In a move signaling a more relaxed regulatory approach to the booming AI sector, UK regulators announced they would not investigate Google’s $2 billion investment in AI startup Anthropic. The move mirrors a similar decision regarding Amazon’s earlier $4 billion stake. This green light comes as Amazon doubles, bringing its total investment in Anthropic to $8 billion.

In other news, this week’s roundup includes Huawei’s unveiling of a new chip that challenges U.S. dominance, and Samsung is investing billions in advanced semiconductor R&D.

Overall, the R&D World Index (RDWI) for the week ending November 22, 2024, closed at 3,764.08 for the 25 companies in the RDWI. The Index was up 1.49% (or 55.18 basis points). Twenty RDWI members gained value last week from 0.24% (Eli Lilly & Co.) to 8.77% (IBM). Five RDWI members lost value the previous week from –1.12% (Roche Holdings AG) to –6.16% (Alibaba).

AI R&D

Regulators ease up on AI startups

The United Kingdom’s (UK’s) Competition and Markets Authority (CMA) announced last week that they would not open an investigation into Google’s $2 billion investment into artificial intelligence (AI) startup Anthropic, San Francisco, California, because Google has not acquired the ability to influence Anthropic’s commercial policy materially. Google does not hold board seats or voting rights at Anthropic and has no veto rights over the startup’s strategic commercial decisions. This ruling mirrors a similar decision not to open a formal investigation into Anthropic’s links with Amazon, which invested $4 billion in the startup, stating that they lacked jurisdiction. Last week, Amazon, Seattle announced it was investing an additional $4 billion in Anthropic -doubling its original investment. Amazon, Microsoft, Google, and other tech giants have been pouring money into AI startups as they look for the next version of OpenAI’s ChatGPT.

Technology R&D

Last week, Huawei Technologies in Shenzhen, China, announced the availability of a new advanced semiconductor chip in its latest Mate 70 series of cellular smartphones. Huawei chips were put on a U.S. trade blocklist during the first Trump administration in 2019. The new chips are a security concern for the U.S. and a commercial challenge to Apple, which counts China as its second-largest market for cellphones after the U.S. Specific details on the new Huawei chips were not released. Still, the company said the phones would be installed and will go on sale this week. Huawei has also sidestepped the use of banned Google Android operating systems on its phones by developing its operating systems.

Samsung Electronics, Suwon, South Korea, announced last week that it has installed production equipment at a new integrated R&D complex in Yongin, South Korea, which is scheduled to begin operations in mid-2025. Samsung said it invests $14.3 billion in the facility, becoming a key research base for its memory, system LSI (large-scale integration), and semiconductor foundry businesses. The 109,000 square meter facility is called NRD-K and is located south of Korea’s capital, Seoul, at its Giheung campus. The equipment installed includes extreme ultraviolet (EUV) lithography and new metal deposition systems, which will be used to develop next-generation memory chips, including 3D DRAM and V-NAND with more than 1,000 layers. In the same announcement, Samsung said it had invested $6.4 billion in its R&D efforts in the third quarter of 2024.

Automotive R&D

Robert Bosch, GmbH, Gerlingen, Germany, announced last week that it plans to cut 5,500 jobs at its global plants. The company employs about 429,400 people and has nine central global R&D locations, three each in the U.S., Europe, and Asia. Most job reductions will occur over the next five years and are fueled by subdued automotive sales and intense competition. Other automotive suppliers, including Ford Motor, Mercedes Benz, and Volkswagen, have also announced significant staff reductions, especially in Europe.

Bosch will also cut hours for some 10,000 workers in Germany, according to Reuters.

AI R&D

AI chip maker NVIDIA, Santa Clara, California, announced last week that its third-quarter revenue was about $37.5 billion, topping analysts’ projections. To maintain its leadership, Nvidia is looking into new markets and uses for its chips, including drug discovery applications and humanoid robots, and various countries are pushing to invest in a national AI infrastructure. Nvidia expects so-called sovereign AI investments to add $10 billion to its sales in 2024 from zero in 2023. Analysts currently estimate that the company has over 80% of the AI chip market share.

RDW Index member Microsoft, Redmond, Washington, announced last week that it is working with pharmaceutical and agricultural materials maker Bayer, Leverkusen, Germany, on specialized AI models fine-tuned on industry-specific data. The companies can now list and monetize those models on Microsoft’s online model catalog. For Bayer, that means that an AI model fine-tuned with its data and designed to provide answers on agronomy and crop production is available to be licensed by its distributors. The model can also answer questions about ingredients in an insecticide or what crops it can be applied to.

Corporate news

The Conference Board, New York City, published its Leading Economic Index (LEI) last week, stating that the index fell 0.4% in October, following a 0.3% decline in September. According to the report, the most significant contributor to this decline came from the manufacturing sector, which remained weak in 11 of 14 industries. The October decline was slightly more than economists expected for that month. The LEI fell by 2.2% from April to October, slightly more than the 2.0% decline over the previous six-month period. The LEI is a predictive variable that anticipates turning points in the business cycle by about seven months.

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), 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.

Company	Ticker	Exchange	2020 R&D Billions $	11/15/24	11/22/24	11/15/24 to 11/22/24	1/1/22 to 11/22/24
Alphabet/Google	GOOGL	NASDAQ	27.30	173.89	166.57	-4.21%	14.99%
Microsoft	MSFT	NASDAQ	17.20	415	417	0.48%	23.99%
Volkswagen AG	VWAGY	OTC	17.26	9.13	8.78	-3.83%	-69.93%
Apple	AAPL	NASDAQ	18.67	225	229.87	2.16%	29.45%
Facebook/Meta	META	NASDAQ	13.87	554.08	559.14	0.91%	66.24%
Intel	INTC	NASDAQ	14.50	24.35	24.50	0.62%	-52.43%
Johnson & Johnson	JNJ	NYSE	13.75	154	155.17	0.76%	-9.29%
Roche Holdings AG	RHHBY	OTC	14.14	35.84	35.44	-1.12%	-31.44%
Merck & Co.	MRK	NYSE	11.38	96.31	99.18	2.98%	29.41%
Novartis	NVS	NYSE	9.39	103.06	104.28	1.18%	19.22%
Toyota	TM	NYSE	10.72	172.84	174.40	0.90%	-5.88%
Pfizer	PFE	NYSE	8.34	24.80	25.65	3.43%	-56.56%
Alibaba	BABA	NYSE	6.01	88.59	83.13	-6.16%	-30.02%
GM	GM	NYSE	6.73	57.04	58.53	2.61%	-0.17%
Honda	HMC	NYSE	8.81	25.82	26.66	3.25%	6.29%
Ford	F	NYSE	9.34	11.01	11.18	1.54%	-46.17%
AbbVie	ABBV	NYSE	13.95	164.99	176.95	7.25%	30.69%
Sanofi SA	SNY	NYSE	7.75	47.97	48.28	0.65%	-3.63%
Cisco	CSCO	NASDAQ	6.33	57.46	58.55	1.90%	-7.61%
Bristol-Myers Squibb	BMY	NYSE	7.13	56.22	58.87	4.71%	-5.58%
Astra Zeneca PLC	AZN	NYSE	6.06	63.23	65.63	3.80%	12.67%
IBM	IBM	NYSE	5.37	204.99	222.97	8.77%	66.82%
Oracle	ORCL	NYSE	6.93	183.74	192.29	4.65%	120.49%
Eli Lilly & Co.	LLY	NYSE	8.61	746.20	748.01	0.24%	170.80%
Stellantis NV	STLA	NYSE	5.31	13.34	13.05	-2.17%	-33.21%
Total			269.522	3708.90	3764.08	1.49%	33.49

Industry	11/15/24	11/22/24	11/15/24 to 11/22/24	1/1/22 to 11/22/24
ICT	1927.10	1954.02	1.40%	34.80%
Automotive	289.18	292.60	1.18%	-14.42%
Biopharmaceutical	1492.62	1517.46	1.66%	47.58%