Three Things (4/24)

No probLlama-3

Meta Platforms debuted a new version of its powerful Llama artificial intelligence model, its latest effort to keep pace with similar technology from the likes of OpenAI and Google. Llama 3 is a comprehensive upgrade from the company’s open source AI model that was released last summer. Llama 3 is “industry leading on a number of benchmarks for models of this size,” Meta’s Chief Product Officer Chris Cox said. “We’re no longer playing catch-up to have a model that’s best-in-class.”

Meta has used AI in its products for years, but has leaned more heavily into the new technology over the past twelve months. With major investments ongoing, the company plans to bring products to the main stage, incorporating features across content feeds, ads, and virtual reality headsets. The speed at which these models are advancing has been impressive but if all of the foundational models are about the same, could the products eventually be commoditized? Barriers to entry are astronomically high so time will tell.

Tesla earnings

Tesla reported quarterly results on Tuesday evening and announced plans to accelerate the launch of more-affordable vehicles. It wasn’t all good news, though, as first-quarter profit plunged to its lowest level since 2021 as well as reporting the biggest decline in revenue since 2012. It comes at a time when global EV sales continue to be under pressure as carmakers prioritize hybrid options versus entirely electric vehicles.

It could be said that Tesla is in the middle of two growth waves: the first driven by its popular Model Y and Model 3, and the next to come with the launch of a new generation of vehicles at a price more suitable for the mass market. Although plans for a lower cost option will spur growth over the medium term, the next frontier, and why the company is valued miles higher than peers, is really autonomous driving. Can Tesla execute?

New retirement regulation

The U.S. Department of Labor released new regulations on Tuesday expanding the scope of fiduciaries in relation to retirement accounts. With the peak of the baby-boom generation in or approaching retirement, rollovers of money from 401(k)s to IRAs are on the rise. Savers move close to $1 trillion each year out of their 401(k) employer-sponsored plans into IRAs and the new regulatory environment will ensure that investments are always in a person’s best interest.

As a fiduciary ourselves, we’ve always been held to the highest standards in the industry and the regulation is an extension of our business model across financial services. The ruling should encourage better investment outcomes, lower fees, and a decrease lock up requirements – all of which we’re major advocates for. Putting investors first is the ethos of our business and we view the new regulation as a major step towards industry wide best practices.

Disclosures:

As of the date of publishing, META, GOOGL, and MSFT are holdings in Titan's Flagship strategy. As of writing, TSLA is a 1.17% holding in the ARK Venture Fund. OpenAI is a holding in the ARK Venture Fund, the holding size will be made available on 4/30/24.

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