Welcome to the first edition of The Nexus Now!

We are a free, specialized, business newsletter focussing on three verticals - Technology, Financial Economics, and Sustainable Energy.

Consider this your free guide to unparalleled research, trivia, and analysis.

TECHNOLOGY

Bluesky, A Stylish Rival to X, is Accessible To All

When Jack Dorsey, then Twitter’s CEO, tweeted in 2019 about creating a new "decentralized" form of social media, Jay Graber saw it as an opportunity. Graber, a former software developer, was chosen in August 2021 to lead the project, called Bluesky.

Today, Bluesky is opening to the public after a year as an invitation-only app. It aims to create an open, decentralized protocol that allows users to create their own versions of the social network.

Bluesky already has features like customizable feeds and personal moderation settings. It plans to invite outside developers to host servers and develop their own content moderation services.

Most Popular Decentralized Social Media in 2023 by Average Monthly Unique Visitors

The above numbers show how Bluesky is well positioned to be a future leader in the decentralized social media space.

For instance, users can subscribe to feeds where algorithms prioritize the most popular posts overall or the posts most popular among the people they follow.

There are also options for feeds geared to their specific areas of interest, such as science or art. Users can toggle personal moderation settings that either “hide,” “warn” or “show” categories of content such as nudity, violence, spam and hate-group iconography.

In summary, Bluesky's transition from idea to public release symbolizes the rising promise of decentralized social media. Offering users customization options and inviting external developers, Bluesky presents a fresh alternative to centralized platforms. Despite challenges, its dedication to openness hints at a bright future for decentralized social networking.

Sam Altman Wants 7 Trillion Dollars?

OpenAI’s chief executive officer is eyeing an investment of 7 trillion dollars to reshape the global market for AI and chips according to a Wall Street Journal report.

The demand for advanced AI chips is soaring, driven by the rapid development of large language models (LLMs) and other artificial general intelligence (AGI) applications.

These sophisticated technologies require immense computational power, pushing existing chip capabilities to their limits. The current chip shortage further exacerbates the bottleneck, hindering progress.

Artifical Intelligence Chip Market Size, 2023 to 2032 (USD Billion)

Altman's proposal, as reported by HPCwire, envisions a multifaceted solution. He seeks to build dozens of chip factories, data centers, and power plants worldwide, creating a self-sustaining ecosystem for AI development. This "AI supergroup" would involve collaboration with major players like TSMC and potentially even governments.

Industry experts like Jensen Huang, CEO of Nvidia, express skepticism, questioning the feasibility and cost-effectiveness of such a monumental project. DIGITIMES Asia reports Huang's lighthearted quip: "For $7 trillion, I could buy all the GPUs, apparently."

Whether Altman's audacious plan materializes remains to be seen. Only time will tell if this venture becomes a turning point in AI development or a cautionary tale of overzealous ambition.

Reddit Signs AI Licensing Deal with Google

Reddit, a social media giant with a staggering 50 million unique daily users, that doesn’t look – or feel – like most other platforms. It’s a hub for linking content from elsewhere, creating “discussion” posts on topics of interest, and posting original text, image, or video content.

The San Francisco-based firm told prospective investors in its IPO that it had signed the deal, worth about $60 million on an annualized basis earlier this year with Google to allow its online communities to be scraped for AI training data, according to Reuters.

Consolidated Statements of Operations

Reddit had more than $800 million in revenue last year, about a 20% increase over its 2022 figure. The ability to profit from the AI wave sweeping the corporate world could help Reddit tap into investors’ enthusiasm for the technology, and boost its IPO.

Noting the AI agreement with Google, Reddit co-founder and CEO Steve Huffman said: “Reddit’s vast and unmatched archive of real, timely, and relevant human conversation on literally any topic is an invaluable dataset for a variety of purposes, including search, AI training, and research.”

 FINANCE

The Return of Dividend Investing

Warren Buffet once said dividend stocks are the secret sauce behind Berkshire Hathaway Inc’s success. However, off late, quant funds, sustainability funds, high growth AI, and semi-conductor stocks have been the hottest stock picks.

Over 2023, the S&P 500 Dividend Aristocrats index, which tracks companies that have consistently raised their dividend payments for the past 25 years, experienced a 5.7% increase. This was in contrast to the 26% gain seen in the S&P 500 total return index.

Growth of $100 in US stock group, by dividend yield, 1926-2020

Despite, their lackluster performance in 2023, we believe dividend stocks are set to make a comeback, and traditional, tried and tested investing methodologies will prevail. Here’s why:

We’re in the midst of an easing cycle, and market volatility is expected. Investors would prefer durable, higher yielding dividends. Morgan Stanley strategists agree with us.

Furthermore, large profitable companies are raising or introducing dividends, and experiencing success. Mastercard, for example, has approved a raise of its quarterly dividend from 57 to 66 cents a share, and has experienced a 5% rise in share price  since December, 2023.

Meta Platforms introduced its first ever dividend – a 50 cent per share quarterly payout, sending shares soaring. Goldman Sachs analysts believe Alphabet and Amazon will soon follow suit in initiating dividends.

We at Nexus believe in the future of dividend stocks!

US Banks vs Private Equity Giants

Private credit firms and credit branches of PE firms are entering into activities traditionally dominated by banks.

A plethora of private investment firms have expanded their lending business beyond financing deals, and have entered consumer lending and real estate.

For example, PacWest Bancorp completed the sale of a $3.54 billion lender finance portfolio to Ares Management. KKR acquired a $373 million portfolio of prime auto loans from Synovus Bank, and bought a $7.2 billion portfolio of super-prime recreational vehicle loans from a unit of BMO Financial Group.

Private Debt Assets Under Management ($BN)

According to a managing partner at Brookfield, a large reason for the banks’ retreat from lending (particularly real estate) is largely due to stricter regulatory impositions. As a result, private credit funds enjoy lesser scrutiny, and have significantly grown their lending businesses.

This is not without its downsides. The IMF stated that private credit lending poses potential danger to the financial system due to the investments’ lack of transparency. This makes it difficult for the market and regulators to assess risk.

The private credit space has a long way to go, and we believe there is a high chance banks and private investment firms can successfully co-exist in the future, given responsible regulation and policies.

 SUSTAINABILITY

China outpaces US in Solar Panel Installation

China are currently the global leaders of Solar energy having 40% of the planets entire solar capacity, USA in second with 12%.

In 2023, China surpassed every other country by installing more new solar capacity than any nation had ever achieved. It took 13 years to reach 500 GW, but by 2026, China is expected to double that total to 1 TW.

The government’s goal of building 1,200 GW of renewable energy capacity by 2030 is on track to be met five years ahead of schedule. The Capital city of Beijing has plans to reach peak emissions by the end of the decade and become carbon-neutral by 2060.

Cumulative Installed Solar Energy Capacity, measured in gigawatts (GW)

The country increased its total capacity by 216.9 GW in the last year alone, dwarfing the U.S total of 175.2 GW.

In summary, China's unprecedented growth in solar energy signifies a monumental shift towards sustainability on a global scale. With ambitious targets surpassed and projections exceeding expectations, China's leadership in renewable energy sets an example for the world to follow.

The Clean Superbowl LVIII

The Kansas City Chiefs became the first team in about two decades to win consecutive Superbowls. Chiefs fans were amongst the happiest in the nation that day, only outdone by even more overjoyed Taylor Swift ‘stans.’

The clean energy transition movement was another big winner. This was the first Superbowl powered entirely by renewable energy sources.

Arrow Canyon's battery energy storage system(BESS) released 166 MWh of DC energy during the event, equivalent to powering 34,297 homes for four hours. Arrow Canyon utilizes a DC coupled system, offering improved efficiency and reduced losses.

DC-Coupled System

If Arrow Canyon's [600,000+ solar panels] are likened to the quarterback, then the battery storage system acts as the protective offensive line safeguarding the team's investment. Energy storage systems play a crucial role in overcoming the inherent variability of solar energy.

This achievement owes much to the collaboration between EDF Renewables' solar panels and Powin's batteries, enhancing Arrow Canyon's efficiency, reliability, and cost-effectiveness, thereby guaranteeing a consistent power output.

Needless to say, the Superbowl was a success. With over 123 million viewers tuned in to watch the game, there were no power related mishaps. We believe not only does this project increase renewable energy awareness, it also highlights its growing efficacy!

Green Manufacturing Milestone: Epson Goes 100% Renewable

Technology leader, Epson Group, with an annual electricity consumption of 876 GWh, has accomplished the extraordinary feat of sourcing 100% of it from renewable sources.

This move makes Epson the first Japanese manufacturer to achieve this feat, which should reduce CO2 emissions by 400,000 tonnes.

This is a significant milestone in Epson’s stated Environmental Vision 2050 where it intends to be both carbon negative and underground resource free.

Roadmap to 100% renewable electricity at all sites worldwide

While Epson is widely known for its office printers and projectors, the demand for physical documents remains significant despite sustainability concerns and the rise of cloud computing.

Surprisingly, the demand for physical documents remains high, bolstered by remote work where individuals require personal printers.

IDC's research reveals staggering figures: over 3 trillion pages printed annually pre-pandemic, only expected to dip to around 2.3 trillion by 2025. That's approximately 4.4 million pages printed every minute – enough to cover 39 football fields.

Clearly, the act of printing is far from defunct, so the fact that a market leader like Epson is making impressive sustainability strides is welcome news.

STAT OF THE WEEK

EDITOR: Rahul

AUTHORS: Hardit, Kabeer, Amartya, Rahul

DESIGN: Kabeer, Ria

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