From Europe to AI and much more
This week we track the money spend on AI, before moving to Europe on their fiscal challenge. We also review why Tesla & Blackstone are betting on India. Finally, are we really dead after we die ?
Tracking the money trail on AI
Recent reports indicate that Amazon and Microsoft have made substantial commitments, totaling at least $15 billion, toward investments in competing generative AI startups.
Venture capital firms have significantly financed a plethora of emerging companies in this sector, with eight prominent ones recently assessed to be valued at an average of 83 times their projected annual revenue.
The public sector has also entered the fray, with Saudi Arabia unveiling a notable $40 billion AI initiative aimed at investment across various domains, including chip manufacturing and data centers. This initiative underscores a significant endorsement of AI technology by one of the world's largest sovereign wealth funds.
Additionally, the US government is utilizing $30 billion in subsidies to attract AI chip manufacturers, mirroring the European Union's €43 billion chip program, which also includes a focus on AI development.
Expenditure in this realm extends to the funding of specialized infrastructure, such as the €540 million investment in a supercomputer for AI model training, jointly financed by the EU, France, and the Netherlands, along with the £900 million initiative in the UK aimed at fostering the development of a national equivalent to "BritGPT."
India has embarked on a comprehensive "AI mission" supported by approximately $1.2 billion in funding from the government.
Projections indicate that China's investment in AI is poised to exceed $38 billion by the year 2027.
Europe facing a big fiscal challenge
The excessive deficit procedure, as outlined in Article 126 of the Treaty on the Functioning of the European Union, mandates member states to address significant deficit and/or debt levels.
This procedure may be initiated by the European Commission if a country breaches or is at risk of breaching the deficit threshold of 3% of GDP, or if it fails to decrease a government debt level above 60% of GDP at a satisfactory pace.
In early March, Italy's national statistics office, Istat, adjusted the previous year's deficit to 7.2% of GDP, up from 5.3%. Projected deficit targets for 2024 and 2025 are set at 4.3% and below 4% respectively.
Just prior to Easter, France reported a 5.6% budget deficit for 2023, primarily due to lower-than-anticipated revenues. This development is anticipated to escalate the country's debt-to-GDP trajectory.
Even Germany is confronting challenges. Necessities such as public infrastructure investment and a notable shift in energy sources away from Russian gas, coupled with increased defense spending, could elevate Germany's debt ratio to over 65% of GDP by 2027 if deficit-financed defense spending escalates by 0.8-0.9% of GDP.
Bank of America suggests that an excessive deficit procedure for Italy, France, and ten other member states is now highly probable. Consequently, stricter monitoring and implementation of consolidation efforts will be imperative from 2025 onward.
The lingering risk persists that countries might be compelled into significant fiscal adjustments and structurally stringent fiscal policies, potentially impeding future economic growth.
Tesla eyeing for India?
In April 2024, Tesla is set to dispatch a team to explore potential locations in India for the establishment of an electric car manufacturing facility, with an estimated investment ranging between $2 billion and $3 billion.
The team, originating from the United States, is scheduled to commence its site evaluation by the latter part of April, with a specific focus on regions housing established automotive clusters.
These regions include Maharashtra and Gujarat in the western part of India, as well as Tamil Nadu situated in the southern part of the country.
India has allocated substantial government subsidies, amounting to billions of dollars, aimed at incentivizing manufacturing activities within critical sectors such as electric vehicles (EVs).
This initiative is viewed as pivotal, especially given China's dominant position in the EV market, making it a significant geopolitical consideration for India.
In discussions with Indian authorities, Tesla has expressed contemplation over manufacturing a smaller car variant at the proposed facility, tailored to be priced below $30,000.
The envisioned model could cater to the Indian market while also being positioned for export to regions such as Southeast Asia, the Gulf countries, Africa, as well as Southern and Eastern Europe.
Blackstone betting on India
India is increasingly becoming a focal point for private equity returns, garnering significant interest from Blackstone owing to its favorable economic dynamics.
With a youthful populace surpassing 1.4 billion and claiming the highest count of engineers globally, India presents an enticing investment terrain.
The government's proactive approach towards implementing pivotal reforms such as the Goods and Services Tax (GST), bankruptcy laws, and the establishment of Real Estate Investment Trusts (REITs) further augments India's appeal to investors.
Blackstone intends to allocate substantial capital, exceeding $2 billion annually, in India over the forthcoming five years.
Currently, India holds the position of the third-largest market for equity investments, trailing only the United States and the United Kingdom.
Blackstone identifies promising investment prospects across diverse sectors, including energy transition, infrastructure such as data centers, and value-added manufacturing, in alignment with initiatives such as Make in India.
Moreover, the burgeoning middle class propels demand in sectors like healthcare, financial services, hospitality, and travel, providing avenues for expansion.
While the United States has historically dominated in terms of stock market returns over the past 10 and 20 years, India consistently secures a robust second position, underscoring its potential as a highly profitable investment hub.
Are you really dead after you die?
Some cardiac-arrest survivors recount extraordinary psychic journeys preceding resuscitation, including encounters with deceased relatives and profound realizations. Professor Jimo Borjigin of the University of Michigan, initially skeptical, recognized the significance of these experiences and their potential neurological basis.
Statistics indicate that approximately one in ten individuals globally claims to have undergone near-death experiences during cardiac arrest or similar life-threatening situations, amounting to around 800 million people. Advancements in medical technology have increased successful resuscitations, challenging previous notions of irreversibility in such cases.
In 2015, Borjigin and colleagues conducted a groundbreaking study on the brain activity of a patient post-cardiac arrest. Their findings, disclosed recently, unveiled unexpected patterns, prompting a reconsideration of conventional understandings of death.
Conventionally, clinical death occurs when the heart ceases to pump blood, leading to cardiac arrest. However, cessation of brain and heart activity, known as "flatlining" and "brain death," may take minutes or even hours to manifest fully.
Following the removal of life support, one patient's brain exhibited a surge in activity, particularly in areas associated with consciousness. Gamma waves, indicative of heightened cognitive function, were observed, peaking several times post-arrest.
During the critical minutes following oxygen deprivation, the patient's brain displayed intense synchronization of neural activity, akin to cognitive processes such as heightened attention and memory recall. This synchronization fluctuated before culminating in a final burst of connectivity.
Despite the patient's impending demise, the brain exhibited remarkable vitality, resembling features commonly reported in near-death experiences, including out-of-body sensations, visions of light, and emotional introspection.
Borjigin contends that the profound neurological activity observed suggests a correlation with near-death experiences, challenging prevailing assumptions about brain function during cardiac arrest and death.
These findings suggest that death may entail a level of neural activity previously unrecognized, hinting at the potential for reversing even total brain death in the future.