FT News Briefing India’s AI boom
5 snips
Jun 24, 2024 A legal loophole is enabling the EU to support Ukraine despite Hungary's veto. Meanwhile, collateralized loan obligations are surging in Europe as investors chase high yields, raising concerns about their safety. India is becoming a hotspot for AI investments, with tech giants like Amazon and Microsoft ramping up infrastructure. The podcast also highlights the challenges surrounding environmental sustainability in India's tech sector, as companies set up data centers while addressing energy consumption.
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CLOs: Risky Loans, High Returns
- Collateralized Loan Obligations (CLOs) are investment vehicles repackaging junk loans into different risk categories.
- Popular after the 2008 financial crisis, CLOs offer high yields to investors while remaining relatively low-cost for issuers.
CLOs: Risk Mitigation
- CLOs, similar to CDOs involved in the 2008 crisis, carry inherent risk due to their composition of junk loans.
- However, they are considered less risky now due to increased diversification, transparency, and structural enhancements.
India's AI Ambitions
- Tech giants like Microsoft and Amazon are investing billions in Indian AI infrastructure, including data centers and cloud storage.
- India aims to become a leading AI hub, leveraging its large pool of engineers and offering incentives for investment.