Apple and Musk to dominate news next week

   2024-06-08 15:06

This was Jensen Huang’s week. As we saw when he appeared at the Computex conference in Taipei this week, Huang is now a fully fledged celebrity CEO. (See Qianer Liu’s report on Computex below). Fittingly, Nvidia also this week briefly passed Apple as the second most valuable company, with a $3 trillion market capitalization. It’s extraordinary that someone who runs a company that two years ago most people wouldn’t have heard of and whose products are among the most arcane in tech has risen to nearly Elon Musk’s level of stardom.

Nvidia is at the nexus of two of the big stories in tech right now, artificial intelligence and China-U.S. trade relations. That was clear in my colleague Anissa Gardizy’s scoop this week revealing that Chinese firms like ByteDance are getting around U.S. export controls on Nvidia’s most advanced AI chips by buying or renting them in the U.S.

Next week, the focus of tech news will shift to Apple and Elon Musk. Let’s face it, the focus is rarely off either of them, but next week will be particularly intense, so buckle up. On Monday, Apple kicks off its annual developer conference, where it typically unveils all sorts of news about upcoming software and hardware. The chatter ahead of next week’s event has been about how Apple will add lots of AI-enhanced features to the iPhone and other products.

Then on Thursday, Tesla shareholders are due to weigh in on Musk’s $45 billion pay package, the one a judge in Delaware rescinded earlier this year. That could be a close vote. On the one side are the Musk superfans, whom we profiled here. They include Tesla chair Robyn Denholm, who wrote a letter to shareholders this week saying the vote was about “retaining Elon’s attention and motivating him to focus on achieving astonishing growth for our company.” (Shouldn’t lifting the value of his existing 12.8% stake be motivation enough?) Meanwhile, some big shareholders aren’t so keen on the pay package. The outcome of this vote will unquestionably be a big story. Stay tuned!

Nvidia CEO Jensen Huang and Advanced Micro Devices CEO Lisa Su, the two biggest luminaries of the chip world, were the stars of the Computex tech conference held in Taipei this week. Smart minds from around the globe converged to explore the realm of AI, particularly in chip manufacturing and the supply chain that supports AI infrastructure.

Huang and Su each showcased their companies’ next generation of chips, which aim to drive the future AI frenzy. Throngs of press chased the two executives, both born in southern Taiwan and maternally related to one another, across town like rock stars. Huang, of course, was the bigger name, inspiring a craze dubbed “Jensanity.”

Amid the hustle and bustle of trade shows and industry gatherings, the chances of securing a table at any nearby eatery were akin to winning the lottery. I often had to squeeze into the space in front of a 7-11, gobbling up rice balls quickly while exchanging bits of industry gossip with other attendees.

Although OpenAI wasn’t present at the exhibition, Sam Altman’s chips gambit was ever present in my conversations with industry veterans in Taiwan’s chip manufacturing and hardware supply chain. I encountered an intriguing mix of skepticism and admiration. The consensus was that Altman is both too idealistic and too radical to build or fund chipmaking plants. The sentiment echoed the approach of TSMC chair and CEO CC Wei, who commented after Tuesday’s TSMC annual shareholders meeting: “Sam Altman, he’s just too aggressive, too aggressive for me to believe.”

TSMC produces the majority of powerful advanced chips globally for everything from AI systems to smartphones, including Nvidia’s highly sought-after silicon chips. Huang reiterated multiple times during Computex how important TSMC is to Nvidia and then said he would support TSMC’s plan to raise its prices. That’s a rare move for a cost-sensitive company like Nvidia.

As for Altman: Creating complex chipmaking infrastructure requires substantial capital, time and talent. Constructing a chip factory alone can take several years, from setting up the facility to installing and testing equipment, as well as fine-tuning production lines and improving yield. If Altman is serious about building multiple chip factories, he had better get a move on soon. If he was already underway, you can bet talent scouts and equipment vendors would have caught wind of it. But the whispers in the Taiwanese circle are few and far between.—Qianer Liu

  • The U.S. government forbids Nvidia to sell some of its most advanced AI chips to customers in China. But it doesn’t stop Chinese firms from buying or renting Nvidia’s chips if they’re used within the U.S. Anissa Gardizy reported on that loophole in export controls, which is how ByteDance got access to Nvidia’s chips.

  • Yueqi Yang scooped that custodian giant State Street is rebuilding its digital assets team with hiring plans, after cutting jobs in the department earlier this year, signaling growing confidence in crypto and tokenized assets.

  • Ann Gehan reported on details of Etsy’s efforts to rid its site, typically known for handmade and vintage items, of cheap goods sold on other marketplaces like Shein and Temu. It’s part of a broader push to revive Etsy’s sales growth, which has stalled over the past three years following the e-commerce boom of 2020 and 2021.

  • Steve LeVine wrote about the shutdown of next-generation battery maker Ionic Materials, which let go of over 40 employees after it failed in its efforts to develop a new polymer for dealing with lithium.

  • Natasha Mascarenhas broke the news that several venture capitalists are leaving their firms to start their own funds, despite how extraordinarily difficult it is to raise new funding right now.

  • Wayne Ma reported that Apple talked with China Mobile about launching Apple TV+ in the country, which would make it the only streaming service from a U.S. company available in that market.

  • ByteDance is looking to fundraise up to $800 million for Dongchedi, the company’s car marketplace division, which is looking to eventually go public, our Asia correspondents Jing Yang, Qianer Liu, and Juro Osawa reported.

  • Anita Ramaswamy made the case in her column that Amazon Web Services should be able to keep its high operating margins in place for some time, thanks to new higher-margin products and an opportunity to sell its own chips. Plus, the company’s AI assistant could help, she wrote.

  • Franklin Templeton, the $1.6 trillion asset manager, is exploring launching a new crypto fund that will invest in a range of tokens beyond bitcoin and ether, Yueqi scooped, a move that would introduce institutional capital to the broader crypto universe.

  • Start your weekend reading with Larissa Zimberoff’s story about Prolific Machines, a secretive lab-grown meat company that recently received an injection of more cash from investors. The story begins with a taste test inside a former jelly bean factory.

  • Microsoft is making changes to its new AI-powered Recall feature on Windows after it drew harsh criticism from security experts in recent weeks. Recall takes a screenshot of users’ screen every five seconds and lets them use an AI-powered search engine to find apps or windows they used in recent months (more here).

  • DocuSign swung to an operating profit of $22.6 million in the April quarter, compared with a loss of $4.6 million a year earlier. The profit turnaround continues a notable improvement in free cash flow demonstrated last year, even as growth remains tepid (more here).

  • A federal judge in Virginia overseeing the Justice Department’s antitrust case against Google’s dominant ad tech business gave the company a small victory Friday by rejecting the DOJ’s request for a jury trial, a Google spokesperson said (more here).

  • Alphabet shareholders on Friday reelected the company’s 10 board directors and rejected 12 stockholder proposals, easily overcoming a recommendation from shareholder proxy adviser Institutional Shareholder Services to remove five directors and pass five of the proposals, which aimed to increase transparency and shareholder rights (more here).

  • Bakkt Holdings, the digital asset marketplace backed by the parent company of the New York Stock Exchange, is working with a financial adviser to explore strategic options, including a potential sale or breakup, Bloomberg reported Friday.

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