US Business Leaders Welcome Xi Jinping 👋 Google Leaks Search Revenue 🫢 Sam Altman Fired From OpenAI 🤖 Newsletter #32
Discover more from FinTech Fusion 💸
US Business Leaders Welcome Xi Jinping 👋 Google Leaks Search Revenue 🫢 Sam Altman Fired From OpenAI 🤖 Newsletter #32
Business leaders ranging from Elon Musk to Tim Cook of Apple welcomed Chinese president, Xi Jinping, to the US last week.
US Business Leaders Welcome Xi Jinping
Alibaba Earnings and a Change of Plans
Carmakers Try to Stem EV Demand Slowdown
Google Expert Accidently Leaks Apple Search Revenue
Sam Altman Fired From OpenAI
US Business Leaders Welcome Xi Jinping
Business leaders ranging from Elon Musk to Tim Cook of Apple welcomed Chinese president, Xi Jinping, to the US last week.
Xi, speaking at a San Francisco hotel, told the audience of business leaders that “China is both a super-large economy and a super-large market , modernization for 1.4bn Chinese is a huge opportunity that China provides to the world.”
The warm tone marks a stark contrast to recent events that have led to a souring of US-China relations over the last 5 years.
Businesses have become more reluctant to invest in China and have been moving supply chains out of the country thanks to the thawing relationship between the two superpowers.
Soon after the event, the US and China agreed to resume military communications and work together to address the growing risks of AI.
Xi concluded his speech by saying “The number one question for us is, are we adversaries or partners?”
If the US and China continue trading blows he warned, “it will only lead to misinformed policymaking, misguided actions and unwanted results. The world needs China and the US to work together for a better future, China is ready to be a partner and friend of the US.”
Whether this will lead to an improvement in US-China relations is unclear but it’s certainly a step in the right direction. The world will be a much safer place if the two countries can start cooperating more.
Alibaba Earnings and a Change of Plans
Shares of Alibaba fell 10% after the company said US export controls could make things difficult for its cloud business.
The decision by the US in October to limit chip exports to China has created major uncertainties for China’s big tech companies, none less so than Alibaba.
The Chinese tech giant no longer plans to spin off its cloud business and has paused the listing of its supermarket business, Freshhippo, so it can evaluate market conditions.
The news came after the company reported earnings that failed to match analyst expectations.
Although revenue for the company as a whole was up 9% to $30.8 billion, this was way below expectations of $37.5 billion, and its cloud unit revenue grew just 2% to $3.81 billion.
Jack Ma, Alibaba’s founder, also disclosed that he would sell about $840 million of Alibaba shares next week.
Joe Tsai, the chairman of Alibaba, said the operating environment in China should be more stable next quarter and Eddie Yongming Wu, the Chief Executive, said the company is conducting a review of its corporate governance structure to “reawaken its entrepreneurial mindset.”
Carmakers Try to Stimulate Electric Vehicle (EV) Demand ⚡
Leading carmakers around the world are increasing their discounts in a bid to stimulate demand which has been much weaker than expected.
In the UK, the average discount in October was 11% below the recommended retail price, whilst in the US it was 10%, 3 times higher than at this point a year ago.
12 months ago discounts in Germany were hardly being offered whereas now many sellers are cutting prices by 7% to attract buyers.
Tesla has famously been cutting prices this year, in an effort to both stimulate demand and create a price war against rival EV sellers.
For years carmakers have seen EVs as a huge market thanks to tightening emissions rules and the promise of nearly limitless consumer demand. Supply rather than demand, has historically been the limiting factor in the growth of the EV market.
Car prices have risen across the board, but the price of EVs increased faster, with leasing costs increasing more for battery-run cars because of a steeper fall in resale values.
It’s unlikely that demand will fall a lot further given the fact that many governments around the world are outlawing the purchase of internal combustion engine vehicles by the mid 2030s.
It might take a few more years for consumers to feel comfortable switching to EVs and the demand issue is likely just a blip on a much longer journey.
Google Expert Accidently Leaks Apple Search Revenue 🔍
During the Justice Department’s monopoly trial against Google it was revealed, accidentally, that Google pays Apple 36% of its search advertising revenue generated through Safari
The primary focus of the Justice Department's investigation into Google's operations has been its financial arrangements with Apple.
Testimony earlier in the proceedings disclosed that in 2021, Google spent an extraordinary sum of $26.3 billion to secure its status as the default search engine on Apple devices.
Data which, now that it’s been revealed, Google believes could “unreasonably undermine [it’s] competitive standing in relation to both competitors and other counterparties.”
The case, aimed at reigning in big tech and brought by the Justice Department against Google, has now been wrapped up, although Judge Amit Mehta admits “I have no idea what I’m going to do” regarding the ruling.
Sam Altman Fired From OpenAI 🤖
In shocking news on Friday OpenAI announced that CEO and cofounder, Sam Altman, had been fired from the company.
The statement said “Mr. Altman’s departure follows a deliberative review process by the board, which concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities. The board no longer has confidence in his ability to continue leading OpenAI.”
The statement from OpenAI also said Greg Brockman would be stepping down as chairman of the board but remain at the company, unfortunately for them, it seems he has different ideas, as you can see below.
How this will impact OpenAI and its partnership with Microsoft remains to be seen but the sudden firing came as a shock to almost everyone in Silicon Valley.
Altman has been the face of OpenAI and the wider boom in the AI industry since the launch of ChatGPT this time last year. Just last week, he led the keynote at the company’s first-ever DevDay conference, where it announced a suite of major new updates to ChatGPT.
Chief Technology Officer, Mira Murati, has been appointed interim CEO whilst the company tries to find a more permanent successor.