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Vested Shorts: $18B in Bitcoin across 11 ETFs, Disney’s India strategy, Figure AI’s $2.6B valuation, China’s PMI dip, and Apple’s pivot to AI

by Parth Parikh
March 2, 2024
4 min read
Vested Shorts: $18B in Bitcoin across 11 ETFs, Disney’s India strategy, Figure AI’s $2.6B valuation, China’s PMI dip, and Apple’s pivot to AI

In today’s edition

  • Apple’s AI focus and Project Titan shelved
  • Bitcoin ETF boom
  • Disney-Reliance mega deal
  • Figure AI’s innovation
  • China’s economic slowdown

Market Snapshot

U.S. equities soared to new heights as March began, continuing February’s record-setting momentum. Technology shares and economic optimism fueled the rally, with the S&P 500 and Nasdaq Composite hitting consecutive record highs. The semiconductor sector led gains, notably Broadcom’s 7.6% surge ahead of its quarterly report. Meanwhile, energy stocks capitalized on a near 2% increase in WTI crude oil, surpassing $80 per barrel for the first time in months. 

Stock market closing data for the week from February 26th to March 1st, 2024

News Summaries

Apple has shifted its strategic focus away from the ambitious “Project Titan,” an initiative aimed at developing an electric vehicle (EV) to rival Tesla and others, toward prioritising advancements in artificial intelligence (AI). This pivot reflects an acknowledgement of the challenges inherent in the automotive industry, including the complexities of autonomous vehicle technology and the competitive pricing landscape. The global EV market, while growing, has shown signs of deceleration, with the market share of battery vehicles increasing by only 2.8% to 15.8% last year, a slowdown from the previous year’s 4.7% surge. Concurrently, Apple’s decision comes amid a broader industry recalibration on self-driving technology, with giants like General Motors and Ford adjusting their autonomous vehicle ambitions in response to regulatory and technological hurdles. This refocusing also coincides with Apple’s efforts to catch up in the AI domain, where competitors like OpenAI, Microsoft, and Google have made significant strides. By reallocating resources from the car project, which was yet to materially contribute to Apple’s valuation, toward AI, Apple is aiming to reinforce its innovation edge and address its growth imperatives in the face of evolving consumer technologies and market dynamics.

The recent approval of spot bitcoin ETFs by US regulators, including heavyweights BlackRock and Invesco, has significantly contributed to a bullish trend in the cryptocurrency market, with 11 funds now holding 303,000 bitcoins valued at $18 billion—representing about 1.5% of the total bitcoin supply. This regulatory milestone has attracted a new wave of investor interest, propelling bitcoin prices and fostering optimism for surpassing all-time highs amidst a broader rally in traditional financial markets fueled by technological advancements such as artificial intelligence. Despite regulatory challenges and scepticism from entities like the European Central Bank, which questions bitcoin’s intrinsic value, the crypto industry’s resilience and recovery from past scandals underscore a transformative phase, marked by substantial fines for compliance failures and legal battles for industry figures, suggesting a pivotal moment for digital assets’ acceptance and integration into mainstream finance.

Disney has embarked on a significant strategic shift in India by merging its operations with Reliance Industries in an $8.5 billion deal aimed at mitigating the financial challenges it faces in the evolving Indian market. Under the arrangement, Reliance will control a 63% majority in the newly formed entity, infusing $1.4 billion into the venture, with Disney retaining a 37% stake. This move comes as Disney reevaluates its global strategy amidst financial pressures, including losses in its India sports segment and the broader challenges in its traditional and streaming businesses. The merger represents an acknowledgement of the complexities in capturing the diverse and cost-sensitive Indian audience, further highlighted by Disney’s recent loss of the lucrative IPL cricket streaming rights to a Reliance-Viacom18 joint venture. This consolidation is poised to significantly alter the media landscape in India, granting the merged entity a dominant position in the country’s television and streaming ad market.

Silicon Valley startup Figure AI, spearheading the integration of artificial intelligence into the workforce with humanoid robots, has secured a substantial $675 million investment from leading tech giants, including Microsoft, OpenAI, and Nvidia, boosting its valuation to $2.6 billion. This infusion of funds is earmarked for expanding AI capabilities, manufacturing of robots, and engineering talent acquisition. Collaborations with OpenAI and Microsoft aim to pioneer next-gen AI models for these robots, enhancing their language processing and operational efficiency. With an eye on addressing labour shortages and replacing roles deemed unsafe or undesirable, Figure AI’s vision extends to filling an anticipated 10 million job vacancies in the US by 2030. This move, supported by an array of prominent investors, signifies a significant step towards the futuristic deployment of AI-powered humanoid robots in various sectors, starting with a partnership with BMW for factory deployment in the US.

China’s economic growth is facing hurdles, as evidenced by the latest data showing a continued contraction in factory activity. The official manufacturing purchasing managers’ index (PMI) dipped to 49.1 in February, marking the fifth consecutive month of decline. This slowdown comes at a critical time, just before the National People’s Congress (NPC) meeting, highlighting the urgency for the Chinese government to implement effective measures to stimulate the economy. Despite a slight improvement in the non-manufacturing sector, overall investor and consumer confidence remains low, signalling a challenging path ahead for achieving the anticipated 5% growth target for 2024 amidst a backdrop of a sluggish property sector, deflation, and faltering foreign investment.

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