Good morning! So what if Google paid Apple billions of dollars to become the default search engine on the Safari web browser—a key sticking point in its US antitrust trial? The two companies may strike yet another contentious partnership. Bloomberg reports that Apple, which is “preparing new capabilities” for iOS 18, is negotiating with Google to licence its Gemini AI models for the iPhone. Apple is behind in the AI rat race despite work on a chatbot dubbed Apple GPT and the large language model Ajax. Because of that, it’s also held talks with Google competitor OpenAI to power new iPhone features. Regardless of which way this goes, chief Tim Cook, who’s already having a drab 2024 (reach our past editions y’all!), may attract additional antitrust scrutiny.

Jessica Jani, Roshni Nair, Soumya Gupta, and Dinesh Narayanan also contributed to today’s edition.

The Market Signal*

Stocks & Economy: After a 7.1% year-on-year jump in exports in January-February, China’s industrial output grew 7% in the first two months of 2024. Fixed asset creation rose 4.2%, indicating a strong pickup in activity. 

Increased economic activity in China coupled with the damage inflicted by Ukrainian drones to Russian refining capacity has pushed up oil prices..  

The Bank of Japan is widely expected to announce an end to its negative interest rate policy today. Several central banks, including the Federal Reserve, will announce rate decisions this week. 

Asian equities were awash in red even though Wall Street had perked up on Monday after a string of losses last week. 

Indian equities will likely remain locked in a range. The GIFT Nifty indicates a weak opening. Meanwhile, Tata Sons is widely reported to sell 2.34 crore equity shares of TCS for $1.1 billion in block deals today. 

SEMICONDUCTORS

Big Dreams, Bigger Challenges

India’s aim to become a top five chip-producing nation in the next five years seems a tall order, going by this analysis in The Wall Street Journal. It argues that the country will be stymied by China’s deeper pockets and vast experience in this space; Beijing is currently raising $27 billion for the third leg of its semiconductor-focused ‘Big Fund’.

China is catching up to cutting-edge chips, with homegrown champions making 5-nanometre (nm) variants. But even as they set sights on the 3nm benchmark, others are doubling down on mature-node or legacy chips—those that have been in production for longer. China’s share of global mature-node production is estimated to increase from 31% in 2023 to 39% in 2027.

That puts India, which wants to leave a mark in legacy chipmaking, in a vulnerable spot. It also lacks refining capacities to ramp up purity levels of chemicals required in semiconductor manufacturing.

PODCAST

Tune in every Monday to Friday as financial journalist and host Govindraj Ethiraj gives you the most important take on the latest in business and economy.

Today, he speaks to Dr Ajai Sahai, Director General & CEO, Federation of Indian Export Organisations, on whether the recent spike in Indian exports will sustain.

AUTO

Tyre’d Yet? 

Auto sales in India are rising, but so are natural rubber prices. Thanks to growing demand, shrinking supply, the Red Sea crisis and this being the lean season, local rubber prices may reach ₹200 ($2.4) per kg for the first time in over a decade. 

Tyre companies will be impacted, and higher prices may be passed on to consumers. It's worth noting that demand may be higher in the coming months because of increased mobility during the elections. 

On other shores, the robots are taking over. Kinda. Mercedes-Benz is finding it so hard to hire reliable workers that it is trialling humanoid robots for “demanding and repetitive” tasks. Ditto BMW and Chinese carmaker Nio.

Plus, lithium-ion batteries are under scrutiny. American cities are trying to identify fires caused by batteries, which can be deadly, and focusing on how to tackle them.

NAVIGATION

All Over The Map

Village locals in Karnataka have had enough of Maps’ shenanigans. They've now erected a blunt warning sign that reads: "Google is wrong. This road does not go to Club Mahindra."

If you're one of Google Maps' billion-plus monthly users, you've been there. Maps is veering drivers off functional highways onto deserted roads or frenetic gullies that lead nowhere. Using the app might get your car stuck on stairs, as it happened with an SUV driver in Tamil Nadu.

What’s wrong with Maps, bro?: Google Maps deprioritises updating less-travelled roads. So each time it sends you from a highway onto a purported shortcut, it’s ditching an accurate, up to date route for one it probably doesn’t have enough information about. Some remote roads in villages might never get updated. 

The Signal

Expecting Google Maps to track and promptly update every nook and cranny is asking for the moon. It’s mostly manually edited, so if it sidelines updating less-traffic paths to keep major roads accurate, it must also sideline suggesting faster routes for more accurate ones. One life lost on a risky, inaccurate shortcut is one too many. 

Maps would do well to establish direct lines of communication with local authorities or even people commuting in real-time to get credible updates on road closures. Live community feedback can help enhance user safety while guiding users on less-travelled roads.

Head to The Core to find out how Google Maps functions in India. Hint: contractors make its world go round. For now.

🎧 Google Maps’ India problem. Also in today's episode: the surge in demand for government affairs positions within companies. Tune in to The Signal Daily on Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you get your podcasts.

FYI

Cleaning drive: India’s Supreme Court ordered the State Bank of India to disclose all details related to electoral bonds by March 21, including their serial numbers. Separately, the Election Commission transferred six home secretaries and a top police officer. 

Bump up: Despite a tough year littered with layoffs, IT services companies are expected to award employees 8.4-9% hikes in pay this year, similar to last year. 

⛽drops: India’s crude oil imports fell 6.6% to a 4-month low in February after hitting a record high in January.

Moving on: The Indian Olympic Association dissolved an ad-hoc committee for wrestling but asked the Wrestling Federation of India to appoint a safeguarding committee or officer to address sexual assault allegations against its former chief Brij Bhushan Sharan Singh. 

Something new: Azim Premji’s private investment arm Premji Invest and Hemant Taneja’s General Catalyst led a $53 million funding round in healthcare-focused AI startup Hippocratic AI, valuing the company at $500 million.

THE DAILY DIGIT

35,000

The number of Indian startups that shut down in 2023. (Bain Capital) 

FWIW

Waste of space: Have $500,000 to spare? Then sign up for SpaceVIP already. We aren’t publicising the company; rather, we’re recommending a splurge for those who can afford it, especially if they’ve gotten bored eating out at Wasabi, Indian Accent, or other high-end restaurants cut from the same cloth. The luxury space travel company will host six guests on a “high-tech” space balloon ride 100,000 feet above sea level, where the lot will be able to watch the sunrise, livestream their Emperor Nero-like experience while the Earth beneath them burns, and dine on food made by Michelin-starred Danish chef Rasmus Munk. On the menu is “aerogel-inspired food” and dishes with “encapsulated aroma”. Brb, craving a Chinese bhel.