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Yesterday, the bad news for finance professionals was that Anthropic had turned its gaze to their patch with software that may make many on Wall Street redundant. But today, there was a bit of a reprieve. Artificial intelligence isn’t all it’s cracked up to be when it comes to replacing traders. Not yet anyway. Across a series of contests between the world’s leading AI models, the verdict so far is unflattering. Most of the systems lose money. They trade too much. They make wildly different decisions when given identical instructions. And no one knows if these shortcomings will fade with more powerful iterations—or if they reveal something fundamental about the gap between large language models and how markets actually work. —David E. Rovella What You Need to Know TodayMorgan Stanley is rolling out cryptocurrency trading on its E*Trade platform with a dig at rivals: cheaper pricing. The launch is the bank’s latest effort in what executives describe as a race to stake a claim in an asset class that was, until recently, all but off limits for banks. After the financial crisis, executives reshaped Morgan Stanley into a wealth-management powerhouse less reliant on the traditional Wall Street businesses of trading and investment banking. Its $13 billion purchase of E*Trade in 2020 was a major push into the retail market, which came with a new suite of rivals in the digital brokerage space. The firm now is betting traditional finance and so-called decentralized finance, or “defi,” will converge, and is building out crypto-related offerings across its business lines to lure customers who previously had to go elsewhere. Nvidia bought $500 million worth of rights for shares in fiber-optic cable maker Corning as part of a broader partnership between the two companies aimed at expanding AI infrastructure. It’s the latest accord in a multibillion-dollar dealmaking frenzy that’s marked the explosion of AI-related stocks—and fears of a catastrophic bubble. Nvidia has struck billions of dollars’ worth of deals across the AI ecosystem, taking stakes in everything from developers such as OpenAI to other chipmakers such as Marvell Technology, in an effort to fuel industrywide growth. Earlier this year, Nvidia invested a total of $4 billion in Lumentum Holdings and Coherent, two companies that develop optics equipment. The standoff in and around the Persian Gulf continued on Wednesday, with the ball now in Iran’s court as the Trump administration seeks a face-saving exit from the war. Washington is said to have presented a one-page memorandum of understanding that would gradually reopen the Strait of Hormuz and lift the American blockade on Iranian ports. New negotiations over Iran’s nuclear program (which were underway when the US and Israel first attacked) would come later. Iran is said to be considering the proposal. Earlier today, the Washington Post revealed a detailed study showing much wider destruction of US military assets by Iran—potentially with the help from Russia—than previously revealed by the Pentagon. Federal Reserve Bank of Chicago President Austan Goolsbee struck a note of caution about US inflation—which hasn’t only failed to approach the central bank’s 2% target, but has risen since the start of the war. Goolsbee called the labor market stable and signaled that the Fed’s more dominant problem right now is likely inflation. “That’s why I’m attuned to these inflation risks—precisely because it has not yet been a stagflationary direction shock,” he said. “It’s just been an inflationary shock. The longer that continues, the more nervous that makes me.” Spring Sale: Save 60% on your first year Get the numbers behind the narratives. Enjoy unlimited access to Bloomberg.com and the Bloomberg app, plus market tools, expert analysis, live updates and more. Offer ends soon. Unlock 60% offWhat You’ll Need to Know TomorrowFor Your CommuteGet the New Economy newsletter for in-depth analysis of global shifts in economic and geopolitical power More from BloombergEnjoying Evening Briefing Americas? Get more news and analysis with our regional editions for Asia and Europe. Check out these newsletters, too:
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