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ChatGPT dipped in quality according to a new study

Scarlet Logan on September 5, 2023

ChatGPT — With the debut of ChatGPT, a novel AI language model, in late 2022, OpenAI grabbed the globe by storm. The success of the AI service cleared the door for a one-of-a-kind AI race, with hundreds of tech companies vying to imitate it.

While the service has received some criticism, OpenAI has taken the liberty of upgrading it, honing the language model to be as faultless as possible. ChatGPT seems to have found its stride after a couple of revisions.

The most current version of the AI language model pioneer sparked a coin rise, sparking demands to halt development. A new research, however, seems to show that the AI bots may have suffered a setback, leading to a decrease.

The ChatGPT study

Between March and June 2022, researchers from Stanford and UC Berkeley conducted a study in which they rigorously analyzed multiple versions of ChatGPT. They devised stringent criteria to assess the chatbot’s proficiency in coding, arithmetic, and visual thinking tasks. The outcome of ChatGPT’s performance was not favorable.

According to the results of the testing, there was a worrying reduction in performance between the versions tested. ChatGPT answered 488 of 500 questions correctly during a math challenge regarding prime numbers in March, yielding a 97.6% accuracy rate. By June, the percentage had decreased to 2.4%, with only 12 questions correctly answered.

The deterioration did not become obvious until the chatbot’s software development talents were examined.

“For GPT-4, the percentage of generations that are directly executable dropped from 52.0% in March to 10.0% in June,” the study said.

The findings were discovered using the models’ pure versions, which did not include any code interpreter plugins.

When it came to reasoning, the researchers used visual prompts and a dataset from the Abstract Reasoning Corpus. There was a clear drop, although it wasn’t as high as in math and coding.

“GPT-4 in June made mistakes on queries on which it was correct for in March,” the study said.

Possible reasons for the decline

The drop was unexpected, prompting the question, “What could explain ChatGPT’s painfully obvious downgrades in recent months?” According to a proposed hypothesis, researchers speculate that it could be a side effect of OpenAI’s optimizations.

Another plausible reason is that the adjustments were implemented as a precaution to prevent ChatGPT from responding to harmful inquiries. However, the safety alignment may limit ChatGPT’s use for other activities.

The model, according to the researchers, has a propensity to offer wordy, indirect solutions rather than unambiguous ones.

On Twitter, AI researcher Santiago Valderrama commented, “GPT-4 is getting worse over time, not better.” He also hinted that a cheaper, quicker mix of models may have replaced the original ChatGPT framework.

“Rumors suggest they are using several smaller and specialized GPT-4 models that act similarly to a large model but are less expensive to run,” he noted.

Valderrama also stated that using smaller models might result in speedier answers, but at the expense of less expertise.

“There are hundreds (maybe thousands already?) of replies from people saying they have noticed the degradation in quality,” Valderrama continued. “Browse the comments, and you’ll read about many situations where GPT-4 is not working as before.”

Other insights

After trying to make sense of the data, Dr. Jim Fan, another AI researcher, commented on some of his observations on Twitter. Fan related them to how OpenAI refined its models.

“Unfortunately, more safety typically comes at the cost of less usefulness, leading to a possible degrade in cognitive skills,” he wrote.

“My guess (no evidence, just speculation) is that OpenAI spent the majority of efforts doing lobotomy from March to June, and didn’t have time to fully recover the other capabilities that matter.”

Fan also pointed out that the safety alignment made code needlessly lengthy, mixing in irrelevant material regardless of the prompts.

“I believe this is a side effect of safety alignment,” he offered. “We’ve all seen GPTs add warnings, disclaimers, and back-pedaling.”

Fans said that cost-cutting measures, as well as the introduction of warnings and disclaimers, might have contributed to ChatGPT’s collapse. Furthermore, the absence of widespread community feedback might have been a role. Although more testing is required, the end results corroborated users’ concerns about the diminishing coherence of ChatGPT’s once-highly lauded outputs.

To avoid future deterioration, enthusiasts have advocated for open-source models such as Meta’s LLaMA, which allows for community debugging. They also stressed the need of constant benchmarking in detecting regressions.

Meanwhile, ChatGPT fans should moderate their expectations because the unique and groundbreaking language model AI chatbot appears to have degraded in quality.

FedNow might be a double-edged sword

Brandon Foster on August 15, 2023

FedNow — Money transfers have evolved into one of the most convenient methods for sending allowances, loans, or salary. Because of advances in technology, there are an abundance of routes for money transfers, such as:

Banks
Online payment platforms
Specialized remittance services

Money transfers can range from local to international, allowing for a variety of financial transactions to be completed. It offers a convenient and efficient method of transmitting money, avoiding the need for real currency. However, not everyone has acclimated to the usage of money transfer services.

While Venmo and Zelle give fast solutions, the financial system has lagged. Most transfers use outdated technologies to handle the money, which might take hours or even days to complete. The Federal Reserve, on the other hand, is striving to change things.

A new system

Later this month, the Federal Reserve will launch FedNow, a new system that would allow banks to instantaneously transfer domestic payments to one another at any time, from Saturday midnight through holidays.

Although the Fed has not specified a release date, it stated in June that FedNow will be available to the public in late July, after 55 banks, credit unions, and other providers were granted permission to utilize its services. As a result, businesses may instantly fulfill invoices, allowing employees and workers to get their compensation as soon as possible.

While everything appears to be going swimmingly, there are some possible hiccups. Customers, for example, might withdraw their entire balance from a bank in a split second, resulting in a bank run with no time for the government to intervene.

FedNow will begin with a $500,000 per-transaction cap, which might prevent major bank runs. However, it is possible that it will not be low enough to cause comparable runs on smaller banks.

Details

FedNow is simply a network that allows banks to instantaneously move money between themselves and account holders from other banks. The Fed attempted to construct such a network at least twice before, both times failing. However, it appears that the moment has come because various real-time payment networks based on comparable architectures have shown to be effective.

The service’s impact will be determined by how quickly FedNow is adopted and the sorts of payment flows that produce the highest volume. According to Kevin Jacques, a Cota Capital partner, it will be mostly used for business-to-business payments. Meanwhile, customers and individuals might utilize FedNow to make monthly mortgage payments or other bigger payments instead of sending a wire transfer.

“We have a number of regional banks that are limited partner investors in our fund, and we make it a point to talk to the executives at those banks, and they seem to be taking a wait-and-see approach,” Jacques added.

“One thing they have to think through is, should they connect and integrate into FedNow or should they integrate into The Clearing House (a banking association and payment company owned by the largest and oldest commercial banks). It’s going to cost them money to make that integration, so they don’t want to do both.”

Potential downsides

FedNow might cause bank runs, which could be more damaging than a Silicon Valley bank failure. Account holders sought to transfer out $42 billion in other institutions in one day using SVB. Wires are now processed overnight, informing authorities of the amount leaving the bank when the bank shuts. They did, however, have the opportunity to interfere before the bank fell.

“If we switch to a system where that transaction happens instantly, regulators are going to have a lot less time to see what’s going on and to act and intervene,” Jacques explained.

“There will be times where regulators will need to intervene in the future, so our argument is for velocity controls. A lot of thinking should go into the transaction size limits.”

Velocity controls measure and limit the quantity of bank deposits that leave in a certain period of time.

Uncertainty for the Fed

While FedNow appears to be a solution, the Federal Reserve must address other issues, such as the unemployment rate in the United States.

The official unemployment figures released last Friday provided a mixed picture, as payrolls were fewer than projected. This suggests that the employment market slowed in June. That month, employment increases were about 100,000 behind the stronger-than-expected 306,000 in May, and fell short of experts’ estimates of 225,000 jobs. It is also the smallest monthly rise since the December 2020 dip.

According to Rucha Vankudre, senior economist for labor market analytics Lightcast:

“The job growth is slowing, but I don’t actually think that’s necessarily a bad thing. In some ways, this is great. We’re continuing to see the soft landing that we’re hoping for.”

However, uncertainty set in, and while employment growth slowed in June, salary growth remained consistent. The month-on-month growth in average hourly wages remained at 0.4%, the same as in May and 4.4% higher than in 2022.

“Wage growth ticked up and remains well above levels the Fed would be comfortable with in their efforts to bring inflation back to 2%,” said Joseph Davis of VanGuard.

Fed Chairman Jerome Powell has stated that further wage increases in a tight job market might contribute to inflation being elevated. Meanwhile, markets fell on Friday, wiping out previous gains and finishing the day and week on a sour note.

Student loan forgiveness plan decision presents unique problem

Brandon Foster on August 15, 2023

Student loan — The United States was handed a blow on Friday when the Supreme Court decided to overturn President Joe Biden’s student debt relief proposal, which would have erased up to $20,000 in federal student loan debt per borrower.

Student loans are already likely to consume a substantial amount of budgets in the fall, when payments and interest accruals resume after a nearly three-year hiatus due to the epidemic. Biden also outlined initiatives to make the transition to payment resumption smoother, including the possibility of forgiving some of the debts. The ruling also indicates that outstanding loan sums are larger than they would have been had the court approved Biden’s initiative and payments started.

The White House claims that the student loan reduction proposal would have eliminated all debt for approximately 20 million people (45% of borrowers).

Cautionary spending

Aside from the stress of student debt for millions of people throughout the country, the decision offers a problem for retailers since it adds another factor to predicting consumer purchasing behavior in the coming months.

With payments resumed, about 40 million Americans with student loans may face another financial challenge, despite their increased prudence. According to several studies, virtually all Americans have reduced their expenditure in some way. Customers, according to various shops, have shifted from high-priced products to lower-priced private-label brands.

The Supreme Court’s ruling comes at a difficult moment, particularly given the implications for shops. Student loan repayment will resume just in time for the busy back-to-school and Christmas seasons.

However, KeyBanc Capital Markets retail analyst Brad Thomas believes the loan adjustments will not determine whether the country enters a recession or not. He did, however, warn that it might have a psychological impact on Americans who are already burdened with hundreds of dollars in other monthly payments.

“It’s enough to potentially give us what could be an ugly and disappointing holiday season, relative to expectations,” said Thomas.

Pressure on consumers and companies

Inflationary pressures have forced Americans to pay more for food and housing, while fears of a recession have exacerbated consumer and business anxieties. Furthermore, government initiatives such as debt relief, which were designed to assist households in dealing with the epidemic, have suffered.

Budgets for programs aimed at low-income households have been boosted, including:

Expanded child tax credits
A robust Supplemental Nutrition Assistance Program
Stimulus checks

Consumers have spent their money on experiences rather than things since the cash injection ended, adding to the variables that might harm retail sales in 2023.

The suspension in student loan payments, according to Brad Thomas, was part of the pandemic tailwind for shops. Meanwhile, KeyBanc predicted that it might provide a 2% yearly headwind to retail sales in the next year if not compensated by greater incomes or further borrowings. During earnings calls in the spring, many retailers said that lesser tax returns resulted in weaker sales.

The figures vary depending on how much student loan debtors pay each month. The Bank of America Institute predicts that the average afflicted household will have to spend roughly $180 per month. Meanwhile, higher education consultant Mark Kantrowitz estimates that the average monthly price is roughly $350. Finally, KeyBanc has estimated an average monthly payment of $400 to $460.

Kantrowitz stated that there is little evidence on Americans spending money on student loans that they did not utilize, and he is dubious that payment resumption will have a large influence on stores. The analyst emphasized how the total represents only a small portion of the country’s gross domestic product.

“The impact on retailers is, yes, it’s going to be a negative, but it’s not going to be a huge decrease,” explained Kantrowitz. “It is a mild decrease.”

According to Brett House, an economics professor at Columbia University’s business school, the adjustments to student loans are manageable in comparison to the challenges individuals face due to inflation. The House also stated that many Americans had gotten increases after the payments were halted in 2020.

Companies impacted

The student debt relief decision may have a greater impact on certain firms than others. Several of the firms exposed sell discretionary goods. Analysts at Wells Fargo also believe that experience-driven businesses are vulnerable.

Meanwhile, due to their popularity among recent graduates and newly hired people, Barclays identified the following brands as the most vulnerable:

American Eagle Outfitters
Figs
Urban Outfitters

Target has been identified as a store that will be pressured by KeyBanc and many equities research companies. They noticed a decline in sales while attracting young, college-educated clientele.

However, retailers may not have factored in consumers beginning student loan repayments in their estimates for this year, and several large companies in the industry have yet to remark on the potential consequences. At the end of the retail earnings cycle, the decision was made to discontinue the prolongation of the student loan pause.

While some stores may suffer until payments resume, experts and executives are confident that customers will continue to spend money on flights and dining out.

Mortgage rates linger below 7% in latest report

Jeah Lorraine Adams on August 15, 2023

Mortgage — The economy has been on an inconsistent flow since the pandemic, with inflation striking a major blow in 2022. As a result, several industries have also felt the effects of the Federal Reserve’s persistent efforts to curb inflation. Although there have been moments of relief, inflation remains.

One of the most glaring issues in the economic landscape today is the increase in mortgage rates.

On Thursday, it was reported that the rates rose for the third consecutive week. However, one key takeaway from the increasing rates is that it remains under the 7% threshold.

The news

On Thursday, Freddie Mac released some new data that showed the 30-year fixed-rate mortgage averaging 6.96% in the week ending August 10. The latest update showed that it had gone higher than the 6.90% from a week earlier. In 2022, the 30-year fixed-rate mortgage had been significantly lower at 5.22%.

The Federal Reserve’s historic rate-hiking campaign has led to elevated mortgage rates, bringing home affordability to its lowest level in the past couple of decades.

People looking to buy a home will find it is more financially straining due to the added cost of financing the mortgage. In addition, homeowners who had locked in lower rates are now hesitant to sell. As a result, prospective buyers are stuck in a dilemma of having to deal with low inventory and high costs.

Since the end of May, rates have continued to rise above 6.5%. The recent average rate is on-level at a peak since November.

“There is no doubt continued high rates will prolong affordability challenges longer than expected,” said Freddie Mac.

“However, upward pressure on rates is the product of a resilient economy with low unemployment and strong wage growth, which historically has kept purchase demand solid.”

To elaborate, the average mortgage rate is derived from the mortgage applications Freddie Mac receives from a number of lenders across the United States. The survey covers borrowers who have excellent credit scores and put 20% down.

Employment and inflation data

After the Federal Reserve pointed out that it relied on jobs and inflation data during its July monetary policy meeting, the rate stayed elevated this week.

Markets were eager to see the July inflation report released on Thursday morning, which showed that inflation soared to 3.2% annually compared to the 3% annual increase in June. The recent update indicated that it was the first time inflation picked up since 2022. In addition, the data showed shelter costs contributing 90% of the total increase in inflation last month.

“July’s Consumer Price Index holds significant importance for the Fed’s upcoming decision,” said Realtor.com economist Jiayi Xu.

Xu added that the faster pace of price increases could fuel the Fed’s concern that inflation will continue to linger longer than expected. The Federal Reserve will also take the upcoming August employment and inflation data into consideration before the next policy meeting in September.

Furthermore, Xu noted that the latest jobs report provided mixed signals regarding the labor market as a smaller number of net new jobs were added while the unemployment rate dipped.

“While July’s jobs report itself is very unlikely to have a direct impact on the Fed’s upcoming decision, the decline to a 3.5% unemployment rate may imply that more significant slowing is needed to align with the Fed’s projected year-end rate of 4.1%,” she said.

Mortgage affordability problems persist

Keeping Current Matters chief economist George Ratiu said that borrowing costs will stay high until financial markets receive an “all clear” signal from the Federal Reserve.

Although the Fed isn’t responsible for setting the interest rates that borrowers pay directly on mortgage, they are still a prominent influence. For example, mortgage rates track the yield on 10-year US Treasuries that move based on anticipation of the Fed’s actions, what they do, and investors’ reactions.

Mortgage rates rise when Treasury yields shoot up, and they follow suit when they go down.

Ratiu said that mortgage rates are currently running higher than they should be in relation to the 10-year Treasury. He also pointed out that the spread between the 30-year fixed rate mortgage and the 10-year Treasury is around 300 basis points. The level has been scarcely seen in the past 50 years, mostly showing up during high inflation and economic turbulence.

“In the absence of the elevated risk premium and hewing closer to a historical average of 172 basis points, today’s 30-year fixed mortgage rate would be around 5.7%,” said Ratiu.

The Mortgage Bankers Association said that homebuyers are still sensitive to elevated interest rates, alluding to a drop in mortgage rates applications last week.

“Due to these higher rates, there was a significant pullback in mortgage application activity,” said MBA president and CEO Bob Broeksmit. “Both prospective buyers and sellers are feeling the squeeze of higher rates as well as low housing inventory, which has prompted a pronounced slowdown in activity this summer.”

George Ratiu said that sales of existing homes have been lagging despite real estate markets benefiting from more people getting employed and receiving improved paychecks this year.

“The challenge comes mainly from too many buyers chasing not enough available properties,” he added.

With history as his reference, Ratiu noted that mortgage rates usually cool off once inflation subsides, experiencing a six-to-eight-month lag.

Theaters are witnessing a new revival in 2023

Brandon Foster on August 15, 2023

Theater — There has been a shift in the box office, which is seeing Marvel and Disney losing its grip on the audience’s attention. While the entertainment titan’s grip on the industry had been strong for over a decade, two movies have come out on top, yielding a power and excitement that hadn’t been felt in a long time.

Barbie and Oppenheimer have both dominated the online world for weeks in anticipation of their premiere, and once they came out to theaters, the two movies quickly became the queen and king of cinema. Such is their power that they have dominated the box office, raking in jaw-dropping revenue..

Barbeinheimer on its second week

Social media dubbed the double premiere of the Greta Gerwig and Christopher Nolan films as “Barbenheimer,” which quickly gained traction months ago. And so far, Barbenheimer has lived up to its hype, even as it went into the second weekend.

“Weekend two proves the outpouring of interest in ‘Barbie’ and ‘Oppenheimer’ a week ago was not a fluke,” said Comscore senior media analyst Paul Dergarabedian.

“Both films put up second weekend numbers that would have been considered solid as debuts and reflect two of the best sophomore session holds in box office history.”

Barbie enjoyed continued success, with domestic screenings raking in $93 million in gross revenue. Internationally, it brought in over $122 million, which saw the film become the No. 1 release worldwide.

The Margot Robbie-led film is the largest domestic second weekend performance for studio Warner Bros.

Meanwhile, Oppenheimer continued to hit high numbers. According to estimates from media analytics company Comscore, the Cillian Murphy-led film had a domestic total of $46 million. As a result, Oppenheimer has generated a worldwide total of almost half a billion dollars.

Distributor Universal estimated that the film would become director Christopher Nolan’s largest non-superhero film of all-time across 40 regions. It is also tipped to be his biggest film ever in 28 regions.

The amount of revenue Barbenheimer is bringing in indicates that there is renewed energy, excitement, and appetite for the movie theater experience after the pandemic prompted many studios to resort to streaming.

“Barbenheimer was never going to happen on your TV,” said National Association of Theater Owners president and CEO Michael O’Leary.

“You have to go into the theater to experience it.”

A rejuvenated box office and lively theaters

While the hype surrounding Barbenheimer has been a massive boost to revenues, repeat viewings have also contributed to the box office earnings.

According to midwest-based chain B&B Theaters, more than 2,100 people watched Barbie in the last two weekends while almost 500 returned for Oppenheimer across its 55 theaters.

For most people, Hollywood and the movie industry are one and the same.O’Leary noted that the United States has always had a sense of a strong movie theater culture.

Following the pandemic’s disastrous impact on theaters and public screenings, he said that people are eager to sit in a theater with a world-class projection screening the movie, surrounded by an atmospheric sound system, and enjoying an immersive experience with others.

O’Leary also said that Barbie and Oppenheimer will only trigger more people to return to the theaters by reminding them of how good the theatrical experience can be.

“It’s a reawakening,” he added.

“At their core, consumers want to go see a compelling story, they want to be entertained,” explained O’Leary. “If stories resonate with people… they tell other people.”

Drawbacks

The reception for Barbie and Oppenheimer has been overwhelmingly positive, but analysts have also chalked up a line that could hinder the momentum. As the WGA and SAG-AFTRA strikes continue, the financial successes are still overshadowed.

“There’s pressure to resolve (these labor disputes) because the possibility of revenue is built on the foundation of having movies and actors to promote them,” explained Dergarabedian.

“For now we have high-profile films, but that pool will be drying out.”

Furthermore, the production limbo created by a lack of negotiations on the studios’ side is creating a domino effect which could see the release date for several projects to be postponed. Boxoffice Pro chief analyst Shawn Robbins said that for the second half of 2023 and the entirety of 2024, theater chains would have to keep a “weather eye on the horizon for problems beyond their control.”

“While it’s important to celebrate the good times right now and realize they can be a barometer for the future, it’s just as important to recognize the fight for equality by so many who play a part in creating the content we see on our screens, large and small,” Robbins added.

Severance packages as career boosters for prospective entrepreneurs

Alice Blake on July 17, 2023

Severance — Starting a business without capital is a tough endeavor that takes a great deal of focus and resourcefulness. Entrepreneurs that embark on this difficult road frequently encounter various challenges from the start. They must traverse a perilous terrain without access to cash, where financial constraints may hinder development and innovation. Without finance, starting a firm means depending primarily on personal resources or incurring large personal debt, putting enormous strain on the entrepreneur’s financial stability.

Severance payouts, on the other hand, might be a lifeline for budding entrepreneurs. These packages, acquired while leaving a former position, might serve as an initial source of money, providing a critical cushion to meet important costs during the early stages of the new enterprise. Entrepreneurs may boost their chances of success by successfully exploiting severance packages by having a financial safety net to back them as they attempt to transform their company ambitions into reality.

What is a severance package?

A severance package is a financial arrangement made by businesses to employees who are laid off, dismissed, or given the option of voluntary retirement. It usually consists of a combination of remuneration, such as a lump sum payout or an extended salary, and additional perks, such as healthcare coverage and career coaching.

These packages are intended to offer employees departing the organization with assistance and a smooth transition. A severance payment might be a crucial resource when establishing an entrepreneurial career. It provides a financial safety net that can be used to pay personal expenses, invest in the new firm, or support initial operating costs.

Aspiring entrepreneurs can avoid some of the risks involved with beginning a firm without external investment by employing a severance package, creating a strong foundation for their entrepreneurial path.

Financial support

With its financial assistance, a severance package may substantially aid the process of beginning a firm. This infusion of capital may be a lifeline for budding entrepreneurs, helping to pay essential launch expenditures and alleviate the first financial load. The severance package’s lump sum payout or prolonged salary might be utilized to protect critical resources such as office space, equipment, inventory, or product development. It may also be used for marketing and advertising to raise brand recognition and attract new consumers.

Furthermore, having this financial support available assists entrepreneurs to weather the inevitable problems and uncertainties that emerge during the early phases of a firm. It gives stability and peace of mind, allowing entrepreneurs to focus on business development and strategy rather than simply on financial concerns.

Finally, the financial assistance provided by a severance payment might be critical in making business ideas a reality.

Time and focus

The gift of time and attention is one of the most significant benefits of obtaining a severance settlement while establishing a business. Entrepreneurs sometimes find themselves with a period of notice or garden leave while transferring from a prior position, during which they are not compelled to work. For ambitious company owners, this focused time may be a valuable resource. It enables individuals to fully immerse themselves in the process of developing their enterprise without the responsibilities and distractions of a traditional employment.

During this time, entrepreneurs may focus their efforts on critical activities like market research, formulating a sound business strategy, refining their product or service offerings, and making significant industry relationships. Because there are no normal time limits, entrepreneurs may devote their whole focus and effort to creating a solid foundation for their firm, positioning them for long-term success. They may embrace opportunities, manage difficulties, and make educated decisions to propel their entrepreneurial activities ahead with this unbroken attention.

Access to benefits

Access to perks through a severance package can be quite beneficial to businesses just starting out. Continued healthcare coverage is a major perk that is frequently included in severance settlements. This ensures that businesses may acquire critical medical treatment without incurring additional costs or negotiating the hassles of obtaining individual health insurance. Additionally, career counseling and outplacement services provided as part of a severance settlement can be quite valuable.

These tools offer advice and experience in navigating the entrepreneurial landscape, assisting entrepreneurs in refining their company strategy, improving their leadership abilities, and connecting with key networks. Outplacement services may also help startups secure new business prospects or alliances, driving their growth.

Access to such benefits not only adds to entrepreneurs’ general well-being and stability, but also provides them with the skills and assistance they need to overcome hurdles and enhance their chances of success in their entrepreneurial path.

Conclusion

Finally, a severance payment provides budding entrepreneurs with an invaluable opportunity to overcome some of the hurdles that come with beginning a firm. The financial assistance given can be a lifeline for entrepreneurs, allowing them to meet beginning costs and negotiate the early phases with better financial security.

Furthermore, the time and concentration provided by a severance payout enable entrepreneurs to completely devote themselves to their company pursuits, building a solid basis for success. Access to perks such as continuing healthcare coverage and career advice improves their chances of establishing a successful business. Effectively using a severance payout may be a game changer, offering the tools and assistance needed to begin on a successful business path.

South Korea working to be the top option for AI chips

Jeah Lorraine Adams on July 10, 2023

South Korea — For more than a year, artificial intelligence has been the trendiest issue in an array of businesses. Midjourney and ChatGPT are two of the most divisive AI programs to date, attracting both pros and casual users. As a result, big corporations have altered their attention to profit on artificial intelligence.

South Korea has increased its attempts to become the top option for AI chips due to the direct relationship between AI and technology. South Korea has all the advantages required to win the global AI chip race, according to industry analysts. It is already one of the dominant giants in the memory chip market and has established one of the most inventive AI ecosystems today.

The country’s strength and targets

According to the Asian country’s digital plan, they want to be one of the world’s top three AI powerhouses by 2027, trailing only the United States and China. Dalton Investments’ senior research analyst, James Lim, highlighted how South Korea might surge to the forefront of the modern era.

“South Korea is very strong in memory chips. AI does require a lot of memory. South Korea dominating in the memory market is definitely an advantage.”

South Korea’s minister of science, information, and communications technology, Jong-ho Lee, stated that the government wants to maintain its leadership position in memory semiconductors.

“South Korea seeks to emerge as a prominent player in rapidly growing and promising areas such as AI semiconductors,” said Lee.

The global hype

Large language models have created a significant demand for high-performance memory devices in the months after ChatGPT’s meteoric rise. Generative AI is a cutting-edge field of artificial intelligence that creates material such as text, graphics, and code, to mention a few examples.

The chips enable generative AI models to remember the bulk of facts from previous exchanges, as well as to record user preferences in order to provide near-human answers.

“In order for the use of AI, including ultra-large language models, a significant number of semiconductor chips are required to operate,” said Lee. “And global companies are competing fiercely to create high-performance and low-power AI semiconductors optimized for AI computation.”

The firms leading the way

Samsung Electronics and SK Hynix are two South Korean companies that have established themselves as the world’s top manufacturers of dynamic memory chips. In order to improve their capabilities, the companies have been actively investing in AI research and development.

Samsung announced plans in March to invest 400 trillion Korean won ($228 billion) in the development of a new semiconductor factory in South Korea. According to SemiAnalysis’ Dylan Patel, Samsung is investing a lot of money.

“And why is that? So they can catch up on technology, so they can continue to maintain their leadership position,” said Patel.

Lee elaborated on the matter, saying: “We will spare no effort to help Korea secure world-class AI semiconductor technology by leveraging our memory semiconductor capabilities AI semiconductors.”

According to TrendForce statistics, Samsung had a market share of 40.7% in the fourth quarter of 2022, while SK Hynix had a market share of 28.8%.

“South Korea has a robust local AI ecosystem, capable of competing with global tech giants,” said Sung Nako of South Korean internet titan Naver.

During a meeting with President Yoon Suk-yeol in June, OpenAI CEO Sam Altman encouraged South Korea to take charge of AI chip manufacturing. Altman also expressed a desire to invest in South Korean businesses. He also contemplated collaborating with well-known chipmakers such as Samsung Electronics.

“US chip giants Nvidia, Intel – they are not involved in the memory business,” Lim noted, implying that it would give South Korea a higher advantage. “They don’t have any exposure in the memory space.”

In comparison to Nvidia, Samsung is renowned as a supplier of greater bandwidth memory chips. The author of “Samsung Rising,” Geoffrey Cain, envisions the South Korean business diving deeper into the logic chip sector.

A greater advantage

The South Korean government has shown its support for the project by spending extensively in AI. The MSIT announced in 2022 that it will invest 1.02 trillion won ($786 million) over the following five years to finance AI semiconductor research and development.

“AI not only drives the growth of digital industries such as cloud computing and metaverse, but also serves as a key factor in dramatically improving productivity in traditional industries, such as manufacturing and logistics,” said Lee. “With AI being applied across various domains, even greater economic ripple effects can now be anticipated.”

South Korea is also committing 862.8 billion won through 2030 to the development of high-end semiconductors through new data centers and collaboration with entrepreneurs. The minister stated last month that the economic and industrial importance of AI semiconductors will continue to rise. He also stated that the country has a significant edge in the foundry and memory chip sectors.

“We will spare no effort to help Korea secure world-class AI semiconductor technology by leveraging our memory semiconductor capabilities to advance AI semiconductors in stages by 2030, developing additional to apply them to data centers, and fostering AI semiconductor experts,” said the minister in a June press release.

Meanwhile, Rebellions, a South Korean AI chip design company, increased its attempts to compete with US chip makers, saying that its new chip exceeded performance benchmarks, outperforming Nvidia’s counterpart by more than three times.

Park Sung-hyun, the CEO and co-founder of Rebellions, described the chip, saying, “In terms of AI workload, we have much better energy efficiency, cost efficiency… sometimes better performance.”

Rebellions is also said to be chasing government contracts as Seoul seeks to strengthen local firms.

Student loan forgiveness plan decision presents unique problem

Brandon Foster on July 10, 2023

The White House claims that the student loan reduction proposal would have eliminated all debt for approximately 20 million people (45% of borrowers).

Cautionary spending

“It’s enough to potentially give us what could be an ugly and disappointing holiday season, relative to expectations,” said Thomas.

Pressure on consumers and companies

Budgets for programs aimed at low-income households have been boosted, including:

Expanded child tax credits
A robust Supplemental Nutrition Assistance Program
Stimulus checks

Consumers have spent their money on experiences rather than things since the cash injection ended, adding to the variables that might harm retail sales in 2023.

“The impact on retailers is, yes, it’s going to be a negative, but it’s not going to be a huge decrease,” explained Kantrowitz. “It is a mild decrease.”

Companies impacted

Meanwhile, due to their popularity among recent graduates and newly hired people, Barclays identified the following brands as the most vulnerable:

American Eagle Outfitters
Figs
Urban Outfitters

Target has been identified as a store that will be pressured by KeyBanc and many equities research companies. They noticed a decline in sales while attracting young, college-educated clientele.

While some stores may suffer until payments resume, experts and executives are confident that customers will continue to spend money on flights and dining out.

FedNow might be a double-edged sword

Brandon Foster on July 10, 2023

Banks
Online payment platforms
Specialized remittance services

A new system

FedNow will begin with a $500,000 per-transaction cap, which might prevent major bank runs. However, it is possible that it will not be low enough to cause comparable runs on smaller banks.

Details

Potential downsides

“If we switch to a system where that transaction happens instantly, regulators are going to have a lot less time to see what’s going on and to act and intervene,” Jacques explained.

“There will be times where regulators will need to intervene in the future, so our argument is for velocity controls. A lot of thinking should go into the transaction size limits.”

Velocity controls measure and limit the quantity of bank deposits that leave in a certain period of time.

Uncertainty for the Fed

While FedNow appears to be a solution, the Federal Reserve must address other issues, such as the unemployment rate in the United States.

According to Rucha Vankudre, senior economist for labor market analytics Lightcast:

“The job growth is slowing, but I don’t actually think that’s necessarily a bad thing. In some ways, this is great. We’re continuing to see the soft landing that we’re hoping for.”

“Wage growth ticked up and remains well above levels the Fed would be comfortable with in their efforts to bring inflation back to 2%,” said Joseph Davis of VanGuard.

Improbable to share the tech for Bored Ape metaverse

Brandon Foster on July 10, 2023

Improbable — For the past few years, the online community has been buzzing with the prospect of a new digital platform: the metaverse.

Several major players have focused on the development of metaverse as a space that allows people to come together to hang out, hold meetings, or even play games.

The creators of the Bored Ape Yacht Club NFT collections have come up with Otherside, an upcoming metaverse game.

Earlier during its “Second Trip” demo, it brought thousands of players together into a shared game world.

Now, Improbable, the startup that created the tech needed to power Otherside, recently opened up to other creators, giving them the opportunity to build more of the metaverse.

The suite

Improbable released its creation suite MSquared (M²), which is capable of creating the following:

Interoperable worlds
Tech stack
Metaverse markup language (MML)

The suite spans an entire network capable of creating digital assets and unique experiences within the online worlds.

Essentially, MSquared serves as a metaverse creation engine.

Improbable CEO and co-founder Herman Narula described it as a “stupidly ambitious project” that hosts a network of metaverses.

In 2022, the gaming tech startup had a value of $3 billion after raising funding.

Early access

On Friday, Improbable is opening early access to MSquared tools, open-sourcing the MML to provide accessibility to builders.

People have already begun playing around with Improbable tools through the Construct metaverse environment.

According to Narula, there are several Otherside demos built in collaboration with Yuga Labs, the startup behind the Bored Ape Yacht Club NFT collection.

They are touted as the best and highest-profile examples of what Improbable technology can do today.

The thousands who had experienced the early demo in April described it as an original gaming feat.

However, Narula believes that the smaller online sessions have been the most successful achievement on Improbable.

He cited the advantages a creator could have by creating an online session, sharing the link via social media, and inviting hundreds if not thousands of users into a shared space could lead to the creation of new economic models.

“You don’t necessarily need very elaborate, large-scale events,” said the Improbable CEO.

“Of course, you can build them, and we plan to do those as well.”

“That’s really exciting, because I think that could create a lot of really fun business models that nobody’s tried before. And that’s what the metaverse really needs – to prove out the use cases that are valuable.”

Experiments

Before the official launch on Friday, Herman Narula and his colleagues shared several experimental spaces, particularly on Twitter, where they could have on-the-fly play sessions.

Last month, soccer star Oleksandr Zinchenko of Arsenal participated in one of the spaces, interacting with his global fanbase.

Since then, more people have been favorable toward the MSquared tech, touting it as the second phase of a long-term plan.

Tech giants take interest

While details regarding Improbable plans have remained under lock and key, there is some positive news.

On Friday, the firm shared that several tech giants are providing cloud streaming tech, enabling them to utilize the MSquared-powered worlds.

The tech giants involved include:

Dolby
Google
Nvidia

Narula also noted that the coming weeks would see more brand content partners apart from Yuga Labs.

The Improbable CEO also said that while MSquared runs on Web3 principles, its network would rely on the idea of digital ownership, making them ill prepared to reveal more technical details.

The firm also plans to shift to decentralized governance so creators can also integrate NFTs from other networks.

“The fundamentals of MSquared are powered by blockchain, and then the experiences on top are blockchain-optional,” said Narula.

“We think that’s a great balance to strike.”

Declining enthusiasm

MSquared’s public rollout is timely as the metaverse has been on a decline.

In late 2021 and early 2022, the metaverse hype had been in full swing, but since then, it has struggled to maintain its hype.

According to Narula, some of the downplayed excitement around the metaverse is based on a misunderstanding of what it is.

It especially boils down to the premise confusion with virtual and augmented reality.

He also cited the hype and unfulfilled promises from tech companies as a part of the diminishing interest.

However, Narula believes social experiences through metaverse platforms are necessary, with MSquared-powered events playing a significant role.

“People are skeptical of the metaverse, people are skeptical of Improbable, people are skeptical of everything,” he said.

“You should be skeptical of us, and of this. It’s fairly normal and rational.”

“Why believe any more hype and promises in a market where so many companies have promised things, especially in a bear market? But what’s really interesting to me is, you don’t have to be cynical when you see the events themselves.”

The ChatGPT study

Possible reasons for the decline

Other insights

A new system

Details

Potential downsides

Uncertainty for the Fed

Cautionary spending

Pressure on consumers and companies

Companies impacted

The news

Employment and inflation data

Mortgage affordability problems persist

Barbeinheimer on its second week

A rejuvenated box office and lively theaters

Drawbacks

What is a severance package?

Financial support

Time and focus

Access to benefits

Conclusion

The country’s strength and targets

The global hype

The firms leading the way

A greater advantage

Cautionary spending

Pressure on consumers and companies

Companies impacted

A new system

Details

Potential downsides

Uncertainty for the Fed

The suite

Early access

Experiments

Tech giants take interest

Declining enthusiasm

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