January 12, 2025: Welcome to 2025! Good News Is Bad…Again

Last week, Dow Jones and S&P fell 1.9%, NASDAQ lost 2.3%. Both S&P and NASDAQ are down nearly 1% so far in 2025, as a hot jobs report spiked treasury yields. Anthropic in is talks to raise funding at a US$60 billion valuation — more than 3x the company’s valuation from around a year ago. Bluesky, an alternative to Elon Musk’s X, is in talks to raise money at a US$700 million valuation in a round led by Bain Capital Ventures. SoftBank’s chip designer Arm is reportedly considering acquiring Ampere computing. CrowdStrike, the cyber security company behind the botched update that took down millions of Windows PCs and servers in July, has more than recovered the US$30 billion in market value it shed in the wake of the crisis. At CES, Nvidia announced a US$3,000 personal AI supercomputer called Digits. Quantum computing stocks dropped Wednesday after Nvidia CEO Jensen Huang declared that useful quantum computers are many years away — Rigetti Computing fell 40%, IonQ shed 37%, D-Wave Quantum fell more than 30%. Microsoft is planning company-wide performance based layoffs, and investing US$3 billion in AI and cloud services in India. Online spending grew 3% to a record US$1.2 trillion over the holiday period, according to Salesforce. Disney is selling its streaming cable business Hulu + Live TV to smaller rival Fubo TV, in exchange for a 70% stake in Fubo. In Canada, conversational AI startup Cohere unveiled a preview of North, a new product that marries its large language models and search models to help corporate users work faster. Toronto-based e-commerce software aggregator Carbon6 Technologies will be acquired by SPS Commerce for US$210 million. Shopify acquired the Shop.ca domain from Emerge Commerce. Sophic Client, Xcyte Digital announced a new CFO.

Startup Cohere moves further into enterprise search.

Conversational AI startup Cohere unveiled a preview of North, a new product that marries its large language models and search models to help corporate users work faster, co-founder and CEO Aidan Gomez said in a blog post. The Information reported last month that Cohere was working on such a product, which is similar to existing offerings like Glean and ones in the works at Google and OpenAI. Cohere’s North shows how the startup is moving beyond its roots in foundational models to offer products aimed at businesses, which could help it generate revenue faster. Cohere was valued at US$5.5 billion after a funding round last July but a few months earlier was making just US$35 million in annualized revenue, as we’ve reported. The North product also positions Cohere in the market for AI agents that automate tasks like handling internal finance interactions and customer support. While this is quickly becoming a crowded market, Cohere is playing up its security capabilities in order to distinguish itself from rivals like OpenAI and Anthropic. https://tinyurl.com/msc7957m

Carbon6 to be acquired by US-based SPS Commerce for $301 million to grow e-commerce merchant toolkit.

Toronto-based e-commerce software aggregator Carbon6 Technologies is set to be acquired by Minneapolis-based retail supply chain solutions company SPS Commerce for US$210 million ($301 million), roughly 40 percent of which is SPS Commerce stock. The transaction is expected to close within the first quarter of 2025, Carbon6 told BetaKit. Founded in 2021 amid the pandemic boom in online retail, Carbon6 had previously raised a total of about $102 million (US$75 million). In 2022, Carbon6 secured a sizable $88 million Series A to buy and build more software tools for online sellers, capping off an acquisition run of 16 companies in 16 months. However, the round was an undisclosed mix of equity and debt. https://tinyurl.com/yrhet68y

Carebook (CRBK-TSXV) joins parade of public Canadian tech companies returning private.

Just over four years after going public, struggling Montréal healthtech firm Carebook Technologies has struck a deal with its largest shareholder to become private once more. Last week, majority shareholder UIL Limited agreed to acquire all common Carebook shares that UIL or its affiliates and associates do not already own for $0.10 apiece in cash. This marks a 122 percent premium relative to the closing price of Carebook’s shares on Jan. 2, the day before the agreement was announced. Since debuting on the TSXV, Carebook has grown its business through acquisitions but continued to lose money and faced difficulty winning over public market investors. The company’s stock price has fallen by more than 95 percent from its high of $2.04 in Oct. 2020 to less than $0.05 prior to this deal, and Carebook currently boasts a market capitalization of approximately $7 million—a fraction of the $23 million combined it paid to acquire Kelowna’s CoreHealth Technologies and Winnipeg-based InfoTech back in 2021. Carebook is set to join the wave of Canadian tech companies that went public during that mid-2020 to late 2021 period and have since opted to return to private markets. This group includes CloudMD, Copperleaf Technologies, MDF Commerce, Nuvei, Q4 Inc., and TrueContext, and has expanded in recent weeks with the addition of Payfare and Softchoice. BetaKit recently reported on this public market exodus, which marked one of the Canadian technology sector’s biggest stories of 2024. https://tinyurl.com/2eaweef6

Shopify (SHOP-TSX, SHOP-NYSE) acquires Shop.ca domain from Emerge Commerce (ECOM-TSXV).

The URL shop.ca, once the home of a large Canadian e-commerce player in its own right, will now redirect to Shopify’s Amazon-like online megastore. Shopify has purchased the domains shop.ca and shop.us from Toronto-based Emerge Commerce for US$375,000 ($536,000). The domains will now automatically direct users to Shop app as the company continues to nurture the presence of its digital marketplace in an increasingly competitive sector. https://tinyurl.com/2mwpbxre

Sophic Client Xcyte Digital (XCYT-TSXV) announces new CFO.

Xcyte Digital Corp., announced that its CFO will be departing the Company after successfully helping complete Xcyte’s Qualifying Transaction) and positioning the Company for it’s next phase of growth. Xcyte also announced the appointment of Michael Ertle as the new Chief Financial Officer, as part of a comprehensive agreement to provide full accounting and administrative services with a team of professionals with Brio Financial Group (“Brio”) effective immediately. Brio’s compensation will consist of a monthly retainer and a stock option grant. Brio has been granted today, an aggregate of 400,000 stock options (the “Options”), each of which will be exercisable into one share at a price of C$0.30 per share until the earlier of (i) three years from the date of grant, (ii) 90 days after Brio ceases to provide services to the Company or any of its subsidiaries in any capacity. Mr. Ertle brings over 12 years of international corporate accounting and financial management experience. With a proven track record in budgeting, forecasting, and financial modeling, he has consistently driven operational efficiency and growth. His expertise spans financial reporting, regulatory compliance, and strategic planning https://tinyurl.com/2fv8jh5v

Anthropic in is talks to raise funding at a US$60 billion valuation.

Artificial intelligence developer Anthropic is in discussions to raise US$2 billion in new funding at a US$60 billion post-investment valuation, according to a person with direct knowledge of the fundraise. Venture capital firm Lightspeed Venture Partners, which is primarily known for investing in younger startups, is leading the deal, this person said. Lightspeed has also backed AI competitors including Mistral, Stability AI and Cartesia. Meanwhile, Anthropic recently passed $875 million in annualized revenue—a measure of the past month’s revenue multiplied by 12, the person said. That reflects significant growth in the past year but is shy of the $1 billion in annualized revenue the company previously told investors it was on track to hit by the end of 2024. By comparison, OpenAI had projected revenue of US$4 billion in 2024, meaning it has been generating about 4.5 times more revenue on a monthly basis. The fundraise would more than triple the startup’s valuation from around a year ago, which valued it at US$18 billion, followed by Amazon committing US$4 billion to Anthropic and developing a supercomputing cluster for the startup to develop its technology. That’s also a higher valuation than the US$40 billion Anthropic floated to investors late last year, The Information previously reported. Anthropic pays Amazon for cloud servers, and Amazon resells Anthropic models to its customers while taking a cut of revenue from such sales. The Wall Street Journal first reported details of Anthropic’s fundraise. https://tinyurl.com/3a99dzwc

Bluesky said to near US$700 million valuation.

Bluesky, an alternative to Elon Musk’s X, is in talks to raise money at a US$700 million valuation in a round led by Bain Capital Ventures, Business Insider reported. The new funding, if completed, would follow a jump in users after Musk successfully campaigned for Donald Trump in last year’s presidential election, turning off some X users. Three-year-old Bluesky, started as a side project of Twitter co-founder Jack Dorsey in 2019, launched to the public in early 2024 with 3 million users. It had reached nearly 26 million users by December. In October, it announced it had raised a US$15 million Series A from investors including Blockchain Capital. Representatives for Bluesky and Bain didn’t immediately respond to requests for comment. https://tinyurl.com/29wve27m

SoftBank’s chip designer Arm considers acquiring Ampere computing.

SoftBank Group Corp. and its majority-owned Arm Holdings Plc are exploring a deal for Ampere Computing LLC, according to people familiar with the matter. Ampere, the Oracle Corp.-backed semiconductor designer, has drawn takeover interest from Arm while exploring its strategic options, said the people, who asked not to be identified because the discussions were private. Ampere, which designs semiconductors that use Arm’s technology, was valued at US$8 billion in a proposed minority investment by Japan’s SoftBank in 2021, Bloomberg News reported at the time. It couldn’t be learned what valuation SoftBank, Arm and Ampere are currently discussing. Ampere has been working with a financial adviser to help field takeover interest, Bloomberg News reported in September. The Santa Clara, California-based company’s interest in a deal with a larger player in the industry suggests that it didn’t see an easy path to an initial public offering. A deal for Ampere, whose early backers also include Carlyle Group Inc., would add to a wave of chip companies looking to capitalize on an AI spending boom. Oracle said last year that it owns 29% of the startup and can exercise future investments options that would give it control of the chipmaker. Though Ampere stands to benefit from the continuing AI frenzy, the market has grown more competitive, with several large tech companies rushing to develop the same kinds of chips that Ampere makes. While there’s a huge interest in control of key components as the data center industry retools for the AI age, Ampere, like larger rivals Intel Corp. and Advanced Micro Devices Inc., is having to respond to a shift in spending away from central processor units, or CPUs, toward Nvidia Corp.’s accelerator chips. https://tinyurl.com/r8cwr426

Global startup investments rebound while number of deals fall.

Global investments in startups rose 5% to US$368.5 billion last year after falling the prior year, according to PitchBook. Investments are down sharply from a high of US$751.5 billion in 2021. At the same time, the number of startup investments fell 18% to 35,686 last year, the lowest since 2017. The number of venture funds raised and the number of startup exits through sales or public offerings also fell last year. U.S. startup investing followed a similar trend. Money invested rose by 29% to US$209 billion, representing roughly 57% of global dealmaking. But the number of deals decreased by 6% to 13,776. Artificial intelligence represented 46% of U.S. deal volume—or US$97 billion—and nearly 30% of the number of deals. https://tinyurl.com/2btyb6au

CrowdStrike bounces back after triggering largest IT outage in history.

CrowdStrike, the cyber security company behind the botched update that took down millions of Windows PCs and servers in July, has more than recovered the US$30 billion in market value it shed in the wake of the crisis. The company’s shares, which plunged by more than a third in the two weeks after the incident, are now worth more than they were on the day before what US House Homeland Security Committee chair Mark Green called the “largest IT outage in history”. CrowdStrike chief executive George Kurtz told the Financial Times the company had bounced back by turning the crisis into “a competitive advantage”. He said the incident — which stranded airline passengers, interrupted hospital appointments and took broadcasters off air around the globe — had not dented customers’ trust. “Customers are staying with us,” Kurtz said in an interview after the company’s latest earnings report. “We had one customer say that broken bones heal stronger and they don’t expect this to reoccur. Conversely, from a competitor standpoint, that hasn’t gone through something like this, there’s probably more risk.” But although insurers have estimated that total losses from the outages could run into billions of dollars, CrowdStrike has only marginally pared back its guidance for the fourth quarter and reported a 97 per cent customer retention rate in the three months to September. https://tinyurl.com/nmnxh6dz

Quantum stocks like Rigetti plunge after Nvidia’s Huang says the computers are 15 to 30 years away.

Quantum computing stocks dropped Wednesday after Nvidia CEO Jensen Huang declared that useful quantum computers are many years away. “If you said 15 years for very useful quantum computers, that would probably be on the early side,” he said during Nvidia’s analyst day. “If you said 30, it’s probably on the late side. But if you picked 20, I think a whole bunch of us would believe it.” Huang said he believes Nvidia will play a “very significant part” in creating the computers and helping the industry “get there as fast as possible.” Stocks tied to quantum computing tumbled on the heels of the comments, with Rigetti Computing plunging 40%, while IonQ shed 37%. D-Wave Quantum dropped more than 30%, while the Defiance Quantum & AI ETF fell 4%. Quantum Computing, which announced a stock offering to raise $100 million, sank 37%. The excitement boosted shares into year-end, with Rigetti and D-Wave rallying 1,449% and 854%, respectively. Supporters of quantum computing say the technology will be able to perform computing tasks regular computers can’t, and process far larger volumes of data. But many investors have warned that it may be too early to rule out proper winners in the sector and real-world use cases. https://tinyurl.com/4af56k5e

Uber speeds up stock buy back.

Uber announced an “accelerated” US$1.5 billion stock buyback, to be mostly done on Monday, reflecting its view that “our stock is undervalued,” Uber CFO Prashanth Mahendra-Rajah said in a statement. Shares of the ride-hailing firm have fallen 24% since mid-October, reflecting growing questions about the impact of self-driving cars on ride-hailing firms. Uber announced a US$7 billion repurchase agreement last February but it had only bought back US$701 million in the first nine months of last year, as its stock rallied before the more recent sell off. Uber said under the agreement, it will pay Bank of America the full US$1.5 billion on Monday and receive most of thes shares immediately although the full share repurchase will be completed by the end of March. https://tinyurl.com/5537e9sf

Microsoft plans company-wide performance based layoffs.

Microsoft is planning to cut less than 1% of its 228,000 employees in the coming months, according to someone briefed on the plans. The layoffs will be based on performance and are likely to affect divisions across the company, this person said. The news of the layoffs were first reported by Business Insider. “At Microsoft we focus on high performance talent,” a Microsoft spokesperson said in a statement. “When people are not performing, we take the appropriate action.” Microsoft frequently cuts small numbers of employees on a rolling basis, typically either due to employee performance or shifting company strategy. Before this month, Microsoft had cut roughly 1,000 people last June, when it downsized its augmented reality unit, and last February laid off 1,900 employees in its gaming unit following its acquisition of Activision. The last time Microsoft did a larger round of layoffs was in early 2023, when the company cut more than 10,000 roles across the company. https://tinyurl.com/553865ku

Microsoft plans US$3 billion AI investment in India, Nadella says.

Microsoft plans to invest US$3 billion to expand its artificial intelligence and cloud services in India. The firm, which has been operating in India for more than two decades, will also train an additional 10 million people in the country with AI, Microsoft CEO Satya Nadella said at an event in Bengaluru on Tuesday. https://tinyurl.com/4zzae7fw

Nvidia announces US$3,000 personal AI supercomputer called Digits.

The chipmaker announced at CES that it’s launching a personal AI supercomputer called Project Digits in May. The heart of Digits is the new GB10 Grace Blackwell Superchip, which packs enough processing power to run sophisticated AI models while being compact enough to fit on a desk and run from a standard power outlet (this kind of processing power used to require much larger, more power-hungry systems). Digits can handle AI models with up to 200 billion parameters and has a starting price of US$3,000. The product itself looks a lot like a Mac Mini. “AI will be mainstream in every application for every industry. With Project Digits, the Grace Blackwell Superchip comes to millions of developers,” Nvidia CEO Jensen Huang said in a press release. “Placing an AI supercomputer on the desks of every data scientist, AI researcher and student empowers them to engage and shape the age of AI.” Each Project Digits system comes equipped with 128GB of unified, coherent memory — by comparison, a good laptop might have 16GB or 32GB of RAM — and up to 4TB of NVMe storage. For even more demanding applications, two Project Digits systems can be linked together to handle models with up to 405 billion parameters (Meta’s best model, Llama 3.1, has 405 billion parameters). https://tinyurl.com/ycy9v3k9

Trump: Emirati firm to spend US$20 billion on U.S. data centers.

President-elect Donald Trump on Tuesday said Emirati real estate firm Damac Properties plans to spend at least US$20 billion to develop data centers in the U.S. Hussain Sajwana, the chairman of Damac, said the data centers will cater to artificial intelligence and cloud computing businesses of major cloud providers like Amazon Web Services and Microsoft. Damac is also an investor in AI startups Anthropic, xAI and Mistral, which rely on such data centers. Last week, Microsoft said it is on track to spend US$80 billion on AI data centers in the twelve months ending in June—a big increase from the year prior, when it spent US$53 billion across all of its capital expenses. Microsoft is optimistic that the Trump administration will help speed up the development of data centers by making it easier to get permitting and encouraging more energy production, The Information has reported. Microsoft and other firms are racing to build data centers so that they can power large supercomputers, which are used to develop advanced AI. Speaking at a press conference in Florida, Trump said the Damac investment will happen over a “short period of time” and could increase to $40 billion. He said the first phase involves projects in Texas and Arizona, as well as several states in the Midwest. https://tinyurl.com/4euun7n5

Microsoft pauses some construction on OpenAI Wisconsin data center.

Microsoft recently suspended construction on part of its multi-billion-dollar artificial intelligence data center campus in Mount Pleasant, Wisconsin—a site where it is building a massive supercomputer for OpenAI. Microsoft said in a statement to Wisconsin Public Radio that it paused the second phase of the build out so that it can evaluate “scope and recent changes in technology,” as well as how “this might impact the design of our facilities.“ Microsoft said in May of last year that it planned to invest US$3.3 billion by the end of 2026 to build an AI data center campus in the area. The Information has reported Microsoft is preparing to use liquid cooling technology in the data centers, as opposed to air cooling, so that they can accommodate Nvidia’s most advanced AI chips, known as Blackwell chips. The facility could cost as much as US$10 billion once fully built. It is unclear whether the recent pause will affect this expansion. In the meantime, OpenAI has made moves to secure computing resources from other cloud providers. https://tinyurl.com/2scx46sz

Disney to sell streaming cable version of Hulu to FuboTV.

Walt Disney Co. is selling its streaming cable business Hulu + Live TV to smaller rival Fubo TV, in exchange for a 70% stake in Fubo. The deal both allows Disney to get out of the streaming cable business, whose future is not bright, and resolve litigation stemming from last year’s aborted effort to launch a sports streaming service. The deal doesn’t involve Hulu’s main business, a Netflix-like video on demand service, which had 47.4 million subscribers at Sept. 30. Instead, Disney is transferring the cable-like business, which had 4.6 million subscribers, to Fubo, which had about 1.5 million subscribers at the same date. The newly enlarged Fubo, to be controlled by Disney, will be in a better position to compete with YouTube TV, a similar business which offers cable TV packages streamed online for a slight discount to cable packages. YouTube TV had 8 million subscribers a year ago. The cable TV business has been in a steady decline, as consumers switch to streaming services like Netflix. Streaming cable services emerged about a decade ago as a lower cost option to cable, but with digital extras, but the steady rise in programming costs has wiped out their cost advantage. Fubo loses money, although Disney and Fubo said the combined company would be “cash flow positive immediately.” As part of the deal, Fubo settled litigation with Disney, Warner Bros. Discovery and Fox over their plan to launch a sports streaming service that a judge blocked last year on antitrust grounds. That service would have posed a dire threat to Fubo. Fubo shares jumped nearly 200% in pre-market trading on the news. https://tinyurl.com/27j2zhek

Tech industry raises concerns over upcoming chip export rules.

The Semiconductor Industry Association on Monday urged the Biden Administration to withhold releasing a planned export control regulation until after Trump takes office, saying the rule could “significantly undercut U.S. leadership and competitiveness” in semiconductor technology. The association, whose members include Nvidia, Advanced Micro Devices, and Intel, said the rule was developed without industry input. “We respectfully caution against making such a swift and significant shift in policy during this transitional period, and without meaningful consultation with industry,” the SIA said in a statement.Similarly, Ken Glueck, executive vice president of Oracle, lamented in a blog post that the new rule “will go down as one of the most destructive to ever hit the U.S. technology industry.” The new restrictions, which have not been released publicly, are meant to close loopholes in the Commerce Department’s current export control regimes, which have failed to prevent Nvidia’s advanced artificial intelligence chips from being smuggled into China. https://tinyurl.com/2xm236np

Biden to issue one last set of restrictions on Nvidia chip exports.

President Joe Biden’s administration is planning to make one last set of sweeping restrictions on the sale of Nvidia’s vaunted artificial intelligence chips before Biden leaves office later this month, Bloomberg reported. The new rules may aim to block sales to adversary countries such as China and Russia and to companies that are based there but operate globally, the report suggested, without providing details. The administration has struggled to prevent Chinese companies like ByteDance from access advanced artificial intelligence chips, The Information reported, ratcheting up the pressure on U.S. officials to issue new restrictions. The report said allies like Canada, Japan, Australia and numerous western European countries would have unfettered access to Nvidia chip purchases, but hundreds of other countries would need to agree to certain human rights and data center security requirements to get the same treatment. https://tinyurl.com/ycyt7ttn

Online spending grew 3% to a record US$1.2 trillion over holiday period, says Salesforce.

Online spending rose 3% to a record US$1.2 trillion globally over the holiday period, with U.S.-sales, specifically, growing 4% to US$282 billion. That’s according to a new report from Salesforce, which aggregated data from across its various cloud services, including Agentforce, Commerce Cloud, Marketing Cloud, and Service Cloud, to garner insights into spending activity spanning 1.5 billion shoppers across dozens of countries from November 1 through December 31, 2024. Overall, the figures fall slightly short of Salesforce’s forecast: It had predicted holiday period online sales growth of 2% (US$1.19 trillion). Despite that shortfall, marquee dates saw standout performances: Black Friday transactions increased 5% to a record US$74.4 billion, while Cyber Monday sales grew 3% to US$49.7 billion. And Thanksgiving generated US$33.6 billion in sales globally, up 6%. There is another current that could undercut these numbers though: a higher-than-normal rate of returns. Salesforce said that consumers have already recouped US$122 billion from merchandize returned to retailers. That’s up by 28% on last year, a figure that could eventually rise to US$133 billion, according to the report. https://tinyurl.com/7xmbn9kc

Amazon to sell ad tools to other E-Commerce sites.

Amazon has built a massive advertising business by charging merchants to promote their product listings on its site. Now, Amazon wants to sell the technology behind its ad business to other e-commerce companies. A new product, called Amazon Retail Ad Service, will let outside retailers use Amazon’s technology to sell ads throughout their website, including in search results. Amazon said multiple online retailers are already testing the technology, including the SoftBank-backed Asian grocery delivery service Weee!, supplements site iHerb and party supplies seller Oriental Trading Company. The service will put Amazon in competition with Instacart, which sells ad services to grocers, as well as advertising technology firms like Criteo that offer similar services. Amazon said in a press release the service keeps retailers’ information separate from Amazon Ads and other parts of its business. Other large online retailers including Walmart and DoorDash have also built their own ad businesses similar to Amazon, which took in $14.3 billion in ad revenue in the third quarter of 2024. https://tinyurl.com/3defw7rr