Greetings!

Great seeing you again! As predicted in the last issue, we’ve once again been saved from the brink of global economic collapse at the 11th hour by a ramshackle deal. How many times must we teeter on the edge?

Since the fate of the world is safe for now, let’s talk about some nicer things. In this issue, we celebrate Nvidia’s entry into the Trillion Dollar Club, the failed attempt for companies to get workers back in the office, as well as some great things I’ve been reading, watching, listening to, and thinking about.

Away we go!

Industry Highlights: AI’s Trillion Dollar Club

The buzz around generative AI tech has been overwhelmingly optimistic, and as I’ve written about previously, many experts see it making just as much impact as the internet did at the turn of the century.

No one is more excited about this forecast than Nvidia, the key chip supplier for companies building AI-fueled products. The company briefly crossed the $1 trillion valuation mark earlier this week, and though prices dipped again on Wednesday, most see it as a sign that the 24-year-old tech company’s time has finally come to run with the big dogs.

Assuming the valuation will indeed increase—the company is currently valued around $940 billion—Nvidia would join Apple, Microsoft, Alphabet (Google), and Amazon in the trillion dollar club. Its stock has jumped over 138% in the last six months, and owing to an extremely positive quarterly earnings report and revenue outlook, a 30% jump this week.

Why such a swift rise? Nvidia’s GPU (graphics processing units) unlock new possibilities in content creation and machine learning—the very skills needed to develop new generative AI products. As The Verge put it, “the AI gold rush sees Nvidia selling shovels at just the right time.”

CFRA Research analyst Angelo Zino put it a bit less colloquially:

While the majority of the tech world is already hoisting Nvidia on its shoulders in celebration, market experts aren’t quite ready to break out the streamers and balloons.

A Barron’s analysis on Wednesday suggests the stock was “way overbought,” which means the shares are due for a pause and will come back down to earth.

The company’s uptick also came as the result of institutional investors, not retail traders, which means the average investor isn’t buying into the AI hype just yet. Experts attribute this to looming concern of a recession.

“It’s becoming evident that more concrete signs of a Fed pause, further progress on inflation and resiliency in the macro environment are likely key missing elements for retail participation,” Vanda analysts wrote in a note.

It’s also likely investors are a bit gun shy after experiencing the recent crypto bubble and worried AI will be the same.

Nvidia is no stranger to that, given their GPU products also helped to build crypto-based products. The company made $5 billion as a result of a covid-related GPU shortage and looked like it was headed for the big time until crypto cooled off in 2022.

Still, many are optimistic about Nvidia’s future.

I have a hard time believing that AI tech will go the way of some of the shady crypto coins out there, since its potential impact is far too great. And serious props for Nvidia being in the right place at the right time.

The Future of Work: Return To Sender

A few weeks ago, both the Center for Disease Control and the World Health Organization officially downgraded the COVID-19 virus, declaring the pandemic was no longer a global health emergency.

Finally, we’re back to normal and workers can get back to the office…right?

Not so much.

According to a recent Wall Street Journal article, office occupancy rates crossed the 50 percent mark at the beginning of the year, which business experts and building owners took as a sign that things were returning to normal. But in the last six months, office use rates have only climbed another eight percent.

Scoop Technologies, a software company that monitors workplace strategies, reported the number of employees working in-person five days a week has actually declined in the last three months—down from 49 percent to 42 percent.

This has resulted in more companies shrinking their office footprints to match attendance patterns. A survey from CBRE, one of the largest managers of US office space, reported that 53 percent of companies expect to reduce their office space significantly in the next three years.

Nowhere is this trend more visible than in New York City, which is often seen as the shining star of office culture. Forbes reported that office visitation peaked in Q3 of last year in NYC, and it’s since fallen way below pre-pandemic levels.

Scoop CEO Robert Sadow said that as long as there’s a high number of open jobs, workers still have the upper hand.

But there may be a battle ahead. The CBRE survey reported that managers plan to redouble their efforts to get workers back in the office full time during the second half of the year.

Politicians are also getting involved. In NYC, Mayor Eric Adams announced tax incentives for office-building owners to upgrade their spaces in an effort to lure workers back with swankier digs.

My read on the situation is that until companies increase their flexibility, they won’t have the leverage they seek. Workers will still choose hybrid work as long as they can do so. And honestly, are we sure that’s such a bad thing? Maybe. The primary concern is productivity, which I think we’ll continue to see increase as we continue to iterate on hybrid business practices and emerging technology. I’d be remiss if I didn’t mention the caveat: If economic conditions continue to slide, companies will gain the upper hand in demanding a more favorable work arrangement.

The Supply Aside: What I’m Reading, Watching, Listening to, and Thinking About Re: Supply Chain, Work, and Beyond

📕 Read - Talk by Michael Smerconish

I’ve been a long-time listener of talk show host Michael Smerconish on the POTUS channel on Sirius XM. He recently did a charity initiative where he’d send a signed copy of his novel, Talk, to anyone who donated. The book is nearly a decade old, but it was eerie how close to political reality it was for that time. In essence, Talk is the novelization of Smerconish’s life as a talk show host. The book’s protagonist, Stan Powers, moves to Pittsburgh (Smerconish got his start in Philadelphia) and learns that though his views are mostly moderate, the fringe politics are what attracts listeners. Smerconish has a knack for storytelling, and this book is entertaining and funny. It’s art imitating life in its finest form.

Here’s some other cool stuff I’m reading:

• The Complete Guide To Haggling in This Economy–The Wall Street Journal

From cars to medical bills, the cost of things we purchase every day is more negotiable than you might think. This article shares strategies for asking for a discount.

• AI could destroy humanity, AI’s creators say–Morning Brew

 Tell the world AI may cause human civilization to collapse without going over Twitter’s character limit. That’s what a bunch of celebrity AI experts did when they signed a 22-word statement warning about the existential risks of the technology that was published by the nonprofit Center for AI Safety this week.

• As China Risks Grow, Manufacturers Seek Plan B—and C and D–The Wall Street Journal

Western executives are shifting to various countries to prepare for contingencies; ‘This is just a crazy time we’re in.’

📺 Watch - Succession

What else but the end of one of the all-time greats? And yes, I’m referring to HBO’s Succession as the show wrapped up last Sunday, and it did not disappoint. It does get one thinking about the Succession references in real-world business—like Bernard Arnault, the world’s richest person and head of luxury behemoth LVMH. Bloomberg and Business Insider both have great articles on how Arnault’s plan for succession mirrors a lot of what went on in the show.

Oh, and the ending? A bunch of online sleuths figured it out weeks ago, thanks to a little baseball knowledge.

👂 Listen - A Double Dose of Scott Galloway

If you’ve read TST for any amount of time, you know how fond I am of Prof Scott Galloway. He’s been popping up a lot lately for some reason, and I’ve recently come across two interviews that featured him.

The first one is from the Working It podcast, where Galloway and host Isabel Berwick discuss why back to the office mandates aren’t working. Galloway thinks more office time would be good for us all—a hot take to all those workers who are demanding flexibility that I mentioned above.

The second is from The Wall Street Journal’s CEO Summit in London, where the good Professor shared some of his views about how he believes AI will change the home and family lives of people in the near future. Spoiler alert: He thinks we’ll all get richer, but our kids will be lonelier and more depressed.

💡 Think - My Silver Anniversary

Today, June 2, marks 25 years since I started in corporate America. My first job was in Westchester, Illinois, and on my first day, I was assigned to a Purchasing Manager named Dick Robinson. I had a couple of meetings in the morning, and after lunch, Dick came to me and said, “It’s a nice sunny day today. Why don’t you take the rest of the afternoon off and enjoy it?” That’s exactly what I did. In retrospect, it might have been a test, but I did show up on Day 2 and still had a job.

I’m thinking about this because I realize I’m more than halfway through my career (I hope!), and the last quarter century has been a fascinating journey for me. I look back at the start of my career not because I have to, but because I want to fondly reminisce. I hope in 25 more years, at the ripe old age of 73, that I’ll be able to look back and do the same.

Charts of the Week

Quote of the Week

Tweet of the Week

Finally...

Thanks so much for reading. I’d love to know what you think about this issue and how I can make it more useful to you.

If you have suggestions or topics you’re interested in seeing me address, shoot me an email at [email protected]!

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Happy reading this weekend!

-- Naseem