Today’s top stories:

1. Five key global issues the US election will influence.

2. Palantir posts $735M revenue as AI demand soars.

3. OpenAI’s shift from non-profit to for-profit.

4. Tech budgets shift away from enterprise apps as OpenAI spending soars.

5. ByteDance revenue matches Meta at $73B, but trades at fraction of value.

Markets Snapshot - Top 5 Economies

Economic Calendar

Most important event in 4 years 🗓️ 

The U.S Presidential election:

Wall street, public markets and international markets will be particularly active these next two days. The outcome of the US election will have a major impact, from Ukraine and China to the Mideast and the rest of the world. 🌎️ 

Today’s top stories

1. Five key global issues the US election will influence 🗳️ 

(i) Ukraine and NATO

Allied assistance to Ukraine since Russia’s invasion

• Harris

  • Vowed to keep up support for as long as it takes but likely to face skepticism in Congress for additional funding.

  • Dissipating support in Congress for more aid amidst Ukraine’s weakening battlefield position.

• Trump

  • Said would end the war “in 24 hours” but hasn’t described how but signaled Ukraine should prepare to make concessions.

  • Experts predict he will most likely reduce US aid to allow EU to fill the gap.

(ii) Mideast

Oil prices down as markets see geopolitical risk fading

• Harris

  • Pledged to ensure Israel defends itself and also called for civilian suffering to end in Gaza. Endorses a two-state solution.

  • Dodged question of Netanyahu being a close US ally.

  • Calls Iran America’s greatest adversary.

• Trump

  • Says Oct 7 would’ve never happened had he been president.

  • Israel needs to “do a better job of public relations” and they should “get it over with.”

  • Dodged question of supporting a Palestinian state while calling for steps to isolate Iran.

(iii) Tariffs

How different countries' exports to the US would be affected if Trump's proposed tariffs were implemented in 2028 assuming 60% tariffs on China and 20% to rest of the world.

• Harris

  • Supports a Biden administration decision extending Trump-era tariffs on China.

  • Backed billions in subsidies for clean energy, infra and high-tech investment.

• Trump

  • Calls for tariffs of up to 20% on imports and levies as high as 60% on trade with China to stimulate investment in the US.

  • Argues that the international trading system is rigged against US interests.

(iv) Tensions between China and Taiwan

Taiwan Strait security index

• Harris

  • Embraces the Biden administration approach to China keeping controls on exports of key chip and other technologies.

  • Supports US commitment to ensuring Taiwan’s security.

  • Backed expansion of alliances across the region countering Beijing.

• Trump

  • Pledges sweeping tariffs on Chinese exports.

  • Claimed Taiwan “stole” the US semiconductor business arguing it should pay more for its own security.

  • Threatened to reduce military commitments in the past and called for Japan and South Korea to spend more on defense.

(v) Migration

Countries receiving the largest remittances from the US in 2023

• Harris

  • Supported tighter limits on undocumented immigration and restrictions on asylum to reduce people from the southern border.

  • Promised push for a bipartisan bill for new asylum limits.

  • Advocated to increase legal immigration and a pathway to citizenship.

• Trump

  • Called for deportation of 11 million+ undocumented immigrants, creating detention camps and deploying troops at the Mexican border.

  • Strict limits on several forms of legal immigration including asylum and birthright citizenship for children of undocumented parents.

2. Palantir hits $725 million revenue as AI demand soars 🚀

Key takeaways:

• Q3 sales grew 30% to $725.5 million, surpassing analyst estimates.

• Company achieved record net income of $144 million.

• US commercial revenue grew 54% to $179 million.

• 104 deals worth over $1 million closed in Q3.

• Stock jumped 13% in after-hours trading, up 140% year-to-date.

What this could mean for the AI industry:

• Military and defense advancements in AI could lead to improved national security measures that protect citizens.

• Government contracts are becoming the new golden ticket in AI as many B2B SaaS firms, including the likes of OpenAI, consider bagging them as priority. 💰️ 

• International adoption seems slower than US uptake, suggesting a potential "AI divide" between nations - kind of like having a flip phone at a smartphone party. 📱

3. OpenAI's $157 billion shift from non-profit to profit status faces regulatory hurdles 🔄

Key takeaways:

• OpenAI is in early talks with California and Delaware regulators to convert from non-profit to for-profit status.

• The company plans to become a public benefit corporation while maintaining a non-profit arm.

• Regulators will scrutinize how OpenAI values its intellectual property, including ChatGPT.

• The conversion must happen within two years, or recent funding could convert to debt.

• The non-profit would retain ownership of a material portion of the for-profit entity.

4. Tech budgets shift away from enterprise apps as OpenAI spending soars 🔄

Artificial intelligence spend by a few top companies

Key takeaways:

• Companies are spending millions on AI without increasing IT budgets.

• C1 plans to spend $24M yearly on OpenAI while cutting Salesforce costs.

• T-Mobile signed a $100M three-year deal with OpenAI for customer service.

• Corporate AI spending is causing reduced investment in traditional cloud services.

• Developers report 20-30% faster app development using AI coding tools.

Here’s why this matters:

• Traditional enterprise software companies are watching their longtime customers experiment with building their own solutions using AI.

• This marks a significant shift in corporate IT spending patterns, though the complexity of migrating away from established systems may slow this transition.

• The trend suggests a future where enterprise software either adapts to incorporate AI or risks obsolescence.

What this could mean for the Enterprise Software industry:

• Legacy players like Salesforce face their "Kodak moment" as companies build in-house alternatives. 📸

• The "enterprise software country club" might need to lower their membership fees or risk losing members to the AI fitness center next door. 🏌️

5. ByteDance revenue matches Meta at $73B, but trades at fraction of value 📊

ByteDance vs Meta: H1 2024 Financial Comparison

Key takeaways:

• ByteDance's first-half revenue grew 35% to $73B, matching Meta's $75.5B.

• However, its market value is only $250B vs Meta's $1.4T.

  • It trades at 1.7x projected 2024 revenue, while Meta trades at 8.7x.

• U.S. law requiring TikTok to split from ByteDance creates uncertainty and a lower valuation.

What this could mean for the social media industry:

• The valuation gap between U.S. and Chinese tech companies might create a gold rush for bargain hunters in the private market 🤑 ("Buy low, sell... whenever ByteDance figures out what's happening!")

• Meta's higher valuation despite similar revenue shows how much the market values political stability - who knew government relations could be worth a trillion dollars? 🎭

Other reads

AI

OpenAI' hires Meta’s former hardware lead for Orion.

Google’s Project Zero finds world’s first 0-day security vulnerability.

Co-founder of Pebble, a Twitter challenger, joins OpenAI.

Meta to allow US military and defense contractors use its AI model.

Rare bees damage Meta’s nuclear-powered AI data center plans.

Tech

How to replace Google with ChatGPT Search as your default search engine.

X-Ray Recaps by Prime Video now has GenAI-powered recaps of shows.

3 Apple Intelligence features to embrace in iOS 18.1 on iPhone 15 and 16 models.

Startup

Seed VCs say startups should not take the highest valuation.

Yazen, an Ozempic startup, raises €19.5M in series A to fight obesity.

Robot AI startup Physical Intelligence raises $400M from Bezos, OpenAI.

Business

Boeing strike ends as workers accept new contract.

Berkshire Hathaway is dumping Apple stock to build cash stockpile.

APAC markets trade mixed due to US election outcome.

US Politics

Axios is tracking the 2024 presidential election results here.

Harris and Trumps’s biggest celebrity endorsements.

Top non-US economies

German chancellor to meet with top ministers to fix Germany’s economy.

Chinese lawmakers meet to approve fiscal stimulus.

Indian economy slow down felt in earnings downgrades.

Worth knowing

An AI polling startup, Aaru, created bots with human personality traits along with a diet of news and information those people might consume, and then asked about their preferences — in this case, who they would vote for.

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