S&P Global — 8 August 2024
Daily Update: August 8, 2024
Regional Differences Will Affect AI Development
By Nathan Hunt
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No single path forward for all countries exists in adopting and applying AI technologies. AI development will be multispeed and multidimensional and will depend upon public and private investment capacity, digital infrastructure, policy support, and workforce capability. Different countries and regions will take different approaches to each of these factors, attempting to play to their strengths without creating destabilizing disruption to labor dynamics or society. Wealthy countries with existing technology industries appear to have a first-mover advantage over developing nations when it comes to AI. Researchers at S&P Global Ratings have examined the complex interactions of different factors on the regional development of AI capabilities in a recent article, “Investment And Talent Are The Keys To Unlocking AI's Potential.”
AI funding will differ across regions. In markets such as the US, private sector funding for AI investment is a core strength. Private sector funding for AI in the US exceeded $355 billion from 2013 to 2023. China ranked second in private sector funding at more than $103 billion. Because of this vast pool of private funding, the US led all other countries in the number of AI companies created during this same decade at 5,509. Private investment in AI startups is projected to increase between 70% and 74% each year, reaching $800 billion-$900 billion by 2027.
Private sector funding is not the only source of investment for AI development. Much of China's spending on AI is likely to be funded by its government and could be relatively opaque to outside observers. China has proven to be adept at mobilizing resources around strategic initiatives in the past. The US and Europe have also invested government resources to boost technology competitiveness, notably with the CHIPS and Science Act in the US.
Unlike cellular technology, which could be introduced to the developing world directly and speedily, AI development depends on the existence of a robust digital infrastructure. Computing capacity, broadband speed and data productivity will determine which countries experience the most near-term gains to productivity from AI.
Policy also plays a role in digital infrastructure. Countries that have AI-friendly policies and regulatory approaches are better positioned to achieve early benefits. The US, Singapore, the UK, Finland and Canada are all countries that combine both strong existing digital infrastructure and supportive policy regimes.
Workforce capability describes the match between technical skill and technical demand. Some countries and regions have an abundance of skilled workers who may be considered AI-ready. Those skilled workforces can be products of both immigration and education. The US, China and some European countries have invested in developing and encouraging AI education at the university level. But successful countries and regions will require both skills and demand. The US is the largest job market for AI-related roles, accounting for about 1.6% of postings in 2023. In the short term, an AI talent shortage is almost inevitable; over time, reskilling and redistribution of AI-ready talent will probably meet market demand.
Today is Thursday, August 8, 2024, and here is today’s essential intelligence.
Global Green Bond Sales May Pick Up After Q2 Dip As Rate-Cut Expectations Grow
Global green bond sales are likely to pick up after declining in the quarter ended June 30, as growing expectations for a US interest rate cut will boost issuance. Green bond sales fell 5.7% year over year to $150.45 billion in the second quarter as issuance slowed in key Europe and Asia-Pacific markets, according to data from UK-based green bond tracker Climate Bonds Initiative (CBI). Issuance in the April-to-June period was down nearly 16% compared with the first quarter. Nonfinancial corporates and sovereigns drove volumes in the quarter, issuing $51.37 billion and $32.92 billion, respectively.
—Read the article from S&P Global Market Intelligence
US Economy Grows Strongly In July As Service Sector Resilience Offsets Manufacturing Malaise
The PMI surveys from S&P Global brought news of a welcome combination of solid economic growth and cooler selling price inflation in July. However, growth is unbalanced with robust service sector gains contrasting with a near-stalled picture for the goods-producing sector. Furthermore, although selling price inflation moderated, the surveys saw some upward pressure on costs, growth of which remained elevated by historical standards.
—Read the article from S&P Global Market Intelligence
Size, Momentum and Value
Burgeoning optimism surrounding impending potential Fed rate cuts and a rotation toward smaller-cap stocks in July may have been short-lived, as global market jitters led to the trouncing of stocks across the capitalization spectrum on Aug. 5, 2024. The S&P 500® plunged 3%, its largest daily decline in almost two years.
—Read the article from S&P Dow Jones Indices
ECSA Freight Watch: Market Weakens As Fundamentals Challenge Sep Deliveries
Amid the usual summer downturn, the South Atlantic grain freight market is facing an anticipated decline rather than a rebound. Intensified tonnage concerns and weak rates in the South Atlantic, combined with ongoing Pacific market weakness, are putting increasing pressure on early-September arrivals. With a rebound during this period increasingly unlikely, the end of seasonality in the East Coast South America suggests a cautious outlook.
—Read the article from S&P Global Commodity Insights
Ukraine's Naftogaz Boosts Gas Output 7% On Year In First Seven Months
The upstream companies of the Naftogaz Group — UkrGazVydobuvannya and UkrNafta — produced 8.6 Bcm of gas in the first seven months of 2024, a 7% increase year on year, the Ukrainian state-owned company said Aug. 6. In a statement, Naftogaz CEO Oleksiy Chernyshov said gas production figures exceeded the operational plan by 2%. "The work does not stop -- not only in the central and western regions, but also in the eastern ones despite all the military challenges," Chernyshov said.
—Read the article from S&P Global Commodity Insights
Listen: Next In Tech | Ep. 179: Kagan Media Summit
For the first time since the pandemic, the Kagan Media and Telecom Summit was back in person in New York, with a packed agenda looking at topics ranging from sports media rights to broadband technology and regulatory changes. Analysts Justin Nielson and John Fletcher join host Eric Hanselman to explore the insights and aspects that made up the Summit. There are media rights deals that have shattered previous records in the NBA and women’s sports, such as the US National Women’s Soccer League. Advertising technology has changed how market participants are looking at monetization. Given this is an election year, ad spending will be booming and additional advertising channels add complexity to value and pricing.
—Listen and subscribe to the podcast from S&P Global Market Intelligence
Interact New York 2024 (October 15-16, 2024)
Join us on 15-16 October for Interact, our flagship software and solutions conference for public and private markets, in New York. Interact provides a unique opportunity to hear experts from across S&P Global and the wider industry, while networking with peers from the investment management, corporate, banking and broader financial community.
—Register for the in-person event from S&P Global Market Intelligence