đź‘ľ AI-bot battle
Hey Snackers,
Your Super Bowl party was likely pricier this year with inflated snacks, but at least chicken wing prices were significantly down from last year. Call it deflation-gate.
The S&P 500 and the techy Nasdaq slid last week as investors digested a mixed bag of earnings — and the possibility that the Fed could raise rates higher than previously expected. Meanwhile, consumer sentiment climbed to a one-year high.
Microsoft and Google kick off the AI-bot race, but their speed comes with concerns
AI of the tiger… Cue the music. The Super Bowl wasn’t the only big competition to play out last week: the AI-chatbot battle officially kicked off. Before getting into it, a quick recap: in November, Microsoft-backed OpenAI launched ChatGPT and it went viral as people used it to answer prompts, write articles, and even craft poems. In January, Microsoft announced plans to integrate OpenAI’s tech into all its products. Then last week, things took an intense turn:
- On Monday Google debuted its ChatGPT rival, Bard — a response to the existential threat posed by OpenAI — and said it’ll soon integrate Bard into web search.
- On Tuesday, in a last-minute news event announced on Monday, Microsoft introduced a ChatGPT-fueled version of its Bing search engine and an AI-supported Edge browser.
- Then on Wednesday, Google held its own news event to show off its Bard chatbot, but the stock tumbled after a video promo contained the wrong answer to a query.
Well, that escalated quickly… The launch of ChatGPT triggered an AI battle between search giant Google and software titan Microsoft, and it could get more heated than their cloud rivalry. Google’s been in the AI game for years (it invented the “transformer” tech that powers ChatGPT). But it’s historically been more cautious with rolling out these lightly tested tools to the public, since there are still significant unknowns. But…
- Google apparently felt pressured to introduce Bard earlier than planned to protect its profit-puppy search biz.
- Microsoft apparently felt pressured to invest billions in OpenAI and attach its powerful tools to its product suite.
Getting there first can be a dangerous game… because competition makes it harder to move cautiously. Now two tech titans with massive reach are racing to crank out genAI features even though concerns abound. Large language models have been known to share false information and biased answers, and have well-documented tendencies to spew out hate speech. Also on the line: the intellectual output of future generations, which could become monotonous.
Coming up this week
Put an extra mint on the pillow... Experiential spending (think: travel, entertainment) is having a moment. And when consumers splurge on trips, they need places to rest their heads. Enter Airbnb, Hyatt, and Marriott, which are set to report this week. Both Marriott and Hyatt are expected to show king-size earnings growth. Airbnb, whose stock is up almost 30% this year, is also predicted to drop big growth. Hotel giant Hilton beat expectations last week after surpassing prepandemic profits, partly thanks to lofty room prices.
Zillow-scrolling returns… as the housing market (slowly) warms up. After hitting a 20-year high in November, mortgage rates have trickled below 7%. Mortgage applications are up, and online brokerage Redfin said that interest from prospective buyers has jumped since a November low. Meanwhile, Zillow said it expects mortgage rates to continue falling. The cos could use the bump after shuttering their pandemic-boom-era iBuyer divisions. Both Redfin's and Zillow's revenue is expected to be down on the year when they report this week.
Stories we’re watching
What the Shell… Environmental-law firm ClientEarth is suing 11 members of Shell's board, alleging that the oil behemoth has failed in its duty to manage climate risk. It’s a first-of-a-kind suit because individuals are being sued — and comes on the heels of Shell reporting a record $40B annual profit. ClientEarth (a Shell investor) said the board’s failed to implement a suitable energy-transition strategy, yet Shell said it does "not accept" the allegations. Last year its renewables spend was less than half of what it dropped on extracting fossil fuels.
A stake through the heart… Crypto exchange Kraken agreed to pay a $30M fine and end its staking program, which let people lock up crypto as collateral and earn yield. The SEC said the program amounted to the sale of unregistered securities (aka: a big no-no). Coinbase — whose own staking program has been a rapidly growing source of revenue — said it has no plans to abandon staking. The issue may soon come to a head: ethereum's upcoming Shanghai hard fork is set to make staking more attractive to investors.
Last week's highlights
- Fluffy: Americans aren’t trading down on their pets. As folks keep spoiling their fur babies, companies like Post, General Mills, and Purina maker Nestlé are investing in the fast-growing pet-food biz.
- Control: After FTX’s collapse, Binance now reportedly controls over half of crypto spot trading. But the exchange has had some issues, and the industry could be at risk of putting too many eggs in one basket.
- Sail: Royal Caribbean’s cruise booking volumes blew prepandemic #s out of the water last year. Rivals Carnival and Norwegian Cruise Line are also sailing with tailwinds as consumers keep YOLO spending on experiences.
What else we’re Snackin’
- Suite: S&P 500 companies are adding more Black women to their boards than ever. A call for more diverse leadership and recruiting mandates have helped boost the # of Black female directors by 6X since 2008.
- Valentine: Love is in the air, and so are scams. Last year, 70K people reported a romance scam (see: fraudsters posing as online love interests to swindle cash). Combined, the dupes cost over $1B — or $4.4K per victim.
- Shop: Corporate buybacks hit a record $1.2T last year and are on pace to top that this year. Last month Chevron tripled its buyback spending to reward shareholders, while Meta announced $40B in buybacks.
This Week
- Monday: Denny’s, Palantir, and Avis
- Tuesday: Valentine’s Day. Airbnb, GoDaddy, TripAdvisor, Nerdwallet, TransUnion, and Marriott International
- Wednesday: Shopify, Kraft, Boston Beer, Roblox, Krispy Kreme, Wyndham, Sunoco, Biogen, Ryder, Roku, Upwork, Twilio, Cisco, and Zillow
- Thursday: Weekly jobless claims. DraftKings, DoorDash, US Foods, Dropbox, LabCorp, Redfin, Re/Max, Hyatt, and WeWork
- Friday: Mercedes-Benz, AMC Networks, and Deere
Authors of this Snacks own ethereum and shares: of Google, Shopify, Boston Beer, Roku, and Microsoft
ID: 2734996