Tobias

Amazon is building its first wholly-owned subsea fiber-optic cable, Fastnet, connecting Maryland to Ireland. This initiative aims to bolster infrastructure for cloud computing and AI, addressing increasing demands for bandwidth, low latency, and cost-effectiveness. Fastnet will have a capacity exceeding 320 Tbps and is projected to be operational by 2028. This strategic move provides Amazon with greater control over its network, enhances resilience, and reduces reliance on third-party providers, reflecting a broader industry trend of tech giants investing in subsea cables.

White-collar layoffs are sweeping corporate America due to factors beyond just AI displacement. Amazon, UPS, and Target, collectively cutting over 60,000 jobs, cite corporate bloat, operational streamlining, and evolving business models as key drivers. While some companies openly attribute job cuts to AI implementation, experts suggest “AI-washing” may be masking underlying issues. Concerns about the economic outlook and a “bandwagon effect” contribute to the layoffs, impacting various sectors and raising questions about the labor market’s strength. Broader economic factors such as slowing sales, tariffs and inventory management issues also play a role.

Instacart launched a suite of AI-powered solutions, including an AI shopping assistant (“Cart Assistant”) and “Store View” for real-time shelf monitoring, to help grocers personalize shopping experiences and optimize operations. Sprouts and Kroger are early adopters. Instacart aims to democratize access to advanced technology, partnering with AI leaders like OpenAI, Microsoft, and Google. This move positions Instacart as a key technology partner amid increasing competition from retail giants like Amazon and Walmart investing in their own AI capabilities.

Bitcoin and Ether prices declined, driven by investor risk aversion linked to concerns about AI stock valuations. Bitcoin traded at $103,356, down 3% on Tuesday, while Ether fell 2.3% to $3,509.10. An analyst suggests decreased retail buying activity. Continued selling could push Bitcoin below $100,000, with limited near-term catalysts for recovery. October’s historically strong seasonality failed to materialize, mirroring 2018’s downturn.

Palantir CEO Alex Karp criticized Michael Burry for shorting Palantir and Nvidia, calling it “bats— crazy” to bet against AI leaders. Burry’s Scion Asset Management held significant put options against both companies. The news led to a stock dip for Palantir despite strong earnings. Karp believes Burry is wrong about the future of AI and Palantir’s role in it. Karp suggests Burry’s bearish sentiment is ill-informed, citing Palantir’s fundamental strength and growth in AI. The clash highlights ongoing debate about AI-related stock valuations.

Amazon secured a $38 billion cloud services deal with OpenAI, indicating a shift towards a dual-cloud strategy for the AI company and potentially paving the way for an IPO. Despite Amazon and Nvidia’s positive market performance, concerns arise over the concentration of market gains within a few tech giants. Separately, governments are increasingly considering tapping into citizens’ retirement savings to alleviate fiscal pressures, raising concerns about long-term risks to pension systems.

Binance CEO Richard Teng denies allegations of preferential treatment towards the Trump-backed stablecoin USD1 before Changpeng Zhao’s pardon. The controversy stems from a $2 billion investment Binance secured from Abu Dhabi’s MGX using USD1, raising concerns about influencing Zhao’s pardon following his guilty plea on money laundering charges. Teng insists Binance didn’t dictate MGX’s investment choice and that USD1 was listed elsewhere prior. Critics, including Senator Elizabeth Warren, allege corruption and question Binance’s technological assistance to World Liberty Financial, linking the pardon to boosting a Trump-related crypto venture.

Norway’s $2 trillion sovereign wealth fund, a major Tesla shareholder, opposes Elon Musk’s proposed $1 trillion pay package due to concerns about its size, dilution, and key person risk mitigation. Norges Bank Investment Management (NBIM) has already voted against the plan, citing concerns about governance implications. The news impacted Tesla shares, trading 2.4% lower premarket. The shareholder vote is a crucial test of investor confidence and could have broader ramifications for executive compensation in the tech industry. Critics argue the plan incentivizes short-term gains at the expense of long-term sustainability.

The AI sector’s valuation is debated, with some fearing a bubble. Magnus Grimeland of Antler argues against this, citing rapid adoption across industries unlike the slower cloud transition. He emphasizes real revenues, exemplified by OpenAI’s $1 billion ARR in 2023. Antler’s portfolio includes AI success stories, like Lovable surpassing $100 million ARR in eight months. Grimeland highlights the market entry of DeepSeek, suggesting smaller AI firms can challenge incumbents with strong teams and business models. Changing consumer behavior, impacted Google search, further fuels AI’s rise.

HSBC CEO Georges Elhedery and General Atlantic CEO William Ford addressed concerns about the disconnect between massive AI infrastructure investments and revenue growth at a Hong Kong summit. While acknowledging AI’s transformative potential, they cautioned that significant productivity gains and consumer willingness to pay for AI-driven services are longer-term prospects, potentially lagging behind investor expectations. Ford compared AI to railroads and electricity, technologies with profound impacts realized over extended periods, highlighting the need for patience and awareness of early-stage pitfalls like capital misallocation.