Good Morning. This is the Investor Lookout with the daily digest.

Here’s what we got today:

• 🎥 Federal Appeals Court Upholds Ban on TikTok

• 🤖 Cohere CEO Says We Are Entering 'AI 2.0'

• 💸 Musk's X.AI Raises Another Round As It Avoids an IPO

Federal Appeals Court Upholds Ban on TikTok

TikTok might soon have its last dance. A U.S. appeals court unanimously upheld a law that may force TikTok to break from its Chinese parent ByteDance or be banned by mid-January. The U.S. Court of Appeals for the District of Columbia Circuit cited national security concerns, rejecting TikTok's argument that the law violates the First Amendment. "The First Amendment exists to protect free speech in the United States," wrote Judge Douglas Ginsburg, and the government acted to protect that freedom from a foreign adversary nation and to limit that adversary's ability to collect data on people in the United States. 

• The appeals court ruled 3-0 against TikTok.

• TikTok has invested over $2 billion to increase protective measures around U.S. user records.

Cohere CEO Says We Are Entering 'AI 2.0'

Forget basic chatbots—AI 2.0 is just around the corner. Cohere's CEO Aidan Gomez says the next era of AI, "AI 2.0," "will move beyond generic LLMs towards tuned and highly optimized end-to-end solutions," which will help businesses achieve their objectives. Instead of relying on one-size-fits-all models, companies can fine-tune AI tools for specific tasks. Cohere is working with Oracle and Fujitsu to build tailored features, while OpenAI is moving in a similar area by previewing an advancement in its latest model, o1, that allows users to fine-tune it.

• Cohere partnered with McKinsey & Company to design custom generative AI solutions for consulting clients.

• Smaller, more efficient models could help startups compete against more established AI companies.

Musk's X.AI Raises Another Round As It Avoids an IPO

Elon Musk's X.AI just secured $6 billion in private funding from a total of 97 investors, as revealed in a filing, and is the latest startup to skip the headaches of a public listing. The funding round was completed swiftly, with the first sale on Nov. 22 and the round closed on Dec. 5. Earlier last week, reports showed that another business created by Elon Musk, SpaceX, is fundraising money in private markets at a $350 billion valuation. With many investors willing to inject funds into tech startups, it's less likely that companies such as X.AI or SpaceX will rush to complete an IPO.

• X.AI will expand its "Colossus" supercomputer to at least one million GPUs.

• The AI startup raised $5 billion in May and $135 million in 2023.

Why thermal batteries could replace lithium-ion batteries for energy storage. CNBC

How UnitedHealthcare and other insurers use AI to deny claims. Quartz

Amazon isn't seeing enough demand for AMD's AI chips to offer them via its cloud. BI

Payrolls increased 227,000 in November, more than expected. CNBC

MicroStrategy's secret sauce is volatility, not bitcoin. FT

Bank of Canada to slash rates by another 50 bps on Dec. 11. Reuters

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