By Noel Randewich and Shristi Achar A

(Reuters) – The Nasdaq ended sharply higher on Thursday after Alphabet and Advanced Micro Devices sparked a megacap rally on fresh optimism about artificial intelligence.

Shares of Alphabet jumped 5.3% as analysts cheered the launch of the Google-parent’s newest AI model, while AMD soared nearly 10% after the company estimated the potential market for its data center AI chips could reach $45 billion this year.

Other heavyweight tech-related stocks also gained, with Nvidia and Meta Platforms rising over 2%, Amazon up 1.6% and Apple 1% higher.

The Philadelphia semiconductor index jumped 2.8%, increasing its 2023 gain to 48%, much of that fueled by bets about the future of AI.

“Today it’s an AMD-Google rally. There’s a contagion effect across the market. Everyone wants to get on the bandwagon,” said Jay Hatfield, CEO of Infrastructure Capital Management in New York.

“We’re kind of in this weird market, a tag-team market, where one day tech leads, and then the next day value and the broad market lead.”

The S&P 500 has steadily climbed since the end of October on expectations the Federal Reserve has finished its campaign of interest rate hikes and that it could begin cutting rates in March.

The S&P 500 climbed 0.80% to end the session at 4,585.59 points, with 1.8 stocks in the index gaining for each one that fell.

The most traded stock in the S&P 500 was Tesla, with $25.7 billion worth of shares changing hands during the session. The shares rose 1.37%.

The Nasdaq Composite jumped 1.37% to 14,339.99 points, while Dow Jones Industrial Average rose 0.18% to 36,117.57 points.

Volume on U.S. exchanges was relatively heavy, with 11.2 billion shares traded, compared to an average of 10.8 billion shares over the previous 20 sessions.

Traders have almost fully priced in the likelihood of the Fed keeping rates unchanged at its meeting next week.

Data on Thursday showed the number of Americans filing new claims for unemployment benefits increased less than expected last week to a seasonally adjusted 220,000 for the week.

A Labor Department jobs report due on Friday could hint at how quickly the U.S. economy is softening and may sway expectations about when the Fed is likely to begin cutting rates. Non-farm payrolls are expected to have increased by 180,000 jobs last month after rising by 150,000 in October.

Interest rate futures imply a nearly 64% chance of a rate cut as soon as March, according to the CME Group’s FedWatch tool.

Limiting gains in the Dow, shares of Merck fell 1.7% after the drugmaker’s immunotherapy combination failed in a lung cancer study.

(Reporting by Amruta Khandekar and Shristi Achar A in Bangalore and by Noel Randewich in Oakland, Calif.; Editing by Saumyadeb Chakrabarty, Anil D’Silva and Richard Chang)

By Kanishka Singh

WASHINGTON (Reuters) – The National Defense Authorization Act, or NDAA, is one of the few major pieces of legislation that the U.S. Congress passes every year, a practice started in 1961.

The legislation governs everything from pay raises for service members and purchases of ships and aircraft to policies such as support for foreign partners like Taiwan.

A compromise version of the $886 billion defense and national security policy bill was revealed late Wednesday after negotiations between Republicans and Democrats. Congress could begin voting on the bill in the coming days.

Here are some highlights from the legislation:

PAY RAISE

The bill calls for a 5.2% pay raise for service members and increases the nation’s total national security budget by about 3% to $886 billion.

PROHIBITION OF BATTERIES MADE BY CHINESE FIRMS

The bill lists certain Chinese battery companies that it says are ineligible for Defense Department procurement.

It says that, starting October 2027, no funds authorized to the Defense Department could be appropriated to procure batteries produced by CATL, BYD Company, Envision Energy, EVE Energy, Gotion High Tech and Hithium Energy Storage Technology.

A number of Republican and Democratic lawmakers have sounded the alarm over potential security threats posed by Chinese storage batteries, arguing that the U.S. risks building a critical dependency on its top rival for the devices, which may have cyber vulnerabilities and put energy grids at risk.

TAIWAN

The bill calls for strengthening U.S. partnership with Taiwan, with the goal of “improving Taiwan’s defensive capabilities and promoting peaceful cross-strait relations” with China. It says Washington will “establish a comprehensive training, advising, and institutional capacity building program for the military forces of Taiwan.”

The United States is Taiwan’s most important international backer and arms supplier even though Washington does not formally recognize its government, maintaining official relations only with Beijing which claims the island as its own territory.

EXTENSION OF DOMESTIC SURVEILLANCE LAW

The more than 3,000-page bill extends the domestic surveillance authority that allows law enforcement to spy on Americans without a warrant by another four months, giving lawmakers more time to either reform or keep the disputed program.

The extension of the surveillance provision – known as Section 702 of the Foreign Intelligence Surveillance Act (FISA) – was tucked into the 2,353rd page of the bill.

URANIUM

According to the bill, the Department of Energy will create a “Nuclear Fuel Security Program” and promote domestic availability of uranium to power advanced reactors.

(Reporting by Kanishka Singh in Washington; Editing by Don Durfee and Jonathan Oatis)

By Aditya Soni

(Reuters) – Alphabet surged nearly 5% on Thursday as Wall Street cheered the launch of Gemini, saying the new artificial intelligence model could help narrow the gap in a race with Microsoft-backed OpenAI.

Long considered a leader in AI research, Alphabet lost the spotlight when OpenAI’s ChatGPT swept the tech landscape upon its launch in November last year and allowed Microsoft to aggressively roll out AI-powered software to businesses.

Now, Gemini looks poised to boost Alphabet’s AI heft again.

The Google parent said the much-awaited AI system was faster than OpenAI’s latest model and can process different forms of media such as video, audio and text. It comes in three versions, each designed to use a different amount of processing power.

“Google is beginning to address investor concerns around generative AI innovation and the high cost of running GenAI models through the combination of Gemini’s different model sizes,” J.P. Morgan analysts said.

The company was on track to add nearly $80 billion to its market value, if gains hold. The warm reception contrasted with the nearly $100 billion selloff in Alphabet in February after its Bard chatbot shared inaccurate information in a promotional video and a company event failed to impress.

“Gemini’s release comes at an interesting point in time when OpenAI/ChatGPT users have been complaining about how updates to the GPT model family have potentially impacted the quality of its output,” Macquarie analysts wrote in a note.

“If Google is shipping a GPT-4-beating model, this could help gather user and developer momentum behind Google.”

The company has added some of the Gemini technology to its Bard chatbot, and plans to roll out its most advanced version of Gemini through Bard early next year.

A six-minute video on the model’s abilities showed it could recognize sleight-of-hand magic tricks and help people create art by offering ideas based on materials and their color.

MICROSOFT’S AI LEAD

Alphabet has so far trailed Microsoft in the race for AI-driven cloud revenue. In the September quarter, growth at Google Cloud slowed to a near three-year low, paling before the rebound seen at Microsoft Azure.

To drive sales of its AI-based offerings, Microsoft has targeted big businesses that already use its software services, while Google has turned to startups, which analysts say have curtailed spending in an uncertain economy.

Shares in both the companies have rallied around 50% this year, part of a broader AI-fueled rally in big technology stocks that has driven much of the Nasdaq’s gains.

Microsoft currently trades at 30.68 times its 12-month forward earnings estimates, compared with the Google parent’s 19.59.

“Some criticism might be that Google is late to the AI party. (But) they want to get it right and they also obviously see the huge opportunity,” said Ken Mahoney, CEO of Mahoney Asset Management in New Jersey.

“There’s different ways to grow your company but one of the best ways is with the same customer base by giving them more solutions or more offerings and that’s what I believe this (Gemini) does for Google.”

(Reporting by Aditya Soni and Amruta Khanderkar in Bengaluru; Editing by Devika Syamnath)

By Noel Randewich and Shristi Achar A

(Reuters) – The Nasdaq surged on Thursday, with Alphabet and Advanced Micro Devices sparking a megacap rally on fresh optimism about artificial intelligence.

Shares of Alphabet jumped over 5% as analysts cheered the launch of the Google-parent’s newest AI model, while AMD soared more than 9% after the company estimated the potential market for its data center AI chips could reach $45 billion this year.

Other heavyweight tech-related stocks also gained, with Nvidia and Amazon climbing nearly 2%, Meta Platforms rising 2.8% and Apple up about 1%.

The Philadelphia semiconductor index jumped 2.4%, bringing its 2023 gain to 47%, much of that fueled by bets about the future of AI.

“Today it’s an AMD-Google rally. There’s a contagion effect across the market. Everyone wants to get on the bandwagon,” said Jay Hatfield, CEO of Infrastructure Capital Management in New York.

“We’re kind of in this weird market, a tag-team market, where one day tech leads, and then the next day value and the broad market lead.”

The S&P 500 has steadily climbed since the end of October on expectations the Federal Reserve has finished its campaign of interest rate hikes and that it could begin cuttingrates in March.

The S&P 500 rose 0.78% to 4,585.04 points. Two stocks gained in the index for every one that fell.

The Nasdaq Composite Index gained 1.28% at 14,328.22 points, while the Dow Jones Industrial Average was up 0.23% at 36,138.93.

Traders have almost fully priced in the likelihood of the Fed keeping rates unchanged at its meeting next week.

Data on Thursday showed the number of Americans filing new claims for unemployment benefits increased less than expected last week to a seasonally adjusted 220,000 for the week.

A Labor Department jobs report due on Friday could hint at how quickly the U.S. economy is softening and may sway expectations about when the Fed is likely to begin cutting rates. Non-farm payrolls are expected to have increased by 180,000 jobs last month after rising by 150,000 in October.

Interest rate futures imply a nearly 64% chance of a rate cut as soon as March, according to the CME Group’s FedWatch tool.

Limiting gains in the Dow, shares of Merck fell 1.2% after the drugmaker’s immunotherapy combination failed in a lung cancer study.

The S&P 500 posted 15 new highs and no new lows; the Nasdaq recorded 64 new highs and 85 new lows.

(Reporting by Amruta Khandekar and Shristi Achar A in Bangalore and by Noel Randewich in Oakland, Calif.; Editing by Saumyadeb Chakrabarty, Anil D’Silva and Richard Chang)

(Corrects paragraph 4 to clarify that Duke Energy disconnected batteries not because of its own security concerns but instead after lawmakers raised concerns)

BEIJING/SHANGHAI (Reuters) – Chinese battery giant CATL has hit back at U.S. utility firm Duke Energy’s move to disconnect its batteries, saying that accusations about CATL batteries posing a potential security threat are false and misleading.

Business and products in the United States do not collect, sell, or share data in any way, the company said.

Products have passed rigorous safety and security reviews including those by U.S. authorities and businesses, it added.

Duke Energy said on Wednesday it had disconnected large-scale batteries made by CATL from North Carolina Marine Corps base Camp Lejeune after lawmakers and experts raised concerns about the battery supplier’s close links to China’s ruling Communist Party.

(This story has been corrected to clarify that Duke Energy disconnected batteries not because of its own security concerns but, instead, after lawmakers raised concerns, in paragraph 4)

(Reporting by Zhang Yan, Qiaoyi Li and Brenda Goh; Editing by Jacqueline Wong)

SANTIAGO (Reuters) – A robot that uses powerful magnets to perform less invasive and more efficient surgeries completed its first international procedure, a gallbladder removal, at a public hospital in Chile this week, according to the company that developed the technology.

The MARS surgical platform at the Luis Tisne hospital in Santiago allows surgeons to “attach a small magnet to organs, like the liver, and use robotic arms with high powered magnets on the patient’s belly to manipulate organs out of the way,” according to Levita Magnetics, the California-based start-up that created robot.

The system also “gives the surgeon control of the camera, which allows for better visualization, it is much more stable. And in surgery, seeing is everything,” said Alberto Rodriguez-Navarro, doctor and founder of Levita Magnetics, the California-based start-up that developed the MARS platform.

“It is better for the patient, with fewer incisions and less pain, faster recovery,” Rodriguez-Navarro told Reuters after the surgery.

“For the surgeon, it’s better since it allows him to be more efficient and, for the system, it allows more surgeries to be done per day.”

The platform was cleared by the U.S. Food and Drug Administration in September and conducted its first commercial surgery at the Cleveland Clinic in Ohio in October.

(Reuters Television report, written by Natalia Ramos; Editing by Aurora Ellis)

Banks Profit to Grow 9% to 15% Annually on Generative AI Adoption

Generative artificial intelligence can increase operating profits in the banking sector by between 9% and 15% annually. That is the sentiment echoed by McKinsey Global Institute in a report. The report indicates that the revolutionary technology could boost earnings in the banking sector to over $340 billion annually, thanks to increased productivity.

Generative AI in Banking

Generative AI is becoming increasingly popular in various industries, popularized with the launch of OpenAI’s ChatGPT and Bard by Alphabet early this year. The technology, which is trained on vast troves of data, has proved to be effective in identifying trends and generating appropriate responses and answers to challenging tasks.

The technology has the potential to collect and interpret vast chunks of financial data on a large scale, therefore empowering bank managers to make informed decisions. In addition, generative AI is key to offering tailored services, enhancing the evaluation of risks, and undertaking tasks. A key advantage of technology is that it has the potential to automate most of the laborious tasks in the banking sector.

In addition, it has the potential to reshape customer services through AI-powered chatbots like ChatGPT, which are already sending shockwaves. Banks are also increasingly adopting AI tools to enhance fraud detection and predict financial trends, allowing them to detect and take advantage of high-risk reward opportunities.

Generative AI has the potential to eventually take over repetitive tasks in the banking sector. In its research, McKinsey points out 63 use cases of the technology across various industries. In the financial sector, the technology would be of great help in the customer service sector and interpreting of critical financial data and reports

Sales and marketing divisions will be the most affected by the technology in the financial sector. McKinsey, in its report, also indicates that Generative AI has the potential to take over most call center roles owing to the effectiveness of most AI-powered chatbots.

Jobs Loss on AI Adoption

Amid the positive attributes of the revolutionary technology, there are growing concerns over the number of people who will be rendered jobless. The fact that 70% of business activities will have automated parts thanks to generative AI is already sounding warning bells over the potential loss of thousands of jobs.

Banks and other financial institutions face an uphill task of balancing adopting AI tools while retaining staff. The prospect of cutting labor costs and enjoying enhanced productivity and efficiency is one that could see most of them opt for AI tools at the expense of workers.

Wall Street is already seeing AI as one of the ways of overhauling working practices and cutting costs in the push to bolster margins. For instance, Goldman Sachs Group has begun using AI-based tools to automate labor-intensive coding elements. On the other hand, Citigroup is leveraging generative AI to analyze vast troves of data on new capital rules.

The use of generative AI to enhance derivatives trading is also gaining momentum as banks look to strengthen their competitive advantage. While most banks have large fraud detection departments, generative AI can help track transactions and flag any anomalies or behavior that does not fit expected patterns.

BEIJING (Reuters) – China’s exports rose 0.5% in November from a year earlier, while imports decreased 0.6%, customs data showed on Thursday.

A Reuters poll of economists had forecast a 1.1% decline in exports and a 3.0% increase in imports.

Contrasting manufacturing activity data for November kept alive calls for further policy support measures to shore up growth, but prompted analysts to question whether predominantly negative sentiment-based surveys were keeping up with recent hard data and early signs of improvement in global trade flows.

(Reporting by Joe Cash; Editing by Kim Coghill)

(Reuters) -Meta Platforms said on Wednesday it has started to roll out end-to-end encryption for all personal chats and calls on Messenger and Facebook.

The end-to-end encryption feature will be available for use immediately, the social media giant said, but it may take some time for all Messenger accounts to be updated with default end-to-end encryption.

Messenger previously had the option to turn on end-to-end encryption, allowing a message to be read only by the sender and its recipients, but with this change messages would be encrypted by default, Meta said.

Meta, whose WhatsApp platform already encrypts messages, has said encryption can help keep users safe from hackers, fraudsters and criminals.

End-to-end encryption has been a bone of contention between companies and governments. The British government had urged Meta in September not to roll out encryption on Instagram and Facebook Messenger without safety measures to protect children from sexual abuse.

(Reporting by Akanksha Khushi and Baranjot Kaur in Bengaluru; Editing by Leslie Adler and Stephen Coates)

Gecko Robotics Raises $100M amid Strong Products Demand

Gecko Robotics is becoming one of the most valuable robotics technology companies. The company is fresh from raising $100 million for a post-money valuation of about $633 million. The new funding round comes a year after the company raised $73 million in a Series C funding led by Drive Capital, Snowpoint Ventures, and Joe Lonsdale, among other investors.

Gecko Robotics Product Line

The company has been flying high amid solid demand for its products and solutions for industrial infrastructure inspections. Its robots are commonly used to assess the safety and condition of infrastructure in the oil, manufacturing, and defense industries. Some of the company’s biggest customers include the US Navy and Air Force.

The company’s growing investments come as investors note the company’s innovative products. The products are at the intersection of artificial intelligence and defense technology. Amid the artificial intelligence frenzy the company remains on the spot as its software and robotics powered by AI are proving to be the real deal in helping clients maintain critical assets for the military.

In the most recent past, Gecko Robotics has signed a contract with the Air Force that will see it engage in modernizing nuclear technology. The company’s solution is also used to maintain the US Navy’s fleet. The fact that the technology is also being used in the Israel-Hamas war and Ukraine all but affirms its reliability in the defense industry

In October, Gecko Robotics unveiled Cantilever, a first of its kind AI driven end to end solution that enhances decision-making. The turnkey asset management solution features robotic inspection data integration analytics tools and user modules. The solution is designed to enable unparalleled analysis and decision-making by bringing together data layers that were previously not possible.

Cantilever is the new solution that Gecko Robotics uses to target clients in the defense manufacturing and energy sectors. It stands out for its ability to enable problem-solving. For instance, the US Navy is already using it to combat the largest issue they face in ensuring ship availability. It allows commanding officers and maintenance teams to generate and then act on repair plans in minutes, a process that previously took months.

The new artificial intelligence-powered tool is also being used in other industries to optimize capital spending and extend the life of critical assets. It also enhances the process of prioritizing maintenance spending to reduce costs and increase uptime while improving safety.

Gecko Robotics Plans

Following the $100 million capital raise, Gecko Robotics is in a solid financial position as it already had $120 million previously raised from other investors including Mark Cuban and Y Combinator. According to the Chief executive officer, the company is in a solid position to reach profitability without having to raise capital again.

Gecko Robotics has plans to go public in the future. It also plans to use the available capital to pursue acquisitions in the software and hardware spaces to enhance its operations and strengthen its competitive edge.  The company has set its sights on transforming most industries through advances in robotics and smart sensor technology.