July 23, 2023: Buckle Up, Could Be A Bumpy Week For Tech Stocks

Last week, Dow Jones rose 2.1% and is on a 10-day win streak, the longest in six years. S&P 500 rose 0.8%, while Nasdaq lost 0.6%, largely due to Thursday’s 2.05% fall. Next week, we expect earnings from Microsoft, Alphabet, and Meta, at the same time, the Fed is expected to raise rates. Outlook comments from any of these events could send tech stocks on another leg down. Newly listed Oddity shares closed up more than 35% from their IPO price. The company joins a list of other recent strong debuts in the consumer sector including fast-casual chain Cava. Microsoft added US$154 billion in market value after it announces US$30 per month AI subscription. SpaceX forecasts doubling of revenue to US$8 billion. Cathie Wood’s flagship exchange-traded fund has rallied more than 50% this year, but Investors have pulled a net US$717 million from the ETF over the past 12 months. Apple is using custom ‘Apple GPT’ chatbot internally as it plans for generative AI features in 2024. ESPN reportedly held talks with the NFL, NBA and MLB for minority stakes. TSMC Arizona chip production has been delayed from 2024 to 2025. In Canada, Sophic Client Legend Power announced a minimum $2 million non-brokered private placement pursuant to the listed issuer exemption. A multinational industry leader entered into a multi-year agreement with Sophic Client OneSoft to deploy the Company’s Cognitive Integrity Management SaaS solution. Sophic Client UGE International achieved a notice to proceed milestone for a 1.3MW rooftop community solar project in New York City. The project is estimated to produce an average of $286K annual revenue, over at least 25 years, at ~85% Gross Margins. CEO Nick Blitterswyck also provided an update for investors as the Company’s backlog is approaching 100 MW year to date. EMERGE announced the closing of a Private Placement for gross proceeds of ~$750K. U.S. mortgage data vendor Black Knight will sell its Optimal Blue business for US$700 million to Constellation Software.

Sophic Client Legend Power Systems (LPS-TSXV, LPSIF-OTC) announces a minimum C$2 million non-brokered private placement pursuant to the listed issuer exemption.

The non-brokered private placement consists of a minimum of 11,111,111 units and up to a maximum of 16,666,667 units of the Company (each, a “Unit”) at a price of $0.18 per Unit for aggregate gross proceeds of a minimum of $2,000,000 and up to a maximum of $3,000,000 (the “Offering”). The Offering is being completed pursuant to the listed issuer financing exemption under Part 5A of National Instrument 45-106 – Prospectus Exemptions (the “LIFE Exemption”). Each Unit will consist of one common share in the capital of the Company (each, a “Share”) and one common share purchase warrant (each, a “Warrant”). Each Warrant will entitle the holder thereof to acquire one additional Share at an exercise price of $0.25 per Share for a period of 24 months from the date of issuance , subject to an accelerated expiry provision, whereby in the event the daily volume weighted average trading price of the Company’s Shares on the TSX Venture Exchange, or such other stock exchange where the majority of the trading volume occurs (the “Exchange”), exceeds $0.40 for a period of 10 consecutive trading days, at the Company’s election, the period within which the Warrants are exercisable, will be reduced and the holders of the Warrants will be entitled to exercise their Warrants for a period of 30 days commencing on the day the Company provides notice, any outstanding Warrants not exercised during the 30 day period will expire. https://bit.ly/3JYHZ1Z

Multinational industry leader has entered into a multi-year agreement with Sophic Client OneSoft Solutions Inc. (OSS-TSXV, OSSIF-OTC) wholly owned subsidiary, OneBridge to deploy the Company’s Cognitive Integrity Management software as a service solution.

Brandon Taylor, OneSoft President and COO remarked, “We are pleased that CIM was selected by another leading pipeline company, following its comprehensive request for proposal (RFP) process to investigate alternative solutions for integrity management of its pipeline assets. This Client plans to initially deploy CIM’s Assessment Planning, phase in our Integrity Compliance functionality and subsequently evaluate Threat Monitoring, Crack Analysis, Internal Corrosion and Risk Management modules over the next 18 months. CIM’s capability to leverage cloud computing, quality assurance and controls, vendor agnostic data formats and AI data analytics using machine learning, as well as CIM’s capability to integrate with numerous proprietary in-house software solutions developed by the Client, were key technology factors considered in choosing the OneBridge solution.” https://bit.ly/44R4VYP

Sophic Client UGE International (UGE-TSXV, UGEIF-OTC) CEO Nick Blitterswyck provides Q2 milestones and business updates with backlog approaching 100 MW year to date in this interview with Radius Research. https://bit.ly/3pZz7SK

Sophic Client UGE International (UGE-TSXV, UGEIF-OTC) achieves notice to proceed milestone for 1.3MW rooftop community solar project in New York City.

Once operational the project is estimated to produce an average of $286,000 in annual revenue, with a total program lifetime of at least 25 years. The Company currently expects average recurring revenue to carry gross margins at or around 85%. In addition, UGE will receive a grant through New York State Energy Research and Development Authority (NYSERDA)’s Clean Energy Communities program, which is designed to help incentivize, among other clean energy priorities, the development of community solar programs and specifically those which serve LMI communities. UGE’s grant is expected to total US$1.7 million. https://bit.ly/43rIx7q

EMERGE (ECOM-TSXV) announces closing of Private Placement.

The Company has closed a private placement (the “Offering”) of units of the Company (the “Units”). Pursuant to the Offering, the Company issued an aggregate of 14,960,000 Units at a price of $0.05 per Unit for gross proceeds of $748,000. Each Unit consists of one (1) common share in the capital of the Company (a “Common Share”) and one (1) common share purchase warrant in the capital of the Company (a “Warrant”). Each Warrant is exercisable to purchase one Common Share at a price of $0.10 per Common Share until July 21, 2025. The Company paid a cash finder’s fees of $5,000 in connection with the closing of the Offering. https://tinyurl.com/mpm9jpvk

Constellation Software (CSU-TSX): ICE buyout target Black Knight sells second unit to ease antitrust path.

U.S. mortgage data vendor Black Knight will sell its Optimal Blue business for US$700 million, shedding a second unit to soothe regulatory concerns over its proposed buyout by NYSE-owner Intercontinental Exchange. Canadian business software firm Constellation Software will buy the unit, provided ICE closes its takeover, the companies said on Monday, sending shares of Black Knight to a one-year high of US$69.60. Constellation had also agreed to buy Black Knight’s Empower loan origination system business in March, a deal that analysts said may not be enough to quell concerns over ICE’s US$11.7 billion proposal. The US$700 million purchase price for Optimal Blue is “much lower” than expected, but the fact that the terms for the ICE-Black Knight deal were not amended is a positive sign, KBW analysts wrote in a note. https://archive.li/wBSm9

ProShop ERP raises $32 million to help manufacturers digitize operations.

Vancouver-based ProShop ERP, which provides enterprise resource planning (ERP) software for manufacturers, has received a $32-million investment from growth equity firm Mainsail Partners. According to ProShop, it will use the capital to expedite its product development. ProShop is meant to help manufacturers move away from paper-based workflows and into a web-based environment. It offers its ERP software to manufacturers in regulated industries such as defence, aerospace, and health care. https://bit.ly/3rH2UA4

Construction software firm Vitruvi to be acquired by US-based Bow River Capital.

Calgary’s Vitruvi provides geospatial information system (GIS)-based software for construction project management that caters to the network, power, and utility sectors. Vitruvi founder, president, and CEO Bryan McIver declined to disclose the acquisition price, noting only that the transaction is a majority acquisition that will see key members of Vitruvi’s management team retain equity in the company. https://bit.ly/3pWnhJc

Toronto and Montréal added the most tech jobs in Canada in the last five years.

In the five-year period, CBRE’s report found that Toronto added 63,800 tech jobs, while Montréal added 51,500. Overall, Canadian cities saw the highest tech job growth rates, which were Vancouver (69 percent), Calgary (61 percent), the Waterloo region (52 percent), and Edmonton (45 percent), which ties with Madison, Wis. https://bit.ly/3OoTCC0

Oddity Tech pops 35% in market debut.

Shares of beauty company Oddity Tech surged in their first day of trading, as investors continue to race to scoop up shares of consumer companies despite a major slowdown in other parts of the new-issue market. Oddity shares closed at US$47.53 on the Nasdaq, up more than 35% from their IPO price of US$35 and giving the company a market valuation of around US$2.7 billion. The company joins a list of other recent strong debuts in the consumer sector including fast-casual chain Cava. Oddity, the parent company of Il Makiage makeup and SpoiledChild skin care, says it uses data and AI to help predict what products are likely to be appealing to customers. The company is both fast-growing and profitable, a change from the money-losing consumer businesses that took advantage of the strong IPO market in 2021 to go public. https://tinyurl.com/bdy25y3r

Microsoft adds US$154 billion in market value after it announces US$30 per month AI subscription.

The company launched Copilot, its artificial intelligence-powered set of capabilities that integrate into Microsoft’s suite of its 365 software offering, which includes Word, Powerpoint, Excel, and Teams, among other offerings. The company will charge US$30 per month per user to have the AI-powered Copilot added to its software offering. Investors cheered the move and the company’s apparent pricing power, with Microsoft stock adding as much as US$154 billion to its market valuation at its peak on Tuesday. That one-day gain is bigger than the entire valuation of Morgan Stanley, Intel, Honeywell, and about 450 other S&P 500 companies. https://bit.ly/44PzjCT

Carvana shares jump 40% on deal to reduce debt by US$1.2 billion.

Carvana has reached a debt restructuring agreement that will reduce the used car retailer’s total debt outstanding by more than US$1.2 billion, the company said Wednesday. Carvana said the agreement will eliminate over 83% of its 2025 and 2027 unsecured note maturities and lower its required cash interest expense by more than US$430 million per year for the next two years. In a separate public filing Wednesday, the company said it will sell up to US$1 billion in shares as it attempts to raise capital and restructure its operations. Shares of the company opened Wednesday more than 35% up at US$53.99 a share – its highest open price in more than a year. They closed up 40% to US$55.80 a share, shy of the stock’s 52-week high of US$58.05 from August 2022. https://tinyurl.com/3p4atnut

SpaceX forecasts doubling of revenue to US$8 billion.

Elon Musk’s Space Exploration Technologies, the most highly valued private tech company in the U.S., has told some investors it expects to bring in about US$8 billion in revenue in 2023, roughly doubling its revenue from last year, according to people familiar with the discussions. The expectation for rapid growth helps explain the fervor of some investors for SpaceX shares, which have defied recently depressed private tech valuations. The company, valued in a secondary share sale at about US$150 billion this month, has also told investors it expects to generate about US$3 billion in operating profit this year, by a measure that excludes expenses tied to building rockets and satellites. SpaceX’s business has been boosted by a growing roster of governments and commercial space companies that pay SpaceX to launch their satellites into orbit, in addition to contracts with NASA to put astronauts in space. The secondary share sale valued SpaceX more highly than publicly traded Boeing, Raytheon or Lockheed Martin, aerospace companies with more than US$60 billion in annual revenue each. https://tinyurl.com/5x8554ew

Autonomous vehicle company Aurora sells US$820 million worth of stock.

Aurora Innovation, the self-driving technology company that aims to launch an autonomous trucking business in 2024, has completed a capital raise of US$820 million from a public and concurrent private offering of its stock. Aurora said in November 2022 that it had enough money to get to mid-2024. The pre-revenue company has repeatedly said it would need to raise again to make it to launch and beyond. In September 2022, a leaked memo showed that Aurora’s CEO, Chris Urmson, had been weighing a range of options to preserve the company’s cash position, including spinouts, layoffs, acquisitions and, of course, raises. In the memo, Urmson said there was value in finding “a path to raise US$300 million in the next year to add around six months to our runway.” https://tcrn.ch/3rHwNQQ

Investors are bailing on Cathie Wood’s popular ARK fund.

Cathie Wood’s flagship exchange-traded fund has rallied more than 50% this year. Investors are using that as an opportunity to get out. They have pulled a net US$717 million from the ARK Innovation ETF over the past 12 months, according to FactSet. That exodus marks a notable shift for a fund that had consistently drawn investor cash since its 2014 inception. Once the largest actively managed ETF with nearly US$30 billion in assets under management, the fund has shrunk to roughly US$9 billion, mostly due to investment losses. Known by its ticker symbol ARKK, Wood’s fund became an investor darling shortly after the onset of the Covid-19 pandemic with hugely successful bets on unprofitable and “disruptive” technology companies. It took in huge amounts of investor money, culminating with a US$6.5 billion inflow in the first quarter of 2021, when its share price peaked. The ARKK fund has an 11% annualized average return since inception, but the average ARKK investor has lost 21% on a dollar-weighted, annualized basis, according to FactSet. The fund remains a cash cow for Wood, who owns a majority stake in its parent company, ARK Investment Management. Its 0.75% annual fee is about double the average fee for active ETFs. Although fee revenue is well off its 2021 peak, ARKK has generated more than US$20 million of fees this year. ARK Investment Management currently has the third-highest daily revenue from active equity ETFs, of at least 145 different issuers, according to an analysis from FactSet. https://archive.li/3vdxB

Cathie Wood’s ARK writes down Twitter stake by 47%.

Cathie Wood’s ARK Investment Management has written down its stake in Twitter by 47% since Elon Musk took the social-media company private last year, Wood said in an interview. “We take fair valuation very seriously and absolutely have had to write that [Twitter] down,” Wood said Friday. “The write-down is not representative of our fundamental outlook and belief in the long term return on investment we believe that it will have for our shareholders.” Wood is still bullish on Twitter’s long-term outlook. She said her fund updates its internal valuations of private companies frequently. “I would love to get more stock at these price levels actually, but no one wants to let any go. So that tells you something,” she added. ARK owns a small stake in Twitter through its venture fund, which is open to the public and includes public-market and private investments. https://archive.li/pL7l4

Elon Musk says Twitter’s cash flow still negative as ad revenue drops 50%.

Twitter’s cash flow remains negative because of a nearly 50% drop in advertising revenue and a heavy debt load, Elon Musk said on Saturday, falling short of his expectation in March that Twitter could reach cash flow positive by June. “Need to reach positive cash flow before we have the luxury of anything else,” Musk said in a tweet replying to suggestions on recapitalization. https://reut.rs/3KowO2X

Tesla in discussion to license Full Self-Driving software to another automaker.

Tesla is in “discussion” to license its Full Self-Driving (FSD) driver-assist technology to another major automaker, Elon Musk said in an earnings call Wednesday. He did not reveal the name of the company, though he did say that licensing FSD was always part of the plan. “We’re not we’re not trying to keep this to ourselves,” Musk said on the call. “We’re more than happy to license it to others.” Musk has spoken about licensing FSD to competitors in the past. Last month, he tweeted that “Tesla aspires to be as helpful as possible to other car companies” — adding, “Also happy to license Autopilot/FSD or other Tesla technology.” https://bit.ly/3OmIo0G

SEC Chair issues warning to companies touting AI opportunities.

Many companies are jumping on the artificial intelligence (AI) bandwagon, touting opportunities and partnerships, but the regulator is watching. Securities and Exchange Commission (SEC) Chair Gary Gensler warned corporations to make accurate representations about their AI-related moves to ensure investors are not deceived. Gensler said that AI is the “most transformative technology of our time, on par with the internet and mass production of automobiles” in prepared remarks before the National Press Club on Monday. However, that high praise came with a stern warning for listed companies promoting AI opportunities to make the most of the hype. “Public companies making statements on AI opportunities and risks need to take care to ensure that material disclosures are accurate and don’t deceive investors,” said Gensler. https://bit.ly/43yPF1V

Microsoft, Activision Blizzard extend deal deadline until October.

Microsoft and Activision Blizzard have set a new deadline of Oct. 18 for closing their US$69 billion merger agreement. The original July 18 deadline passed without a deal being struck because U.K. regulators last week delayed their final decision on it until late August. The extension suggests that Microsoft and Activision Blizzard feel they have come too far in their battle to win regulatory approval to let the deal fall apart at this stage. The companies have already won two separate court rulings against the Federal Trade Commission, which has tried to block the deal. The FTC is reportedly weighing its options to continue the fight, but also recently opened an investigation of OpenAI and may be ready to focus more attention on a new target. As part of the deadline extension, Microsoft has agreed to increase the termination fee it will pay to Activision Blizzard from US$3 billion to US$3.5 billion if the deal is scuttled after Aug. 29. Microsoft will pay US$4.5 billion if the deal is terminated after Sept. 15. https://tinyurl.com/bdnp99zf

Britain’s Entain to buy U.S.-based Angstrom Sports for up to US$266 million.

Ladbrokes-owner Entain on Monday agreed to acquire U.S.-based Angstrom Sports for a potential consideration of up to 203 million pounds (US$266 million) as it looks to widen its footprint in the country. The acquisition of the sports modelling, forecasting and data analytics company will comprise a total consideration of 81 million pounds and contingent payments of 122 million pounds over three years, the company said in a statement. “Their next generation forecasting, pricing and risk management capabilities will unlock significant opportunities across BetMGM’s U.S. sports betting offering, particularly in the fast-growing markets of parlay and in-play wagering,” Chief Executive Officer Jette Nygaard-Andersen said. BetMGM is Entain’s joint venture with MGM Resorts. Over the years, Entain has added several betting groups to its portfolio to expand into Canada, the Netherlands and other parts of Europe. https://archive.li/tK13f

Microsoft’s OpenAI-powered Office 365 software will be costly.

Microsoft on Tuesday announced pricing for its new artificial intelligence tools for its Office 365 software, which lets people use OpenAI’s AI models to automatically draft passages in Word documents, summarize emails, or create PowerPoint presentations from brief written prompts. The products will cost an extra US$30 per month per person, more than doubling the cost of the cheapest version of 365 software per seat. Microsoft has been selling the AI tools to a select group of companies that want to offer them to large groups of employees, and it has been charging those customers a roughly 40% premium for the AI features, The Information previously reported. https://tinyurl.com/mrxfazae

Apple using custom ‘Apple GPT’ chatbot internally as it plans for generative AI features in 2024.

While Microsoft is selling AI to the enterprise, Apple is reportedly developing its own strategy for generative AI. Mark Gurman at Bloomberg has new details on what sounds like a serious effort to develop technology within Apple that can compete with OpenAI’s ChatGPT AI. According to Gurman, Apple is internally testing a generative AI chatbot it developed that some are calling Apple GPT. The project uses a framework called “Ajax” that Apple started building in 2022 to base various machine learning projects on a shared foundation. https://bit.ly/3DmUUXS

Meta Releases much-anticipated open-source AI model, Llama 2.

Meta Platforms on Tuesday released its latest open-source artificial intelligence model, Llama 2, and said it would allow developers to use it for commercial purposes. A month ago, The Information reported Meta wanted to make Llama 2—a large-language model that competes with closed-source models from OpenAI—available commercially. The first version of Llama was only available for research purposes. Llama 2 will be available on a variety of platforms including Microsoft’s Azure, Amazon Web Services and Hugging Face, and can also be downloaded directly from Meta’s website and run locally. The rise of open source LLMs is one of the most watched areas of AI. Falcon is another open-source LLM that has gained traction in recent weeks. If open source models can improve quickly, developers of proprietary models such as OpenAI, Anthropic and Google may not be able to charge as much for their software. OpenAI has separately been developing a new open source LLM for commercial use, The Information reported, but hasn’t released it. https://tinyurl.com/bdhcjpsv

Google tests AI tool that produces news articles.

Google is testing a product that uses artificial intelligence to write news articles and pitching it to major U.S. media companies, The New York Times reported. Google is pitching the AI tool, which produces articles based on information such as details of current events, to The Times as well as The Washington Post and The Wall Street Journal’s owner, News Corp., according to the report. The Times, citing a person familiar with the product, said that Google believes the tool could help journalists by automating some tasks and freeing up time for others. The latest move by Google comes as executives in many industries are trying to figure out the potential impact of generative AI on how businesses operate and what kinds of jobs the technology could eliminate or create. In the media industry, major news organizations have been debating whether to use AI tools and discussing how the proliferation of misleading AI-generated content could undermine trust in news. Some executives who saw Google’s recent pitch found the AI tool “unsettling,” according to the Times. https://tinyurl.com/33dh34k7

SEC is worried chatbots could fuel a market panic.

In a speech given to the National Press Club on Monday, SEC Chair Gary Gensler said recent advances in generative AI increase the possibility of institutions relying on the same subset of information to make decisions. Gensler said the large demand for data and computing power could mean only a few tech platforms may dominate the field, narrowing the field of AI models companies can use. If a model provides inaccurate or irrelevant information, financial institutions may end up using the same flawed data and making the same bad decisions — creating the risk of something like the 2008 financial crisis, where banks played “follow the leader” based on information from credit raters, or the Twitter-fueled run on Silicon Valley Bank. Gensler compared the potential fallout to something like the 2008 crisis, which he said demonstrated the risks of a “centralized dataset or model” in finance. https://bit.ly/3pUuBoK

ESPN reportedly held talks with the NFL, NBA and MLB for minority stakes.

Disney has held early talks with the National Football League, the National Basketball Association and Major League Baseball on potentially taking a minority stake in ESPN, according to CNBC. The report comes a week after Disney CEO Bob Iger indicated that he’s open to finding a strategic partner, especially if it can help figure out a way to distribute the sports cable network directly to consumers through streaming. Several issues complicate the possibility of sports leagues taking a minority stake in ESPN. The NFL, NBA and MLB get paid billions of dollars by ESPN to broadcast their live games—a key revenue stream which could be harmed if any of the leagues assumes even a minority ownership of the sports media giant. It would also create a significant conflict of interest as ESPN’s broadcast rivals and fellow live-sports rights holders including Comcast-owned NBCUniversal and Paramount. Still, it’s clear Iger and Disney need to figure out a new plan for ESPN. The firm continues to generate cash for Disney, but with the erosion of the traditional cable TV bundle, skyrocketing sports costs, and greater competition from tech giants including Amazon, Google’s YouTube and Apple, the outlook for ESPN’s core business is getting more grim. https://tinyurl.com/e47x4w2u

Netflix gains nearly 6 million subscribers as paid sharing soars.

A year ago today, Netflix reported its largest quarterly loss ever, with 970,000 subscribers dropping the service. The company has since crawled out from under the rubble. Netflix revealed Wednesday that, for the second quarter of 2023, the streaming giant saw a jump (or should we say leap) in 5.9 million global subscribers, bringing the total to 238.4 million subs. The subscriber addition far exceeds industry guidance; analysts forecasted an increase of 1.7 million subs. Netflix ended Q1 with 232.5 million users. https://tcrn.ch/3Q5ETgr

Roblox is going to let developers offer subscriptions in their experiences.

Subscriptions could open up a new revenue stream for developers. Roblox already offers developers a lot of ways to monetize their experiences, including the ability to sell virtual items in an experience or on the Roblox marketplace, offering in-experience passes to certain content and gating experiences behind paid access. However, those examples are all one-time fees, and Roblox argues that subscriptions would offer a way for developers to “establish a recurring economic relationship with their users and potentially increase the predictability of their earnings.” (Other monetization options include subscriptions to private servers, engagement-based payouts, and slotting in Roblox’s “Immersive Ads.”) https://bit.ly/43vqopd

Activision Blizzard lays off esports staff as it faces potential dramatic changes for the Overwatch League.

Amid the final days of the Activision Blizzard / Microsoft deal, Activision Blizzard is laying off workers in its esports department while also preparing for potentially huge changes coming to the Overwatch League. Early today, Blizzard released its second quarter earnings report, within which lies the potential fate of the Overwatch League. From the report: During the second quarter, we amended certain terms of our collaborative arrangements with team entities participating in the Overwatch League. According to the amended terms, following the conclusion of the current Overwatch League season, the teams will vote on an updated operating agreement. If the teams do not vote to continue under an updated operating agreement, a termination fee of US$6 million will be payable to each participating team entity (total fee of approximately US$114 million). https://bit.ly/3DkLb47

Engagement on Instagram’s Threads has cratered.

Shortly after Meta’s new Twitter clone Threads hits 100 million users, analysts say that the app’s user engagement has precipitously dropped off. NBC News reports that data from Sensor Tower and Similarweb indicates that the newly released social media platform from Meta has seen a drop off in attention from users. Sensor Tower Data suggests that on Tuesday and Wednesday, daily active users dropped 20% from Saturday while time spent on the platform fell 50% from 20 minutes to 10 minutes. Similarweb’s data reportedly paints a picture equally as grim as daily active users dropped 25% from a peak on July 7 to Monday, while time spent on the app dropped over 50% from 20 minutes to 8 minutes. Threads was unveiled as Meta’s Twitter killer and became available for download in the U.S. on July 5, and since then, the platform has garnered well over 100 million users, who are able to access it directly from Instagram. The app has not come without its fair share of issues, however. Meta is really trying to brand Threads as an apolitical “friendly place,” according to CEO Mark Zuckerberg and the rollout might have been too premature, as users who want to delete Threads will need to nuke their entire Instagram account. https://tinyurl.com/y5jcua69

Microsoft to face EU probe over Teams and Office bundling.

Microsoft is set to be formally investigated by the EU over claims it is unfairly bundling its Teams videoconferencing app with its Office software, as the European Commission turns up the heat on the tech giant. The commission is set next week to open a formal probe into allegations that Microsoft is abusing its dominant position — the first such investigation for more than a decade — after deeming concessions by the US group insufficient, four people with direct knowledge of the competition watchdog’s thinking said on Monday. Two of the people added that the commission could issue formal charges against Microsoft as early as the autumn. The Financial Times reported in April that Microsoft had offered in talks with the EU to stop forcing Office customers to have Teams automatically installed on their devices as well. This followed a complaint in 2020 to Brussels by Microsoft’s rival Slack that alleged that such bundling of the two services broke EU competition law. https://archive.li/ZWRqm

Norway temporarily bans personalized ads from Facebook, Instagram.

Norway ordered Meta Platforms to temporarily stop showing Facebook and Instagram users in Norway ads based on their location and online activity, Politico reported. The ban, set to last three months starting in August, follows a ruling from the Court of Justice of the European Union that Meta was unlawfully collecting users’ data. Norway is the first country to act on the court’s ruling. If Meta violates the ban, it will be fined 1 million Norwegian krone per day, an amount equivalent to around 90,000 euros. Norway could lift the ban if Meta finds a way to legally collect personal data and allow users to opt out of targeted advertising, according to Politico. https://tinyurl.com/mr2ft6up

FTC pauses case against Microsoft-Activision Merger.

The Federal Trade Commission has paused its lawsuit seeking to block Microsoft’s planned acquisition of game maker Activision, Bloomberg reported. The move means Microsoft is one step closer to finishing the biggest acquisition in its history, valued at about US$69 billion. The FTC’s capitulation came days after a federal judge rejected an attempt by the U.S. antitrust agency to prevent the companies from closing the deal and criticized the government’s arguments. The companies must still work out a deal with UK competition regulators, who were concerned about the deal’s impact on competition in the gaming market. https://tinyurl.com/mwbpyv3e

AI companies adopt safeguards after White House pressure.

Seven leading artificial intelligence companies—Amazon, Anthropic, Google, Inflection, Meta, Microsoft and OpenAI—committed to sharing more information about their models and taking measures to reduce their potential harm, following pressure from the Biden administration. The safeguards that the companies agreed to include allowing outside experts to test their models prior to release; developing a system to indicate when content is AI-generated; and prioritizing research on avoiding bias and discrimination in their technology. President Joe Biden announced the commitments at a press conference Friday. The announcement will likely be the first of many government-led initiatives in the U.S. and abroad to rein in the fast-moving AI sector. Some industry players fear that competition among the top firms, which are racing to develop powerful AI technology, could lead them to prioritize speed over ensuring their models won’t cause societal harm. https://tinyurl.com/45r7edu3

Fed launches long-awaited instant payments service, modernizing system.

The U.S. Federal Reserve has launched a long-awaited service which will aim to modernize the country’s payment system by eventually allowing everyday Americans to send and receive funds in seconds, 24 hours a day, seven days a week, the central bank announced on Thursday. The “FedNow” service, which has been in the works since 2019, will seek to eliminate the several-day lag it commonly takes cash transfers to settle, bringing the U.S. in line with countries including the United Kingdom, India, Brazil, as well as the European Union, where similar services have existed for years. FedNow is launching with 41 banks and 15 service providers certified to use the service, including community banks and large lenders like JPMorgan Chase, Bank of New York Mellon, and US Bancorp, but the Fed plans to onboard more banks and credit unions this year. The Fed said on Thursday in a statement that 35 banks and credit unions were currently utilizing the service, as well as the Treasury Department’s Bureau of Fiscal Service. The service will compete with private sector real-time payments systems, including The Clearing House’s RTP network, and was initially opposed by big banks who said it was redundant. But many have since agreed to participate on the basis FedNow will allow them to expand the services they can offer clients. Unlike peer-to-peer payments services like Venmo or PayPal, which act as intermediaries between banks, payments made via FedNow will settle directly in central bank accounts. The Fed also operates a real-time payments system called FedWire, but that’s reserved for large-scale, mostly corporate payments and is only operational during business hours. While the new FedNow system is for everyone, it’s likely to benefit consumers and small businesses the most, analysts have said. https://archive.li/LpNWA

TSMC Arizona chip production delayed from 2024 to 2025.

The start of TSMC Arizona chip production – which will include chips for older Apple devices – has now been officially delayed by the company. Production was scheduled to begin in late 2024, and this has now been pushed back to early 2025. Apple’s chipmaker had previously acknowledged that construction work had fallen well behind schedule, but had said at the time that this “[did] not necessarily mean” that initial chip production would be delayed … TSMC first announced its plans to build one or more chip plants in Arizona back in 2020. It was claimed that 1,600 US jobs would be created, including those in a local supply chain. The company sought substantial subsidies from the US government in order to proceed. Apple supported this bid, lobbying on TSMC’s behalf through the CHIPS Act, a US$50 billion program to promote chip fabrication within the US. Apple has said that the plant would make chips for Apple’s devices, though only for older ones. https://bit.ly/3DmxmCf

Tesla builds first Cybertruck after years of delays.

Tesla’s Austin, Texas Gigafactory has built its first-ever Cybertruck, the company said on Twitter, starting the countdown to deliveries on the US$882 billion company’s first new car since the Model Y in 2020. Musk has said the company plans to start Cybertruck deliveries this fall. Tesla first revealed the stainless steel pick-up truck in 2019 but production of the vehicle stalled over what Musk described as supply chain issues. Then in June, the executive in charge of the Cybertruck supply chain, Mustapha El Akkari, left Tesla for its rival Rivian, The Information reported. The electric truck will bring Tesla into one of the most popular car segments in the US. Tesla delivered the first of its new semi trucks in 2022, and CEO Elon Musk said the company would start producing an updated version of its first vehicle, the Roadster sports car, in 2024. https://tinyurl.com/kjktz68y