July 14, 2024: NASDAQ Almost Flat, Uneventful Week?

Last week, markets had a big shake-up on Thursday, but major indices closed up for the week — Dow Jones rose 1.6%, S&P 500 gained 0.9%, and Nasdaq composite was up 25 bps. That said, with the NASDAQ still stretched, upcoming tech earnings could cause volatility. U.S. venture capital funding surged to US$55.6 billion in Q2, marking the highest quarterly total in two years, largely driven by a few large AI driven rounds. Ticketing app, StubHub has decided to delay its planned summer IPO until after Labor Day. Microsoft and Apple gave up on obtaining OpenAI Board seats amid Antitrust probes. Google ended acquisition discussions with marketing software firm Hubspot. MicroStrategy, the largest corporate holder of bitcoin, announced a 10-for-1 stock split on Thursday. Electric-vehicle stocks Tesla, Rivian and Lucid showed major signs of life after Q2 deliveries proved to be better than Wall Street estimates. Apple is preparing over 90 million iPhone 16 units for 2024 alone, counting on AI services to fuel demand for its new lineup after a rocky 2023. Hackers broke into AT&T’s systems and stole call and text logs of “nearly all” of its cellular customers, the company said on Friday, blaming a breach of Snowflake’s cloud service for the hack. In Canada, Héroux-Devtek, entered into a definitive agreement to be acquired by Platinum Equity for $32.50/sh in cash, representing a total enterprise value of approximately $1.35 billion — a 28% premium to the closing share price on July 10, 2024. After reaching US$100 million in revenue, Vena became Canada’s latest “centaur” company. Sophic Client, Xcyte Digital announced the closing of the Webinar asset purchase. During 2023, the assets being acquired generated ~US$2.8 million in revenue and US$615K EBITDA. In our recent report, we look at the market size for cybersecurity and the trends that we believe make this a top investment theme in 2024 and beyond, which bodes well for Sophic Client, Plurilock.

Héroux-Devtek enters into definitive agreement to be acquired by Platinum Equity.

Héroux-Devtek, entered into an arrangement agreement with an affiliate (the “Purchaser”) of Platinum Equity Advisors, LLC (“Platinum Equity”), a U.S. based private equity firm, pursuant to which the Purchaser will acquire all the issued and outstanding common shares of the Corporation, other than the shares to be rolled over by members of senior management of the Corporation (the “Rollover Shareholders”), for $32.50 in cash per share, representing a total enterprise value of approximately $1.35 billion, subject to customary closing conditions (the “Transaction”). The consideration offered to the Corporation’s shareholders under the Transaction represents a 28% premium to the closing share price on July 10, 2024 and a 47% premium to the 90-day volume weighted average trading price per share on the Toronto Stock Exchange for the period ending on July 10, 2024. https://tinyurl.com/w3rptr3p

CPPIB invests €550 million for 20% stake in Hg’s Team.blue.

Canada’s biggest pension fund is buying a 20% stake in Team.blue from investment firm Hg in a deal valuing the technology group at €4.8 billion (US$5.2 billion). Canada Pension Plan Investment Board will pay about €550 million for the stake, while Hg remains the largest single investor and plans to provide further funds for Team.blue’s growth, according to a statement on Wednesday, confirming an earlier Bloomberg News report. Team.blue, which employs more than 2,500 people, offers website tools and software services to over 3 million small and medium-sized businesses and entrepreneurs across 22 European countries. It acquired web service and hosting firm Loopia Group from Axcel earlier this year. A stake sale in Team.blue follows on the heels of one of the strongest weeks for buyouts this year globally. Private equity firms clinched more than US$30 billion of deals in the last week of June, raising hopes for a rebound in M&A following a slow first half of the year. Hg, which specializes in the buyouts of software and services businesses, has been one of the more active players in recent months. It sold a majority stake in crisis management and business resilience software provider F24 to private equity firm Altor last week, months after it agreed to buy AuditBoard in a deal valuing the risk management software provider at more than US$3 billion including debt. https://tinyurl.com/56krspye

Bell acquires #CDNtech companies Stratejm and CloudKettle to beef up cloud capabilities.

Bell has acquired two Canadian tech companies as it looks to boost its cloud services capabilities. The telecommunications giant has purchased Mississauga, Ont.-based Stratejm and Halifax, N.S.-based CloudKettle, both for undisclosed amounts.Founded in 2013, Stratejm is a security services provider that offers a range of solutions, covering real-time threat detection and response and incident management, to Canadian and international organizations. Stratejm also offers services to companies, such as a virtual chief information security officer, security and vulnerability assessments, penetration testing, and security management consulting, among others. Bell has also acquired CloudKettle, a professional services firm and Salesforce consulting partner. Founded in 2015, CloudKettle helps companies across industries like telecommunications, financial services, and healthcare with strategic advice and business intelligence to help them use Salesforce platforms. https://tinyurl.com/nbddr934

TandemLaunch secures $27 million first close of Fund IV to build more Montréal deep-tech startups.

Montréal-based venture studio TandemLaunch has secured $27 million in the initial closing of its fourth fund to create and back more early-stage deep technology startups. TandemLaunch’s Fund IV limited partners (LPs) include leads BDC Capital and Fonds de solidarité FTQ, as well as over 30 family offices and angels from across Canada and abroad. The company creation and venture capital (VC) firm aims to secure up to $40 million for Fund IV by September, with plans to fuel the launch of more than a dozen new Montréal startups. TandemLaunch builds and backs companies in artificial intelligence, computer vision, the Internet of things, sustainability, and advanced sensors, specializing in university tech transfers. https://tinyurl.com/nhzut4j6

Digital Innovation Cluster invests $15 million into AI megaproject from consortium of Canadian healthtech companies.

Canada’s federally funded Global Innovation Cluster for digital technologies (DIGITAL) is investing $15.3 million into Health Compass II, the continuation of an artificial intelligence (AI) integration project from a consortium of Canadian healthtech companies. DIGITAL backed the first phase of the Health Compass project with $3.1 million in 2022. The $44 million project is led by Richmond, BC-based clinic management software firm ORX Surgical with collaboration from Tali AI, Healwell AI, Phelix AI, WELL Health, and Simon Fraser University (SFU). https://tinyurl.com/3snk7cnb

Clutch receives $10 million strategic investment from iA Financial group.

Toronto-based online vehicle marketplace Clutch has received a $10 million strategic investment from iA Financial Group. The investment will see iA’s offerings integrated into Clutch’s platform, allowing customers to purchase a vehicle and select certain types of insurance and warranty coverage in a single transaction. iA said that it is using the investment to develop its expertise in selling products on an “entirely online basis.” The investment comes shortly after iA closed the approximately US$170 million acquisition of Chicago, Ill-based direct-to-consumer life insurance provider Vericity. https://tinyurl.com/mr45j7ns

After reaching US$100 million in revenue, Vena becomes Canada’s latest “centaur” company.

Financial planning startup Vena claims it has attained “centaur status” by reaching US$100 million in annual recurring revenue. The term “centaur” was first coined by Bessemer Venture Partners to recognize private SaaS companies that reach the nine-figure revenue milestone. Vena has raised significant venture financing during its run, most recently securing $300 million in Series C funding from Vista Equity Partners in 2021. https://tinyurl.com/yckf8dav

Sophic Client Xcyte Digital (XCYT-TSXV) announces closing of Webinar.net asset purchase.

Xcyte Digital Corp., a trusted global events technology partner specializing in next-generation event technology for physical, hybrid, virtual, immersive, and phone-based events that enhance participant engagement, announces that, further to its news release dated May 1, 2024, the Company has completed the acquisition of all the assets of Webinar.net Incorporated (“Webinar”), a Delaware corporation (the “Transaction”), including Webinar’s technology and revenue-producing assets. Webinar.net is an online presentation platform, offering a simple, engaging, and cost-effective solution for global webinars with branded experiences. Hosted on the cloud with enterprise-grade scale and security, webinar.net simplifies the complex world of online meetings, handling millions of attendees worldwide. During the trailing twelve months ended December 31, 2023, the Webinar assets being acquired generated approximately US$2.8 million in revenue (unaudited), approximately US$615,000 EBITDA (unaudited) and approximately US$343,000 net income (unaudited). https://tinyurl.com/ytd25sxv

Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) appoints Chief Operating Officer and hires marketing director.

Kraken Robotics Inc. announces that effective July 9, Nathaniel Spencer has been appointed Chief Operating Officer of Kraken. Mr. Spencer joined Kraken in August 2021 with the acquisition of PanGeo Subsea, where he was the Vice President of Service Delivery. For the last 18 months, Nat has been the Managing Director of Kraken’s subsea power business. Nat has over 12 years in the marine sector, including founding a subsea inspection business that was sold to Oceaneering in 2016. Kraken is also pleased to announce that Erica Kierstead has joined as Director of Global Marketing. Based in Boston, Erica spent 2 years at MITRE in marketing and communications most recently focused on the AI and Bluetech sectors, and prior to that spent 9 years at Hydroid and then HII in marketing. https://tinyurl.com/386ubz7c

Game Maker shift up jumps in South Korea after US$320 million IPO.

Game developer Shift Up Corp. jumped 18% in its first day of trade in South Korea after an initial public offering that raised 435 billion won (US$320 million), the largest in the country for a gaming firm in almost three years. The shares ended the session at 71,000 won. The startup, which has China’s Tencent Holdings Ltd. as its second-largest holder, sold nearly 7.3 million shares at 60,000 won each, the top of a marketed range. The offering drew strong interest from funds, with demand for 226 times the number of shares available to them, according to a filing last week. https://tinyurl.com/53nd9z8t

StubHub delays IPO to after Labor Day.

Ticketing app StubHub decided to delay its planned summer initial public offering until after Labor Day, the Wall Street Journal reported. The company has been hoping for a US$16.5 billion valuation, but that may be too far of a reach for some investors. StubHub has benefitted from a boom in live events and growing profits, but carries a heavy debt load and comparable public companies that don’t necessarily trade at the kind of valuation multiples that would support the kind of stock price StubHub executives want. Only a small handful of tech companies have gone public this year, likely marking the third consecutive year of IPO activity that will be far below historic norms. A few that made the leap, like Reddit, Astera Labs and Rubrik, are trading above their IPO prices. https://tinyurl.com/2chn977v

AI deals lift US venture capital funding to highest level in two years, data shows.

U.S. venture capital funding surged to US$55.6 billion in the second quarter, marking the highest quarterly total in two years, according to PitchBook data published on Wednesday. The latest figure shows a 47% jump from the US$37.8 billion U.S. startups raised in the first quarter, largely driven by significant investments in artificial-intelligence companies, including US$6 billion raised by Elon Musk’s xAI and US$1.1 billion raised by CoreWeave. https://tinyurl.com/2v39e49r

Microsoft and Apple give up OpenAI Board seat amid Antitrust probes.

Apple will no longer take a board observer seat at OpenAI and Microsoft is giving up its observer seat, an OpenAI spokesperson said on Wednesday. OpenAI is “establishing a new approach to informing and engaging key strategic partners” and plans to hold regular meetings with those stakeholders to share updates on the company, the spokesperson added. The shake up comes as Microsoft’s US$13 billion investment in the startup is under scrutiny by antitrust regulators including the FTC and the European Commission. Microsoft’s investment in OpenAI entitles it to 49% of the startup’s future profits, but Microsoft technically does not own any share of OpenAI. Microsoft said in a letter to OpenAI CEO Sam Altman on Wednesday that it is “confident in the company’s direction,” adding that “we no longer believe our limited role as an observer is necessary.” Just last week, news surfaced that Apple would also get a board observer seat. The quick reversal suggests antitrust scrutiny has grown since that news. https://tinyurl.com/4avke7hy

Google calls off talks to buy marketing software firm HubSpot.

Google ended acquisition discussions with marketing software firm Hubspot, Bloomberg reported. HubSpot’s stock fell immediately following the news, ending the trading day down 12% at US$491.12. The online search giant had reached out to Hubspot to express interest in buying it earlier this year, and talks between the two were reportedly still ongoing in early May. But the talks ended before they advanced to the due diligence stage. Had the deal gone through, it would likely have been Google parent Alphabet’s largest-ever acquisition. Today’s stock drop means that Hubspot shares are now roughly 22% lower than where they were before the news about Google’s interest broke in April. That may reflect investors’ concerns about how HubSpot, now to remain independent, will be hurt by a prolonged pullback in spending from the small and medium-sized enterprises that make up most of its customer base and the threat of its business being disrupted by artificial intelligence. https://tinyurl.com/4fwjy995

AMD to acquire Finnish AI developer Silo in US$665 million all-cash transaction.

Advanced Micro Devices has agreed to acquire Silo AI, a Finnish AI model developer, for approximately US$665 million in cash, the company announced on Wednesday, as it looks to close the gap against chip giant Nvidia. Helsinki-based Silo helps large companies build specialized AI models and software, and its customers include Allianz, Philips, Rolls-Royce and Unilever. The firm has also developed its own open-source multilingual LLMs. Now, Silo’s team will use AMD’s software tools to build custom LLMs for customers. Nvidia has also been acquisitive as of late, buying two Israeli startups in April to make its AI chips easier and cheaper to use. https://tinyurl.com/yywsnhua

SoftBank acquires UK AI chipmaker Graphcore.

U.K. chip company Graphcore has been formally acquired by Japan’s SoftBank. Rumors of the deal have abounded for some time, but protracted negotiations and regulatory approvals have meant neither company has confirmed anything until now. Founded out of Bristol in 2016, Graphcore has devised a new kind of processor dubbed an “intelligence processing unit” (IPU), distinct to the kinds of graphics processing units (GPU) developed by the likes of Nvidia. While both accelerate computation, IPUs have a different architecture designed from the ground-up for AI workloads. Graphcore pitches its chips as a more efficient alternative to GPUs, with a focus on supporting large-scale parallel processing and executing complex machine learning models, where the model and data are tightly coupled. Graphcore had raised around US$700 million since its inception, reaching a valuation just shy of US$3 billion in late 2020. With big-name corporate and institutional investors like Microsoft and Sequoia. https://tinyurl.com/3wtpvxtz

Bain Capital, software firm Envestnet approach a deal.

Buyout firm Bain Capital is nearing a deal to buy publicly-listed financial software vendor Envestnet, Reuters reported. The deal would reportedly value the firm at close to its current stock price of around US$63, which translates to a US$3.5 billion market capitalization. Envestnet’s stock has risen 27% so far this year, roughly in line with the tech-heavy Nasdaq Composite index. Amid a broader slump in deal activity, private equity firms have been vying to scoop up publicly-traded software companies in recent months even as valuations ascribed by public investors remain high. Bain last month announced plans to acquire educational software provider PowerSchool for US$5.6 billion, representing a roughly 37% premium to the company’s previous stock price. Another private equity firm, Permira, said it would spend nearly US$7 billion to take website builder Squarespace private in May. https://tinyurl.com/mbxv52dm

UiPath to lay off 10% of staff to cut costs.

UiPath, which sells software for automating payroll and other workplace processes, said on Tuesday that it will lay off 10% of its workforce, or around 420 people. The layoffs are part of an effort to cut back on operating expenses, the company said. While UiPath’s revenue has grown steadily over the past year, the company has recently come under pressure from newer generative AI products offered by competitors. UiPath lowered its full-year revenue expectations by $100 million last month and told shareholders that it was facing “increased deal scrutiny” from customers who were deciding between its products or competing generative AI tools. https://tinyurl.com/yfs2xhf4

MicroStrategy, the largest corporate holder of bitcoin, announced a 10-for-1 stock split on Thursday.

The company said the shares will be split into class A common stock and class B common stock “to make MicroStrategy’s stock more accessible to investors and employees.” The move comes amid a lull for the price of bitcoin, which has been stuck in a tight range since about March, but which many investors expect to rebound in the second half of the year. The shares rose about 6% but are currently about 34% off an all-time high of US$1,999.99, reached in March of this year. MicroStrategy stock is up 106% this year, compared to bitcoin’s 38% gain, and 216% in the past 12 months, compared to bitcoin’s 91% advance. https://tinyurl.com/55n9u33b

Tesla delays robotaxi event to October.

Tesla plans to delay its highly anticipated robotaxi introduction from August to October, according to Bloomberg. The change, which was communicated internally at the electric vehicle maker, will give teams more time to work on prototypes, according to the report. Musk first announced an August 8 reveal for a fully-autonomous taxi in April, following reports that Tesla has paused plans to build a US$25,000 consumer vehicle known as the Model 2. But the summer deadline surprised many employees at the time, who had been unaware of the company’s plans. A lot is riding on the robotaxi, which Musk has pitched as a key part of Tesla’s future as an AI company, rather than a car maker. Wedbush analyst Daniel Ives described the event as laying out the “the yellow brick road to [Full Self-Driving] and an autonomous future.” Tesla shares dropped 6% on Thursday, despite a surge in recent days that returned the company to near all-time highs after it lost more than half of its value over the prior 12 months. https://tinyurl.com/3tj68kpp

Tesla’s EV market share slips below 50% in US.

Tesla made up less than half of all electric vehicles sold in the US in the second quarter, a sign of declining dominance for the automotive company credited with creating an early market for EVs.Teslas accounted for 49.7% of EV sold in the US between April and June, compared to 59.3% the year before, according to Cox Automotive research cited by The New York Times. Overall, US electric vehicle sales grew 11.3% from last year with companies like GM and Ford taking part of the pie, according to the report. Tesla sales have suffered in recent quarters as the company faced increased competition in both the US and China, and an aging product lineup. Last week, Tesla reported its second quarter of sales decline with 443,956 car deliveries, down nearly 5% from the year before. https://tinyurl.com/bddm76sj

EV stocks are showing major signs of life.

Electric-vehicle stocks are showing major signs of life after second-quarter deliveries proved to be better than Wall Street estimates. Tesla is in the middle of the 10-day winning streak, with the stock soaring 44% over the period. Prior to the rebound, shares were down 27% year-to-date, but they’re now back in positive territory for the year, up 6%. Tesla’s rally represents a massive turnaround for the company, which went through a series of painful layoffs earlier this year. The good news for Tesla has spread to other EV manufacturers in recent days. Rivian stock has soared 31% since Volkswagen announced a major multi-billion dollar investment in the EV truck company late last month. Finally, Lucid Group, which has suffered a sharp decline since it went public in 2021, appears to finally have turned the corner after it reported second-quarter vehicle deliveries on Monday. The luxury EV sedan maker said it delivered 2,394 vehicles in the second-quarter, representing a 22% increase from the first-quarter and a year-over-year increase of 70%. Lucid stock has surged 18% since the start of July and is up nearly 40% from its 52-week low reached in April. https://tinyurl.com/3a2z89sw

Intuit lays off 10% as TurboTax-maker prioritizes AI.

Intuit CEO Sasan Goodarzi told staff Wednesday that the company plans to lay off 1,800 employees, or roughly 10% of its workforce, as it looks to invest in new AI-powered services. Goodarzi said the move was not a cost-cutting measure, and that Intuit will replace the roles with new hires in areas such as engineering and sales. Intuit stock fell 2.6% following Intuit’s announcement. The move by Intuit, which sells tax and accounting software such as TurboTax and QuickBooks, highlights how traditional software businesses are pivoting amid new competition from generative AI. Among the new products Intuit plans to emphasize is a chatbot, Intuit Assist, that can automate software tasks and answer financial questions. https://tinyurl.com/mryejdc3

Apple prepping over 90 million iPhone 16 units for 2024 alone.

The summer is always a quiet season for new Apple products, but the company is hard at work preparing for a big fall of hardware releases. According to a new report, Apple is planning to ship a massive 90 million or more iPhone 16 models in 2024 alone. Apple Inc. aims to ship at least 90 million iPhone 16 devices in the latter half of this year, counting on AI services to fuel demand for its new lineup after a rocky 2023. The company told suppliers and partners that it’s targeting about 10% growth in shipments of new iPhones compared with their predecessors, a person familiar with the matter said, after shipping about 81 million iPhone 15s in the second half of 2023. It is unsurprising that Apple may be banking on its Apple Intelligence features to drive iPhone upgrades, because the list of compatible AI devices is extremely short on iPhones. https://tinyurl.com/426mxt3f

US Vision Pro sales likely to fall 75% this quarter.

Market intelligence company IDC has been monitoring US Vision Pro sales, and says the current data indicates they will plummet by 75% this quarter. The firm believes the device won’t achieve 500k sales in its first year, and that only the launch of a cheaper model can drive growth. A more affordable edition — which IDC estimates would cost roughly half as much — should rekindle interest in 2025, but sales may not rise meaningfully over the coming year, IDC said. Essentially, the company is suggesting that almost all the early adopters in the US who wanted to buy the spatial computer have already done so, meaning there will only be a trickle of domestic sales from the point. This will, however, be offset by international sales. Many have suggested that a second Apple Vision product would need to hit a price point of around US$1,500 to achieve consumer appeal. https://tinyurl.com/2zrv63cj

Musk says xAI will build supercomputer on its own.

Elon Musk said his xAI would buy chips from Nvidia rather than rent the chips from Oracle so xAI could build an artificial intelligence data center more quickly, confirming a story published in The Information Tuesday. In a post on X, Musk said xAI plans to build a system with 100,000 Nvidia H100 chips, as The Information previously reported. The data center will be in Memphis, Tenn. The Information previously reported that xAI was discussing a deal potentially worth US$10 billion to rent chips from Oracle. Under an existing deal, xAI rents 24,000 chips from Oracle. “Oracle is a great company and there is another company that shows promise also involved in that OpenAI GB200 cluster, but, when our fate depends on being the fastest by far, we must have our own hands on the steering wheel, rather than be a backseat driver,” he said on X. https://tinyurl.com/s4zh5mwc

Meta Platforms to release largest Llama 3 model on July 23.

Meta Platforms plans to release the largest version of its open-source Llama 3 model on July 23, according to a Meta employee. This version, with 405 billion parameters, or the “settings” that determine how AI models respond to questions, will also be multimodal, meaning that it will be able to understand and generate images and text, The Information previously reported. Meta in April released two smaller models within the Llama 3 family, with 8 billion and 70 billion parameters, which developers quickly embraced. The earlier launches served to build excitement for the largest Llama 3 model, which was expected to be launched around now. Its release comes about a year after the launch of Llama 2. Meta declined to comment. The Facebook parent company has differentiated itself from other AI developers through its open-source strategy, though it’s still unclear how Meta plans to make money from its free large language models. And the open-source AI industry is becoming increasingly crowded, with rivals like Google, Elon Musk’s xAI and Mistral also releasing free AI. https://tinyurl.com/3ed85war

OpenAI develops benchmark to track AI progress.

OpenAI shared a new benchmark during an all-hands meeting on Tuesday that would help the startup track its progress towards developing artificial general intelligence, or software that’s able to reason like humans do, according to a Bloomberg report. OpenAI executives told employees that the company’s technology is currently on the first level, which encompasses AI software that’s able to converse with people, and is close to reaching the second, referring to AI that can do basic problem-solving tasks, the Bloomberg report said. The third tier refers to AI software that can take actions on a user’s behalf, the fourth tier refers to software that can come up with new inventions, and the most advanced tier refers to AI that can do the work of an entire organization, according to Bloomberg. An OpenAI spokesperson declined to comment. https://tinyurl.com/2va4kr2f

AT&T says hackers stole call and text records of ‘nearly all’ customers.

Hackers broke into AT&T’s systems and stole call and text logs of “nearly all” of its cellular customers, the company said on Friday, blaming a breach of Snowflake’s cloud service for the hack. The stolen data includes records of which phone numbers called or texted other phone numbers and the time and duration of those calls, but does not include the content of calls or text messages or customers’ personal information, the company said. The breach occurred when hackers broke into AT&T’s data stored in Snowflake’s cloud environment, an AT&T spokesperson told media outlets on Friday. Snowflake said last month that hackers broke into the accounts of over 100 customers, which include Ticketmaster and Lending Tree, using stolen passwords that leaked online. AT&T, which has over 100 million customers, said the breach covered customer data from a six-month period in 2022, and those of a smaller subset of customers from 2023. The FCC said on Friday that it is investigating the breach. https://tinyurl.com/4tcynxnz

How did the auto dealer outage end? CDK almost certainly paid a $25 million ransom.

CDK Global, a software firm serving car dealerships across the US that was roiled by a cyberattack last month, appears to have paid a US$25 million ransom to the hackers, multiple sources familiar with the matter told CNN. Pinpointing exactly who sends a cryptocurrency payment can be complicated by the relative anonymity that some crypto services offer. But data on the blockchain that underpins cryptocurrency payments also tells its own story. On June 21, about 387 bitcoin — then the equivalent of roughly US$25 million — was sent to a cryptocurrency account controlled by hackers affiliated with a type of ransomware called BlackSuit, Chris Janczewski, head of global investigations at crypto-tracking firm TRM Labs, told CNN. A week after the payment was made, CDK said that it was bringing car dealers back online to its software platform. https://tinyurl.com/cv2shnzx

Amazon Rufus shopping chatbot now available for all U.S. shoppers.

Amazon has added its shopping chatbot, Rufus, to its mobile app, making it available to all U.S. customers, the company said Friday. The chatbot can compare products, answer questions about items and summarize customer reviews. It can also answer questions about orders, such as what day items are supposed to arrive, according to Amazon. Amazon says Rufus has been trained on its own product catalog and reviews, as well as information from other websites. The company had been ramping up the chatbot’s availability after announcing it in February. Rufus is the most visible way for shoppers that Amazon has woven generative artificial intelligence into its e-commerce site. The company has also been working on AI services for merchants, including tools that write descriptions for products and generate images and videos for advertisements. https://tinyurl.com/4a334whr

SEC says crypto accounting rule won’t apply to some banks.

The Securities and Exchange Commission is removing a key obstacle that has been standing in the way of banks offering crypto-related services. It has begun waiving a requirement that banks and brokers report crypto assets under custody as liabilities on their balance sheet, in cases where they have “sufficiently demonstrated” that clients’ assets will not be affected in the event of a bankruptcy. In 2022, the SEC issued an accounting guidance—staff accounting bulletin No. 121—directing public companies that hold crypto for clients to count it as a liability on their balance sheets. It deterred banks from offering crypto-related services, because it would subject them to higher capital requirements. Congress voted to rescind the guidance, a move supported by banking trade groups, but in May, President Joe Biden vetoed the resolution. But now the SEC has decided that it will exempt “certain broker dealers and custody banks” from the requirement in cases where they “have sufficiently demonstrated to SEC staff that their fact patterns are different from those described in SAB 121,” including “ensuring that customers maintain ownership of their assets even in the case of a resolution or bankruptcy,” a spokesperson for the SEC said in an emailed statement. Financial firms including State Street and BNY Mellon have advocated for the SEC to exempt banks from the balance sheet treatment. BNY launched a crypto custody business in 2022, but it remains small, with minimal balance sheet implications for now. Bloomberg Law earlier reported on the news, citing an unnamed SEC person. https://tinyurl.com/3kvez7ef

Microsoft and Occidental sign carbon credit deal to help offset AI energy surge.

Microsoft and Occidental Petroleum have signed a record carbon credit deal worth hundreds of millions of dollars, as the technology industry struggles to keep its climate promises amid a surge in power needs driven by artificial intelligence. Occidental, one of the biggest US oil producers, will sell 500,000 carbon credits for an undisclosed amount to Microsoft over six years, under an agreement announced on Tuesday. The companies said it was the largest deal of its kind, and would allow Microsoft to offset its emissions by paying Occidental to have the carbon removed from the atmosphere and stored underground. The deal comes as Big Tech struggles to contain a drastic rise in energy emissions driven by AI expansion. Microsoft said in May that its emissions had risen by almost a third since 2020, mainly from the construction of data centres. Google also last week admitted that its emissions had increased by almost half since 2019 as a result of the building of power-intensive infrastructure to support AI. https://tinyurl.com/8yp2dpum

Sophic Client Plurilock (PLUR-TSXV, PLCKF-OTCQB) Report – A Global Crisis.

In Sophic Capital’s Digital Defense report, we highlighted how susceptible people and organizations are to cybercrime. Despite the power of the internet, data, and technology, cybercrime losses reached a staggering US$12 billion in 2023. Organizations need to invest in cybersecurity to protect themselves and their clients. In this report, we look at the market size for cybersecurity and the trends that we believe make this a top investment theme in 2024 and beyond. At the current trajectory, the annual cost of cyberattacks is projected to reach US$10.5 trillion annually by 2025. These attacks are becoming more strategic, impacting critical infrastructure and economic cornerstones. In our next report, we’ll introduce Sophic Capital client Plurilock Security, a cybersecurity solutions provider for the United States and Canadian Federal Governments along with Global 2000 companies. Through these relationships, Plurilock sells its unique brand of Critical Services, aiding clients with expertise to defend against, detect, and prevent costly data breaches and cyber-attacks. https://bit.ly/45UAX8e