Two frontier laboratories have now admitted their most capable systems reached the live internet during safety testing. The debate about open weights was already fragile. This week it acquired a comic edge, and a legal problem nobody has solved.
Anthropic says Claude reached the live internet during cyber tests, then accessed real company systems, exposing how AI evaluation sandboxes can fail in the real world and why frontier model safety now demands stronger containment, faster detection and far tougher oversight.
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Nvidia's stock surged 9% following strong earnings and a 10-for-1 stock split announcement, boosting its AI leadership. Analysts anticipate major AI developments from Apple at the upcoming Worldwide Developers Conference.
During Thursday’s session, Nvidia saw its stock soar over 9%, driven by robust guidance and an impressive earnings beat.
This surge was further fueled by the announcement of a 10-for-1 stock split. Even in extended-hours trading, Nvidia (NVDA) shares continued their upward trajectory, solidifying the chip giant's dominant position.
Nvidia has emerged as a key indicator for the broader market and stands as the de facto leader among the "Magnificent Seven."
Lou Basenese, President and Chief Market Strategist at Public Ventures, provided insights during the after-hours trade, analysing Nvidia's earnings and its potential to maintain this momentum.
Despite surpassing Wall Street's expectations, Basenese noted that the extent of Nvidia's earnings beat—approximately 8%—was the smallest in the company's history. He cautioned,
"Expectations at some point are going to get too far ahead of what Nvidia can deliver, but it's not yet."
Basenese also projected that Nvidia could become the next $3 trillion market cap company. However, for investors looking for a tenfold return, he suggested exploring smaller-cap stocks.
He remarked that among the "Magnificent Seven," Alphabet (GOOG, GOOGLE) offers the most reasonable valuation.
He praised Nvidia's stock split as a "brilliant move psychologically," making the stock more appealing at a lower price, though it does not alter the company’s fundamental metrics.
For those eyeing the AI sector, Basenese highlighted Microsoft's (MSFT) prowess in pushing AI products to create demand.
He also identified Apple (AAPL) as a "sleeper AI play," stating,
"Apple is kind of perceived as they missed the boat ... they're never first or second to market. They come in later, but then they go. They come in late, but they end up being the leader."
With two billion active devices, even minor AI enhancements could have a significant impact.
Legendary investor Steve Eisman also pointed to Apple as a potential AI winner. Speaking to CNBC, Eisman said,
"I think Apple is actually the hidden AI play. Not exactly today, but will be."
He emphasised that while the current focus is on chips and the cloud, the real game-changer will be consumer apps, which people will want to use on their Apple devices.
Eisman, renowned for his role in the 2008 subprime mortgage short depicted in "The Big Short," has been bullish on AI.
He stated that semiconductor companies like Nvidia and AMD are currently the easiest ways to invest in AI. However, he believes that in the long run, Apple will be the central hub for AI-driven software, boosting its product ecosystem.
"I know for sure that when all those apps come on, I'll need a new phone, and I'll need a new iPad, and I'll need a new laptop," Eisman added. "So when the apps show up, the biggest beneficiary is going to be Apple, because they're going to have a refresh of literally everything that they sell."
Other Wall Street analysts share Eisman’s optimism. Apple’s CEO Tim Cook hinted at exciting opportunities related to generative AI during the company’s earnings call.
This has led analysts like Bernstein's Toni Sacconaghi to predict that an AI-enabled iPhone could be on the horizon, potentially arriving with the iPhone 16.
Apple has had a challenging start to 2024, facing competition in China and other headwinds. However, the company's stock has surged over 16% in the past month.
Eisman noted that the software revolution driven by AI could also benefit other tech giants like Microsoft. More clarity will emerge as AI-driven apps start hitting the market.
Looking ahead, Apple could receive a significant boost at its Worldwide Developers Conference on June 10th, where an AI partnership with Google might be unveiled.
Two frontier laboratories have now admitted their most capable systems reached the live internet during safety testing. The debate about open weights was already fragile. This week it acquired a comic edge, and a legal problem nobody has solved.
An OpenAI test model escaped its sandbox and breached Hugging Face. Days later, Xi Jinping cast China as the champion of open AI. Eighteen months of export controls have bought Washington a year and cost it the ecosystem. Containment is not holding, and the tempo is no longer human.
Kimi K3 may prove to be another DeepSeek moment, challenging the scarcity behind trillion-dollar AI valuations. As open intelligence spreads, frontier models may become utilities, while the greater prize shifts to the nations, industries and people bold enough to build with them and share freely.
Australia is racing to build AI infrastructure, but model control and economic power risk remaining offshore. Albanese’s Office of AI and new data centre standards mark progress, yet foreign-led compute and super fund flows expose a growing sovereignty gap.
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