THE NEWS

A new report from The Wall Street Journal hit the wires late Thursday during the U.S. cash session, revealing that Meta is reportedly delaying the release of its flagship AI model, “Behemoth,” due to internal concerns over its performance and mounting questions about its multibillion-dollar splurge in AI investments.

Initially slated for an April release around Meta’s inaugural AI conference (LlamaCon) for developers, Behemoth has been pushed to late in the second half of this year.

The delays come as Meta has publicly claimed that Behemoth outperforms competitors like OpenAI and Google on certain benchmarks. People familiar with the delays say Behemoth has faced “training challenges.” 

Since Meta’s first Llama model was released in early 2023, 11 of the 14 original researchers from the company’s Fundamental AI Research Team have left.

Meanwhile, Meta disclosed in its latest earnings report that it had raised its capital expenditure forecast to between $64 billion and $72 billion, up from a previous range of $60 billion to $65 billion—a significant portion of that increase earmarked for AI infrastructure.

This development mirrors delays at other major AI labs, including OpenAI and Anthropic, suggesting that progress in large language models has slowed. 

“Right now, the progress is quite small across all the labs, all the models,” Ravid Shwartz-Ziv, an assistant professor and faculty fellow at New York University’s Center for Data Science, told WSJ.

In markets, Meta shares are down a little more than 2% – coming into resistance after a multi-week 37% run. 

What could possibly go wrong?

. . . 

Via SchiffGold.com,

In Wednesday’s episode of The Peter Schiff Show, Peter unpacks the Federal Reserve’s recent decision to hold rates steady, dissecting Jerome Powell’s latest press conference for its contradictions and disconnect from the economic realities faced by Americans. He also critiques ongoing trade policy blunders and warns that political posturing could lead the U.S. into a major economic downturn.

Peter opens by reflecting on the Fed’s latest move and the market’s reaction, pointing out the gap between Powell’s rhetoric and investors’ response:

Well as expected [last week], the federal reserve left interest rates unchanged. The fed funds target remains between 4.25 and 4.5%. You know, I think this was one of the most hawkish press conferences that I’ve seen Powell participate in. You wouldn’t really know that by the reaction in the stock market. Stock market kind of, you know, just ignored what Powell said. The bond market did get a boost as you would expect.

Noting the mismatch between the Federal Reserve’s statements and actual inflation data, Peter takes issue with Powell’s assertion that inflation expectations remain grounded:

First of all, in the prepared remarks, one of the interesting comments– or more lie than comment– is that Powell said that inflation expectations remain well anchored and the Fed’s job is to make sure they stay that way. Now, I don’t know what world Powell is living in, you know, kind of like the Baghdad Bob world from the Gulf War because inflation expectations left the 2% anchor a long time ago. I mean, hasn’t Powell been paying attention to any of the Michigan numbers that have been coming out on inflation expectations that show, I think, one year expectations with a six handle and five year expectations have got at least a four handle? So we’re nowhere near 2%. 

Peter is quick to highlight how the Fed’s optimistic portrayal of the economy doesn’t match the underlying risks. He questions how Powell can call the current situation “a great place” when real economic indicators tell a different story:

How is Powell describing the economy as being in a great place? How is he saying that inflation is in a great place? How was he saying that the labor market is in a great place? It doesn’t sound like a great place to me. I mean, a great place would be that the odds of higher inflation are going down, right, not where the odds are going up… That would be a good place, but when you’re admitting that the odds of higher inflation are going up, that’s pretty far from a great place.

Turning from monetary policy to international trade, Peter addresses the persistent uncertainty around trade negotiations with China. He suggests that China would be wise to reduce its reliance on American consumers, who are increasingly unable to afford the goods they import:

But I don’t have a lot of optimism for these China trade talks. And in fact, what I think the Chinese may finally be doing is the right thing. They’ve been resisting doing the right thing for a long time because there’s always some short-term pain. Because the biggest mistake that China made, and I’ve been talking about this for decades now, was hitching its cart to our wagon. They tried to service the US consumer, supply the US consumer with goods, without recognizing that the US consumer was broke and really couldn’t afford to pay for the goods.

Peter concludes with a critique of protectionist policy, using a recent proposal by Donald Trump as a case study in economic misunderstanding. He points out the self-defeating nature of a proposed 100% tariff on foreign-made films—a move that threatens an industry where the U.S. actually excels internationally:

Probably the most ridiculous thing that the president said this week wasn’t even during that interview. It was on a post on Truth Social out of the blue. Trump posts, ‘I’m going to impose a hundred percent tariff on movies filmed outside the United States.’ A hundred percent tariff, right? First of all, the movie industry, Hollywood motion pictures, that’s one of our industries that we have a trade surplus. We export a lot more movies than we import. So movies, the motion picture industry, Hollywood entertainment, that is not a problem that Donald Trump needs to fix.

Be sure to check out Peter’s other analysis from the Mining Network!