AI Acceleration Firm Groq Gets $750m New Funding

Groq is the creator of the Groq "LPU" (Language Processing Unit) which aims to accelerate AI inference by having a purpose built hardware accelerator that is optimised for running pre-trained models. 

Despite the hardware product, or rather in conjunction with it and enabled by it, Groq's approach is "software first" designed to give developers direct control and simplify hardware utilization (compare the Mojo approach). The hardware and software are tightly linked to enable higher performance. 

This tight coupling has an impact on the software stack - whereas Groq has a proprietary stack, Nvidia's GPUs are supported across open source products like PyTorch and TensorFlow.

You could say its sweet spot is low latency AI inference.

Groq's latest funding round of $750m was led by Disruptive. Other VCs participated as well. Its early funding rounds were from Social Capital (Series A and B) and TDK Ventures (Series B), the corporate venture capital arm of TDK Corporation.

Japanese Yen Falls to Record Low versus USD

USDJPY is trading at 160 yen to the dollar (26 June 2024), down from the 140s in January 2024, and 130s in January 2023.  Relative strength indicators suggest the yen is oversold. When USDJPY hit 160 on April 29th, Japan started buying yen for dollars, according to market participants. Currency traders however remained strategically bearish on yen based on expectations on the interest rate differential - the premise that Japanese rates will remain low in contrast with relatively high US interest rates. Standard Chartered reflected that the April intervention is unlikely to be a "one and done move".

Nikkei Dives 4.5% After US Stimulus Boost

Index volatility was constant at 48% down from a high of 60%.

Japan's Nikkei 225 Closes Down 4.7%, European Markets Down 3% and Recovers 1%

The sell off was driven by strong US data - followed by remarks that the stock market was at its peak.

The Carry Trade Concretised - Uridashi Bonds

Uridashi bonds are bonds sold to Japanese household investors, giving returns in a high-yielding currency such as NZD or AUD, which offers a premium over the historically low domestic interest rates in Japan.

This has the follow risks
- credit risk of the issuer
- FX risk, as the foreign currency coupon payments have to exchanged into JPY

They became popular in the 2000s.

2015- market size was USD 33bn.

23/11/2017 - Bank of Japan benchmark rate, -0.1%
23/11/2017 - Reserve Bank of New Zealand benchmark rate 1.75%
23/11/2017 - Reserve Bank of Australia benchmark rate 1.5%
23/11/2017 - Swiss National Bank benchmark rate -0.75%  (Banque Nationale Suisse)

The official benchmark rate in Switzerland is the "3m LIBOR CHF".

Japan's GPIF, world's largest pension fund, falls 3.8 per cent in the year

Japan's Government Pension Investment Fund (GPIF), worth $1.3 trillion, lost 5.3 trillion yen ($51bn) in the year ended March 31st, its worse annual result since the financial crisis.

The loss included a 10.8% loss on domestic equities and 9.6% on global equities. Japanese bonds, which the fund was cutting since October 2014, when it moved allocations more to equities, posted a 4.1% gain, following the Bank of Japan's move to negative interest rates.

The fund has 80% of its holdings in passive investments.

The Canada Pension Plan Investment Board (CPPIB), a retirement savings plan financed by employers and employees in Canada except Quebec, was created in 1966 and is sized at $278 billion as of March 31, 2016, fared better with a 3.4% return with gains in real estate and emerging-market equity private investments.

ARM to be bought by Softbank (IoT Big Driver)

Cambridge, UK based Smartphone-chip-maker ARM Holdings confirmed it is to be bought by Japan's Softbank (a recognised investor in "technology paradigm shifts") for £24bn (or 31bn USD), a premium of 43% on its traded market value. ARM's customers include Samsung and Apple. However, an earlier acquisition of Sprint Telecom is weighing heavy on Softbank's finances who will take a loan from Mizuho Bank to finance the acquisition of ARM for just under one-third of the deal value. Growth in the "Internet of Things" (and the evolution from the mobile Internet) is believed to be one of the prime motivations behind the acquisition.

Global Bond Rally Pushes Yields to Low Levels

Investors are buying up sovereign debt as equities slide - sending US Treasuries yields to a one-year low. Bond indices, such as the BAML World Sovereign Bond Index also tumbled to 1.29 percent, it's lowest value since 2005. Japan's 10 year yields went negative.

Japan Invests £700m in Building UK Power Plants

Hitachi (TYO: 6501) is investing £700m to co-build two nuclear plants in Britain with Rolls-Royce and Babcock International, the engineering support services firm. This will be a "hundred year commitment". One of the sites is the Isle of Anglesey, in North West Wales. Hitachi stock gained about 10 Yen in the days following the announcement.

Japan - World's Largest LNG Consumer - Reduces its Bid Price for Asian Cargoes

Asia:
Asian LNG has slipped below $13 per mmBtu as the stockpiling from Japan and Korea and mild weather (reducing air conditioning demand) has given East Asia more bargaining power in the market for seaborne cargoes. According to Reuters, Kogas is not paying more than $12.50 with Indian importers paying up to $2 less per mmBtu owing to lower transport costs.

Europe:
In the UK the price of wholesale gas went up due to summer maintenance schedules at North Sea fields.

US (Henry Hub):
Henry Hub spot is around $2.74 and future at $2.80. Another US benchmark is New York City Gate spot (the diff between Henry Hub price and another hub being known as "location differential"). Major pricing locations include "citygates" which are places where distribution companies receive gas from a pipeline. NYC Gate spot is commonly used for pricing gas in the north-eastern US. Other city gate locations include Boston, Baltimore, Pittsburgh and Buffalo (second most populous city in the State of New York, originally the "Village of Buffalo" with 25 residents).

Citygate prices include the premium paid for delivery to the "citygate" from the main market centre (Henry Hub in Louisiana, adjacent to Texas and Mississippi). The Henry Hub is where gas is channelled to smaller distribution lines.

What factors do you think influence the city gate prices most? Henry Hub spot, weather patterns or inventory levels?

Hitachi says Bye Bye Disk Drives

Hitachi sold its disk drive unit to Western Digital for the sum of (around) $4.3.bn, causing a 2.18% rise in Hitachi's stock price (its peer Sanyo rose 2.4% on the news). The combination of Hitachi's HDD unit and Western Digital will make WD (hq'ed in California) the company with the largest global market share for hard disk drives (50% according to IDC), the next-in-line being Seagate STX with 29% market share (they own the Maxtor brand). The remaining share is held by Toshiba and Samsung.

The acquisition of HGST (Hitachi Global Storage Technologies) gives WD control over a large portfolio of global assets including the Hitachi San Jose Reseach Center and manufacturing plants in Shenzhen, China (substrate manufacturing is done in Sarawak, Malaysia - substrate (common examples, being aluminium and glass) is what is used to create the platter in the disc drive  - the core internals of the disk drive consisting of several layers of platter on a spindle).

Hitachi was set up in 1910 as a product company specializing in electrical engineering. Its first product was an induction motor (used in many household appliances). They went on to produce a bunch of electrical products, including transformers, ammeters and voltmeters. Their involvement in appliances (washing machines and refrigerators) It was founded by Namihei Odaira, an electrical engineering graduate who worked for several engineering companies before founding Hitachi around the age of 36, following his interest and research in developing induction motors.

World's Largest Economies: US, China, Japan

China has overtaken Japan to take the number two slot, but incomes in Japan are still ten times that of China (using current exchange rates). In 2010 Q2, Chinese output was $1.33 trillion versus $1.29 trillion. DP World mentioned first half profits were up 17% (citing a revival in world trade). DP World have interest in various ports, including Chennai, Cochin and Vishakapatnam (on India's East coast, state of Andhra Pradesh, capital Hyderabad).

Japanese Bonds and Equities This Week

JGB futures hit a record 2 year high (as people moved money from falling shares). JGBs have also been helped by the Eurozone debt crisis. 3 month LIBOR on YEN is currently around 0.24% (24 TV series) compared with 0.53% for USD 3m-Libor (easy to remember, 53 is the 16th prime number) - Yen LIBOR used to be more than USD. NKY is currently around 9700 level (fell a lot in May). GBP 3-month LIBOR is 73 bps (21st prime number).

Fire-breathing Growth for Sq Enix with Dragon Quest Sales Final Quarter '09

Pretax profit was 8.2 billion yen on sales of 44.8 billion yen due to the release of Final Fantasy 13 (sold 1.9m copies) and Dragon Quest 9 (sold 4.1m copies). Awesome sales!

The Final Fantasy series started in 1987.

Square Enix is part of a holding company that's HQ'ed in Shibuya-ku in Japan. Shibuya station is one of Tokyo's busiest stations (Tokyo prefecture is one of the 47 subnational jurisdictions of Japan). Shibuya is the HQ of Casio and Google Japan. Apart from games software, Square is also involved in the sale and rental of arcade game machines and operation of mobile phone portals.

Japan's Democratic party wins over Taro Aso's LDP - Historic

The political landscape of the world's second largest economy has been redrawn.

The Conservative LDP has been in power ever since the post-war recovery in Japan, a period of over 50 years. It formed a so-called "iron triangle" consisting of itself, the bureaucracy and Japanese business. Defeated LDP president and PM, Taro Aso, said he would step down as party leader. Among the criticisms levelled at the LDP was that it was "sluggish" to respond to the economic crisis.

Japan has a bicameral Parliament (i.e. two houses). e.g. US -> House of Representatives, House of Councillors (upper house), UK -> House of Commons, House of Lords. (one house to represent aristocracy, one house to represent commoners - concept was the aristocrats are wealthier and wiser than the commoners).

Together they are known as the National Diet of Japan.

Treasury Orders Probe into Banks and Outrageous use of Bailout Money

The Treasury has ordered an inquiry into how banks are managed, Chancellor Alistair Darling has stated. Gordon Brown insisted Thursday that there should be "no reward for failure".

RBS, bailed out by £20bn by the government last year, will pay up to £1bn in bonuses to its 177,000 staff.

In Asia, Nomura has opened and equity sales, trading and investment banking office in India, which is becoming increasingly important for Japanese companies. For example, Nomura advised Daiichi Sankyo acquired generic drugs maker Ranbaxy in 2008.

Ranbaxy started its research program in the late 1970s.

Japan joins Europe in Recessionary Doldrums

Kaoru Yosano, fiscal policy minister for Japan, announced Japan is joining Europe in recession, following two straight quarters of negative GDP growth.