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Artificial Intelligence

Big Tech is dumping tons of money into AI

Might as well strike will the iron is hot. After tech giants released their earnings late last week, they showed that Big Tech poured over $200 billion into AI and doubled down on the industry.

Interlinked Investments

Tech companies have been hemorrhaging money trying to develop AI but failed to translate the spending into real sales, and Wall Street punished them for it last quarter.

Their response to faltering stocks? Invest a record amount into the technology:

• Meta CEO Mark Zuckerberg pledged to further invest in AI, which he said can “accelerate our core businesses,” and increased the company’s capital expenditure outlook to $40 billion this year.

• Amazon invested $22.6 billion on tech and real estate, including semiconductor chips and data centers.

  • Compared with the same period last year, that is an 81% increase.

• Apple also vowed to invest in AI after releasing a host of products and features that utilize the technology, including its own Apple Intelligence.

• Google surpassed earnings expectations and disclosed that over 25% of their new code is created by AI (with human oversight).

How did this news affect them on Wall Street? It’s a bit of a toss-up. While Meta and Microsoft saw a decline after the former's spending strategy created concerns and the latter's projection for cloud revenue growth disappointed, shares of Amazon and Alphabet (the parent company of Google) jumped when each of them surpassed earnings expectations.

Health

The wellness industry is now worth more than Big Pharma

Everyone hop in the car and take a trip to hot yoga. The global wellness industry is now worth more than $6 trillion, more than the pharmaceutical and sports industries, according to a new report by the Global Wellness Institute (GWI).

The growth seen in the industry is partially a result of the pandemic when more people started to prioritize their health and well-being, including an increased importance on mental health.

Health Gurus

According to a report by the GWI, the wellness market has grown by 26% since 2019 to a total value of $6.32 trillion. As businesses leverage the increased stress (no pun intended) people put on their health, "growth is even stronger than we predicted," said Katherine Johnson, one of the authors of the Global Wellness Economy Monitor.

The report from the GWI looks at spending from 11 different sectors, each contributing to the over $6 trillion valuation:

• The largest of the 11 was the personal care and beauty sector, which is valued at over $1.2 trillion by itself.

  • The healthy eating, nutrition, and weight loss sector came in second, at $1.09 trillion, and the physical activity sector was the third-largest, at $1.06 trillion.

• The one that grew the fastest was the wellness real estate sector, inflating nearly 20% from 2019 to 2023.

According to the report, North America spent $5,768 annually per person, more than any other region, while Europe came in second, at $1,794 annually.

The $6T valuation could be inflated

While the $6.32 trillion price tag put on the industry is an unfathomably large number, it’s partially because the GWI has a broad definition of wellness (see here). McKinsey & Co., a consulting company, only measures wellness on six categories and valued the industry at a more tame $1.8 trillion at the start of this year.

One of the report’s authors told Bloomberg that “we’re measuring dollars being spent on services and products,” and that businesses are increasingly marketing products (like those in the personal care and beauty sector) as self-care and wellness items.

In addition, some of the categories feature products that most of us wouldn’t necessarily consider self-care devices:

• The wellness real estate sector included sales of smart air filtration systems in its valuation.

However, it is irrefutable that people are interested in wellness: Earlier this year, Sirio, a new hotel brand, opened a Dubai location that exclusively focuses on wellness and self-care. The Emory Hotel in London also offers a $13,000 exclusive wellness club, which spans over four floors.

Election 2024

Gamblers were right about the outcome of the election

I suppose gamblers had a better grip on politics than expert pollsters. Election wagering erupted during this year’s presidential race, gaining attention for predicting Trump as an early winner and billions worth of bets placed. It turns out they were right.

Now, hundreds of millions of dollars will be paid out to winners who bet on prediction markets Polymarket, Kalshi, and PredictIt after correctly predicting the winner of the 2024 US presidential election.

A popular choice

As people tried placing some last-second wagers, prediction markets became the most downloaded free apps on Apple’s App Store this week. Thousands of bettors are waiting for the $446 million in winnings to be dispersed.

• Polymarket brought in over $2 billion in election bets alone and generated the most money out of all prediction markets, but didn’t disclose its bet count.

• Kalshi, which was just allowed to begin election betting last month, had 40,000 bets for President-elect Donald Trump and 28,000 for VP Kamala Harris.

Leading up to the election, prediction markets became a secondary indication of who may win the election next to polls, becoming commonplace in tech circles and politics:

• In late August, Bloomberg expanded its terminal service (which is frequently used in the banking industry) to include Polymarket chances.

• A staffer for a mayoral candidate in San Francisco tracked statistics from prediction markets and traditional polls.

• A prominent tech founder, not named by the Washington Post, reportedly browsed at Polymarket to see how his preferred candidate was doing.

It seems the newfound importance of prediction markets paid off, as proponents of them say it’s a better way to foresee political events as they respond to new information in real-time, plus, there is something at stake for people (money).

Swaying the outcome

But even as prediction markets garnered a flood of attention, critics were skeptical they were accurate, arguing they lack a historical record and can be manipulated more easily.

Although the prediction markets were correct about the outcome, critics were right that there is a risk in treating these markets the same as poll results, as private money can easily manipulate them:

• As many as 11 accounts have reportedly been tied to a French trader known as the Polymarket “whale”, who bet heavily on Trump and swayed the odds in the president-elect’s favor by several percentage points.

  • Known as Théo, the French trader will take home a profit of over $85 million, according to a new Business Insider report.

The markets were wrong about one thing: Trump became the first Republican to win the majority of the popular vote in two decades, but the prediction markets didn't give him much of a chance to win it, with the odds reaching a high of 43%.

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Grab Bag

No one is hotter than Chili’s right now

I’m on my way to get some baby back ribs. After releasing its quarterly earnings last week, Chili’s showed it has outperformed in the casual restaurant industry, thanks to its spicy deals and hot items that have gone viral.

Red Hot

In the most recent quarter, Brinker International (which gets 90% of its profits from Chili’s) showed a record 14% gain in same-store sales and a 6.5% increase in customer traffic, which immediately boosted its shares by 9%. Year to date, Chili’s stock is up an astounding 165%.

Compared to the remainder of the casual dining sector, which will likely see a record number of chains file for bankruptcy this year, Chili's is doing fantastic in what is now a struggling market.

Chili’s Comeback

Chili’s said it brought itself back from struggling sales and waning demand by introducing more affordable menu items that directly compete with fast food restaurants. It said that three main items, along with promotions and social media, get most of the credit for boosting its business:

• Its $10.99 Big Smasher burger, a rival to the Big Mac, “continues to win with guests,” according to Brinker CEO Kevin Hochman.

  • It also included bottomless drinks (non-alcoholic) and unlimited refills of chips with salsa and french fries.

• The $6 margarita has also captivated customers, especially a special promotion drink that ran this October.

• The viral Tripple Dipper, which lets guests pick three appetizers and sauces, now accounts for over 11% of the chain’s revenue alone.

  • Its TikTok fame has led sales of the $20 app to surge 70% in the last year.

Chili’s might be the last fast-casual restaurant: TGI Fridays recently filed for Chapter 11 bankruptcy protection after abruptly closing 50 locations last week. Hooters is having difficulties due to "pressure from current market conditions," and Red Lobster filed for bankruptcy in May.

These high-tech berries are worth $1 billion

Now even fruit can’t escape the tech sector. How times have changed. Agrovision, a producer and supplier of “premium superfruits”, is using AI, data analytics, and genetics to cultivate fruit, which helped them reach a $1 billion valuation in August.

Agrovision wants to create the ideal fruit using technology, and its berries tend to be priced on the premium side of things (around $6-$8 for a 9.8 oz pack), but it’s a luxury you’ll want to pay more for, according to co-founder Steve Magami.

Berry Nice

Agrovision wants berries to be better… period.

“There’s nothing worse than… a soft, a mushy, a short-shelf life blueberry,” Magami told Bloomberg. The company is focusing on affordability and consistency with a premium product, no mushy berries (how dare they) in any package.

The company has found what it says are the ideal microclimates to grow its superfruits, with farms in the US, Peru, and Morrocco. But it also has a technological edge that gives their berries some extra burst:

• Agrovision has research and development teams that produce categories of berries that maximize shelf life, nutrition, flavor, and climate resistance.

• It employs AI algorithms to arrange seasonal workers, conduct quality control, and forecast cultivation and harvesting dates.

• The company also has a partnership with RipeLocker, which supplies them with vacuum storage chambers that keep fruit fresh for three months.

More artificial intelligence will be included in Agrovision's product lines in the future, along with new products like antioxidant-rich blueberries and seedless cherries.

Fun fact: There is a berry blast in America right now. According to the US Department of Agriculture, fresh blueberry imports increased from 44 million pounds in 2000–2002 to 450 million pounds in 2018–2020.

Fast Facts

Vintage Vamp: Polish archaeologists recreated the head of a 400-year-old "vampire" who had been buried with a sickle around her neck.

Invasive Insects: Hawaii is racing to stop invasive coconut rhinoceros beetles, which are native to Southeast Asia, China, and Africa, from taking over its coconut trees and soil.

Cod Consumers: Scientists from MIT found Atlantic cod ate 10 million capelin, a small forage fish,  in four hours while migrating off Norway's coastline. The giant meal only accounted for 0.1% of the capein in the region.

PeaWorld: During a performance at SeaWorld in San Antonio, an orca pooped and then sprayed the audience with the excrement-filled water. Now that's dinner and a show.

Horse Play: Originally from Mongolia, two Przewalskis, one of the rarest horse breeds on Earth, unexpectedly found their way into western US farms. BTW their names are Shrek and Fiona.