While Nasdaq closed last week up fractionally higher, September was its worst month in the year, as the index was down nearly 6%. Dow Jones fell 1.2% and S&P 500 lost 0.4% last week. OpenAI is seeking a new valuation of between US$80 billion to US$90 billion, roughly triple its level earlier this year. The startup, which is 49% owned by Microsoft, has told investors that it expects to reach US$1 billion in revenue this year and generate many billions more in 2024. CoreWeave, a cloud computing provider that’s among the hottest startups in the artificial intelligence race, is finalizing a minority stake sale that values the company at US$7 billion. CoreWeave was an early adopter of Nvidia Corp. graphics chips for data centers, getting ahead of a wave of demand for powerful processors to run artificial intelligence applications. Amazon has agreed to invest up to US$4 billion in AI startup Anthropic. iPhone designer Jony Ive and OpenAI CEO Sam Altman are in advanced talks with SoftBank CEO Masayoshi Son to raise US$1 billion in capital to fund the creation of the “iPhone of artificial intelligence” that uses OpenAI’s artificial intelligence software, the Financial Times reported. In a complaint filed in federal court in Seattle Tuesday, the FTC and 17 states accused Amazon of engaging in a course of conduct to exclude rivals in online marketplace services and stifle competition. Nvidia’s France offices were raided by the country’s competition authority this week, according to a report from The Wall Street Journal. In Canada, HS GovTech will be acquired for an all-cash consideration of $0.54, a ~150% premium. Canadian small cap tech names are beat up, and investors are beginning to notice. Shopify has invested in wholesale site Faire. The companies did not disclose the size of Shopify’s stake or the value of the deal.
Canadian Technology Capital Markets & Company News
Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) announces management update.
Kraken Robotics Inc. announces that Ms. Lynne Adu will take over leadership of Kraken’s Services business, expanding her current role as Vice President Commercial at Kraken. In 2018, Ms. Adu joined PanGeo Subsea (acquired by Kraken in 2021) as General Manager and VP Commercial. Based in Aberdeen, Scotland, Ms. Adu has an MBA and more than 25 years of experience in a variety of management roles in offshore oil and gas and offshore services. Kraken is also announcing the retirement of Moya Cahill, previously Kraken’s EVP of Services as well as co-founder of PanGeo Subsea. Kraken has continued to add depth to the organization in 2023 across many areas including engineering, project management, business development, HSSE, and production. As a global leader in the marine technology sector, Kraken has been attracting talent worldwide from notable companies and organizations such as Ultra Defense, Cenovus Energy, ExxonMobil, Mind Technologies, Royal Canadian Navy, Turkish Navy, and Technip. As the market for naval defense technologies is seeing strong secular growth, Kraken has been building increased depth in our Business Development and Sales teams. Below we highlight several changes; Commander Peter Kirkegaard will be migrating to Kraken’s sales team as Subject Matter Expert in Seabed Warfare, after the past 3 years supporting Kraken’s successful delivery of the Royal Danish Navy’s Towed Sonar Upgrade program; Commander Roland Leyte recently joined Kraken after 35 years of distinguished service in the Royal Canadian Navy; Captain Cem Hasanoğlu has joined Kraken’s sales team as a Senior MCM Specialist, after 25 years of distinguished service in the Turkish Navy; and Mr. Dennis Hogan has joined the US Sales Team and based out of the Boston office. Before joining Kraken, Mr. Hogan served as the Commercial Sales Manager – North America for Klein Marine Systems from 2019 to 2023. https://tinyurl.com/376765wv
Sophic Client Clear Blue Technologies (CBLU-TSXV, CBUTF-OTC, 0YA-FRA) announces extension and renewal of existing loan and Convertible Debentures.
Clear Blue Technologies announces that it has concluded a renewal and extension of its loan with BDC Capital. BDC is the primary lender and supporter of Clear Blue and has provided strong support to the company in both equity and debt financings. As part of this agreement, the existing $3 million loan has a renewed three-year payment schedule and an extension of the term of the loan to July 2026. BDC Capital has additionally entered into a debt settlement agreement with the Company to settle aggregate indebtedness of $343,000 owed by the Company in exchange for the issuance of 4.9 million common shares of the Company at a price per common share of $0.07. Concurrently, the Company is very pleased to announce that the holders of its 10% convertible debentures issued in Q4 of 2021 have also agreed to renew and amend the terms of the debentures. Together these two items provide a significant improvement in working capital for Clear Blue and further position the company for positive cashflow going forward. https://tinyurl.com/4x4uf34y
HS Govtech (HS-CSE) announces execution of arrangement agreement.
HS GovTech has entered into a definitive arrangement agreement with a British Columbia subsidiary of a US private equity fund operated by Banneker Partners LLC, pursuant to which the Purchaser will acquire all of the issued and outstanding common shares of the Company on a fully diluted basis, for an all-cash consideration of $0.54 per share, representing an aggregate transaction value of approximately $33.3 million. The purchase price represents a 151.2% premium to the closing price of $0.215 and a 174.1% premium to the 20-day volume weighted price of $0.197 per Share on September 15, 2023. Echelon Capital Markets acted as financial advisor to the Company and the Special Committee. McMillan LLP acted as legal counsel to the Company, Stikeman Elliott LLP, and Orrick Herrington & Sutcliffe LLP acted as legal counsel to the Purchaser, and Wildeboer Dellelce LLP acted as counsel to Echelon Capital Markets. https://tinyurl.com/28cdjmfn
Brookfield (BAM-NYSE, BAM-TSX), THL weigh bids for pipeline inspector Rosen Group.
Brookfield Asset Management and Thomas H. Lee Partners are among suitors considering making final bids for Rosen Group, an engineering firm specializing in testing oil and gas assets, people with knowledge of the matter said. Partners Group Holding AG and Goldman Sachs Group Inc.’s investment arm are also weighing offers for the business, which could be valued at as much as US$4 billion in any deal, according to the people. Rosen Group’s owners have called for binding offers for the business in October, they said. Private credit funds are weighing providing as much as €1.2 billion (US$1.3 billion) to help finance a prospective buyout of Rosen, the people said, asking not to be identified discussing confidential information. Deliberations are ongoing and there’s no certainty any of the suitors will decide to proceed with offers. The owners could also decide to retain the business if value expectations are not met, they said. Representatives for Brookfield, Partners Group, Goldman Sachs and Thomas H Lee Partners declined to comment, while a spokesperson for Rosen couldn’t be reached for comment. A sale of the company would add to about $324 million of deals in the industrials sector this year, data compiled by Bloomberg show. German metering company Techem GmbH is attracting takeover interest from investment firms including Blackstone Inc. and Macquarie Group Ltd., in a deal that could value the business at about €8 billion (US$8.5 billion). https://tinyurl.com/mrxhwpw2
Reliq Health Technologies, Inc. (RHT-TSXV) announces private placement of up to $4 million.
Reliq has entered into an engagement with PI Financial Corp. pursuant to which PI will act as agent for the Company on a “best efforts” agency basis in connection with a private placement of up to 10,000,000 units of the Company at a price of $0.40 per Unit for gross proceeds to the Company of up to $4,000,000. Each Unit will consist of one common share (a “Share”) and one transferable Share purchase warrant (a “Warrant”). Each Warrant shall be exercisable into one additional common share (“Warrant Share”) of the Company for a period of 30 months from the Closing Date (as defined below) at an exercise price of $0.52 (the “Warrant Share Price”). https://tinyurl.com/5e8n5nvh
SolarBank (SUNN-CSE) completes sale of 21MW community solar sites in upstate New York to Honeywell International.
Honeywell International has acquired the Company’s proposed 21 MW DC ground-mount solar power projects that are under development in upstate New York. The Projects are known as SB 13-1, SB 13-2 and SB-14. SolarBank originated the sites in upstate New York and the Projects have received positive interconnection results via a completed Coordinated Electric System Interconnection Review (CESIR). The Projects will be developed as three separate 7 MW DC solar power projects. The Company will now continue to build the Projects for Honeywell to commercial operation via an engineering, procurement, and construction agreement (EPC). The sale of the Projects and EPC agreement have a total value of approximately US$41 million. The Company also expects that it will retain an operations and maintenance contract for the Projects following the completion of construction. The Company previously announced that it had entered into a funding arrangement with Honeywell whereby Honeywell provided funding for deposits/advance payments by the Company’s subsidiaries that currently own the Projects to vendors in furtherance of the development of the Projects. These advances, which total approximately US$2.668 million, will be offset against the money due from Honeywell to the Company under the definitive agreements for the Projects. The projects are expected to operate as community solar sites, selling credits to subscribers and are also expected to be eligible to participate in the NYSUN program to receive NYSERDA incentives. https://tinyurl.com/mvmhzbnt
Shopify (SHOP-NYSE, SHOP-TSX) invests in wholesale site Faire.
Wholesale e-commerce site Faire announced Wednesday that Shopify had invested in its business, marking the latest partnership between Shopify and a large startup that works closely with sellers who use its e-commerce software. Shopify will also make it easier for its sellers to order and manage inventory from Faire through a new app. The companies did not disclose the size of Shopify’s stake or the value of the deal, but Shopify’s partnership agreements typically include both equity and warrants to purchase additional shares in the future. Shopify struck a similar partnership with marketing software firm Klaviyo in 2022 that included a US$100 million investment. That deal resulted in a quick win for Shopify in Klaviyo’s IPO earlier this month. Faire last raised a US$416 million extension round in May 2022 which valued the company at US$12.59 billion. Backers include Sequoia Capital and Dragoneer Investment Group. https://tinyurl.com/ytecy375
Front Row Ventures closes over-subscribed $5.5-million pan-Canadian fund.
Front Row Ventures, the university student-led fund that invests in student-led startups, has closed $5.5 million for its first pan-Canadian fund. Some 50 founders backed the oversubscribed fund, which closed July 28, despite the current challenging fundraising environment. Historically, Front Row Ventures has focused on investing in early-stage, student-led Canadian startups. The new fund, FRV-CAN-22, is 10 times larger than Front Row Ventures’ first fund, finding backing from founders, operators, angel investors, and VCs, including institutional support from Inovia Capital and Quebec MEIE. https://tinyurl.com/bdd7pb8r
Homecare Hub secures $3.4 million in seed funding for its Airbnb-style senior care platform.
Toronto-based senior care platform Homecare Hub raised US$2.5 million ($3.4 million) in an all-equity seed funding round with participation from Inception Health, Ballad Ventures, Blue Lion Global, CABHI, and AARP. The oversubscribed seed round officially closed Sept. 13 and with additional milestone-based funding the round could surpass US$3 million. The company declined to disclose its valuation. https://tinyurl.com/32cyezpd
Global Markets: IPOs, Venture Capital, M&A
Alibaba’s Cainiao Logistics unit files for Hong Kong IPO.
Chinese e-commerce giant Alibaba Group’s logistics unit, Cainiao Smart Logistics Network, has filed its application to go public on the Hong Kong Stock Exchange. Alibaba said it would spin off Cainiao by way of the unit’s own initial public offering. The move is part of Alibaba’s massive restructuring plan. In March, the company said that it would split into six business units—including its three commerce-related businesses as well as logistics, cloud computing and online entertainment—and each unit would eventually seek its own IPO. But Cainiao’s IPO filing comes at a time when the environment for new listings is extremely challenging. This year, Hong Kong’s IPO market could hit its lowest fundraising level in 11 years, according to Deloitte China. Despite the headwinds, Cainiao is aiming to raise at least US$1 billion in the IPO, according to the South China Morning Post, a newspaper owned by Alibaba. For the fiscal year through March 2023, Cainiao’s revenue grew 16% year on year, according to the filing. The pace of growth was slower than the previous fiscal year, when revenue rose 27%. https://tinyurl.com/mr2xxuyp
Data Center firm AirTrunk mulls IPO at A$10 billion value.
Data center operator AirTrunk is considering an initial public offering that would give the company an enterprise value of more than A$10 billion (US$6.4 billion), the Australian Financial Review reported. AirTrunk investors Macquarie Asset Management and PSP Investments sent a request for proposals to seven banks earlier this month for a review that will examine an IPO in Australia and options including the sale of a minority stake in the business, according to the newspaper. Development of artificial intelligence computing is boosting the industry’s prospects, according to AirTrunk’s Chief Executive Officer Robin Khuda. “The level of growth we are seeing right now is something we have not seen in 10 years,” he told a conference this month. “It’s remarkable.” AirTrunk last month obtained a A$4.6 billion multi-currency sustainability-linked loan, the largest syndicated deal in Australia this year. https://archive.ph/4Pzj5
OpenAI seeks new valuation of up to US$90 billion in sale of existing shares.
OpenAI is talking to investors about a share sale that would value the artificial-intelligence startup behind ChatGPT at between US$80 billion to US$90 billion, roughly triple its level earlier this year. The startup, which is 49% owned by Microsoft, has told investors that it expects to reach US$1 billion in revenue this year and generate many billions more in 2024, people familiar with the discussion said. The deal is expected to allow employees to sell their existing shares as opposed to the company issuing new ones to raise additional capital. OpenAI representatives have begun pitching investors on the deal, the people said, though it is possible the terms could change. A valuation of US$80 billion or more would make OpenAI one of the most highly valued global startups, behind Elon Musk’s SpaceX and TikTok owner ByteDance. The figure underscores the extent to which OpenAI has been able to reshape the landscape of Silicon Valley and force even richer, more established tech giants to overhaul their product roadmaps and follow its lead. https://archive.ph/vnLJ5
CoreWeave nears stake sale to Fidelity, others at US$7 billion valuation.
CoreWeave, a cloud computing provider that’s among the hottest startups in the artificial intelligence race, is finalizing a minority stake sale that values the company at US$7 billion, according to people with knowledge of the matter. Fidelity Investments has agreed to buy the largest portion of the roughly US$500 million of employee-owned shares that have been tendered, said the people, who asked not to be named discussing confidential talks. JPMorgan Asset Management and Goanna Capital are among institutions in talks to participate, some of the people said. Terms haven’t been finalized and could still change, they added. Roseland, New Jersey-based CoreWeave, which previously specialized in ethereum mining, is projected to achieve about US$1.5 billion in revenue in 2024, Bloomberg News reported last month. CoreWeave was an early adopter of Nvidia Corp. graphics chips for data centers, getting ahead of a wave of demand for powerful processors to run artificial intelligence applications. The company, led by Chief Executive Officer and co-founder Michael Intrator, is building out data centers based on Nvidia’s chips to offer AI-related computing. Nvidia has become one of the leading AI companies and has seen its stock surge almost 200% this year. CoreWeave has raised US$421 million in equity this year, including from Nvidia. Microsoft Corp. has agreed to spend billions of dollars over several years on cloud infrastructure from CoreWeave, CNBC reported in June. https://archive.ph/l6tuJ
Amazon agrees to invest up to US$4 billion in AI startup Anthropic.
Amazon has agreed to invest up to US$4 billion in artificial intelligence startup Anthropic, as big tech’s race for generative AI heats up. The investment is part of a broader deal between Amazon and Anthropic, according to a statement by the companies. As part of the agreement, Anthropic will choose Amazon Web Services as its primary cloud provider, and use AWS’ Trainium and Inferentia chips to build and train its models used to power chatbots and other applications. Following the investment, Amazon will gain a minority position in Anthropic. The companies didn’t disclose the valuation at which Amazon’s investment in Anthropic will be made. A challenger to ChatGPT maker OpenAI, Anthropic received a US$400 million investment by Google earlier this year, and was valued at more than $4 billion after a funding round by Spark Capital in March. https://tinyurl.com/mwtub2hy
OpenAI and Jony Ive in talks to raise US$1 billion from SoftBank for AI device.
iPhone designer Jony Ive and OpenAI CEO Sam Altman are in advanced talks with SoftBank CEO Masayoshi Son to raise $1 billion in capital to fund the creation of the “iPhone of artificial intelligence” that uses OpenAI’s artificial intelligence software, the Financial Times reported. The report followed The Information’s reporting about Ive, Altman and Son discussing a new AI hardware device. Son wants mobile chip designer Arm, which SoftBank controls, to play a key role in the device. The men have considered forming a new company for this device that would draw on talent and technology from their networks, the report says. https://tinyurl.com/yc6hh777
Meta CEO Mark Zuckerberg looks to digital assistants, smart glasses and AI to help metaverse push.
Meta has new artificial intelligence tools and celebrity-endorsed digital assistants that CEO Mark Zuckerberg hopes will help to jump-start the metaverse. Zuckerberg showed off the AI software as well as the company’s new Quest 3 virtual reality headset and latest Ray-Ban smart glasses on Wednesday at Meta’s Connect conference for VR developers at its headquarters in Menlo Park, California. Users of Facebook’s various chatting apps like WhatsApp and Messenger will soon be able to share digital stickers that can be automatically created via written prompts, capitalizing on the popularity of technology like ChatGPT. https://tinyurl.com/3a79wrtn
Peloton shares soar on digital content, apparel partnership with Lululemon.
Peloton and Lululemon are joining forces. The two companies announced a five-year partnership Wednesday that will bring Peloton’s content to Lululemon’s exercise app. Lululemon in turn will become Peloton’s primary athletic apparel partner, and a select number of Peloton’s instructors will become ambassadors for the apparel retailer. The terms of the deal, and whether the two companies will share revenue, were not disclosed. Peloton’s stock jumped more than 15% in extended trading on the news. Shares of Lululemon — which has a roughly US$48 billion market cap compared to Peloton’s US$1.7 billion — were flat in after-hours trading. As part of the announcement, Lululemon said it plans to stop selling Mirror, which allows users to stream workout classes, by the end of the year. The company had been exploring a sale of the product after sales had come in below expectations and Lululemon was forced to take a US$443 million impairment charge related to the equipment, the company said earlier this year. Peloton’s content will now be accessible through Mirror, it told CNBC, but the fate of the Mirror device and whether the division will be sold off remains unclear. Meanwhile, sales for Peloton’s connected fitness products have steadily fallen from their pandemic-era highs, so the company has zeroed in on content as its primary value proposition. https://tinyurl.com/2s3k2jet
AMD’s stock pops after Microsoft tech chief touts chipmaker’s AI products.
Shares of AMD rose almost 5% Thursday, a day after Microsoft’s technology chief said the chipmaker is bolstering its position in artificial intelligence, where Nvidia dominates. So far this year, Nvidia shares have almost tripled while AMD is up about 60%. Since the launch in late 2022 of OpenAI’s ChatGPT chatbot, the tech industry has been swarming to new large language models, which require hefty processing power. Nvidia’s graphics processing units are handling so much of those workloads that the company is forecasting 170% year-over-year revenue growth in the current quarter. AMD announced in June that during the third quarter, it would start sampling its MI300X chip with clients. Those GPUs were designed specifically for AI models. https://tinyurl.com/yc3y3kx3
Apple held talks with Microsoft about acquiring Bing in 2020.
As the Department of Justice’s antitrust case against Google presses on, we continue to learn more about Apple’s search agreement with the company and its talks with other companies. Now, Bloomberg reports, citing “people with knowledge of the matter,” that Microsoft held talks with Apple in 2020 about selling Bing, which would’ve then replaced Google as the default search engine on Apple platforms. Apple and Microsoft had a deal in place from 2013 through 2017, which saw Apple use Microsoft’s Bing search engine to power Siri and Spotlight search results. Towards the end of this agreement in 2016, Microsoft put a plan in motion to expand upon its deal with Apple to make Bing the default search engine in Safari on iPhone, iPad, and Mac. But come 2020, a new round of talks opened between Apple and Microsoft. Bloomberg reports that Microsoft executives met with Apple’s Services VP Eddy Cue to “discuss the possibility of acquiring Bing.” These talks were reportedly “exploratory” and “never reached an advanced stage,” Bloomberg says. The revenue generated from its deal with Google was a “key reason” Apple’s talks to acquire Bing never advanced beyond that stage. “The company also had concerns about Bing’s ability to compete with Google in quality and capabilities,” today’s report explains. https://tinyurl.com/zwft48jp
Costco teams up with Google-backed health startup to offer US$29 virtual doctor’s visits to members.
The perks of club Costco go beyond the walls of a warehouse, and soon, members will have access to one more: bargain prices on medical care. Through a new partnership with Sesame, a healthcare marketplace startup backed by Google, Costco members can receive virtual doctor’s visits for US$29, plus discounts on other telehealth and in-person services, Sesame said Monday. The move into primary care follows similar investments by retailers Walmart and Amazon, as well as from pharmacies CVS and Walgreens. Although Costco currently offers pharmacy and other health-related services that help attract customers to its warehouses, Goldhill told Bloomberg neither company currently has plans to open primary care clinics in-store. Bloomberg also reported the companies declined to reveal financial terms but said the agreement is expected to benefit both. Costco has nearly 125 million membership cardholders. Sesame was founded in 2018 and now connects patients with thousands of outpatient healthcare providers in all 50 states. The company aims to primarily serve uninsured people as well as those with high-deductible insurance and health savings account plans. In addition to US$29 virtual visits, Costco members will be able to receive virtual mental health sessions for US$79, health checkups for US$72, and a 10% discount on other services. Sesame says their offering allows patients to develop long-term relationships with a provider, including in-person visits where available. https://tinyurl.com/4c2rwu3s
ChatGPT can now ‘speak,’ listen and process images, OpenAI says.
OpenAI’s ChatGPT can now “see, hear and speak,” or, at least, understand spoken words, respond with a synthetic voice and process images, the company announced Monday. The update to the chatbot — OpenAI’s biggest since the introduction of GPT-4 — allows users to opt into voice conversations on ChatGPT’s mobile app and choose from five different synthetic voices for the bot to respond with. Users will also be able to share images with ChatGPT and highlight areas of focus or analysis (think: “What kinds of clouds are these?”). The changes will be rolling out to paying users in the next two weeks, OpenAI said. While voice functionality will be limited to the iOS and Android apps, the image processing capabilities will be available on all platforms. https://tinyurl.com/3apxr9zw
CIA builds its own artificial intelligence tool in rivalry with China.
US intelligence agencies are getting their own ChatGPT-style tool to sift through an avalanche of public information for clues. The Central Intelligence Agency is preparing to roll out a feature akin to OpenAI Inc.’s now-famous program that will use artificial intelligence to give analysts better access to open-source intelligence, according to agency officials. The CIA’s Open-Source Enterprise division plans to provide intelligence agencies with its AI tool soon. “We’ve gone from newspapers and radio, to newspapers and television, to newspapers and cable television, to basic internet, to big data, and it just keeps going,” Randy Nixon, director of the division, said in an interview. “We have to find the needles in the needle field.” The CIA’s AI tool will allow users to see the original source of the information that they’re viewing, Nixon said. He said that a chat feature is a logical part of getting intelligence distributed quicker. “Then you can take it to the next level and start chatting and asking questions of the machines to give you answers, also sourced,” said Nixon, whose division oversees intelligence drawn from publicly and commercially available sources. “Our collection can just continue to grow and grow with no limitations other than how much things cost.” The CIA didn’t say what model it will use to underpin its new tool or how it will protect information from seeping onto the open Internet, something large enterprises are still grappling to ensure by establishing guardrails. The agency has emphasized its expanding partnerships with the tech sector in recent years. The AI tool will be available across the 18-agency US intelligence community, which includes the CIA, National Security Agency, the Federal Bureau of Investigation and agencies run by branches of the military. It won’t be available to policy makers or the public. Nixon said the agency closely follows US privacy laws. https://archive.ph/Oivh3
Media, Streaming, Gaming & Sports Betting
Epic Games sheds 830 employees, sells music and ad-tech businesses.
Epic Games, the company behind hit video game Fortnite, said it will eliminate 830 jobs, affecting roughly 16% of its employees. The company said 250 of the departures stemmed from two divestitures: It is selling most of its ownership in ad-tech company SuperAwesome to that business’s management team, and it is selling music platform Bandcamp to music-licensing business Songtradr. Epic said the layoffs and divestitures were part of broader cost-cutting. “While Fortnite is starting to grow again, the growth is driven primarily by creator content with significant revenue sharing, and this is a lower margin business,” CEO Tim Sweeney said in a message to employees, posted on the company’s website. Separately, both Epic and Apple asked the U.S. Supreme Court to review earlier rulings in their antitrust dispute. Epic asked the court to review the legal standards an appeals court used in upholding a 2021 decision by a federal judge that largely favored Apple, according to The Verge. Apple appealed a part of the decision that favored Epic and would require Apple to allow developers to tell users about other payment options, The Verge said. https://tinyurl.com/3km956pd
Adtech, Privacy & Regulatory
FTC sues Amazon in landmark Antitrust case over marketplace.
In a complaint filed in federal court in Seattle Tuesday, the FTC and 17 states accused Amazon of engaging in a course of conduct to exclude rivals in online marketplace services and stifle competition. The company is also accused of illegally forcing sellers on its platform to use its logistics and delivery services in exchange for prominent placement and of punishing merchants who offer lower prices on competing sites. “Amazon is a monopolist and it is exploiting its monopolies in ways that leave shoppers and sellers paying more for worse service,” FTC Chair Lina Khan said in a briefing with reporters. “The stakes here are high. There is immediate harm that is ongoing. Sellers are paying US$1 of every US$2 to Amazon.” The suit is the fourth the agency has filed this year targeting Amazon, underscoring the determination of the Biden administration to put the growing concentration of corporate power, especially among Big Tech companies, at the heart of economic policy. In a statement, Amazon said it will challenge the FTC’s lawsuit in court, adding that it “radically” departs from the agency’s mission of protecting consumers and is “wrong on the facts and the law.” Amazon has pushed the FTC to recuse Khan from its case, citing her academic work and prior statements about the company. It has also accused the agency of harassing founder Jeff Bezos and the company’s Chief Executive Officer Andy Jassy with document and interview requests. https://archive.ph/aOeCZ
Nvidia offices raided by French competition authority.
Nvidia’s France offices were raided by the country’s competition authority this week, according to a report from The Wall Street Journal. While the French agency doesn’t mention Nvidia by name, it confirms it carried out a raid over concerns about anti-competitive practices in the graphics cards industry. Sources tell the WSJ that French authorities specifically targeted Nvidia, which has seen demand for its chips skyrocket in recent months. Several companies, including Microsoft and OpenAI, have purchased thousands of the company’s high-end AI chips to power large language models. That massive demand resulted in a lot more money for Nvidia. According to the WSJ, these types of raids occur early in the morning and have authorities “search a company’s premises, seize physical and digital materials and interview employees who arrive for work.” The French authority says it conducted the raid as part of its increased scrutiny on cloud technology, a topic the agency published a market study on in June. https://tinyurl.com/rxv9skjw
Fintech, Blockchain & Cryptocurrency
MicroStrategy purchased another US$150 million in bitcoin since August as prices tumbled.
Software firm MicroStrategy spent US$147.3 million on bitcoin purchases over the past two months, using stock sales to help finance the investment, an SEC filing shows. The acquisitions added 5,455 bitcoins between August 1 and September 24, expanding the firm’s stockpile to 158,245 tokens. Aside from fees and expenses, these were bought at an average price of US$27,053. To finance the US$150 million bitcoin acquisition, 403,362 company shares were sold. On Tuesday, bitcoin dipped 0.5% to US$26,169. Based on current market prices, MicroStrategy’s total bitcoin holdings are equal to over $4.1 billion. In early August, MicroStrategy co-founder Michael Saylor touted the possibility of cashing in shares to accumulate more tokens. A long-time bull on bitcoin, he predicted in June that the coin’s dominance would double under the SEC’s crackdown on other sectors of the crypto market. A previous filing from that month indicated that MicroStrategy could sell up to US$750 million in stock to fund its bitcoin expansion. Stock sales were also used in July, when the firm added over 12,000 bitcoins. But since its July peak, the token’s price has plummeted around 13%, dropping from over US$31,000. In the same timeframe, Microstrategy stock has fallen 20%. Earlier in the year, a 72% rally in bitcoin helped MicroStrategy achieve its first profitable quarter in over two years. The company began building its bitcoin trove in 2020, and had to take a large writedown after the token plunged in 2022. https://tinyurl.com/2nea6s4b
Ford halts work on US$3.5 billion EV battery factory with China’s CATL.
Ford confirmed Monday it has immediately stopped work at a US$3.5 billion factory in Michigan that was supposed to make cheaper lithium iron phosphate batteries using tech from China’s CATL. “We’re pausing work and limiting spending on construction on the Marshall project until we’re confident about our ability to competitively operate the plant,” Ford spokesperson TR Reid said in an email to TechCrunch. Under the arrangement that was announced in February 2023, Ford’s wholly owned subsidiary would manufacture the battery cells using LFP battery cell knowledge and services provided by CATL. It’s unclear if this is a temporary pause or if the project will be shelved altogether. The stoppage comes more than a week after United Autoworkers launched a limited strike affecting Ford, GM and Stellantis. It also follows an announcement in July 2023 that two congressional committees had launched investigations into the automaker’s licensing deal with CATL. The US$3.5 billion Ford had initially committed to investing in the factory was supposed to be part of the automaker’s plan to pour more than US$50 billion into electric vehicles globally through 2026. Ford said it planned to deliver an annual run rate of 600,000 electric vehicles globally by the end of this year and 2 million globally by the end of 2026. The factory — dubbed BlueOval Battery Park Michigan by Ford and the Marshall Megasite by local residents who opposed the project — garnered US$1.7 billion in state incentives to locate in Marshall, Michigan. Ford said at the time the factory would employ 2,500 workers and production was expected to begin in 2026. https://tinyurl.com/bddx9vjn
The information and recommendations made available through our emails, newsletters, website and press releases (collectively referred to as the “Material”) by Sophic Capital Inc. (“Sophic” or “Company”) is for informational purposes only and shall not be used or construed as an offer to sell or be used as a solicitation of an offer to buy any services or securities. In accessing or consuming the Materials, you hereby acknowledge that any reliance upon any Materials shall be at your sole risk. In particular, none of the information provided in our monthly newsletter and emails or any other Material should be viewed as an invite, and/or induce or encourage any person to make any kind of investment decision. The recommendations and information provided in our Material are not tailored to the needs of particular persons and may not be appropriate for you depending on your financial position or investment goals or needs. You should apply your own judgment in making any use of the information provided in the Company’s Material, especially as the basis for any investment decisions. Securities or other investments referred to in the Materials may not be suitable for you and you should not make any kind of investment decision in relation to them without first obtaining independent investment advice from a qualified and registered investment advisor. You further agree that neither Sophic, its, directors, officers, shareholders, employees, affiliates consultants, and/or clients will be liable for any losses or liabilities that may be occasioned as a result of the information provided in any of the Material. By accessing Sophic’s website and signing up to receive the Company’s monthly newsletter or any other Material, you accept and agree to be bound by and comply with the terms and conditions set out herein. If you do not accept and agree to the terms, you should not use the Company’s website or accept the terms and conditions associated to the newsletter signup. Sophic is not registered as an adviser or dealer under the securities legislation of any jurisdiction of Canada or elsewhere and provides Material on behalf of its clients pursuant to an exemption from the registration requirements that is available in respect of generic advice. In no event will Sophic be responsible or liable to you or any other party for any damages of any kind arising out of or relating to the use of, misuse of and/or inability to use the Company’s website or Material. The information is directed only at persons resident in Canada. The Company’s Material or the information provided in the Material shall not in any form constitute as an offer or solicitation to anyone in the United States of America or any jurisdiction where such offer or solicitation is not authorized or to any person to whom it is unlawful to make such a solicitation. If you choose to access Sophic’s website and/or have signed up to receive the Company’s monthly newsletter or any other Material, you acknowledge that the information in the Material is intended for use by persons resident in Canada only. Sophic is not an investment advisor nor does it maintain any registrations as such, and Material provided by Sophic shall not be used to make investment decisions. Information provided in the Company’s Material is often opinionated and should be considered for information purposes only. No stock exchange or securities regulatory authority anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. Sophic and/or its principals and employees may have positions in the stocks mentioned in the Company’s Material and may trade in the stocks mentioned in the Material. Do not consider buying or selling any stock without conducting your own due diligence and/or without obtaining independent investment advice from a qualified and registered investment advisor. The Company has not independently verified any of the data from third party sources referred to in the Material, including information provided by Sophic clients that are the subject of the report, or ascertained the underlying assumptions relied upon by such sources. The Company does not assume any responsibility for the accuracy or completeness of this information or for any failure by any such other persons to disclose events which may have occurred or may affect the significance or accuracy of any such information. The Material may contain forward looking information. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible,” “projects,” “plans,” and similar expressions, or statements that events, conditions or results “will,” “may,” “could,” or “should” occur or be achieved or their negatives or other comparable words and include, without limitation, statements regarding, projected revenue, income or earnings or other results of operations, strategy, plans, objectives, goals and targets, plans to increase market share or with respect to anticipated performance compared to competitors, product development and adoption by potential customers. These statements relate to future events and future performance. Forward-looking statements are based on opinions and assumptions as of the date made, and are subject to a variety of risks and other factors that could cause actual events/results to differ materially from these forward looking statements. There can be no assurance that such expectations will prove to be correct; these statements are no guarantee of future performance and involve known and unknown risks, uncertainties and other factors. Sophic provides no assurance as to future results, performance, or achievements and no representations are made that actual results achieved will be as indicated in the forward looking information. Nothing herein can be assumed or predicted, and you are strongly encouraged to learn more and seek independent advice before relying on any information presented.