☕️AI Alpha

GSAM shrugs off AI risks post DeepSeek’s dramatic ascent.

February 20, 2025

Good morning.

Speaking at the Portfolio Construction Forum Market Summit 2025 on Wednesday, Dennis Walsh, global co-head of quantitative investment strategies at Goldman Sachs, said large language models (LLMs) continue to be pivotal to their investment team's decision-making.

According to Capital Brief, Walsh said his team members are “big proponents of open-source models…We like the fact that we can actually have full control of that model end to end, which is quite important,"

Walsh applauded DeepSeek’s “common sense innovations” for their efficiency, and added that Grok 3, the new model from Elon Musk's xAI released this week, is "putting up numbers better than any other model we've seen really yet".

ASX as at market close. Commodities and crypto in USD.

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Market movers

Company results are pouring in and markets are on the move. Leading the charge on Wednesday was Corporate Travel Management, with shares surging 10% on future growth hopes despite a 42% profit plunge due to weaker European revenues.

On the flip side, Mineral Resources shares tumbled after the company posted an $807 million half-year loss, dragged down by falling lithium prices, rising debt and fresh governance concerns.

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The quick sync

  • Backed by Airtree’s $2.3m seed round, AI startup Twine is cutting through the chaos between product and sales teams, turning scattered feedback into actionable revenue drivers. (Capital Brief)

  • Scarcity Partners is racing to lock in $300 million after flipping its first investment for a quick profit, with investors piling in before competition stiffens. (Capital Brief)

  • Grant Hackett just made the biggest move of his corporate career, with GDG’s $320m Evidentia acquisition marking a major shift in Australia’s financial landscape. (Capital Brief)

  • The Albanese government is pushing a new superannuation framework that could lock retirees into set drawdown rates, sparking fears of reduced financial choice. (AFR)

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Trading floor

M&A

  • Light & Wonder buys Grover Gaming assets for $1.34b, shares rise 9%. (Capital Brief)

  • Morpheus Ventures considers selling part of its SafetyCulture stake. (AFR)

  • Seek sold its Employment Hero stake to KKR amid rising competition. (Capital Brief)

  • TPG Capital nears interfund transfer for Novotech after external sale efforts fell short. (AFR)

  • Yumbah Aquaculture plans to merge with Clean Seas Seafood in a $28.1m deal. (BNA)

  • Lactalis hires Rothschild to pursue Fonterra’s $2b+ dairy asset sale. (The Australian)

  • Mitsui buys 40% of Rio Tinto’s Rhodes Ridge, targeting 2030 production. (Capital Brief)

  • Mosaic Brands' collapse leaves creditors with a $242m shortfall as no buyers emerge. (BNA)

  • Brag Media cofounder sues Vinyl Group for $2m over acquisition payment. (Startup Daily)

  • Colgate-Palmolive buys Prime100 for $500m to grow in pet food. (AFR)

  • Grant Hackett’s GDG buys Evidentia for $320m, boosting managed accounts dominance. (Capital Brief)

  • Mandalay Venture Partners partners with Malaysia’s Segi Fresh to expand agtech in ASEAN. (BNA)

  • Labor offers $500m for Whyalla steelworks if new owner takes over. (Capital Brief)

Capital Markets

  • Gilmour Space received final approval for Australia’s first locally built orbital rocket launch, marking a historic milestone. (Capital Brief)

  • Fletcher Building lost NZ$134m but shares rose on cost-cutting progress. (Capital Brief)

  • Kiwibank seeks $NZ500m capital raise, with deal teams vying for advisory roles. (AFR)

  • Goodman Group raised $4.4b for data centres, with profit up 8% to $1.22b. (Capital Brief)

  • Field Solutions collapses after failed $8.6m raise. (BNA)

  • The Greens seek to cut insurance stamp duty and expand disaster reinsurance, funded by fossil fuel companies. (Capital Brief)

  • Australian wage growth slows despite strong job market, easing inflation concerns. (Reuters)

  • Clarity Pharmaceuticals gained a third FDA fast track for its prostate cancer diagnostic. (Capital Brief)

  • JPMorgan handles $218m Aristocrat Leisure block trade at $79 per share. (AFR)

  • Scarcity Partners nears $300m fund close after $108m Evidentia sale. (Capital Brief | Capital Brief)

  • UBS avoids Australian stocks, favoring China’s tech sector due to valuation concerns. (AFR)

  • ANZ forecasts a 0.5-point GDP hit to China from Trump’s tariffs. (Capital Brief)

  • Star Entertainment struggles with cash after large debt payment. (AFR)

  • Some economists argue the RBA's rate cut was a mistake, warning of potential negative consequences despite widespread support. (Capital Brief)

  • ACCC targets cartels in supermarkets and airlines, warns of crypto scam risks. (The Australian)

  • NRW Holdings halted ASX trading pending an update on its SIMEC contract in South Australia. (Capital Brief)

  • Apple unveils iPhone 16e, a budget AI-powered smartphone. (AFR)

  • Novo Nordisk is suing KBP Biosciences for up to US$830m over drug fraud. (Capital Brief)

  • Hexaware Technologies surged on its market debut after a US$1b IPO, marking the largest IT services IPO in over a decade. (Capital Brief)

  • Microsoft's quantum breakthrough with "Goldilocks" particle may outpace rivals. (AFR)

  • Deloitte predicts 150bps RBA rate cuts by 2026. (Capital Brief)

  • Elon Musk’s X is in talks to raise funds at its original US$44b valuation, despite past markdowns. (Capital Brief)

  • Glencore is reviewing a potential exit from the LSE, a move that could further weaken the UK’s status as a global mining hub. (FT)

  • KPMG US erases diversity reports and scraps DEI goals, bowing to Trump-era legal pressure. (FT)

  • Brussels tightens sanctions on Russian aluminium and oil, defying fears that Trump may cut US pressure on Moscow in a Ukraine peace deal. (FT)

  • The US SEC is enlisting India’s help to serve fraud and bribery charges against Adani Group’s billionaire founder and his nephew. (Reuters)

VC

  • Koloma raised $37.5m to explore hydrogen in Australia. (Capital Brief)

  • PropHero raised $25.1m in Australia’s largest proptech Series A. (Capital Brief)

  • LaunchVic picked 11 Victorian scaleups for its 30X30 unicorn-growth program. (Capital Brief)

  • Airtree backs Twine’s $2.3m seed round to improve product-sales communication with AI. (Capital Brief)

People moves

  • Clive Palmer launches Trump-inspired party, Trumpet of Patriots, ahead of Australian election. (Reuters)

  • Australian children easily bypass social media age limits ahead of upcoming under-16 ban. (Reuters)

☝️ Know about a deal or people move we don’t? Hit reply.

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