July 21, 2024: NASDAQ Down VIX Up

Last week, after a few weeks of markets being extended, Dow Jones rose 0.7%, S&P 500 fell 2% after hitting a record Tuesday, and Nasdaq lost 3.65%. CBOE Volatility Index, or VIX, jumped nearly 33% to 16.53, logging its largest weekly gain since March 2023. However, the VIX is still well below recent peaks of ~21. OneStream Software, backed by KKR is targeting a valuation of about US$4.38 billion in its U.S. IPO. CrowdStrike stock fell 9% on Friday morning, after a flawed software update triggered a major global tech outage that affected banks, airlines, broadcasters and other businesses. Google recently has been in talks to acquire Wiz, a four-year-old cybersecurity startup, for around US$23 billion. GitLab is reportedly exploring a sale to Datadog, sending its shares up 7%. Meta is considering buying a small stake in EssilorLuxottica. Shares of Serve Robotics soared as much as 241% on Friday after Nvidia disclosed a stake in the company. The price of bitcoin and Coinbase jumped on Monday, as investors boosted bets that pro-crypto candidate Donald Trump will win the November presidential election. Broadcom shares rose 3% after a report that the chip designer was talking to OpenAI about developing a new server chip for AI. Shares of major chip design and hardware providers fell Wednesday after reports that the Biden administration is considering tougher trade restrictions. In Canada, Sophic Client, Intermap closed the first tranche of its LIFE offering for aggregate gross proceeds of ~$1.2 million. Sophic Client, ADM Endeavors, continues to add new government clients. The Company is working on a new facility to increase capacity 5x, by the end of the year. The market value of the property value and new facility has increased significantly, representing a hidden asset on the balance sheet. Sophic Client Plurilock Security, added significant heft to its Industry Advisory Council.

Sophic Client Intermap (IMP-TSX, ITMSF-OTC) Closes First Tranche of LIFE Offering.

Intermap Technologies, announced that it closed the first tranche of its previously announced offering (the “Offering”) of Class “A” common shares in the capital of the Company (“Shares”). The first tranche of the Offering included the issuance of 2,770,000 Shares at a price of $0.45 per Share for aggregate gross proceeds of $1,246,500.00. The Company intends to close a second tranche of the Offering within the next two weeks at the same offering price of $0.45 per Share. Any additional tranches, including the second tranche, will be subject to the maximum number of Shares issuable under the Offering of 4,300,000 for maximum aggregate gross proceeds of $1,935,000.00. The Company intends to use the net proceeds from the Offering primarily to execute on its contract with the Indonesian government to map the island of Sulawesi as well as on a renewed and expanded contract with the U.S. Air Force. The net proceeds may also be used in connection with other Southeast Asian contract awards as well as a major renewal and expansion of a global insurance client agreement. https://bit.ly/3zMzMM2

Sophic Client ADM Endeavors (ADMQ-OTC) continues to add new government clients.

In 2023, ADM Endeavors pivoted its sales strategy to focus on building long-term relationships with repeat customers. Unlike most promotional product companies that pursue big corporate deals through brokers, ADM targets local public organizations like schools and government departments. Although many of these organizations provide smaller contracts, the market opportunity is larger than corporate deals and these smaller deals tend to generate reoccurring, consistent business as well as predictable revenues. The Company’s performance through the first half of 2024 has proven this strategy is working via the Company’s steady growth in both business and revenues. Some of the recent contracts signed include Upper Trinity Regional Water District, The City of Irving Parks and Recreation, Trinity Basin Preparatory, and International Leadership Mansfield Heritage K-8. Some recent contract renewals include Tarrant County and The City of Euless Fire Department. To support ADM Endeavors’ continued growth through targeted smaller, local public organizations, the Company is constructing a new facility that can increase production by up to 5 times current capacity. The new facility will serve as a centralized manufacturing hub, fulfillment center, and retail storefront, consolidating operations under one roof to drive margin expansion and better enable the Company to serve its customers. The facility remains on track to open before year-end. The Company is pleased that property value has increased significantly since first acquired in 2021 and the new facility under construction will be another accretive fixed asset for shareholders. Based on comparisons to recent local listings for peer industrial properties from multiple real estate agents, the new facility could be worth between US$8 million to US$10 million upon completion. Based on similar comparisons, the remaining 10.5 acres of raw land could be valued between US$3 million to US$5 million. These data points are based off current unsold properties and are illustrative of the hidden asset value not fully reflected on the Company’s balance sheet. Construction is well underway with the concreate slab completed and 50% of the vertical beams erected. To accelerate growth, ADM Endeavors is also investigating opportunities to acquire accretive businesses. The Texas promotional products market is highly fragmented with several family businesses that do not have executive succession plans seeking exits. ADM Endeavors is currently evaluating several opportunities and will update investors if/when attractive and accretive opportunities present themselves. https://bit.ly/3Wp2ATP

Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) completes high resolution route survey contract in Australia.

Kraken Robotics Inc. announces the successful completion of a contract to supply high-resolution seabed mapping sonar service to Precision Hydrographic Services (PHS), a customer supporting the Australian Department of Defence. The Australian Department of Defence project sought to undertake Hydrographic High Resolution Route Surveys (RS) for a number of Australian ports. The purpose of these surveys was to enable the collection of Maritime Geospatial Information (MGI) to support maritime domain awareness through the acquisition of high-resolution seabed foundation data and associated oceanographic data. https://bit.ly/3Wp9rwe

Sophic Client UGE International (UGE-TSXV, UGEIF-OTC) achieves commercial operation for rooftop community solar project in Staten Island, New York.

UGE International announced that its 510kW rooftop community solar project in Staten Island, New York reached commercial operation and has begun generating electricity. UGE’s newest community solar project is built atop Expressway Plaza, a shopping center on Staten Island. At just over half a megawatt, the project will offset roughly 700 metric tons of CO2 emissions each year and will produce enough electricity to power approximately 140 homes. Subscribers to the Expressway Plaza community solar project will save a minimum of 10% on their electricity bills. In addition, UGE covered the cost of a needed roof replacement on Expressway Plaza, ensuring the building remains structurally sound for the solar project’s lifetime of at least 22 years. With the completion of this project, UGE’s operating portfolio now stands at 7.1MW. In addition to its operating portfolio, UGE has eight projects totaling 18.1MW in deployment and construction, the final phases of development. In addition, UGE has another two rooftop community solar projects in New York City currently under construction, both of which are projected to reach commercial operation early this fall. https://bit.ly/3zCTDgw

Sophic Client Plurilock Security (PLUR-TSXV, PLCKF-OTC) appoints former White House lawyer/senior CIA officer to Industry Advisory Council.

Plurilock Security announces the appointment of former White House cyber and national security lawyer, and longtime Palantir Senior Advisor Bryan Cunningham to the Company’s Industry Advisory Council. Mr. Cunningham served as Deputy Legal Adviser to the National Security Council under Condoleezza Rice and was a career CIA officer. He was a principal contributor to the first U.S. National Strategy to Secure Cyberspace and drafted significant portions of the Homeland Security Act and related legislation, helping to shepherd them through Congress. He is the current Executive Director of the University of California, Irvine’s Cybersecurity Policy & Research Institute, was founding vice-chair of the American Bar Association Cyber Security Privacy Task Force and was awarded the National Intelligence Medal of Achievement for his work on information issues. As the principal author of legal and ethics chapters in authoritative cybersecurity textbooks, Mr. Cunnigham is also a frequent media commentator on intelligence, cyber, and national security issues. https://bit.ly/462C1GY

Sophic Client Plurilock Security (PLUR-TSXV, PLCKF-OTC) appoints former CrowdStrike board member / AppDynamics President to Industry Advisors Council.

Plurilock Security Inc., a global cybersecurity services and solutions provider, announces the appointment of technology veteran and former CrowdStrike board member Joe Sexton to the Company’s Industry Advisors Council. Mr. Sexton was the President of Worldwide Field Operations for AppDynamics (acquired by Cisco for US$3.7 billion), a leader in application intelligence for software-defined businesses, where he was responsible for all field operations including sales, marketing, business development and customer success. Prior to joining AppDynamics, Mr. Sexton was Executive Vice President of Worldwide Sales at McAfee where he was responsible for US$2.5 billion in annual sales and managed an organization of 2,000 people. He has also held executive sales positions at Cisco, Mercury Interactive, EMC and CA Technologies, and held Executive In Residence roles at Greylock Partners and Lightspeed Venture Partners. In addition, Mr. Sexton was an Executive Sales Advisor to the CEO of PagerDuty during their transition from a private company through their successful IPO via the New York Stock Exchange. He currently serves on the Board of Director’s for Laconic, Aqua Security, XFactor, and Menlo Security. https://bit.ly/4bKDe7f

Ford’s EV plans are in flux once again as it invests US$3 billion into its biggest trucks.

Ford said Tuesday it will expand production of its Super Duty trucks to a factory in Canada that was slated for a US$1.34 billion transformation into an assembly plant for its next-generation of electric vehicles. The U.S. automaker said it will start producing F-Series Super Duty pickups at its Oakville Assembly plant in Ontario, Canada, beginning in 2026 — a move that will add capacity of about 100,000 units annually. The decision will also further delay plans for a three-row electric vehicle, which was supposed to be assembled at Oakville starting in 2027. Ford was pitching a different angle in April 2023 when it announced plans to spend US$1.34 billion to transform the Oakville facility in Canada into an assembly plant for its next-generation of EVs. https://tinyurl.com/y5vc8efn

Planned closes $35 million Series B, adds Hopper CEO to board.

Montréal-based Planned has secured $35 million in Series B financing to fuel its product development and international expansion plans. The all-equity round was led by Columbus, Ohio’s Drive Capital and saw participation from fellow existing investor, New-York-based Outsiders Fund. An undisclosed institutional investor and fourth financier also participated, but Planned declined to share their identities with BetaKit. This latest capital brings Planned’s total funding to date to $65 million. Since the last round, Planned grew its revenue by a multiple of 30 and its annual recurring revenue is “multiple millions,”. Inovia Capital, which previously invested in the startup at the seed stage, sold its stake as part of Planned’s $24.5 million CAD Series A round in 2022. https://tinyurl.com/fwycvuhv

Acel Power raises $13.6 million to ramp up production of battery-powered boat motors.

Vancouver-based ocean tech startup Acel Power has closed $13.6 million (US$10 million) in Series A funding to scale up production of its battery-powered outboard boat engine. The funding was led by Tau Capital, an Abu Dhabi, United Arab Emirates (UAE)-based venture capital firm focused on sustainable science and technology. Acel claims that its electric motors last five times longer than gas motors. Founded in 2021 according to New Ventures BC, Acel Power designs and manufactures electric propulsion systems for the marine industry. https://tinyurl.com/373pb9em

KKR-backed OneStream seeks US$4.38 billion valuation in US IPO.

OneStream Software, which is backed by private equity firm KKR is targeting a valuation of about US$4.38 billion in its U.S. initial public offering. The software firm and its selling shareholders aim to sell 24.5 million shares, priced between US$17 and US$19 each, to raise up to US$465.5 million, according to a filing on Monday. The U.S. IPO market has shown signs of promise in 2024, marked by a rise in listings as investors grow more confident in new offerings in the hopes of a soft landing for the economy. The target valuation for its public float is significantly lower than the US$6 billion valuation it had in 2021 when OneStream raised funding from investors, including D1 Capital Partners and Tiger Global Management. Founded in 2010, OneStream helps CFOs prepare and report financial statements to regulators and investors. According to its website, the company also assists organizations with planning, budgeting and forecasting. The company has over 1400 customers across the globe including Toyota Motor, UPS, News Corp and General Dynamics. KKR acquired a majority stake in OneStream in 2019, valuing the company at over US$1 billion. OneStream, which will list its shares on Nasdaq under the ticker symbol “OS”, said the funds from the IPO will be used to increase capitalization and financial flexibility. https://tinyurl.com/n73t4x76

India’s Ola Electric eyes lower valuation of US$4.5 billion for IPO, sources say.

SoftBank-backed Indian e-scooter maker Ola Electric is likely to value the company at around US$4.5 billion for its initial public offering (IPO), around 16%-20% lower than the valuation at its last funding round, two sources told Reuters. The Indian markets regulator in June approved Ola’s US$660 million stock market listing, the first IPO by an EV maker in India and set to be one of the country’s largest share sales this year. Ola Electric is likely to list on Indian bourses in the first week of August, said the two sources, who have direct knowledge of the matter, but declined to be named as the discussions are private. Ola Electric did not immediately respond to a request for comment. Ola Electric’s last funding round in September, led by Singapore’s investment firm Temasek, valued it at US$5.4 billion, but one of the sources said that would drop this time, pointing to a “recalibration” in the valuation of tech stocks globally. https://tinyurl.com/5a3wzssk

Crowdstrike flaw causes global IT outage, disrupting banks, airlines, broadcasters.

CrowdStrike stock fell 9% on Friday morning, after a flawed software update by the cybersecurity firm triggered a major global tech outage that affected banks, airlines, broadcasters and other businesses. CrowdStrike’s faulty update caused Windows computers around the world to crash, with many devices showing an error screen known as the “blue screen of death.“ Many flights were grounded, while banks reported disruptions to some online transactions. Other businesses such as TV broadcasters and telecom operators also reported issues, and several 911 operators across the US were unable to respond to emergencies for several hours on Friday morning. Tesla CEO Elon Musk said the outage “gave a seizure to the automotive supply chain.” CrowdStrike said on Friday that it was rolling out an update to fix the outage. Some customers’ computers would install the update automatically, while others will need to be manually rebooted, which could take “some time,” CrowdStrike CEO George Kurtz said. Meanwhile, Microsoft CEO Satya Nadella pinned the issue on Crowdstrike’s update but said in a statement that the two companies were working together to help customers recover. https://tinyurl.com/5t2rybrm

Google has been in talks to acquire Wiz for US$23 billion.

Google recently has been in talks to acquire Wiz, a four-year-old cybersecurity startup, for around US$23 billion, two people with knowledge of the deal said. The deal could still fall apart over negotiations about earnouts—payments Wiz employees would receive based on future performance of the business—and concerns about a prolonged regulatory review, one of the people said. Wiz’s software helps businesses keep track of their applications that run in the cloud, including on cloud servers rented from firms like Google, Microsoft, and Amazon. The acquisition could help Google Cloud generate more security revenue while steering more of Wiz’s customers to rent cloud servers from Google. The Wall Street Journal earlier reported on the talks. The deal talks come shortly before a judge is expected to rule on a Justice Department antitrust lawsuit over Google’s dominant search business, while another antitrust suit over its powerful online ads business is due to go to trial shortly. In selling cloud services, however, Google faces much bigger rivals. The Wiz acquisition price would be a significant premium to its US$12 billion valuation as of a funding round in May. An Israeli founded startup, Wiz has raised US$1.9 billion from investors including Lightspeed Venture Partners, Greenoaks Capital Partners and Index Ventures, and said it was generating US$350 million in annualized revenue as of late last year, meaning the valuation multiple on its forward revenue is much higher than that of other enterprise software firms. Annualized revenue usually refers to the prior month’s revenue multiplied by 12. Based on its first quarter results, Google Cloud is likely to generate more than US$40 billion in revenue this year, meaning it is about two and a half times smaller than its top rival Amazon Web Services. Google two years ago bought another cybersecurity firm, Mandiant, for more than US$5 billion. Google recently ended a pursuit of online marketing provider HubSpot, which would have cost more than US$25 billion. https://tinyurl.com/3fwrky7e

GitLab explores sale, shares jump 7%.

GitLab, which sells a cloud-based code repository for programmers, is exploring a sale after receiving interest from potential buyers including cloud monitoring service Datadog, according to Reuters. Google is another potential buyer. Through its venture capital arm, Google parent Alphabet owns a 22.2% voting stake in GitLab. GitLab shares rose more than 7% Wednesday, giving it a market capitalization of roughly US$8.6 billion. GitLab’s biggest rival is Microsoft-owned GitHub, which has attracted customers through an OpenAI-powered coding assistant, putting pressure on GitLab. For that reason and others, many industry executives and investors had expected GitLab to consider potential buyers. A spokesperson for GitLab didn’t return a request for comment. https://tinyurl.com/2e7xmb8n

Meta explores investment in European eyewear giant EssilorLuxottica.

Meta Platforms is considering buying a small stake in EssilorLuxottica, the European eyewear giant it currently partners with to make Ray-Ban “smart glasses,” according to the Financial Times. The deal, if it goes ahead, suggests Meta is keen to strengthen its partnership with EssilorLuxottica. The two companies have collaborated on two versions of the smart Ray Bans, the latest of which includes Meta’s AI assistant and has sold better than anticipated. Meta relies on EssilorLuxottica for design, manufacturing and distribution of the glasses, while it develops the technology. The talks come as the two companies try to hash out their latest agreement for the smart-glasses work. EssilorLuxottica, which formed in 2018 after French optical lens firm Essilor merged with Italian eyewear company Luxottica, has a market capitalization of 90 billion euros. The company is controlled by the family of former Essilor Chairman Leonardo Del Vecchio, which has about 32% of the stock. Like Meta, EssilorLuxottica has ambitions to expand its smart-glasses business and has recently held talks with other U.S. tech firms. https://tinyurl.com/2cvhc397

In unusual move, Sequoia offers to buy Stripe shares from its own investors.

Sequoia Capital has offered to buy US$861 million worth of shares of Stripe from some of the venture firm’s investors, according to a letter sent to those investors, which Stripe co-founder John Collison has publicly confirmed. The price implies a US$70 billion valuation for the payments provider, which Sequoia began funding in 2010. It’s not common for venture firms to buy out startup stakes from their investors, known as limited partners. The deal helps LPs book a return from their investment in Sequoia, in lieu of an initial public offering from Stripe during a period when relatively few tech companies are going public. LPs usually only get returns from an IPO, the sale of a startup, or a venture firm’s sale of shares to other investors, known as a secondary transaction. Earlier this year, Sequoia bought shares from Stripe employees in a deal that valued the company at US$65 billion. At the time, Sequoia indicated to Stripe that it wanted to buy even more shares. Now, Sequoia is offering to buy Stripe shares from LPs in venture funds it raised between 2009 and 2012. Investors have until August 14 to decide, the letter from Sequoia said. Axios earlier reported on the letter. https://tinyurl.com/yc7y8vm9

Serve Robotics stock soars 241% after Nvidia takes US$4 million stake in the company.

Shares of Serve Robotics soared as much as 241% on Friday after Nvidia disclosed a stake in the company. According to a Form 4 filing made with the SEC on Thursday, Nvidia purchased 1.05 million shares of Serve at a price of US$2.42 per share in April, representing a total investment worth just over US$3.7 million. The stock purchase was pursuant to a 6.0% convertible debt note that Nvidia held on the company. The bond was converted to stock following Serve Robotics public debut in April. Serve Robotics was founded in 2017 and develops and operates self-driving vehicles focused on last-mile delivery. Serve Robotics is small, with a market valuation of about US$275 million on Friday. Before the surge on Friday, it was worth just under US$100 million. The company generated revenue of just US$1 million over the past year. According to Serve’s May 2024 investor presentation, Nvidia has invested just over US$12 million in the company. Other investors include 7-Eleven and Uber, who invested US$11.5 million in Serve Robotics. The company launched its operations in Los Angeles as the first test city. As part of its “next phase” of expansion, it is considering new deployments in San Diego, Dallas, and Vancouver. This isn’t the first time Nvidia has disclosed investments in early-stage companies focused on AI and robotics. In February, Nvidia disclosed relatively small investments in SoundHound AI and Nano X Imaging, resulting in similarly big stock price moves. https://tinyurl.com/2tfp3nw6

Starboard builds big stake in Tinder parent Match.

Match Group MTCH 7.46% has drawn the attention of another activist investor, Starboard Value. The hedge fund has built a big stake in the online-dating company and is pushing for a possible sale if a turnaround isn’t successful, according to people familiar with the matter. Match has recently faced at least two other activists, including Elliott Investment Management. https://tinyurl.com/49r3v28u

Coinbase, Bitcoin rally on Trump re-election odds.

The price of bitcoin and shares in crypto exchange Coinbase jumped on Monday, as investors boosted bets that pro-crypto candidate Donald Trump will win the November presidential election following an assassination attempt on Saturday. “This whole [bitcoin price] move seems to be caused by the market pricing in a Trump win at the coming election (similar to Reagan after a failed assassination attempt in 1981) and this is positive for crypto prices because of his overtly pro-crypto stance,” crypto trading firm QCP wrote in market commentary on Monday. Coinbase shares jumped 12% while bitcoin rose more than 4% to US$63,299 as of midday New York time Monday. Trump is still set to attend the Bitcoin Conference in-person in Nashville on July 27, the conference’s organizer announced on X. https://tinyurl.com/3z3ehpj2

Broadcom shares rise 3% after report on OpenAI chip talks.

Broadcom shares rose 3% Thursday after The Information reported that the chip designer was talking to OpenAI about developing a new server chip for artificial intelligence. OpenAI’s chip team is led by a former member of a Google team that worked with Broadcom to make Google’s tensor processing units that power the search company’s AI. A new chip wouldn’t land until 2026 at the earliest but it could fit into a broader plan by OpenAI CEO Sam Altman to boost the availability of AI chips and data centers through a new company, with OpenAI as a minority shareholder. Taiwan Semiconductor Manufacturing Co., has told Altman it would be open to producing the new chip—or more AI chips from Nvidia—if he placed substantial orders for them. Altman has also recently discussed setting up a company or companies to finance land, power and servers that OpenAI would eventually rent out, the report said. Altman believes his company needs many more specialized servers to realize its dream of AI superintelligence. https://tinyurl.com/f2jhuyax

TSMC second-quarter profit beats expectations as AI chip boom continues.

Taiwan Semiconductor Manufacturing Company on Thursday beat revenue and profit expectations in the second quarter, as demand for advanced chips used in AI applications continue to surge. Chairman and CEO C.C. Wei in an earnings call on Thursday said business in the second quarter was supported by strong demand for its industry-leading 3-nanometer and 5-nanometer technologies, though it was offset by continuous smartphone seasonality. “The supply continues to be pretty tight, all the way through 2025,” Wei warned, adding that the firm hopes the tight supply can ease in 2026. The chip giant currently produces 3-nanometer chips and plans to commence mass production of 2-nanometer chips in 2025. Typically, a smaller nanometer size yields more powerful and efficient chips. Development of 2-nanometer technology is “progressing well” and is on track for volume production in 2025, said TSMC. For the third quarter, the business is expected to be supported by strong smartphone and AI-related demand, said Wei, adding that they continue to expect 2024 to be “a strong growth year for TSMC.” TSMC projects third-quarter revenue between US$22.4 billion and US$23.2 billion. This compares to US$17.3 billion in revenue posted in the same period a year ago. TSMC shares closed 2.43% lower on Thursday, as Asian chip stocks tumbled on the back of a U.S. tech sell-off sparked by reports that Washington is considering tighter export curbs. Surging demand for advanced chips used in AI applications has boosted TSMC’s Taiwan-listed shares by nearly 70% so far this year. https://tinyurl.com/2s4zu359

ASML bookings surge as AI chip demand boosts purchases of its critical semiconductor tools.

ASML reported second-quarter earnings and sales that beat forecasts, as interest in artificial intelligence chips drives up demand for the Dutch firm’s critical semiconductor making equipment. Though ASML beat expectations, shares of the firm sank 11% on Wednesday amid a global slump in semiconductor stocks, as a Bloomberg report said the Biden administration is considering a wide-sweeping rule to clamp down on companies exporting their critical chipmaking equipment to China. ASML sources 49% of its sales from China — highlighting how much of a risk such export curbs would pose to the firm. ASML previously forecast second-quarter net sales of between 5.7 billion euros and 6.2 billion euros. Net sales fell 9.5% year-on-year, while net income dropped by 18.7%. This was narrower than the falls logged last quarter. Net bookings — a key metric for the market, marking orders for ASML machinery — totaled 5.6 billion euros in the June quarter, rising more than 24% year-on-year. The Dutch firm is one of the most important semiconductor companies in the world, producing tools known as extreme ultraviolet (EUV) lithography machines, which are required to manufacture the most advanced chips. ASML has previously called 2024 a “transition” year as it expects the semiconductor industry to start to recover after a tough 2023. The company kept its outlook for the full year unchanged. ASML now said it forecast third-quarter net sales of between 6.7 billion euros and 7.3 billion euros. Analysts had expected the company to forecast revenue of 7.6 billion euros in the third quarter. ASML also faces geopolitical headwinds. Following pressure from the U.S., the Dutch government last year introduced curbs on the export of advanced semiconductor equipment, amid U.S. pressure to cut Beijing off from key chipmaking tools. The measures also impact the ASML offerings, although China has never received an ASML EUV machine. ASML previously said that export restrictions would impact 10% to 15% of it’s China sales this year. https://tinyurl.com/mrycacnj

Chip stocks fall on report that Biden is considering tougher China trade rules.

Shares of major chip design and hardware providers fell Wednesday after Bloomberg reported that the Biden administration is considering tougher trade restrictions to prevent Chinese companies from developing advanced semiconductors. Federal officials have discussed the plan with allied governments such as Japan and the Netherlands, which allegedly let local firms such as Tokyo Electron and ASML Holding sell advanced chip technology to Chinese firms. The restrictions the Biden administration is mulling are known as the “foreign direct product rule,” which allows the U.S. to impose trade restrictions on products made by other countries, even if they include a small amount of American technology. Shares of those two companies as well as those of Applied Materials, Nvidia, and Advanced Micro Devices also fell Wednesday. Bloomberg reported that some U.S. allies—who have already halted some shipments of chip equipment to China—view the threats of an escalation as “draconian.” https://tinyurl.com/mvaenk8s

Netflix forecasts revenue slowdown in Q3 after faster growth in Q2.

Netflix’s revenue growth accelerated to 17% in the second quarter, from 15% in the first quarter, as it lifted its subscriber count to 277.65 million, from 269.6 million in the first quarter. But the company forecast that revenue growth would slow to 14% in the third quarter, sending Netflix shares down 3% in after-hours trading. The forecast suggests that Netflix’s efforts to crack down on password-sharing, which has driven subscriber growth in the past year or so, may be petering out. Netflix’s big hope of maintaining revenue growth is its nascent ad business, which has been expanding slowly. The company doesn’t disclose its ad revenue, saying only Thursday that membership in the subscription tier that carries ads grew 34% quarter on quarter—without saying to what number. https://tinyurl.com/4d34hwm2

OpenAI launches ‘mini’ version of flagship AI model.

OpenAI on Thursday released a smaller, cheaper version of its flagship GPT-4o large language model that could help developers of artificial intelligence apps to cut costs. It could also help lower OpenAI’s own costs of running the AI. OpenAI claimed the new model, GPT-4o mini, outperforms rivals such as Anthropic’s Claude 3 Haiku and Google’s Gemini 1.5 Flash, though it isn’t as accurate on reasoning, math and coding tasks compared to a bigger, more expensive version of GPT-4o. That may not matter as much to developers who care more about fast response times and who are building applications that do simpler tasks like summarization, though. AI providers like OpenAI have been racing to develop smaller, cheaper models to boost sales, as their most advanced models can be expensive for some customers. GPT-4o mini is more than 60% cheaper than GPT-3.5 Turbo and 90% cheaper than GPT-4o. In March, OpenAI was generating US$1 billion in annualized revenue from its API model business, The Information previously reported. That business is separate from ChatGPT and also exceeds what Microsoft is making from selling access to OpenAI’s models. https://tinyurl.com/2p8b8stw

NBA moves one step closer to US$76 billion sports rights package.

The NBA’s Board of Governors has approved its new collection of live sports rights deals, the league’s commissioner Adam Silver said during a press conference on Tuesday. The deals could reshape how people watch NBA games for the next decade. (The board includes a representative, often the owner, from each team in the league.) The NBA has agreed to new deals with Disney’s ESPN, Comcast and Amazon to broadcast regular season and playoff games, as the league’s in-season tournament, for 11 years starting with the 2025 season, according to people familiar with the matter. In total, the NBA would receive roughly $76 billion over the lifetime of the contracts, roughly tripling the total value of its current rights deals with ESPN and Warner Bros. Discovery. It also would mark another significant expansion into live sports for Amazon, which already pays the NFL around US$1 billion per year to exclusively stream its Thursday night games. However, the deals are not yet completed. The NBA now has to present the deals to Warner Bros. Discovery, one of its existing rights partners that has broadcast NBA games for decades. WBD will then have five days to match one of the deals the NBA has agreed to. WBD is reportedly interested in matching Amazon’s package, though it’s unclear if the NBA will accept that proposal, which could lead to a legal battle between the organizations. https://tinyurl.com/ymp5ybrj

Meta to withhold multimodal models from EU.

Meta Platforms won’t release future multimodal AI models in the European Union because of legal concerns over regulation in the region, Axios reports. The Facebook parent company said in a statement to Axios that it will “release a multimodal Llama model over the coming months, but not in the EU due to the unpredictable nature of the European regulatory environment.” The decision demonstrates how U.S. tech companies are responding to new European regulations by holding back new technology from Europe. When Meta launched its Twitter-rival app Threads last year, for example, it did not roll it out the app in Europe because of regulatory concerns. Last month, Apple also announced that it wouldn’t make its new AI features available in Europe. https://tinyurl.com/4j7hfcx8

Amazon Prime Day drives U.S. online sales to record US$14.2 billion.

Online spending in the U.S. surged 11% year over year to US$14.2 billion during Amazon’s 48-hour Prime Day event, topping estimates and setting a record, according to Adobe Analytics. Adobe said the strong showing was driven by back-to-school shopping and an “apparent product refresh cycle,” as consumers looked to snap up new tablets, TVs and Bluetooth speakers in droves. That’s a shift from last year, when inflation-weary shoppers used the discount event to stock up on household essentials like pantry staples and office supplies. The company had predicted U.S. shoppers would spend US$14 billion online during the two-day event. Adobe tracks transactions not just on Amazon but also across a wide swath of U.S. retail sites. Amazon’s Prime Day event, which ran Tuesday and Wednesday, has become a big revenue driver for other retailers, which often hold competing sales timed around Prime Day. https://tinyurl.com/43ez5jfz

BlackRock CEO Larry Fink ‘major believer’ there’s role for bitcoin in portfolios. https://tinyurl.com/3n6kt7cx

Starbucks could give a much-needed jolt to the EV market.

The new 400 kW stations — with fast-charging capabilities that can juice up compatible EVs to about 80% in about 30 minutes — are set to be installed in stores around the nation, including across Interstate 5, a critical West Coast route from Canada to Mexico. The charging stations will be accessible to all EV owners. The new charging stations will help reduce “range anxiety” among EV owners, giving them an easily accessible and well-known place to stop when their batteries run low. https://tinyurl.com/4ntumznp

China’s battery giant taps Europe’s elite to expand supply chain.

China’s CATL, the world’s biggest electric vehicle battery maker, has held talks with overseas sovereign wealth funds and the private offices of the super-rich about raising a US$1.5 billion fund to build out its global supply chain. The offshore fund would enable Fujian-based CATL, a supplier to Tesla, Volkswagen and Ford, to finance an ecosystem of companies needed to help it expand production in Europe and other foreign markets, two people with knowledge of the matter said. China’s overseas direct investment rules make it difficult for CATL to make a large volume of international investments, despite it having Rmb289bn (US$40 billion) of cash as of March 31, said one person briefed on the fund. As part of China’s strict system of capital controls, Beijing requires companies to get government approval for overseas direct investment above a certain threshold, which is typically an arduous and months-long bureaucratic process. The battery maker plans to contribute about 15 per cent of the fund alongside global investors, said the people. The fund would primarily target companies that could supply CATL in Europe, they said. The company held a 37 per cent share of the global market for electric vehicle batteries last year, according to South Korea-based consultancy SNE Research. https://archive.ph/CITpJ