November 12, 2023: Major Indices Close Week Above Recent October Highs

Last week, Dow Jones rose 0.65%, S&P 500 rose 1.3%, and Nasdaq composite was up 2.4%. Shein has told potential investors that it’s seeking a valuation of US$80 billion to US$90 billion in an eventual U.S. IPO, a big jump from the fast-fashion giant’s US$66 billion valuation when it raised money in May. WeWork, once valued at US$47 billion, filed for bankruptcy, which also impacted SoftBank’s Q3 results. Meta and Tencent signed a preliminary agreement to sell a budget-friendly version of Meta’s Quest mixed-reality headsets in China, marking the first time Meta has been able to offer a product or service in China since 2009. Shares of The Trade Desk dropped by as much as 30% in after-hours trading Thursday after the firm projected slower revenue growth in the current quarter. Disney reduced its streaming losses, and projected profits next year. Uber’s Free Cash Flow more than doubled as bookings growth picked up. Southeast Asian ride-hailing and delivery giant Grab on Thursday reported its first operating profit on an adjusted basis, as the company’s businesses continue to recover after the pandemic. Datadog stock surged 28% for its best day ever after a beat and raise quarter. Roblox the video-game platform popular among teenagers, surged by the most in almost nine months after reporting Q3 bookings and revenue that far exceeded Wall Street’s projections. Humane kicked off a marketing effort for its upcoming AI Pin, likely to be the first of many AI-centered hardware devices. In Canada, Sophic Client Xcyte Digital announced the closing of its Qualifying Transaction. The Company completed an oversubscribed private placement for aggregate gross proceeds of $4.4 million. Sophic Client Kraken Robotics delivered a mine hunting solution to the Australian Navy. This represented Kraken’s first KATFISH system sale in APAC, following a successful in-country demonstration for the Royal Australian Navy in Q1 2023.

Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) delivers mine hunting solution to Australian Navy.

Krakent has supplied high-resolution seabed mapping sonar equipment to the Royal Australian Navy. Kraken delivered its KATFISH high-speed high-definition seabed awareness solution in Q2, and recently completed system integration and sea trials in Cairns, Australia. Kraken expects to provide additional in-service support including training, spares and operational support. Continuing to build off successful KATFISH deliveries with various NATO navies, this represented Kraken’s first KATFISH system sale in the Asia-Pacific region. This system delivery follows the results of a successful in-country demonstration of KATFISH™ for the Royal Australian Navy in Q1 of this year. https://bit.ly/47mX3PZ

Sophic Client Xcyte Digital (XCYT-TSXV) announces closing of Qualifying Transaction and Concurrent Financing.

Xcyte Digital announces the completion of its previously announced acquisition (the “Transaction”) of all of the issued and outstanding securities of Xcyte Digital Corp. (“Xcyte Florida”), an event technology aggregation and development company. In connection with the closing of the Transaction (the “Closing”), the Company: completed an oversubscribed private placement (the “Concurrent Financing”) for aggregate gross proceeds of $4.4 million. https://tinyurl.com/3m4nhj62

Sophic Client UGE International (UGE-TSXV, UGEIF-OTC) announces update to size of offering of project development Green Bonds and filing of Final Short Form Prospectus.

The Company announces that the size of the Offering has decreased from up to 5,263 9.0% secured debentures of the Company, for gross proceeds of up to US$4,999,850, to 1,697 9.0% secured debentures of the Company (the “Green Bonds”), for gross proceeds of CAD$1,538,050 and US$74,100. Further, the Offering will be underwritten by the Underwriters (as defined below), pursuant to the terms and conditions of the Underwriting Agreement (as defined below). The Company also announces that it has filed its final short form prospectus dated November 10, 2023 (the “Final Prospectus”) with the securities regulatory authorities in the provinces of Ontario, British Columbia and Alberta qualifying the Green Bonds for distribution in those provinces and has obtained a receipt for the Final Prospectus from the Ontario Securities Commission. The Company also announces it has entered into an underwriting agreement (the “Underwriting Agreement”) dated November 10, 2023 with Canaccord Genuity Corp., iA Private Wealth Inc., Echelon Wealth Partners Inc. and PI Financial Corp. (collectively, the “Underwriters”) in respect of the Offering. The Company also wishes to update the total amount of aggregate principal amount of the 6.5% convertible debentures of the Company originally due October 31, 2023 (the “Convertible Debentures”) that have been extended. Convertible Debentures with an aggregate principal amount of CAD$1,632,000 have been extended. The remaining Convertible Debentures, having an aggregate principal amount of CAD$368,000, were repaid by the Company in accordance with their terms. https://tinyurl.com/2z3j6bs8

Virtual care platform Mednow (MNOW-TSXV) announces restructuring, looks for buyer.

Toronto based digital pharmacy startup Mednow has been placed into receivership under the Bankruptcy and Insolvency Act, to restructure and identify parties interested in purchasing the company or its assets. The announcement comes a little over two years after the company raised approximately $37 million for its initial public offering on the TSX Venture Exchange TSXV in March 2021. Ernst & Young has been appointed as a restructuring professional, or receiver, to help reposition the business to meet the long-term needs of its stakeholders and customers. https://tinyurl.com/3ra6kacj

Quantum startup Photonic raises $137 million, strikes strategic partnership with Microsoft.

Quantum startup Photonic has raised a $137 million funding round from a pool of investors that includes new strategic partner Microsoft. In addition to Microsoft’s investment, the funding round also saw participation from the British Columbia Investment Management Corporation, the United Kingdom’s National Security Strategic Investment Fund, Inovia Capital, and Amadeus Capital Partners also participated in the round. Photonic said it has raised $193 million to date. https://tinyurl.com/582uh7ta

Recharge Véhicule Électrique raises over $7 million to expand at-home EV charging.

Québec-based Recharge Véhicule Électrique (RVE) has received over $7 million as it looks to develop and deploy its electric vehicle home charging solutions. Fondaction, Investissement Québec, and Export Development Canada (EDC) each contributed $2 million, while a grant of $1.8 million from the Québec Ministry of Economy, Innovation, and Energy rounded out the rest of the transaction.  This was RVE’s first external funding round, which it is classifying as a Series A round, according to RVE spokesperson Frédéric Boucher. RVE said its offerings align with the Québec government’s new Electric Vehicle Charging Strategy, which aims to increase access to home charging and adapt 35 percent of parking spaces in multi-unit buildings for charging stations by 2030.   https://tinyurl.com/avff8aan

Acton Capital closes US$240 million Fund VI to invest in tech startups across Canada and Europe.

Acton Capital has closed its sixth venture capital (VC) fund, securing US$240 million to back tech startups across Canada and Europe. Fund VI marks the Munich, Germany-based growth-stage VC firm’s largest fund to date, and brings its total capital raised to $1 billion. Acton has invested in tech-enabled business models since 1999, funding a total of nearly 100 companies, including Etsy and Mambu. To date, Acton has backed nine Canadian tech firms. Acton partner Hannes Blum, based in Vancouver, has led the firm’s investments in Canada for the past seven years. According to Blum, Acton intends to back 15 to 20 startups in total through Fund VI, including another two to four Canadian startups. “We’re very proud of our track record in Canada and have worked with exceptional founders over the years,” Blum told BetaKit, citing Acton’s investments in startups like Toronto’s Chefs Plate, Burnaby, BC-based legaltech unicorn Clio, Toronto underwear brand Knix Wear, Toronto-based virtual care startup Maple, and Victoria e-commerce software firm Mobify. Chefs Plate was acquired by fellow mealkit delivery firm HelloFresh in 2018 and Mobify was purchased by Salesforce in 2020, while Knix Wear sold a majority stake to Swedish hygiene products giant Essity for US$410 million last year. https://tinyurl.com/2bmb4hc9

Shein targets up to US$90 billion valuation in U.S. IPO.

Shein has told potential investors that it’s seeking a valuation of between US$80 billion and US$90 billion in an eventual U.S. initial public offering, according to a report from Bloomberg. That would be a big jump from the fast-fashion giant’s US$66 billion valuation when it raised money in May, though the report said that timing of a potential IPO remains uncertain due to market volatility. Recent secondary sales have valued the company between US$50 billion and US$60 billion, the report said. Shein expects its net income to reach US$2.5 billion this year, according to the Bloomberg report. That would be more than the US$800 million in net profit it recorded last year, according to the Wall Street Journal. Shein has been making an aggressive push to sell more outside brands on its website in the U.S. and other markets. It’s been trying to woo popular sellers from Amazon and struck a partnership with Forever 21’s parent company to sell Forever 21 products. https://tinyurl.com/yey7z98e

Palo Alto Networks says it will acquire Talon Cyber Security.

Palo Alto Networks intends to acquire Talon Cyber Security, the company said on Monday, in a move that will add another product to its portfolio of enterprise security software. The announcement confirmed a report in The Information on Sunday, which said the deal was worth over US$600 million. Talon’s core product is a secure web browser based on Google’s Chromium software that companies can use to monitor employees’ browsing habits, prevent them from clicking malicious links, or keep track of what they’re downloading or screenshotting. The Israeli startup was founded in 2021 and had raised US$126 million. The deal continues a string of small acquisitions by Palo Alto Networks, which announced plans to buy the data security startup Dig last month. The company has recently relied on acquisitions to widen its offerings in order to win over more customers with bundled discounts, The Information has reported. https://tinyurl.com/474xn4cs

WeWork, once valued at US$47 billion, files for bankruptcy.

Office-sharing company WeWork filed for Chapter 11 bankruptcy protection in New Jersey federal court Monday, saying that it had entered into agreements with the vast majority of its secured note holders and that it intended to trim “non-operational” leases. The bankruptcy filing is limited to WeWork’s locations in the U.S. and Canada, the company said in a press release. The company reported liabilities ranging from US$10 billion to US$50 billion, according to a bankruptcy filing. WeWork has suffered one of the most spectacular corporate collapses in recent U.S. history over the past few years. Valued in 2019 at US$47 billion in a round led by Masayoshi Son’s SoftBank, the company tried and failed to go public five years ago. It disclosed in an August regulatory filing that bankruptcy could be a concern. WeWork debuted through a special purpose acquisition company in 2021 but has since lost about 98% of its value. The company in mid-August announced a 1-for-40 reverse stock split to get its shares trading back above US$1, a requirement for keeping its New York Stock Exchange listing. WeWork shares had fallen to a low of about 10 cents and were trading at about 83 cents before the stock was halted Monday. https://tinyurl.com/23ep4xau

SoftBank Group reports loss as WeWork’s collapse weighs.

SoftBank’s Vision Fund recorded a loss of about US$1.7 billion in the quarter through September as the tech investor wrote down the value of its stake in WeWork, which filed for Chapter 11 bankruptcy protection in federal court earlier this week. SoftBank Group as a whole reported a net loss of 931 billion yen (US$6.17 billion) in the quarter. The Japanese company said the yen’s weakness also hurt its financial results in the Japanese currency. SoftBank, led by billionaire founder Masayoshi Son, continues to look for new investment opportunities, especially in artificial intelligence and robotics. The successful initial public offering of SoftBank-owned U.K. chip designer Arm in September has given Son more financing options for future deals. https://tinyurl.com/3dd5s6c2

Meta, Tencent sign preliminary deal to sell Quest headset in China.

Meta Platforms and Tencent have signed a preliminary agreement to sell a budget-friendly version of Meta’s Quest mixed-reality headsets in China, The Wall Street Journal reported. The move would be the first time Meta has been able to offer a product or service in China after its online services were blocked from the country in 2009 following social unrest in China’s northwest Xinjiang region. The newspaper said Tencent would be the exclusive retailer for the headset. The headset is a new, yet-to-be-released model that would sit somewhere between the Quest 2 and Quest 3 in terms of performance, the newspaper said. Meta would take a larger share of hardware sales while Tencent would take a larger share of content and services revenue. While Meta might have been able to sell a version of its Quest headsets in China independently, by law, it would still have needed a Chinese partner such as Tencent to sell services and software for it. https://tinyurl.com/84k7ptkv

Shares of The Trade Desk, an online ad firm, plunge 30% on slower growth.

Shares of The Trade Desk, which sells services to online advertisers, dropped by as much as 30% in after-hours trading Thursday after the firm projected slower revenue growth of 18% to US$580 million in the current quarter. In the quarter that ended in September, revenue rose 25% and the company reported US$189 million in free cash flow. Prior to the earnings report, shares in the company had risen more than 70% this year, giving it a US$38 billion market capitalization. Shares in other ad-dependent companies, including Meta, Snap and Alphabet, fell in after-hours trading, possibly in response to The Trade Desk’s report. Geopolitical tensions in the Middle East have cast a shadow over ad sellers’ outlooks for the fourth quarter. https://tinyurl.com/y83kxkpp

Disney reduces streaming losses, projects profits next year.

Disney said it reduced its streaming losses to US$387 million in the three months ending in September—its fiscal fourth quarter—down from US$1.47 billion in operating loss last year. The company said it still projects that its streaming business will be profitable by this time next year. Disney’s direct-to-consumer streaming business, which consists of Disney+, Hulu and ESPN+, generated nearly US$5.6 billion in revenue during the period. Disney CEO Bob Iger said the company plans to cut another US$2 billion in costs, after enacting reorganization earlier this year that was designed, in part, to cut US$5.5 billion in costs. In streaming, Disney+, excluding its Disney+ Hotstar service in India, added 7 million subscribers during the company’s fiscal fourth quarter. The number of subscribers to Hulu’s subscription video service remained flat quarter to quarter, at nearly 44 million. ESPN+ ended the period with 26 million subscribers, an uptick of 3% from the end of June. Notably, ESPN+ turned a slight profit of US$33 million. Disney has been in talks with tech companies and telecom giants, including Amazon and Verizon, along with sports leagues, on creating a new, fully-streaming version of ESPN. Overall, Disney’s sports segment—ESPN—generated nearly US$3.5 billion in revenue during the three months ending in September, with an operating profit of nearly US$1 billion. That was more than the US$805 million in operating profit generated by Disney’s other entertainment cable TV networks. https://tinyurl.com/27bn9fjp

Instacart grocery order volume up 6% in first earnings release.

Instacart said its grocery order volume was up 6% and revenue grew by 14% year-over-year in the third quarter—growth numbers that remained relatively sluggish but beat Wall Street expectations. The firm’s stock rose in after-hours trading, but remained below its IPO price of US$30 a share. The company indicated it would continue growing more slowly than its gig-economy peers like DoorDash, which grew marketplace volume by 24% last quarter. Instacart said it expected its volume growth “to remain in the 5-6% range” next quarter. The company said it would “opportunistically” buy back up to US$500 million shares, signaling that it thinks its stock price is low. The company said it had US$2.2 billion in cash, and expects that cash pile to grow. In 2023, it said it would pull in more than three times as much adjusted earnings before interest, taxes, depreciation and amortization than it did in 2022. https://tinyurl.com/2jzdtnak

Uber’s Free Cash Flow more than doubles as bookings growth picks up.

Uber Technologies reported 11% higher revenues of US$9.3 billion in the third quarter, as growth in gross bookings picked up. Uber’s bottom line is also looking healthier: the company swung to a net profit of US$221 million in the quarter, compared with a big loss a year earlier, while free cash flow more than doubled in the quarter to US$905 million. Uber’s ride-hailing business is now driving much of the company’s growth, a sign it has recovered from the impact of the pandemic. Mobility gross bookings rose 31%. Uber Eats’ business increased its gross bookings 18%, a slower rate of growth than its biggest rival DoorDash, but an improvement on the pace of recent quarters. In contrast, Uber’s freight business reported a 27% drop in gross bookings, as the freight business suffers from the same downturn in the freight market that has affected firms like Flexport. https://tinyurl.com/bdctyz7c

Lyft reports higher revenue but growth trails Uber.

Lyft reported 10% higher revenue in the third quarter, as its ride-hailing business appeared to pick up a tad, although the company is growing well below the pace of its bigger rival, Uber. The revenue growth rate compared with a 3% increase in the second quarter, while gross bookings grew 15%, up from the second quarter. But earlier this week Uber reported 31% growth in gross bookings for its ride-hailing business in the same quarter. Lyft also continues to burn cash, while Uber is now solidly profitable on a cash basis. Investors, who have sold Lyft stock down to around US$10 since early this year—compared with its IPO price from 2019 of US$72—were unimpressed with the latest results. Lyft stock was trading down 3% in early trading on Thursday. The company has a market capitalization of just US$4 billion. https://tinyurl.com/kkvwx64t

Southeast Asia’s Grab delivers first adjusted operating profit.

Southeast Asian ride-hailing and delivery giant Grab on Thursday reported its first operating profit on an adjusted basis, as the company’s businesses continue to recover after the pandemic. Grab, which went public on the Nasdaq Stock Market in 2021 via merging with a blank-check company sponsored by Altimeter Capital Management, recorded US$29 million in adjusted earnings before interest depreciation and amortization in the third quarter. Adjusted EBITDA excludes a number of cost items such as interest rate expenses. Grab’s revenue grew 61% to US$615 million from the same quarter last year. Losses narrowed by 71% to US$99 million. “Our next financial milestone will be achieving positive free cash flow, which we expect to happen sometime next year,” Chief Financial Officer Peter Oey said in an interview. Grab said it has a 70% market share in the ride-sharing market across Southeast Asia and over 50% in deliveries as of recently. Oey said the company expects the ride-sharing market to recover to pre-pandemic level by the end of the year. https://tinyurl.com/5zcv8n6a

Klaviyo posts 48% revenue jump.

Marketing automation provider Klaviyo posted US$175.8 million in revenue for the third quarter, a 48% increase from the year earlier, in its first earnings report as a public company Tuesday. The company projected between US$195 million and US$197 million in revenue for the fourth quarter, a 34% to 36% increase from a year earlier. The fourth quarter is typically Klaviyo’s strongest quarter due to a spike in e-commerce sales and retailers’ marketing pushes for Black Friday and Cyber Monday. The slowdown in quarterly growth comes on the heels of a price hike last September that Klaviyo has been phasing in for existing customers. The company also said it has continued to grow its customer base and increased the number of customers generating more than US$50,000 of annual recurring revenue by 89% from a year earlier. As Klaviyo was gearing up to go public earlier this year, it reorganized sales and customer support teams to pursue larger customers and increase the number of customers in other industries beyond e-commerce sellers. https://tinyurl.com/2sskb9wr

Datadog stock surges 28% for its best day ever after cloud company beats estimates, lifts guidance.

Shares of cloud monitoring software firm Datadog soared 28% on Tuesday, their best day ever, after the company reported stronger-than-expected third-quarter earnings and full-year guidance. The company reported quarterly revenue of US$547.5 million, up 25% year over year, topping estimates. That growth rate was consistent with results in the second quarter. Analysts surveyed by LSEG, formerly known as Refinitiv, had expected revenue of US$524.1 million. Adjusted earnings per share came out to 45 cents, better than the 34 cents analysts expected. Datadog also bumped up its revenue and profit view for the full year. The company now expects fourth-quarter revenue between US$564 million and US$568 million, alongside full-year revenue of around US$2.1 billion. The figures exceeded consensus of US$543.3 million and US$2.06 billion, respectively, according to a survey of analysts by LSEG. Co-founder and CEO Olivier Pomel told analysts on a conference call that “AI-native customers” contributed 2.5% of Datadog’s annualized revenue during the quarter. Pomel declined to confirm if his company was working with OpenAI, Anthropic or Cohere. All three sell access to large language models that can compose text based on a few words of human input. Datadog’s surge buoyed other cloud-computing names, including MongoDB and Snowflake. The latest guidance is the cheeriest Datadog has been all year. Its stock fell sharply in August after lowering guidance as companies reduced cloud spending. Datadog builds cloud monitoring and security products that work with Amazon Web Services, Google Cloud and Microsoft Azure. The company was founded in 2010 and debuted on the Nasdaq in 2019. https://tinyurl.com/29mj5c2k

Robinhood returns to losing money after first profitable quarter.

Robinhood returned to losing money in the third quarter, after posting its first quarterly profit in the second quarter of this year. The trading app lost US$85 million between July and September, compared with a $25 million profit between April and June, while revenue from its trading business shrank 11%, as crypto trading declined. Despite the loss, there were some bright spots. Despite the trading decline, Robinhood’s net interest revenues rose 96%, reflecting higher interest rates that the company is earning on margin loans and cash held in corporate and customer accounts. That lifted overall revenues 29%. Meanwhile, operating expenses rose slightly. And the net loss was a significant reduction from the US$175 million loss a year earlier. https://tinyurl.com/3vb489dt

Roblox soars after bookings, revenue beat estimates.

Roblox Corp., the video-game platform popular among teenagers, surged by the most in almost nine months after reporting third-quarter bookings and revenue that far exceeded Wall Street’s projections. Bookings jumped 20% to US$839.5 million from a year earlier, the San Mateo, California-based company said Wednesday, surpassing the US$822 million that analysts had estimated. The company’s popularity among young adults delivered Roblox US$81.1 million in adjusted earnings before interest, taxes, depreciation and amortization, also exceeding expectations. https://tinyurl.com/ps49shnh

Unity shares slide as the company posts a revenue miss and skips guidance.

Unity Software shares fell as much as 15% in extended trading on Thursday after the video-game engine maker reported a third-quarter revenue miss and refrained from issuing guidance. The company’s revenue grew about 69% year over year, mainly thanks to the US$2.9 billion acquisition of mobile advertising company ironSource, according to a regulatory filing. The US$124.1 million net loss narrowed from US$250.0 million in the year-ago quarter. The Create Solutions segment, which includes game-development tools, generated US$189 million in revenue, declining slightly and below the US$204.7 million consensus among analysts polled by StreetAccount. Lower revenue from China was a factor because of the country’s continued limits on gaming. In September, Unity announced new fees based on the number of people who install games built with Unity’s editor software, prompting an outcry that hurt the stock in the following days. The company apologized and revamped its plans based on feedback, and on Oct. 9, Unity said CEO John Riccitiello was retiring, effective immediately, with former Red Hat CEO Jim Whitehurst stepping in as interim chief. The new fees go into effect at the beginning of 2024. Unity’s Grow Solutions segment, which includes game publishing and advertising, contributed US$355.3 million in revenue, up nearly 166% and higher than the StreetAccount consensus of US$345.3 million. Pressure stemming from the new fees cut into the division’s results. Notwithstanding Thursday’s move, Unity shares are down about 12% this year, while the S&P 500 index has gained 13%. https://tinyurl.com/yc3nd47b

Bumble shares drop as founder Wolfe Herd to relinquish CEO role.

Bumble founder Whitney Wolfe Herd will step down as CEO of the dating apps operator and hand over the role to seasoned executive Lidiane Jones, knocking its shares down 10% to a record on Monday. Jones is the CEO of Salesforce-owned Slack and has held senior roles at Microsoft where she spent more than 12 years. She will take over on Jan. 2, while Wolfe Herd will remain executive chair, Bumble said in a statement. https://tinyurl.com/23bf78s8

Rivian raises production forecast for 2023, narrows losses in Q3.

Rivian continued to close the gap on losses, reduce costs and ramp up production in the third quarter with results that beat Wall Street expectations and suggested a rosier future, including raising its annual production guidance from 52,000 to 54,000 vehicles. The EV maker reported Tuesday (after markets closed) revenue of US$1.33 billion, a figure driven by deliveries of 15,564 vehicles and more than double from the same period last year. The company also showed modest 1.5% revenue growth quarter over quarter. On the income front, the company reported a third-quarter net loss of US$1.37 billion, a 20% decrease from the US$1.72 billion in losses in the same year-ago period. On an adjusted basis, the company reported a net loss of US$942 million, or US$1.19 earnings per share. The company said its “strong progress” to reduce costs has prompted it to improve it adjusted earnings guidance for the year to a loss of US$4 billion. Rivian also announced that it is no longer locked into an exclusive agreement with Amazon, opening an opportunity for the company to sell its commercial vans to other customers. Rivian still plans to stick by a deal to deliver 100,000 electric vans to Amazon. https://tinyurl.com/5y828ck9

Microsoft offers Nvidia AI Chips to Y Combinator-backed startups.

Microsoft said Tuesday it will give some startups backed by Y Combinator and M12, Microsoft’s venture arm, access to a cluster of servers equipped with specialized chips, known as graphics processing units, to develop artificial intelligence software. The GPU servers, made by Nvidia, have been hard to come by in the past year, especially for startups, as companies increasingly use them to develop conversational AI, also known as large language models. The GPU server cluster is part of Microsoft’s incentive program for startups, in which it gives them free credits to rent Azure cloud servers and other services in the hopes that the startups become meaningful paying customers as they grow. Microsoft’s blog post about the GPU cluster for Y Combinator companies implies it will eventually give other startups in the broader Microsoft program access to similar servers. Even so, an M12 spokesperson says access to the cluster will be free for a limited time, as “we are running a business” and the goal is to help startups get off the ground with their AI. Venture capitalists competing to win AI deals also have been highlighting their relationships with cloud providers such as Microsoft, implying they could help the startups gain access to GPUs, and some VC firms themselves have even purchased access to GPUs for their portfolio companies. https://tinyurl.com/2ue574dh

Humane kicks off marketing for AI pin.

Humane kicked off a marketing effort for its upcoming AI Pin, likely to be the first of many AI-centered hardware devices. Humane, which is backed by big name investors including Microsoft, OpenAI CEO Sam Altman and Tiger Global, said it would start taking orders for the device on Nov. 16. The AI Pin will retail for US$699, although cellular connectivity will cost US$24 a month. The startup’s founders, Imran Chaudhri and Bethany Bongiorno, also released a 10-minute video that describes the capabilities of the device. The AI Pin is likely to be the first of many hardware devices designed to incorporate AI technologies. As The Information previously reported, Altman and former Apple design chief Jony Ive secretly met to discuss making an AI-powered smartphone. https://tinyurl.com/476staf5

Microsoft-backed OpenAI announces GPT-4 Turbo, its most powerful AI yet.

OpenAI announced its new, more powerful GPT-4 Turbo artificial intelligence model Monday during its first in-person event, and revealed a new option that will let users create custom versions of its viral ChatGPT chatbot. It’s also cutting prices on the fees that companies and developers pay to run its software. OpenAI’s announcements show that one of the hottest companies in tech is rapidly evolving its offerings in an effort to stay ahead of rivals like Anthropic, Google and Meta in the AI arms race. ChatGPT, which broke records as the fastest-growing consumer app in history months after its launch, now has about 100 million weekly active users, OpenAI said Monday. More than 92% of Fortune 500 companies use the platform, up from 80% in August, and they span across industries like financial services, legal applications and education, OpenAI CTO Mira Murati told reporters Monday. https://tinyurl.com/pkvdbcxd

Amazon Developing ‘Olympus’ AI to narrow gap with Microsoft, OpenAI.

Amazon is developing new conversational AI software as it seeks to catch up to OpenAI and Microsoft in selling such software to corporate customers, according to a person with direct knowledge. Amazon’s new large language model, codenamed Olympus, may also power new features in its online retail store, Alexa voice assistant on devices such as the Echo, and its Amazon Web Services unit, this person said. Olympus, which AWS could announce as soon as December, is expected to perform better than Titan, another group of Greek-named LLMs that AWS is currently selling to cloud customers, this person said. Late last year, AWS delayed the launch of Titan because it paled in comparison to the LLM technology behind OpenAI’s ChatGPT, The Information previously reported. It isn’t clear when AWS will finish developing Olympus or when it will come online. Only one Titan model is generally available to AWS customers, to develop applications with personalization and search capabilities. Two other Titan models, designed to help customers create apps that give ChatGPT-like text answers or summarize long tracts of text, aren’t broadly available. AWS also sells LLMs made by Anthropic and other providers. https://tinyurl.com/5n8nx3fs

Musk’s xAI demos Grok AI assistant.

Elon Musk teased an early version of the new AI assistant designed by his artificial intelligence startup xAI. The AI, known as Grok, is trained on data from Musk’s social media site X.com, formerly known as Twitter, and is designed to be humorous, Musk said late on Friday. In a screenshot of Grok shared by Musk, the bot responded sarcastically to a question about how to make cocaine: “Oh, sure! Just a moment while I pull up the recipe for homemade cocaine. You know, because I’m totally going to help you with that.” Grok, which will compete with OpenAI’s ChatGPT and Google’s Bard, is in early beta. It was released to a small group of testers on Saturday, and will eventually be available as part of a premium subscription on X.com, Musk said. https://tinyurl.com/2jc7e5rf

Cruise is recalling 950 driverless cars after one of its vehicles ran over a pedestrian.

Cruise, the self-driving car subsidiary of General Motors, says it is recalling 950 of its driverless vehicles in response to an October incident in which one of its robotaxis ran over a pedestrian. The recall, which was initiated by the company, will take the form of an over-the-air software update to the collision detection subsystem so the vehicle remains stationary during certain crash incidents, rather than pulling over to the side of the road. On October 2nd, a pedestrian was struck by a hit-and-run driver in San Francisco, throwing her in the path of a nearby Cruise vehicle. The driverless car then attempted to pull over to the side of the road, dragging the pedestrian 20 feet and seriously injuring her. In the recall notice, Cruise acknowledges that in certain situations the pullover attempt “is not the desired post-collision response. https://tinyurl.com/2nwbwsz8

Amazon and Meta test advertising partnership.

Amazon and Meta Platforms are testing a partnership that lets people buy Amazon products directly from ads on Instagram and Facebook, an Amazon spokesperson confirmed. The collaboration comes as both companies face mounting competition from TikTok, which is trying to parlay its social media success into an e-commerce business. The partnership asks people to link their Amazon accounts to their social media profiles. Amazon ads for products will also show estimated delivery times, whether they’re eligible for Prime delivery and product details, an Amazon spokesperson said. Amazon has had difficulty selling users on social media-like features it has launched such as live shopping, while Meta has scaled back its e-commerce efforts, including by removing the “Shop” tab from Instagram in February. https://tinyurl.com/4kk2efad

Amazon discounts One Medical for Prime members by 50%.

Amazon is cutting the cost of its One Medical subscription for Prime members. People who already pay US$139 for Amazon’s Prime membership can now pay another US$99 per year or US$9 per month to join One Medical, which includes virtual care services at no extra cost. One Medical costs US$199 per year for people who aren’t Prime members. Amazon completed its US$3.5 billion acquisition of One Medical in February. While One Medical runs bricks-and-mortar clinics, it also offers some telehealth services that overlap with Amazon Clinic, another one of Amazon’s healthcare ventures. Clinic offers one-off telehealth visits for common conditions that can range in price from US$30 to US$95, meaning that a single Amazon Clinic visit can now cost nearly as much as an annual One Medical subscription for a Prime member, Forbes noted. https://tinyurl.com/ywfa7usx

Goldman looks to get out of GM card partnership.

Goldman Sachs told some employees it planned to offload its General Motors credit card program, The Wall Street Journal reported, as the investment bank continues to retreat from consumer lending. GM is expected to run a process to find a new issuer for its branded credit cards, according to the report. The Journal has also previously reported that Goldman is also trying to get out of its lengthy contract to be the issuer for the Apple Card, including having conversations with American Express about taking over as issuer. The Journal’s report on Tuesday said those conversations also involved discussions about whether Amex would be interested in the GM program. Goldman declined to comment on the report when asked by The Information. After a failed and costly foray into consumer lending, Goldman has tried to go back to its roots as an investment bank. In the process, it has pared its consumer operations considerably, including cutting big pieces of its Marcus consumer operations and striking a deal to sell its Greensky home-improvement loan business, which it only bought in 2021, last month. https://tinyurl.com/yc7st68c

Intel in lead to get billions for secure defense-chip facilities.

Intel has ruled the market for central processing units since the 1980s. But rival AMD overtook Intel in market value last year, thanks in part to an expensive bet on chip design. Intel has ruled the market for central processing units since the 1980s. But rival AMD overtook Intel in market value last year, thanks in part to an expensive bet on chip design. WSJ’s Asa Fitch explains the companies’ battle for the brains of your computer. Funded under the Biden administration’s US$53 billion Chips Act passed last year, the operation could reside at least in part at Intel’s Arizona factory complex, the people said. The plan for the program illustrates Washington’s willingness to get deeply involved in private industry to secure supplies of chips increasingly seen as a fulcrum of geopolitical power and military might. Chips are vital in artificial intelligence, espionage and cyberwarfare, and feature prominently in cutting-edge jet fighters, missiles and other advanced weaponry. The Biden administration has yet to set the exact amount of the funding that will be available. Several people familiar with the situation said the facilities could cost US$3 billion to US$4 billion, and the money would come from US$39 billion of manufacturing grants authorized under the Chips Act. Increasing the stability of domestic chip supplies is among the central objectives of the Chips Act, which Commerce Secretary Gina Raimondo described earlier this year as a “national security investment.” The Defense Department signed an agreement this summer with the Commerce Department that gave it insight into the details of the chip-project funding plans, according to a copy of the document seen by The Wall Street Journal. https://tinyurl.com/3fttjwst