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FILE PHOTO: The X account of Elon Musk in seen blocked on a mobile screen in this illustration after Brazil's telecommunications regulator suspended access to Elon Musk's X social network in the country to comply with an order from a judge who has been locked in a months-long feud with the billionaire investor, Sao Paulo, Brazil taken August 31, 2024.
Hard Numbers: X marks the spot in Brazil again, China stocks plummet on stimulus worries, Cameroon insists on presidential signs of life, Hungary embraces the olive
5: X was officially reinstated in Brazil, ending a five week ban of the social media platform, which had failed to comply with court orders to remove accounts that were spreading disinformation. X owner Elon Musk had initially defied the orders and refused to pay related fines, styling himself as a defender of free speech. In the end, Musk and X caved as the ban had caused Brazil’s 40 million X users to start using other sites instead.
7: Mainland China’s benchmark stock index plummeted 7% on Tuesday, in the largest single day drop since February 2020, a time when COVID was first spreading rapidly in the country. Analysts suggested the drop, which snapped a 10-day streak of gains, reflected fading optimism that the Chinese government’s current stimulus policies will be enough to perk up a sluggish economy.
31: He is not dead. Repeat. Not dead. That’s the official word from the Cameroonian government about 91-year old president, Paul Biya, who has not been seen in public in 32 days. Biya, who has held power since 1982, was last spotted leaving a China-Africa summit in Beijing on Sept. 8. Since then, he has missed a number of high profile events, including the entire UN General Assembly in New York.
12.35: Hungary is known for the delicacy of its goulash, the harmonies of Franz Liszt, and the architectural beauties of Budapest. But olive oil? Too chilly right? Not any more. Hungarian farmers are increasingly planting olive trees as climate change shifts the temperate zones of Europe northward and inflicts more frequent droughts on traditional Mediterranean olive habitats like Spain. A mere tenth of a liter of the stuff from Hungary now fetches $12.35 in neighboring Slovenia.
AI is turbocharging the stock market, but is it all hype?
In this episode of GZERO AI, Taylor Owen, host of the Machines Like Us podcast, explores how artificial intelligence is turbocharging the stock market and transforming our economy. With AI driving the S&P 500 to new heights and drastically boosting NVIDIA's stock, researchers predict a future where we could be 1,000 times wealthier. However, Owen raises critical questions about whether this rapid growth is sustainable or simply a bubble ready to burst.
So whatever your lingering skepticism of this current moment of AI hype might be, one thing is undeniable: AI is turbocharging the stock market and the economy more broadly.
The S&P 500 hit an all-time high this year, largely driven by AI. NVIDIA's stock jumped 700% since the launch of ChatGPT, at one point becoming the most valuable company in the world. And some researchers think this is going to get even crazier. They argue that we could see 30% per capita economic growth by 2100 because of AI. What this means is that in 25 years of 30% per capita growth, we would be 1,000 times richer than we are now.
But what are these wild predictions based on? Really comes down till human labor being replaced by AI. These economists argue that AI could replace humans and that machines could do all sorts of things that humans can't or things that we can already do much better. Perhaps more importantly though, humans aren't constrained by the number of humans we have in the workforce. We can scale labor in a way unconstrained by human capacity. This fundamentally changes, they argue, the core dynamics of the economy.
But these are still predictions, and they're wild speculations, and they're often being promoted by the very same people who will benefit the most from the hype around AI. There's just no good evidence at this point that these things are necessarily going to come to fruition. And even if this wealth is generated, this 1,000 times richer than we are now wealth, there's no guarantee how it's going to be distributed, who will get it, who will benefit and who won't. It's pretty clear that wealth is likely to trickle up to those that own and control these technologies, as they have in the past. It's also clear that those that are most precarious in the workforce will be the most vulnerable and likely the most harmed. This is almost certainly, if we're talking about machines replacing humans, going to be women and minorities who are overrepresented in the service workforce.
Some argue that UBI could be a solution to this, that we should simply take this excess wealth and distribute it to all of us so that we don't have to work. But there's a real problem here. People find meaning in their work. I recently spoke to Rana Foroohar, a global economic reporter for the Financial Times, and she made this case really powerfully to me that we derive meaning from work, and if you take that away, there are going to be serious political repercussions. We've already started to see these. Because of all of this, Rana thinks we're in a bubble. She thinks the economy simply can't run this hot for this long. It would be historically unprecedented, she argues, for this to go on for very much longer. But also the narratives she argues about why this economic growth is going to happen simply are too tenuous to support the economic growth that's being built on it. And this for her is a clear sign that we're in a bubble. When you have a single narrative that doesn't allow for any contradictions, this clear narrative of a certainty of a path that is supporting a huge amount of economic activity, that is the sign of a bubble.
Finally, she argues that economic growth is simply too concentrated. Too few people are seeing the benefits of this at the moment. These are the six or seven tech companies who are responsible for the bulk of the value being generated around AI. This concentration is not broadly good for society. If a tech bubble collapses though, we are all on the hook for it. Like any bubble, we as a society, our pension funds, our investments, our retirements, the rest of the economy are being floated by this bubble, so we need to think really carefully about how and when this deflates.
Cityscape of the Lujiazui Financial District in Pudong with the Shanghai Tower, the Shanghai World Financial Center, Jinmao Tower, the Oriental Pearl TV Tower and other skyscrapers and high-rise buildings at sunset in Shanghai, China, 1 August 2019
Chinese bears, Indian bulls
It’s been a bad month for Chinese stock markets. Since Jan. 1, the Hang Seng China Enterprises index has plunged 11%, after losing 14% last year. The benchmark CSI 300 index for domestically traded stocks has shed more than 5%, after accounting for the renminbi’s drop against the dollar. A slide that started in 2021 has now erased $6.3 trillion from Chinese and Hong Kong equities, a sell-off that is reshaping geopolitical dynamics in Asia, particularly for India.
Compared to China, India has emerged as a darling of global investors, with indices like the Nifty 50 and BSE Sensex reaching record highs. JPMorgan hails India as its number one market in Asia, crediting companies adopting a “China plus one” strategy. Foreign investment is up, with firms like Apple, Maruti Suzuki, and a host of drug companies increasing production on the subcontinent.
What’s driving the switch?
China’s “economic malaise” has been making headlines for some time. Its real estate sector is in deep crisis, while unemployment and disillusionment among young people are rampant. While Beijing claims the country enjoyed economic growth of 5.2% last year, not all economists believe the numbers. All of which makes investors nervous and looking for other options.
What could this mean for the rest of the world?
While some observers think a slowing economy could temper China's aggressive foreign policy and trade practices, others think it could up the military ante for President Xi Jinping. Economic woes could undermine Xi’s leadership, creating the need for a distraction or rallying point to keep his hold on power. That could spell trouble for some of China’s neighbors such as Taiwan and the Philippines.It could also make it more difficult for China to continue using its Belt and Road Initiative to curry favor with governments in the region. Since 2018, China has committed or invested over $150 billion in the economies of Bangladesh, Maldives, Myanmar, Pakistan, Nepal, Sri Lanka, and Afghanistan, and is now the biggest foreign investor in Maldives, Pakistan, and Sri Lanka. If China’s money runs low, so could its influence – opening the door for rival powers, like India, to fill the vacuum.
This undated file photo shows a researcher wearing cleanroom suit displaying a wafer in the lab of Shanghai Microsemi Semiconductor
Hard Numbers: China’s chip stocks, Black Sea bottleneck, COVID’s transatlantic routine, Indians at the US border
8.6 billion: China’s leading microchip manufacturers lost 8.6 billion in share value on Monday after the US imposed new restrictions on the export of semiconductor-related technologies to China. Remember, 21st-century great power competition is increasingly looking like a bowl of chips.
120: Is the UN-brokered Ukraine grain export deal taking on water? In recent days, the number of vessels waiting to sail to or from Ukrainian ports hit a record of 120. The culprit? Long waits at the Istanbul-based mandatory inspection station set up as part of the deal to assuage Russian concerns that grain boats could smuggle weapons into Ukraine.
8 million: If prior patterns hold, rising COVID cases in Europe right now could herald a fresh wave of the illness in the US this fall and winter. So far, fewer than 8 million Americans have gotten the latest round of booster shots since they became widely available in early September.
16,290: US officials at the southern border have detained a record number of asylum-seekers from an unlikely place this year: India. Since last October, 16,290 of that country’s citizens have been taken into custody at the Mexican border, many of them seeking refuge from persecution based on their religion, caste, or sexual orientation.This article comes to you from the Signal newsletter team of GZERO Media. Sign up today.
A poster by street artist Harry Greb depicting Russian opposition leader Alexey Navalny in Rome.
Hard Numbers: Navalny sentenced (again), oily oceans, Alibaba stock buyback, Ukrainian fundraising star
9: Imprisoned Russian opposition leader Alexei Navalny was sentenced on Tuesday to nine more years in jail after being convicted of fraud and contempt of court. In his closing statement, the top Kremlin critic blasted Vladimir Putin and Russia’s war in Ukraine, urging Russians to protest.
52.8 million: That’s the amount of toxic oily water being dumped annually into the world’s oceans, according to an investigation by Deutsche Welle. The figure is roughly five times the equivalent of the 1989 Exxon Valdez spill in Alaska, one of the worst maritime environmental disasters ever.
25 billion: Alibaba wants to buy back more than $25 billion worth of stock. The Chinese e-commerce giant aims to reassure investors about the company's future despite being targeted by Xi Jinping’s tech crackdown.
380,000: A seven-year-old Ukrainian girl who went viral for singing the Frozen theme song from a bomb shelter in Kyiv performed her country’s national anthem during a concert in Poland. The event, attended by thousands, raised some $380,000 for Ukrainian refugees like her.China vows action over delisting of telcos by US
SHANGHAI • China will take "necessary measures" to safeguard the interests of its companies after the New York Stock Exchange (NYSE) began delisting three Chinese telecom firms that Washington says have military ties, China's Commerce Ministry said.
Ant's mammoth IPO set to be windfall for Hong Kong market
Summer may be over but the financial world is sizzling with a historic debut on Thursday of ground-breaking proportions.
Fits like a glove? Malaysians snap up shares in pandemic
A month into Malaysia's movement control order (MCO), software business owner Ariff Azraai was saddled with a mountain of bills.