 | May 08, 2025 | | | | | | Happy Thursday! OpenAI has hired Instacart CEO Fidji Simo to oversee some parts of the company in a major leadership restructuring. President Trump is planning to rescind a Biden-era plan to restrict exports of advanced AI chips. Disney reports solid ad revenue growth thanks to live sports.
| | | | OpenAI has hired Instacart CEO Fidji Simo to oversee some parts of the company in a major leadership restructuring at the artificial intelligence firm. Simo and OpenAI CEO Sam Altman announced the news after The Information on Wednesday reported that OpenAI was planning to hire a senior executive for a major leadership role. Altman said in a post on X that Simo's role will be "CEO of applications" and that she will report to him. Altman will continue overseeing research and infrastructure teams that are core to AI development, while leaving much of the rest of the company to Simo. Simo said in her letter to staff posted on Instacart's website that her new role at OpenAI will involve "leading the product, business, and other company functions." In recent months, Altman has expressed his lack of interest in running the entire company, The Information earlier reported. Simo's experience in running an e-commerce and advertising business could benefit OpenAI as it plans to expand its revenue beyond ChatGPT. | | | | President Donald Trump is planning to rescind a Biden-era plan to restrict exports of advanced artificial intelligence chips to countries around the world, the Commerce Department told Bloomberg. Nvidia and other chip firms said the plan, an executive order issued by President Joe Biden in January that was set to take effect May 15, would hurt their businesses. The regulation aimed to keep more AI chips inside the U.S. or its closest allies while capping the percentage of Nvidia chips that could be sold elsewhere, from Malaysia to India. Critics of the rules, including Nvidia, said they might encourage foreign companies or governments to use chips made by U.S. adversaries, such as China, to develop AI. (Trump has increased restrictions on the sale of U.S. AI chips to China.) The Trump administration said it is considering introducing a "simpler" rule that "unleashes American innovation and ensures American AI dominance," according to a statement the Commerce Department provided to Bloomberg. That would be welcome news for small cloud providers such as Oracle, which were concerned the Biden executive order would greatly impact their global data center plans. | | | | The ad market is healthy if you have live sports—at least according to Disney leadership during the company's fiscal second-quarter earnings call on Wednesday. Disney said domestic ad revenue for ESPN, its sports segment, grew 29% year over year, driven by airing more NFL and college football playoff games during the three months ending in March. Disney is preparing to launch a new, all-streaming version of ESPN later this year. Disney CEO Bob Iger said ESPN chairman Jimmy Pitaro will unveil the name of the streaming service and its pricing next week. Disney CFO Hugh Johnston said the company continues to see "robust" interest from advertisers heading into this year's TV upfronts, when advertisers negotiate billions of dollars in ad-spending deals for the coming year. Restaurants and healthcare advertisers are continuing to spend, though some of that demand is offset by there being more streaming ad inventory available in the market, he said. Disney expects its overall ads business to grow by more than 3% this year, he added. Disney's entertainment streaming business also continues to see momentum, ending the company's fiscal second-quarter with $6.1 billion in revenue and a profit of $336 million—the latter up from $47 million during the same quarter last year. The increase in revenue and profits were driven in part by price increases to Disney+ and its other streaming services, the company said. Disney+ ended the quarter with 126 million global subscribers, up 1% from the previous quarter. Disney's domestic Hulu subscription service (excluding its live, cable-TV like service) surpassed 50 million subscribers. | | | | Google on Tuesday cut around 200 employees across its global business organization, the unit responsible for sales and partnerships, according to a person with direct knowledge of the situation. A Google spokesperson said that the company was "making a small number of changes across our teams to drive greater collaboration and expand our ability to quickly and effectively serve our customers." The cuts follow Google's layoff last month of hundreds of employees across its platforms and devices unit, which builds Android and Chrome, in addition to a voluntary buyout program in that department. Over the past 18 months, Google has made a series of job cuts across the company, often at the scale of "hundreds" of job cuts, in contrast to its layoffs of 12,000 people in 2023 that sparked an internal backlash. Tuesday's cuts impacted less than 1% of the global business organization, according to the person with direct knowledge. Alphabet, Google's parent company, had around 185,000 employees at the end of last quarter. In the company's most recent earnings call, chief financial officer Anat Askenazi said that the company intended to increase headcount in "key investment areas" but also noted that the company had announced "consolidation of teams which helps not just with cost but with velocity and speed." | | | | Mobile app ad firm AppLovin's business continued to soar in the first quarter of 2025, with revenue rocketing 40% from the first quarter last year to $1.48 billion. The overall revenue number was better than AppLovin's own projections. AppLovin stock jumped 14% in after-hours trading. The advertising company's business and stock have been on a tear since late last year, when the company began pivoting into ecommerce advertising, a departure from the company's core gaming business. Free cash flow was $826 million in the first quarter, a nearly 19% rise since the fourth quarter of last year. In the first quarter ad revenue rocketed 71%, although that growth was offset by a 14% decline in its apps revenue. AppLovin executives noted on a call with investors on Wednesday that ecommerce ad revenue remains a small minority of its total ad business. AppLovin's gaming apps business has shown more volatility than advertising. The app business suffered a drop in revenue in 2023 before stabilizing last year. AppLovin has said it has been finetuning its portfolio of apps, including by cutting marketing spending, to reduce costs. In February it announced it had tentatively reached a deal to sell its mobile gaming business for $900 million in cash and stock although today the company detailed revised terms for the sale involving less cash in what it called a "definitive agreement." The ad business has continued growing quickly despite a number of Wall Street short seller reports earlier this year which questioned the effectiveness of its advertising technology. The company has hired a law firm to investigate the short sellers. | | | | OpenAI said Wednesday it is planning to build data centers for artificial intelligence in countries other than the U.S. through its Stargate joint venture with SoftBank, which aims to develop $500 billion worth of facilities over the next four years. The move is notable because OpenAI said other companies, not just OpenAI, would use the data center capacity it develops overseas. OpenAI also might make investments in AI developers that use the facilities. OpenAI said in a blog post it will partner with other countries "in coordination with the U.S. government" so that other nations can develop "democratic AI" with data that does not leave their borders. The first phase would involve 10 countries that would also commit to funding the new facilities. OpenAI didn't name them. OpenAI has special ambitions to expand its business in large countries such as India, and previously said it would develop products with SoftBank specifically for Japanese customers. "This is a moment when we need to act to support countries around the world that would prefer to build on democratic AI rails, and provide a clear alternative to authoritarian versions of AI that would deploy it to consolidate power," OpenAI said in a statement, which didn't specifically reference geopolitical adversaries such as China. | | | | Uber reported 14% higher revenue of $11.5 billion in the first quarter but sharply higher operating income of $1.2 billion. Still, shares of the ride-hailing and food delivery firm fell 2%, as growth in the company's gross bookings—the total dollar value of food orders and ride hailing trips going through Uber's platform—came in at the low end of the company's projections. Uber had projected gross bookings of between $42 billion and $43.5 billion but it ended up reporting $42.8 billion. Meanwhile, Uber reported 35% higher adjusted EBITDA, which excludes expenses such as stock-based compensation and taxes. That increase was driven by Uber's delivery business, where ebitda rose 45% to $763 million. Uber has lately focused on striking partnerships with self driving car developers, including Alphabet's Waymo, to incorporate their vehicles into its fleet of ride-hailing cars. On a call with analysts, Uber CEO Dara Khosrowshahi said that a Waymo partnership launched last month in Austin—under which Uber customers can book a ride on a Waymo self driving car—was proving popular. The "average Waymo in Austin is busier than 99%" of Uber's human drivers, he said. | | | | Meta Platforms earlier this year discussed adding facial recognition to its smart glasses and other devices, The Information reported. The technology would allow somebody wearing the glasses to, for example, identify a person they met at a party by name. If implemented, facial recognition would be part of a feature internally referred to as "super sensing," which Meta hopes will help its smart glasses become more popular. When a device uses the "super sensing" feature, it would always keep its cameras and sensors turned on and use artificial intelligence to remember what its wearer encountered throughout a day. That AI could eventually, say, see that a user hadn't picked up their keys and proactively remind them to do so. Meta is testing an early version of super sensing, activated by a wearer saying, "Hey Meta, start live AI." Meta's current smart glasses can run "live AI" for about 30 minutes due to constraints on battery life. But Meta is working to make its upcoming smart glasses capable of running the feature for hours. Those glasses, codenamed Aperol and Bellini, are slated for release next year. | | | | Apple is "actively looking at" adding AI search options to its Safari browser and has had discussions with the AI search provider Perplexity, an Apple executive testified on Wednesday during the Google search monopoly remedies trial, Bloomberg reported. The executive, senior vice president of services Eddy Cue, said that Apple would prefer to keep its Google Search default deal, worth an estimated $20 billion a year for Apple. But the Justice Department and other plaintiffs in the case are seeking to block Google from making any deals involving revenue sharing for search —such as the Apple deal—after a federal judge ruled last August that Google's exclusive default deals had played a key part in maintaining its illegal search monopoly. Cue, testifying on behalf of Google, said that he believed that AI search providers would eventually replace traditional search engines like Google, and that Safari searches had dipped for the first time last month, which he attributed to AI. Cue said he believed Apple would eventually add providers like OpenAI, Perplexity and Anthropic as options to Safari, though not necessarily as defaults. Apple is currently working with OpenAI for its "Apple Intelligence" feature. CEO Sundar Pichai testified last week that Google hopes to reach a deal to add Gemini to Apple Intelligence by the middle of this year. | | | | BNY's global head of digital assets Caroline Butler has decided to leave the company after more than five years, according to the bank. Carolyn Weinberg, the bank's chief solutions innovation officer who joined from BlackRock in January, will continue to lead the company's digital assets strategy and platform. In March, Butler testified in Congress on behalf of the bank on stablecoin legislation. The bank safekeeps reserve assets for Circle's stablecoins. It also has a digital assets custody product. Separately, State Street's head of digital asset solutions, Vanessa Fernandes, who joined from BNY last September, has left. State Street's overall strategy for digital assets is led by Donna Milrod, chief product officer, and Chris Rowland, head of custody, digital and fund services, the bank said. | | | Popular articles By Sri Muppidi, Aaron Holmes, Stephanie Palazzolo and Erin Woo
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