As the year comes to an end, may the Holiday Season bring you happiness and 2024 be filled with investing success. We will be back in January. Last week, the market looked past Wednesday’s sell-off and major indexes rose for an eighth straight week — Dow Jones rose 0.2%, S&P 500 was up 0.75%, Nasdaq gained 1.2%. Software startup ServiceTitan is preparing for 2024 IPO. Anthropic, is in talks to raise US$750 million in a venture round led by Menlo Ventures. OpenAI is in talks to raise new funding at a valuation of US$100 billion or more. ByteDance’s sales broke US$110 billion to pass Tencent in 2023. China’s iPhone ban accelerates across government and state firms. Adobe and Figma called off the US$20 billion acquisition of Figma by Adobe. Adobe now has US$6 billion for AI and buybacks after the deal collapsed. Cybersecurity firm Okta will buy startup Spera for a reported US$100 million. Shares of Micron gained about 6% in premarket trading Thursday, after the largest US maker of memory semiconductors indicated data center demand is compensating for a slowly recovering market for personal computers and smartphones. Apple is aiming to sell the Vision Pro in February, the company has also developed a breakthrough method for Running LLMs on iPhones. Google might already be replacing some Ad sales jobs with AI. Google will pay US$700 million to settle claims by a group of state attorneys general. BlackRock’s proposed bitcoin ETF will now allow cash redemptions after pushback from the SEC. In Canada, HIVE announced a $25 million bought deal. Sophic Client, Legend Power reported Q4 F2023 results, management is focused on advancing sales opportunities. Sophic Client, Kraken received a Synthetic Aperture Sonar Order from NATO CMRE. Sophic Client Ionik unveiled a fully rebranded website, taking another step in its brand evolution.

Canadian Technology Capital Markets & Company News

Sophic Client Legend Power Systems (LPS-TSXV, LPSIF-OTC) reports Q4 F2023 financial results.

Q4 F2023 Highlights: Revenue of $159 thousand versus $579 thousand in Q4 F2022. Adjusted EBITDA loss of $926 thousand versus a $893 thousand loss in Q4 F2022. Net loss of $970 thousand versus a $1.09 million loss in Q4 F2022. Cash of $2.5 million, no debt, and $3.79 million in working capital at September 30, 2023 “Our focus this quarter remained around advancing sales opportunities and we currently have new late-stage large deals with very strong financial viability,” said Randy Buchamer, Legend Power Systems CEO. “We have passed the critical stage of having to prove our solutions work. We have successfully completed technology evaluations in numerous markets, and we are focusing on helping partners and prospects develop deployment plans. We have many prospects deciding on where and how to deploy SmartGates and our order visibility is clearer and stronger than ever.” https://bit.ly/47abdUb

Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) receives Synthetic Aperture Sonar Order from NATO CMRE.

Kraken Robotics Inc. has received an order from NATO Science and Technology Organisation (STO) Centre for Maritime Research and Experimentation (CMRE) for a Miniature Synthetic Aperture Sonar (MINSAS) System from Kraken. The order followed an openly competed tender process and was delivered in Q4. Kraken’s MINSAS was selected having met CMRE’s rigorous requirements for a robust, broadband Synthetic Aperture Sonar. Kraken’s MINSAS will be integrated onto a NATO CMRE’s Uncrewed Underwater Vehicle (UUV), where it will also support advanced Artificial Intelligence capabilities such as Automated Target Recognition (ATR). https://bit.ly/41NeUhP

Sophic Client Ionik (INIK-TSXV, INIKF-OTCQX) unveils fully rebranded website.

PopReach Corporation (dba “Ionik”), a data-driven marketing technology company, took another step in its brand evolution with the launch of its new website, ionikgroup.com. The new website provides a clearer overview of Ionik’s focused strategy as well as the team and marketing technology platform that it has acquired and developed over the last transformative year. “We executed both strategically through our acquisitions and tactically with our integration efforts through 2023, which has allowed us to close the year with the launching of our new website communicating our go forward strategy. Our industry is constantly in a state of change, however, with the experience of the team we’ve assembled and our investment in building our expanding platform we have shown resilience throughout 2023 and are well positioned as we approach the market as Ionik in 2024” said Ted Hastings, CEO. “The new Ionik brand is now communicating our total offering, demonstrating how we leverage solutions to find new value for our clients and investors.” Visitors can explore Ionik’s comprehensive services and solutions that make up its advanced marketing technology platform at the new site, which was created by Ionik’s brand solutions agency, SCS. The domain popreach.com, which hosted the Company’s former corporate site, has been updated to focus on the PopReach Games business featuring its free-to-play mobile games portfolio. https://bit.ly/3tkc8nn

HIVE Digital (HIVE-TSX, HIVE-NASDAQ) announces $25 million Bought Deal Private Placement financing to HODL Bitcoin production and expand green mining footprint by 100MW.

The Company entered into an agreement with Stifel Canada and Canaccord Genuity as co-lead underwriters and joint bookrunners (the “Underwriters”), whereby the Underwriters will purchase, on a bought-deal basis, 5,000,000 special warrants of the Company (the “Special Warrants”) at a price of $5.00 per Special Warrant for aggregate gross proceeds to the Company of $25,000,000 (the “Offering”). The completion of the Offering will be subject to receipt of all necessary regulatory and corporate approvals or consents. The Company will grant the Underwriters an option to increase the size of the Offering by up to an additional 15% of the Special Warrants sold under the Offering, exercisable in whole or in part, at any time and from time to time up to 48 hours prior to the Closing Date (as hereinafter defined). Each Special Warrant shall entitle the holder thereof to receive, subject to adjustment in certain circumstances and the Penalty Provision (as defined below), and without payment of additional consideration, one (1) unit of the Company (each a “Unit”) upon the exercise or deemed exercise of each Special Warrant. Each Unit shall consist of one (1) common share of the Company (a “Unit Share”) and one-half (0.5) of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each Warrant will entitle the holder thereof to purchase one common share of the Company (a “Warrant Share”) at a price of $6.00 per Warrant Share for a period of 36 months following the closing of the Offering. http://tinyurl.com/2s4dfyp4

Brookfield hires advisors to sell assets from Saeta worth $1.6 billion- sources.

Canada’s Brookfield is working to sell renewable assets owned by its company Saeta Yield worth 1.5 billion euros ($1.64 billion) including debt, according to five people with knowledge of the deal. The investment fund is working Santander and Societe Generale on the sale of the wind and photovoltaic plants located in Spain and Portugal, the people said, speaking on condition of anonymity. Saeta owns 28 wind farms and 10 photovoltaic parks, according to its website. It also owns seven solar thermal plants that are not part of the sale process, according to the sources. http://tinyurl.com/2nej3dxf

Ionomr Innovations raises $26.7 million to boost green hydrogen sector.

Vancouver and Rochester, NY-based electrochemical engineering startup Ionomr Innovations has closed a $26.7 million (US$20 million) Series A extension. The financing was led by returning investors NGIF Cleantech Ventures and Pallasite Ventures, and saw participation from Shell Ventures, Chevron Technology Ventures, Finindus, Samsung Ventures, SAIC Capital, N.V. Bekaert, and Asahi Kasei. According to a spokesperson from Ionomr, the round is an extension raised at a higher valuation. The startup’s last funding round totalling $18.7 million was announced in early 2022. This funding brings its total Series A financing to $46.6 million, and its total funding to $55.4 million. http://tinyurl.com/3chbchd7

Inverted AI closes $5.3 million in seed funding for vehicle safety simulation tech.

Vancouver-based Inverted AI has closed over $5.3 million (US$4 million) in seed funding as it looks to develop AI technology for realistically simulating human drivers on roadways. The seed round was led by Yaletown Partners, with participation from Blue Titan Ventures, Dasein Capital, Inovia Capital, Defined, and WUTIF. The startup’s last raise was a $1.4 million funding round closed in November 2021, led by Blue Titan Ventures. http://tinyurl.com/3fdp3ppb

Global Markets: IPOs, Venture Capital, M&A

Software startup ServiceTitan prepares for 2024 IPO-sources.

ServiceTitan Inc, a Los Angeles-based startup that makes software to help contract workers manage their businesses, has revived preparations for an initial public offering (IPO) in 2024, according to people familiar with the matter. ServiceTitan, which had been preparing to go public in 2022 before the market for IPOs soured, is working with investment banks Goldman Sachs and Morgan Stanley on its latest preparations for a stock market listing that could come as early as the second quarter of 2024, the sources said, requesting anonymity as the discussions are confidential. Valued at US$9.5 billion after a Thoma Bravo-led funding round in 2021, ServiceTitan has yet to decide on how much it plans to raise from the share sale and what valuation it will seek, the sources said, cautioning that the company’s plans are subject to market conditions and could change. ServiceTitan’s stock market launch would add to a growing list of companies, including social media firm Reddit, cloud security company Rubrik, and healthcare payments firm Waystar, aiming for flotations in the first half of 2024, according to people familiar with the matter. Founded in 2012 by Ara Mahdessian and Vahe Kuzoyan, ServiceTitan has emerged as a major player in a niche market, making software used by more than 11,800 businesses that are run by technicians serving the HVAC (heating, ventilation and air-conditioning) sector. http://tinyurl.com/yy69xy8f

Menlo Ventures to lead US$750 million Anthropic funding round.

Anthropic, a two-year old artificial intelligence startup, is in talks to raise US$750 million in a venture round led by Menlo Ventures, The Information reported Wednesday. The deal would value the OpenAI rival at US$15 billion not including the investment, more than three times its valuation this spring. The deal hasn’t closed and the financial valuation could top US$18 billion. The funding round comes weeks after Anthropic raised large rounds from Amazon and Google, which provide cloud computing services to the startup. Earlier this fall, Amazon committed to invest up to US$4 billion in Anthropic, with a US$1.25 billion initial investment, and Google committed US$2 billion, with an initial investment of US$500 million. http://tinyurl.com/44pc4v67

OpenAI is in talks to raise new funding at valuation of US$100 billion or more.

OpenAI would be second-most valuable US startup behind SpaceX Company also in talks for billions from G42 for chip venture OpenAI is in early discussions to raise a fresh round of funding at a valuation at or above US$100 billion, people with knowledge of the matter said, a deal that would cement the ChatGPT maker as one of the world’s most valuable startups. Investors potentially involved in the fundraising round have been included in preliminary discussions, according to the people, who asked not to be identified to discuss private matters. Details like the terms, valuation. http://tinyurl.com/y59njh3f

OpenAI suspends ByteDance’s account after alleged violation of terms.

OpenAI has suspended ByteDance’s account as the U.S. company is looking into the Chinese tech giant’s violation of its terms of service, The Verge reported. The suspension came after The Verge’s Command Line newsletter earlier reported that ByteDance, TikTok’s parent company, used OpenAI’s GPT model to develop its own conversational artificial intelligence software. Such a practice is in direct violation of OpenAI’s terms of service, which prohibits the use of its large language models for developing AI models that compete with OpenAI products, according to the report. ByteDance a few months ago told a team developing the company’s own LLM to stop using text generated by OpenAI’s GPT models in its model development work, but the team continues to use OpenAI’s technology in ways that violate its terms of service, according to The Verge. A few months ago, ByteDance released an AI chatbot product in China called Doubao, which is based on the company’s own LLM. In China, ByteDance is competing fiercely with other Chinese tech giants such as Alibaba, Tencent and Baidu, which all develop their own foundational AI models. http://tinyurl.com/yc25aze5

ByteDance’s sales break US$110 billion to pass Tencent in 2023.

TikTok’s Chinese owner expects revenue growth of about 30% World’s biggest startup expands in commerce, online services. ByteDance Ltd.’s sales surged in 2023 to more than US$110 billion, according to people familiar with the matter, potentially overtaking arch-foe Tencent Holdings Ltd. in a sign TikTok’s fledgling e-commerce business is driving growth at a time of economic malaise. The world’s most valuable startup’s growth broadly matched the 30% pace it managed in 2022, when it reported sales in excess of US$80 billion, the people said, asking not to be identified as the information isn’t public. That’s despite economic turbulence in China and elevated scrutiny and restrictions in key markets from the US to India. http://tinyurl.com/2kuxtrkm

China’s iPhone ban accelerates across government and state firms.

More Chinese agencies and government-backed firms across the country have ordered staff to stop bringing iPhones and other foreign devices to work, setting in motion an unprecedented prohibition that’s likely to block Apple Inc. and Samsung Electronics Co. from parts of the world’s biggest mobile market. Multiple state firms and government departments across at least eight provinces — including the prosperous coast — instructed employees in the past month or two to start carrying local brands, according to people familiar with the matter. That’s a major step-up from around September, when a small number of agencies in Beijing and Tianjin began telling staff to leave foreign devices at home, said the people, who asked not to be identified discussing confidential orders. The much broader, coordinated effort marks a dramatic quickening of Beijing’s campaign to wean itself off American technology, coinciding with the resurgent popularity of homegrown brand Huawei Technologies Co. Xi Jinping’s administration this year decided to expand a ban on foreign devices beyond the most sensitive departments — a directive that had been in place for years — to encompass many more government agencies and even state firms, Bloomberg News reported in September. Apple shares dipped to a session low after Bloomberg reported on the widening bans. The stock fell less than 1% to US$197.57 at the close Friday in New York and then declined further in after-hours trading. Apple had reached a record high earlier in the week. https://archive.is/uh0Zf

Coupang agrees to acquire Farfetch, loan it US$500 million.

South Korean e-commerce firm Coupang agreed to acquire beleaguered luxury fashion marketplace Farfetch and give it a US$500 million bridge loan, the companies said on Monday. Farfetch, a U.K.-based company that went public in 2018 on the New York Stock Exchange, had a market capitalization of more than US$20 billion at its peak in 2021. But lately, Farfetch had appeared to be struggling and in a securities filing on Monday, the company said that without additional cash, Farfetch “would have been unable to continue as a going concern.” JPMorgan will market Farfetch’s assets and if there is no competing bid, Coupang will buy Farfetch, according to a Coupang regulatory filing. In the meantime, however, Coupang and an investment firm advanced the company loans. http://tinyurl.com/mr2ckpvz

Adobe and Figma call off US$20 billion acquisition.

Adobe is abandoning its US$20 billion acquisition of design startup Figma, the companies announced Monday, after the proposed merger drew fierce scrutiny from antitrust regulators in Europe. “We no longer see a path toward regulatory approval of the deal,” Figma’s chief executive officer Dylan Field said Monday. Adobe announced plans to buy Figma fifteen months ago, in a mega deal that was priced at more than 50 times the startup’s revenue at the time. The sale of Figma would have been a boon for venture capitalists Greylock Partners, Kleiner Perkins, Andreessen Horowitz and Durable Capital Partners, The Information reported at the time of the deal. Adobe will pay Figma a breakup fee of $1 billion, the companies said. http://tinyurl.com/3u9eyw76

Adobe has US$6 billion for AI and buybacks after Figma deal collapses.

Adobe Inc.’s failed merger with Figma Inc. leaves the software company with about US$6 billion in cash that it will likely use to accelerate artificial intelligence development and buy back stock. What’s less clear is how Adobe will address the competitive pressures that helped inspire the acquisition in the first place. When the company struck the US$20 billion deal for Figma last September, investors worried that Adobe’s core portfolio of creative software, including Photoshop and Illustrator, were running out of room to grow. Web-based startups such as Figma and Australia-based startup Canva Inc. were capturing the attention of younger users and rapidly gaining customers. The deal’s high price only further convinced Adobe shareholders that management was anxious about the competition. Much of that gloom has dissipated in 2023 as Adobe invested rapidly into generative AI, building proprietary models and launching popular features. The stock has gained 77% this year as investors expect AI to expand Adobe’s user base, increase revenue per user and cement its dominance among creative design professionals. https://archive.is/4Okme

Clearlake, Insight agree US$4.4 billion deal to buy Alteryx.

A consortium backed by Clearlake Capital and Insight Partners has agreed to buy Alteryx Inc. in a deal valuing the software developer at US$4.4 billion including debt. Alteryx shareholders will receive US$48.25 in cash for every Class A or Class B common share they own, according to a statement on Monday that confirmed an earlier Bloomberg News report. Reuters had previously reported the talks. The offer represents a 59% premium to Alteryx’s last closing price before news of a potential sale first emerged in early September. The shares closed Monday down 1.6% to US$47.27. https://archive.is/xDW22

Cybersecurity firm Okta to buy startup Spera for reported US$100 million.

Okta, the multifactor authentication software firm, announced on Tuesday that it will acquire the Israeli security startup Spera. The deal is reportedly worth more than US$100 million, according to Israeli tech news outlet Calcalist. Okta said it expects to complete the acquisition by April 2024. Spera was founded last year and had previously only just US$10 million in seed funding, led by Tel Aviv-based YL Ventures and joined by firms including Google and Palo Alto Networks. The company’s product helps businesses keep track of their accounts across different software subscriptions and cloud platforms, both to keep track of suspicious logins and to manage costs by cutting down on unused software. Okta plans to roll those capabilities into its existing identity management software for enterprise customers, the company said. http://tinyurl.com/yx6emw2r

Blue Origin, others make buyout bids for rocket maker ULA.

Blue Origin has made a bid to acquire rocket maker United Launch Alliance, a deal which could give Jeff Bezos’s company an edge in the fight for federal launch contracts, The Wall Street Journal reported. ULA, a joint venture between Boeing and Lockheed Martin formed in 2005, was the federal government’s main launch provider before Elon Musk’s SpaceX entered the market in 2014. In 2018, Blue Origin won a contract with ULA to supply engines for its next generation Vulcan rocket. ULA plans to launch Vulcan for the first time on January 8. Private equity firm Cerberus has also made a bid, and defense contractor Textron has expressed interest in acquiring the company, according to the report, which did not disclose the value of the bids. http://tinyurl.com/debwmcpt

Move over, Nvidia: The best-performing stock of 2023 is a battery maker that’s skyrocketed nearly 600%.

The world’s best-performing stock of 2023 isn’t part of the vaunted “Magnificent Seven” — it’s a little-known South Korean cathode maker. Shares in Ecopro have soared a staggering 572% year-to-date, per data from Refinitiv. Seoul’s tech-heavy Kosdaq index is up 27% over the same period. South Koreans have piled into so-called “theme stocks” like EV battery makers over the past 12 months, in a frenzy that’s led to huge spikes in volatility and forced financial watchdogs to crack down on what they see as excessive speculation. Ecopro’s stock price jumped over 1,000% between January and late July. Although it’s given up some of those gains since, it’s still the best performer in Bloomberg’s 2,647-member World Index year-to-date. The component maker’s stratospheric returns in 2024 mean it’s even outperformed US semiconductor giant Nvidia, the poster child for this year’s AI-fueled rally. Nvidia, which dominates the market for the graphics processing units (GPUs) that power large language models like GPT-4, has seen its stock price skyrocket 229% year-to-date, lifting its total market capitalization to more than US$1.2 trillion. http://tinyurl.com/mrf3htur

Micron gains on strong forecast buoyed by data center demand.

Shares of Micron Technology Inc. gained about 6% in premarket trading Thursday after the largest US maker of memory semiconductors gave a strong revenue forecast, indicating that data center demand is compensating for a slowly recovering market for personal computers and smartphones. Fiscal second-quarter revenue will be US$5.1 billion to US$5.5 billion, the company said in a statement Wednesday. That compares with an average analyst estimate of US$4.99 billion. Excluding certain items, Micron will have a loss of 21 cents to 35 cents — narrower than the 62 cents projected by analysts. http://tinyurl.com/2ecevz4w

Electric scooter company Bird files for bankruptcy.

Micromobility startup was delisted from the NYSE in September. Bird has filed for Chapter 11 bankruptcy, capping off a turbulent year for the electric scooter company. In a press release, Bird confirmed that it had entered into a “financial restructuring process aimed at strengthening its balance sheet,” with the company continuing to operate as normal in pursuit of “long-term, sustainable growth.” A Chapter 11 bankruptcy will enable Bird to restructure its financials without disrupting day-to-day operations, with Apollo Global Management division MidCap Financial among existing lenders providing US$25 million in financing through the bankruptcy proceedings. The ultimate goal is to sell Bird’s assets, with a so-called “stalking horse” agreement kicking off a bidding process designed to get as much value out of Bird as possible, with its lenders setting a baseline bid before opening things up to external suitors over the next four months. http://tinyurl.com/5ymapvud

Emerging Technologies

Apple aiming to sell Vision Pro in February.

Bloomberg reported Wednesday that Apple is aiming to make the Vision Pro available for sale in February. Apple announced the Vision Pro in June but said it would only be available in “early 2024” without providing a specific date. Journalists and analysts who were given a demo of the device in June said they weren’t able to use certain features such as Siri, the virtual keyboard or the front-facing screen that shows a wearer’s eyes, suggesting these elements weren’t yet finished. Releasing the Vision Pro in February is a surprise given Apple’s previous track record with the Apple Watch. That product was announced in September 2014 for “early 2015” and ultimately shipped the following April. http://tinyurl.com/3w5vkhuy

Google might already be replacing some Ad sales jobs with AI.

Google is wrapping its head around the idea of being a generative AI company. The “code red” called in response to ChatGPT has had Googlers scrambling to come up with AI features and ideas. Once all the dust settles on that work, Google might turn inward and try to “optimize” the company with some of its new AI capabilities. With artificial intelligence being the hot new thing, how much of Google’s, uh, natural intelligence needs to be there? A report at The Information says that AI might already be taking people’s jobs at Google. The report cites people briefed on the plans and says Google intends to “consolidate staff, including through possible layoffs, by reassigning employees at its large customer sales unit who oversee relationships with major advertisers.” According to the report, the jobs are being vacated because Google’s new AI tools have automated them. The report says a future restructuring was apparently already announced at a department-wide Google Ads meeting last week. Google announced a “new era of AI-powered ads” in May, featuring a “natural-language conversational experience within Google Ads, designed to jump-start campaign creation and simplify Search ads.” Google said its new AI could scan your website and “generate relevant and effective keywords, headlines, descriptions, images, and other assets,” making the Google Ads chatbot one part designer and one part sales expert. http://tinyurl.com/5cemxat5

Apple develops breakthrough method for Running LLMs on iPhones.

LLM-based chatbots like ChatGPT and Claude are incredibly data and memory-intensive, typically requiring vast amounts of memory to function, which is a challenge for devices like iPhones that have limited memory capacity. To tackle this issue, Apple researchers have developed a novel technique that uses flash memory – the same memory where your apps and photos live – to store the AI model’s data. The breakthrough in AI efficiency opens new possibilities for future iPhones, such as more advanced Siri capabilities, real-time language translation, and sophisticated AI-driven features in photography and augmented reality. The technology also sets the stage for iPhones to run complex AI assistants and chatbots on-device, something Apple is already said to be working on. Apple’s work on generative AI could eventually be incorporated into its Siri voice assistant. Apple in February 2023 held an AI summit and briefed employees on its large language model work. According to Bloomberg, Apple is aiming for a smarter version of Siri that’s deeply integrated with AI. Apple is planning to update the way that Siri interacts with the Messages app, allowing users to field complex questions and auto-complete sentences more effectively. Beyond that, Apple is rumored to be planning to add AI to as many Apple apps as possible. http://tinyurl.com/386nza75

Self-Driving vehicles are finding a home in industrial operations.

Autonomous trucks may be running into trouble on the highway, but the technology behind self-driving vehicles is getting traction deeper inside shipping operations in freight yards, warehouses and seaports. Kimberly-Clark credits hundreds of autonomous forklifts with helping the consumer-products company keep Kleenex facial tissue, Cottonelle toilet paper and other goods flowing to stores despite labor shortages during the Covid pandemic. Sharpie maker Newell Brands says the vehicles are helping deliver safety improvements and cost savings across the company’s operations. Logistics executives say autonomous vehicles that lift and move heavy pallets are becoming more common as companies find it harder to hire workers. Although the market for autonomous trucks that move trailers around freight yards remains small, technology intelligence firm ABI Research projects it will grow at a compound annual growth rate of about 53% from 2022 to 2030. ABI estimates millions of artificial-intelligence-enabled cameras will be installed outside warehouses to help the robotic equipment find its way around the industrial yards. http://tinyurl.com/5v9mcmv5

In U.S.-China AI contest, the race is on to deploy killer robots.

Alongside Sydney Harbour, engineers are working on a submarine that will be powered by artificial intelligence and will have no human crew. The project is being driven by a contest between the U.S., its allies and China to develop AI-controlled weapons that will operate autonomously, including warships and fighter jets. The outcome of this competition could determine the global balance of power. To meet the challenge of a rising China, the Australian Navy is taking two very different deep dives into advanced submarine technology. One is pricey and slow: For a new force of up to 13 nuclear-powered attack submarines, the Australian taxpayer will fork out an average of more than AUD$28 billion (US$18 billion) apiece. And the last of the subs won’t arrive until well past the middle of the century. The other is cheap and fast: launching three unmanned subs, powered by artificial intelligence, called Ghost Sharks. The navy will spend just over AUD$23 million each for them – less than a tenth of 1% of the cost of each nuclear sub Australia will get. And the Ghost Sharks will be delivered by mid-2025. The two vessels differ starkly in complexity, capability and dimension. The uncrewed Ghost Shark is the size of a school bus, while the first of Australia’s nuclear subs will be about the length of a football field with a crew of 132. But the vast gulf in their cost and delivery speed reveal how automation powered by artificial intelligence is poised to revolutionize weapons, warfare and military power – and shape the escalating rivalry between China and the United States. Australia, one of America’s closest allies, could have dozens of lethal autonomous robots patrolling the ocean depths years before its first nuclear submarine goes on patrol. Without the need to cocoon a crew, the design, manufacture and performance of submarines is radically transformed, says Shane Arnott. He is the senior vice-president of engineering at U.S. defense contractor Anduril, whose Australian subsidiary is building the Ghost Shark subs for the Australian Navy. An intensifying military-technology arms race is heightening the sense of urgency. On one side are the United States and its allies, who want to preserve a world order long shaped by America’s economic and military dominance. On the other is China, which rankles at U.S. ascendancy in the region and is challenging America’s military dominance in the Asia-Pacific. Ukraine’s innovative use of technologies to resist Russia’s invasion is heating up this competition. A spokesperson for Australia’s Department of Defence said it was a priority to “translate disruptive new technologies into Australian Defence Force capability.” The department is investigating, among other things, “autonomous undersea warfare capabilities to complement its crewed submarines and surface fleet, and enhance their lethality and survivability,” the spokesperson said. America will field “multiple thousands” of autonomous, unmanned systems within the next two years in a bid to offset China’s advantage in numbers of weapons and people, the U.S. Deputy Secretary of Defense, Kathleen Hicks, said in an August 28 speech. “We’ll counter the PLA’s mass with mass of our own, but ours will be harder to plan for, harder to hit, harder to beat,” she said. https://bit.ly/48vKtPf

NHS to pioneer drone deliveries in bid to improve service.

Silicon Valley group Zipline allies with trust in northern England to drop essential medical supplies. Zipline’s drones can travel up to 130 miles and parachute packages on to landing zones. Silicon Valley-based Zipline is to deliver medical supplies by drone for the UK’s NHS in a pioneering move that is meant to cut costs and improve services to hundreds of thousands of patients. The world’s largest drone logistics service expects to deliver medical and surgical supplies to more than 30 NHS hospitals and clinics in the north of England in the second half of next year. Its fixed-wing drones can travel up to 130 miles and parachute packages on to landing zones. Zipline’s move into the UK is the latest expansion for the US drone delivery company, which includes Cleveland Clinic, Intermountain Healthcare and Walmart among its partners. The company, which at its latest funding round this year was reported to have a US$4.2 billion valuation, counts Sequoia Capital, Andreessen Horowitz, Baillie Gifford, Temasek and Fidelity among its backers. The company received clearance in 2023 from the US Federal Aviation Administration to carry out flights “beyond visual line of sight”, waiving a requirement to have humans on the ground monitoring each flight. http://tinyurl.com/3k7es97v

Media, Streaming, Gaming & Sports Betting

Chanos turns bullish on US gaming due to bad bettors, FT says.

Short-seller Jim Chanos has switched to a bullish stance on the US gambling industry’s prospects, he told the Financial Times in an interview. The hedge fund manager, who is best known for his bearish bet against Enron Corp., said he had reassessed his pessimism about online sports betting despite previously shorting DraftKings Inc. in May 2021. He exited his short position in July last year, booking a US$10 million profit. “The betting numbers have continued to be strong in the US, stronger than we thought they’d be,” he told the FT. “The thing that we underestimated — that I think is going to be a benefit for all these companies for a while anyway — is what bad betters the US gamblers are.” He said he had witnessed growth in riskier forms of betting, in which operators can boost margins, during the 2022-2023 National Football League season. Such wagers have “really bad-odds bets for [gamblers] . . . so it’s become a better business than we thought it would be and we saw that during last year’s football season and that’s why we covered our short,” he told the paper. https://archive.is/6fVs0

Amazon Considers Investing in Regional Broadcaster Diamond Sports.

Amazon is considering investing in bankrupt regional sports broadcaster Diamond Sports, The Wall Street Journal reported on Monday. The potential deal could eventually lead to Amazon’s Prime Video broadcasting Diamond’s games, which include local rights to half of NBA and MLB matches, as well as one-third of NHL games, according to the Journal. Diamond, which declared bankruptcy in March, received permission from some creditors to engage in the talks with Amazon, the Journal reported citing people familiar with the matter. Amazon since 2019 has had a stake in another regional sports broadcaster, the YES Network, which broadcasts New York Yankees and Brooklyn Nets games in the New York metropolitan area. http://tinyurl.com/nhmk62nm

China unveils new draft rules for videogames.

China’s regulators published new draft rules for videogames that aim to restrict online spending, causing the shares of major Chinese gaming companies such as Tencent and NetEase to plunge. The new rules, announced Friday by the National Press and Publication Administration, ban some of the industry’s commonly used tactics that encourage users to play games more often and spend more money, such as rewards for people who log in every day or spend money for consecutive days. The draft rules, which came at a time when Tencent’s earnings were recovering, raise questions about whether China’s internet companies will face a new round of crackdown. When China’s government tightened its regulations for internet companies in 2021, it froze new game licenses for eight months, but it resumed issuing licenses last year. Tencent last month said its revenue for the third quarter rose 10%. http://tinyurl.com/4ceed8r9

PlayStation sales and blockbuster games propel console market back to growth.

Sony outsells Microsoft’s Xbox and Nintendo’s Switch as sector recovers from post-pandemic slump. Resurgent sales of Sony’s latest PlayStation and a strong line-up of blockbuster games led the console market back to growth this year after a post-pandemic slump. Sony said on Wednesday it had sold 50 million PlayStation 5s almost as quickly as its last generation of the device, overcoming longstanding supply problems to outsell Microsoft’s Xbox by almost three to one in 2023. The console market — including hardware, software and services — is set to rebound 7.2 per cent this year to US$60.9 billion, after a 7.3 per cent decline in 2022, according to data from Ampere Analysis, the research group. Sony said it hit the 50 million sales milestone on December 9, 161 weeks after the PS5 launched. This compares with the 160 weeks it took the PS4 to reach the same point after its release. Microsoft has not published official Xbox sales figures for several years. http://tinyurl.com/43a5pnx9

Adtech, Privacy & Regulatory

Google to pay US$700 million to settle play store litigation.

Google agreed to pay US$700 million to settle claims by a group of state attorneys general that it violated antitrust laws through its operation of the Google Play store for mobile apps. Under the settlement, Google will pay US$630 million to a fund that will be distributed to consumers and US$70 million to a fund that will be used by the states, the company said in a statement Monday night. Google will also allow Android developers to use alternative billing systems, following opposition from app makers over fees Google charges on in-app purchases. Google and the states reached a settlement agreement in September but didn’t disclose the terms. The litigation is one of a handful of cases alleging that Google abused its market dominance with Google Play to prevent competition in mobile app distribution. Google settled a similar lawsuit from Tinder maker Match Group but lost another in federal court to Epic Games, a decision that Google plans to appeal. http://tinyurl.com/2yzm3rw4

Comcast says hackers stole data of close to 36 million Xfinity customers.

Comcast has confirmed that hackers exploiting a critical-rated security vulnerability accessed the sensitive information of almost 36 million Xfinity customers. This vulnerability, known as “CitrixBleed,” is found in Citrix networking devices often used by big corporations and has been under mass-exploitation by hackers since late August. Citrix made patches available in early October, but many organizations did not patch in time. http://tinyurl.com/h54ww94w

Fintech, Blockchain & Cryptocurrency

Walmart expands Affirm partnership to 4,500 stores.

Walmart has expanded its partnership with “buy now, pay later” company Affirm to self-checkout kiosks at more than 4,500 U.S. stores, the companies said on Tuesday. Affirm, which offers monthly installment loans to shoppers, already has a large presence in e-commerce, including through partnership with Amazon. The Walmart deal helps the company increase its reach in physical stores. Affirm shares closed up 15% at US$50.46 following the announcement. The company’s stock has more than quadrupled in value this year but remains far below its 2021 peak of more than US$160. http://tinyurl.com/muxs6wdn

BlackRock’s proposed bitcoin ETF will now allow cash redemptions after pushback from the SEC.

BlackRock updated its proposed bitcoin spot ETF to allow cash redemptions, bringing the fund more in line with regulatory demands. According to an amended S-1 filing, the world’s largest asset manager has agreed to put aside its preferred in-kind redemption mechanism for the time being and instead offer investors cash creation and redemption. BlackRock previously filed for the ETF to offer in-kind redemptions, which would allow investors to redeem their fund shares for the bitcoin held within the investment vehicle. Under the SEC-sanctioned cash model, the firm will effectively have to convert the crypto asset into cash when returning shares to investors. But BlackRock isn’t giving up hope that in-kind redemptions won’t be made available down the road. BlackRock was preceded by other firms in amending the redemption procedure, such as Ark 21Shares and WisdomTree. http://tinyurl.com/4mt5nb8c


ASML ships first “High NA” lithography system to Intel.

Dutch semiconductor equipment maker ASML said on Thursday it is shipping the first of its new “High NA” extreme ultraviolet lithography systems to Intel Corp. The new machines, which will cost more than US$300 million each, are expected to help computer chip makers produce smaller, faster semiconductors. ASML published an image of one segment of the machine departing from its headquarters in Veldhoven, Netherlands, in a protective case with a red ribbon tied around it, on the X social media platform. ASML dominates the market for lithography systems – machines that use lasers to help create the circuitry of chips. The High NA machines, which when assembled will be larger than a truck, are being shipped in 250 separate crates, including 13 large containers. They are expected to be used in commercial chip manufacturing starting in 2026 or 2027. Intel ordered the first of the High NA pilot machines in 2022. Other chip manufacturers that have ordered the machines include TSMC, Samsung, SK Hynix and Micron. ASML told reporters on Nov. 30 the company expected to ship the first of the pilot tools before the end of the year. http://tinyurl.com/bdcspufw


The information and recommendations made available through our emails, newsletters, website and press releases (collectively referred to as the “Material”) by Sophic Capital Inc. (“Sophic” or “Company”) is for informational purposes only and shall not be used or construed as an offer to sell or be used as a solicitation of an offer to buy any services or securities. In accessing or consuming the Materials, you hereby acknowledge that any reliance upon any Materials shall be at your sole risk. In particular, none of the information provided in our monthly newsletter and emails or any other Material should be viewed as an invite, and/or induce or encourage any person to make any kind of investment decision. The recommendations and information provided in our Material are not tailored to the needs of particular persons and may not be appropriate for you depending on your financial position or investment goals or needs. You should apply your own judgment in making any use of the information provided in the Company’s Material, especially as the basis for any investment decisions. Securities or other investments referred to in the Materials may not be suitable for you and you should not make any kind of investment decision in relation to them without first obtaining independent investment advice from a qualified and registered investment advisor. You further agree that neither Sophic, its, directors, officers, shareholders, employees, affiliates consultants, and/or clients will be liable for any losses or liabilities that may be occasioned as a result of the information provided in any of the Material. By accessing Sophic’s website and signing up to receive the Company’s monthly newsletter or any other Material, you accept and agree to be bound by and comply with the terms and conditions set out herein. If you do not accept and agree to the terms, you should not use the Company’s website or accept the terms and conditions associated to the newsletter signup. Sophic is not registered as an adviser or dealer under the securities legislation of any jurisdiction of Canada or elsewhere and provides Material on behalf of its clients pursuant to an exemption from the registration requirements that is available in respect of generic advice. In no event will Sophic be responsible or liable to you or any other party for any damages of any kind arising out of or relating to the use of, misuse of and/or inability to use the Company’s website or Material. The information is directed only at persons resident in Canada. The Company’s Material or the information provided in the Material shall not in any form constitute as an offer or solicitation to anyone in the United States of America or any jurisdiction where such offer or solicitation is not authorized or to any person to whom it is unlawful to make such a solicitation. If you choose to access Sophic’s website and/or have signed up to receive the Company’s monthly newsletter or any other Material, you acknowledge that the information in the Material is intended for use by persons resident in Canada only. Sophic is not an investment advisor nor does it maintain any registrations as such, and Material provided by Sophic shall not be used to make investment decisions. Information provided in the Company’s Material is often opinionated and should be considered for information purposes only. No stock exchange or securities regulatory authority anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. Sophic and/or its principals and employees may have positions in the stocks mentioned in the Company’s Material and may trade in the stocks mentioned in the Material. Do not consider buying or selling any stock without conducting your own due diligence and/or without obtaining independent investment advice from a qualified and registered investment advisor. The Company has not independently verified any of the data from third party sources referred to in the Material, including information provided by Sophic clients that are the subject of the report, or ascertained the underlying assumptions relied upon by such sources. The Company does not assume any responsibility for the accuracy or completeness of this information or for any failure by any such other persons to disclose events which may have occurred or may affect the significance or accuracy of any such information. The Material may contain forward looking information. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible,” “projects,” “plans,” and similar expressions, or statements that events, conditions or results “will,” “may,” “could,” or “should” occur or be achieved or their negatives or other comparable words and include, without limitation, statements regarding, projected revenue, income or earnings or other results of operations, strategy, plans, objectives, goals and targets, plans to increase market share or with respect to anticipated performance compared to competitors, product development and adoption by potential customers. These statements relate to future events and future performance. Forward-looking statements are based on opinions and assumptions as of the date made, and are subject to a variety of risks and other factors that could cause actual events/results to differ materially from these forward looking statements. There can be no assurance that such expectations will prove to be correct; these statements are no guarantee of future performance and involve known and unknown risks, uncertainties and other factors. Sophic provides no assurance as to future results, performance, or achievements and no representations are made that actual results achieved will be as indicated in the forward looking information. Nothing herein can be assumed or predicted, and you are strongly encouraged to learn more and seek independent advice before relying on any information presented.