📣 OpenAI launches o1 and o1-mini

Harris plans corporate tax raise to 28%

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Techonomy Barista
September 13, 2024

This is the Techonomy Barista, where the cloud is always percolating and the takes are always fresh. 🍹 

It’s Friday, and we hope you’re sitting comfortably with your favorite drink in hand. Let’s dive in.

An AI engineer ponders the implications of scaling laws in foundational models.

Today’s succulent serves:

  1. OpenAI’s new strawberry series of models. 🍓 

  2. US debt interest payments hit $1T.

  3. Harris plans to raise corporate tax rate to 28%.

  4. Xi pushes for 5% growth target despite tough times.

  5. From boom to limited growth - Fintech funding trends. 🎢

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Economic Calendar

Economic calendar showing the most important events in the top five economies.
All times are US EST.

1. OpenAI’s next leap: models capable of reasoning 🧠 

Key Takeaways:

  • OpenAI introduces "Strawberry" series AI models, designed for extended processing and ‘thinking’ before responding to hard problems.

  • The o1 and o1-mini models excel in science, coding, and hard math tasks.

  • o1 scored 83% on International Mathematics Olympiad qualifying exam, up from 13% for GPT-4o.

  • Models use automated "chain-of-thought" reasoning to break down complex problems in competitive programming and PhD-level science.

  • The o1 model available in ChatGPT Plus and API starting Thursday.

What This Could Mean for You:

  • Your next coding project might get a boost from AI that actually understands the problem, not just copy-pastes Stack Overflow answers. 🤖

  • Math homework help just leveled up—but don't expect your teacher to believe an AI solved that impossible equation. Time to practice your "I just got lucky" face! 😇

2. US debt interest hits $1T, deficit nears $2T 🤯 

Source: CNBC, US Treasury, Techonomy Barista analysis.

Key Takeaways:

  • US gov. spent over $1T on debt interest payments this year - a 30% increase from Aug 2023.

  • Net interest payments reached $843 billion, third-highest expense after Social Security and Medicare.

  • 2024 budget deficit is nearly $1.9 trillion, a 24% increase from last year.

  • Federal Reserve expected to lower interest rates slightly next week.

How It Impacts You:

  • Higher government debt costs could lead to reduced spending on public services or increased taxes.

  • The growing deficit might impact long-term economic stability, potentially influencing job security and wage growth.

  • If you're a bond investor, falling Treasury yields could mean lower returns on your investments. 📉 

3. Wall Street braces for 5% earnings hit if Harris wins. 📉

Credits: IBD.

Key Takeaways:

  • Harris plans to raise corporate tax rate to 28% from 21%, while increasing capital gains tax to 28%.

  • Goldman Sachs predicts 5% hit to S&P 500 earnings under Harris' plan.

  • Trump proposes cutting corporate tax rate to 15% for U.S. manufacturers.

  • Economic models suggest Trump would increase deficits more than Harris.

How It Impacts You:

  • Higher corporate taxes could lead to slower job growth and wage increases.

  • Increased capital gains tax may affect your investment returns if you're a high earner.

  • Trump's proposed tariffs might increase prices on imported goods you buy regularly.

  • Maybe it's time to consider a career change to "professional tax advisor" – seems like a growth industry! 📊

4. China's Xi pushes for 5% growth target amid economic doubts 🎯

Economic momentum has waned due to property slump.
Source: Bloomberg

Key Takeaways:

  • President Xi urges officials to achieve annual growth target.

  • Economists from UBS and JPMorgan predict China may miss 5% goal.

  • China's $17 trillion economy faces prolonged property downturn.

  • Recent government efforts include interest rate cuts while manufacturing and exports remain crucial for growth.

How It Impacts You:

  • If you're into global markets, China's economic performance might shake up your portfolio. Time to diversify or double down on chopsticks futures? 🥢

  • Slower growth could mean cheaper goods for consumers worldwide. 🛍️ 

  • Travel plans to China might become more affordable if their currency weakens, but don't expect the Great Wall to be on sale anytime soon.

5. FinTech funding rollercoaster: From boom to selective growth. 🎢

Source: World Economic Forum.

Key Takeaways:

  • Global fintech VC funding peaked at $92 billion in 2021, driven by low interest rates and pandemic-induced digitalization.

  • Latin America and MENA regions showed the highest growth rates in fintech funding from 2015-2023.

  • Significant geographic disparities existed: Sub-Saharan Africa, Latin America, and MENA received only 10% of global fintech funding (2020-2023).

  • US and Canada had the highest concentration of local investors (85%+), while other regions relied more on foreign investment.

Singapore dominated Asian top 10 deal for H1 2024.

  • In 2024, the fintech sector is experiencing a funding slowdown, with total investments dropping to $30 billion, a 67% decrease from the 2021 peak.

  • In 2024, the fintech sector is experiencing smaller, more focused deals rather than large funding rounds. Marketplace lending, WealthTech, PayTech, and infrastructure/enterprise software are attracting the most deals in 2024.

  • Despite the overall decline, certain regions like MENA are bucking the trend, with funding in the area tripling between 2020 and 2023.

Bottom Line: The fintech funding landscape has shifted from a gold rush to a treasure hunt. 🏴‍☠️ Investors are now more selective, focusing on niche solutions and established players rather than chasing unicorns. While the total funding may be lower, the smarter money is finding its way to companies solving real problems. So, if you're a fintech startup, it's time to polish your problem-solving skills – and maybe learn to speak a little Arabic or Portuguese while you're at it! 🌍💼

Other news:

AI

Meta has acknowledged it has trained its AI on all your public text and photos posted on Facebook and Instagram since 2007.

Tech

Gemini Live is for free for all Android users.

Startups

Business

China hands PwC $62 million and a 6-month ban for botching its work for Evergrande.

Boeing workers on strike after 96% vote for a walkout.

US Politics

World

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