Like LeBron James before him, Jeff Bezos is taking his talents to South Beach. And his taxable income, too.
Last year, the Amazon founder announced on Instagram that he was leaving the gloomy skies of Seattle for the sunshine in Miami. On Monday, an analysis by CNBC argued that the timing of his snowbird migration seemed all too specific. After two years of not selling any Amazon stock, recent SEC filings show Bezos is launching a pre-scheduled stock-selling plan that will unload, in today's prices, some $8.7 billion worth of shares over the next year. With no state income or capital-gains taxes in Florida, Bezos will save about $610 million that otherwise would have landed in Washington's state coffers. He could buy another megayacht with that and still have enough left over for a one-day pass at Disney World.
ARTIFICIAL INTELLIGENCE
Nvidia CEO Expects AI to Get Cheaper as Computing Power Expands
Jensen Huang, CEO of chipmaker Nvidia, told a conference on Monday that the costs of building out AI will fall as computers get smarter and faster. His comments were in response to a Wall Street Journalreport that OpenAI's Sam Altman is on the hunt for $7 trillion (yes, with a "t") to pour into the semiconductor industry — the ocean in which the generative AI algae bloom is currently taking place.
Chipping Away
ChatGPT may seem to pull sentences out of thin air like a digital Rumplestiltskin, but it takes a heck of a lot of computing power to a) train the large language models that underpin it, and b) keep the thing running. As popular as ChatGPT and its brethren are, they have not transformed into instant money-makers for the companies that build and operate them.
A major part of the cost equation for generative AI is semiconductors, which are pricey bits of hardware. Nvidia's role as a chipmaker has made it one of the biggest winners of the AI boom, so much so that its market capitalization overtook Amazon's on Monday for the first time in two decades. However, sources told the WSJ that Altman is on a mission to increase the globe's chipmaking capacity, sending supply up and costs down. Huang, however, said he doesn't see the need for a massive increase in hardware:
"You can't assume just that you will buy more computers. You have to also assume that the computers are going to become faster and therefore the total amount that you need is not as much," Huang said at the World Government Summit in Dubai, as reported by Bloomberg.
While Huang may not buy into the idea that Altman needs to spend $7 trillion bulking up the industry, he does think the near term will see perhaps another $1 trillion spent on growing AI infrastructure. "There's about a trillion dollars' worth of installed base of data centers. Over the course of the next four or five years, we'll have $2 trillion worth of data centers that will be powering software around the world," said Huang.
As Is Our Custom: For Nvidia, which is far and away the chipmaker that has benefited the most from the generative AI boom, there are plenty of new deals to go around. Reuters reported last week that Nvidia will start making custom chips for firms. Its customers include OpenAI and Google, so working with Big Tech companies to inveigle itself deeper into their infrastructure is a smart move in a world where its dominant market position could be eroded by the Altmans of the world turning on the money hose to create new chipmakers.
…because whiskey is having itself a moment. Over the last decade, whiskey has been the strongest-performing luxury asset class in the world, according to Knight Frank, with key endorsements from outlets like Barron's.
On top of Don, you can chalk that performance up to the laws of supply and demand, with a new wave of female imbibers and an exploding class of international consumers with newfound disposable income.
With Vinovest, enterprising investors can wedge themselves into this burgeoning market and:
Become a supplier to some of the largest names in whiskey including Templeton Rye, Bulleit, and Angel's Envy.
Selling Cost-Consciousness is at the Forefront of Earnings Season
"Operational efficiency" is Corporate America's buzzphrase du jour.
Executive usage of the euphemism for what could simply be called "cost-cutting" skyrocketed this earnings season, according to a recent analysis of conference call transcripts by Morgan Stanley strategists, highlighting how companies are lasered in on convincing investors that they're operating with fiscal discipline and protecting margins.
Cost in Translation
It's been about two years since 2022's great market correction, in which investors finally started to look for profits after buying all the pandemic-era's hype of growth and potential. And companies are finally starting to deliver. Disney, for instance, credited cost-cutting for its projections of a 20% rise in profit this year. Last year, that came in part by way of mass layoffs, which totaled 7,000 as the House of Mouse targeted some $5.5 billion in cost-cutting. Hertz Global and Levi Strauss have also cited layoffs as a means to protect margins, per a Bloomberg report on Monday.
"Operational efficiency" is often mentioned in the same breath as another trendy term: artificial intelligence, which is basically operational efficiency on steroids:
Among companies citing "operational efficiency" in their earnings calls, Morgan Stanley strategists say there is significant overlap with companies that tout the future productivity-boosting potential of AI. That mostly includes firms in software, health care, professional services, and finance.
These same companies are passing the cost-saving measures forward in the form of investment in AI. Meta, for example, which just reported record profit after a "year of efficiency" that featured mass layoffs, has touted aggressive investments into both consumer-facing generative AI tools as well as AI implementation of back-end technologies to bolster its platforms and ad-targeting systems.
The Altar of AI: Still, humans may not need to immediately fret about being sacrificed at the altar of AI. At least according to a recent study from the Massachusetts Institute of Technology, which found that the majority of jobs that could theoretically be replaced by AI systems using computer vision — recognizing and analyzing visual inputs — should be safe for humans for at least the next few years, if not decades, thanks to the exorbitant costs of operating such AI technologies. But "majority" is a loose technical term — the study still found it would be cost-effective to replace 23% of workers whose jobs could theoretically be replaced by computer vision AI systems. May the odds be ever in your favor.
Written by Brian Boyle
ENERGY
Texas Oil Rivals Hook Up In Another Massive Energy Merger
They're still wheeling and dealing over in Texarabia.
Diamondback Energy and Endeavor Energy Resources, two rival oil companies, have agreed to merge into one Permian Basin giant driller valued at roughly $50 billion. It's the latest in a string of mega deals in a sector that's continued to see activity despite high interest rates bogging down M&A transactions in other industries.
Come Together Right Now
Diamondback, which began operations in 2007 and went public five years later, has become one of the fastest-growing companies in the Permian Basin, the 75,000-square-mile oil and gas-rich area spanning across Texas and New Mexico. The company gained new wells through its acquisitions of groups like QEP Resources, Energen, Ajax Resources, and others.
In this latest stock-and-cash deal, Diamondback will acquire Endeavor for roughly $26 billion. When the deal closes, Diamondback will control about 840,000 acres and expects to produce 816,00 barrels of oil and gas per day.
Dealmaking and consolidation have become the name of the game as energy companies look to scale:
In October, Chevron announced it was buying Hess for $53 billion, and not just because it wants a new toy truck every Christmas. As part of the deal, Chevron obtained a 30% stake in the Stabroek Block, an oil and gas site off the coast of Guyana.
Shortly before that, Exxon said it was purchasing Pioneer Natural Resources for roughly $60 billion, doubling its production volume in the Permian Basin.
Dig a Little Deeper: Both the International Energy Agency and OPEC forecast oil demand to grow in the next two years. Russia's invasion of Ukraine, the Israel-Hamas War, and other Middle Eastern conflicts continue to tighten oil supplies and drive up prices. So despite pushes for clean energy, black gold likely won't be phased out any time soon.
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Extra Upside
The candy man: The price of cocoa is rising, and your favorite treats might cost more.
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As Is Our Custom: For Nvidia, which is far and away the chipmaker that has benefited the most from the generative AI boom, there are plenty of new deals to go around. 
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