š¤ šø Altman Seeking Trillions for AI Silicon Tech
Happy Sunday all,
If you have Presidentās Day off tomorrow - enjoy! I love a good three day weekend. Iāve been thinking about posting two times per week on YouTube for at least a month to test how it feels, and I think the only thing stopping me is my ability to focus š¤£
In a world full of distraction, I was in search for tips on how to stay focused. One of the podcasts I stumbled upon was Jay Shettyās advice for productivity. One key tip that he noted researchers have found is that for creative or deep work - the best work sessions are 52 minutes of focused time, followed by a 17 minute break (sounds like clickbait, doesnāt it?). Other methods include the tried and true pomodoro method, which is the concept of 25 minute stretches of work followed by a 5 minute break.
I plan to try this ā52 minuteā work session tomorrow and break it up with a 15-20 minute break and will report back on how itās goingā¦ or, if you start to see me produce more content: youāll know itās working lol.
Hope you have a great start of your week,
ā Humphrey, Tim & Rickie
Market Report
Sam Altman Seeks Trillions of Dollars to Reshape AI Business
Sam Altman, CEO of OpenAI, has been reported by the WSJ to be pitching a plan with a staggering cost of $5 trillion to $7 trillion to massively increase the supply of silicon necessary for advancing AI technology.
According to Axios, $7 trillion is 219 times the $32 billion that TSMC, the world's best and largest chip manufacturer, spent in capital expenditures in 2023.
It's also 206 times the $34 billion cost of the Manhattan Project, adjusted for inflation. It's more than 8 times the entire annual budget for the U.S. Department of Defense.
At the cheapest cost of debt ā the U.S. Treasury risk-free rate of 4% ā it would cost $280 billion per year to service. That's 10 times TSMC's 2023 net income, or 30 times the net income of Nvidia.
Companies Reduce Expectations as Uncertainties Rise
Companies are adopting an increasingly cautious stance in their earnings outlooks amid a backdrop of economic uncertainties and high stock market expectations, with only 40% of firms exceeding analysts' forecasts, the lowest since April 2020.
Despite strong quarterly earnings growth of 7% YoY for the S&P 500 Index, many companies are issuing guidance below expectations due to concerns about the economy, potential Federal Reserve rate cuts, and geopolitical risks.
This is done to lower expectations and then more easily surpass those low expectations since companies are more aware of the significant impact on stock prices for those that fail to meet estimates.
Consumer Spending Slows Down in January
In January, U.S. retail sales experienced a larger-than-expected drop of 0.8%, signaling a potential slowdown in consumer spending. This decline follows a robust holiday shopping period in December, with revised figures showing a 0.4% gain.
Despite this setback, areas like food services and drinking establishments saw growth, indicating a continued shift towards service-based consumption.
US New-Home Construction Plunges by Most Since April 2020
In January, U.S. new-home construction saw a significant decline of 14.8%, marking the largest drop since the pandemic began. Multifamily home construction fell by over 35%.
Despite a slight increase in permits for single-family homes, the overall decrease in building permits, combined with elevated mortgage rates near 7%, points to ongoing challenges.
However, builder confidence has been rising, buoyed by the expectation of declining borrowing costs and limited competition from existing homes, which remain scarce due to owners holding onto lower-rate mortgages.