In today’s newsletter:

• News - 📊 Vanguard’s Chief Economist Warns: AI Stock Crash Ahead? ⚠️

• Culture - 🎵 AI to Slash Music Industry’s Earnings by 25% in 4 Years 🎤

📊 Vanguard’s Chief Economist Warns: AI Stock Crash Ahead? ⚠️

Investors may be overhyping AI stocks, with Vanguard’s chief economist, Joe Davis, warning of a potential correction in share prices. While Davis acknowledges AI's potential to rival the personal computer in transforming productivity and jobs, he argues the market is pricing in a 90% likelihood of that outcome, despite Vanguard predicting 60% to 65% odds that AI is more impactful than the personal computer. Drawing parallels to the late 1990s dotcom bubble, Davis suggests today’s valuations are more aligned with 1997 levels of optimism, even though we’re closer to 1992 in terms of actual impact.

AI-linked stocks like Nvidia, which has soared over 180% this year, have been key drivers of Wall Street’s rally, but Davis cautions that the real winners may lie outside of tech. Industries like healthcare, utilities, and finance, which adopt AI to boost operations, could ultimately reap the benefits, even as AI stock valuations cool. The irony, he notes, is that even truly transformative technologies can still lead to stock price corrections, though predicting when remains uncertain.

🗞️ In Other News…

• Apple is leveraging Amazon Web Services’ custom AI chips, including Trainium2, to enhance efficiency in training and inference for its AI models like Apple Intelligence, while also exploring integration with other cloud providers and emphasizing on-device processing capabilities.

• Google's generative AI video model, Veo, has launched via Vertex AI with advanced capabilities for creating high-quality 1080p videos and built-in safeguards, outpacing OpenAI's competing Sora product, which has yet to release.

• Nvidia has invested in six AI companies, including SoundHound AI, which leads in conversational AI and shows strong revenue growth, but remains a speculative and high-risk investment due to significant losses and high valuation.

• Japan plans to use AI to combat anime and manga piracy, which costs billions in lost revenue, through a ¥300 million pilot program to detect illegal content online, aiming to protect its thriving creative industries and boost cultural exports.

• Petbarn, in partnership with Microsoft and Insight Enterprises, has launched PetAI, a generative AI assistant integrated into its app and website, providing personalized pet care advice and product recommendations to simplify pet ownership for Australians.

🎵 AI to Slash Music Industry’s Earnings by 25% in 4 Years 🎤

The music and audiovisual industries face a major shake-up as AI threatens to eat away at creators’ income, with a new global report predicting a 20-25% drop in earnings by 2028. Released by the International Confederation of Societies of Authors and Composers (CISAC), the study warns that while tech giants will profit massively from AI’s €64 billion market growth, creators will lose out unless stronger policies are enacted. Björn Ulvaeus of ABBA fame praised Australia and New Zealand for leading the charge in crafting AI regulations that balance innovation with creator protections, emphasizing that their decisions will set a global standard.

The report highlights two key challenges for creators: unauthorized use of their work by AI and shrinking job opportunities as AI-generated content competes with human-made creations. With generative AI music projected to account for 20% of streaming platform revenues and 60% of music library earnings by 2028, the stakes are high. Dean Ormston of Apra Amcos called for decisive action to protect creators’ livelihoods and ensure AI enhances rather than exploits cultural works, especially Indigenous heritage. The message is clear: policymakers must act fast to secure a future where AI and human creativity can thrive together.

VC Fundraising Rounds

• Yurts, a leader in secure and trusted generative AI integration at scale for defense, government, and enterprise customers, announced a $40 million Series B funding round. (12/3/24)

• Liom, a leader in non-invasive biomarker monitoring, is revolutionizing health tracking with its innovative wearable technology designed to enable non-invasive glucose monitoring and announced a $25 million Series A funding round. (12/3/24)

• Tenstorrent, an AI chip and IP startup, raised $693 million in an oversubscribed Series D round at a $2 billion pre-money valuation. (12/2/24)

• 9fin, a London-based company, has secured $50 million in a Series B funding round to advance its AI-powered analytics platform for global debt capital markets. (12/2/24)

Meme of the Day