December 08, 2024: Software, AI and Bitcoin

Last week, Dow Jones fell 0.6% after hitting a fresh all-time high Wednesday. S&P 500 was up around 1%, Nasdaq composite rose 3.3% — both indices set records on Friday. The Nasdaq could be looking extended here, as investors seem to have begun bidding up software names. Some investors are of the view that early January could see some selling pressure for tax related reasons. SpaceX is in talks to sell insider shares in a transaction valuing the company at about US$350 billion, a significant premium to a previously mulled valuation of US$255 billion reported by Bloomberg. Stock and crypto trading app eToro has hired Goldman Sachs as it plans a 2025 IPO. Fidelity marked up its equity stake in X by 32% in October. Salesforce stock jumped 6% after hours after reporting quarterly results, even as revenue growth stayed flat. Super Micro, on Monday said an independent investigation into its accounting practices found “no evidence of misconduct” shares surged 29% to US$42. As Bitcoin hit $100,000, Hedge funds made Microstrategy Wall Street’s hottest trade — effectively monetizing volatility in order to provide Microstrategy cash to buy Bitcoin. Google’s CEO Pichai said Wednesday that gains in conversational AI would be harder to come by in the coming years. Amazon unveiled new AI models, chips, and a supercomputer for Anthropic. OpenAI and Anduril will jointly develop AI for U.S. anti-drone systems to improve their ability to detect and respond to aerial threats. Sophic Client, Legend Power Systems Inc. provided a corporate update. Sophic Client Cybeats appointed cybersecurity industry leaders to its Advisory Board. Sophic Client Plurilock secured a $2.5 million order from the Department of National Defense. Sophic Client American Aires – Price is Right – in our report, we compared American Aires’ valuation to MedTech and Direct to Consumer companies. Canadian-founded, US -based AI company Tenstorrent secured more than US$693 million in a Series D funding from a slew of big-name investors.

Sophic Client Legend Power Systems Inc. (LPS-TSXV, LPSIF-OTC) corporate update.

This year has been transformative for Legend Power Systems, with tangible wins across five strategic pillars that form the backbone of our growth strategy. Each of these pillars represents a standalone opportunity to drive significant revenue growth, but together, they form a synergistic foundation that will likely catapult us to over $100 million annual revenue within the next 3–5 years. We are transitioning from dozens of SmartGATE installations annually to hundreds, and ultimately to thousands per year, in the near future. This shift is underpinned by strong execution, proven solutions, and a growing pipeline of wins and opportunities. The accomplishments we’ve already achieved demonstrate our ability to deliver, and we are confident that our trajectory is not just upward but transformative. GSA Green Proving Ground: SmartGATE is being deployed in federal facilities under the GSA’s program, with validation from Oak Ridge National Laboratory to quantify energy and cost-saving benefits, paving the way for broader adoption across government and private sectors. Department of Defense: Initial deployments at military bases address critical power challenges, with contracts expanding to include over 1,000 buildings, positioning SmartGATE as essential for infrastructure modernization. Energy Performance Contracts (EPC): Legend’s role in ESCO-led projects has grown, with proven success in optimizing energy systems and significant deals nearing final approval. City of New York: Collaborations with DCAS and NYC electrification initiatives position Legend for major growth opportunities in city-owned facilities spanning 15 million square feet. GSA Multiple Award Schedule: Expected soon, this designation will streamline federal procurement, accelerate revenue growth, and enhance Legend’s credibility in government markets. Outlook: Record bookings, improved margins, and a strong pipeline position Legend to reach $100 million in annual revenue within 3–5 years while achieving EBITDA-positive operations in 2025. https://t.co/kftq4IyFuU

Sophic Client Cybeats Technologies Corp. (CYBT-CSE,CYBCF-OTCQB) appoints cybersecurity industry leaders, Kurt Callewaert and Bob Haack, to its Advisory Board.

Cybeats Technologies Corp., announced the appointments of Kurt Callewaert and Bob Haack to the Cybeats Advisory Board. These distinguished industry leaders bring decades of experience in cybersecurity, regulatory compliance, and software supply chain management, further enhancing Cybeats’ commitment to securing the global software ecosystem. The Cybeats Advisory Board was created in 2021, and comprises seasoned experts who provide strategic insights, market expertise, and guidance to support our vision and business objectives. The Company continues to expand the advisory board with diverse perspectives and deep industry knowledge which are instrumental in shaping our direction and ensuring we stay ahead in a competitive landscape. Bob Haack is a leading expert in device security, driving innovative, scalable solutions across industries – including medical devices and the U.S. Department of Defense Risk Management Framework (RMF) – to protect connected systems, ensure compliance, and anticipate future challenges. Kurt Callewaert joins the advisory board of Cybeats following the recent partnership between Cybeats and Capyx, which leverages Cybeats’ products to help businesses in Belgium and Luxembourg meet compliance requirements under the EU Cyber Resilience Act (CRA), NIS2, and DORA. Mr. Callewaert is the Business Line Director Cybersecurity of Capyx Belgium and founder & co-CEO of Capyx Luxemburg, a leading IT services provider focused on helping businesses meet compliance requirements in cybersecurity, particularly in the EU market. https://t.co/JPxfAORGV8

Sophic Client Plurilock (PLUR-TSXV, PLCKF-OTCQB) secures $2.5 million order from the Department of National Defense.

Plurilock received a three-year sales order for a total of $2.5 million with the Canadian Department of National Defense (“DND” or the “Customer”) dated November 28, 2024. The one-year contract, with two optional renewal years for a total potential duration of three years, was secured through the Company’s subsidiary, Integra Networks Corporation. The agreement provides the client with advanced software licensing to streamline developer experience, app management and operations. In connection with this $2.5 million sales order, Plurilock anticipates that both the expenses associated with fulfillment of this order and the gross margin will be consistent with the Company’s historic Solutions Division hardware and system sales business as previously reported in the Company’s most recent MD&A. Plurilock expects delivery and fulfillment to begin during Q4 2024. Further details with respect to the terms of the contract are subject to confidentiality and non-disclosure. https://t.co/Xp4kzotOJW

AI chipmaker Tenstorrent closes nearly US$700 million Series D at US$2.6 billion valuation.

Canadian-founded, United States (US)-based artificial intelligence (AI) hardware company Tenstorrent has secured more than US$693 million in Series D funding from a slew of big-name investors, including Amazon founder Jeff Bezos’s investment firm and electronics giant Samsung. The AI chipmaker said it plans to use the funding to build out its open-source AI software stacks, ramp up hiring, expand its global development and design centres, and build systems and clouds for AI developers as it gears up to compete with Nvidia and other players in the AI chip space.This fresh capital brings Tenstorrent’s total funding to date to nearly US$1 billion. The Series D announcement comes shortly after Tenstorrent quietly relocated from Canada to the US, moving its headquarters from Toronto to Santa Clara, Calif. Canada remains a focus for Tenstorrent going forward, and said the firm has committed to continuing to grow its workforce in Canada as part of its latest round, which was supported by three new Canadian investors: Export Development Canada, the Healthcare of Ontario Pension Plan, and Georgian. https://tinyurl.com/2zu746rh

Federal government outlines $2 billion in AI compute spending commitment.

The federal government has launched the Canadian Sovereign AI Compute Strategy, outlining how it intends to deploy the $2 billion it promised for artificial intelligence (AI) computing power as part of Budget 2024. This funding has been allocated towards increasing the computing power available to Canada’s AI researchers, startups, and scaleups. The Liberals claim this strategy “will meet the short-term, medium-term, and long-term compute needs” of domestic players as they conduct AI research and develop made-in-Canada AI products. $300 million will go to affordable AI compute for SMBs. AI compute, which is typically provided by chips and data centres, refers to the energy-intensive computational resources required for AI systems to perform tasks like processing data, running algorithms, and training machine learning models. According to Innovation, Science, and Economic Development Canada (ISED), $1 billion will fund “public” supercomputing infrastructure. This includes the establishment of a large supercomputing facility for researchers and companies and a smaller computing facility led by Shared Services Canada, the agency that provides information tech to federal departments, as well as the National Research Council of Canada (NRC). That facility will be designed for government and industry research and development, including for national security purposes. The feds will begin seeking partners to build, manage, and run this large sovereign supercomputing facility in Spring 2025, with preference for proposals that leverage private capital to increase its scale and co-locate commercial computing infrastructure. As building both of these facilities will take time, $200 million of this $1 billion will be used to augment existing public computing infrastructure managed by NRC, Canada’s three AI research institutes, and the Digital Research Alliance of Canada so as to address the country’s immediate needs. To support these efforts, another $700 million has been dedicated to financing the build out or expansion of commercial AI data centres in Canada, with the expectation that they will provide substantial capacity and flexible and affordable computing offerings to Canadian companies. These funds will be distributed by the Strategic Innovation Fund via the AI Compute Challenge to companies, consortiums, and academic-industry partnerships. Priority will be given to Canadian projects that can demonstrate sustainability (including the use of environmentally sustainable energy sources and Canadian-made AI compute hardware or software) and a high rate of return on public investment. The remaining $300 million will go towards providing affordable access to computing power to small and medium-sized businesses (SMBs) through the AI Compute Access Fund. This fund will support the purchase of AI compute resources by Canadian businesses to meet their near-term needs as the feds seek to build more long-term domestic compute capacity. More details on the AI Compute Access Fund will be shared when it is launched in Spring 2025. https://tinyurl.com/3jerjz84

SpaceX weighs tender offer raising valuation to US$350 billion.

SpaceX is in talks to sell insider shares in a transaction valuing the rocket and satellite maker at about US$350 billion, according to people familiar with the matter, a massive jump highlighting the post-election gains across Elon Musk’s business empire. That would be a significant premium to a previously mulled valuation of US$255 billion as reported by Bloomberg News and other media outlets just last month. SpaceX was last valued at about US$210 billion in a tender offer earlier this year. The potential transaction would cement SpaceX’s status as the most valuable private startup in the world and rival the market capitalizations of some the largest public companies. SpaceX has established itself as one of the industry’s preeminent rocket launch providers, lofting satellites, cargo and people to space for NASA, the Pentagon and commercial partners, and is building out a large network of Starlink satellites providing internet service. Musk’s businesses have seen an enormous boost since the US election, with investors seeking to capitalize on the billionaire’s deepening ties to President-elect Donald Trump. Shares in electric-vehicle maker Tesla Inc., Musk’s only publicly traded company, are up about 40% since Nov. 5, while his own wealth has soared to about US$353 billion, according to the Bloomberg Billionaires Index. https://archive.ph/4SqCj

Trading app eToro plans IPO, hires Goldman Sachs.

Stock and crypto trading app eToro has hired Goldman Sachs as it plans for a initial public offering, Bloomberg reported. The company could go public as soon as the second quarter next year, and more banks may be added as advisers, the outlet said. Last year, eToro raised US$250 million in a funding round that valued the digital brokerage at US$3.5 billion from investors including ION Group and SoftBank Vision Fund 2, after its proposed merger with a blank-check company fell through. Earlier this year, eToro reached a US$1.5 million settlement with the Securities and Exchange Commission, which claimed it operated an unregistered broker and clearing agency. It agreed to limit the types of crypto assets available in the U.S., and now only offers bitcoin, bitcoin cash and ether. https://tinyurl.com/5hdtymk3

Tencent-backed WeDoctor plans Hong Kong IPO filing this month.

WeDoctor, a Chinese online healthcare company backed by tech giant Tencent, plans to submit an application this month for an initial public offering in Hong Kong that could raise as much as US$500 million, the South China Morning Post reported. The company, whose investors include Chinese venture capital firm HongShan, hopes to complete its Hong Kong IPO by June next year, according to the report. WeDoctor, based in Hangzhou, previously filed for a Hong Kong IPO in 2021, but the listing never happened because the Chinese government’s 2021 regulatory crackdown on the tech sector and new rules for overseas listings forced many companies to scrap their IPO plans at the time. WeDoctor’s revived IPO plan comes at a time when Hong Kong’s IPO market is recently showing some signs of recovery after the total value of listings in the first half of this year fell to lowest levels in two decades. Last month, Chinese express delivery firm SF Holding’s Hong Kong IPO raised about US$750 million. In September, Chinese home appliance maker Midea raised nearly US$4 billion in its Hong Kong listing. https://tinyurl.com/5n6sptns

Fidelity marks up investment in X by 32%.

Fidelity Investments marked up its equity stake in Elon Musk’s X by 32% in October, according to a recent investor filing. The markup follows several markdowns over the past couple of years, since the 2022 buyout of X, formerly known as Twitter. Even accounting for the latest markup, Fidelity’s valuation of X is down 72% from October 2022, when Fidelity helped finance Elon Musk’s US$44 billion buyout of the site. The increased valuation could reflect the higher stock prices of Musk’s companies since Donald Trump’s election, given Musk’s close relationship with the incoming president. The election also coincided with users defecting from X in favor of rival sites like Threads and Bluesky. https://tinyurl.com/mr473rem

Salesforce stock jumps as revenue growth stays flat.

Salesforce said revenue for the quarter ended Oct. 31 rose 8% to US$9.44 billion, the same as the prior quarter’s growth rate, indicating that spending on enterprise software has yet to take off again after a prolonged slump. The provider of software used to manage sales slightly raised its full-year guidance for operating margin and operating cash flow growth. Salesforce shares rose more than 6% in after-hours trading. The company projected that revenue would grow between 7% and 9% to around US$10 billion in the fourth quarter, in line with the previous two quarters but slightly less than what analysts polled by LSEG Data and Analytics were forecasting. The forecast suggests that Salesforce doesn’t see Agentforce, a new automation tool powered by AI that launched on Oct. 29, as a major revenue driver in the fourth quarter. Salesforce’s current remaining performance obligations, a measure of how much customers are contracted to spend on its platform in the future, grew 10% to US$26.4 billion, the same rate as last quarter. Prior to reporting this quarter’s results, Salesforce’s stock had increased 29% this year, compared with 32% for the Nasdaq Composite index. https://tinyurl.com/3n4k3pwu

Super Micro investigation finds ‘no evidence of misconduct’.

Super Micro, a maker of servers for data centers, on Monday said an independent investigation into its accounting practices found “no evidence of misconduct.” Its shares surged 29% to US$42. The San Jose, Calif., company’s board hired outside lawyers and accountants to perform the investigation in August, following a report by short seller Hindenburg Research that it had manipulated its finances and after Ernst & Young raised concerns about its accounting practices. The Department of Justice has opened a probe into the company, according to The Wall Street Journal. Super Micro’s stock has not recovered to its US$49.12 price before EY resigned as its auditor in October. https://tinyurl.com/3sv62hns

Hedge funds make Microstrategy wall street’s hottest trade.

To sate his multibillion dollar rampant appetite for Bitcoin, Michael Saylor has tapped demand from retail investors transfixed by MicroStrategy Inc.’s more than 500% rally this year. He’s also benefited from hedge funds who care far less where the stock trades. Calamos Advisors LLC co-Chief Investment Officer Eli Pars has been among the buyers for more than US$6 billion of convertible notes sold by MicroStrategy this year to finance the purchase of his ever-expanding cryptocurrency hoard. Like many other managers, Pars uses the notes in market-neutral arbitrage bets that exploit the surging volatility of the underlying asset. “Convertibles are a way for issuers to monetize the volatility of their stocks, and MicroStrategy is an extreme example,” said Pars, whose firm owns more than US$130 million of MicroStrategy notes in both long and arbitrage strategies. Co-founder Saylor has accumulated Bitcoin now worth around US$40 billion over the past four years after deciding that the tiny enterprise software maker needed to embark on a different path to survive. He accelerated the strategy shift in October by announcing plans to raise US$42 billion over the next three years through an evenly split combination of equity and fixed-income securities. Since Oct. 31 alone, MicroStrategy has bought about US$13.5 billion in Bitcoin and issued US$3 billion in zero-interest convertible notes, the firm’s fifth bond offering this year. These low-interest, long-term notes, with more than $7 billion now outstanding, can be exchanged for equity if the stock price rises above certain levels. Hedge funds are buying them to deploy their own version of a convertible arbitrage tactic already being done elsewhere by the likes of AQR Capital Management and Man Group. It has been one of the hottest strategies on Wall Street this year. While flavors of the tactic vary, convertible arbitrage traders generally use hedges to isolate the exchange feature of the notes and treat it as an equity option whose value is tied to the stock’s volatility. The more the stock swings, the more profitable the trade becomes — and MicroStrategy has been nothing if not turbulent. This year, MicroStrategy has posted an average daily move of 5.2% in either direction, compared with 0.6% for the S&P 500 Index. The shares jumped as much as 8.5% in premarket trading on Thursday in New York, as Bitcoin blew past the US$100,000 level. Saylor touted volatility as a selling point while presenting his capital raising plan during an earnings conference call in October with investors and analysts, noting that its stock is more volatile than any member of the S&P 500. The dynamic is driven in part by the wild fluctuations of Bitcoin’s price, which has more than doubled this year. Plus, MicroStrategy traded at a more than 200% premium to the value of the Bitcoin it owns, a level that could also add to volatility. Another appeal to Wall Street pros is the pricing of MicroStrategy’s convertible bonds, which are at relatively cheap levels that would allow them to lock in potentially juicy arbitrage profits. MicroStrategy is the largest issuer of convertible bonds this year globally. “The trade is attractive because the implied vol of the converts is way below realized vol or option implied vol,” said Pars. Even across the convertible universe, MicroStrategy is a “very rare opportunity” especially considering the size and number of issues, he said. In addition to Calamos Partners, top holders of MicroStrategy’s bonds include Linden Advisors, Context Capital, Graham Capital and Millennium Management, according to data compiled by Bloomberg. Near-endless demand from price-agnostic speculators is a key leg of what some have jokingly termed Saylor’s perpetual-motion money machine, allowing MicroStrategy repeatedly to raise money, to help keep Bitcoin aloft by buying it in droves, and thereby plump the value of its shares. The danger is the possibility crypto’s massive year-long rally reverses, in which case an ever-more leveraged bet on its value could have severe consequences for its owners. MicroStrategy is selling stock through an at-the-market offering program, which allows its investment banks to create shares and sell them at market prices, with the proceeds added to its balance sheet. https://archive.ph/mWi2F

Bitcoin will replace gold as the ‘premier store of value’ asset in the next decade, Bernstein says.

Bitcoin just topped US$100,000 for the first time ever, and it’s a milestone for the crypto that puts is on the path to replacing gold as the top store of value in the world economy, Bernstein said on Thursday. “Our conviction in Bitcoin is beyond cyclical gyrations,” analyst Gautam Chhugani wrote, predicting the coin will reach US$200,000 by late 2025. “We expect Bitcoin to emerge as the new-age premier ‘store of value’ asset eventually replacing Gold over the next decade and becoming a permanent part of institutional multi-asset allocation and a standard for corporate treasury management.” The prediction came after bitcoin broke through the US$100,000 mark on Wednesday. Bitcoin spot ETFs have accumulated around US$100 billion since they were launched earlier this year, making the funds the fastest-growing ETFs ever, he said. At the same time, business software firm MicroStrategy has been aggressively pursuing a “bitcoin treasury strategy,” holding over US$40 billion of the token on its balance sheet, and other firms are following suit. According to Bernstein, ETFs have boosted bitcoin’s “store of value” allure by offering traditional investors a more convenient way to hold the token. Meanwhile, updated guidelines from the Financial Accounting Standards Board will make it easier for corporations to hold bitcoin on their balance sheets, facilitating further adoption. https://tinyurl.com/bdeeatxd

Google CEO Pichai says ‘hill is steeper’ for AI advancements.

Google CEO Sundar Pichai said Wednesday that gains in conversational artificial intelligence capabilities would be harder to come by in the coming years, even as he touted the company’s improvements in high-priority areas such as reasoning. The comment appeared to confirm a November report from The Information and mirrored a slowdown that OpenAI was also experiencing from using traditional techniques to improve AI. “The low-hanging fruit is gone,” Pichai said of the company’s AI research efforts. “The hill is steeper.” Pichai said models would continue to get better at completing a sequence of actions, which would help with automating software tasks, but “deeper breakthroughs” would be needed for more dramatic improvements. Pichai also threw barbs at Microsoft, noting that the rival was “using someone else’s models”—a reference to Microsoft’s use of OpenAI technology in its Copilot products. Microsoft has recently prioritized developing its own models, MAI, and Pichai said he “would love to do a side-by-side comparison of Microsoft’s own models and our models, any day, any time.” https://tinyurl.com/23bvvzc2

Amazon unveils new AI model, chips, supercomputer for Anthropic.

Amazon on Tuesday unveiled half a dozen artificial intelligence models the company plans to sell to cloud customers and which it said were comparable to models sold by Google, Anthropic, OpenAI and others. It also showed a new version of its AI data center chip, which it is using to build a server cluster for Anthropic. Some of the Amazon models are multimodal, meaning they can generate images and video in addition to text, confirming a report in The Information last week. The announcement shows that despite the several billions of dollars Amazon has invested in Anthropic, Amazon doesn’t want to exclusively rely on such AI developers. Amazon said the new chip, Trainium2, is a better value than Nvidia’s H100 AI chip, the dominant AI server chip. The comment is a sign AWS is heavily leaning into its in-house chips to try to lessen its reliance on Nvidia, though Trainium chips don’t appear to have attracted many customers. Garman said Amazon is building a supercomputing server cluster for Anthropic—which just received another US$4 billion investment from the cloud provider—containing hundreds of thousands of Trainium chips. Amazon Web Services chief Matt Garman said it would be the “largest AI compute cluster reported to date.” Benoit Dupin, senior director of machine learning and AI at Apple, also made an appearance on-stage to talk about the company’s use of AWS’ in-house server chips. Dupin said Apple is in the early stages of evaluating whether the new AWS AI chip could be used to pre-train models that would power AI products, such as Apple Intelligence. https://tinyurl.com/mr249p6b

OpenAI, Anduril to develop anti-drone AI for U.S. defense.

OpenAI and defense technology startup Anduril said on Wednesday they would jointly develop artificial intelligence for U.S. anti-drone systems to improve their ability to detect and respond to aerial threats. Anduril said two weeks ago it won a U.S. military contract to develop such systems. The AI models will be developed using Anduril’s data about the threats anti-drone systems face. The announcement comes after OpenAI and other AI developers walked back self-imposed bans on military usage of their products. In January, OpenAI removed language on its website that previously prohibited the use of its products for the purposes of “military and warfare.” Last month, Meta Platforms said U.S. government agencies and contractors working on defense and national security could use its AI models for military purposes after previously saying it wouldn’t permit such usage. https://tinyurl.com/4bm7xvw5

OpenAI surpasses 300 million weekly active users.

OpenAI’s popular chatbot, ChatGPT, has surpassed 300 million weekly active users, CEO Sam Altman said at the New York Times’ Dealbook Summit on Wednesday, confirming The Information’s earlier reporting. The milestone comes a little more than three months after the chatbot reached 200 million weekly active users and a year after it reached 100 million weekly active users. More than 10 million people pay for a premium version of ChatGPT, which costs $20 per month, to help with writing, coding and other tasks, with another 1 million subscribers that are part of higher-priced plans for business teams, The Information previously reported. That implies that the chatbot is conservatively generating more than $225 million in revenue per month, or $2.7 billion on an annual basis, based on publicly available prices of its subscriptions. https://tinyurl.com/39emvnhr

OpenAI confirms new US$200 monthly subscription, ChatGPT Pro, which includes its o1 reasoning model.

OpenAI has launched a new subscription plan for ChatGPT, its AI-powered chatbot platform — and it’s very, very expensive. OpenAI announced ChatGPT Pro, a new US$200-per-month subscription tier that provides unlimited access to all of OpenAI’s models, including the full version of its o1 “reasoning” model. Unlike most AI, o1 and other reasoning models attempt to check their own work as they do it. This helps them avoid some of the pitfalls that normally trip up models, with the downside being that they often take longer to arrive at solutions. O1 reasons through tasks, planning ahead and performing a series of actions that help the model tease out answers. OpenAI released a preview of o1 in September, but this new version is, generally speaking, more performant. https://tinyurl.com/4c4ajnds

Meta joins the nuclear-powered AI fray.

Facebook parent Meta is seeking developers that can bring nuclear reactors online starting in the early 2030s to support data centers and communities around them. Meta is joining Amazon, Google and other tech giants in turning to nuclear generation to fuel energy-thirsty AI data centers with zero-carbon electrons. The company just announced a “request for proposals” that targets a large pipeline — one to four gigawatts — of new generation. It’s seeking partners that can “help accelerate the availability of new nuclear generators and create sufficient scale to achieve material cost reductions by deploying multiple units,” an RFP summary states. While some tech players have unveiled nuclear deals with specific startups, Meta is casting a wide net for now. https://tinyurl.com/4tcm5jaf

AQR’s Cliff Asness Says AI Has Now Taken Over Parts of His Job.

AQR Capital Management’s Cliff Asness says the quant firm is actively deploying artificial intelligence — including in the core parts of the investing process that used to be the co-founder’s domain. The technology is being used to help combine and weight the various investment factors that guide stock picking, thereby steering the nuts and bolts of an allocation method where Asness previously used to issue the final call, he said in an interview on Bloomberg Television on Tuesday. “AI’s coming for me now,” he said. “It turns out it’s annoyingly better than me.” The Greenwich, Connecticut-based firm, which runs about $116 billion, is also using AI to generate trading signals from text and boost productivity by speeding up coding, for instance, he said in the interview. It’s a big statement of confidence from a quant who once doubted if buzzy new trends like big data would ever affect the basics of the business. https://archive.ph/0Sn36

U.S. imposes export restrictions on advanced memory chips to China.

The U.S. is restricting the sale to China of advanced memory chips that are crucial for artificial intelligence development, as part of its annual updates to export controls designed to prevent China from accessing cutting-edge semiconductor technology for military use. This year’s updates cover the sale of high bandwidth memory chips, which are key to training generative AI and which enable faster data processing than traditional memory. In addition to the advanced memories, the new regulation will also bar U.S. companies and citizens from selling two dozen kinds of chipmaking equipment and three software tools to China, the Department of Commerce said on Monday. “They’re the strongest controls ever enacted by the U.S. to degrade the PRC’s ability to make the most advanced chips that they’re using in their military modernization,” Secretary of Commerce Gina Raimondo said in a call with reporters, referring to the People’s Republic of China. The new rules will “set the next administration up to continue the important momentum necessary to preserve American tech security and leadership,” Raimondo added. https://tinyurl.com/4kyxudb2

TikTok CEO: will seek Supreme Court review to halt ban.

TikTok CEO Shou Zi Chew told the video app’s staff that it will seek an injunction to a looming federal law that will force the app to shut down in the U.S. unless it finds a buyer for the operations. “While today’s news is disappointing, rest assured we will continue the fight to protect free speech on our platform,” Chew wrote in a memo, which was seen by The Information. “Our next step is to seek an injunction of the ban, pending review by the US Supreme Court.” The memo, which hadn’t previously been reported, followed a decision by the U.S. Court of Appeals for the D.C. Circuit that rejected TikTok’s First Amendment challenge to the law. https://tinyurl.com/8dwftwj8

Black Friday sales jump over 10%.

U.S. shoppers spent 10.2% more on Black Friday compared to the same day a year earlier, according to one tracker of real time online spending. Adobe Analytics said in a report on holiday shopping that U.S. shoppers spent US$10.8 billion online the day after Thanksgiving, when many retailers offer steep discounts on goods, up from US$9.8 billion. That increase was better than Adobe’s estimate of a 7.5% increase in Black Friday spending last year compared to the prior year. On Thanksgiving itself, U.S. shoppers spent US$6.1 billion, nearly 9% more than they spent on that day in 2023, according to Adobe. https://tinyurl.com/3rtrj63b

Crypto trading volume surged to US$10 trillion for the first time in November.

Crypto trading volume climbed to an all-time high in November, with more than US$10 trillion of digital assets changing hands for the first time on centralized spot and derivatives exchanges. The combined volume doubled last month, according to data compiled by CCData. Crypto markets surged amid optimism for a friendlier regulatory environment for the industry under the newly elected Trump administration, with market bellwether Bitcoin jumping 38% and setting a record high of almost US$100,000. Monthly spot trading volume on centralized exchanges increased 128%, to US$3.43 trillion, the second-highest number ever since May 2021. Derivatives volume climbed 89% to US$6.99 trillion, surpassing the previous all-time high from March, according to CCData. The data doesn’t include volume from so-called decentralized finance platforms. Many South Korean spot crypto exchanges like Upbit saw a surge in activity as traders plunged into altcoins. The aggregate trading volume on the CME exchange rose 83% to US$245 billion, an all-time high for the institutional exchange offering crypto futures. https://archive.ph/Av7Wa

Intel CEO Gelsinger abruptly steps down.

Pat Gelsinger stepped down abruptly as CEO of Intel, less than four years after taking the helm of the struggling chip maker, signaling the board has lost patience with his efforts to turn around the company. In a short statement on Monday morning, Intel said Gelsinger had “retired from the company after a distinguished 40-plus-year career and stepped down from the board of directors, effective Dec. 1.” Intel named chief financial officer David Zinsner and veteran executive Michelle Johnston Holthaus, as interim co-CEOs while it conducts a search for a new CEO. Intel has been in decline for several years, as the once iconic chip maker has fallen behind in key markets such as mobile and more recently AI chips, an area now dominated by Nvidia. In a statement, Intel chair Frank Yeary said that the board knows “we have much more work to do at the company and are committed to restoring investor confidence.” Intel stock, which has fallen by half this year, rose slightly in early trading on Monday. https://tinyurl.com/24taz6z4

TSMC in talks with Nvidia for AI chip production in Arizona, sources say.

Taiwan Semiconductor Manufacturing Co is in discussions with Nvidia Corp to produce its Blackwell artificial intelligence chips at the contract manufacturer’s new plant in Arizona, three sources familiar with the matter said. TSMC is already making preparations to start production early next year, the sources said. Nvidia’s Blackwell chips, which the company unveiled in March, have so far been manufactured at TSMC’s facilities in Taiwan. The company has seen high demand from customers involved in generative AI and accelerated computing for the chips, which it says is 30 times speedier at tasks like serving up answers from chatbots. The agreement, if finalised, would secure another customer for TSMC’s Arizona facility, which is scheduled to start volume production next year. However, while TSMC plans to produce the front-end process of Nvidia’s Blackwell chips in Arizona, the chips will still need to be shipped back to Taiwan for packaging. The Arizona facility does not have chip on wafer on substrate (CoWoS) capacity that is essential to the Blackwell chips, two of the sources said. https://tinyurl.com/2s49b7j6

Sophic Client American Aires (WIFI-CSE, AAIRF-OTCQB) – Price is Right.

In Sophic Capital’s A Revenue Model that’s a Breath of Fresh Aires report, we detailed the revenue model of Sophic Capital client American Aires Inc.. Essentially, American Aires generates revenue by selling direct to the consumer, through partnerships, and OEM/licensing. As well, we noted that part of American Aires’ business strategy was to create loyal customers who will purchase additional products. In this report, we compare the valuation of the Company versus its peers, based upon where their stocks trade. In the following analysis, we compare American Aires’ valuation to MedTech and Direct to Consumer companies. Some investors could argue that American Aires sits somewhere in the middle on this spectrum of classification given the Company’s offerings and technology-based IP. Indeed, we find that on a revenue growth and Gross Margin scale, American Aires does sit in the middle of this spectrum. American Aires’ order volume is strong, validating CEO Josh Bruni’s proven strategy of leveraging high impact partnerships with athletes such as Michael Chandler. In spite of this success, the stock market is not rewarding American Aires’ stock, with the stock trading at lower revenue multiples relative to where the market currently values MedTech and direct-to-consumer peers. Investors seeking exposure to this sector, and a company growing organically via calibrated marketing campaigns, should consider Sophic Capital client, American Aires. https://t.co/92y3sQWoK