The R&D World Index (RDWI) for the week ending December 27, 2024, closed at 3,890.59, rising 1.77% (or 67.68 basis points). Automotive stocks, in particular, drove the uptick, with Honda surging by 20.39% after announcing a merger plan with Nissan. Meanwhile, tech giants showed mixed results, as IBM slid slightly (-0.26%) and Microsoft dropped -1.38%. Beyond market performance, notable developments this week include shifts in AI-driven consumer packaged goods R&D, news of corporate restructuring (such as Xerox’s acquisition of Lexmark), and updates on drone legislation regulations. Highlights also include the approval of a new sleep apnea drug from Eli Lilly, Microsoft’s initiative to integrate its Copilot AI tool, and forecasts for technology changes as we move forward to 2025.
Automotive R&D
Honda and Nissan aim to merge in 2026
Honda and Nissan discuss merge. Pictured are the Nissan, Honda, and Mitsubishi CEOs. Image courtesy of Honda
RDW Index member Honda Motor, Tokyo, Japan, and Nissan Motor, Yokohama, Japan, jointly announced last week that they plan to merge in 2026. Honda stated that the action was not a rescue for the financially troubled Nissan but a recognition that developing new technologies is too complex to do alone. Honda invests about $7 billion annually in R&D, while Nissan invests about $2.5 billion. The companies intend to form an automaker that, combined with Nissan partner Mitsubishi Corp., Tokyo, would be the third largest automaker in the world, behind Toyota and Volkswagen. With the industry shifting quickly to AI-driven autonomous vehicles, both firms said they must combine R&D operations and reduce costs to remain competitive. They acknowledged significant hurdles in merging overlapping model lines and large marketing teams. Nevertheless, Nissan and Honda’s shares rallied following the announcement.
Technology & Consumer R&D
CPG industry sees AI-based transformations
An article in the current Forbes issue notes that R&D in the consumer packaged goods (CPG) industry is evolving rapidly as AI-powered platforms reduce the number of physical experiments required for product introductions. These platforms can generate thousands of potential formulation candidates, enabling researchers to combine AI-generated insights with their domain expertise. Forbes indicates that organizations finding the most success integrate results into collaborative R&D processes and redesign development workflows, maintaining a balance of computational and human perspectives.
Study highlights 2025 technology changes
A study in last week’s Wall Street Journal anticipates several key tech shifts in 2025: the integration of AI “intelligent agents” across industries; a reduction in electric vehicle (EV) sales following reduced government subsidies under the Trump administration; increased demand for clean power sources in data centers; a potential TikTok ban taking effect January 19; and the rapid expansion of cryptocurrency, aided by the debut of bitcoin exchange-traded funds (ETFs).
Corporate News
Xerox Holdings to buy Lexmark International
Xerox Holdings, Norwalk, Connecticut, announced last week that it was acquiring Lexmark International, Lexington, Kentucky, for about $1.5 billion, including debt. This move returns Lexmark to U.S. ownership after the printer firm spent several decades under China-based investors following its spin-off from IBM in 1991. The acquisition stands to create a vertically integrated printing equipment and services provider, boosting Xerox’s overall revenue by about one-third. Xerox invests roughly $300 million annually in R&D.
ICT R&D
Chinese AI-based start-ups narrow gap with U.S. AI leaders
Chinese AI-based start-ups are reportedly gaining ground faster than expected despite restrictions on purchasing advanced U.S. AI chips. DeepSeek, one of China’s most prominent AI start-ups, claims its large language model chip performs on par with OpenAI’s newest reasoning model chip, o1. RDW Index member Alibaba, Hangzhou, and Tencent, Shenzhen, funded an AI model that excels at mathematical computations, with performance close to o1. Alibaba also reports early success in testing an in-house experimental AI chip specializing in math.
Microsoft tests forced AI adoption with Copilot
[IBM]
RDW Index member Microsoft, Redmond, Washington, announced last week that it is trialing an aggressive strategy to expand its AI assistant, Copilot. Even users who did not request the feature or opt-in see Copilot pop-ups in Word, Excel, and PowerPoint. Microsoft also raised prices for all Microsoft 365 subscribers in Australia and several Southeast Asian markets to cover Copilot’s costs. Users have reported mixed reactions, citing Copilot’s “help” prompts as intrusive or unexpected. Microsoft has declined to comment on user objections.
Pharmaceutical & Healthcare R&D
FDA approves new Lilly drug for obstructive sleep apnea
[Lilly]
RDW Index member Eli Lilly & Co., Indianapolis, Indiana, revealed last week that the U.S. Food and Drug Administration (FDA) approved Zepbound for obese adults with moderate to severe obstructive sleep apnea. Zepbound is the first prescription medication explicitly indicated for this demographic. Lilly initially launched the drug in November 2023. Obstructive sleep apnea involves partial or complete airway blockages during sleep, which, if untreated, can lead to other complications.
Defense & Security
Drone takedown laws face potential revision
[Adobe stock]
Under current U.S. law, very few entities have legal authority to disable or “take down” a flying drone. Federal agencies, including the FBI and Department of Homeland Security, can do so under narrow circumstances. Recent incidents involving drones targeting infrastructure and mass gatherings have sparked a review of these rules. Current policies treat drones as aircraft, which makes interfering with them a criminal matter. Officials say they are exploring ways to streamline the legal steps required for takedowns, noting that current approval procedures can require extensive paperwork and high-level signoffs.
The R&D World Index
R&D World’s R&D Index is a weekly stock market summary of the top international companies involved in R&D. The top 25 industrial R&D spenders in 2020 were selected based on the latest listings from Schonfeld & Associates’ June 2020 R&D Ratios & Budgets. These 25 companies include pharmaceutical (10 companies), automotive (6 companies), and ICT (9 companies) that invested nearly $260 billion in R&D in 2019 — about 10% of all global R&D expenditures across governments, industries, and academia combined, according to R&D World’s 2021 Global R&D Funding Forecast. The companies’ stock prices below are from NASDAQ, NYSE, and OTC exchanges at market close on the Friday before publication.
| Ticker | Exchange | 2020 R&D Billions $ | 12/20/24 | 12/27/24 | 12/20/24 to 12/27/24 | 1/1/22 to 12/27/24 | ||
|---|---|---|---|---|---|---|---|---|
| 1 | Alphabet/Google | GOOGL | NASDAQ | 27.303 | 192.96 | 194.07 | 0.58% | 33.98% |
| 2 | Microsoft | MSFT | NASDAQ | 17.198 | 436.60 | 430.56 | -1.38% | 28.02% |
| 3 | Volkswagen AG | VWAGY | OTC | 17.259 | 9.41 | 9.43 | 0.21% | -67.71% |
| 4 | Apple | AAPL | NASDAQ | 18.667 | 254.49 | 255.65 | 0.46% | 43.97% |
| 5 | Facebook/Meta | META | NASDAQ | 13.874 | 585.25 | 599.81 | 2.49% | 78.33% |
| 6 | Intel | INTC | NASDAQ | 14.503 | 19.52 | 20.32 | 4.10% | 60.54% |
| 7 | Johnson & Johnson | JNJ | NYSE | 13.750 | 144.47 | 145.05 | 0.40% | -15.21% |
| 8 | Roche Holdings AG | RHHBY | OTC | 14.143 | 34.50 | 35.07 | 1.65% | -32.15% |
| 9 | Merck & Co. | MRK | NYSE | 11.381 | 98.05 | 99.70 | 1.68% | 30.09% |
| 10 | Novartis | NVS | NYSE | 9.387 | 97.11 | 98.39 | 1.32% | 12.48% |
| 11 | Toyota | TM | NYSE | 10.724 | 178.17 | 199.52 | 11.98% | 7.67% |
| 12 | Pfizer | PFE | NYSE | 8.336 | 26.36 | 26.62 | 0.99% | -54.92% |
| 13 | Alibaba | BABA | NYSE | 6.006 | 82.28 | 85.06 | 3.38% | -28.39% |
| 14 | GM | GM | NYSE | 6.727 | 51.81 | 54.28 | 4.77% | -7.42% |
| 15 | Honda | HMC | NYSE | 8.806 | 23.89 | 28.76 | 20.39% | 1.09% |
| 16 | Ford | F | NYSE | 9.340 | 9.88 | 10.03 | 1.52% | -51.71% |
| 17 | AbbVie | ABBV | NYSE | 13.949 | 175.58 | 178.01 | 1.38% | 31.47% |
| 18 | Sanofi SA | SNY | NYSE | 7.750 | 47.71 | 48.73 | 2.14% | -2.73% |
| 19 | Cisco | CSCO | NASDAQ | 6.331 | 58.52 | 59.61 | 1.86% | -5.93% |
| 20 | Bristol-Myers Squibb | BMY | NYSE | 7.130 | 57.33 | 57.68 | 0.61% | -7.49% |
| 21 | Astra Zeneca PLC | AZN | NYSE | 6.056 | 65.35 | 66.26 | 1.39% | 13.75% |
| 22 | IBM | IBM | NYSE | 5.368 | 223.36 | 222.78 | -0.26% | 66.68% |
| 23 | Oracle | ORCL | NYSE | 6.928 | 169.66 | 168.96 | -0.41% | 93.74% |
| 24 | Eli Lilly & Co. | LLY | NYSE | 8.606 | 767.76 | 783.17 | 2.01% | 183.53% |
| 25 | Stellantis NV | STLA | NYSE | 5.309 | 12.89 | 13.07 | 1.40% | -33.11% |
| Total | 269.522 | 3822.91 | 3890.59 | 1.77% | 37.98% | |||
| ICT | 2022.64 | 2036.82 | 0.70% | 40.51% | ||||
| Automotive | 286.05 | 315.09 | 10.15% | -7.84% | ||||
| Biopharmaceutical | 1514.22 | 1538.68 | 1.62% | 49.64% |
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