The R&D World Index (RDWI) for the week ending October 18, 2024, closed at 4.022.95 for the 25 companies in the RDWI. The Index was down -0.66% (or -26.77 basis points). Thirteen RDWI members gained value last week from 0.21% (Pfizer) to 4.63% (Cisco). Twelve RDWI members lost value the previous week from -0.05% (Sanofi SA) to -7.00% (Alibaba).
This week’s R&D highlights include Google’s plan to construct seven nuclear reactors in the U.S., Amazon.com’s deal with Databricks to help companies cut costs, OpenAI and Bain’s deal to sell more OpenAI tools to Bain’s clients, and GM getting to the root of EV battery production by investing in lithium.
AI R&D:
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Google to back construction of seven nuclear reactors in US
RDW Index member Google, Mountain View, California, announced last week that it would back the construction of seven small nuclear reactors in the U.S. for 24/7 carbon-free energy to power its artificial intelligence (AI) applications, following Microsoft’s decision to restart a three-mile-island (Pennsylvania) nuclear reactor for the same purpose. Earlier this year, Amazon purchased a data center at another nuclear plant. Like Microsoft, Google would be the sole power customer for these seven reactors. The nuclear energy startup Kairos Power, Alameda, California, will build the reactors, creating 500 MW of nuclear power by 2030. Power demand is rising for the first time in years, much of it driven by the need to build more data centers for AI.
NYT publisher sends Perplexity AI “cease and desist” notice
The publisher of the New York Times sent generative AI startup Perplexity AI, San Francisco, a “cease and desist” notice last week demanding that the firm stop accessing and using its content. The Times is already taking on ChatGPT creator OpenAI, San Francisco, with a similar-based lawsuit pending. The Times joins Forbes and Conde Nast, who have also accused Perplexity of using their materials without permission to generate AI-based search results. Perplexity was launched two years ago by Amazon founder Jeff Bezos, who is trying to mount a challenge against search giant Google. When users type questions into the Perplexity search box on its website, it responds with AI-generated summaries, featured sources, and links.
Amazon.com and Databricks cut AI deal
Amazon.com, Seattle, Washington, and startup Databricks, San Francisco, announced a five-year deal last week that could cut costs for businesses seeking to build their AI capabilities. Databricks said it will use Amazon’s Trainium AI chips to power a service that helps companies customize an AI model or develop their own. Amazon says customers pay less to use its homegrown chips than competitors like Nvidia’s graphics processing units (GPUs). Databricks bought AI startup MosaicMI, Mercer Island, Washington, in 2023 for $1.3 billion and is expanding the acquired company’s services to get a piece of corporate AI deals. Databrick’s revenue stream is from its analytics, AI, and other cloud-based software that taps AI-ready data for companies to build their enterprise technology tools.
Ericsson to expand base in India
Mobile communications company Ericsson, Stockholm, Sweden, announced last week that it plans to expand its R&D base in India for work applications in AI, Generative AI, and application programming interfaces (APIs). The combination of high-performance programmable networks and network APIs, along with a solid Indian community of developers, are expected to lead to significant growth and innovation, according to Ericsson. The company expects to invest more resources in R&D around 6G, network APIs, and AI for applications in fraud detection, device management, security, and secure network interfaces. Ericsson has R&D sites in Chennai, Bengaluru, and Gurugram that work across telecom domains, including transport, Packet Core, OSS, BSS, Cloud, and advanced AI technologies.
OpenAI and Bain to expand pact to sell OpenAI’s tools
OpenAI, San Francisco, and consulting firm Bain & Company, Boston, announced last week that they are expanding their pact to sell OpenAI’s tools, including ChatGPT, to Bain clients. The companies announced a selling partnership in 2023 when they began introducing OpenAI technology to businesses. In August 2024, Bain’s 13,000 consultancies received licenses for ChatGPT Enterprise, the chatbot version targeted at large companies. At the deal’s core is a team building industry-specific AI tools for various sectors, including life sciences.
TSMC posts strong third-quarter results
Demand for AI semiconductor chips continues to expand as Taiwan Semiconductor Manufacturing Company, Hsinchu, Taiwan, posted strong third-quarter results last week and expects revenue from server AI processors for Nvidia’s AI chips to more than triple in 2024 from 2023 levels. However, net bookings for large equipment maker ASML, Veldhoven, Netherlands, for the third quarter were less than half what business analysts expected. ASML also stated that its 2025 revenue is expected to come at the low end of its previous forecast. Forecasts from equipment makers KLA, Applied Materials, and Lam Research were similarly subdued. A few mega customers like TSMC often overpower the semiconductor equipment market.
Automotive R&D:
GM to boost lithium investment
RDW Index member General Motors, Detroit, announced last week that it will boost a planned second investment in Lithium Americas, Vancouver, British Columbia, Canada. The investment will be increased for the miner’s Thacker Pass project in Nevada by nearly 90% to $625 million, giving GM an ownership stake in the mine and producing the critical ingredient for electric vehicle (EV) batteries. GM’s investment follows the U.S. Department of Energy’s $2.26 billion preliminary investment in March 2024 to finance the development of lithium processing facilities at Thacker Pass. This deal comes as GM and Ford Motor, Dearborn, Michigan, have delayed or canceled several EV models as U.S. consumers have been slower to embrace EVs than the automakers had once forecast.
The R&D World Index
R&D World’s R&D Index is a weekly stock market summary of the top international companies involved in R&D. The top 25 industrial R&D spenders in 2020 were selected based on the latest listings from Schonfeld & Associates’ June 2020 R&D Ratios & Budgets. These 25 companies include pharmaceutical (10 companies), automotive (6 companies), and ICT (9 companies), which invested a cumulative total of nearly 260 billion dollars in R&D in 2019, or approximately 10% of all the R&D spending in the world by government, industries, and academia combined, according to R&D World’s 2021 Global R&D Funding Forecast. The stock prices used in the R&D World Index are tabulated from NASDAQ, NYSE, and OTC common stock prices for the companies selected at the close of stock trading business on the Friday preceding the online publication of the R&D World Index.
| Company | Ticker | Exchange | 2020 R&D billions$ | 10/11/24 | 10/18/24 | 10/11/24 to 10/18/24 | 1/1/22 to 10/18/24 |
|---|---|---|---|---|---|---|---|
| Alphabet/Google | GOOGL | NASDAQ | 27.303 | 164.52 | 165.05 | 0.32% | 13.95% |
| Microsoft | MSFT | NASDAQ | 17.198 | 416.32 | 418.16 | 0.44% | 24.33% |
| Volkswagen AG | VWAGY | OTC | 17.259 | 10.54 | 10.35 | -1.80% | -64.55% |
| Apple | AAPL | NASDAQ | 18.667 | 227.55 | 235.00 | 3.27% | 32.34% |
| Facebook/Meta | META | NASDAQ | 13.874 | 589.95 | 576.47 | -4.65% | 71.39% |
| Intel | INTC | NASDAQ | 14.503 | 23.56 | 22.77 | -3.35% | -55.79% |
| Johnson & Johnson | JNJ | NYSE | 13.750 | 161.46 | 165.12 | 2.27% | -3.48% |
| Roche Holdings AG | RHHBY | OTC | 14.143 | 39.18 | 39.56 | 0.97% | -23.47% |
| Merck & Co. | MRK | NYSE | 11.381 | 109.73 | 108.70 | -0.94% | 41.83% |
| Novartis | NVS | NYSE | 9.387 | 116.22 | 117.18 | 0.83% | 33.97% |
| Toyota | TM | NYSE | 10.724 | 174.06 | 171.53 | -1.45% | -7.43% |
| Pfizer | PFE | NYSE | 8.336 | 29.16 | 29.22 | 0.21% | -50.52% |
| Alibaba | BABA | NYSE | 6.006 | 110.14 | 102.43 | -7.00% | -13.77% |
| GM | GM | NYSE | 6.727 | 47.87 | 49.18 | 2.74% | -16.12% |
| Honda | HMC | NYSE | 8.806 | 31.69 | 30.96 | -2.30% | 8.82% |
| Ford | F | NYSE | 9.340 | 10.72 | 11.10 | 3.54% | -46.56% |
| AbbVie | ABBV | NYSE | 13.949 | 194.19 | 188.86 | -2.74% | 39.48% |
| Sanofi SA | SNY | NYSE | 7.750 | 54.96 | 54.93 | -0.05% | 9.64% |
| Cisco | CSCO | NASDAQ | 6.331 | 54.25 | 56.76 | 4.63% | -10.43% |
| Bristol-Myers Squibb | BMY | NYSE | 7.130 | 52.20 | 53.22 | 1.95% | -14.64% |
| Astra Zeneca PLC | AZN | NYSE | 6.056 | 77.35 | 78.26 | 1.18% | 34.35% |
| IBM | IBM | NYSE | 5.368 | 233.26 | 232.20 | -0.54% | 73.72% |
| Oracle | ORCL | NYSE | 6.928 | 175.77 | 174.69 | -0.61% | 100.31% |
| Eli Lilly & Co. | LLY | NYSE | 8.606 | 932.06 | 917.97 | -1.51% | 232.33% |
| Stellantis NV | STLA | NYSE | 5.309 | 13.01 | 13.28 | 2.08% | -32.04% |
| Total | 269.522 | 4049.72 | 4022.95 | -0.66% | 42.67% | ||
| ICT | 115.6 | 1995.32 | 1983.53 | -0.59% | 36.83% | ||
| Automotive | 59.8 | 287.89 | 286.40 | -0.52% | -16.23% | ||
| Biopharmaceutical | 83.6 | 1766.51 | 1753.02 | -0.76% | 70.49% |
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