Top findings from Davos

Top findings from Davos

Panel discussions, back-to-back private meetings, talks at the best parties to attend: The World Economic Forum in Davos, Switzerland was back to its pre-pandemic form this year, as leaders gathered to discuss the state of the world. Had a meeting for.

It was the first Davos gathering without any Covid-related restrictions since 2020, as fears about the pandemic had almost completely subsided. But those present had a lot more on their minds. Here are some of the big takeaways from the five-day conference that ended on Friday.

Artificial intelligence was discussed everywhere. Several meeting places on the main street of Davos presented themselves as places to learn about AI; dozens of official panels focused on the technology (including “Generative AI: The Steam Engine of the Fourth Industrial Revolution?”); And the rock stars of the gathering were AI leaders like OpenAI’s Sam Altman, Inflection AI’s Mustafa Suleiman, and Foghere’s Aidan Gomez. While the official theme may have been about “rebuilding trust,” the unofficial theme was almost undoubtedly “Artificial Intelligence Will Reshape Everything.”

At times, the excitement of discussing potential uses of AI outweighs the current reality of the technology, and many acknowledged that it is too early to accurately predict its future. Attendees also discussed the potential dangers of AI, including job losses, increasing social inequality, and the rapid spread of misinformation. One industrial executive mused in a private discussion about whether the cost of retraining workers whose jobs were replaced by AI would eat up a large portion of the savings created by tech-enabled efficiencies, though others Said that he had always planned to reinvest any such savings in himself. professions.

ESG may be on the back burner, but it’s still on the stove. As DealBook’s sister newsletter Climate Forward wrote this week, climate change was not a big focus of the discussion at Davos, despite 2023 being the hottest year on record.

Nevertheless, both finance and industry officials spoke positively about financial opportunities in climate change, including lending to electric vehicles and decarbonization projects.

Optimism continued, albeit cautiously. While attendees were quick to notice the rise of populist politics and geopolitical risks such as two wars, the outlook in Davos seemed quite positive.

Executives said the macroeconomic picture looks promising for most of the world, as the Fed and other central banks appear ready to cut interest rates and inflation appears largely under control. While some allowed that adventurous regulators might hinder deal making, almost all companies were ready to get into the business through M&As, initial public offerings and others.

That said, many – perhaps chastised by Davos’ collective blind spots on the coronavirus at the 2020 confab – said businesses need to be prepared for potential challenges, including an escalation of the Israel-Gaza war, over issues like US-Chinese Intensification of stress is involved. A shocking blow to Taiwan and its economy.

And here’s the final round of what was seen and heard at Davos this year:

  • At the annual luncheon, hosted by Lally Weymouth, a senior associate editor at the Washington Post, attendees were given time to speak, but few stayed so long that OpenAI’s Altman—who is the business director of this year’s event— Hasti Hai – was given only a few moments. To talk, DealBook listens. (Blackstone’s Steve Schwarzman offered Altman his time.)

  • A parlor game among attendees was comparing the scores generated by their Ora Ring health trackers, which were typically low due to back-to-back meetings during the day and partying well into the night. (Andrew’s “readiness score” – Ora’s measure of whether “you’re ready to take on bigger challenges or if you need some recovery and rest” – hovers between 50 to 60 out of 100.) Less hypercompetitive. Those who went to the stage said that they were too scared to see their scores. – Michael J. de la mercede

Stocks reached new highs. The S&P 500 index closed at a record on Friday, surpassing its previous high set in early 2022. Investors have been paying attention to signs that the Fed has raised interest rates and are betting that will help expand corporate profits.

Apple lost a patent battle. The company is removing blood-oxygen sensors from its Apple Watch Series 9 and Watch Ultra 2 after the International Trade Commission ruled that the company infringed a patent held by medical technology company Masimo. Apple this week lost an appeal to delay a ban on device imports imposed by the ITC

Donald Trump wins massive victory in Iowa caucusesAnd now all eyes are on Tuesday’s New Hampshire primary election, when she is expected to face a strong challenge from Nikki Haley in the state, where independent voters can also vote. Trump’s victory comes as he faces 91 felony counts and four criminal charges.

Dick Bows said he would retire after a 50-year career. A banking analyst whose contradictory and frequent calls won him few admirers in Wall Street’s executive suites, the 83-year-old remained a media magnet until the last possible moment; He was quoted in Bloomberg on Thursday discussing Trump’s impact on stock prices.

A federal judge this week threw JetBlue Airlines into turmoil by blocking a $3.8 billion deal to acquire Spirit Airlines. Overseeing the appeal of that decision will be the first of several pressing challenges awaiting JetBlue’s new CEO, Joanna Geraghty, when she takes over next month.

Geraghty, a 51-year-old longtime JetBlue executive, replaces Robin Hayes, who cited health concerns and “the extraordinary challenges and pressures of this job” when announcing this month that he planned to step down.

Geraghty has been at JetBlue for nearly two decades, having held roles ranging from legal, operations and human resources, and has served as chief operating officer since 2018. A lawyer by training, he worked at the law firm Holland & Knight before JetBlue. she will be First woman to lead a major US airline,

And when she takes charge she will have to deal with a difficult problem.

The first major function: monitoring the appeal. JetBlue and Spirit said Friday they have filed a notice of appeal with the U.S. Court of Appeals for the First Circuit. Such a move is risky because it increases both costs and uncertainty.

The Justice Department had argued the existence of a “Spirit effect”, in which Spirit’s existence forced other low-cost airlines to lower fares. Paul Dennis, who represented US Airways in its merger with American Airlines a decade earlier, said he thought the trial judge who blocked the merger had wrongly assumed that Spirit would remain as strong a competitor as it was. . The airline, which hasn’t made a profit since before the pandemic, is cutting routes and struggling with a heavy debt load. Soul Said on FridaY that it was assessing options to refinance the maturities due in 2025.

“It’s not clear whether Spirit’s influence will last two years from now,” Dennis said.

Nevertheless, the judge rejected the notion that Spirit was so weak that it needed to make a deal (“failed firm defense”), arguing that the airlines “presented no evidence that Spirit was in such dire financial straits.” The situation was such that it had no hope for its future.” And as long as Spirit is in business, it will remain behind low-cost fliers, said George Hay, an economics professor at Cornell University who previously worked at the Justice Department.

“The only thing they can offer is low cost,” Hay said. “Unless they’re virtually bankrupt, they’ll still be a competitive force.”

Losing the appeal would mean that JetBlue would need to compete with the Big Four airlines on its own. all four have joint 66 percent stake Of domestic market. The deal with Spirit will give JetBlue additional power over planes, airport gates and staff. The company’s other attempts at expansion have also been thwarted: a previous partnership with American Airlines was blocked due to its own antitrust concerns. And the carrier lost to Alaska Airlines in its attempt to buy Virgin America.

JetBlue is also still grappling with post-pandemic changes. there are more air travelers traveling internationally, and a shortage of airline traffic controllers persists, causing the system to become blocked. On Friday the airline said it would cut more routes To improve profitability and reliability. (The airline told CNBC that the plan was already in the works before the judge’s decision.)

We may soon learn how Geraghty plans to address these challenges: JetBlue will report earnings next week.

China released a lot of bad news this week, but one data point stood out: The population has declined for the second year in a row, according to government data. The country’s demographic crisis is showing no sign of abating. A rapidly aging population is already putting pressure on health care and pension systems, while President Xi Jinping finds it increasingly difficult to boost domestic consumption and reshape the economy. Low birthrates of future workers also threaten medium to long-term growth.

Some people hope that the Chinese lunar calendar can provide some help. The Year of the Dragon, which begins next month and occurs every 12 years, has historically seen a boom in so-called baby dragon, One reason is that some Chinese traditionally believe that children born in the year of the Dragon are lucky And more likely to succeed.

But experts warn there’s a catch: Women of childbearing age in China, who tend to have fewer children than their parents, if at all, are less likely to believe in the age-old superstitions. Is. “Auspicious zodiac years in the past have seen higher birthrates,” Wang Feng, an expert on Chinese demography at the University of California, Irvine, told The Financial Times. “But given the gloomy economic outlook and pessimism among young people, I doubt we will see a notable rebound this year.”

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