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AI Stocks Slump: A Wake-Up Call for Investors in Asia

Explore the recent market slump affecting AI investments in Asia, key players, investor concerns, and the future of tech stocks.

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AI investments in Asia

TL;DR:

  • AI stocks, including Nvidia and Alphabet, have led a sharp decline in US and Asian markets.
  • Investors are concerned about high AI expenditure without immediate revenue benefits.
  • The slump may signal a shift towards more discerning investment in AI technologies.

In a dramatic turn of events, financial markets in the US and Asia have taken a significant hit, with technology companies, particularly those focused on artificial intelligence (AI), bearing the brunt. This sudden downturn has left investors questioning the sustainability of the AI boom and the future of tech investments.

Market Meltdown: AI Stocks Lead the Decline

Wednesday’s trading session in New York saw a substantial sell-off, with the S&P 500 dropping by 2.3% and the tech-heavy Nasdaq plummeting by 3.6%. The Dow Jones Industrial Average also fell by 1.2%. Major tech giants, including Nvidia, Alphabet, Microsoft, Apple, and Tesla, were among the hardest hit.

The trend continued into Thursday, with Japan’s Nikkei index leading the declines in Asia, falling by more than 3%. Chip makers Renesas Electronics and Tokyo Electron in Japan, along with South Korea’s SK Hynix, were among the biggest losers.

Nvidia and Tesla: Key Players in the Slump

Nvidia, a leading AI chip giant, saw its shares drop by 6.8%. The company has lost about 15% of its value in the past two weeks. Tesla, the electric car maker led by multi-billionaire Elon Musk, experienced a significant 12% drop after its latest financial results failed to meet investor expectations.

Google and YouTube parent company Alphabet also saw its stock price fall by 5%. Despite reporting financial results that beat analyst expectations, the company’s high spending on AI technology has raised concerns among investors.

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Investor Concerns: Expenditure vs. Revenue

Investors are becoming increasingly wary of the high expenditure on AI without immediate revenue benefits. Jun Bei Liu, Portfolio Manager at Tribeca Investment Partners, commented, “I don’t think this will mark the start of the disbelief in AI… it just simply means investors will focus more on returns in this space than just buying the whole sector.”

Additionally, investors are cautious due to major surprises in the US presidential election campaign and the timing of an interest rate cut by the US central bank.

The Future of AI Investments

The recent slump in AI stocks may signal a shift towards more discerning investment in AI technologies. Investors are likely to become more selective, focusing on companies that can demonstrate a clear path to profitability and revenue growth from their AI investments.

Assessing AI Investments

Before investing in AI stocks, consider the following prompt:

Prompt: Evaluate the company’s AI strategy and its potential for revenue generation. Look for clear indicators of how the company plans to monetise its AI investments and the timeline for achieving profitability.

This prompt is crucial for investors to make informed decisions about AI stocks, ensuring they are not just buying into the hype but investing in companies with solid business models.

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AI and AGI in Asia: A Growing Landscape

Despite the recent market volatility, the AI and AGI landscape in Asia continues to grow. Companies and governments are investing heavily in AI technologies, recognising their potential to drive economic growth and innovation.

For instance, China has made significant strides in AI, with companies like Baidu and Tencent leading the way. South Korea and Japan are also investing heavily in AI, with a focus on robotics, autonomous vehicles, and smart cities.

To learn more about AI investments, tap here.

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The AI Revolution: Asia’s Role in a Transforming World

Explore the AI revolution in Asia, its challenges, and future prospects with insights from Eric Schmidt, highlighting the power of large language models and the importance of speed and risk-taking.

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AI Revolution Asia

TL;DR:

  • Eric Schmidt predicts AI’s impact over the next two years will be profound, surpassing social media’s influence.
  • Frontier models like OpenAI and Anthropic are leading the AI race, but funding and power are significant challenges.
  • Schmidt suggests a shift from arbitrary language to digital commands will revolutionise programming.

The AI Revolution is Here

Artificial Intelligence (AI) is set to transform the world in ways we can barely imagine. Eric Schmidt, former CEO and Chairman of Google, believes the changes brought by large language models (LLMs) like ChatGPT will be more profound than the impact of social media. This transformation will happen rapidly, within the next two years, and will affect every aspect of our lives.

The Power of Large Language Models

Large language models have reached a stage where they can interpret complex prompts and perform tasks that were once thought impossible. Schmidt highlights three key areas where AI will have a significant impact:

  • Context Windows as Short-Term Memory: Developers can use context windows to give LLMs short-term memory, allowing them to process vast amounts of information quickly.
  • AI Agents: These agents can read, understand, and apply complex concepts, such as chemistry, and use this knowledge to perform tasks.
  • Text to Action: The ability to convert text into actions will revolutionise programming, making it accessible to everyone.

The TikTok Example

To illustrate the power of text to action, Schmidt uses the example of TikTok. If TikTok were banned, he proposes using an LLM to create a copy of the app, complete with users, music, and preferences, all within 30 seconds. This demonstrates the potential of AI to disrupt traditional programming and business models.

Money and Power: The Challenges Ahead

While the potential of AI is immense, there are significant challenges to overcome. Schmidt highlights two main obstacles:

  • Funding: The leading AI companies, such as OpenAI, require vast amounts of money to continue their work. Sam Altman, CEO of OpenAI, estimates the company needs $300 billion.
  • Power: The energy required to power these AI models is beyond the current capabilities of the US power grid. Schmidt suggests partnering with Canada, which has abundant hydropower, to meet these energy needs.

The Race for AI Supremacy

Schmidt notes that the gap between the leading AI models and newcomers is widening. Six months ago, he believed the gap was closing, but now it appears to be growing. This highlights the importance of speed and risk-taking in the AI race. Companies that can move quickly and take calculated risks will have a significant advantage.

The Importance of Speed and Risk-Taking

Schmidt emphasises the need for speed in decision-making during this period of rapid change. He attributes Google’s underwhelming performance in AI to its culture, specifically its work-from-home culture, which he believes slows down decision-making. He also highlights the importance of risk-taking, citing Microsoft’s deal with OpenAI as an example of a risk that paid off.

Asia’s Role in the AI Revolution

Asia is poised to play a significant role in the AI revolution. With its vast population, technological prowess, and innovative spirit, Asia has the potential to lead the way in AI development and implementation. Countries like China, Japan, and South Korea are already investing heavily in AI, and their contributions will shape the future of this transformative technology.

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The Future of AI in Asia

The future of AI in Asia is bright. As AI continues to evolve, it will create new opportunities and challenges. Asia’s tech-savvy youth are well-positioned to take advantage of these opportunities and drive innovation in the AI space.

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AI Showdown: ChatGPT Doubles Users, Meta Hits 400 Million, and Google Reboots Strategy

Explore the rapid growth of AI adoption in Asia, with insights from OpenAI, Meta, and Google. Discover how AI is shaping the future.

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AI adoption in Asia

TL;DR:

  • ChatGPT usage doubled to 200 million active monthly users.
  • Meta’s AI features reach 400 million monthly users.
  • Google reintroduces AI image generator after addressing controversies.

In the rapidly evolving world of artificial intelligence (AI), the competition among tech giants is heating up. Recent data reveals significant growth in the adoption of AI chatbots and tools, highlighting the increasing importance of this technology in our daily lives. Let’s dive into the latest developments from OpenAI, Meta, and Google.

ChatGPT’s Meteoric Rise

OpenAI, the creator of ChatGPT, has announced that the usage of its iconic chatbot has more than doubled since November, reaching an impressive 200 million active monthly users. This surge in popularity is a testament to the growing interest and acceptance of AI-powered tools among the general public.

  • ChatGPT usage doubled to 200 million active monthly users.
  • 92% of Fortune 500 companies are using OpenAI’s services.

“The numbers could help quiet the small but growing group of naysayers that are asking to see bigger and quicker revenue from AI chatbots and other tools.”

Meta’s AI Expansion

Facebook-owner Meta has also reported a significant increase in the usage of its AI features. With 400 million monthly users and 185 million weekly users, Meta’s AI tools are gaining traction among its vast user base. The company’s Llama model, available for free, has seen a doubling in usage between May and July, highlighting its competitive edge against paid models like ChatGPT and Google’s Gemini.

  • Meta’s AI features reach 400 million monthly users.
  • Llama model usage doubled between May and July.

“The use of AI by Meta’s more than three billion users was ‘growing quickly, and we haven’t even rolled out in UK, Brazil, or EU yet,’ CEO and founder Mark Zuckerberg said in post on Threads.”

Google’s AI Comeback

Google, despite its early lead in developing generative AI, has faced criticism for lagging behind its rivals. However, the search engine giant is making a comeback with its Gemini chatbot, now integrated across all its products. Google has also reintroduced its AI image generator to premium and business customers after addressing previous controversies.

  • Google’s Gemini chatbot is now included across all its products.
  • AI image generator reintroduced after addressing controversies.

“Google earlier this year suspended generating images of people after Gemini was discovered to be creating diverse but historically inaccurate images, such as Asian Nazis during World War II or a George Washington who was Black.”

The Future of AI in Asia

The rapid growth of AI adoption in Asia is a testament to the region’s tech-savvy population and its eagerness to embrace emerging technologies. As AI continues to evolve, it is crucial for companies to stay ahead of the curve and address the ethical and practical challenges that come with this powerful technology. As AI continues to evolve, it is clear that its impact on our lives will only grow stronger. Stay informed, stay curious, and embrace the future of technology.

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We’d love to hear your thoughts on the future of AI and AGI in Asia. What excites you the most about this technology? Have you had any personal experiences with AI tools like ChatGPT or Meta’s AI features? Share your stories and insights in the comments below. Don’t forget to subscribe for updates on AI and AGI developments.

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The Future of AI: A Landmark Treaty Signed by US, Britain, and EU

The AI Convention, the first international AI treaty, addresses AI’s human rights aspects but faces criticisms for lacking enforceability.

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AI Convention

TL;DR:

  • The first legally binding international AI treaty will be signed by the US, Britain, EU, and other countries.
  • The AI Convention focuses on protecting human rights from potential AI risks.
  • Critics argue the treaty has been watered down and lacks enforceability.

A New Era in AI Governance

Artificial Intelligence (AI) is changing the world rapidly. From self-driving cars to predictive analytics, AI is everywhere. However, with great power comes great responsibility. That’s why the first legally binding international AI treaty is a big deal. This treaty, known as the AI Convention, will be signed by the US, Britain, EU, and other countries. Let’s dive into what this means for the future of AI.

What is the AI Convention?

The AI Convention is a treaty that focuses on the human rights aspects of AI. It was negotiated by 57 countries and adopted in May. The Council of Europe, an international organisation safeguarding human rights, led this initiative. The treaty aims to address the risks AI may pose while promoting responsible innovation.

“This Convention is a major step to ensuring that these new technologies can be harnessed without eroding our oldest values, like human rights and the rule of law,” said Britain’s justice minister, Shabana Mahmood.

How Does the AI Convention Work?

The AI Convention allows signatories to adopt or maintain measures to give effect to its provisions. This means countries can create their own laws based on the treaty’s principles. However, the treaty has been criticised for being too broad and lacking enforceability.

Francesca Fanucci, a legal expert at ECNL who contributed to the treaty’s drafting, highlighted some flaws:

“The formulation of principles and obligations in this convention is so overbroad and fraught with caveats that it raises serious questions about their legal certainty and effective enforceability,” she said.

Criticisms of the AI Convention

Critics argue that the treaty has been watered down. Fanucci pointed out exemptions for AI systems used for national security purposes. She also noted limited scrutiny of private companies compared to the public sector, calling it a “double standard”.

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Despite these criticisms, the AI Convention is a significant step forward in AI governance. It shows that countries are taking AI risks seriously and are willing to cooperate internationally.

The AI Convention vs. EU AI Act

It’s important to note that the AI Convention is separate from the EU AI Act. The EU AI Act is a comprehensive regulation on the development, deployment, and use of AI systems within the EU internal market. The AI Convention, on the other hand, is a broader treaty focusing on human rights.

What’s Next for AI Governance?

The AI Convention is just the beginning. As AI continues to evolve, so will the laws and treaties governing it. Countries will need to work together to ensure that AI is used responsibly and ethically.

AI in Asia: A Growing Landscape

While the AI Convention is a global initiative, Asia is also making strides in AI governance. Countries like China, Japan, and South Korea are investing heavily in AI. They are also developing their own AI regulations and ethical guidelines.

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What do you think about the AI Convention? Do you agree with the critics, or do you think it’s a step in the right direction? Share your thoughts in the comments below. And don’t forget to subscribe for updates on AI and AGI developments.

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