What We Learned This Week

Beast on Prime: Amazon recently secured a deal with YouTube star Mr. Beast for a reality game show on Prime Video, offering the largest cash prize in reality TV history at $5 million. This strategic move underscores Amazon's commitment to diverse content and marks Mr. Beast's first foray into traditional media. With his extensive online following, including 245 million subscribers and over 50 billion views (his most-viewed video is a reenactment of the Netflix hit "Squid Game" which has 58 million views and counting), Mr. Beast brings significant reach to the platform. This partnership presents an opportunity to engage younger audiences with the Amazon and Prime brands through compelling content. It's a development worth observing as it unfolds.

Apple and Google Fighting to Make Up Lost Ground: Apple and Alphabet are reportedly engaged in serious discussions regarding the integration of Alphabet's generative AI platform, Gemini, into future releases of iOS software. This marks a significant move for both companies, particularly as they are perceived as relative laggards in AI development within the big tech cohort. Apple's recent emphasis on AI's importance in its product roadmap and its substantial investment in AI resources further underscores the significance of this potential partnership. For Apple, it could translate into substantial contract revenue, further leveraging Alphabet's reported annual payment of nearly $20 billion for being the default search engine. Additionally, integrating off-device AI compute capabilities could enhance future iOS versions, allowing for more sophisticated AI tasks alongside on-device processing integration. For Alphabet, this partnership presents a high-profile opportunity to gain ground against competitors by potentially reaching over 2 billion iPhones worldwide. If realized, it could be a mutually beneficial arrangement, alleviating negative investor sentiment regarding perceived AI progress stagnation.

Chipotle Cuts its Stock Price: Chipotle made headlines this week with its announcement of a 50 for 1 stock split, signaling a nod to smaller retail investors. With shares trading near $3000, the move aims to make ownership more accessible to a broader investor base. While a stock split doesn't fundamentally alter the company's value, it often broadens the shareholder base, potentially lifting the stock price (never a reason to buy a stock). This strategy is common among companies seeking to diversify their investor profile, particularly when institutional ownership becomes dominant. While institutional investors may prefer higher stock prices for reduced transaction costs, catering to retail investors can add diversity to the stock's influence in varying market conditions.

In a League of their Own: Nvidia once again demonstrated its pivotal role in the emerging AI revolution at its annual developer conference this week, likened in significance to major events such as Apple’s product launches and Warren Buffett’s annual shareholder meetings. Introducing its latest generation of GPUs, dubbed Blackwell, just two years after the groundbreaking H100 chips, Nvidia solidifies its position as a key player in AI advancement. The new chips boast impressive improvements, offering up to 30 times faster performance and consuming 25 times less power than their predecessors. While pricing details were not disclosed, previous H100 chips commanded hefty prices ranging from $25,000 to $40,000 per chip, with entire systems costing as much as $200,000. Despite these high costs, demand soared, resulting in lengthy wait times of up to 11 months. With major partnerships already in place with industry giants like Amazon, Alphabet, and Oracle, Nvidia's success seems assured. Testimonials from prominent tech CEOs further underscore the company's indispensable role in shaping the future of technology. Despite challenges, Nvidia continues to defy expectations and maintain its leading position in the field.