Tech and Market Movements: AI, Unionization, and Big Deals

SK Hynix's AI Surge, Musk's Investment Poll, Union Wins at Microsoft, and More

SK Hynix Tumbles by Most in 20 Months After AI Selloff - Bloomberg

• SK Hynix’s Q2 revenue more than doubled, indicating a global boom in AI hardware spending in 2024.

• The company reported sales of 16.4 trillion won ($11.9 billion) compared to the projected 16.1 trillion won, and operating profit of 5.47 trillion won compared to expectations for 5.24 trillion won.

• Samsung Electronics Co. and Micron Technology Inc. are among the main beneficiaries of the race to supply components essential to creating ChatGPT-like generative AI services, including high-bandwidth memory that powers Nvidia’s AI accelerators. The company has a widening lead over Samsung in the memory market and plans to spend $15 billion in South Korea to meet surging demand for high-end chips. The stock has risen by 47% since the start of the year, but some analysts warn that the market may be cyclical.

Musk’s Poll Shows Most Want Tesla to Invest $5 Billion in xAI - Bloomberg

• Elon Musk is asking his X followers whether Tesla should invest $5 billion into his AI startup.

• Musk was supportive of the idea of Tesla investing in xAI if there was shareholder approval.

Microsoft’s ‘World of Warcraft’ Gaming Staff Votes to Unionize - Bloomberg

• Warcraft workers at Microsoft have voted to unionize, bringing the number of unionized US gaming employees to 1,750.

• A majority of Warcraft team employees supported the Communications Workers of America (CWA).

• Microsoft has remained neutral and agreed to voluntarily recognize and negotiate with the CWA if it secured majority support.

• The new bargaining unit could help spur more organizing at the company and potentially raise the standards of the industry as a whole. ּ The Warcraft workers hope to secure a say on issues like pay, remote work, and workplace diversity and equity.

NBA Picks Amazon for Long-Term TV Deal - Bloomberg

• NBA announces new long-term TV contract with Amazon

• NBA plans to generate $76 billion in fees for the league over their 11-year life

ServiceNow Reports Strong Sales on Expanded Product Line - Bloomberg

• ServiceNow Inc. reported better-than-expected sales and bookings, indicating customer enthusiasm for its expanding suite of tools. Second-quarter subscription sales increased 23% to $2.54 billion and remaining performance obligation increased 22% in the period ending June 30, both exceeding analysts’ estimates. The company’s adoption of generative AI-oriented products is helping boost earnings, according to CEO Bill McDermott. The shares increased about 5% in extended trading after closing at $730.87 in New York.

Beefed-Up Olympics Security Thins Out Tourists, Squeezing Merchants - New York Times

• Metal fences and police checkpoints have turned some areas of Paris into dead zones for the Summer Olympics.

• Businesses have seen a 50% drop in tourism and more for shopkeepers nearby due to tough new security measures and an unexpected drop in foot traffic.

• The Olympics were supposed to bring an economic boom, but small businesses stuck in zones with the strictest security have seen sales slump up to 70% in the past week. 10. People wanting to dine near the Eiffel Tower or get access to the Notre Dame plaza need a special QR code this week involving a background check. 11. Big sponsors like the French luxury goods conglomerate LVMH, Adidas and Coca-Cola stand to profit handsomely. 12. The opening ceremony of the 2024 Paris Olympics is set to take place on Friday, with more than 300,000 spectators lining the route.

Why Paper Checks Refuse to Die - New York Times

• Target stopped accepting personal checks as a form of payment this month

• Check fraud has more than doubled in recent years, and it costs at least a dollar for businesses to process each check they receive

• Many industries, including contractors, charitable and religious organizations, landlords, government taxing authorities, and professional-service firms, receive double-digit percentages of their payments by check

• Checks are a fundamental cultural signifier of relationship-based commerce and are almost like a handshake

• Sending money on a digital payment platform like Venmo feels like the opposite of an embrace, even if it includes emojis

• The fear of adding an errant zero or missing a payment because of a misplaced click might outweigh the hassle and fraud risk associated with checks

• Simplicity is where homeowners’ association dues come in.

A Kamala Harris Presidency Could Mean More of the Same on A.I. Regulation - New York Times

• Vice President Kamala Harris has taken a leading role in the White House on artificial intelligence policy

• She has won concessions from Big Tech leaders on A.I. but hasn’t successfully pushed Congress to regulate it

• Harris has previously taken tougher stances on Big Tech and pushed for laws against cyberbullying and privacy for children online

• A win for Harris could mean little U.S. regulation and the chance to shape White House and Congressional views on the technology

• Ms. Harris has connections to tech companies from her time in California and her brother-in-law is the top lawyer at Uber

• The tech industry is central to making sure that the government communicates well and has up-to-date systems

• Regulators have sued Google, Meta, Amazon, and Apple, accusing them of monopolistic behavior.

From Online Drug Lord to Crypto Entrepreneur, Blake Benthall Is Back in Business - New York Times

• Blake Benthall was arrested for running Silk Road 2.0, an illegal drug bazaar that generated $8 million a month in illicit drug sales

• He spent nearly 10 years helping the government crack down on crypto abuses to pay for his crimes

• Now, he runs a start-up called Fathom, which aims to provide businesses and government agencies with software to track digital currency transactions and ensure legal compliance

• His criminal experience can help unmask fraud before it leads to another scam like FTX, the now-defunct cryptocurrency exchange whose founder is in prison

• Consensus, a crypto convention, has grown to an exposition of dozens of digital currencies and start-ups attended by more than 15,000 people

• Some of the skeptical government investigators who worked on the Silk Road cases have become fervent crypto evangelists

• Fathom has attracted investors, including a former F.B.I. agent named Vincent D’Agostino who invested in his business on the spot.

Small Banks Say Their Commercial Real Estate Loans Are Fine - New York Times

• Community banks are big commercial real-estate lenders, but their loans are to sturdy local businesses, not those facing vacant office space.

• Small community banks are being misunderstood and seen as a potential crisis waiting to happen due to falling property values in the real estate market

• Majority of commercial building loans by small banks are for smaller buildings that tend to be fully leased

• Missing payments on missed payments on those types of mortgages have not risen substantially, indicating a lack of financial pressure on apartment building landlords

• Most community banks don’t have the type of exposure to the owners of half-empty towers in Manhattan, San Francisco, and Chicago

• Regulators are watching small lenders closely after the unexpected failure of three larger regional banks last year

• Flushing Financial, with $9 billion in assets, is among the banks that have exceeded the threshold for a bank to cover its financial obligations during a crisis

• Investors are concerned about the surge in loan defaults and a shoot-first mentality.

Boeing plea deal lays out its failure to meet earlier agreement - Financial Times

• US President Joe Biden will frame his decision to drop out of the 2024 presidential race as a defence of democracy in his national address later.

• Biden will focus on defending personal freedoms and civil rights for the remainder of his term

• UK state-owned energy company to focus on offshore wind development to leverage up to £60bn of private investment

• Chipotle reports strong demand in Q2 but warns of margin pressure due to higher costs for dairy, avocados, and protein

• White House says Biden will not resign as president and wants to finish the job he started

• Vietnam begins two days of national mourning for Communist party leader Nguyen Phu Trong

• China’s Fujian province will be without passenger trains due to Typhoon Gaemi sweeps the country’s south-east

• Some Republicans have called on Biden to step aside as the civilian administration, but he has not pledged to fight the Israeli-Palestinian conflict

• Israeli Prime Minister Benjamin Netanyahu wants to retain control of the Strip of Steel for the sake of Israeli-occupied territory.

US markets suffer worst day since 2022 as Tesla and AI stocks fall - Financial Times

• US stock indices experienced their worst day in over 18 months due to tech sector sell-off

• S&P 500 fell 2.3% and Nasdaq Composite fell 3.6%, driven by big tech stocks such as Nvidia, Microsoft, Apple, and Tesla

• Tesla’s profits fell short of expectations, while Google parent Alphabet narrowly beat analysts’ revenue forecasts

• Investors have backed away from stocks boosted by AI in favour of unloved corners of the market such as smaller companies

• Russell 2000 index of smaller companies fell only 2.1% despite recent rally on hopes of interest cuts

• US Treasuries rallied as investors sought safe assets and ramped up bets on Federal Reserve interest rate cuts

US warns tech start-ups on security threats from foreign investors - Financial Times

• The US National Counterintelligence and Security Center has warned technology start-ups that foreign adversaries, including China, are using investments to acquire sensitive data and threaten national security.

• Silicon Valley companies have stepped up screening of staff and potential recruits due to the threat of Chinese espionage, and some investors have been ordered to turn away capital linked to China.

• The NCSC warned that foreign threat actors might use private investment such as venture capital and private equity to exploit tech start-up in ways that could threaten economic and national security

• Chinese venture capital investment has focused on US emerging tech sectors such as AI, a Chinese government priority

• Foreign actors could use strategies to shield their ownership and intent, such as channelling investments via intermediaries in the US or abroad and designing investments to avoid scrutiny from the Committee on Foreign Investment in the United States

• Start-ups should take steps to shield themselves from potentially nefarious actors, including guarding critical assets and limiting data shared with investors
  -Foreign actors could also target US government contractors, threatening national security

The problem of ‘model collapse’: how a lack of human data limits AI progress - Financial Times

• The use of computer-generated data to train AI models can lead to rapid degradation and nonsensical results

• AI companies are testing the use of synthetic data for training large language models

• Research suggests that the accumulation and amplification of mistakes from successive generations of training can cause AI models to collapse over time

• The speed of deterioration is related to the severity of shortcomings in model design, learning process, and data quality

• Synthetic data trained on information produced by previous generations can exacerbate problems and overwhelm models with errors and misconceptions

• One technique to mitigate the problem is to embed a “watermark” that flags AI-generated content for exclusion from training data sets

• Building generative AI models from pre-AI internet data can provide a first-mover advantage in building AI models.

Hizbollah drone footage highlights Israeli security vulnerabilities - Financial Times

• Hizbollah released footage of a crucial Israeli military base filmed by one of its drones, highlighting the ease with which Iran-backed militias can penetrate Israel’s air defences.

• The video showed high-quality images of the Ramat David air base, including an Iron Dome launcher and close-ups of helicopters and fighter jets, and claimed to identify the office and name of base commanders.

• Israel has traditionally focused on stopping rockets and missiles fired by its regional foes, but cheaper drones provided by Iran appear to be struggling against its advanced technology. The accuracy of such drones seems unaffected by Israel’s jamming of the commercial GPS signal, which covers most of the country’s north and much of southern Lebanon. (

• At least three Israeli soldiers have been killed and dozens injured in drone attacks in recent months, including a large attack on a small military base in Beit Hillel in northern Israel.

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.

A Case for Backing Up Your Precious Photos and Files at Home - Wall Street Journal

• Back up your precious photos and files through the cloud to safeguard against loss

• Some cloud services have unexpectedly shut down or scaled back the space they give users

• Storage analysts recommend three moves: backing up files in the cloud, on solid-state drives, and keeping another copy in a remote location

• HDDs store files on discs that spin, while SSDs don’t have moving parts and are more fragile

• SSD prices have fallen 90% over the past decade and are cheaper long-term than cloud storage

• Don’t trust important files to companies you’ve never heard of, such as Samsung or SanDisk

• Transfer your files to an SSD to make the backup process completely pain-free

The Tesla of Stoves Comes With a Battery to Power Your Whole House - Wall Street Journal

• Battery-powered cooktops may replace gas-powered ranges in the future

• Electricity is the best way to power everything from cooking to driving

• America’s infrastructure is inadequate to distribute electricity

• Copper and Impulse are startups using batteries to upgrade appliances and make the power grid more robust

• Impulse plans to integrate its system directly into a home’s wiring to push electricity back into the grid

• The stored power could potentially be worth hundreds of dollars a year to a homeowner

• In the future, Impulse may sell an array of battery-powered appliances, including hot-water heaters.