Legal Wins, Market Shifts, and Global Security Updates

Amazon's Court Victory, AI Market Trends, Paris Olympics Cybersecurity, and More

Amazon Says Washington State Injury Case Has Been Dismissed - Bloomberg

• Amazon has been dismissed a case alleging it exposed warehouse workers to injuries due to lack of evidence.

• The Washington state Department of Labor and Industries cited Amazon for setting rapid productivity targets that risked hurting employees working at multiple facilities

• Amazon appealed the citations and the matter went before the state Bureau of Industrial Insurance Appeals

• A judge ruled that the state lacked sufficient evidence to support its allegations that the pace of work in Amazon warehouses is hazardous

• Investigations in 2021 found hazards in nearly every Amazon warehouse, with workers experiencing pain and taking medication to ease symptoms

• This is a major victory for Amazon, which has been defending the safety of its warehouses against growing government scrutiny.

Great Rotation Trade Sees Investors Dump AI Giants for Less Obvious Stocks - Bloomberg

• Equity investors are looking for ways to take advantage of the benefits of AI technology beyond just chips and software. Concerns over sustainability, geopolitical tensions, and shifts in global monetary policy are driving a broadening of the market amid a hunt for new drivers. Investors are selling AI giants and buying smaller stocks and defensives that had lagged behind. The AI theme is expanding to areas beyond tech and communications, including the vast amounts of power and land the technology requires. Utilities saw a bump in optimism in the second quarter related to the idea that AI would command more investment and result in stronger growth. The two biggest gainers since the end of June have been real estate and utilities. The surge in the tech industry’s electricity demand is outstripping the available supply in many parts of the world, putting focus on utilities around the world. The demand for data centers, AI and cryptocurrency may double to more than 1,000 terawatt-hours in 2026. The shortage of equipment transformers has boosted shares of top transformer makers. Companies involved in solar, hydro, wind, and nuclear power are also potential beneficiaries. The specter of increased power usage raises attention to renewable energy shares.

Paris Olympics’ Cyber Team Braces for Onslaught From Hackers - Bloomberg

• A group of hacktivists affiliated with Russian intelligence is suspected of carrying out large-scale attacks during the Summer Olympics in Paris.

• The French government has identified 500 companies, organizations, and facilities critical to the functioning of the Summer Games and is working with them to audit their systems for potential cybersecurity flaws

• Non-traditional targets, such as non-traditional companies or organizations with less-scrutinized protections than more obvious marks, may also be in hackers’ sights

• Cybercriminals have previously targeted the Olympics and affiliated organizations such as anti-doping agencies

• Russia has been banned from the Games due to breaching the Olympic charter by including sports organizations inside Ukraine as its own

• Geopolitical tensions in the Middle East and South China Sea are running high, and cybercriminals continue to bombard corporate computer networks with hacking attempts

• Some recent attacks on the Games have already occurred, and the situation is more volatile than in previous circumstances.

Vice President Kamala Harris Joins TikTok Following Meme Surge - Bloomberg

• US Vice President Kamala Harris has joined TikTok with her first personal account.

• Harris already had a TikTok account run by her campaign.

FTC’s Khan Backs Open AI Models in Bid to Avoid Monopolies - Bloomberg

• Open-weight AI models can promote competition and make them more accessible to smaller companies and researchers.

• Critics have warned that open models carry an increased risk of abuse and could potentially allow companies from geopolitical rivals like China to piggyback off the technology.

• The FTC is conducting an antitrust investigation into Microsoft Corp. over its relationship with OpenAI and its hiring of staff from Inflection AI.

2025 Could Be a Great Time to Be President, Economically Speaking - New York Times

• The US economy is expected to have a solid outlook in the next few years, with inflation returning to normal and the Federal Reserve preparing to cut interest rates.

• Infrastructure spending under the Biden administration is likely to break ground in earnest in 2025 and 2026, with a burst in green-energy, manufacturing, and infrastructure investment expected to continue over the next several years.

• The president who shepherded some of the policies that are laying the positive groundwork for the positive economic outlook won’t get to take credit for it. The Republican platform pledged to lower interest rates and prioritize infrastructure and manufacturing on the campaign trail, which could be well within reach if economists’ projections come true. The Federal Reserve’s preferred inflation measure peaked at more than 7% in 2021 and 2022, but has since cooled to 2.6%.

• With inflation fading, policymakers predict that interest rates could be cut to 4.1-3% by the end of next year and 3.1% by 2026 to bring inflation back under control. It would still be higher than the rock-bottom rates that prevailed in the 2010s but considerably less costly to borrow money.

China Is Closing the A.I. Gap With the United States - New York Times

• Chinese tech companies have unveiled A.I. technologies that rival American systems

• These technologies are already in the hands of consumers and software developers

• Chinese companies are more willing to release their technologies to consumers or share the underlying software code

• Open source has been a cornerstone of the development of computer software, the internet, and now, artificial intelligence

• China’s efforts could have enormous implications for future innovations and military technologies

• Kuaishou released its video generator, Kling, in China more than a month ago and to users worldwide on Wednesday.

China Rules Solar Energy, but Its Industry at Home Is in Trouble - New York Times

• China dominates the global market for solar energy, with nearly every solar panel on the planet made by Chinese companies.

• However, China’s solar panel domestic industry is in upheaval, with wholesale prices plummeting by almost 50% and stock prices of its biggest makers of panels and equipment halving in 12 months

• Chinese manufacturers are cutting prices far below their costs to compete for customers and still building factories

• The solar sector highlights China’s industrial policy of choosing industries to dominate, flooding them with loans and letting companies fight it out

• China’s approach can lead to big financial losses for local governments, state investment funds, and state-supported banks

• Automakers in China are following the solar industry’s lead in cutting prices sharply and ramping up exports to compensate for a slowing domestic economy

• Beijing’s spare-no-expense policies are drawing criticism from the United States, the European Union, and other trading partners

• Former President Donald Trump has called for an end to the Biden administration’s renewable energy programs.

How US Chips Continue to End Up in Russian Missiles - New York Times

• Russia has obtained nearly $4 billion in restricted chips since the war began in Ukraine

• Many of the chips are shipped through shell companies in Hong Kong

• Shell companies at 135 Bonham Strand are a crucial link in a chain connecting US research labs to Russian arms makers and battlefields

• Russia imported almost the same number of critical chips in the last three months of 2023 as in the same period in 2021

• The reliance on China for many of these chips has deepened, with transactions increasingly executed in Renminbi

• U.S. chipmakers sell their products to international distributors, and the chip companies are not legally required to track where their goods go from there

• Russian companies use millions of dollars worth of American chips to power missiles and other technology.

The Murdoch Family Is Battling Over the Future of the Fox Empire - New York Times

• Rupert Murdoch is in a legal battle with three of his children over the future of his media empire

• He wants to preserve it as a conservative political force after his death

• The family designed the irrevocable trust nearly 25 years ago, but their political views have diverged since then

• James, Elisabeth, and Prudence Murdoch are fighting back against their father’s efforts to amend the trust

• They argue that only by empowering Lachlan Murdoch to run the company without interference can he preserve its conservative editorial bent and protect its commercial value

• A trial to determine if Mr. Murdoch is acting in good faith is expected to start in September

• Representatives for the two sides have hired high-powered litigators, and the battle has all the makings of a final fight for control of the empire.

News updates from July 25: US economy grows 2.8% in second quarter; Ackman slashes IPO fundraising target - Financial Times

• Apollo has struck a deal to buy UK parcel delivery company Evri for £2.7bn from Advent International.

• US economy grew at a 2.8% annualised rate in the second quarter, showing continued resilience

• Strong economic data paused a sell-off in tech stocks that had resulted in the worst trading day for Nasdaq Composite and S&P 500 since 2022

• New US jobless claims fell more than expected in the week ending July 20, indicating a resilient labour market

• Treasury yields rose and stock futures pared losses following the release of strong second-quarter GDP figures

• NHS issues alert as blood stocks fall below critically low levels, highlighting the need for urgent blood supplies

• Blood and platelet transplants are urgently needed across hospitals in England and Wales.

Wall Street extends tech rout for third day - Financial Times

• Wall Street suffered a third day of declines despite better than expected US growth figures

• Nasdaq Composite swung between early losses and subsequent gains before closing down 0.9%

• US chipmakers Nvidia, AMD, and Alphabet fell after disappointing earnings reports

• European and Asian tech stocks also tumbled, with concerns over rising AI-related capex spending outweighing solid second-quarter earnings

• Thin summer liquidity may be exacerbating market moves

• Expectations that the Federal Reserve will soon lower borrowing costs have triggered a shift away from high-flying big tech companies

• The US two-year yield reached its lowest level since early February, driven by interest rate cut hopes and a clamour for safe assets

Sinaloa drug cartel leaders including son of ‘El Chapo’ arrested in US - Financial Times

• Kamala Harris condemns “hate-fuelled” protests against Israeli Prime Minister Benjamin Netanyahu in Washington

• US economy grew at a 2.8% annualised rate in the second quarter

• California Supreme Court upholds landmark ruling allowing gig economy companies to treat workers as independent contractors

• Ford shares post worst day since 2008 following earnings miss

• Elon Musk seeks board approval to invest $5bn in his AI start-up xAI

• Tech stocks have taken a hit this week after some weak earnings damped sentiment about the sector

Musk to seek Tesla board approval for $5bn injection into xAI start-up - Financial Times

• Tesla CEO Elon Musk plans to invest $5bn in his AI start-up xAI, seeking board approval and shareholder vote.

• Musk is seeking to recast Tesla as a robotics and AI company, with a focus on building autonomous robotaxis and humanoid robots driven by the technology.

• The investment could revive questions about conflicts of interest between Musk’s web of companies, including SpaceX and Neuralink, which develops computer-brain interfaces. The independence of Tesla’s board has also been questioned due to a previous pay package voided by a Delaware court. - xAI is aiming to catch up with rivals in the race to develop intelligence chatbots, with OpenAI and Anthropic leading the way at $18bn and $13bn, respectively.

Uber and Lyft score victory in landmark California gig economy case - Financial Times

• California supreme court upholds Proposition 22, allowing gig economy companies to treat workers as independent contractors

• Proposition 22 exempted companies from complying with a new state law that would have classified workers as employees

• Companies such as Uber and Lyft had campaigned aggressively in support of the proposal ahead of the 2020 vote

• The decision marks the final stage of a years-long challenge in the California courts by individual drivers and the Service Employees International Union

• Drivers in Massachusetts will remain independent contractors with limited healthcare and a minimum earnings guarantee

• A repeal of Prop 22 would have resulted in additional costs for Lyft, DoorDash, and Uber in 2025.

OpenAI Tests SearchGPT, Taking Aim at Google - Wall Street Journal

• OpenAI has partnered with publishers to build a new AI search tool called SearchGPT. The tool will summarize information found on websites and allow users to ask follow-up questions. It is OpenAI’s most direct challenge to Google’s dominance in search since the release of ChatGPT in 2022.- Other AI companies, such as Perplexity, are also entering the search battle. Publishers are concerned that AI-powered search tools from OpenAI or Alphabet’s Google will serve up complete answers based on news content, starving publishers of online traffic and advertising revenue. OpenAI plans to offer a wait list for U.S. users to sign up to try the tool. News publishers and creators will be among the first few testers and creators.

This Summer’s Shopping Trend Is a Minimalist’s Nightmare - Wall Street Journal

• Accessorizing with accessories is becoming more popular than just jewelry or matching outfits with handbags.

• Popular accessories include lip-balm holders for Stanley tumblers, Jibbitz charms for Crocs, PopSockets for Kindles, and Bogg bags for beach and pool-goers.

• Social media platforms like Instagram and TikTok have a significant influence on purchasing and buying new accessories. People tend to go to retailers for items they already know they want, while they go to social media for inspiration and impulse buying.

• 28% of Americans who are interested in accessories want other people to like and notice what they wear, especially if they consider it a way to express their personalities online.

Google Talks to Acquire Cybersecurity Startup Wiz Fall Apart - Wall Street Journal

• Google’s talks with Wiz have fallen apart.

• Wiz is now aiming for an initial public offering.

Alexa Is in Millions of Households—and Amazon Is Losing Billions - Wall Street Journal

• Amazon has lost tens of billions of dollars on its devices business, which includes Echos and other products such as Kindles, Fire TV Sticks and video doorbells.

• The company launched Echo smart home devices with its Alexa voice assistant in 2014, but customers mostly used it mostly for free apps such as setting alarms and checking the weather.

• Amazon is launching a paid tier of Alexa as part of a plan to reverse losses, but even some engineers are worried it won’t work

• CEO Andy Jassy is rethinking the Bezos-era metric inside Amazon called downstream impact, which assigns a financial value to a product or service based on how customers spend within Amazon’s ecosystem after purchase

• Downstream impact has been used across Amazon business lines, from its Prime membership program to its video offerings and music

• Some Amazon devices can count on direct revenue, such as selling users subscriptions attached to the product

• In other cases, the downstream impact idea broke down, according to people familiar with the devices business

• Former CEO Jeff Bezos introduced a Kindle Fire tablet in 2011.

Google Is Keeping Cookies in Chrome After All - Wall Street Journal

• Google is ending its plan to eliminate cookies in its Chrome browser after four years of efforts, delays, and disagreements with the advertising industry.

• Advertisers objected to the plan to replace cookies, saying it would force them to shift spending to Google’s digital-ad products

• Google will present users with a prompt to decide whether to turn cookies on or off instead of eliminating them

• The transition requires significant work by many participants and will have an impact on publishers, advertisers, and everyone involved in online advertising

• U.K. regulators opened an investigation into whether the plan would hurt competition in digital advertising, and Google delayed cookies’ demise beyond the last announced target date of end of this year.