BizNews Edge: Rand slides on steady rates, Musk's AI warning, shake-up at IDAC, and more...

Elon Musk tells The Economist that AI will out-think the whole of humanity within five years, and he sounds strangely at peace with that. Back home, the Reserve Bank blindsided everyone with a shock rate hold, the Rand took its worst knock in months, and Citigroup walked away from a bet it had believed in for weeks. Add a dramatic exit at the top of South Africa's anti-corruption unit, big numbers from Vodacom and Impala Platinum, and a fond farewell to R.W. Johnson, and that's a full day of news in about twenty minutes. Have a listen..Listen here.Episode breakdown.IntroductionAlec Hogg: Hello and welcome to the BizNews Edge for Monday the 27th of July. I'm Alec Hogg. You'll find a change to our format today. We won't have that long interview anymore, and indeed this is an audio product now, and that gives us an opportunity to turn it around quicker and to take those big interviews and keep them available to everyone.We won't be losing any part of the Edge. And today we're going deep into a conversation that's got everyone from Silicon Valley to Sandton talking. Elon Musk sitting down with Zanny Minton Beddoes, the editor-in-chief of The Economist, and telling her calmly that artificial intelligence will outstrip the combined brainpower of the entire human race within five years. Not eventually — five years. We'll unpack that and what it means for you later in the show.We'll also end today with some rare good news about Apple's Siri, courtesy of Bloomberg's ace on Apple, Mark Gurman. But first, as always, let's catch up on everything else that's moved your world since we last chatted with you. And since Friday, there's been a lot of it. The Rand took a hiding after the Reserve Bank did something almost nobody expected on Thursday afternoon. There's a dramatic resignation at the top of South Africa's anti-corruption unit that happened over the weekend. Vodacom and Impala both had news for the market this morning, and the tributes continue to pour in for RW Johnson.The Rand and the Reserve Bank's surprise holdAlec Hogg: Well, let's start with the Rand. Being an open economy, 50% of our activity here in South Africa is either imports or exports, and the Rand is thus crucial to many businesses, and indeed many livelihoods.Well, here's what happened. Twenty economists were surveyed by Bloomberg ahead of last week's interest rate decision. Seventeen of them, the overwhelming majority, reckoned that Governor Lesetja Kganyago and his Monetary Policy Committee would raise South African interest rates by a quarter percent — that's 25 basis points. Inflation had just jumped to 5% for June, its worst reading in two years. And with the Iran war reigniting, oil prices climbing again — just check the Sasol share price — a rate increase looked like the obvious defensive move. It was the kind of thing one expects from Kganyago and co.Well, the MPC did not follow the script. In a split four-to-two vote, they left the repo rate exactly where it was, at 7%. The market's reaction was immediate and brutal. The Rand had its worst session since March — that's four months ago — sliding from around 16.40 to the US dollar to just past 16.70, and losing even more ground against the euro and the pound.Now, here's the part I find genuinely fascinating, and it's straight out of a Bloomberg report on BusNews.com. Citigroup — one of the biggest banking groups in the world, and a big operator in emerging market currencies — had a standing bullish bet on the Rand against the euro. They believed in the story. Hours after the Reserve Bank decision, they closed it out at a loss, and a sizeable one.Citigroup told Bloomberg it isn't convinced the pain is over either. They're now calling the Rand fragile, warning that even with some relief coming through on iron ore, gold, platinum, and eventually petrol prices (let's hope), it's hard to see how our currency will absorb the kind of shocks currently hitting emerging markets, chiefly oil prices being driven higher by that Iran conflict.For Rand watchers, the takeaway is simple: don't assume the central bank will always do the obvious thing. And if you're holding dollar or euro exposure, this is not the week to get complacent.IDAC head resignsAlec Hogg: Staying in Pretoria, a much bigger political story broke over the weekend. IDAC head Andrea Johnson has resigned with immediate effect, and President Ramaphosa accepted it. In a letter to her new boss, NDPP advocate Andy Mothibi — a letter that appears to be available pretty much everywhere — Johnson said five months of unprecedented attacks on her, arising from IDAC's investigation into senior crime intelligence officials, had become too damaging to the institution she'd served for 30 years.She's currently testifying before the Madlanga Commission, where it's emerged that she authorised probes into eight senior crime intelligence officers, including a lieutenant general, and that this was done without proper legal basis. Sounds a little bit like what's been going on at the PIC, with the chief executive there Patrick Dlamini being accused of authorising an investigation into some dodgy dealings without proper legal basis. Well, that's according to the whistleblower, if you want to call them that.Johnson, who'd already applied for retirement at 55 — she's now 56 — asked to waive her three-month notice and vacate within 24 hours, clear her desk. She warned that a fitness-to-hold-office hearing would be as costly and inconclusive as a similar case where the accused simply returned to work. Basically, she's saying: let's save everybody a lot of trouble, I'll walk out, go on retirement immediately, and let the NPA carry on with its work.The Democratic Alliance's Glynnis Breytenbach, who herself was a prosecutor at the National Prosecuting Authority, welcomed the exit but said it underscores, in her words, the dire need for a truly independent anti-corruption body — aka the Scorpions — which Jacob Zuma closed down as one of his first items of business when he became president of South Africa.Markets: Vodacom and Impala PlatinumAlec Hogg: Onto the markets. Vodacom's first-quarter update, released on SENS this morning, showed real strength beneath the surface. Group revenue was up close to 6%. Service revenue accelerated past 12% on a normalised basis, and financial services revenue rocketed by more than 25%. The group has folded in its majority stake now in Kenya's Safaricom — remember, it did that huge deal with the East African giant — and lifted its long-term revenue target by half, to over 300 billion Rand.Investors weren't impressed, not initially anyway. The board trimmed its dividend payout ratio from 75% to 65% of profits, keeping that extra 10 percentage points back to fund growth in East and North Africa. Vodacom, though, is held by many purely for its yield, and the share price dropped sharply on the news, wiping out weeks of gains in just a few minutes — down by 10 Rand, to the low 140s, on the news. But that didn't last. Bulls came in, the price re-stabilised, and it's back to where it was on Friday.In the mining sector, Impala Platinum announced on SENS this morning that it's closed down operations at its Rustenburg complex for five days — from last Friday until tomorrow — because of a rise in serious safety incidents, several involving rail-bound equipment. Impala Rustenburg's spokesperson, Moses Motlhageng, says the operation's overall injury rate had been improving, but the severity of recent incidents demanded a full stop: mass employee engagement, re-verification of every locomotive and anti-collision system, and an independent audit of the safety systems themselves.Impala's chief executive, Nico Muller, was blunt: no production target is more important than people getting home safely. The cost is real for shareholders — roughly eight days of output at an operation employing over 50,000 people — but for a group that's chasing zero harm, not just in word but in deed, it's a price worth paying, they believe. Investors have gotten used to safety trumping profits in South Africa at last; the share price is fractionally higher this morning than Friday's close, though still down a third over the past 12 months.Remembering RW JohnsonAlec Hogg: And finally for today's catch-up: there's been lots written about the late RW Johnson, but today's piece on BizNews is the best of them all. In William Saunderson-Meyer's story, republished from Politicsweb, he remembers a 40-year friendship with the political scientist and journalist RW — everyone called him Bill — who died in Cape Town this past week.Saunderson-Meyer calls him the ultimate contrarian, an Oxford don who walked away from tenure — in other words, lifetime employment at Oxford — and then spent decades here at home warning against the consensus of his time that the ANC would run South Africa into the ground. Johnson, by his old friend's own admission, was right far more often than either of them like to admit.In his later years, he wrote a regular column for BizNews at my invitation, before a falling-out relating to the controversial John Steenhuisen, which we have covered in some depth here on BizNews. Well, whatever your view of the man, few in South African letters argued as fiercely, or as well. His widow, Irina Filatova, tells me a memorial service will take place on the 6th of August. You'll find the details at the top of William Saunderson-Meyer's column, on BizNews today.Elon Musk on AI (clip from The Economist's Intelligence podcast)Alec Hogg: Well, that interview on The Economist — that's required watching, not just for those who follow Elon Musk and his views on how to think about the future, but for anyone who's interested in how AI is going to change the world as we know it. And Musk is pretty well plugged in there — better plugged in than most of us, in fact most of humanity, on what that might be.His interview with Zanny Minton Beddoes, the Economist's editor, is on their publication's website, and it's a privilege for us to be partners with The Economist — the only other organisation in Africa that has the right to republish its content under licence. That conversation is one you need to actually sit with, because underneath Musk's usual showmanship is something genuinely unsettling, or genuinely exciting, depending on your disposition.But here's a line that left me cold. Musk told the Economist's editor, quote: "I think AI may exceed the sum of human intelligence in around five years." You'll hear that in the short clip we're playing here. It's from Zanny's conversation on the topic with The Economist's Intelligence podcast, starting with Elon's quotable quote.Elon Musk: In fact, I think AI may exceed the sum of human intelligence in about, and around, five years.Zanny Minton Beddoes: In five years?Elon Musk: Roughly five years is my guess. There really won't be anything that AI can't do better than humans, apart from being human, perhaps.Zanny Minton Beddoes: I asked him what life would be like in ten years, and he went to 2036.Elon Musk: Ten years, 2036 — the most likely outcome is incredible abundance for all. I'll make another prediction: money won't matter in 2036.Zanny Minton Beddoes: I was very struck listening to him being very upbeat in this conversation, and I put it to him that he used to be worried about AI.Elon Musk: My philosophical conclusion is to look on the bright side. I can't see any way to really stop this incredible momentum of AI and robots.Zanny Minton Beddoes: He reminded me that the reason he founded OpenAI was to be a counterweight to Google, which then had a monopoly on AI, because he was worried about this. But he basically said there's nothing we can do about it — it's happening, it's unstoppable, so we might as well be along for the ride. I think the big takeaway for me was that he has decided it is unstoppable AI, and therefore the only thing left to do is try to shape it. He thinks the best we can hope for is to ensure the AIs have the right kind of values, and that we can shape them into being, in the lingo, aligned with humans.Elon Musk: The most immediate thing that we could do is to have the leading AI companies at least just meet, or have some sort of call, once every few weeks, and just discuss any safety and security issues.Zanny Minton Beddoes: Actually, the day after our interview, the news came out that an OpenAI model had escaped from its sandbox testing area, gone rogue, and attacked Hugging Face, another AI company, who were only able to defend themselves by using Chinese models. mean, this is like the Matrix.Alec Hogg: It is, indeed... So what does it mean for you? Well, first on AI: whatever your view of Musk's showmanship, take the underlying signal seriously. The people building this technology are themselves telling you, on the record, that they can't stop it, and they aren't sure they'll be able to fully control it. That's not a reason to panic. It's a reason to get literate, fast, on how these tools work, where they're heading, and how they'll reshape your industry, your portfolio and your workforce over the next five to ten years — not the next fifty. Ten years from now, he says, money won't matter. What does that mean? Think about it deeply.And secondly, on the Rand: this is a live reminder that South African assets are being priced in a world of compounding uncertainty. A Reserve Bank willing to surprise the market, an inflation trend that's currently heading the wrong way, and a Middle East conflict that keeps putting upward pressure on the oil price — and, by definition, on what we pay at the pump. But if you've got offshore exposure — and I'd argue every South African investor should — this is not the moment to assume the Rand's recent stability is the new normal.I'm talking about Magnus Heystek. He's got a starring role at BNC#9. Tickets are getting scarce, which surprised me — we usually book out at least a month in advance, and it's only two weeks to go. There'd been a cancellation here and there. So if you want to join us in the Drakensberg, go along to BizNews.com, see the image at the top of the page, and grab yourself one of the last opportunities to get some valuable insights from our 31 keynote speakers.Apple's Siri, finally worth talking to (clip from Bloomberg's Odd Lots podcast)Alec Hogg: And let's end today's Edge on some genuinely good news for Apple users, which our data shows is the preferred ecosystem by far for the business tribe. Mark Gurman is Bloomberg's man — inside Cupertino, you could say — and by most accounts he knows almost as much about what's coming next at Apple as CEO Tim Cook himself does. His verdict: Siri, which was launched more than a decade ago and mocked for a decade and a half as the industry's most disappointing AI assistant of any type, has finally come good. And Mark wouldn't be saying that unless he actually believed it.Well, this is a clip I've taken from the in-depth discussion he had on Bloomberg's Odd Lots podcast. It's really worth listening to if you're an Apple fan, or like some of the business tribe, expecting to hold Apple in your portfolio.Mark Gurman: Not really, not yet — even though they haven't done the dumb things on AI infrastructure that so many of the others have done, it really gives you an insight into what this incredible company is busy with.But for purposes of this discussion, here's his view on Siri. They launched Siri in 2011, and I was on another show the other day, and the host was telling me he asked Siri — he's got the old Siri still — "When is the next Fed meeting?" I know you guys like talking about that. And Siri's response was: "There are no Fed meetings in your calendar." Okay. I have the new Siri AI, and so I said, "When's the next Fed meeting?" It gave me the date.Odd Lots: What powers Siri AI's intelligence today?Mark Gurman: It's Apple Foundation models that have been rebuilt with Google underpinnings. It's Gemini.Odd Lots: Okay. So going forward, is the idea that Siri will just be a Gemini skin?Mark Gurman: From the language, sort of the way we all talk about AI today, it's like a model, whatever this thing is you talk to. It's like a reskinned Gemini that has access to your personal data. So you can ask it about your text messages, your photos, your emails — it's actually pretty nifty. One thing I've been doing: people send me calendar appointments on my work computer. I take a picture of my work screen with the phone, and then just add it to my calendar through Siri.Odd Lots: Oh, that's pretty nice. How many people have that use case?Mark Gurman: I don't know, but it does work. It's extremely competent.Alec Hogg: But after 15 years of jokes at its expense, Apple's assistant may finally be worth talking to, even if, as Gurman tells it, the brain underneath now belongs to Google.Sign-offAlec Hogg: That's the BizNews Edge for this Monday, the 27th of July. Thank you for spending this time with me. For more on all of today's stories, head over to BizNews. I'm Alec Hogg. Until the next time, cheerio. And the next time is tomorrow.

BizNews Edge: Rand slides on steady rates, Musk's AI warning, shake-up at IDAC, and more...

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