This as-told-to essay is based on a conversation with a former McKinsey & Company associate who worked at the company for one and a half years. They spoke on condition of anonymity due to privacy concerns. Business Insider has verified their identity and employment at McKinsey. The following has been edited for length and clarity.

I joined McKinsey as an associate in 2021. Going in, I always knew, "I'm here for a bad time, not a long time."

I knew that the work would be challenging, and I also hoped that if I stuck it out, I'd be able to build up my analytical toolkit and learn how to problem-solve really well.

But looking back, I regret the way I approached my time at McKinsey.

There was little apprenticeship

One of the things I struggled with was the lack of apprenticeship. It's supposed to be a really apprenticeship-heavy culture, but that wasn't my experience.

You're expected to start working from day one. I was there to learn, but it was a frustrating experience because no one was there to teach me. I wanted somebody to sit down with me and teach me the basic skills required for the job, like how to problem-solve for a meeting, how to wordsmith a deck, and how to fix my mistakes.

I was alone on an island while my manager drowned in her other work. I felt like I wasn't learning anything.

As a result, I heard senior-level employees commenting about how the new analysts and associates weren't good because they weren't receiving any apprenticeship.

I typically worked from 7:30 a.m. until 11:30 p.m.

As consultants, we didn't have to do any hardcore research because we had teams that did our research for us. We also had a team we could call on if we needed help with Excel, a team to make our PowerPoints pretty, and a team to set up calls with experts.

It's funny because people ask me, "You had all those researchers, so what did you do?"

My days mainly consisted of problem-solving meetings in which we'd show the partners or senior partners our decks and get their feedback, take notes, and then revise accordingly before the next meeting, which might be later that same day or the following day. Sometimes I'd have three of these meetings a day, all on different decks.

I also had to spend time doing analyses for new pages in the deck, as well as in client meetings and on calls with experts.

On a typical day, I worked from 7:30 a.m. or 8 a.m. until 11:30 p.m. And it was pedal to the metal — I didn't leave my desk, forgot to eat, and dropped tons of weight. I barely remembered to go to the bathroom. I only remembered to get up when I noticed my dog looking at me all sad.

And although we had a budget for fun work events, some people didn't like attending them because they'd still have a ton of work waiting for them when they got home.

For example, I had many team dinners where some people would call their Uber secretly underneath the table so they could get home and keep working. It kind of took the fun away.

The bar at McKinsey was much higher than at my previous consulting firm

I feel like people love to hate consultants. They say that consultants just take companies' money and don't add value. But many consulting firms get projects based on results and outcomes, and McKinsey couldn't be McKinsey without results.

I've read comments on social media that assume there are a lot of overpaid idiots at McKinsey. But there really aren't — there's an attitude of "move up or out," so people there are really good.

I got the chance to solve a lot of ambiguous problems with some really good problem-solvers. The company really goes out of its way to give clients a bespoke experience, as opposed to Big Four work which is more of a plug-and-chug into the same slide situation.

I had previously worked at another consulting firm, and my experience there compared to McKinsey was like night and day. The work at McKinsey was so much harder, and the bar was so much higher. Everything at McKinsey is just a lot more customized.

Some associate partners and partners were mean

The people at McKinsey were both the best and worst parts of my experience.

The analysts and associates were all cool, but a few associate partners and partners were mean. They freaked out over mistakes and belittled people's thought processes.

My McKinsey friends always said I got really unlucky in terms of the associate partners I had to work closely with.

Although it wasn't an everyday thing, they made some analysts and associates cry. One associate partner looked at a slide I made, began laughing hysterically, and said it was the worst slide they had ever seen. Another associate partner yelled at and made fun of people while talking about them behind their backs — and also to their faces.

But one of my favorite memories also involves the people at McKinsey. One time, an associate partner screamed at me in front of our whole team because they wrongfully thought I was going to miss a deadline — but I knew I could meet it and didn't end up missing it.

I ended up crying.

My team felt so bad for me that they rallied behind me and we all stopped working for the night. One of my coworkers went and got bottles of wine, and we all drank in the team room; it just felt like a lot of camaraderie.

I took a mental health break because I couldn't do it anymore

After about a year of working at McKinsey, I took a three-month mental health leave. It was literally driving me to the edge. I just couldn't do it anymore.

I was crying more and taking anxiety medication at a higher dosage than I had ever needed before joining. The week before I decided to leave, I was oscillating between being way too OK, and then crying, and then being way too stoic.

I shared with my development group leader (DGL), a mentor assigned by McKinsey, that I was thinking about taking short-term mental health disability leave. I wasn't even nervous about bringing this up because of how normal it seemed — I know other McKinsey employees who have also taken health breaks due to the mental toll.

Before McKinsey, I didn't even know mental health disability benefits were a thing. Now I know more than a few people who have gotten them. The mental toll, plus the workload, was crazy.

I've heard multiple people, myself included, say, "I do not get paid enough for this shit," and I genuinely believe that. I don't think that the pay was enough for what we were doing, despite the fact that I was making over $200,000 when I left.

During my break, I tried to pick up new hobbies and realized that I hated every hobby. I tried to get out of the house more but wasn't really successful because of how down I was. Sometimes, I'd have to hire a dog walker even though I was home because I just felt like I couldn't handle it. At some point, I couldn't even care for myself, so my mom came to town to care for me and my dog.

I decided to officially leave because I realized if working here caused my mental health to deteriorate, why would I stay? Why would I want to be someplace that causes me to be in such a dark place?

I regret not being more assertive when I was there

The problem with McKinsey wasn't the work — I'm used to working hard, working long hours, and being frustrated at work. I think it was really the people beating down on me and making me feel like I was never enough that really cracked me.

It's been over a year since I officially left, and I feel much better now. I'm hopping back into the job market and doing interviews. They always say that once you go to McKinsey, you can go anywhere, but the market is bad right now, and that hasn't been my experience. It's hard for me to quantify the value of having worked at McKinsey.

Overall, my time at McKinsey was a good learning experience — not so much in terms of hard analytical skills, as I didn't pick up as many of those as I had wanted, but I did learn a lot about myself and working with different kinds of people.

I wish I had been a bit more assertive while I was there. You know the saying, "Play the game, or the game plays you?" I think the game played me, and if I had been a little more willing to stand up for what I needed, like being apprenticed and standing up to the mean associate partners, it would've been much better.

Maybe if I had stood up for myself more or received more guidance, I wouldn't have gotten yelled at as much. But I also think it was going on mental health leave was inevitable, given the kind of people I ran into. I don't think there was anything I could have really done.

As I look for a new job, I'm absolutely looking for companies that care about their employees, value inclusivity, and treat everyone with respect. I'm looking for companies that value apprenticeship, and I always ask in coffee chats, "What is the apprenticeship model at your company? What is the hierarchy model at your company? What is the upward feedback model at your company?" Those are things I will always ask now.

McKinsey & Company declined a request for comment from Business Insider.

If you worked at a top consulting firm and want to share your story, email Jane Zhang at janezhang@businessinsider.com.

from All Content from Business Insider https://ift.tt/kK60u4U
via IFTTT

• Wealth can't buy everything — even some things that have a price tag.
• Some brands require luck, loyalty, and resolve before you can secure one of their status symbols.
• Unless you're a notable billionaire, even money can't grant you a membership at Augusta National.

Wealth grants access to a lot, but even the wealthy can't just buy anything.

Certain privileges require more than money. Sometimes, that means being in the right place at the right time — and there are instances when your family connections matter more than your bank account.

Exclusivity isn't only reserved for the wealthy, of course, but the entries on this list can cost up to seven figures if you're lucky — or connected — enough to purchase them.

Limited memberships, strict voting panels, and scarcity make them extremely difficult to get for anyone who isn't a billionaire.

Here are five things that are hard to do even if you're considered rich.

Getting a membership at Augusta National Golf Club

The Augusta National Golf Club is home to the sport's most anticipated tournament — the Masters. The tournament is a favorite of the rich, and wealthy golf fanatics flock to Georgia during the first full week of April to attend.

The club has a secret membership list of around 300 members. You can't just apply and pay for a membership. It's by invitation only, and you can only join when an existing member leaves or dies.

Bloomberg reported in 2015 that billionaires like Warren Buffett, Bill Gates, Stanley Druckenmiller, and others are said to be members.

Securing an apartment in this New York City co-op building

In a cul-de-sac facing New York's East River, there's a nearly 100-year-old building where residents' privacy is a top priority, and a strict board presides over applications.

The 26-floor Art Deco River House is considered one of the most exclusive places to live in New York City.

"The River House, with its old world charm, is one of the most famously discreet buildings in the city," its description on StreetEasy reads. "It is a tradition among staff and apartment owners to be protective of the building's privacy."

Residents collectively own the building and share responsibilities as a cooperative building or co-op. One of those tasks is approving or denying those hoping to score an apartment.

Getting into the building isn't as simple as being able to afford it. Richard Nixon, Joan Crawford, and Diane Keaton have all been rejected, The Real Deal reported.

Meanwhile, some of its famous residents have included Uma Thurman and Henry Kissinger.

Buying a new Hermès Birkin bag

The Hermès Birkin bag is a status symbol among the wealthy and fashionable. Depending on the bag's size, color, and material, a brand-new one can cost between five and six figures.

But don't expect to walk into a department store and leave with one. Experts say that a prospective buyer must shop the rest of the Hermès catalog for a while before they might be offered a Birkin for sale.

The experts said there's no set amount you have to spend before you get the call that a Birkin bag is available for you to purchase. It's mostly a waiting game that depends on when a bag that matches your preferences becomes available and how in-demand that bag is. (The brand didn't respond to a request for comment from BI earlier this year.)

Reserving a table at Rao's in New York City

The name Rao's is probably most recognizable for its jars of pasta sauce on grocery store shelves.

The family-run business is also responsible for a handful of restaurants scattered through major cities in the US. Its original location in New York City is one of the toughest reservations to secure.

A phone call to the restaurant will prompt a message explaining that Rao's is completely booked for the rest of 2024. It's not because it's some star-studded hot spot.

There are only 10 tables, and they belong to people who Rao's co-owner Frank Pellegrino Jr. considers family. They're assigned "table rights" on specific nights, and their standing reservations are passed from generation to generation, according to Delish.

"There's weeklies, biweeklies, monthlies, and quarterlies, so in every three-month period, I see all my clients. And now I'm dealing with their children and grandchildren," Pellegrino told Town and Country in 2020.

Those with table rights are allowed to lend their tables to friends for a night or donate them to charity auctions. Some wannabe diners are willing to bid hundreds of dollars on third-party reservation apps to secure them, The New York Times reported in 2023.

Buying this Cartier watch

Cartier only created four unique models of the Cheich watch, and the one that sold at auction for $1.1 million in 2022 set a record for the jewelry maker, according to Forbes.

It was first created in the 1980s as a prize for whoever completed the Cartier challenge by winning two back-to-back 6,200-mile Paris-Dakar races. In 1984 and 1985, motorcycle racer Gaston Rahier became the first and only person to complete the task.

Since then, the timepiece has remained "shrouded in mystery" for 40 years, according to the Sotheby's listing from 2022. One of the four models made is considered lost, and the other two remain in Cartier's collection. Production of the watch ended in 1986.

from All Content from Business Insider https://ift.tt/0wyRBJv
via IFTTT

• Gen Zers are in their boycott era, turning against anything that doesn't align with their beliefs.
• This includes the jobs they go for and those they try to avoid.
• It is driven by frustration with corporate culture and the aim of being more authentic at work. 

Gen Z is in its boycott era.

Zoomers seem to be sick of climbing the corporate ladder, tipping culture, dating apps, and rich influencers selling them stuff.

They also stick to their guns when it comes to applying — or not applying — for certain jobs when companies don't align with their beliefs, according to experts and Gen Z professionals.

While there's been an understanding in previous generations that the place where one earns their money doesn't necessarily have to be a place they inherently agree with, Gen Z places the value of its principles higher.

A recent TikTok, for example, highlights the movement. The creator said they were quitting their job at Starbucks and that they judged every customer who still orders from there.

Starbucks faced criticism and boycotts during the Israel-Hamas war from supporters of both sides. Pressure against the company has also built since 2022 in response to union-busting tactics.

As a result, it has become severely frowned-upon by a large sector of young people on social media to show themselves ordering from the chain. Other recently-shunned companies include McDonalds, Pizza Hut, Hyundai, HP, and Siemens.

Some companies may be starting to take notice and change. Deloitte, for example, has committed to environmental sustainability and social equality following its 2023 Gen Z and Millennial Survey that found younger generations are demanding more from employers regarding these issues. 77% of Zoomer respondents of the survey stated the importance of working at a company whose values aligned with theirs.

Gen Zers told Business Insider they would spurn certain companies that didn't reach their expectations when it came to LGBTQ+ issues, world conflicts, and policies — or lack thereof — around work-life balance and time off.

Karim Adib, for example, a Zoomer who works as a PR specialist at ClickThrough Marketing, told BI that Gen Z is very aware of their impact on the world, including how they make their money.

Growing up with the internet and starting their careers in a remote work environment has given the generation more options, he said.

"With those options, we now don't have to join companies that don't align with who we are because there are plenty of companies that do that we can apply for," he said.

Omar Taleb, a Gen Zer who graduated last year, told BI he was surprised to learn how much he cared about a company's values when considering prospective job opportunities.

He never considered his employer "to be the barometer of morality," he said, but since the pandemic, Black Lives Matter protests after the death of George Floyd, and the ongoing conflict in Gaza, "neutrality seems so dated," he said.

"We were given no choice but to care about a company's ethics and principles," he said. "A company with stated values and actions to support said values tells me they see themselves as a force for good in society. It makes it all the better showing up to work and putting in the hours."

Bringing their whole selves to work

Erin McGoff, a film director and TikTok creator who makes content about life and career advice, told BI that Gen Zers have a goal of bringing their "whole self to work."

Traditionally, with previous generations, there has been a work-life separation, such as not discussing one's personal life or politics in the office.

But Gen Z, McGoff said, want their workplace to align politically — so they have to talk about it. At the same time, they are big supporters of the work-life balance — coining the term "lazy-girl jobs" and believing in the benefits of "quiet quitting."

"They want to bring their whole selves to work, but they also don't want work to be their life," McGoff said.

Adib said issues that are important to him include social equality and giving everyone a fair shot.

"I can't associate or work with any company that helps further social inequality in any way, as no paycheck can help feeling you're making someone else's life harder by doing your 9-to-5," he said.

Gabrielle Yap, who is 26, said Gen Z grew up in a time when information was available at their fingertips 24/7.

"We've seen the good, the bad, and the ugly of various companies through social media, news, and other channels," she said.

"That means we're pretty clued into what goes on behind the scenes, and we're not just looking for a flashy brand or a big paycheck. We want to align ourselves with companies that walk the talk, so to speak."

Whether it's social justice initiatives, environmental policies, or fostering diversity and inclusion in the workplace, Yap said she wants to feel like she's contributing to something meaningful at work.

"I want to see tangible evidence that the company is committed to these values," she said. "It's not just about making a profit anymore; it's about making a difference."

Research from Bright Network, a networking service that connects recent graduates and students with employers, found that sustainability was an important consideration for 92% of young job-seekers who wanted the companies they were applying for to be moving toward net zero status.

A recent survey by legal recruiters Major, Lindsey & Africa also found that when considering an employer, 60% of Gen Z lawyers thought pro bono work was of high importance.

"Our generation was also blessed with the knowledge that there's more to the world than just our immediate surroundings," Adib said.

"With that came the knowledge that your work affects other people around the world, the environment, and maybe even future generations."

Moving the needle on what we discuss at work

Khalid Machchate, the chairman of K&W Technology Group and a millennial who hires Zoomers, told BI that politics, money, and even religion have all become discussable in the workplace for Gen Z, "which would've been unfathomable to previous generations."

"The company's public stance on these points, as well as the managers' views, affect the organization's capacity to hire Gen Zers," he said.

This cohort also tends to quit "fairly quickly," he added, if their organization doesn't align with their views.

Taleb told BI it's not that he won't apply for certain jobs, but he will question how long he can last in an environment that he disagrees with.

"Especially as a gay man of color," he said. "Sitting in an office and pretending the social fabric isn't fraying doesn't work for me and the rest of my generation."

Yap told BI that transparency is something she values highly at the company she works for. This includes what its policies are, as well as its shortcomings.

Overall, she appreciates a good company culture — somewhere she feels "valued, supported, and empowered to grow both personally and professionally."

"A company's principles, ethics, and values are a big part of shaping its culture," she said. "When those values align with my own, it creates a sense of belonging and purpose that goes beyond just punching the clock every day."

from All Content from Business Insider https://ift.tt/fsLx5oF
via IFTTT

• Tesla's US electric vehicle market share has grown to 51.3%, despite numerous challenges.
• Overall US EV sales dropped 15% in Q1 as buyers favored hybrids.
• Tesla's future partly depends on the reception of Elon Musk's ambitious robotaxi service.

Lately, it feels like almost everything is going wrong for Tesla and its CEO Elon Musk.

However, there's some surprisingly good news buried in the carnage of the electric vehicle market.

Tesla's US market share actually grew in the first quarter. That follows a similar increase in the fourth quarter, according to EV sales data from Cox Automotive's Kelley Blue Book.

Since the end of September, Tesla's share of the US EV market has grown by 1.3 percentage points to 51.3%. That outpaced all other automakers. Hyundai, VW, and BMW lost market share in the period.

This leaves Tesla way ahead. The next closest rival is Ford, with a meager 7.4% market share.

These stats say more about the general sorry state of the US EV market. Overall sales dropped 15% during the first quarter as more car buyers picked hybrids instead.

Shares of EV maker Rivian have slumped 59% so far this year. Polestar is a penny stock and Fisker is just trying to stay alive.

Tesla's stock is down 37% in 2024. That's still a lot and it represents a loss of well over $100 billion in market value.

The company has been slashing prices to try to shed rising inventory of unsold vehicles. And yet, it massively missed Wall Street sales expectations. Recent layoffs and high-profile departures are spooking investors. In China and other EV markets, there's intense competition from BYD and other EV makers.

So, there's still a lot going wrong. But Tesla remains the world's most valuable car company by a cool $100 billion. (Toyota's second).

Does that mean there's more stock pain to come for Tesla? A lot depends now on how investors receive Musk's ambitious robotaxi service. The launch date for that is August 8. At the moment, anyway.

from All Content from Business Insider https://ift.tt/O0Y97BF
via IFTTT

• New Gallup data reveals the US has fallen behind many G7 countries in key indicators.
• 26% of Americans struggled to afford food in 2023, and confidence in the military has fallen.
• Public confidence in US institutions, including the government and judiciary, has declined.

The US may be losing its strong standing among the world's most developed nations.

New data from Gallup released Wednesday shows that for the first time in nearly two decades of polling, the US has fallen behind several G7 countries — an informal group of industrialized democracies — for indicators such as people's ability to meet basic needs, confidence in the national government, and trust in the military.

"The U.S. remains the dominant voice of the G7 on the global stage," the Gallup report notes. "But the reality of public opinion at home is starting to tell a different story: one in which the U.S. no longer stands out as a leader in confidence in institutions, fundamental to its democracy."

The US spends more on its military than most of the G7 countries combined, though confidence has progressively fallen over the last few years. US confidence in the military fell to a new low of 81% — and for the first time, US confidence fell below another G7 nation, France.

The drop in confidence began shortly after the Biden Administration's decision to withdraw US forces from Afghanistan in 2021, falling from 93% reported confidence in 2020 in former President Donald Trump's final year in the White House to 81% in 2023 more than halfway through Biden's term.

Additionally, Gallup's polling revealed that just a third of Americans in 2023 thought the US was spending the right amount on defense, with 35% thinking the US spends too much and 29% believing that the Department of Defense's total budget of $851.8 billion in 2023 wasn't enough.

The survey also noted a steep drop in confidence in the US judicial system, with the share of respondents saying they were confident falling to 42% in 2023, making it the nation with the lowest judicial confidence and slightly lower than Italy. The sharp drop in reported confidence in 2023 occurred the same year four grand juries across the country indicted former president Trump, charging him with 91 felonies, which he and many of his supporters have deemed as politically motivated.

The US Supreme Court's decision to overturn Roe v. Wade's decades-old abortion precedent in 2022 may have played a role in the drop in reported confidence as well, a decision that nearly 60% of Americans disapprove of, according to Pew Research.

After a tumultuous 2023 in the House of Representatives that immediately began with a power struggle, later leading to former Rep. Kevin McCarthy historically getting ousted as speaker, Gallup reported that public confidence in the US government fell to just 30%, or 3 percentage points beneath the United Kingdom, which has cycled through 3 prime ministers since mid-2022.

Despite those sour views of American institutions, the country's economy remains stronger than its G7 peers. US GDP grew 2.5% in 2023 from the previous year, compared to Japan at 1.9% and Canada at 1.5%, according to the OECD.

Still, each year since 2009, the US has had the highest — or tied highest — percentage of residents saying they were struggling to afford food. In 2023, 26% of Americans at times struggled to afford food in the last 12 months, compared to the next highest, Canada, at 17%. Japan, the lowest of the G7 countries, was only 8%.

"Even though the U.S. economy is growing faster than any other G7 country, the economic perceptions among its people do not fully reflect this economic reality," Benedict Vigers, associate consultant and author of the report, told BI. "Americans are split on their economic trajectory: with 44% thinking their local economies are getting better, and 48% thinking they are getting worse. Similarly, the proportion of Americans who are 'living comfortably on their present incomes' dipped again in 2023 to 41% – it has not been lower than this in over a decade."

from All Content from Business Insider https://ift.tt/C1itqux
via IFTTT

• Tesla is having a rough start to the year. 
• The EV maker reported disappointing deliveries for Q1, before announcing sweeping layoffs.
• With falling demand in the US and increased competition in China, Tesla is in a tough spot.

Tesla is in full-blown cost-cutting mode.

After releasing a disastrous first-quarter sales report this month, CEO Elon Musk announced the company would reveal a long-awaited robotaxi in August. 

But that announcement was quickly overshadowed by sweeping layoffs, something Musk attributed to a reorganization and streamlining "for the next phase of growth." 

In all, Tesla said it would cut more than 10% of its workforce, amounting to more than 14,000 people. Tesla is also losing some key top executives: Drew Baglino and Rogan Patel announced this week they would leave the company. Baglino was senior vice president for powertrain and energy engineering and Patel was vice president of public policy and business development.

It's unclear what, exactly, Tesla plans to show off in August as a self-driving, revenue-generating new product. And in the months between then and now, investors are demanding more than a rehashed robotaxi dream.

It's not Musk's first time promising a self-driving taxi

Musk said in 2019 that he expected Tesla to have 1 million cars on the road in the next year that could function as robotaxis.

"We believe we'll have the most profitable autonomous taxi on the market," he said on an earnings call in April of that year.

On a separate fundraising call around that time, he said Full Self-Driving could propel Tesla to a $500-billion valuation, and make Teslas worth up to $250,000, CNBC reported at the time. He also reportedly said Tesla robotaxis would be able to do 100 hours of work a week for their owners.

In the years since, Tesla's Full Self-Driving software (which remains Level 2, even as competing automakers have reached Level 3 and beyond), has rolled out to more vehicles as Tesla has continued to outsell competitors. Its market cap did, in fact, hit $500 billion, as Musk predicted. And it turned a profit at long last. 

But a robotaxi never materialized, even as Musk continued to tout FSD as a continued linchpin to Tesla's growth.

Now, cheaper EVs have thrown a wrench into Musk's plans

Tesla started an all-out price war in 2023, slashing prices up to $20,000 and bringing its best-selling model below the average price for any new car (about $47,000 in March 2024) in an effort to boost sales and stay ahead of the competition.

More than a year in, Tesla has, for the most part, maintained its pricing edge thanks to industry-leading margins, while some other automakers rethink their EV plans.

But Tesla might not remain the price leader forever. According to Reuters, Tesla has ended plans for another one of Musk's longtime pet projects: a truly affordable EV. The car, sometimes called the Model 2, was expected to cost $25,000 — about $14,000 less than Tesla's cheapest sedan.

Musk disputed the report, which cited internal documents and multiple people with knowledge of the matter, leaving analysts scratching their heads about what comes next.

After years of growth at hyper-speed, Tesla reducing its labor force isn't unthinkable — especially after building a brand new factory to churn out an entirely new (and not-yet-profitable) product — but it could hint at demand problems.

"The sweeping layoffs announced yesterday, amounting to a reduction in crewed production capacity, should now leave no doubt that the decline in deliveries has been a function of lower demand and not supply," JPMorgan analyst Ryan Brinkman said in a note to clients on Tuesday as shares fell to their lowest levels in more than a year.

Kelley Blue Book data also points to flagging demand, showing Tesla's share of the US EV market has fallen to 51% this year from 62% in 2023.

And Tesla is facing intensifying competition in China, where it's now neck-and-neck with homegrown EV startups like BYD, who are exporting their cheaper cars to Europe, Asia, and Mexico, further increasing the pressure.

Musk is sure to face questions about the Model 2 when it reports earnings on April 23. Analysts will also be looking to learn how a robotaxi can turn a profit, too. 

"Investors are struggling to see how the company can use its infrastructure and network to achieve a path to monetization," Adam Jonas, a longtime Tesla bull, said in a note to clients on April 11.

And first, they'll have to get them street-legal.  

from All Content from Business Insider https://ift.tt/NqSuTUl
via IFTTT

• The AI war is going to be really, really, really expensive.
• Google DeepMind boss Demis Hassabis suggests Google will spend $100 billion-plus on AI development.
• His prediction signals just how much money tech giants will have to spend to make AI smarter.

Winning the AI wars won't come cheap. Just ask Demis Hassabis.

To kick off this year's TED conference, Google's AI boss gave an audience in Vancouver a reality check on Monday by offering his best guess on how much the search giant will spend on developing AI: more than $100 billion.

Hassabis, who leads the famed research lab DeepMind within Google, and is arguably the single most important figure at the center of Alphabet's AI plans, shared the astronomical number in response to a question about what the competition was up to.

According to a report from The Information last month, Microsoft and OpenAI have been drawing up plans to create a $100 billion supercomputer called "Stargate" containing "millions of specialized server chips" to power the ChatGPT-maker's AI.

Naturally, then, when Hassabis was asked about his rivals' rumored supercomputer and its cost, he was quick to note that Google's spend could top that: "We don't talk about our specific numbers, but I think we're investing more than that over time."

Though the generative AI boom has already triggered a huge surge of investment — AI startups alone raised almost $50 billion last year, per Crunchbase data — Hassabis' comments signal that competition to lead the AI sector is going to get a lot more expensive.

That's especially the case for companies like Google, Microsoft, and OpenAI, which are all engaged in an intense battle to emerge as the first to claim the development of artificial general intelligence, AI with the capacity to match human reasoning and ingenuity.

Chunky chips

Still, the idea that one company could spend more than $100 billion on a single technology that some think could be overhyped is eye-opening.

It's worth considering where that spending could go. For starters, a big chunk of development cost will be on chips.

They make for one of the most expensive purchases for companies invested in the race to develop smarter AI. Simply put, the more chips you have, the more computing power available to train AI models on greater volumes of data.

Companies working on large language models, like Google's Gemini and OpenAI's GPT-4 Turbo, have depended significantly on chips from third parties like Nvidia. But they're increasingly trying to design their own.

The general business of training models is getting more expensive, too.

Stanford University's annual AI index report, published this week, notes that the "training costs of state-of-the-art AI models have reached unprecedented levels."

It noted that OpenAI's GPT-4 used "an estimated $78 million worth of compute to train," versus the $4.3 million that was used to train GPT-3 in 2020. Google's Gemini Ultra, meanwhile, cost $191 million to train. The original technology behind AI models cost about $900 to train in 2017.

The report also noted that "there is a direct correlation between the training costs of AI models and their computational requirements," so if AGI is the end goal, the cost is only likely to spiral.

from All Content from Business Insider https://ift.tt/vLoex83
via IFTTT

• Tesla shares have tumbled 62% from their peak as investors gear up for a growth slowdown.
• The stock drop has fueled an estimated $160 billion decline in Elon Musk's net worth.
• The Tesla CEO is now worth about $178 billion, down from $340 billion in November 2021.

Tesla's mounting troubles have dealt a heavy blow to Elon Musk's net worth.

In November 2021, the Tesla CEO held the top spot on the Bloomberg Billionaires Index, and seemed untouchable with an estimated fortune of $340 billion. He was more than three times richer than Warren Buffett at that point.

However, Musk's net worth has plunged by about $160 billion since then to $178 billion at Tuesday's close. The key driver has been Tesla stock, which has tumbled from a split-adjusted peak of $415 in 2021 to $157 — a 62% decline.

The share-price slump has slashed Tesla's market capitalization from north of $1.2 trillion to below $500 billion. Musk's net worth has taken a big hit from the decline because his 13% stake in the automaker makes up a big chunk of his wealth.

Musk's start to this year has also been dismal relative to his peers in the 12-digit club. He topped the Bloomberg rich list with a $229 billion fortune in January, but his net worth has crashed by $51 billion, or 22%, since then.

The Tesla and SpaceX CEO now ranks third in the wealth rankings, behind LVMH's Bernard Arnault and Amazon's Jeff Bezos. Meta's Mark Zuckerberg is on the verge of leapfrogging him too.

Moreover, Musk is the only one of the world's 11 richest people whose net worth has declined this year. He's lost more money on paper than anyone on the list has gained, including Zuckerberg who's up almost $50 billion.

Tesla's stock has tumbled in recent months due to mounting concerns about the company. Musk told employees over the weekend that more than 10% of the company's global workforce would be laid off, signaling demand for EVs is faltering.

The automaker delivered fewer cars than expected to customers last quarter, and has made price cuts that threaten to erode its profit margins.

Moreover, Musk is fending off fierce competition from Chinese rivals like Buffett-backed BYD, and has repeatedly underscored the painful impact of higher interest rates on customer demand.

Musk's fortune isn't completely tied to Tesla. He also owns an estimated 42% stake in SpaceX, the space exploration company valued at $180 billion in December, and a roughly 79% stake in X after he acquired Twitter in 2022 and rebranded it last year.

from All Content from Business Insider https://ift.tt/KPb6a3g
via IFTTT

• Singapore employees can formally request flexible work arrangements starting December 1.
• The guideline is part of a global trend toward workforce flexibility.
• While not legally binding, workers can approach unions for support if requests are not considered.

Employees in Singapore will be able to formally request arrangements like working from home, shorter workweeks, and flexible hours.

The new guideline, which kicks in on December 1, ensures that bosses officially consider requests for flexible arrangements that help workers manage their personal and professional lives, according to a Tuesday government release.

The announcement highlights a global effort by governments to give employees more flexibility and relax in-office policies. The UK, Ireland, and Australia have implemented similar arrangements.

In Singapore, 73% of young employees said they preferred remote jobs, according to a 2023 survey by research firm Universum. 

While the guideline is not legally binding, employees can seek assistance from the national trade union or their individual union if they feel their request was not properly considered. Employers can reject the request if they believe it affects the company's productivity and ability to meet a client's demand.

Women and older workers are more likely to request flexible work arrangements, the government noted. Women are more likely to work from home than men: 41% of women, compared with 28% of men, worked remotely in the US, according to the 2022 Bureau of Labor Statistics survey.

"Flexible work arrangements can be beneficial for both employees and employers," said Gan Siow Huang, Singapore's minister of state for manpower, in the press release. "They enable employees to achieve better work-life harmony, and give employers a competitive advantage in talent attraction and retention."

Singapore's version of the guideline applies to all businesses, regardless of size. It includes all workers once they have completed probation, the trial period at the beginning of the job when the employer can asses if someone is a good fit.

Having a formal process in place for workers to make requests can improve employees' mental health and work-life balance, Theodoric Chew, CEO of workplace mental health platform Intellect, told Business Insider.

If early adopters, like government agencies, show that flexible work helps employees without sacrificing productivity, companies will follow, Chew said.

Several American leaders, including Bernie Sanders, Point72 CEO Steve Cohen, and IAC and Expedia chairman Barry Diller, have called for, or predicted, four-day workweeks.

from All Content from Business Insider https://ift.tt/DEutQ13
via IFTTT

• US Fed chair Jerome Powell has signaled a delay in expected interest rate cuts.
• He said the Fed needs more time to be confident that its fight against inflation is working.
• An analyst suggests excess money, a result of pandemic-era policies, may be drained from the economy this year.

US Federal Reserve chair Jerome Powell damped expectations of impending interest rate cuts on Tuesday — a sign that the Fed may have pumped so much money into the economy during the pandemic that the surplus is still making its way through the country.

Speaking on a panel discussion at the Wilson Center in Washington, Powell said while inflation pressure has eased in the last year, it hasn't come down enough in recent months.

"The recent data have clearly not given us greater confidence and instead indicate that is likely to take longer than expected to achieve that confidence," Powell said Tuesday

This means that the Fed isn't confident at this point that inflation is headed to its 2% target level in the longer term.

Strong job growth is contributing to price gains. In particular, the Personal Consumption Expenditures Price Index — a key inflation metric for the Fed — was little changed in March over its 2.8% reading in February, Powell pointed out.

So the Fed can keep interest rates higher for longer to cool price rises — although the central bank also has room to cut should the labor market "unexpectedly weaken," Powell added.

"If higher inflation does persist, we can maintain the current level of restriction for as long as needed," he said.

Higher interest rates make borrowing more expensive for anything from mortgages to credit cards — it encourages people to save rather than spend, which in theory, helps bring down prices. But it takes a while for the effects to be felt, and the risk is that the central bank raises rates to the point where the economy slows down and even tilts into recession as demand contracts.

Conversely, lower interest rates encourage borrowing and spending — thus driving the economy when growth slows, such as during the COVID-19 pandemic when the Fed cut rates massively and pumped money into the system.

Excess money may be drained from the economy this year, an analyst said

Powell's comments on Tuesday were a departure from just a month ago, when Fed officials stuck to their expectations of three rate cuts this year.

They also illustrate the Fed's tricky balance as it tries to steer the US economy into a "soft landing," thus averting a recession.

Jim Reid, a research strategist at Deutsche Bank, wrote in a note on Tuesday that he believes it will be "incredibly difficult" to achieve a soft landing for the US economy because it's moved from the largest jump in the money supply since the World War II to the largest contraction since 1930.

Even though the Fed has tightened the money supply — hiking interest rates 11 times since March 2022 — the scale of the COVID-19 stimulus and money supply is still taking time to work through the system, Reid added in the note published before Powell's comments on the same day.

But Reid thinks the excess money could be drained from the economy later this year, when money supply in the economy normalizes.

"If that's correct, then maybe cutting rates in preparation for that is actually the correct thing to do," said Reid. "However, faced with inflation that is currently accelerating, that would be very, very difficult for the Fed to communicate and be comfortable doing."

Deustche Bank is just pricing in one Fed rate cut, in December 2024.

Demand, supply chain snarls, and fiscal stimulus also contribute to inflation

To be sure, money supply isn't the only thing that contributes to inflation.

As Bill Dudley, a former president of the Federal Reserve of New York, explained in an opinion piece for Bloomberg in February 2023, other factors influencing the US economy include consumer demand and stimulus money, and the Fed keeping rates "too low for too long."

"If rates had been considerably higher, earlier, the economy would have grown more slowly, the labor market wouldn't be as tight and wage and price inflation would be lower," wrote Dudley.

Fed Chair Powell had said inflation was "transitory" amid the COVID-19 pandemic but stopped using the term in 2022 amid persistent price rises.

The Fed will gather on April 30 to May 1 for its next policy meeting.

from All Content from Business Insider https://ift.tt/nlg4fT2
via IFTTT