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What’s going on here?

Biotech firm Insilico Medicine has just set a new era of drug-making in motion.

What does this mean?

AI seems to be accelerating at warp speed these days, and the fast-moving tech has been sharing its momentum with almost every industry out there. This time, it’s drug-making that’s getting a turbo-boost. Biotech firm Insilico Medicine announced that its new lung disease drug is the first drug entirely discovered and developed by AI to reach phase-II clinical trials. And that’s pretty exciting. See, the firm – which is backed by investment giant Warburg Pincus and Chinese conglomerate Fosun Group – is one of the frontrunners in the AI-powered drug development space. This venture, then, could be a watershed moment in the race for what Morgan Stanley calls AI’s $50 billion opportunity in the sector.

Why should I care?

The bigger picture: Failing faster.

This gambit isn’t guaranteed to be a winner, mind you: last month Benelovent AI, a London-based biotech firm, laid off half its staff when its leading drug prospect failed to bear fruit. But that’s not an indictment of the whole AI-powered industry. After all, most new drugs fail anyway, and AI’s ability to crunch tons of data, identify proteins associated with diseases, and propose medicines to target them saves heaps of time. That means the smart tech can make failed drugs less costly – and successful ones easier to find.

For markets: Watch the dips.

AI hype seems to be propping up the markets these days – but analysts at Barclays don’t see an all-out collapse of the high-tech boom in the cards. In fact, they see any dips in AI-related stocks as buying opportunities, not as heralds of imminent disaster. Their reasoning: recent stock rallies have been concentrated in profitable businesses, and valuation metrics aren’t crazy either – so the stocks could still have more room to run.

What’s going on here?

Russia just about defused a bombshell attempted coup over the weekend.

What does this mean?

Russia’s invasion of Ukraine was met with an immediate outpouring of global criticism – and over the ensuing 17 months, voices of dissent within the country have joined that chorus too. Fed up with a dragged-out war that was once pegged to last only a few days, feelings among even previous supporters have soured – with some favoring a more aggressive approach and others pushing for a swift settlement. Those undercurrents led to a near-explosion in recent days, when the Wagner mercenary group staged an armed uprising that shook the Kremlin’s “stable” facade. And while Putin ultimately managed to keep Moscow out of the crossfire with a last-minute deal, it’s clear that the country’s political might isn’t as rock solid as it once seemed.

Why should I care?

For markets: Oily maneuverings.
Russia might be in the Western world’s bad books, but it’s still a key player in the global supply chain of natural resources. So, when Mother Russia sneezes, the world could catch a cold – or at least, see a shake-up in oil prices – especially with the risk that further turmoil could stop millions of barrels being exported. The US, for one, has taken that threat seriously, drafting plans to keep supply chains moving in case things do get messy. And while last weekend’s crisis was averted, political unrest still has markets on high alert, with oil prices rising on Monday.

The bigger picture: From worse to worse.
Putin having a pow-wow with a formerly loyal mercenary group is a pretty clear sign of fragility – and his hasty calls to international friends, assuring them all’s fine and dandy, don’t exactly scream stability either. And while an optimist might think that pressure could help bring this war to a close, the opposite might be true instead: this kerfuffle could make Russia increasingly unpredictable on the global stage.