The Information : Oracle Exec: AMD Gaining Favor in Nvidia-Dominated Market for

Oracle Exec: AMD Gaining Favor in Nvidia-Dominated Market for AI Chips

The Takeaway
Karan Batta, a top Oracle cloud executive, says competition with Nvidia is necessary to reduce hardware costs—and control expenses for businesses that want to make their own AI apps by running their own large language models.

Despite Nvidia’s booming growth in selling data center chips for artificial intelligence, some customers developing AI are turning to chips from smaller rival Advanced Micro Devices, said Karan Batta, a senior executive in Oracle’s cloud business. Oracle rents out chips from both companies.

“What we’re finding now is customers are not necessarily tied to any one particular vendor for inferencing,” Batta said. Inference computing refers to AI that has already been developed and is powering applications.

“There’s a lot of effort being put into AMD, and [the company is] doing a good job” at improving its chips’ performance, he said.

Batta declined to provide specifics or names of customers, but his comments show how Oracle wants to reduce its dependence on AI chip leader Nvidia, similar to Microsoft and other cloud providers.

While AMD’s latest flagship server chips, launched in 2023, may not be as powerful as the latest Nvidia flagship—the H100, launched in 2022—executives at Oracle and Microsoft feel they have little choice but to support AMD to promote competition.

In the meantime, Oracle and other cloud providers are booming as they rent out more Nvidia servers to customers such as OpenAI and Elon Musk’s xAI. Oracle is a distant fourth place behind Amazon Web Services, Microsoft Azure and Google Cloud in server rentals in the U.S. It generated $2.4 billion from that business in the August quarter, up 45% from a year earlier.

Oracle entered cloud computing relatively late but got somewhat lucky last year, as its business benefited from a frenzy among AI startups to secure cloud servers. It also has an advantage with some AI developer customers because it’s not a competitive threat to them; Oracle, unlike its bigger rivals, isn’t developing its own large language models similar to OpenAI’s GPT-4.

The boom in AI server rentals reflects the development or training of new AI models. But many businesses have yet to adopt LLMs aside from using applications such as ChatGPT, GitHub Copilot and a handful of others in areas like customer service. Those businesses’ leaders have said the technology is not useful enough or costs too much.

As Nvidia runs away with the server chip market, competition is needed to drive down hardware costs, said Batta. Doing so will keep AI inference costs under control for businesses that want to use LLMs to make their own AI apps or want to buy such apps from software vendors, he said. The cost to rent Nvidia chips for inference has been dropping, but its next flagship AI chips might change that.

Other Nvidia customers have expressed similar concerns privately, reflecting fear that Nvidia products will continue to command a large premium if AMD or others don’t eat into its share of the market. So far, that hasn’t really happened. AMD said its data center revenue rose 115% to $2.8 billion in the June quarter compared to the same period a year ago, while Nvidia data center revenue rose 154% to $26.3 billion in the July quarter.

“Nvidia innovates constantly to deliver enhanced value to our customers, enabling AI for every cloud and enterprise,” an Nvidia spokesperson said in a statement.

Oracle’s use of AMD hardware could also help it guard against potential Nvidia supply shortages, Batta said. Such shortages occurred throughout much of last year.

As Oracle looks to capture more of the market for powering AI model training, co-founder Larry Ellison said Monday that it is designing a data center with a capacity of more than one gigawatt, enough to power a city like San Francisco. Batta declined to provide details on that data center or when it might be operational.

To support its expansion, Oracle is investing in its ability to string together clusters of AI chips so they can act like a single computer—the ideal setup for training new LLMs, he said.

Those improvements include changes to how Oracle cools the heat-generating chips and builds tunnels for cables to link chips across different buildings so they don’t all need to be in the same place. Oracle plans to at least double the size of the interconnected groups of chips, known as clusters, it offers customers—from 64,000 graphics processing units to more than 128,000, he said without specifying the timeline.

Oracle can still benefit from demand for AI training even if startups are using other clouds to develop their core models, Batta said. For example, companies also need hardware for other purposes like fine-tuning, in which developers hone a model for a specific task. Some AI companies are buying access to older chips for those workloads, Batta said.

That might be a reference to a deal Oracle struck with OpenAI and Microsoft to use a facility in Texas next year, according to the AI Data Center Database, but Batta declined to comment on specific companies.

Oracle recently faced a setback when Musk decided to build his own GPU cluster in Memphis rather than rent one from Oracle because it couldn’t move fast enough to set up the data center. Batta said it was too early to say whether xAI can get its Colossus cluster of 100,000 H100s completed faster than Oracle would have.

“I don’t have a baseline to compare with. Am I way faster [than xAI]? Am I way slower?…I do think if you compare us with other cloud providers, we feel like we’re one of the fastest, if not the fastest, from an AI compute perspective.”

WWD : Aura Blockchain Crosses 50 Million Product Mark

Aura Blockchain Crosses 50 Million Product Mark
The consortium launched by LVMH, Prada and Cartier has 50 million luxury products registered, including upcoming collections from Jil Sander, Maison Margiela and Marni, among others.

PARIS — Aura Blockchain Consortium has crossed the 50 million mark, hitting a milestone with that many luxury products now registered with the technology.

The Switzerland-based group now encompasses 50 members, from the founding five in 2022 which included LVMH Moët Hennessy Louis Vuitton, Diesel parent company OTB Group, Prada Group, Richemont’s Cartier and Mercedes-Benz.

The 50 million number comes just three months after the consortium registered 40 million products on its private blockchain.

“This is showing a great acceleration of the brands joining, but also implementing and preparing the information that is going to be put on the [digital product passports],” Aura Blockchain Consortium chief executive officer Romain Carrere.

Digital product passports, or DPPs, connect a physical product to a digital record that can house product information and sourcing through the supply chain for a deep dive on traceability. They are one of the requirements of the European Union’s upcoming Ecodesign for Sustainable Product Regulation, which will start rolling out next year for apparel and textiles.

Brands are adapting quickly to the new technology, which can trace product through resale and repair, as well as authenticate and combat counterfeiting.

“If we look at groups like OTB, they have announced that starting with their fall collection, they will put all of their products on the blockchain,” Carrere said.

Other brands will also add a certificate of authenticity for their garments and accessories, including Jil Sander, Maison Margiela and Marni with their fall 2024 collections equipped with the technology.

“This shows we are growing, and we are working with many other brands that we haven’t announced yet,” he added.

The blockchain can include both upstream, meaning production and sourcing info, and downstream, meaning loyalty programs or insurance tied to an object, as well as repair and resale.

Carrere highlighted that because the consortium was founded by brands and has a nonprofit status, it is being built to fit their needs and can adapt to various brands, from jewelry and hard luxury to automobiles.

“A strong point is that since we were created by brands for brands, we have the information they share, the information of what they need, so we are able to build the technology that represents their needs.”

The tech standards that Aura’s blockchain is creating are establishing a framework and technological standard that will help brands adapt to DPP needs.

The blockchain’s private and closed network will also support the privacy concerns of luxury brands. The consortium’s technology can be used across brands but is not proprietary to any one brand. Its tech will enable member brands to prepare for the sustainability-focused requirements of the European Union.

“That was a real need from the luxury brands, that we are really focusing on the longevity of the product data, and also the fact that we are independent and we can never be bought out,” he added.

Carrere added that Aura is growing its Geneva-based team to accommodate the additional brands that are joining the consortium as more get up to speed ahead of the DPP rollout in Europe.

WWD : FTC Makes a $365 Million Argument Against Tapestry’s Deal to Buy Capri

FTC Makes a $365 Million Argument Against Tapestry’s Deal to Buy Capri
A hearing in Manhattan federal court dug into the analysis underpinning the government’s case against the $8.5 billion acquisition.

The Federal Trade Commission sued to stop Tapestry Inc.’s $8.5 billion deal to buy Capri Holdings, in large part on the grounds that putting Coach, Kate Spade and Michael Kors all under one roof would be bad for American consumers.

On Wednesday, the federal court hearing for a preliminary injunction that’s expected to determine whether the deal can go forward or not, put a number on that concern — $365 million.

That’s the “loss of consumer welfare” annually that was attributable to potential price increases that could result from the deal, according to the merger analysis of economist Loren Smith, who reviewed the transaction for the FTC and testified before Judge Jennifer Rochon.

Smith said that Tapestry, which owns Coach, Kate Spade and Stuart Weitzman, would have a big incentive to raise prices or cut the value of the products it sells after buying Capri and its brands, Michael Kors, Versace and Jimmy Choo.

The economist said that the accessible luxury brands at the core of the case — Michael Kors, Coach and Kate Spade — can not currently raise prices without also boosting the value they give to consumers given the competitive environment. In that, he echoed a point made by Joanne Crevoiserat, Tapestry’s chief executive officer, on the stand on Tuesday.

But Smith said the pricing dynamic would change once the deal is done.

That’s because his analysis of data in the case — including internal branding research produced in discovery — suggested that if Michael Kors lost customers by raising prices, those customers would likely turn to either Coach or Kate Spade (and vice versa).

“If I own the brands, I don’t care so much that just happened,” Smith said.

Smith’s merger simulation showed that Coach could raise its average price on a handbag from $145 before the merger to $159 after. Kate Spade could go from $108 to $122 and Michael Kors could push its $103 average up to $133.

Combined, that would be a 17 percent hike in price, or a commensurate decline in value for the same prices.

All together, that works out to $365 million annually.

WSJ : Private Markets Seem Out of Reach for Individual Investors. BlackRock Thin

Private Markets Seem Out of Reach for Individual Investors. BlackRock Thinks It Has an Answer.
Asset manager teams up with Partners Group to offer wealthy investors a preset portfolio

It might be getting easier for individual investors to tap in to the opaque world of private markets.

BlackRock BLK -0.76%decrease; red down pointing triangle plans to offer wealthy investors a way to access areas such as private equity and private credit in an attempt to build a new revenue stream. The asset manager is joining with private-equity firm Partners Group PGHN 0.09%increase; green up pointing triangle to create a so-called model portfolio that wealth advisers could use to help clients invest in a variety of private-market offerings in one fell swoop.

The move is the latest push by BlackRock, which made its name managing publicly traded stocks and bonds, into the more lucrative business of private investments. Private funds tend to charge investors higher fees and are harder to sell than publicly traded investments. But investors are increasingly looking for ways to access the growing sector.

BlackRock and Partners Group see an opportunity in bringing private markets to individuals in a simplified way.

“There’s currently a zoo of documents for financial advisers, who know they should be doing more in private markets, but don’t know enough and, frankly, are a little worried about using individual products,” said Mark Wiedman, head of the global client business at BlackRock.

Institutional investors such as pension funds and sovereign-wealth funds have ramped up their exposure to private markets over the past several decades as a way to diversify and potentially collect higher returns. As growth in that market has slowed, private-equity firms such as Blackstone, Apollo Global Management and KKR have launched a slew of products targeting wealthy individuals, who tend to have little to no exposure to private markets.

Other traditional asset managers have also teamed up with private-markets specialists. State Street and Apollo on Tuesday announced a partnership to launch an exchange-traded fund and other products focused on private credit.

BlackRock remains a relatively small player in private markets, but it has spent billions this year on acquisitions to beef up its offerings. It agreed to buy private-market data-provider Preqin and Global Infrastructure Partners, which invests in assets such as gas pipelines and data centers.

The private-markets model portfolio from BlackRock and Partners will be available early next year to advisers and wealth-management clients who are “qualified,” meaning they have at least $2.2 million in net worth excluding their primary residence. An individual who wants a 10% allocation to private markets could do so through a single investment.

The firms didn’t yet have details on the product’s fees.

Model portfolios, or preset investment templates for financial advisers, have soared in popularity in recent years, collecting trillions in assets. BlackRock alone manages $131 billion in such portfolios.

Partners was an early mover in private wealth, and launched the first U.S. private-equity fund aimed at individuals in 2009. Still, as a Swiss firm, it isn’t as well known in the U.S. as its competitors. By joining forces with BlackRock, which has roughly 30,000 wealth advisers using its model portfolios, Partners hopes to extend its reach.

Wiedman and Partners CEO Dave Layton said they hatched the idea for the product when they ran into each other on a plane from Los Angeles to San Francisco earlier this year.

Layton, who had just attended the Milken Institute Global Conference, told Wiedman he was concerned about the amount of resources his competitors were rapidly plowing into private wealth.

“We have seen a real, incredible push by many of our peers to pivot into a space where we’ve been for a long time,” Layton said.

FT : Spain vetoed Hungarian bid for train group ‘over Ukraine concerns’

Spain vetoed Hungarian bid for train group ‘over Ukraine concerns’
Madrid did not want Budapest to acquire Talgo gauge technology that Kyiv needs for its rail system, says official

Spain blocked the Hungarian takeover of a Madrid-based trainmaker on the grounds that Viktor Orbán’s Russia-friendly government should not acquire technology that could be useful to Ukraine, according to people familiar with the matter.

A senior Spanish government official said Madrid vetoed the €619mn bid for Talgo in part because the company could aid Ukraine’s reconstruction by helping it strengthen its rail links with the EU.

“One of Ukraine’s biggest interests is the rail connection,” the official told the Financial Times, stressing that Talgo could help Ukraine overcome one big impediment: the fact its rail tracks are a different width.

Spain has classified the documents explaining its decision — which it made on “public security and order” grounds — and declined to comment on whether its concerns are linked to Orbán and his relations with Russia, which have been the closest of any western leader since Moscow’s full-scale invasion of Ukraine.

Spain’s Prime Minister Pedro Sánchez has criticised Orbán as the “pro-Putin” leader of the “international far right” and said the Hungarian prime minister “wants to bring Ukraine to its knees”.

Ganz-Mávag, the consortium that launched the Talgo bid in March, is backed by an investment arm of the Hungarian state and trainmaker Magyar-Vagon, which Spain has asserted is “ultimately controlled” by Hungarian oil company MOL.

The Spanish official said Talgo had advanced engineering — known as automatic gauge change technology — that would enable trains to move seamlessly between Ukrainian train tracks and narrower rails in neighbouring European countries.

“That point of collaboration with Ukraine is one of the most important parts of the process of reconstructing the country and integrating it into Europe,” the official said.

Ukraine’s train tracks are 1,520mm wide in line with Soviet norms, but the standard for European rails is 1,435mm, a size that originated in the UK.

Variable gauge technology was developed in Spain because the country, unusually, uses multiple track widths: the most common is a 1,668mm Iberian gauge, but there is a 1,000mm narrow gauge in the north while Spain’s high-speed trains run on standard European tracks.

According to Talgo, which produces passenger trains, its variable gauge system “enables a train to adapt its wheel gauge while running at approximately 15km/h and without having to stop”.

Due to Ukraine’s wider tracks, most passengers on trains to and from Warsaw have to endure waits of several hours while the train axles are adjusted manually. Such delays also affect wagons carrying Ukrainian exports of grain and other goods, whose weight exacerbates the problem of incompatible gauges.

Talgo pioneered the gauge change technology and is still considered a leader in the field, even though most of its key patents have expired and other trainmakers now have similar engineering.

Ganz-Mávag has already said “there are no well-founded reasons” for Spain’s veto and vowed to launch legal action against the government.

In comments to the FT, a spokesperson for the consortium disputed the idea that its interest in Talgo was driven by the variable gauge system and stressed that the technology was “not exclusive” to Talgo.

“Our interest in Talgo has always focused on increasing the production capacity of this leading company in supplying high-speed passenger trains. Gauge change technology is simply not a factor to be taken into consideration and anyone knowledgeable of the train sector would know this to be an excuse to hide behind a political decision.”

MOL, one of eastern Europe’s largest companies with a significant state ownership and which has continued to process Russian crude despite the war, did not immediately respond to a request for comment.

A lawyer familiar with Talgo said the gauge change technology “did not make sense” as a reason for Spain to veto the bid. “There is either something they are not telling us, or they just don’t want to sell to a government they are criticising every day.”

A Hungarian government spokesperson did not immediately respond to a request for comment.

György Bacsa, chief operating officer of oil group MOL’s Hungarian operations and chairman of the Ganz-Mavag Europe board, said MOL exercised no control over the train company.

FT : Goldman Sachs to earn $92mn from advising on $36bn Kellanova sale

Goldman Sachs to earn $92mn from advising on $36bn Kellanova sale
Jumbo fee comes as Wall Street hopes that long-awaited deal boom is back

Goldman Sachs is set to earn $92mn from its work advising Pringles and Pop-Tarts maker Kellanova on its $36bn sale to Mars, one of Wall Street’s biggest M&A paydays in recent years.

The fee for Goldman, disclosed in a regulatory filing on Wednesday, underscores burgeoning optimism on Wall Street that deal activity is picking up after a lacklustre two years. Lazard, which advised Kellanova’s board of directors on the deal, is set to earn $10mn. The vast majority of both fees is dependent on the deal successfully closing.

The fee is enormous, even by Wall Street standards, especially given the size of the transaction.

Mars’s $36bn deal for Kellanova is the largest US merger announced this year. But bigger deals agreed last year nevertheless yielded lower fees for the banks involved.

Goldman managed the roughly $65bn sale process for Pioneer last year, netting the bank a fee of about $46mn, and also stood to earn $80mn after Hess Corp was sold to Chevron for $60bn. Boutique investment bank Centerview Partners agreed a fee of $88mn for selling oncology-focused biotech Seagen for $43bn to Pfizer.

Sell-side fees tend to be particularly large to reward longtime advisers who will no longer have a client once the deal closes.

The lofty fee for Goldman points to the growing sense on Wall Street that dealmaking is gaining momentum after a challenging two years as markets were chilled by higher interest rates and the US government’s aggressive approach to antitrust issues.

Goldman chief executive David Solomon told CNBC on Wednesday that third-quarter earnings on Wall Street next month would show “a material improvement in investment banking activity”.

However, the recovery has taken longer to materialise than many on Wall Street were anticipating.

“I thought by this time we’d be back to 10-year averages, and we’re not quite there yet,” Solomon said. “I think there are a variety of reasons that have held it back a little bit. I think the big one is financial sponsors have been slower to move forward and engage and monetise on their portfolios because they’ve had a lot of these assets marked higher.”

Kellanova, which makes Cheez-Its, Rice Krispies Treats and Eggo waffles, was created in 2023 after Kellogg separated its breakfast cereals and snacks businesses.

The regulatory filing disclosed that the deal talks with Mars began at the end of May when the chief executives of the two companies met for lunch at the Chicago office of law firm Skadden Arps, where Mars initially bid $77 per share. Kellanova ended up securing a deal for $83.50 per share.

FT : 7-Eleven owner taps Nomura to advise on takeover battle after rejecting $39

7-Eleven owner taps Nomura to advise on takeover battle after rejecting $39bn offer
Circle K parent Alimentation Couche-Tard says it is focused on securing deal with Seven & i

Seven & i Holdings has brought on Japan’s biggest investment bank to advise its board in preparation for a potential takeover battle with Canada’s Alimentation Couche-Tard, whose opening $39bn bid for the 7-Eleven owner was rejected.

Nomura was recently appointed as an adviser to Seven & i’s special committee of independent board directors set up to examine the takeover offer for the world’s largest convenience store chain, according to three people with knowledge of the situation.

News of the appointment comes after Couche-Tard said this week it remained “highly focused” on the takeover, despite Seven & i’s rejection of a preliminary offer. Couche-Tard added that it was prepared to have “collaborative and friendly discussions” on a deal.

A merger between Couche-Tard, which operates the Circle K brand, and Seven & i would result in the creation of one of the largest retail chains in the US and be the biggest buyout of a Japanese company by a foreign group.

The Canadian group’s opening offer of $14.86 a share in cash — which gave Seven & i an estimated enterprise value of close to $60bn, according to analysts — was rejected by the Japanese group this month as “grossly” undervaluing its business.

Seven & i added that any takeover offer risked running into competition issues in the US, where the Federal Trade Commission has approached both sides as a precautionary measure ahead of any deal. Combined, the companies have more than 14,000 US locations, many of them selling petrol, according to Opis, an energy market information service.

In its rejection, Seven & i also highlighted the need for deeper discussion of the central role that its 22,800 convenience stores play in Japan, where they are considered part of the social infrastructure needed to provide supplies and basic services in the event of an earthquake or other natural disaster.

Seven & i’s share price is hovering at about ¥2,120 ($14.87) a share, giving it a market capitalisation close to the Couche-Tard offer and well above where the stock was trading before the takeover approach became public in August.

“We are disappointed in 7 & i’s refusal to engage in friendly discussions,” Couche-Tard said this week. “We are highly confident that collaborative discussions would lead to our ability to find increased value for 7 & i shareholders.”

The Canadian company also played down Seven & i’s regulatory concerns, saying the highly fragmented US convenience store market would make it possible for the two companies to manage competition issues by divesting some sites. It also committed to “continuing to serve” an important role in Japan’s emergency response.

Nomura, Seven & i and Couche-Tard declined to comment.

>>> US After Hours Summary: NTGR +23.4% roaring higher on settlement agreement a

After Hours Summary: NTGR +23.4% roaring higher on settlement agreement and raised guidance; OXM -9.1% slides on lackluster earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: None

Companies trading higher in after hours in reaction to news: NTGR +23.4% (settlement agreement with TP-Link Systems; raises Q3 revenue guidance), BEEP +5.5% (authorizes $10 mln buyback plan), BBW +1.9% (new repurchase program of $100 mln), MOD +1.9% (provides FY27 financial targets), RWT +1.5% (increases dividend), GLPI +1.5% (completes acquisition of land where BALY casino will be constructed), CYH +1.1% (CMO to retire; appoints new CMO), NSIT +0.6% (new stock repurchase program of $300 mln), WRB +0.5% (special cash dividend), PACS +0.1% (finalizes acqusition of 53 skilled nursing facilities), BEN +0.1% (prelim AUM), ACN +0.1% (awarded $1.6 bln U.S. Air Force contract)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: OXM -9.1%

Companies trading lower in after hours in reaction to news: VNOM -4.4% (acquires subsidiaries for $461 mln; files stock offering), INSG -2.1% (debt reduction and capital structure improvements), AVNW -2% (to delay 10-K), LENZ -2% (files stock offering), EZPW -1.4% (to acquire 53 pawn stores in Mexico), RUM -0.9% (shatters records on debate night), PLTR -0.5% (new wave of customers at AIPCon), MSFT -0.3% (OpenAI raising funds at a $150 bln valuation, according to Bloomberg), AMZN -0.2% (AWS to invest $1.8 bln in Brazil, according to Reuters), SOI -0.2% (completes acquisition of Mobile Energy Rentals), PBR -0.2% (starting up natural gas processing unit), IVZ -0.1% (prelim AUM), SITC -0.1% (spin-off date of its retail properties)

TechCrunch : Mark Zuckerberg says WhatsApp has 100M monthly active users in the

Mark Zuckerberg says WhatsApp has 100M monthly active users in the US

Meta CEO Mark Zuckerberg said Thursday on his channel that WhatsApp now has more than 100 million monthly active users in the U.S., a country where SMS/texts is a popular mode of communication.

The announcement is the first time WhatsApp has released data about users in the U.S. The company also noted that more than 50% of WhatsApp’s users have iPhones, which is not surprising given that iOS has the majority market share in the country.

WhatsApp is a popular app worldwide, with more than 2 billion active users monthly. The company has historically focused on countries like India, which is WhatsApp’s largest user base with more than 500 million monthly active users, and Brazil and Indonesia.

WhatsApp has recently ramped up its marketing push in the U.S. In the past few years, WhatsApp has placed ad campaigns, placements in Times Square and TV spots emphasizing privacy and end-to-end encryption protection. Most recently, it started a national campaign about WhatsApp by bringing back some of the cast of the TV show “Modern Family.”

Just like Google, Meta has emphasized in its marketing the differences between green bubble and blue bubble devices caused by Apple’s iMessage. But now that Apple has adopted Rich Communication Services (RCS), Android users can send and receive high-quality media files and have options to look at typing indicators and read receipts. The messages will still be green, though, according to screenshots of Apple’s website.

However, Meta is still pushing its cross-platform app by highlighting some other features, such as polls, high-quality video calling and reactions. The company is capping off the announcement with another marketing campaign by placing a 200-foot bubble between the Apple and Samsung stores in The Americana Mall in Los Angeles.