TheChek News Flow

‘MiniLife’ research extends growing field of synthetic biology into new territory

European scientists have started work on a project to create simple forms of life from scratch in the lab, capitalising on theoretical and experimental advances in the fast-growing field of synthetic biology.

Starting with inanimate chemicals, the researchers aim to produce metabolically active cells that grow, divide and show “Darwinian evolution” within six years.

The €13mn “MiniLife” project, which is funded by the European Research Council and involves biologists and chemists from several universities, could be the first in the world to reach the minimum criteria for a synthetic living system.

“Success would constitute a landmark achievement in basic science,” said Eörs Szathmáry, director of the Centre for the Conceptual Foundations of Science at the Parmenides Foundation in Germany, who is a principal investigator on the ERC grant. “De-novo creation of living systems is a long-standing dream of humanity.”

John Sutherland, who works on the chemistry of early life at the MRC Laboratory of Molecular Biology in Cambridge, said the project joins a growing worldwide effort to “create minimal living systems”.

Sutherland, who is not involved in the MiniLife project, added: “This is driven by the perennial desire to understand how life originated on Earth and whether it could also have originated elsewhere in the observable universe.”

Other artificial life researchers are working with the known building blocks of life on Earth, particularly the nucleotides that make up ribonucleic acid. The ERC project, in contrast, aims truly to start from scratch, without using molecules that are themselves products of evolution.

“We abstract away from known life forms because they are highly evolved creatures,” said Szathmáry, “and simplify so as to arrive at a minimalistic formulation.”

The MiniLife researchers are evaluating four systems that might, individually, or in combination, be developed into a basis for minimal life. All are “autocatalytic”, a property essential for self-replication in which a chemical reaction is catalysed by its own products.

One candidate is the formose reaction. The process, discovered in the 19th century, converts an extremely simple chemical, formaldehyde, into an increasingly diverse and complex series of sugar molecules. As the reaction is fed with formaldehyde, the droplets’ behaviour varies with the composition of sugars inside them.

“Some grow faster and divide more quickly than others,” said Andrew Griffiths, a MiniLife investigator at the École Supérieure de Physique et de Chimie Industrielles in Paris. “We end up with the emergence of something equivalent to fitness in biology, like a mixture of slow-growing and fast-growing bacteria, but in a very simple chemical system.”

The formose-based system must be able to display reliable hereditability — passing on acquired characteristics from one generation to the next — perhaps in conjunction with one of the other systems being evaluated.

The six-year timing is ambitious, said Griffiths, who is optimistic that the project will be able to “demonstrate rudimentary Darwinian evolution”. As a minimum that would involve a system that can switch between two heritable states in different environments, analogous to the famous peppered moth whose wings are white in clean environments and black when it lives in polluted places with dark surfaces.

Sijbren Otto, a professor of systems chemistry at Groningen university and another member of the MiniLife team, said his primary motivation was “fascination with the nature and origin of life. Although the molecules we develop will probably not be the ones from which life started on the prebiotic Earth 3.8bn years ago, the mechanisms we hope to unveil will be very relevant for understanding what happened then.”

Last month an international group of researchers warned of the “unprecedented risks” posed by another area of synthetic biology. They said “mirror life” — manufactured bacteria that are structural reflections of natural microbes — could overwhelm the defences of people, other animals and plants.

Asked about the safety of the MiniLife project, Otto said its creations were “extremely unlikely to have any viability outside very controlled lab conditions” and posed no possible risk to the public.

However, the team is working with experts to develop an ethical framework for the research. “Now is the time to think much further ahead to where the research is likely to lead,” Otto said.

Private credit may end up looking a bit more like a bank

As the industry expands, there are some areas that should start to attract regulatory scrutiny

Banks may find it galling to see lightly regulated private credit making inroads into their business. But by and large, the growth of the sector is good news for the financial system. Rather than turning short-term deposits into long-term loans (a mismatch that has been known to trip up banks), funds tap into genuinely long-term capital, broadly matching the duration of their loans. 

Yet that is only true insofar as private credit sticks to its core mission. As the industry expands, and stretches its tendrils towards new investors and new investment opportunities, there are some areas that should start to attract regulatory scrutiny. 

For one thing, private lending is becoming increasingly enmeshed with the traditional banking system. Banks strike partnership agreements with private credit funds, and lend them money. That is not necessarily concerning given that the debt gets sliced up and banks end up holding the less-risky tranches on their balance sheets. It is also still tiny in the context of banks’ loan books. But the overall exposure — and whether it becomes concentrated with some particular lenders, or some particular private credit managers — is worth keeping an eye on.

Another issue is private credit’s own loan quality. Where it engages in direct lending, it often serves riskier companies — especially now that banks and the syndicated loan market are again on hand for those seeking plain-vanilla debt. Payment-in-kind loans — which allow issuers to defer interest payments — have been rising, partly as a result of straitened companies seeking to refinance.

Whether this additional flexibility will just delay inevitable blow-ups — a drag on private credit groups themselves and the economy at large — or whether it will help fundamentally good companies find a path to profitability, is an open question. But as the private credit industry becomes bigger, regulators may be keen to delve more deeply into loan books.

Most obviously, any effort to attract high net worth, or even retail, money is destined for much hoop-jumping. Just think about the complexities involved in State Street and Apollo’s mooted public-private credit exchange traded fund, for which the companies requested approval in September. There are obvious questions around transparency, pricing and valuation — hard enough to do on a quarterly basis, let alone daily.

The question of liquidity is even more problematic. If more investors want to sell their ETF than there are buyers in the market, Apollo is on hand to buy a slice of the private loans to provide backstop liquidity. It may not need to, especially if the fledgling secondary market for private loans develops. But, as private credit expands, the age-old problem of how to turn short-term money into long-term loans may end up resurfacing in unexpected places. 

Belgium bans disposable vapes as concern grows over e-cigarettes

Experts say crackdowns on single-use products may have limited impact on growing industry

Belgium on Wednesday became the first EU country to ban sales of disposable vapes, as governments across the continent try to reverse growing e-cigarette use among younger people.

England, France and Germany are planning tighter regulations, but experts warn such moves are likely to have only limited impact on the rapidly growing industry. Hungary banned the ElfBar brand of disposable vapes two years ago on the grounds that the product had a high nicotine content and was being marketed to minors.

The looming controls highlight the difficulties policymakers face as they try to manage the health risks of vapes while supporting their positive impact in helping adults wean themselves off tobacco cigarettes. The moves reflect concern over how the pricing and marketing of disposable products have fuelled underage use and attracted young people who may never have smoked cigarettes.

Yet disposable vape curbs were unlikely to have much effect as consumers could easily shift to reusable products such as pod vapes and vape pens, said Caitlin Notley, professor of addiction sciences at the UK’s University of East Anglia.  

“Policies like this [Belgian ban] are important for politicians because they make a clear statement,” Notley said. “But there’s probably going to be a limited impact.”

E-cigarette use has grown sharply over the past decade. The products are less harmful than tobacco cigarettes because they do not produce tar or carbon monoxide, but most still contain the addictive ingredient nicotine. Studies have suggested vape use can damage blood vessels and lung function.

Authorities are also worried about the social and environmental effects of disposable vapes. They are generally made of hard-to-recycle mixed materials, including a lithium-ion battery.

In the past few years, single-use vapes have rapidly attracted a new generation of users who have never previously smoked.

More than half of British vapers aged 11-17 said they used disposable products more frequently than reusables, according to a survey this year by campaign group Action on Smoking and Health. Current vaping rates among the underaged cohort, which includes using the products less than once a month, is 7.2 per cent, Ash added.

Young people drove a rise in the prevalence of vaping by adults in England who had never regularly smoked from 0.5 per cent to 3.5 per cent between 2021 and 2024, according to a study published this year.

“For those who would have taken up smoking, [vaping] is a good thing,” said Sarah Jackson, co-author of the paper and principal research fellow in the tobacco and alcohol research group of UK university UCL. “For people would not have otherwise taken up smoking, starting to vape regularly will expose them to more harm than if they had neither smoked nor vaped.”

Some vaping products use designs that appeal to younger people. Disposable brands such as ElfBar and Lost Mary, both made by China’s Shenzhen iMiracle Technology, deploy tropical fruit flavours and vibrantly coloured packaging.

Vaping industry representatives argue that authorities should respond with stronger enforcement rather than outright bans on disposables. This could include licensing of retailers, as well as steep fines without prosecution for selling illegally to under-aged buyers.

“Just banning the products really isn’t the answer,” said Dan Marchant, managing director of Vape Club, the UK’s largest online vape products retailer. “We need proactive enforcement of the current regulations.”

Banning single-use vapes would drive consumers towards illegal products, industry figures add. Illicit products account for as much as one-third of the vape items sold, the UK’s Chartered Trading Standards Institute has estimated, with infringements including inaccurate tank sizes, excessive nicotine concentration and harmful materials.

All vaping products sold in European countries should be pretested or preregistered to ensure regulatory compliance, said Asli Ertonguc, western Europe area director for British American Tobacco.

“The [disposables] prohibition will create illegal markets, which is our biggest concern,” Ertonguc said. “[It will also encourage] users who are accustomed to these products to go back to smoking.”

Other observers, including the World Health Organization, argue for tougher rules to restrict vaping products’ attractiveness. The UK parliament is considering restrictions on packaging, marketing, display and minimum pricing of vapes, said Nicholas Hopkinson, a professor of respiratory medicine at Imperial College London.

The disposables ban would not reduce usage if companies continued to market other “cheap, colourful and appealing devices that are notionally reusable but in practice treated as disposable”, Hopkinson said.

The disposables bans will be closely watched to gauge consumer behaviour.

Jasmine Khouja, a senior research associate in the tobacco and alcohol research group at the UK’s Bristol university, pointed to a range of potential outcomes in a survey of young UK adults on the upcoming ban, from switching to reusable or other nicotine products to quitting vapes altogether.

“Some even said they would switch to smoking because they thought it might help them quit nicotine, as it’s not as nice as vaping,” she added.

Will weight-loss drugs lead to upheaval in the sugar market?

While many traders have brushed off concerns, the potential impact is clear

The health risks of too much sugar have been made clear, but the billion-dollar global market to supply it is thriving. Sales of sweet treats remain strong, and waistlines keep expanding. Could weight-loss drugs now succeed where governments, scientists and doctors have failed: crushing demand for sugar? 

So-called glucagon-like peptide-1 receptor agonists (GLP-1s) contained in such drugs as Wegovy, Mounjaro and Ozempic curb users’ appetites and are being hailed as game changers for tackling obesity and potentially a range of other conditions, from diabetes to addiction. They could also lead to an upheaval in sugar markets.

Fears that Americans on GLP-1s will stop buying treats have already spooked businesses and investors. Mondelez and PepsiCo stocks took a hit after Walmart chief executive John Furner reported that customers on these drugs were buying fewer groceries. Hershey has also acknowledged experiencing a “mild impact” on sales, attributed to the growing use of GLP-1 medications.

Sugar traders, for now, are brushing off concerns about weight-loss drugs’ potential to dent demand. Perhaps they’re battle-hardened — decades of sugar-is-bad campaigns have not made a dent in global consumption, which has quadrupled in the past 60 years, according to Professor Paul Behrens of the British Academy. Sweet treats still fly off the shelves in most markets, and until recently sugar prices have been riding high on weather woes and rising production costs.

There are other reasons for traders’ nonchalance. So far, Ozempic and other drugs are pricey and only available to a small segment of wealthy consumers in developed countries. Even if these appetite-suppressing drugs do start reducing demand, the thinking goes, it’ll be a slow burn, giving markets and sugar producers plenty of time to adjust.

But could this confidence be misplaced? Weight-loss drugs do work in curbing appetites. That makes them far more likely to reshape sugar consumption — and with it, the sugar market.

Stephen Geldart of London-based sugar merchant Czarnikow believes the GLP-1 drugs are already on track to disrupt demand, starting with wealthy nations. “I think we’re just in the early stages of it, partly because these drugs are still quite expensive,” he told me. “So they’re not widespread — yet.” 

That “yet” looms large. In the UK, for example, the government plans to roll out Mounjaro on the NHS. Prices are likely to drop elsewhere too, especially as pharmaceutical companies race to sell compounded versions of drugs, circumventing patents.

If prices fall and access broadens, the ripple effects could reach middle-income and even developing markets. The obesity epidemic and slew of health conditions that come with it are not limited to rich western nations. In India, the world’s biggest sugar consumer, rates of diabetes and obesity are soaring. Indians consume a staggering 29mn tonnes of sugar annually — 15 per cent of global demand. Even a modest uptake of GLP-1s there could shake the market in ways that traders might find hard to ignore.

Geldart highlights another phenomenon that should give sugar market participants pause: heavy buyers of products with high sugar levels such as ice cream, cookies and chocolate account for a disproportionate amount of sales. If such users cut back, there could be a big impact.

Tracking sugar consumption is notoriously tricky, though. There’s a real risk, therefore, that these trends could develop under the radar before the industry wakes up to what’s happening.

However, a quiet drop in demand could be magnified by rising supply. High prices over the past year have spurred a wave of sugarcane investments, particularly in Brazil. If production ramps up while consumption falters, the market could face a supply glut that drags prices lower and forces a painful adjustment. Already, prices have fallen back recently on reduced production worries. Raw sugar futures in New York have dropped from their November 2023 peak of 28 cents a pound, plunging this month to less than 19.50 cents.

Sugar’s adaptability — it can be repurposed into ethanol for fuel or bioplastics — might provide a cushion, especially as demand for low-carbon fuels and renewable materials grows. Yet this transition won’t happen overnight.

Until now, the sugar market has not attracted much speculative interest. But how long before short sellers seize an opportunity to get a slice of the Ozempic pie? 

Tech group emerges as crucial backer of start-ups seeking to gain from the AI revolution its chips are powering

Nvidia invested $1bn in artificial intelligence companies in 2024, as it emerged as a crucial backer of start-ups trying to gain from the AI revolution the big tech group’s chips are powering.

The semiconductor giant, which surpassed a $3tn market capitalisation in June on the back of huge demand for its high-performing graphics processing units (GPUs), has pumped ever greater sums into some of its own customers in the burgeoning sector.

According to corporate filings and Dealroom research, Nvidia spent a total of $1bn across 50 start-up funding rounds and several corporate deals in 2024, compared with 2023, which saw 39 start-up rounds and $872mn in spending.

The vast majority of deals were with “core AI” companies with high computing infrastructure demands, and so in some cases also buyers of its own chips.

Tech companies have spent tens of billions of dollars on Nvidia’s chips over the past year since the debut of ChatGPT two years ago kick-started an unprecedented surge of investment in AI.

Nvidia’s uptick in deals comes after it amassed a $9bn war chest of cash with its GPUs becoming one of the world’s hottest commodities.

The company’s shares rose more than 170 per cent in 2024, as it and other tech giants helped power the S&P 500 index to its best two-year run this century.

Nvidia’s $1bn worth of investments in “non-affiliated entities” in the first nine months last year includes both its venture and corporate investment arms. According to company filings, that sum was 15 per cent more than in 2023 and more than 10 times as much as it invested in 2022.

Some of Nvidia’s largest customers, such as Microsoft, Amazon and Google, are actively working to reduce their reliance on its GPUs by developing their own custom chips. Such a development could make smaller AI companies a more important generator of revenues for Nvidia in the future.

“Right now Nvidia wants there to be more competition and it makes sense for them to have these new players in the mix,” said a fund manager with a stake in a number of companies it had invested in.

In 2024, Nvidia struck more deals than Microsoft and Amazon, although Google remains far more active, according to Dealroom.

Such prolific dealmaking has raised concerns about Nvidia’s grip over the AI industry, at a time when it is facing heightened antitrust scrutiny in the US, Europe and China.

Bill Kovacic, former chair of the US Federal Trade Commission, said competition watchdogs were “keen” to investigate a “dominant enterprise making these big investments” to see if buying company stakes was aimed at “achieving exclusivity”, although he said investments in a customer base could prove beneficial.

Nvidia strongly rejects the idea that it connects funding with any requirement to use its technology. The company said it was “working to grow our ecosystem, support great companies and enhance our platform for everyone. We compete and win on merit, independent of any investments we make.”

It added: “Every company should be free to make independent technological choices that best suit their needs and strategies.”

The Silicon Valley group’s most recent start-up deal was a strategic investment in Elon Musk’s xAI, alongside rival chipmaker AMD.

Other significant 2024 investments included its participation in funding rounds for OpenAI, Cohere, Mistral and Perplexity, some of the most prominent AI model providers.

Nvidia also has a start-up incubator, Inception, which separately has helped the early evolution of thousands of fledgling companies. The Inception programme offers start-ups “preferred pricing” on hardware, as well as cloud credits from Nvidia’s partners.

There has been an uptick in Nvidia’s acquisitions, including a takeover of Run:ai, an Israeli AI workload management platform. The deal closed this week after coming under scrutiny from the EU’s antitrust regulator, which ultimately cleared the transaction. The US Department of Justice was also looking at the deal, according to Politico.

Nvidia also bought AI software groups Nebulon, OctoAI, Brev.dev, Shoreline.io and Deci. Collectively it has made more acquisitions in 2024 than the previous four years combined, according to Dealroom.

The company is investing widely, pouring millions of dollars into AI groups involved in medical technology, search engines, gaming, drones, chips, traffic management, logistics, data storage and generation, natural language processing and humanoid robots.

Its portfolio includes a number of start-ups whose valuations have soared to billions of dollars. CoreWeave, an AI cloud computing service provider and significant purchaser of Nvidia chips, is preparing to float early this year at a valuation as high as $35bn — increasing from about $7bn a year ago.

Nvidia invested $100mn in CoreWeave in early 2023, and participated in a $1bn equity fundraising round by the company in May.

Another group, Applied Digital, was facing a plunging share price in 2024, with revenue misses and considerable debt obligations, before a group of investors led by Nvidia provided $160mn of equity capital in September, prompting a 65 per cent surge in its share price.

“Nvidia is using their massive market cap and huge cash flow to keep purchasers alive,” said Nate Koppikar, a short seller at Orso Partners. “If Applied Digital had died, that’s [a large volume] of sales that would have died with it.”

Elon Musk had an eventful 2024, what with his hard push into right-wing politics and leveraging his X social media platform and considerable influence to help Donald Trump win the presidential election.

Putting politics aside for a moment, it’s worth focusing on another Musk pastime: making promises for Tesla.

The Tesla CEO’s promises — and repeated missed deadlines — have become a primary thread in the Tesla storyline. And they’ve always had an eye-popping quality that captured the imagination of investors and helped drive up the value of Tesla stock, giving the company a valuation of $1.3 trillion. There was his claim in 2015 that Tesla vehicles would be self-driving in two years, that cross-country driverless road-trips would be enabled by the end of 2017, and that Tesla owners would be able to earn money via a massive driverless ride-hailing network in 2020.

And while Tesla has cemented its place in history books thanks to building and selling millions of electric vehicles, none of the above promises (nor many others) have come to pass.

But that hasn’t stopped Musk from making more promises in 2024. Here’s an accounting of those promises and when he expects them to become reality.

The $25,000 EV

In 2024 alone, Musk pledged to unveil a $25,000 EV, then scrapped it in April to prioritize a robotaxi prototype — a decision that led to mass layoffs as Tesla pursued its “next phase of growth.”

Musk has flip-flopped on whether the affordable EV would ever come to market. But during Tesla’s third-quarter earnings call, Musk said the idea of building a $25,000 car with a steering wheel and pedals is “pointless” and “silly.” He said the only car he’d sell at that price point would be the Cybercab.

During the call, an analyst asked if Tesla would make a lower-cost EV that’s not the Cybercab, and Musk replied that all of the company’s cars moving forward would be autonomous. He also said that of the 7 million vehicles Tesla has built to date, the “vast majority” are “capable of autonomy,” and that Tesla is “currently making on the order of 35,000 autonomous vehicles a week.” Musk is clearly using a loose definition of autonomy here, because Tesla still does not produce vehicles that are safe to use without a human behind the wheel.

(Flashback: Musk originally promised in 2016, in a since-deleted post on Tesla’s website, that “All Tesla Cars Being Produced Now Have Full Self-Driving Hardware,” and that only a software update would be needed to turn regular old Teslas into self-driving cars. That didn’t happen, and Tesla has had to upgrade cars with older hardware.)

It’s also worth noting that during that earnings call, Musk said that he expects vehicle growth to reach 20% to 30% in 2025 due to “lower cost vehicles” and the “advent of autonomy.”

Start production on the Cybercab by 2025 or 2026

Tesla unveiled 20 Cybercab prototypes at a flashy Hollywood event in October, and Musk took the opportunity to share some plans for the vehicles, as well as Tesla’s so-called Full Self-Driving (FSD) software. FSD is Tesla’s advanced driver assistance system that can perform many automated driving tasks, but still requires a human to remain attentive behind the wheel and take over if needed.

Musk told customers they would be able to one day buy a robotaxi — a two-door, two-seat vehicle with no steering wheel or pedals — for less than $30,000. He also said that the average operating cost of the Cybercab will reduce over time to only $0.20 per mile. And he said Tesla would start production on the purpose-built AVs in 2025 or 2026.

(Flashback: Musk said in 2022 that Tesla would mass-produce robotaxis by 2024. Before that, in 2019, he said that Tesla would have a million robotaxis on roads by 2020. Musk has promised that Tesla would solve full self-driving “next year” since at least 2016.)

A few weeks later, during Tesla’s third-quarter earnings call, Musk said Tesla would reach “volume production in ’26,” and that the company was eventually “aiming for at least 2 million units a year of Cybercab.”

Current federal regulations that require vehicles to be built with certain safety standards, like manual human controls, could be roadblocks for Tesla to mass produce its Cybercabs. The National Highway Traffic Safety Administration recently proposed new rules that would fast-track exemptions for such vehicles, but they would require companies to share more data with the agency, like crash reporting. Today, automakers are required to report crashes when ADAS or autonomous driving tech is engaged.

Musk has railed against the rule before, and President-elect Donald Trump’s transition team is reportedly exploring scrapping it.

Robovan in development

During Tesla’s robotaxi reveal, the company also showed investors a Robovan prototype. At the time Musk didn’t share any concrete plans for the vehicle, but in November he posted on X that the Robovan is in development, along with “some other things.”

(Flashback: In 2016, Musk said Tesla would start building a minibus using the Model X chassis in two to three years.)

“Unsupervised FSD” and autonomous ride-hail in 2025

At the event, Musk also promised that Model 3 and Model Y owners would be able to use an “unsupervised” version of FSD in California and Texas in 2025.

It wasn’t, and still isn’t, clear what Musk meant by “unsupervised” FSD. Today, Tesla’s FSD is still not fully autonomous, and to dispel any confusion, Tesla this year began referring to the software as “supervised FSD.” Removing the supervision could mean that Tesla plans to remove the driver, or it could mean that Tesla plans to offer a Level 3 autonomous system that allows drivers to go hands-off, eyes-off for a portion of their ride.

During Tesla’s third-quarter earnings call, Musk took the promise of unsupervised FSD a step further. He said he hopes to launch a service that will let people hail self-driving Teslas in California and Texas in 2025. He also claimed Tesla had begun testing the service in the Bay Area with employees.

(Context: There are several tiers of permits required to test and deploy autonomous vehicles in California. Tesla has held a permit to test AVs with a safety driver in the front seat since 2015, but the Department of Motor Vehicles told TechCrunch in October that Tesla last reported using that permit in 2019.)

It’s not clear if Tesla plans to launch this ride-hail service with its robotaxis or with existing Tesla Model 3 and Model Y owners. Tesla’s first-quarter earnings presentation included a mock-up of a future Tesla ride-hail app, and the company has for years teased the idea of a ride-hailing network using Teslas that had been updated to drive fully autonomously. The idea is similar to Uber, only Tesla owners would add their properly equipped self-driving vehicles to the automaker’s ride-hailing app to make extra cash when the cars are not in use. Tesla would take 25% to 30% of the revenue.

Finally, during Tesla’s first-quarter earnings call, Musk said Tesla was in talks with a “major automaker” to license FSD, but so far has not announced any such deals.

“Over a thousand Optimus robots working at Tesla” in 2025

Musk has made some out-there promises about Optimus, Tesla’s humanoid robot. During Tesla’s annual shareholder meeting, Musk promised that Tesla would move into “limited production” of the Optimus next year, with “over 1,000, or a few thousand, Optimus robots working at Tesla” in 2025. He also said he expects Optimus to be on sale by 2026. In a post on X, the billionaire executive added that he expects to have more Optimus bots available for use by other companies in 2026.

He did not specify if the bots would be working fully autonomously, or if they would be remotely controlled by humans, as they were during Tesla’s robotaxi reveal event in October.

(Context: While humanoid robots are improving to the point of being able to autonomously complete specific tasks, many experts say generalized robotics is still years away due to a lack of training data.)

Aside from manufacturing promises, Musk also predicted that Optimus could one day lift Tesla’s market cap to $25 trillion. That’s roughly seven times the current market caps of Apple and Nvidia. At the end of December, Tesla’s market cap was around $1.42 trillion, which is almost a 160% increase from the $550 billion market cap before Trump won the presidential election.

This past year wasn’t the highest-grossing period for robotics startup investment. However, it was one of the flashiest.

In areas from humanoid coworker bots to AI robot brains, startups developing some of the most scifi-esque applications of the technology scored the year’s largest rounds. Big deals skewed early stage as well, indicating the cycle is likely just getting started.

Illustrative of the trend is Figure, a 2-year-old startup dedicated to “bringing a general purpose humanoid to life.” Founded in 2022, the Silicon Valley startup pulled in $675 million in Series B funding in February to further its vision of building robots to perform unsafe and undesirable jobs.

Another example is the year’s second-biggest round, which went to robot brain developer Physical Intelligence. The San Francisco startup, founded just this year, pulled in $400 million at a $2 billion valuation last month.

Altogether, robotics-related startups secured around $7.2 billion in seed- through growth-stage investments in 2024, per Crunchbase data. That’s slightly above year-ago levels, but still well below the 2021 market peak, as charted below.

Versatile robots

One trend we’re seeing in the funding tallies is that investors are interested in startups developing versatile robots capable of doing more than just a simple task or two.

Besides Figure and Physical Intelligence, another exemplar of this concept is Pittsburgh-based Skild AI, which is also developing brain models that can be used in a variety of robots and for different tasks. It raised a $300 million Series A in July at $1.5 billion valuation.

A few months earlier, Silicon Valley-based Collaborative Robotics landed a $100 million Series B to create what it calls “practical collaborative robots” — or “cobots” — to work alongside humans in areas such as manufacturing, healthcare and retail. And San Francisco’s Bright Machines, which focuses on flexible factory robots, wrapped up a $106 million equity financing in June.

On the home front, meanwhile, Cruise founder Kyle Vogt launched The Bot Company this year with a focus on household robotics. The San Francisco startup closed on $150 million in initial funding to build a robot that will help with a variety of household chores.

Help wanted

Robotics startups commonly point to current and projected labor shortages as a motivating factor. Figure founder Brett Adcock’s master plan for the company, for instance, is built on the premise that “there are over 10 million unsafe or undesirable jobs in the U.S. alone,” and that an aging population will only make positions harder to fill.

Using Crunchbase data, we put together a list of 14 companies that raised large rounds this year with a focus on developing robots to do work currently performed by humans.

One robotics power investor and major employer who appears to share this vision is Amazon founder Jeff Bezos and his fund, Bezos Expeditions. Bezos, whose company is known for its embrace of warehouse automation technologies, has backed at least four major rounds for robotics companies this year through his investment vehicles: Figure, Physical Intelligence, Skild AI and Swiss-Mile, which is developing a wheel-legged robot.

Surgical robotics, drones and more

Beyond workplace bots and AI robot brains, we also saw continued investment in areas that have long been major robotics startup sectors.

Surgical robotics is one. This year, two of the biggest investments went to MMI, a developer of technology for robotic-assisted microsurgical procedures, and Capstan Medical, which is working on robotics-enabled technology offering a less invasive alternative to traditional open heart surgery. Both raised $110 million Series C rounds.

Drones and robot delivery vehicles scooped up considerable funding over the years, and continued to do so in 2024. Skydio, which sells drones for enterprise and military use cases, landed a $170 million extension round last month. In the delivery space, another startup with the military as a primary customer, autonomous ground transportation provider Forterra, locked up a $75 million Series B.

Not about exits (yet)

Broadly, the pipeline of funded robotics startups this year fits mostly in what I’d call the “fun to watch” stage. That is, the most heavily funded names are largely early stage, with huge ambitions, fascinating business plans and modest pressure at this point to produce consistent earnings or a clear path to profitability.

Investors, too, seem willing to play wait-and-see if their portfolio companies can deliver on early promises.

It looks like an exceedingly risky proposition, albeit one with potential for enormous returns. That, at least, is what Figure expects in its master plan which admits that: “We face high risk and extremely low chances of success.”

“However, if we are successful,” Figure maintains, “we have the potential to positively impact humanity and to build the largest company on the planet.”

Carlos Slim, Latin America’s richest man, boosted his stakes in American energy companies in the current year as the world’s leading tycoons continue betting on fossil fuels.

Slim invested $602 million in Parsippany, New Jersey-based refiner PBF Energy, boosting his stake to 25%, and also bought $326 million worth of shares in Houston-based oil producer Talos Energy.

Last year, the Mexican billionaire’s Grupo Carso SAB agreed to acquire PetroBal SAPI’s stake in two oil fields in Campeche in southern Mexico for $530 million, expanding its bet on energy production.

Under the deal, Grupo Carso will take a 50% stake in the Ichalkil and Pokoch oil field. According to the company, the fields produce about 16,350 barrels of crude oil equivalent per day. Carso shares jumped to record highs after the deal was announced. Mexican President Andres Manuel Lopez Obrador welcomed the deal despite earlier being critical of energy reforms that opened exploration to private investment,

“Why do I celebrate this? Because it stays in the hands of Mexicans and I’m sure that they’re going to invest to extract crude. I consider that to be good news,” the president said at his daily news conference.

Obradors’ nationalist policies have seen the Mexican government become increasingly hostile to foreign companies.

Last year, giant oil and commodities trading firm, Trafigura, was forced to scale back its oil trading business in Mexico thanks to shrinking margins.

Trafigura has recorded margin compression due to fuel subsidies by the Mexican government.

Meanwhile, Warren Buffett’s Berkshire Hathaway has continued growing its oil and gas stakes. Two weeks ago, Berkshire Hathaway bought another 8.9 million shares of Occidental Petroleum with the company now owning 260 million shares of OXY. Berkshire Hathaway's OXY stake is currently worth $12 billion, making it the company’s sixth largest holding.

Instead of touting projects as ‘clean and affordable,’ renewables firms are highlighting their projects’ ability to meet energy needs

Green energy companies are freaking out, trying to figure out how to navigate the Republican sweep of the White House and Congress.

After being a favorite punching bag of President-elect Donald Trump’s campaign, they are reaching out to incoming cabinet appointees, hunting for friendly members of the transition team and calling on Republican members of Congress, according to executives. Some say they raced to order equipment or move dirt on projects before the new year to grandfather-in lucrative tax credits.

Stakes are high. Significant reductions to tax credits, and Trump’s promised tariffs on imports, could reduce investment in new renewables plants by $350 billion over the next decade, said Chris Seiple, vice chairman of power and renewables at Wood Mackenzie.

In Washington, D.C., the industry has gone into defense mode. Executives traveled to the capital to meet with Republican members of Congress in December, people familiar with the matter say. Advisers have suggested the industry tweak its talking points. Instead of touting projects as “clean and affordable,” renewables firms are highlighting their projects’ ability to “meet energy needs.”

Some executives say they are pinning their hopes on North Dakota Gov. Doug Burgum, Trump’s choice for Interior Department secretary who would also chair a planned National Energy Council.

North Dakota is a coal and oil state, but under Burgum it also has welcomed wind energy, which provided 36% of its power generation in 2023. The executives are cautiously optimistic that Burgum’s business-friendly background will translate to a pragmatic approach at Interior, which oversees public lands and minerals, including energy development such as solar farms and offshore wind projects.

Above all, many in the industry hope that the country’s growing need for more electricity—to power things like AI data centers—will carry the day.

“It’s all about demand right now,” said Jim Murphy, president and co-founder of Invenergy, a developer of renewables, transmission and natural-gas power. “If you look at the forecasts, we’re going to need everything as fast as we can get it.”

Addition, not subtraction

Solar, wind and battery storage have been on a tear in recent years, with investment boosted by tax credits in the Inflation Reduction Act, President Biden’s signature climate law. About $75 billion in new projects connected to the grid between September 2022 and March, according to the American Clean Power Association.

Trump has called the IRA a scam and wants it repealed. His victory has plunged the renewable-power industry into a period of policy uncertainty. Few expect a wholesale repeal, but parts of the IRA are likely to be scrapped.

The election results set off a wave of unease and employee questions within the clean-energy industry. Many companies held town halls to answer questions or sent companywide emails reassuring workers that projects would continue, several executives and advisers said.

One helpful trend for the industry is that after roughly two decades of little to no growth in power demand because of efficiency gains, electricity-usage forecasts have skyrocketed in many states because of the spread of AI, EVs, manufacturing and broader electrification efforts. Utilities compare it with the introduction of air conditioning.

That trend has allowed companies to take a page out of the playbook of the oil-and-gas industry, which spent the past four years under the Biden administration using terms such as “addition, not subtraction” to talk about energy sources.

Sheldon Kimber, chief executive of clean-energy developer Intersect Power, said a key message to members of Congress is to preserve the “durability of the IRA and the tax credits in a world where demand is off the charts,” and not to make any changes retroactive. Intersect has a $20 billion plan to build renewables and batteries at new data centers with Alphabet’s Google and private-equity firm TPG.

“That’s the number one thing is just get everybody on the same page ” said Kimber. “Our government puts policy down and people invest billions of dollars based upon that policy.”

Some green executives hope Tesla Chief Executive Elon Musk will play a mitigating role in Trump’s view on renewables. Tesla makes batteries for EVs and grid-scale storage projects, and sells home solar and storage.

Likewise, Chris Wright, Trump’s choice for energy secretary, touts fossil fuels as a way to end energy poverty but is viewed by renewables developers as a pro-business company founder. Wright’s Liberty Energy has invested in green-energy startups pursuing nuclear and geothermal projects.

Trump has said he wants to unleash more U.S. oil and gas production, but tax credits for wind and solar survived and were extended under the first Trump administration, said Akshat Kasliwal, head of renewable asset analytics at PA Consulting.

“At that time, we were not facing reliability issues to the extent we are now,” Kasliwal added.

Worst-case scenarios

Tax cuts passed in 2017 during Trump’s first term will expire at the end of this year, and Republican leaders say extending them is a must. They will look to cut trillions of dollars to offset deficits. Repealing clean-energy subsidies in part or whole has been repeatedly mentioned as a potential source of funding.

As a hedge against the tax-bill debate going poorly for them, some developers were in a frenzy to start projects by Dec. 31.

Companies ordered equipment such as transformers or began roadwork at sites. Those actions can prove that construction had started, which would safeguard access to existing investment-tax credits even if projects are completed later under a less-generous tax regime, said Tim Urban, tax policy leader at Bracewell.

Erik Lensch, CEO of Leyline Renewable Capital, which lends to developers, received a flood of funding requests after the election to get projects started in a hurry.

The technology considered most at risk to lose tax credits or face delays with federal permits is offshore wind. Trump has directed some of his fiercest criticism at offshore wind projects, which he promised to “end on day one.”

Murphy, of Invenergy, said the strong campaign rhetoric is concerning. The developer holds offshore wind leases off the New Jersey and California coasts.

“If we have to hunker down and hold on to our position and see if the situation changes, we’ll see if the situation changes,” Murphy said.

US stocks soar more than 20% for second year in a row

Investor excitement over AI helps Big Tech once again drive gains in blue-chip S&P 500

The US’s S&P 500 index has risen more than 20 per cent for the second year in a row, as investor excitement about artificial intelligence fuels strong gains in megacap technology stocks.

Despite a sell-off in December, the basket of blue-chip stocks has ended 2024 up 23.3 per cent, following a 24.2 per cent gain the previous year, marking its best two-year run of performance this century. The index has now made annual gains of more than 20 per cent four times in the past six years.

The rally has been led by big tech stocks exposed to AI. Shares in chipmaker Nvidia have gained 172 per cent over the year, while Meta, which has also bet heavily on the nascent technology, has risen 65 per cent.

The S&P 500’s performance stands in contrast to European markets, with the Stoxx 600 gaining 6 per cent and the FTSE 100 rising 5.7 per cent. An MSCI index of Asia-Pacific stocks is up 7.6 per cent.

“The US [market] has rarely been so exceptional,” said Michael Metcalfe, head of macro strategy at State Street Global Markets.

Wall Street stocks have also been lifted by the Federal Reserve’s cuts to interest rates for the first time since the Covid-19 pandemic and resilient economic data that has reassured investors that the US is heading for a soft landing. Expectations of tax cuts and looser regulation during Donald Trump’s second term as president have also fuelled gains in recent months.

Benjamin Bowler, Bank of America strategist, said Trump’s “laissez-faire economics, tax cuts and deregulation”, coupled with a potential “AI revolution”, meant the rally was likely to continue into 2025. Although 2024 was undoubtedly “a good year” for the US stock market, “it may only be the beginning”, he said.

But Chris Jeffery, head of macro at $1.4tn-in-assets fund manager Legal & General Investment Management, said there were “quite a few red flags that should make us a bit cautious”.

The difference between forward price-to-earnings ratios in US and European stocks could only be justified if “you believe that the last 10 years [of tech-driven US earnings growth] can carry on, and carry on for an awful long time”, he added.

Investors have also had to dial back their expectations of rate cuts over the coming year. With inflation still above target, forecasts released by the Fed suggesting interest rates will fall in 2025 by less than previously hoped inflicted the S&P 500’s worst session in four months in early December. That damped investor exuberance after Trump’s election win in November, and helped push the index down 2.5 per cent in December.

Megacap tech stocks including the so-called Magnificent Seven — Apple, Microsoft, Meta, Amazon, Alphabet, Nvidia and Tesla — were again the dominant force in the US market.

Bulls contend that Big Tech’s earnings growth and AI’s potential to spur productivity justify valuations.

Mike Zigmont, co-head of trading and research at Visdom Investment Group, said that, barring a collapse of revenue, the Magnificent Seven would remain highly popular in 2025 because of the outsized returns they have delivered in the past. “Investors just seek them out,” he said.

But their gains have prompted bearish commentators to draw comparisons between today’s top-heavy market and the tech bubble that burst spectacularly at the turn of the millennium. 

In contrast to the tech sector’s gains, industrial materials companies were among the S&P 500’s worst performers in 2024 as China’s struggling economy and fears of a US recession that has yet to materialise dented investors’ appetite. 

Bouts of volatility briefly interrupted the S&P 500’s otherwise steady ascent. In addition to December’s fall, stocks sold off sharply in early August, with falls extending beyond the tech sector.

Nevertheless, at the start of December asset managers’ net long exposure to the S&P 500 had risen to the highest level in more than 20 years, according to Bank of America’s monthly survey of global fund managers, indicating “super-bullish sentiment”. Meanwhile, retail investor enthusiasm for stock market gains over the next year had never been higher, according to Deutsche Bank.

However, Citi’s closely watched US economic surprise index has slipped in recent weeks, indicating that economic momentum is trending weaker than expected. Some analysts say that sluggish growth in the amount of money circulating in the US economy, high Treasury yields and a strong dollar all point to a potential economic contraction in 2025.

Investors have sold tech stocks in recent days, while the Russell 2000 index of small-cap stocks has slipped further from its November record high. The equal-weighted S&P 500, which gives a 0.2 per cent weighting to each constituent, has shed 6.6 per cent over the past month. 

The concentration of returns in Big Tech will remain a “pain trade” for investment funds which can only hold so much of any single stock, said Charlie McElligott, a strategist at Nomura.

Investors “just can’t own enough” of the biggest names, he added.