June 30, 2024:Nasdaq Ends H1 up 18%, Up Nine Weeks Of Past Ten

Last week, Dow Jones was down 0.1%, S&P 500 lost 0.1%, and Nasdaq composite was up 0.2%. Nasdaq and S&P 500 both reversed after hitting record highs Friday morning. Webtoon, which operates a smartphone app for authors and readers of comics jumped 9% following its IPO. Clario, a provider of software to help drugmakers advance treatments through clinical trials, has filed confidentially for an IPO and is targeting a valuation of US$10 billion+. SpaceX will value insider shares at US$112 each for a total valuation for the rocket company of almost US$210 billion. Anduril has lined up backers for one of the biggest venture deals this year as it is close to finalizing a US$1.5 billion investment, which will value the 7-year-old company at around US$12.5 billion, pre-money. Volkswagen Group plans to invest up to US$5 billion into electric vehicle maker Rivian, giving the startup a cash infusion to help it fund its heavy losses. Amazon hit a market capitalization of US$2 trillion for the first time in trading on Wednesday. OpenAI sales of conversational AI models passed a US$1 billion annual rate. Apple and Meta discussed integrating Meta’s AI assistant on Apple products. Amazon is planning to launch a ChatGPT-like consumer chatbot. In Canada, Sophic Client Legend Power reported its first orders for the city of New York. Sophic Client, Plurilock won Ua 814K three year contract with an existing customer to deliver cloud security to a major laboratory data and advisory firm. Sophic Client, Xcyte Digital announced the closing of the MCON transaction. Hut 8 will receive US$150 million from Coatue to provide AI computing power. Thoma Bravo is exploring the sale of Trader, a Canadian automotive marketplace and software provider. State Street, and Galaxy will jointly develop new digital assets ETFs. Target and Shopify teamed up to expand Target’s third-party marketplace.

Sophic Client Legend Power Systems Inc. (LPS-TSXV, LPSIF-OTC) reports first orders for the city of New York.

Legend Power Systems reports several key milestones in company sales growth and public sector adoption. The Company has received an order on June 25, 2024 and a deposit from contractors serving the City of New York School Construction Authority in support of a new school being built in the City of New York. This SmartGATE purchase is through a switchgear manufacturer for incorporation into the core switchgear, which represents another large market opportunity beyond the public sector. Additionally, this is the first 4000 amp SmartGATE Gen 3 that has been ordered. In addition, the US Federal Government has begun installation of the first SmartGATE for the Department of Homeland Security at a border facility. Furthermore the GSA has selected a large federal office within the Washington DC Federal Triangle for the next SmartGATE installation. These orders and installations are in addition to delivering 4 SmartGATE systems to a school system in New Mexico through a significant ESCO performance contracting firm this month as well. https://bit.ly/4cGnNOq

Sophic Client Plurilock (PLUR-TSXV, PLCKF-OTCQB) wins US$814,000 three year contract with existing customer to deliver cloud security to major laboratory data and advisory firm.

Plurilock Security Inc. has been awarded a contract to deliver cloud and data security solutions to a major global laboratory data and advisory firm through its Aurora subsidiary. Under the terms of a three year, US$814,000 contract, the Company will provide integrated cloud security posture management (CSPM), cloud native application protection (CNAPP), and data security posture management (DSPM) capabilities to an existing customer. These solutions will enable the customer, who serves thousands of laboratories around the world in pharmaceutical, biotech, chemistry, and other scientific fields, to better protect and manage their proprietary cloud applications and data. https://bit.ly/3KWwF6C

Sophic Client Xcyte Digital (XCYT-TSXV) announces closing of MCON Live Inc. share exchange and asset purchase.

Xcyte Digital Corp. announced that further to its June 13, 2024 press release, the Company has completed the share exchange and asset purchase agreement (the “Agreement”) with MCON Live Inc., a Nevada corporation (“MCON”), pursuant to which, among other things, a wholly-owned subsidiary of Xcyte has acquired 5% of the common stock of MCON (the “MCON Shares”) and 100% of MCON’s online business (the “Transaction”). MCON is a veteran-owned company that hosts various annual events that bring the military community together through a celebration of military culture. 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/4exTF9x

Sophic Capital Client Plurilock (PLUR-TSXV, PLCKF-OTC) interview with CEO Ian Paterson.

Watch the interview here. bit.ly/3XG72yf

Sophic Capital Client Plurilock (PLUR-TSXV, PLCKF-OTC) interview with Chairman of the Board, Ali Hakimzadeh.

Watch the interview here. https://bit.ly/4cBif7C

Bitcoin miner Hut 8 (HUT-NASDAQ, HUT-TSX) to receive US$150 million to provide AI computing power.

Toronto-founded, Miami, Fla.-based bitcoin mining and data center provider firm Hut 8 has entered a definitive agreement that will see it receive a US$150 million strategic investment from New York City-based investment management firm Coatue. The funding will come in the form of a convertible note, which will have an interest rate of eight percent per year with an initial term of five years, which can be extended at the company’s option. Coatue will have the option to convert the note into shares of Hut 8’s common stock, subject to certain limitations, at a price of US$16.395 per share. The converted price is a little more than a US$4 premium on Hut 8’s NASDAQ closing price of US$12.31 on Monday. Hut 8 says the strategic funding will accelerate the growth of its data-centre portfolio and indicates that it is using its experience to become a leading provider of computing power for artificial intelligence (AI) applications. Hut 8 believes that Coatue’s investment will help it unlock opportunities and connections as it enters this next phase. https://tinyurl.com/4jtebf72

e-Zinc powers up with $42 million to validate energy storage solution in the field.

Toronto-based e-Zinc has raised $42 million (US$31 million) in new funding as it gears up for field demonstration projects of its long-duration energy storage solution. The round, which e-Zinc classified as follow-on funding to its 2022 Series A round, was led by Evok Innovations, with support from Mitsubishi Heavy Industries, the Crown corporation Export Development Canada, and Ultratech Capital Partners. Other participants included existing shareholders Toyota Ventures, Eni Next, Anzu Partners, BDC, and Graphite Ventures. e-Zinc has developed a zinc-based energy storage system that it claims can be less expensive compared to lithium-ion systems for long-duration applications. https://tinyurl.com/3c6athcj

Gaiia closes $18 million Series A as it looks to build the Shopify for ISPs.

When Québec City-based Gaiia spun out of internet service provider (ISP) Oxio in June 2023, the team set a goal of acquiring five customers by the end of its first year. “We have everything we need to create a $100 billion company, and we want to get there as soon as possible with the means that we have and with the least amount of dilution possible.” That first year has just wrapped up, and the startup has surpassed its initial goal fourfold. Now, Gaiia, which offers an all-in-one operating system to ISPs, is looking to use some fresh financing to continue its momentum. Gaiia has closed $18 million (US$13.2 million) in a Series A financing round led by new investor Inovia Capital. Other participants included existing investor Y Combinator, and new investors GTMfund, General Advance, as well as Simon De Baene and Manon Brouillette. To date, Gaiia has raised roughly $35 million. The recent funding round, completed in May, followed closely on the heels of a US$13 million seed round in October 2023. https://tinyurl.com/bp8pdapy

Thoma Bravo is exploring a sale of Canadian auto marketplace Trader.

Thoma Bravo is exploring the sale of Trader, a Canadian automotive marketplace and software provider, according to people with knowledge of the matter. The private equity firm is working with an adviser to solicit interest from potential buyers, said the people, who asked not to be identified discussing confidential information. The company could be valued at C$4 billion ($2.9 billion) or more, including debt, the people said. Thoma Bravo agreed in 2016 to buy Trader from Apax Partners for about C$1.6 billion, according to a statement at the time. Trader, headquartered in Etobicoke, Ontario, operates websites including autotrader.ca. https://archive.ph/vUdyH

State Street, Galaxy (GLXY-TSX) to jointly develop new digital assets ETFs.

Galaxy Asset Management, an affiliate of Galaxy Digital, and State Street said they are jointly developing new exchange-traded funds that will offer exposure to companies in the digital asset space. State Street is set to provide administrative and accounting services for the new digital assets ETFs, the companies said. The companies filed for ETFs on Wednesday that will buy shares in crypto-related companies and also offer spot and futures exposure to bitcoin and other crypto currencies. Galaxy, in partnership with Invesco, issues a spot bitcoin ETF and has applied with regulators for an ether ETF. https://tinyurl.com/33spp2uc

Target and Shopify (SHOP-NYSE, SHOP-TSX) team up to expand Target’s third-party marketplace.

Shopify merchants can now sell their items to Target’s millions of shoppers, thanks to a new partnership. The companies announced on Monday that sellers on the commerce platform can apply to join Target Plus, the retail giant’s third-party marketplace where merchants can sell and manage orders. Target is the first major retailer to collaborate with Shopify to introduce its merchants’ products into physical stores. The initial group of Shopify sellers to be featured at Target include True Classic and Caden Lane, among others. Target Plus launched in 2019 to allow consumers to discover new products from third-party retailers, such as Crocs, Maui Jim, Timberland and Ruggable. However, the retailer lags behind rivals like Amazon, eBay and Walmart. In the face of stiff competition, Target is making a strategic move by partnering with Shopify to boost its third-party marketplace, which currently hosts 1,200 sellers, a fraction of Amazon’s nearly 2 million selling partners and Walmart’s 135,000. The partnership announcement follows Target’s unsatisfactory quarterly results, which showed a 3.7% decline in comparable sales. This marks the fourth quarter in a row of decreasing comparable sales for the company. Additionally, Target’s overall sales dropped by 3.2% in the first quarter of 2024. https://tinyurl.com/y7x7dve4

Webtoon jumps 9% in IPO.

Webtoon Entertainment, which operates a smartphone app for authors and readers of comics, raised US$315 million in an initial public offering Thursday under the ticker WBTN after pricing shares at $21 Wednesday evening. At the stock’s peak, just under US$24, the offering valued the company at nearly US$3 billion. The Los Angeles-based company sells access to serialized graphic novels and runs ads that appear on the app. Revenue increased 19% last year to nearly US$1.3 billion as it capitalized on growing interest in anime and Korean pop culture, especially among young people. Its net loss widened to US$145 million. Fund giant BlackRock planned to buy up to US$50 million in the offering, and the company also sold $50 million in a private placement to its South Korean parent, Naver. After the listing and private placement, Naver was expected to hold 63% of Webtoon. Shares ended up 9% at US$23. https://tinyurl.com/mtss4sy3

Drug-trial software maker Clario files confidentially for IPO.

Clario, a provider of software to help drugmakers advance treatments through clinical trials, has filed confidentially for an initial public offering and is targeting a valuation of more than US$10 billion, people familiar with the matter said. The Philadelphia-based company is working with underwriters including JPMorgan Chase & Co., Morgan Stanley, Jefferies Financial Group Inc. and UBS Group AG, according to the people. It’s targeting next year for a listing, one of the people said. Clario, whose backers include Nordic Capital and Astorg, was formed in 2021 in a deal to combine ERT and Bioclinica. The company generates annual revenue of US$1.1 billion, with earnings before interest, taxes, depreciation and amortization of about US$400 million, some of the people said. Clario’s software helps drug developers and researchers collect and analyze data to plan and manage clinical trials, including those that rely on remote monitoring and reporting. The company has worked with pharmaceutical firms, biotechs and medical device companies on 26,000 clinical trials that have led to 800 drug approvals, according to its website. https://archive.ph/Xqfnn

Fast fashion retailer Shein filed for London listing in early June.

Shein confidentially filed papers with Britain’s markets regulator in early June, two sources said, kicking off the process for a potential London listing by the online fast-fashion retailer later in the year. The China-founded company, which was valued at US$66 billion in a fundraising round last year, began to explore a listing on the London Stock Exchange early this year, Reuters reported in May, citing sources. Shein’s original plan to list in New York came unstuck following opposition from U.S. lawmakers. It is not immediately clear when Shein, known for its US$5 tops and US$10 dresses, plans to launch the initial public offering (IPO). Shein has updated China’s securities regulator officially about its change of listing venue, said the sources. The company, however, has yet to receive a nod from the China Securities Regulatory Commission (CSRC), one of them said. https://tinyurl.com/b49we45

SpaceX tender values company near US$210 billion.

SpaceX will value insider shares at US$112 each for a total valuation for the rocket company of almost US$210 billion, Bloomberg reported. That’s up from a valuation of US$180 billion in December. The share price was set as part of twice yearly tender offers that enable employees and other shareholders to sell their stakes, according to the report. The quantity of shares sold in the tender offer is not finalized and could change, according to the report. The SpaceX valuation is a new record for a private U.S. startup, though it is still lower than TikTok’s Chinese parent company ByteDance, which is valued at US$268 billion. SpaceX, which is run by founder and CEO Elon Musk, makes money selling rocket launches to customers including NASA, as well as from its satellite internet service Starlink. https://tinyurl.com/mvx4k2v5

Anduril nears US$12.5 billion-valuation round led by Founders Fund, Sands Capital.

Anduril has lined up backers for one of the biggest venture deals this year. The defense startup is close to finalizing a US$1.5 billion investment co-led by Peter Thiel’s Founders Fund, according to two people involved in the deal. Sands Capital, known for investments just before public offerings, is co-leading the deal as a new investor, according to one of those people. The investment will value the 7-year-old company at around US$12.5 billion, or US$14 billion including the new money, according to the people. Founders Fund, which has invested in every prior Anduril round, will invest US$400 million as part of the new fundraising, said one of the people. The capital raise is unusually large given the moribund market for investments in mature companies outside those in artificial intelligence. It follows Anduril’s revenue growth, which roughly doubled last year to about US$500 million. Anduril, which makes rocket launchers, drones and high-tech weapons systems, has told investors it is aiming to hit US$1 billion in annual revenue by 2026. Its strong revenue growth has encouraged other VC investors to embrace defense tech startups, which many had avoided because of concerns about the unpredictability of government contracts and agreements with limited partners that prevented them from investing in weaponry. Such growth comes at a cost. Anduril has told investors it expected to burn through US$2 billion between 2021 to 2026. Its US$12.5 billion price tag is 25 times last year’s revenue, a much higher multiple than for incumbents like Lockheed Martin, which is valued at 1.6 times last year’s sales in the public markets. https://tinyurl.com/2vzpzk8j

Nvidia partner Lambda Labs seeks US$800 million as AI computing demand soars.

Lambda Labs, a cloud computing start-up that rents out servers powered by Nvidia’s artificial intelligence chips, is in talks to raise another US$800 million as it looks to capitalise on the bull market around AI and the scarcity of the most advanced graphics processing units. The proposed deal would vault the company into the ranks of Silicon Valley’s best funded start-ups of recent years, at a time demand is skyrocketing for the computing infrastructure behind the generative AI boom. The funding would add to the US$320 million that the San Jose-based group raised in February at a US$1.5 billion valuation. Lambda also announced in April that it had secured a US$500million loan using its Nvidia chips as collateral, which it would use to fund the expansion of its cloud services. Term sheets are expected in mid-July and JPMorgan is helping co-ordinate Lambda’s fundraising, which has not yet specified a revised valuation, according to three people familiar with the process. The capital will be used to purchase more Nvidia GPUs and associated cloud networking software, as well as hire more staff. Chief executive Jensen Huang has funnelled its GPUs to the likes of Lambda and its rival CoreWeave as he seeks to diversify Nvidia’s customer base and create new rivals to cloud giants Google, Amazon and Microsoft. Those Big Tech companies are also not only Huang’s clients but competitors developing their own AI-specialised chips. CoreWeave has meanwhile reached a valuation of US$19 billion, and last month struck two deals raising US$7.5 billion in debt and US$1.1bn in equity. Lambda raised US$44 million in March 2023 with support from Quora founder and OpenAI board member Adam D’Angelo, alongside OpenAI president Greg Brockman and Y Combinator chief executive Garry Tan. https://tinyurl.com/3wyac67w

VW to invest up to US$5 billion into Rivian.

Volkswagen Group plans to invest up to US$5 billion into electric vehicle maker Rivian, giving the startup a cash infusion to help it fund its heavy losses. Rivian stock, which has been depressed in recent months, jumped 21% on the news. The two companies also announced a joint venture to create software that could power future electric vehicles both plan to make. Volkswagen is putting US$1 billion into Rivian via a convertible note and “is expected” to invest a further US$4 billion in two tranches next year and in 2026, the companies said in a statement. One of the US$2 billion tranches will be related to the joint venture, they said. Rivian already counts Amazon as a major backer: the ecommerce giant took a big stake in Rivian and is a customer. But Rivian loses money on every vehicle it makes, although it has been taking steps to become more efficient. https://tinyurl.com/4nx2kc9y

Nokia bets on AI data center boom in US$2.3 billion Infinera deal.

Nokia CEO Lundmark sees Infinera growth picking up in 2025 Acquisition is largest for Nokia since Alcatel-Lucent in 2016. Nokia Oyj has agreed to buy Infinera Corp. in a US$2.3 billion deal that will expand the company’s networking products for data centers and increase its presence in the US, a potentially key source of growth as the boom in artificial intelligence drives demand for server capacity. “AI is driving significant investments in data centers at the moment, and one of the key attractions of this acquisition is that it significantly increases our exposure to data centers,” Nokia Chief Executive Officer Pekka Lundmark said in a call with reporters on Friday. https://tinyurl.com/3jexj4yr

Amazon market capitalization hits US$2 trillion for first time.

Amazon hit a market capitalization of US$2 trillion for the first time in trading on Wednesday. Shares in Amazon have risen 29% this year as the company improved profitability in its e-commerce business and re-accelerated growth in cloud computing. The milestone puts Amazon alongside Nvidia, Apple, Microsoft and Google, all of which have a market value of at least US$2 trillion. https://tinyurl.com/yc6edf3e

Micron shares slide after revenue forecast fails to top estimates.

Micron shares fell about 7% in extended trading on Wednesday as investors looked past better-than-expected results and focused instead on a revenue forecast that was in line with estimates. The shares have more than doubled in the past year as the company rides the artificial intelligence boom. Micron’s most advanced memory is needed for AI graphics processing units (GPUs) like Nvidia’s, putting the company in position to benefit from demand for technology to train and deploy AI applications like OpenAI’s ChatGPT. https://tinyurl.com/ydtkvr5r

OpenAI sales of conversational AI models passed US$1 billion annual rate.

OpenAI in March was generating US$1 billion in annualized revenue from the sale of conversational artificial intelligence models to app developers such as Salesforce, Klarna and Jane Street, The Information reported. The milestone is an indication of rising business interest in the technology and also means that OpenAI has been selling more of its models to developers than Microsoft is. Microsoft is the exclusive reseller of OpenAI models to developers, promising them discounts on a bundle of Microsoft services. But OpenAI has managed to win over customers to its own API by promising early access to upcoming AI. Microsoft still benefits from OpenAI’s success, as it powers all of the startup’s cloud services and generates plenty of revenue and commissions from that arrangement. But the new figures show how OpenAI is holding its own in growing a business to a $3.4 billion annualized rate as of earlier this month, mainly thanks to ChatGPT. Read more analysis of the figures here. https://tinyurl.com/yk3z4urf

Oracle says a TikTok ban would hurt cloud business.

Oracle said a ban on TikTok in the U.S. could hurt its business providing cloud computing services for the short-form video app, Oracle disclosed in its annual report. Oracle said a new law signed by President Joe Biden in April could make it illegal for companies to rent servers to TikTok, unless TikTok’s owner takes certain steps, such as selling the business. If that happens, and Oracle is not able to find a new customer to take over TikTok’s capacity “in a timely manner,” the company said its revenues and profits would be “adversely impacted.” Oracle did not disclose the size of its contract with TikTok, but The Information has reported that it is likely worth several hundreds of millions of dollars annually, making TikTok-parent ByteDance one of Oracle’s largest cloud customers. https://tinyurl.com/2nsukr25

Apple and Meta discuss integrating Meta’s AI assistant on Apple product.

Apple and Meta Platforms have discussed a possible integration of Meta’s AI Assistant into Apple’s AI offerings, the Wall Street Journal reported, the latest sign of how expansive Apple is likely to be with the array of AI chatbots it will offer users of iPhones and other Apple hardware. When Apple unveiled its plans for AI earlier this month, it said it would offer chatbots from other companies, starting with OpenAI. The iPhone maker has had discussions with Google and Anthropic, The Information has previously reported, and the WSJ said Apple has also talked with Perplexity as well as Meta. Apple isn’t expected to pay any of the AI firms to integrate their chatbots, instead offering them wider distribution. Meta’s AI Assistant is already available through Meta’s apps, including Facebook, WhatsApp and Instagram. https://tinyurl.com/4e9ayh24

Amazon plans a ChatGPT-like consumer chatbot.

Amazon is working on a consumer-facing chatbot in addition to the AI features it plans to introduce to its Alexa voice assistant, Business Insider reported Monday. The browser-based chatbot, internally code-named “Metis,” will be powered by Amazon’s Olympus large language model and resemble existing chatbots already offered by competitors like OpenAI and Microsoft, according to the report. Amazon has set a tentative launch date for September, according to Business Insider, around the same time it reportedly plans to roll out a slate of new LLM-based features for its Alexa voice assistant, including one that will require a subscription fee. Metis is being developed by Amazon’s GenAI organization, and the chatbot uses some of the same technology as the new version of Alexa, according to the report. https://tinyurl.com/2325ndr7

Waymo’s San Francisco Robotaxi service becomes widely available.

Waymo, a self-driving taxi service operated by Google parent Alphabet, said Tuesday it is removing a waitlist for customers in San Francisco, its second commercial market in the U.S. The high cost of purchasing, training and operating the driverless cars—an augmented SUV manufactured by Jaguar—means Waymo is still likely to lose money, even with more paying customers. Still, the expansion means that Waymo is getting closer to competing nationwide with Uber and Lyft. “While we can’t share details, we continue to bring costs down as we gradually scale our operations,” Waymo spokesperson Julia Ilina said. Waymo has raised more than $5.5 billion from outside investors and began selling rides in Phoenix before expanding to San Francisco in 2022. Waymo vehicles aren’t perfect, and the company recalled the software for its vehicles in February after one collided with a pickup truck in Phoenix. Earlier this month, Waymo recalled 672 vehicles after one of its vehicles hit a utility pole in Arizona. Amazon’s Zoox and General Motors’ Cruise also are developing robotaxis, while Tesla this summer plans to announce its plans for robotaxi vehicles. Unlike the other competitors, Tesla isn’t expected to use expensive sensors such as spinning lasers on the vehicles, which means its upfront costs could be lower. https://tinyurl.com/ye3n9jdf

YouTube is reportedly in talks with record labels to license music for new AI tools.

YouTube is in talks with music record labels to license their songs to train new artificial intelligence tools that mimic songs made by popular artists, according to The Financial Times. The video streaming giant is offering a one-time cash payment, instead of ongoing royalties, to major record labels including Universal Music, Sony and Warner. One AI product under development for this year is an AI song generator, which YouTube hopes to sign up dozens of artists to use their music to train the software, according to the report. While much of the recent conversation surrounding AI companies and their use of copyrighted work has centered on news and publishing outlets, the music and film and TV industries have also voiced skepticism and concerns about how their work could be misappropriated by AI startups. And at least the music industry is not afraid to get litigious. On Monday, the Recording Industry Association of America filed two copyright-infringement lawsuits against AI music startups Suno and Udio, arguing that the companies used their music to train their AI music services. https://tinyurl.com/nhjpnhms

European Union accuses Apple of breaking new tech rules.

The European Commission said it has informed Apple of its preliminary view that the company’s rules for its App Store violate the region’s Digital Markets Act. Apple’s App Store rules “prevent app developers from freely steering consumers to alternative channels for offers and content,” the commission said in a statement released on Monday. The executive arm of the European Union also said that it has opened a new non-compliance investigation into Apple. The move highlights the regulatory challenges Apple and other tech giants face in the EU due to the region’s sweeping legislation on digital markets and competition. Last week, Apple told media outlets that its new artificial intelligence features won’t be available in the EU because of concerns that the Digital Markets Act could compromise user privacy and data security. https://tinyurl.com/539e9rxc

Europe says Microsoft breached antitrust rules with Teams bundling.

European regulators found that Microsoft’s past practice of bundling subscriptions to its Teams videoconferencing app with its popular Office software breached antitrust rules, the European Commission said on Tuesday. The regulators allege that Microsoft gave Teams an unfair advantage over competitors by effectively making the app free for customers who were already paying for Office. The EU first started investigating Microsoft’s Teams business last year in response to a complaint filed by Slack in 2020 that focused on the bundling practice. After the probe opened, Microsoft last year voluntarily unbundled Teams from Office, meaning that new customers would have to pay for the apps separately. But EU regulators said on Tuesday that those changes were “insufficient” to address its concerns, which also include the allegation that Teams isn’t adequately interoperable with competitors’ apps. Microsoft, which now has the opportunity to respond to the charges, could face a fine of up to 10 percent of its annual revenue and remedies imposed by the EU if the investigation finds that it violated antitrust laws. https://tinyurl.com/2p2h24u3

OpenAI takes further steps to block developers’ access in China.

OpenAI is taking new steps to restrict China-based developers’ access to the U.S. company’s services through an application programming interface. While users in mainland China cannot directly register with OpenAI’s services such as ChatGPT, Chinese developers have managed to gain access through APIs. But this week, OpenAI has sent notifications to developers in China saying that it will block the use of APIs from countries and regions that are not supported by OpenAI’s services, from July 9, according to Chinese media reports. In response to OpenAI’s move, China’s domestic AI startups that operate their own large language models similar to ChatGPT are reaching out to Chinese developers who currently use OpenAI, offering them easy migration to the Chinese companies’ platforms. It is unclear what prompted OpenAI’s latest move. But it comes at a time when the U.S. government has been stepping up its efforts to limit China’s access to advanced U.S. technology in key areas such as semiconductors and AI. https://tinyurl.com/6udtbsk5

US probing China Telecom, China Mobile over internet, cloud risks.

The Biden administration is investigating China Mobile, China Telecom and China Unicom over concerns the firms could exploit access to American data through their U.S. cloud and internet businesses by providing it to Beijing, three sources familiar with the matter said. Authorities at the Commerce Department are running the investigation, which has not been previously reported. They have subpoenaed the state-backed companies and have completed “risk-based analyses” of China Mobile and China Telecom, but are not as advanced in their probe of China Unicom, the people said, declining to be named because the probe is not public. The companies still have a small presence in the United States, for example, providing cloud services and routing wholesale U.S. internet traffic. That gives them access to Americans’ data even after telecom regulators barred them from providing telephone and retail internet services in the United States. The Chinese companies and their U.S.-based lawyers did not respond to requests for comment. The investigation is the latest effort by Washington to prevent Beijing from exploiting Chinese firms’ access to U.S. data to harm companies, Americans or national security, as part of a deepening tech war between the geopolitical rivals. https://tinyurl.com/48d35x2k

Amazon to launch Temu-like discount section with direct shipping from China.

Amazon plans to launch a section on its shopping site featuring cheap items that ship directly to overseas consumers from warehouses in China, according to slides shown to Chinese sellers, marking the e-commerce giant’s most aggressive response yet to the growth of bargain sites like Temu and Shein. The new marketplace will offer unbranded fashion, home goods and daily necessities, according to the slides, and orders will take 9 to 11 days to get to customers. Amazon told Chinese sellers in a recent closed-door meeting that it would start signing up merchants this summer and begin accepting inventory in the fall. Temu and Shein have seen enormous growth with U.S. shoppers in recent years by offering eye-wateringly cheap prices on goods that ship directly from China. That has sparked debate within Amazon, which has long touted speedy shipping times from its massive U.S. fulfillment network, on how to best respond, The Information previously reported. There will be a new section on Amazon.com’s homepage that takes shoppers to the bargain items, according to the slides. Sellers joining the bargain section can determine their product selection and pricing, and can produce in small batches to test the demand for any new products they plan to launch, the slides show. The model is similar to that of Shein, which prides itself on getting their suppliers to produce trendy goods in small batches in order to minimize unsold inventory. https://tinyurl.com/3n7sc4bh

VanEck files for Solana ETF, first attempt in U.S.

Asset manager VanEck filed paperwork for a proposed solana exchange-traded fund, making it the first fund firm to seek Securities and Exchange Commission approval to launch an ETF holding the cryptocurrency. Solana jumped more than 7% to US$149 Thursday morning after the filing, reaching a market valuation of US$69 billion. Though the SEC signed off on bitcoin ETFs early this year, the solana ETF application will likely face big hurdles. The SEC has named solana tokens as unregistered securities in its lawsuits against Binance and Coinbase. In the filing, VanEck says it will not engage in staking of solana tokens to earn yield for the fund. https://tinyurl.com/2p84wch7

SEC Sues Consensys for violating securities law.

The U.S. Securities and Exchange Commission filed a lawsuit against ethereum software firm Consensys over its popular crypto wallet MetaMask, alleging it acted as an unregistered securities broker. The agency alleged MetaMask’s services violated securities laws by allowing users to buy and sell crypto securities assets and pledge tokens in exchange for earning yield. In a statement, Consensys said it is “confident in our position that the SEC has not been granted authority to regulate software interfaces like MetaMask.” In April, Consensys sued SEC, seeking confirming that ether is not a security, and that it didn’t violate securities laws by providing MetaMask product. https://tinyurl.com/2px5n6kj