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Vested Shorts:Amazon’s $4B investment in Anthropic, Xiaomi rivals Tesla, AI meets Hollywood, and DoorDash drone delivery

by Parth Parikh
March 30, 2024
4 min read
Vested Shorts:Amazon’s $4B investment in Anthropic, Xiaomi rivals Tesla, AI meets Hollywood, and DoorDash drone delivery

In today’s edition

  • Global markets rally
  • OpenAI showcases Sora to major studios
  • Amazon’s AI ambitions
  • Xiaomi’s EV leap
  • Skyborne deliveries soar

Market Snapshot

The stock market displayed mixed performance as it approached the holiday weekend, with the S&P 500 and Dow Jones Industrial Average reaching new record highs, while the Nasdaq Composite edged slightly lower. This divergence came against the backdrop of anticipation for the upcoming Personal Consumption Expenditures (PCE) price index report, a key inflation indicator favoured by the Federal Reserve. Despite the US stock and bond markets being closed for the Good Friday holiday, the inflation data is highly anticipated due to recent reports showing higher-than-expected increases in both the Consumer Price Index (CPI) and Producer Price Index (PPI) for January and February.

Stock market closing data for the week from March 25th to 29th, 2024

News Summaries

Global stock markets have seen their best first-quarter performance in five years, with a 7.7% increase in the MSCI worldwide stocks index, driven by optimism for a soft US economic landing and interest in artificial intelligence. Nvidia’s significant market value gain, over $1 trillion, underscores the AI sector’s influence on this growth. Despite inflation concerns, the US’s stable domestic growth and the Federal Reserve’s rate cut projections have supported investor confidence. This positive momentum has spread globally, with stock indices in Europe and Japan also showing impressive gains, signalling a broadening of the rally across various sectors beyond technology. 

OpenAI is actively engaging with major Hollywood studios like Paramount, Universal, and Warner Bros Discovery to introduce Sora, its advanced video generation technology, aiming to demonstrate its potential to revolutionize the film industry. During these presentations, led by CEO Sam Altman and COO Brad Lightcap, the technology showcased its ability to generate detailed videos from simple prompts, sparking debates about its impact on production costs and creative processes. Despite Hollywood’s cautious stance, especially in light of recent strikes emphasizing AI protections, the meetings indicate a growing interest in how AI could streamline production while raising questions about creative integrity and technical limitations. OpenAI’s strategy remains focused on refining Sora, addressing its current constraints, and exploring safe commercialization avenues, with the industry’s response tilting towards optimism for potential cost savings without undermining the storytelling ethos.

Amazon has injected an additional $2.75 billion into AI startup Anthropic, bringing its total investment to $4 billion and marking its largest venture commitment yet. His move is part of a broader trend among tech giants like Google, Microsoft, and Amazon themselves, who are increasingly partnering with AI startups to secure a competitive edge in the generative AI field. Despite growing regulatory scrutiny over potential anti-competitive risks, these collaborations continue to flourish. Anthropic, known for its advanced AI model Claude 3, which rivals Open Ai’s GPT-4, benefits from these investments by gaining substantial financial and technological resources, including cloud and computing services, at a valuation surpassing $18 billion. Amazon’s investment not only solidifies its partnership with Anthropic, ensuring Amazon Web Services as its primary cloud provider, but also positions Amazon competitively against Microsoft and Google in the AI space, highlighting the strategic importance of AI in shaping the future of technology and business.

Xiaomi, traditionally known for its smartphones, is entering the electric vehicle (EV) market with the launch of its Speed Ultra 7 sports sedan in China, marking a bold shift towards becoming a top-five global auto manufacturer. Despite Apple’s recent withdrawal from its own car project, Xiaomi is diving in with a $29,867 price tag for its first EV, challenging established players like Tesla. The company aims to leverage its consumer electronics expertise and extensive supply chain relationships, including partnerships with battery and motor manufacturers, to produce a vehicle with impressive specifications, such as a range of up to 830km on a single charge. Amid a competitive and consolidating Chinese EV market, Xiaomi’s move into automotive represents a strategic bet on diversification and the pursuit of a new growth frontier, supported by its robust smartphone business cash flow and the strategic backing of the Chinese government, even as it navigates the challenges of aligning its value-for-money brand image with the premium EV market.

DoorDash, in collaboration with Alphabet’s Wing, has initiated drone delivery for Wendy’s, building on a trend towards faster, less polluting delivery methods. This service, following a pilot in Australia, offers customers an option for drone delivery at checkout, free of charge for now. The move is part of a broader effort to leverage drones to meet instant delivery expectations while mitigating road congestion and emissions. Although the delivery process is swift, the operational backend, from order placement to pick up, shows areas for improvement to streamline the overall efficiency. Similarly, Walmart’s exploration of drone delivery points to a future where drone services could become more integrated into e-commerce platforms, aiming for a seamless one-click ordering process. As drone delivery gains traction in the US, ongoing developments in infrastructure and technology are expected to address current limitations, enhancing the viability and convenience of drone-based logistics.


Rahul 19 hours ago


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