Last week, the market had modest gains, driven in the second half of the week. For the week, Dow Jones gained 2 points, S&P 500 index was up 0.2% and Nasdaq composite rose 0.7%. S&P 500 hit its 2023 high on Friday, and Nasdaq is coming up to that level. The market rally could be ready to run, but sentiment is already bullish. Out of 128 closely held companies that achieved valuations at or above US$1 billion as of 2021, nearly 90% were estimated to be valued lower in private trades, and about a third of the startups’ valuations in the group dropped below US$1 billion. SpaceX is discussing allowing a sale of company shares by employees and other investors at a valuation of US$175 billion or more, an increase of at least 17% over the last such offering. Fidelity and Jane Street backed CoreWeave at a US$7 billion valuation. CoreWeave, is a cloud computing provider that’s among the hottest startups in the artificial intelligence race. Elon Musk is looking to raise US$1 billion for xAI, his AI company. OpenAI rival, Mistral nears a US$2 billion valuation with Andreessen Horowitz, Nvidia, and Salesforce backing. Google’s new Gemini AI model is getting a mixed reception after its big debut yesterday, but users may have less confidence in the company’s tech or integrity after finding out that the most impressive demo of Gemini was pretty much faked. AMD holds launch event for AI chips that challenge Nvidia. AMD stock didn’t move on the news but is up 82% so far this year. Insiders sold or filed to sell about 370,000 shares last month. Moves come after the stock more than tripled in value in 2023. In Canada, there was news of a number of start ups securing funding, totaling ~$220 million, well below weekly 2020 and 2021 highs, but nonetheless encouraging for investors’ innovation risk appetite.
Canadian Technology Capital Markets & Company News
$86 million Series D extension has Koho targeting growth and profitability.
Koho says it has surpassed one million users and a $100 million run rate, with “hundreds of millions” on its loan book. The funding comes via an all-primary, all-equity $86 million extension to that Series D round, featuring a mix of both new and existing investors: BDC, Drive Capital, Eldridge Industries, HOOPP, Portage, Round13, and TTV. Notably, Koho says it has maintained the $800 million near-unicorn valuation it established in 2021, bucking the trend of markdowns that have plagued both FinTech and venture capital more broadly over the past two years. https://tinyurl.com/mr24ef54
ContactMonkey raises $55 million Series A from Updata Partners.
Toronto-based email communications startup ContactMonkey has secured $55 million in Series A funding. According to the company, the investment came from just one investor: American growth equity firm Updata Partners. https://tinyurl.com/y6jbsk2m
Asian food delivery service Fantuan secures US$40 million series c round.
Burnaby, British Columbia-based Fantuan has closed $54.3 million (US$40 million) in Series C funding for its Asian food ordering and delivery platform. The round, which closed in November, was co-led by GrubMarket, a San Francisco-based e-commerce company, and Celtic House Asia Partners, a lead investor in Fantuan’s seed round and an investor in GrubMarket. https://tinyurl.com/5n6z7b7d
Founded by Alphabet alums, Canadian-led AI hardware startup Extropic secures over $14 million.
Canadian-led, United States-based Extropic has closed $14.1 million in seed funding to build “physics-based computing” hardware for generative artificial intelligence (AI). This summer, The Information reported that Extropic—which was previously known as Qyber—was working on a chip designed to run large language models. Extropic is developing “a novel full-stack paradigm of physics-based computing” for generative AI. https://tinyurl.com/bdewppev
ThoughtExchange Raises $13.5 million in equity funding.
ThoughtExchange, a Vancouver, Canada-based company providing an AI engagement and survey platform, raised $13.5 million in Equity funding. The round saw participation from InBC Investment Corp. along with existing investors Information Venture Partners, Yaletown Partners, Voyager Capital, HarbourVest and First Generation Capital. ThoughtExchange is an AI-accelerated engagement and survey platform. By combining deep AI capabilities with proprietary qualitative survey methods, the SaaS platform bridges the gap between quantitative sentiment and actionable solutions. Today, its customers span school districts representing thousands of educational leaders and nearly 40 million students across North America, as well as large public and corporate organizations. https://tinyurl.com/3kb5hy9u
Innovate BC, NRC IRAP invest $2 million into 13 BC cleantech companies.
Thirteen cleantech companies based in British Columbia have received a combined $2 million in research and development (R&D) funding from Innovate BC and the National Research Council of Canada Industrial Research Assistance Program (NRC IRAP). The funding came from the BC Fast Pilot program, which aims to help small and medium-sized businesses design, build, and operate a pilot plant or small demonstration of their technology. According to a statement released Monday, the funding will be used to support cleantech projects that the companies are piloting. Since the program started in 2019, $9.9 million has been invested into 75 pilot projects, including the most recent group of recipients. Each project in this latest round is receiving up to $200,000 from Innovate BC and NRC IRAP. https://tinyurl.com/etst4x2x
EZee Assist reveals $1.85 million in funding to help franchises manage institutional memory.
EZee Assist wants to make it easier for franchise and hub-and-spoke businesses to share internal, often critical, but difficult-to-access operational knowledge. Founded earlier this year, the Toronto-based software startup has closed $1.85 million in previously unannounced pre-seed funding to tackle this problem with the help of generative artificial intelligence (AI). https://tinyurl.com/59sza8ce
Sixty Degree Capital closes $338 million for third venture fund.
Toronto-headquartered Sixty Degree Capital has completed a final close of its third venture fund. The fund earmarks $338 million (US$250 million) to invest in enterprise software and healthtech startups. Sixty Degree Capital, which has invested in Canadian startups like Miovision and Northern Biologics, said its third fund will invest in tech companies between the Series A and pre-IPO stages. The fund is already actively deploying capital into companies like Cato Networks, Docker, NextPoint, Strive Health, Navan, Aqua Security, Arctic Wolf, and Paperspace. Sixty Degree Capital’s recent fund close comes amid a resurgence in investment for Canadian software businesses. According to a recent report from Canadian accelerator L-SPARK, Canada’s SaaS sector saw a marked year-over-year rebound in investment in 2023, tracking $6.9 billion invested in Canadian SaaS startups in 2023, roughly double the $3.9 billion invested in 2022. https://tinyurl.com/ss8a9ztb
Global Markets: IPOs, Venture Capital, M&A
Roughly a third of unicorns see valuations shrink, limiting IPO prospects.
A sharp reset in private market valuations has stripped numerous so-called unicorns of their status, making it harder for some startups to pursue their long-delayed initial public offerings. Out of 128 closely held companies that achieved valuations at or above US$1 billion as of 2021, nearly 90% were estimated to be valued lower in private trades, according to Forge Global, an alternative trading venue operator. About a third of the startups’ valuations in the group tracked by Forge dropped below US$1 billion — the threshold to be considered a unicorn. These firms have lately avoided soliciting fresh funding for fear of attracting a lower valuation than in their previous rounds, which can carry a stigma. Only 2% of a broader group of 513 unicorns monitored by Forge from the end of 2021 through Sept. 30 have lost their status through a down round. The rising tide of optimism that minted a wave of unicorns in 2021 now looks more like a mania, one that spread far beyond private assets. More than 1,400 companies raised a combined US$376 billion in the busiest year ever for US listings, according to data compiled by Bloomberg. Yet despite a market rally this year which saw the S&P 500 index climbing 19%, companies that went public in 2021 are still on average 18% below their offer prices. https://archive.is/j9y4u
SpaceX valuation could surge 17% in new tender offer.
SpaceX is discussing allowing a sale of company shares by employees and other investors at a valuation of US$175 billion or more, an increase of at least 17% over the last such offering, Bloomberg reported. The size of the tender offer could range between US$500 million and US$750 million and value SpaceX shares at about US$95 each, Bloomberg said. The rocket company, which was founded by Elon Musk, was reportedly valued at $150 billion in a tender offer in the summer. https://tinyurl.com/jaukxwv9
Fidelity and Jane Street back CoreWeave at US$7 billion valuation.
CoreWeave, a cloud computing provider that’s among the hottest startups in the artificial intelligence race, said it closed a minority stake sale to investors led by Fidelity Management & Research Co. Investment Management Corp. of Ontario, Jane Street, JPMorgan Asset Management, Nat Friedman, Daniel Gross, Goanna Capital and Zoom Ventures also participated in the deal, CoreWeave said, confirming an earlier Bloomberg News report. The transaction values the company at US$7 billion, said people with knowledge of the matter, asking not to be identified discussing confidential information. https://tinyurl.com/3sav3mx9
SoftBank Corp takes 51% of Cubic Telecom for US$513M to drive into the connected car world.
Automakers and technology companies are building ever-more sophisticated digital platforms into the future generations of cars and other vehicles. A startup that’s built a system to makes it easy to connect that software and hardware to wireless networks has picked up a major round of funding. Cubic Telecom, which provides a software-based networking solution for vehicles (and other devices) to link up with mobile networks in whichever country they happen to be, has picked up €473 million (US$513 million at today’s rates) from SoftBank Corp. SoftBank is taking a 51% stake in the Dublin-based startup, valuing it at just over US$1 billion (€927 million). This effectively makes Cubic Telecom a consolidated subsidiary of SoftBank. Cubic Telecom is currently linking up 450,000 new vehicles — consumer cars, trucks and more — using its platform each month, and orders in the books are going to raise that rate “exponentially” over the next five years, the company said. https://tinyurl.com/y7f843cd
VAST Data eyes IPO after valuation surges to US$9.1 billion in latest fund raise.
VAST Data is preparing for an initial public offering as it raised US$118 million in the latest funding round that valued the data infrastructure company at US$9.1 billion, more than double what it was worth two years ago, the company told Reuters in an interview. Fidelity Management & Research led the funding, with participation from venture capital firms New Enterprise Associates, BOND Capital and Drive Capital, in a rare late stage financing round amid a slow funding environment this year. VAST Data said it has tripled its revenue year-over-year, crossing $200 million in annual recurring revenue by end of September as generative AI workload surges. The New York-based company helps enterprises with their data-intensive computing needs. Its software lets clients catalog, refine and preserve both structured and unstructured data, an increasing demand as AI labs such as OpenAI use huge datasets train large language models and enterprises try to mine insights from their proprietary data. https://tinyurl.com/376hp68j
Smile DirectClub to liquidate after rescue deal fails.
A potential deal to rescue the once-buzzy tooth straightening startup Smile Direct Club has failed and the company is shutting down, the company said Friday. The publicly-traded company, which distributes and manages temporary braces for people looking to straighten their teeth, filed for bankruptcy in September and had been negotiating a rescue deal, which failed to garner support from its creditors. Smile Direct Club went public at an US$8.9 billion valuation in 2019 and raised more than US$1.7 billion from investors, including in its initial public offering. It’s part of a fleet of once-high flying startups that have shut down in recent weeks, including freight broker Convoy, healthcare software startup Olive AI and homebuilding startup Veev. Current customers are expected to continue to pay for their aligners if they are on payment plans, according to Smile DirectClub’s website. The company is no longer taking new customers and customer support will stop, the website says. The lifetime guarantee for aligners no longer exists. https://tinyurl.com/36jvwes7
Elon Musk is looking to raise US$1 billion for xAI.
Elon Musk is looking to raise 1/44 of a Twitter for his AI company, xAI. In other words, the man behind Tesla, SpaceX and X is seeking US$1 billion in funding for his next venture. According to an SEC filing, Musk has raised about US$135 million so far from four unnamed investors, with the first sale occurring on November 29. That means he still has about US$865 million to go to meet his US$1 billion goal. So far, xAI is working on Grok, which is Musk’s answer to OpenAI’s ChatGPT, Google’s Bard or Anthropic’s Claude. https://tinyurl.com/4ss5vfy3
OpenAI rival Mistral nears US$2 billion valuation with Andreessen Horowitz backing.
Mistral AI is in the final stages of raising roughly €450 million (US$487 million) from investors including Nvidia Corp. and Salesforce Inc. in a funding round that values the OpenAI rival at about US$2 billion, according to people familiar with the deal. The deal includes more than €325 million in equity from investors led by Andreessen Horowitz, which is in talks to invest €200 million in funding, the people said, asking not to be identified because the discussions are private. Nvidia and Salesforce agreed to contribute another €120 million in convertible debt, they said. Some of the details are in flux and may still change, the people said. The startup’s three co-founders agreed to sell more than €1 million apiece in equity as part of the deal, according to documents detailing the transaction terms that Bloomberg reviewed. Three other Mistral insiders are set to offload shares. The US$2 billion valuation for a company less than a year old underscores the tech world’s unbridled optimism about the future promise and profit of artificial intelligence companies. Mistral makes open-source software that powers chatbots and other generative AI tools, a field that requires considerable computing resources. It describes itself as less expensive and more efficient than US peers. Mistral, which has emerged as one of Europe’s most prominent AI startups, was founded by former scientists from Alphabet Inc.’s DeepMind and Meta Platforms Inc. who had worked on large language models similar to those offered by Sam Altman’s OpenAI. Mistral raised a US$113 million initial round in June, an enormous sum for a European tech startup. https://archive.is/4F3dT
Sam Altman-backed chip startup inked US$51 million deal with OpenAI.
OpenAI in 2019 signed a nonbinding letter of intent with chip developer Rain AI to spend US$51 million on the startup’s chips when they became available, according to a person familiar with the situation. The deal shows how OpenAI business was sometimes entwined with its co-founder and CEO Sam Altman’s personal investments. Rain raised its 2018 seed round from Altman, whose various business activities may have factored into the board’s decision to abruptly fire him just over two weeks ago. Altman this summer told The Information that he tries to “avoid things that are directly an issue with the company you’re running and disclose everything.” He didn’t immediately respond to a request for comment. Wired first reported the OpenAI-Rain AI deal. Rain AI’s chips, known as “neuromorphic processing units,” are inspired by the structure of the human brain. The company claims that these chips require less power than the traditional Nvidia graphics processing units commonly used in the industry, and will allow AI models to be customized, or “fine-tuned,” based on their surroundings in real time. Rain AI’s chips are not yet available for purchase. These features were a strong draw for OpenAI, which hoped to use the chips to reduce its data center costs and deploy its models in devices like phones and watches, the person said. The reason behind the deal has not been previously reported. Altman has previously spoken with iPhone designer Jony Ive and SoftBank CEO Masayoshi Son about building a new AI hardware device, The Information reported. One of Rain AI’s investors, Saudi Aramco-owned Prosperity7, was recently forced by the U.S. government to sell its stake in the startup due to concerns that intellectual property could leak to China given growing connections between China and Saudi Arabia, Bloomberg reported. The divestment is unlikely to affect the OpenAI deal, the person said. However, OpenAI has not allocated any money towards Rain AI’s chips this year and does not plan to next year, a second person familiar with the situation said. https://tinyurl.com/3znes3dv
Ex-OpenAI director Reid Hoffman says we still don’t ‘fully know’ why board forced out Altman.
Three weeks after OpenAI’s board briefly pushed out CEO Sam Altman without providing a specific reason for its decision, former director Reid Hoffman says he’s still puzzled by what took place and why. “Reading the blog post was like, ‘What’s going on?’” Hoffman, the co-founder of LinkedIn and a prominent startup investor, said onstage at Wired’s LiveWired conference in San Francisco on Tuesday. “I still don’t think we fully know.” Altman was ultimately brought back to lead the high-profile artificial intelligence startup after a major push by top investors and the threat of a mass exodus among the company’s workforce. The board is now undergoing a facelift, which includes the departure of some longtime directors, but all the parties involved have remained largely mum on what led to the initial chaos. https://tinyurl.com/4ekh2rhr
Google delays Gemini launch from next week to January.
Google announced Gemini at I/O 2023 as its next-generation foundation model. According to a report today, Google was originally going to launch Gemini next week, but that has now been delayed until January. The Information reported how Gemini was supposed to get a big reveal next week with a series of events in California, New York, and Washington, which is aimed at politicians and policymakers. Sundar Pichai decided to delay the launch after Google “found the AI didn’t reliably handle some non-English queries.” Global language support is top of mind, with Google ultimately aiming to match or surpass OpenAI’s GPT-4. Sources in today’s article say the company has “met that standard in some respects.” The CEO said in November that the company is “focused on getting Gemini 1.0 out as soon as possible, make sure it’s competitive, state of the art, and we’ll build from there on.” At the moment, Google is said to still be “finalizing the primary, biggest version of Gemini.” https://tinyurl.com/yds3j3mh
Google’s best Gemini demo was faked.
Google’s new Gemini AI model is getting a mixed reception after its big debut yesterday, but users may have less confidence in the company’s tech or integrity after finding out that the most impressive demo of Gemini was pretty much faked. A video called “Hands-on with Gemini: Interacting with multimodal AI” hit a million views over the last day, and it’s not hard to see why. The impressive demo “highlights some of our favorite interactions with Gemini,” showing how the multimodal model (i.e., it understands and mixes language and visual understanding) can be flexible and responsive to a variety of inputs. Just one problem: The video isn’t real. “We created the demo by capturing footage in order to test Gemini’s capabilities on a wide range of challenges. Then we prompted Gemini using still image frames from the footage, and prompting via text.” (Parmy Olson at Bloomberg was the first to report the discrepancy.) So although it might kind of do the things Google shows in the video, it didn’t, and maybe couldn’t, do them live and in the way they implied. In actuality, it was a series of carefully tuned text prompts with still images, clearly selected and shortened to misrepresent what the interaction is actually like. https://tinyurl.com/y2twf9wj
UK regulator and U.S. FTC examine Microsoft-OpenAI deal.
The UK’s antitrust regulator is weighing whether to investigate Microsoft’s deal with OpenAI on antitrust grounds, the agency said on Friday. Meanwhile, the Federal Trade Commission in the U.S. is also looking into the partnership between the two companies to see whether it violates antitrust law, Bloomberg reported. The FTC’s inquiry isn’t yet a formal investigation, the report said. The UK Competition and Markets Authority will gather input from the companies over the coming month to gauge whether Microsoft’s multibillion dollar investment in OpenAI, which gave Microsoft 49% of the startup’s future profits up to a theoretical cap and for the rights to reuse OpenAI’s software in its own products, constitutes a “merger situation” under UK law. If it does, the regulator may open an investigation into whether the deal stifles competition, a process that could result in the government forcing Microsoft to explain and potentially unwind certain aspects of its OpenAI deal. The regulator is now asking the two companies and “interested third parties” to submit comments before it decides if it should launch an investigation. Parties have until January to submit comments. In a statement, Microsoft president Brad Smith said that Microsoft’s deal with OpenAI maintains “independence for both companies” and “is very different from an acquisition such as Google’s purchase of DeepMind in the UK. https://tinyurl.com/4jjpaews
AMD holds launch event for AI chips that challenge Nvidia.
Advanced Micro Devices on Wednesday released more details about its MI300 chips for artificial intelligence computing, which CEO Lisa Su has said will help the company generate billions of dollars in revenue and make up ground against Nvidia. AMD said Microsoft, Oracle and Meta—all of which are also major Nvidia customers—have already bought or plan to buy the new chips. AMD also said the MI300 outperforms Nvidia’s H100 graphics processing unit, including in the amount of memory it holds. However, Nvidia has already announced a new GPU, known as the H200, which has more memory and will be available in the second quarter of 2024. AMD stock didn’t move on the news but is up 82% so far this year, in anticipation of new revenue from the new chips. https://tinyurl.com/4p4knwpa
Nvidia insiders unload shares after 220% AI rally.
Insiders sold or filed to sell about 370,000 shares last month. Moves come after the stock more than tripled in value in 2023. While corporate insiders are increasingly betting on shares of their own firms, bosses at the S&P 500’s best-performing company are cashing in. Nvidia Corp. executives and directors last month sold or filed paperwork showing they intend to sell roughly 370,000 shares worth about US$180 million, according to data compiled by the Washington Service. If all of the shares were sold, it would be the biggest monthly disposal by dollar value in at least six years. https://tinyurl.com/mt9esw5r
TikTok owner ByteDance offers to buy back US$5 billion worth of investor shares as IPO prospects remain slim.
Beijing-based ByteDance, the owner of TikTok, is offering to buy back up to US$5 billion worth of shares from existing investors as its initial public offering plan remains up in air, according to sources briefed on the matter. The price offered to investors is similar to the US$160 per share offered to employees, which puts the company’s total valuation at US$268 billion, or about 10 per cent lower compared with the value a year ago when it conducted a US$3 billion share buy-back plan for earlier investors, one source, who declined to be named as the matter is private, told the South China Morning Post. https://tinyurl.com/3xzta82y
Mastercard to buy back shares worth US$11 billion.
Mastercard on Tuesday said its board had approved a new share repurchase program, authorizing the company to buy back up to US$11 billion of its Class A shares. The payments processing giant also raised it s quarterly dividend to 66 cents per share over previous dividend of 57 cents. The company said its new share repurchase program will become effective at the completion of its previously announced US$9 billion program. Shares of Mastercard rose about 1% to US$411.75 in after-hours trading. Its rival Visa in October had also authorized a new US$25 billion multi-year share repurchase program. https://tinyurl.com/yzck7zzw
Uber, Jabil and Builders FirstSource set to join S&P 500.
Uber Technologies Inc. has been added to the S&P 500 Index, after reporting two straight quarters of operating profits that have fueled a big rally in the ride-sharing company this year. Jabil Inc. and Builders FirstSource Inc. are set to join too. San Francisco-based Uber and the latter two companies will replace Sealed Air Corp., Alaska Air Group Inc. and SolarEdge Technologies Inc. in the S&P 500, respectively. The new additions will join the index prior to the market opening on Dec. 18, S&P Dow Jones Indices said in a press release. Shares of Uber were up 7.3% in after-hours trading. They’ve gained 132% this year. Shares of manufacturing services company Jabil were up by 4.6% and supplier and manufacturer Builders FirstSource saw post-market gains of close to 7%. Wall Street analysts had predicted Uber would be added to the index after the company’s third quarter results showed a second consecutive profitable quarter — a financial viability requirement for inclusion in the benchmark index. Prior to its inclusion, Uber was one of the largest US companies eligible to be added to the S&P 500 with a market capitalization of over US$118 billion. https://tinyurl.com/ytw86nwk
Bitcoin bump boosts Robinhood crypto trading.
Robinhood’s crypto trading volume surged 75% in November compared with one month prior, according to preliminary trading data the company disclosed on Monday, while its stock trading volume remained relatively flat. The spike comes as crypto prices have surged in recent weeks, with the price of bitcoin rising more than 20% over the past month and topping US$42,000 in recent days, highs not seen since before the popular terraUSD and luna cryptocurrencies collapsed in May 2022. Robinhood’s update today suggests it processed around US$4 billion in crypto trades last month, based on its previously disclosed October total, the most since FTX collapsed in November 2022. The surge in crypto investor enthusiasm has likely also boosted trading volumes on crypto exchange Coinbase, which has seen its stock price surge more than 60% over the past month. https://tinyurl.com/xh2n5hpm
Twilio lays off 5% of workforce.
Software company Twilio is cutting 5% of its workforce, the company said Monday, in its third round of layoffs since September of 2022. The cuts affect about 300 employees in Twilio’s data and analytics business, according to regulatory filings. In an address to “Twilions”—the company’s term for its employees—CEO Jeff Lawson blamed the cuts on lackluster growth in its data unit, which recently lost its president Elena Donio. “Last year, we made the decision to invest, ahead of growth, in go-to-market for Segment,” Lawson said. “Unfortunately, that bet hasn’t led to the growth outcome we’d hoped for. As a result, we’re simply spending too much.” Twilio has recently come under pressure from activist shareholders. Activist investor Anson Funds recently called on Twilio to sell its data and analytics business, if not sell the entire company, The Information reported last week. Legion Partners is similarly pushing for changes at the company—the activist investors have amassed stakes worth US$50 million each. https://tinyurl.com/4skachad
Virgin Galactic shares plunge after Branson rules out further investment.
Virgin Galactic shares plunged more than 17% Monday, after British billionaire Richard Branson ruled out further investment in the company. In an interview with the Financial Times published Sunday, Branson said that his sprawling business empire no longer has “the deepest pockets” in the wake of the Covid-19 pandemic, adding that Virgin Galactic should have “sufficient funds to do its job on its own.” Virgin Galactic shares finished down 17.5%. The company, founded by Branson in 2004, last month announced job cuts and the suspension of commercial flights for 18 months by mid-2024. The cost-cutting is part of a plan to save cash to develop a larger spacecraft, dubbed Delta, that aims to take passengers past the edge of space. The group estimated that its current funding would carry it through to 2026, when Delta is scheduled to enter service. Virgin Investments remains the second-largest shareholder in Virgin Galactic, according to LSEG data, with a 7.69% holding, behind the 8.43% of State Street Global Advisors. https://tinyurl.com/4vpkwdpv
Another activist investor calls for Disney to add Nelson Peltz to Board.
Another activist investor is calling for Disney to add Nelson Peltz, co-founder of Trian Fund Management, to its board of directors. It puts additional pressure on Disney to reach a compromise with Peltz, who last week announced his intentions to mount a proxy challenge for seats on the company’s board. In a letter to Disney shareholders, Ancora, an investment firm based in Cleveland, said “a degree of shareholder-driven change is certainly warranted in Disney’s boardroom following an extended period of absentminded governance, ineffective succession planning, polarizing actions and sustained value destruction.” Ancora also argued that while Disney has blamed its missteps on the regime under former CEO Bob Chapek, Disney’s board is also responsible for the company’s struggles: it “was in the driver’s seat” before, during and after Chapek’s tenure. It endorsed Peltz, or a “qualified designee,” getting a board seat. News of Ancora’s letter was first reported by Axios. Last week, Peltz said Disney turned down his request for board seats. It also named Morgan Stanley’s retiring CEO James P. Gorman and former Sky CEO Sir Jeremy Darroach to its board—moves which Peltz said were an improvement to the status quo but not enough. https://tinyurl.com/4hdy7den
GameStop’s potential new strategy: Let Ryan Cohen buy other stocks with company cash.
Struggling retailer GameStop is giving its CEO and chair Ryan Cohen even more control, including the ability to use company cash to buy other stocks. In its quarterly report released Wednesday night, GameStop announced two changes to its corporate investment plan: company cash can now be used to buy equities instead of just short-term debt, and that Cohen is in charge of the investments. The company did not hold a quarterly conference call with Wall Street analysts, but Wedbush’s Michael Pachter called the decision “inane” and “alarming.” “Investors have a myriad of investment vehicles available to them and therefore do not need GameStop to act as a mutual fund. If GameStop truly believes in the value of its shares, it should use its excess cash to buy back stock,” Pachter said in a note to clients. The change comes as Cohen’s attempted turnaround at GameStop is floundering. https://tinyurl.com/mr4x7cp5
Meta’s AI chief doesn’t think AI super intelligence is coming anytime soon, and is skeptical on quantum computing.
Meta’s chief scientist and deep learning pioneer Yann LeCun said he believes that current AI systems are decades away from reaching some semblance of sentience, equipped with common sense that can push their abilities beyond merely summarizing mountains of text in creative ways. His point of view stands in contrast to that of Nvidia CEO Jensen Huang, who recently said AI will be “fairly competitive” with humans in less than five years, besting people at a multitude of mentally intensive tasks. “I know Jensen,” LeCun said at a recent event highlighting the Facebook parent company’s 10-year anniversary of its Fundamental AI Research team. LeCun said the Nvidia CEO has much to gain from the AI craze. “There is an AI war, and he’s supplying the weapons.” ″[If] you think AGI is in, the more GPUs you have to buy,” LeCun said, about technologists attempting to develop artificial general intelligence, the kind of AI on par with human-level intelligence. As long as researchers at firms such as OpenAI continue their pursuit of AGI, they will need more of Nvidia’s computer chips. Society is more likely to get “cat-level” or “dog-level” AI years before human-level AI, LeCun said. And the technology industry’s current focus on language models and text data will not be enough to create the kinds of advanced human-like AI systems that researchers have been dreaming about for decades. https://tinyurl.com/bdd7592n
Media, Streaming, Gaming & Sports Betting
Amazon doesn’t renew U.K. Premier League Rights. Amazon will stop broadcasting matches from the U.K.’s top soccer league in 2025.
The Premier League said Monday that it had sold four years of U.K. broadcast rights starting with the 2025-2026 season to Comcast’s Sky Sports and Warner Bros. Discovery’s TNT Sports for a total of US$8.5 billion. Prime Video has broadcast 20 out of the Premier League’s several hundred matches per season each year since it entered the market in 2019, and The Telegraph had reported that the company was interested in bidding for the next package of rights. But Amazon isn’t getting out of soccer entirely—through a separate deal, Prime Video will broadcast 17 Champions League games per year in the U.K. starting in 2024. https://tinyurl.com/2ubsatbw
Chinese e-commerce platform Temu drawing shoppers from US dollar stores -data.
Temu, the fast-growing Chinese e-commerce platform selling US$4 home decor and US$10 shirts, is successfully taking on U.S. dollar stores including industry leader Dollar General, according to the latest market share data. As of last month, Temu accounted for nearly 17% of market share in the United States within the discount stores categories, according to data analytics firm Earnest Analytics. That compares to 8% for the dollar chain Five Below, 43% for Dollar General and 28% for Dollar Tree. Temu launched in the United States in September 2022 and quickly became popular through its use of social-media influencers to tout its merchandise as better and more affordable than traditional stores. Temu uses a network of China-based manufacturers of cheap personal electronics, clothes and home goods. Factories and merchants on Temu send merchandise directly to Temu shoppers, using a trade exemption that allows shipments under US$800 to enter the U.S. duty-free. https://tinyurl.com/4vw5zkhs
Amazon slashes seller fees on cheap apparel.
Amazon said Tuesday that it plans to slash the commissions it takes on sales of apparel items under US$20. The move coincides with mounting competition from discount online clothing retailers like Shein and Temu. Amazon currently takes a 17% cut of all apparel sales that outside sellers make through its website, but will reduce that commission to 5% on items priced lower than US$15 and 10% for items between US$15 and US$20 beginning on January 15. Amazon isn’t changing the commissions it charges for other kinds of items. Amazon announced the change in apparel fees as part of a broader overhaul of its seller fee structure. The company is also lowering the fees it charges sellers for fulfillment while adding new inbound fees that are intended to encourage sellers to send items to multiple warehouses located closer to Amazon customers. Additionally, Amazon is adding a new returns processing fee for most items with high return rates”, part of a broader effort at the company to cut down on costs associated with returns. https://tinyurl.com/mr2rpfux
Amazon tests grocery subscription service for Prime members.
Amazon is piloting a new grocery subscription for members of its Prime program, the company said Thursday, marking the latest recalibration of its online supermarket offerings. Members of the company’s Prime program will have the option to pay US$9.99 per month to get unlimited grocery delivery from Whole Foods and Amazon Fresh on orders more than US$35. They’ll also have access to 30-minute pickup on orders of any size. To start, the service is rolling out in Denver, Colorado; Sacramento, California; and Columbus, Ohio. https://tinyurl.com/3bt98znw
Fintech, Blockchain & Cryptocurrency
Jamie Dimon says he’s deeply opposed to crypto and the government should ‘close it down’.
Cryptocurrencies may be on a hot streak, but the head of America’s biggest bank still isn’t buying the hype. Jamie Dimon, in a hearing before the Senate Banking Committee on Wednesday, reiterated he deep opposition to the space, calling on the government to have a heavier hand in controlling the space. “If I was the government, I’d close it down,” JPMorgan chief Jamie Dimon told lawmakers. “I’ve always been deeply opposed to crypto, bitcoin, et cetera,” he remarked, responding to a question posed by Democratic Sen. Elizabeth Warren. https://tinyurl.com/4rhk5zm8
Nvidia seeks to build out AI ecosystem in tech-hungry Japan.
Nvidia CEO seeks local partnerships to build ‘AI factories’ Japan can create own AI infrastructure, Nvidia CEO says. Nvidia Corp. plans to help build an AI tech-related ecosystem in Japan to meet demand in a country eager to gain an edge in artificial intelligence. The Santa Clara, California-based company will seek to partner with Japanese research organizations, companies and startups to build factories of AI, Chief Executive Officer Jensen Huang said during opening remarks in a meeting with Japanese Economy Minister Yasutoshi Nishimura Tuesday. Nvidia will set up an AI research laboratory and invest in local startups and educate the public on using AI, Huang said. https://tinyurl.com/236mm3ra
Dutch Chip company ASM to build US$324, million US base in Arizona.
ASM International NV plans to invest $324 million (€300 million) in a new US headquarters in Arizona, furthering its international expansion in a state with an already-booming semiconductor economy. The Dutch manufacturer of chipmaking gear is set to hire 500 people for the new facility in Scottsdale, Arizona, on top of more than 800 it already employs in the state. The company has had its US headquarters in Phoenix since 1976. Those commitments have made the Phoenix region a hot spot for the US chip industry as President Joe Biden’s administration prepares to dole out semiconductor subsidies valued at US$100 billion. The money from the 2022 Chips and Science Act aims to boost domestic manufacturing of critical electronic components and wean the US off Asian supply chains that Washington worries pose a national security risk. Industry officials say that one of the biggest threats to the US effort is a lack of engineers, computer scientists and technicians. Chip companies could struggle to fill almost 60% of the roughly 115,000 jobs they are slated to add by 2030, according to the Semiconductor Industry Association. https://archive.is/3zJDJ
Ford and Xcel Energy will build 30,000 EV charging ports for fleet businesses.
Ford may be dialing back some of its larger EV investments, but it’s still operating under the assumption that a lot of businesses will be interested in electrifying their fleets eventually. The company is partnering with Xcel Energy to install 30,000 EV charging ports for fleet customers by 2030, at little to no cost to the businesses to the businesses themselves. The project will be run out of Ford Pro, which is the automaker’s commercial vehicle and software division. The first EV charger installations will begin in the first quarter of 2024 in two states, Wisconsin and Colorado, and later will grow to include more states, said Amanda Rome, executive vice president and chief customer officer at Xcel Energy. Xcel said it would absorb “most of the upfront costs” of the charging installations, with Rome predicting that customers would get “up to US$150,000” in savings from the program. Ford, meanwhile, will offer a “full suite” of charging products to customers, including fleet management and software tools to help commercial fleet owners manage their charging. Commercial EV sales are growing, albeit slower than passenger vehicles. Ford has sold 6,187 E-Transit vans in 2023, up from 5,811 sold in 2022. The company also sold 20,365 F-150 Lightning trucks, up 13,258 in 2022. EVs accounted for a little under 8 percent of all US vehicle sales in the third quarter of 2023, according to Cox Automotive. But like with passenger vehicles, commercial customers are hampered by several factors, including cost and a dearth in charging options. Ford said it wants to help make EVs more attractive for commercial fleet owners by addressing these challenges head-on. https://tinyurl.com/3sf55dtd
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