 | Oct 18, 2024 | | | | Supported by  | | | | | TGIF! Amazon has opened a new type of small grocery store next to a Whole Foods Market. Netflix is expecting slower revenue growth next year. The U.S. is investigating whether Taiwan Semiconductor Manufacturing Co. produced chips for China's Huawei in potential violation of export controls.
| | | | Amazon has opened a new type of small grocery store next to a Whole Foods Market, a spokesperson confirmed. The store, branded Amazon Grocery, offers products that aren't sold in Whole Foods, due in part to the health grocer's restrictions on ingredients like artificial sweeteners and color additives. The first Amazon Grocery location is located in the same building as an existing Whole Foods Market in downtown Chicago. The 3,800 square-foot store includes 3,500 products, including some grocery and household brands that aren't sold in Whole Foods, as well as drinks and grab-and-go meals, spokesperson Jessica Martin said. "We're testing and learning with a new grocery shopping experience with a small-format store from Amazon under the same roof as Whole Foods Market," Martin said. The new store is the latest in a series of changes to Amazon's grocery lineup. Last week, Amazon said it was adding an automated mini-warehouse inside a different Whole Foods location that would also let shoppers buy products that Whole Foods doesn't sell, such as Coca-Cola and Tide Pods. The new Amazon Grocery store does not feature Just Walk Out, the cashierless checkout technology that Amazon uses in its Amazon Go convenience stores. Amazon pulled Just Walk Out from its U.S. Amazon Fresh grocery stores earlier this year and recently closed three Amazon Go stores. | | | | Netflix revenue grew 15% year over year to $9.8 billion in the third quarter of 2024, the company said in its earnings report. Netflix also said based on its forecast for the fourth quarter, it expects full-year 2024 revenue to be up 15% as well. However, Netflix also expects revenue growth to slow next year to between 11% to 13%. This likely places pressure on Netflix to generate more revenue from its ads business in the years ahead. Netflix cautioned that while it will achieve "critical ad subscriber scale for advertisers" in 2025, it does not expect advertising to be a primary driver of revenue growth next year. This suggests that Netflix is hoping advertising can provide a significant boost to overall revenue in 2026 and beyond. Netflix said there are signs of momentum with its ad-supported tier: in the third quarter, it accounted for more than 50% of sign-ups in the countries where it offers the ad tier. On the company's earnings call, Netflix co-CEO Greg Peters predicted the company would roughly double ad revenue in 2025, "albeit it's off a small base." | | | | The U.S. Commerce Department is investigating whether Taiwan Semiconductor Manufacturing Co., the world's largest chip manufacturer, produced chips for China's Huawei Technologies, in potential violation of U.S. export controls, The Information reported. The department has reached out to TSMC to ask whether the Taiwanese company has been making artificial intelligence chips or smartphone chips for Huawei. Since 2020, the U.S. has blocked Huawei from buying chips manufactured using American equipment. Huawei is also banned from using U.S. technology to make its own chips without approval from the U.S. Commerce Department. The probe is still in its early stage. If the department found that TSMC violated export rules, the company could face penalties such as fines or temporary restrictions on its ability to access U.S. technology. TSMC manufactures chips designed by Apple, Nvidia and numerous other customers around the world. The Biden administration has given TSMC $6.6 billion to help the company build its chipmaking facilities in Arizona. | | | | Google's head of search and advertising, Prabhakar Raghavan, is moving to a new role while the team behind the company's Gemini artificial intelligence chatbot, which competes with OpenAI's ChatGPT, is moving to the DeepMind AI group, CEO Sundar Pichai said Thursday. Raghavan spent about four years in the role after earlier running ads. The search business is under some threat from ChatGPT and from the U.S. courts that have ruled Google acted in an anticompetitive manner and could impose penalties that hurt revenue. Nick Fox, a longtime Google manager who helped develop its search advertising product, AdWords, and previously managed a host of other products, including messaging apps, is taking Raghavan's role, Pichai said. But arguably the most consequential result of Thursday's announcement is the continued ascension of DeepMind chief Demis Hassabis, as it gives him control over key consumer products for the first time. Hassabis was frustrated by the previous arrangement, in which he generated the technology that Google's product teams commercialized. DeepMind develops large language models, also known as Gemini, that power the Gemini chatbot, AI features in search, and are sold to app developers through an application programming interface. Both the chatbot and API are lagging far behind OpenAI in terms of customers, but the chatbot is available through the Google mobile app and could receive a lot more traffic from the billions of people who use Google's other products. The U.S. Justice Department, which won an antitrust case against Google's search engine, is trying to convince a judge to hamstring Google's ability to leverage its search and other products to gain an edge in conversational AI. | | | | Zuora, which sells software for businesses to manage subscription billing, has agreed to be bought by private equity firm Silver Lake and Singaporean sovereign wealth fund GIC for $1.7 billion, the company said Thursday. The deal values Zuora 20% higher than its valuation in April, before media reports circulated about a potential sale. The deal is the latest in a string of software deals by Silver Lake this year. The private-equity firm has invested in at least 18 software buyouts since January, according to PitchBook. Zuora went public in 2018 but has had a rocky performance since then, with shares trading at less than half of its IPO price for most of this year. Its CEO, Tien Tzuo, was an early employee at Salesforce and later its chief strategy officer before co-founding Zuora. | | | | Taiwan Semiconductor Manufacturing Corp lifted third quarter revenues 39% to $23.5 billion and net income 54%, as the world's biggest chipmaker benefited from surging demand for AI chips. TSMC manufactures chips designed by other companies, such as Apple and Nvidia. It particularly dominates the market for advanced chips and has emerged as the only manufacturer able to make Nvidia's intricately designed AI chips. On an investor call on Thursday CEO C.C. Wei cited "one of my key customers" saying demand for AI chips "right now is insane." Wei responded to questions about the returns that companies will get from investing in AI by saying that TSMC had gained productivity benefits from using AI in its manufacturing and R&D operations. The benefit of AI is "real," he said. | | | | Meditation app Calm said Thursday it had entered into a partnership with healthcare giant UnitedHealth that will make the app's services available to more than 13 million people. The partnership follows its move, first reported by The Information, to set aside tens of millions of dollars of equity warrants for strategic partnerships. Those shares, priced at a deep discount to the share price in its 2020 Series C round, indicated the 14-year-old startup was laying the groundwork for future corporate partnerships. Backed by TPG and Lightspeed Venture Partners, the company has been focusing more on selling group subscriptions to corporations and healthcare organizations that make the services available to its members. That's a shift from an earlier strategy of focusing on sales to individuals and is closer to rival Headspace's strategy. It's not clear if UnitedHealth received the warrants as part of the arrangement. Calm and UnitedHealth representatives didn't immediately return requests for comment. | | | | Harvard Management Company delivered a 9.6% return for its fiscal year ending June 30, 2024, according to its annual report released Thursday. This exceeds the $53.2 billion endowment's 9.3% annualized return over the last seven years. While Harvard's performance in a challenging macroeconomic environment is a positive sign for investment firms firms seeking its investment, the university noted that its public equity portfolio outperformed its private investments, including buyout and VC funds, for the second consecutive year. That lagging performance could deter it from further increasing its private allocations. Fundraising in the VC industry remains sluggish compared to the zero-interest-rate bull market. Through the third quarter of 2024, U.S. VC funds raised $65 billion compared to $153 billion in the first nine months of 2021, according to PitchBook data. | | | | Payment giant Stripe is in talks to buy Bridge, a San Francisco-based stablecoin infrastructure startup, for $1 billion, Forbes reported, citing people familiar with the discussions. Founded in 2022 by Coinbase and Square alumni Zach Abrams and Sean Yu, Bridge helps companies convert dollars or euros into blockchain-based stablecoins and works with clients such as SpaceX. The company has raised around $58 million from investors including Ribbit Capital, Index Ventures and Sequoia Capital. Either party could still walk away from the talks. One potential hurdle to a deal could include whether Stripe can get comfortable with the uncertainty regulatory environment facing crypto firms like Bridge. Bridge has said in an interview with Fortune in August that it has money-transmitter licenses in most U.S. states and is applying for further licenses. Representatives of Stripe and Bridge didn't immediately respond to requests for comment. | | | | Meta Platforms on Wednesday reorganized and laid off staff on several teams, according to a spokesperson for Meta. The affected teams included Instagram, WhatsApp and Reality Labs, Meta's augmented and virtual reality unit, The Verge reported. Meta in June culled middle managers from Reality Labs, and in 2022 and 2023 cut about a quarter of the company's staff through mass layoffs. "A few teams at Meta are making changes to ensure resources are aligned with their long-term strategic goals and location strategy," the spokesperson said. "This includes moving some teams to different locations, and moving some employees to different roles. In situations like this when a role is eliminated, we work hard to find other opportunities for impacted employees." Separately, Meta also fired employees for violating policies around meal credits, according to posts on the anonymous forum Blind. The company offers allowances for food to be delivered to its offices, which some employees used to purchase items such as toothpaste, the posts said. Meta declined to comment on the firings. The Financial Times earlier reported the firings. | | | | | Popular articles By Stephanie Palazzolo and Erin Woo
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