How AI is responsible for 10% of the GDP of a Caribbean island – 04/01/2024 – Tech

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The country of ‘AI’

Last year, AI (artificial intelligence) was responsible for a 10% share of a country’s GDP (Gross Domestic Product).

We are not talking about the USA, home to companies like OpenAI (owner of ChatGPT) and big techs, nor about nations considered tax havens, which attract many technology companies.

The country in this case is Anguillaa small Caribbean island with 15,000 inhabitants that is a British overseas territory.

Understand: it owns the domain “.ai”, used in the electronic address of several artificial intelligence companies (AI is the acronym in English for artificial intelligence).

• The country raised around US$32 million (R$ 160 million) last year with website address auctions.

• Each record varies from $140 (R$700) to thousands of dollars.

“Some people call it a windfall,” Anguilla Prime Minister Ellis Webster told the New York Times. “We just call it God smiling at us.”

Anguilla’s economic activity depends on tourism, with its beaches occupied by resorts and hotels. In 2017, a tropical cyclone devastated the island, destroying the electricity infrastructure and properties in the territory at the time.

How the Anguillan government has spent AI money:

• Made health services free for citizens aged 70 and over;

• He allocated millions to complete the construction of a school;

• The budget for sporting activities and events and for citizens to seek medical treatment abroad has increased.

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The first year of federal state-owned companies under Lula 3

The net profit of the main federal state-owned companies fell 24% in 2023, in the first year of the third Lula (PT) government.

The combined result of Petrobras, BB (Banco do Brasil), BNDES, Caixa and Correios was R$182 billion in the period.

In which profit fell:

↳ Petrobras: the result retreated 33% in relation to 2022 (to R$124.6 billion).

• The company attributed the drop to the drop in oil prices in 2023 compared to the previous year, when the commodity appreciated in value due to the war in Ukraine.

↳ BNDES: annual drop in 5%to R$11.9 billion.

• Management states that the basis for comparison with 2022 was harmed by the sale of shares that year — which was not repeated in 2023.

In which profit grew:

↳ BB: high of 11.3%to R$35.5 billion.

• The bank cites as one of the factors for the improvement the growth in revenue from service provision — consortiums, insurance and credit and guarantee operations.

↳ Box: high of 15.5% in the result, to R$ 10.6 billion.

• The institution highlights the improvement in the financial margin, with more revenue from credit operations, and the control of defaults – with the drop in interest rates from the middle of the year onwards.

The post office saw their losses decrease by 22% in 2023, to R$596 million. The company saw a drop in expenses and an improvement in financial results, mainly with fewer exchange rate variations.

Yes but… Signs of government intervention in the management of state-owned companies, demonstrated both last year and in 2024, are a cause for concern for investors.

• This year, an order that came from the government to restrict the distribution of extraordinary dividends from Petrobras took R$50 billion off the company’s market value in one day.

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Startup of the Week: Pocket Architect

On Mondays, the panel features an x-ray of a startup that recently announced funding.

The startup: Founded in 2016 – at the time as a trailer that functioned as a type of mobile office – it works to connect consumers with architects and interior designers.

In numbers: the startup announced that it had received funding from R$ 15 million.

• The funding is added to another R$5 million from previous rounds.

Who invested: the Headline XP fund, formed by the brokerage’s clients and the global venture capital manager Headline.

What problem does it solve: the platform works to make scalable – and therefore more accessible – a service known for being individualized.

• To this end, it offers an online consultancy model that lasts two hours for each room measuring up to 20 square meters.

• It provides tools that provide 3D visualization or a 360º Tour of the finished environment, as well as a 2D floor plan and a list of products with quantities and pricing.

Why it’s featured: To indicate the potential of the market in which it operates, Arquiteto de Bolso cites the fact that 90% of renovations in the country are not monitored by an interior design professional.

Both are part of the sector known as construtech (startups related to civil construction).

This round from Arquiteto de Bolso represents 62% of the total raised by the segment last year. were invested US$4.8 million (R$ 24 million) in startups in this niche in the country in 2023, according to a survey by the Sling Hub data platform.

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Luxury retail websites are under threat

Farfetch, MatchesFashion, and Net-a-Porter, luxury fashion retail websites, followed the rapid expansion of two markets during the pandemic: online sales and the luxury market.

Now, the three multi-brand fashion retailers are experiencing serious problems.

↳ Farfetch was saved from bankruptcy at the end of last year thanks to an acquisition by the South Korean group Coupang and a loan of US$500 million (R$2.5 billion).

• The store that became famous as a curator of independent brands was valued at US$40 billion (R$200 billion) at its peak, in 2021.

↳ MatchesFashion, known for operating around the world – it delivered to 150 countries besides the United Kingdom – went into administration (the British term for a process similar to judicial recovery in Brazil).

↳ Yoox Net-a-Porter was about to be sold to Farfetch last year, but the deal did not go ahead. It belongs to Richemont, which continues to look for a buyer for the asset and considered it as “discontinued operations” on its balance sheet.

What explains the collapse of independent stores in the luxury market:

Fierce Competition: The success of multi-brand stores in the online world has attracted the attention and budget of giants in the sector.

• To compete with them, independent websites had to invest heavily in discounts, free shipping and logistics to fulfill all orders quickly.

Pandemic hangover: the market began to turn around in mid-2022, with interest rates rising in the US, and investors cut much of their financing for operations that were not profitable.

Change of focus: Experts interviewed by the New York Times claim that the platforms made a miscalculation when they left aside the curation of independent brands in order to sell a little of everything.