Stepmark Partners

A recent 3% inflation reading indicates more entrenched inflation, suggesting prolonged price pressures. The U.S. added 143,000 jobs in January with unemployment at 4% and wages up 4.1%. Trump’s 25% tariffs on steel and aluminum, combined with trade tensions, add more uncertainty to inflation—though strong earnings have propelled U.S. stocks near record highs. Meanwhile, Elon Musk and the Department of Government Efficiency (DOGE) are embroiled in a lawsuit over alleged unauthorized access to government records. Apple is reportedly aiming for humanoid robot mass production by 2028, and Sunday’s Super Bowl drew a record 127.7 million viewers, thanks partly to free streaming. // Top 5 AI highlights // [1] ??OpenAI will merge the “o” series into GPT-5, unifying all tools and phasing out standalone o-models. Sam Altman expects AI costs to drop tenfold yearly, comparing it to a faster-than-Moore’s Law trend. Read more from BI: https://lnkd.in/gDMvJJJZ and X: https://lnkd.in/guqF2_EA. [2] ??Elon Musk’s consortium offered $97.4 billion for OpenAI’s nonprofit arm, though estimates place its worth at $40 billion. Musk says he will withdraw if the board stops its for-profit shift. Meanwhile, OpenAI aims to produce its own AI chips by 2026 and recently aired a $14 million Super Bowl ad. More from Reuters: https://lnkd.in/g6-pDMqP and TC: https://lnkd.in/gMEi-bK3. [3] ??President Macron unveiled a €109 billion AI investment to position France as a global leader, focusing on data centers and leveraging the country’s nuclear energy surplus. Startups like Mistral and LightOn are key contributors to French AI growth. Read more from TC: https://lnkd.in/gHxZiUnn. [4] ???Vice President JD Vance, in Paris, called for dismantling EU AI regulations, stressing an America First approach and urging allies to favor U.S.-made chips. The U.S. and U.K. notably declined to sign a universal AI agreement. More from WSJ: https://lnkd.in/gJ9dpwU5. [5] ??Former OpenAI chief scientist Ilya Sutskever’s startup, Safe Superintelligence (SSI), aims for a $20 billion valuation while emphasizing AI safety over quick commercialization. Founded with Daniel Gross and Daniel Levy, SSI remains secretive but has drawn major interest. Former OpenAI members such as John Schulman continue to join new ventures. More from YF: https://lnkd.in/gZ8WGfzS and TC: https://lnkd.in/g67U4EX6.

Trump paused 25% tariffs on Mexico and Canada after boosting border security. He also imposed a 10% tariff on Chinese imports, prompting Beijing’s swift retaliation with new tariffs and export restrictions. U.S. job openings fell to 7.16 million from 8.15 million in November, though the private sector hired 183,000 in January. Manufacturing expanded for the first time since 2022, spurred by higher orders and output. In tech, Google ended its DEI program—after Meta’s move—while Meta considers reincorporating from Delaware to Texas over legal issues. Trump also signed an order to create a U.S. sovereign wealth fund that could acquire TikTok. The Beatles won a Grammy on Sunday for an AI-assisted version of 1973’s “Now and Then.” // Top 5 AI highlights // [1] ??OpenAI introduced a “deep research” feature for ChatGPT Pro and released the o3 mini reasoning model 11 days after DeepSeek’s R1 launch. A trademark filing shows interest in hardware from wearables to humanoid robots, reflecting recent robotics hires and a rumored custom chip. The tool accepts text, images, PDFs, and spreadsheets. OpenAI also plans its first Super Bowl ad on Sunday. Read from The Verge: https://lnkd.in/g-tU69G4, TC: https://lnkd.in/gjEfsPyx, and WSJ: https://lnkd.in/gQ8xedHr [2] ???♂?Google’s DeepMind Gemini 2.0 ushers in a new era of agentic AI with advanced multimodal abilities. The Gemini 2.0 Flash model is available via the Gemini API in Google AI Studio, Vertex AI, and the Gemini app, offering image generation, text-to-speech, and deep research. Early prototypes like Project Astra and Project Mariner, refined with user feedback and powered by custom Trillium TPUs, set a new benchmark. More from Google: https://lnkd.in/gkCgiY_R [3] ??Alphabet CEO Sundar Pichai plans to invest about $75 billion in 2025, well above the $59.73 billion consensus. Most spending will go to servers, data centers, and networking to support Google’s AI growth. The company expects $16–18 billion in Q1 spending and will boost AI and Cloud hiring. More from CNBC: https://lnkd.in/gy6uJxeZ [4] ??Amazon plans to spend $100 billion on capital expenditures in 2025, up from $83 billion last year, mainly to expand AWS AI infrastructure with more data centers, networking, and custom chips. Q4 CapEx reached $26.3 billion, signaling a strong investment pace. CEO Andy Jassy sees AI as a "once-in-a-lifetime opportunity," despite rising investor skepticism. Amazon’s spending surpasses Microsoft ($80B), Alphabet ($75B), and Meta ($65B). Details on CNBC: https://lnkd.in/eS2NHd-T [5] ??Figure AI is ending its OpenAI partnership to focus on in-house AI for humanoid robots after a breakthrough in end-to-end AI that promises scalable robotics. This mirrors the move toward proprietary AI integrated with specialized hardware. Read more from X: https://lnkd.in/gk5gi3QV

??Breakthrough innovations and strategic investments defined 2024's AI ecosystem. Starting in 2025, our monthly AI Financing series will highlight key developments and financing activities for AI. January's report includes the Stargate Project, DeepSeek's breakthrough, and OpenAI's latest model update with a potential new valuation. Access it here: https://lnkd.in/e9wSY9cv Stay ahead of the curve. Join us in exploring the transformative AI landscape #AIInnovation #TechInvestments #AITrends2025

For the final week of January, on Monday, $1 trillion was lost in market value after DeepSeek’s cost-effective training method called into question AI spending. The market partially recovered this week as tech earnings indicated no pullback in CapEx despite DeekSeek’s breakthrough. The Fed met on Wednesday and maintained the benchmark rate of 4.25% to 4.5%, amid inflation concerns. The Department of Commerce reported US GDP grew 2.3% in Q4 2024, short of the expected 2.5%. Microsoft is rumored to be in talks to keep TikTok in the US. Elsewhere, banks are planning to sell as much as $3 billion in debt from the buyout of X. Finally, President Trump vows 25% tariffs on Canada and Mexico starting this Saturday that could disrupt nearly $1.6 trillion in annual trade. // Top 5 AI highlights // [1] ??Chinese AI startup DeepSeek has dethroned ChatGPT as the most downloaded free app on the U.S. App Store. Additionally, Perplexity has added DeepSeek R1 to support web research, Despite concerns about DeepSeek using prohibited access to OpenAI, Microsoft (OpenAI’s exclusive partner) is offering R1 on its Azure Platform. Read more from CNBC: https://lnkd.in/eQm48kQF and Bloomberg: https://lnkd.in/ghTuWXGx [2] ??Meta plans to significantly boost its CapEx to $60–$65 billion in 2025, up from $38–$40 billion in 2024. Much of that will fund the expansion of data centers needed for its AI initiatives. The company also aims to secure 1.3 million GPUs this year and hire additional AI engineers. Meanwhile, Microsoft and other tech giants are making similarly large bets on infrastructure, signaling an escalating “arms race” in AI. More information on Reuters: https://lnkd.in/dzuEJAJV [3] ???On Tuesday, OpenAI unveiled ChatGPT Gov, a secure AI platform for U.S. government agencies. Aimed to launch “within a month,” ChatGPT Gov is capable of a multitude of tasks, ranging from legal and compliance work to law enforcement and healthcare. Despite heavy popularity with government employees, the platform faces scrutiny over AI's potential harms, including bias and privacy concerns. On Thursday, they were rumored to raise $40 billion at a $340B Valuation. Read more CNBC: https://lnkd.in/exj6jHVF on TechCrunch: https://lnkd.in/gRWYDpXR [4] ??FactSet and Perplexity have partnered to integrate AI-driven insights with FactSet’s premium financial data. This collaboration enables users to access both public and proprietary datasets, analyze large data sets, uncover trends, and streamline workflows. Perplexity has also integrated Crunchbase. Both are only available to Enterprise Pro users. Details on X: https://lnkd.in/ggVHj2ge [5] ??Alibaba, not missing out on the latest AI buzz unveiled its Qwen 2.5-Max AI model, claiming to outperform GPT-4, DeepSeek-V3, and Llama-3.1-405B. The model is part of Alibaba's advanced Qwen multimodal system, which integrates text, images, and speech capabilities. Learn more on Reuters: https://lnkd.in/d5Q6yqc8

The World Economic Forum opened in Davos on Monday where leaders across the world gathered to share and exchange insights. After the inauguration, President Trump threatened a 25% tariff on Canada and Mexico, signaling his intent to renegotiate a major continental trade deal. Meanwhile, the “$TRUMP” crypto token soared to more than $10 billion, boosting the values of other cryptocurrencies. TikTok was restored on Sunday with ByteDance in active talks for a deal to keep TikTok in the US. KPMG aims to be the first Big Four firm to own a law firm, and the CFPB is suing Capital One for misleading consumers about interest rates, depriving them of more than $2 billion. Lastly, Ohio State captured the National Championship on Monday night. // Top 5 AI highlights // [1] ??President Trump announced the $500B Stargate Project to expand U.S. AI infrastructure. Backed by OpenAI, SoftBank, Oracle, and MGX—with $100B initial investment—it surpasses combined 2023 R&D from Meta, Apple, Amazon, and Google. Additionally, Abu Dhabi plans to invest $300B in AI. Read on CNN: https://lnkd.in/gfj9NvBM and CNBC: https://lnkd.in/gVesykmQ. [2] ??OpenAI unveiled “Operator,” an AI agent that autonomously handles web tasks for ChatGPT Pro users ($200/month). “Operator” combines GPT-4o’s vision with browser actions, requiring user approval for sensitive steps. Microsoft released AutoGen 0.4, a direct competitor. OpenAI also announced “o3 mini,” a new reasoning model. More from The Verge: https://lnkd.in/gge43tg4 and Reuters: https://lnkd.in/gRW4JHqF. [3] ?? Perplexity AI has launched a new feature, Perplexity Assistant. The Assistant leverages Perplexity’s search engine to provide real-time web access and perform multi-app tasks like booking rides, creating calendar entries, and reserving tables at restaurants while maintaining context. Read more from Tech Crunch: https://lnkd.in/gzYXSHY3 [4] ??DeepSeek introduced R1, claiming performance on par with OpenAI’s o1 for math/science tasks at 90-95% lower cost. ByteDance’s Doubao-1.5-pro similarly rivals o1. More on Tech Crunch: https://lnkd.in/gMYX8Nm8 and Reuters: https://lnkd.in/gn_9PvHX. [5] ???Mistral AI’s CEO at Davos hinted at a potential IPO that could invigorate Europe’s AI market. The company, valued at $6B with $1.14B raised, could catalyze AI investment alongside Spain’s €150M subsidies and the EU’s €384.5M AI fund. Read Tech Crunch: https://lnkd.in/gHxVhtvC and Tech Monitor: https://lnkd.in/gvr7fUcR.

Happy Friday! December’s 3.2% CPI beat expectations of 3.3%, signaling cooling inflation. However, strong jobs data has delayed Fed rate cut forecasts to June, with warnings of potential hikes. The SEC sued Elon Musk for failing to disclose his growing Twitter stake, raising transparency concerns. Intel Capital plans to split from Intel by late 2025, signaling a strategic shift. Meta disbanded its DEI team, while Chinese app RedNote topped Apple’s app store as TikTok faces U.S. ban. Major Music groups canceled Grammy Week events, redirecting funds to wildfire relief amid Los Angeles fires. These key updates set the stage for major changes across industries with Q4 earnings kicking off this week, here is the full calendar: https://lnkd.in/dmdjMFQT // Top 5 AI highlights // [1] ?? OpenAI has launched Tasks, a new beta feature in ChatGPT allowing Plus, Team, and Pro subscribers to schedule actions and reminders. Designed to position ChatGPT as a versatile digital assistant, Tasks enables users to set one-time or recurring prompts, managed via chat or a dedicated web section. In the meantime, OpenAI added Blackstone executive Adebayo Ogunlesi, as it shifts to a for-profit model. See more on The Verge: https://lnkd.in/g3NcPvPm and OpenAI: https://lnkd.in/eTS3VDQS [2] ?? Microsoft announced the formation of a new AI-focused group, Core AI - Platform and Tools, led by Jay Parikh, former Lacework CEO and Meta engineering head. Tasked with building Microsoft’s end-to-end Copilot and AI stack for internal and external use, the group will integrate AI platform and developer teams. More on CNBC: https://lnkd.in/dKDra8M4 [3] ?? Reddit released Reddit Answers this week, a conversational AI tool that enhances search functionality by leveraging the platform’s unique user-generated content with 57 million daily active users. The tool positions Reddit as a leader in niche community knowledge while capitalizing on proprietary data. However, challenges like community backlash and competition from AI giants remain. Check it out: https://lnkd.in/evG_7igd [4] ?? Nvidia partnered with Illumina and the Mayo Clinic to drive AI adoption in healthcare, targeting the $10 trillion global market. Illumina will use Nvidia’s generative AI for biology and chemistry, while Mayo Clinic integrates its hardware and software for digital pathology. Nvidia envisions AI transforming drug development, clinical trials, and surgical tools, enabling virtual digital humans and faster lab simulations. Details on BBG: https://lnkd.in/eFERRMGd [5] ? President Joe Biden issued an executive order to accelerate AI infrastructure development, directing federal agencies to fast-track permitting for data centers and clean power facilities. The White House also unveiled new export limits on advanced AI chips. Elsewhere Macquarie to invest up to $5 billion in Applied Digital AI Data Centers. More on Yahoo: https://lnkd.in/e3Ndn_am AP News: https://lnkd.in/eQ5PfP8Z and WSJ: https://lnkd.in/eJhs7vnV

Happy New Year! JPMorgan is mandating full office returns, following similar moves by AT&T and Amazon. In the Macro lens, November's job market hit a 6 mo. high in openings. December's nonfarm payroll jumped by 256K with unemployment dropping to 4.1%. Meanwhile, the LA wildfires could become the most expensive fire event with costs of up to $57 billion. On the tech front, Apple resolved its $95M Siri privacy lawsuit, and Meta pivoted by dropping Fact-Checking and appointing Joel Kaplan as global policy head to deepen political ties. In AI, Blackstone committed $300M to DDN, a leader in AI-driven data intelligence, reflecting the sector's ongoing momentum, which saw $56B in funding across 885 deals last year. Top 5 AI Highlights: [1] ?? OpenAI CEO Sam Altman states that OpenAI is close to achieving AGI. By 2025, he foresees AI agents reshaping the workforce. Beyond AGI, OpenAI targets superintelligence to spur progress. Committed to safety, it seeks a gradual rollout to benefit society. Despite the growth, OpenAI is losing money on its $200 ChatGPT Pro plan, reporting $5 billion in losses against $3.7 billion in revenue. Read more of the Blog: https://lnkd.in/e4MSgf3N and details on the loss: https://lnkd.in/dWRzd8Bf [2] ?? Chinese startup Deepseek has built a cutting-edge AI model, Deepseek-V3, for just $5.6 million, challenging tech giants like Google and OpenAI. Scoring 80/100 on AI benchmarks, it rivals top models, excelling in coding (92%) and math (85%). Using a Mixture of Experts (MoE) design, it trained efficiently on 2,048 GPUs over 57 days, redefining the traditional costly approach to training LLMs. Read more on Substack: https://lnkd.in/eXA3AgQb [3] ?? Microsoft will invest over $80 billion in AI-enabled data centers globally in fiscal 2025, with over half for U.S. projects. The plan supports AI infrastructure, workforce training, and U.S. leadership in AI. Microsoft aims to train 2.5 million Americans in AI skills in 2025. Amazon plans an $11 billion expansion in Georgia, while Trump announced a $20 billion foreign investment for new U.S. data centers.? More on Microsoft: https://lnkd.in/gBdgQqsM, Amazon: https://lnkd.in/dAwSFxq4, and Trump’s announcement: https://lnkd.in/gzaWhd6W [4] ?? Anthropic, led by Lightspeed, is raising $2 billion at a $60 billion valuation, bringing total funding to $15.7 billion, making it the 5th most valuable startup. This follows Amazon’s $4 billion investment in November 2024. With rivals like Elon Musk’s xAI recently raising $6 billion, LLM developers are in a heated race to secure funding. Details on TechCrunch: https://lnkd.in/eaNbtNJz. [5] ??? Getty Images’ $3.7 billion acquisition of Shutterstock merges two struggling giants to combat AI’s disruption of the visual content industry.? By combining Getty’s expansive content library with Shutterstock’s contributor platform, the merger aims to restore growth and relevance. More on Bloomberg: https://archive.is/wU4sc

The week before Christmas brings a whirlwind of updates from the financial, political, and tech worlds as we head into the holiday season. The Federal Reserve’s cautious stance on further rate cuts after a 25-basis cut, shook markets this week. Meanwhile, the U.S. economy exceeded expectations with a 3.1% GDP growth in Q3 and low unemployment claims, showcasing resilience amidst uncertainty. On the global stage, Germany braces for early elections following Chancellor Olaf Scholz’s confidence vote loss. In the U.S., the Supreme Court prepares to hear TikTok’s case against potential bans while the FTC’s crackdown on junk fees promises transparency for consumers. In the tech world, AWS unveiled a $10B investment in Ohio’s data infrastructure. Finally, AT&T joins the return-to-office trend with a strict five-day policy. //Top 5 AI highlights// [1] ?? Google unveiled advancements in AI with Veo 2, a video generation model and Imagen 3, its highest-quality image generator. Google also announced Project Astra, enhanced with Gemini 2.0, gains multilingual dialogue and integration with Search, Lens, and Maps. Gemini 2.0 Flash thinking, Google’s reasoning model, rivals the capability of OpenAI’s o1 full capability. More details: https://lnkd.in/erdDDgXH and https://lnkd.in/dPFKurJf [2] ??? Elon Musk’s xAI launched an upgraded Grok 2 chatbot, boasting faster speeds, improved accuracy, and multilingual capabilities. Integrated into X (formerly Twitter), Grok includes a new “Grok button” for real-time context and trend insights. xAI also added its image generator, Aurora, currently in beta, to its API, enhancing its AI ecosystem. More on TechCrunch:https://lnkd.in/g3idd_vY [3] ?? AI-powered search engine Perplexity raised $500M, valuing it at $9B, amid intensifying competition with OpenAI's ChatGPT Search and Google's AI advancements. The funding supports Perplexity's recent acquisition of Carbon. In comparison, Google is reportedly planning to take a more aggressive move, aiming to build a chatbot-like “AI mode” directly into Google Search, highlighting the growing competition in search engine applications. More information: https://lnkd.in/ga4enrbY [4] ?? Nvidia’s Jetson Orin Nano Super delivers 67 TOPS (Total Operation Per Second) at $249, offering 70% more performance at half the cost of its predecessor’s 40 TOPS for $499. It excels in AI tasks like large language models and vision transformers. Its compatibility makes it ideal for robotics, IoT, and edge AI applications. Watch Jensen’s demo here: https://lnkd.in/gkpjz25d [5] ?? Ilya Sutskever, previously OpenAI’s co-founder, announced at NeurIPS that “pre-training as we know it will end,” likening finite internet data to AI’s “fossil fuel.” He predicted next-gen AI will reason step-by-step, act autonomously, and scale in ways akin to human evolution. More: https://lnkd.in/gBt6cUkv.? Dhruv Batra, an AI pioneer, thinks otherwise. Details on X: https://lnkd.in/e2VJUdid

?? We're excited to announce the launch of our 5-week series spotlighting innovative AI companies transforming various industries. This week, we cover Harvey, a pioneering platform revolutionizing legal services by providing AI solutions tailored for law firms. Harvey's technology streamlines legal workflows, enabling lawyers to focus on strategic aspects of their practice. Stay tuned as we explore more cutting-edge companies in the coming weeks! cc Gabe Pereyra Winston Weinberg https://lnkd.in/g4xCH6wy

Economic and corporate developments this week highlight shifting inflation trends and transformative partnerships in Big Tech. CPI rose to 2.7% year-over-year for November, compared to 2.6% for October, with core inflation at 3.3% as expected. Investors still expect a Fed rate cut at next week’s meeting, despite inflation’s slight uptick. In the retail sector, the Albertson-Kroger merger collapsed after a court ruling, and Walgreens is in talks of a buyout. In Big Tech, Google is partnering with Intersect Power and TPG Rise Climate to develop industrial parks combining data centers with clean energy plants, with the first project set for 2026. //Top 5 AI highlights// [1] ??OpenAI has launched Sora, its new AI-powered video generator, as a standalone product available to ChatGPT Plus and Pro users on Monday. While Sora can generate creative videos, human depictions are restricted to invited testers due to concerns about misuse. CEO Sam Altman mentioned the company is prioritizing the prevention of harmful content and emphasizes that Sora will not replace the entertainment industry though tools like Sora have been raising ethical concerns. Learn more about Sora: https://openai.com/sora/ [2] ??Grok launched Aurora, rolling it out globally within a week. Initially available as a beta under Grok 2, Aurora faced early removal after generating photorealistic but controversial images, such as copyrighted figures. Elon Musk confirmed Aurora is in beta; he promises improvements amid concerns about content restrictions. Details on X: https://lnkd.in/gNd98kQF [3] ??Google’s Gemini 2.0, launching as an experimental preview, introduces enhanced multimodal capabilities like audio and image generation. Its performance is ranked twice as fast as its predecessor Gemini 1.5 Pro, with improvements in code and reasoning. CEO Demis Hassabis highlights its cost-efficient performance and advancements in agent-based AI, such as Project Astra and Mariner. More information: https://lnkd.in/gGVxvTp4 [4] ??U.S. grants export license for advanced AI chips to a Microsoft-run UAE facility, resolving previous export concerns. The license supports Microsoft's $1.5 billion investment in G42, an Emirati AI firm that dominates the region's tech landscape. G42's significant revenue contribution to Cerebras highlights the strategic importance of the export approval for the AI chip manufacturer's? IPO plans. Read more: https://lnkd.in/gEQ64Wnt [5] ??Apple launches major AI update with ChatGPT integration on Siri, enabling advanced question handling through OpenAI's GPT-4o model. The iOS 18.2 release introduces Apple Intelligence features for iPhone 15 and 16 models, with privacy-protected access to ChatGPT and new image generation tools. Meanwhile, Apple is developing its own AI chip, code-named Baltra, in collaboration with Broadcom, with production projected for 2026 via TSMC's advanced process, which also produces for Nvidia. More details: https://lnkd.in/g4HvDfZD?