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Greetings! It's no surprise that President Joe Biden isn't a TikTok fan: He's not really the target demographic. But the president signaled today that he also isn't a fan of Temu or Shein, two online shopping sites with ties to China that sell lots of cut-price clothing, housewares and other stuff. The Biden administration is taking new steps to close the import duty loophole that has allowed both shopping services to flourish in the U.S. (For more, see our in depth report here.) Lawmakers have been complaining about the use of the loophole—known as de minimis—for more than a year. In the spring, the administration started cracking down on it, as we reported here. So today's action hardly comes as a surprise. But it is ironic, given that the Biden administration has separately sued Amazon, alleging that it's a monopolist that does things which prevent "current competitors from growing and new competitors from emerging." Heading the list of such competitors are none other than Temu and Shein! We detailed here how the threat posed by Temu and Shein has prompted plenty of soul-searching within Amazon. In fact, the two companies are enough of a threat that Amazon was planning to launch a special section of its website that would also use the de minimis loophole to import stuff from China. At the time, we speculated Amazon's move would prompt action to close the loophole. Perhaps that was Amazon's intention all along! After all, anything that hurts Temu and Shein is good for Amazon. Not surprisingly, shares of Temu parent PDD fell 2.4% on Friday, while Amazon shares traded up most of the day before a late-in-the-day slide. (Check out our analysis this week of PDD and its stock price). To be sure, closing de minimis won't kill Temu or Shein. Temu has anticipated the closing of the loophole by changing its strategy. It has been signing up Chinese sellers that have inventory in U.S. warehouses and can ship to homes from there. Meanwhile, Shein executive chair Donald Tang told The New York Times this week that if de minimis is eliminated, Shein would "find different ways to satisfy our customers." We'll see if he's right. But over at Amazon, you have to bet they're not too upset by Biden's actions today. Klarna CEO Sebastian Siemiatkowski's declaration that use of artificial intelligence–powered tools would allow him to slash his company's spending on Salesforce and Workday has sparked questions—particularly from Salesforce CEO Marc Benioff. "I have had several of my friends reach out to him because he hasn't said where he's managing his data, how is he managing and sharing his information, how is he achieving compliance?" Benioff said at a press conference Thursday. "How is he doing this? I thought it was so interesting, but there's no other data." Benioff is one of many who are puzzled by how Klarna's goal of building DIY apps to replace those vendors would work in practice. Siematkowski, who has been a major cheerleader of software from OpenAI, hasn't been very specific about his plans. But a Klarna spokesperson said the company's goal is to make its internal software work better with AI tools, something platforms like Workday struggle with. Saving money on licensing fees is just an added bonus. As Benioff notes, Siemiatkowski would have to iron out some wrinkles. Besides managing compliance and data storage, there's the question of maintaining all that software. AI may have made it cheap to write simple programs, but trying to do the job of two vendors while running a fintech company could be more trouble than it's worth.—Jon Victor - OpenAI's funding round, at a $150 billion valuation, dominated AI-related news. Kate Clark and Cory Weinberg scooped the news that OpenAI is talking with a UAE-backed investment fund about participating in its $7 billion funding round. On Friday, Kate broke the news that Tiger Global Management is also considering participating.
- Earlier in the week, Kate and Natasha Mascarenhas also detailed how Josh Kushner—whose firm Thrive Capital will be a significant participant in the fundraise—is essentially going all-in on the AI company.
- Part of the reason investors are fawning over OpenAI is that more than 11 million subscribers now pay to use ChatGPT, Amir Efrati revealed.
- Michael Roddan revealed in this detailed story that some big banks have been ending their partnerships with Stripe as part of a broader pullback from fintech customers.
- TikTok is facing a ban if it doesn't cut ties with its Chinese parent. But it hopes to get the ban law frozen while a legal action winds through the courts. In the meantime, TikTok has largely gone about its regular business, Kaya Yurieff and Juro Osawa reported.
- Jing Yang took a look in this column at challenges for investors considering the stock of Temu parent PDD, which has enjoyed soaring profits and revenues but is now threatened by the issues facing Temu. Conversely, Anita Ramaswamy argued that investors buying into domain name seller GoDaddy might be overestimating the company's growth plans.
- To return cash to their limited partners, venture capitalists are getting creative, Kate Clark reported. Some firms involved in crypto are staking tokens, while others are relying heavily on selling equity on the secondary market.
- Start your weekend reading with Abe Brown's profile of Joe Lonsdale, a Palantir co-founder and venture capitalist who is working with Elon Musk to help get Donald Trump elected president.
- Waymo and Uber expanded their robotaxi partnership to Austin, Texas, and Atlanta.
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