Finimize - ⚔️ Microsoft came for Apple

What’s going on here?

Microsoft unveiled its AI-powered PC on Monday, aiming to take a bite out of Apple's business.

What does this mean?

Microsoft’s Copilot+ PCs will feature new Qualcomm chips that promise blazing speed, all-day battery life, cooler temperatures, and the ability to handle some AI tasks offline. That could leave Apple in its dust, with PCs that are 58% faster than the MacBook Air M3. To pull this all off, Microsoft made two big moves. For one, it optimized Windows systems to run on the latest and most efficient chips, which are more like the type used in smartphones than the usual Intel ones. For another, Microsoft added a dedicated chip component that can process AI features from within the laptop itself, instead of using the cloud.

Why should I care?

Zooming out: The deal’s a win-win.

Microsoft is relying on Qualcomm’s energy-efficient chips – produced in partnership with British chip company Arm – to power AI models and improve the Windows franchise. For Qualcomm, that’s a chance to showcase its mobile phone tech’s suitability for AI-powered devices. Morgan Stanley certainly sees this partnership sticking around: the big bank predicts that 14% of all Windows PC shipments will feature Arm systems as soon as 2026, up from, well, 0% last year.

The bigger picture: It pays to be first.

Microsoft’s leading the Big Tech pack when it comes to AI. The company hinted that its AI agent, capable of seeing and speaking, will soon be in smart speakers, phones, and even VR headsets. Plus, Microsoft’s bet on OpenAI is paying off. With the ChatGPT-creator's advanced language models enhancing Copilot AI, Microsoft can now better compete with Google and Apple. So naturally, Microsoft wants to capitalize on its early lead by creating AI products that everyday consumers will pay for. Right now, it seems the next phase of the AI race is not about world-changing software, but rolling out portable, AI-first products.

What’s going on here?

Asset manager Carlyle raised billions for the biggest-ever Japan-focused private equity fund.

What does this mean?

Private equity firms have generally struggled to raise cash in today’s “will-it-or-won’t-it recession” economy. But it seems investors will make an exception for Japan: the value of management buyouts in the country hit a record high last year. In fact, Carlyle has managed to raise 430 billion yen ($2.8 billion) for its fifth Japanese buyout fund – 70% more than it racked up in its last round during 2021. And there’s a reason why the asset manager needed to line its coffers: Carlyle recently announced it was buying KFC Japan, spending 135 billion yen ($863 million) to get its fingers – licked, presumably – into the country’s food industry.

Why should I care?

Zooming out: So this is love.

Investors’ fascination with Japan is, in part, down to the government’s efforts to make the country’s companies more profitable and lucrative for shareholders. But on top of that, Japan has the lowest interest rates of any developed country, with rates only recently poking their head above zero. That not only supports the country’s economic recovery, but also makes borrowing cheap. So while the high interest rates of most other major markets are making it expensive for firms to pull off hefty purchases, Japan is looking a lot more affordable.

The bigger picture: Oh Blighty.

The UK’s companies have been on shopping lists, too: takeover activity in the country recently hit its highest level since 2018. Now, the UK’s interest rates are high, sure, but that’s outweighed by the country’s cheap company valuations. So recently, firms have been making opportunistic bids on companies listed on the London Stock Exchange, with analysts speculating that they may relist the companies stateside where they’d likely fetch a higher valuation.