📈 Growing High-Interest Debt

Good morning. Let’s get this bread 💪 

- Ruchirr Sharma & Shatakshi Sharmaa  

TABLE OF CONTENTS

• 📈 Growing High-Interest Debt

• 🤖 Elon Musk questions viability of Trump-backed $500B Stargate AI project

• 🗞️ Bite-sized summaries

  • 🛫 AI booking

  • 🤝 No more DEI

• 🧑‍🍳 What else is cookin’?

• 🍿 Entertainment, Entertainment, Entertainment

MARKETS

🌍️ International

• U.S. stock markets closed higher, buoyed by strong fourth-quarter earnings. Despite challenges from rising yields and inflation, investor sentiment remained positive as major sectors performed well

LOANS

📈 Growing High-Interest Debt

Zerodha co-founder Nithin Kamath has raised concerns about the rising trend of high-interest debt in India, particularly in the small-ticket personal loans and credit card segments.

In a recent post on X, Kamath highlighted how aggressive marketing by fintech companies, including incessant spamming about instant pre-approved loans, has driven some people to borrow beyond their means.

• Kamath cited data from the Centre for Research in International Finance (CRIF), which revealed that personal loans in India reached a staggering ₹13.7 lakh crore as of September 2024.

• Public sector banks hold the largest share (38%), followed by private banks (33%) and NBFCs (24%).

• Despite this, the extent of defaults on these small-ticket loans is becoming a growing concern, and the full impact is expected to surface in the coming quarters.

He emphasized the psychological toll debt can take on one's personal and professional lives. Kamath advised prioritizing the repayment of high-interest debt, such as credit card balances, before focusing on savings or investments. "Paying off high-interest loans is the easiest and most effective way to improve one's financial health," he remarked.

The warning serves as a timely reminder for individuals to exercise caution when borrowing and to avoid falling prey to relentless loan app promotions. Addressing debt responsibly not only ensures financial stability but also fosters peace of mind.

Read more: Economic Times

ARTIFICIAL INTELLIGENCE

🤖 Elon Musk questions viability of Trump-backed $500B Stargate AI project

Tesla and SpaceX CEO Elon Musk has voiced concerns over the financial feasibility of the ambitious $500 billion Stargate AI Project, spearheaded by SoftBank and OpenAI under the backing of former President Donald Trump. Musk highlighted doubts about SoftBank’s ability to finance the initiative, pointing out that the company reportedly has less than $10 billion in secured funding.

What is the Stargate Project?

• Announced by Trump at the White House, the Stargate AI Project aims to develop a nationwide AI infrastructure, create over 100,000 jobs, and solidify the US's position as a leader in AI technology.

• Partners include OpenAI, Oracle, Microsoft, NVIDIA, and Abu Dhabi-based MGX, with the initial $100 billion being deployed for construction in Texas.

• The project promises advancements in healthcare and national security while driving economic growth.

Financial Challenges and Industry Doubts

• Despite the strong government backing and strategic partnerships, analysts question SoftBank's financial readiness to handle such a massive undertaking.

• Critics note the reliance on executive orders to fast-track the project, raising concerns about its long-term sustainability.

SoftBank CEO Masayoshi Son called the project a "new golden age for America," committing to full funding within four years. OpenAI’s Sam Altman emphasized its transformative potential, including breakthroughs in healthcare. Meanwhile, Oracle’s Larry Ellison celebrated its historic significance, citing AI’s role in advancing healthcare technologies.

Overall: While the Stargate Project embodies bold ambitions to propel the US ahead in the global AI race, Musk’s concerns underline the need for financial prudence. As the project progresses, its success hinges on robust funding, execution, and sustained industry collaboration.

Read more: Economic Times

GENERAL OVERVIEW

🗞️ Bite-sized summaries

🛫 AI booking - Air India has introduced an AI-driven feature, eZ Booking, on its website to expedite ticket reservations for its Maharaja Club loyalty program members. Powered by Agentic AI the feature simplifies the booking process by reducing the need for multiple data entry steps and navigation across screens. This innovation enhances user experience by streamlining interactions with the digital platform. Satya Ramaswamy, Air India's Chief Digital and Technology Officer, said this marks an early step in deploying advanced AI capabilities across the airline's digital ecosystem. This initiative underscores Air India's commitment to leveraging technology for customer convenience.

🤝 No more DEI - The Trump administration has moved to dismantle federal Diversity, Equity, Inclusion, and Accessibility (DEIA) programs, placing employees on paid leave and directing agencies to end initiatives and remove related content. President Trump signed an executive order to eliminate DEIA efforts, claiming they promote division and waste taxpayer funds. Federal agencies must comply by preparing reduction-in-force plans and reporting disguised DEI efforts. Critics, including civil rights groups and advocacy organizations, argue the decision undermines workplace inclusivity and may violate civil rights. Legal challenges are expected, while corporate responses indicate reduced DEI efforts in alignment with the administration's stance.

HEADLINES

🧑‍🍳 What else is cookin’?

What’s happening in India (and around the world 🌍️)

• Reliance Jio gains subscribers in Nov as Airtel, Vodafone Idea, & BSNL report losses.

• Hindustan Unilever acquires 90.5% stake in beauty brand Minimalist at Rs 2,955 crore valuation.

• India's gas consumption rises 11% in 2024, driving LNG imports.

• Govt not considering any structural change in capital gains tax.

• India and US trying to arrange early meeting between Modi and Trump.

CULTURE

🍿 Entertainment, Entertainment, Entertainment

• Australian open 2025 is in full swing: Doubles semi-finals complete - updates here.

• Junaid Khan and Khushi Kapoor’s song from Loveyapa, Kaun Kinna Zaroori Si out now.