Microsoft will invest $10 billion in the "Google killer", the best hedge fund of 2022 and a new undesirable organization in Russia

Microsoft to Invest $10 Billion in ChatGPT Chatbot Creator

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Microsoft has made a bid for leadership in the artificial intelligence market: the corporation is investing $ 10 billion in the developer of ChatGPT, an advanced chat bot that can generate new information, communicate and complete tasks. Microsoft expects to use the technology in all of its products, including Word and the Bing search engine. Such large-scale investments clearly indicate the company's desire to compete more actively with Google in the field of AI.

• Microsoft on Monday announced plans to ramp up investment in OpenAI, the creator of chatbot ChatGPT. The statement refers to a "multi-year, multi-billion dollar investment" that will significantly strengthen the relationship with the startup. The exact amount and details of the agreement were not disclosed, but earlier the media wrote that it was about $ 10 billion. Including investments will be directed to the creation of supercomputers and developments in the field of artificial intelligence.
• It is assumed that Microsoft will invest money gradually over several years, although the final conditions may change, Bloomberg reported , citing sources. According to Semafor, Microsoft's participation implies that it will receive 75% of OpenAI's profits until it returns its investment, after which Microsoft will get 49% of OpenAI, another 49% to other investors, and 2% will remain with the OpenAI parent company.
• ChatGPT is an advanced AI chatbot launched last November. In its first week of release, it gained over 1 million users and the moniker "Google Killer". We talked about why ChatGPT is seen as a technological revolution, how it can be useful, and what, on the contrary, it is not capable of yet, we talked about here .
• Microsoft has previously invested in OpenAI twice, in 2019 ($1 billion) and 2021 (undisclosed amount). Elon Musk and LinkedIn co-founder Reed Hoffman were among the company's early investors in 2015. In early January of this year, the WSJ wrote that OpenAI was in talks with investors to sell its shares based on a company-wide valuation of about $29 billion, making it one of the most valuable American startups, despite its low income.
• According to experts , Microsoft's large-scale investment in a startup indicates the company's desire to actively implement artificial intelligence in its products. Microsoft is already using OpenAI technologies in the Bing search engine and the Microsoft Design app. Last week, CEO Satya Nadella said that Microsoft plans to implement AI in all of its products. According to The Information, the corporation is considering adding ChatGPT's ability to create and edit texts in its office applications - Word text editor, PowerPoint presentation editor and Outlook mail service.
• In 2019, after Microsoft invested $1 billion in OpenAI, the company said it would prioritize Microsoft when bringing new products to market. This decision drew criticism from representatives of the technology community, who reminded that the goal of OpenAI was to help humanity, and not specific shareholders.

What's in it for me

The scale of Microsoft's investment in OpenAI clearly indicates the corporation's desire to bypass Google and other competitors in the fight for artificial intelligence technologies. After the advent of ChatGPT, many people started talking about the imminent death of conventional search engines, the transformation of the learning process, and other changes. For Microsoft, which once lost to Google in the search market, this is a chance to take the lead again. For users - soon to get Word and PowerPoint with artificial intelligence.

MONEY

Best hedge fund last year

in 2022. The An absolute record has been set on the investment market: Ken Griffin's Citadel hedge fund brought investors $16 billion previous annual record - $15 billion - belonged to John Poulson, who back in 2007 bet against the US mortgage bubble. Michael Lewis' book The Big Short is dedicated to the last event. This is all the more impressive given that all of the top 20 hedge funds generated only $22.4 billion in profits after fees. The entire sector lost $208 billion in total, and outside the top 20, the average return was negative - minus 8.4%. Several large fund bets on different asset classes, including stocks and bonds, worked at once, writes the Financial Times. The publication suggests that the government bonds played a role, but the exact structure of the "fired" assets is unknown.

Digital wallet from the largest banks

Major US banks, including Wells Fargo, Bank of America and JPMorgan Chase, have decided to team up to create a new digital wallet that could compete with PayPal and Apple Pay, writes The Wall Street Journal. It is planned that with the help of this wallet it will be possible to pay for purchases on the Internet and at the checkout, as it will be linked to debit and credit cards. The wallet will be managed by Early Warning Services, which also operates the Zelle money transfer service. At the initial stage, only US citizens will be able to use the wallet.

INVESTMENTS

Norilsk Nickel may reduce dividends for 2022

The management of Norilsk Nickel proposed to reduce dividends for 2022 to $1.5 billion in order to increase investments, RBC found out . At the end of 2021, Norilsk Nickel paid $6.3 billion. The company's shares fell by 1.4% today.

Norilsk Nickel's dividend policy provides for a dividend payout of 30–60% of EBITDA, depending on the leverage. Based on these ratios, dividends for 2022 should be about $5.4 billion and bring a yield of 11.5-15.8%, calculated BCS . The $1.5 billion dividend implies a 4.4% dividend yield. According to BCS, this will have a negative impact on the shares of Norilsk Nickel.

The market took the information about a possible reduction in dividends more firmly than it could be feared, says FG Finam analyst Alexei Kalachev. He explains this by the fact that the market expected such a decision. According to him, a yield of about 4.5% is not so small by today's standards, but not enough to maintain the status of a "dividend generator". This yield is significantly lower than that of oil and gas companies, but it is better than that of ferrous metallurgy companies, which have completely suspended the implementation of their dividend policy.

In the long term, investments are more important than dividends, and the negative effect on Norilsk Nickel shares from a possible dividend cut will be short-lived, Kalachev believes. Finam retained its Buy rating on Norilsk Nickel shares with a target price of RUB 19,974 and upside potential of around 34% in 2023.

WHAT ELSE HAPPENED

• The Prosecutor General's Office recognized the Andrei Sakharov Foundation as an undesirable organization. “Based on the results of studying the materials received, on January 23, 2023, the Prosecutor General’s Office of the Russian Federation decided to recognize the activities of the foreign non-governmental organization The Andrei Sakharov Foundation (“Andrei Sakharov Foundation”), USA, as undesirable on the territory of the Russian Federation,” the agency’s website . says The report states that the foundation's activities "pose a threat to the foundations of the constitutional order and security" of Russia.
• The diplomatic conflict between Russia and the Baltic countries has escalated again. Today, the Russian Foreign Ministry first announced the expulsion of the Estonian ambassador and the lowering of the level of diplomatic relations with Estonia to the level of charge d'affaires. This is a reaction to "a new unfriendly step towards a radical reduction in the size of the Russian embassy in Tallinn, confirming the line towards the collapse of relations between our countries." In response, Estonia announced that it was expelling the Russian ambassador from the country. Estonia was supported by Latvia, which announced that, as a sign of solidarity, it was also lowering the level of diplomatic relations with Russia and expelling the Russian ambassador.
• Deliveries of Russian oil by sea in the week by January 20 lost almost all of the growth of the previous week, writes Bloomberg. They fell by 22%, or 820,000 bpd, to 2.98 million bpd. This time, Far Eastern deliveries fell the most. The four-week moving average remained at the level of the second half of 2022. Due to the low price, revenues to the Russian budget from export duties fell by the same 22%, or $13 million, to $48 million. Almost all Russian oil goes to Asia. Flows are split roughly evenly between China, India, an unspecified Asia (which includes Turkey), and tankers with an unspecified port of destination.

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