May 05, 2024: Bad News Is Good News Again

Markets ended the week strongly, due to a tame jobs report, which led to rate cut hopes and a rebounding Apple, prior to Berkshire indicating it cut its Apple position on Saturday. Dow Jones rose 1.1% during the week, S&P 500 gained 0.55%, and Nasdaq composite rose 1.4%. CoreWeave, an Nvidia-backed cloud startup, said it raised US$1.1 billion in new funding led by Coatue Management. The round valued it at US$19 billion. Artificial intelligence startup Anthropic on Wednesday unveiled its first mobile app for iPhone users and a new subscription plan for enterprise customers. Tesla shares surged 15% on Monday after Bloomberg reported that the automaker had partnered with Chinese internet company Baidu to help bring the electric vehicle maker’s driver assistance technology to China. A 10.5% drop in iPhone revenue dragged down Apple’s overall revenue by 4% in the March quarter, the tech giant reported Thursday, leading to a 2.3% decline in net profit. Apple announced a new US$110 billion share buyback and increased the dividend. Apple has renewed discussions with OpenAI about using the startup’s technology to power some new features coming to the iPhone later this year. Google on Monday announced new features for its Performance Max ad-buying tool, which uses artificial intelligence to optimize ad campaigns. In Canada, Sophic Client Ionik announced the sale of PopReach Games portfolio for a total aggregate purchase price of up to US$9.8 million. Sophic Capital Client, Xcyte Digital signed agreement to purchase assets of Webinar.net, bringing the Companys’ Pro Forma revenue run rate to US$5.0 million, before synergies, up 500% since the Company’s 2023 RTO. Zedcor announced a $4 million Bought Deal and $10 million concurrent Private Placement offering. Stack Capital invested US$8 million into Canva.

Sophic Client Ionik (INIK-TSXV, INIKF-OTCQX) announces sale of PopReach Games portfolio.

PopReach Corporation (dba Ionik), a data-driven performance marketing technology company, announced the sale of substantially all of its mobile games portfolio including its subsidiary, PopReach Technologies Private Limited (“PopReach India”), a live operations games studio located in Bangalore, India (collectively “PopReach Games”) to Phoenix Games Holdings UK Ltd. for a total aggregate purchase price of up to US$9.8 million. This accretive Transaction allows Ionik to focus on its core advertising and marketing technology business while continuing to expand the capabilities of its first party data platform. It also strengthens the Company’s balance sheet while providing financial flexibility for potential future acquisitions. https://bit.ly/3JGvdES

Sophic Capital Client Xcyte Digital Corp. (XCYT-TSXV) signs agreement to purchase assets of Webinar.net.

Xcyte Digital signed an asset purchase agreement on May 1, 2024 with Webinar.net Incorporated, pursuant to which a wholly owned subsidiary of the Company will acquire all of the assets of Webinar. During the trailing twelve months ended December 31, 2023, the Webinar assets being acquired generated approximately US$2.8 million in revenue, positive EBITDA (unaudited) and approximately US$343,000 Net Income (unaudited). During the twelve months ended December 31, 2023, Xcyte and prior acquisitions generated revenue of approximately US$2.2 million and EBITDA loss of US$0.7 million(unaudited). As a result, for the year ended December 31, 2023 the combined Xcyte businesses would have Pro Forma annual revenue run rate of US$5.0 million before any revenue or cost synergies. https://bit.ly/3WqrBhx

Sophic Client Plurilock (PLUR-TSXV, PLCKF-OTCQB) announces $900,000 sale to Canadian federal government agency.

Plurilock announced the sale of an advanced edge and network security solution to a key agency of the Government of Canada, in a combined hardware and software sale totaling $900,000. The sale provides the agency with technology to upgrade certain high-security networks, providing new high-capacity and high-performance capabilities. These capabilities will enable authorized users to work securely on these high-security networks from locations around the world, with maximum performance and while complying with current standards and best practices. https://tinyurl.com/mtzk9msa

Zedcor Inc. (ZDC-TSXV) announces $4 million Bought Deal and $10 million concurrent Private Placement offering.

Zedcor entered into an agreement with Beacon Securities Limited (“Beacon”), on behalf of a syndicate of underwriters (together with Beacon, the “Underwriters”), pursuant to which the Underwriters have agreed to purchase, on a bought deal basis, with a right to arrange for substituted purchasers, 4,000,000 common shares (the “Offered Shares”) of the Company at a price of $1.00 per Offered Share (the “Issue Price”) for aggregate gross proceeds to the Company of $4,000,000 (the “Offering”), pursuant to Part 5A (the “Listed Issuer Financing Exemption”) of National Instrument 45-106 – Prospectus Exemptions (“NI 45-106”). In connection with the Offering, the Company has granted the Underwriters, an option (the “Underwriters’ Option”), exercisable, in whole or in part by Beacon by giving notice to the Company at any time up to 48 hours prior to the Closing Date (as defined below) to purchase up to an additional 1,000,000 Offered Shares at the Issue Price for additional gross proceeds of up to $1,000,000. Subject to compliance with applicable regulatory requirements and in accordance with NI 45-106, the Offered Shares will be offered for sale to purchasers resident in Canada, except Quebec, and other qualifying jurisdictions, pursuant to the Listed Issuer Financing Exemption. The securities issued under the Listed Issuer Financing Exemption will not be subject to a hold period pursuant to applicable Canadian securities laws. In addition to the Offering, the Company and the Underwriters also intend to complete a brokered private placement on a commercially reasonable “best efforts” agency basis of common shares of the Company (the “Private Placement Shares”) to certain purchasers pursuant to applicable exemptions under NI 45-106 at the Issue Price for gross proceeds of up to $10,000,000 (the “Concurrent Private Placement”). The Private Placement Shares will be offered for sale to purchasers resident in Canada and other qualifying jurisdictions. Any Private Placement Shares issued under the Concurrent Private Placement will be subject to a four-month hold period in Canada. The Company intends to use the net proceeds of the Offering and the Concurrent Private Placement for the expansion of its fleet of MobileyeZTM security towers to meet strong demand from its US operations, other capital expenditures, working capital and general corporate purposes. https://tinyurl.com/2u6d9txk

Stack Capital (STCK-TSXV) invests US$8 million into Canva.

Stack Capital Group, an investment holding company that invests in some of the world’s most innovative and disruptive growth & late-stage private companies, is has invested US$8 million into Canva, a leading global online visual communication and collaboration business that empowers its users, from novices all the way up to industry professionals, to design anything and publish anywhere, using its dynamic all-in-one platform. Whether its presentations, videos, website content, social media content, whiteboards, or any other visual material for that matter – Canva is a perfect solution for anyone looking to create. “We couldn’t be happier to add such a high-quality business like Canva to our portfolio,” said Jeff Parks, Chief Executive Officer of Stack Capital. “While the incredible growth that has already been achieved by Melanie, Cliff, Cameron, and the Canva team is impressive, we believe that they’ve only begun to scratch the surface, and that its best days lie ahead.” https://tinyurl.com/2rma3wzk

Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) receives $8 million contract for sub-seabed imaging services.

Kraken Robotics Inc. announces that it has signed an $8 million Acoustic Corer™ contract that will leverage Kraken’s equipment and advanced processing expertise in de-risking a marine construction project. Under the contract to be completed this year, Kraken will provide high resolution sonar imagery at depths of up to 20 meters in the seabed using its 3D Acoustic Core imaging sonar. This marks the fourth major acoustic corer campaign by Kraken since 2022 and builds upon our track record of having completed numerous multi-disciplinary surveys around the globe. https://bit.ly/44odcEz

Sophic Capital Client Sophic Client Legend Power Systems Inc. (LPS-TSXV, LPSIF-OTC) SmartGATE upgrade sparks market potential.

Legend Power Systems announced the first Ontario School Board to have previously deployed its first-generation SmartGATE is upgrading its solution to the latest generation of SmartGATE technology. This upgrade was facilitated by co-funding through Independent Electricity Service Operator (“IESO”) incentives and is valued at $100,000. Between 2016 and 2019, Legend Power Systems supplied over 120 Harmonizers to educational institutions, with co-funding provided through various programs to support decarbonization initiatives. Recent updates to the IESO incentive programs now enable these Harmonizers to qualify for additional incentives when upgrading to the latest SmartGATE technology. In some instances, these incentives can cover up to 40% of the upgrade costs, rendering the upgrade path an enticing proposition for stakeholders in the education sector. By upgrading to the latest technology schools can now benefit from many new features including higher energy savings and GHG emissions reductions as well as improved power quality features that reduce grid volatility coming into the school, which lowers operating costs including maintenance and repairs. https://bit.ly/3yeSmeM

Sophic Capital Client Sophic Client UGE International (UGE-TSXV, UGEIF-OTC) partners with maxsolar to achieve optimal project performance.

UGE announces that it has signed a national service agreement with MaxSolar, a nation-wide renewable energy project operations & maintenance provider. UGE, which had a decade of experience providing EPC (engineering, procurement, and construction) services, transformed into a full-lifecycle developer and IPP (independent power producer) starting in 2020. Since commencing the transition, UGE has built an operating portfolio of 12 projects totaling 6.6MW, with an additional nine projects totaling 18.6MW under construction. Inclusive of its projects under construction, UGE’s portfolio spans six states. The Company now has roughly 1GW of projects with site control in its development pipeline, with plans to scale its operating portfolio significantly in the coming years. As UGE’s operating portfolio has begun to grow, with an expectation of 5X growth in 2024 alone, UGE recognized a need to enhance its portfolio operations and maintenance (O&M) strategy to ensure the optimal performance of all projects. After a rigorous selection process, UGE has chosen MaxSolar to provide nationwide O&M services for its portfolio. MaxSolar will support UGE to ensure the long-term ROI of its renewable energy assets by providing preventative and corrective maintenance, system monitoring, emergency response services, and array cleaning. MaxSolar has grown to become a leading national provider of Operations & Maintenance, Asset Management and Technical Services for commercial and community solar asset owners across the United States. The company currently operates and maintains a portfolio of projects encompassing over 550 assets and 450 MW of capacity, across 20 states and the District of Columbia. MaxSolar programs ensure that asset owners receive the maximum energy, environmental, and financial benefits from their renewable energy assets. https://bit.ly/3y4sVg7

Sophic Client Ionik (INIK-TSXV, INIKF-OTCQX) announces record fourth quarter and fiscal 2023 results.

PopReach Corporation (dba Ionik), announced its financial results for the three and twelve months ended December 31, 2023. Record revenue of US$140.6 million during its fiscal year 2023, as compared to US$98.1 million for the prior twelve months ended December 31, 2022, an increase of 43.3%. Revenue growth was primarily driven by the acquisitions of Schiefer Media, Inc. (SCS) and OpenMoves, LLC in Q2 and S44 LLC in Q4. Record gross profit of US$55.5 million in its fiscal year 2023 ($38.6 million for the prior twelve months), representing a 43.7% increase from the comparable period in the prior year, driven by the increase in revenue. Gross margin percentage of 39.5% in fiscal year 2023 (39.4% for the prior twelve months). Record Adjusted EBITDA of US$14.9 million (US$9.8 million for the prior twelve months), an increase of 51.3%. Adjusted EBITDA growth was predominantly related to the three 2023 acquisitions as well as operating expense reductions. Revenue of US$38.5 million during fourth quarter, an increase of 12.7% versus US$34.2 million for the prior quarter with growth driven by the acquisition of SHIFT44 in November 2023. Adjusted EBITDA of US$5.0 million, compared to US$3.7 million for the prior quarter, with growth derived from 2023 acquisitions. Cash as at December 31, 2023 was US$7.4 million compared to US$8.9 million at September 30, 2023, and $7.8 million at December 31, 2022. During the three and twelve months ended December 31, 2023 the Company generated cash flow from operations of US$2.0 million and US$8.5 million respectively. At December 31, 2023, the Company had not drawn on its revolving facility of $10.0 million and had available to it $30.8 million of its $105.0 million term loan facility. Management believes that its current capital position is sufficient to execute its current business and operational strategies. Ionik expects to achieve record revenue and Adjusted EBITDA in 2024 through a combination of organic and inorganic topline growth as well as continued reduction of operating expenses and gross margin expansion as acquisitions are fully integrated. The Company is now well positioned from a geographical coverage perspective and with its expansive product and services suite to become a leading trusted full service advertising platform. https://bit.ly/4dbVto5

Sophic Client UGE International (UGE-TSXV, UGEIF-OTC) reports 2023 financial results.

UGE reports all amounts in US dollars. 2023 was a high-growth year for UGE, as it doubled the size of its operational portfolio and achieved Notice to Proceed (“NTP”) on 18.2MW of projects, a record for the Company. Key financial results in Q4 2023 and for the year ended December 31, 2023 included: Ended the year with 4.8MW of operating assets that contributed $34.2K and $435.7K of energy generation revenue in the three and 12 months ended December 31, 2023. While the annual figure reflects an increase of 24% over the prior year, the quarterly figure declined 59% primarily because one system was offline due to ongoing repairs. While energy generation revenue increased, the Company realized total revenue of $143.4K and $1,210.2K, representing declines of 87% and 68% for the three- and 12-month periods, respectively, as compared to the same periods in 2022. This decline is associated with the run-off of the Company’s legacy third party EPC contracts and its shift away from providing external engineering services. The net loss and adjusted net loss for the quarter was $4.1 million, compared with $2.3 million net loss and adjusted net loss for the same quarter of 2022, as a result of continued investment in developing UGE’s project portfolio. The increase was driven by increased headcount, development, and financing expenses as the Company develops its growing portfolio. Cash used in operations for 2023 was $17.9 million versus $6.5 million in 2022, and the cash balance at December 31, 2023 was $2.4 million. Key business highlights in Q4 2023 and for the year ended December 31, 2023: Throughout 2023 the Company reached commercial operation on 2.5MW of projects, including a 1.0MW project in Norway, Maine within the fourth quarter, which more than doubled the Company’s operational portfolio from 2.3MW to 4.8MW. Within 2023 the Company reached NTP on 18.2MW of projects, a new record for the Company, and compared with 1.0MW of projects in 2022. Project backlog (Stages 3.1 – 5) was 324MW on December 31, 2023, compared to 343MW on September 30, 2023 and 260MW on December 31, 2022. The Company went through an extensive re-mapping exercise of its projects in late 2023, which allowed the Company to firm up project timelines and likelihoods which is represented in an updated Supplemental Disclosure file available on the Company’s website. https://bit.ly/4dhzk7M

Cloud provider CoreWeave valued at US$19 billion in Coatue-led funding.

CoreWeave, an Nvidia-backed cloud startup, said it raised US$1.1 billion in new funding led by Coatue Management. The round valued it at a US$19 billion valuation, according to a person told by participants in the deal. Other investors including Magnetar Capital, Altimeter Capital, Lykos Global Management and Fidelity also participated in the funding round, which The Wall Street Journal first reported. The fundraise comes just five months after the cloud startup announced it had closed a sale of US$642 million in shares held by employees and other shareholders that valued it at US$7 billion. In total, CoreWeave has raised more than US$3.5 billion in capital, including US$2.3 billion of debt collateralized by Nvidia H100 chips. Last summer, the company told investors it was on track to generate US$500 million in revenue in 2023, a roughly 25-fold increase over its 2022 revenue of about US$25 million, The Information previously reported. Part of its success may be attributed to the special attention it’s received from chipmaker Nvidia, which has given it and other small cloud providers generous allotments of rare H100 chips, The Information reported. That’s likely because CoreWeave and its peers aren’t developing AI chips that compete with Nvidia’s, unlike larger cloud providers like Microsoft, Amazon and Google. https://tinyurl.com/mr2h83v8

Anthropic launches iPhone app and enterprise subscription plan.

Artificial intelligence startup Anthropic on Wednesday unveiled its first mobile app for iPhone users and a new subscription plan for enterprise customers. The subscription offering, called Team, costs US$30 per user a month and is available for corporate customers with a minimum five users. Both products will use Claude 3, the company’s latest version of its large language model. The new iPhone app is free, signaling Anthropic’s attempt to increase its consumer users while it expands sales to enterprise clients. The startup has also hired its first Android developer, according to CNBC. A spokesperson for Anthropic said it has no specific timeline for Android app “but it is very much on our roadmap.” Founded by former researchers at OpenAI, Anthropic has emerged as one of the frontrunners to develop AI that can talk, create and code like humans. The San Francisco-based startup has raised over US$7 billion from investors including Google and Amazon and is valued at US$15 billion, not including its recent fundraising round. The company has projected annualized revenue of US$850 million by the end of 2024, though it’s not clear if it will meet that goal. OpenAI late last year passed US$1.6 billion in annualized revenue, boosted by sales of its enterprise subscriptions. https://tinyurl.com/2k292hxe

Tesla to partner with Baidu in China on full self-driving roll out.

Tesla shares surged 15% on Monday after Bloomberg reported that the automaker had partnered with Chinese internet company Baidu to help bring the electric vehicle maker’s driver assistance technology to China. CEO Elon Musk visited China on Sunday, where he met with China’s No. 2 official, Premier Li Qiang. After his visit, Tesla received tentative approval to sell the driver assistance technology, known as “Full Self-Driving (Supervised),” in China. The country is Tesla’s second largest market and the largest car market in the world. That approval came after Tesla reached a deal to work with Baidu on mapping and navigation, as well as meeting China’s data security and privacy requirements, according to the report. The stock price surge follows months of stock declines triggered by slowing sales, layoffs, the departure of key executives, and concerns from investors about Tesla’s plans for new vehicles. https://tinyurl.com/ycxzf2bn

Apple revenue falls on 10.5% drop in iPhone sales.

A 10.5% drop in iPhone revenue dragged down Apple’s overall revenue by 4% in the March quarter, the tech giant reported Thursday, leading to a 2.3% decline in net profit. The weaker quarter signals that Apple’s business remains depressed, after a slight uptick in its first fiscal quarter, with only the services segment showing any meaningful growth. The company’s revenue fell slightly in its last fiscal year, ending in September, and Apple stock has fallen about 10% so far in 2024. Apple announced a new US$110 billion share buyback and increased the dividend. Apple shares were trading up nearly 7% after hours. https://tinyurl.com/6yta9br5

AMD increases guidance for GPU sales to US$4 billion, stock still falls.

Advanced Micro Devices on Tuesday raised its projected data center chip sales to more than US$4 billion this year, from a January projection of US$3.5 billion, thanks in part to its new chip that competes with Nvidia’s. The bump reflects demand for AMD’s new graphics processing units, known as the MI300, the company said on an earnings call with investors. The 15% increase in projected sales follows a 75% increase in projected 2024 data-center chip sales three months ago. Together, the changes mean AMD is now projecting sales of the data center chip to be more than twice what it projected just a few months ago. The increased projection suggests AMD is gaining ground on Nvidia, but remains far behind its larger rival. Nvidia’s data center revenue, largely for GPU sales, was $18.4 billion in the most recent quarter alone. AMD’s stock fell 7% in after hours trading. AMD says Microsoft, Meta Platforms and Oracle—which are all Nvidia customers—bought its new AI chips. The Information has reported that Amazon Web Services has no current plans to offer the chips and is focusing on Nvidia and its own homegrown AI chips. https://tinyurl.com/2dn4cadr

Block profit surges fourfold on Cash app, Bitcoin.

Block’s profit surged nearly four-fold in the first quarter to $472 million, driven by transactions in its Cash App money-transfer service and revenue from selling Bitcoin. Revenue for the first three months of the year rose 19% to $5.9 billion. It raised its full-year outlook for gross profit, which measures revenue after Bitcoin mining and other costs, to US$8.78 billion from US$8.65 billion. The San Francisco-based company makes money from its Cash App by charging fees between 0.75% and 3% on the transactions as well as mining Bitcoin. Block generated US$2.7 billion revenue from selling Bitcoin, representing nearly 46% of the company’s total revenue. The company has also introduced its own chips for crypto mining and a new mining rig system that it expects will help reduce the cost of generating new Bitcoin. The company said will dedicate 10% of its monthly gross profits from Bitcoin services to buy more Bitcoin assets. Revenue from its Square businesses, which provides point-of-sale devices and software, rose 11% to US$1.7 billion. “We believe the world needs an open protocol for money, one that’s not owned or controlled by any single entity,” CEO Jack Dorsey wrote in a letter to shareholders. Block shares rose 10% in after hours trading. https://tinyurl.com/2vrnb5ej

Coinbase revenue jumps, buoyed by Bitcoin ETF euphoria.

Coinbase, the largest U.S. crypto exchange, reported US$1.6 billion in revenue for the first quarter, more than doubled from a year ago and up 72% from the prior quarter, driven by strong crypto market conditions following the arrival of bitcoin exchange-traded funds in January. Net income surged to US$1.2 billion in the first quarter, marking the second consecutive quarterly profit for Coinbase, but it benefited from US$737 million in mostly unrealized crypto assets mark-to-market gains. In April, trading revenue reached over US$300 million. Trading volume at Coinbase Prime, its institutional service that works with big firms including bitcoin ETF issuers, hit all-time highs, driving revenue to US$85.4 million from US$22.3 million a year ago. Lending also surged and the company disclosed US$797 million in loans to customers. Coinbase, which provides bitcoin custody for eight out of the 11 bitcoin ETF issuers, said custodial fees rose to US$32.3 million, nearly doubled from a year ago. Coinbase’s headcount remains flat at 3,416, the same as the end of 2023. https://tinyurl.com/3ezub5ub

Pinterest shares surge as revenue growth rebounds.

Pinterest shares surged nearly 20% in after-hours trading on Tuesday after the online scrapbooking site reported its fastest revenue growth since the e-commerce boom of 2021. The company’s revenue rose 23% to US$740 million in the first quarter, a jump that comes amid a broader digital ad rebound and after Pinterest added features to make it easier for users to buy items they see on its site. Pinterest said monthly active users rose 12% from a year earlier to 518 million, with Gen Z representing around 40% of total users. Pinterest projected second quarter revenue of between US$835 million and US$850 million, up 18% to 20% from a year earlier. https://tinyurl.com/mu5jbp64

DoorDash projects slowdown in Q2.

DoorDash, which is grappling with the fallout of regulations in New York and Seattle imposing minimum pay rates for deliverypeople, projected that its business would slow markedly in the second quarter. DoorDash stock fell 15% in after-hours trading. DoorDash said the new earnings rules had increased costs to consumers and “reduced sales to merchants”. But because New York and Seattle represent only a “small portion of our total orders,” the new rules had reduced its total orders “less than 1%” in the quarter. Still, DoorDash’s growth has been slowing steadily over the past 12 months, particularly its measure of total orders, although its revenue is growing more strongly thanks to the contribution from its newer advertising business. In the first quarter, gross order value expanded 21% to US$19.2 billion. DoorDash projected its gross order value would expand between 15% and 18% in the second quarter. https://tinyurl.com/ebm48cb6

Etsy shares drop as sales continue to slump.

Etsy shares dropped nearly 13% after the online marketplace posted first-quarter revenue of US$646 million, just a 0.8% increase from a year earlier, and a continued decline in gross merchandise sales, which fell 3.7% to US$3 billion. Etsy has been hit hard by the e-commerce slowdown in recent years following a pandemic boom, and has seen its revenue growth cool as users cut back on discretionary spending and sites with cheaper offerings like Shein and Temu gain market share. The company laid off 11% of its employees in December, The Information was first to report, citing a more competitive macro environment. The company has recently focused on improving the customer experience in order to keep shoppers coming back. Etsy projected a continued decline in gross merchandise sales for the current quarter, and said there were “a range of potential outcomes” for GMS growth for the full year. https://tinyurl.com/2v5pu7cx

Google lays off more engineering staff.

Google last week laid off staff working on tools for software developers, and it plans to relocate some of those roles to offices in Mexico and India, a person with knowledge of the cuts said. At least 200 people lost their positions, according to CNBC. The layoffs, which took place on April 25, affected staff working on Dart and Python, two open-source programming languages. The cuts also targeted employees working on Flutter, open-source software for programming user interfaces, this person said. The teams were part of Google’s “Core” engineering unit. TechCrunch first reported on the layoffs. Google didn’t immediately respond to a request for comment. The company has laid off groups of staff throughout this year. It told investors last week that its profit margins had improved as a result of staff cuts and other cost reductions. https://tinyurl.com/yrw9ebmz

The next iPhone will probably feature AI — but Tim Cook still keeps us guessing.

Cook continued to keep a tight lid on all things AI, merely teasing big AI announcements in the “coming weeks.” It’s a standard play from the CEO, who has been hesitant to publicly discuss Apple’s AI development. Cook reiterated that the iPhone maker was “well positioned,” saying there were “big opportunities” across Apple products for generative AI. The remarks — and slightly better-than-expected numbers — appeared to reassure investors, with the stock climbing 6% premarket. A US$110 billion share buyback also helped. Wedbush analyst Dan Ives described the earnings call as a “drumroll moment,” adding Apple looked set to unveil its long-awaited AI strategy at its Worldwide Developers Conference in June. Cook has previously promised to share details of the company’s AI work later this year. Ives said Apple’s AI efforts were set to drive a “supercycle starting with iPhone 16 this fall.” Now, despite beating Wall Street’s pessimistic estimates, sales of its flagship product are declining. iPhone sales slumped by 10% in the past three months, with the company facing increasingly tough competition in key markets like China. Investors are hoping that new generative AI features for its products can boost Apple’s slumping smartphone sales. https://tinyurl.com/yc32jcd8

Apple intensifies talks with OpenAI for iPhone generative AI features.

Apple Inc. has renewed discussions with OpenAI about using the startup’s technology to power some new features coming to the iPhone later this year, according to people familiar with the matter. The two companies have begun discussing terms of a possible agreement and how the OpenAI features would be integrated into Apple’s iOS 18, the next iPhone operating system, said the people, who asked not to be identified because the deliberations are private. The move marks a reopening of dialogue between the companies. Apple had talked to OpenAI about a deal earlier this year, though work between the two parties had been minimal since then. Apple also remains in discussions with Alphabet Inc.’s Google about licensing that company’s Gemini chatbot. Apple hasn’t made a final decision on which partners it will use, and there’s no guarantee that a deal will be worked out. It’s possible that the company ultimately reaches an agreement with both OpenAI and Google — or picks another provider entirely. Representatives for Apple, OpenAI and Google declined to comment. The next iPhone operating system will include several new features based on Apple’s in-house large language model — AI software that can generate human-sounding text — but the company also has been seeking partners to power a chatbot-like feature akin to OpenAI’s ChatGPT. Bloomberg first reported in March on the discussions, which have included AI startup Anthropic as well. Apple Inc. has renewed discussions with OpenAI about using the startup’s technology to power some new features coming to the iPhone later this year, according to people familiar with the matter. The two companies have begun discussing terms of a possible agreement and how the OpenAI features would be integrated into Apple’s iOS 18, the next iPhone operating system, said the people, who asked not to be identified because the deliberations are private. The move marks a reopening of dialogue between the companies. Apple had talked to OpenAI about a deal earlier this year, though work between the two parties had been minimal since then. Apple also remains in discussions with Alphabet Inc.’s Google about licensing that company’s Gemini chatbot. Apple hasn’t made a final decision on which partners it will use, and there’s no guarantee that a deal will be worked out. It’s possible that the company ultimately reaches an agreement with both OpenAI and Google — or picks another provider entirely. Representatives for Apple, OpenAI and Google declined to comment. The next iPhone operating system will include several new features based on Apple’s in-house large language model — AI software that can generate human-sounding text — but the company also has been seeking partners to power a chatbot-like feature akin to OpenAI’s ChatGPT. Bloomberg first reported in March on the discussions, which have included AI startup Anthropic as well. https://archive.ph/1MSWA

Financial Times signs licensing agreement with OpenAI.

UK-based Financial Times has signed an agreement to license its content to ChatGPT creator OpenAI, the publisher announced on Monday. The agreement will allow OpenAI to train its conversational AI on Financial Times content and link to articles in ChatGPT responses. The Financial Times wouldn’t comment on the financial details of the deal. The partnership is the latest in a string of deals OpenAI has struck with publishers, including Axel Springer and the Associated Press, as it looks for new, up-to-date data to train its models on. In the past, OpenAI has offered publishers as little as $1 million a year for access to their content. https://tinyurl.com/43rvtdcs

Walmart to shutter all health clinics, end virtual care over ‘lack of profitability’.

Walmart is closing all 51 of its healthcare clinics and ending virtual care services, the company said on Tuesday, calling the business unprofitable and unsustainable. The clinics were located next to Walmart stores in six U.S. states and offered primary and urgent care, as well as services like X-rays and dental work. The retail giant had opened the first clinic in 2019 and added online health services in 2021 when it acquired the telehealth company MeMD. Walmart said in a press release that factors including “escalating operating costs” had led to a “lack of profitability that make the care business unsustainable for us at this time.” Walmart will continue to operate its thousands of pharmacies and vision centers. almart’s moves into healthcare had helped spur archrival Amazon to make its US$3.9 billion acquisition of One Medical, which also offers in-person care and telehealth services. While Amazon hasn’t broken out One Medical results, the company reported an operating loss of US$420 million in 2022, the last full year before Amazon completed its acquisition. https://tinyurl.com/4kspwyau

Google launches new automated ad-buying features.

Google on Monday announced new features for its Performance Max ad-buying tool, which uses artificial intelligence to optimize ad campaigns. One upgrade, “Final URL expansion,” lets advertisers automatically adjust an ad’s link based on a user’s search intent—for example, to surface a more relevant brand on a store website. Another feature allows advertisers to target their campaigns to retain customers as opposed to acquiring new ones. The launches show how Google continues to add features to Performance Max that automate more aspects of the ad-buying process as it invests heavily in training its advanced AI model Gemini. Besides boosting spending, the efforts could help it shed staff involved in selling Google’s tools to advertisers. Google cut hundreds of jobs on that team in January. https://tinyurl.com/yc65mkrt

TikTok could be banned in Europe as well as the US.

Hugely popular video app TikTok could be banned in Europe as well as the US, according to remarks made by the president of the European Commission. TikTok is also under two separate EU investigations, and President Biden last week signed a bill which would see the app banned in the US within nine months unless it is sold to an American company. Last month, the House voted overwhelmingly to either ban TikTok from the US, or to force the sale of the app to an American-owned company. Senators had seemed less convinced of the need for the legislation, so the Department of Justice pushed the sale option rather than the ban. President Biden last week signed off on the bill, which gives Chinese owner ByteDance up to nine months to sell to a US company – though that deadline could be extended to 12 months. The credibility of the claimed national security risks were thrown into some doubt by a seemingly ‘interesting’ source, but by that point the initiative seemed to have gained sufficient momentum that it was going to happen anyway. TikTok could be banned in Europe too. Commission President Ursula von der Leyen hinted that banning TikTok in the European Union is an option, during a debate this evening in Maastricht, featuring parties’ lead candidates for the bloc’s 2024 election. TikTok is currently being investigated by the EU for possible breaches of the law, including a scheme to use gift vouchers to reward users for watching videos – which may fall foul of a prohibition on features intended to increase the addictiveness of app use by children. https://tinyurl.com/4myvwhcz