Category: Insights

The American penny is once again facing scrutiny. DOGE, an organization spearheaded by Elon Musk to reduce government expenditures, argues that the penny is too costly to produce. The copper-colored coin costs more to manufacture than its actual worth.

According to DOGE’s statement on X, it costs taxpayers three cents to produce a one-cent coin, based on 2023 prices. A year later, the production cost increased to 3.69 cents, as reported in the annual report from the institution responsible for producing U.S. currency.

The future of the penny has been a topic of debate for years in the United States. Former President Barack Obama requested Congressional approval in 2012 to use cheaper metals to reduce production costs. Pennies are currently made from zinc with a thin copper plating.

Critics fear price hikes if pennies are phased out completely. Supermarkets may round prices up, potentially impacting consumers, especially when purchasing low-cost items.

In 2023, producing pennies cost $179 million, according to DOGE. This organization aims to make the government more efficient and cost-effective. Musk claims ministries waste substantial amounts of money and intends for DOGE to achieve $500 billion in savings annually.

A new player in the artificial intelligence (AI) landscape is capturing attention in app stores worldwide—DeepSeek, a Chinese AI chatbot. Comparable in performance to leading AI assistants across the globe, DeepSeek distinguishes itself by being developed at a fraction of the cost.

Microsoft CEO Satya Nadella expressed admiration for this breakthrough, stating, “We must take developments from China very, very seriously,” during last week’s World Economic Forum in Switzerland. The buzz around DeepSeek is palpable in the AI community. The chatbot, created by a Chinese start-up, reportedly required less than $6 million for training—significantly less than the billions spent by companies like OpenAI on their models.

In the coming years, the United States plans to invest at least $500 billion in AI, as recently announced by President Donald Trump.

A Cost-Free Chatbot with Reasoning Capability

Like other renowned AI chatbots, DeepSeek enables users to have conversations and seek solutions to problems. This Chinese language model performs similarly to ChatGPT o1, a paid version of ChatGPT, but costs nothing to use. Both DeepSeek and ChatGPT o1 use logical steps and control questions to solve queries, allowing users to follow along with their reasoning.

However, DeepSeek offers an advantage by being open-source, allowing companies to run the program on their own systems, potentially reducing the risk of data misuse. Despite its open-source nature, DeepSeek remains secretive about the data used for its training, akin to other AI chatbot developers. Consequently, the specifics of how DeepSeek operates remain vague. Notably, it incorporates well-known Chinese limitations, preventing inquiries about topics such as the 1989 Tiananmen Square protests or China-related geopolitical issues.

Investor Concerns Emerge with DeepSeek’s Arrival

DeepSeek’s launch is causing ripples in Silicon Valley. Major AI tech companies like NVIDIA, Meta, and Microsoft have seen their stock prices fall in recent days. Shares of Dutch chipmaker ASML dropped by 9% in value.

This reaction stems from the realization that AI development might be far less expensive and require fewer computer chips than previously thought. DeepSeek demonstrates China’s active participation in the AI race, despite U.S. efforts to restrict powerful chips from Chinese hands. Yet, skepticism persists regarding the Chinese company’s transparency about the computational power used for its chatbot.

The sudden focus on DeepSeek is attracting widespread attention, with the app ranking highly in European markets, including the Netherlands. However, experts caution users to remain vigilant about data security, given the app’s free nature. There is uncertainty about whether their conversations and data are stored safely.

South Korea’s economy exhibited negligible growth in the final quarter of 2024, primarily attributed to ongoing political turmoil, according to the South Korean central bank. Despite a full-year growth of 2 percent, the last quarter’s performance was particularly lackluster, registering a mere 0.1 percent increase. This underperformance marks a deviation from expected growth in Asia’s third-largest economy.

The persistent political unrest has adversely impacted consumer confidence, leading to reduced domestic expenditure. In addition, the country is grappling with rising unemployment rates, now the highest since 2021. As a nation heavily reliant on exports, South Korea faces further economic pressures from potential import tariffs proposed by the new U.S. President, Donald Trump. The South Korean government has expressed concern over these developments, anticipating a possible decline in U.S. sales.

To bolster exports, the South Korean government announced a substantial support package of $250 billion (approximately €240 billion) on Thursday. Meanwhile, Hyundai, one of the country’s major exporters alongside Samsung and Kia, has projected slower growth for 2025 due to political instability and looming tariff threats. The automaker aims to sell 4.17 million vehicles this year, a marginal increase of 0.1 percent from the previous year, and forecasts a modest revenue growth of 3 to 4 percent, a significant decrease from last year’s 7.7 percent growth. Despite a 17 percent decline in quarterly profits, Hyundai achieved record sales for the year.

In the political realm, the situation remains volatile following the arrest of suspended President Yoon Suk-yeol. In early December, Yoon declared a state of emergency, a decision rapidly condemned by the parliamentary opposition. His pre-trial detention was recently extended, prompting unrest among his supporters. This political instability continues to cast a shadow over South Korea’s economic prospects heading into the new year.

In a rapidly changing global environment, the specter of disinformation and misinformation looms large, posing the most significant threat over the next two years. Accompanying these informational threats, the immediate risk of war continues to cast a shadow over international stability. This assessment is drawn from the World Economic Forum’s (WEF) comprehensive Global Risk Report, released on Tuesday, which emphasizes the mounting pressures faced by world policymakers.

The Global Risk Report is an annual publication that aims to provide a detailed overview of the immediate, short, and long-term risks that could impact global stability. It serves as a critical resource for policymakers, offering insights into urgent crises and highlighting potential issues that may evolve into significant challenges in the future. For the 2025 edition of the Global Risk Report, the WEF solicited insights from over nine hundred experts across various sectors, including policy makers, scientists, and industry leaders. Their collective analysis underscores an urgent need to address the risks of war, rampant disinformation and misinformation, as well as environmental crises.

War remains a pressing concern as geopolitical tensions rise, with experts warning of potential conflicts that could erupt in 2025. The immediate risk of war affects not only the nations directly involved but also has widespread implications for global markets and economic stability. However, the slightly longer-term menace of disinformation and misinformation is identified as a more insidious threat. This form of risk, which has consistently topped the list of global dangers, includes efforts by foreign actors to manipulate public opinion and electoral outcomes through deceptive means. Moreover, misinformation can obscure the realities of conflict zones and damage the reputations of countries’ products and services, thereby affecting international trade and diplomatic relationships.

The report also highlights how environmental challenges are compounding these threats, exacerbating existing vulnerabilities. Climate-related disruptions pose severe risks to economies, both through direct impacts, such as natural disasters, and indirectly, through challenges related to food security and migration.

As governments and industries prepare for the upcoming World Economic Forum meeting in Davos, this report serves as a critical call to action. Addressing these multifaceted risks requires not only immediate attention but also coordinated long-term strategies that integrate technological innovation, international cooperation, and policy development. In a world increasingly shaped by complex challenges, understanding and mitigating these risks is essential for building a resilient global future.

On the eve of his inaugural ceremony, it was apparent that Donald Trump’s ascension to the presidency would mark a noteworthy chapter in American history. Deviating from the traditional outdoor setting due to frigid weather, the ceremonies were held indoors at the Capitol, where Trump ambitiously proclaimed the dawn of “a golden age” for the United States.

For economists and financial analysts, the implications of Trump’s promises are multifaceted. His main agenda, “America First,” suggests potential shifts in both domestic economic policy and international trade relations. Trump’s commitment to expelling “millions of criminals” through an extensive deportation campaign could have significant impacts on labor markets and industries reliant on immigrant labor.

In a controversial move that could affect corporate and investment landscapes, the president announced that the U.S. government would only recognize two genders, a policy that might influence companies’ diversity and inclusion strategies, impacting employee relations and brand perceptions.

Trump’s assertion to “take back the Panama Canal” is another bold statement with potential ramifications for trade routes and international shipping dynamics. His renaming of the Gulf of Mexico to the “Gulf of America” underscores a nationalist tone that could influence foreign policy and international economic partnerships. The president emphasizes military success not by conflict but by avoidance, hinting at a strategic shift that might alter defense spending and military contracts.

Trump’s speech, characterized by its length and improvisational elements, declared a new era of prosperity with promises of unparalleled victories. His narrative of personal resilience, referencing a thwarted assassination attempt, aims to bolster investor confidence in his leadership.

As Trump’s rhetoric sets the stage for his administration’s policies, financial markets and businesses will watch closely to discern the economic viability and impact of these ambitious initiatives.

As the clock ticks towards Sunday, the popular social media platform TikTok is facing a potential shutdown in the United States, unless President Joe Biden steps in to halt the process, the company reported on Saturday. TikTok has cited a lack of “necessary clarity and security” from the White House as a critical factor in its decision-making about remaining operational in the U.S.

This development follows a Friday ruling by the U.S. Supreme Court, allowing the continuation of a ban on the app. The Biden administration has indicated that the implementation of this law will be in the hands of Donald Trump, who is set to be inaugurated as President on Monday. In a statement to CNN, Trump remarked, “In the end it’s up to me, so you’ll see what I’m going to do,” highlighting the uncertainty surrounding the app’s future.

Under current legislation, ByteDance, TikTok’s Chinese parent company, is required to divest its American operations to a U.S.-based entity. This transaction needs to be completed by January 19th, a deadline that TikTok has consistently pushed back against. The primary concern driving the ban is the fear of Chinese interference. U.S. intelligence agencies have flagged TikTok as a potential national security threat, citing risks of American user data being transferred to the Chinese government, alongside fears of Chinese influence on American users through the platform.

TikTok, however, has refuted these claims, asserting that it does not have close ties with the Chinese government. Moreover, the company emphasizes its ownership structure, pointing out that it is predominantly controlled by international investors, challenging the perception that it is a wholly “Chinese” entity. As the situation unfolds, all eyes are on the Biden administration and President-elect Trump to see how they navigate this complex intersection of technology, commerce, and national security.

The American Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, the billionaire CEO of Tesla and SpaceX. In 2022, Musk acquired X, then known as Twitter, but he disclosed his intentions to sell the company too late, causing other investors to suffer significant financial losses.

The SEC’s complaint was filed in a Washington court on Tuesday, just a few days before Donald Trump’s inauguration as the 45th President of the United States. Musk is one of Trump’s closest advisors.

This is not the first time Musk has faced legal action from the SEC. For instance, he was involved in a dispute when he expressed his desire to remove Tesla from the stock exchange. The SEC believes that Musk should have disclosed his ownership of 5% of Twitter’s shares in March 2022, which he did not do until April 4th.

By that time, Musk had already increased his stake to 9%. When the news of his ownership became public, the stock price surged by 27%. The SEC argues that other investors were disadvantaged because Musk was able to purchase shares at a lower price during the sharp price increase. They estimate that this disadvantage resulted in a loss of $150 million for investors.

However, Musk has a different perspective. Shortly after announcing his intention to acquire the entire company in April, he also concluded an agreement on the deal on April 25th. Earlier, he had stated that he would purchase shares without taking over the company or influencing the board. The SEC disagrees with this assertion.

Musk’s lawyer maintains that the owner of X did nothing wrong and that any potential offense is minor. He suggests that a fine is sufficient to resolve the matter. In the fall of 2022, Musk ultimately acquired the entire company, paying a total of $44 billion for X.

as reported by the German statistical agency Destatis. Europe’s largest economy experienced a 0.2 percent decline compared to the previous year, marking the second year of economic contraction after a 0.3 percent decline in 2023.

Destatis attributes the economic downturn to several factors. Firstly, the high energy prices have significantly impacted Germany’s economy. Additionally, the agency highlights the increasing foreign competition in key export markets for Germany. Furthermore, the high interest rates are considered another contributing factor.

Germany, the Netherlands’ primary trading partner, has been grappling with economic challenges. Last year’s quarterly results prompted news agency Bloomberg to label the situation as a “mild recession.” A recession is defined as a two-quarter decline in gross domestic product (GDP), which encompasses all economic activity generated by citizens and companies.

Germany’s energy dependence on Russia has made it particularly vulnerable to the impact of higher energy costs since the onset of the Ukraine war. Moreover, the German car sector is facing challenges due to disappointing sales figures in China. This decline is attributed to the growing preference among Chinese consumers for Chinese car brands. As a result, Volkswagen, Germany’s largest car manufacturer, is considering the closure of factories within Germany to reduce costs.

While Germany holds the distinction of being the Netherlands’ most significant trading partner, the Dutch economy did manage to experience growth in 2024. In the third quarter of last year, the Dutch economy demonstrated a 0.8 percent increase compared to the preceding quarter.

Once a titan in the mobile phone industry, Nokia is gearing up for a groundbreaking return this time, not just as a hardware giant, but as a leader in artificial intelligence (AI) and digital transformation. With its eyes firmly set on the future, Nokia is poised to redefine its legacy by leveraging cutting-edge technology to address the demands of a rapidly evolving digital world. Let’s delve into how Nokia is making its comeback and why it matters.

A Brief History

In the early 2000s, Nokia was synonymous with mobile phones. Known for their durability and iconic design, Nokia devices were in the hands of millions worldwide. However, the rise of smartphones, led by Apple and Android-based manufacturers, saw Nokia’s market share dwindle. A series of strategic missteps, including its reliance on the Symbian OS and late entry into the smartphone race, led to its acquisition by Microsoft in 2014.

Despite the decline in its consumer phone business, Nokia didn’t fade into obscurity. Instead, it pivoted to focus on network infrastructure, becoming a critical player in telecommunications equipment, including 5G technology. Now, Nokia is leveraging this foundation to stake its claim in AI and digital transformation.

Why AI and Digital Transformation?

The global economy is undergoing a seismic shift, with AI and digital innovation at the forefront of this transformation. Nokia is not only embracing these changes but actively driving them through pioneering initiatives in the metaverse, AI, and digital innovation. As Pekka Lundmark, Nokia’s CEO, aptly puts it, “No one will be able to own the metaverse. We need collaboration to build it and to ensure it achieves its full potential.” Leveraging its expertise in 5G infrastructure, Nokia is creating advanced metaverse solutions that bridge virtual and physical worlds for industries like education, healthcare, and entertainment. Through AI-driven analytics and automation, the company is optimizing industrial workflows and enabling smarter, more efficient operations. Nokia’s digital innovation extends to virtual training environments, immersive collaborations, and tools that enhance productivity while reducing costs. This robust approach underscores Nokia’s vision of building a seamlessly connected and intelligent digital future.

The Road Ahead

Nokia’s transformation exemplifies its resilience and forward-thinking strategy. By fully embracing AI and digital transformation, the company is not just staying relevant but is carving out a leadership role in the next wave of technological advancements. As Nokia continues to evolve and innovate, the world will witness how this iconic brand redefines its legacy in the digital era.

In a landscape where change drives progress, Nokia stands as a testament to the power of reinvention. The real question isn’t whether Nokia can succeed again, it’s how far this journey of renewal will shape the future of global technology and innovation.

NATO is increasing its presence in the Baltic Sea in response to suspicious activities by vessels in the region, particularly those suspected of being part of Russia’s shadow fleet. This fleet is believed to be involved in sabotaging undersea cables and pipelines, posing significant threats to critical infrastructure.

To counter these activities, NATO will deploy sea drones, naval aircraft, and frigates, according to Secretary-General Mark Rutte. Speaking on Tuesday after a high-level meeting with leaders from Germany, Poland, Denmark, Finland, Sweden, Estonia, Latvia, and Lithuania, Rutte emphasized the alliance’s commitment to swift action. Member states will enhance their monitoring capabilities, pursue suspicious vessels more aggressively, and, if necessary, seize and board them.

“We will fight back against subversive attacks,” Rutte declared. NATO ships have been patrolling the Baltic Sea since last week, with the Dutch frigate Tromp leading the mission. Recent incidents of cable and pipeline destruction in the region have heightened concerns about the vulnerability of maritime infrastructure.

“Our oversight measures are being strengthened, and inspections of vessels will become more frequent,” Rutte added. “There is significant cause for concern. Securing our infrastructure is of utmost importance.”