Investors are selling tech stocks, as they reassess the costs and benefits of AI, both for the companies facilitating the large language models, and for those whose business models are threatened by AI. Capital spending on Wall Street this year on AI by big tech companies is in excess of $1 trillion, and that’s triggered concerns about when companies will get payback.

The share price of market leader, chipmaker NVIDIA, is up slightly this year. While it has outlined huge capex plans, it's also selling chips, making real money from the AI revolution. Microsoft, by contrast, is spending money and promising to make money from AI, and its share price is off 19 per cent. Amazon is in a similar position, and its share price is off nine per cent this year.

Local software provider Atlassian is listed on the Nasdaq. Its share price is off 56 per cent this year, and close to 80pc over the past year on fears that its products will be replaced by AI.

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News in brief

The federal government has released a 300-page business case for a 194km fast rail link between Sydney and Newcastle, which could carry trains 200 metres long, and travel up to 320km an hour, and take about an hour to travel between the two cities.

Scaling back the capital gains tax concession for property investors would do little to help supply, but it would help more first home buyers enter the market, according to the federal Department of Treasury.

Scentre Group, owner of Westfield shopping centres in Australia, is pushing hard into residential housing, and has lodged proposals to develop more than 16,000 apartments at six of its malls.

Australia’s largest oil and gas company, Woodside, has delivered a 24 per cent drop in full-year profit on softer commodity prices, as it continues its search for a new CEO.

Donald Trump is implementing a new global tariff at 10 per cent rather than the 15 per cent rate announced at the weekend after his defeat at the Supreme Court, according to a notice from the US customs agency.

Fear-o-meter

The AI revolution is unstoppable. But that doesn’t mean we know where it is going. Investors in recent weeks have sold off tech stocks, legal firms, insurance companies, tracking businesses and others all fearful that AI will replace their business models.

Maybe it will. But that doesn’t mean those companies won’t reinvent themselves or potentially benefit from using AI smarter.

Google, for example, relied heavily on people paying for Google ads. It realised that revenue model was fading. Its parent Alphabet reinvented itself with its Gemini large language model. It is now one of the leading exponents of AI.

(According to SparkToro, already more than 50 per cent of search is what’s known as “no-click” or “zero-click”. People read the AI summary and don’t click on a website.)

Atlassian is down nearly 80 per cent over the past year on concerns its business will be undermined by AI. No matter how much boss Mike Cannon-Brookes says AI will help its collaboration tools, not replace them, investors keep selling.

The point is while we know the AI revolution is inescapable, it isn’t clear where it is going.

Fear & Greed Q+A today

On how AI can help with Australia's productivity dilemma, and why local businesses are struggling with the last mile. It's one of the topics being explored at today’s Agentforce World Tour Sydney. Fear & Greed is partnering with Salesforce for this event.

 

“Globally, we’re seeing an increase quarter on quarter of 70 per cent of our customers going from pilot to production with AgentForce, which is super exciting. So all in, we’ve got over 3,300 customers globally live in production getting value from AgentForce.

 

ANZ Bank — they’re saving their commercial bankers a month per year per banker. So less time doing admin, more time with customers, and everyone on the equation wins. Xero — their customer experience team is averaging an increase of 20 per cent higher speed to answer and 20 per cent higher on customer happiness.

 

We also have an employee agent called Slackbot. I use it every day on my phone before every customer meeting. It scrapes Google Drive, my email, and Salesforce. And it gives me the contextual intelligence to save me time. If I don’t get a briefing before a customer, I can walk in and know more about them and know what questions to ask.”

Greed-o-meter

A comfortable retirement now requires tens of thousands of dollars more in superannuation, according to new figures from the Association of Superannuation Funds of Australia. A single homeowner retiring at age 67 requires a $630,000 super lump sum to live comfortably, while a couple needs $730,000. That's up $40,000. Here are ASFA's calculations for weekly expenses in retirement:

Source: ASFA, reported in The Australian

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