Chalmers bets on AI; Bond yields hit multi-year highs; CSL strikes Trump deal

Chalmers bets on AI; Bond yields hit multi-year highs; CSL strikes Trump deal

News in brief

Renewed fighting between the US and Iran has pushed oil prices higher, adding to inflation concerns and driving bond yields to multi-year highs. Australia’s 10-year yield is at a 15-year high.

 

CSL has struck a deal with the Trump administration to cut some US medicine prices and reduce its tariff exposure, after the White House imposed a 100pc impost on patented drug imports.

 

ASIC has closed its investigation into Mineral Resources and founder Chris Ellison without taking enforcement action over tax evasion allegations. Ellison remains managing director despite previously being expected to step down.

 

Solar has overtaken coal as China’s largest source of installed power capacity for the first time. It now accounts for almost a third of capacity, although only around one-eighth of actual generation.

 

LIV Golf could file for bankruptcy protection as soon as next week. Saudi Arabia’s sovereign wealth fund is ending its backing after pouring more than $US5 billion into the breakaway league.

Fear-o-meter

An edited excerpt of Tim Cook's final memo to Apple staff, on stepping down as CEO after 15 years:

 

"Today is my last day as CEO of Apple. This is a moment I always knew would come one day, and yet it is still hard to believe it has arrived and I am writing these words.

 

The truth is, whatever there is to say about my success, I know it is all because of you. You have brought out the best in me. In all my life, I have never seen or been with such an extraordinary team of people before, and every day I get to see more examples of that.

 

There is something truly special about Apple. I am most proud of what an annual report could never capture. This place is proof that culture triumphs over everything. We share a belief that what we build matters and that we have both the opportunity and the responsibility to leave the world better than we found it. That purpose is part of what makes this place extraordinary. Apple helps nurture it, but I believe it lived within each of you long before you arrived here. It is what brought you to this company and what continues to drive the work you do every day.

Together, we have created something far greater than any one of us could have imagined or accomplished alone. And that’s the secret to our success. We bring out the best in each other. We lift each other up. We have made it possible to leave our “dent in the universe”, as Steve once described it, because of who we are and what we believe, because of what we value and how we see the world. How fortunate we are. How fortunate I am."

Fear & Greed Q+A today

Australian businesses are spending big on AI, but just eight per cent are measuring the return. Jeremy explores the pressure on AI budgets, how to measure value, and the emerging AI price war:

 

“Where I think the businesses are going to be moving to is being able to use different models for different reasons. So the more expensive, when we talk about those tokens, they consume more tokens at the more relevant newer frontier models. But you may be able to use some of the cheaper models for lower impact activities inside your organisation.

 

What we thought was this duopoly just a couple of weeks ago has all of a sudden come into this really competitive price war coming on with different models being your own machines, own data stacks inside your building, not just the cloud based frontier models.”

Treasurer Jim Chalmers says artificial intelligence could deliver the biggest lift to Australian living standards in a generation, but Treasury is warning the payoff is far from guaranteed.

 

The government is pitching AI as a potential answer to Australia’s productivity problem, with Treasury estimating productivity growth could eventually reach between 1.5 and 2% a year in an upside scenario.

 

Treasury expects most of the gains to come from adopting AI developed overseas and embedding it into Australian businesses. It means businesses will need to change how they operate and invest in workers’ skills.

 

And AI isn’t a substitute for economic reform. Treasury says competition, infrastructure, regulation, skills and openness to investment will still determine how much Australia benefits.

 

There’s also a potential sting from the $150 billion expected to be invested in AI-related data centres by 2030. It should boost economic activity, but Treasury warns the construction boom could add to inflation, potentially putting upward pressure on interest rates.

Greed-o-meter

Market	Month %	Annual %	Median $
Sydney	-1.4	-4.6	1,222,718
Melbourne	-1.1	-4.7	786,718
Brisbane	-1.0	10.8	1,080,142
Adelaide	-0.8	8.6	937,207
Perth	-0.8	15.6	999,987
Hobart	-0.2	8.1	752,397
Darwin	0.6	14.6	647,259
Canberra	-1.1	-0.4	864,998
National	-0.9	2.7	912,885

Forwarded from a friend? Sign up to our daily newsletter

A closer look at the August house price figures from Cotality, with Darwin the only capital city to record growth.

Listen to today's episode 🎧 

Source: Cotality