After another busy earnings week, Nasdaq was up ~0.1%, as it re-approaches its 2023 highs, Dow Jones was down 1.2% and S&P fell 0.8%. SoftBank’s chip maker Arm Ltd has filed with regulators confidentially for a U.S. stock market listing, Arm said last Saturday, setting the stage for this year’s largest initial public offering. Alibaba’s global online commerce arm weighs a US IPO. Chegg shares plunge 38% after ChatGPT warning. Shares of AMD dropped more than 5% after the chip maker reported a 9% revenue decline in the first quarter. Apple’s revenue fell 3% despite iPhone sales growth. Samsung surpasses Apple in smartphone shipments by 1% amid a persisting market decline. Qualcomm gives a light forecast, phone chip sales fall 17%. Uber revenues rise 29% as ride-hailing business expands. Coinbase revenue drops 34%, and the Company cuts back on costs. OpenAI reportedly lost US$540 million developing ChatGPT in 2022, as the business is expected to be very capex intensive — OpenAI CEO Sam Altman may be aiming to raise up to US$100 billion in the next few years to develop artificial intelligence so smart it can improve itself. Google DeepMind boss predicts AI as powerful as the human brain could arrive within the next few years. IBM to pause hiring for jobs that AI could do. Viasat’s recent satellite launch adds power and flexibility in satellite broadband competition — Potential positive for Sophic Client Clear Blue contract wins. In Canada, venture capital investment in Q1 2023 dropped by 82 percent compared to last year. Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) forecasts 2023 revenue to be in the $66 – $78 million range and adjusted EBITDA in the $12-$17 million range. The mid-point guidance range ($72 million in revenue and $14.5 million in EBITDA) implies revenue growth of 76% over 2022 and adjusted EBITDA growth of 275%. Shopify soared 28% on strong earnings and the sale of its logistics unit, the Company plans to slash headcount. BlackBerry is considering breaking up its businesses as it reviews its portfolio.
Canadian Technology Capital Markets & Company News
Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) forecasts continued strong growth after record 2022 financial results.
For 2023, Kraken expects revenue to be in the $66 – $78 million range and adjusted EBITDA in the $12-$17 million range. The mid-point guidance range ($72 million in revenue and $14.5 million in EBITDA) implies revenue growth of 76% over 2022 and adjusted EBITDA growth of 275%. Capex in 2023 is expected to be $5-$6 million. 2023 outlook is largely driven by contracts in hand and reflects strength across both Products and Services groups addressing defense and offshore energy customers. Revenue for the year ended December 31, 2022, was a record $40.9 million compared to $25.6 million in the prior year. The 60% year-over-year growth was driven by the delivery of KATFISH™ mine-hunting systems, AquaPix® synthetic aperture sonar (“SAS”), and SeaPower™ batteries as well as a full year of service revenue from PanGeo Subsea which was acquired in July 2021. Gross margins for 2022 were 42%, compared to 44% in 2021. Adjusted EBITDA for the year was $5.3 million resulting in a 13% Adjusted EBITDA Margin, compared to an Adjusted EBITDA of $2.1 million in the prior year and a 8% Adjusted EBITDA Margin. Cash balance at year end 2022 was $8.3 million compared to $6.8 million as of December 31, 2021. https://bit.ly/42aMjBJ
Sophic Client Legend Power Systems Inc. (LPS-TSXV, LPSIF-OTC) announces partnership with sparta group and encompass power solutions to expand market reach.
Legend Power announced that it has entered into a distribution agreement with Sparta Group’s Energy division (TSXV: SAY) and its affiliate Encompass Power Solutions. The agreement is intended to expand Sparta’s offering to include Legend Power’s SmartGATE Active Power Management Grid Edge Platform, expanding Sparta’s industrial presence to include the commercial real estate sector. The agreement with Sparta Group is part of Legend Power Systems’ strategy to expand its distribution network and bring its innovative solution to a wider audience. https://bit.ly/40YM8bO
Nanalysis Scientific Corp. (NSCI-TSXV) announces upsize to private placement of units.
The Company has increased the size of its previously announced non-brokered private placement of units. The Company will now issue up to 6,881,167 Units at a price of $0.60 per Unit for aggregate gross proceeds of up to $4,128,700. Other than the increase in the size of the Offering, all other terms and conditions of the Offering remain unchanged, as described in the press release dated April 21, 2023. https://bit.ly/3VwR4U1
BlackBerry (BB-NYSE, BB-TSX) considering breaking up its businesses to improve revenue, cash flow.
BlackBerry is considering breaking up its businesses as it reviews its portfolio. On Monday, BlackBerry announced it will initiate an assessment of the corporation’s businesses as it explores “strategic alternatives to drive enhanced shareholder value.” Among these alternatives include the potential separation of “one or more of BlackBerry’s businesses.” BlackBerry CEO said the review is meant to deliver revenue growth and improve its cash flow. This review was implemented as BlackBerry’s growth has stalled. In March, it lowered its fourth-quarter and full-year revenue expectations for its cybersecurity business, citing macro challenges as the key factor for the decline. BlackBerry reported US$151 million in total company revenue for its fiscal 2023 year. For comparison, the company posted US$185 million in year-over-year revenue in 2022. This represents an 18 percent decline. https://bit.ly/3HIXf1S
Shopify (SHOP-NYSE, SHOP-TSX) soars 28% on strong earnings and sale of logistics unit, plans to slash headcount.
Shopify stock surged 28% on Thursday after the e-commerce company reported a surprise earnings beat for the first quarter and announced that it sold its logistics unit and would embark on a new round of reductions to headcount. It also announced that it will reduce headcount at the company by 20%. Separately, Insider also reported this week that company insiders were bracing for a big strategy shift to the logistics side of the business, with plans to pull back on its “fulfillment center” warehouses, capital-heavy projects that had trouble turning a profit. On Thursday, the company confirmed the reports, announcing it had sold its logistics unit to freight company Flexport. The deal includes the sale of Deliverr, a shipping service Shopify bought last year for US$2.1 billion. Shopify’s first-quarter revenue came in at US$1.51 billion, surpassing estimates of US$1.43 billion and adding $0.01 per share. The company benefited from its integration on the websites of other businesses, such as Mattel and Coty. https://bit.ly/3VFDeiy
Shopify (SHOP-NYSE, SHOP-TSX) backs Nigeria-based FinTech Nomba in US$30 million round.
Shopify has made an investment into Nomba, a Nigeria-based FinTech firm that raised US$30 million in what it classifies as a “pre-Series B” funding. The round was led by Base10 Partners, which has also invested in FinTech companies Nubank, Plaid, and Brex. In addition to Shopify, it also saw participation from existing investors Partech Partners and Khosla Ventures, as well as new investor Helios.do. With this round, Nomba has raised approximately US$36.7 million in total funding to date. https://bit.ly/3pcrcRo
Canadian venture capital investment in Q1 2023 drops by 82 percent compared to last year.
In the first quarter of 2023, deals in Canada’s tech ecosystem plummeted. The latest data from Briefed.in shows Canada experienced a 82 percent decline in amount invested compared to the same time last year, and a 67 percent drop in number of deals. Compared to the last quarter (Q4 2022), this quarter also saw total investment fall by 61 percent and a 23 percent decrease in the number of deals compared. In recent months, tech companies have faced shaky markets thanks to factors ranging from war and geopolitical tensions in Europe, soaring inflation at 30-year highs, tightening central bank policy, and surging oil prices. According to Briefed.in, total funding in the quarter topped out at $876.2 million over 55 deals. So far in 2023, Canada is 13 percent of the way to match the total deals done in 2022 and nine percent of the way to match in total investment, according to Briefed.in. https://bit.ly/427giuJ
Odaia closes $34 million Series B to fix “bottleneck” in drug delivery process.
Toronto-based software startup Odaia has secured $34 million (US$25 million) in Series B financing co-led by Threshold Ventures and Monograph Capital, a pair of foreign venture capital investors focused on life sciences and healthtech companies. In addition to Threshold and Monograph, Odaia’s all-equity Series B round saw participation from investor Wittington Ventures, another first-time investor in the startup. Existing backers also joined the round in Flint Capital, BDC Capital, StandUp Ventures, and Graphite Ventures. Odaia’s Series B round brings the startup’s total funding to about $55 million, from a list of investors that also includes Innospark Ventures, Alumni Ventures, MaRS IAF, and Panache Ventures. https://bit.ly/3NA3eto
Brightspark seeks to recreate its “home run” exits of Think Dynamics, Radian6 as it launches $120 million fund.
Brightspark Ventures thinks now is the right time to be investing in early-stage Canadian tech companies as it holds the first close for its latest fund, which has a target size of $120 million. In this initial close, Brightspark has raised $60 million and has “firm commitments” for an additional $15 million. Brightspark expects to close around $90 million by June with a final close before the end of this year. This latest fund is called Brightspark Canadian Opportunities Fund (BCOF) II, and follows BCOF I, which launched in 2020 with $60 million. https://bit.ly/3VzanML
Diagram Ventures closes $100-million for latest fund as it continues to bet on FinTech.
Diagram Ventures remains bullish on FinTech companies as it launches its latest venture fund with a first close of $100 million. The $100 million raised for the fund represents Diagram’s original target size, but the goal post shifted, as Lafortune said the firm has commitments that bring it closer to $120 million. This is more than double the size of Diagram’s second fund, which closed at $55 million. While this latest fund represents Diagram’s third fund to support its venture-building efforts, it is the firm’s fourth overall. In 2021, Diagram raised a $120 million Opportunity Fund to continue investing in the promising companies in its portfolio. https://bit.ly/3HJiXD0
Global Markets: IPOs, Venture Capital, M&A
SoftBank’s Arm registers for blockbuster U.S. IPO.
SoftBank Group Corp’s chip maker Arm Ltd has filed with regulators confidentially for a U.S. stock market listing, Arm said last Saturday, setting the stage for this year’s largest initial public offering. The IPO registration shows that Softbank is pressing ahead with the blockbuster offering despite adverse market conditions, after saying in March that it planned to list Arm in the U.S. stock market. U.S. IPOs, excluding listings for special purpose acquisition companies, are down about 22% to a total of just US$2.35 billion year-to-date, according to Dealogic, as stock market volatility and economic uncertainty put many IPO hopefuls off. Arm plans to sell its shares on Nasdaq later this year, seeking to raise between US$8 billion and US$10 billion, people familiar with the matter said. In a statement, which confirmed an earlier Reuters report on the planned IPO, Arm said the size and price range for the offering has not yet been determined. SoftBank has been targeting a listing for Arm since its deal to sell the chip designer to Nvidia Corp for US$40 billion collapsed last year because of objections from U.S. and European antitrust regulators. Arm’s IPO preparations are being led by Goldman Sachs Group Inc, JPMorgan Chase & Co, Barclays and Mizuho Financial Group. https://bit.ly/44voKFJ
Alibaba’s global online commerce arm weighs a US IPO.
Alibaba Group Holding Ltd.’s international online shopping unit is exploring a US initial public offering as it weighs options to spur growth for the business that includes major e-commerce brands Lazada and AliExpress. The firm is in the early stages of consideration and the IPO’s size has yet to be determined, according to people familiar with the matter. The business group is in talks with banks that could potentially help prepare for the IPO next year, said one of the people, who asked not to be named as the matter is private. Alibaba’s US-listed shares spiked as much as 5% in pre-market trading in New York. The unit, which competes with rivals such as Amazon.com Inc. in markets outside China, is one of six parts that Alibaba is splitting into. Valuations for the international business units vary: Morgan Stanley in March priced “international retail” units including Lazada and Trendyol at roughly US$29 billion, while a CICC analyst report from the same month valued the firm’s international division at about US$39 billion. In recent quarters however, growth has been volatile in the face of global recessionary fears. https://bloom.bg/3M26igO
UK plans to loosen IPO rules amid angst over dearth of deals.
The UK is proposing “significant changes to the listing rulebook” in a bid to make London more attractive as a financial center with its moribund capital markets stoking fears about the city’s ability to compete with New York and Asian hubs. The Financial Conduct Authority wants to replace its premium and standard listing categories with a single offering in a bid to attract more companies, according to a statement Tuesday. The regulator said the changes would make UK listings less complicated and onerous. It would make it easier for companies to have two classes of shares, which is favored by some entrepreneurs who want to keep control of their businesses even after they have gone public, and would remove mandatory shareholder votes, including on acquisitions. The proposals follow a dramatic drop in the number of new listings in London as other companies seek to move their shares to New York. https://bloom.bg/3phcSax
Chegg shares plunge 38% after ChatGPT warning.
Online education firm Chegg told investors it believes OpenAI’s ChatGPT is “having an impact on our new customer growth rate” as student customers embraced the chatbot as a studying tool. In after-hours trading, Chegg shares fell 38%. It didn’t help that the firm reported a 7% decline in revenues year over year after reporting a 1% decline in the fourth quarter. Chegg, which had a market capitalization of US$2.1 billion on Monday, before the after-hours plunge, said it was embracing artificial intelligence by launching its own study aide powered by ChatGPT. The company is hardly the only software firm roiled by OpenAI’s software. The Information reported last week about 13 companies including Grammarly that now face the prospect of competing against a cheaper product—ChatGPT. https://bit.ly/3NGu0jR
AMD’s revenue decline is worsening but CEO projects second half growth.
Shares of AMD dropped more than 5% after the chip maker reported a 9% revenue decline in the first quarter compared to the previous year as ongoing weakness in PC demand outweighed strong sales of processors for industrial devices. The results, however, show how AMD’s efforts to diversify its business in recent helped it cope with a chilly technology spending environment. While sales of PC and gaming chips declined 65% and 6%, respectively, revenue from “embedded” processors—which stems from AMD’s nearly US$50 billion acquisition of Xilinx last February—grew 163% to more than US$1.5 billion compared to last year. AMD forecast a 19% revenue decline for the second quarter, but CEO Lisa Su told analysts Tuesday that the company expects to return to revenue growth in the second half of the year. AMD generated US$328 million in free cash flow in the first quarter, down from US$924 million a year ago. Operating margin dropped from 19% last year to -3% in the first quarter due in part to AMD’s incorporation of its acquisition of server chip maker Pensando Systems and its increased investment in developing graphics processing chips for artificial intelligence, Su said on the call. https://bit.ly/417Fyjf
Apple’s revenue falls 3% despite iPhone sales growth.
Apple’s sales fell 3% to US$94.8 billion in the March quarter, thanks to a sharp drop in revenue from Macs and iPads, while iPhone sales rose 1.5%. Net income dropped slightly to US$24.1 billion, the company said. The iPhone sales growth was striking, given that the overall smartphone market shrank during the quarter, according to both research firm IDC and comments from executives at Qualcomm, which supplies most cell phone makers with crucial chips, during its quarterly earnings update on Wednesday. Apple CEO Tim Cook attributed the performance to growth in performing markets, like India. Apple forecast a similar overall sales decline for the June quarter, which means the company is heading for a full-year decline, as its revenue has fallen 4% for the first half of its fiscal year. https://bit.ly/41fPjMm
Samsung surpasses Apple in smartphone shipments by 1% amid persisting market decline.
Samsung overtook Apple through a slender 1% lead to secure the top spot in smartphone shipment volumes during the first quarter of 2023, despite the ongoing contraction of the smartphone market, according to a new report. The South Korean electronics giant shipped a total of 60.6 million units, narrowly surpassing Apple’s 58 million in the quarter ending March, according to research firm Counterpoint. The overall smartphone market saw a year-on-year decline of 14% and a quarter-on-quarter drop of 7%, resulting in a total of 280.2 million shipment units in Q1 2023, the Hong Kong-headquartered firm said in a report. Concurrently, revenues experienced a 7% year-on-year reduction, reaching a record-low of $104 billion. While Samsung took the lead in shipment volumes, Apple maintained a commanding first quarter in terms of operating profits, securing a substantial 72% lead over Samsung. The iPhone maker also captured half of the market’s revenue, maintaining a 31% advantage over its South Korean competitor. https://bit.ly/3pjmzVy
Qualcomm gives light forecast, phone chip sales fall 17%.
Qualcomm reported second-quarter earnings on Wednesday that were in line with analyst expectations, but sales from handset chips, a core business for the company, declined 17% from a year earlier. Qualcomm shares fell over 4% in extended trading. Qualcomm said it expected around US$8.5 billion in sales in the current quarter, short of Wall Street expectations of US$9.14 billion. Analysts were expecting current-quarter earnings guidance of US$2.16 per share, but the company said it would be around US$1.80. Qualcomm CEO Cristiano Amon in a statement blamed the results on a challenging environment, and the company said it had not seen evidence that smartphone sales are recovering in China. The smartphone market is looking at a tough 2023, with shipments for the global market declining over 14% in the first quarter, according to IDC. https://cnb.cx/3NISQ2E
Uber revenues rise 29% as ride-hailing business expands.
Uber reported 29% higher revenue and a sharply reduced operating loss, as its ride-hailing business expanded gross bookings 40% compared with a year-earlier period. Growth in Uber’s food-delivery business, meanwhile, increased 8%. The company’s revenue continues to benefit from changes in its UK business early last year, where drivers are now classified as workers rather than as independent contractors, while payments to drivers are recognized in cost of revenues. If this change is excluded, the percentage of fares that Uber keeps in its ride-hailing business would have dropped slightly to 21.4%, the company said. Uber said it generated US$549 million in free cash flow—cash from operating activities less capex—whereas in the year-earlier period the company had burned US$47 million in cash. Uber shares rose 11.5% on Tuesday, giving the company a roughly US$73.5 billion market capitalization. Despite the good news, Uber is trading at US$36.52 per share, well below its 2019 IPO price of US$45. https://bit.ly/3M16Tzl
Instacart’s order volume growth slows in first quarter.
Instacart’s gross order volume grew between 5% and 10% in the first quarter, The Information reported on Friday, slower than its full-year 2022 growth rate of 16% and slower than the equivalent metric reported by DoorDash and Uber’s food-delivery arm. The slowdown could affect the timing of Instacart’s public market debut. The company, which recently increased its internal valuation to $12 billion, had delayed an IPO from 2022 as it waited to go public. The slowdown in order volume, an indicator of revenue, reflects how the lingering effects of Covid has made Instacart’s growth uneven. It may also reflect increasing competition facing Instacart, as firms like DoorDash expand into grocery delivery. https://bit.ly/42bpA9g
Coinbase revenue drops 34%, cuts back on costs.
Coinbase’s revenue fell 34% in the first quarter compared with the same period a year earlier thanks to a slump in trading volume, though cost cutting efforts helped the crypto exchange narrow its losses. The company’s shares rose nearly 8% in after hours trading on Thursday. Overall revenue came in at US$773 million, with trading revenue down 63% from a year prior. Coinbase’s subscription and services revenue, which includes interest income, more than doubled over the same period. Rising interest rates have cooled crypto prices and trading activity but have boosted the interest income Coinbase receives from a partnership with USDC stablecoin issuer Circle. Coinbase reported a US$79 million net loss for the quarter, which included a US$144 million restructuring charge from January layoffs, compared to a US$430 million net loss the same period a year earlier. Operating expenses fell 48%, from US$1.72 billion last year to US$894 million this quarter. The company, which is the crosshairs of U.S. securities regulators, said in a shareholder letter that it hopes to avoid litigation but is “fully prepared” to defend itself and advocate for crypto more broadly. https://bit.ly/41bX7P2
OpenAI reportedly lost US$540 million developing ChatGPT in 2022.
It’s no surprise that large AI language models are expensive business, but just how costly they are to build hasn’t been clear. As reported by The Information, we now have a glimpse behind the curtain: In OpenAI’s case, the figure totals US$540 million in losses last year as the startup developed ChatGPT. And while revenue is pacing to hit hundreds of millions per annum, expenses are set to grow, too. Specifically, the report mentions that OpenAI CEO Sam Altman may be aiming to raise up to US$100 billion in the next few years to develop artificial intelligence so smart it can improve itself. Additionally, OpenAI is keen to acquire fresh data sets for its software, some of which aren’t on the internet at present. These data sets are a point of contention elsewhere. Companies such as Samsung are wary of their proprietary data slipping into the ChatGPT data pool, as evidenced by a recent ban on generative AI usage with company materials. https://bit.ly/44tEWYh
Viasat launch adds power and flexibility in satellite broadband competition — Potential positive for Sophic Client Clear Blue Technologies (CBLU-TSXV, CBUTF-OTC, 0YA-FRA) contract wins.
Viasat took a big step toward satellite staying power last weekend, as the long-awaited launch of the first of the ViaSat-3 trio rumbled off the ground (thanks to the “full power” version of SpaceX’s Falcon Heavy rocket.) The feat brings a new punch to Viasat’s network, helping it grow its share of the satellite communications market and bolster its existing position against the low Earth orbit challengers such as SpaceX’s Starlink, OneWeb and Amazon’s Kuiper. The first of the three planned satellites, the “Americas” satellite, is currently on its way to the distant geosynchronous orbit, with the EMEA (Europe, the Middle East, and Africa) and APAC (Asia-Pacific) satellites expected to launch in the coming months. Each satellite is the most powerful communications spacecraft ever launched, with over 1 Terabit per second of capacity, more than triple its ViaSat-2 predecessor. https://cnb.cx/3pddKgi
Europe’s major satellite players line up to build Starlink competitor.
A consortium of nearly every major European satellite company announced Tuesday that it plans to bid for a proposed satellite constellation to provide global communications. Essentially, such a constellation would provide the European Union with connectivity from low-Earth orbit similar to what SpaceX’s Starlink offers.The bid, which includes large players such as Airbus Defence and Space, Eutelsat, SES, and Thales Alenia Space, comes in response to a request by the European Union for help in constructing a sovereign constellation to provide secure communications for government services, including military applications. European Union Commissioner Thierry Breton announced the continent’s plans for this constellation—known as Infrastructure for Resilience, Interconnectivity and Security by Satellite, or IRIS²—last November. The European Union will provide 2.4 billion euro, with additional contributions expected from the European Space Agency and private investments. The partnership announced Tuesday, which also includes Deutsche Telekom, Hispasat, OHB, Orange, Hisdesat, and Telespazio, will aim to create a state-of-the-art satellite constellation based on a multi-orbit architecture. Although it is top-heavy with established industry players, the partnership said it will encourage startups in the European space sector to join the coalition. This is in response to a desire by Breton to broaden the European commercial space sector. At present, Europe estimates the cost of this constellation at about 6 billion euro and desires it to be ready to provide global coverage by the year 2027. Both the budget and the timeline for this project are likely very ambitious, given the amount of coordination needed and the unlikelihood that Europe’s Ariane 6 rocket will have the spare launch capacity to get hundreds of satellites into low-Earth orbit starting in the mid-2020s. The Ariane 6 rocket will not debut until 2024 at the earliest. https://bit.ly/3NGMykb
IBM to pause hiring for jobs that AI could do.
International Business Machines Corp. Chief Executive Officer Arvind Krishna said the company expects to pause hiring for roles it thinks could be replaced with artificial intelligence in the coming years. Hiring in back-office functions — such as human resources — will be suspended or slowed, Krishna said in an interview. These non-customer-facing roles amount to roughly 26,000 workers, Krishna said. “I could easily see 30% of that getting replaced by AI and automation over a five-year period.” https://bit.ly/44sfXEr
Samsung tells employees not to use AI tools like ChatGPT, citing security concerns.
Samsung has banned the use of generative AI tools like ChatGPT on its internal networks and company-owned devices over fears that uploading sensitive information to these platforms represents a security risk. The rule was communicated to staff in a memo which describes it as a temporary restriction while Samsung works to “create a secure environment” to safely use generative AI tools. The biggest risk factor is likely OpenAI’s chatbot ChatGPT, which has become hugely popular not only as toy for entertainment but as a tool to help with serious work. People can use the system to summarize reports or write response to emails — but that might mean inputting sensitive information, which OpenAI might have access too. The privacy risks involved in using ChatGPT vary based on how a user accesses the service. Samsung reportedly has plans for its employees to use AI tools eventually, but it sounds like it’s waiting to develop in-house solutions. Bloomberg notes that it’s working on tools to help with translation, summarizing documents, and software development. https://bit.ly/3NCsYWe
Google DeepMind boss predicts AI as powerful as the human brain could arrive within the next few years, report says.
Demis Hassabis, CEO and cofounder of London-based DeepMind, believes artificial general intelligence (AGI) – a theoretical concept in the field that envisions AI matching the cognitive abilities of humans – is on the horizon as AI research accelerates. The comments come as Google, which bought DeepMind for US$500 million in 2014, is attempting to fortify its business by doubling down on AI as it seeks to fend off a challenge to its core search unit from Microsoft-backed ChatGPT developer OpenAI. Hassabis is playing a central role in Google’s mission to advance its AI capabilities, having been announced last month as the leader of a newly formed unit at Google that brings DeepMind together with Google Brain, a separate AI research arm. Hassabis said during the conference that he didn’t “see any reason” why AI progress would slow down, but did suggest that developing AGI technologies would need to be done “in a cautious manner using the scientific method” that involves rigorous experiments and testing. https://bit.ly/44wHBjT
Media, Streaming, Gaming & Sports Betting
Prospects of Vice Media bankruptcy rises as sale process drags on.
The prospects of a Vice Media bankruptcy are rising, as the media company’s sale process drags on with few bidders showing much interest, say people close to the situation. The New York Times reported earlier that Vice was preparing to file for bankruptcy in a few weeks, but was still looking for a buyer to avoid such a filing. A person familiar with the situation denied Vice was preparing for a filing but said it was a possibility. A bankruptcy filing would be an ignominious end for the media company, the owner of Vice News, Refinery29, the Virtue ad agency and a video production business which was once valued as high as US$5.7 billion. Vice has lately faced an anemic digital ad market and a weak market for video programming. https://bit.ly/3HKi4tz
Adtech, Privacy & Regulatory
FTC proposes barring Meta from monetizing kids’ data.
The Federal Trade Commission proposed on Wednesday barring Facebook parent company Meta from monetizing kids’ data after it says the company violated a 2020 privacy order. According to the FTC, an independent assessor found “several gaps and weaknesses in Facebook’s privacy program” that posed “substantial risks to the public.” The company had agreed to independent assessments of its updated privacy program as part of the 2020 settlement, under which Facebook paid a US$5 billion civil penalty following an FTC investigation around the Cambridge Analytica data scandal. The FTC alleges Facebook also violated an earlier 2012 order by continuing to allow app developers access to private user information. Facebook allowed third-party apps to access user data until mid-2020 in some cases, the FTC alleges. The FTC is also accusing Meta of violating the Children’s Online Privacy Protection Rule by misrepresenting parental controls on its Messenger Kids app. The COPPA Rule requires parental consent for websites to collect personal information from kids under 13. The FTC alleged that while the company marketed that the app would only allow kids to talk with contacts their parents approved, children were able to communicate with additional contacts in group chats or group video calls in some circumstances. https://bit.ly/3HJbQuc
Snap begins testing sponsored links in AI chatbot conversations.
Snap has begun testing sponsored links in users’ conversations with its artificial intelligence chatbot, My AI, a top ad executive at the company announced at the NewFronts advertising conference on Tuesday. If users ask for food or travel recommendations, My AI could respond with sponsored links from a restaurant or hotel, Rob Wilk, Snap’s new president of the Americas, said. Wilk also said that data Snap gleans from users’ conversations with My AI could help power recommendations for video and advertisements users see elsewhere in the app. The announcement was Snap’s first concrete example of how it plans to monetize its AI chatbot feature, which it made available to all users at its partner summit last month. It comes at a crucial time for Snap, whose stock price plunged last week after Snap reported falling ad revenue for the first time as a public company. At NewFronts, Snap also announced that it was opening up advertisements on Spotlight to global advertisers, allowing advertisers to purchase a “First Story” ad slot in friends’ stories and launching a marketplace for brands to partner with creators on Snap. https://bit.ly/42xdZAS
Biden meets Microsoft, Google CEOs on AI dangers.
President Joe Biden met with CEOs of top artificial intelligence companies including Microsoft and Alphabet’s Google on Thursday and made clear they must ensure their products are safe before they are deployed. Biden, who has used ChatGPT and experimented with it, told the officials they must mitigate current and potential risks AI poses to individuals, society and national security, the White House said. The meeting included a “frank and constructive discussion” on the need for companies to be more transparent with policymakers about their AI systems; the importance of evaluating the safety of such products; and the need to protect them from malicious attacks, the White House added. https://reut.rs/42pFjRE
Fintech, Blockchain & Cryptocurrency
Microsoft Teams now lets small businesses charge for appointments, webinars, and more.
Microsoft is launching a payments system inside Microsoft Teams that lets small businesses earn money from appointments, classes, one-on-one sessions, webinars, and much more. Teams business users in the US and Canada will now be able to collect payments during a meeting, opening up the service to financial advisors, lawyers, instructors, tutors, and other small and medium-sized businesses (SMB) to collect payments for virtual meetings. Microsoft is now tapping into that tech-savviness and demand from small businesses to offer a new payments app within Teams. It’s designed to let businesses host webinars or one-on-one sessions and accept payments for them. Microsoft has partnered with GoDaddy, PayPal, and Stripe to make this possible, and it’s free for Teams business users. The payments app for Microsoft Teams is available in public preview right now, and you can install and configure it from Microsoft’s business AppSource store right here. https://bit.ly/3LQmm5g
TSMC plans for first German chip fab with cost up to €10 billion.
Taiwan Semiconductor Manufacturing Co. is in talks with partners to spend as much as €10 billion (US$11 billion) to build a chip fabrication plant in Saxony, Germany, according to people familiar with the matter. The planned venture between TSMC, NXP Semiconductors NV, Robert Bosch GmbH and Infineon Technologies AG will include state subsidies and would have a budget of at least €7 billion, with the total investment likely closer to €10 billion, the people said, asking not to be identified because the information is private. A final decision has not been made and the plans could still change, they said. https://bit.ly/44Kegme
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