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In today’s edition
- Telegram’s user growth
- TikTok’s revenue milestone
- Abu Dhabi’s AI leap
- Auto giants collaborate
Market Snapshot
This past week, the S&P 500 and Nasdaq Composite experienced their second consecutive week of declines, largely influenced by pressures on technology stocks and discouraging inflation data, which dampened hopes for Federal Reserve rate cuts.
High inflation readings from the Consumer Price Index (CPI) and Producer Price Index (PPI) reports have made investors wary, especially ahead of the Federal Reserve’s upcoming meeting where rates are expected to remain unchanged. Notably, tech giants like Adobe, Salesforce, and Amazon saw significant losses, contributing to the overall market downturn.
By week’s end, the S&P 500 slightly fell by 0.1%, the Dow Jones by 0.02%, and the Nasdaq Composite by 0.7%, reflecting investor caution amidst uncertain economic indicators.
Stock market closing data for the week from March 11th to 17th, 2024
News Summaries
From 500 million in early 2021 to 900 million now, Telegram’s user base has expanded significantly. Coupled with this, the successful introduction of advertising and premium services brings it to the cusp of profitability and a potential IPO. With a compact workforce of about 50, the platform has evolved beyond its initial cryptocurrency audience to become a critical global communication resource. As it tackles the complex issue of content moderation, Telegram is turning to AI to find a balance between protecting freedom of speech and adhering to regulations. On the financial front, the company has raised approximately $2 billion through debt financing since 2021, preparing the ground for a public listing that might include offering shares to its loyal users. This strategy highlights Telegram’s commitment to independence while capitalizing on user growth and technological advancements.
In 2023, TikTok, owned by Beijing-based ByteDance, generated $16 billion in revenue within the US, underscoring the app’s substantial footprint amidst looming threats of a ban and potential forced sale to an American entity. This performance contributed to ByteDance’s $120 billion global revenue, positioning it to potentially surpass Meta as the leading social media conglomerate in terms of revenue. Despite TikTok’s unprofitability due to aggressive global expansion costs, ByteDance reported a net profit of $28 billion for the year, largely fueled by its operations in China through TikTok’s counterpart, Douyin, and its expanding e-commerce ventures. The company’s financial success occurs amid heightened geopolitical tensions and regulatory challenges in the US, casting uncertainty over TikTok’s future in a key market but also highlighting the app’s critical role in ByteDance’s global strategy and valuation considerations.
The United Arab Emirates, through its new Abu Dhabi-based investment company MGX, is making strategic moves to position itself as a global leader in artificial intelligence development by entering discussions for a potential investment in OpenAI’s chip venture. With estimates suggesting the cost of AI infrastructure could reach up to $7 trillion, the UAE, leveraging its considerable wealth, energy resources, and political support, aims to attract top AI talents and firms, including potential collaborations with industry leaders like Elon Musk’s xAI. The establishment of MGX, in collaboration with AI-focused G42 and sovereign fund Mubadala, reflects the UAE’s strategy to become an AI powerhouse by fostering an ecosystem conducive to technology innovation and partnerships despite navigating geopolitical complexities and trade tensions, especially with China. This endeavour aligns with the UAE’s proactive stance on AI, as evidenced by its appointment as the world’s first AI minister and prioritization of US tech partnerships, underlining its ambition to drive responsible and long-term AI advancements globally.
In a strategic shift driven by the competitive pressure of China’s rising electric vehicle (EV) market, Honda and Nissan, Japan’s leading car manufacturers, have decided to collaborate on developing electric cars, highlighting a broader trend among traditional automakers to pool resources against common threats. This collaboration, announced shortly after Volkswagen’s potential partnership with Renault, is aimed at consolidating efforts in software, core EV components, and auto intelligence technology to stay competitive against Chinese EV manufacturers like BYD, which has recently surpassed Tesla in sales. Despite their historical rivalry and without immediate plans for a capital tie-up, both companies recognize the urgency to adapt to the rapidly evolving automotive landscape. This move reflects a significant industry shift, as automakers worldwide face escalating costs and challenges in producing affordable EVs that are profitable, prompting them to reconsider past competitive stances in favour of collaboration to ensure survival and success in the face of global competition and technological advancements.
