🦾 Can These Tech Giants Save AI?

Good morning. US stock futures dipped in Friday morning trading as investors reviewed a flurry of corporate earnings ahead of a key inflation report.

🤖 Tech giants unite on AI chip components

📝 Our report: Intel, Google, Microsoft, Meta, and other tech giants are forming the Ultra Accelerator Link (UALink) Promoter Group to steer the development of AI accelerator chip connections in data centers. In a recent report, Gartner estimates that the value of AI accelerators used in servers will total $21 billion this year, increasing to $33 billion by 2028. Revenue from AI chips will hit $33.4 billion by 2025, meanwhile, projects Gartner.

 🔑 Key points:

• The UALink Promoter Group — which also counts AMD (but not Arm just yet), Hewlett Packard Enterprise, Broadcom and Cisco among its members — is proposing a new industry standard to connect the AI accelerator chips found within a growing number of servers.

• Broadly defined, AI accelerators are chips ranging from GPUs to custom-designed solutions to speed up the training, fine-tuning and running of AI models.

• Glaringly absent from the list of the group's members is Nvidia, which is by far the largest producer of AI accelerators with an estimated 80% to 95% of the market.

💡 So what: The formation of the Ultra Accelerator Link (UALink) Promoter Group by tech giants like Intel, Google, Microsoft, and Meta to guide the development of components linking AI accelerator chips in data centers means these companies are collaborating to standardize and improve the efficiency of AI hardware infrastructure. This cooperation aims to boost performance, reduce costs, and ensure compatibility across different systems, which could accelerate advancements in AI technology and make data centers more powerful and efficient.

Friday - No Major Economic News

📈 Ramit Sethi shares his best personal finance tips

🚗 New or used car? Which one should you buy?

👨🏽‍💼 Is it time to find a new financial advisor?

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📈 Fed exec: High interest rates are working

WHAT: Federal Reserve Bank of New York President John Williams expects inflation to keep sliding in the second half of the year, noting that high borrowing costs are putting the brakes on the economy. “With the economy coming into better balance over time and the disinflation taking place in other economies reducing global inflationary pressures, I expect inflation to resume moderating in the second half of this year,” Williams said in prepared remarks at the Economic Club of New York.

WHY: Fed officials have signaled interest rates likely need to stay elevated for longer as inflation cools more slowly than expected. US central bankers have left their benchmark rate in a target range of 5.25% to 5.5% since July.

💰 Governments work to salvage global tax deal

WHAT: After three days of talks in Paris failed to seal the deal, nearly 130 countries have pledged to save the first pillar of a global tax deal on highly profitable multinationals by the end of June. Officials from 127 countries and jurisdictions have struggled for months to finalise the terms of an international treaty about how to reallocate taxing rights across borders, mainly on U.S. big digital companies.

WHY: The treaty codifies how governments are to reallocate taxing rights on about $200 billion in profits from the biggest and most profitable multinationals to the countries where their sales occur.

🛸 Drone deliveries on the way

WHAT: Federal regulators have given Amazon the green light to expand its drone delivery program, according to a recent announcement by the company. In a blog post published on its website, Seattle-based Amazon said that the Federal Aviation Administration has given its Prime Air delivery service the OK to operate drones “beyond visual line of sight,” removing a barrier that has prevented its drones from traveling longer distances.

WHY: Businesses have wanted simpler rules that could open neighborhood skies to new commercial applications of drones, but privacy advocates and some airplane and balloon pilots remain wary.

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