Market View: Kevin Warsh’s Fed Hikes Rates; Lumentum, Coherent, Generac and Salesforce Ride the AI Wave

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In control when it comes to markets, I'm looking at the AI trade broadening beyond chip makers. That's where I'm going to start. Last night, investors followed the light. Optical networking companies, Lumentum and Coherent, were the two biggest gainers on the S&P 500 Their technology helps move enormous quantities of data quickly between the chips and service inside AI data centers.

I think an important question to ask is, how optical components have become such a critical and potentially lucrative part of the AI infrastructure build out. And after the extraordinary gains that we have seen, I think it's time to perhaps ask, are they still investable? So Lumentum, Coherent, companies that I'm looking at, in particular for you. In the meantime, in other news, Anthropic is to open a Singapore office in October and sees Singapore as a standout market for Claude. That's right, AI firm Anthropic, according to BT, going to open its office here next month. This will be the fifth location in Asia Pacific. So Anthropic expanding in our region, and this expansion is meant to support strong demand for Claude. That's its AI model. It says Singapore is a standout market. Anthropic has an economic index of its own, and we rank second globally out of 121 countries for Claude usage per capita. That's right. So local adoption for Claude running 5.81 times higher than expected relative to our population size. A lot of us love Claude apparently. So the new Singapore office is going to join Anthropic's existing network in the region that's in Tokyo, Bengaluru, Seoul, and Sydney. Senior executives scheduled to visit Singapore in October for the opening. They will be meeting customers, policy makers, partners as well. They're growing Anthropic across APEC and opening an office here where Claude usage per capita is among the highest in the world is a natural step. So Anthropic's going to work with organizations of every size, startups, digital natives, large enterprises. It's really going to try to get embedded in our ecosystem.

Dale Finlay, the name you want to know, General Manager of ASEAN for Anthropic. Dale's going to be based here. He's spent nearly a decade at Google Cloud, and he's going to be driving regional commercial operations. So exciting. Anthropic opening a Singapore office in October, signaling how strategically important Singapore is to Anthropic and that perhaps we could become the regional center for enterprise AI adoption. That's what I'm thinking. As AI companies pursue more users, though infrastructure and investment, one technology founder believes the industry has failed to bring the public along. Who am I talking about? Reddit co-founder Alexis Ohanian, who says the tech industry has been tone deaf in explaining AI, allowing misinformation and fears about job losses, even humanity's future to spread. That's right. Alex Ohanian speaking to CNBC, saying the tech industry has been tone deaf in explaining the risks of AI, suggesting that its risks are more mundane than the sort of Terminator and Skynet scenarios that have been floating around. I'm sure you remember Skynet, right? From the Terminator, that fictional self-aware AI system that saw humans as a threat and sought to wipe us all out. So, the Reddit co-founder, Ohanian's comments, Alexis Ohanian, they come after warnings from researchers at AI labs, OpenAI, Anthropic as well, that the rapid advancement of tech, known as recursive self-improvement or RSI, can help develop more advanced models, potentially creating this cycle in which you see more capable models contributing to building even more capable ones. And the concern is that if AI systems start taking over the process of training new models that, well, human developers are just going to lose control over how these new systems evolve and they'll go rogue, right? But Ohanian is arguing the opposite, saying the risks are real, but apocalyptic warnings, terminator style, can distract from the real concerns that we need to be focusing on, like agent swarms. That's when multiple AI agents all work together to perform a complicated task. And Ohanian, I think, is quite interesting. He compares AI to nuclear energy, saying both are powerful, both are scientific advances. They can cause harm, but also deliver major benefits if they are used and managed responsibly.

And he hopes that the discussion moves in a healthy direction.

So interesting, right? Ah, you know, in terms of developments, just earlier this month, an AI researcher quit his job at Anthropic, accused the company of acting irresponsibly when developing the powerful tech. That man's name was Jacob Coxson, and he's worked as a researcher at both OpenAI and Anthropic. And on social media, he came out, said he resigned because he was concerned that Anthropic and OpenAI were, quote, unquote, gambling with our lives. And said, the people building AI earnestly believe that it could kill us all by the end of the decade. I think you want some nuances here. There's a lot of misinformation flying around. And we're going to pass through this in a show that we're going to be doing on Monday on this very topic. Yep. In the meantime, I mean, you know, it's interesting because the heart of this debate is, is this really about communications failure or are public concerns entirely rational? We need to get to the bottom of this. Why are so many AI leaders warning that development may need to slow? And should investors feel reassured by their caution? Or should we be worried about the growth assumptions that are supporting AI valuations?