Sam Altman, ex-CEO of OpenAI participates in the a talk at the Asia-Pacific Economic Cooperation (APEC) Leaders’ Week in San Francisco, California, on November 16, 2023.
Andrew Caballero-reynolds | Afp | Getty Images
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U.S. stocks capped off a winning week Friday, with all major indexes inching up slightly. Meanwhile, Treasury yields briefly dropped to their lowest level since September before bouncing up. Asia-Pacific markets mostly rose Monday. Japan’s Nikkei 225 briefly touched a 33-year high before retreating into negative territory, while China’s central bank kept one-year and five-year loan prime rates unchanged.
Ouster at OpenAI
OpenAI’s new CEO will be Emmett Shear, previously chief executive of Twitch, CNBC has confirmed. On Friday, former OpenAI CEO Sam Altman was abruptly ousted from the artificial intelligence company by the board of directors. It seems efforts by OpenAI investors — such as Microsoft, Tiger Global and Thrive Capital — pushing to bring Altman back as CEO didn’t succeed.
Musk’s ‘thermonuclear lawsuit’
Apple, Disney and other companies have joined IBM in suspending their advertising campaigns on X, formerly known as Twitter. Their move was triggered by a report by Media Matters for America highlighting how corporate ads were displayed next to antisemitic content on X. In response, Musk threatened to file “a thermonuclear lawsuit against Media Matters.”
Ceiling on U.S.-China tensions
U.S. President Joe Biden met Chinese President Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation conference last week. There were positive developments: Talks between the two militaries will resume and the two countries agreed to establish intergovernmental dialogue on AI. “The U.S. and China are trying to put a ceiling on their tensions,” said a risk analyst.
[PRO] Buy the Baba dip?
Alibaba announced it was shelving plans to spin off and list its cloud computing arm. The reaction from investors was immediate: Hong Kong- and U.S.-listed shares of Alibaba tumbled around 10% last week. But some Wall Street’s analysts think Alibaba’s move was the right one that won’t affect the attractiveness of Alibaba’s shares.
The positive vibrations from last week’s cool inflation reports are dissipating — but you can still feel them, if you focus.
It was in U.S. Treasurys that the positive sentiment was most palpable still. The 10-year yield, which tracks the market’s expectations of where interest rates will end up in the long run, briefly traded at 4.379%. That’s the lowest since Sept. 20, signaling downward pressure on yields.
Stocks had a more muted Friday. It almost seemed like markets refused to close the week on a bad note, so major indexes managed to eke out the most marginal gains. The S&P 500 added 0.13%, the Dow Jones Industrial Average squeezed out a 0.01% increase and the Nasdaq Composite notched a 0.08% gain.
But when viewed on a weekly basis, movements of the indexes are much more impressive. The S&P grew 2.2% and the Dow advanced 1.9% for their first three-win streak since July. The Nasdaq increased 2.4%, its first three-week positive streak since June.
And things are looking good for the rest of the year.
“I think the story for the rest [of] this year isn’t ‘are we going to finish with a bit of a rally,’ because it does appear likely that we’re going to finish with a bit of a rally,” said Scott Ladner, chief investment officer at Horizon Investments.
Of course, there’s the turmoil currently plaguing OpenAI — what with Sam Altman’s sudden ouster. But my sense is it’s a matter of internal politics (et tu, Ilya?) rather than a fundamental problem with the technology.
“This story has elements of corporate and ideological discord, but not even a whiff of diminished promise,” as Zachary Lipton, a Carnegie Mellon University professor of machine learning and operations research, said.
Even if it were the latter, OpenAI is “not the only game in town,” as industry analyst Patrick Moorhead put it. In other words, there will be other companies — like Anthropic or Google — more than ready to assume AI leadership.
And Nvidia’s report, out Tuesday, will in all probability reassure investors shaken by the cracks in the gilded world of generative AI.