Great expectations: Nvidia has driven the stock market higher, but can it live up to the hype this week?

8/20/23 8:00PM

Great expectations

‍For much of this year, AI has been the driving force behind much of the positive stock market narrative. Now, that optimism is set to be tested, as Nvidia, the best performing stock in the S&P 500 Index in 2023, will report earnings on Wednesday.

Back in May, Nvidia told investors that it expected revenue in its second quarter of the year to be around $11bn. There’s nothing particularly unusual about doing that — companies offer this sort of guidance all the time — except that it was roughly 50% more than what analysts were expecting... which is particularly unusual. Indeed, that kind of increase would have been surprising even for a much smaller company, but for a giant like Nvidia, it's pretty much unheard of.

‍Right place, right time

‍Not by accident, Nvidia now finds itself in the perfect position to cash in on the AI boom, as demand for the company’s graphics processing units (GPUs), which can power large-language models and other machine learning tools, surges. For example, OpenAI’s models for the groundbreaking GPT-3 model were trained on Nvidia hardware.

So far, Nvidia shares have roughly tripled in value this year, taking the company to a $1 trillion valuation, and dragging much of the rest of the tech sector with it. Will it live up to the hype?

‍Related reading: Chartr's Sunday Deep Dive — Checking In On ChatGPT.

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While gaming industry groups may not like it, there’s been a huge change in the methods people are using to put money on the big games, with everyone from fortunate NYC bar owners, to a far less fortunate Spanish supporter, turning to prediction markets to try and turn their sports know-how into cold, hard cash.

According to a new report from Adam Blacker for apptopia, that shift might have been even more seismic than imagined in the wake of the NBA and NHL finals and around the 2026 World Cup kicking off.

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Anthropic pulls Fable and Mythos access worldwide after Trump administration bars their use by foreign nationals

Only days after releasing two versions of its next-gen AI model, Anthropic has disabled them for users worldwide.

Anthropic says it received a Friday night order from the Trump administration to suspend access to the models for any foreign national (anywhere in the world) — a group that included some Anthropic employees. In response, the company turned off access to everyone.

Last week, the company released to the public its much-anticipated Claude Fable 5 model (and its restricted version Claude Mythos 5, which is still being tested with trusted partners). Anthropic said in a blog post announcing the action that officials cited national security concerns with the new models, while offering few specific details.

The post said that the government gave the company “verbal evidence of a potential narrow, non-universal jailbreak” of the public Fable 5 model. A jailbreak is a means by which users can evade restrictions built into the code to unlock prohibited functionality. Anthropic downplayed the significance of the attack, and said other major models, such as OpenAI’s GPT-5.5, could also be affected by the technique described.

Fears of these first Mythos-class models being misused are running high, after Anthropic warned the cybersecurity world in May that the advanced cyber capabilities of Mythos have rapidly discovered thousands of vulnerabilities in ubiquitous software, leading to the decision to restrict the full version of the model to a close group of trusted partners for testing.

This morning, Axios reported that Anthropic technical staff have flown to Washington to meet with White House officials to resolve the issue.

The Wall Street Journal is reporting that the Trump administration’s decision to take action against Anthropic was prompted by discussions that Amazon CEO Andy Jassy had with officials, including Treasury Secretary Scott Bessent. According to the report, Amazon researchers said they had been able to evade some of Fable 5’s security restrictions using specific prompts. Amazon is a major investor in Anthropic.

Anthropic is currently suing the US government to fight the Pentagon’s blacklisting of the company on national security grounds.

Statement on the US government directive to suspend access to Fable 5 and Mythos 5