Welcome to the start of the year! Here's a quick recap on everything that happened last week. Global markets posted their best run since 2019, India sent warships to the Red Sea to deter Houthi militants after Modi met with the ruler of Saudi Arabia (India is reliant on normal trade flows so it can continue buying Middle Eastern oil), the price of land in Beijing is falling in government auctions, and the NYT is suing OpenAI based on improper use of its materials for AI training. Oh, and — the US expanded its offshore acreage to cover a massive section of Arctic ocean. The area is only becoming more accessible as climate change ramps up. Let's just hope the US want to build wind turbines there, and not the other thing.
What I'd also like to do is highlight something that happened last year which I feel hasn't really been taken seriously enough — what I'm calling my favourite headline of last year.
You may or may not remember that in Week 21 of 2023, the S&P 500 quickly wiped off a lot of value – over US$500 billion – when an AI-generated image of an explosion near the US Pentagon building spread over Twitter. In a society currently anxious about the future implications of AI, deepfake imagery, and AI disinformation, we seem to have collectively forgotten about this moment that happened less than a year ago. And yet, when it comes to the problems AI poses for reality, the stock market saw it first. Here we saw a publicly available computer program used to confuse traders and, ultimately, briefly tank the world's leading stock market.
This is something I was surprised to see quickly forgotten by the authors of Op-Eds in publications like The Economist, typically proferred in the tone of a cautionary tale. But there is an optimistic upside – the speed with which the losses were reverted. In less than two hours, the market realised its errors, and collectively re-invested, meaning that the shock was very short lived. That shows that the human brain – and lots of brains put together – can easily, and relatively rapidly, figure out what is AI deception and what is not.
Of course, there's the pessimistic view, too – people didn't bother to find out if it was true or not before acting on fear. There's a lot of lessons in there, but you've heard it all before, and we're all going to keep hearing about it, so I won't bother. Food for thought though, and without doubt, one of the more interesting couple of seconds on the grand clock of financial market history.
Global markets post best run in 4 years
AFR
Global shares recorded their biggest annual rise since 2019 after a strong rally in the past two months as investors bet that central banks will start cutting interest rates in 2024.
The MSCI's world share index, the broad gauge of global developed market equities, posted a 20 per cent gain, its most in four years.
The price of land in Beijing is falling in government auctions: Caixin
Caixin
Beijing completed its last land auction of 2023 on Thursday, capping a year of declining prices, showing that even the most resilient property market is struggling to attract developers to buy land amid a prolonged real estate slump.
In 2023, Beijing sold 5.82 million square meters (62.2 million square foot) of land for residential development for 174.1 billion yuan ($24.4 billion), up 7.8% from last year.
India sends 3 warships off Yemen to protect cargo after talking with Saudi ruler
The Hindu
In the backdrop of an increased security threat to shipping vessels in the Gulf of Aden and the Arabian Sea, Prime Minister Narendra Modi on Tuesday held a telephone conversation with the Prime Minister of Saudi Arabia, Prince Mohammed bin Salman.
New York Times sues OpenAI claiming misconduct in use of IP for AI training
NY Times
The New York Times sued OpenAI and Microsoft for copyright infringement on Wednesday, opening a new front in the increasingly intense legal battle over the unauthorized use of published work to train artificial intelligence technologies.
US expands ownership of offshore seabed in Arctic waters
BNNBloomberg
The US extended its claims on the ocean floor by an area twice the size of California, securing rights to potentially resource-rich seabeds at a time when Washington is ramping up efforts to safeguard supplies of minerals key to future technologies. The so-called Extended Continental Shelf covers about 1 million square kilometers (386,100 square miles), predominantly in the Arctic and Bering Sea, an area of increasing strategic importance where Canada and Russia also have claims. The US has also declared the shelf's boundaries in the Atlantic, Pacific and Gulf of Mexico.
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