation’s cybersecurity capabilities.

Microsoft is vying with the likes of Alphabet Inc., Amazon.com Inc. and Alibaba Group Holding Ltd. to win over businesses in Southeast Asia, a fast-digitizing region of more than 650 million people. Tech companies are expanding their operations in Malaysia and nearby countries such as Singapore, diversifying beyond China to reduce geopolitical risks amid tensions between Beijing and Washington.

“We are committed to supporting Malaysia’s AI transformation and ensure it benefits all Malaysians,” Nadella said at the end of a whistle-stop tour of three countries in the region. In Kuala Lumpur, he met Prime Minister Anwar Ibrahim before addressing business leaders and developers at a company event.

The investment is the biggest by Microsoft in its 32 years in Malaysia and underscores Microsoft’s effort to emerge as a winner in Asia. Nadella has pledged at least $7 billion to build out the company’s services from Japan to India, while touting AI as a growth engine and prodding countries to boost investment in the technology.

In Malaysia, the southern Johor Bahru region — connected by a causeway to Singapore — is emerging as one of Asia’s rising AI data center hotspots....

....MUCH MORE

Recently (April 30): "Microsoft boss charms Indonesia with $1.7B AI, cloud injection" 

"Major eruption at Ruang volcano, ash to 19.2 km (63 000 feet) a.s.l., Indonesia"

Here's a prop bet for you. By May 15, 2026 we will see the satellite-measured -inferred global lower atmospheric temperature decline by at least 1/2 degree C.

The two keepers of the satellite record are Remote Sensing Systems in Santa Rosa CA and the University of Alabama-Huntsville. 

Here's the temperature graph from UAH:

And here is one of the keepers of the numbers, Roy Spencer, PhD. on the background of the graph:

Since 1979, NOAA satellites have been carrying instruments which measure the natural microwave thermal emissions from oxygen in the atmosphere. The intensity of the signals these microwave radiometers measure at different microwave frequencies is directly proportional to the temperature of different, deep layers of the atmosphere. Every month, John Christy and I update global temperature datasets that represent the piecing together of the temperature data from a total of fifteen instruments flying on different satellites over the years. A discussion of the latest version (6.0) of the dataset is located here.

The graph above represents the latest update; updates are usually made within the first week of every month. Contrary to some reports, the satellite measurements are not calibrated in any way with the global surface-based thermometer records of temperature. They instead use their own on-board precision redundant platinum resistance thermometers (PRTs) calibrated to a laboratory reference standard before launch.

The digital data for the above plot, as well as for various sub-regions of the Earth and for three other atmospheric layers, are available at the links below. You can copy and paste the data into a spreadsheet program like Excel to do your own plotting and analysis (in Excel, you might need to use the “Data>Text to Columns” function to get the data separated into columns after pasting):

Lower Troposphere: http://vortex.nsstc.uah.edu/data/msu/v6.0/tlt/uahncdc_lt_6.0.txt
Mid-Troposphere: http://vortex.nsstc.uah.edu/data/msu/v6.0/tmt/uahncdc_mt_6.0.txt
Tropopause: http://vortex.nsstc.uah.edu/data/msu/v6.0/ttp/uahncdc_tp_6.0.txt
Lower Stratosphere: http://vortex.nsstc.uah.edu/data/msu/v6.0/tls/uahncdc_ls_6.0.txt

Again the baseline for the prop bet: the above "Latest Global Temp. Anomaly (March '24: +0.95°C)"

And now, not really related because the aerosols didn't get injected high enough, just reaching the lower boundary of the tropical stratosphere (~20 km), but posted because it reminded me to declare the proposition, from The Watchers, April 30:

Another high-level eruption started at Indonesia’s Ruang volcano at 18:15 UTC on April 29, 2024 (01:15 LT, April 30), producing an ash column to an estimated height of about 19.2 km (63 000 feet) above sea level. Authorities raised the Alert Level to 4 and the Aviation Color Code to Red. This powerful eruption comes just 2 weeks after a similar eruption on April 16.

This intense volcanic eruption was characterized by the dramatic emission of incandescent lava that soared into the sky, illuminating it with a bright red hue. This spectacular display was further enhanced by the presence of volcanic lightning, a phenomenon associated with the eruption of ash-laden plumes into the atmosphere. Such visual manifestations are typical signs of significant volcanic activity, indicating the release of vast amounts of energy and material from within the Earth.

Concurrently, a significant shower of stones and gravel occurred, extending over a broader area than during the previous eruption on April 16. This widespread fallout is indicative of the eruption’s intensity and its capacity to disperse material over a large radius....

....MUCH MORE, including some impressive pictures.

"Inside Ukraine’s Killer-Drone Startup Industry"

From Wired, May 2:

Ukraine needs small drones to combat Russian forces—and is bootstrapping its own industry at home.

On the top floor of a building somewhere in Ukraine is a drone workshop.

Inside is a chaotic workbench covered in logic boards, antennas, batteries, augmented reality headsets, and rotor blades. On one end of the room is a makeshift photo studio—a jet-black quadcopter drone sits on a long white sheet, waiting for its close-up.

This particular workshop’s Geppetto is Yvan. He grins as he shows off his creations, flittering around with a lit cigarette in his mouth, dangling ash, grabbing different models. (Yvan is a pseudonym; WIRED granted some of the people in this story anonymity due to the security risk.)

Yvan holds up a mid-size drone: This model successfully hit a target from 11 kilometers away, he says, but it should be capable of traveling at least 20. He’s trying different batteries and controllers to try to extend the range. He screws on a stabilizer tailpiece to a hard plastic shell—Yvan 3D-prints these himself—and holds up the assembled bomb. It’s capable of carrying a 3.5-kilogram explosive payload, enough to take out a Russian tank.

He uses his index finger and thumb to pick up a nondescript beige chip: This, he says, is what he’s really proud of.

One big problem with these drones—which are based on commercially available first-person-view (FPV) or photography drones—is that their explosive payload is jimmy-rigged on. It requires the drone to crash in order to close the circuit and trigger the explosion.

This chip, Yvan says, allows for remote detonation from a significant distance, meaning the operator can park their drone and lay in wait for hours, even days, before it goes off. He expects this technology could, eventually, be connected to AI—exploding only if it registers a nearby tank, for example. He has created a long-range smart land mine, I note. After the idea is passed through our translator, he nods enthusiastically.

There are many of these FPV drone workshops around Ukraine—Kyiv estimates there are about 200 Ukrainian companies producing aerial drones, with others producing land- and sea-based uncrewed vehicles. But Yvan, grinning proudly, insists that the manufacturer which he represents, VERBA, is the best.

Ukraine is facing increasingly tough odds in its defensive war against a better-resourced, better-equipped enemy. Thanks to delayed aid from Washington and shortages in other NATO warehouses, Ukraine has lacked artillery shells, long-range missiles, and even air defense munitions.

These drones, however, represent a bright spot for the Ukrainians. Entrepreneurship and innovation is scaling up a sizable drone industry in the country, and it’s making new technological leaps that would make the Pentagon envious.

The age of drone warfare is here, and Ukraine wants to be a superpower.

After Yvan showed off his workshop, we loaded into the car to visit one of his factories.

Behind a steel door is a room filled with racks, where 30 3D printers are working simultaneously, printing various drone components in unison. The twentysomething employees seem accustomed to the screeching alarm—some are soldering the drones together, others are tinkering with designs in AutoCAD, one is lounging on a sofa.

Strung across one shelf of 3D printers is a black flag, a take on Blackbeard’s (apocryphal) pirate flag. It shows a horned skeleton wearing an AR headset and holding a controller, thrusting his spear toward a bleeding heart as a quadcopter flies above....

....MUCH MORE

Infrastructure: Microsoft Is Making a Massive $10 Billion Renewable Energy Bet

From The Motley Fool via Yahoo Finance:

Microsoft (NASDAQ: MSFT) has signed a first-of-its-kind global framework agreement to accelerate renewable energy capacity expansion. The five-year deal will help support the development of over 10.5 gigawatts (GW) of new renewable energy capacity. That's a staggering eight times larger than the biggest corporate power-purchase agreement (PPA) ever signed.

The tech titan signed this agreement with Brookfield Asset Management and its affiliate Brookfield Renewable (NYSE: BEPC)(NYSE: BEP). It significantly expands their long-standing relationship with Microsoft. The deal, reportedly supporting more than $10 billion of future developments, will meaningfully enhance and extend Brookfield Renewable's long-term growth outlook.

A supercharged agreement
The global renewable energy framework agreement provides a visible pathway for Brookfield to build and deliver over 10.5 GW of new renewable energy capacity in the U.S. and Europe between 2026 and 2030. That will help support Microsoft's goal of reaching 100% zero-carbon energy purchases by 2030.

It significantly enhances the companies' relationship. Microsoft currently has PPAs covering nearly 1 GW of renewable energy from Brookfield.

The deal will provide Microsoft with access to a pipeline of new renewable energy capacity to support the growing demand for its cloud services. In addition to wind and solar, the agreement will focus on new and impactful carbon-free energy generation technologies. The tech giant needs more electricity to support power-hungry data centers that are required to capitalize on growing digitalization and the increased adoption of artificial intelligence (AI). AI applications require significant computing power that, in turn, demands massively more electricity.

While the agreement initially focuses on building capacity in the U.S. and Europe, Microsoft can increase the scope to Asia-Pacific, India, and Latin America. The deal incentivizes Brookfield to build a large portfolio of renewable energy projects.

A powerful growth driver
Brookfield Renewable is the perfect partner for Microsoft. Few companies can match its global scale and development capabilities. It has one of the world's largest operating portfolios with 33 GW of capacity across several technologies (hydro, wind, solar, and storage) and geographies (North and South America, Europe, and Asia Pacific).

On top of that, it has a leading development pipeline with a staggering 155.4 GW of projects in various stages. Brookfield also boasts a portfolio of sustainable solutions, including nuclear services, renewable natural gas, and carbon capture and storage....

....MUCH MORE

If interested see also:

• Uranium Miner Cameco and Brookfield Renewable Partners To Buy Nuke Maker Westinghouse (CCJ; BEP)
• "Infrastructure debt embraces fundraising boom"
• The Infrastructure Theme Is For Real (PWR)
• DEI and ESG Live On, We Just Won't Talk About Them (BLK)

 That's one lesson from BlackRock's purchase of Global Infrastructure Partners. 

Seeing A Lot Of "Dovish" Talk Regarding The Fed Chair's Comments Tuesday...Don't Bet On The Doves

Here are three headlines from Money Control, Bloomberg and MarketWatch respectively:

Powell’s dovish policy may provide relief to markets, again spark hope of early rate cut instead of hike

Jerome Powell’s Fed Dictionary Somehow Fails to Include the Word ‘Hawkish’

Was Fed’s Powell dovish or not? 4 key takeaways from Wednesday’s press conference. 

Coincidentally, Politico.eu's Izabella Kaminska tweeted this on Sunday:

Reminded of the time I tried to get to the bottom of why we call it dovish or hawkish monetary policy, and discovered an etymology with roots to the 60s, the Vietnam war, Cold War, game theory and err Julie Andrews. https://t.co/gYztVnqAme

— Izabella Kaminska (@izakaminska) April 28, 2024

And me, I flash on the the release of the symbolic Doves of Peace after the Pope's prayer for peace in Ukraine back in freakin' 2014:

Not betting on the doves.
(contra the video outro the Vatican doves got away, some folks near the window got souvenir feathers though)

"Nvidia supplier SK Hynix says HBM chips almost sold out for 2025"

Yesterday folks looked in horror at Super Micro Computer's results  and ran away from anything associated with AI, screaming "It's all a lie." Or, the more literary types: "There is no there there."

Today, Here's Reuters with the headline story, May 2:

South Korea's SK Hynix said on Thursday that its high-bandwidth memory (HBM) chips used in AI chipsets were sold out for this year and almost sold out for 2025 as businesses aggressively expand artificial intelligence services.The Nvidia supplier and the world's second-largest memory chipmaker will begin sending samples of its latest HBM chip, called the 12-layer HBM3E, in May and begin mass producing them in the third quarter.

SK Hynix which competes with U.S. rival Micron and domestic behemoth Samsung Electronics in HBM was until March the sole supplier of HBM chips to Nvidia, according to analysts who add that major AI chip purchasers are keen to diversify their suppliers to better maintain operating margins. Nvidia commands some 80% of the AI chip market....

....MUCH MORE

"Is Nvidia Really The King Of AI? Not In This Realm" (BAH)

There is a definitional problem with the term "AI stocks [or companies]" in that AI is a tool. Much as the (over) hyped nanotechnology revolution didn't produce "nanotech stocks" but instead became incorporated into processes and procedures that give companies employing same an incremental edge rather than epochal shifts.*

However, if there is an AI "company" Nvidia would deserve the moniker as much as anyone.

That's me, quoting myself from the introduction to a 2020 post, coincidentally also from IBD.

Here at Climateer Investing, We Recycle! From Investor's Business Daily, May 2:

When investors think of the giants of artificial intelligence, Magnificent Seven stocks like Nvidia (NVDA), Microsoft (MSFT) and Alphabet (GOOGL) or maybe Palantir Technologies (PLTR) come to mind. But defense, intelligence and civil management consultant Booz Allen Hamilton (BAH) wears the crown as the largest provider of AI to the federal government.

While Nvidia, Meta, Microsoft, Google and Palantir all made the latest list of new buys by the best mutual funds, Booz Allen Hamilton also secured a spot on the list.

Boosted by strong institutional demand and an A- Accumulation/Distribution Rating, BAH stock has now crafted a flat base with a 150.59 buy point. A breakout would propel the stock an all-time high.

Virginia-based Booz Allen Hamilton earns a 94 Composite Rating. The rating shows it is outpacing 94% of all stocks in terms of key stock-picking factors.

Booz Allen Hamilton Drives AI In Government
Across its three major business segments — defense, civil government and intelligence — Booz Allen Hamilton is leading the AI push throughout the federal government. Last year, the firm was recognized as the largest provider of AI-related services to the federal government by researcher GovWin from Deltek.

Booz Allen Hamilton works with the Defense Department to try and get ahead of adversaries in the global AI race. Collaborating with the Pentagon, it is working to integrate AI into all aspects of missions and operations. That includes training an AI-ready workforce and defining and building the related infrastructure.

In the civil government space, Booz Allen's work spans energy and the environment, financial services, health, homeland security, law enforcement, and transportation. The company deploys cognitive search algorithms and develops models to predict global health threats. It also leverages computer vision to identify suspicious packages.

In the intelligence arena, Booz Allen Hamiltion works across the federal government to harness AI to support intelligence analysts and improve decision-making.

Earnings Pop...

....MUCH MORE

The introduction was so pleasingly apropos. Let's try recycling the outro from that 2020 post! (which itself was recycled from a post ten years earlier)

And from a December 2010 post: 

"Top Investment Trends For Futurists" (PXN; TINY)

...The reason for highlighting nano is two-fold.

1) Since Feynman coined the word there has been a misconception among investors that there would be a nano-technology "industry". This has proven not to be the case and won't be in the future. Rather nano is a tool, an approach toward problem solving.

There will be some breakthroughs that make their discoverers instantly (after 10 years of research) wealthy but the real beneficiaries will be companies like Kyocera and 3M and Siemens. They will use the technology to do what they are already doing, just better, faster, cheaper, more.

2) In spite of the fact that there will be few pure plays we are convinced that nano combined with advances in materials science and manufacturing technology is what will spur the next secular bull market....

When it becomes ubiquitous, the distinctions blur, the drive for creativity recedes, stasis, then death.
Wait what? Entropy! I meant to co-opt the physically precise  concept of entropy to metaphorically describe the trend. Not death.
No, death bad, Sand Hill Road good.

Hmmmm....

«China will have no choice but to become more repressive, more closed, colder»

From Neue Zürcher Zeitung's TheMarket.ch, May 1:

In her new book «Wild Ride», China expert Anne Stevenson-Yang argues that China’s experiment with capitalism has failed. In this in-depth interview, she explains why Beijing is now closing the Chinese economy again – and what the consequences are for the financial markets.

German Version

China is keeping the financial markets on edge. After many years of phenomenal growth, the collapse of the real estate market and the economic slump are now dampening investor sentiment.

In addition, there are growing tensions with the West. At the center of the geopolitical conflict is the tech sector. IT companies such as Apple are diversifying their supply chains in order to reduce their dependence on China as a production base. Meanwhile, US export restrictions for leading companies in the semiconductor industry such as Nvidia and ASML are becoming increasingly stringent. With the forced sale of the social media app TikTok, Washington is now also taking action against Chinese internet companies with a presence in the US.

So what’s next for China? The new book «Wild Ride: A short history of the opening and closing of the Chinese economy» by Anne Stevenson-Yang provides helpful clues. Few observers know the subject as well as the American, who has lived in the People’s Republic for more than 25 years.

In this in-depth interview with The Market NZZ, which has been lightly edited, Anne Stevenson-Yang explains how she personally experienced China’s rise from a backward agrarian state to a global economic power, why the unprecedented boom of China’s economy ended in today’s crisis and why she believes the Middle Kingdom’s future will be even more isolationist.

 «This is not a situation where you can simply digest the debt through growth because 

growth has been created by debt – and there isn’t any sort of organic growth within the 

Chinese economy»: Anne Stevenson-Yang.

In your new book, «Wild Ride», you make the case that China’s experiment with capitalism has failed. What went wrong?
It was always going to happen. For decades, people have been both enthusiastic about China’s growth and anxious about its competition. It always made me roll my eyes, having lived through the 1980s when Japan was viewed in a similar light. Back then, everyone was worried about Japan’s rapid rise, fearing that it would soon surpass the US as the world’s largest economy. Japanese investors were buying up iconic American assets like movie studios and the Rockefeller Center in New York. However, Japan’s investment-driven economy eventually collapsed, and I believe China’s situation is similar, but on steroids.

China’s rise to global economic power is one of the most important developments in recent decades. Was there ever a chance that a market economy system could have been successful?
I think that’s based on a misunderstanding. Many people felt that way because during the 1980s and into the 1990s, China underwent rapid liberalization. Life was becoming much freer, with abundant job opportunities, rising incomes, and an explosion of goods and products in the markets. In contrast, when I first arrived in the early 1980s, China was a very sepia colored communist society where people addressed each other as ‹comrade›. The fashion was drab, with only blue, white, or gray clothing available, and food options were severely limited.

And then?
By the end of the 1980s, it was just an exploding cornucopia of different things to buy. It was exhilarating to experience the arts flourishing, with rock music and classical concerts, expressionist paintings, and exhibitions that were a little bit risqué. We even had an improv theater in Beijing. But to mistake that for progress toward a Jeffersonian democracy was obviously wrong. China is a society that’s modeled on Leninist Russia, not the 18th century US. In reality, the economic opening from 1980 to present has been a strategic effort to harness capital, all in the knowledge that the doors would eventually close again – which is precisely what’s happening now.

What was the broader impetus for opening up China’s economy and attracting international capital?
In the early 1980s, when Deng Xiaoping sort of walked out of prison and into Zhongnanhai, China’s leadership sought to consolidate power and gain public support after the impoverished and highly controlled Maoist era. To achieve this, they focused on domestic growth and relaxed controls. As I remember quite vividly, one notable change was allowing farmers to grow and sell their own crops, as long as they met quotas. This freedom brought prosperity and improved livelihoods, enabling farmers to grow crops suited to their local conditions, like coffee on acidic land in hilly areas. Imagine the wealth that was generated thanks to these changes, and how much happier people were.

What was the turning point when the capitalist experiment started to fail?
There were two pivotal moments, and they both revolved around the Communist Party, maintaining control even as the economy and society became more complex and diverse. The first one, of course, was the 1989 Tiananmen Square protests and massacre. During the 1980s, China experienced a surge in new companies and businesses, leading to rapid growth and complexity. The bureaucracy struggled to keep pace, resulting in a relaxation of regulations by necessity. As a result, individuals and groups began to assert their newfound autonomy and exercise their rights in unprecedented ways.

And that became a problem for the communist regime?
Yes, as people began to demand a greater share of the economy, protests erupted into large-scale public demonstrations. The Communist Party, perceiving this as a threat, responded with force, violently suppressing the protests by shooting people and running them over in the streets with tanks. In the aftermath, the central government reorganized the bureaucracy and economy to consolidate its power, ensuring greater central control over key aspects such as personnel appointments and local governance. This marked a significant shift towards a more authoritarian approach, aimed at preventing similar challenges to their authority in the future.

What was the second turning point?

....MUCH MORE

"Tesla retreats from next-generation ‘gigacasting’ manufacturing process" (TSLA)

 A Reuters Exclusive, May 1:

Tesla has backed away from an ambitious plan for innovations in gigacasting, its pioneering manufacturing process, according to two sources familiar with the matter, in another sign that the electric-vehicle maker is retrenching amid falling sales and rising competition.

Tesla has been a leader in gigacasting, a cutting-edge technique that uses huge presses with thousands of tons of clamping pressure to die-cast large sections of the car’s underbody. On a typical vehicle, the underbody can consist of hundreds of individual parts.

 

Last year, as Tesla developed a new small-vehicle platform, it aimed to punch out the underbody in a single piece, Reuters exclusively reported last September, citing five sources familiar with the automaker’s gigacasting operations. The long-term goal was to radically simplify manufacturing and slash costs.

 

But Tesla has since halted the effort, opting to stick with its more proven method of casting vehicle underbodies in three pieces: two gigacasted front and rear sections and a midsection made of aluminum and steel frames to store batteries, according to the two sources familiar with the matter. That is largely the same three-piece method the company has used for its last two new models, the Model Y crossover SUV and the Cybertruck pickup.

 

Tesla’s retreat from one-piece gigacasting has not been previously reported. The automaker did not respond to a request for comment.

 

The decision to hold off on the potential manufacturing breakthrough marks another example of Tesla slashing short-term spending as it adjusts to falling sales and profit margins, softening EV demand globally, and intensifying competition from rival EV makers such as China’s BYD (002594.SZ). 

 

, opens ne Tesla last month laid off more than 10% of its global workforce. A handful of senior executives have also resigned or been pushed out.

 

Such moves also reflect a fundamental strategy shift, with Tesla now focusing more on developing self-driving vehicles than on pushing for huge growth in EV sales volume, which many investors had been counting on.

 

The step-back on gigacasting occurred last autumn, the people said, before Tesla decided in late February to halt development of an all-new affordable car, often called the Model 2, which would have been the first vehicle it built with one-piece gigacasting. Reuters first reported the cancellation of the Model 2 on April 5....

....MUCH MORE

 

On one hand this is a bit of penny-wise, pound-foolish as gigacasting saves money on every unit sold. On the other hand "every unit sold."

 

If sales over the next three to six quarters are expected to decline, or at best flat-line it would make sense to delay the capital expenditure required to expand the gigcasting technique throughout the manufacturing empire.

Tesla currently has the ability to squeeze three million units out of the various gigafactories and would be hard-pressed to see unit sales hit 500,000 per quarter before Q2 2026, especially so if they are penciling-in a recession in any of their major markets.

All that being said, the gigacasting method will be how automobiles are produced later this decade and beyond.

Previously:

November 2023: ""Volvo Joins Tesla, Toyota in Giga Press Game""

November 2023: "Where In The World Is The FT's David Keohane? (gigacasting)"

February 2023: "Tesla's Margins? Thank Gigapresses (TSLA)"

Tesla was the first automaker to go large with the gigapresses.

And with Ford and now Toyota following suit, Elon is trying to stay ahead of the competition with the next innovation. From Technology.org, September 15:

Tesla Aims to ‘Gigacast’ the Underbody of Its EVs as a Single Piece

Tesla has achieved a significant technological breakthrough that could revolutionize its electric vehicle (EV) manufacturing process. Now, the company is nearly ready to die-cast – or gigacast, as Elon Musk calls it – nearly the entire underbody of its EVs as a single piece.

Tesla originally introduced the concept of “gigacasting” by utilizing massive presses with clamping pressures ranging from 6,000 to 9,000 tons to mold the front and rear structures of its Model Y. This innovative approach substantially lowered production costs, placing other automakers in a race to catch up.

To further solidify its lead, Tesla is now on the brink of a groundbreaking development that would enable the die casting of nearly the entire complex underbody of an EV as a single piece. This stands in stark contrast to traditional cars, which require approximately 400 individual parts for the underbody.

This gigacasting expertise forms a critical component of Tesla’s “unboxed” manufacturing strategy, unveiled by CEO Elon Musk in March. It is a cornerstone of Musk’s plan to produce tens of millions of more affordable EVs in the next decade while maintaining profitability....

....MUCH MORE

Nvidia-Backed CoreWeave Raises $1.1 Billion At A $19 billion Valuation

As has been pointed out by people smarter than I, sometimes the AI biz does seem a bit incestuous.

From cloud mavens, SiliconAngle, May 1:

CoreWeave Inc., the operator of a cloud platform optimized for graphics card workloads, today announced that it has closed a $1.1 billion funding round.

The Series C raise reportedly values the company at $19 billion. That’s up from the $7 billion it was worth following a $642 million secondary sale in December. Fidelity Management, which led that deal, also joined in the funding round CoreWeave announced today along with Coatue, Lykos Global Management, Altimeter Capital and Magnetar.

CoreWeave operates a public cloud that provides access to about a dozen different Nvidia Corp. graphics processing units. It targets two main use cases: artificial intelligence and graphics rendering. CoreWeave claims that its platform allows customers to run such workloads more cost-efficiently than established public clouds and with better performance.

Some of the GPUs the company offers, such as the H100, are built from the ground up for AI workloads. Its cloud also features other Nvidia chips such as the A40, which is mainly geared towards computer graphics professionals. 

Unlike their AI-optimized counterparts, the A40 and the other rendering-optimized GPUs that CoreWeave provides include RT Cores. Those are circuits optimized for ray tracing, a rendering technique used to simulate lighting effects such as shadows and motion blur. The method involves shining virtual light rays on an object and studying how those rays bounce back to find the most realistic-looking pixel settings....

....MUCH MORE

Previously:
June 2023
Chips: "Nvidia Leads, Habana Challenges on MLPerf GPT-3 Benchmark" (NVDA; INTC)

From EE Times, June 26:

The latest round of MLPerf training benchmarks includes GPT-3, the model ChatGPT is based on, for the first time. The GPT-3 training crown was claimed by cloud provider CoreWeave using more than 3,000 Nvidia H100 GPUs. What’s more surprising is that there were no entries from previous training submitters Google, Graphcore and others, or other competitors like AMD. It was left to Intel’s Habana Labs to be the only challenger to Nvidia on GPT-3 with its Gaudi2 accelerator.

CoreWeave used 3,584 Nvidia HGX-H100s to train a representative portion of GPT-3 in 10.94 minutes (this is the biggest number of GPUs the cloud provider could make available at one time, and is not the full size of its cluster). A portion of GPT-3 is used for the benchmark since it would be impractical to insist submitters train the entirety of GPT-3, which could take months and cost millions of dollars. Submitters instead train an already partially-trained GPT-3 from a particular checkpoint until it converges to a certain accuracy. The portion used is about 0.4% of the total training workload for GPT-3; based on CoreWeave’s 10.94 minutes score, 3,584 GPUs would take almost two days to train the whole thing.....

December 2023
Cloud: GPU's as a Service Gets Big Backers (GaaS)
March 2024
"Nvidia CEO Becomes Kingmaker by Name-Dropping Stocks" (NVDA+++++++)
March 2024
Google Cloud Is Losing Top Executives
March 26
AI In The Cloud: "CoreWeave Is in Talks for Funding at $16 Billion Valuation"

"Marx and Engels Meet The Jetsons"

Since it's May Day, a repost from May 2013:

We've looked at some aspects of Marx and Engels:
Karl Marx Dabbles in the Market (and rationalizes his success)
Karl Marx on Market Manias
And:
Friedrich Engels: Global Macro With an Emphasis on Commodities

Here's more, from The Baffler:

Of Flying Cars and the Declining Rate of Profit

A secret question hovers over us, a sense of disappointment, a broken promise we were given as children about what our adult world was supposed to be like. I am referring not to the standard false promises that children are always given (about how the world is fair, or how those who work hard shall be rewarded), but to a particular generational promise—given to those who were children in the fifties, sixties, seventies, or eighties—one that was never quite articulated as a promise but rather as a set of assumptions about what our adult world would be like. And since it was never quite promised, now that it has failed to come true, we’re left confused: indignant, but at the same time, embarrassed at our own indignation, ashamed we were ever so silly to believe our elders to begin with.

Where, in short, are the flying cars? Where are the force fields, tractor beams, teleportation pods, antigravity sleds, tricorders, immortality drugs, colonies on Mars, and all the other technological wonders any child growing up in the mid-to-late twentieth century assumed would exist by now? Even those inventions that seemed ready to emerge—like cloning or cryogenics—ended up betraying their lofty promises. What happened to them?...MUCH MORE

"...In the earliest formulations, which largely came out of the Marxist tradition, a lot of this technological background was acknowledged. Fredric Jameson’s “Postmodernism, or the Cultural Logic of Late Capitalism” proposed the term “postmodernism” to refer to the cultural logic appropriate to a new, technological phase of capitalism, one that had been heralded by Marxist economist Ernest Mandel as early as 1972. Mandel had argued that humanity stood at the verge of a “third technological revolution,” as profound as the Agricultural or Industrial Revolution, in which computers, robots, new energy sources, and new information technologies would replace industrial labor—the “end of work” as it soon came to be called—reducing us all to designers and computer technicians coming up with crazy visions that cybernetic factories would produce...."

HT: The Columbia Journalism Review's The Audit blog.
Also:

Marx on Politics

"Politics is the art of looking for trouble, finding it everywhere, 

diagnosing it incorrectly, and applying the wrong remedies."
-Groucho (source) 

"Marx at 193"
...Groucho versus Karl: the great Marx debate

Religion is the sigh of the oppressed creature, the heart of a heartless world, just as it is the spirit of a spiritless situation. It is the opium of the people.
Karl Marx 

It isn’t necessary to have relatives in Kansas City in order to be unhappy.
Groucho Marx

The last capitalist we hang shall be the one who sold us the rope.
Karl Marx 

Money frees you from doing things you dislike. Since I dislike doing nearly everything, money is handy.
Groucho Marx

The oppressed are allowed once every few years to decide which particular representatives of the oppressing class are to represent and repress them.
Karl Marx 

In America you can go on the air and kid the politicians, and the politicians can go on the air and kid the people.
Groucho Marx

Is the color scheme a little too, as they say in Hollywood, On the Nose?

"Germany as Collateral Damage in America’s New Cold War"

Happy May Day!

From one of our two favorite Marxist economists. But first the introduction to 2022's "America’s real adversaries are its European and other allies":

The author of this essay, Michael Hudson, is a Marxist economist.

But not just any Marxist economist. Leon Trotsky was his godfather.

And in addition to his professorship at the University of Missouri - Kansas City he teaches at Beijing's School of Marxist Studies, Peking University.

Yves Smith at naked capitalism seems to like him.

And he almost has me convinced that the only way to clear the sclerotic arteries of American capitalism is to declare Jubilee on all debts. He may have gotten attracted to this ancient idea during his time on Harvard's archaeology faculty at the Peabody Museum as a research fellow in Babylonian economics. (Wiki) Not to be confused with The Babylon Bee's 2019 piece "Modernized Year Of Jubilee Will Forgive Everyone For Their Old Tweets". [rather ironic in light of the Bee's being kicked off Twitter, inciting Elon Musk and setting that whole train in motion]

Anyhoo, from Professor Hudson's website, February 8, 2022 i.e. sixteen days before Russia invaded:

The U.S. aim is to keep them from trading with China and Russia 

And the headline essay, from Professor Hudson's personal website, March 29, 2024:

As published in Berliner Zeitung.

The dismantling of German industry since 2022 is collateral damage in America’s geopolitical war to isolate China, Russia and allied countries whose rising prosperity and self-sufficiency is viewed as an unacceptable challenge to U.S. hegemony. To prepare for what promises to be a long and costly fight, U.S. strategists made a pre-emptive move in 2022 to turn Europe away from its trade and investment relations with Russia. In effect, they asked Germany to commit industrial suicide and become a U.S. dependency. That made Germany the first and most immediate target in America’s New Cold War.

Upon taking office in January 2021, Joe Biden and his national-security staff declared China to be America’s number one enemy, viewing its economic success as an existential threat to U.S. hegemony. To prevent its market opportunities from attracting European participation as it built up its own military defense, the Biden team sought to lock Europe into the U.S. economic orbit as part of its drive to isolate China and its supporters, hoping that this would disrupt their economies, creating popular pressure to surrender their hopes for a new multiipolar economic order.

This strategy required European trade sanctions against Russia, and similar moves to block trade with China in order to prevent Europe from being swept into the emerging China-centered mutual prosperity sphere. To prepare for its U.S.-China war, U.S. strategists sought to block China’s ability to receive Russian military support. The plan was to drain Russia’s military power by arming Ukraine to draw Russia into a bloody fight that might bring about a regime change. The unrealistic hope was that voters would resent war, just as they had resented the war in Afghanistan that had helped end the Soviet Union. In this case they might replace Putin with oligarchic leaders willing to pursue neoliberal pro-U.S. policies akin to those of the Yeltsin regime. The effect has been just the opposite. Russian voters have done what any population under attack would do: They have rallied around Putin. And the Western sanctions have obliged Russia and China to become more self-sufficient.

This U.S. plan for an extended global New Cold War had a problem. The German economy was enjoying prosperity by exporting industrial products to Russia and investing in post-Soviet markets, while importing Russian gas and other raw materials at relatively low international prices. It is axiomatic that under normal conditions international diplomacy follows national self-interest. The problem for U.S. Cold Warriors was how to persuade Germany’s leaders to make an uneconomic choice to abandon its profitable commerce with Russia. The solution was to foment the war with Russia in Ukraine and Russia and incite Russophobia to justify imposing a vast array of sanctions blocking European commerce with Russia.....

....MUCH MORE

California's Property & Casualty Insurance Mess: "Allstate to write in California when it can price for cat models & reinsurance costs" (ALL)

Don't encroach on wilderness/semi-wilderness by building housing in forests.

From the cat bond/reinsurance mavens at Artemis, April 26:

US insurer Allstate has said that it will resume underwriting policies in California once new regulation has been enacted that allows it to price using forward-looking catastrophe risk models and include the costs of reinsurance within its rates, Bloomberg has reported.

New regulations are set to be enacted in California in response to what has been seen as an insurance crisis with carriers exiting the state after taking heavy wildfire and weather losses in recent years.

As we’ve previously reported, the rules are set to allow the use of forward-looking catastrophe models and to expand catastrophe model use to cover additional perils, while additional regulation is expected to enable insurance carriers to factor in their costs of reinsurance cover into their policy pricing as well.

Both of these issues, the inability to leverage modern catastrophe models for pricing and to price sufficiently to afford the cost of reinsurance, have been cited by a number of major carriers that have pulled-back on writing business in California in recent years.

Now, Bloomberg has reported that Allstate is ready to return, on the condition the new regulations are passed....

....MUCH MORE

Nobel Prizewinner Angus Deaton Has Rethought His Support For Immigration

The writer is himself an immigrant.

From the International Monetary Fund's Finance & Development symposium, "Rethinking Economics" March 24:

....I used to subscribe to the near consensus among economists that immigration to the US was a good thing, with great benefits to the migrants and little or no cost to domestic low-skilled workers. I no longer think so. Economists’ beliefs are not unanimous on this but are shaped by econometric designs that may be credible but often rest on short-term outcomes. Longer-term analysis over the past century and a half tells a different story. Inequality was high when America was open, was much lower when the borders were closed, and rose again post Hart-Celler (the Immigration and Nationality Act of 1965) as the fraction of foreign-born people rose back to its levels in the Gilded Age. It has also been plausibly argued that the Great Migration of millions of African Americans from the rural South to the factories in the North would not have happened if factory owners had been able to hire the European migrants they preferred....

....MUCH MORE on various other topics.

Media: Reporting On Amazon's Dark Underbelly (and Andreessen Horowitz)

From Vanity Fair, April 23:

Inside the Brutal Business Practices of Amazon—And How It Became 'Too Toxic to Touch'

In an interview with Vanity Fair, reporter Dana Mattioli reveals how the company systematically stifles criticism, squeezes out competitors, and even pits its own employees against one another. “People tend not to last,” she says, “because it’s very aggressive and it can be bruising.”

In May of 2020, seven members of the House Judiciary Antitrust Subcommittee penned a letter to then CEO of Amazon Jeff Bezos. “On April 23,” their message began, The Wall Street Journal “reported that Amazon employees used sensitive business information from third-party sellers on its platform to develop competing products.” The article contradicted previous sworn testimony from the company’s general counsel, possibly rendering the testimony “false or perjurious,” the seven congressional leaders wrote.

The Journal’s exposé, which ultimately spurred Bezos’s first-ever congressional testimony, was written by Dana Mattioli as part of the paper’s wide-ranging investigation into Amazon’s business practices. At the time, Mattioli, a longtime business reporter, had recently moved into the Amazon beat, her interest piqued by the corporation’s tentacular infiltration of nearly every aspect of American economic life. Now, four years later, she’s out with The Everything War, a new book-length examination of Amazon that explores everything from its rise to power to its lobbying efforts and the brewing backlash against it.

In this interview with Vanity Fair, edited for length and clarity, Mattioli and I spoke about the challenges of reporting on an infamously secretive and combative company, Amazon’s forays into political-influence peddling, its new foe in the Biden administration, and which candidate she thinks Amazon execs want to see back in the White House come January 2025.

Vanity Fair: What first got you interested in covering Amazon?

Dana Mattioli: I was The Wall Street Journal’s mergers-and-acquisitions reporter for six years, and in that role, my job was to cover which companies are buying other companies across industries globally. Something fascinating happened during my tenure in that role. It wasn’t just retail companies that were nervous about Amazon. I’d speak to the bankers, the lawyers, the CEOs, the board members at different companies, and they started talking about how they were worried about Amazon invading their industry. Over the course of those six years, those questions got louder. It started bleeding into other sectors where you wouldn’t even really think about Amazon at the time. The company seemed to stretch into every vertical and its tentacles kept spreading. It occurred to me that this was the most interesting company, but also one of the most secretive companies in business history. That to me seemed like such a fun challenge to dig in and see what was going on behind the scenes....

....MUCH MORE

And 700 miles south, November 19, 2022:

Andreessen Horowitz and the Media: Yikes! (COIN) "Inside the nasty battle between Silicon Valley and the reporters who write about it."

"Eastern China’s Hangzhou to test self-driving vehicles in downtown, urban areas"

From the South China Morning Post, May 1:

Eight main districts in Hangzhou including downtown Gongshu and Shangcheng, as well as Tonglu county, will be open for self-driving vehicle tests from May 1
Hangzhou’s initiative shows much-needed local government support for China’s autonomous-driving system developers

The municipal government of Hangzhou, the capital of eastern Zhejiang province, is looking to help step up China’s autonomous transport ambitions by opening the city’s main urban areas to self-driving vehicles starting from this year’s May Day holiday.

Eight main districts in the city including downtown Gongshu and Shangcheng, as well as Tonglu county – covering an area of 3,474 square kilometres – will be made available to pilot tests of self-driving vehicles from Wednesday, according to a report by local outlet Qianjiang Evening News.

This new initiative by Hangzhou forms part of a new municipal policy to bolster the application of “intelligent connected vehicles” within the city, helping China’s move towards a driverless future....

....MUCH MORE

KKR Survey: "There’s ‘No Going Back’ For Insurance Company Investment Portfolios"

From Institutional Investor, April 30:

CIOs are more confident in both liquid and illiquid allocations and building more resilient, “all-weather” portfolios.

While higher interest rates and a new market regime are stressing many investors, to insurance companies, today’s markets feel closer to normalcy — and their investment performance has left them feeling confident about how they have constructed their portfolios.

The “last 12 years have been abnormal, today is normal,” said a chief investment officer at an insurance company, one of almost 50 CIOs who participated in KKR’s first insurance survey since 2021. The group surveyed oversees a total of more than $8 trillion in assets. Half were based in the U.S., a third were based in Europe, and the rest in Asia or elsewhere.

A little context: The last time KKR did the survey there were $15 trillion of negative-yielding fixed income assets in aggregate. “Today, by comparison, that number is zero,” a report on the survey says. Insurers tend to have more conservative portfolios than other institutional investors to protect their bottom line, should claims be higher than risk models expected. In a low rate environment with less risky assets like fixed income yielded little, insurers were unable to write as many policies as they might have in the past.

But higher interest rates meant CIOs could build up bigger pools of liquid assets — namely government and other investment grade bonds — to meet their overall return goals. This has benefited insurers at the business level: They can now write more policies, thus driving revenue. It has also enabled insurers to continue growing their allocations to alternative investments. That combination has given insurers more confidence in their loss reserves so they can write new business, which they want to do, according to KKR....

....MUCH MORE

They can invest in collateralized Beanie Baby obligations for all I care as long as they maintain their claims-paying capacity. If they don't, perhaps top insurance company officers should be subject to the old-school justice of Henry I:

Does King Henry I's Order of 1125 Apply To The BoE and Treasury As Well As To The Royal Mint? 

"All the moneyers who were in England should be mutilated"
This was the order given by King Henry I in 1125. Specifically, they should each "lose their right hand and be castrated....

"Microsoft boss charms Indonesia with $1.7B AI, cloud injection"

From The Register, April 30: 

Promises to train 850,000 workers and build datacenters

Microsoft CEO Satya Nadella says the company will invest $1.7 billion in expanding its presence and building datacenters in Indonesia.

Nadella announced the investment during his grand tour of Southeast Asia, the same region Apple CEO Tim Cook visited earlier this month. During his trip to the island country, Nadella met Indonesian President Joko Widodo and his cabinet to discuss AI. In a blog post, Microsoft said it plans to "transform the nation into a global economic powerhouse."

"This new generation of AI is reshaping how people live and work everywhere, including in Indonesia," Nadella said. "The investments we are announcing today – spanning digital infrastructure, skilling, and support for developers – will help Indonesia thrive in this new era."

To support this infrastructure, Microsoft will train 840,000 Indonesians in AI, a big chunk of the 2.5 million AI trainees envisioned across Southeast Asia. It seems plans for the datacenters aren't set in stone yet, but according to Reuters, President Widodo said the small island of Bali just east of Java and the soon-to-be new capital city of Nusantara on the island of Borneo would both be good options....

....MUCH MORE

"Elon Musk issues brutal email to Tesla staff as he goes 'absolutely hardcore' and fires two senior executives, his entire Supercharger team, and moves to lay off hundreds more employees"

There's a reason for today's Tesla, Tesla, Tesla theme. Something's up. As noted April 23: 

It is possible that Mr. Musk knows more about electric vehicles and the retail market for electric vehicles than I do. And it is possible that he intuits something about the industry or the regulatory or government policy framework toward electric vehicles that he hopes to either guard against or take advantage of....

From the Daily Mail, April 30:

• Elon Musk announced two senior executives were fired Monday night
• The Tesla boss revealed he will go 'hardcore' with layoffs amid falling sales
• He made a surprise visit to China Sunday promising driverless cars

Elon Musk fired two Tesla senior executives and announced plans to go 'absolutely hardcore' with layoffs, frustrated by falling sales and the pace of job cuts so far, according to a new report. 

The Tesla boss, who sat down with Chinese premier Li Qiang on Sunday promising an imminent roll-out of driverless cars in the country, sent a brutal email to senior managers Monday night, The Information reported.

Rebecca Tinucci, senior director of the electric vehicle maker charging infrastructure, and Daniel Ho, head of the new vehicles program, will leave on Tuesday morning, the report said.

Musk also plans to dismiss everyone working for Tinucci and Ho, including the roughly 500 employees who work in the Supercharger group.

'Hopefully these actions are making it clear that we need to be absolutely hard core about headcount and cost reduction. While some on exec staff are taking this seriously, most are not yet doing so,' Musk said....

....MUCH MORE

Today (so far):

• "Ford Lost $130,000 on Every EV It Sold in the First Quarter" (F)
• Watch Out Elon: "Wireless EV Charging Hits Key Benchmark"
• "Elon Musk says any company that isn’t spending $10 billion on AI this year like Tesla won’t be able to compete" (TSLA)

Chips: "AMD’s outlook fails to impress, and its stock falls"

From MarketWatch, April 30:

Chip company gives a revenue forecast that’s in line with the consensus view at the midpoint 

Advanced Micro Devices Inc. late Tuesday reported quarterly earnings that met Wall Street’s expectations, but it wasn’t enough to boost the stock as the company also merely matched the consensus view with the midpoint of its outlook.

“This is an incredibly exciting time for the industry, as widespread deployment of [artificial intelligence] is driving demand for significantly more compute across a broad range of markets,” Chief Executive Lisa Su said. “We are executing very well as we ramp our data-center business and enable AI capabilities across our product portfolio.”

The company said it expects second-quarter revenue of $5.7 billion, plus or minus $300 million, which is in line with analysts’ forecasts of $5.73 billion.

That would represent year-over-year growth of about 6% at its midpoint, the company said. Non-GAAP gross margin for the quarter is expected to be around 53%.

AMD shares AMD dropped more than 3% in after-hours trading Tuesday....

....MUCH MORE

Chip sales for the data center market were up 80%.

"Amazon stock rises as Q1 earnings top estimates with $143.3B in revenue; AWS sales up 17%" (AMZN)

The stock is trading up $3.95 (2.26%) at $178.95 in early after-hours action. Not quite making back the $5.96 lost during the regular session.

From Seattle's own, GeekWire, April 30:

Amazon topped estimates for its first quarter earnings, reporting $143.3 billion in revenue, up 13% year-over-year, and earnings per share of $0.98.

Analysts expected Q1 revenue of $142.7 billion and earnings per share of $0.83.

Amazon’s two big profit drivers, Amazon Web Services and advertising, posted year-over-year revenue growth of 17% and 24%, respectively.

Overall operating income reached $15.3 billion in the first quarter, compared to $4.8 billion a year ago, and well ahead of estimates....

....MUCH MORE including pre-conference call guidance.

"Ford Lost $130,000 on Every EV It Sold in the First Quarter" (F)

Making a business of electric vehicles is hard.

From Car&Driver, April 26:

The Blue Oval reported an 84 percent drop in revenue in its Model e electric division.

• Ford's Model e EV division reported a net revenue of around $100,000,000 in the first quarter.
• Adding in expenses, though, the Blue Oval's EV arm lost $1.3 billion for the quarter.
• Ford largely blames margin-cutting price cuts for the massive drop in revenue compared to Q1 2023.

Ford reported a net income of $1.3 billion for the first quarter of 2024, a figure largely bolstered by the success of the company's Ford Pro fleet division and the $3 billion it brought in—more than three times that of the internal-combustion-engine-focused Ford Blue arm. The Blue Oval's battery-electric–oriented Model e division, however, remained a drain on company funds, losing $1.3 billion for the quarter—around twice what it lost during the same period in 2023. The company blamed "industry-wide pricing pressure" in its first-quarter earnings presentation....

....MUCH MORE

The article goes on to point out it is a damn good thing the rest of Ford's business is profitable.

Watch Out Elon: "Wireless EV Charging Hits Key Benchmark"

One of the current (!) and future cash flows that go into analyst models of Tesla's valuation is the charging business. In North America they basically own it, with by far the largest network of charging points and with 20 out of 22 competitors having signed on to the standard.

One figure that's been tossed around is $5 billion in annual revenue by 2030. Whether that's a good guess, I don't know but that's the order of magnitude. Plus it's easy to remember.

From IEEE Spectrum, April 18:

Wireless EV Charging Hits Key Benchmark
Oak Ridge researchers move plugless electric future forward 

Researchers at Oak Ridge National Laboratory in Tennessee recently announced that they have set a record for wireless EV charging. Their system’s magnetic coils have reached a 100-kilowatt power level. In tests in their lab, the researchers reported their system’s transmitter supplied enough energy to a receiver mounted on the underside of a Hyundai Kona EV to boost the state of charge in the car’s battery by 50 percent (enough for about 150 kilometers of range) in less than 20 minutes.

“Impressive,” says Duc Minh Nguyen, a research associate in the Communication Theory Lab at King Abdullah University of Science and Technology (KAUST) in Saudi Arabia. Nguyen is the lead author of several of papers on dynamic wireless charging, including some published when he was working toward his PhD at KAUST.

The Oak Ridge announcement marks the latest milestone in work on wireless charging that stretches back more than a decade. As IEEE Spectrumreported in 2018, WiTricity, headquartered in Watertown, Mass., had announced a partnership with an unspecified automaker to install wireless charging receivers on its EVs. Then in 2021, the company revealed that it was working with Hyundai to outfit some of its Genesis GV60 EVs with Wireless charging. (In early 2023, Car Buzz reported that it had sniffed out paperwork pointing to Hyundai’s plans to equip its Ionic 5 EV with wireless charging capability.)....

....MUCH MORE

Another development was the unveiling of a battery at the Beijing Auto Show last week. 

From Reuters, another example of those advantage flywheels accruing incremental gains for the best-of breed-companies, in this case the world's largest EV battery producer. From Reuters, April 25:

Chinese EV battery maker CATL unveils LFP battery with 1,000 km range

It's not just the 620 mile range. The battery can handle extremely fast charging. From Electrek, also April 25:

CATL unveils world’s first LFP battery with 4C ultra-fast charging for 370-mi in 10 mins

"....that can add 370 miles (600 km) range in 10 minutes..."

And the flywheels? From the time CATL introduced the predecessor to the new battery, July 11, 2023:

"CATL announces new battery with 400 kilometer range on 10 minute charge"
Have I ever mentioned the "Flywheel Effect?"
*****
I think we're witnessing the Flywheel Effect in action at, not just China's but the world's largest battery producer.
Incremental advantages lead to overwhelming business success. I don't know if there are 16,000 researchers in the entire rest of the battery biz. If that's the case, how can they catch up to CATL? 

Amazing what being able to hire 16,000 researchers can lead to,

And just for grins and giggles, from Reuters, April 29:

CATL boss visits Elon Musk's Beijing hotel on Tesla CEO's surprise trip

"Elon Musk says any company that isn’t spending $10 billion on AI this year like Tesla won’t be able to compete" (TSLA)

This.

This is such an important concept to grasp. It's the advantage flywheels, the rich get richer, winner-take-all reality of business in 2024.

From Fortune via Yahoo Finance April 29:

Elon Musk has a message for America’s business leaders—either prepare yourself for the AI revolution or start writing your corporate obituary.

At a juncture in time when Tesla’s CEO is cutting back on investments into new vehicle capacity, he is spending $10 billion this year alone to bulk up on AI training and inference, and position Tesla at the forefront of the industry for real-life applications outside of generative AI.

“Any company not spending at this level, and doing so efficiently, cannot compete,” he posted on X Sunday.

Spending on AI inference would primarily be targeted at his range of cars, a possible indication that he is preparing the ground for the next generation of his custom-designed Full Self-Driving (FSD) computer known as HW5.

The distinction between training and inference is important since close observers will know Musk is currently working on another major AI project, his humanoid robot dubbed Optimus after the 1980s cartoon vehicle that transformed into a sentient robot.

This bold and risky pivot toward AI—and by implication away from his previous focus on a tenfold increase in car sales to 20 million EVs annually—definitively answers the perennial question whether Tesla is an automaker or a tech company in favor of the latter.

Any typical auto executive would have long since invested in rejuvenating one of the oldest product ranges in the auto industry. For example, Tesla’s EV archrival, BYD, is pumping out one new model after another across its portfolio of brands with the help of its small army of 90,000 vehicle engineers.

Tesla will spend around $10B this year in combined training and inference AI, the latter being primarily in car.

Any company not spending at this level, and doing so efficiently, cannot compete.

— Elon Musk (@elonmusk) April 28, 2024

Musk however seems to view his cars more as an iPhone on wheels, a premium device for delivering high-margin software, that can be sold at lower profit since revenue will be recouped by offering services around the vehicle.

For the moment, that approach has not worked. Tesla has found itself forced to repeatedly cut prices to stimulate enough demand to keep his factories humming. Musk even recently resorted to slashing the price of his FSD software by a third.

Only 18 months ago, the idea of Tesla struggling to find customers seemed ludicrous, to borrow a favorite adjective of Musk. Yet China’s new generation of EV rivals are in a class of their own when it comes to value for money, and his own personal brand has been tarnished.

Musk’s latest answer has been to....

....MUCH MORE 

This story was originally featured on Fortune.com

Previously:
March 18
In Nvidia's World, If You (and your company) Don't Have Money You Will Not Be Able To Compete (NVDA)

The advantage flywheels keep spinning and reinforcing each other to the point that the Pareto distribution of profits - 20% of companies reap 80% of the profits - is becoming Super-Pareto where 5% of the companies reap 95% of the profits and is approaching Hyper-Pareto at maybe 2% of companies reaping 98% of profits.

It all comes down to having the resources to keep up. 

I watched Mr. Huang give the keynote and it's all a bit much to digest before firing out comments that would make any sense at all so here are some of today's headlines to give a taste of what the intro paragraph is based on.

These are Nvidia's press releases via GlobeNewswire....

February 28
The Hyper-Pareto Distribution Of Profits Is Happening Right Now (plus an anniversary)

It's not some cutesy management* fad or pop insight like "Business secrets of Genghis Khan."

To the rich go the profits and internalizing that fact makes the rest of this portfolio construction/fund management/investing stuff easier to conceptualize and execute.

And AI is accelerating the already extant dynamic. 

*****

*Although people had been observing and discussing "rich get richer" and "winner-take-all" dynamics for over a century, one of our favorite pointers toward the current situation did come out of a business school. We've been hammering on this for so long that I start to bore myself. Here's a recapitulation from last year, linking to an article that was published seven years ago today:

HBR—From Pareto To Hyper-Pareto: "AI Is Going to Change the 80/20 Rule"

A prescient article from the Harvard Business Review, February 28, 2017:....

*****

Why Do the Biggest Companies Keep Getting Bigger? It’s How They Spend on Tech" 

...Much more important than the direct monetization of big data is the strategic advantage it can bestow over time.

In a winner-take-all economy, as in a horse race, small differences in superiority are rewarded all out of proportion to the actual advantage. A top thoroughbred may only be a couple fifths of a second faster than the field but those two lengths over the course of a season can mean triple the earnings for #1 vs. #2.

In commerce the results can be even more dramatic because rather than the 60%/20%/10% purse structure of the racetrack the winning vendor will often get 100% of a customer's business.....

Just to reiterate, every incremental advantage that a company can afford does not affect income production in isolation. They accrete in sometimes unforeseeable combinations:

How to Think About Companies: "Advantage Flywheels"

A very handy conceptual framework first posted after the start of the U.S. lockdowns, April 2020. Schools were closed so it seemed natural to link to a superb mini-MBA module.  

Eat your heat out HBR....

February 7
AI: Tesla Installing Second Dojo Supercomputer In New York Gigafactory (TSLA; NVDA)

January 5
AI: "Inside Tesla’s Innovative And Homegrown 'Dojo' AI Supercomputer" (TSLA)

It really is a big deal that a company can afford to spend over a billion dollars to build their own supercomputer and it really is a big deal that the same company has all the training data from the billions of miles of real-world driving and it really is a great example of the concept of advantage flywheels and hyper-pareto distribution of rewards, i.e. the rich get richer.

Whether it is going to open-up the $10 trillion addressable market and add the $500 billion of market cap that Morgan Stanley foresees is still an open question....

And many more. If interested use the 'search blog' box, upper left.