S&P Global — 19 December 2024
Daily Update: December 19, 2024
What’s Next for Artificial Intelligence in 2025
By Nathan Hunt
Start every business day with our analyses of the most pressing developments affecting markets today, alongside a curated selection of our latest and most important insights on the global economy
Most discussions of AI in business today have the consistency and durability of cotton candy; chew on them for longer than a moment, and they dissolve away into a vague, sugary nothingness. Yet 80% of organizations predict that their use and application of AI will increase over the next two years. How can most businesses express so much confidence in such a nascent technology? The reality and the immediate future of AI are more promising than its current applications.
A group of researchers at S&P Global explored the flavors of AI technology that will drive business and innovation in 2025 in a recent article, “AI's shift from promise to practice.” These flavors include multimodal AI, edge AI, causal AI, agentic AI and cognitive AI.
Human intelligence is informed by multimodal inputs, including images, audio, text and video. Multimodal AI is capable of ingesting multiple different inputs. This technology gained traction in 2024 after OpenAI, NVIDIA and Meta introduced their own versions. For AI to be adopted in industrial applications and other real-world or virtual/hybrid environments, multimodal capabilities are required. Specifically, multimodal AI can be applied in sectors such as healthcare, automotive, finance and retail, where unstructured data can come in diverse formats.
So far, a great deal of innovation in AI has been driven by large language models that depend on gigantic datacenters and vast amounts of data and energy. This centralization can create single points of failure in mission-critical applications. Edge AI follows a different paradigm — small language models and crypto protocols enable a decentralized and distributed AI computing environment that is more energy efficient than a datacenter.
One issue with the pattern recognition technology that underlies generative AI and discriminative AI applications is that it can detect spurious correlations as quickly as meaningful ones. Ice cream consumption doesn’t cause gasoline prices to rise in San Francisco; summer weather leads to more ice cream consumption and road trips. The distinction here is causality. Causal AI can help resolve the difference between meaningful and meaningless patterns by using causal inference, similar to human reasoning.
Agentic AI is rapidly advancing toward widespread business applications. AI agents are trained to operate independently, making decisions and performing tasks based on existing instructions. Their ability to ingest information and enact decisions marks a step forward for large-scale automation.
Cognitive AI may be a bit more of a stretch. Cognitive AI is built to mimic human cognitive functions, such as reasoning, learning and problem-solving. The challenge for developers is that psychologists and neuroscientists understand little about how the brain reasons, learns or solves problems. These technologies are modeled on the output of human cognition rather than human cognition itself. While cognitive AI may be more aspirational than real, technology companies may attempt to sell solutions as “cognitive” that are simply agentic and multimodal.
Today is Thursday, December 19, 2024, and here is today’s essential intelligence.
Listen: Navigating a New Era of Shipping Environmental Regulations
As the maritime industry faces a crucial turning point, the adoption of stringent environmental regulations is reshaping fuel consumption and market dynamics. In this episode of Commodities Focus, our Platts experts discuss the implications of the European Union's Emissions Trading System (ETS) on shipping operations and the transition to alternative fuels.
—Listen and subscribe to the podcast from S&P Global Commodity Insights
Total Debt for Rated US Companies Reaches New High
The total debt load among nonfinancial US companies with assigned credit ratings from S&P Global Ratings reached a new record in the third quarter, according to S&P Global Market Intelligence data. Combined debt in the third quarter among all rated nonfinancial companies rose about 0.5% to $8.453 trillion, surpassing a previous record of $8.431 trillion in the first quarter. The increase was led by investment-grade companies, those with credit ratings of BBB- and above, which reported a record combined debt of $6.628 trillion in the third quarter. That was up from $6.493 trillion in the second quarter.
—Read the article from S&P Global Market Intelligence
Political Turmoil Clouds Brighter Outlook for French Banks
The long-awaited upturn in French banks' fortunes faces headwinds from mounting political uncertainty following the fall of the country's government. France was plunged into political chaos on Dec. 4 when the country's parliament voted to oust Prime Minister Michel Barnier after he attempted to force through an unpopular 2025 budget. French President Emmanuel Macron is now working to cobble together enough support from across the deeply divided French parliament for a new administration that can avoid a similar fate.
—Read the article from S&P Global Market Intelligence
Ukraine Ready to Discuss Non-Russian Gas Transit to Europe: PM Shmyhal
Ukraine is ready to discuss the transit of gas via its territory provided it is non-Russian molecules, Ukraine's Prime Minister Denys Shmyhal said late Dec. 16 following talks with his Slovakian counterpart Robert Fico. The current five-year Russia-Ukraine gas transit deal expires at the end of 2024 and Russian gas flows to Europe — including to Slovakia — will cease if no new arrangements are put in place. Some 42 million cu m/d of Russian gas still flows to Europe via the Sudzha interconnection point on the Ukrainian border.
—Read the article from S&P Global Commodity Insights
Italy’s LNG Regasification Capacity Growth Central to Russian Gas Displacement: Snam
Italy's LNG infrastructure build-out has been pivotal in reducing its dependence on Russian pipeline gas, as total import capacity is expected to reach some 28 Bcm/year by 2025, Elio Ruggeri, director of LNG at national transmission system operator, Snam, told S&P Global Commodity Insights. This comes as the operator's latest LNG infrastructure project, the Ravenna FSRU, is expected to begin operations in the first quarter of 2025, with installation of the floating import facility set for late February, according to Ruggeri.
—Read the article from S&P Global Commodity Insights
NFL Football Fans Profiled
The recent S&P Global Market Intelligence Kagan US first-quarter 2024 Consumer Insights survey indicates that 48% of internet adults in the United States watch NFL football games. The league is also making strides in Europe, with regular season matches planned for cities like London, Munich and Barcelona during the 2024/2025 season. A related survey conducted in December 2023 found that 9% of internet adults in Germany and 7% in the UK engage with NFL games, highlighting a growing international interest in American football.
—Read the article from S&P Global Market Intelligence
Webinar: Navigating the New NAIC Bond Definition Framework (Jan. 14, 2025)
The NAIC's Principles Based Bond Definition (PBBD) changes, set to take effect on January 1, 2025, represent the most significant changes to insurer investment schedules in decades. Bonds will now be categorized into two major groups: asset-backed securities and issuer credit obligations. Certain securities may not qualify as "asset-backed" under the new guidelines, resulting in higher capital charges related to Schedule BA reporting. Both insurers and the asset managers that service the industry are actively working to understand and adapt to these changes.
—Register for the webinar from S&P Global Market Intelligence