In this week’s R&D Market Pulse, the $29.1 billion Constellation-Calpine mega-merger promises to reshape U.S. energy, the Commerce Department awards a third CHIPS for America facility to Arizona State University, and new AI export restrictions put China on notice. Meanwhile, Elon Musk’s xAI rolls out a consumer app, BlackRock withdraws from a major climate initiative, and the R&D Index dips –0.55% amid tech-stock volatility.
The R&D World Index (RDWI) for the week ending January 10, 2025, closed at 3,841.32 for the 25 companies in the Index — down –0.55% (or –21.17 basis points). Ten RDWI members gained value last week (led by Volkswagen AG at +3.96%), and thirteen lost value (with Oracle sliding –at 7.11%). Two members saw no net change (Honda and Stellantis).
Here’s a longitudinal look at the index over the past five years:
5-year performance of a market cap weighted R&D Index, based on 25 top R&D spending companies.
Below, we highlight key developments, from CHIPS Act facility awards to significant energy, biotech, and AI announcements.
Government & energy R&D
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Biden administration further limits global AI chip sales
The Biden administration moved to limit the global sale of artificial intelligence (AI) chips and the equipment used to manufacture them within the past two weeks by passing “the mother of all regulations”. This policy move has the tacit approval of the Republican-led House committee, calling it a “once-in-a-generation moment” to block China’s militaristic technology ambitions. President-elect Trump, who takes office next week, is expected to be just as hawkish on China’s attempts to obtain U.S. technologies, according to Trump spokespeople.
The administration’s latest directive, characterized by Fortune magazine as a “last-minute bombshell,” introduces comprehensive controls over both hardware components and algorithmic assets. The framework establishes stringent oversight of modern AI chips and, notably, extends the regulatory scope to encompass proprietary model weights—the fundamental neural network parameters that constitute the computational foundation of contemporary generative AI systems.
The regulatory architecture implements a nuanced, three-tier classification system for global technology transfer. The United States and 18 strategic allies—including Britain, Canada, Germany, Japan, South Korea, and Taiwan—maintain unrestricted access to advanced AI components. Meanwhile, nations under existing restrictions, especially China and Russia, face continued comprehensive procurement limitations. The framework introduces a novel intermediate category encompassing other nations, including established U.S. partners such as Mexico, Switzerland, Poland, and Israel, who must now navigate negotiable quantitative restrictions on AI chip imports.
Nvidia’s vice president of government affairs, Ned Finkle, characterized the 200+ page regulatory framework as “misguided” and “sweeping overreach,” highlighting concerns about implementation methodology and legislative review processes.
Despite prior GPU export controls, Chinese AI firms like DeepSeek continue to make major strides. DeepSeek’s newly launched “DeepSeek-V3” LLM (671 billion parameters, MoE architecture) was trained on NVIDIA H800 GPUs (less powerful than blocked GPUs such asNVIDIA’s H100 and H200 series that will feature in xAI’s ‘Colossus’ — see below under “Technology & software”) at a fraction of typical training costs.
Figure: Benchmark performance comparison across leading language models, showing evaluation metrics for DeepSeek-V3 and its counterparts. The visualization presents performance scores across five key benchmarks: MMLU-Pro (testing multi-task knowledge), GPQA-Diamond (graduate-level reasoning), MATH-500 (mathematical problem-solving), Codeforces (competitive programming), and SWE-bench Verified (software engineering tasks). DeepSeek-V3 demonstrates superior performance in mathematical reasoning (90.2% on MATH-500) and competitive programming (51.6% on Codeforces) compared to other open-source models, while achieving comparable results to closed-source models like Claude-3.5 across various metrics. Data sourced from “DeepSeek-V3 Technical Report” (DeepSeek-AI, December 2024 / arXiv:2412.19437v1).
[Adobe Stock]
BlackRock withdraws from Net Zero initiative
Asset manager BlackRock, New York City, announced last week that it was withdrawing from the United Nations (UN)-sponsored international climate initiative, Net Zero Asset Managers Initiative. Companies have been broadly pulling back from initiative related to climate change and diversity equity and inclusion ahead of the second Trump administration. Trump is expected to roll back related regulations.
Constellation Energy scoops up Calpine for $29.1B
Constellation Energy, Baltimore, Maryland, announced last week that it will buy privately held Calpine, Houston, Texas, for $29.1 billion, including $12.7 billion of net debt. Constellation is the owner of America’s largest nuclear power facilities and Calpine is the owner of America’s largest natural gas power fleet. The deal, according to analysts, is a win-win for both parties and gives Constellation more exposure to Texas—the fastest growing power market—and to California.
Academic & research
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Commerce awards third CHIPS Facility to ASU
Arizona State University Research Park, Tempe, was named as the third CHIPS for America R&D facility last week by the U.S. Department of Commerce and its nonprofit Natcast—a purpose built entity created to operate the National Semiconductor Technology Center consortium. This new Tempe facility will focus on semiconductor prototyping and packaging and be operational by the end of 2028. This award follows awards announced in 2024 for a design and collaboration facility in Sunnyvale, California expected to open this year and an extreme ultraviolet accelerator in Albany, New York expected to begin operations in 2026. The Tempe facility will benefit from proximity to Arizona’s large semiconductor industry with major manufacturers including Taiwan Semiconductor Manufacturing Compay (TSMC), Hsinchu, Taiwan, and Intel, Santa Clara, California, each growing their presence within Arizona.
Technology & software
Elon Musk’s xAI readies “Grok” consumer app
Elon Musk’s AI startup, xAI, launched its first stand-alone consumer app, Grok, last week, as noticed in Apple’s App Store. Users were able to use the app free of charge. Apple’s description of the product stated that it was an early beta product and that it was being introduced to the U.S. for iOS. xAI is reportedly plotting an expansion of its Colossus supercomputer to include at least one million GPUs, which could dwarf other top-tier HPCs.
This chart visualizes estimated total cores (CPU + GPU) for El Capitan and xAI’s planned Colossus suppercomputer at different phases (100k, 200k, and a future 1 million GPUs).
[Adobe Stock]
Microsoft plans $3 billion AI and cloud expansion in India
RDW Index member Microsoft, Redmond, Washington, announced last week that it plans to spend $3 billion over the next two years to expand its cloud and AI infrastructure in India. This investment is the company’s single largest expansion in India to date. The company plans to grow its Azure cloud business in India and set up new data centers. Microsoft currently has three data-center clusters in India with a fourth in the works along with capacity builds with telecommunications company Jio, a subsidiary of Indian conglomerate Reliance Industries. Microsoft plans to invest $80 billion in AI data centers in its current fiscal year ending in June, 2025.
Synopsys-Ansys merger wins UK regulator go-ahead
The semiconductor chip design software group of Synopsys’, Sunnyvale, California, $35 billion purchase of Ansys, Canonsburg, Pennsylvania, was approved last week by the United Kingdom’s Competition and Markets Authority. The approval was made following the companies’ sell off of business units that concerned the regulator. Both companies struck deals with Keysight, Santa Rosa, California, to divest themselves of Synopsys’ Optical Solutions Group and Ansys’ PowerArtist software tool in recent months to secure regulatory approval for the merger. The company now expects to close its transaction by June 2025.
Healthcare & public health
AMD invests $20M in drug-discovery firm Absci
Advanced Micro Devices (AMD), Santa Clara, California, announced last week that it is investing $20 million in drug-discovery firm Absci, Seattle, Washington. AMD is looking to sell its AI chips in the healthcare sector and its partnership with Absci is expected to reduce hardware costs and optimize AI solutions. Drug discovery efforts involving AI require immense amounts of computational power which is a reason for Absci’s partnership with AMD. Wet lab research for drugs is quickly changing to AI-based solutions, which has directly affected the computational budgets of drug developers.
The site in Dundlak, Ireland [WuXi Biologics]
WuXi Biologics to sell Irish vaccine plant to Merck
Contract drug developer and manufacturer WuXi Biologics, Shanghai, China, announced last week that it will sell its vaccine manufacturing facility in Dundalk, Ireland, to RDW Index member Merck & Co, Rahway, New Jersey for $500 million. The deal is expected to close in the first half of this year. The sale will allow the company to realize its investment in the assets and focus on providing contract vaccine services from its sites in Suzhou, China. In 2023, the site won recognition from the International Society for Pharmaceutical Engineering (ISPE) as the Facility of the Year Award (FOYA) in the Operations category. WuXi noted then that the site was “one of the largest facilities of its kind in Europe.”
The R&D World Index
R&D World’s R&D Index is a weekly stock market summary of the top international companies engaged in R&D. The top 25 industrial R&D spenders in 2020 were identified by Schonfeld & Associates’ June 2020 R&D Ratios & Budgets report. This group — spanning pharmaceuticals (10 companies), automotive (6), and ICT (9) — collectively spent nearly $260 billion on R&D in 2019, about 10% of total global R&D across government, industries, and academia, based on R&D World’s 2021 Global R&D Funding Forecast. Index stock prices are from NASDAQ, NYSE, and OTC, measured at market close on the Friday before publication.
R&D World Index Week Ending January 10, 2025
| Ticker | Exchange | 2020 R&D Billions $ | 01/03/25 | 01/10/25 | 1/3/25 to 1/10/25 | 1/1/22 to 1/10/25 | ||
|---|---|---|---|---|---|---|---|---|
| 1 | Alphabet/Google | GOOGL | NASDAQ | 27.303 | 193.13 | 193.17 | 0.01% | 33.36% |
| 2 | Microsoft | MSFT | NASDAQ | 17.198 | 423.35 | 418.95 | -1.04% | 24.57% |
| 3 | Volkswagen AG | VWAGY | OTC | 17.259 | 9.10 | 9.46 | 3.96% | -67.60% |
| 4 | Apple | AAPL | NASDAQ | 18.667 | 243.36 | 236.85 | -2.68% | 33.38% |
| 5 | Facebook/Meta | META | NASDAQ | 13.874 | 604.63 | 615.86 | 1.86% | 83.10% |
| 6 | Intel | INTC | NASDAQ | 14.503 | 20.56 | 19.15 | -6.86% | -62.82% |
| 7 | Johnson & Johnson | JNJ | NYSE | 13.750 | 144.19 | 142.06 | -1.48% | -16.96% |
| 8 | Roche Holdings AG | RHHBY | OTC | 14.143 | 35.18 | 36.46 | 3.64% | -29.46% |
| 9 | Merck & Co. | MRK | NYSE | 11.381 | 99.14 | 99.25 | 0.11% | 29.50% |
| 10 | Novartis | NVS | NYSE | 9.387 | 97.64 | 99.08 | 1.47% | 13.27% |
| 11 | Toyota | TM | NYSE | 10.724 | 195.25 | 183.47 | -6.03% | -0.99% |
| 12 | Pfizer | PFE | NYSE | 8.336 | 26.59 | 26.72 | 0.49% | -54.75% |
| 13 | Alibaba | BABA | NYSE | 6.006 | 85.54 | 80.53 | -5.86% | -32.21% |
| 14 | GM | GM | NYSE | 6.727 | 51.77 | 49.85 | -3.71% | -14.98% |
| 15 | Honda | HMC | NYSE | 8.806 | 28.65 | 28.65 | 0.00% | 0.70% |
| 16 | Ford | F | NYSE | 9.340 | 9.88 | 9.65 | -2.33% | -53.54% |
| 17 | AbbVie | ABBV | NYSE | 13.949 | 181.22 | 175.17 | -3.34% | 29.37% |
| 18 | Sanofi SA | SNY | NYSE | 7.750 | 48.15 | 48.73 | 1.20% | -2.73% |
| 19 | Cisco | CSCO | NASDAQ | 6.331 | 58.86 | 58.74 | -0.20% | -7.31% |
| 20 | Bristol-Myers Squibb | BMY | NYSE | 7.130 | 56.57 | 55.83 | -1.31% | -10.46% |
| 21 | Astra Zeneca PLC | AZN | NYSE | 6.056 | 66.25 | 67.01 | 1.15% | 15.04% |
| 22 | IBM | IBM | NYSE | 5.368 | 222.65 | 219.75 | -1.30% | 64.41% |
| 23 | Oracle | ORCL | NYSE | 6.928 | 166.32 | 154.50 | -7.11% | 77.16% |
| 24 | Eli Lilly & Co. | LLY | NYSE | 8.606 | 781.98 | 799.90 | 2.29% | 189.59% |
| 25 | Stellantis NV | STLA | NYSE | 5.309 | 12.53 | 12.53 | 0.00% | -35.88% |
| Total | 269.522 | 3862.49 | 3841.32 | -0.55% | 36.23% | |||
| ICT | 2018.40 | 1997.50 | -1.04% | 37.79% | ||||
| Automotive | 307.18 | 293.61 | -4.42% | -14.12% | ||||
| Biopharmaceutical | 1536.91 | 1550.21 | -0.87% | 50.76% | ||||
Note: Stock prices are from NASDAQ, NYSE, and OTC at close of business on the Friday prior to publication.
