Business Insider - Insider Today: Wall Street <3 AI

View in browser

February 23, 2024 • 4 min read

with Dan DeFrancesco

Happy Friday! It's been 52 years, but we're back on the moon like we never left. 

In today’s big story, we’re looking at Wall Street’s love affair with Nvidia (and AI) while Big Tech still grapples with how to use the tools. 

What’s on deck

But first, it’s AI’s world and we’re all just living in it. 

Was this email forwarded to you? Sign up now

AndreyKrav/iStock, Michael M. Santiago/Getty, Tyler Le/BI

The big story

AI over everything

AI hasn’t taken over the world yet, but it’s got a stranglehold on the markets.

Nvidia’s much-anticipated earnings didn’t disappoint. The chipmaker stock skyrocketed, adding the equivalent of Netflix’s entire market cap to its valuation in a single day. 

And it might not stop there. Analysts across the Street boosted their price targets for Nvidia, with one suggesting the stock has 80% of potential upside, Business Insider’s Matthew Fox writes.  

But this week wasn’t just about crowning Nvidia as the king of AI. 

Since Nvidia’s GPUs sit at the center of the AI revolution, the company’s success suggests the hype around the tech is warranted. A rising tide lifts all ships, and Nvidia's earnings beat boosted the entire market. 

The S&P 500 finished Thursday up 2.11%, notching another record, while the tech-heavy Nasdaq Composite jumped nearly 3%. 

Meanwhile, Japan’s flagship Nikkei 225 index set a new all-time high for the first time since 1989, thanks largely to chip stocks tied to the AI boom. 

It wasn’t just Nvidia’s numbers that impressed Wall Street, though. CEO Jensen Huang’s conviction is also a good sign for the stock, according to analysts.

“I have rarely heard a CEO be so bullish, so committed to this theme, and so convinced that this is the future,” Kathleen Brooks of XTB told BI’s George Glover.

Chelsea Jia Feng/BI

With so much momentum, what could possibly go wrong?

The generative AI boom is still young — ChatGPT was launched little over a year ago — and a lot remains unknown. Specifically, many AI models are still a work in progress.

One issue is bias showing up in AI tools. One startup — affectionately known as the “BlackGPT” — is aiming to change that with a bias detection tool and API, BI’s Monica Melton writes. 

Lawsuits from content owners over the usage of their material are another threat to big AI companies. Copyright laws being updated to incorporate generative AI models would have massive implications.

But the best example of the uncertainty of the AI landscape comes from how one of the biggest tech companies in the world is approaching the issue.

Internal documents show that Amazon is warning its employees not to use third-party generative AI tools for work, BI’s Ashley Stewart and Eugene Kim report. 

"While we may find ourselves using GenAl tools, especially when it seems to make life easier, we should be sure not to use it for confidential Amazon work," the company told employees in a recent email.

It’s an interesting acknowledgement of the risks involved with using AI tools — especially when Amazon is pitching its own chatbot to customers.

3 things in

Markets

🔔 Before the opening bell: US stock futures tread water in Friday’s premarket as traders take a breather after Nvidia’s earnings sparked a record-smashing day for global markets.

Paul Morigi/Getty Images; Jenny Chang-Rodriguez/Insider

1. More Goldman drama. A new committee within the firm’s investment bank has reportedly left some senior executives up in arms over who’s in and who’s out. Meanwhile, ex-partner Joe Duran details what life after Goldman is like. (They're still on good terms, for the record.)

2. The Fed needs to thread the needle. The central bank managed to curb inflation without crushing growth. But even with a soft landing in sight, experts say policymakers still face the tough task of stopping inflation from flaring up without triggering a recession.

3. AI has made Jensen Huang eye-wateringly rich. The Nvidia CEO’s personal fortune jumped by $10 billion on Thursday alone. Huang, who owns 3.5% of all Nvidia shares, now has a net worth of $69 billion, making him the world’s 21st-wealthiest person.

3 things in

Tech

Reuters/BI

1. Reddit gave us a lot more information about its plans to go public. The social-media giant is set to list via IPO next month. In a Thursday SEC filing, Reddit laid out how much karma users will need to buy shares ahead of its stock-market debut and revealed that OpenAI boss Sam Altman holds an 8.7% stake in the company.

2. People think Google’s Gemini is “woke.” The company is pausing Gemini after social media users complained the AI model wouldn’t generate images of white people. Elon Musk said in a post on X after the announcement that Gemini had made Google's "insane racist, anti-civilizational programming clear to all."

3. Can Rivian afford to build its next vehicle? It seems like even the company’s CEO isn’t sure. During an interview with CNBC, RJ Scaringe appeared to avoid answering questions about the EV maker's financial health. The interview came after Rivian missed earnings expectations, and Scaringe revealed plans to slash 10% of its staff. 

3 things in

Business

Lucas Jackson/Reuters

1. Wayfair is leaner and meaner — thanks to layoffs. In a letter to shareholders, CEO Niraj Shah said Wayfair is “getting more done, and faster, and at a lower cost” after several rounds of layoffs last year.

2. Vice is shutting down its website and laying off hundreds of people. The media company will stop publishing content on its site and shift its focus to its studio. Check out the memo CEO Bruce Dixon sent to staff.

3. Boxabl customers are asking for their money back. BI spoke to 35 would-be purchasers of the tiny homebuilding startup’s Casita, which lists for $60,000. Two-thirds said they’d asked for refunds due to long waits, poor communication, and uncertainty about delivery timelines.

In other news

What's happening today

The Insider Today team

Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, editor, in London. George Glover, reporter, in London.

Get in touch, email us at insidertoday@insider.com

Get more Business Insider

Subscribe for unlimited articles.

Never miss a story when you download our app.