September 3, 2023 • 25 mins
In this episode, Parth & Abdul discuss the reasons behind the weakening AUD against foreign currencies. Additionally, they discuss the upcoming Arm IPO, the accumulation of AI chips from Saudi Arabia, and the Friendtech craze in Crypto.
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Episode Transcript
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(00:05):
Good afternoon, ladies and gentlemen.Welcome back to the Investor's Diary podcast,
where we help you works moder andharder by providing a weekly market updates and
insights. We're back again this weekwith our regularly scheduled podcast. Sorry if
it looks like we've been away fora while, we've had delete our last
episode due to some fasual inaccuracies.But with all that aside, let's focus
on today. The main topics ofinterests for today's episode are the is the
(00:30):
aggressive depreciation of the Australian dollar,the upcoming IPO of ARM, which is
a should manufacturer owned by soft Bank, Talking even more about computer chips,
will even will analyze the reasons behindSaudi and UE and cumulating chips at a
massive scale. And lastly we'll discussthe reason crypto frenzy to the market is
called friantech. Yeah, well,so, welcome back, folks. Let's
(00:52):
start off with the first topic thatwe've mentioned, which was the aggressive depreciation
of the Australian dollars. We're hereto dissect the recent roller coaster right that
the au D has been on andexploring the driving factors behind its decline and
the ripple effects it has had onvarious sectors of the economy. So up,
though, let's just jump right in. Why don't you take us ahead?
(01:15):
Right? So, the Australian dollarhas taken quite a tumble, owing
to a combination of lower interest ratesthan those abroad and mounting concerns about China's
economic slowdown. This perfect storm hasseen the ausea dollars slide from nearly sixty
nine cents US dollars to around sixtyfour cents US dollars in just a matter
(01:37):
of weeks. Yeah, it's fascinatinghow a lower currency, or a depreciation
in the currency can shake up variousaspects of the economy. This depreciation,
for example, will make four andgoods more expensive. It also leads to
increased important inflation if is to persist. And let's not forget about the demand
pressures it generates for Australian goods andservices from both domestic and foreign consumers.
(02:01):
You're right, part, And thisslide in the exchange rate hasn't spared the
fuel pump either. The weaker Australiandollar has contributed to petrol prices surging above
two dollars per leader as importing fuelfrom overseas has become more expensive. Well,
luckily I don't have a car,so I don't have to worry about
the fuel prices. So I actuallyhadn't noticed that, but still interesting to
(02:23):
know. But you know, whatis even more interesting is to see how
the currencies of fluctuation has an impacton consumer sentiments. So senior economists at
anz Adelaide timbrel if I said thename correctly stated that a potential connection between
the weaker exchange rate has a directcorrelation with dwinlink consumer confidence. Right,
(02:46):
and let's also take note of RBA'sstance. They have a more dovish stance
of monty monetary policy compared to foreigncentral banks and this has certainly played a
part in this weakening of the currency. Yeah, that is very true.
The contrast between the RBA or thereserve back on Australia and their approach compared
(03:07):
to the foreign counterparts has definitely addedanother layer of an intricate web of this
global currency dynamics that we're currently facing. Right, And then added to that
is the China factor, as Australia'slarge export marketing and a significant consumer of
resources like iron ore, gas andcoal. Any tremors in China's economy sends
(03:29):
ripples throughout ours definitely, and aswe know, Australia is a very commodity
driven economy and these sort of issuesin China would directly affect Australia. And
talking more about china struggles, there'sthe fact of falling property prices, the
challenges for property developers, soft retailsales, and all of these have a
(03:50):
direct bearing on Australia's export performance,which in turn affects the value for dollar.
It's like a chain reaction, isn'tin part a downturn in China's directly
impacts our key exports and as thedemand waves our currency takes a hit.
Yeah, exactly. And it's notjust about the exports, it's also about
(04:11):
the imports and the tourism. Thefalling dollar presents a golden opportunity for tourists
coming in bound, making Australia amore attractive destination due to their increased purchasing
power because globally, the eighty isdepreciating against most other major currencies. And
I guess that's where the civil aligningis amidst all the fluctuations, right,
(04:33):
It's great to hear how tourists aretaking advantage of the situation, contributing to
our local economy. But then wealso have the flip side right where Australians
heading overseas face the brunt of aweaker aud which can then make them think
twice before splurging more on international trips. That is true, there are two
sides of the story, the jointsand dilemmas of currency fluctuations shaping our decisions
(04:58):
on where to go, what's abuying, how to spend. You definitely
hit the nail on the head,but let's not lose sight of how businesses
are navigating these currency shifts. Importersor firms who primarily import, for instance,
have to juggle the challenge of timingpurchases and setting prices, all while
keeping an eye on these for fluctuationsin currencies right. And it's also very
(05:23):
impressive to see how businesses are usinghedging strategies to mitigate these risks associated with
currency volatility, much like insurance.As one coffee importer pointed out, that's
actually a very solid analogy. It'sincredible how businesses adapt and strategize to ensure
they remain resilient, especially given theweakening aud Now, one of the key
(05:45):
players in this dance of currencies isthe Reserve Bank of Australia the RBA,
their interest rate decisions having far reachingimpact, influencing both local and global in
investor behavior. Yeah, I mean, as we talked about a little earlier,
there's a divergence in the interest ratesbetween Australia and other major countries.
With some central banks raising their rates, global investors may be drawn to those
(06:09):
foreign denominated assets, which would alsoin turn lead to a reduced demand for
the Australian dollar. Right. That'sa very crucial point, and it's very
fascinating just to see how higher interests, the relationship between interest rates and currency
prices, and how higher interest ratesin other countries can trigger shifts in investor
(06:30):
preferences and ultimate influence our currency value. Yeah, and speaking of forecasts,
it's interesting to see the differing opinionsamongst economists about where the Ausie dollar is
headed. So while the RBA projectsa certain level, some institutions have actually
adjusted their predictions based on recent developments. Right. And it is a testament
(06:55):
to the dynamic nature of economics,isn't it. The constant evaluation and reassessment
of data. It's to fine tunepredictions exactly, and I guess it.
They're also a reminder that while forecastsdo provide valuable insights, they are subject
to change as new information emergence.But I guess that is the beauty of
economics. It keeps us on ourtoes, challenges our assumptions, and encourages
(07:16):
us to embrace uncertainty. Not tosound a little too cheesy, but I
think we've covered the aggressive depreciation ofthe ad quite in depth, so I'm
having to move onto the next topic. If you are yeah, let's let's
do that that Soft banks are IPO, right, the story that intertwines technology,
(07:39):
finance and envision. So as wedelve into this, you know this
iconic architecture, a little bit aboutarms and name synonymous with innovation has filed
for its IPO. This move hassent ripples throughout the IPO market, which
(07:59):
has been somewhat dormant in recent timesdue to the fluctuations and interest rates as
we spoke about earlier in Australia,but globally too, as we've alluted in
other episodes, and evolving appetite forrisk, that's right, and the timing
of ARMS IPO is quite significant fromour perspective because this reflects a strategic move
by soft Bank, who owns ARM, to capitalize on the immense potential of
(08:24):
this technology. Giant arms chip designsare the driving force behind the smartphones that
have become integral to our lives,making this IPO a pivotal moment for both
the tech and financial markets, right, and the technology landscapes evolving rapidly,
and ARMS IPO is poised to testthe waters, gauging investor interests and market
(08:46):
appetite for such transformative endeavors. Theconvergence of cutting a technology and financial strategy
is truly awe inspiring. It definitelyis. And I just want to dive
deeper into the roots of ARM alittle bit and it's history. So ARM
is a British company which is headquarteredin Cambridge, and it has a history
that is intertwined with the evolution ofcomputing. It was borne from a joint
(09:11):
venture between Acorn Computers and Apple andARM has become the architecture today behind ninety
nine percent of all smartphones. Sothe smartphone that you're using to listen to
this podcast is probably has a chipthat was designed by ARM. Right,
and Arm's role in architect is pivotable, is pivotal. Their designs set the
(09:35):
foundations for chips that power devices.Like you said, their innovation in energy
efficient designs years ago has also shapedthe modern tech landscape, making them a
neutral force in the tech industry.And here's where this gets interesting for me.
Right, So, soft Bank acquiredARM in twenty sixteen for a thirty
two billion dollars valuation, which markedthe monumental shift in the tech landscape.
(10:01):
This was part of SoftBank's vision totap into the IoT sector or the Internet
of things sector, and this wascatalyzed by this acquisition. Right. And
while the internet so IoT played apart, ARMS impact is far reaching.
Its journey from smartphone chips to connectedcars showcases its adaptability and innovation. However,
(10:22):
it is important to acknowledge the headlines, including the slowdown and smartphone demand,
that the company has been navigating.And I feel this adapting into these
challenges really underscores ARMS resilience. Yeah, and just for the viewers or listeners
at home that are unaware, smartphoneshave been dueling quite a bit. Just
in Apple's most recent Quotality report,they actually saw a decline in the sale
(10:46):
of iPhones because and my assumption andprediction here is that because smartphones have become
a monotonous where each new model hassuch a minor upgrade that most people don't
think it's worthwhile upgrading their phone everyyear. And I can definitely say that's
true for me. I don't knowhow you feel about that. I feel
the same way too. Yeah,And let's talk about ARMS business model again.
(11:09):
So ARMS business model further underscores theirapproach. Right, So they license
their intellectual property for the architectures,enabling other companies to build systems around them.
In recent years, they've also venturedinto selling their own processor designs and
move that actually proved to be morelucrative than mirror licensing. And this,
(11:30):
in my opinion, this transition showcasesthe firm's proactive stands in continuously innovating in
the industry. Right, and thesaga of ARM continues at SoftBank's acquisition in
twenty sixteen, priced at thirty twobillion dollars, remains a watershed movie.
This marked the largest ever purchase ofthe European technology company. At the time.
(11:50):
SoftBank's intentions to see opportunities within theinternetive Things sector exemplifies their foresight,
and I feel that the ripple effectsacquisitions are still felt today. And it's
not just wearables or smart home appliancesthat ARM is involved in. They've also
ventured into new territories like connected cars. But it's also essential, as we
(12:13):
mentioned, to acknowledge the challenges theyface. The slow on the smartphones has
impacted chip demand industrywide, and ARMhas also suffered a bit due to that.
However, navigating through these challenges it'sjust natural and demands a delicate balance
in my opinion. And if wedive into the financials for the company,
(12:33):
the company's recent financial performance highlights bothprogress and hurdles. So earnings data for
the quarter ending June thirty reveals anotable achievement with six hundred million US dollars
generated, Yet the same period alsobrought a nine point five billion yen loss,
(12:54):
which was a significant shift from thetwenty eight point nine billion profit in
the previous year. And these financialdynamics demonstrate the complexities of the industry and
also show the slowdown in the demandfor smartphones. Right, and this narrative
takes a turn as we explore,ARMS pass endeavors SoftBank's initial attempt to sell
ARM to NA Video face regulatory obstacles, specifically concerns over competition in national security,
(13:18):
Navidia's prominent role in the semiconductor landscape, and it's a sense of AI
applications underscore the significance of this hurdle, and the intersection of business interests and
regulatory consideration shapes the trajectory of techgiants. Yeah, definitely, and a
pivot and strategy emerged for soft Bankas they decided to well as we know,
(13:41):
list ARM as an independent company.And this decision follow the regulatory challenges
that were mentioned above by Abdu andilluminates the complex dance of tech conglomerates and
regulatory scrutiny that they have to face. Additionally, rumors also do suggest that
off Bank, through its Vision Fund, intends to secure the remaining twenty five
(14:03):
percent equity stake in ARM. Rightand looking ahead, arms IPO filing unveils
the next chapter. A lot ofinvestors take the stage as the company is
now gauging the market's response questions linkerregarding the quantum of funds they see to
raise and the sought after valuation andthe CEO of arm Rene Haas has propelled
(14:28):
the company into new horizons and thetech world continue to just sit on the
sidelines and watch. The expansion intodata center servers driven by the likes of
Amazon is a strategic move that echoesthe evolution of the tech sector, and
these strategic maneuvers reflect the company's resilienceand forward thinking approach, right and moving
(14:48):
on to more more tech, moretech news. Saudi and UE are accusing
a lot of computer chips and partwould you like to introduce this top Yeah,
for sure, So talking about well, Saudi Arabia and the United Arab
Emirates accumulating a lot of computer chips. We're gonna just dive a little deeper
(15:11):
into how and why they're doing thisto captivate and capture the world of artificial
intelligence. And it's a very excitingjourney because I had actually never heard of
this before we decided to record thispodcast. So diving into the first bit
of information is Saudi Arabia's King AbdullahUniversity of King Abdullah University of Science and
(15:33):
Technology is making waves with its grandplans. The plan is the acquisition of
three thousand high end chips valued ata staggering one hundred and twenty million dollars,
which just showcase their commitment to innovation. Right that's a substantial investment,
reflecting the seriousness of their endeavor.It's really astonishing to see how their determination
(15:56):
to foster local talent is being matchedby their financial back. And speaking of
chips, the numbers are just mindboggling. So let me just tell you
some of the numbers I've researched soopenly. I trained its advanced the GPT
three model, which was its previousmodel on one twenty four eight one hundred
chips now COWSTS, which is theKing Abdullah University of Science and Technology.
(16:19):
Their ambitions are storing higher with asupercomputer named Shaheen three running seven hundred the
Nvidia gracehoppers. This powerhouse is goingto pave the way for Saudi Arabia's own
large language model yep, and thisis really is a truly a big leap
forward. The trajectory of Shaheen threeand the development of their own alms signaled
(16:44):
their intention to make a significant impactin the AI landscape. And let's not
forget about the global collaboration stakes hereright, Cowsts provable responsible AI and Data
Analytics lab is led by Chinese andthis undiscoes the international dimension of this AI
advancement. Right. It is atestament to the inclusive nature of AI research,
(17:08):
bringing together diverse expertise from around theworld that amplifies the potential ground baking
discoveries. Meanwhile, the UAE hasbeen blazing its own trill in the AI
universe. They established an AI Ministryin twenty seventeen, which set the state
for this impressive journey and culminated inthe unbuilding of a generative AI guide.
(17:32):
Their commitment to innovation is truly inspiring. The UE's focus on rectory frameworks reveals
their responsible approach to embracing technologies potential. Yeah, the race for AI excellence
is a global phenomenon, and SaudiArabia and the UA both are clearly in
the driver's seat and they're determined tocreate their own narrative and shape the AI
(17:53):
landscape on their own terms. Right. And as we draw that conversation to
a close, is Avid that outSaudi Arabia and you are making remarkable strikes
in the AI domain. And wewill shift conversation now to the new crypto
frenzy friendtech. That's really been allover my feed this last few weeks.
(18:18):
So yeah, let's jump right intoit. Friendtech is a social interaction that
takes so let's take sorry that.So friendtech takes social interaction with the to
a new level with an intriguing twist. It engages conversations with others. Sorry
to engage in conversations with others,users are required to invest by purchasing shares
(18:41):
tied to another person, and thisparadigm shifts transforms how we perceive online conversations
and interactions. It's so fascinating,isn't it. It's essentially a crypto powered
social network, and when users registeron friendtech, they use their total accounts
as an entry point. Each individual'sTwitter account is intricately linked to chez,
(19:06):
creating an innovative ecosystem where ownership andcommunication is intertwined. Right. But here
is where it gets even more captivating. The value of these sharts isn't static.
It's a dynamic entity that fluctuates basedon the market's perception and engagement within
the individual. So the rise andfall of share prices really mirrors the evolving
(19:30):
narrative of each user. I findthe concept of investing in someone's success quite
revolutionary. So musicians, athletes,and creators of all kinds can now have
their success backed by the very peoplewho admire and support them. However,
with any innovation, like in thepast, there are some challenges. So
(19:52):
firstly, there is the privacy concernsthat have recently surfaced, particularly regarding access
to user Twitter accounts and the Theseconcerns have so far served as a potential
to term for new users. Forexample, I have yet to join the
platform primarily due to that privacy factor, and it is imperative way the benefits
against the risks right. And Moreover, the history of social media on the
(20:15):
blockchain offers both lessons and cautionary tales. For instance, I'm not sure if
the listeners are familiar, but therewas a similar style, similar platform called
big Cloud, which was the flashin the pand social media experiment launched during
the whole crypto supercycle I think twentyone twenty twenty two. But Big Cloud
(20:36):
initially intrigued many pre funding influencers accountswith its unique cryptocurrency had a similar model
where you were able to invest inthe person and the person had shares.
However, its journey from high toobscurity underscores the challenges that such that frintake
could face. Indeed, and therise and fall of Big Cloud's fortunes does
(20:57):
offer very valuable insights all some speculate, myself included that Friantech might follow a
similar trajectory. It is worth notingthat the developer behind frontech is pseudonymous known
as Racer on Twitter, and hedoes seem to have drawn lessons from the
successes and failures of platforms such asbit cloud, right and now delving intv
(21:18):
astonishing growth Friantech, the platform's meteoricrise cannot be overlooked. On a Sunday,
very quiet Sunday, the platform generatedis stagging one point one two million
dollars in fees in just a meretwenty four hours, which which sorry,
since it's been launched on the eleventhof August, and the community fees have
(21:41):
surpassed in astonishing two point eight milliondollars. Just to put those numbers into
perspective, this level of activity onchain is very, very impressive. This
surpassed even the entire Bitcoin network's performancein the same time frame. Now notably
this surge in activity has also propelledbase which friantech is built on, which
(22:02):
is the Ethereum scaling layer by coinbased where friantech is built on, as
I'll just mentioned, and this hasnow claimed the throne as the largest LAYERC
two network, although in my opinionthis is temporary and this achievement has followed
months of rivalry and competition with othernetworks and other layout layer twos on Ethereum
such as Arbitrum and Optimism. Right, and as the crypto landscape evolves,
(22:25):
the financial implications of fantech success areunniable. The platform's designed positions it as
a Monterey layer adjacent to Twitter's tutorprofiles. Now fans arelike like you and
me are not able to purchase,like we said earlier, shares in our
favorite social media influencers athletes, formingan investment avenue that transcends conventional engagement.
(22:49):
What's very intriguing is that even thoughvirtually anyone can claim an account and join,
the spotlight does fall on celebrities orminor celebrities who own a portion of
the trading fees that is generated frombuying and setting their own shares and Intriguingly,
the platform itself emerges as a beneficiarywho retains a large percentage of the
(23:11):
trading fee. Cut Right and Fantechhas been praised for its user friending design
and seamless user experience, a rarityin an industry that has often struggled with
cumbersome interfaces. Despite its mobile onlyaccessibility, the platform standard feature is the
ability for users to directly message thecelebrity they support. So this is a
(23:33):
feature that's different to a big connect, a big cloud. So this is
an alluring feature, especially at atime when messaging platform messaging platform space limitations.
And that's not the only when there'sa bunch of other accounts that are
on the platform that are already worthmore than five six thousand dollars. Racer,
who is speculated to have created theplatform, is the most valuable profile,
(23:56):
with close to one hundred and fiftypeople owning a organized share in the
profile. There's also other Twitter influencerssuch as Kobe, who we have definitely
mentioned in the past, and thelikes of Hassaka and Anson who have hundreds
of thousand followers on the platform thathave also garnered thousands and thousands of dollars
worth of value per share for theirequity on the frontech platform. But like
(24:19):
many crypto apps, since defy exchangeunisop unas unleash this innovation. Frontech also
uses a bonding curve algorithm to setprices, which is a math heavy system
that means trading can happen even whenthere is no buyers, So it is
hard to say how many users theplatform does currently have as trading can occur
(24:41):
even though there's not dam much activityon the platform. That's very interesting and
with that we learn that's a wrap. But it's great to be back.
And in this episode we just talkeda little bit about the Australian dollars,
aggressive depreciation, the upcoming arms IPYou're by SoftBank Saudi, and UE's chip
(25:02):
accumulation and a little bit about friendTych. Thank you very much for tuning
in with us yet another episode ofthe Investitary podcast. We thank you again
for listening and peace, Peace,
Good afternoon, ladies and gentlemen.Welcome back to the Investor's Diary podcast,
where we help you works moder andharder by providing a weekly market updates and
insights. We're back again this weekwith our regularly scheduled podcast. Sorry if
it looks like we've been away fora while, we've had delete our last
episode due to some fasual inaccuracies.But with all that aside, let's focus
on today. The main topics ofinterests for today's episode are the is the
(00:30):
aggressive depreciation of the Australian dollar,the upcoming IPO of ARM, which is
a should manufacturer owned by soft Bank, Talking even more about computer chips,
will even will analyze the reasons behindSaudi and UE and cumulating chips at a
massive scale. And lastly we'll discussthe reason crypto frenzy to the market is
called friantech. Yeah, well,so, welcome back, folks. Let's
(00:52):
start off with the first topic thatwe've mentioned, which was the aggressive depreciation
of the Australian dollars. We're hereto dissect the recent roller coaster right that
the au D has been on andexploring the driving factors behind its decline and
the ripple effects it has had onvarious sectors of the economy. So up,
though, let's just jump right in. Why don't you take us ahead?
(01:15):
Right? So, the Australian dollarhas taken quite a tumble, owing
to a combination of lower interest ratesthan those abroad and mounting concerns about China's
economic slowdown. This perfect storm hasseen the ausea dollars slide from nearly sixty
nine cents US dollars to around sixtyfour cents US dollars in just a matter
(01:37):
of weeks. Yeah, it's fascinatinghow a lower currency, or a depreciation
in the currency can shake up variousaspects of the economy. This depreciation,
for example, will make four andgoods more expensive. It also leads to
increased important inflation if is to persist. And let's not forget about the demand
pressures it generates for Australian goods andservices from both domestic and foreign consumers.
(02:01):
You're right, part, And thisslide in the exchange rate hasn't spared the
fuel pump either. The weaker Australiandollar has contributed to petrol prices surging above
two dollars per leader as importing fuelfrom overseas has become more expensive. Well,
luckily I don't have a car,so I don't have to worry about
the fuel prices. So I actuallyhadn't noticed that, but still interesting to
(02:23):
know. But you know, whatis even more interesting is to see how
the currencies of fluctuation has an impacton consumer sentiments. So senior economists at
anz Adelaide timbrel if I said thename correctly stated that a potential connection between
the weaker exchange rate has a directcorrelation with dwinlink consumer confidence. Right,
(02:46):
and let's also take note of RBA'sstance. They have a more dovish stance
of monty monetary policy compared to foreigncentral banks and this has certainly played a
part in this weakening of the currency. Yeah, that is very true.
The contrast between the RBA or thereserve back on Australia and their approach compared
(03:07):
to the foreign counterparts has definitely addedanother layer of an intricate web of this
global currency dynamics that we're currently facing. Right, And then added to that
is the China factor, as Australia'slarge export marketing and a significant consumer of
resources like iron ore, gas andcoal. Any tremors in China's economy sends
(03:29):
ripples throughout ours definitely, and aswe know, Australia is a very commodity
driven economy and these sort of issuesin China would directly affect Australia. And
talking more about china struggles, there'sthe fact of falling property prices, the
challenges for property developers, soft retailsales, and all of these have a
(03:50):
direct bearing on Australia's export performance,which in turn affects the value for dollar.
It's like a chain reaction, isn'tin part a downturn in China's directly
impacts our key exports and as thedemand waves our currency takes a hit.
Yeah, exactly. And it's notjust about the exports, it's also about
(04:11):
the imports and the tourism. Thefalling dollar presents a golden opportunity for tourists
coming in bound, making Australia amore attractive destination due to their increased purchasing
power because globally, the eighty isdepreciating against most other major currencies. And
I guess that's where the civil aligningis amidst all the fluctuations, right,
(04:33):
It's great to hear how tourists aretaking advantage of the situation, contributing to
our local economy. But then wealso have the flip side right where Australians
heading overseas face the brunt of aweaker aud which can then make them think
twice before splurging more on international trips. That is true, there are two
sides of the story, the jointsand dilemmas of currency fluctuations shaping our decisions
(04:58):
on where to go, what's abuying, how to spend. You definitely
hit the nail on the head,but let's not lose sight of how businesses
are navigating these currency shifts. Importersor firms who primarily import, for instance,
have to juggle the challenge of timingpurchases and setting prices, all while
keeping an eye on these for fluctuationsin currencies right. And it's also very
(05:23):
impressive to see how businesses are usinghedging strategies to mitigate these risks associated with
currency volatility, much like insurance.As one coffee importer pointed out, that's
actually a very solid analogy. It'sincredible how businesses adapt and strategize to ensure
they remain resilient, especially given theweakening aud Now, one of the key
(05:45):
players in this dance of currencies isthe Reserve Bank of Australia the RBA,
their interest rate decisions having far reachingimpact, influencing both local and global in
investor behavior. Yeah, I mean, as we talked about a little earlier,
there's a divergence in the interest ratesbetween Australia and other major countries.
With some central banks raising their rates, global investors may be drawn to those
(06:09):
foreign denominated assets, which would alsoin turn lead to a reduced demand for
the Australian dollar. Right. That'sa very crucial point, and it's very
fascinating just to see how higher interests, the relationship between interest rates and currency
prices, and how higher interest ratesin other countries can trigger shifts in investor
(06:30):
preferences and ultimate influence our currency value. Yeah, and speaking of forecasts,
it's interesting to see the differing opinionsamongst economists about where the Ausie dollar is
headed. So while the RBA projectsa certain level, some institutions have actually
adjusted their predictions based on recent developments. Right. And it is a testament
(06:55):
to the dynamic nature of economics,isn't it. The constant evaluation and reassessment
of data. It's to fine tunepredictions exactly, and I guess it.
They're also a reminder that while forecastsdo provide valuable insights, they are subject
to change as new information emergence.But I guess that is the beauty of
economics. It keeps us on ourtoes, challenges our assumptions, and encourages
(07:16):
us to embrace uncertainty. Not tosound a little too cheesy, but I
think we've covered the aggressive depreciation ofthe ad quite in depth, so I'm
having to move onto the next topic. If you are yeah, let's let's
do that that Soft banks are IPO, right, the story that intertwines technology,
(07:39):
finance and envision. So as wedelve into this, you know this
iconic architecture, a little bit aboutarms and name synonymous with innovation has filed
for its IPO. This move hassent ripples throughout the IPO market, which
(07:59):
has been somewhat dormant in recent timesdue to the fluctuations and interest rates as
we spoke about earlier in Australia,but globally too, as we've alluted in
other episodes, and evolving appetite forrisk, that's right, and the timing
of ARMS IPO is quite significant fromour perspective because this reflects a strategic move
by soft Bank, who owns ARM, to capitalize on the immense potential of
(08:24):
this technology. Giant arms chip designsare the driving force behind the smartphones that
have become integral to our lives,making this IPO a pivotal moment for both
the tech and financial markets, right, and the technology landscapes evolving rapidly,
and ARMS IPO is poised to testthe waters, gauging investor interests and market
(08:46):
appetite for such transformative endeavors. Theconvergence of cutting a technology and financial strategy
is truly awe inspiring. It definitelyis. And I just want to dive
deeper into the roots of ARM alittle bit and it's history. So ARM
is a British company which is headquarteredin Cambridge, and it has a history
that is intertwined with the evolution ofcomputing. It was borne from a joint
(09:11):
venture between Acorn Computers and Apple andARM has become the architecture today behind ninety
nine percent of all smartphones. Sothe smartphone that you're using to listen to
this podcast is probably has a chipthat was designed by ARM. Right,
and Arm's role in architect is pivotable, is pivotal. Their designs set the
(09:35):
foundations for chips that power devices.Like you said, their innovation in energy
efficient designs years ago has also shapedthe modern tech landscape, making them a
neutral force in the tech industry.And here's where this gets interesting for me.
Right, So, soft Bank acquiredARM in twenty sixteen for a thirty
two billion dollars valuation, which markedthe monumental shift in the tech landscape.
(10:01):
This was part of SoftBank's vision totap into the IoT sector or the Internet
of things sector, and this wascatalyzed by this acquisition. Right. And
while the internet so IoT played apart, ARMS impact is far reaching.
Its journey from smartphone chips to connectedcars showcases its adaptability and innovation. However,
(10:22):
it is important to acknowledge the headlines, including the slowdown and smartphone demand,
that the company has been navigating.And I feel this adapting into these
challenges really underscores ARMS resilience. Yeah, and just for the viewers or listeners
at home that are unaware, smartphoneshave been dueling quite a bit. Just
in Apple's most recent Quotality report,they actually saw a decline in the sale
(10:46):
of iPhones because and my assumption andprediction here is that because smartphones have become
a monotonous where each new model hassuch a minor upgrade that most people don't
think it's worthwhile upgrading their phone everyyear. And I can definitely say that's
true for me. I don't knowhow you feel about that. I feel
the same way too. Yeah,And let's talk about ARMS business model again.
(11:09):
So ARMS business model further underscores theirapproach. Right, So they license
their intellectual property for the architectures,enabling other companies to build systems around them.
In recent years, they've also venturedinto selling their own processor designs and
move that actually proved to be morelucrative than mirror licensing. And this,
(11:30):
in my opinion, this transition showcasesthe firm's proactive stands in continuously innovating in
the industry. Right, and thesaga of ARM continues at SoftBank's acquisition in
twenty sixteen, priced at thirty twobillion dollars, remains a watershed movie.
This marked the largest ever purchase ofthe European technology company. At the time.
(11:50):
SoftBank's intentions to see opportunities within theinternetive Things sector exemplifies their foresight,
and I feel that the ripple effectsacquisitions are still felt today. And it's
not just wearables or smart home appliancesthat ARM is involved in. They've also
ventured into new territories like connected cars. But it's also essential, as we
(12:13):
mentioned, to acknowledge the challenges theyface. The slow on the smartphones has
impacted chip demand industrywide, and ARMhas also suffered a bit due to that.
However, navigating through these challenges it'sjust natural and demands a delicate balance
in my opinion. And if wedive into the financials for the company,
(12:33):
the company's recent financial performance highlights bothprogress and hurdles. So earnings data for
the quarter ending June thirty reveals anotable achievement with six hundred million US dollars
generated, Yet the same period alsobrought a nine point five billion yen loss,
(12:54):
which was a significant shift from thetwenty eight point nine billion profit in
the previous year. And these financialdynamics demonstrate the complexities of the industry and
also show the slowdown in the demandfor smartphones. Right, and this narrative
takes a turn as we explore,ARMS pass endeavors SoftBank's initial attempt to sell
ARM to NA Video face regulatory obstacles, specifically concerns over competition in national security,
(13:18):
Navidia's prominent role in the semiconductor landscape, and it's a sense of AI
applications underscore the significance of this hurdle, and the intersection of business interests and
regulatory consideration shapes the trajectory of techgiants. Yeah, definitely, and a
pivot and strategy emerged for soft Bankas they decided to well as we know,
(13:41):
list ARM as an independent company.And this decision follow the regulatory challenges
that were mentioned above by Abdu andilluminates the complex dance of tech conglomerates and
regulatory scrutiny that they have to face. Additionally, rumors also do suggest that
off Bank, through its Vision Fund, intends to secure the remaining twenty five
(14:03):
percent equity stake in ARM. Rightand looking ahead, arms IPO filing unveils
the next chapter. A lot ofinvestors take the stage as the company is
now gauging the market's response questions linkerregarding the quantum of funds they see to
raise and the sought after valuation andthe CEO of arm Rene Haas has propelled
(14:28):
the company into new horizons and thetech world continue to just sit on the
sidelines and watch. The expansion intodata center servers driven by the likes of
Amazon is a strategic move that echoesthe evolution of the tech sector, and
these strategic maneuvers reflect the company's resilienceand forward thinking approach, right and moving
(14:48):
on to more more tech, moretech news. Saudi and UE are accusing
a lot of computer chips and partwould you like to introduce this top Yeah,
for sure, So talking about well, Saudi Arabia and the United Arab
Emirates accumulating a lot of computer chips. We're gonna just dive a little deeper
(15:11):
into how and why they're doing thisto captivate and capture the world of artificial
intelligence. And it's a very excitingjourney because I had actually never heard of
this before we decided to record thispodcast. So diving into the first bit
of information is Saudi Arabia's King AbdullahUniversity of King Abdullah University of Science and
(15:33):
Technology is making waves with its grandplans. The plan is the acquisition of
three thousand high end chips valued ata staggering one hundred and twenty million dollars,
which just showcase their commitment to innovation. Right that's a substantial investment,
reflecting the seriousness of their endeavor.It's really astonishing to see how their determination
(15:56):
to foster local talent is being matchedby their financial back. And speaking of
chips, the numbers are just mindboggling. So let me just tell you
some of the numbers I've researched soopenly. I trained its advanced the GPT
three model, which was its previousmodel on one twenty four eight one hundred
chips now COWSTS, which is theKing Abdullah University of Science and Technology.
(16:19):
Their ambitions are storing higher with asupercomputer named Shaheen three running seven hundred the
Nvidia gracehoppers. This powerhouse is goingto pave the way for Saudi Arabia's own
large language model yep, and thisis really is a truly a big leap
forward. The trajectory of Shaheen threeand the development of their own alms signaled
(16:44):
their intention to make a significant impactin the AI landscape. And let's not
forget about the global collaboration stakes hereright, Cowsts provable responsible AI and Data
Analytics lab is led by Chinese andthis undiscoes the international dimension of this AI
advancement. Right. It is atestament to the inclusive nature of AI research,
(17:08):
bringing together diverse expertise from around theworld that amplifies the potential ground baking
discoveries. Meanwhile, the UAE hasbeen blazing its own trill in the AI
universe. They established an AI Ministryin twenty seventeen, which set the state
for this impressive journey and culminated inthe unbuilding of a generative AI guide.
(17:32):
Their commitment to innovation is truly inspiring. The UE's focus on rectory frameworks reveals
their responsible approach to embracing technologies potential. Yeah, the race for AI excellence
is a global phenomenon, and SaudiArabia and the UA both are clearly in
the driver's seat and they're determined tocreate their own narrative and shape the AI
(17:53):
landscape on their own terms. Right. And as we draw that conversation to
a close, is Avid that outSaudi Arabia and you are making remarkable strikes
in the AI domain. And wewill shift conversation now to the new crypto
frenzy friendtech. That's really been allover my feed this last few weeks.
(18:18):
So yeah, let's jump right intoit. Friendtech is a social interaction that
takes so let's take sorry that.So friendtech takes social interaction with the to
a new level with an intriguing twist. It engages conversations with others. Sorry
to engage in conversations with others,users are required to invest by purchasing shares
(18:41):
tied to another person, and thisparadigm shifts transforms how we perceive online conversations
and interactions. It's so fascinating,isn't it. It's essentially a crypto powered
social network, and when users registeron friendtech, they use their total accounts
as an entry point. Each individual'sTwitter account is intricately linked to chez,
(19:06):
creating an innovative ecosystem where ownership andcommunication is intertwined. Right. But here
is where it gets even more captivating. The value of these sharts isn't static.
It's a dynamic entity that fluctuates basedon the market's perception and engagement within
the individual. So the rise andfall of share prices really mirrors the evolving
(19:30):
narrative of each user. I findthe concept of investing in someone's success quite
revolutionary. So musicians, athletes,and creators of all kinds can now have
their success backed by the very peoplewho admire and support them. However,
with any innovation, like in thepast, there are some challenges. So
(19:52):
firstly, there is the privacy concernsthat have recently surfaced, particularly regarding access
to user Twitter accounts and the Theseconcerns have so far served as a potential
to term for new users. Forexample, I have yet to join the
platform primarily due to that privacy factor, and it is imperative way the benefits
against the risks right. And Moreover, the history of social media on the
(20:15):
blockchain offers both lessons and cautionary tales. For instance, I'm not sure if
the listeners are familiar, but therewas a similar style, similar platform called
big Cloud, which was the flashin the pand social media experiment launched during
the whole crypto supercycle I think twentyone twenty twenty two. But Big Cloud
(20:36):
initially intrigued many pre funding influencers accountswith its unique cryptocurrency had a similar model
where you were able to invest inthe person and the person had shares.
However, its journey from high toobscurity underscores the challenges that such that frintake
could face. Indeed, and therise and fall of Big Cloud's fortunes does
(20:57):
offer very valuable insights all some speculate, myself included that Friantech might follow a
similar trajectory. It is worth notingthat the developer behind frontech is pseudonymous known
as Racer on Twitter, and hedoes seem to have drawn lessons from the
successes and failures of platforms such asbit cloud, right and now delving intv
(21:18):
astonishing growth Friantech, the platform's meteoricrise cannot be overlooked. On a Sunday,
very quiet Sunday, the platform generatedis stagging one point one two million
dollars in fees in just a meretwenty four hours, which which sorry,
since it's been launched on the eleventhof August, and the community fees have
(21:41):
surpassed in astonishing two point eight milliondollars. Just to put those numbers into
perspective, this level of activity onchain is very, very impressive. This
surpassed even the entire Bitcoin network's performancein the same time frame. Now notably
this surge in activity has also propelledbase which friantech is built on, which
(22:02):
is the Ethereum scaling layer by coinbased where friantech is built on, as
I'll just mentioned, and this hasnow claimed the throne as the largest LAYERC
two network, although in my opinionthis is temporary and this achievement has followed
months of rivalry and competition with othernetworks and other layout layer twos on Ethereum
such as Arbitrum and Optimism. Right, and as the crypto landscape evolves,
(22:25):
the financial implications of fantech success areunniable. The platform's designed positions it as
a Monterey layer adjacent to Twitter's tutorprofiles. Now fans arelike like you and
me are not able to purchase,like we said earlier, shares in our
favorite social media influencers athletes, formingan investment avenue that transcends conventional engagement.
(22:49):
What's very intriguing is that even thoughvirtually anyone can claim an account and join,
the spotlight does fall on celebrities orminor celebrities who own a portion of
the trading fees that is generated frombuying and setting their own shares and Intriguingly,
the platform itself emerges as a beneficiarywho retains a large percentage of the
(23:11):
trading fee. Cut Right and Fantechhas been praised for its user friending design
and seamless user experience, a rarityin an industry that has often struggled with
cumbersome interfaces. Despite its mobile onlyaccessibility, the platform standard feature is the
ability for users to directly message thecelebrity they support. So this is a
(23:33):
feature that's different to a big connect, a big cloud. So this is
an alluring feature, especially at atime when messaging platform messaging platform space limitations.
And that's not the only when there'sa bunch of other accounts that are
on the platform that are already worthmore than five six thousand dollars. Racer,
who is speculated to have created theplatform, is the most valuable profile,
(23:56):
with close to one hundred and fiftypeople owning a organized share in the
profile. There's also other Twitter influencerssuch as Kobe, who we have definitely
mentioned in the past, and thelikes of Hassaka and Anson who have hundreds
of thousand followers on the platform thathave also garnered thousands and thousands of dollars
worth of value per share for theirequity on the frontech platform. But like
(24:19):
many crypto apps, since defy exchangeunisop unas unleash this innovation. Frontech also
uses a bonding curve algorithm to setprices, which is a math heavy system
that means trading can happen even whenthere is no buyers, So it is
hard to say how many users theplatform does currently have as trading can occur
(24:41):
even though there's not dam much activityon the platform. That's very interesting and
with that we learn that's a wrap. But it's great to be back.
And in this episode we just talkeda little bit about the Australian dollars,
aggressive depreciation, the upcoming arms IPYou're by SoftBank Saudi, and UE's chip
(25:02):
accumulation and a little bit about friendTych. Thank you very much for tuning
in with us yet another episode ofthe Investitary podcast. We thank you again
for listening and peace, Peace,
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