LLMs and the generative AI applications they enable are energy hogs, driving huge emission increases. In 2019, researchers estimated that training a single large LLM produced the same CO₂ as 125 Beijing-New York return flights. Yet now there are over 100 LLMs. This problem is only going to accelerate, and it needs to be called out.

Enjoy this month’s read – from all of us at North Ridge Partners.

Original Thinking From North Ridge Partners

Since ChatGPT burst into public consciousness in late 2022, the adoption of AI tools has surged. But it comes with a sustainability sting in the tail because generative AI is a huge energy hog. Read our analysis of AI’s little-understood carbon crisis here.

Seismic Shifts

• Last week when the Japanese Central Bank raised interest rates, the Yen carry trade began to unwind.

• The result was seismic, with the Nikkei falling 12%, markets tumbling, and analysts calling a U.S. recession.

• Then, a couple of days later early news came in of a consumer slowdown. The canary in the coalmine was large travel stocks – with growth stalwarts Airbnb off 16% and Booking Holdings off 9%.

• These fault lines have clearly shifted the dial on the market’s expectations of the Fed – which have moved from a few small cuts by the end of 2025 to a more aggressive easing in monetary policy.

Big Tech News

• Meta’s mega Q2 result easily beats expectations and demonstrates how AI is fueling new advertising growth. Meanwhile, what’s $50bn between friends? That’s the amount the Zuck is believed to have frittered away since 2020 on his Metaverse dream.

• Alphabet delivers a lifetime of news in just a month! The company beats estimates in July, just as Wiz walks away from its $23 billion deal to sell to Google, and a US court finds that Google’s search engine is a monopolist that abused its monopoly power. Potentially the most profound US tech news in years.

• Amazon misses quarterly revenue targets and issues lacklustre guidance. Advertising may be weak - but it’s still winning in Cloud.

• Markets cool on AI leaders like Intel, which is cutting its headcount by 15 per cent. Nvidia’s stratospheric valuation also falls back towards earth as the AI hype cools. All eyes turn to its Q2 report and guidance later this month.

Asia Pacific Tech News

• Proving that Australia’s home-grown unicorn can play the AI game, Canva goes all-in with Leonardo.

• The 40-year-old company that just grew July revenues 45% over PCP…of course, it’s … TSMC.

• Is Nvidia’s AI choke hold starting to crack? US export restrictions are driving Chinese innovation.

• Four of China’s ‘AI Tigers’ - Baichuan, Zhipu AI, Moonshot AI and MiniMax - have now raised a billion each, and the country’s AI sector has swelled to over 1.6 million companies.

Stuff We Found Interesting

• Hey ChatGPT, why are the people who helped build ChatGPT suddenly leaving ChatGPT?

• …just as SearchGPT will soon be available for hallucinations.

• Elon Musk sues advertisers for not advertising. No, that’s not a meme.

• Lesson’s from Crowdstrike’s massive own goal.

Tech Investment Banking Across Asia Pacific

North Ridge Partners advises tech companies across the Asia Pacific on strategy, capital raising and M&A. We’re experienced dealmakers who have built and sold many tech companies. In partnership with GP Bullhound, we have 200 bankers in 17 global offices.

Contact us here.

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