FT : Japan stock exchange chief says reforms are cutting down ‘aimless’ listings

Japan stock exchange chief says reforms are cutting down ‘aimless’ listings
Hiromi Yamaji’s campaign has helped lift benchmark stock index above its 1980s bubble-ear peak

The chief of Japan’s stock exchange said fewer companies were listing “aimlessly” as a result of its corporate governance drive and rising shareholder activism.

Hiromi Yamaji, the head of the Japan Exchange Group which controls the Tokyo Stock Exchange, said in an interview with the Financial Times that in the past, companies “just kept listing because it was prestigious”.

He added: “But now that is changing due to increased expectations from shareholders and because of the exchange’s own push to improve corporate governance.”

The former Nomura banker, who took over JPX in 2023, introduced a radical “name and shame” regime in January to drive better valuations, particularly at listed companies with a price-to-book ratio of less than one, meaning the market values them below their book value. As of May, 34 per cent of Topix 500 companies had a price-to-book ratio of less than one.

The exchange’s campaign has helped, along with a weak yen and investors choosing Japan over China due to geopolitical tensions, to lift the country’s benchmark stock index above its bubble-era peak set in the late 1980s.

Buyouts have surged in Japan, with the total value hitting $4.2bn last year, the highest level since 2006, according to LSEG data. School operator Benesse Holdings and karaoke company Shidax were among the companies to announce plans to go private.

Yamaji said companies deciding not to list or to go private was a “healthy” sign: “If they decide to do this [not list] they may come back after they improve their operations and become stronger.”

At the end of June, 1,335 of the 1,643 companies listed on the exchange’s most prestigious section have complied with its request to outline plans to raise their valuations.

JPX is updating the list monthly and has canvassed investors about the measures companies have taken in order to build a playbook for others to emulate.

Yamaji said he was ready to do more to encourage improvements in corporate governance. In the second half of the year, he intends to publish anonymous case studies of companies that are failing to properly address governance concerns.

He has also proposed new rules for the Topix index that could increase the required free float, adjusted for market capitalisation, of included stocks. This change could further reduce the number of listed companies by 40 per cent to an estimated 1,200 by the second half of 2028, he said.

JPMorgan analysts said changing the inclusion rules “could give small [and] mid-cap companies near the threshold for exclusion an incentive to improve their stock prices”.

There are other signs of progress. Cross-shareholdings, which were historically a way to cement ties between companies but have been criticised by investors for creating conflicts of interest and misallocating capital, are being unwound in many sectors.

At the same time, corporate Japan is experiencing an increase in shareholder activism. CLSA said there had been as many activist events — such as investors taking positions or making significant suggestions to companies — in the first half of the year as there were in the whole of 2023.

Executives are under growing pressure. During the most recent AGM season, 64 per cent of company bosses achieved shareholder support of more than 90 per cent, down from 81 per cent in 2018, according to CLSA.

Executives including Toyota’s chair Akio Toyoda and SoftBank’s founder Masayoshi Son saw their support materially deteriorate this year. Toyoda has been grappling with data scandals at the automaker’s subsidiaries and Son has been criticised for what proxu advisers say is an unfavourable return on equity.

“Unearned re-election is getting rarer,” said Nicholas Smith, a strategist at CLSA in Tokyo.

Yamaji welcomed the development. “This does not happen unless domestic institutional investors are voting against the company’s proposal,” he said, “so, I think that’s good progress.”

FT : Samsung in crisis: AI chip ambitions hit by unprecedented worker unrest

Samsung in crisis: AI chip ambitions hit by unprecedented worker unrest
Korean tech giant risks losing disenchanted engineers to domestic rival SK Hynix

Samsung Electronics is wrestling with an escalating labour crisis that is complicating its efforts to catch up with rivals in the booming market for semiconductors used in artificial intelligence systems.

The Korean technology giant pleased investors earlier this month with its expectations that second-quarter operating profits would increase by almost 1,500 per cent year-on-year, as the global memory market rebounds from a prolonged slump.

But the stronger-than-expected guidance came amid growing worker unrest and setbacks in chip production that have seen it fall behind rivals in areas identified as essential for future growth. Samsung shares have risen about 7.5 per cent this year, against a 65 per cent rally for smaller domestic rival SK Hynix.

Samsung is trailing SK Hynix and US chipmaker Micron in developing high-bandwidth memory (HBM) chips, a crucial component of AI systems, and is yet to pass tests required to qualify as an HBM supplier to the industry leader Nvidia.  

“This is extremely concerning for a company that has historically been the leading memory manufacturer,” said Myron Xie, an analyst at chip consultancy SemiAnalysis. “HBM is a very profitable product so Samsung is missing out on a big opportunity.”


Samsung has also failed to make a dent in TSMC’s dominance of the global foundry business — the market for contract manufacturing of processor chips — despite optimism that big customers would seek to reduce their dependence on the Taiwanese chip giant amid heightened geopolitical risks.

“While customers would like a second foundry alternative, the number one priority for customers is the quality of the technology and being able to have a stable source of supply, which Samsung foundry hasn’t delivered,” said Xie.

In May, Samsung chair Lee Jae-yong abruptly installed a new head of Samsung Electronics’ chip division, industry veteran Jun Young-hyun, who promised to “renew the atmosphere internally and externally” to address a “chip crisis” at the company.

But a Samsung chip engineer, speaking on condition of anonymity, told the Financial Times that they “didn’t see many changes even after our chief was replaced”.

“The internal atmosphere is gloomy as we fall behind SK Hynix in HBM and fail to catch up with TSMC in foundry,” the engineer said.

“People are feeling unhappy about their pay in general as they think they are treated worse than their peers at SK Hynix,” they added. “Many people are thinking of leaving the company to join our competitors.”

The growing worker discontent was exposed last Monday, when an estimated 6,500 members of the National Samsung Electronics Union, which has seen its ranks grow from 10,000 to more than 30,000 in the space of a year, launched an unprecedented three-day strike.

The company, which unveiled its latest foldable smartphones on Wednesday with enhanced AI features, is also under severe pressure from Apple and lower-cost Chinese rivals in the mobile sector, while Chinese competitors are also threatening to erode its market share in the display and home appliance sectors.

“Workers’ morale is low, discouraged by smaller financial rewards,” said a researcher at Samsung’s smartphone business, also speaking on condition of anonymity. “They feel helpless because management seems directionless.”

“I had been accustomed to sales growth all my company life, but this is the first time that I see falling growth,” added a Samsung home appliance salesperson, who also did not wish to be named. “People in my team are feeling a sense of crisis.”

Samsung denied the NSEU’s claims that the three-day walkout had disrupted chip production. But on Wednesday, the union announced it would continue with an “indefinite strike” that would target production lines, including those used to manufacture HBM chips.

“Management has no intention of dialogue,” the union said in a statement. “We have clearly identified line production disruptions and the company will regret this decision.”

Samsung said in a statement to the FT that it “remains committed to engaging in good faith negotiations with the union”, but otherwise declined to comment on personnel matters. However, analysts said the strike would complicate efforts to make up lost ground on SK Hynix in the HBM race.

According to one Samsung investor, the rivals are now locked in fierce competition for a limited supply of Korean engineering talent. Both companies declined to comment on the talent battle.

Samsung last week announced a cross-division team dedicated to HBM development efforts and should eventually close the technology gap on SK Hynix as the industry moves to future generations of HBM chips, according to CW Chung, an analyst at Nomura.

“Once you take the wrong strategy and develop the wrong chip, its ripple effects will last about three years,” said Chung, noting that the wider memory upcycle would continue to drive the company’s profitability in the meantime. “But the worst seems to be behind the company now.”

Samsung argues that, as the only company with capabilities in cutting-edge foundry and memory chips, as well as next-generation “advanced packaging” techniques, it will be well placed to take on a burgeoning alliance between SK Hynix and TSMC, which are working closely together on the next generation of AI chips.

“Our commitment to technological advancement and scale of investment have been core to our success and will continue to be so,” the company said. “We are confident and excited at the opportunity to navigate the current landscape and solidify our leadership position.”

But Xie from SemiAnalysis said that “being a one-stop shop is of little value to chip design companies when Samsung is best at none of the above aspects”.

“Given Samsung has seen its technology capabilities erode in multiple areas of its business, it seems there are problems that stem from the company’s leadership and culture,” he added. “A cultural reset may be long and painful, but it may be the best thing for the company in the long term.”

FT : Chinese EV laser maker fights back against Pentagon blacklisting

Chinese EV laser maker fights back against Pentagon blacklisting
Hesai says it has been forced to sue US government after allegations of military links

David Li says he was “shocked” in May last year when the US Congressional Research Service accused his company, Hesai — the world’s biggest producer of laser sensors used in electric vehicles — of supporting the Chinese military.

The CRS report was the first public sign that Hesai would become the latest victim of the US-China tech war. Then, in January, Hesai was hit with even worse news when the Pentagon added the Shanghai-based and New York-listed group to a list of Chinese entities alleged to be part of China’s military-civil fusion programme.

While the Pentagon move to add Hesai to a list of about 40 “Chinese Military Companies” instituted in 2021 had no regulatory impact, it created a perception of investment risk that helped trigger a battering of Hesai’s share price.

Li, a University of Illinois Urbana-Champaign graduate and Hesai chief executive, decided that the company he had co-founded had to fight back.

Hesai began legal proceedings by suing the Pentagon in a US court in May, and this month asked for a summary judgment. The action came shortly after Li returned from Washington after an unsuccessful bid to talk US officials around.

“It became difficult to get the record clean without suing them,” he told the Financial Times in an interview. “The goal isn’t to defeat anybody. The goal is to . . . have an open dialogue because we think it is a really bad mistake.”

Hesai is among a rising number of Chinese groups targeted for alleged military links amid deepening fears in Washington over the threats posed by Beijing to US national security.

Congress is considering legislation that would ban the Pentagon from using products that contain Chinese-made lidar, which uses lasers to detect surrounding road conditions for advanced driver-assistance systems. Lidar can also be used in sophisticated robotics products.

Hesai is also a rare example of a Chinese group deciding not to take US actions against it lying down. ByteDance, owner of video app TikTok, is also contesting a law that would ban the platform unless it divests the app.

Hesai alleges that the Pentagon’s behaviour was “arbitrary and capricious” because it did not provide the company with prior notice or an opportunity to respond. It argues that the Pentagon has failed to explain its rationale, provide evidence or review information submitted by the company.

The Pentagon declined to comment on the lawsuit. But it said Hesai met the definition of a “Chinese military company” as outlined in the US law that requires the defence department to compile the list. The Pentagon added that the term generally referred to companies “owned by, controlled by, affiliated with, or contributing to the People’s Republic of China’s military modernisation or to the PRC defence industrial base”.

Li denies any connection between Hesai and the Chinese military and says it has not received “any investment” from the Chinese government or state-linked entities.

Hesai’s lidar sensors, he says, are controlled and operated by customers. It cannot access the images generated by lidar, as the technology does not have wireless connectivity and cannot be accessed remotely. 

“This is civilian technology . . . we have procedures in place to even prevent the units being directly sold to any military of any country,” Li said.

Founded 10 years ago in Silicon Valley, but with its main operations now in Shanghai and Hangzhou, Hesai has a market share of just under 50 per cent of lidar sales to the global automotive industry and works with most of China’s top EV makers. 

Of its Rmb1.8bn ($250mn) in revenues in 2023, China accounted for 55 per cent and the US just over 40 per cent, but Hesai expects that US proportion will fall to less than 20 per cent this year.

Hesai has also faced scrutiny from China experts in Washington. In a report on Hesai, James Mulvenon, chief intelligence officer at the US group Pamir Consulting, alleged that it appeared to have facilities inside, or just next to, a dedicated military-civil fusion (MCF) zone in Shanghai.

Mulvenon said Hesai also appeared to have supply-chain connections with universities that conduct cutting-edge research for the People’s Liberation Army. His report also alleged that Hesai technology had been used in vehicles used in the repression of Uyghur Muslims in the Xinjiang region.

Hesai disputed Mulvenon’s claims, saying it had no connections with any Chinese military organisations, does not have any facility within or adjacent to any dedicated MCF zones in Shanghai, nor is it aware of its products being used as part of the Xinjiang allegations.

The US is also increasingly concerned that Chinese groups may use their technology to target the data of Americans. The White House recently launched an investigation into whether Chinese cars that use sensors, including lidar, and data-collection technology posed a risk to US national security.

US officials are also concerned about Chinese laws that require domestic firms to hand over data to the government.

In a preliminary prospectus filed with the US Securities and Exchange Commission ahead of its New York listing early last year, Hesai itself said it faced risks associated with having the majority of its operations in China, including the fact that Beijing “may influence or intervene in our operations at any time”, in addition to having possible oversight influence on “data security”.

Mulvenon said the US intelligence community was concerned about “telematics” — systems that store data and allow its wireless transfer over long distances.

“Intelligence professionals know that vehicle telematics data like lidar have a high value, and China’s laws give me zero confidence that Hesai can protect American vehicle data,” he said.

Ouster, an American rival of Hesai, has also urged lawmakers to take these risks more seriously before the Chinese company has a chance to expand further in the US.

Revenues for the lidar market globally are forecast to surge to about $14bn next year and to more than $45bn by 2030, from less than $2bn in 2022, according to S&P. China is expected to dominate about two-thirds of the market next year.

While Hesai brands itself as “global” with offices in the US and Germany, Li said the company has benefited from being in China just as the country’s EV industry has boomed.

“If you are the best lidar [company] in China, there is a good chance that you could be the best in the world,” he said.

But he conceded the backdrop of tensions between Washington and Beijing created uncertainty about Hesai’s overseas sales.

“I don’t like where geopolitics is going. There’s nothing I can do about it,” he said.

CrunchBase : The Week’s 10 Biggest Funding Rounds: Skild AI Grabs $300M To Build

The Week’s 10 Biggest Funding Rounds: Skild AI Grabs $300M To Build Robot Brains

After a quiet holiday week, investors were back in action dishing out big rounds to startups in robotics, biotech, healthcare and more. Half a dozen rounds hit nine figures — perhaps a good sign for startups for the rest of summer.

1. Skild AI, $300M, robotics: The good year for robotics startups continued this week. Skild AI became the latest such startup to raise big, locking in a $300 million Series A led by Coatue, Lightspeed Venture Partners, SoftBank Group and Jeff Bezos, through his Bezos Expeditions. The funding brings the company to a valuation of $1.5 billion. The Pittsburgh-based startup isn’t building robots, however, it’s building robot brains. The theory is that those brain models can then be used in a variety of robots and for different tasks — instead of just having one application. It seems a lot of big-name investors agree with that strategy.

2. Element Biosciences, $277M, biotech: It’s hard to get through a week without a big biotech raise, and this one’s no different. Element Biosciences raised more than $277 million in a Series D led by Wellington Management. The San Diego-based biotech startup is focused on developing DNA sequencing and multi-omics technology for research markets. Founded in 2017, the company has raised $678 million, per Crunchbase.

3. Regal, $250M, film: Regal, the second-largest movie theater chain in the U.S., makes the list this week after it secured $250 million to upgrade its locations. The company is looking to add to its 425 theaters across the country — with enhancements that include luxury recliners and other amenities. Regal is owned by Cineworld, which emerged from bankruptcy with a financial restructuring process last year. Investors were not disclosed.

4. (tied) HarmonyCares, $200M, healthcare: HarmonyCares, a provider of in-home primary care, raised one of the biggest rounds of the week to expand its operations. The Troy, Michigan-based healthcare company closed a $200 million round led by General Catalyst, McKesson Ventures and a large unnamed national payor. The firm operates home-based primary care practices in 15 states –offering services such as home health, hospice, radiology and laboratory – and will look to grow its geographical reach across the U.S.

4. (tied) Earned Wealth, $200M, financial services: Wealth tech startup Earned Wealth raised a $200 million investment led by Silversmith Capital Partners and Summit Partners. The company offers medical professionals financial planning, tax planning and investment advice on one platform. The new cash is expected to go toward acquisitions. Founded in 2021, the company has raised $212 million, per Crunchbase.

6. Hebbia, $130M, artificial intelligence: Hebbia, an AI startup that helps businesses analyze all types of data to answer more complex, multi-step questions, raised a $130 million Series B from a handful of big-name investors. The new round was led by Andreessen Horowitz and values the company at approximately $700 million, per Bloomberg. The New York-based startup allows companies to sift through structured and unstructured data — including regulatory filings and PDFs — to answer more detailed and complicated business questions. In the last 18 months, the startup has grown revenue 15x and quintupled headcount. Founded in 2020, the company has raised a total of $161 million, per Crunchbase.

7. Hayden AI, $90M, govtech: Next time you think about double parking, remember a San Francisco-based startup just raised a big Series C to help make sure you don’t. Hayden AI, a vision AI platform, locked in a $90 million growth equity round led by The Rise Fund — TPG’s impact investing platform. While the company’s platform uses cameras mounted on buses that can spot illegal parking or moving violations, it also can do more. The platform uses geospatial data collection sensor systems to give cities insights to improve traffic safety and accessibility. It can detect and predict traffic congestion, improve transportation networks and more. Founded in 2019, the company has now raised more than $193 million, per Crunchbase. The funding is the largest received by a startup in the govtech sector this year, but it is by no means the only one. In fact, govtech startups have already raised $271.4 million this year, per Crunchbase data. That already surpasses last year’s total of $249.7 million invested into the sector.

8. X-Bow Systems, $70M, aerospace: Albuquerque, New Mexico-based X-Bow Systems, a developer of solid rocket motors and hypersonics technologies, raised more than $70 million led by Razor’s Edge. Founded in 2016, the company has raised nearly $160 million, per Crunchbase.

9. Captions, $60M, artificial intelligence: New York-based Captions, a generative video creation and editing platform, raised a $60 million Series C led by Index Ventures at a valuation of $500 million. Founded in 2021, Captions has raised $100 million, per Crunchbase.

10. ZwitterCo, $58.4M, sustainability: Woburn, Massachusetts-based ZwitterCo, a water treatment startup using membrane technologies, closed a $58.4 million Series B funding round led by Evok Innovations. Founded in 2018, the company has raised nearly $99 million, per Crunchbase.

TechCrunch : Here’s the full list of 28 US AI startups that have raised $100M or

For some, AI fatigue is real — but clearly venture investors haven’t grown tired of the category.

In the first half of 2024 alone, more than $35.5 billion was invested into AI startups globally, recent Crunchbase data found. Five of the six venture rounds of more than $1 billion raised in the first half of 2024 were raised by AI companies.

Many other AI startups were able to raise mega-rounds of more than $100 million. U.S. startups raised two of the billion-dollar rounds in the first half of this year and nearly two-thirds, 64%, of the mega-rounds.
Here are the U.S.-based AI companies that raised $100 million or more so far in 2024:

July
  • Hebbia, $130 million: Andreessen Horowitz led the round for Hebbia that closed July 8. The startup, which uses generative AI to search large documents, also raised money from Peter Thiel, Index Ventures and Google Ventures and garnered a $700 million valuation.
  • Skild AI, $300 million: Pittsburgh-based Skild AI announced a $300 million Series A round on July 9 that valued the company at $1.5 billion. The round was led by Lightspeed Venture Partners, Coatue and Jeff Bezos’ Bezos Expeditions with participation from Sequoia, Menlo Ventures and General Catalyst, among others. Skild AI builds tech to power robots.
June
  • Bright Machines, $106 million: BlackRock led a $106 million Series C round into Bright Machines that closed on June 25. Nvidia, Microsoft and Eclipse Ventures, among others, also participated. The startup makes both smart robotics and AI-driven software and has raised more than $437 million in total funding.
  • Etched.ai, $120 million: San Francisco-based Etched.ai raised a $120 million Series A round on June 25. The round was led by Primary Venture Partners and Positive Sum with participation from Two Sigma Ventures, Peter Thiel and Kyle Vogt, among others. Etched.ai is working to make chips that can run AI models faster and cheaper than GPUs.
  • EvolutionaryScale, $142 million: New York-based EvolutionaryScale is developing biological AI models for therapeutic design. It raised a $142 million seed round that closed on June 25. The round was led by Lux Capital, former GitHub CEO Nat Friedman and Daniel Gross, an angel investor and former head of AI at Y Combinator. The company was founded in 2023.
  • AKASA, $120 million: Healthcare revenue cycle automation platform Akasa announced a $120 million round on June 18. The San Francisco-based startup has collected $205 million in total funding and has raised from investors, including Andreessen Horowitz, Costanoa Ventures and Bond in prior rounds.
  • AlphaSense, $650 million: New York-based AlphaSense raised a $650 million Series F round that was announced on June 11. The round was led by Viking Global Investors and BDT & MSD Partners with participation from CapitalG, SoftBank Vision Fund and Goldman Sachs, among others. AlphaSense is a market intelligence platform founded in 2008. The company has raised more than $1.4 billion in venture funding and was most recently valued at $4 billion.

May
  • xAI, $6 billion: Elon Musk’s xAI raised a jaw-dropping $6 billion Series B round on May 31 from investors, including Sequoia, Valor Equity Partners and Fidelity, among others. The startup is building an AI platform that will “accelerate human scientific discovery” and is valued at an equally stunning $24 billion.
  • Scale AI, $1 billion: Scale AI, a startup that provides data-labeling services to companies for training AI models, raised $1 billion in May. The Series F round was led by Accel with participation from Tiger Global, Spark Capital and Amazon, among others. San Francisco-based Scale AI has raised more than $1.6 billion in total and is currently valued at nearly $14 billion.
  • Suno, $125 million: AI-music creation platform Suno raised $125 million in a Series B round that closed on May 21. The round values the Cambridge, Massachusetts, startup at $500 million. Founder Collective, Lightspeed Venture Partners and Matrix participated in the round in addition to former GitHub CEO Nat Friedman and former head of AI at Y Combinator Daniel Gross.
  • Weka, $140 million: Silicon Valley-based Weka created an AI-native data platform and raised $140 million in a Series E round that closed on May 13. The funding was led by Valor Equity Partners with participation from Qualcomm Ventures, Nvidia and Hitachi Ventures, among others. The startup was valued at $1.6 billion.
  • CoreWeave, $1.1 billion: New Jersey-based GPU infrastructure provider CoreWeave raised $1.1 billion in a Series C round that closed on May 1. Coatue led the round with participation from Fidelity, Altimeter Capital and Magnetar Capital, among others. CoreWeave was launched in 2017 and is valued at $19 billion.
April
  • Blaize, $106 million: AI computing platform company Blaize raised $106 million in a Series D round that was announced on April 29. The round had participation from investors, including Temasek, Franklin Templeton and Bess Ventures, among others. The company was founded in 2010 and has raised $242 million.
  • Augment, $227 million: Palo Alto-based Augment raised $227 million for its AI coding assistance startup. The startup’s Series B round was announced on April 24. Lightspeed Venture Partners, Index Ventures and Sutter Hill Ventures participated in the round, which valued the startup just shy of $1 billion.
  • Cognition, $175 million: Founders Fund led applied AI lab startup Cognition’s $175 million round that closed on April 24. This round came just about a month after the firm raised a $21 million Series A round in March from Founders Fund and numerous other investors, including Ramp co-founder Eric Glyman, Stripe co-founders Patrick and John Collison, and DoorDash co-founder Tony Xu. The company was founded in November 2023 and is already valued at nearly $2 billion.
  • Xaira Therapeutics, $1 billion: San Francisco-based AI drug discovery startup Xaira Therapeutics raised a $1 billion Series A round. Foresite Capital and ARCH Venture Partners led the round that was announced on April 23. Sequoia, NEA and Lux Capital participated in the round, among many others.
  • Cyera, $300 million: Coatue led the recent $300 million Series C round into AI-powered data security platform Cyera that closed on April 9. The round valued New York-based startup at $1.4 billion. Sequoia, Redpoint and Accel also participated in the round, among others.

March
  • Celestial AI, $175 million: Celestial AI, founded in 2020, is building an optical interconnect technology platform for data centers and AI solutions and raised a $175 million Series C round on March 27, which brought its total funding amount to $338 million. The round was led by Thomas Tull’s US Innovative Technology Fund with participation from M Ventures, Temasek and Tyche Partners, among others.
  • FundGuard, $100 million: FundGuard is a New York-based startup offering an AI-powered investment accounting operating system that raised $100 million at a $400 million valuation. The Series C round closed on March 25 and was led by Key1 Capital with participation from Hamilton Lane, Blumberg Capital and Team8, among others.
  • Together AI, $106 million: Salesforce Ventures led Together AI’s $106 million Series A round that valued the company at $1.2 billion. Together AI is a platform designed to help create infrastructure and open source generative AI for developing AI models. NEA, Kleiner Perkins and Lux Capital also participated in the round, among others. The round was announced on March 13.
  • Zephyr AI, $111 million: Fairfax Station, Virginia-based Zephyr AI raised a $111 million Series A round that closed on March 13. Revolution Growth, Eli Lilly and Company Foundation, EPIQ Capital Group and investor Jeff Skoll all participated in the round. The startup, founded in 2020, uses AI to enhance drug discovery and precision medicine. It has raised $129.5 million total so far.
February
  • Glean, $203 million: AI-driven enterprise search startup Glean raised $203 million in a February 27 round that valued the startup at $2.4 billion. The Series D round was led by Lightspeed Venture Partners and Kleiner Perkins with participation from Sequoia, General Catalyst and Databricks Ventures, among others. The Silicon Valley-based startup has raised more than $350 million in venture funding and its founder, Arvind Jain, was recently interviewed on TechCrunch’s Found podcast.
  • Figure, $675 million: Silicon Valley-based AI robotics startup Figure raised a $675 million Series B round that closed on February 24. The round valued the startup at nearly $2.7 billion. Nvidia, OpenAI and Microsoft participated in the round, among others. The startup was founded in 2022 and has raised more than $850 million.
  • Abridge, $150 million: Pittsburgh-based Abridge, which uses AI to transcribe medical conversations, raised a $150 million Series C round that closed on February 23. The round was led by Redpoint and Lightspeed Venture Partners with participation from USV, IVP and Spark Capital, among others. This round brings the six-year-old company’s valuation to $850 million.
  • Recogni, $102 million: The company designs high-output but low-power AI interface solutions, and it raised a $102 million Series C round on February 20. The round was led by GreatPoint Ventures and Celesta Capital. Pledge Ventures, Mayfield and DNS Capital also contributed to the round.
  • Lambda, $320 million: San Francisco-based deep learning infrastructure company Lambda raised $320 million in a Series C round that was announced on February 15. The round was led by Thomas Tull’s US Innovative Technology Fund with participation from Gradient Ventures, Mercato Partners and T. Rowe Price, among others. Lambda has raised more than $900 million in venture capital and was most recently valued at $1.5 billion.
  • Magic, $117 million: AI coding startup Magic raised a $117 million Series B round that closed on February 12. The round was led by NFDG Ventures with participation from CapitalG and angel investor Elad Gil. The San Francisco-based company has raised more than $145 million in total capital.
January
  • Kore.ai, $150 million: A startup building conversational AI for enterprises, Kore.ai raised a $150 million Series D round that was announced on January 30. FTV Capital led the round into the Orlando, Florida-based company. Nvidia, Vistara Growth, and NextEquity Partners participated as well, among others. Kore.ai was founded in 2013 and has raised more than $223 million in funding.

WSJ : Sports Betting Companies Weed Out Winners. Gamblers Want to Know Why.

Sports Betting Companies Weed Out Winners. Gamblers Want to Know Why.
Bettors and regulators seek more clarity on why platforms limit wagers by some successful customers

Online sports betting companies enlist celebrities, offer free bets and dole out perks to promote a tantalizing possibility: winning.

But some gamblers who manage to beat sportsbooks say they are often shut down when they succeed too much.

Dave Holmes, a sports bettor in Chicago, said that as he started to win more using a math-based wagering strategy, companies including BetMGM, ESPN Bet and Caesars began rejecting his bets. He typically puts down about $100 per bet. Some companies have offered instead to accept as little as 50 cents.

“I would love to actually be given an answer to why it’s happening, and they refuse to do that,” Holmes said.

Some frequent gamblers search the odds on everything from National Football League and Major League Baseball games to table tennis and darts, seeking weaknesses in prices set by sportsbooks and making advantageous wagers, much the way hedge funds seek opportunities to pounce on undervalued stocks.

Bettors who have been reined in say the mystery of why and when it happens is frustrating. Some have suggested that sportsbooks be required to offer the same maximum for all bettors or explain why some bettors are subject to different limits within the apps they use regularly.

Earlier this year, the Massachusetts Gaming Commission held a public discussion on wager limits, raising questions and seeking answers on how online sports-betting companies decide how much money to accept from individual customers.

Several sports-betting companies licensed in the state—including DraftKings DKNG 1.91%increase; green up pointing triangle, FanDuel, BetMGM, Caesars, ESPN Bet and Fanatics—agreed to attend the session but didn’t show up, citing concerns that proprietary business information would be made public, according to the commission. They have since agreed to participate with the commission on discussing the issue. (Fox Corp. has an ownership stake in FanDuel’s parent company, Flutter Entertainment FLUT 1.85%increase; green up pointing triangle. Fox and Wall Street Journal parent News Corp share common ownership.)

The regulator is digging into wager limits at a time of increased scrutiny on the other side of the sportsbook business: the biggest losers. Companies place big bettors in so-called VIP programs, doling out thousands of dollars in free bets and other perks for their most profitable customers, The Wall Street Journal reported in February. In response, U.S. Sen. Richard Blumenthal (D., Conn.) sent letters to online gambling companies questioning how they use player data and other marketing to target customers.

Sports-betting companies don’t regularly report how many customers are limited or how many are part of VIP programs. Nakisha Skinner, a Massachusetts Gaming Commission member, said in a March public meeting that she is concerned about transparency and fairness.

“You have a situation where a patron is losing, and being encouraged through outreach by an operator’s VIP staff and incentives,” Skinner said. “What’s the balance when that same patron begins to win?”

Setting limits
Sports-betting executives say bettors who are limited make up a fraction of their customer base and tend to be professional gamblers—unlike most customers, who bet on sports for entertainment. Betting heavily with promotions could get a customer limited, some companies said.

Sportsbooks deploy sophisticated risk-and-trading desks to monitor how money flows through various bets, attempting to minimize losses while offering attractive odds for customers. The companies say they have to manage their risk to operate the business profitably.

Bricks-and-mortar casinos have long maintained the option to block winning players, including at sportsbooks, and many successful bettors have to adopt ways to disguise their bets so that casinos can’t track what they are doing. The legendary sports bettor Billy Walters famously employed teams of people to spread out around Las Vegas and place bets for him.

Online gambling companies typically set a maximum amount of money customers can put down for any bet they offer. Some gamblers discover their personal bet allowances are lower when they log on to place a wager.

Michael Holt lives in South Dakota, near the border with Iowa. His home state hasn’t legalized sports betting, so he drives to Iowa to make legal wagers online there.

During March Madness, he placed a few $50 bets on basketball. He won some of them and noticed in the next couple of days that ESPN Bet and Caesars would take only $5 or $10 bets from him. So far, he hasn’t noticed limits on his bets with DraftKings or FanDuel.

Holt said he has placed a total of $1,000 in wagers on the ESPN Bet app and won a total of $1,200 for a $200 profit.

“The fact that they flagged a $200-worth of a player is kind of crazy to me,” he said.

Up nearly $50,000
A DraftKings spokesman said the company offers tens of thousands of wagers a day, all with market-specific betting limits. “We restrict less than 1% of players below the market limit based largely on betting behaviors,” he said.

Penn Entertainment PENN -0.91%decrease; red down pointing triangle, which operates ESPN Bet, said in answers submitted to Massachusetts regulators that customers get an on-screen message when a wager exceeds their approved limit, which is updated in real time, and that customers can ask for those limits to increase. Any law or regulation that would limit or ban operators from setting such guardrails would force it to cut back on its offerings, the company said.

Holmes, the Chicago sports bettor, researched a mathematical approach to gambling, one that he said puts the odds more in bettors’ favor, and said he is up nearly $50,000 since he began.

He said he has been limited by five companies with no explanation. Holmes initially tried to put down $100 per bet but now can’t wager more than $10, $25 or $50 depending on the company and the type of bet he is trying to place.

If the companies were forthright and told gamblers directly that they had won too much and were taking actions to manage the business risks, he said, “I would be very understanding of that.”

FT : Investors pile into platinum funds in bet on hybrid vehicles

Investors pile into platinum funds in bet on hybrid vehicles
Highest ETF inflows in four years come as electric car sales flag

Investors are betting on resurgent interest in hybrid vehicles and resilient demand for traditional combustion engines cars by pouring cash into funds that invest in platinum at the fastest rate in four years.

Holdings of exchange traded funds backed by physical platinum surged by about 444,000 ounces in the second quarter, equating to almost 6 per cent of annual demand and the biggest jump since 2020. Both hybrid and traditional engine vehicles use platinum to reduce harmful emissions.

Sales of hybrid vehicles have surged — with major carmakers investing heavily in this area again — as consumers grow wary of fully electric vehicles, while combustion engine vehicles are now predicted to be around for longer than previously thought.

“The investor interest is coming from slower battery electric vehicle growth and the higher for longer combustion engine vehicle demand,” said Edward Sterck, director of research at the World Platinum Investment Council, an industry lobby group. He added that “hydrogen is a nice-to-have future story for platinum.”

The ETF inflows helped to propel the platinum price 20 per cent higher over a month to the middle of May, after mostly trading below $1,000 per ounce since last June. The metal has since retraced some of its gains to trade at $1,014 per ounce, less than half of its all-time high of $2,240 in 2008.


Analysts said some investors were taking their profits from a rally in gold, which hit an all-time high of around $2,450 per troy ounce in May, and reinvesting them into other precious metals such as silver and platinum.

“It’s all about the fact that we have had a strong precious metals rally in gold and silver and an expectation that platinum would be the next in the group to gain,” said Nitesh Shah, head of commodities research at WisdomTree, which offers a platinum ETF.

ETFs linked to palladium, another metal used in catalytic converters, have seen strong inflows equating to 200,000 ounces this year.

Global carmakers including Ford and Stellantis are expanding their line-up of gas-electric hybrids as sales growth of electric vehicles slows owing to concerns about cost and charging infrastructure. Investments in hybrid technology are far smaller than electric vehicles while carmakers are able to generate higher profit margins.

Toyota has also churned out record profits on the back of booming hybrid sales and recently unveiled a new generation of internal combustion engines as it expects the global shift to electric vehicles to take longer than expected.

Against this backdrop, hybrid vehicle sales in Europe this year have climbed 21 per cent to 1.3mn units, compared with growth of just 2 per cent for EVs, according to BNP Paribas. US hybrid sales have risen even faster at 35 per cent year on year.

“Manufacturers who had decided to stop producing hybrids are adding them back to their catalogue. Everything has shifted from around a year ago,” said Philippe Houchois, an analyst at Jefferies. He added that even though the sales data on “the revival of hybrids” is mixed, especially in Europe, carmakers have heavily started to reinvest in the technology.

“It is hybrids for longer, plug-ins for longer,” he said. “They will all need catalytic converters.”

Catalytic converters in hybrid vehicles require higher volumes of platinum and palladium than traditional petrol and diesel engines.

By contrast, the slowdown in EV demand has hit the prices of metals used in batteries such as lithium, cobalt and nickel.

Nicky Shiels, an analyst at MKS Pamp, a Swiss precious metals refinery and trader, said that the EV slowdown was “an absolute tailwind” for investment demand for platinum.

Shiels added that investor attention had been further boosted by mining company BHP’s abortive bid for rival Anglo American earlier this year. As part of its offer, BHP had demanded that Anglo exit its platinum business, the world’s largest producer, adding risk for investors who tried to gain exposure to platinum by investing in the mining equity.

Paul Syms, head of commodities product management at Invesco, said that platinum demand was also boosted by AI and data storage since the metal is used in hard disc drives, while supply is expected to be low.

FT : Tesco takes on Waitrose and M&S in premium range fight

Tesco takes on Waitrose and M&S in premium range fight
UK’s biggest supermarket aiming for extra £1bn in sales as spending on upmarket own-brand labels rises

Tesco, the UK’s largest supermarket, has thrown down the gauntlet to upmarket rivals Waitrose and Marks and Spencer, signalling it is targeting an extra £1bn in sales for its upmarket range Finest. 

“We haven’t yet set our stall out to say ‘what would it take to get to £3bn’ but we’re very conscious it is playing an increasingly important role,” chief executive Ken Murphy told the Financial Times. Finest has annual sales of £2bn and includes products such as apple and cider sausages selling for £4 and bottles of Argentinian Malbec for £8.50.

“We genuinely believe . . . that our intrinsic [food] qualities are every bit as good as anything you would get at Sainsbury’s and increasingly out of Waitrose,” added Murphy, whose chain commands 27.7 per cent of the UK grocery food market. “M&S we probably still have a bit of work to do.”

His remarks come as shoppers shun restaurants in the face of higher living costs having also become more adventurous with their cooking at home after experimenting during the coronavirus pandemic. 

Spending on premium labels owned by supermarkets was up 12 per cent in the year to June 9 compared with the previous year, according to data group Kantar, even as food bills come down after a period of surging inflation. It was also nearly double the 6.9 per cent growth in growth in all brands owned by the grocers, including their budget ranges.

Tesco’s Finest products account for only just over 3 per cent of the group’s £61.4bn sales — but this would be equivalent to about a quarter of Waitrose’s total sales and M&S’s food sales, respectively.

However, it has taken Tesco about a decade to reach that level, from £1.4bn in sales in 2013. There is no target date set for potentially getting sales to £3bn.

Clive Black, a retail analyst at Shore Capital, said it would not be earlier than “the medium and long term before that number is reached” as the UK grocery industry’s annual growth is relatively modest.

The Finest range, which first launched in 1998 and is known for its silver branding, is being sold in more of its 3,000-odd shops and the chain has been expanding it to include its dine-in-for-two offer — a mainstay for premium rival M&S — that sells coq au vin for £7.50 and a green vegetable medley with wild garlic butter for £3.  

Premium ranges have become a battleground in the cut-throat competition between supermarkets. Rivals such as Waitrose last month relaunched its premium own label No. 1 and Asda introduced its “Exceptional” range in May. Waitrose said No.1 “sets a new benchmark for quality”.

Sainsbury’s has also been adding to its premium offering, while M&S’s food division — which touts the welfare credentials of its products — has recently posted soaring annual sales. Even disrupters such as German discounter chain Lidl have benefited from this trend with its Delux range.

Murphy rejected suggestions that supermarkets could just repackage standard products with a premium label to sell to customers. 

He said when Tesco was concocting new products at its food development centre, part of the group’s headquarters in Welwyn Garden City, it wanted “at a minimum to match or beat M&S or Waitrose”. “If we can’t satisfy ourselves that we’re at least as good at them, ideally, better than them, the product doesn’t make it.” 

For example, although the Finest range already includes sourdough bread, the supermarket has been tinkering with its recipes to improve the product. Across the industry it has been commonplace to use dehydrated starter but it will now also use its own live culture that goes into the base of the bread.

“This is restaurant-quality now,” said Jamie Robinson, Tesco’s executive chef, who used to work for Michelin-starred chef and restaurateur Marco Pierre White. 

There has been “a massive step change in our product culture, from an innovation point of view” said Murphy after Tesco hired Breige Donaghy, its director of product development and innovation, and Dominic Morrey, its commercial director of fresh food, in 2022 with a mandate to boost Finest.

Tesco’s sales of upmarket food have been buoyed by more people entertaining at home and dining in on a Friday and Saturday as they watch their spending.

“While it is a trade up from a core, own-brand product, it is a massive saving versus eating out because eating out has become way more expensive relative to food,” said Murphy. 

The pandemic also ignited an interest in cooking, forcing supermarkets to up their game when it comes to ingredients and the cuisines on offer. 

It takes Tesco on average about 40 weeks for a product to be launched but it can fast track certain items, Donaghy said. She has a team of 60 developers who focus on shoppers’ “needs and wants”, who pay close attention to food trends and work closely with its technical and commercial teams as well as suppliers such as Cranswick and Bakkavor to manufacture the products.

Tesco has been working with some of its suppliers for decades and there was “an element of trust and an understanding of each other’s working processes and there’s also a lack of fear . . . they can rely on the longevity of the relationship to invest in better processing, better ingredients, better cooking techniques”, Murphy said.

There has to be a balance, however, between “the razzmatazz of new products and excitement” and the quality of fresh food such as vegetables, meat, fish and poultry, he added. “If you don’t get the basics right, nobody’s going to believe that you’re making a product like this.”

FT : Meloni seeks to bring nuclear power back to Italy

Meloni seeks to bring nuclear power back to Italy
Rome plans to allow investments in small reactors as part of a bid to lower the country’s carbon emissions

Prime Minister Giorgia Meloni’s rightwing government is planning to reintroduce nuclear energy 35 years after Italy shut down its last atomic plant, in a bid to lower the country’s carbon emissions.

Environment and energy security minister Gilberto Pichetto Fratin told the Financial Times that Rome plans to introduce legislation to enable investments in small modular nuclear reactors which could be operational within 10 years.

Atomic power should account for at least 11 per cent of the country’s total electricity consumption by 2050, he said, as Italy seeks to reduce its reliance on imported fossil fuels.

“To have a guarantee of continuity on clean energy, we must insert a quota of nuclear energy,” the minister said.

Renewable technologies such as solar and wind power “cannot provide the security that we need”, he argued, reflecting his government’s scepticism towards these technologies.


Italy built four nuclear power stations in the 1960s and ’70s and had planned an ambitious expansion of its nuclear power capacity. But after the 1986 Chernobyl disaster in the Soviet Union, Italians voted overwhelmingly in a national referendum to end subsidies for the development of new reactors. 

Amid the surge of anti-nuclear sentiment, Italy then decided to shut down all its existing nuclear power plants, the last of which closed in 1990. 

Two decades later, then-Prime Minister Silvio Berlusconi attempted to restart Italy’s nuclear programme, passing a new law and working up contracts for the construction of new reactors. But his attempt was derailed by a 2011 referendum in which more than 90 per cent of voters rejected the plan.   

In a recent survey commissioned by Legambiente — a leading Italian environmental group, 75 per cent of the 1,000 respondents expressed scepticism that nuclear power was a solution to Italy’s energy woes, with 25 per cent staunchly opposed on safety grounds. But 37 per cent said nuclear power could help Italy if the technology was safer.

Pichetto Fratin said he is confident that Italians’ historic “aversion” to nuclear power could be overcome, given that the newest technology has “different levels of safety and benefits families and businesses”. 

He said the past referendums are not an impediment to the Meloni government pushing new laws to facilitate a nuclear power restart. Italy has also retained a “high competence” in the sector, he said, with cutting-edge research institutions and Italian enterprises active in the nuclear supply chain in foreign markets. 

“It’s a matter of perception, awareness,” he said. “Young people are more aware, the elderly less so. They are of the Chernobyl generation and when they hear talk of nuclear power . . . they automatically say no.”

The Meloni government’s nuclear push comes as it has imposed new restrictions on the rollout of solar power, with the prime minister warning that the proliferation of photovoltaic panels threatens Italy’s food security. 

Pichetto Fratin said Rome is also concerned about overreliance on solar panels, which are largely made in China.

“It is clear that the development of solar is strongly linked to imports from China . . . a country that has a very government-controlled enterprise system, which can be a political, as well as commercial tool,” he said.

Many Italians are also complaining that photovoltaics are spoiling the view of the picturesque Italian countryside. “Solar panels on our hills, which are a place for tourists, are not always pleasant,” the minister said, calling “caution and moderation in authorising solar panels”.

By contrast, the minister argued that small nuclear power plants are more efficient, as generating 300MW would require just four hectares of land, a fraction of the land needed by solar parks.

“Italy has peculiar cartographic characteristics . . . it doesn’t have huge free spaces for solar panels,” he said. “We cannot cover a terrain like Italy — with its hills and mountains — with solar panels.”

FT : AI hype is not a replay of the dotcom bubble, but it’s a remix

AI hype is not a replay of the dotcom bubble, but it’s a remix
So says Goldman Sachs

Goldman Sachs last month made free-to-read a note on AI’s elusive productivity benefits and returns. It was written up in lots of places as a signal that the smart money was bailing out. Here’s tech blogger Ed Zitron:

This report is so significant because Goldman Sachs, like any investment bank, does not care about anyone’s feelings unless doing so is profitable. It will gladly hype anything if it thinks it’ll make a buck. [ . . . ] For Goldman to suddenly turn on the AI movement suggests that it’s extremely anxious about the future of generative AI, with almost everybody agreeing on one core point: that the longer this tech takes to make people money, the more money it’s going to need to make.

But like god and Rory Bremner, Goldman speaks in many voices. The intended audience for a publicly available global macro research note isn’t the same as for its investment advice. So while the general public is served non-specific caution, the brokerage clients get something more measured.

Goldman’s portfolio strategy team this week updated the bank’s view in light of a market pullback since February. It notes no sign yet of capitulation among companies selling shovels to the gold rush, like Microsoft, AMD and Super Micro. It’s those companies expected to turn generative AI into sellable products and services — software makers, mostly — that have been having a tough time:
While Nvidia, the AI OG, remains in a class of its own . . . 

What’s notable however is that Nvidia’s recent rally has been on fumes. Earnings forecast upgrades underpinned Nvidia’s nearly 200 per cent gain last year, but most of this year’s advance is explained by multiple expansion.

Having started the year at 25 times forward earnings, Nvidia now trades at 42 turns. A richer valuation contributed about 70 per cent of its year-to-date gain, Goldman calculates.


Heightened optimism comes in spite of the consensus expecting Nvidia’s revenue growth to decelerate from 265 per cent in the fourth quarter 2023 to just 25 per cent for the last quarter of 2025. A sizeable gap has opened up between perceptions of the size of Nvidia’s addressable market, that of its customers, and that of their customers.

Nvidia is due to post second-quarter numbers in late August, towards the end of reporting season, by which time the mood might already have darkened. A few cautious updates from downstream companies would heighten concerns about whether the $357bn spent on capex and R&D last year by Amazon, Meta, Microsoft and Alphabet (the so-called hyperscalers) can generate a decent return.

Goldman offers the caveat that, relative to history and earnings power, $357bn a year isn’t that much to spend:

At the height of the Tech Bubble, TMT stocks were spending more than 100% of cash flows from operations (CFO) on capex and R&D as many telecom stocks “overinvested.” In contrast, today’s leading TMT stocks are extremely profitable. While capex and R&D as a share of sales has increased, capex and R&D as a share of CFO equals a more contained 72% currently, and has actually been declining modestly as earnings of the group have recovered. This compares with a 40-year median of 67%. This dynamic is borne out in the economy-wide data as well.


And while capex and R&D inflation will keep outpacing sales growth, investors have at least set earnings growth at appropriate levels for the investment to wash its face, Goldman says:

Today’s hyperscalers have converted 31% of trailing 3-year capex and R&D into earnings on average during the past 5 years. They’ve spent $1.1 trillion on capex and R&D during the past 3 years (2022, 2023, 2024E). While the mapping of AI investment to earnings is not one-for-one, this aggregation implies these firms need to generate $335 billion of earnings in 2025 to achieve an ROI similar to recent history. That level of earnings would represent 16% growth versus 2024E, compared with current consensus expectations of 16%. In the late 1990s, required earnings growth for the Telecom firms equaled 22%, higher than today but in line with the consensus expectation of 24%. But ultimately, earnings collapsed by -120%.

So in the end, everything hangs on whether hyperscaler revenue accelerates before the capex depreciation charges take effect. On that point, Goldman can only offer its clients a trillion-dollar question mark: