Good morning! Meta wants to flood classrooms with its VR headsets. Axios reports that Zuck's firm plans to launch a whole bunch of education apps for teenagers on Quest. The idea of kids peering at intestines up close through Meta's gear is certainly tantalising, but the jury is still out on the impact of strapping heavy headsets on teenagers. Whatever happened to teachers scribbling on good old blackboards?

Roshni Nair and Anup Semwal also contributed to today’s edition.

The Market Signal* 

Stocks & Economy: US Federal Reserve Chair Jerome Powell confirmed what the markets were expecting: rates will likely stay higher for longer. The Fed’s confidence is shaken and it is no longer sure when its tight monetary policy will begin having the full desired impact on prices. 

Meanwhile, an outlandish theory says interest rates jumping from 0% to over 5% is the reason for the US’ economic resilience. It says Americans are now earning on their investments and savings deposits because of high rates and spending the extra cash. The US government alone is paying $50 billion in interest each month on its mammoth $35 trillion debt. 

The rupee touched a record low of 83.54 against the US dollar on Tuesday as the world awaited Israel’s response to Iran’s missile barrage last weekend. Asian equities opened weak. Indian markets are closed for Ram Navami.

ARTIFICIAL INTELLIGENCE

These Models Aren’t Servin’

“You are no longer in the running to be America's Next Top Model.”

If you think this iconic line from one of the most iconic reality TV series doesn’t apply to AI, you’re wrong.

The Information reports that AI startups are training large language models (LLMs) on, well, LLMs by OpenAI, Google, Anthropic, etc. The result: a deluge of derivative models trained on the same data. And it’s not just small companies. For every Sora that’s scraped Google’s YouTube, there’s a Bard that’s scraped OpenAI’s ChatGPT and an Adobe Firefly trained on Midjourney.

Startups undercutting AI giants on price can only go so far. It won’t be long before the latter tighten controls to prevent revenue loss.

The clone wars are funnier when you realise there are no universal standards to evaluate an AI model. In the absence of independent auditing and testing, AI companies are “grading their own homework”. 

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.

In today’s special edition, he speaks to CVoter founder Yashwant Deshmukh, author and business advisor Rama Bijapurkar, and economic journalist and columnist Shankkar Aiyar on the 2024 elections. How will voters cast their ballot? What will drive their choices? What about first time voters? And will they vote differently from older generations?

TRADE

An Unequal Race

Indian exports shrank in March despite the leg-up for electronic goods from iPhone shipments, and pharmaceuticals. Its imports also fell, mostly because of lower oil and gold imports that month. 

While a month does not make much of a difference, merchandise exports were down 3.11% in FY24 compared to FY23 to total $437 billion. Global headwinds such as war and disruptions of key shipping routes have impacted trade.

One other reason could be China ramping up exports. So much so that the US is getting uncomfortable with its competitive intensity. Beijing is trying to export its way out of an economic slump. The strategy seems to be paying off as its economy grew a faster-than-expected 5.3% in January-March. Exports rose 1.5%, although volume growth was 4% as prices of the goods it ships were lower. 

Cost is the single-biggest factor on which China beats India. 

MIGRATION

Green Pastures Look Distant

The line of Indians waiting for a US green card is so long and growing that by 2030 the wait for some will be nearly two centuries. The backlog could exceed 2.1 million individuals in the top three employment-based categories.

Currently, the number of individuals stuck in the employment-based immigration queue is over one million. The US caps the annual number of employment-based permanent residencies to 140,000 and 7% per country. 

Visa woes: US ambassador to India Eric Garcetti told ANI in a recent interview that President Joe Biden had specifically asked him to bring down visa times in India. Wait times had already been curbed by 75%, he said. Garcetti also said that the US had opened its newest consulate in Hyderabad and was planning two more—one in Bengaluru and another in Ahmedabad. 

However, it falls on the US Congress to clear green card and visa backlogs and Indian-American lawmakers have been pushing hard for removing country caps.  

The Signal

US work visas and green cards are increasingly coveted by Indian professionals, especially those in the IT and financial services industries. In the past few years, demand has skyrocketed with ever more Indians trying to migrate Stateside. Even blue-collar workers are trying different routes, including illegal ones, to reach the US where they hope to eventually become naturalised. In December 2023, France intercepted a Nicaragua-bound chartered flight that was carrying 276 Indian passengers who were to be smuggled into the US. 

🎧 The American Dream has a waitlist. Also in today’s episode: Tesla’s recent setbacks. Tune in on Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you get your podcasts.

FYI

Another hurdle for VSS: The Centre has deferred Paytm’s Rs 50 crore investment in its Paytm Payment Services arm due to concerns over Chinese shareholding in the parent company, Reuters reports.

Hoping for a turnaround: The Economic Times reports that Vodafone Idea has raised Rs 5,600 crore from nearly 60 anchor investors, including Fidelity and UBS, in the run up to its follow-on public offering on April 18.

The eagle has landed: According to the IMF’s April forecast, the US economy is on track to grow at double the rate of its G7 peers (2.7%), while Germany’s is just 0.2%. At 6.8%, India’s projected growth this year is the fastest of all major economies.

Chance pe dance: Indian space startups such as Dhruva Space, Skyroot Aerospace, Bellatrix Aerospace, and Agnikul Cosmos have received save the date requests to meet SpaceX chief Elon Musk in Delhi on April 22.

About time: Google Wallet is launching in India, according to TechCrunch. But unlike in other markets where Wallet and Pay are combined in a single app, Google will continue operating Pay as a standalone app.

THE DAILY DIGIT

$6 trillion

The addition to global GDP if women entrepreneurs could have the same access to credit as their male peers. (Bloomberg)

FWIW

Money grows on trees: Japan's cash grows in the wilds of Nepal. No kidding. The bark of a wild Himalayan shrub called agreli, which grows on the hillsides near Mount Everest, is peeled, beaten and dried to make paper for the globe's third most traded currency. Kanpou Inc., an Osaka-based company that provides paper to the Japanese government, sent experts to Nepal in 2015 to train local farmers as their supply of paper was dwindling. This was due to Japanese farmers quitting the fields for city life. Cut to 2024, Nepal will be shipping 140 tons of currency paper to Japan. Local farmers are over the moon. One of them is expected to pocket a tidy $60,000 profit. Who knew it pays to grow money?