Arvind's Newsletter

1.India’s top VCs face fresh obstacles as startup investment plummets

Indian startups have raised about $7 billion this year, according to market intelligence platform Tracxn, down from about $25 billion in 2022 and $37 billion in 2021

High-flying venture investors in India managing hundreds of millions of dollars are tempering expectations, making early-stage startup bets that in best-case scenarios they hope will return 3-5x invested capital.

Several leading India investors, including Peak XV Partners, Elevation Capital, Lightspeed, Nexus and Accel, have raised $500 million-plus in the past two years, emboldened by earlier home runs and vast market potential.

However, the prevailing mood has shifted this year. Investors are increasingly cautioning that they are struggling to spot fund-returning opportunities — their latest headache in the world’s most populous nation. (A VC with a recently raised fund below $250 million asserted that investment firms wielding $500 million or more in capital reserves face greater difficulty deploying those assets profitably.)

2.E.U. Agrees on Landmark Artificial Intelligence Rules

European Union policymakers agreed to a sweeping new law to regulate artificial intelligence, one of the world’s first comprehensive attempts to limit the use of a rapidly evolving technology that has wide-ranging societal and economic implications.

The law, called the A.I. Act, sets a new global benchmark for countries seeking to harness the potential benefits of the technology, while trying to protect against its possible risks, like automating jobs, spreading misinformation online and endangering national security. The law still needs to go through a few final steps for approval, but the political agreement means its key outlines have been set.

3.Saudi Arabia led oil-producing countries in opposing a COP28 deal to end fossil-fuel use.

In a leaked letter, OPEC, the oil-exporting cartel, urged its members and partners to reject any deal targeting fossil fuels directly, rather than emissions. People close to the talks said Saudi and other Arab negotiators stormed out of one meeting discussing a pledge to “phase out” fossil fuels, which has become the central debate of this year’s summit.

The German climate envoy told Politico that OPEC’s intervention was a sign of “panic” as the scale of support for the pledge became clear: At least 80 countries, including the U.S., are demanding that COP28 clearly calls for an eventual end to fossil-fuel use, Reuters reported.

4.Semiconductor giants race to make next generation of cutting-edge chips, reports Financial Times

The world’s leading semiconductor companies are racing to make so-called “2 nanometre” processor chips that will power the next generation of smartphones, data centres and artificial intelligence.

Taiwan Semiconductor Manufacturing Company remains the analysts’ favourite to maintain its global supremacy in the sector, but Samsung Electronics and Intel have identified the industry’s next leap forward as a chance to close the gap. For decades, chipmakers have sought to make ever more compact products. The smaller the transistors on a chip, the lower the energy consumption and the higher their speed. Today, terms such as “2 nanometre” and “3 nanometre” are widely used as shorthand for each new generation of chip, rather than a semiconductor’s actual physical dimensions.

Any company that opens up a technological lead in the next generation of advanced semiconductors will be well placed to dominate an industry that pulled in well over $500bn in global chip sales last year. That is projected to grow further due to a surge in demand for the data centre chips that power generative AI services.

TSMC, which dominates the global market in processors, has already shown the process test results for its “N2” — or 2 nanometre — prototypes to some of its biggest customers, including Apple and Nvidia, according to two people with direct knowledge of the discussions.

But two people close to Samsung said the Korean chipmaker was offering cut-price versions of its latest 2 nanometre prototypes in an effort to attract the interest of big-name customers including Nvidia.

TSMC, which has said that mass production of N2 chips will begin in 2025, typically launches the mobile version first, with Apple as its lead customer. Versions for PC and then high-performance computing chips designed for higher power loads will come later.

Apple’s latest flagship smartphones, the iPhone 15 Pro and Pro Max, were the first mass-market consumer devices to deploy TSMC’s new 3 nanometre chip technology when they were introduced in September this year.

5.From Chandrayaan 3 to G 20 : Top things Indians searched in 2023

Data shared by Google indicates that the country's most-searched news topic was the Chandrayaan-3 moon mission. Queries about the G20 summit, Israel-Gaza war and the death of Friends’ star Matthew Perry also ranked high.

The country's most searched news topic was the Chandrayaan-3 space mission followed by updates about the Karnataka Assembly elections and the Israel-Gaza war. Disasters such as the Turkey earthquake and Odisha train accident made it to the top trends as did updates about Manipur amid recurring bouts of violence.