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Google's parent company Alphabet has become the latest high tech company to join the rarified $1 trillion stock market club. Alphabet Thursday joined Apple, Amazon, and Microsoft as the only U.S. companies to ever be awarded such a lofty market valuation by investors. The stock has been on a tear - up nearly 16 percent in just the past three months - outpacing the broader S&P 500 index. Despite constant threats of a regulatory crackdown by Washington and the European Union - some investors just can't get enough of the world's leading online advertising platform. Annual sales are expected to hit nearly $163 billion for fiscal year 2019, according to Refinitiv, a double-digit surge from fiscal year 2018. Enamored by that kind of sales growth - Alphabet is just one of a small group of stocks found in the top holdings of both mutual funds and hedge funds - two types of large investors who hold different investment styles. But others on Wall Street may be itching to hit the sell button. Those shorting the stock, or betting the stock will fall, is near a 52-week high, on that basis, concerns about the stock are more intense than those of peers such as Microsoft and Facebook. Besides a worry that Alphabet and the handful of tech stocks that have driven the market to record highs are too pricey...some Alphabet investors worry the search giant and parent of YouTube will have no choice but to spend more money in order to pre-empt any new regulations from Washington. Higher spending equals less profit down the line. And there's one more concern. Some investors worry that Alphabet may follow Amazon.com, which hit a $1 trillion market cap and then tumbled. Investors will get a financial update from Alphabet when it releases fourth quarter and full year results on February 3.
Amid surging health care costs and acrimonious public debate, a new study found that a public-run system would save money over time.
America used to be the world’s premier technology innovator and China its best duplicator. The administration of US president Donald Trump touted the former as a major concession by China, which has vowed to strengthen its intellectual property protection. In fact, the deal merely repackages changes that China has already made over the past two years, strengthening court jurisdiction over IP cases and making it easier for US companies to collect damages.
Could electric car-maker Tesla throw a lifeline to ASX lithium miners like Pilbara Minerals Ltd (ASX: PLS)?The post Could Tesla throw ASX lithium miners a lifeline? appeared first on Motley Fool Australia.
(Bloomberg) -- Democrats seeking to counter President Donald Trump’s use of “socialism” as a slur can look to a yearlong effort to fight back now underway in Florida.Trump frequently attacks Elizabeth Warren and Bernie Sanders as socialists in the mold of progressives in Congress like Representative Alexandria Ocasio-Cortez, who are pushing the party to adopt far-left policies.This attack has particular resonance among Hispanic voters, particularly those from socialist countries. Democrats were stung by a narrow loss in a gubernatorial race in 2018 that featured similar accusations, and Florida Democrats are looking to blunt those attacks in the crucial 2020 swing state. The party is reaching out to voters whose negative experiences with governments in Nicaragua, Venezuela and Cuba have heightened their concerns about socialism and made them receptive to Trump’s criticisms.Over the past year, the state Democratic Party has hired a Latino outreach director, launched a Spanish-language radio show and trained surrogates to make their case on Univision, Telemundo and local TV and radio. It’s also seeking to register more Latino voters as part of a $2.8 million effort on voter registration.Roughly one in six registered voters in Florida is Hispanic, according to the Pew Research Center. Exit polls showed that Cuban Americans, who make up roughly a third of Florida Hispanics, were about twice as likely to vote for Trump in 2016 as non-Cuban Hispanics.Democrats nationally fear that the attack is effective enough to peel off votes from other Latin American immigrants in 2020.Charges of socialism have “absolutely worked” in the past, said Evelyn Perez-Verdia, a Colombian-American consultant who works in South Florida. “They are playing with the fears of our communities,” she said.Joshua Karp, a former spokesman for Andrew Gillum, a Florida Democratic gubernatorial candidate in 2016, said he’s concerned that the national party is underestimating the potency of that messaging, especially in such a closely fought state.Gillum lost by slightly less than half a percentage point in a race in which both Trump and the Republican candidate, Ron DeSantis, painted him as a “far-left socialist” who “wants to turn Florida into Venezuela,” a label Gillum rejected and fact-checkers rated as false.Still, Karp said the accusation may have been effective in damaging Gillum’s campaign in a state where races are often decided by the thinnest of margins.“In the research I have seen, this word is a gateway to people believing other negative narratives about Democrats,” he said. “By leading with socialism, Republicans can inject other arguments about Democrats that would otherwise be dismissed by a lot of voters.”Trump has signaled that he will intensify those attacks, regardless of the eventual Democratic nominee.One recent series of ads by the Trump campaign on Facebook claimed that “every 2020 Democrat candidate” has embraced “the ideas of radical socialists like Alexandria Ocasio-Cortez and Ilhan Omar to try and appeal to their extreme left-wing base.”“We’ve seen socialism completely FAIL in countries like Venezuela and Greece,” the ad says before asking voters to take an “official socialism approval poll.”Trump is hardly the first Republican to paint an opponent as a socialist. John McCain and Mitt Romney both used the label to describe Barack Obama at times. Among the crowded Democratic field, only Sanders calls himself a “democratic socialist,” while the attacks have helped push Warren and former Vice President Joe Biden to state they are capitalists.At a debate in September, Sanders was pressed by a Univision reporter to explain the difference between his views and those of authoritarian socialists like Venezuelan President Nicolás Maduro. ”Let me be very clear: Anybody who does what Maduro does is a vicious tyrant,” Sanders responded.Trump is already pushing hard on the attack line in online ads that are aimed at building up lists of potential voters and donors.Online AdsA recent online ad segues from a news segment on the Green New Deal proposal endorsed by Sanders and Ocasio-Cortez to images of Joseph Stalin, Fidel Castro and a flag-burning by a fringe U.S. group, the Revolutionary Communist Party, all shown beneath a banner urging viewers to text the campaign.Trump is spending big on online ads already, putting $28 million toward ads on Facebook and $13 million for ads on Google so far, making him one of the biggest advertisers on both platforms.But Florida Democratic Party spokeswoman Luisana Pérez Fernandez said many of the key voters there can be reached better through local radio and TV shows. That led the party to launch “Democracia al Dia,” a half-hour radio show on Saturdays that reaches about 6,000 listeners each week, and why it’s training media surrogates to appear on local news shows.Among the arguments that Democrats are making: criticizing the Trump administration’s handling of Venezuela’s troubled government, deportations of Cuban residents and failure to grant temporary protected status to Venezuelans. They’re also hitting back with an epithet of their own, calling Trump a “caudillo,” a Spanish word for an authoritarian leader.“His systematic attacks against the free press, his intentions to pack the judiciary, his idea of justice -- where the whole Justice Department, the FBI and the intelligence community has to be loyal to him -- this is exactly what we fled in Latin America,” said Leopoldo Martinez, a Democratic National Committee member who fought the regime of Hugo Chávez in Venezuela. “This is not a thing of left or right.”But Republicans argue that Democrats brought the charge of socialism on themselves. Rory Cooper, a Republican political strategist, said that Democratic proposals for Medicare for All, a Green New Deal and free college have reinvigorated the debate over socialism, as has the prominence of Sanders in the primary.“If you look at the platform that the Democrats are struggling with right now, it’s very clear that within their own party there is this generational tension between the Bernie Sanders platform and the Obama-Biden pragmatic platform,” he said. “I think it makes complete sense for Republicans to take advantage of that tension.”(Updates Trump spending on Facebook ads in 19th paragraph. A pervious version of this article corrected name of Florida Democratic Party spokeswoman Luisana Pérez Fernandez in 20th parargraph.)To contact the reporter on this story: Ryan Teague Beckwith in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Wendy Benjaminson at email@example.com, Steve GeimannFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- This New Year’s Day, 55,000 people signed up to lose weight with the smartphone app Noom. You’ve probably seen the ads -- it claims to have helped more than 350,000 get slimmer.Dieting, not to mention keeping weight off, is an iffy proposition, but Americans spend billions each year trying.Noom, which combines human coaches and AI, has attracted $114 million from A-list investors such as Sequoia Capital, Groupe Arnault-backed Aglaé Ventures, WhatsApp co-founder Jan Koum, Serena Williams, and other prominent names that see promise in its approach and growth.The company’s founders say they’re in constant conversation with their investors who are watching the market to assess a possible IPO as soon as this year.Crowded MarketIndeed, in a competitive market, Noom has racked up impressive growth, driven in part by aggressive advertising: Noom closed 2019 with $237 million in revenue, up from $61 million and $12 million in the two previous years, respectively.“For a certain demographic, Weight Watchers is more comfortable and familiar,” said David Katz, founding director of Yale University’s Prevention Research Center. “For a younger, more digitally savvy audience, Noom is a different way to get a grip.”Shares in WW International Inc., the diet company formerly known as Weight Watchers, have more than doubled from last year’s low in June. In September, WW announced the Oprah’s 2020 Vision: Your Life In Focus Tour with shareholder Oprah Winfrey. Investors will have to wait for WW’s fourth-quarter results in late February for a sense about early-year sign ups.Industry analysts note the cyclical nature of the dieting industry and that Noom’s robust start this year does not necessarily herald lasting success.“You’ve got a lot of program starts after the holidays, and that’s the nature of the business,” said Steven Halper, a senior health-care IT and managed care analyst at Cantor Fitzgerald.Pounds Off, Pounds On“You get in shape, you lose your weight, everyone wants to look good at the beach in the summer time, and lo and behold the weight comes back on,” Halper said. He covers Tivity Health Inc., which acquired WW rival Nutrisystem in March.Noom was founded over a decade ago by Artem Petakov, a former Google engineer, and Saeju Jeong, lover of heavy metal, who strayed from his family lineage of 29 medical doctors to be an entrepreneur.“Noom’s story didn’t initially work,” said Amy Sun, a partner at Sequoia Capital. Sequoia invested for the first time in the $58 million Series E round that Noom announced in May 2019.“They tried a whole bunch of different angles, including doing pure AI where it’s completely automated, and they tried 100% human coaches, and it wasn’t until they married the two that the company started to grow,” said Sun.The company now employs 1,600 remote, full-time coaches in 36 states.Not Peloton“The product they have today is not what they started with,” said Miyuki Matsumoto, head of U.S. investments at Groupe Arnault’s tech venture-capital arm Aglaé Ventures. The firm invested the second most after Sequoia in the most recent funding round.“We weren’t thinking we were going to get our money back in two years or less, even though that’s a possibility,” Matsumoto said.Sun notes that Sequoia is looking to capitalize on the trend of digital companies focused on helping people manage their health. Other investors saw that trend in Peloton Interactive Inc., which priced at $29 a share in its September IPO, but traded as low at $21 a share a month later.“Peloton is quite different because so much of their revenue is hardware,” Sun said. “It’s hardware plus subscription, versus Noom is all digital.”To contact the reporter on this story: Hailey Waller in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: James Ludden at email@example.com, Ian FisherFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- When Russian President Vladimir Putin announced a radical overhaul of Russia’s governance system this week, he also ended the Medvedev era. Dmitry Medvedev was, at least formally, Putin’s closest sidekick, the politician with whom the strongman was most willing to share formal power. Whether or not it’s time for Medvedev’s political obit, his stint near the top of Russia’s so-called power vertical will serve as an example of how the Putin system’s inertia can suffocate the best modernizing intentions.Medvedev abruptly resigned as prime minister on Wednesday, without giving advance notice to members of his government, who also had to tender their resignations. “We as the government must give our country’s president the opportunity to make all the necessary decisions,” Medvedev said, though it wasn’t clear how his continued occupancy of the top cabinet post could get in the way of Putin’s reform. Putin expressed rather tepid gratitude for the prime minister’s service. “Not everything has worked out, but then things never work out completely,” he said. Putin has always avoided firing close, trusted associates, but as prime minister since 2012, Medvedev presided over Russia’s longest run of declining real incomes during Putin’s 20-year rule. The government’s $400 billion “national projects” spending plan, designed to rectify things, hasn’t gotten off to a great start. The new job Putin has offered Medvedev didn’t even exist before — deputy chairman of the Security Council, an advisory body that includes Russia's mighty security chiefs. It’s formally headed by Putin but run by its secretary, former secret police chief Nikolai Patrushev. The council has been described, including by Kremlin propaganda outlets, as the closest Russia has to the Soviet Union's ruling Politburo. So the newly created post, with Putin as the direct supervisor, can be enormously influential — but perhaps not when filled by Medvedev, who has never really commanded the respect of the security bosses in the way Putin does, with his KGB record and training.Medvedev’s move means he isn’t likely to be Putin’s successor as president when the latter's term ends in 2024. Nor will he return to the prime ministerial post, now handed to a supremely skillful technocrat, former tax chief Mikhail Mishustin. His career has been launched on a downward trajectory — something he probably expected. For years, he has appeared bored and morose at official functions, time and again photographed with his eyes closed and seemingly asleep. Opposition politician and anti-corruption activist Alexey Navalny posted one such photo taken as Putin delivered his Wednesday address, tweeting, “Only one thing in Russia is really stable and unshakable — Dmitry Medvedev, asleep during the president’s state of the nation speech.”During a recent award ceremony, Medvedev’s New Year’s greetings included this quotation from Anton Chekhov: “The newer the year, the closer you are to death, the wider your bald spot, the twistier your wrinkles, the older your wife, the more kids you have and the less money.” Some of the incredulous listeners couldn't help but recall Medvedev's most famous quote, his answer to a woman in Russian-annexed Crimea in 2016 who complained that her pension was too low: “There's just no money now. When we find the money, we'll raise pensions. You hang on in there, stay cheerful and healthy.”Medvedev may have been fatigued and depressed lately as his government failed to deliver on Putin's promises of a tangible improvement in living standards, but money isn't something he's lacked himself. During this snowless winter, the vast land plot around his residence in Central Russia is covered with artificial snow. Medvedev has never given a substantive answer to a long video produced by Navalny's team and watched more than 33 million times on YouTube, in which he was accused of accumulating vast wealth while working for the government.Medvedev's approval rating never recovered from that video's release, languishing below 40% in recent months, while Putin's remains close to 70%. Government spending cuts that began in 2015 and lasted through 2018 didn't help, and the government’s decision in June 2018 to raise the retirement age — made by Putin, but often ascribed to Medvedev because of his perceived insensitivity — dealt his popularity an especially crippling blow.The visibly bored, defeated Medvedev at the end of his prime ministership was a far cry from the hopeful, cheerful modernizer who started a four-year presidency in 2008 and charmed U.S. President Barack Obama and his aides into trying a reset of U.S.-Russia relations. Though many Putin opponents — myself included — never believed Medvedev could pursue an independent policy, so-called system liberals, believers in changing the system from within, vested serious hopes in the younger, more polished leader. They believed he could shake off Putin's conservative influence if he ran for a second term in 2012, and that Russia would then gradually become freer both economically and politically.Medvedev tried some promising things. He set up a large innovation center at Skolkovo near Moscow, trying to lure investors and entrepreneurs into a Russian version of Silicon Valley. He started reforms in the self-serving, thoroughly rotten law-enforcement agencies, and he modernized Russia's obsolete armed forces, starting an ambitious reorganization and rearmament. He removed some of the most entrenched, hidebound regional leaders, breaking up the corrupt monopolies that had sprung up around them.But the system liberals’ hopes were probably dashed in March 2011, when Medvedev ordered the Russian representative in the United Nations Security Council to abstain on a resolution authorizing the U.S. and its allies to use force against the regime of Muammar Qaddafi in Libya. Putin publicly criticized his protege for not ordering a "no" vote, likening the Western intervention in Libya to a “medieval crusade." In his book, “From Cold War to Hot Peace," Michael McFaul, former U.S. ambassador to Russia and a believer in Medvedev's liberal intentions, wrote that “U.S. military intervention in Libya, which helped topple Qaddafi, also inadvertently might have helped remove Medvedev from power in Russia."In September 2011, Putin and Medvedev announced they intended to switch jobs the following year, a development that bitterly disappointed the system liberals. Protests against a rigged parliamentary election, which broke out less than three months later, only served to convince Putin that the West was trying to undermine him and empower Medvedev instead. But, perhaps out of a sense of loyalty toward his temporary successor who hadn't tried to cling to power, Putin made no attempt to replace Medvedev as prime minister.The latter never really raised his head again. He avoided making major decisions or advocating big reforms; the cabinet ministers learned they needed Putin's approval for anything remotely controversial. In a way, that helped Russia build a protective economic wall after Putin annexed Crimea and, simultaneously, the oil price crashed in 2014. Amid Western sanctions and a tightening hold of Putin's cronies and enforcers on the economy, Russia's generally competent economic managers could only cut spending to insulate the budget from external shocks — and accumulate international reserves every time the price of oil edged up. Medvedev's tenure ended with these reserves at $554 billion, near the 2008 historic high of $569 billion.Putin's patience was sorely tested. Busy with geopolitical chess and with finding ways to retain power after 2024, he clearly wanted his hands free from domestic economic management. He wanted to set goals and let someone else get to them. Time after time, he told Medvedev that he wanted "results.” They failed to materialize.Meanwhile, Medvedev's work as the formal leader of the Kremlin's loyalist party, United Russia, also proved insufficient. The party's support melted away, and its legislative majorities and governorships have had to be obtained with increasing rigging efforts and administrative pressure. In December, only 29% of Russians were willing to cast a vote for United Russia in a national election, a threat to its parliamentary majority even in an unfair system. Putin needs a stronger party behind him post-2024, and an effort to build one on the basis of his broad support network, the United People's Front — or to reform United Russia — is to be expected.Putin’s legendary personal loyalty stretched far enough not to send Medvedev, who is only 54, into retirement. But then, it was Putin himself who backpedaled in 2011 instead of letting Medvedev pursue his cautiously reformist course. It was Putin who created a system that paralyzed any kind of economic liberalization and who launched Russia on military adventures that limited its ability to develop trade. Putin, who gave Medvedev the exhilarating hope of building a more modern Russia, then quickly took it away, leaving his former successor with little except the luxurious lifestyle enjoyed by the Russian elite.It was Putin's country to give and to take back.To contact the author of this story: Leonid Bershidsky at firstname.lastname@example.orgTo contact the editor responsible for this story: Tobin Harshaw at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Sonos Inc. Chief Executive Officer Patrick Spence accused Alphabet Inc.’s Google and Amazon.com Inc. of using their market power to thwart competition a week after filing a lawsuit against the world’s largest search engine.“Today’s dominant companies have so much power across such a broad array of markets and continue to leverage that power to expand into new markets that we need to rethink existing laws and policies,” said Spence Friday at a congressional antitrust hearing in Boulder, Colorado, led by Representative David Cicilline, the Rhode Island Democrat who is investigating competition in the technology sector.Sonos, a 1,500-person company, sued Google Jan. 7 for allegedly infringing five patents covering multi-room audio technology. Spence said Google’s dominance enabled it to violate the speaker company’s intellectual property. He said that Google tries to prevent customers from using its voice assistants alongside another company’s on Sonos speakers. While Amazon doesn’t go that far, he said, it has used its power to “to subsidize the conquest” of the booming smart-speaker market, particularly by under-pricing its offerings.Sonos has worked with the committee since before it decided to file the lawsuit, according to a person familiar with the discussions. It has also responded to questions that the committee sent to customers of the large technology platforms.Google has disputed Sonos’ claims and said it will defend itself. The search giant, which faces antitrust probes by 48 state attorneys general as well as the U.S. Justice Department, says it faces robust competition. Cicilline is using the hearing to air grievances by smaller companies, following a series of Washington meetings that focused on the tech giants.“It is apparent that the dominant platforms are increasingly using their gatekeeper power in abusive and coercive ways,” Cicilline said in his opening statement.The panel also heard from David Barnett, the founder of Boulder-based PopSockets, which makes phone holders and stands. He alleged that Amazon frequently engaged in “bullying,” including deliberately selling counterfeits, threatening to go to unauthorized resellers and dropping prices without consulting. “We have $10 million less to innovate this year” because of PopSockets’s decision to end its relationship with Amazon even though it’s more difficult to sell elsewhere, Barnett said.“It seems like Amazon is so dominant that there is no alternative,” said Representative Ken Buck, a Colorado Republican on the committee.Amazon said in a statement that PopSockets is a “valued retail vendor” and added: “We’ve continued to work with PopSockets to address our shared concerns about counterfeit, and continue to have a relationship with PopSockets through Merch by Amazon, which enables other sellers to create customized PopSockets for sale.”The company said it refuses to work with some resellers to ensure low prices, and rejects the notion that it’s dominant, saying it represents just 4% of U.S. retail.The panel also heard from Kirsten Daru, general counsel of Tile Inc., which makes devices that pair with phones to help people locate lost items such as keys or purses.Apple Inc. is reportedly preparing to unveil a competing service, and Daru’s 100-employee company alleges the phone maker has started putting up roadblocks to Tile’s business, such as burying permissions that allow the phone and Tile devices to communicate and prompting users to disable permissions that have been set.“You’re playing up against a team that owns the field, the ball and can change the rules at any given time,” Daru said in an interview before the hearing, adding that a majority of the company’s customers are on Apple’s operating system.Apple said that its treatment of permissions, which focused on location, were designed to protect user privacy and that it’s working with developers whose customers may want particular apps to be able to track them at all times.Daru said Apple also removed Tile devices from its retail stores, and that it bid on search terms related to the would-be rival to drive up the cost of advertising 50% each week during the fall.Cicilline has said his goal is to develop a final report with recommendations for Congress this year. He told reporters on Tuesday that he wants to wrap up his probe by the end of March and said he’s hopeful the tech giants will cooperate with requests for chief executives to give information without subpoenas, preferably in public hearings.“It’s hard to imagine that we’d conclude the investigation without hearing from some of the large technology CEOs, particularly in companies whether there’s such really centralized decision making,” he said.(Updates with comments from PopSockets CEO from eighth paragraph)\--With assistance from Mark Gurman, Rebecca Kern and David McLaughlin.To contact the reporter on this story: Ben Brody in Washington, D.C. at firstname.lastname@example.orgTo contact the editors responsible for this story: Sara Forden at email@example.com, Paula DwyerFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Shares of Google parent Alphabet Inc. (GOOGL) have jumped 9% in 2020 to help it ascend into the $1 trillion market cap club. Is it time to buy?
(Bloomberg) -- European Union privacy watchdogs are gearing up to police digital assistants after revelations that Amazon.com Inc. workers listened in on people’s conversations with their Alexa digital assistants.Bloomberg first reported in April that Amazon had a team of thousands of workers around the world listening to Alexa audio requests with the goal of improving the software.Similar issues have been raised over Google and Apple Inc.’s digital assistants, triggering privacy fears across the world, as intimate conversations in some users’ homes were laid bare to technicians fine-tuning the technology.EU regulators are now working on a common approach on how to police the technology, said Tine Larsen, head of the data protection authority in Luxembourg, where the U.S. retail giant has its European base and employs a staff of more than 2,000.“Because it’s a question of principle, the members of the EDPB should work out a common position in line with the consistency mechanism to apply data protection rules in a harmonized way for this type of treatment,” she said, referring to a panel of regulators from across the 28-nation EU.The revelations of the snooping into people’s homes came after regulators across Europe were handed beefed-up powers with its General Data Protection Regulation in May 2018, including the right to levy fines of as much as 4% of a company’s global annual sales for the most serious violations. But the move toward common guidelines for digital assistants means companies should avoid fines -- for now.Larsen’s comments echo those of Helen Dixon, head of the Irish watchdog, responsible for overseeing the likes of Apple and Google.She told Bloomberg in November that the regulator first has to “bottom out fully on whether it’s true” when companies say they need to do transcripts of people’s interactions with the assistants. That’s why a focus will be first on coming up with guidelines, instead of investigations or inquiries, she said.Amazon said in a statement that “to help improve Alexa, we manually review and annotate a small fraction of 1% of Alexa requests” and that “access to data annotation tools is only granted to a limited number of employees who require them to improve the service.”EU regulators are working on a common position on the privacy issues surrounding voice assistant systems, said Johannes Caspar, head of the watchdog in Hamburg, Germany. “We urgently need common and reliable industry standards on this to better regulate” privacy protections, he said in an email.Caspar’s office initiated a number of probes into the issue, including one into Facebook over audio transcriptions from its Messenger users, he said. The questions his office has asked of Facebook have been discussed within the EDPB, the EU body of national regulators. The plan is to use the results to have a more coordinated approach by all European regulators affected by the issue, he said.Europe Mulls New Tougher Rules for Artificial IntelligenceThe U.K., which is set to leave the EU at the end of the month, will soon publish the results of a consultation into security features for smart speakers and other connected devices, with proposals for mandatory industry requirements that could lead to potential new regulation, U.K. Digital Secretary Nicky Morgan told Bloomberg Wednesday.Siri ChangesApple, whose Siri virtual assistant is embedded in its operating phone and desktop computer operating systems, pointed to an August blog post about the issue.“We know that customers have been concerned by recent reports of people listening to audio Siri recordings as part of our Siri quality evaluation process — which we call grading,” it said. “We heard their concerns, immediately suspended human grading of Siri requests and began a thorough review of our practices and policies. We’ve decided to make some changes to Siri as a result.”Google, which offers similar technology, referred to its September announcement that it would add new security protections to the way its workers listen to audio snippets, meant to help improve the product’s quality.In a blog post in September, Google said it would tell users that their audio may be listened to if they opt in to a feature that also improves audio quality. “We believe in putting you in control of your data, and we always work to keep it safe. We’re committed to being transparent about how our settings work so you can decide what works best for you,” the company said.While Amazon is escaping penalties over Alexa, Luxembourg, which is the company’s main privacy watchdog in Europe, is probing the company for other potential breaches.This follows complaints from activists that the online retailer is illegally tracking and profiling internet users without their permission, as well as not providing full access to users’ data.Amazon ‘Cooperating’The company says it’s “cooperating” with the authority, “which is at an advanced stage of its fact finding,” according to an emailed statement. The data commission declined to comment on any probes, citing local rules.French privacy activists La Quadrature du Net, filed one of the complaints on behalf of more than 10,000 customers. They urge regulators to crack down on “behavioral analysis and targeted advertising” by Amazon and levy a fine that is “as high as possible” due to the “massive, lasting and manifestly deliberate nature” of the alleged violations without the consent of its users.None of Your Business (Noyb), a group created by Austrian activist Max Schrems, followed up with a separate complaint last January over data access concerns, accusing Amazon of violating EU law by not handing over all personal data requested by a user of its Amazon Prime service.Arthur Messaud, a lawyer with La Quadrature du Net, and Schrems said they’d had no updates from the Luxembourg regulator, which is bound by strict secrecy provisions under national law, meaning it can’t reveal details until after any fines have been levies and all avenues of appeal have been exhausted.(Updates with Google response from 15th paragraph)\--With assistance from Natalia Drozdiak.To contact the reporter on this story: Stephanie Bodoni in Luxembourg at firstname.lastname@example.orgTo contact the editors responsible for this story: Anthony Aarons at email@example.com, Peter Chapman, Giles TurnerFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- German rangers stand guard to shoo away visitors from a nondescript stretch of forest near Berlin, where a sign nearby warns of “Lebensgefahr” (mortal danger).The precautions are part of the frantic activity underway to set up Tesla Inc.’s latest assembly plant, Elon Musk’s most daring attack on the German auto establishment. Workers wielding metal detectors have started combing through an area covering some 200 football fields to search for errant ammunition lurking beneath the sandy surface of tiny Gruenheide.It’s the first stage to prepare a site that could churn out as many as 500,000 cars a year, employ 12,000 people and pose a serious challenge to Volkswagen AG, Daimler AG and BMW AG. Once deemed free of World War II explosives, harvesters and trucks will roll in to clear thousands of trees in the first stage of development. The work needs to be done by the end of February to meet Tesla’s aggressive timetable. The project represents a second chance for the quiet town, nestled between two lakes on the edge of a nature reserve southeast of Berlin.Gruenheide lost out on a similar factory two decades ago, when BMW opted for Leipzig. That missed opportunity helped town officials to move quickly when Tesla expressed interest in building its first European factory in Germany, with a plot set aside for industrial use and offering easy access to the Autobahn and rail lines.Read More: Elon Musk’s German Factory Started With Love Letter From Berlin“The investment is a unique opportunity,” Mayor Arne Christiani said in his office, where a map of the Tesla project hangs on the wall. “It gives young people with a good education or a university degree the possibility to stay in our region—an option that didn’t exist in past years.”If it clears Germany’s red tape, the plant will make batteries, powertrains and vehicles, including the Model Y crossover, the Model 3 sedan and any future cars, according to company filings. The factory hall will include a pressing plant, paint shop and seat manufacturing in a building that will be 744 meters (2,440 feet) long—nearly triple the length of the Titanic. There’s space for four such facilities.Musk is taking his fight for the future of transport into the heartland of the combustion engine, where the established players long laughed off Tesla as an upstart on feeble financial footing that couldn’t compete with their rich engineering heritage. He casually dropped the news at an awards ceremony in Berlin in November, leaving the top brass of Germany’s car industry shell-shocked.“Elon Musk is going where his strongest competitors are, right into the heart of the global auto industry,” said Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler. “No other foreign carmaker has done that in decades given Germany’s high wages, powerful unions and high taxes.”Building a factory in Europe’s largest car market is a major test of Musk’s global ambitions. Demand in the region is flat, and buyers are more loyal to local brands. Meanwhile, labor costs in Germany’s auto sector are 50% higher than in the U.S. and five times what they are in Poland, just an hour’s drive away from Gruenheide.Gruenheide TimelineEnd February: Finish tree logging before migrant birds nest March 5: Deadline for comments from nearby residents March 18: Public meeting to discuss the project Mid-2020: Construction expected to begin July 2021: Targeted start of productionOn the positive side, electric cars require less labor to build, and Germany has a deep reserve of auto experts. The location also offers the soft-power advantage of proximity to the country’s leaders.Under pressure for being slow to pick up on the electric-car shift, Chancellor Angela Merkel’s government extended a welcoming hand to Musk. Economy Minister Peter Altmaier offered to try to ease regulatory hurdles that may snag construction. “There’s a lot at stake” in Tesla’s plan, he said soon after the project was announced.Musk’s incursion comes at a strategically opportune time. Riding a wave of optimism after successfully starting deliveries of its China-built Model 3 sedans a year after breaking ground on a factory there, Tesla’s stock has doubled in the past three months.Meanwhile, German peers are struggling with the costly shift away from combustion engines. Volkswagen and Mercedes-Benz parent Daimler announced thousands of job cuts last year, when German car production fell to its lowest level in almost a quarter of a century. For Gruenheide, the planned investment has suddenly transformed the town of 8,700 people into a sought-after location. Local officials receive development proposals on a daily basis: anything from 22-story apartment towers to U.S.-style shopping malls, said Christiani, who hopes the plant will help unlock financing for public transport, schools and medical facilities.In the town hall, five thick binders are available for locals to peruse the project’s details, including 463 trucks expected to roll into the plant each day, a rail spur for train deliveries and an on-site fire brigade.Tesla still has to jump through a number of hoops. Residents have the chance to raise objections, and some have bemoaned that they’ve seen little from the company since its blockbuster announcement. Meanwhile, the local water utility warned it won’t be able to supply the site in time and raised concerns over its location in a zone meant to help protect drinking water supplies.And then the company has to carry out initiatives to protect wildlife—including scaring off any wolves in the area, relocating hibernating bats and removing lizards and snakes until construction is finished. The U.S. carmaker also has to replace felled trees.The mayor expects these hurdles to be cleared so that the first made-in-Gruenheide Teslas can roll out in July 2021.“The forest is classified as a harvest-ready, inferior pine forest,” Christiani said. “It was never supposed to be a rain forest.”—With assistance from Hayley Warren (Adds criticism from water utility in 17th paragraph.)To contact the author of this story: Stefan Nicola in Berlin at firstname.lastname@example.orgTo contact the editor responsible for this story: Chris Reiter at email@example.com, Craig TrudellChad ThomasFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The European Union is considering new legally binding requirements for developers of artificial intelligence in an effort to ensure modern technology is developed and used in an ethical way.The EU’s executive arm is set to propose the new rules apply to “high-risk sectors,” such as healthcare and transport, and suggest the bloc updates safety and liability laws, according to a draft of a so-called “white paper” on artificial intelligence obtained by Bloomberg. The European Commission is due to unveil the paper in mid-February and the final version is likely to change.The paper is part of the EU’s broader effort to catch up to the U.S. and China on advancements in AI, but in a way that promotes European values such as user privacy. While some critics have long argued that stringent data protection laws like the EU’s could hinder innovation around AI, EU officials say harmonizing rules across the region will boost development.European Commission President Ursula von der Leyen has pledged her team would present a new legislative approach on artificial intelligence within the first 100 days of her mandate, which started Dec. 1, handing the task to the EU’s digital chief, Margrethe Vestager, to coordinate.A spokesman for the Brussels-based Commission declined to comment on leaks but added: “To maximize the benefits and address the challenges of Artificial Intelligence, Europe has to act as one and will define its own way, a human way. Trust and security of EU citizens will therefore be at the center of the EU’s strategy.”Facial RecognitionThe EU is also considering new obligations for public authorities around the deployment of facial recognition technology and more detailed rules on the use of such systems in public spaces. However, the provision on facial recognition isn’t among the three policy options officials recommend that the commission pursue.The provision suggests prohibiting use of facial recognition by public and private actors in public spaces for several years to allow time to assess the risks of such technology.“Such a ban would be a far-reaching measure that might hamper the development and uptake of this technology,” the commission says in the document, adding that it’s therefore preferable to focus on implementing relevant provisions in the EU’s existing data protection laws.As part of the recommended policy measures, the EU also wants to urge its member states to appoint authorities to monitor the enforcement of any future rules governing the use of AI, according to the document.In the draft, the EU defines high-risk applications as “applications of artificial intelligence which can produce legal effects for the individual or the legal entity or pose risk of injury, death or significant material damage for the individual or the legal entity.”Artificial intelligence is already subject to a variety of European regulations, including rules on fundamental rights around privacy, non-discrimination, as well as product safety and liability laws, but the rules may not fully cover all specific risks posed by new technologies, the Commission says in the document. For instance, product safety laws currently wouldn’t apply to services based on AI.Key RequirementsThe EU’s AI strategy will build on previous work coordinated by the commission, including reports published in the last year by a committee of academics, experts and executives. EU rules often reverberate across the globe, as companies don’t want to build software or hardware which would be banned from the bloc’s vast developed market.One of the reports outlined a set of seven key requirements that AI systems should implement in order to be deemed trustworthy, including incorporating human oversight, respect for privacy, traceability and avoiding unfair bias in decisions taken by the systems.The other report outlined policy and investment recommendations for the EU and its member states. The experts said unnecessarily prescriptive regulation should be avoided but that governments should restrict the development of automated lethal weapons and consider new rules around unjustified tracking through facial recognition or other biometric technologies.Alphabet Inc.’s Chief Executive Officer Sundar Pichai will also make a rare public appearance in Brussels next week to give a speech at a think-tank about the development of responsible AI ahead of the EU’s February announcement.(Adds more details in paragraph six, eight)To contact the reporter on this story: Natalia Drozdiak in Brussels at firstname.lastname@example.orgTo contact the editors responsible for this story: Giles Turner at email@example.com, Nikos ChrysolorasFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Five years ago, in a routine display of trash talking, Tesla Inc.’s Elon Musk made a now infamous quip about how hard it is to manufacture automobiles.“Cars are very complex compared to phones or smartwatches,’’ he told German newspaper Handelsblatt. “You can’t just go to a supplier like Foxconn and say: Build me a car.”He may be proven wrong. Foxconn Technology Group, through its Hon Hai Precision Industry Co. unit, will establish a joint venture with Fiat Chrysler Automobiles NV, the Taiwanese company said in an exchange filing Thursday. While not yet signed, they expect their 50-50 enterprise will “develop and manufacture electric vehicles and engage in IOV (internet of vehicles) business,” referencing a growing ecosystem of connected cars that share location, weather, traffic and vehicle information.Hon Hai would be responsible for design, components and supply chain management, Chairman Young Liu told Debby Wu of Bloomberg News. Foxconn might not actually do final assembly, he said.If you’ve ever visited Foxconn’s global headquarters on the outskirts of Taipei, you’d know that the prospect of the company designing cars is disconcerting. It truly is one of the ugliest office buildings in the world. So let’s hope Fiat Chrysler takes the driver’s seat on that.However, components, supply chain management, and manufacturing are right up Foxconn’s alley. The company makes most of Apple Inc.’s iPhones and iPads, as well as a lot of the electronics that go into cars, including Teslas.Tesla’s then-head of vehicle engineering, Doug Field, whose resume includes Apple and Ford Motor Co., in February 2018 subtly dissed the Foxconn-Apple relationship. “The model at Foxconn was very different” from Tesla, because the Taiwanese company uses manual labor to achieve economies of scale quickly. The iPad is a product “whose simplicity is orders of magnitude below ours.” Field returned to Apple later that year.Let’s agree, cars are indeed more complicated than tablets or smartphones. But I’ll say that there’s no way Elon Musk could churn out half a million handsets per day, consistently, with quality and on time.By contrast, Foxconn, because of the reasons Field outlined, could be well placed to leverage its 40 years of experience in manufacturing, scale and manual processes to get Fiat Chrysler to mass production of electric vehicles quicker than almost anyone in the world. After all, Foxconn’s giant workforce and scale mean it’s the only company that can churn out 5 million iPhones a week at launch every year for the past decade.With scale comes not just cost advantages but supply-chain leverage, an important element when you’re hunting down parts that may be in short stock. Batteries, for example, have been a bottleneck for Tesla deliveries in the past. But when your client list includes Apple, Dell Inc., HP Inc. and a dozen other companies that need batteries by the container, suppliers are likely to put you higher on the priority list. Given that they’re the largest cost of an electric vehicle, solving both the supply problem and then using scale to force costs down could give Foxconn and Fiat Chrysler an edge.Having electric vehicles more readily available and delivered on time might even take the gloss off the cult of Tesla, which is driven in part by the difficulty of getting your hands on one. Yet Fiat Chrysler needs to ensure that Foxconn doesn’t mess it up. It’s known to be domineering in partnerships, with an obsession toward efficiency and cutting costs, rather than value-added branding. Its venture with HMD Global Oyj to revive the Nokia name looked promising until Foxconn executives started pulling rank, overruling those who truly knew how to design and market phones. Many of the talented members of the consortium left and the brand is unlikely to see the revival that many had expected.Sure, Fiat Chrysler is taking a risk by betting on Foxconn. But the U.S.-Italian car company doesn’t have much to lose, and knows that it has little time to waste. Chief Executive Officer Mike Manley is hoping to merge with France’s PSA Group, and told investors in October that electrification could happen on a grand scale after that.It’s also likely to join a self-driving car venture being set up by BMW AG and Daimler AG, Bloomberg reported this month. Such plans necessitate the kind of electric vehicle technologies it doesn’t currently have. Foxconn doesn’t, either, but between them there’s every chance the two companies can develop or acquire what’s needed.If Foxconn really wants to make it in electric vehicles, it will need to learn from Fiat Chrysler the importance of good design, marketing savvy, and brand mystique. In other words, a little bit of Elon Musk.Just not too much.To contact the author of this story: Tim Culpan at firstname.lastname@example.orgTo contact the editor responsible for this story: Patrick McDowell at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
If Tesla has finally put worries about operational chaos and financial instability behind it, how high might its share price fly? The sharp rally has left most Wall Street analysts struggling to justify their much lower share price forecasts — while giving the Tesla bulls new confidence to predict that the stock will move even higher. In the middle of 2018, Pierre Ferragu, an analyst at New Street Research, came up with the Street’s most ambitious forecast at $530 a share.
The drinks are still flowing at Le Bernardin and The Grill in Manhattan, but the bankers spending lavishly there may soon notice that their wallets are not being refilled as rapidly as their glasses. Bonus pools are expected to be lower at some of Wall Street’s top banks after merger and acquisition advisory fees dropped $558m last year, several top dealmakers tell DD.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. The European Union’s trade chief said the race is on to avert an escalation in transatlantic commercial tensions as a result of U.S. objections to a French digital-services tax.European Trade Commissioner Phil Hogan said coming days could determine whether the EU succeeds in helping broker an international agreement on the taxation of digital businesses through the Organization for Economic Cooperation and Development.“Next week is a very important week to try and see, could we come to a positive outcome on this,” Hogan said in a Bloomberg Television interview on Thursday in Washington. “I’m not going to prejudge the outcome.”President Donald Trump is threatening to hit $2.4 billion of French goods with tariffs in retaliation for the digital-services tax in France. The U.S. alleged on Dec. 2 -- the day after Hogan became EU trade chief -- that France’s levy discriminates against American technology companies such as Google, Apple Inc. and Amazon.com Inc.If realized, this would mark the first time the Trump administration had deployed against Europe a policy tool -- Section 301 of a 1974 American law -- reserved so far for the trade war with China. The prospect has alarmed the EU, which is already scrambling to expand its policy arsenal in response to a separate U.S. threat to the rules-based international system.Hogan signaled that talks on the matter between French Finance Minister Bruno Le Maire and U.S. Treasury Secretary Steven Mnuchin are key.Le Maire and Mnuchin “are in daily communication to see how we can move this process along toward some compromise,” Hogan said.To contact the reporters on this story: Jonathan Stearns in Washington at firstname.lastname@example.org;Vonnie Quinn in Washington at email@example.comTo contact the editors responsible for this story: Brendan Murray at firstname.lastname@example.org, Michael Heath, Alexandra VeroudeFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Follow Bloomberg on Telegram for all the investment news and analysis you need.It’s a tantalizing prospect for traders whose success often hinges on microseconds: a desktop PC algorithm that crunches market data faster than today’s most advanced supercomputers.Japan’s Toshiba Corp. says it has the technology to make such rapid-fire calculations a reality -- not quite quantum computing, but perhaps the next best thing. The claim is being met with a mix of intrigue and skepticism at financial firms in Tokyo and around the world.Toshiba’s “Simulated Bifurcation Algorithm” is designed to harness the principles behind quantum computers without requiring the use of such machines, which currently have limited applications and can cost millions of dollars to build and keep near absolute zero temperature. Toshiba says its technology, which may also have uses outside finance, runs on PCs made from off-the-shelf components.“You can just plug it into a server and run it at room temperature,” Kosuke Tatsumura, a senior research scientist at Toshiba’s Computer & Network Systems Laboratory, said in an interview. The Tokyo-based conglomerate, while best known for its consumer electronics and nuclear reactors, has long conducted research into advanced technologies.Toshiba has said it needs a partner to adopt the algorithm for real-world use, and financial firms have taken notice as they grapple for an edge in markets increasingly dominated by machines. Banks, brokerages and asset managers have all been experimenting with quantum computing, although viable applications are generally considered to be some time away.Why Quantum Computers Will Be Super Awesome, Someday: QuickTakeArbitrage OpportunitiesToshiba said its system is capable of calculating arbitrage opportunities for currencies in microseconds. The company has hired financial professionals to work on the project and aims to complete a real-world trial by March 2021.“Finance is the most familiar application,” Toshiba Chief Executive Officer Nobuaki Kurumatani said in an interview. “But there are so many uses. This is a technology with real potential.”Toshiba’s algorithm seems to outperform rival approaches on mathematical benchmarks, but how it will perform on real-world problems is anyone’s guess. Access to the company’s backtesting in currency trading and portfolio optimization isn’t publicly available and adopting the technology to a new problem would likely require rebuilding the algorithm from scratch.“There is a lot of talk about applications of quantum computing in finance, but it’s not very clear where it would be all that necessary,” said Takanobu Mizuta, a fund manager and senior researcher at Sparx Group Co. Optimizing a portfolio is not something that needs to be done in microseconds and calculations involved in high-frequency trading, where speed counts, are not very complicated, Mizuta said.Toshiba may choose to use the algorithm for areas outside finance. Other applications could include things like plotting complex shipping and logistics routes and developing new drugs with molecular precision, according to the company.First IdeaThe idea first arose in 2015, when senior research scientist Hayato Goto was exploring how the qualities of some complex systems can suddenly change with additional input, a phenomenon he describes as bifurcation. But it took him two years, he said, to realize the discovery could be used to craft algorithms that can efficiently sift through a huge number of possibilities -- like a quantum computer without the onerous requirements to run one.Goto partnered with Tatsumura, whose semiconductor expertise was crucial in making the calculations work on multiple processors in parallel.“We will see some ideas for specific applications of quantum computing coming out over the next five years,” said Masayuki Ohzeki, an associate professor at Tohoku University whose research focuses on the technology. “But real implementation will depend on when there is a good match between improvement in performance and techniques that simplify the calculations.”Toshiba revealed its Simulated Bifurcation Algorithm in April, initially garnering little attention outside the scientific community. In October, the company announced that its model had identified potential arbitrage opportunities in currency trading in just 30 microseconds -- fast enough, it claimed, to give it a 90% chance of making profitable trades. That triggered inquiries from financial institutions in Japan and abroad, Toshiba said.Quantum ComputingInvestment banks are already eyeing quantum computing as an opportunity and a threat. Goldman Sachs Group Inc. has been building an in-house research team and late last year joined forces with startup WC Ware to speed up the search for a “quantum advantage.” Japan’s Nomura Holdings Inc. has partnered with Ohzeki’s lab at Tohoku University to explore applications in asset management using a machine made by Canada’s D-Wave Systems Inc.“Right now, what you can do with it is still hypothetical,” said Kazuyuki Takeda, a general manager at Mizuho-DL Financial Technology Co., a research arm of one of Japan’s biggest financial groups. “It will take quite a bit of time before we have practical uses of quantum computing. At least 10 years or so.”Alphabet Inc.’s Google claimed in October that its quantum computer -- built on a custom processor with bespoke cryogenic cooling -- could perform a task in 200 seconds that would take today’s fastest supercomputer 10,000 years. Researchers at IBM have countered, saying that their supercomputer can match Google’s Sycamore processor “in a matter of days.” But that cluster of machines occupies an area the size of two basketball courts inside the Oak Ridge National Laboratory. In either case, the cost of quantum-like computational capability appears to still be prohibitively high for most applications.In the meantime, Toshiba is hoping it will succeed in commercializing its new algorithms -- whether in finance or elsewhere -- by delivering a computational edge with existing technology.“We give ourselves about a one-year lead for the stuff that we release publicly,” Goto said. “The more cutting-edge knowledge we have internally gives us confidence that we won’t be easily caught up with.”(Updates with expert comment and latest developments in quantum computing.)\--With assistance from Michael Patterson.To contact the reporters on this story: Pavel Alpeyev in Tokyo at email@example.com;Grace Huang in Tokyo at firstname.lastname@example.org;Shoko Oda in Tokyo at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Vlad Savov, Tom RedmondFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Hon Hai Precision Industry Co., the main assembler of Apple Inc.’s iPhones, will establish a joint venture with Fiat Chrysler Automobiles NV to develop and make electric vehicles in China.Hon Hai and its subsidiaries will hold 50% of the venture and Fiat Chrysler the rest, the Taiwanese company said in an exchange filing. While the two companies have yet to sign a formal agreement, they plan to target the Chinese market first and consider exporting cars later. They aim to ink the agreement in the first quarter, according to a person familiar with the matter, and Hon Hai’s Hong Kong-listed unit FIT Hon Teng will also be involved. Fiat Chrysler declined to comment beyond the filing.Shares of Hon Hai were up as much as 2.7% in Taipei trading Friday, their biggest intraday rise since mid-November and the main driver behind the benchmark Taiex’s gain.Hon Hai, the primary listed vehicle for Terry Gou’s Foxconn Technology Group, seeks to diversify from its role as the assembler of a swath of the world’s electronics from Macbooks to Sony Playstations. The company aims to employ its expertise in precision manufacturing and supply chain management to grow the automotive business to 10% of revenue in the long run, Chairman Young Liu told Bloomberg News.“Hon Hai will be responsible for design, components and supply chain management,” he said in a text message, adding that the company will not get into car assembly.Hon Hai and Fiat Chrysler are focusing on the Chinese market because of sheer volume, the executive said. While consumers in the country buy more electric vehicles than anywhere else in the world, sales have slumped since the government pared back subsidies amid a broader market downturn in demand.Hon Hai relies on Apple for about half of sales. Past attempts to diversify its product lines haven’t been entirely successful. The company has tried to invest in a number of electric-vehicle ventures but none has borne fruit. Hon Hai, which competes globally with the likes of Flex Ltd. and Jabil Inc., may now be counting on transferring years of consumer electronics production experience to an automotive arena that’s increasingly going high-tech.“As autos get more and more electrified and more and more digital components replace mechanical ones -- especially with EVs but also just traditional vehicles -- there’s scope for a real opportunity here,” said Matthew Kanterman, an analyst with Bloomberg Intelligence. “Vertical expertise is key in auto, and so a deal like FCA -- if it proves successful -- can help unlock doors for Hon Hai as that would be a strong reference account.”While Hon Hai has limited automotive experience, it does bring enormous supply-chain understanding to the table, said Michael Dunne, chief executive officer of consultant ZoZo Go. Tesla Inc. CEO Elon Musk told shareholders in 2014 that Foxconn was supplying some components to the electric-vehicle pioneer.From Fiat Chrysler’s perspective, the automaker has struggled to crack the Chinese market for years, and tightening fuel-economy standards and electric-vehicle mandates make the task even more challenging. Its market share in the world’s largest car market was less than 1% in 2018, well behind Ford Motor Co.’s 2.3% and General Motors Co.’s 13.8%.Chief Executive Officer Mike Manley is trying to reboot Fiat Chrysler’s money-losing Chinese operations. He restructured the automaker’s decade-old joint venture with Guangzhou Automobile Group in April, calling the shakeup an attempt to “more rapidly respond to changes in the Chinese market.”Read more: Mega Merger Wouldn’t Fix PSA-Fiat Chrysler’s China Woes(Updates with share price move and analyst comment)\--With assistance from Daniele Lepido.To contact the reporters on this story: Debby Wu in Taipei at email@example.com;Gabrielle Coppola in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Craig Trudell at email@example.com, ;Edwin Chan at firstname.lastname@example.org, Cécile Daurat, Vlad SavovFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Elon Musk’s suggestion for how to fix Twitter? Identify the bots.Musk, the SpaceX and Tesla Inc. chief executive officer, was asked Thursday by Twitter Inc. CEO Jack Dorsey how he would fix the social network, where Musk has almost 31 million followers.“Give us some direct feedback,” said Dorsey, who spoke to Musk via a video call from a company meeting in Houston. Musk was projected onto a giant screen as thousands of Twitter employees watched the two executives chat. “If you were running Twitter,“ Dorsey continued, “what would you do?”“I think it would be helpful to differentiate” between real and fake users, Musk replied, according to a video posted to Twitter by an employee. “Is this a real person or is this a bot net or a sort of troll army or something like that?”“Basically, how do you tell if the feedback is real or someone trying to manipulate the system, or probably real, or probably trying to manipulate the system,” Musk continued. “What do people actually want, what are people actually upset about versus manipulation of the system by various interest groups.”It’s possible at least one of the groups Musk had in mind was “TSLAQ,” a loose collective of critics, skeptics and short sellers who often tweet using the hashtag combining Tesla’s ticker symbol with the -Q that is added when listed companies go bankrupt.Musk faces relentless criticism from the group on Twitter. The billionaire is one of the site’s most popular users and one of its most controversial. He called a British caver a “pedo guy” in 2018 and was later sued for defamation. Later that same year, he tweeted that he was thinking of taking Tesla private, prompting a temporary halt on trading and a U.S. Securities and Exchange Commission lawsuit.Musk, one of many high-profile Twitter users to speak at the company event this week, also predicted that humans would send a tweet from Mars sometime in the next five to nine years, according to videos posted by employees. After Dorsey and Musk finished chatting, model and cookbook author Chrissy Teigen, another popular user, made an appearance on stage.\--With assistance from Dana Hull.To contact the reporter on this story: Kurt Wagner in San Francisco at email@example.comTo contact the editors responsible for this story: Jillian Ward at firstname.lastname@example.org, Andrew PollackFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Quanergy Systems Inc.. said Chief Executive Officer and co-founder Louay Eldada stepped down after the driverless car technology startup failed to fulfill technical promises and questions mounted about its finances.Kevin Kennedy, who joined Quanergy’s board last April, will take over as interim CEO, it said in a statement released publicly after Bloomberg News inquired about the leadership change. Eldada also left the board, effective Jan. 13, the company said.Quanergy makes lidar, sensors that use lasers to create real-time imagery of the physical world. It’s a critical component for many autonomous cars, and Quanergy seemed uniquely positioned to capitalize on the emergence of a huge new industry. But its fortunes waned in recent years.Eldada was a central figure both in the company’s early success and its more recent troubles. He co-founded Quanergy in 2012, based on early progress on solid-state lidar, a version of the technology that promised smaller, more efficient and cheaper sensors. The company scored several partnerships with car companies and began talking to banks about an initial public offering in late 2017.But Quanergy consistently failed to hit an ambitious timeline for the development of its sensors. Industry partners and former employees said the company shipped devices that didn’t work as advertised, and employees found Eldada’s management style alternately intimidating and alienating, Bloomberg News reported in 2018. The company contested various aspects of Bloomberg’s reporting. “Quanergy has never knowingly shipped product with defects,” a spokeswoman for the company said at the time.In recent years, Quanergy has focused increasingly on mapping, security and other non-automotive applications, a shift that former employees said reflected the deteriorating prospects of the company landing large deals with autonomous vehicle makers.This wasn’t entirely due to Quanergy’s own performance. Some of the frontrunners in the autonomous driving industry, such as Alphabet Inc.’s Waymo, developed their own lidar and have been slower-than-expected to deliver fully driverless vehicles. Enthusiasm for lidar companies among investors has been cooling for several years.But there were also mounting complaints about Eldada’s management. Former employees have said Quanergy’s leadership misled them about equity options they received as part of their compensation. Akram Benmbarek, a former Quanergy executive, sued the company last May over the way it handled his stock options. Chief Financial Officer Patrick Archambault said last year that Quanergy had reviewed pending litigation with a former employee and determined that it was “completely without merit.“ In interviews in 2018, Eldada dismissed concerns around the company’s finances. In a statement in October 2018, the company said it had secured new funding in a round led by a “global top-tier fund” at a valuation exceeding $2 billion. He said the “level of happiness is high” among employees.Much of the new financing came from Eldada and Tianyue Yu, another Quanergy founder, according to people familiar with the company who asked not to be named discussing private business dealings. Quanergy initiated a $75 million financing round in March 2018, and managed to raise $25 million, according to a regulatory filing later that year. Another filing said Quanergy began a $150 million offering that October and raised just over $20 million.Quanergy didn’t respond to requests for comment beyond its statement, which touted its sensors designed for the security and transportation sectors. Eldada, it said, “will continue his support of the company as a consultant and evangelist.”(Updates with more details after third paragraph.)\--With assistance from Liana Baker.To contact the reporters on this story: Joshua Brustein in New York at email@example.com;Mark Bergen in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Jillian Ward at email@example.com, Alistair BarrFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Alphabet this afternoon became the fourth tech giant to join the highly exclusive trillion-dollar club, one whose original member, Apple, saw its market cap soar past $1 trillion for the first time in August 2018 and which has since welcomed -- and pushed back out -- Amazon, which passed the $1 trillion mark in September 2018 but is now valued at $931 billion; and Microsoft, a charter member since August 2019 and now worth $1.27 trillion. Saudi Aramco, the petroleum and natural gas company that went public last month, also now has a market value of $1.19 trillion. For one thing, investors seem to like that much of Pichai's compensation is tied to the company's performance.