🍋 The AI Economy

Together With

Good Morning! Even though interest rates have been rising, a new study found that most Americans are still earning rock-bottom interest rates on their savings accounts (see Daily Visual below). Speaking of banks, some experts are calling on the FDIC to increase the maximum deposit amount insurable - right now it’s only $250k.

Jamie Dimon is leading the turnaround plan at First Republic, and is advising the bank on how to raise capital. Amazon will lay off another 9,000 workers in an effort to boost costs. And NYC officially replaced the iconic "I <3 NYC" logo with "We <3 NYC," a decision that has been met with backlash from some New Yorkers.

Want to invest in the next big brand name in your home and get in on the ground floor of an innovative technology company? Check out today’s sponsor RYSE.

Have feedback? Let us know at [email protected].

First time reading? Sign up here.

1. Story of the Day: The AI Economy

High-interest rates may have dealt a crushing blow to Big Tech and Silicon Valley Bank, but there is no need to lose hope for the future of Silicon Valley just yet. In fact, history suggests that during economic downturns over the past century, the technology sector has been the one to pull us out of recessions time and time again. And after a rough 2022 and 2023, some economists and investors think that innovations in AI can be that beacon of hope.

While some think high-interest rates have stifled innovation, we’ve nevertheless seen groundbreaking ideas during tougher times. Take the introduction of IBM's PC in 1981, for example. Despite interest rates being a whopping 17%, IBM took the bold step of releasing their revolutionary product, which forever changed the way we work.

Fast forward to more recent times, and we see that the internet boom largely came after a recession in the 1990s. And even during the Great Recession of 2008, the iPhone was introduced.

Enter ChatGPT, the AI-based language model released in December 2022. Experts believe that AI has the potential to transform the way we work and communicate, and the AI frenzy in 2023 could be just the push the economy needs to grow out of the current recession. With the potential to revolutionize industries from healthcare to finance, the rise of AI could be the key to unlocking new levels of productivity and innovation.

Takeaway: Could AI truly revolutionize our economy, or are we in a bubble and the chatter is all hype and noise? It’s tough to say. And while some are hopeful and say AI could be the ‘2nd industrial revolution,’ others are pessimistic and worry that ChatGPT is just the start of machines taking our jobs. But given the record amount of capital flowing into the AI space, it might be a trend worth keeping an eye on.

2. Markets Rundown

_{For access to Wall Street insider interviews, industry deep-dives, premium research/resources and weekly Knowledge Drop newsletter, check out our Insiders membership.}

Stocks closed higher after the UBS-Credit Suisse deal.

Movers & Shakers

• (+) New York Community Bancorp ($NYCB) +32% after the FDIC said the bank’s subsidiary will assume Signature Bank’s deposits.

• (+) UBS ($UBS) +3% after the Credit Suisse acquisition.

• (–) Bed Bath & Beyond ($BBBY) -21% after the company announced a reverse stock split.

Private Dealmaking

• Rippling, an employee onboarding platform, raised $500 million

• ProsperOps, a cloud optimization startup, raised $72 million

• Nowcoder Technology, a Chinese campus recruitment platform, raised $50 million

• Assured Allies, a longevity assurance platform, raised $42.5 million

• Hexa, an Israeli 3D money visualization and management platform, raised $20.5 million

• Archway, a digital banking startup, raised $15 million

A Message from RYSE: Software Companies Take Big Hits While Hardware Shows Resilience

Since its peak in November 2021, the S&P Software & Services index has dropped by 36.25% more than the S&P Technology Hardware index.

Big names like Salesforce, Snowflake and Zoom have taken significant hits from their peaks in 2021 - Salesforce down 40%, Snowflake down 66% and Zoom down an incredible 85%. All this while hardware focused companies like Apple continue to display resilience in these difficult market conditions.

One company - RYSE - believes this trend of hardware outperformance may continue, and has invested in developing Apple-like hardware products for the smart-home industry. They have patented innovative technology to automate window shades, and help save energy in residential homes, and commercial buildings.

Leveraging A.I. sensors, and weather data, they believe that their technologies can save upwards of 20% on cooling energy and 74% on lighting energy when deployed correctly.

Their exclusive public stock offering is open for a limited time, and investors can invest in RYSE at $1/share.

3. Top Reads

• Credit Suisse-UBS deal shows shareholders no longer in charge (Axios)

• The banking crisis creates two new questions for investors (YF)

• What are AT1 bonds, and why are Credit Suisse’s worthless? (CNN)

• How this financial crisis is different than 2008 (Axios)

• Why do bank runs happen (CNBC)

• The ugly truth about Switzerland for investors (BB)

• The first line of defense should always be cash (CNBC)

• ETF industry could grow to $15T in next five years (Fox)

• Why more deals are likely after the fall of Credit Suisse (NYT)

• Dollar Tree can’t afford to sell eggs anymore (CNN)

4. Shortform Book of the Day: Joyful

Read More Books, Faster - Shortform offers super-detailed guides to 1000+ books in categories like finance, careers, self-improvement, and more. Their comprehensive coverage and deep insights will give you the world's greatest ideas without the fluff.

Start your free trial and get 3 months off the annual subscription!

Have you ever wondered why we stop to watch the orange glow that arrives before sunset, or why we flock to see cherry blossoms bloom in spring? Is there a reason that people—regardless of gender, age, culture, or ethnicity—are mesmerized by baby animals, and can't help but smile when they see a burst of confetti or a cluster of colorful balloons?

We are often made to feel that the physical world has little or no impact on our inner joy. Increasingly, experts urge us to find balance and calm by looking inward—through mindfulness or meditation—and muting the outside world. But what if the natural vibrancy of our surroundings is actually our most renewable and easily accessible source of joy?

In Joyful, designer Ingrid Fetell Lee explores how the seemingly mundane spaces and objects we interact with every day have surprising and powerful effects on our mood.

Drawing on insights from neuroscience and psychology, she explains why one setting makes us feel anxious or competitive, while another fosters acceptance and delight—and, most importantly, she reveals how we can harness the power of our surroundings to live fuller, healthier, and truly joyful lives.

“The only requirement is what you already have: an openness to discovering the joy that surrounds you.”

5. Short Squeez Picks

• 8 books that will sharpen your thinking

• Against doomerism

• An oral history of LinkedIn

• The true cost of commuting

• Psychological paths of least resistance

6. Daily Visual: Most Americans Still Earning Rock Bottom Interest Rates

Select US Savings Accounts Rates

_{Source: Axios}

7. Daily Acumen

Successes can be fleeting, and failures can be devastating, but what truly matters is having the courage to continue on. It's not about the end result, but about the journey and the effort put forth.

Failure can be a powerful teacher, providing valuable lessons that can help you grow and improve. The key is to not let failure define you or deter you from pursuing your goals. Instead, learn from your mistakes, pick yourself up, and keep moving forward.

On the other hand, success can also be a fleeting state. Just because you achieve a certain level of success doesn't mean you can rest on your laurels. It's important to continue working hard and pushing yourself, as complacency can lead to stagnation and eventual decline.

Ultimately, it's the courage to keep going in the face of both success and failure that counts. This requires persistence, resilience, and a willingness to learn and adapt along the way. So, whether you're experiencing a setback or a triumph, remember to keep moving forward with courage and determination.

8. Memes of the Day

 Advertise With Us / Merch Store / Private Equity Course

Want more Short Squeez?

Become an Insider. You'll get access to:

1. Industry deep-dives & compelling investment ideas

2. Wall Street Insider interviews breaking down their investment portfolio, strategy & investment picks

3. Knowledge Drop - an exclusive alpha-generating newsletter covering the best weekly research & content (podcasts, articles, blogs)

4. Vault – a collection of investing & recruiting guides, modeling courses, salary / comp data, institutional research (40+ resources added / month)

See you on the Inside.

*****