R&D Market Pulse: Biden blocks $14.1B US Steel-Nippon deal, tech stocks drop

The R&D World Index (RDWI) for the week ending January 3, 2025, closed at 3,862.49 for the 25 companies in the RDWI — down –0.72% (or -28.10 basis points). Five RDWI members gained value last week, led by AbbVie (+1.80%), while Roche Holdings AG rose the least (+0.31%). Meanwhile, twenty RDWI members dipped, ranging from a slight -0.02% (Astra Zeneca) to –1.81% (Apple). Below, we highlight key developments, from major steel and software acquisitions to automotive expansions, aerospace manufacturing reforms, and new public health proposals.

Industrial & Manufacturing R&D

U.S. Steel sale to Japan blocked

President Biden blocked the $14.1 billion sale of U.S. Steel (Pittsburgh, Pennsylvania) to Nippon Steel (Tokyo, Japan) last week following months of review by the Committee on Foreign Investment in the U.S. (Cfius). Nippon Steel, the world’s fourth-largest steelmaker, sought to enter the American market where tariffs have kept prices high. Company officials plan to challenge the decision on due process grounds. U.S. Steel warns that the blockage could force plant closures and production shifts to lower-cost facilities. The prospective deal had stirred opposition from steelworker unions, community leaders, and political candidates, who cited national security and domestic labor concerns. U.S. Steel and Nippon Steel are suing to allow the sale.

Automotive

BYD Auto reaches record R&D workforce

BYD Auto (Shenzhen, China) announced last week that it has grown its workforce to nearly one million employees. Among them are 110,000 engineers and staff across 11 major research institutes, making BYD the automaker with the largest R&D headcount in the world. More than 50,000 college graduates have joined over the past three years — two-thirds hold Master’s or Doctorate degrees, and about 80% serve in R&D roles. The company also plans to build a new automotive plant in Indonesia, which is projected to begin operations by the end of 2025.

Technology & software

NVIDIA finalizes Run:ai acquisition

Nvidia (Santa Clara, California) confirmed last week that it has closed its acquisition of Run:ai (Tel Aviv, Israel). Run:ai’s software helps data centers optimize Nvidia’s AI chips, allowing maximum performance with potentially fewer GPU resources. Regulators in the U.S. and Europe examined the deal, noting that Run:ai’s capabilities might reduce Nvidia’s hardware sales. Nvidia executives emphasized that Run:ai software would become open source, enabling users to modify and integrate the technology more efficiently.

IBM’s $6.4b Hasicorp deal faces UK antitrust review

RDW Index member IBM, Armonk, New York, announced last week that its planned $6.4 billion takeover of HashiCorp, San Francisco, was being reviewed by the United Kingdom’s antitrust watchdog, the Competition and Market Authority, which was inviting comments from interested parties by January 16, 2025. IBM’s deal to buy HashiCorp would extend its push into cloud and AI as those offerings drive growth. HashiCorp makes tools and products that help its customers set up cloud infrastructures.

Aerospace & defense

Boeing’s surprise inspections address manufacturing crisis

Boeing, Crystal City, Virginia, announced last week that it is conducting surprise inspections at its production facilities as part of a broader plan to prevent manufacturing problems like the one that led to a jet-panel blowout on an Alaska Air flight in early 2024, Boeing outlined more than a dozen steps it has taken in the past few months to address a manufacturing quality crisis that forced the company to slow production and resulted in extensive scrutiny by federal regulators. Among the new quality measures are increased fuselage inspections by Boeing supplier Spirit Aerosystems before they leave Spirit’s factory, additional worker training, and confidentiality safeguards for employees who report problems. Simplified instructions for building aircraft were also put in place.

Academic & research

MIT study shows AI shortens discovery process

Research announced last week by Aidan Toner-Rodgers at MIT reveals that AI tools can dramatically accelerate materials science research. Scientists can specify desired characteristics for new compounds, and an AI tool generates candidate recipes for researchers to evaluate. Toner-Rodgers’ research, based on studying 1,018 scientists at a large U.S. firm’s R&D lab, showed that after implementing an AI tool, researchers discovered 44% more materials, leading to a 39% increase in patent filings and a 17% rise in downstream product innovation. The tool’s impact was notably uneven — while top-performing scientists nearly doubled their output, the bottom third saw minimal gains. When exploring the mechanisms behind the findings, Toner-Rodgers found that AI automates 57% of “idea-generation” tasks while also reallocating researchers to the new task of “evaluating model-produced candidate materials.”

 

Healthcare & public health

U.S. Surgeon General proposes new alcohol warning labels

The U.S. Surgeon General, Vice Admiral Vivek H. Murthy, last week said that alcoholic beverages, including beer, wine, and spirits, should have a label indicating the risk of cancer. An act of Congress would be required to change the existing warning labels on
these consumables. Current labels only require a warning against drunken driving and drinking while pregnant and also that drinking may cause health problems. However, recent and well-established research reveals that alcohol is a preventable cause of cancer that is responsible for about 100,000 cases of cancer deaths annually in the U.S. But most Americans are unaware of this risk, according to Murthy. It’s unlikely that his proposal will get bipartisan support in Congress, which has not adopted significant legislation in the alcohol industry since 1988.

Government & energy

DOE’s BETO to fund sustainable propane and algae R&D

Last week, the U.S. Department of Energy’s (DOE’s) Bioenergy Technologies Office (BETO) announced that it will fund R&D projects on sustainable propane and renewable chemicals and algal system cultivation and preprocessing. According to BETO, producing chemicals and propane from domestic renewable feedstock could help improve domestic supply chains by increasing energy efficiency and reducing greenhouse gas emissions. Funding for both programs is expected to be released this month and should last about three years.

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), automotive (6), and ICT (9) organizations, collectively investing nearly $260 billion in R&D in 2019 — about 10% of global R&D spending by governments, industries, and academia, as reported in R&D World’s 2021 Global R&D Funding Forecast. The index quotes below reflect the Friday closing prices before online publication.

R&D World Index Week Ending January 3, 2025

#	Company	Ticker	Exchange	2020 R&D Billions $	12/27/24	01/03/25	12/27/24 to 1/3/25	1/1/22 to 1/3/25
1	Alphabet/Google	GOOGL	NASDAQ	27.303	194.07	193.13	-0.48%	33.33%
2	Microsoft	MSFT	NASDAQ	17.198	430.56	423.35	-1.67%	25.88%
3	Volkswagen AG	VWAGY	OTC	17.259	9.43	9.10	-3.50%	-68.84%
4	Apple	AAPL	NASDAQ	18.667	255.65	243.36	-4.81%	37.05%
5	Facebook/Meta	META	NASDAQ	13.874	599.81	604.63	0.80%	79.76%
6	Intel	INTC	NASDAQ	14.503	20.32	20.56	1.18%	-60.08%
7	Johnson & Johnson	JNJ	NYSE	13.750	145.05	144.19	-0.59%	-15.71%
8	Roche Holdings AG	RHHBY	OTC	14.143	35.07	35.18	0.31%	-31.94%
9	Merck & Co.	MRK	NYSE	11.381	99.70	99.14	-0.56%	29.36%
10	Novartis	NVS	NYSE	9.387	98.39	97.64	-0.76%	11.63%
11	Toyota	TM	NYSE	10.724	199.52	195.25	-2.14%	5.37%
12	Pfizer	PFE	NYSE	8.336	26.62	26.59	-0.11%	-54.97%
13	Alibaba	BABA	NYSE	6.006	85.06	85.54	0.56%	-27.99%
14	GM	GM	NYSE	6.727	54.28	51.77	-4.62%	-11.70%
15	Honda	HMC	NYSE	8.806	28.76	28.65	-0.38%	0.70%
16	Ford	F	NYSE	9.340	10.03	9.88	-1.50%	-52.43%
17	AbbVie	ABBV	NYSE	13.949	178.01	181.22	1.80%	33.84%
18	Sanofi SA	SNY	NYSE	7.750	48.73	48.15	-1.19%	-3.89%
19	Cisco	CSCO	NASDAQ	6.331	59.61	58.86	-1.26%	-7.12%
20	Bristol-Myers Squibb	BMY	NYSE	7.130	57.68	56.57	-1.92%	-9.27%
21	Astra Zeneca PLC	AZN	NYSE	6.056	66.26	66.25	-0.02%	13.73%
22	IBM	IBM	NYSE	5.368	222.78	222.65	-0.06%	66.58%
23	Oracle	ORCL	NYSE	6.928	168.96	166.32	-1.56%	90.71%
24	Eli Lilly & Co.	LLY	NYSE	8.606	783.17	781.98	-0.15%	183.10%
25	Stellantis NV	STLA	NYSE	5.309	13.07	12.53	-4.13%	-35.88%
Total				269.522	3890.59	3862.49	-0.72%	36.98%
ICT					2036.82	2018.40	-0.90%	39.24%
Automotive					315.09	307.18	-2.51%	-11.30%
Biopharmaceutical					1538.68	1536.91	-0.12%	49.47%

 

Note: Stock prices are from NASDAQ, NYSE, and OTC at close of business on the Friday prior to publication.