Elon Musk attends the 2024 Breakthrough Prize ceremony at the Academy Museum of Motion Pictures on April 13, 2024 in Los Angeles, California.
Taylor Hill | Getty Images
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Friday Summary
Wall Street was closed on Monday for Memorial Day, so here's a recap of what happened on Friday. The Nasdaq Composite Index hit a new record high, fueled by a stellar earnings report from Nvidia. Nvidia shares rose 2.6% on Friday, helping it surge 15% for the week. Meanwhile, the Nasdaq led the major indexes with a 1.41% gain for the week. The S&P 500 rose 0.7% to end with a 0.03% gain for the week. However, the Dow Jones Industrial Average posted its first weekly loss in five weeks, despite a slight gain on Friday. Treasury yields were little changed and oil prices recovered from a three-month low.
Nvidia CEO's net worth soars
Nvidia CEO Jensen Huang's net worth has soared to more than $90 billion as the company's stock price soared to an all-time high on better-than-expected profits. The company's shares rose more than 9% to close at about $1,038 a share last Thursday. Huang owns about 86.76 million Nvidia shares, more than 3.5% of the company's shares outstanding. Five years ago, Huang's Nvidia shares were worth about $3 billion.
Investors told to reject Musk deals
Proxy advisory firm Glass Lewis has recommended that Tesla shareholders reject a $56 billion compensation package for CEO Elon Musk, citing the excessive amount, potential dilution and Musk's involvement in multiple time-consuming projects. The package, which was struck down by a judge in January, is tied to Tesla's market value reaching certain milestones. The firm also criticized a proposal to incorporate Tesla in Texas. Tesla's board has defended the package, citing Musk's role in the company's growth.
Google AI Overview Failed
Google's search feature, “AI Summary,” has faced criticism for generating inaccurate or controversial answers. Users have shared examples of errors, such as describing President Obama as Muslim or suggesting adding glue to pizza. These issues highlight the challenges of AI-generated content, but Google has insisted that most information is high quality and that the company is addressing the issues. Google's image generation tool, Gemini, has also faced issues, with users pointing out historical inaccuracies and questionable answers.
$5.3 billion weight loss factory
Eli Lilly is investing $5.3 billion to expand its manufacturing plant in Indiana in response to growing demand for its weight loss and diabetes drugs. This brings Lilly's total investment in the facility to $9 billion, the largest in the company's history. The facility, which produces the active ingredients for both drugs, is expected to be fully operational by 2028. The company is also investing in other manufacturing sites to meet growing demand for these drugs.
[PRO] Overinvested in Nvidia?
Wall Street has been pretty bullish on Nvidia, with many analysts raising their price targets following last week's impressive earnings, but some investors may feel they're overinvested in the artificial intelligence chipmaker. CNBC's Weizhen Tan looks at some stocks that could help diversify your portfolio.
Elon Musk's artificial intelligence startup xAI has secured $6 billion in Series B funding, valuing the company at $24 billion. Notable investors include Andreessen Horowitz, Sequoia Capital, and Saudi Arabia's Prince Alwaleed bin Talal.
The funding comes on the heels of Amazon investing an additional $2.75 billion in AI startup Anthropic last month, bringing its total investment since September to $4 billion. Amazon offers AI services through Amazon Web Services, but is seen as lagging behind in developing large-scale language models, an area where OpenAI and Google (which is also an investor in Anthropic) are working. They are leading the race to dominate the fast-growing trillion-dollar AI market.
AI models rely heavily on huge amounts of data for training, and Musk's xAI has the built-in advantage of having his chatbot Grok integrated into X, which gives it access to vast amounts of data and users. But the quality of the training data matters most, as Google's recent struggles with AI Overview show. Google's AI has been criticized for generating questionable advice and misinformation, highlighting the principle of “garbage in, garbage out.”
The importance of training data is further underscored by two recent OpenAI deals: the first, a $250 million deal with News Corp, will give OpenAI access to journalism from reputable sources such as the Wall Street Journal, Barron's, and MarketWatch. This will allow OpenAI's chatbots to understand journalistic standards and improve fairness, while also providing media companies with a way to counteract declining advertising revenues.
The second deal, with Reddit, gives OpenAI access to more than 100,000 forums, 306 million unique users, and 16 billion posts — a massive dataset of human interactions that's valuable for understanding online behavior but has also raised concerns about exposure to the platform's darker side, such as racism, misogyny, and religious bigotry, risks that Reddit acknowledged in its IPO prospectus.
Musk's insistence on spreading far-right accounts on X and not restricting free speech highlights the importance of monitoring potential biases that may arise in AI systems. OpenAI and xAI's contrasting approaches to training data highlight the ethical considerations inherent in AI development. But who knows how ChatGPT will evaluate Reddit's r/wallstreetbets, Roaring Kitty, and meme stocks GameStop and AMC.
— CNBC's Hakyung Kim, Brian Evans, Kif Leswing, Hayden Field, Annika Kim Constantino and Weizen Tan contributed to this report.
