April 21, 2024: Another Tough Week, Heading Into Q4 Earnings

Last week, S&P 500 lost 3.05% – its biggest weekly decline in a year. Nasdaq composite fell 5.5% – its worst week since November 2022. However, the first-day stock price of Ibotta, traded up 17% Thursday from its US$88 IPO price, which already was at the top of the range bankers expected. French AI start-up Mistral, is in talks to raise €500 million in a deal that would more than double its valuation to at least €5 billion. Venture capital firm Andreessen Horowitz has completed a US$7.2 billion fundraise, exceeding an earlier target of US$6.9 billion. Italy’s Prysmian announced a deal to buy US firm Encore Wire for an enterprise value of about 3.9 billion euros (US$4.15 billion). Bentley Systems is exploring options that include a sale after attracting acquisition interest. Google could spend more than US$100 billion over time developing its artificial intelligence technology. Microsoft is looking to double new data center capacity. Meta Platforms on Thursday launched a new version of Meta AI, available in its apps and Ray-Ban smart glasses. Baidu’s Ernie AI chatbot now has 200 million users. Shares of critical chip firm ASML dropped 5% as sales missed expectations. TSMC cut its chip market outlook as consumer weakness persisted. TSMC’s stock slid more than 6% in Taipei, the biggest intraday decline in about 18 months. In Canada, Sophic Client, Kraken Robotics reported record 2023 financial results, and sees its strong momentum continuing. For 2024, Kraken reiterated guidance, expecting revenue between $90.0 million and $100.0 million and Adjusted EBITDA in the $18.0 million to $24.0 million range. Sophic Client, UGE International achieved notice to proceed milestone for a 847kw rooftop community solar project in Queens, New York. UGE had the project appraised by a third party for a fair market value of US$2.7 million or US$3.14/watt.

Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) reports record 2023 financial results and sees strong momentum continuing.

Financial Highlights for year ended December 31, 2023. Consolidated revenue was $69.6 million compared to $40.9 million, an increase of 70% over 2022. Product revenue was $52.6 million compared to $24.9 million in 2022, an increase of 111%. Service revenue was $17.0 million, an increase of 6% compared to 2022. Gross margin percentage was 49% as compared to 42% in 2022. Adjusted EBITDA was $14.1 million compared to an Adjusted EBITDA of $5.3 million in 2022, an increase of 166%. Adjusted EBITDA margin was 20% compared to 13% in the comparable year. Kraken is reiterating its 2024 financial guidance. For 2024, Kraken expects revenue between $90.0 million to $100.0 million and Adjusted EBITDA in the $18.0 million to $24.0 million range. Capital expenditures in 2024 are expected to range from $6.0 million to $7.0 million. Our 2024 outlook is driven by contracts in hand and reflects strength across both our Products and Services groups addressing defense and offshore energy customers. There is a notable acceleration in demand for dual use defense and commercial technologies for subsea security, surveillance, and infrastructure inspection. Kraken provides advanced technology solutions to these markets. In the mine countermeasures (MCM) market, Kraken is one of a small number of companies with proven operational solutions, solid reference customers, and has the best price/performance offering. Defense industry spending is growing and the allocation of spending to unmanned maritime platforms is growing. Commercial market activity is also strong, driven by the development and maintenance of offshore wind and offshore oil and gas infrastructure. https://bit.ly/49NWWhb

Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) receives $6 million order for subsea batteries. Customer details cannot be disclosed. Deliveries are expected to occur in 2024 and 2025. https://bit.ly/4aU6uZL

Sophic Client UGE International (UGE-TSXV, UGEIF-OTC) achieves notice to proceed milestone for 847kw rooftop community solar project in Queens, New York.

UGE International Ltd. has reached the ‘Notice to Proceed’ (NTP) milestone for its 847kW rooftop community solar project in Queens, New York. The NTP milestone indicates that financing for the project has closed and all necessary permits and interconnection approvals for the project are in place. The project will be built atop a new 249,675-square-foot warehouse and parking facility in College Point, Queens that is developed and owned by New York City-based real estate developer Wildflower Ltd LLC. Once the project reaches commercial operation, it will be UGE’s sixth solar project completed with Wildflower, with a seventh under construction and an eighth in development. Each year, the project will offset over 1,000 metric tons (roughly 2.5 million pounds) of CO2 emissions, the equivalent produced by burning nearly 125,000 gallons of gasoline. At 847kW it will produce enough electricity to power more than 200 homes. UGE will reserve 50% of the project’s energy output for Low- to Moderate-Income (LMI) subscribers, allowing these households and businesses to save upwards of 10% on their electricity costs. UGE had the College Point project appraised by a third party for a fair market value of USD$2.7 million or USD$3.14/watt. Having reached NTP, the College Point project will now enter deployment and construction – the final phase before reaching commercial operation. UGE now has 9 projects totaling 18.6MW in this final development phase. Once complete, these projects will join UGE’s operating portfolio, which currently stands at 6.6MW. The College Point project is projected to reach commercial operation this summer. https://bit.ly/3W1Bm5B

Shein’s Canadian delivery partner UniUni secures nearly $70 million.

Richmond, British Columbia-based last-mile delivery startup UniUni, which primarily serves e-commerce giants Shein and Temu, has secured US$50 million ($69 million) in Series C financing. The round was led by venture capital (VC) firm DCM and will be used to develop the proprietary tech stack powering UniUni’s logistics platform and to expand its delivery coverage in the United States. This latest funding round follows UniUni securing just over $45 million in Series B funding over two tranches last year, both backed by Canadian VC firm Celtic House Venture Partners. The first tranche closed in March 2023 and secured $20 million (US$15 million), following which Lu told TechCrunch the startup’s goal is to secure $1 billion unicorn valuation status by 2025. The second tranche secured almost $28 million (US$20 million) in December 2023. With the latest raise, UniUni has secured around US$110 million ($152 million) in capital to date. https://tinyurl.com/35cz79wr

Swtch Energy secures US$27.2 million to continue deployment of EV chargers for multi-unit buildings.

Toronto-based Swtch Energy, which develops electric vehicle (EV) charging and management solutions for multi-tenant buildings, has raised US$27.2 million ($37.4 million) in Series B funding. Communitech recently added Swtch to its list of Canadian tech companies with the potential to reach $1 billion in revenue by 2030. The all-equity round was led by global impact investor Blue Earth Capital, Alantra’s Energy Transition Fund, Klima, GIGA Investments Corp, and return investor Active Impact Investments. Swtch added that it has raised $40.2 million to date. Swtch went on to raise as $1.1 million seed round in 2020 and a $16.5 million Series A round in April 2022, when it also claimed it would use the capital for expansion across North America. Swtch claimed 1,500 of its charging stations were installed in North America at the time of the Series A round. Following the Series B raise, Swtch claims it has seen a tenfold increase in its charging network, while Axios reports that it has about 10,000 charging ports deployed in Canada and the United States. https://tinyurl.com/4hu4d9t9

Eocycle Technologies secures $25 million to expand wind turbines in US, Europe.

Montréal-based cleantech company Eocycle Technologies has closed $25 million in Series A funding as it looks to expand its distributed wind turbines in the United States and Europe. The deal closed earlier this month and was led by Export Development Canada (EDC), which contributed a $10 million equity investment. The round saw additional participation from Fonds de Solidarité FTQ and Investissement Québec, which contributed $10 million in equity financing and a $5 million loan, respectively. To date, Eocycle has raised $47 million in equity financing. . https://tinyurl.com/yc3by5xd

Vidyard unveils industry-first hyper-realistic, personalized ai avatars to scale sales and marketing video communications.

Vidyard also announced that it has secured $15 million in funding led by Export Development Canada (EDC) with participation from BMO Capital Partners, in addition to existing investors Battery Ventures, Bessemer Venture Partners, and iNovia Capital. The funding will accelerate Vidyard’s innovation and adoption, propelling users into the AI era. This brings Vidyard’s total funding to date to $90.7 million. https://tinyurl.com/46j747wz

Canada to push ahead with digital services tax on global tech firms starting 2024.

Canada will press ahead with introduction of a digital services tax on large technology companies, which would raise $5.9 billion (US$4.3 billion) over the five years starting fiscal 2024/25, the federal budget showed on Tuesday. Canada, seeking to address the challenge of taxing digital giants like Google parent Alphabet and Amazon.com that can book their profits in low-tax countries, had held off for two years to allow for the conclusion of talks on a global treaty on taxing multinationals. Negotiations though are dragging. Washington opposes the plan on the grounds that it unfairly singles out U.S. firms. The tax would begin to apply for the 2024 calendar year, with the first year covering taxable revenues earned since Jan 1, 2022. https://tinyurl.com/5wdxdb85

Ibotta trades up 17% after IPO.

The first-day stock price of Ibotta, the venture-backed digital couponing app, traded up 17% Thursday from its US$88 IPO price, which already was at the top of the range bankers expected. That nudges the company’s market cap above US$3 billion. The first-day performance continues the sprinkling of good vibes in the IPO market, even as the broader stock market fell for the fifth straight day. Reddit and Astera Labs, two venture-backed firms that went public last month, are trading above their IPO prices. The early IPO successes should leave the door open for more listings. Next up is Rubrik, which started its investor roadshow this week. https://tinyurl.com/5n7cvmus

Mistral in talks to raise €500mn at €5bn valuation.

French artificial intelligence start-up Mistral is in talks to raise €500 million in a deal that would more than double its valuation to at least €5 billion, following proposals from multiple investors seeking to invest in the one-year-old company. Mistral’s three founders, led by chief executive Arthur Mensch, are considering their options just four months after raising about €400 million in a round that valued the start-up at €2 billion. Venture capital and sovereign wealth funds are among those eager to back the Paris-based company, seen as Europe’s best chance of taking on Silicon Valley groups OpenAI and Anthropic, according to multiple people close to the talks. Mistral has been approached by investors and has begun discussions over a fundraising deal that would value the company at €5 billion or more, according to three people familiar with the situation. If the company pushed ahead, it was likely to raise as much as €500 million, said two of the people. The company has attracted backing from prominent venture capital funds, including Lightspeed Venture Partners, Andreessen Horowitz and General Catalyst as well as Nvidia, Salesforce and former Google chief Eric Schmidt, over two funding rounds. https://archive.ph/fBR8H

Andreessen Horowitz raises US$7.2 billion, surpassing target.

Venture capital firm Andreessen Horowitz has completed a US$7.2 billion fundraise, exceeding an earlier target of US$6.9 billion, according to Axios. The firm will deploy the fresh capital across seven different verticals, including artificial intelligence infrastructure and applications, and “American dynamism,” or companies that support U.S. national interests. The larger-than-expected raise is notable given the challenging fundraising environment, which has forced many firms to downsize their targets. Tiger Global Management raised US$2.2 billion for its latest venture fund, 63% less than the US$6 billion goal set in 2022, for example. https://tinyurl.com/9psb7be6

China’s capital markets activity falls to multi-decade lows.

Chinese companies have raised just US$6.4 billion in mainland IPOs, follow-on and convertible share offerings so far this year — the lowest level on record, according to Dealogic data. Their fundraising in offshore markets including Hong Kong is US$1.6 billion, the lowest year-to-date since 2003. China’s outbound M&A of US$2.5 billion is the lowest recorded amount over the same period since 2005. On international bond markets, Chinese companies, banks and government borrowers have issued US$26 billion so far this year, slightly above last year’s US$24 billion but otherwise the lowest level since 2016. On the mainland, borrowing of US$246 billion is up 17 per cent on last year. https://archive.ph/HDpi1

Cable giant Prysmian to buy Encore Wire in US$4.2 billion deal.

Italy’s Prysmian announced a deal to buy US firm Encore Wire for an enterprise value of about 3.9 billion euros (US$4.15 billion) as it doubles down on a North American market that already powers its profits. Massimo Battaini, CEO-designate of the world’s largest cablemaker, described wire and cable maker Encore as a “strong player” in the U.S., in particular in the industrial construction segment. Battaini said the deal would allow Prysmian to become “even more relevant” in the North American market, its most profitable one, thanks to the complementary portfolios of the two firms. Prysmian shares, which are trading at record highs, rose as much as 7.2% on Monday, giving it a market capitalisation of around 14 billion euros. The inclusion of Encore will see North America account for more than 30% of Prysmian’s core earnings (EBITDA). It will also mean it reaches its business plan target for an adjusted EBITDA of around 2 billion euros “much faster than in 2027. The company said it expects the acquisition to generate annual ‘run rate’ synergies on its EBITDA of around 140 million euros, from commercial activities and cost cutting, within four years from closing of the deal, which is expected in the second half of 2024. This will help Prysmian increase its earnings per share (EPS) by about 30%. Prysmian said last year it was focused on organic growth with scope for only “bolt-on” acquisitions in specific market segments or geographies using a war chest of around 1.1 billion euros. Prysmian, which was created in 2005 after a spin-off from the Pirelli group, has since made two large acquisitions, Netherlands-based Draka in 2011 and U.S.-based General Cable in 2018. The group will finance the Encore transaction through a mix of 1.1 billion euros in cash and newly committed debt facilities of 3.4 billion euros, the company said. https://tinyurl.com/5buk9mhm

Bentley Systems explores options amid takeover interest, sources say.

Bentley Systems, an engineering software company with a market value of nearly US$16 billion, is exploring options that include a sale after attracting acquisition interest, according to people familiar with the matter. Among the companies that have expressed interest in a deal with Bentley are electrical equipment maker Schneider Electric and design software firm Cadence Design Systems, one of the sources said. The Bentley family controls the eponymous company through a special class of shares. The company has formed a special committee of its board of directors to explore its options, that include an outright sale of the company as well as a joint venture, the sources said. Bentley’s shares jumped more than 5% on Thursday on the news of a potential deal. https://tinyurl.com/yvbzuct8

Tesla cuts global workforce by more than 10%.

Tesla is cutting its global headcount by more than 10%, joining the likes of Google, Amazon and Microsoft in trimming their workforce this year. The electric vehicle maker had 140,473 employees worldwide as of the end of 2023, which means the layoff would eliminate more than 14,000 jobs. “There is nothing I hate more, but it must be done. This will enable us to be lean, innovative and hungry for the next growth phase cycle,” CEO Elon Musk said in an email to staff on Monday, a copy of which was seen by The Information. The move came just two weeks after Musk said Tesla would raise the compensation for engineers on the artificial intelligence teams, in response to intensifying competition for talent from companies such as OpenAI. Tesla also canceled job offers for a number of new hires, according to a Tesla employee, although it remains unclear if the rescinded offers are part of the 10%-plus cut. https://tinyurl.com/yre4au4z

Demis Hassabis says Google AI spending will top US$100 billion.

Google will spend more than US$100 billion over time developing its artificial intelligence technology, said AI chief Demis Hassabis, who made the comments at a TED conference in Vancouver on Monday, according to Bloomberg. The figure underscores the race underway among big tech companies investing deeply in AI. Hassabis was responding to a question about a joint effort by Microsoft and OpenAI to build a supercomputer called Stargate, details of which were first reported by The Information. The companies could spend up to US$100 billion on the effort by 2028, The Information previously reported. Hassabis didn’t specify a time frame for Google’s investment. https://tinyurl.com/ypazrs2y

Microsoft looks to double new data center capacity amid AI boom.

Microsoft is planning to dramatically scale up its data center capacity as it rushes to meet demand for training and running large-scale AI models, Business Insider reported on Wednesday, citing an internal presentation from the company’s cloud business. The company has added more than 500 megawatts of new datacenter capacity since July and plans to double its new capacity in the first half of 2024, according to the report. The increase comes as Microsoft is wooing developers to build and run AI applications on its Azure cloud platform while simultaneously building supercomputers to support large-scale AI models developed by OpenAI, the startup that Microsoft has invested billions of dollars in and whose technology underlies Microsoft’s own suite of AI applications. Microsoft has been discussing plans to build a new supercomputer for OpenAI that could cost as much as US$100 billion, The Information reported last month. https://tinyurl.com/2neeb7nv

Meta updates its AI assistant and releases smaller versions of Llama 3.

Meta Platforms on Thursday launched a new version of Meta AI, the artificial intelligence assistant available in its apps and Ray-Ban smart glasses. The assistant is powered by Llama 3, the latest generation of its flagship open-source large language model. The company also released smaller versions of Llama 3. The new version of Meta AI will be integrated into the search boxes of Facebook, Instagram, WhatsApp and Messenger. It will also be available through a website. Previously, users could only access Meta AI in the messaging inboxes of Meta’s apps. “Our goal is to build the world’s leading AI and make it available to everyone,” Meta CEO Mark Zuckerberg said in a post on Instagram announcing the releases. “The bottom line is, we believe that Meta AI is now the most intelligent AI assistant that you can freely use,” he added. The smaller versions of Llama 3 have 8 billion and 70 billion parameters, which are settings that encode what models learn during training. The company is still training a version with more than 400 billion parameters, Zuckerberg said. Meta said in a blog post that the released versions of Llama 3 perform better than similarly sized models from rivals including Google, Mistral and Anthropic. https://tinyurl.com/yxk9ucpb

Baidu says Ernie AI chatbot now has 200 million users.

The number of users of Baidu’s Ernie Bot, China’s most popular ChatGPT-style chatbot, has doubled in recent months to more than 200 million, according to the company. Robin Li, chief executive of the Beijing-based internet giant, said at a conference Tuesday that the company’s Chinese-language chatbot now has over 200 million users and more than 85,000 enterprise clients. He added that Ernie Bot’s application programming interface is being used 200 million times each day, according to a transcript of his remarks, meaning users have been querying the chatbot that many times daily. Baidu said in December that its chatbot had 100 million users, and in February said the technology had begun to contribute to Baidu’s top line. OpenAI Chief Executive Sam Altman said in November that the company’s ChatGPT had 100 million weekly active users. ChatGPT remains the world’s largest AI chat platform, receiving 1.77 billion desktop and mobile visits worldwide in March, including repeat visits from the same individuals, according to data analytics platform Similarweb. Google’s Gemini had more than 433.5 million visits worldwide to its desktop and mobile sites in March, according to Similarweb. https://tinyurl.com/y3sb2cht

Apple spent US$16 billion on manufacturing in Vietnam since 2019.

Apple has spent more than US$16 billion on the manufacturing of products and components in Vietnam since 2019 and plans to further increase spending in the country, a local Vietnamese newspaper reported. The details come amid a two-day visit by Apple CEO Tim Cook to Vietnam, where HomePods, AirPods and Apple Watches are assembled by Chinese and Taiwanese manufacturing partners. Apple also buys iPhone displays that are assembled by South Korean firms such as Samsung and LG with factories in Vietnam. Apple has looked to places like Vietnam and India to expand its manufacturing beyond China to hedge against geopolitical and supply chain risk. However, Vietnam lacks a large and mature manufacturing and engineering workforce, making it difficult to produce the large volumes that Apple requires for products such as the iPhone. https://tinyurl.com/mr3cf7yu

Shares of critical chip firm ASML drop 5% as sales miss expectations with 22% fall.

Shares of ASML on Wednesday fell as the company missed sales forecasts, but stuck to its full-year outlook. ASML’s stock was down around 4.5% in early European trade after the results. Here’s how ASML did versus LSEG consensus estimates: Net sales: 5.29 billion euros (US$5.62 billion) versus 5.39 billion euros expected. Net profit: 1.22 billion euros versus 1.07 billion euros expected. Net sales fell 21.6% year-on-year while net income dropped 37.4%. ASML’s net sales fell in the middle point of the company’s guidance. Net bookings for ASML’s machinery, a closely watched booking, totaled 3.6 billion euros in the first quarter, down 4% year-on-year but plunging nearly two thirds versus the December quarter. ASML is one of the most important semiconductor firms in the world, producing tools known as extreme ultraviolet lithography machines, which are required to manufacture the most advanced chips globally. Last year, weak demand for consumer electronics such as smartphones and laptops hit chipmakers that produce semiconductors for those devices. That has in turn led to slightly weaker call for ASML’s gear. However, various semiconductor firms across the board, such as memory chipmaker Samsung, are seeing a rebound in demand. Part of ASML’s bullishness comes from the fact that Samsung, TSMC and Intel are ramping up production capacity in America, with the support of funding from the U.S. CHIPS and Science Act. “I think by 2025 you will see all three of those coming together. New fab openings, strong secular trends and the industry in the midst of its upturn,” Roger Dassen, chief financial officer of ASML, said in a pre-recorded video interview. ASML is yet to address any impact from export restrictions to China in the first quarter. https://tinyurl.com/33m4db86

TSMC cuts chip market outlook as consumer weakness persists.

Taiwan Semiconductor Manufacturing Co. scaled back its outlook for a chip market expansion, cautioning that the smartphone and personal-computing markets remain weak. The world’s largest maker of advanced chips cut its expectations for 2024 semiconductor market growth — excluding memory chips — to about 10%, from above that figure. Chief Executive Officer C. C. Wei also trimmed his growth forecast for the foundry sector, which TSMC leads. Meanwhile, the company maintained its estimates for spending at anywhere between US$28 billion and US$32 billion amid capacity expansion and upgrades this year. “Macroeconomic and geopolitical uncertainty persists, potentially weighing on consumer sentiment and end-market demand,” Wei told analysts on a conference call. TSMC’s stock slid more than 6% in Taipei, the biggest intraday decline in about 18 months. The outlook overshadowed what was otherwise a solid beat on projected revenue that reaffirmed the growth TSMC and other chipmakers are seeing from demand for all things artificial intelligence. The new forecast also highlights the diverging fortunes of those who make chips for consumer products and those who are designing and manufacturing the most advanced chips for AI processing. TSMC’s forecasts may prove to be a sign of what’s to come as other chip giants prepare to post earnings. ASML Holding NV — the sole provider of the world’s most advanced chipmaking machines — reported a 22% miss on first-quarter bookings on Wednesday. Other companies including Intel Corp. report next week. https://tinyurl.com/urpv3npd

Tesla recalls all 3,878 Cybertrucks over pedal problem.

Tesla has recalled all 3,878 Cybertrucks sold to customers since the first deliveries on November 30, due to an issue with the pick-up truck’s accelerator pedal, the National Highway Traffic Safety Administration disclosed Friday. The pedal pad “may dislodge and become trapped by the interior trim,” increasing the risk of collision, the NHTSA said. Unlike many Tesla recalls, which involve software updates “over-the-air,” in this case Tesla needs to replace or rework the accelerator pedal on every car in person. The recall of Tesla’s first new vehicle in years follows layoffs of more than 10% of Tesla’s staff, and the departure of two key executives, Drew Balingo and Rohan Patel this week. Tesla shares are down nearly 40% from the start of the year. https://tinyurl.com/yc57xhsy

Global iPhone shipments fell 9.6% in the first quarter, another sign of Apple’s woes this year.

Samsung, based in South Korea, beat its American counterpart by 10 million units in the first quarter, according to a report released on Monday by the market researcher International Data Corporation. Samsung regained its top spot as the smartphone maker with the highest shipments, a title it lost in the last three months of 2023. iPhone shipments are a closely watched metric because the devices comprise the bulk of Apple’s sales. The company sold US$69.7 billion of iPhones in the three months ending December 31, according to the company’s most recent quarterly report. Services came in second at US$23.1 billion. Apple is facing a slew of challenges this year. iPhone sales fell in China, a key market. In recent months, the company abandoned an expensive and decadelong electric-vehicle project, and like other Big Tech companies, Apple was recently hit with an antitrust lawsuit by the US Justice Department. Apple didn’t immediately respond to a request for comment from Business Insider sent outside regular business hours. Global smartphone shipments rose for a third straight quarter, up 7.8% year over year, signaling a rebound in the overall industry. In 2023, annual shipments fell 3.2% compared with the previous year. But in 2022, the annual decline was 11.3%, marking the lowest numbers since 2013 because of weak demand and inflation. Both Apple and Samsung saw a drop in year-on-year shipments, while the Chinese manufacturers Xiaomi and Transsion saw close to a 34% and 85% rise, respectively, from the first quarter last year, according to the IDC report. https://tinyurl.com/43xbtmey

Boston Dynamics just unveiled a fully electric, freakishly flexible humanoid robot.

In the months and years ahead, we’re excited to show what the world’s most dynamic humanoid robot can really do—in the lab, in the factory, and in our lives. We designed the electric version of Atlas to be stronger, more dexterous, and more agile,” the company said. “Atlas may resemble a human form factor, but we are equipping the robot to move in the most efficient way possible to complete a task, rather than being constrained by a human range of motion. Atlas will move in ways that exceed human capabilities. The video shows Atlas lying on the ground, but then its legs twist around backward and prop the robot up as it stands to full height, swivels on its torso, and walks toward the camera. Boston Dynamics says it’s exploring commercial uses for the new Atlas, beginning with Hyundai, which acquired the robotics firm in 2021. Competitor Agility Robotics has a partnership that lets Amazon use its bipedal robots, called Digit, to lift and move items in some warehouses. Boston Dynamics says the fully electric Atlas “will be stronger, with a broader range of motion than any of our previous generations.” Besides Atlas, Boston Dynamics has also unveiled four-legged doglike robots called Spot that some police departments have started using. An artist-in-residence at SpaceX has even trained some Spot robots to paint, and now they have their own art exhibit. Atlas may have even helped inspire Tesla’s humanoid robot, Optimus. Boston Dynamics founder Marc Raibert said on a recent episode of Lex Fridman’s podcast that “it’s hard not to think that seeing what Atlas is doing is a little bit of an inspiration” for the Tesla Bot. https://tinyurl.com/5n99ps8c

Netflix password crackdown delivers millions of new customers.

Netflix showed that its password-sharing crackdown continues to bear fruit, delivering its strongest first-quarter customer additions since the pandemic and further strengthening its position as the dominant global streamer. The company added 9.33 million subscribers in the first quarter, more than five times the number of customers it added during the same period a year earlier, with its efforts to limit password sharing continuing to bear fruit. Netflix began limiting password sharing in earnest about a year ago. Netflix has spent the last year rolling out that initiative, working to expand its ad business and changing its line-up of prices and plans to better position itself for the future. Early next year, the company plans to stop providing investors quarterly membership numbers and the average revenue generated per member, saying it now has multiple pricing tiers in a variety of markets. Netflix said it would add annual revenue guidance. Netflix ended the first quarter with 269.6 million paying customers globally and said it now has an audience of more than a half billion people. Netflix’s subscriber growth in the first three months of 2024 was slower than the fourth quarter of last year, when it added 13.1 million subscribers, but remained robust, topping some Wall Street analyst forecasts. It expects net customer additions during the second quarter to be lower than the first quarter due to seasonality. Despite the strong first-quarter results, shares of Netflix fell 4.6% in after-hours trading. The company gave a softer-than-expected revenue outlook for the current quarter, and the stock had risen more than 25% this year ahead of the earnings report. https://tinyurl.com/5xymfjr5

Digital ad revenue growth decelerates again in 2023, per IAB ad revenue report.

Ad revenue growth decelerated for the second year in a row after heady post-COVID ad revenue gains. US digital ad revenue grew at a slower rate in 2023 compared to 2022, hampered by inflation, climbing interest rates and advertising industry layoffs, according to the IAB/PwC Internet Advertising Revenue Report released Tuesday. Digital ad revenues increased 7.3% from 2022’s total of US$209.7 billion. But in 2022, overall ad revenue growth still made in the double digits, with an average of 10.3% for the year. From CTV to audio to programmatic, multiple ad formats saw some form of correction from the pandemic’s sky-high revenue growth. Overall revenue growth also paled in comparison to 2021’s runaway post-pandemic growth of 35.4% YOY. https://tinyurl.com/mryev7ez

Call of Duty league billionaire owners get break from Microsoft.

Microsoft Corp.’s Activision unit is offering teams competing in its professional Call of Duty League financial relief as the esports industry faces broad challenges generating profit. The teams, including ones owned by sports-business billionaires Robert Kraft and Stan Kroenke, will no longer be required to pay the league’s entry fees, according to a blog post on Tuesday. Previously collected fees will be returned. A lawsuit this year from a former owner identified the fees as US$27.5 million per franchise. https://tinyurl.com/44carpef

U.K. regulator finds flaws with Google’s ad privacy plan.

The U.K.’s privacy regulator believes Google’s proposal to eliminate online advertisers’ ability to track web users via “browser cookies” has flaws that would allow the tracking to continue even after it’s implemented, the Wall Street Journal reported, citing documents from the Information Commissioner’s Office. The regulator’s claims could be a hurdle for Google’s ad privacy initiative, called Privacy Sandbox, which Google has said it plans to roll out widely this year. The privacy regulator plans to share its recommendations with the Competition and Markets Authority, the U.K.’s competition watchdog, which is monitoring the rollout of Privacy Sandbox. The CMA could ask Google to make changes in light of the other agency’s findings, potentially delaying the system’s full release. Google said in January that it would begin phasing out browser cookies among 1% of its users. https://tinyurl.com/35yckvmv

Former TikTok data scientist reportedly alleges data sharing with ByteDance in China.

A former TikTok data scientist is alleging that he was instructed to share biweekly reports containing U.S. user data with ByteDance workers in Beijing, Fortune reported on Monday. The allegations could further jeopardize TikTok’s future in the United States as the Senate considers a bill that would force a sale or ban of TikTok if passed. The former data scientist, Evan Turner, worked at TikTok from April through September 2022. Turner also reported to a ByteDance executive in China, Fortune reported, despite being nominally reassigned to a Seattle-based manager as part of Project Texas, TikTok’s widely publicized effort to wall off American data from employees outside of the United States. In a statement posted to the social media platform X, TikTok called the Fortune story “inaccurate” without specifically denying Turner’s account. TikTok said that U.S. user data was isolated as part of Project Texas in January 2023, meaning that Turner’s tenure at the company would predate Project Texas. https://tinyurl.com/2ucy5vpp

China orders Apple to remove popular messaging apps.

China ordered Apple to remove some of the world’s most popular chat messaging apps from its app store in the country, the latest example of censorship demands on the iPhone seller in the company’s second-biggest market. Meta Platforms’ WhatsApp and Threads as well as messaging platforms Signal and Telegram were taken off the Chinese App Store Friday. Apple said it was told to remove certain apps because of national security concerns, without specifying which. “We are obligated to follow the laws in the countries where we operate, even when we disagree,” an Apple spokesperson said. These messaging apps, which allow users to exchange messages and share files individually and in large groups, combined have around three billion users globally. They can only be accessed in China through virtual private networks that take users outside China’s Great Firewall, but are still commonly used. https://tinyurl.com/4b34j3f6

Hong Kong Grants Conditional Approvals for Bitcoin, Ether ETFs.

Hong Kong has conditionally approved its first exchange-traded funds that invest directly in bitcoin and ether, several asset management firms said, a move that could boost the city’s status as a crypto hub and funnel more investor capital into the two biggest crypto tokens. At least three offshore Chinese asset managers plan to launch the ETFs soon. The Hong Kong units of Harvest Fund Management and Bosera Asset Management received conditional approval from Hong Kong Securities and Futures Commission for the ETF products, according to multiple media reports on Monday. China Asset Management’s Hong Kong unit said in a statement it received approval to provide virtual asset management services and is planning to launch bitcoin and ether ETFs. The timing of the ETF launches is unclear. The launch will be subject to conditions including listing approval by the Hong Kong Exchanges and Clearing Ltd., according to the SFC. https://tinyurl.com/yc2f4rdp

Booming AI demand threatens global electricity supply.

Electricity supply is becoming the latest chokepoint to threaten the growth of artificial intelligence, according to leading tech industry chiefs, as power-hungry data centres add to the strain on grids around the world. The power supply issue has also fuelled concerns about the latest technology boom’s environmental impact. Countries worldwide need to meet renewable energy commitments and electrify sectors such as transportation in response to accelerating climate change. To support these changes, many nations will need to reform their electricity grids, according to analysts. Research group Dgtl Infra has estimated that global data centre capital expenditure will surpass US$225 billion in 2024. Nvidia’s chief executive Jensen Huang said this year that US$1 trillion worth of data centres would need to be built in the next several years to support generative AI, which is power intensive and involves the processing of enormous volumes of information. Such growth would require huge amounts of electricity, even if systems become more efficient. According to the International Energy Agency, the electricity consumed by data centres globally will more than double by 2026 to more than 1,000 terawatt hours, an amount roughly equivalent to what Japan consumes annually. US data centre electricity consumption is expected to grow from 4 per cent to 6 per cent of total demand by 2026, while the AI industry is forecast to expand “exponentially” and consume at least 10 times its 2023 demand by 2026, said the IEA. Even before the generative AI boom, some major markets were struggling to keep up with demand. It can take years for new renewable energy projects such as wind farms to gain regulatory approval and be connected to the grid. There is also a need in some places to build new transmission lines that carry electricity from one point to another. The concerns have driven interest among data centre developers in options such as onsite power generation and nuclear energy, with Microsoft this year hiring a director of “nuclear development acceleration”. https://archive.ph/rU0ab

Arcadia raises US$50 million to bring AI to community solar.

Arcadia Power, a global utility data and community solar platform, announced the recent close of a US$50 million round of funding. The company will use the new funding to support growth of its community solar program along with leveraging artificial intelligence to delve into its energy data. The latest round of funding includes a fund managed by Macquarie Asset Management as a new equity investor, alongside existing investors Energy Impact Partners, J.P. Morgan Asset Management, BoxGroup, G2 Venture Partners, Camber Creek, Triangle Peak Partners, and Broadscale Group. The company said it also raised a new US$30 million credit facility with J.P. Morgan. In 2018 the company raised US$25 million to expand its community solar program, and at the same time announced that is had secured over 120 MW of solar power for its community solar programs. This funding followed a US$6 million investment in 2017 that was led by G2VP, with participation from ValueAct Spring Fund, McKnight Foundation, Energy Impact Partners, Cendana Capital, Wonder Ventures, BoxGroup, and existing investors. The company reports that it manages the nation’s largest community solar portfolio with more than 2 GW of solar under management. https://tinyurl.com/226jhmd5