June 16, 2024: Indices Diverge, Some Caution Could Be Warranted

Last week, Nasdaq and S&P 500 rose again, as both indices hit fresh highs. Dow Jones fell 0.5%. The market rally could be due for a breather as indices appear to diverge. Shares in newly public Tempus AI began trading on the stock market on Friday, ending up 8.8% from its IPO price. StubHub’s EBITDA is said to be US$350 million ahead of a planned IPO. Apple on Monday announced highly anticipated updates that will bring generative AI capabilities to its devices, including a partnership with OpenAI’s ChatGPT that will aid Siri queries. Apple isn’t paying OpenAI for the ChatGPT partnership, and could work with Google’s Gemini in the future. OpenAI has surpassed US$3.4 billion in annualized revenue, more than doubling since late 2023. Adobe shares rose over 14% in extended trading Thursday as generative AI fueled its revenue growth. Broadcom revenue jumped 43% on AI chip demand. Microsoft will directly tie one third of performance bonuses for its 14 highest-paid executives to their success in improving the company’s cybersecurity. In Canada, there was yet another take-out, with Copperleaf being acquired for $12/sh in cash, a premium of ~66% to the 90–day VWAP. HEALWELL entered into an agreement to acquire BioPharma Services Inc., one of the largest full-service Contract Research Organizations headquartered in Canada, for up to ~$14.5 million. Tribe Property Technologies will conduct a non-brokered private placement, under the Listed Issuer Financing Exemption for gross proceeds of up to $2.5 million. Sophic Client, Xcyte Digital announced the execution of a definitive agreement with MCON Live, expanding into the military veteran community. Samsung, is leading a round of at least US$300 million in Tenstorrent, a Toronto-based AI chip company. Toronto-based cleantech startup Parity has a secured $26.1 million Series B financing to scale the adoption of its software solution aimed at reducing greenhouse gas emissions in urban buildings.

Copperleaf Technologies Inc. (CPLF-TSX) enters into definitive agreement to be acquired by IFS AB.

Copperleaf entered into a definitive arrangement agreement with Industrial and Financial Systems, IFS AB, pursuant to which IFS will indirectly acquire all of the issued and outstanding common shares of Copperleaf for $12.00 in cash per Share, representing a total equity value of approximately $1.0 billion on a fully diluted basis. The Consideration represents a premium of approximately 18% to the closing price of the Shares on the Toronto Stock Exchange on June 10, 2024, and a premium of approximately 66% to the 90–day volume weighted average trading price of the Shares on the TSX as of the same date. This value further represents a 70% premium to the closing price on May 3, 2024, the last trading day prior to IFS’s submission of its non-binding proposal for an acquisition of the Company. https://tinyurl.com/yy8a7wkk

HEALWELL (AIDX-TSX) AI to acquire BioPharma, one of Canada’s largest CROs, to expand and AI-enable clinical research offerings.

HEALWELL has entered into an agreement to acquire BioPharma Services Inc., one of the largest full-service Contract Research Organizations (“CRO”) headquartered in Canada. BioPharma is focused on bioequivalence and early-stage clinical trials, with over 2,200 clinical trials completed to date with approximately 250 pharma clients since inception. BioPharma is expected to generate between $35 to $40 Million of revenue in 2024 with approximately 5% EBITDA1 operating margins based on YTD performance and has generated approximately $31 million of revenue in the trailing 12-month period. BioPharma has over 250 team members. HEALWELL will pay $11.9 million in cash and shares in addition to a 3-year performance earn-out that may result in an additional payment of up to $2.5 million. Once BioPharma and the previously announced VeroSource acquisitions are closed, HEALWELL’s annualized revenue run-rate is expected to be greater than $65 million per year. https://tinyurl.com/p5hdyxeh

Bitfarms (BITF-TSX) adopts ‘poison pill’ after Riot takeover offer turns hostile.

Bitcoin mining company Bitfarms Ltd. is adopting a “poison pill” shareholder rights plan as a defense after an unsolicited takeover offer by larger rival Riot Platforms Inc. Under terms of the plan, if an entity acquires an equity stake of more than 15% by Sept. 10, Bitfarms will issue new stock to prior existing shareholders, diluting the stake of the entity pursuing a hostile takeover, Bitfarms said in a statement Monday. Riot Platforms made an unsolicited, US$950 million offer in May to buy Bitfarms Ltd. after the smaller Bitcoin miner rebuffed its takeover approach the prior month. Bitfarms said its board had determined that the proposal “significantly undervalues” the company and its growth prospects. Back in April, Riot privately offered $2.30 a share in cash and stock for Bitfarms, which was about 20% above what the company’s shares traded for before the offer was made. Riot beneficially owned 47,830,440 shares of Bitfarms, representing approximately 12% of the issued and outstanding stock, the company said in a statement June 5. https://archive.ph/bA4oY

Tribe Property Technologies (TRBE-TSXV) announces private placement under the Listed Issuer Financing Exemption (LIFE).

Tribe Property Technologies announced that due to the over-subscription of the Company’s previous private placement, the Company will conduct a non-brokered private placement, under the Listed Issuer Financing Exemption (“LIFE”) (as defined below), of up to 4,807,693 units of the Company at a price of $0.52 per Unit to raise gross proceeds of up to $2,500,000. Each Unit will consist of one common share of the Company and one-half of one common share purchase warrant. Each Warrant will entitle the holder to purchase one common share of the Company at a price of $0.82 at any time on or before that date which is 60 months after the closing date of the Offering. The Company anticipates that members of the Company’s management and insiders will participate in the Offering. The net proceeds raised from the Offering will be used for general working capital purposes. https://tinyurl.com/2s3c2577

Sophic Client Xcyte Digital (XCYT-TSXV) announces execution of definitive agreement with MCON Live Inc.

Xcyte Digital Corp entered into a share exchange and asset purchase agreement dated June 12, 2024 with MCON Live Inc., a Nevada corporation, pursuant to which, among other things, a wholly-owned subsidiary of Xcyte will acquire 5% of the common stock of MCON and 100% of MCON’s online business. MCON is a veteran-owned company that hosts various annual events that bring the military community together through a celebration of military culture. As consideration for the Transaction, Xcyte will issue MCON 50 multiple voting shares in the capital of Xcyte (each an “MV Share”) each of which is convertible into 10,000 subordinate voting shares in the capital of Xcyte (each an “SV Share”), subject to adjustment in certain circumstances, for a total of 500,000 SV Shares, in exchange for the MCON Shares and certain intangible assets related to MCON’s online business. Following the closing of the Transaction (the “Closing”), MCON will receive 25% of the revenue generated by such online business, after deducting all third-party expenses, sales commissions and other direct costs. MCON’s next live event is expected to be held on October 24, 2024, and will be a global event powered by Xcyte Digital, enabling an immersive/hybrid format for the first time in its history. https://bit.ly/3xjpAKc

Sophic Client Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) supports energy transition in Taiwan.

Kraken Robotics Inc. announces since undertaking its first seabed survey project in Taiwan 3 years ago, Kraken Robotics has supported the installation of over 1.8GW of green energy through the use of the innovative 3D acoustic Sub-Bottom Imager (SBI). With a 10+ year track record and more than 30,000 kilometres of high-resolution seabed surveys for offshore energy, Kraken has provided services for major offshore developers and contractors such as Ørsted, Scottish Power Renewables, Scottish and Southern Energy, RWE, Equinor and Vattenfall. From our initial activities mainly in Europe, Kraken has more recently expanded to support projects in the US and Asia Pacific, including Australia and Taiwan. Taiwan has an ambitious target of generating 5.6GW of green energy by 2025, and Kraken has been in country supporting this energy transition from an early stage, having supported cable installation projects from 2021 onwards, providing cable burial assessment and highlighting areas of remedial trenching requirements. Following successful projects, Kraken’s SBI has been recognised as the ideal cable assessment survey sensor for other regional projects which require cables to be buried deeper into the seabed providing protection from vessel traffic and mobile seabed sediments. By imaging to 5 metre burial depth, the SBI enabled these projects to image the entirety of the cable network, confirming their depth and thus their protection. With more projects on the horizon, Kraken’s supported total will surpass 3GW in 2025, representing over 50% of installed capacity in Taiwan, all of which will have been during the construction phase. As windfarms complete construction and enter the operational and maintenance phase, additional cable inspections are required periodically throughout the operational life of the windfarm, providing future market opportunities. https://bit.ly/4ejQWR0

Samsung values chip customer Tenstorrent at US$2 billion.

Samsung, the second-largest smartphone maker in the world, is leading a round of at least US$300 million in Tenstorrent, a Toronto-based AI chip company helmed by CEO Jim Keller, an Apple and Tesla veteran. The deal values Tenstorrent at US$2 billion before the investment, according to two people involved in the round. South Korea’s LG Electronics also plans to participate as a new investor, one of the people said, alongside returning investors Fidelity Management and Hyundai Motor Group. Both electronics giants are well known to Tenstorrent. In August, the 8-year-old startup announced that the Samsung Catalyst Fund, the company’s VC arm, co-led a US$100 million round in Tenstorrent. Then in October, Tenstorrent chose Samsung’s foundry business to produce its chips. That effectively prevented Taiwan Semiconductor Manufacturing Co., the market leader in manufacturing chips for other companies, from gaining Tenstorrent as a customer. LG, for its part, has been working with Tenstorrent to develop chips for its televisions and other products. https://tinyurl.com/528awcah

FLO charges ahead with $139 million to expand network, product line.

Québec City-based electric vehicle (EV) charging tech firm FLO has raised $139 million in new funding to support its geographic and product line expansion. A spokesperson for FLO told BetaKit that a “substantial majority” of the round consisted of Series E equity financing, with the minority consisting of non-dilutive funding. The equity portion was led by Export Development Canada (EDC), with support from the Caisse de dépôt et placement du Québec (CDPQ), Investissement Québec, the Business Development Bank of Canada, Energy Impact Partners, and MacKinnon, Bennett & Company. https://tinyurl.com/4f3p3m5k

Two Small Fish Ventures holds $41 million final close for Fund III.

Toronto-based Two Small Fish Ventures (TSFV) has secured the final close of its third venture fund, meeting its $40 million target. The announcement comes less than two years after the fund’s initial close of $24 million (US$17.5 million) in October 2022. Since then, TSFV, which invests in early-stage “industry-disrupting, world-class giants of the future,” has been in deployment mode with Fund III, making early bets on frontier tech startups that are already showing returns. https://tinyurl.com/ywa8prmh

Parity closes $26 million Series B round as it eyes new verticals, markets for HVAC optimization software.

Toronto-based cleantech startup Parity has secured $26.1 million (US$19 million) in Series B financing to scale the adoption of its software solution aimed at reducing greenhouse gas emissions in urban buildings. The round was led by Montréal-based climate impact fund Idealist Capital, which recently received a $50 million injection from the federal government’s Canada Growth Fund. This round brings Parity’s total funding to date to over $34 million. The startup’s goal is to not only reduce the carbon footprint of urban buildings, but also autonomously optimize the system controls, relieving building managers of the daily burden of managing HVAC performance. At the time of its $5 million fundraise in 2019, Parity claimed its software could save buildings 25 to 35 percent on heating and cooling bills. Nearly 40 percent of carbon emissions are generated from the real estate sector alone, with Parity claiming that half of those emissions stem from inefficient HVAC systems.. https://tinyurl.com/3cx3fxwv

Led by former Solium CEO, CreditApp secures $2.7 million to commercialize auto lending software.

Calgary-based FinTech startup CreditApp has closed $2.7 million in financing led by Inovia Capital to commercialize its software for automotive dealerships and lenders. This brings CreditApp’s total funding to $7.4 million, which includes $4.7 million in previously unannounced equity funding from 2022 CreditApp secured to support its launch and research and development efforts. https://tinyurl.com/2fr4cdnc

Medical data firm Tempus AI enjoys IPO pop.

Shares in newly public Tempus AI began trading on the stock market on Friday, ending up 8.8% from its IPO price. The Chicago-based firm, which says it uses artificial intelligence to help doctors analyze patients’ medical testing data, is one of the first AI-focused companies to go public since generative AI took off about 18 months ago. Tempus AI priced shares in the offering at US$37, the top of its target price range, implying a valuation of just over US$6 billion, below the US$8.1 billion valuation where it last raised money privately, in October 2022. At Friday’s close, Tempus is worth roughly US$6.6 billion. Shares opened at US$40 apiece on Friday morning, then jumped as high as US$43.01, and ended the trading day at US$40.25. Founder and CEO Eric Lefkofsky, who previously founded e-commerce firm Groupon, has a majority of the voting rights thanks to supervoting stock he holds. The nine-year-old company, which changed its name to Tempus AI from Tempus Labs in December, lost $196 million on $531 million in net revenue in 2023, filings show. https://tinyurl.com/yc34w3kz

StubHub EBITDA is said to be US$350 million ahead of planned IPO.

StubHub had US$350 million in earnings before interest, taxes, depreciation and amortization for the year ending in March, as the ticket seller prepares for a planned US initial public offering, according to a person familiar with the matter. The operator of ticketing resale platforms StubHub and Viagogo saw US$1.4 billion in revenue in the period, as well as US$505 million of unlevered free cash flow, the person said, asking not to be identified as the information isn’t public. StubHub is in early discussions about its listing with prospective investors and is working with Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of America Corp. on the planned listing, a different person familiar with the matter said. The IPO could come as soon as July, the person said. A StubHub listing would come as the ticketing business is being roiled by a US Department of Justice-led lawsuit against Live Nation Entertainment Inc. seeking to force the US concert promoter to sell its giant ticketing arm, Ticketmaster. Such a development may create an independent rival to platforms like StubHub and Viagogo. The company had explored going public via a direct listing in 2022 that could value it at more than US$13 billion, and filed confidentially with the US Securities and Exchange Commission at the time, Bloomberg News reported. Shares of Vivid Seats Inc., a competitor to StubHub which went public via a merger with a blank-check company in 2021, have declined about 60% since its listing. Vivid Seats had US$142 million in adjusted Ebitda and US$712.9 million in revenue in 2023, according to a statement. It trades at a multiple of about 12.2 times earnings, Bloomberg calculations show. https://archive.ph/5VPDZ

Hong Kong pop star-backed esports firm NIP Group files for US IPO.

NIP Group comprises Sweden’s Ninjas In Pyjamas and China’s ESV5, teams that compete professionally in hit titles including League of Legends and Honor of Kings. The two organizations merged in 2023, the filing shows. The number of American depositary shares the company will offer and their price range will be disclosed in a later filing when the company begins marketing them. NIP Group had a net loss of US$57.2 million on revenue of US$83.7 million in 2023, compared with a pro forma net loss of US$31.3 million on revenue of US$73.2 million the previous year, accounting for the effect of the merger, the filings show. Wang is a singer and producer with 97 million followers across his social media platforms, according to his official Spotify biography. He performed at the League of Legends World Championship opening ceremony in 2022, the bio shows. The offering is being led by Deutsche Bank AG, China International Capital Corp., US Tiger Securities and GF Securities Hong Kong. The company plans for its depositary shares to trade on the Nasdaq Stock Market under the symbol NIPG. https://archive.ph/sXTw8

Apple unveils Apple Intelligence, partnership with OpenAI at WWDC.

Apple on Monday announced highly anticipated updates that will bring generative AI capabilities to its devices, including a partnership with OpenAI’s ChatGPT that will aid Siri queries. At its annual developers conference, WWDC, the iPhone maker unveiled software called Apple Intelligence that it says will understand users’ preferences to create personalized suggestions and actions. For example, a user can ask Siri to play a podcast their wife sent over text without specifying the specific podcast, and Siri will search relevant messages to find the episode. Features in its email client Mail will offer to write emails as well as generate inline suggestions and quick replies. In the Photos application, users will be able to search their photo library, remove objects from the background of pictures and create movies. And new Genmojis will allow users to create emojis of their own by typing descriptions into the keyboard. Some of these features, such as the smart replies in Mail, catch the company up to rival Google. Apple also said it will incorporate ChatGPT, powered by its new model version GPT-4o. The company, which has made privacy a hallmark of its marketing over the last few years, stressed ways users will have control over their involvement with the chatbot. Siri will ask users permission to share their queries with ChatGPT, which will offer suggestions. ChatGPT integration will launch on iOS18, iPadOS18 and MacOS Sequoia later this year. https://tinyurl.com/cy24hbu3

Apple isn’t paying OpenAI for ChatGPT partnership.

Neither Apple nor OpenAI are paying each other to integrate ChatGPT into the iPhone, according to a person with knowledge of the deal. Instead, OpenAI hopes greater exposure on iPhones will help it sell a paid version of ChatGPT, which costs around US$20 a month for individuals. Apple would take its 30% cut of these subscriptions as is customary for in-app purchases. Sometime in the future, Apple hopes to strike revenue-sharing agreements with AI partners in which it gets a cut of the revenue generated from integrating their chatbots with the iPhone, according to Bloomberg, which first reported details of the deal. OpenAI leaders have privately said the Apple arrangement could be worth billions of dollars to the startup if things go well, The Information previously reported. Apple unveiled new AI-powered features this week at its annual developer’s conference, including an integration with ChatGPT, which will answer questions and perform tasks that Apple’s AI can’t handle. Apple executives said customers will eventually be able to select other chatbots including Google’s, similar to how they can select different default search engines in the Safari browser. Anthropic also has been talking to Apple about getting its Claude AI into Apple devices. The OpenAI-Apple arrangement differs from Apple’s deal with Google, in which the search provider pays Apple billions of dollars for the privilege of being Safari’s default search engine. https://tinyurl.com/msrn47uw

Apple confirms plans to work with Google’s Gemini ‘in the future’.

Following a keynote presentation at WWDC 2024 that both introduced Apple Intelligence and confirmed a partnership that brings ChatGPT access to Siri through a deal with OpenAI, SVP Craig Federighi confirmed plans to work with additional third-party models. The first example given by the executive was one the companies with which Apple was exploring a partnership. OpenAI’s ChatGPT will be the first third-party model to receive integration at some point later this year. Apple says users will be able to access the system without having to sign up for an account or pay for premium services. As for that platform’s integration with the revamped iOS 18 version of Siri, Federighi confirmed that the voice assistant will alert a user before sending them off its own in-house models. https://tinyurl.com/y3audcdy

OpenAI surpasses US$3.4 billion in annualized revenue.

Large language model developer OpenAI has more than doubled its annualized revenue to US$3.4 billion, up from US$1.6 billion in late 2023, The Information reported. The majority of that revenue—about US$3.2 billion on an annualized basis—comes from subscriptions to OpenAI’s chatbots as well as fees from letting software developers access its models through an application programming interface. OpenAI also receives a cut of the revenue Microsoft makes from selling OpenAI’s products to Azure cloud customers. That cut, roughly 20% of what Microsoft generates, amounts to about US$200 million on an annualized basis. OpenAI has experienced accelerating growth over the last year, driven by businesses and consumers incorporating its conversational AI software into their work. It now greatly outpaces its startup competitors. Last fall, rival Anthropic told investors it was generating revenue at a US$100 million annualized rate, with plans to reach more than US$850 million in annualized revenue by the end of 2024. Cohere, a Canadian OpenAI rival, was generating just US$22 million in annualized revenue in April. https://tinyurl.com/bdfdcyzj

Microsoft to rent Oracle cloud servers for OpenAI.

Microsoft will rent Oracle’s cloud servers under a deal announced on Tuesday, giving Microsoft more server capacity for OpenAI, which previously ran exclusively on Microsoft’s servers, the companies announced on Tuesday. The deal will “enable OpenAI to continue to scale,” OpenAI CEO Sam Altman said in a statement, and comes as demand for specialized Nvidia chips known as GPUs remains high as companies increasingly use generative AI software. Oracle announced the partnership at the same time that it reported earnings, which showed revenue of US$14.3 billion, or 3% higher than the same quarter a year prior, a deceleration from 7% growth in the previous quarter. Oracle’s cloud revenue growth also slowed to 20% from 25% in the third quarter. Oracle also announced a new partnership with Google Cloud that will make its database software available to Google’s cloud computing customers. Oracle shares rose 8% in after-hours trading. The deal builds on an existing agreement between Microsoft and Oracle announced last year that made it easier for customers to move data between the two companies’ cloud servers. Separately, Microsoft and Oracle have been discussing ways to share computing capacity for AI workloads amid a worldwide GPU shortage since as early as May of last year, The Information previously reported. https://tinyurl.com/2dsw9kk5

Mistral, a European OpenAI rival, secures US$640 million at near US$6 billion valuation.

Mistral, a Paris-based rival to OpenAI, has secured US$640 million in funding at a near US$6 billion valuation, the company announced on Tuesday. The round was led by General Catalyst, and saw participation from other investors including Lightspeed Venture Partners, Andreessen Horowitz and Nvidia. The Information originally reported details of the fundraising here. The round continues the trend of back-to-back fundraisings for the hottest AI startups. Mistral, which recently began to generate revenue, last raised US$415 million at a valuation of US$2 billion in December. The company makes money by charging customers that use an application programming interface to access its large language models, though it also offers other LLMs for free. It’s unclear whether that business model will work in the long run. A person at a firm which resells Mistral software said that the vast majority of its customers are using the smaller free Mistral models, with less than 10% using the largest paid model, The Information previously reported. https://tinyurl.com/258ry5sf

Lacework to be acquired by Fortinet.

Security firm Lacework announced that it has entered an agreement to be acquired by public cybersecurity company Fortinet. The terms of the deal were not disclosed. The deal for Lacework comes one month after a competitor, Wiz, bid to buy the company for around US$200 million, a steep discount to Lacework’s US$8.3 billion valuation. The talks later fell apart in due diligence. Now, the private cybersecurity startup has a new home in a publicly-traded security firm. The transaction is expected to close in the second half of this year, according to a release. https://tinyurl.com/yk4fwmrc

Cognizant to buy Belcan from AE Industrial Partners for US$1.3 billion.

Cognizant Technology Solutions has struck a deal to buy Belcan, a supplier of engineering research-and-development services, from private-equity firm AE Industrial Partners for about US$1.3 billion in cash and stock. Cognizant on Monday said it would pay US$1.19 billion in cash and issue 1.47 million shares for Belcan, which provides digital engineering services for customers in the commercial aerospace, defense, space, marine and industrial verticals, and is expected to generate annualized revenue topping US$800 million. https://tinyurl.com/2y8wwy5c

Apollo, Kyndryl in bid for DXC Technology.

Buyout firm Apollo Global and Kyndryl Holdings, the information technology services provider that was spun out of IBM are in talks about a joint bid for DXC Technology, people familiar with the matter said on Monday. Apollo and Kyndryl have discussed an acquisition offer for DXC of between US$22 and US$25 per share, one of the sources said. DXC shares jumped on the news and ended trading in New York on Monday up 11% at US$18.45, giving the company a market value of US$3.3 billion. DXC, which is also an IT services vendor, is separately soliciting bids to sell its insurance software business for more than US$2 billion and may opt to remain an independent company under Raul Fernandez, who was appointed chief executive in February, the sources added. DXC’s business offerings include analytics and engineering that help companies manage their operations, as well as cyber security, cloud infrastructure and outsourcing. The company’s revenue has taken a hit over the last year, as high interest rates and fears about an economic slowdown have prompted many of its corporate customers to curb spending. Its shares lost more than a third of their value in the last 12 months. DXC has responded to the slowdown through a series of cost cuts and restructuring initiatives. The Ashburn, Virginia-based company has said it last held talks to sell itself last year, and that it ended these discussions after a private equity suitor failed to raise the necessary financing. Kyndryl, which specializes in infrastructure IT services, has a market value of US$6 billion. Apollo, with US$671 billion of assets under management, is one of the world’s biggest investors in private equity and corporate credit assets. https://tinyurl.com/24jd2z6k

Adobe’s shares rally as generative AI fuels revenue growth.

Adobe shares rose over 14% in extended trading Thursday after the design software company said revenue for the second quarter ending May 31 rose 10% to US$5.31 billion, slightly higher than its own forecast, thanks to higher net new digital media subscriptions of US$487 million. The San Jose, Calif., company said it’s seeing more customers adopt its artificial intelligence services. The maker of Premiere Pro and Illustrator slightly lifted the low end of its full year revenue forecast to more than US$21.4 billion. It generated US$1.94 billion in cash flow from operations during the quarter. https://tinyurl.com/59jvb7zm

Broadcom revenue jumps 43% on AI chip demand.

Broadcom said Wednesday that its revenue jumped 43% to US$12.5 billion in its second quarter ending in May, partially due to increasing demand for chips used for artificial intelligence. The company also boosted its full-year forecast to US$51 billion from US$50 billion, in part due to its November acquisition of cloud computing provider VMware. Broadcom’s revenue from AI products was US$3.1 billion during the quarter, nearly one quarter of the total. The Palo Alto, Calif.-based company said net income fell 39% from the year-ago quarter to US$2.1 billion, partially due to costs related to past acquisitions and taxes related to employees’ vested equity. The company generated US$4.5 billion in cash flow from operations. Broadcom also announced a 10-for-1 stock split that will take place markets close on July 12 and will begin trading on a split-adjusted basis on July 15. Shares rose 13% after hours, extending a 38% year-to-date gain. https://tinyurl.com/ynfe7afb

Microsoft President: Executive bonuses will be tied to cybersecurity.

Microsoft will directly tie one third of performance bonuses for its 14 highest-paid executives to their success in improving the company’s cybersecurity, President Brad Smith told congressional lawmakers on Thursday. His disclosure came amid a tense, hours-long committee hearing in which lawmakers grilled Smith on a federal report accusing the software giant of failing to prioritize cybersecurity, as well as on questions related to Microsoft’s business with China. The hearing came hours after Propublica published an investigation that found that a flaw in Microsoft’s Azure cloud login software enabled Russian hackers to break into Microsoft customers during the so-called Solarwinds hack in 2020, contradicting a statement Smith made to Congress in 2021 that no Microsoft vulnerability was exploited in Solarwinds. Without responding to specific allegations in that report, Smith said that Microsoft “accepts responsibility” for breaches involving its software and that the company recently put new security measures in place including the changes to executive compensation meant to prioritize the company’s security. Lawmakers also grilled Smith on Microsoft’s extensive business in China, where Microsoft operates several research facilities and provides cloud computing services to Chinese companies and government agencies. Florida Republican Carlos Giminez asked Smith whether Microsoft hands over customer data to the Chinese government in compliance with the country’s law requiring such handovers. Smith responded that China had not enforced that law in Microsoft’s case, a response Giminez said he did “not trust.” The questions came as several tech companies have been downsizing their China businesses and moving researchers out of the country amid heightened tensions, including Microsoft. https://tinyurl.com/4u9vydeh

Amazon to launch satellite internet in South America through vrio deal.

Amazon said Thursday that it plans to launch its Project Kuiper satellite internet service, a rival to SpaceX’s Starlink, in seven South American countries through a distribution deal with local telecommunications firm Vrio. Vrio will distribute Kuiper internet in Brazil, Argentina, Chile, Uruguay, Peru, Ecuador and Columbia through its DirecTV Latin America and Sky Brasil brands, the companies said in a press release. The companies didn’t share a timeline for country launches, but Amazon has said that it plans to launch commercial Kuiper service at some point in 2025. Around 383 million people live in the countries where Vrio and Amazon are launching Kuiper, including 200 million who the World Bank estimates aren’t yet connected to the internet, the companies said. https://tinyurl.com/ysruwwka

Billionaires Sunil Mittal and Mukesh Ambani take on Elon Musk in India’s internet space race.

India’s biggest telecom companies, led by rival billionaires Mukesh Ambani and Sunil Bharti Mittal, are primed to launch satellite internet services as they challenge Elon Musk’s attempts to establish Starlink in the country. Bharti Airtel’s joint venture with Eutelsat OneWeb, the Anglo-French satellite communications group, could start operating as early as June and Ambani’s JioSpaceFiber expects to follow later this year, according to four people familiar with the matter. Musk’s SpaceX, the owner of Starlink, has been trying to enter the country for more than three years, but has not won regulatory approvals and was rebuked in 2021 by local authorities for signing up customers without having the proper licences. https://archive.ph/C1V7C

Tesla claims it has 2 Optimus humanoid robots working autonomously in factory.

Tesla claims that it currently has two Optimus humanoid robots working autonomously in a factory, which would be a first. Tesla has been releasing a lot of information and video about Optimus lately, but the last report showed that the company was still training the bots using virtual reality and remote control. They would perform useful tasks in a lab environment, but based on human inputs, much like a puppet. But now Tesla claims that the robots are operating autonomously in a factory, which would be a major step. The automaker previously said that this was the goal by the end of the year. CEO Elon Musk also recently said that Tesla Optimus might go on sale as soon as next year. Musk previously said that he expects Optimus to cost “less than half of a car” – so closer to US$25,000. https://tinyurl.com/bd4bvm6z

Google is ready to fill free streaming TV channels with ads.

Google is launching a new advertising network that serves targeted ads to Google TV-powered streaming boxes and smart TVs. The ads service, known as the Google TV network, lets advertisers place unskippable in-stream ad spots across more than 125 live channels — many that are FAST, or free ad-supported streaming TV channels that Google’s been hell-bent on getting users to notice. Google says there are 20 million monthly active Google TV and Android TV OS devices, a significant figure for advertisers to consider. The reach can go even further when including YouTube, which reaches over 150 million monthly active viewers in the living room. Google Ads and Google Display & Video 360 users can expand their campaigns to include the Google TV network by checking a new box under YouTube & Google. Google Ads can spread across networks on Google TV, and include Google-owned ad inventory in third-party apps. According to Google, viewers of Google TV’s free channels watch on average 75 minutes per day. FAST channels are growing fast since it’s the closest thing to paid cable service without the bill, and while the content is mostly reruns, sometimes people just want that old-school background noise — a perfect place for ads. Matty Benedetto is the creator behind Unnecessary Inventions who has amassed millions of followers across just about every social media network. These inventions are what Matty describes as unique solves to first world problems, and they range from a pair of glasses with built-in sponges that soak up tears to a funnel that catches falling ingredients from a burrito and neatly sorts it into a taco below. It’s these unique solves that have kept folks returning again and again to Matty’s video content for that last five years. In this first episode of my new video series, Full Frame: Creators, that profiles internet creators I spend a whole day with Matty to figure out how he makes his inventions and how he makes a living from posting about them. https://tinyurl.com/yjntj3me

Mandiant says hackers stole a ‘significant volume of data’ from Snowflake customers.

Security researchers say they believe financially motivated cybercriminals have stolen a “significant volume of data” from hundreds of customers hosting their vast banks of data with cloud storage giant Snowflake. Incident response firm Mandiant, which is working with Snowflake to investigate the recent spate of data thefts, said in a blog post Monday that the two firms have notified around 165 customers that their data may have been stolen. It’s the first time that the number of affected Snowflake customers has been disclosed since the account hacks began in April. Snowflake has said little to date about the attacks, only that a “limited number” of its customers are affected. The cloud data giant has more than 9,800 corporate customers, like healthcare organizations, retail giants and some of the world’s largest tech companies, which use Snowflake for data analytics. So far, only Ticketmaster and LendingTree have confirmed data thefts where their stolen data was hosted on Snowflake. https://tinyurl.com/msx3mjpc

Biden considers more AI chip restrictions for China.

The Biden administration is looking to make it harder for Chinese firms to develop advanced server chips for artificial intelligence, according to a Bloomberg report. The U.S. Commerce Department is weighing whether to limit access of an emerging chip technology, known as gate all-around, that industry leaders such as Nvidia and Advanced Micro Devices plan to incorporate in their chips over the next year, the report said. Bloomberg also reported that the U.S. may limit the export of high-bandwidth memory chips, a key component of AI chips. The U.S. Commerce Department has already prohibited China from accessing advanced AI semiconductors such as Nvidia’s H100, but the new rules could hinder Chinese firms from creating their own AI chips. The move comes after The Information reported on a loophole allowing Chinese firms to access H100 chips through U.S. cloud providers as long as they rent the chips within U.S. borders, thereby avoiding the export restrictions. https://tinyurl.com/mryc3t4d

GM has a secret to help sell its new EVs. It’s Costco.

General Motors has a not-so-secret weapon when it comes to getting U.S. consumers into its new all-electric vehicles: Costco Wholesale. The Detroit automaker said it’s increasingly using the retail giant’s Costco Auto Program for EVs as it expands its portfolio from niche vehicles to mass-market segments with vehicles such as the Chevrolet Equinox and Chevrolet Blazer EVs. Automakers such as GM, Ford Motor and Volkswagen have been shifting their electric vehicle strategies in recent months in an effort to boost sales and achieve long-elusive profits on the vehicles. Brands have eased off all-electric messaging, leaned into hybrid vehicles as a bridge toward adoption and struck charging partnerships to boost consumer confidence in the market. An intermediary such as Costco, which has a robust customer demographic for new vehicle buyers, could help move the needle for EV sales. Costco Auto, a third-party service of the wholesale retailer, doesn’t sell the vehicles. Instead, it acts as a facilitator, or partner, for franchised dealers and automakers such as GM, offering Costco members special pricing on the vehicles via discounts and other incentives, the retailer said. Costco Auto has facilitated more than 500,000 vehicle sales annually over the past five years on average, according to Jay Maxwell, Costco Auto Program general manager responsible for strategic partnerships. That volume, like that of many of Costco’s products, is a lot. It amounts to at least 3% of all vehicles sold in the U.S. each year and more than the annual sales of large publicly traded dealer groups such as Lithia Motors and AutoNation. https://tinyurl.com/7tjenvwt