The R&D World Index (RDWI) for the week ending November 10, 2023, closed at 3,041.10 for the 25 companies in the RDWI. The Index was up 1.92% (or 57.29 basis points). Ten RDWI members gained value last week from 0.26% (Sanofi SA) to 5.52% (Apple) Fifteen RDWI members lost value last week from -0.39% (Roche Holdings AG) to -9.81% (General Motors).
RDW Index member Apple, Cupertino, California, announced its new M3 family of CPUs (central processing units) on October 30 with the first devices (PCs) scheduled to arrive last week. These chips are based on Apple’s 3 nm process which the company has transitioned to from its previous 5 nm process (M5). The core counts for M3 chips are the same as Apple’s M5 chips, except the top-end M3 Max can scale up to a larger 126 GB of Unified Memory. These new chips pose a formidable challenge to Intel’s CPUs. The M3 family is the result of increasing R&D efforts by Apple with about a $8 billion R&D increment over the past two years and $7.5 billion R&D investment per quarter in 2023 or $30 billion for the full fiscal year.
Nvidia, Santa Clara, California, last week announced that it was working on three new AI chips that are customized for China which could be available by the end of 2023. The new chips comply with U.S. regulations that prevented the company from shipping more advanced semiconductors to China without a license. Nvidia is set to send samples of these new chips to potential buyers over the next several weeks. The new chips may help Nvidia make up for more than $5 billion in orders which were put in jeopardy by new U.S. regulations. The new chips fall short of processor performance thresholds which would require a U.S. export license, according to analyst Bernstein Research, Nashville.
Microsoft, Redmond, Washington, last week was reported to temporarily block employee access to its ChatGPT website initially citing security concerns. Access was restored after a short period with the company stating the restrictions were made in error. Microsoft encourages employees and customers to use Bing Chat Enterprise and ChatGPT Enterprise which come with greater levels of privacy and security protections. Though the blockage was temporary, it highlights security concerns that have prompted other companies to restrict the use of ChatGPT and other external AI tools for some employees.
General Motors, Detroit, last week issued a voluntary software recall by Cruise, its self-driving vehicle unit following a suspension of its operating license by the California Department of Motor Vehicles. The suspension was made following an accident where a Cruise vehicle left a pedestrian severely injured. The DMV stated that Cruise had misrepresented information related to the safety of its vehicles’ technology. Cruise has suspended all its driverless operations across the U.S. Cruise said it was working on a software update without any indication of when that will be completed.
Elon Musk announced the first product, a bot named Grok, last week for his xAI startup, San Francisco. Grok will be made available to X’s (formerly Twitter) Premium + subscribers after beta testing with a limited group of users. Grok is designed for search tasks including information retrieval and coding assistance. Musk created Grok as an alternative AI option to Google and Microsoft’s OpenAI tools. Supposedly, Grok will answer questions that are rejected by most other AI systems.
Foreign firms are pulling their investments out of China, according to a recent study by Macrobond, Malmo, Sweden. This move is being made due to a slowing Chinese economy and continuing tensions between the U.S. and China. Foreign firms have pulled more than $160 billion in total earnings from China during six successive quarters through the end of September 2023 according to an analysis of China data. The outflow of earnings leaving China has pushed overall direct investment in China into the red in Q3 of 2023 for the first time in 25 years. The yuan depreciated 5.7% against the U.S. dollar in 2023 and hit its lowest level in more than a decade in September 2023.
Intel, Santa Clara, California, is the leading semiconductor maker to receive money under the U.S. government’s $53 billion Chip Act. If finalized, Intel’s secure facilities for producing microchips for U.S. military and intelligence applications would be explicitly designated as a secure enclave. This operation would at least reside at Intel’s massive Arizona factory complex. The U.S. Department of Commerce’s CHIPS program office, which oversees the Chips Act disbursements, will begin distributing manufacturing grants over the next several weeks.
Some biotechnology startup companies are now receiving capital from Saudi Arabia as U.S. venture funding slows and Middle Eastern countries look to boost their life-science operations. Aramco Ventures, a subsidiary of Saudi Arabia’s national oil company is one organization looking to diversify its operations. The United Arab Emirates (UAE) is also participating in these funding operations. These investments pose some political and ethical challenges as the U.S. government cites the countries for human rights abuses. The often-U.S. startups are establishing R&D centers in the Arab countries with the Arab-supplied seed monies. Chad Mirkin, director of the International Institute for Nanotechnology at Northwestern University, Evanston, Illinois, states that the “U.S. venture market is stressed and becoming a lot more conservative.”
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) which invested a cumulative total of nearly 260 billion dollars in R&D in 2019, or approximately 10% of all the R&D spending in the world by government, industries, and academia combined, according to R&D World’s 2021 Global R&D Funding Forecast. The stock prices used in the R&D World Index are tabulated from NASDAQ, NYSE, and OTC common stock prices for the companies selected at the close of stock trading business on the Friday preceding the online publication of the R&D World Index.