Speaker 1: Welcome to Sonofa - Your Personal Generative AI Podcast.

Speaker 2: And we're diving into a fascinating blend of business moves, market reactions, and emerging tech today. Right?

Speaker 1: Precisely. General Mills selling off its Canadian yogurt business, Alibaba's new AI model, and the ripples from DeepSeek's open-source AI are all on the menu.

Speaker 2: Lot to unpack there. Let's start with General Mills. So, they've finally offloaded their Canadian yogurt operations to Sodiaal, including brands like Yoplait and Liberté.

Speaker 1: Yeah, a move that's been in the works since they signed those agreements last September to sell their entire North American yogurt business. Remember? To Lactalis and Sodiaal, for a cool $2.1 billion.

Speaker 2: Right, a big shift. But they're holding onto the US side of things…for now. At least until 2025, pending the usual regulatory hurdles, of course. So, how's this reshaping their financial outlook?

Speaker 1: Well, they've adjusted their 2025 earnings forecast. Now anticipating a slightly larger dip in EPS — between 2% and 4% — thanks to higher interest expenses from financing that Whitebridge Pet Brands acquisition. Though, organic net sales growth projections remain unchanged. Which is interesting.

Speaker 2: Oh? So, the pet food business is adding costs but not impacting sales growth expectations. That's, uh, a curious balance. What about their stock performance?

Speaker 1: GIS shares actually closed up over 2% on Monday, reaching $61.64. Seems the market isn't too worried about the yogurt sale or the pet food costs…yet.

Speaker 2: Hmm. Okay, so let's switch gears to Alibaba. They're making waves with their new AI model, Qwen2.5-VL. Capable of everything from video comprehension to PC control. Pretty impressive, right?

Speaker 1: Yeah, definitely trying to compete with the big players like OpenAI's Operator. And they’re claiming some serious victories over GPT-4o, Claude 3.5, and even Google's Gemini in various tests. Bold claims.

Speaker 2: And they’re not just making empty boasts either, right? From what I've seen, it can analyze complex data, process lengthy videos, and even interact with mobile apps. Booking flights, no less. It seems like it’s got some real-world application potential.

Speaker 1: For sure. And this comes after they launched a bunch of other AI tools earlier this year. Clearly, Alibaba is doubling down on AI, which, considering the current landscape, is a smart move. Their cloud revenue is already seeing a boost, up 7% to $4.22 billion last quarter. Not bad, huh?

Speaker 2: Not bad at all. But, speaking of the AI landscape, let's talk about the elephant in the room. DeepSeek. Their open-source R1 model has really shaken things up, hasn't it?

Speaker 1: Absolutely. U.S. tech stocks took a tumble, with Nvidia losing a staggering $600 billion in market cap. Just on Monday. All because DeepSeek managed to achieve similar, or arguably better, performance with drastically lower costs and computing power.

Speaker 2: Yeah, it's a game-changer. Suddenly, those massive AI infrastructure investments by Microsoft and Meta look a little…questionable. Especially considering the backdrop of the Biden administration's semiconductor embargoes on China.

Speaker 1: It's ironic, isn't it? Those restrictions were meant to stifle China's AI development. Now, a Chinese company is disrupting the market with a leaner, more efficient approach. It's definitely thrown a wrench into the works. What are your thoughts? Well, it makes you wonder about the long-term implications. If DeepSeek can achieve this level of performance with such limited resources, imagine what they could accomplish with unfettered access to advanced chips and technology. It’s a pretty significant development.

Speaker 2: It is, and investors are definitely taking note. The interest in Chinese stock ETFs like FXI and KWEB is likely to increase as a result of all this. Especially with BABA stock already up over 1% premarket on Tuesday.

Speaker 1: It's a fascinating dynamic. While U.S. tech giants are grappling with the implications of DeepSeek's breakthrough, the overall market seems to be regaining its footing. Futures are rebounding, and all major indices except the Russell 2000 are showing gains. Almost as if Monday's dip was a momentary blip.

Speaker 2: Almost. But that blip exposed a potential vulnerability in the tech sector's narrative, didn't it? It raises questions about the sustainability of massive AI investments and the potential for a shift towards value stocks, as Jeremy Siegel pointed out. And, of course, the Fed's interest rate decision looms large, along with the upcoming earnings reports of those "Magnificent 7" tech giants. Lots of uncertainty still swirling around. Yeah?

Speaker 1: For sure. And let's not forget the other factors at play here. Economic data showing improvement, the buzz around upcoming earnings reports from major players like General Motors, Boeing, and Starbucks, the positive momentum in stock advances… it's a complex picture. Lots of moving parts.

Speaker 2: Definitely. And with so much happening in the markets, it'll be interesting to see how these stories develop and intertwine. There's a lot to keep an eye on.

Speaker 1: So, uh, quite a bit of market activity to unpack here. Boeing showing gains despite projected losses, Starbucks dipping pre-earnings…it's a mixed bag, isn't it?

Speaker 2: Yeah, a real rollercoaster. And then you've got Brown & Brown and Nucor exceeding expectations, while IMAC Holdings and ZK International are absolutely skyrocketing. Over 100% gains for IMAC? That's wild!

Speaker 1: Absolutely. Talk about a market surge. Their protein-based cancer treatment subsidiary, Ignite Proteomics, must be generating serious buzz. And ZK International, with its improved EPS, clearly striking a chord with investors. What do you make of it?

Speaker 2: Well, it speaks to the power of innovation in healthcare and, frankly, the market's appetite for promising new therapies. It'll be interesting to see if these gains hold up in the long run.

Speaker 1: For sure. Now, shifting gears to commodities, oil's inching upwards, gold's seeing a modest bump, but the Dollar Index is strengthening. All while Asian markets offer a mixed picture, with some indices up and others down. Europe, however, seems to be trending upwards. Kind of a global tug-of-war, wouldn't you say?

Speaker 2: Yeah, definitely a lot of push and pull across global markets. And then, of course, looming over all of this is the Fed's interest rate decision and the potential impact on, well, everything. It's a complicated landscape right now.

Speaker 1: Absolutely. Okay, but let's talk Microsoft and TikTok. Trump's claim about a potential acquisition, aiming for a 50% stake in a U.S.-based joint venture…it's a bold move, right?

Speaker 2: Bold, and potentially game-changing. Especially considering TikTok's massive user base and influence on the digital ad market. 170 million users? That's not chump change. And, reportedly, outpacing even Instagram amongst teens. Wow.

Speaker 1: Yeah, pretty significant. And with other bidders like Perplexity and Frank McCourt in the mix, it's a high-stakes battle for a slice of the social media pie. Remember the 2020 acquisition drama with Microsoft and Oracle? History seems to be repeating itself, doesn't it?

Speaker 2: It does, but with a different political backdrop. And the potential valuation? Between $40 and $50 billion? Staggering. If it goes through, this could reshape the entire social media landscape. It makes you wonder what Larry Ellison and Elon Musk’s involvement could be.

Speaker 1: For sure. Now, let's pivot to DeepSeek. Sam Altman acknowledging their R1 model's impressive performance and cost-effectiveness… it’s a big deal, right? Especially after that market tumble on Monday.

Speaker 2: Huge. Nvidia losing $600 billion in market cap? That's a seismic shift. And Altman admitting DeepSeek's model delivers impressive results for the price? It's a humbling acknowledgement, but also a sign of healthy competition. Or at least a claim to be. “We’ll deliver better models,” he says. Hmm. We shall see.

Speaker 1: We shall. And the fact that DeepSeek's model is reportedly the most downloaded app on the Apple US store? That's a clear indicator of its impact. It'll be interesting to see how OpenAI responds, especially with their stated goal of achieving AGI.

Speaker 2: Definitely. And finally, Ray Dalio's warning about a potential AI bubble...comparing the current climate to the dot-com era…it's a sobering perspective, isn't it?

Speaker 1: It's almost like clockwork, isn't it? A company disrupts the market, gains massive traction, and boom - cyberattacks.

Speaker 2: Yeah, the timing of these attacks on DeepSeek is…suspicious, to say the least. Right after their app tops the charts? It makes you wonder.

Speaker 1: It does. Is it a coincidence? A coordinated effort to destabilize them? Or just the inevitable consequence of being in the spotlight? Who knows? It's hard to say for sure, but…

Speaker 2: But it definitely raises some eyebrows. Especially with the current geopolitical climate surrounding AI development. I mean, think about it. The U.S. is trying to restrict China's access to advanced chips, and suddenly, a Chinese company comes out of nowhere and shakes up the entire industry. It’s like…

Speaker 1: …a David and Goliath story, but with a digital twist. And David just landed a major blow. So, naturally, Goliath might be tempted to retaliate, right? Not directly, of course, but through… other means. Cyberattacks, for instance. Just a theory. I mean, we are all thinking it, right?

Speaker 2: It's a compelling theory. And let's be honest, these kinds of attacks are becoming increasingly common in the tech world. It's almost a badge of honor these days. If you're not being targeted, are you even a player? It’s crazy, right?

Speaker 1: It is. And for DeepSeek, this adds another layer of complexity to their already challenging situation. Navigating the competitive AI landscape, dealing with geopolitical pressures, and now fending off cyberattacks. It's a lot to handle, and I kind of admire their tenacity. They are taking it all in stride so far.

Speaker 2: They are. And if they can weather this storm, it'll only strengthen their position. It's a trial by fire, in a way. Survival of the fittest. And as for that next article, well, another dose of reality. Stephen King taking on Elon Musk over H-1B visas? Always interesting when those two clash. Musk has been so vocal about immigration these days.

Speaker 1: It is. Two titans, completely different worlds, butting heads. It's the kind of story that just captures the zeitgeist, doesn't it? The intersection of technology, politics, and…well, horror. Pure Stephen King. Classic Elon.

Speaker 2: Yeah. It's a reminder that even in the fast-paced world of tech and finance, these broader societal issues are always simmering beneath the surface. And sometimes, they boil over in unexpected ways. It’s kind of fascinating, if you think about it.

Speaker 1: It is. And that, my friends, brings us to the end of another episode of Sonofa - Your Personal Generative AI Podcast. Thanks for tuning in, and we'll see you next time! Stay curious, stay informed, and stay tuned. Bye!

Speaker 2: And remember, folks, don't take anything we say as investment advice. Do your own research! Until next time, stay informed and stay engaged. Catch you later!