INTEL: Gaudi3 Targets Nvidia and AMD

Intel, though sparse on specifics, announced that its upcoming Gaudi3 chip is set to rival Nvidia's H100, currently the preferred option for companies constructing massive chip farms for AI applications. Additionally, Gaudi3 aims to compete with AMD's upcoming MI300X, with plans to begin deliveries to customers in 2024.

Intel's venture into Gaudi chips dates back to 2019, following its acquisition of the chip developer Habana Labs, marking its foray into this segment of the AI chip market.

Intel also introduced Core Ultra chips, tailored for Windows laptops and PCs, along with their new fifth-generation Xeon server chips. Both feature a dedicated AI component known as an NPU, designed to accelerate AI program execution.

This announcement is a clear indicator that established processor manufacturers, such as Intel's competitors AMD and Qualcomm, are adjusting their product lines to focus more on AI. They are also signaling to investors the potential for AI models to drive a significant increase in demand for their chips.

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FED: Surprise Rally Sparks Concerns

While markets experienced a significant rally following the Federal Reserve's move towards a more relaxed monetary policy, a specific segment of the financial system has reasons to be cautious.

For those involved in the overnight funding markets, crucial for bank borrowing and setting interest rates, the Federal Reserve's recent policy meeting delivered a critical message from Chair Jerome Powell. Despite the positive market response and the decline of the 10-year US yield below 4%, Powell indicated that the reduction of the Fed's balance sheet would proceed as initially planned.

There's an ongoing debate about whether the Fed might be underestimating the impact of reducing its balance sheet, a process known as quantitative tightening, particularly on vital financial segments like the repurchase-agreement markets.

These markets are integral to the financial system's infrastructure. Recent tensions in these areas saw a benchmark rate reach a record high, reminiscent of September 2019. During that period, a different overnight market rate dramatically increased, peaking at 10%, which led to the Federal Reserve stepping in to stabilize the situation.

GM: Cruise Control Downsizing

General Motors' autonomous vehicle subsidiary, Cruise, announced the termination of 900 employees, approximately one-fourth of its total staff. The reductions mainly affect the company's commercial operations and associated corporate roles. This decision follows a previous wave of contractor dismissals at Cruise last month.

The announcement came just one day after the company dismissed nine prominent “key leaders” amidst ongoing safety probes triggered by an incident in October in San Francisco. This accident, involving one of Cruise's self-driving cars, led to the temporary suspension of its robotaxi service.

Additionally, GM is preparing to lay off around 1,300 workers in Michigan, beginning early the following year. Most of these layoffs are anticipated, correlating with the discontinuation of production for certain vehicle models.

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Ethical Tech Saga

OpenAI, founded in December 2015 by visionaries like Elon Musk and Sam Altman, started with a mission to democratize AI technology for global benefit, supported by a $1 billion pledge from its founders.

Initially a non-profit, OpenAI emphasized ethical AI development, aiming to align advancements with human values. In 2019, it transitioned into a "capped-profit" entity through OpenAI LP, merging the need for substantial investment with its altruistic vision. This shift, highlighted by a significant partnership with Microsoft, allowed OpenAI to scale its operations while maintaining its ethical foundations.

OpenAI's innovations, particularly the GPT series and DALL-E, have reshaped AI research and opened discussions on the economic and societal implications of AI. These advancements extend their influence beyond technology, impacting finance, content creation, and more.

Looking ahead, OpenAI's growth in the AI market suggests a significant reshaping of industries and the creation of new economic opportunities. However, this journey involves challenges, including ethical considerations and balancing innovation with public welfare.

Chart of the Day

📊 The U.S. unemployment rate has steadied around 3.7% in Nov. 2023.

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Sources:

_{1. Bloomberg (www.bloomberg.com)}

_{2. Bloomerg (www.bloomberg.com)}

_{3. CNBC (www.cnbc.com)}