The AI Industry's 'happy Few'

Companies touting their artificial intelligence products dominated the Promenade, the main road in Davos. In past years at the World Economic Forum annual meeting, cryptocurrency firms were the most prominent down the Promenade. But AI fever has taken over in 2024.

"We few, we happy few, we band of brothers." The rallying cry from Shakespeare's Henry V, ahead of the Battle of Agincourt, might as well be the motto of today's artificial intelligence elites.Last night, OpenAI unveiled a partnership with AMD, in which it will deploy 6 gigawatts of the latter's Instinct graphics processing units to power its AI infrastructure. The deal includes a warrant for OpenAI to acquire up to 10% of AMD.

That comes after OpenAI's $100 billion pact with Nvidia.

OpenAI was also the catalyst for a surge in Figma shares after CEO Sam Altman promoted the design software vendor's technology in an onstage demo.

But as our U.S. colleagues have pointed out, the arrangement between OpenAI and AMD adds a new layer to the increasingly circular nature of AI's corporate economy, where capital, equity and compute are traded among the same handful of companies building and powering the technology.Nvidia is supplying the capital to buy its chips. Oracle is helping build the sites. AMD and Broadcom are stepping in as suppliers. OpenAI is anchoring the demand.

It's a tightly wound circular economy, and one that analysts fear could face real strain if any link in the chain starts to weaken.As the AI arms race accelerates, the question looms — can this "band of brothers" carry the weight of an entire industry's expectations?And, just like the Battle of Agincourt, can they be remembered not for their numbers, but for their impact on the AI space?— CNBC's MacKenzie Sigalos contributed to this report.

What you need to know today

OpenAI-AMD announce deal. That could see Sam Altman's company take a 10% stake in the chipmaker. OpenAI will deploy 6 gigawatts of AMD's Instinct graphics processing units over multiple years and across multiple generations of hardware. Shares of AMD skyrocketed 23.71% Monday following the news.

Figma rides OpenAI hype. The design software vendor's stocks climbed 7% after Altman discussed Figma's integration into ChatGPT, and showed how third-party applications could plug in with OpenAI's Apps software development framework.Tesla teases potential new car model. Tesla shares rose more than 5% Monday after the electric vehicle maker posted a teaser video on X, sparking speculation that the company could be gearing up to release a new car.

S&P and Nasdaq reach new records. On Monday stateside, both indexes were spurred by optimism about increased M&A activity after two major deals were announced, namely, the OpenAI-AMD partnership, and Fifth Third Bancorp's agreement to buy fellow bank Comerica for $10.9 billion. In Europe, the Stoxx 600 ended the day little changed. Three big bets outside the U.S. Bridgewater Associates has identified three key markets which it says can provide a layer of resilience to portfolios as investors' equities exposures hit all-time highs.

And finally...

Paul Tudor Jones speaking at the World Economic Forum in Davos, Switzerland, January 21, 2020.

Paul Tudor Jones says ingredients are in place for massive rally before a 'blow off' top to bull marketBillionaire hedge fund manager Paul Tudor Jones believes the conditions are set for a powerful surge in stock prices before the bull market tops out."My guess is that I think all the ingredients are in place for some kind of a blow off," Jones said Monday on CNBC's "Squawk Box."The founder and chief investment officer of Tudor Investment said today's market is reminiscent of the setup leading up to the burst of the dot-com bubble in late 1999, with dramatic rallies in technology shares and heightened speculative behavior.

Source: CNBC