Finimize - 🦾 Anthropic looks jacked

What’s going on here?

With its economy still sagging, China is pulling out the stops to get consumers spending again.

What does this mean?

This is just the latest round of stimulus from the world’s second-biggest economy. Previous moves haven’t had quite the impact the government had hoped – and now, with exports at risk of a slowdown, policymakers are doubling down on incentives to boost spending and business investment. There are a few things on the table. Shoppers can snag subsidies on home appliances and phone, tablet, and smartwatch purchases of up to 6,000 yuan ($818) this year. A popular trade-in program for electric and hybrid cars is getting another spin, having fueled over 3.7 million auto sales last year. Plus, farmers and factories can get money back on new industrial equipment.

Why should I care?

For markets: No fireworks, only sparklers.

China has been taking a bit-by-bit stimulus approach, as it seeks to move away from its old debt-driven growth model and toward a more self-sustaining one. But the slow road is not without risk. Weak consumer confidence, a lingering property crisis, and shaky business conditions are dragging down prices, leaving markets stuck in neutral. And without bolder moves, global investors are likely to stay away – squashing hopes of a stronger recovery.

The bigger picture: Stay away, Japan.

China could be heading into a "balance sheet recession", where businesses prioritize paying back debt over spending and investing – a situation that could lead to a decades-long Japan-style spiral of weak demand, falling prices, and meager growth. That's reflected in the country's bond yields hitting record lows. They’ve fallen below levels seen during the pandemic panic and the global financial crisis.

What’s going on here?

AI startup Anthropic is on the brink of raising $2 billion in brand-new funding, which would give it an ovation-worthy $60 billion valuation.

What does this mean?

Anthropic – maker of the Claude AI chatbot – is only four years old, and its new potential valuation is more than triple the $18 billion it hit just last year. The startup is hugely popular among programmers, businesses, and big-name investors. Amazon, for one, has poured $8 billion into it. It’s no surprise: the buzz around generative, “learning” AI models and their potential to transform how we work and live has been driving eye-popping investments for two years now. And firms like Anthropic, xAI, and OpenAI are locked in an expensive race to develop breakthrough, market-leading models.

Why should I care?

Zooming out: Promises, promises.

AI investment has been rolling in, but profits are still nowhere to be seen. Companies like Anthropic are playing the long game, betting billions on the technology’s transformative potential. And, sure, if those hefty wagers pay off, the rewards could be sweet – both for the tech investors who put up the dough and for the industries that might benefit from bigger profit and improved productivity. But let’s be real: that’s far from guaranteed.

The bigger picture: Not everyone’s a winner.

Investors on the hunt for the next AI payday likely had their ears pricked this week, when Nvidia’s CEO called robotics a “multitrillion-dollar opportunity”. But there’s a flipside: this tech could lead to devastating job cuts that have the potential to cripple economies. No wonder labor unions across a wide range of industries – from dockworkers to delivery drivers and grocery employees – are pushing for greater job protections. With every advance that AI makes, it sparks big questions about who stands to gain – and who might lose.