December 17, 2023: Another Strong Week And More M&A

With the Fed possibly pivoting to rate cuts in 2024, Dow Jones hit an all-time high, S&P 500, Nasdaq composite, Russell 2000 and S&P MidCap 400 – all hit 52-week highs. For the week, Dow Jones was up 2.9%, S&P 500 gained 2.5%, and Nasdaq composite rose 2.85%. Publicly traded electronic signature company DocuSign is working with advisers to explore a sale, potentially setting up one of the largest leveraged buyouts in recent years. A private equity consortium led by Insight Partners and Clearlake Capital Group is in advanced talks to take data analytics software company, Alteryx private for around US$5 billion, including debt. Global Payments is considering an acquisition of US peer Shift4. TikTok and Indonesian internet firm GoTo, have announced a deal in which TikTok will acquire GoTo’s Tokopedia e-commerce subsidiary in Indonesia. Oracle stock dropped 8% on slower revenue growth. Adobe shares fell 6% after hours after the company issued a revenue projection for its new fiscal year that implied a smaller boost from its new artificial intelligence products than investors had been hoping. Etsy is laying off around 11% of employees, as the site struggles to grow sales amid fierce competition from bargain-priced sellers like Shein and Temu. Epic Games’ victory against Google has put Apple back under App Store pressure. In Canada, Sophic Client, Kraken maintained strong Q4 service utilization, with a record number of survey awards. Sophic Client, Xcyte Digital, hosted the Metaverse Spectrum and celebrated a successful business conference, expo, awards, and pitch fest, where 27 companies had the opportunity to pitch to a panel of judges and connect with over 120 investors. TMX Group, the owner of the Toronto Stock Exchange, said on Wednesday it had acquired an around 78% stake in U.S. data analytics company VettaFi Holdings for US$848 million ($1.14 billion).

Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) awarded seabed survey contract in Australia.

Kraken Robotics Inc. is providing more detail on a recent contract announcement. Kraken will supply high-resolution seabed mapping sonar service to Precision Hydrographic Services (PHS), a customer supporting the Australian Department of Defence. The Australian Department of Defence has awarded PHS a program to collect Hydrographic High Resolution Route Surveys (RS) for a number of Australian ports. The survey campaign will take place between January and May 2024. This contract follows the results of a successful in-country demonstration of KATFISH™ for the customer in Q1 of this year and the purchase of a KATFISH system by the RAN in Q2. https://bit.ly/3TnK1hx

Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) maintains strong Q4 service utilization with record number of survey awards.

Kraken Robotics Inc. announces it has received multiple survey service orders in Q4 to support offshore energy and infrastructure projects allowing the company to maintain strong utilization. These offshore project surveys valued at approximately $5 million include: 1. Cable and pipeline depth of burial support in the Mediterranean Sea: 2. Cable depth of burial assessment along a North Sea subsea interconnector cable: 3. Cable burial assessment surveys within an offshore windfarm in the German North Sea: 4. Cable burial assessment survey within two offshore windfarms off the coast of Taiwan: 5. Buried boulder survey and analysis offshore Germany for windfarm foundation locations. Given recent announcements such as the $3 million KATFISH SAS survey contract (starting in Australia in Q1/ 2024) and a $1 million buried subsea pipeline survey (starting in the Americas in Q1 / 2024) as well as other projects which commence late in 2023, the Company is expecting a busy start to the next calendar year. https://bit.ly/3GHkvw9

Sophic Client Xcyte Digital (XCYT-TSXV) hosted Metaverse Spectrum celebrated a successful business conference, expo, awards, and pitch fest.

The Metaverse Spectrum, an online marketplace for metaverse solutions and Web 3.0 technologies, announces the tremendous success of its second annual Metaverse Business Conference and Expo. The virtual event, which took place on December 6 and 7, 2023, attracted over 500 attendees from around the world and was covered by its live newsdesk facilitated by Innovation Tech & Today. Featuring over 25 booths in the expo hall, the two-day conference showcased the latest innovations in the metaverse, VR, augmented reality, Web3, and AI. With 100 award recipients and 9 esteemed judges, the event brought together industry leaders and professionals to foster collaboration, innovation, and investment within the immersive technology ecosystem. The conference also introduced the Author’s Hub, sponsored by Skolay, providing a platform for authors in the metaverse space to share their expertise and insights. A highlight of the event was the inaugural Pitch Fest in the Metaverse, where 27 companies had the opportunity to pitch their ideas to a panel of judges and connect with over 120 investors. The Pitch Fest was made possible by the strategic collaboration with Gust, empowering startups with access to a vast network of potential investors. Notable investors in attendance included SC Ventures, Focus Investment Banking, Spouting Rock Asset Management, London Real Ventures, and Newbridge Securities Corporation, among others. https://tinyurl.com/4sa9x3r3

Toronto Stock Exchange operator TMX (X-TSX) buys remaining stake in VettaFi for US$848 million.

TMX Group, the owner of the Toronto Stock Exchange, said on Wednesday it had acquired an around 78% stake in U.S. data analytics company VettaFi Holdings for US$848 million ($1.14 billion). In January, the group took a 21% stake in the New York City-based firm, which values the total deal at US$1.03 billion. The deal will be financed through bank debt of up to $1 billion in term loans, and will add to TMX’s adjusted earnings per share in the first year of the deal, excluding synergies, the company said in a statement. As part of the deal, the operator will also assume $100 million of VettaFi’s debt. VettaFi provides a database of exchange-traded funds (ETFs), analytics and indices, and the exchange operator’s analytics business. https://tinyurl.com/ym3b6h2v

Durable raises $18 million as it looks to help service-based businesses run on autopilot.

One month after soft-launching its artificial intelligence (AI)-powered website builder in the fall of 2022, Durable had already created 26,000 websites. Durable revealed it has raised $18 million (US$14 million) in Series A financing, and is now looking to become a full-stack “business in a box” platform for service-based entrepreneurs. Durable’s Series A financing, which closed last month, was led by Spark Capital with participation from existing investors Torch Capital, Altman Capital, Dash Fund, South Park Commons, Infinity Ventures, and Soma Capital. To date, the startup has raised over $27 million (US$20 million). http://tinyurl.com/4j6wfcu6

Y Combinator graduate Terminal closes $4.2 million seed round.

Toronto-based Terminal, a trucking telematics integrations startup, has closed a US$3.1 million ($4.2 million) seed round after being one of seven Canadian-affiliated companies participating in Y Combinator’s Summer 2023 cohort. The round was led by Golden Ventures, and featured participation from Y Combinator, Wayfinder Ventures, Northside Ventures, McVestCo VC. http://tinyurl.com/mtecddpa

Leav secures $2.3 million in seed funding for its mobile self-checkout solution.

Montréal-based mobile checkout startup Leav has raised $2.3 million in seed funding for its scan-as-you-go checkout platform. The round was led by Exo10.vc, a venture capital fund by Nicolas Bouchard, and featured participation from Next Canada, Dispatch Ventures, angel investors, as well as the company’s advisors, whose names were not disclosed. Leav last raised $150,000 from a friends and family round in 2020. http://tinyurl.com/ms45puks

Vistara Growth secures $200 million initial close for fifth private credit fund.

Vancouver-based Vistara Growth has raised over $200 million for its latest technology-focused private credit fund. Vistara’s initial closing of Fund V was anchored by increased commitments from existing limited partners (LPs). Per Vistara, the fund’s LPs include undisclosed BC family offices, successful entrepreneurs from the tech, real estate, and hospitality industries, and private foundations. This amount brings the growth-stage tech investor over a third of the way toward its $540 million target for Fund V. http://tinyurl.com/mw7wa4st

The Farmer’s Dog looks to raise fresh capital.

The Farmer’s Dog, a high-end pet food startup, is working with JPMorgan and other investment banks to raise hundreds of millions of dollars by early next year, in a deal that could value it significantly higher than its last US$2.5 billion valuation, The Information reported. A successful funding round would buck the trend of collapsing direct-to-consumer valuations over the past two years. The Farmer’s Dog delivers bags of customized dog food to doorsteps of customers who sign up for a subscription. The startup, which isn’t profitable, expects to generate more than US$800 million in sales this year, up about 60% from last year. The startup has previously raised more than US$150 million in total from investors including Shasta Ventures, Insight Partners and Forerunner Ventures. https://tinyurl.com/yfwcbx8a

China chipmaker seeks funds at US$19.5 billion value as IPOs cool.

Changxin Memory Technologies Inc. is delaying its initial public offering and will instead consider raising funds at about a 140 billion yuan (US$19.5 billion) valuation, becoming the latest Chinese company to call off a debut because of volatile market conditions. Changxin had completed a shareholder restructuring around the middle of 2023 to prepare for the potential listing, according to people familiar with the situation. But it decided to await a more favorable market after communications with regulators and prospective investors, said the people, asking not to be identified discussing a private matter. A financing round will allow the chipmaker — one of China’s biggest manufacturers of the memory essential to computers and smartphones — to continue expanding capacity in anticipation of a rebound in global tech demand in 2024. Like Huawei Technologies Co., Changxin is among a select few firms that embody Beijing’s ambitions to match the US technologically, particularly in the semiconductors that underpin most advances from AI to self-driving cars. Memory chips, an industry now dominated by Samsung Electronics Co., SK Hynix Inc. and Micron Technology Inc., could serve as a launchpad for more advanced semiconductor development down the road. https://archive.is/PzVIs

E-Signature company DocuSign explores sale.

Publicly traded electronic signature company DocuSign is working with advisers to explore a sale, The Wall Street Journal reported Friday, potentially setting up one of the largest leveraged buyouts in recent years. DocuSign, with a market capitalization of US$11 billion, lets people send and sign documents electronically, rather than relying on pen and paper. The company saw revenue growth of about 50% year over year in 2020 and 2021, driven by a surge of demand when the pandemic popularized remote work, after going public in 2018 at a US$6 billion valuation. As remote workers returned to the office, DocuSign’s revenue growth has cooled. The company could draw interest from big tech companies or private equity firms, The Journal reported. Leveraged buyouts have slowed down this year as higher interest rates made debt more expensive for private equity firms. https://tinyurl.com/4yhv2jpt

Insight, Clearlake close in on US$5 billion deal for software firm Alteryx.

A private equity consortium led by Insight Partners and Clearlake Capital Group is in advanced talks to take data analytics software company Alteryx private for around US$5 billion, including debt, people familiar with the matter said on Thursday. The deal would come as fierce competition from big rivals such as Microsoft and Oracle, as well as setbacks in winning new business, have suppressed Alteryx’s valuation and made it an acquisition target. Insight and Clearlake are in discussions to pay more than US$50 per share in cash for Alteryx, the sources said, cautioning that the negotiations have not been completed. Such a deal would represent a premium of more than 65% to Alteryx’s share price on Sept. 5, the last trading day before Reuters reported that Alteryx was exploring a sale. Symphony Technology Group (STG), another private equity firm, has also been vying for Alteryx and could still try to clinch a deal, one of the sources added. https://tinyurl.com/tuxkvjtf

Global Payments considers acquisition of US peer Shift4.

Global Payments Inc. is weighing an acquisition of Shift4 Payments Inc., people with knowledge of the matter said. Atlanta-based Global Payments has been working with an adviser to study the feasibility of a deal for Shift4, according to the people, who asked not to be identified discussing confidential information. Deliberations are ongoing and there’s no certainty they’ll result in a transaction, they said. Representatives for Global Payments and Shift4 didn’t immediately respond to requests for comment. Shares in Allentown, Pennsylvania-based Shift4 rose as much as 13% on Thursday. The stock was up 8.9% at 3:15 p.m. in New York, giving the company a market value of about US$6.1 billion. Global Payments was down 3.7% for a market value of roughly US$32.4 billion. Shift4 helps process more than US$200 billion in payments every year, with operations in North America, Europe and Asia, according to its website. The company serves companies in sectors ranging from airlines and travel to casinos and gaming. Shift4 was founded in 1999 and went public in 2020. https://archive.is/g9iGq

TikTok to acquire Indonesia’s Tokopedia to revive local e-commerce push.

TikTok and Indonesian internet firm GoTo have announced a deal in which TikTok will acquire GoTo’s Tokopedia e-commerce subsidiary in Indonesia. The deal, which the two companies described as a strategic partnership, will likely enable TikTok to revive its e-commerce service in Indonesia, where the service was forced to shut down in October after the government banned social media firms from facilitating online shopping transactions. TikTok Shop in Indonesia will merge with Tokopedia and then TikTok will take a 75.1% stake in the combined entity, PT Tokopedia, to become its controlling shareholder, according to a regulatory filing and a joint statement from TikTok and GoTo. GoTo will own the remaining 24.9% of PT Tokopedia. TikTok, which is owned by China’s ByteDance, has committed to invest more than $1.5 billion in PT Tokopedia to expand its business over time, the firms said. GoTo’s other businesses, such as payment and financial services as well as its Gojek ride-hailing and food delivery app, will continue to cooperate with Tokopedia as strategic partners. When Indonesia announced the social e-commerce ban, government officials cited concerns that the growth of TikTok Shop was threatening small local businesses. By merging with Tokopedia, an Indonesian online marketplace serving local merchants, TikTok could address such concerns. Before the ban, Indonesia was TikTok Shop’s largest market in the world by daily transaction volume. GoTo was created in the 2021 merger between Gojek and Tokopedia, two of Indonesia’s biggest local internet firms. But Tokopedia’s money-losing business has made it harder for GoTo, whose shares are publicly traded in the Indonesia Stock Exchange, to show a clear path to profitability. And Tokopedia’s growth also has been slowing due in part to competition from TikTok Shop. After the deal with TikTok, Tokopedia will no longer be consolidated into GoTo’s earnings. https://tinyurl.com/4apzy7pm

Oracle stock drops 8% on slower revenue growth.

For the past several months, Oracle has been touting its cloud computing deals with artificial intelligence startups like Elon Musk’s X.AI. But on Monday, the company’s stock tumbled more than 8% in after-hours trading after the company failed to show more business momentum from those relationships. In the quarter ended Nov. 30, Oracle’s cloud server rental unit generated US$1.6 billion in revenue, up 52% year-over-year but down from growth rates of 76% and 66% in the prior two quarters, respectively. Overall, revenue at the database pioneer rose 5% to nearly US$13 billion—down from 9% year-over-year revenue growth in the prior quarter. (As of Monday, Oracle stock was up 37% so far this year, a lower increase than most other big enterprise software firms.) At the same time, Oracle also said its data center spending is ramping up so that it could capture more revenue. In a press release, Larry Ellison said Oracle is in the process of more than doubling the company’s 66 cloud data centers. On a call with investors, chief executive officer Safra Catz said the company, which spent US$2.4 billion on capital expenditures in the six months that ended Nov. 30, will spend about $5.6 billion in the following six months. Catz said the company left “hundreds of millions” of dollars in revenue on the table because of a lack of data center capacity. https://tinyurl.com/4at66ea7

Adobe shares fall on lower-than-expected 2024 guidance.

Adobe shares fell 6% after hours after the company issued a revenue projection for its new fiscal year that implied a smaller boost from its new artificial intelligence products than investors had been hoping. The software maker said it expects revenue in the fiscal year ending in November 2024 to increase roughly 10%, to a range of US$21.3 billion to US$21.5 billion. Analysts had been expecting revenue of US$21.7 billion, according to S&P Global Market Intelligence. For the quarter ended Dec. 1, Adobe said revenue grew 12% year-over-year to more than US$5 billion, up from the 10% growth the company reported in the previous quarter. In the fiscal year ended Dec. 1, Adobe said revenue increased 10%, to US$19.4 billion. Despite the increase, investors were hoping the company’s new generative AI products, such as image-generator Firefly, would translate into faster growth next year. Still, Adobe’s shares had climbed 85% this year, before Wednesday’s after-hours decline. Regarding its pending US$20 billion acquisition of Figma, CEO Shantanu Narayen said Adobe is responding to concerns from regulators in the EU and U.K. Those agencies are expected to decide whether to allow the deal to go ahead in early 2024, and the company is expecting the U.S. Justice Department to decide whether it will issue a complaint “soon.” Narayen previously said he expected the deal would close this year. Adobe also disclosed Wednesday in a securities filing that it could face “significant monetary costs” due to an inquiry from the Federal Trade Commission, which is looking into its subscription and cancellation practices. The company said it believes its practices have been lawful, but that the costs of defending itself or reaching a settlement could have a “material impact” on its financial results and operations. https://tinyurl.com/bdctd3vm

Etsy cuts 11% of staff as competition mounts.

Etsy is laying off around 11% of employees, The Information reported Wednesday, as the site struggles to grow sales amid fierce competition from bargain-priced sellers like Shein and Temu. The cuts will affect roughly 225 employees. In a blog post, CEO Josh Silverman blamed the cuts on a challenging macroeconomic and competitive environment, noting that sales volumes on Etsy’s site haven’t grown since 2021. Etsy shares fell around 6% following the announcement. https://tinyurl.com/2pyrkyu4

Cruise to lay off 24% of workforce.

General Motors’ Cruise self-driving car unit is laying off 24% of its workforce, TechCrunch reported, amounting to about 900 people. News of the layoffs comes two weeks after GM’s CFO Paul Jacobson said the carmaker would cut spending on Cruise by “hundreds of millions of dollars” in 2024, which raised expectations of layoffs. Cruise has been on the backfoot since it lost a license from California regulators to operate its self-driving car fleet in San Francisco, after an accident involving a pedestrian. Last month Cruise CEO Klye Vogt resigned. The unit lost more than US$1.7 billion in the first nine months of the year. TechCrunch said non-engineering jobs were targeted in the layoffs, including corporate staffing. https://tinyurl.com/ycysdfwy

Tesla recalls 2 million cars for autopilot problem.

Tesla announced a software update for 2 million cars across its lineup on Tuesday to address an “increased risk of a crash” caused by drivers using its autopilot software, according to the National Highway Traffic Safety Administration. Tesla described the move as a “recall” but unlike in typical car manufacturer recalls, drivers don’t need to return their cars to the manufacturer. Instead, Tesla does an over-the-air update remotely. The recalls cover Tesla’s Model S, Model X, Model 3 and Model Y cars. It follows an investigation by the NHTSA starting in 2021 into 11 crashes involving Tesla’s Autopilot driver assist technology. The update is aimed at dealing with drivers who aren’t paying attention when the Autosteer cruise control feature is enabled, according to the agency. Tesla frequently issues recalls solved by software updates, including one in February to update Tesla’s Full Self-Driving software across models, and one in October to address a brake fluid notifications on the Model X. https://tinyurl.com/3fs54edy

OpenAI to pay Axel Springer tens of millions to use news content.

Axel Springer SE is granting ChatGPT-maker OpenAI the right to use content from its news outlets to develop artificial intelligence models and respond to queries from users. As part of the deal announced Wednesday, San Francisco-based OpenAI will pay Axel Springer for articles and other content from publications that include Politico, Business Insider, and European properties Bild and Die Welt, the companies said in a joint statement. Financial terms of the agreement were not disclosed. The Wall Street Journal earlier reported on the deal. This isn’t the first deal between OpenAI and news publishers. In July, the Microsoft Corp.-backed startup struck a deal with the Associated Press to license its archive of news stories to develop its AI models. That same month, OpenAI signed a $5 million deal with the American Journalism Project, an organization that supports local publishers, to experiment with ways outlets can use AI in news. Still, as publishers grapple with the right strategy toward generative AI, some fear their news content is being used to build AI models without proper compensation, and others see risks in using the technology, which is prone to fabrication, to produce news. Some European media, like Radio France, have blocked OpenAI’s tools over data collection concerns. The Figaro in France said it would never use generative AI to help write stories. https://archive.is/KECdP

Google plans new ‘Pixie’ AI assistant for pixel phones.

Google is developing a new artificial intelligence assistant, known internally as Pixie, that will be exclusive to its Pixel devices, including a smartphone, as the company implements its new Gemini AI across its products, The Information reported. Pixie could be available as soon as next year with the launch of the Pixel 9 and 9 Pro phones. It aims to provide more personalized help and recommendations than the current Google Assistant by tapping into a user’s data from apps like Google Maps and Gmail. Google’s moves show how it plans to differentiate its Pixel devices, which also include tablets and earbuds, from competitors such as Samsung (which uses Google’s Android software) and Apple. Google has doubled down on Google-branded devices in part because the iPhone has taken market share from Android phones such as Samsung’s in key markets like the U.S. https://tinyurl.com/nrpcyvvk

Microsoft says its homegrown AI model outperforms meta’s Llama 2, runs on phones.

Microsoft on Tuesday released the latest version of artificial intelligence it says can outperform big AI models from companies such as Meta or Mistral at a fraction of the cost. Microsoft describes the model, Phi-2, as a “small language model” because it requires less computing power than models like OpenAI’s GPT-4 or Meta’s Llama-2 while carrying out similar tasks, such as generating text or describing images. Microsoft says its model was trained only on high quality data and is small enough to run locally on a laptop or mobile device. Phi-2 will be available through Microsoft’s cloud, Azure, where developers can use it in their own apps. The release shows how Microsoft is forging its own path in AI rather than relying entirely on OpenAI, whose models it uses for AI features in Bing and Office 365. https://tinyurl.com/3fh2y9p7

Meta starts testing multimodal AI in smart glasses.

Meta Platforms will start testing multimodal artificial intelligence in its Ray-Ban smart glasses, chief technology officer Andrew Bosworth said in a post on Threads Tuesday. The test will be available through an opt-in early access program in the U.S., he said. Multimodal AI models understand and generate text, images and other mediums. This feature will “take advantage of the camera on the glasses, in order to give you information not just about a question you’ve asked it, but also about the world around you,” Bosworth said in a video attached to the post. In a demonstration in the video, he looked at a piece of wall art with the outline of California and asked the AI to tell him what it saw. Meta is also rolling out a feature allowing people using the smart glasses to ask Meta AI, the company’s AI assistant, for real-time information, Bosworth said. That is “powered in part by Bing,” he said. Meta announced these features at its developer conference, Meta Connect, in September. https://tinyurl.com/4sha36wa

ByteDance’s Pico cancels next VR headset.

ByteDance, the Chinese parent of TikTok, is canceling the next version of the virtual reality headset from its Pico subsidiary, the Pico 5, in a major retreat from the VR market where it has been competing with Meta Platforms and others, according to people familiar with the situation. The decision came after sales of Pico’s last headset, the Pico 4, fell far short of ByteDance’s expectations. The pullback comes as the VR industry as a whole is grappling with weak demand, as rising interest rates have prompted consumers to become more careful in their spending. Pico last month laid off about 400 people, or more than a fifth of its then-workforce of 1,800, including many cuts on sales and marketing teams as well as content partnership teams. Another 600 people were transferred to other roles within ByteDance. ByteDance, which jumped into the VR market in early 2021 with the purchase of Pico for $1.3 billion, isn’t abandoning its ambitions in the market entirely. Pico’s engineers have been working on a confidential long-term project codenamed “Swan,” which aims to eventually develop a high-end headset using cutting-edge technologies, and that project will continue at least for the time being, the people said. The project, however, is still largely experimental and conceptual, and it is unclear whether any commercial product can actually come out of it. Pico will also continue with the previously planned release of an updated version of the Pico 4, the people said. https://tinyurl.com/y9u3rv2b

Tesla unveils its latest humanoid robot, Optimus Gen 2, in demo video.

On Tuesday, Tesla released a demo video showing the latest version of its prototype humanoid robot, Optimus Gen 2. Over one year after Tesla’s first public Optimus robot demonstration, which showcased shaky robots that waved and slumped over, things have apparently progressed quite a bit, assuming that the video accurately reflects the technology. After a recent episode where Google fudged an AI demonstration for the sake of marketing hype, it’s best to take Tesla’s claims with a grain of salt until they are independently verified in practical, real-world demonstrations. With that dose of skepticism in mind, let’s take a look at what Tesla is promising in this non-production prototype robot. https://tinyurl.com/4wfd9r39

Starlink loses out on US$886 million in rural broadband subsidies.

The FCC announced that it won’t award Elon Musk’s Starlink an US$886 million subsidy from the Universal Service Fund for expanding broadband service in rural areas. The money would have come from the Rural Digital Opportunity Fund program (RDOF), but the FCC writes that Starlink wasn’t able to “demonstrate that it could deliver the promised service” and that giving the subsidy to it wouldn’t be “the best use of limited Universal Service Fund dollars.” That was the same reason the FCC gave when it rejected Starlink’s bid last year, which led to this appeal. SpaceX had previously won the bidding to roll out 100Mbps download and 20Mbps upload “low-latency internet to 642,925 locations in 35 states,” funded by the RDOF.” http://tinyurl.com/2wtwbk8z

Amazon’s Project Kuiper confirms its super-fast satellite communication tech works in space.

Amazon’s Project Kuiper successfully validated key technology that will increase throughput and reduce latency for customers using its satellite internet service, the company said Thursday. That technology is called “optical inter-satellite links” (OISL), a type of optical communication that uses infrared lasers to send data between spacecraft on orbit. OISL has been around for a while to enable inter-satellite communications, but earlier generations were limited to linking just two satellites at a time. Kuiper’s satellites will be able to connect with many other spacecraft simultaneously, which will form a mesh network in space. This mesh capability is key: With it, Kuiper says it will be able to move data around 30% faster than terrestrial fiber optical cables sending data along an equivalent distance. http://tinyurl.com/yc7tc3y2

Epic Games victory against Google puts Apple back under App Store pressure.

This week saw an Epic Games victory in its court case against Google, a jury finding that the Play Store was indeed operated in an anti-competitive fashion. This is despite the fact that Epic mostly lost a near-identical case against Apple back in 2021. The differing conclusions in the two cases puts Apple back under pressure. That isn’t the end of things, by any means. First, while a jury has found that Google broke the law, it will now be up to the judge in the case to decide what to do about it. We’ll need to wait for a ruling on what Google needs to do to resolve the problem. Second, Google has announced that it plans to appeal the verdict, no matter what action it is ordered to take. http://tinyurl.com/3te2jbfm

Disney, Comcast increase US ad spending on Instagram after dropping Musk’s X.

Big U.S. companies including Walt Disney and Comcast increased advertising spending on Instagram after pausing commercials on X last month, according to Sensor Tower, as marketers flee the Elon Musk-owned social media platform over antisemitic content. Disney and Comcast lifted their U.S. spending on the app owned by Meta by 40% and about 6% respectively in the two weeks from Nov. 20, Sensor Tower data showed. Paramount, meanwhile, tripled its spending on Snapchat. The figures underscore the challenge facing Musk, who in late November unleashed a profanity-laced tirade against advertisers who had dropped X, formerly known as Twitter. Tower’s data showed 51 of the top 100 U.S. advertisers on X from October last year, when Musk bought the platform, have ceased ad spending on it as of November 2023. The platform has also seen a 16% decline in monthly active users since the buyout, though the user engagement has remained stable, the market intelligence firm said. http://tinyurl.com/nhbyv48h

Threads is finally available to users in the EU.

Five months after its launch in July, Meta’s social network Threads is now finally available to people living in the European Union. In a post on Threads, Mark Zuckerberg announced that Meta is opening up Threads to more countries in Europe. “Today we’re opening Threads to more countries in Europe. The Threads.net website has a “Use without a profile” mode, which doesn’t require users to log in through Instagram. While users can look at posts through that mode, they won’t be able to reply to, like, or repost them. If you are using Threads in the EU without any profile, you will see a single algorithmically populated feed. You can also search for accounts, but seemingly not for posts. At launch in July, the company restricted access to the new social network in the EU to become compliant with various rules of the bloc. http://tinyurl.com/2kcp8mrm

Google loses Antitrust case over app store fees.

A federal jury in San Francisco found that Google broke antitrust rules in how it operates a mobile app store for Android-powered devices, siding with game developer Epic Games in a closely watched battle that could jeopardize billions of dollars in annual revenue. The jury said Google’s rules that force Android app developers to pay fees of up to 30% for in-app transactions are unlawful. Epic lost a similar case against Apple that went to trial in 2021, but is appealing the decision. Epic had alleged that Google abused its market dominance by requiring app developers to use its payment systems and pay fees to Google. Following the jury decision, a judge overseeing the case could decide that Google must give developers the option of using different payment systems that charge lower fees. Google earlier reached agreements with state attorneys general and dating app maker Match Group over similar claims that Epic made, including allowing Match to use alternative payment systems. https://tinyurl.com/3a8yt3su

Google’s loss to Epic will likely have little impact in the near-term.

A federal jury decided on Monday that Google’s app store has benefited from anticompetitive behavior, but it could take a long time before the company faces any potential changes to the Google Play store, and those changes are unlikely to hurt revenue significantly. That said, the ruling could give more ammunition to other antitrust cases against the company, even though those cases will likely take years to reach a resolution. Epic Games originally sued Google in 2020, alleging it uses its dominant position as the developer of Android to strike deals with handset makers and collect excess fees from consumers. Google collects between 15% and 30% for all digital purchases made through its storefront. Epic tried to bypass those fees by charging users directly for purchases in the popular game Fortnite; Google then booted the game out of its store, spurring the lawsuit. It will be a while before any potential changes come to pass. Google denied any wrongdoing and says it will appeal the verdict, so it could be tied up in appeals court for years. “The trial made clear that we compete fiercely with Apple and its App Store, as well as app stores on Android devices and gaming consoles,” wrote Wilson White, VP, Government Affairs & Public Policy in a statement. “We will continue to defend the Android business model and remain deeply committed to our users, partners, and the broader Android ecosystem.” Analysts noted Tuesday they expect a multi-year process before any changes would likely come to pass. “Google’s epic loss is much ado about nothing,” wrote Needham analysts. Worst case scenario, Needham analysts argued, was that “Google loses all appeals and must add competitors, though it’s unclear consumers would move,” they stipulated. “Also, Google could charge new competitors to the Play store a revenue share of 15%+ so that the new competitors would have to charge consumers higher fees that includes Google’s ‘overhead’ charge.” However, the verdict does have the potential to arm separate antitrust action against the search giant — ones that are closer to the heart of the company’s core revenue streams. Some analysts have noted that the loss for Google could influence an ongoing similar case brought by the Department of Justice. Investors are awaiting more details of potential remedies to react strongly one way or another. Alphabet’s stock barely moved upon news of the verdict, and closed down less than 1% on Tuesday. https://tinyurl.com/58awrzvk

FTC investigating Adobe over making it too hard to cancel.

The FTC is investigating Adobe, after widespread consumer complaints that the company makes it too hard to cancel app subscriptions. Adobe was one of the earliest software companies to switch from a one-off purchase model to recurring subscriptions, but consumers have long complained that it’s easier to start a subscription than it is to end one. Adobe revealed the Federal Trade Commission (FTC) investigation in a regulatory filing with the Securities and Exchange Commission (SEC). The SEC requires companies to disclose any material risks which might affect their profitability, in order to ensure that investors are making informed decisions. http://tinyurl.com/ynntttwu

Jack Ma’s biggest e-commerce rival is coming for Amazon.

Jack Ma essentially invented the e-commerce business in China by co-founding Alibaba Group Holding Ltd. and steering it to the top of the country’s private sector. But a couple weeks ago, the celebrated entrepreneur called out a little-known rival for outpacing his brainchild and becoming a role model for the tech industry. “Congratulations to Pinduoduo for their decision-making, execution and efforts of the past years,” Ma wrote on an internal forum, prodding Alibaba’s 220,000-plus employees to “correct its course.” For those outside of China, the name Pinduoduo may have drawn a blank. Yet the upstart, formally known as PDD Holdings Inc., has been surging in popularity for years, winning over customers in the domestic e-commerce market with a range of innovations. It’s also the company behind the hit shopping app Temu in the US, which has gone from zero to rivaling Amazon.com Inc. and Walmart Inc. in just more than a year. After Ma’s comments, PDD’s market valuation climbed above Alibaba’s for the first time ever, a seismic shift for an industry that has been dominated for more than a decade by the house that Jack built. https://archive.is/6ObrF

Shoppers spend almost twice as long on Temu app than key rivals.

Games and rewards entice shoppers to spend longer on Temu Firm has seen explosive growth in US, with sales topping Shein Shoppers are spending almost twice as long on Temu, the online shopping juggernaut backed by Chinese heavyweight PDD Holdings Inc., than they are on the apps of major rivals like Amazon.com Inc., according to research firm Apptopia. On average, users spent 18 minutes per day on the Temu app in the second quarter, compared with 10 minutes for Amazon and 11 minutes for Alibaba Group Holding Ltd.’s AliExpress, based on Apptopia’s device-level analysis. Among younger users, the time spent on Temu was 19 minutes, it said. http://tinyurl.com/ms5n4w86

Temu was the most-downloaded iPhone app in the US in 2023.

Temu, the Chinese e-commerce company whose app is now attracting longer engagement times than Amazon, is Apple’s most downloaded free app in the U.S. for 2023. The Cupertino-based tech giant released an App Store feature that showcases the top iPhone apps of the year, free and paid, as measured by app installs — its proxy for overall popularity. This year, apps from Chinese-based companies have taken over spots previously held by U.S. tech giants like Meta and Google, as CapCut and TikTok, which hail from Beijing-based ByteDance, came in at No. 3 and No. 5, respectively. Meta, which last year held the No. 3, No. 4 and No. 9 spots with WhatsApp, Instagram and Facebook, respectively, showed up in the top 10 this year with a slightly different mix. http://tinyurl.com/skyx69vr

Apple offers to let rivals access tap-and-go technology.

Apple has offered to let rivals access its tap-and-go mobile payments systems used for mobile wallets, a move that could settle EU antitrust charges and stave off a possible hefty fine, Reuters reported. The EU’s competition regulator last year charged Apple with curbing rivals’ access to its tap-and-go technology based on Near-Field Communication, making it difficult for them to develop rival services on Apple devices. The European Commission is likely to seek feedback next month from rivals and customers before deciding whether to accept Apple’s offer, the people said. https://tinyurl.com/mrxduhtk

Google pay adding Affirm and Zip as payment options.

Google Pay will add the “buy now, pay later” providers Affirm and Zip as payment options for some merchants next year, Affirm and Zip said on Wednesday. Google Pay users with Android phones will be able to select Affirm or Zip as a payment option when they check out using the apps or mobile websites for some merchants, according to the companies. Neither company specified which merchants would be included. In a press release, Zip said Google Pay will show shoppers a banner that will tell them they can pay with Zip. Affirm’s press release did not provide similar details on how Google Pay will highlight Affirm as a payment option. A Google spokesperson said the Affirm and Zip integrations will be Google Pay’s first for online BNPL purchases. Google Pay plans to add other BNPL payment options beyond Affirm and Zip in the future. Becoming more visible to Google Pay users will drive additional revenue to Affirm and Zip, which are competing in an increasingly crowded BNPL field that includes Klarna and Block-owned Afterpay, as well as large tech companies such as Apple and PayPal. Affirm is also available through the Amazon Pay and Shop Pay digital wallets. https://tinyurl.com/yjap43e5

SEC rejects Coinbase petition for new crypto rules.

The Securities and Exchange Commission Friday denied a petition by crypto exchange Coinbase to write new rules for digital assets, saying existing rules sufficed. Coinbase Chief Legal Officer Paul Grewal said the exchange would appeal the decision, which he criticized as “arbitrary and capricious.” Coinbase has argued that financial regulations were inadequate for digitally native assets. But SEC Chair Gary Gensler, in a statement Friday, said “existing laws and regulations already apply to the crypto securities markets.” The SEC maintains many crypto assets should be treated like securities, which the crypto industry has resisted. The agency sued Coinbase in June, alleging it was operating an unregistered crypto exchange. Shares of the company fell 3.5% on Friday. They’re up 340% for the year to date. https://tinyurl.com/2k9yy6h7

US expects to make multi-billion chips awards within the next year.

U.S. Commerce Secretary Gina Raimondo said she expects to make around a dozen semiconductor chips funding awards within the next year, including multi-billion dollar announcements that could drastically reshape U.S. chip production. She announced the first award on Monday US$35 million to a BAE Systems facility in Hampshire to produce chips for fighter planes from the “Chips for America” semiconductor manufacturing and research subsidy program approved by Congress in August 2022. “Next year we’ll get into some of the bigger ones with leading-edge fabs,” Raimondo told reporters. “A year from now I think we will have made 10 or 12 similar announcements, some of them multi-billion-dollar announcements.” In an interview with Reuters, Raimondo said that the number of awards could go higher than 12. She said she wants the percentage of semiconductors produced in the United States to rise from about 12% to closer to 20% – though that is still down from 40% in 1990 – and to have at least two “leading-edge” U.S. manufacturing clusters. In addition, she wants the U.S. to have cutting-edge memory and packaging production and to “meet the military’s needs for current and mature” chips. Raimondo noted that the U.S. currently does not have any cutting-edge manufacturing production and wants to get that to about 10%. Companies like Intel, Micron, GlobalFoundries are among those seeking significant funding from the chip program. Raimondo said the program has received more than 550 statements of interest and nearly 150 pre-applications, full applications, and concept plans. Congress has allocated US$39 billion for manufacturing incentives to encourage companies to build and expand facilities and awards can be a mix of grants, government loans or loan guarantees. The department has said direct funding awards are expected to range between 5%-15% of project capital expenditures and total award amounts will generally not exceed 35% of project capital expenditures. http://tinyurl.com/mudy4c6x

U.S. official downplays China’s ability to produce advanced chips.

A senior U.S. Commerce Department official said Chinese tech giant Huawei may not have the ability to produce advanced chips with efficiency necessary for a large-scale rollout, according to Bloomberg. Thea Kendler, assistant secretary for export administration, said during a congressional testimony that Huawei’s advanced chips may not have achieved a sufficient yield—the percentage of non-defective chips among the total production lot—and the performance of the chip in Huawei’s phone is actually poorer than what the company had years ago, according to Bloomberg. Kendler, according to Bloomberg, said that the Biden administration’s restrictions on the exports of certain semiconductor technologies to China have been “meaningful” in slowing China’s efforts to make advanced chips. His comments come after Huawei earlier this year unveiled a new smartphone that contained a chip that was manufactured using a 7 nanometer process technology. That raised questions about whether China’s domestic chip makers were able to supply such chips despite U.S. export restrictions. https://tinyurl.com/yz3yfbay

TSMC demos its first 2nm chips to Apple, mass production slated for 2025.

Apple may have just unveiled its first 3-nanometer processors with the A17 Pro and M3, but it’s also already looking toward the 2-nanometer future. TSMC is Apple’s fabrication partner for all of its Apple Silicon chips. The company hopes to begin mass production of 2nm chips in 2025. If history is any indication, the first 2nm chips will be focused on mobile processors, and Apple will be TSMC’s first customer. In fact, Apple bought TSMC’s entire supply of 3nm chips for 2023. http://tinyurl.com/yc2unkba

Ford slashes production target for all-electric F-150 Lightning to match demand.

Ford will cut production of its all-electric pickup truck in 2024 in an effort to match consumer demand. Ford executives signaled in October during its third-quarter earnings call plans to “adjust” production of its all-electric vehicles and delay about US$12 billion in investments due to softening demand for higher-priced premium electric vehicles. The automaker didn’t explicitly refer to the Lightning during the earnings call, instead pointing to other examples such as the reduction in Mustang Mach-E production and the decision to delay a second battery factory in Kentucky.. http://tinyurl.com/47c2exsf

The US could remove 1 Billion tons of carbon from the air — for US$130 Billion.

The US alone could remove 1 billion tons of carbon from the atmosphere annually by midcentury using existing technologies. Forests, soil and manmade solutions in their early stages of development could help get the US to net zero, according to a report published on Monday by Lawrence Livermore National Laboratory that lays out a roadmap to pull CO2 from the air. Biomass carbon removal and storage (BiCRS) accounts for about 70% of the US’s carbon removal potential, or approximately 700 million tons annually, said Jennifer Pett-Ridge, lead author and a senior staff scientist at the lab. BiCRS — pronounced “bikers” — involves collecting municipal solid waste and forestry scraps that have pulled CO2 from the air and then using them to make products like hydrogen, biogas and charcoal. When it comes to BiCRS, “the science is really settled,” she said, adding that the US has enough waste biomass to do this and the processes are clear. What’s missing is the financing to build facilities capable of transforming the waste into new materials that effectively lock up the CO2. Reaching the capacity to remove 1 billion tons of carbon annually using BiCRS and other methods could cost US$130 billion, according to the report. That amount is equivalent to a mere 0.5% of current US gross domestic product or less than the amount the country spends on solid waste management annually, the report notes. “Instead of schlepping all that stuff over to a landfill and just letting it decompose and be released back to the atmosphere as CO2 or methane, this is an opportunity to recycle stuff that is gross, that you put into your trash and you don’t want to see again,” Pett-Ridge said. https://archive.is/Ofu3v