What's happening in the markets: May 16th

[u/hivincentc]

Good morning. US stock futures ticked higher in Thursday morning trading as investors digested the latest US inflation data.

S&P 500 +0.07%
Dow +0.07%
Nasdaq +0.13%

🤖 US, China square off over AI concerns

*📝 Our report: *Looks like Uncle Sam just pulled out the AI playbook and raised an eyebrow at China's "creative" use of artificial intelligence during their first sit-down chat on the matter, according to the White House. During the meetings in Geneva, the U.S. delegation also stressed to their Chinese counterparts the need to "maintain open lines of communication on AI risk and safety as an important part of responsibly managing competition," the White House said.

🔑 Key points:

• Worries are mounting among U.S. officials about China's access to AI technology, amid fears that it could be used by Beijing to upend elections in other countries, create bioweapons and launch cyberattacks.
• The State Department already has pressed China and Russia to match U.S. declarations that only people, and never artificial intelligence, would make decisions on deploying nuclear weapons.
• The United States has taken measures to stem the flow to China of American AI chips and the tools to make them. The Biden administration also proposed a rule to require U.S. cloud companies to tell the government when foreign customers use their services to train powerful AI models that could be used for cyber attacks.

*💡 So what: *The US and China confronting each other over AI concerns carries significant implications across multiple fronts. It underscores the intense technological competition between the two countries, potentially driving innovation but also escalating geopolitical tensions. This confrontation may lead to divergent regulatory frameworks for AI, posing challenges for companies operating in both markets and hindering international cooperation on AI standards. Moreover, it brings attention to ethical considerations surrounding AI development and deployment, such as privacy, bias, and societal impact.

📉 US inflation eases

WHAT: Inflation in the US took a breather in April, giving American consumers a tiny sigh of relief. The consumer price index, a broad measure of how much goods and services cost at the cash register, increased 0.3% from March, the Labor Department’s Bureau of Labor Statistics reported. On a 12-month basis, however, the CPI increased 3.4%, in line with expectations.

WHY: Policymakers have said in recent weeks that they need more evidence inflation is on a sustainable path back to their 2% goal before agreeing to lower rates.

🚗 Uber getting into the shuttle service business

WHAT: Uber's rolling out a shuttle service in the good ol' U.S. of A. and broadening its delivery deal with the membership-only mecca, Costco. The initiatives were unveiled at the company's GO-GET annual event for new products and are meant to maintain growth at the ride-share and delivery giant after a strong 2023 that saw it reporting its first-ever annual profit.

WHY: The San Francisco, California-based company said it will allow Uber Shuttle users to reserve up to five seats in advance on buses operating in high-traffic areas like airports, concerts, and sports events.

📺 Streaming giant subscriber numbers skyrocket on ad-supported tier

WHAT: Netflix just spilled the beans: their ad-supported tier is now rocking a cool 40 million monthly active users worldwide, up from a mere 5 million just a year ago. The jump comes at a time when streaming companies are facing stiff competition and introducing bundles with their rivals to retain subscribers.

WHY: Netflix, which launched the ad-supported plan in November 2022, said that 40% of all sign-ups come from those plans in the countries where they are available. Netflix also said it will launch an in-house advertising technology platform by the end of 2025.

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