Carlos Slim's $1.2B Gas Field Investment, Bitcoin Market Turmoil, Nvidia's Downgrade, and More

Carlos Slim's $1.2B Energy Investment, Bitcoin Uncertainty, Nvidia Downgrade

Carlos Slim’s Firm to Invest $1.2 Billion in Mexican Gas Field - Bloomberg

• Carlos Slim’s Grupo Carso SAB is investing $1.2 billion to develop a gas field in the Gulf of Mexico with state-run Petroleos Mexicanos. The field, Lakach, is expected to produce gas around 2026 and will be stored and processed in an inland facility. The deal is a potential model for private enterprise to work with Pemex, Mexico’s state oil company. The Mexican government has reasserted state control of the energy industry, but production and exploration have slowed with less private investment.- President-elect Claudia Sheinbaum has said she will work with private investors in energy while insisting that Mexico’s natural resources belong to the people.

Bitcoin’s Lingering Mt. Gox Overhang Leaves Market in a State of Suspense - Bloomberg

• Mt. Gox trustee has made repayments in Bitcoin and Bitcoin Cash to rehabilitation creditors

• Many creditors are expected to receive repayments by the end of October

• Bitcoin price has fallen to its lowest since February due to uncertainty and potential supply overhang

• Low levels of liquidity and potential liquidation of $2.3 billion Bitcoin pose immediate threats to the market

Nvidia Gets Rare Downgrade on Valuation Concerns After Rally - Bloomberg

• New Street Research analyst Pierre Ferragu downgraded Nvidia to neutral from buy, saying the stock is fully valued after a 156% gain this year and a gain of almost 240% in 2023. The company trades at nearly 23 times estimated revenue for the next 12 months, making it the most expensive stock in the S&P 500 Index. Additional upside will only materialize in a bull case beyond 2025, according to Ferragu. The downgrade is rare for a company that has become the biggest beneficiary of the artificial intelligence spending boom. New Street set a one-year price target of $135 for Nvidia, compared with its most recent close of $128.28.

Drahi’s French Fiber Sale Said to Stall Over Valuation Concerns - Bloomberg

• Telecom tycoon Patrick Drahi’s sale of XpFibre, a controlling stake in his French fiber optic company, is stalled due to disagreements over price. Drahi is seeking a valuation of about €8 billion or more, while some potential buyers have offered €6 billion to €7 billion, including debt. Private equity firms KKR & Co., Global Infrastructure Partners, Ardian, and OMERS Infrastructure are among the bidders. Negotiations have hit an impasse due to the wide gap in price, and it is possible that Drahi may still reach an agreement with a bidder.

Goldman and Citi Predict More Gains for Nvidia Supplier Hynix After 90% Rally - Bloomberg

• SK Hynix, a key supplier of high-bandwidth memory chips to Nvidia, has seen a significant increase in its stock price over the past year.

• Wall Street analysts have upgraded their forecasts for the firm, citing the potential for AI and positive earnings surprises in this month’s earnings.

• The company is expected to report a second-quarter operating profit of 5 trillion won, its most in six years, and a turnaround from last year’s losses. However, there are concerns about a potential oversupply of memory chips and a potential downturn in the memory industry due to increasing output and overproduction. The current share valuation may not fully reflect the potential of HBM, as demand for HBM may not be fully reflected yet due to the world’s unfamiliarity with AI. (

• Samsung Electronics Co. has reportedly entered talks with Nvidia to supply its own HBM chips, but the reports were denied by Samsung.

One Obstacle for Trump’s Promises: This Isn’t the 2016 Economy - New York Times

• Donald Trump has put tariffs and tax cuts at the center of his campaign

• Inflation has risen significantly since Trump’s first term, potentially making his policies riskier

• Businesses and consumers are more accustomed to adjusting prices due to the pandemic

• The Federal Reserve has lifted interest rates to slow demand and control inflation

• Tax cuts could speed up the economy and add to the deficit, potentially boosting inflation and adding to the national debt

• Mass deportations could cause labor shortages and push up prices

• President Biden and Trump are expected to continue to run deficits if elected

• Economic analyses suggest that both candidates may end up with a substantially larger budget gap.

New Factories and Jobs Are Not Enough to Stem France’s Far Right Surge - New York Times

• President Emmanuel Macron’s promise of re-industrialization in northern France has helped stimulate the economy

• A new factory is being built in Billy-Berclau to make next-generation electric vehicle batteries for the Automotive Cells Company

• Three more giant electric car battery plants are expected to open by 2026 in the region

• The far-right National Rally party has gained ground in areas decimated by job losses

• Pas-de-Calais, a former mining area, has tended to vote for Communist or left-leaning candidates representing workers’ rights before swinging in the early 2000s to support more centrist politicians

• Despite the new factory, people feel defeated and angry, worried about the rising cost of everything, and also about immigration.

Is Xenophobia on Chinese Social Media Teaching Real-World Hate? - New York Times

• China heavily censors information the government bans

• The Chinese internet is laden with hate speech toward Japanese, Americans, Jews and Africans

• Rising nationalism that has been promoted in China under the leadership of President Xi Jinping

• China has the world’s most sophisticated system to censor the internet when it wants to

U.S. Job Growth Extends Streak, but Signs of Concern Emerge - New York Times

• US economy adds 206,000 jobs in June, exceeding forecasts

• Unemployment rate rises to 4.1% for the first time since November 2021

• Hiring was concentrated in health care, social assistance, and government sectors

• Pay gains have been outpacing inflation for about a year

• Market response was muted, with stocks rising modestly and government bond yields falling

• Economists expect further deceleration in job and wage growth until the Fed acts to ease credit conditions

Apartments Could Be the Next Real Estate Business to Struggle - New York Times

• Rental property owners are struggling due to rising interest rates and waning demand in some cities

• Growing number of rental properties, especially in the South and Southwest, are in financial distress

• Only 1.7% of multifamily loans are at least 30 days delinquent, compared to 7% of office loans and 6% of hotel and retail loans

• Analysts worry that up to 20% of all loans on apartment properties could be at risk of default

• Rents have surged during the pandemic but have stalled in recent months, causing rents to fall in many parts of the country

• Interest rates have made mortgages much more expensive for building owners, making them struggle to make payments on their mortgages

• Multifamily loans make up a majority of loans newly added to watch lists compiled by industry experts

• Many more apartment loans could become distressed.

News updates from July 5: US economy adds 206,000 jobs; Keir Starmer appointed UK prime minister - Financial Times

• Donald Trump distanced himself from the conservative policy blueprint Project 2025, which proposes ways to reshape the federal government if a Republican candidate is elected president in November.

• Trump’s comments may be seen as an effort to appeal to more moderate voters in the run-up to the election

• Big Tech stocks lifted Wall Street indices to record highs, with technology the best performing sector

• Soft details in June’s non-farm payrolls report raise risks around an economic slowdown, which would have a bigger impact on domestically focused companies

• Treasuries rallied as yields fell, with the 10-year Treasury note yield dropping 0.07 percentage points to 4.28%

• Large UK stocks fell and gilts rallied after Labour claimed its first election victory since 2015

• Bitcoin fell below $54,000 on Friday, the lowest level since February, as traders braced for sales from defunct Japanese exchange Mt Gox

New podcast series: China’s race to tech supremacy - Financial Times

• China aims to lead the world in technology, including artificial intelligence, computer chips, robots, and electric cars.

• The FT’s Tech Tonic podcast explores the reasons behind China’s emergence as a global technology leader and whether it will overtake the US in the global tech race.

• James Kynge travels to Shenzhen, a hub for manufacturing and Chinese tech innovation, and follows Chinese electric vehicle maker BYD to Germany and Nigeria to witness the impact of Chinese technology dominance.

Ex-directors allege fraud at Tether-backed crypto group Northern Data - Financial Times

• Two former executives of Northern Data, a German crypto and AI infrastructure company, were sacked after raising concerns about alleged fraud they claim was being perpetrated by its CEO and COO.

• Northern Data was falsely misrepresenting the strength of its financial condition and committing tax evasion to the tune of potentially tens of millions of dollars

• The company has been investigating a US IPO for its AI cloud computing and data centre businesses and potential advisers are basing their valuation on Northern Data’s tie-up with Tether Group

• Tether has facilitated the purchase of over $800 million of high-end Nvidia Corp chips used for generative AI applications

• Joshua Porter, appointed COO, raised concerns about the company’s financial state, cash position, and solvency with the executive leadership team

• He was sacked in March 2023 after revealing the company had a $30M German tax liability and additional liabilities of almost $8M

• Accounting firm Deloitte refused to give an option letter supporting Northern Data not to pay taxes on crypto mining profits generated on US soil

• Aroosh Thillainathan, co-founder and CEO, stopped responding to Porter’s communications after he was promoted to North America president and CEO.

AI has all the answers. Even the wrong ones - Financial Times

• Large language models can solve logic puzzles

• Fernando Perez-Cruz and Hyun Song Shin recently tested the ability of GPT-4 to solve the “Cheryl’s birthday puzzle”

• The puzzle is a challenging one that requires eliminating possibilities step by step while pondering questions such as, “What is it that Albert must know, given what he knows that Bernard does not know?”

• GPT_4 got the answer right every time, fluently elaborating varied and accurate explanations of the logic of the problem

• However, the illusion of logical mastery was nothing more than a clever illusion when a trivially modified version of the puzzle was asked

• Changing the names of characters and months to the puzzle did not solve the puzzle

• Other puzzles, such as the “Monty Hall problem,” and “Juliet, Bill, and Ted,” were also tested and failed to solve them as well

• Larger language models may rely on wordplay to solve puzzles, but may need to be tested to be more accurate

• A word game model may be used to test the capabilities of large language models in problem solving.

Samsung expects profits to surge on demand for AI chips - Financial Times

• Samsung Electronics expects a 15-fold increase in second-quarter operating profit due to strong demand for memory chip prices and AI products.

• Operating profit is estimated to have jumped 1,452% to Won10.4tn ($7.5tn) from a year earlier, better than analysts’ expectations of Won8.8tn

• Samsung plans to launch its latest foldable phones with AI features next week in Paris to stave off competition from Chinese rivals in the high-margin segment

• D-Ram chip prices rose by 13 to 18% in Q2, while prices of Nand flash memory chips used for data storage gained 15 to 20%

• Mobile chip earnings have made up for deteriorating margins in the smartphone business, with Samsung’s flagship S24 smartphones selling well but higher material and marketing costs eating into profits

• The labour union threatens to launch a three-day strike on Monday, demanding higher wages and more holidays.

In an Era of Fakes, How to Know When Someone Online Is Real - Wall Street Journal

• Getting messages on social media could be a sign of a scam.

• Face-to-face meetings can provide valuable insights into human behavior.

Sam Altman Startup Names Former X Executive as First Head of Privacy - Wall Street Journal

• Tools for Humanity has appointed Damien Kieran as its first head of privacy as the company faces regulatory scrutiny over its Worldcoin venture. Kieran left his job as chief privacy officer at Twitter after Elon Musk’s takeover of the social-media platform.- Worldcoin lets users download a wallet app that supports a digital identity known as World ID, which scans people’s eyes in exchange for cryptocurrency tokens.

• Kieran faces the task of liaising with regulators globally and addressing concerns over how Worldcoin handles biometric data, which has raised eyebrows in countries such as Spain and Germany.

• The Bavarian State Office for Data Protection Supervision launched a review of Worldcoin last year, citing the high sensitivity of the biometrically data it processes. Worldcoin tokens are distributed to users in countries where they are legally available, and nearly 6 million users across more than 160 countries have signed up for World ID.

How the Kindle Became a Must-Have Accessory (Again) - Wall Street Journal

• TikTok’s literary subculture, BookTok, is giving e-readers the Stanley cup treatment. Kindle has become the gadget of choice among the community of book lovers. Kindle sales have grown in double-digit percentages for each of the past two years and are on track for similar gains this year. People under 45 are Kindle’s fastest-growing customer segment. BookTokkers share reading habits, book clubs, book challenges, library cards, and people’s reading setups. Kindle Unlimited, Amazon’s $12-a-month subscription service allows customers to borrow more than four million digital books. Kindle newbies are driving the sales growth, with about 60% of Kindle sales growth coming from people who’ve never owned one of the devices before. Print and ebook sales rose during the pandemic but have declined since, according to market-research firm Circana. Library checkouts have jumped 75% since 2019, reaching 370 million ebooks last year.

Apple Watch Is Becoming Doctors’ Favorite Medical Device - Wall Street Journal

• Doctors are using the Apple Watch as part of diagnosing and managing heart-rhythm disorders in patients.

• The Apple Watch is being used informally in medical care despite other approved devices being available to track the same metrics

• Dr. Rod Passman, a cardiologist and professor of medicine at Northwestern Medicine, is conducting a six-year, National Institutes of Health-funded study to determine if data from the Watch can be used to reduce the time spent on blood-thinning medications for atrial fibrillation patients

• Passman has received an exception to FDA rules to use the Watch to alert patients who have already been diagnosed with the disorder that they are having an irregular heartbeat

• Many doctors are encouraging patients to buy an Apple Watch to monitor stress levels and assess stress levels

• Apple shipped about 40 million of its watches in 2023 alone, making it a popular choice for healthcare professionals

• Compliance with medical-monitoring devices is an issue, but doctors are opting for the Watch due to its simplicity, affordability, and ubiquity

• Patients wear the Watch for an average of more than 14 hours a day.

Why You Shouldn’t Buy an iPhone This Summer. All the Reasons, From A to I. - Wall Street Journal

• Apple has announced Apple Intelligence, a new artificial-intelligence software for iPhones, iPads, and Macs.

• The software requires brand spankin’ new hardware, including the iPhone 15 Pro or 15 Pro Max, or any of the new iPhone 16 models due in September. The new software includes tools such as an emoji generator, a smarter Siri, text summarization, built-in ChatGPT support, and more.

• There are two theories on why Apple requires a new phone to get Apple Intelligence: better processors and more memory for AI software and cold hard cash deals on older models

• Apple executives have said that the company designs products for longevity, and the high-end Pro models are expected to get a redesigned camera system and bigger screens this year.