Arvind's Newsletter

1.Bajaj Finserv says Allianz has indicated it's considering an exit from insurance JV

Bajaj Finserv on October 22 said Allianz has indicated it is "actively considering an exit
from the life and general insurance joint ventures".

"Discussions are at preliminary stage and there is no proposal before the Board of the Company or its insurance subsidiaries in this regard," said Bajaj Finserv in a stock exchange filing. Bajaj holds a 74% stake in the joint ventures with Allianz, and the balance equity stake (26%) is with the German firm.

Meanwhile a separate news report Bloomberg mentioned that Allianz and Jio Financials were in discussion for a Life and General Insurance joint venture.

2.FIIs pulling out of India is not a surprise. But where is their money going?

Foreign investors are pulling their money out of India. While that may not be surprising, the question is which global markets are catching the attention of foreign portfolio investors (FPIs) now?

The short answer: Apart from China, it was South Korea, Japan and Indonesia. These three markets alone attracted foreign investments of over $18.5 billion so far in 2024, according to data from Dezerv as of 21 October.

3.Hindustan Unilever to separate ice cream business following board decision

Hindustan Unilever’s (HUL) board of directors, in a meeting held on Wednesday, decided to separate its ice cream business. In September, the board had constituted a committee of independent directors to evaluate the way forward for the business.

The committee noted that the ice cream business is a high-growth category and requires significant investment to realise its full potential. Currently, the business contributes around three per cent of HUL’s turnover.

The company further stated in the filing: “Given Unilever owns the trademarks and know-how and has announced the separation of its ice cream business, local capabilities will need to be developed to continue running the business.”

HUL also mentioned that the ice cream business operates with a different model, including cold chain infrastructure, and a distinct channel landscape, which limits synergies with the rest of HUL.

4.Anthropic says latest AI model can control users’ computers

Anthropic on Tuesday released an upgraded version of its Claude 3.5 Sonnet model that can understand and interact with any desktop app. Via a new “Computer Use” API, now in open beta, the model can imitate keystrokes, button clicks, and mouse gestures, essentially emulating a person sitting at a PC.

“We trained Claude to see what’s happening on a screen and then use the software tools available to carry out tasks,” Anthropic wrote in a blog post shared with TechCrunch. “When a developer tasks Claude with using a piece of computer software and gives it the necessary access, Claude looks at screenshots of what’s visible to the user, then counts how many pixels vertically or horizontally it needs to move a cursor in order to click in the correct place.”

5.Netflix company culture rejig | Co-CEO Ted Sarandos backs move; is it a step in the right direction?

Netflix revised its widely known culture deck in June, following a year-long review and feedback from 1,500 employees. However, the update has drawn criticism, according to a report by Business Insider. Co-CEO Ted Sarandos acknowledged that the original deck "put more emphasis on freedom than responsibility".

In the latest version, Netflix removed the "freedom and responsibility" section and introduced a new focus called "People Over Process". This new approach emphasises hiring "unusually responsible people" who can thrive in an environment that values openness and independence, as per the BI report.

Additionally, Netflix updated its "Keeper's Test", a performance evaluation tool first implemented in 2009. The new version encourages regular discussions between employees and their managers about what’s going well in their roles, the report added.

Addressing concerns about shifting workplace culture, Sarandos reportedly said at The Wall Street Journal's Tech Live conference, "When anyone says, 'Hey, the culture is changing.' Yes, of course it needs to. We definitely change the culture… we wanted to reflect how we work, not dictate how we work.”

6.Escaping the New Gilded Age; Daron Acemoglu on Project Syndicate

In an America where wealth has increasingly become the primary source of social status, billionaires are viewed as entrepreneurial geniuses who exhibit unique levels of creativity, courage, foresight, and expertise on a wide range of topics. Yet it should be obvious that wealth is a poor metric for wisdom. Some excerpts:

“Tech billionaires such as Bill Gates, Mark Zuckerberg, and Elon Musk are not just among the richest people in human history. They also are exceptionally powerful – socially, culturally, and politically. While this is partly a reflection of the social status that our society attaches to wealth in general, that is not the whole story.

What matters even more than simple wealth is that these particular billionaires are viewed as entrepreneurial geniuses who exhibit unique levels of creativity, daring, foresight, and expertise on a wide range of topics. Add the fact that many of them control major means of communication – namely, the key social-media platforms – and you have something almost unparalleled in recent history.

The image of the rich, brave businessman who transforms the world can be traced back at least to the robber barons of the Gilded Age. But one of the main sources of its contemporary popular appeal is Ayn Rand’s novel Atlas Shrugged, whose protagonist, John Galt, strives to re-create capitalism through the sheer force of his idealism and will.

While Rand’s novel has long held canonical status in the minds of Silicon Valley entrepreneurs and libertarian-leaning politicians, the influence of its central archetype is hardly confined to those circles. From Bruce Wayne (Batman) and Tony Stark (Iron Man) to Darius Tanz in the TV series Salvation, rich, technologically savvy innovators who save the world from impending disaster are a staple of our popular culture.

Some individuals will always have more power than others, but how much power is too much? Once upon a time, power was linked to physical strength or military prowess, whereas now its perquisites usually stem from what Simon Johnson and I call “persuasion power,” which, as we explain in our book Power and Progress, is rooted in status or prestige. The greater your status, the more easily you can persuade others.”

7.The War of the AI Roses: Microsoft and OpenAI’s Close Partnership Shows Signs of Fraying

Microsoft had already pumped $13 billion into OpenAI, and Mr. Nadella was initially willing to keep the cash spigot flowing. But after OpenAI’s board of directors briefly ousted Mr. Altman last November, Mr. Nadella and Microsoft reconsidered, according to four people familiar with the talks who spoke on the condition of anonymity.

Over the next few months, Microsoft wouldn’t budge as OpenAI, which expects to lose $5 billion this year, continued to ask for more money and more computing power to build and run its A.I. systems.

Mr. Altman once called OpenAI’s partnership with Microsoft “the best bromance in tech,” but ties between the companies have started to fray. Financial pressure on OpenAI, concern about its stability and disagreements between employees of the two companies have strained their five-year partnership, according to interviews with 19 people familiar with the relationship between the companies.

Over the last year, OpenAI has been trying to renegotiate the deal to help it secure more computing power and reduce crushing expenses while Microsoft executives have grown concerned that their A.I. work is too dependent on OpenAI. Mr. Nadella has said privately that Mr. Altman’s firing in November shocked and concerned him, according to five people with knowledge of his comments.

8.The 20 Countries With the Lowest Fertility Rates in 2024

Worldwide, fertility has fallen from an average of 5 births per woman in 1950 to 2.3 births per woman in 2021.

With fewer children being born, concerns have arisen that there may soon be ‘too few’ people to sustain economies.

The below graphic lists countries with the lowest fertility rates as of 2024, based on data compiled by Statista. All figures are estimates.

The fertility rate refers to the average number of children born to a woman of childbearing age in a given country. Typically, women between the ages of 15 and 45 are considered to be in their child-bearing years.

A fertility rate of 2.1 children per woman, known as the “replacement rate,” keeps the population stable by replacing both parents and accounting for infant mortality—assuming no migration and stable mortality rates.

Taiwan’s and South Korea’s fertility rate is estimated at 1.11 children per woman, the lowest in the world.