Thursday, October 31, 2024

Microsoft's AI struggle

Bloomberg Morning Briefing Americas

Good morning. Microsoft is struggling to ride the AI boom. Fashion modeling is the latest profession under threat. And the Dodgers win their eighth World Series championship after beating the Yankees 7-6. Listen to the day's top stories.

Microsoft isn't making as much money as it expected from the AI boom. Capacity constraints in the company's data centers are limiting its ability to meet demand, resulting in a slower growth forecast for its Azure cloud-computing business. Over at Meta, Mark Zuckerberg outlined heavy investment in AI and the metaverse, but cautioned about widening losses at AI division Reality Labs.

An AI-generated image depicts Mango's Sunset Dream collection of its youth line. Source: Mango

Add another job to the list that the machine might replace. Spanish fast-fashion chain Mango is eliminating some human models and using AI-generated avatars to create ad campaigns more quickly. But the future of AI hinges increasingly on Taiwan as thousands of businesses and entrepreneurs rely on the island to turn their AI visions into reality. Taiwan Semiconductor, the foundation of this success, recently warned of  "severe challenges" as the US controls the flow of cutting-edge chips to China.

On the campaign trail. Kamala Harris and Donald Trump held dueling star-studded events in Wisconsin to mobilize supporters in the swing state. Trump campaigned with NFL legend Brett Favre, and Harris brought popular bands to Madison. Trump also posed for photos in the seat of a dump truck in a jibe at a President Joe Biden remark about GOP supporters, though the White House has disputed the characterization of the comment.

Gold climbed to yet another record, boosted by demand for safe havens ahead of the election. It managed to shrug off robust US jobs and growth data, in a further sign that the metal may well be the "ultimate risk-off asset."

MicroStrategy hired banks to help it raise $42 billion through the sale of new shares and fixed income to buy more Bitcoin after a flurry of deals over the past year. It posted a third consecutive quarterly loss after taking an impairment charge against the value of its roughly $18 billion crypto stockpile.

Deep Dive

A home in Aldie, Virginia, on Feb. 20, 2024. Photographer: Nathan Howard/Bloomberg

For a brief moment, it looked like US homebuyers would finally catch a break

  • The housing market was beginning to thaw as mortgage rates fell in September to a two-year low. But in the past few weeks, borrowing costs have surged, by one measure even crossing 7% and raising questions about whether a fledgling recovery in home sales will persist. 
  • It's a tricky time for whipsawed home shoppers. And it's unclear exactly how many buyers will try to fight through affordability challenges to land a deal before lower rates that are expected next year lure in more competition. 
  • The jump in rates serves as a double whammy for homebuyers, choking off affordability and discouraging more owners from listing properties. One measure of demand — weekly mortgage applications — fell throughout much of this month as borrowing costs climbed, though it ticked up in the week ended Oct. 25.

The Big Take

Amazon is eager to take on ChatGPT, but technical challenges have forced the company to repeatedly postpone an AI-powered version of its voice assistant Alexa.

Opinion

Photographer: Alex Slitz/Getty Images

Shohei Ohtani is just the most prominent of a generation of Japanese athletes who are outperforming expectations, Gearoid Reidy writes. His triumph is more than just the story of a prodigiously gifted man or once-in-a-lifetime aberration. It is also one of Japan's turnaround

Before You Go

Photographer: Elsa/Getty Images

The LA Dodgers won their eighth World Series championship after overcoming a five-run deficit in Game 5 to stun the NY Yankees 7-6. As epic meltdowns go, this one will be talked about for years to come. "This is like, as bad as it gets," Yankees pitcher Gerrit Cole said.

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