February 18, 2024: First Down Week In Six Weeks. All Eyes On Nvidia Next Week.

Last week, markets held up reasonably well despite hot inflation reports. Dow Jones was down 0.1%, S&P 500 lost 0.4% and Nasdaq fell 1.3%. As indices remain near highs, Nvidia’s earnings report Wednesday will be crucial. The Company surpassed Amazon in market capitalization on Tuesday. OpenAI completed a deal that values the company at US$80 billion or more, nearly tripling its valuation in less than 10 months. SoftBank founder Masayoshi Son is seeking as much as US$100 billion to bankroll a chip venture to compete with Nvidia and supply semiconductors essential for AI. Nvidia also blogged about a new AI model, Sora, that produces original video based on text descriptions of what people want to see. Google on Thursday announced an upgraded version of its flagship conversational artificial intelligence, Gemini. Apple plans to release an AI-powered coding assistant this year. Walmart is in talks to buy TV maker Vizio. Uber unveiled a US$7 billion stock buyback plan. In Canada, as Sophic Client Kraken Robotics’ stock is at fresh 52 week highs, the company provided positive updates for 2023 and a strong 2024 outlook. Kraken’s sales funnel pipeline at the end of December 2023 was over $900 million, and the company expects 2024 revenue between $90 to $100 million and Adj EBITDA in the $18 to $24 million range. Another Canadian small cap company is getting taken out, as Think Research entered into a definitive agreement to be acquired by Beedie Capital, for a 100% premium to the closing price of the Common Shares on February 15, 2024 and a 75% premium to the 30-day volume-weighted average trading price of the Common Shares. Shopify’s warned operating expenses would grow in Q1, sending its stock down more than 7% in trading Tuesday morning.

Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) updates 2023 financial guidance and provides strong 2024 outlook.

Unaudited preliminary results show that the Company’s strong momentum continued from Q3 2023 into Q4 2023. As a result, Kraken Robotics expects to report fiscal 2023 revenue at approximately the midpoint of our $66 and $72 million guidance, representing top line growth of about 68% year over year. The Company also expects Adj EBITDA toward the higher end of our $12 to $15 million guidance, versus Adjusted EBITDA of $5.3 million for the year ended December 31, 2022. Capital expenditures for 2023 are currently anticipated to be approximately $7.5 million, higher than our $5 to $6 million guidance due to additional investments in assets for engineering, customer success and services groups to drive growth in 2024 and beyond. For 2024, the Company currently expects revenue between $90 to $100 million and Adj EBITDA in the $18 to $24 million range. Capital expenditures in 2024 are expected to range from $6 to $7 million. 2024 outlook is largely driven by contracts in hand and reflects strength across both our Products and Services groups addressing defense and offshore energy customers. Kraken’s sales funnel pipeline at the end of December 2023 was over $900 million. https://bit.ly/3wfxSls

Sophic Client OneSoft Solutions Inc. (OSS-TSXV, OSSIF-OTC) announces commercial availability of new crack management module to integrate with Cognitive Integrity Management.

OneSoft’s wholly owned OneBridge Solutions, Inc. operating subsidiary will showcase several new functionality modules that integrate with OneBridge’s Cognitive Integrity Management® (CIM) software-as-a-service (SaaS) solution at the Pipeline and Pigging Integrity Management (PPIM) conference February 12 – 16, 2024 in Houston, TX. OneBridge will release its new Crack Management solution for general market use. Based on the technology sharing agreement with TL Anderson Consulting. The newly released MAT-8 CIM Simplified Fatigue Analysis/Fitness for Service Crack Management functions allow users to perform a basic crack fatigue screening analysis using Crack inline inspection (ILI) inspection results. ILI Data is ingested into the CIM platform, similar to CIM’s Corrosion Management module. Pre-analysis reports help users understand the nature of their inspection results, even before any engineering calculations are performed. Users can then calculate both failure pressures and remaining life for all reported crack-like flaws. Remaining life calculation considers both fatigue and stress corrosion cracking (“SCC”) growth. Users have the option to apply different analytical methodologies, including fixed growth rates, crack-to-crack ILI, or half-life analysis. The Company’s optional enhanced Crack PCFA Management Module provides the addition of Pressure Cycle Fatigue Analysis – Pressure cycling using Modified Mat-8, which performs full fatigue analysis. Pressure data can be uploaded into the CIM platform with the analysis results supporting further sensitivity studies, the prioritization of anomalies, determination of hydro testing and support of ILI re-inspection intervals. https://bit.ly/3uCvjcr

Think Research (THNK-TSXV) enters into definitive agreement to be acquired by Beedie Capital.

Think Research Corporation shareholders to receive cash payment of $0.32 per Common Share, representing a 100% premium to the closing price of the Common Shares on February 15, 2024 and a 75% premium to the 30-day volume-weighted average trading price of the Common Shares. Special Committee and Board (excluding any interested directors) unanimously determined the Transaction is in the best interests of the Company, and the Board (excluding any interested directors) has recommended that shareholders vote in favour of the Transaction. Certain shareholders, including Chief Executive Officer, Sachin Aggarwal, to roll their equity ownership. Shareholders holding 48.21% of the Common Shares have agreed to support the Transaction. http://tinyurl.com/mr36stm6

Shopify (SHOP-NYSE, SHOP-TSX) forecasts higher expenses as marketing ramps up.

Shopify warned that its operating expenses would grow in the first quarter as it spends more on marketing, sending shares in the e-commerce software giant down more than 7% in trading Tuesday morning. Shopify said expenses would increase at a “low teens” rate from the fourth quarter, and that free cash flow margin as a percentage of revenue would be a high single digits figure. Free cash flow margin was 21% for the fourth quarter and 13% for the full year in 2023. The company also predicted a slight slowdown in revenue growth, which it said would be in the low twenties in the current quarter versus 26% year-on-year growth in the fourth quarter. Shopify sold off its logistics business to freight forwarding startup Flexport in May, in a major reversal that helped the e-commerce software maker cut costs and return to profitability. Now, the company is emphasizing a continued push to win larger enterprise clients and growing the number of sales it facilitates in brick-and-mortar stores. http://tinyurl.com/bdcmrjn6

CDPQ invests $125 million to accelerate Levio’s growth.

CDPQ announced an investment of $125 million to support the acquisition strategy of Levio, a leading consulting firm that leverages its expertise to achieve digital transformations, tailoring new technologies to ever-changing business realities. Founded in 2014 and now present in five countries, the company specializes in supporting institutional and corporate clients when planning, managing and executing large-scale digital transformation programs. In a context where new technologies enable evolving organization’s business models, Levio shares the risk of project execution with its clients and commits to delivering the expected solutions and benefits. With a dozen acquisitions under its belt, Levio is a disciplined buyer that has demonstrated its integration capabilities through an approach that aims to develop new skills. The company is currently entering a new expansion phase, primarily in North America, with a view to increasing its geographic footprint, further strengthening its value-added offering, and developing new business practices. Levio currently has nearly 2,000 consultants working in 12 offices in Canada, the United States, Morocco, India and France.  As part of this transaction, Desjardins Capital Markets acted as Levio’s exclusive financial advisor. http://tinyurl.com/4zecb9ar

CDPQ acquires 80% stake in a solar plant in Japan.

CDPQ, a global investment group, today announced it has acquired an 80% stake in a solar power generation plant in Japan, alongside its portfolio company Shizen Energy Inc. The Inuyama project, which went into operation in the last few days, has a total solar power generation capacity of 31 MW, enough to power the equivalent of 7,850 homes. This acquisition marks CDPQ’s first co-investment with Japan’s Shizen Energy as part of a JPY 50 billion ($460 million) co-investment framework announced last year, when CDPQ invested JPY 20 billion ($186 million) in the company to support its growth. http://tinyurl.com/2hxfnewc

Evercloak closes $2 million seed round as it looks to cool buildings without heating the planet.

Kitchener-Waterloo-based cleantech startup Evercloak has raised $2 million in seed funding as it gears up to commercialize its energy efficient membrane technology. The round was led by Bioindustrial Innovation Canada through the business accelerator’s Sustainable Chemistry Alliance fund, with participation from Greensoil Ventures, Groundbreak Ventures, Ontario Centres of Innovation, and a number of angel investors. Nearly 70 countries recently pledged to reduce their cooling emissions by 68 percent by 2050. A spinout from the University of Waterloo founded in 2018, Evercloak has developed ultra-thin nanofilms designed to reduce the energy used by commercial and residential air conditioning and dehumidification systems. Aimed at lowering greenhouse gas emissions, the startup says its technology can reduce air conditioning energy demands by more than 50 percent. According to the United Nations, conventional cooling, such as air conditioning, is responsible for over seven percent of global greenhouse gas emissions, and if not managed, energy needs for space cooling will triple by 2050. Nearly 70 countries, including Canada, recently pledged to reduce their cooling emissions by 68 percent by 2050. Evercloak says its tech could help these nations meet those targets. The startup’s nanocoatings range from single atomic layers to hundreds of nanometers in thickness, and can produce films using a variety of materials, including graphene oxide, graphene, and carbon nanotubes, among others. http://tinyurl.com/3x46usva

OpenAI completes deal that values the company at US$80 billion.

OpenAI has completed a deal that values the San Francisco artificial intelligence company at US$80 billion or more, nearly tripling its valuation in less than 10 months, according to three people with knowledge of the deal. The company would sell existing shares in a so-called tender offer led by the venture firm Thrive Capital, the people said. The deal lets employees cash out their shares in the company, rather than a traditional funding round that would raise money for business operations. OpenAI, which declined to comment, is now one of the world’s most valuable tech start-ups, behind ByteDance and SpaceX, according to figures from the data tracker CB Insights. The deal comes at a critical time for OpenAI, providing it with an important vote of confidence after a year of controversy. In November, the company’s board fired Sam Altman, its chief executive, because it lost confidence in his leadership. The dismissal ignited a week of chaos and threw the company’s future into doubt, as employees threatened to resign in solidarity with Mr. Altman. Ultimately, he was reinstated and several board members resigned. The company agreed to a similar deal early last year. The venture-capital firms Thrive Capital, Sequoia Capital, Andreessen Horowitz and K2 Global agreed to buy OpenAI shares in a tender offer, valuing the company at around US$29 billion. Investors are eager to pour money into A.I. companies. Last January, Microsoft invested US$10 billion in OpenAI, bringing its total investment in the San Francisco start-up to US$13 billion. Since then, Anthropic, an OpenAI rival, has raised US$6 billion from Google and Amazon. Cohere, a start-up founded by former Google researchers, raised US$270 million, bringing its total funding to more than US$440 million, and Inflection AI, founded by a former Google executive, also raised a US$1.3 billion round, bringing its total to US$1.5 billion. http://tinyurl.com/mucjxa4y

Masayoshi Son seeks to build a US$100 Billion AI chip venture.

SoftBank Group Corp. founder Masayoshi Son is seeking as much as US$100 billion to bankroll a chip venture to compete with Nvidia Corp. and supply semiconductors essential for AI, according to people with knowledge of the matter. Code-named Izanagi, the project marks the billionaire’s next big endeavor as SoftBank sharply curtails startup investments. Son envisions creating a company that can complement chip design unit Arm Holdings Plc and allow the billionaire to build an AI chip powerhouse, said the people, who requested anonymity because the discussions remain private. In one scenario being considered, SoftBank would provide US$30 billion, with US$70 billion possibly coming from institutions in the Middle East, one of the people said. http://tinyurl.com/45sa88zp

OpenAI CEO Altman asks U.S. for approval to launch AI chip venture.

As OpenAI CEO Sam Altman formulates a plan to radically increase the number of specialized servers available to develop and operate artificial intelligence, he is asking Biden administration officials, Bloomberg reported. Altman has been talking to sovereign wealth funds, including in the Middle East, to participate in a new venture that would aim to develop and manufacture new server chips. Altman has said he worries that based on current trends, there won’t be enough capacity to power the software his company is developing. But raising money from Middle Eastern countries such as the United Arab Emirates might raise U.S. concerns, given Chinese investment and collaboration with AI developers in the region. There’s also the question of where the theoretical new chips might be produced, as the U.S. has restricted the availability of chipmaking machines to avoid them falling into Chinese hands. http://tinyurl.com/4dbcfd7m

OpenAI unveils AI generator of realistic video.

OpenAI on Thursday blogged about a new artificial model, Sora, that produces original video based on text descriptions of what people want to see. The model is similar to technology from startups Runway and Pika Labs but ups the ante in the fast-moving sector. The OpenAI preview also is sure to open some eyes in Hollywood and among video creators. OpenAI also didn’t say when its video model would be available publicly, but said it would share with a limited number of outsiders. Throughout the day, OpenAI CEO Sam Altman posted demonstrations of Sora’s capabilities on his X account. “Sam plz don’t make me homeless,” joked YouTube video juggernaut Jimmy Donaldson, better known as MrBeast, in response to Altman’s announcement on X. Runway CEO Cris Valenzuela posted, simply: “game on.” http://tinyurl.com/37xm8usw

Google unveils major upgrade to flagship conversational AI.

Google on Thursday announced an upgraded version of its flagship conversational artificial intelligence, Gemini, underscoring the urgency with which the company is moving to compete with market leader OpenAI. The company said it is testing the new model with a small group of outside developers but didn’t say when it would be broadly available. Google is likely to make the new version of Gemini available to consumers soon through a paid subscription to a chatbot, also named Gemini, that competes with OpenAI’s ChatGPT. Google said its new Gemini model, also known as a large language model, was cheaper to run than an earlier version it launched just a week ago and that it leaps past rivals in one key aspect: the amount of information it can process. Customers can ask the AI model to analyze one hour of video, 11 hours of audio, more than 30,000 lines of code, or more than 700,000 words—meaning it can digest at least several books’ worth of text. These features will be particularly useful for customers who want to produce summaries of documents or find patterns in financial data they upload to the model. And it means the new Gemini can handle 30 times more customer data, known as inputs, at a time, compared to what the best available version of Gemini could do just a week ago. Google said the new Gemini handles five times more customer inputs than a model from Anthropic, a rival that Google also has funded. http://tinyurl.com/zcb4e7m8

Apple plans to release AI-powered coding assistant this year.

Apple could release a software coding assistant as early as this year that helps developers tap into large language models to automate writing blocks of code for Apple’s software, Bloomberg reported. The tool would be similar to Microsoft’s GitHub Copilot, the automatic code-writing tool powered by OpenAI’s artificial intelligence. Bloomberg said Apple’s tool will be released as part of the next version of Xcode, Apple’s programming software, and it is already being tested internally. Developers have flocked to GitHub Copilot, which charges US$10 a month to suggest code fragments while they type, similar to autocomplete in Gmail. These tools have eased the process of writing long lines of mundane computer code from scratch. http://tinyurl.com/y2dnwfp5

Nvidia is now worth more than Amazon thanks to the AI chip boom.

Nvidia surpassed Amazon in market capitalization on Tuesday. It’s a sign of strong demand for semiconductors that run cutting-edge artificial intelligence and the investor appetite for the companies that make the chips. Nvidia closed at US$721.28 per share, giving it a market value of US$1.78 trillion to Amazon’s US$1.75 trillion market cap. While Nvidia also briefly passed Amazon on Monday, this is the first since 2002 that Nvidia is worth more after the market close. Nvidia’s main products in 2002 were graphics cards for gaming PCs. But Nvidia shares are up over 246% in the last 12 months on robust demand for its server AI chips that can cost more than US$20,000 each. Companies such as Microsoft, OpenAI and Meta need tens of thousands of them to run products such as ChatGPT and Copilot. Amazon isn’t slowing down, either. The company reported better-than-expected quarterly earnings Feb. 1 that showed it successfully reined in expenses after laying off 27,000 employees. Amazon shares are up about 78% in the past 12 months. Still, it shows there’s an ongoing shuffle among the world’s most valuable companies. In January, for example, Microsoft surpassed Apple to become the most valuable U.S. company by market capitalization, largely on the strength of its cloud partnership with OpenAI and new AI features in Windows and Office. Nvidia reports quarterly earnings Feb. 21. Analysts expect 118% annual growth in sales to US$59.04 billion. http://tinyurl.com/3p3vc68v

Walmart in talks to buy TV maker Vizio.

The retail giant is in talks to buy smart television-manufacturer for more than US$2 billion. The move would give Walmart more places where it can sell ads and pitch shoppers on goods. Walmart, including its Sam’s Club chain, has historically been Vizio’s largest customer. The discussions between Walmart and Vizio are ongoing, and a deal may not happen. Shares in Vizio surged around 25% to US$9.75 in Tuesday trading, bringing the company’s stock-market value close to $2 billion. Meanwhile, shares in Vizio rival Roku fell nearly 9%. The deal talks demonstrate the importance of consumer data and ad space for major retailers as they build out their ad businesses and compete with. In addition to being an e-commerce behemoth, Amazon is among the biggest ad players in the U.S. behind Google parent Alphabet and Facebook owner Meta Platforms. Amazon has also been building its own smart TV business. Advertisers continue to shift dollars into the retail media space, which is expected to hit US$59.6 billion in U.S. ad revenue this year, up almost 30% from last year. Walmart gets most of its U.S. revenue from its grocery business, which typically has low profit margins. Executives see the Walmart Connect ad unit as a path to heftier profits and a way to generate cash beyond the company’s longtime engine of selling goods through stores. Amazon makes up 17% of the operating systems in connected TVs, compared with Vizio’s operating system, which makes up 8%, according to Parks Associates. Roku has 25% market share. Buying Vizio would give Walmart access to a TV operating system and more ad inventory and ad viewership data. http://tinyurl.com/4abssrnc

Wish, discount site once valued at US$14 billion, sold for US$173 million.

The parent company of Wish, ContextLogic Inc., said Monday that it would sell the discount shopping site to Southeast Asian e-commerce firm Qoo10 for US$173 million. The sale is a dramatic fall for Wish, which was valued at US$14 billion when it went public in 2020. Wish made a name for itself in the late 2010s by shipping items like clothing and electronics to U.S. and European shoppers directly from China. The model helped Wish offer dirt cheap prices that won over shoppers from rivals like Amazon, but the site failed to turn a profit. Wish presaged a newer wave of deeper-pocketed competitors like Temu and Shein, which also typically undercut Amazon on price and ship directly to U.S. and European consumers from China. Amazon has weighed changes to its e-commerce site, including reducing seller fees and adding a second “Buy Box,” in response to Temu and Shein, The Information reported last week. http://tinyurl.com/2p8nx8dk

Instacart to cut 250 jobs, says three top execs resign.

Instacart said on Tuesday that it is cutting 250 jobs, or 7% of its workforce, and disclosed three top executives resigned. The grocery delivery app unveiled news of the restructuring alongside a 6% increase in revenue to US$806 million for the fourth quarter. Shares fell 3% after hours. Instacart said it handled 70.1 million orders, a 5% growth from the previous year, worth US$7.9 billion, a 7% increase. The company expects a slightly faster growth rate in the current quarter, with gross transaction volume up 7% to 10%. http://tinyurl.com/wu4upf9z

Airbnb forecasts higher revenue as it expands internationally.

Airbnb said late Tuesday that revenue rose 17% in the fourth quarter to US$2.2 billion, above its earlier forecast. A 12% increase in bookings and a foreign exchange lift boosted results. The home rental site swung to a net loss of US$349 million, largely due to tax expenses in Italy. CEO and co-founder Brian Chesky, who launched a blockbuster public offering in 2020, has been trying to jumpstart growth as the pandemic’s boost to rental demand faded. In a letter to shareholders, Airbnb said it’s investing more in international markets, including Switzerland, Belgium and the Netherlands. It forecast revenue for the current quarter between US$2.03 billion to US$2.07 billion vs. forecasts of US$2.03 billion expected by analysts. Shares fell 4% after hours. http://tinyurl.com/2dxwzxck

Uber unveils $7 Billion stock buyback plan.

Uber unveiled a US$7 billion stock buyback plan, a sign the ride-hailing giant feels confident enough of its profit potential it can spend money repurchasing stock. Uber made the announcement the day after its smaller U.S. rival, Lyft, reported earnings, showing that it had generated free cash flow in the fourth quarter for the first time. Uber, which operates internationally and in food delivery, is already solidly profitable. In 2023 it generated US$3.4 billion in free cash flow. Uber also said Wednesday that over the next three years it expects gross bookings—the dollar value of all transactions on its platform—to increase at a compounded annual rate in the mid-to-high teens as a percentage. It also expects free cash flow to be around 90% of earnings before interest, taxes, depreciation and amortization, and for Ebitda to grow as high as 40% on a compounded annual growth rate. As Uber reported Ebitda of about US$4 billion last year, the company’s projection implies free cash flow should be well north of US$3 billion annually. http://tinyurl.com/2btcmnnw

Lyft posts free cash flow in Q4.

Lyft generated cash in the fourth quarter, even after taking into account capital expenditures, a sign that the no. 2 ride hailing firm is becoming more of a sustainable business. Meanwhile Lyft CEO David Risher forecast that Lyft would do the same for all of 2024, the first time ever. Risher, a former Amazon executive who took over Lyft last April, has committed to achieving “profitable growth” for Lyft. In the quarter, Lyft’s revenue grew only 4%, a slower rate of growth than in the third quarter, although gross bookings grew 17%. Lyft stock rose as much as 60% in after-hours trading, but that reaction turned out to be based on a mistake in Lyft’s press release that suggested Lyft’s profit margin would rise by five percentage points in 2024. Lyft CFO Erin Brewer clarified on an analyst call that the expected improvement in profit margin was only half a percentage point. Lyft’s rally cooled, although the stock was trading up 18% later in the evening. http://tinyurl.com/4w4fh8rj

Robinhood transaction revenue grows, shares rise.

Robinhood said transaction-based revenue from its trading platform grew 8% in the fourth quarter from a year earlier, to US$200 million, the first annual growth in the core trading business in two years. Net interest revenue rose 41% to US$236 million, helped in part by higher interest rates, driving total revenue to US$471 million, up 24% from a year earlier. The company lowered its operating expenses in the quarter by 17% to US$445 million, contributing to net income of $30 million. It’s the highest quarterly net income the company has posted since 2020 and only the second time Robinhood has posted a profit on that basis since its July 2021 initial public offering. Shares rose about 9% after hours. http://tinyurl.com/5fpdnzsj

Coinbase reports surging revenue on Bitcoin rally.

Coinbase lifted revenue 52% in the fourth quarter, reflecting how much the bitcoin market has recovered over the past 12 months. The crypto exchange turned a net profit of US$273 million in the quarter, compared with a loss of US$557 million a year earlier. Revenue from consumer transactions, the biggest part of Coinbase’s business, jumped 59% to US$492.5 million. Interest income also rose, reflecting higher interest rates prevailing in 2023. Coinbase’s business rises and falls in line with the crypto market. Bitcoin prices have roughly doubled over the past 12 months. http://tinyurl.com/en8fnraf

Bezos sells US$2 billion of Amazon shares in first major stock sale since 2021.

Jeff Bezos unloaded 12 million shares of Amazon.com Inc. this week, the first time the billionaire has sold the company’s stock since 2021. The sales took place on Wednesday and Thursday and netted just over US$2 billion, according to a filing. http://tinyurl.com/mry8ke55

Microsoft’s AI growth is helping its cloud business weaken Amazon’s lead.

Amazon Web Services is still the cloud leader. But Microsoft is quickly closing the gap. While Microsoft doesn’t disclose revenue figures for its Azure cloud infrastructure, analyst figures suggest that five years ago it was half as big as AWS. Now, it’s about three-quarters the size of its top rival, analysts estimate. Part of Microsoft’s recent momentum is because of artificial intelligence. Amy Hood, the company’s finance chief, said on Microsoft’s Jan. 30 earnings call that 6 points of revenue growth in the Azure and cloud services division came from AI in the latest period, up from 3 points the prior quarter. In total, revenue at Azure increased 30% in the quarter, compared with 13% year-over-year growth at AWS.. http://tinyurl.com/245zff5n

Apple fans are starting to return their Vision Pros.

For some Apple Vision Pro buyers, the honeymoon is already over. It’s no coincidence that there’s been an uptick on social media of Vision Pro owners saying they’re returning their US$3,500 headsets in the past few days. Apple allows you to return any product within 14 days of purchase — and for the first wave of Vision Pro buyers, we’re right about at that point. Comfort is among the most cited reasons for returns. People have said the headset gives them headaches and triggers motion sickness. The weight of the device, and the fact that most of it is front-loaded, has been another complaint. Many folks who said they’d be returning the device also noted they’d be eager to try a second-gen Vision Pro. Others emphasized that the tech wasn’t the issue at hand so much as the lack of a killer app or comfort. It’s also hard to say how widespread of a phenomenon this is. While these users are speaking out on social media, we have no idea of the actual return rate — or what Apple’s internal expectations for the Vision Pro are. http://tinyurl.com/438phttx

Meta’s Zuckerberg says Quest 3 headset is better than Apple Vision Pro.

Meta CEO Mark Zuckerberg said Wednesday that the Meta Quest 3 mixed-reality headset was the “better product, period” when compared with the Apple Vision Pro. The comments, which were posted on Instagram, were Zuckerberg’s first volley against Apple’s $3,500 device, which debuted to mixed reviews earlier this month due to its lack of comfort but breakthrough user experience. Zuckerberg laid out reasons for why he felt Meta’s product was better despite the Vision Pro costing seven times more. Those included the ability to play virtual-reality games, exercise and socialize with people, features that aren’t the focus of the Vision Pro. He also touted advantages such as the Quest’s lack of wires, lighter weight, wider field of view and brighter screen. One of Zuckerberg’s more dubious claims was that the Quest has “high-quality” video passthrough, which he demonstrated by filming his comments with the Quest 3’s cameras. However, the Quest 3’s video passthrough is more grainy and distorted in real life, something that video recordings with the device don’t appear to pick up. http://tinyurl.com/eree6zwk

Microsoft’s Xbox Game Pass service grows to 34 million subscribers.

Microsoft’s Xbox Game Pass service now has 34 million subscribers. That’s up 36 percent from the 25 million Microsoft previously reported more than two years ago. It’s the first time Microsoft has disclosed fresh Xbox Game Pass subscriber numbers since announcing its Activision Blizzard acquisition in January 2022. http://tinyurl.com/5xfzvwa6

Google upgrades employee coding assistant to boost productivity.

Google has launched a coding assistant for its software engineers based on its most advanced artificial intelligence model, Gemini, Business Insider reported. The coding model, Goose, is “trained on the sum total of 25 years of engineering expertise at Google,” according to internal documents. Employees had already had access to an internal code-generating tool similar to GitHub Copilot since at least late 2022. The move shows how Google is using its heavy investment in Gemini to boost internal productivity in addition to integrating it with revenue-generating products. With Google promising investors that it will cut costs, the company has increasingly automated functions such as ad sales, relying on tools that automatically design campaigns for advertisers. Google’s coding AI could speed up product development and reduce Google’s need to hire certain engineers. http://tinyurl.com/2urw29pr

Paramount Plus and Peacock are reportedly considering a partnership.

First it was Warner Bros. Discovery eyeing Paramount Plus. Next it was Byron Allen. Now news comes that Comcast, the owner of Peacock, may be entertaining a merger with the beleaguered Paramount. Everyone seems to be kicking the tires on the storied entertainment business. In Comcast’s case it may make sense. Both Paramount Plus and Peacock have been working hard to court subscribers in order to further solidify their respective statuses as lasting players in the streaming space. According to a new report, the platforms’ parent companies could be considering a unique partnership. The Wall Street Journal reports that Comcast and Paramount have been in recent talks about a potential streaming partnership that could see Paramount Plus and Peacock being offered to subscribers together as a package deal. Along with making access to the two platforms comparatively cheaper than buying separate subscriptions, the partnership would help Comcast and Paramount “produce significant cost savings — from spending on programming to marketing.” Word of these recent talks comes in the wake of Disney / ESPN, Fox, and Warner Bros. announcing last week that they’re working together to create a new shared service focused on sports — a sign that more studios and networks are beginning to get very serious about collaborating to survive the streaming wars. http://tinyurl.com/22v9sy6c

Meta directs advertisers to workaround for Apple ad fee.

Meta Platforms is encouraging its advertisers to adopt a workaround to avoid paying Apple’s 30% service fee on transactions made through iOS apps. In a blog post Thursday, Meta said that advertisers who wanted to pay for “boosted posts,” which expand the reach of their ads on Facebook and Instagram, can avoid paying Apple’s fee if they make the purchases on Facebook and Instagram’s websites. Advertisers who opt to continue boosting posts through Facebook and Instagram’s iOS apps will need to pay in advance by adding prepaid funds to their accounts. However, they will be charged 30% extra to cover Apple’s fee. Meta said it will not keep the money, which will go to Apple. http://tinyurl.com/yc63h6tv

Musk and Tesla to appeal Delaware ruling on US$56 Billion pay.

Elon Musk and Tesla plan to appeal a Delaware judge’s decision to void the Tesla CEO’s US$56 billion pay package, Reuters reported, citing a letter filed in court Tuesday. That letter, from the lawyers representing shareholder Richard Tornetta, the plaintiff in the case, asks the judge to pause her ruling until an appeal is resolved, according to the report. A lawyer for Tornetta told Reuters that both parties will agree to a stay—a pause in the case that means Tesla won’t need to comply with the judge’s order yet—if they can agree to an appeal bond, which would help ensure that Tesla would pay the legal fees it owes in the case that its appeal fails. This is the first sign that Musk will appeal the January 30 ruling. In an earlier post on X, Musk said he will move to hold a shareholder vote to reincorporate Tesla out of Delaware and into Texas. http://tinyurl.com/4brpjb32

Temu airs Super Bowl ads for second year in a row.

Temu planned US$10 million in giveaways as it ran ads at the Super Bowl for the second year in a row, part of the shopping app’s U.S. marketing blitz. Despite the tens of millions of dollars the company likely spent on the giveaways and buying airtime during the broadcast, Temu has also spent aggressively on digital advertising on platforms like Meta and Google in recent months—Goldman Sachs analysts estimated that Temu spent US$1.2 billion on Meta advertising in 2023. Temu, which is owned by Chinese internet giant PDD Holdings, first entered the U.S. market in 2022, and a similar Super Bowl ad last year helped kick off a period of rapid growth for the site, which contracts with suppliers based mostly in China to make and ship goods directly to shoppers. Temu, Shein and TikTok are all competing fiercely to become the go-to site for Americans to shop online. All three sites rely on mobile apps for the bulk of their sales and use frequent coupons and discounts to push shoppers to make purchases. The sites can offer rock-bottom prices by shipping products directly from suppliers, although shoppers typically have to wait longer to receive their items. http://tinyurl.com/yy272mxk

Bitcoin tops US$50,000 for the first time in 2 years as ETF demand grows and investors anticipate rate cuts.

The token hit a record high of US$50,334 early on Monday, representing a roughly 15% increase since the start of the year and marking the highest level since December 2021. The rise has been driven by bullishness among investors for bitcoin ETFs, which were first approved by the Securities and Exchange Commission last month. The jump in bitcoin’s price also comes amid a broader risk-on shift as investors get ready for the Federal Reserve to cut interest rates this year. The cryptocurrency has rallied alongside the stock market, with the S&P 500 closing above 5,000 for the first time ever last Friday to extend a strong rally in the first two months of 2024. http://tinyurl.com/rsrkyn85

Intel in talks for more than US$10 billion in CHIPS act incentives.

Money to come from US$39 billion grant and US$75 billion loan pool. Award to be announced in the coming weeks, people familiar say. The Biden administration is in talks to confer more than US$10 billion in subsidies to Intel Corp., people familiar with the matter said, in what would be the largest award yet under a plan to bring semiconductor manufacturing back to US soil. Intel’s award package is expected to include both loans and direct grants, according to the people, who asked not to be identified because the deliberations are private. They stressed that negotiations are still underway. http://tinyurl.com/38bcwf69

Lucid slashes prices for its luxury EVs for the third time in seven months.

Lucid Motors announced it was slashing prices on most of its electric vehicles and would also provide up to US$1,000 for customers to purchase charging equipment. It was the third price reduction announced by the company in just seven months and came as the company continues to struggle to generate demand amid a broader slowdown in EV sales growth across multiple markets. Lucid said its base Air Pure model with rear-wheel drive would now start at US$71,400, which includes a US$1,500 destination fee. That’s down from Air Pure’s US$78,900 price announced in October, which itself was down from the US$83,900 price that was reported in August. The Lucid Air Touring with all-wheel drive will now start at US$79,400, while the Lucid Grand Touring, with a projected range of over 500 miles, will start at US$111,400. Both include the destination charge. Lucid also plans on offering US$1,000 for customers to purchase charging equipment. Home chargers can cost as little as US$400 and as much as US$1,000. Lucid’s own Connected Home Charging Station retails for US$1,200. And lastly, the company says it will offer all new Lucid Air customers free scheduled maintenance for two years or up to 24,000 miles. Lucid says its price cuts and other bonuses are designed to address the “barriers” to EV ownership — namely, price and ease. The luxury automaker has struggled to generate demand for its premium-priced vehicles, producing only 8,428 vehicles in 2023, of which only 6,001 were delivered to customers. Lucid also laid off 18 percent of its workforce and cut production targets multiple times. Lucid is majority owned by Saudi Arabia’s Public Investment Fund and is currently building a production facility in the country. The company has shipped 800 vehicles to Saudi Arabia, but it’s unclear whether those deliveries are counted in the company’s report. Major manufacturers like Audi, Mercedes-Benz, BMW, and Tesla all have premium-priced models available for sale. Lucid’s EVs are impeccably designed, garnering many awards, but they have never been affordable. Even with today’s price cuts, the Air Pure is still over $20,000 more expensive than the average sale price for an EV. http://tinyurl.com/59pc6dtk

Sophic Insights (TSXV-UGE, OTCQB-UGEIF) – Illuminating Sustainable Cash Flow.

In Sophic Capital’s Sunny Side Up report, we looked at how Sophic Capital client UGE, a full lifecycle developer and operator of U.S. community solar projects, finances its community solar projects as well as its development pipeline. Specifically, UGE’s projects create more value with decreasing risk as they proceed through the Company’s development pipeline. And to finance the Company’s growth, management has successfully closed several Green Bond financings backed by UGE’s large pipeline of projects, financed projects with project-level debt, and leveraged investment tax credits and tax equity structures. In this report, we’ll look at a general example of the cash flows that a UGE project can generate. UGE’s project development model is unique in that it does not require cash to fund equity ownership of its projects. In our next report, we’ll dive deeper into the pipeline, the potential value of this asset and where UGE is trading compared to its pipeline. https://bit.ly/3SYhQFt