🚀 Grok 3 vs. OpenAI and DeepSeek

What’s going on here?

xAI released its latest chatbot, Grok 3 – and ​​Elon Musk wants you to know that his prodigy is smarter than the other kids.

What does this mean?

Musk has said Grok 3 is “in a league of its own”. In fairness, you can’t say xAI’s chatbots aren’t different: they’re known for churning out images and texts without conforming to the type of guardrails that have become standard for preventing unsavory results. Yet, in what could arguably be a reassuring reflection of society, Grok hasn’t been as impactful as ChatGPT or DeepSeek thus far. So, eager to keep up, xAI’s latest model promises more powerful reasoning than previous iterations and new “Deep Search” features – a name that sure is similar to OpenAI’s recent release.

Why should I care?

For markets: Money bought happiness this week.

In this version, xAI has doubled the system’s GPU cluster – nerd talk for the network of processors that handle the computing tasks. That’s a costly upgrade, and one that contradicts DeepSeek’s strategy of undercutting competitors with cheap and cheerful tools. So forgive the rest of the supply chain for handing out high-fives. Remember, DeepSeek’s emergence made many worry that Big Tech might rein in spending. But so long as companies like xAI are willing to pay top dollar to stay in contention, the likes of chipmakers and data centers can count on them to line their pockets – and investors’ too.

The bigger picture: Bit by bot.

Not long ago, a chatbot update sounded like a dystopian news story. But nowadays, they seem as commonplace as iPhone releases. Far from blown away by these incremental improvements, many experts are waiting for the agent that can do more than chat – think schedule appointments, manage complex projects, and generally take action with minimal oversight. For investors, that means it’s not just about finding the smartest and fastest bots, but identifying the ones that can successfully embed themselves into daily lives.

What’s going on here?

UK inflation just hit its highest level in ten months, presenting the Bank of England (BoE) with a technical challenge.

What does this mean?

January’s 3% inflation figure flew past both December’s 2.5% and economists’ forecasts of 2.8%. That’s partly down to runaway food and drink prices. But even if you strip them out, core inflation – which doesn’t count the most volatile contributors like energy and food – was still relatively high at 3.7%. Analysts expected that, but it’s a headache for the BoE. The central bank will need to pitch interest rates perfectly, putting enough pressure on inflation without excessively weighing down the economy. Traders still believe it’ll cut rates twice this year, but this news has made them less sure that the first trim will come in March.

Why should I care?

For markets: A one-way flight outta here please, British Airways.

Young Brits have been fleeing the country in hopes of finding a better life – or at least, the occasional blue sky – abroad. And it seems that attitude has found its way into boardrooms, too. Major companies are ditching their UK stock market listings, with Glencore the latest to consider listing elsewhere for a higher valuation. This mass exodus could damage the country’s reputation on the corporate stage and reduce investment levels. That’d make it harder for UK firms to access cash – another blocker for Britain’s economic recovery.

The bigger picture: Maybe it is about timing the market, after all.

The UK announced on Wednesday that it’ll shorten the time it takes to finalize stock and bond trades to one day. That might give impatient investors some reason to stick around: many have complained that the standard two-day period holds up money for too long, increasing credit risk and slowing down the trading process. Problem is, that won’t kick in until 2027.