Arvind's Newsletter

1.Direct to (Airtel’s) Home: Bharti Eyes Tata Play Buy

Sunil Mittal-led Bharti Airtel is in advanced negotiations with the Tata Group to buy loss-making Tata Play, India’s largest direct-to-home (DTH) business, said people aware of the matter. The aim is to consolidate its presence in the digital TV segment that’s facing growth challenges while improving Airtel’s bundled offerings to shore up its non-mobile revenues through convergence.

If a sale happens, it will mark Tata’s departure from its sub-scale content and entertainment operations. It will also be the second time that the two business groups strike a deal, after Bharti bought out Tata’s bleeding and leveraged consumer mobility business in 2017 and absorbed it two years later.

2.GIC considering possible sale of 50% stake in Greenko Energy

GIC Pte is considering options for its 50 per cent stake in India’s Greenko Energy Holdings, including a possible sale that could be worth around $5 billion, people familiar with the matter said. 
 
The Singaporean sovereign wealth fund is in initial discussions with financial advisers to help evaluate a full or partial sale of its holding in Greenko, the people said, asking not to be identified because the matter is private. A deal could value the renewable energy firm at about $10 billion, they said.

Greenko, which has other backers including Abu Dhabi Investment Authority, known as ADIA, and Japanese financial group Orix Corp., may also seek to raise funds in the coming months to help its growth, another person said.

3.Why Zomato backer Sanjeev Bikhchandani is a bottom-up, not top-down, investor

Sanjeev Bikhchandani, Naukri.com’s founder, has transformed into a leading venture capitalist with a keen eye for category-defining companies. In an exclusive interview with Mint, he shares his insights on the evolving landscape of investments, and the future of Zomato and Policybazaar.

Some Edited excerpts:

“We don’t look at it sector-wise. We look at internet companies. We meet about 1,000 companies a quarter. And the good ones we invest in. We don’t have any preconceived notion about whether a sector is good or bad.”

“For example, in 2008, if had you told me to look at the insurance-comparison sector, there was no sector. We just met a company and we were interested in it. Likewise, in 2010, if had you told me to look at the restaurant-listing sector, there was no sector. But we met the FoodieBay (Zomato, before it was renamed) team, and we liked them. We liked what they were doing and went in. That’s how we like to do it—bottom-up, not top-down.”

“If what they’re doing looks interesting, the people seem good, it might be worthwhile backing them. Because when you are investing in category-creating companies, you don’t look at sectors… There are no categories in many cases, just good teams.”

4.Brazilian authorities plan to dredge parts of the Amazon River in response to water levels reaching a record low

They say a deeper river basin will allow trade — including vital food and medicine for remote communities — to keep flowing. But environmentalists argue the move will devastate the local ecosystem. “The decision to dredge meets a need for communities, for mankind,” an expert told The New York Times. “But, from an environmnetal point of view, it is reckless.”

Other countries may soon have to consider similarly radical responses to droughts: According to the World Meteorological Organization, climate change has pushed 50% of the world’s rivers below normal levels.

5.The Nobel Prize for Physics went to pioneers of artificial intelligence for breakthroughs in machine learning. 

The University of Toronto’s Geoffrey Hinton, one of the so-called “Godfathers of AI,” and Princeton’s John Hopfield used tools from physics to create the underpinnings of modern learning. “Machines can now mimic functions such as memory and learning,” the prize committee said.

Hinton and Hopfield’s work, which builds on ideas from the human brain as well as fundamental physics, are behind all the recent advances in AI, which is itself improving scientific discovery in things like Google DeepMind’s AlphaFold.

Hinton shares the award with fellow computer scientist John Hopfield, who invented a type of pattern-matching neural network that could store and reconstruct data. Hinton built on this technology, known as Hopfield networks, to develop back propagation, an algorithm that lets neural networks learn.

But since May 2023, Hinton was now scared of the technology that he had helped bring about, the 76-year-old scientist has become much better known as a figurehead for doomerism—the mindset that takes a very real risk that near-future AI could produce catastrophic results, up to and including human extinction.

6.Chinese stock rally cools after Beijing holds off on fiscal stimulus

China’s blistering stock market rally cooled on Tuesday after Beijing officials held off on unveiling more stimulus for the world’s second-largest economy. The blue-chip CSI 300 index of Shanghai- and Shenzhen-listed stocks surged 10.8 per cent upon opening after a week-long holiday, before falling back to close 5.9 per cent higher.

Markets were disappointed by the lack of significant new fiscal spending announcements from state planners, analysts said. Hong Kong’s Hang Seng index fell 9.4 per cent, its worst day since October 2008, after having risen 11 per cent over the previous five days. The Hang Seng Tech index tumbled 12.8 per cent. Traders speculated that investors were selling Hong Kong assets to fund mainland trades.

7.Google’s grip on search slips as TikTok and AI startup mount challenge

Google’s grip on the nearly $300 billion search advertising business is loosening.

For years, the tech giant has seemed invincible in this corner of the ad market, which is the foundation of its business. Now, rivals are beginning to eat into its lead, and new offerings—fueled by the rise of artificial intelligence and social video—threaten to reshape the landscape.

TikTok, the wildly popular short-form video platform, has recently started allowing brands to target ads based on users’ search queries—a direct challenge to Google’s core business.

Perplexity, an AI search startup backed by Jeff Bezos, plans to introduce ads later this month under its AI-generated answers. Until now, it has made revenue mostly from a $20-a-month subscription offering that grants access to more-powerful AI technology.

The new initiatives add to the pressure on Google from the rise of Amazon.com, which has taken a chunk of search ad spending. Many consumers begin product searches on the e-commerce platform.

Google’s share of the U.S. search ad market is expected to drop below 50% next year for the first time in over a decade, according to the research firm eMarketer.

Amazon is expected to have 22.3% of the market this year, with 17.6% growth, compared with Google’s 50.5% share and its 7.6% growth.

8.More than half of 2025’s movies from Hollywood’s biggest studios will be existing intellectual property. 

The trend towards familiar material is not new: The 10 biggest US film releases of 2024 so far have all been remakes, sequels, and prequels, including Dune: Part Two, Inside Out 2, and Deadpool & Wolverine. But consumers are becoming cautious about buying movie tickets, CNBC reported, and studios are keen to know that there are audiences for big-budget releases, making existing popular IP an easier pitch. Next year’s big releases include more Toy Story, more Jurassic Park, and a sequel to Dirty Dancing, in case anyone was concerned that the 21st century had begun.