Nvidia’s Cute Supercomputer

Good morning.

The one silver lining from the dark cloud that was the pandemic is going dark.

On Tuesday, Bloomberg reported that JPMorgan Chase is preparing to tell all of its more than 300,000 employees they must return to working in the office five days a week. It's an escalation from its current hybrid policy, which calls for most workers to leave the sofa-workstations and weather the commute at least three days a week. If you're in New York City and notice a slight uptick in a grumpier-than-usual crowd headed toward midtown, now you know why. The Pandemic New World Order was castles in the sand.

Nvidia, king of the data center server, was the surprise star of this year's Consumer Electronics Show (CES), the tech industry's version of the Golden Globes.

Late Monday, the chipmaker announced a slew of consumer-focused hardware, including a $3,000 "personal AI supercomputer" called Digits. Not to be outdone, Amazon-backed Anthropic is closing in on a new fundraising round at a $60 billion valuation, according to a Wall Street Journal report on Tuesday.

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Digits brings the power of Nvidia's AI-enabling cloud servers to home offices, and comes stocked with the company's AI software library, such as development kits and some pre-trained models. In other words, Digits will likely be most useful for hardcore hobbyists and at-home developers when it's released in May. But Nvidia says the platform will also allow for the integration of so-called computer-using AI agents — a.k.a., systems that employ large-language models to autonomously perform tasks on behalf of users, like sifting through email archives or even booking events or reservations online.

According to AI evangelists, agents are the next step in the robo-revolution, a level-up from our current chatbot status quo. Google, Microsoft, and Anthropic have already debuted agents of their own, in various capacities. With Digits, Nvidia wants to offer users a way to run agents directly at home, rather than relying on remote cloud servers. But just how powerful is the hardware?

• Digits, which is about the size of a standard hardcover book, comes packed with 128GB of unified memory (a normal laptop has maybe 32GB of RAM) and a GB10 chip capable of up to 1 petaflop of AI performance. Which means it can run AI models with up to 200 billion parameters — an amount of power that is hard to obtain today without renting cloud space.
• Ok, now the laymen's translation: That's just enough to capably handle industry-standard LLMs; the last-gen ChatGPT-3.5 requires about 175 billion parameters while Meta's top model, Llama 3.1, requires around 405 billion parameters. Nvidia says two Digits systems can be linked together to reach that threshold.

Mission Control: Anthropic began rolling out a developer beta for its AI agent system, the aptly named Computer Use, in October; Anthropic said then it wants to expand access to it early this year, just in time for its latest reported fundraising round. OpenAI, meanwhile, is preparing to launch its computer-using agents as soon as this month, The Information reported Tuesday. The roll-out has been deliberate for good reason: Via what's been dubbed "injection attacks," malicious actors have flooded the web with dangerous websites designed to lure in and trick AI agents into exposing sensitive user data, like credit card information. Building an agent capable of dodging such digital booby traps requires tons of safety testing. Just last month, OpenAI co-founder Wojciech Zaremba accused Anthropic of releasing an agent that came up short on safety mitigations, saying "If OpenAI would do the same, we would get tons of hate." Just make sure the good robots beat the bad robots, and we're good, guys, really.

Written by Brian Boyle

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Zuck has no use for it, and you already know what Elon thinks, but the news industry still has a friend in Apple, provided it can get a handle on those irritating AI hallucinations passing themselves off as alerts.

According to a Financial Times report published Tuesday, Apple is ramping up its Apple News division, potentially throwing more resources behind the tiny alerts that pop up on your iPhone to ruin your day. Apple's News app has taken on more meaning for traditional news outlets trying to make a buck in the digital news hellscape, but at the same time, Apple's foray into AI-generated news alerts has left some major publications looking foolish as it has a habit of completely misrepresenting their articles.

Extra! Extra!

Sources told the FT that Apple is considering offering its Apple News app in more countries, while deepening local coverage in the UK. It's reportedly also thinking of bringing its puzzles section, currently only available to the US and Canada, to the UK as well. Apple News works largely by syndicating articles from major publications. There is a small cadre of journalists reporting directly for Apple, but it's a long way from having its own bona fide newsroom. While Apple News is free, there's a premium version called Apple News+ that charges $12.99 per month.

Over the past year, the importance of Apple News to publishers appears to have grown, as traffic driven by other digital platforms like Facebook and Google has shrunk. In May last year, Semafor media reporter Max Tani called Apple News "as good a partner in Big Tech as many media companies are going to find." But lately, Apple's marrying of news and tech has landed it on the wrong side of some legacy publications:

• The BBC submitted a complaint to Apple in December after Apple Intelligence — the company's suite of AI tools for which it partnered with OpenAI — blasted out a news summary that incorrectly claimed the BBC had reported Luigi Mangione, suspect in the shooting of UnitedHealthcare CEO Brian Thompson, had shot himself.
• This was not an isolated incident. Apple Intelligence also wrongly issued a BBC summary saying that tennis star Rafael Nadal had come out as gay, and in November, it inaccurately said that The New York Times had reported Israeli Prime Minister Benjamin Netanyahu had been arrested.

Apple issued a statement on Tuesday saying it would update the software, but some members of the news industry called for it to be taken offline altogether. "Trust in news is low enough already without giant American corporations coming in and using it as a kind of test product," Alan Rusbridger, former editor of The Guardian and current member of Meta's Oversight Board, told the BBC's Today Programme, adding the company should nix the feature until it's able to more accurately summarize news.

Post-Truth: Meta has expressed some equivocacy about news on its platforms in recent years, and now it's apparently blasé about having facts on them too. The company announced Tuesday that it's dismantling its fact-checking program in favor of a Twitter/X-esque "community notes" mechanism, where users rather than paid fact-checkers can submit notes on the factuality of the posts they see. This burst of free-expressionism apparently did not apply to Meta employees who let their feelings be known about a new board member, UFC President Dana White — the company deleted all internal posts critical of the appointment.

Written by Isobel Asher Hamilton

Are you a high-yield bond? Because you've caught my interest. That line will get you thrown out of a bar, but you'd have been a hit at the US government's monthly auction of 10-year notes on Tuesday, which at 4.68% landed the highest yield for newly auctioned securities since 2007.

The overall yield on the US 10-Year Treasury Bond also touched its highest intraday point, 4.699%, since last spring. That's thanks to an extended selloff emboldened by new economic data suggesting more interest rate cuts are less likely in the short term thanks to economic growth coupled with more stubborn inflation.

What Goes Up (Probably) Sends Something Down

Typically, fixed-rate bond prices fall when market interest rates rise, in what's called an inverse relationship. Moreover, when fixed-rate bond prices fall, bond yields rise (and vice versa in both cases).

That means that one possible sign of rising bond yields is the market pricing in the expectation of fewer rate cuts. Given new economic data, the uptick in the 10-Year note yield Tuesday — part of a trend that dates back to early December — is pretty much an indication of exactly that:

• Services sector activity accelerated in December, according to new data from the Institute for Supply Management released Tuesday. Its non-manufacturing purchasing managers index rose two points from November to 54.1. Anything above 50 suggests growth in the services sector — but a measure of the cost of service inputs also rose to 64.4, the highest since February 2023, from 58.2 in November, suggesting resilient inflation that could delay future rate cuts by the Federal Reserve.
• There's also the matter of job openings, which Labor Department data released Tuesday showed rocketed to 8.1 million in November, well above the 7.7 million expected by economists. Actual hiring slowed to 5.3 million, down from 5.4 million in October — but the numbers generally align with the Fed's hope of a so-called soft landing, where inflation and the labour market cool gradually and require less intervention over time.

GOP Elephant in the Room: Yields on the 10-year note have been rising since December as markets have bet that President-elect Donald Trump's economic plans, like tariffs, and all-around animal spirits could push up inflation and the deficit, further reducing the probability of rate cuts. Then again, if anyone thinks they know what's coming next, remember that old joke about the guy who walks into a bar and asks the bartender, "What if there were no US-Canadian border?" Never mind.

Written by Sean Craig