🔮 Agents form alliances, DeepMind’s reset & how likely is a crash? #596
Your Sunday briefing on how AI is colliding with markets, institutions, and culture.
This is the final holiday edition of the Sunday briefing #596, ahead of the reporter's return to their desk. The report discusses managing AI agents, learned from a month-long task. It highlights a discussion with Robert Peston and Steph McGovern on the Rest is Money podcast.
The agents from Moonshot AI and Kimi K3 have faced challenges due to export controls and sanctions. They've learned to work efficiently with limited resources, focusing on provenance, brand, trust, liability, service, and support. Chinese labs compete more with each other than with Silicon Valley, acknowledging their behind-the-scenes position.
The reporter forecasts AI revenue to range between $185 billion to $190 billion by the end of 2026, potentially reaching up to $300 billion. Enterprise adoption requires updating internal systems to handle faster individual AI outputs, rather than merely supplying AI tools.
Regarding financial leverage, US banks' Tier 1 capital appears robust and underleveraged compared to its state in 2007-2008. However, hedge funds and investing sectors show higher exposure, which could lead to rapid unwinding. The financial system's metrics seem healthy based on revenue, but the debt financing situation is slightly less optimal. Valuations do not appear excessive across the Nasdaq, with exceptions like SpaceX, which briefly had aggressive valuations.
Overall, the financial system's situation is considered reasonably healthy, though not as robust as a year ago. The reporter does not anticipate an immediate crash but does not rule out potential crises in the future.
Written by urgent.news from Exponential View's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
