>>> Weekend Papers Summary

Weekend Papers Summary

FINANCIAL TIMES
-The Biden administration plans to increase tariffs on Chinese electric vehicle imports from 25% to 100%, as part of its efforts to protect the American industry ahead of the US election. The move comes amid concerns that China could flood the US market with cheap EVs, threatening the American car industry. The Biden administration has been reviewing tariffs from then-president Donald Trump, and the new EV tariffs will be announced alongside the conclusion of the review led by the US Trade Representative. Biden has also expressed his desire to triple tariffs on Chinese steel and aluminum.
-US and China have agreed to intensify cooperation on replacing coal with clean power, following a meeting between President Joe Biden's climate policy adviser John Podesta and Chinese counterpart Liu Zhenmin. The US and China will engage in technical exchanges on climate-related issues, including technology for measuring greenhouse gas emissions and methane emissions controls. They will also intensify technical and policy exchanges on renewable energy rollout and coal consumption phase-down. US officials emphasized the importance of slowing coal-fired power plant growth in China.
-The US has increased its criticism of Israel's war, with the death toll reaching 35,000. However, weapons have continued to be delivered, sometimes due to urgent requests from the Israeli military. President Biden has paused the delivery of offensive weapons, including 1,800 bombs, due to concerns over their impact on urban settings in Gaza. He also warned Israel that the US would cease supply of certain offensive weapons if Israel attacks Rafah, a city in southern Gaza where over 1M people seek refuge.
-A state department study suggests Israel may have used US-made weapons in the Gaza war, violating humanitarian rights. The declassified study, sent to Congress, found that due to Israel's heavy reliance on US-made weaponry, it was reasonable to assess that American munitions were used in ways inconsistent with international humanitarian law or established practices for mitigating civilian harm. The assessment was mandated by President Joe Biden, who issued a directive to impose stricter oversight on US weapons transfers.
-China's consumer inflation rose in April, while factory prices continued to decline, indicating a rocky recovery in the world's second-largest economy. The national consumer price index rose 0.3% YoY, up from 0.1% in March. The rise was attributed to price increases in energy, education, and tourism, offsetting falling food costs. The inflation reading was better than the 0.2% predicted by economists, and came as President Xi Jinping focuses on a manufacturing revival to boost economic growth and offset the property sector slowdown. This strategy has sparked concerns among western leaders about cheap Chinese imports flooding their markets.
-China's President Xi Jinping has upgraded its relationship with Hungary, making the central European state led by Prime Minister Viktor Orban a model for other European states. During a five-day tour of Europe, Xi hailed the partnership as an "all-weather comprehensive strategic partnership for the new era". Budapest is now part of Beijing's "circle of friends," countries that support China's efforts to counter US power and receive investment, trade, and diplomatic support. This expansion of the relationship carries a weightier geopolitical message.
-High-yield or junk-rated companies have issued over $14B worth of dollar-denominated bonds this week, the highest totals since late 2021. Investment-grade borrowers have sold $56.7B of new bonds across 45 issuances, the largest weekly dollar amount raised since late February and the greatest deal count in two-and-a-half years. Bankers and investors are highlighting the growing belief that US interest rates are unlikely to fall steeply this year, prompting companies to meet their funding needs now rather than risking higher borrowing costs. The November US election threatens to unsettle markets late in the year.
-Russian forces have launched an attack on Ukraine's north-eastern Kharkiv region, aiming to exploit Moscow's superior weaponry and manpower before US military aid arrives. Ukrainian defense ministry reported that Russian armored units attempted to break through Ukrainian defensive lines after conducting artillery and air strikes around Vovchansk. The ministry stated that these attacks have been repelled, and battles of varying intensity continue. President Volodymyr Zelensky criticized the Russian attack, stating that Ukraine had met them with troops and artillery, but their military and command had calculated their forces to face the enemy with fire.
-The Academy of Motion Picture Arts & Sciences is launching a $500M global fundraising campaign to counter a decline in the annual Oscars TV broadcast. The Academy has raised $100M so far, with individual donors including Leonard Blavatnik. It has also signed sponsorship deals with global luxury brands. The TV audience for the Oscars has decreased from 44M US viewers in 2014 to 19.5M this year. The current deal with ABC ends in 2028, and negotiations on renewal are set to begin.

THE NEW YORK TIMES
-Israel has halted the flow of humanitarian aid to Gaza due to an Israeli military incursion into the southern city of Rafah. Aid officials warned that essentials like food and medicine were running dangerously low, threatening to worsen the already dire humanitarian crisis. The situation is described as devastating, complex, and erratic, with UNICEF's senior emergency coordinator in Gaza, Hamish Young, describing it as "unheard of". Despite Israel allowing 200,000 liters of fuel into southern Gaza, this may only offer temporary respite for hospitals and bakeries that rely on generators for electricity. Most aid for Gaza had been entering through two border crossings in the southern end of the territory.
-The Biden administration believes Israel has likely violated international standards in failing to protect civilians in Gaza, but has not found specific instances that would justify withholding military aid. The State Department's most detailed assessment of Israel's conduct in Gaza stated that Israel has the knowledge, experience, and tools to implement best practices for mitigating civilian harm in its military operations. However, the report raised substantial questions about whether the Israel Defense Forces are making sufficient use of those tools.
-The judge in Donald J. Trump's criminal trial has personally asked Michael D. Cohen, a key witness, to stop speaking out against the former president. Cohen, who was once a personal lawyer for Trump, paid $130,000 in hush money to silence Stormy Daniels's account of extramarital sex with the then-presidential candidate. Cohen, who is expected to begin testifying next week, has been outspoken in his taunting of Trump, recently posting a TikTok video in which he wore a shirt with a picture of the former president behind bars. Justice Merchan stated that the directive came from the highest authority in the court, and Cohen declined to comment.
-Protesters have been arrested at the University of Pennsylvania, Massachusetts Institute of Technology, and the University of Arizona, as well as two other schools that have bowed to student demands and canceled speeches by the U.S. ambassador to the United Nations. The University of California, Berkeley, has also faced challenges in holding commencement ceremonies without major disruptions. High-profile speakers, such as author Colson Whitehead and comedian Jerry Seinfeld, have become potential flashpoints due to arrests. Arrests continued on Friday as more schools sought to secure their ceremonies. Asna Tabassum, the University of Southern California valedictorian, received her diploma after being canceled after being criticized by pro-Israel groups. Xavier University in New Orleans became the second school to rescind an invitation to Linda Thomas-Greenfield, the American ambassador to the United Nations, agreeing to a key demand from student demonstrators. Arizona State University has put the chief of its campus police department on paid administrative leave after complaints were filed related to the chief's actions in late April.
-Ronn Torossian, a New York City public relations executive and associate of Mayor Eric Adams, was arrested at Syracuse University's pro-Palestinian encampment. Torossian and other parents protested the school's inaction on student safety issues, including violence and antisemitism. Torossian confronted a student protester with a sign promoting Palestine's freedom, and was arrested when he refused to leave.
-A powerful solar storm has triggered the highest-level geomagnetic storm in Earth's atmosphere, expected to make the northern lights visible as far south as Florida and Southern California. The storm is the strongest such storm to reach Earth since Halloween 2003, causing power outages in Sweden and damaging transformers in South Africa. The National Oceanic and Atmospheric Administration issued an unusual storm watch for the first time in 19 years, which was later upgraded to a warning. The storm is expected to continue through the weekend as a steady stream of emissions from the sun continues to bombard the planet's magnetic field. The northern lights, also known as auroras, will be the most visible part of the storm, but authorities and companies will also be monitoring its effects on infrastructure, such as global positioning systems, radio communications, and electrical power.
-Apple's top software executives, Craig Federighi and John Giannandrea, have decided that Siri, the company's virtual assistant, needs a brain transplant. The decision was made after weeks of testing OpenAI's new chatbot, ChatGPT. Siri, introduced in 2011, had been limited to individual requests and struggled to follow conversations. ChatGPT, on the other hand, was able to understand users' preferences and adapt to different situations, making Siri appear outdated. The decision comes after weeks of testing and testing of ChatGPT.
-Chinese leader Xi Jinping received a gift of fine cognac at the Élysée Palace in Paris and was cheered in Belgrade by Serbians waving Chinese flags. By the time he left Hungary on Friday, the clouds over his country's relations with the West looked less dark, at least from China's perspective. Xi told President Emmanuel Macron of France that relations would be "as vibrant and thriving as springtime" and that the "tree of China-Serbia friendship will grow tall and sturdy." In Hungary, he told Prime Minister Viktor Orban that their countries were poised to "embark on a golden voyage." The Chinese state-run news media, never less than glowing about Mr. Xi, went to strenuous lengths to present his European meetings as a triumph.

THE NEW YORK POST
-On Friday, the Pentagon has unveiled a $400M military aid package for Ukraine, which includes surface-to-air missiles, artillery rounds, and other necessary weaponry to counter Russian advances in the war-torn region. This is the third tranche of aid since Congress approved $60 billion in additional funding last month. The package includes munitions for Patriot air defense systems, National Advanced Surface-to-Air Missile Systems, Stinger anti-aircraft missiles, High Mobility Artillery Rocket Systems, howitzer artillery rounds, and other equipment.
-Elon Musk's AI startup, xAI, could be valued at a higher-than-expected $20B in its first funding round, as investor demand surges. The company, which powers the Grok chatbot, could raise between $7B and $8B, surpassing the $6B billion raised at an $18B valuation reported by Bloomberg earlier this week. Musk, who launched Tesla, SpaceX, Neuralink, and Boring, has asked investors to wire in money by the end of Friday before he closes the window on the first funding round. Musk said that he can leverage Tesla's computing power to help xAI, as electric vehicles use only 10% of their computing power.

WSJ : Tesla Turmoil Means Make-or-Break Moment for EV Charging

Tesla Turmoil Means Make-or-Break Moment for EV Charging
Turmoil in Tesla’s charging network puts spotlight on other fast-charging providers

The EV charging industry faces a make-or-break moment.

Tesla TSLA -2.04%decrease; red down pointing triangle rattled the U.S. charging industry in late April with deep cuts to the team that created the country’s most successful charging network. Since then, comments by Chief Executive Elon Musk have left other charging companies scratching their heads about Tesla’s plans.

Immediately after the layoffs, Musk tweeted that Tesla would build Superchargers, the web of fast chargers that enable cross-country road trips, at a slower pace for new locations. Then on Friday he took to his social-media site, X, to say: “Tesla will spend well over $500M expanding our Supercharger network to create thousands of NEW chargers this year.”

Any shift in Tesla’s rapid building pace opens up a massive opportunity, though there is no obvious No. 2 in the race to build a U.S. highway network.

Companies from Walmart to Mercedes to BP to a consortium of carmakers have made bold promises to build their own fast-charging networks across the U.S. Billions of dollars are pledged, but so far no one has built anything close to what Tesla has created.

The turmoil comes at a key moment with companies competing for the first awards for more than $5 billion in public funding from the 2021 federal infrastructure law to increase the availability of highway chargers.

Walmart says it will leverage its massive real-estate portfolio to launch its own fast-charging network at thousands of U.S. locations by 2030. For now, it offers chargers from third-party providers at 280 stores.

Ionna, a $1 billion joint venture of seven automakers—BMW, General Motors, Honda, Hyundai, Kia, Mercedes-Benz and Stellantis—set a 30,000-charger target for North America. It received federal regulatory approval in February but hasn’t opened a site yet and is still hiring staff.

“It’s the wild west out there,” said Bill Ferro, co-founder and chief technology officer at Paren, a software company focused on EV charging reliability. “Anybody and everybody is trying to put EV charging stations in place.”

Tesla stunned the nascent charging industry with a massive layoff in its Supercharger group. It was adding new locations at a rapid clip and has started opening its well-regarded web of fast chargers to other kinds of vehicles. Many viewed it as a solution to the country’s charging conundrum.

Tesla has also scooped up about $29 million in public funding at 69 sites, more locations for the federal highway network than any other company, according to data from the firm EVAdoption.

More fast chargers are needed along highways to overcome “range anxiety”—the fear that EV drivers will run out of power while traveling long distances.

Tesla has more than 25,500 Superchargers in the U.S., part of a global network of more than 50,000 fast chargers, according to government data and the company. Tesla also has slower “Destination” chargers in places such as hotels and shopping centers where drivers are parked for longer periods.

No single company can replicate Tesla’s pace in the near term in the U.S. It has built half of the fast chargers added in the U.S. this year, according to government data. The equipment can repower a battery in around 20 minutes to an hour, depending on the car.

One reason there aren’t more chargers: the business model. The publicly traded charging providers outside of Tesla’s system haven’t turned a profit.

Charging is a challenging business if it is based only on selling electricity as fuel, said Nick Nigro, founder of the research and consulting group Atlas Public Policy. It requires having equipment in use frequently, which can be hard in many spots until more EV drivers hit the road.

Automakers can use charging as a marketing strategy like Tesla has, while retailers can lure customers to spend inside stores.

“If you’re basing it on the value that you can extract from somebody who is charging, then that’s a different model,” Nigro said.

The nation’s charging network “will continue to grow based on investments from the federal government, the private sector and states,” a spokesman for the federal government’s Joint Office of Transportation and Energy said.

Volkswagen’s Electrify America spent much of 2022 and 2023 swapping 700 older, spotty chargers with new, more reliable equipment. It has some of the industry’s biggest plans this year: replacing another 800 pieces of equipment at existing sites and installing 800 chargers at new locations, increasing its network by about 20%.

Regardless of the pace of charger construction by Tesla or other companies, “There’s a hell of a lot of work to do,” said Robert Barrosa, CEO of Electrify America, which was created as part of the Dieselgate settlement to resolve allegations that Volkswagen cheated on emissions tests.

Walmart is one of the few fast-charging entrants that has said it would compete on cost. The company has stores within 10 miles of most Americans.

Given that footprint, “we’re uniquely positioned to provide people with a convenient, reliable and affordable charging experience,” said Vishal Kapadia, senior vice president of energy transformation at Walmart.

One potential boon is that charging takes longer than pumping gasoline. Fuel retailers in Europe have found that about twice as many EV drivers come inside the stores and spend money as gasoline drivers, said Mark Morelli, president and CEO of Vontier, which manages the software for about 60,000 charging ports globally.

“There’s a much higher natural conversion rate,” Morelli said.

Oil giant BP last year agreed to pay $1.3 billion in cash for a chain of about 280 U.S. fuel and convenience stores and roadside restaurants from TravelCenters of America. BP plans to spend $1 billion in EV charging across the U.S. by 2030, including an agreement last October to buy $100 million in Tesla-manufactured fast chargers for some of its sites.

BP CEO Murray Auchincloss said Tuesday that the purchase agreement hasn’t been affected by Tesla’s layoffs. BP, like Tesla, has been among the companies competing for and winning federal charging dollars.

If Tesla were to slow its pace of adding charging sites, “I guess then that’s an opportunity for us in the United States to take more space,” Auchincloss said Tuesday.

Drivers are pulling up often enough that public fast chargers in 18 states have turned profitable, with use rates—a key industry measure—averaging more than 15% in states such as Florida, Nevada and Texas, according to data tracked by the firm Stable Auto.

Mercedes plans to spend $1 billion on public charging in North America that would be available to any driver. It has opened a flagship charging station in Atlanta as well as Mercedes-branded chargers at a dozen Buc-ee’s locations in the Southeast.

Andrew Cornelia, CEO of Mercedes-Benz charging in North America and a former Tesla executive, said there is enough consumer demand that companies investing in charging now can do so to “support EV adoption, the customer experience and to make money” instead of seeing it as only a marketing exercise.

FT : Ferrari seeks to woo new generation of fans in high-end fashion push

Ferrari seeks to woo new generation of fans in high-end fashion push
Car group has launched several collections but luxury market is becoming more challenging

When legendary Fiat boss Sergio Marchionne predicted that Ferrari would turn into a “luxury brand beyond the cars sector” in 2015, the Italian sports-car maker was yet to be spun off from its parent company and transformed into a $76bn business.

Almost a decade on, the Modena-based company controlled by the billionaire Agnelli family has broken into the ranks of high fashion with its seventh collection unveiled in February at Milan Fashion Week.

It featured dresses, skirts and capes in silk and organza in white and the brand’s staple red and yellow palettes, as well as accessories including sunglasses that cost €950 and small handbags that sell for more than €1,000.

“For us it is important because we have to nurture the next generation of Ferraristi,” chief executive Benedetto Vigna told the Financial Times.

“There will be people that can afford to [spend] €300,000-€500,000 on a car, and there are people that instead want to be attached to the brand, [through] something that is elegant, not a merchandise look.”

Ferrari’s merchandise prices have also increased significantly, said Vigna, with caps that once sold for €8 now priced at €80. Logo-emblazoned puffer jackets, with a retail price below €200, and hoodies are also popular among younger Ferrari fans. 

An increasing number of luxury brands have sought to diversify their products in a bid to target a broader range of consumers and capitalise on their brand equity. Jeweller Bulgari recently appointed its first-ever creative director for accessories, while Fendi and Dolce & Gabbana have ventured into home decor, and other fashion houses, including Chanel, Armani and Prada, have launched skiwear lines.

But brands usually stay within the same or similar sectors — although Bugatti and Porsche have launched small collections of apparel, Ferrari is the only carmaker to have made the leap from engineering and sports clothing into top-end luxury fashion.

“The luxury sector is a single competitive arena, we all fight for the same discretionary spender,” said Ferrari’s chief brand officer Maria Carla Liuni. “The personal luxury goods market is the most interesting for us . . . Ferrari has hundreds of millions of fans around the world and we are settling on a 1 per cent slice.”

Before launching its high-fashion line three years ago, the 85-year-old car company had partnered with a range of retailers to sell a variety of branded merchandise including apparel, shampoo and perfumes.

In 2019 the group decided to bring back merchandising design in-house. Creative director Rocco Iannone, who previously worked for Armani and Dolce & Gabbana, joined to launch Ferrari’s high-fashion line and spent two years studying the brand’s identity and heritage to come up with his first collection. 

Iannone’s first collection debuted during the pandemic in 2021 with an evocative fashion show hosted by chair John Elkann — who wore a vintage Ferrari-printed red silk shirt — at the car factory in Maranello. The designer said the collection was originally targeted at Gen Z and Asian customers but over the past two seasons there had been a qualitative shift in tailoring and materials.

“The point was to expand beyond Ferrari’s fan base,” Iannone told the FT. “The challenge was to create a narrative based on the brand’s history and heritage essentially starting from scratch and without actually having archives and a consolidated client base as creative directors normally do.”

Iannone said he ultimately drew inspiration from photographs of Italian cinema icons such as Anna Magnani and Monica Vitti driving Ferrari cars in the 1960s.

Analysts, however, have been sceptical about the venture’s financial success. “In my view it remains an uphill battle,” said Luca Solca, head of global luxury goods at Bernstein.

“One of the issues is that when a brand that sells products at a very high average price, as do Ferrari, Porsche or Bugatti, it’s hard to succeed in product categories with much lower average prices without giving the impression you are selling a gadget or giving away products.”

Several other analysts, who spoke on condition of anonymity, questioned the lack of financial disclosures on the fashion line. “The fact they don’t offer financial details makes us think the fashion line isn’t going so well, or at the very least not as well as Ferrari had anticipated when it launched,” said one.

Luxury retailers face an increasingly challenging market with the fortunes of groups diverging as the sector experiences a lower growth phase.

Vigna, however, insisted Ferrari was able to attract talent from other important fashion brands “because they believe in the project”.

Its foray into fashion is on top of a car business that is breaking records. On four occasions last year the company upgraded its own annual profit forecasts, as customers poured ever-higher sums into personalising their sports cars.

Net profit hit €1.26bn last year, with margins above every other car manufacturer, as it commanded higher prices and increased car sales to 13,663.

Vigna declined to speculate whether clothing would one day sit alongside cars as a major financial pillar of the business. But, after arriving in 2021, he focused on rejuvenating a clothing division that had become “more of a place to park people that were not good [at making] cars”. 

Ferrari’s apparel offering has evolved through the years and its affordable sports merchandise and high-fashion lines now coexist. The company’s management argues that the 2015 stock market debut in New York at $52 per share showed that Ferrari is a luxury label rather than simply a sports car one, given that its shares currently trade at more than $400.

Liuni said the “story is as important as the product” and Ferrari had worked on finding a common thread between being an exclusive brand for the ultra rich and an inclusive one for all Formula One fans.

Since joining the company in 2022 Liuni has overhauled the team by poaching professionals from competitors in the luxury fashion sector and boosted investment in the fashion line. Beyond its revamped Italian flagship stores, the label is also planning new openings in London next year and in New York in 2026.

“We just presented management with a five- to eight-year plan . . . we are just at the beginning of this revolution,” she said. “But if there were a lack of demand we wouldn’t be part of the game.”

But Bernstein’s Solca said Ferrari had yet to “find the key” to make its push into fashion “credible”.

For example, he said, “highly sophisticated and luxurious tracksuits might have worked well” but by taking away the “performance element” from its luxury apparel offering, Ferrari also removed the obvious connection between its brand and the fashion sector.

“Jeweller Bulgari has branched out into handbags by using its flagship snake logo in its buckles, Tiffany has launched cafés by evoking the ‘Breakfast at Tiffany’s theme’, but how do you connect Ferrari and high fashion?”

FT : Ken Griffin urges Harvard University to embrace ‘western values’

Ken Griffin urges Harvard University to embrace ‘western values’
Hedge fund founder who has given his alma mater over $500mn pushes back on ‘cultural revolution’

Ken Griffin has called on Harvard University to embrace “western values”, with the billionaire hedge fund manager and donor saying the turmoil sweeping across college campuses was the product of a “cultural revolution” in US education.

Griffin, who founded the $63bn US hedge fund Citadel and has given more than $500mn to his alma mater, told the Financial Times that the US had “lost sight of education as the means of pursuing truth and acquiring knowledge” over the past decade.

“The narrative on some of our college campuses has devolved to the level that the system is rigged and unfair, and that America is plagued by systemic racism and systemic injustice,” he said in an interview.

Universities including Harvard, Stanford and the Massachusetts Institute of Technology have been consumed by sometimes violent protests against Israel’s war in Gaza that have pitted wealthy donors against student activists.

Bill Ackman, another hedge fund billionaire, led a successful campaign for the resignation of the president of Harvard. Marc Rowan, head of private equity group Apollo Global Management, has stoked a fierce debate about governance at the University of Pennsylvania, whose Wharton school of business has reported a fall in donations. 

“What you’re seeing now is the end-product of this cultural revolution in American education playing out on American campuses, in particular, using the paradigm of the oppressor and the oppressed,” Griffin said.

“The protests on college campuses are almost like performative art, and we’re not actually helping Palestinians or Israelis with these surreal protests,” the 55-year-old financier said, adding that in previous humanitarian crises, Americans would focus on practical help, such as organising food drives.

As a Harvard undergraduate, Griffin had a satellite dish installed on the roof of his dormitory so he could trade convertible bonds, laying the foundation for the launch of his hedge fund in 1990. 

He has since given the institution roughly a quarter of the more than $2bn he has provided to philanthropic efforts, making him one of the university’s largest donors in its modern history. A record $16bn profit for Citadel’s investors in 2022 established Griffin’s company as the most successful hedge fund of all time. 

In January, the financier called Harvard students “whiny snowflakes” and said he was pausing donations to the university over its handling of antisemitism on campus, which he blamed on its “DEI agenda”.

His critique of its diversity, equity and inclusion policies came amid a leadership crisis that culminated earlier that month with the resignation of its president Claudine Gay. With a $50bn endowment, Harvard is the world’s wealthiest university.

Asked what Harvard should do next, Griffin told the Financial Times: “Harvard should put front and centre [that it] stands for meritocracy in America and will educate the next generation of leaders in American business, government, healthcare, and the philanthropic community. Harvard will embrace our Western values that have built one of the greatest nations in the world, foster those values with students, and ask them to manifest these values throughout the rest of their life.”

Griffin casts himself as a proponent of free speech and advancing the “American dream”. People who know him expect that one day he may move into politics.

“Freedom of speech does not give you the right to storm a building or vandalise it,” said Griffin. “That’s not freedom of speech. That’s just anarchy.”

The Citadel founder drew parallels between the US campus protests and the Black Lives Matter social movement, when some social media users posted black squares on Instagram, out of solidarity with the fight for racial justice. 

“You didn’t help a single child learn that day how to read, write, or do math better,” he said. “You want a pat on the back for posting a black screen on your Instagram account? Give me a break. It’s embarrassing.”

Donors’ withdrawal of millions of dollars in planned funding to punish US universities for their responses to Hamas’s attack on Israel has reignited questions about the influence of plutocrats on US universities. 

Griffin said the many wealthy Harvard donors he had spoken to had “little interest in micromanaging the university”, however. “There is a palpable interest in Harvard serving as a beacon of truth-seeking and meritocracy,” he said: “Many wealthy donors have valuable insight into transformation and improvement strategies that are clearly needed at this time.”

The Information : OpenAI Develops AI Voice Assistant As It Chases Google, Apple

OpenAI Develops AI Voice Assistant As It Chases Google, Apple

In the race to develop artificial intelligence that communicates the way humans do, OpenAI is preparing to demonstrate technology that talks to people—using sound as well as text—and recognizes objects and images. The ChatGPT developer has shown some of these capabilities, which include better logical reasoning than its current products, to some customers, according to two people who have seen the new AI.

The technology is another step in OpenAI CEO Sam Altman’s quest to ultimately develop a highly responsive AI akin to the virtual assistant in the Spike Jonze film “Her,” and to enable existing voice assistants like Apple’s Siri to be more useful. The company could preview the upgraded AI publicly at an event as soon as Monday, which would help it get ahead of a slew of AI announcements from its rival Google later in the week, one of the people said.

The Takeaway
• New OpenAI software has built-in audio and visual understanding
• It could boost the performance of automated customer service agents
• OpenAI could complete GPT-5 and release it publicly by the end of the year

OpenAI sees assistants with visual and audio capabilities as potentially as transformative as the smartphone. The assistant could theoretically do a range of things not possible today, such as acting as a tutor for a student working on a paper or on math problems, or giving people information about their surroundings when they ask for it, like translating signs or explaining how to fix car troubles.

The new tech is too big to run on personal devices today, but customers in the near term could use the cloud-based version to improve features OpenAI’s software already powers, such as automated customer service agents. The audio features of the new software could help such agents better understand the intonation of callers’ voices or whether they’re being sarcastic in making a request, said one of the people with knowledge of it.

OpenAI already has software that can transcribe audio and convert text to speech, but those features are available through separate conversational AI models, whereas the new model brings those features together. That gives the new multimodal model a better understanding of image and audio, as well as making it faster to use than the less-capable models.

Microsoft, which can use OpenAI’s technology at will because it is the company’s top financial backer, could use OpenAI’s new AI to improve its own voice assistant or try to make it compact enough to run on small devices, including wearables with front-facing cameras that can capture the customer’s surroundings.

It isn’t clear when OpenAI will make the new features available to its paying customers, but it eventually plans to make them part of the free version of its chatbot, ChatGPT, said one of the people who has used it. OpenAI aims to make the new AI model powering these features cheaper to run than the most advanced model it sells today, GPT-4 Turbo, this person said. The new model also outperforms GPT-4 Turbo in answering some types of questions, this person said. However, the new model can still make mistakes, known as hallucinations. (Spokespeople for OpenAI did not respond to requests for comment.)

GPT-5 Release

Google executives, meanwhile, have long dreamed of using AI to develop powerful assistants. In December, Google showed a video of a conversational AI it had developed, Gemini, that responded to a person’s voice commands in real time and recognized images the person was looking at. However, the company separately explained that these capabilities required researchers to prompt the models with images and text instructions, rather than the simple dialogue the video demonstrated. In the meantime, Gemini has added features that can analyze audio in addition to imagery and text, but it doesn't understand many traditional voice commands or talk to users the way traditional voice assistants like Siri and Google Assistant do.


Still image from Google's December demonstration of multimodal features of Gemini AI, via YouTube
OpenAI also is trying to stay ahead of Meta Platforms, which in April released an open-source AI, Llama 3, that surpassed the performance of most conversational AI models available today and received rave reviews from AI app developers.

The upcoming OpenAI model with audio and visual capabilities is one of a number of products under development. The company has been aiming to launch a web search engine, which aims to compete with Google’s. (The Information first reported on it in February.) OpenAI also is developing a type of automation software known as a computer-using agent that could speed up software development and other computer-based tasks, and the company has previewed an AI video generator, Sora, that isn’t available publicly yet but has made waves in Hollywood.

More importantly, OpenAI has been developing GPT-5, which it hopes will represent a significant improvement over GPT-4—a model it released more than a year ago. It could complete GPT-5 and release it publicly by the end of the year, said a person who has discussed it with OpenAI leaders.

The blitz of product and AI model development at OpenAI means some projects previously announced aren’t getting as much attention. For instance, though the startup promised developers that by the first quarter of this year they would be able to make money from building custom chatbots for its store, OpenAI has yet to launch a way for them to do so.

On the other hand, improving visual and audio capabilities could aid OpenAI in getting its conversational AI running on millions or billions of Apple devices. The iPhone maker has held discussions with OpenAI in recent months about how the next iPhone operating system could integrate OpenAI’s models, Bloomberg reported. However, the ChatGPT maker has tough competition: Apple is holding similar talks with Google, Bloomberg reported.

Altman is also working with iPhone developer Jony Ive on a separate AI consumer device, which could raise up to $1 billion in funding from investors including Emerson Collective and Thrive Capital, The Information first reported. In doing so, Altman would be joining the ranks of the big tech companies and startups all racing to release AI-powered devices and wearables that could capture the imaginations—and wallets—of consumers.

However, the large size of the most advanced AI models means they will need to run in the cloud for now and require an internet connection to work. It could take months or even years for complex conversational AI with visual and audio capabilities to become small enough to run on devices.

Tiered Pricing

OpenAI, which could generate billions of dollars in revenue this year, is also planning to release a new pricing model that would offer customers up to a 50% discount if they prepay to reserve tokens (the words large language models process or generate), according to a person who spoke to executives.

Currently, the startup offers mainly on-demand pricing, charging developers anywhere from a few cents to $120 for every million tokens its LLMs generate. Some larger customers receive volume discounts.

Discounts for paying in advance are common in cloud computing—customers of Microsoft Azure, Google Cloud and Amazon Web Services can lower their costs by reserving server capacity ahead of time.

With more-flexible pricing, OpenAI could better compete with rival model developers, as well as the startups that aim to help developers run open-source models more cheaply, known as AI server resellers or inference providers. Their focus on cost efficiency has sometimes driven these startups to offer the same LLMs at lower and lower prices, or even below cost in some cases.

OpenAI has already introduced a way for its developers to lower costs with Batch API, an application programming interface it launched in April that provides developers with cheaper pricing if they upload model queries in bulk and are willing to wait up to 24 hours for responses. For their part, AI-server resellers such as Together AI and Anyscale say that running open-source models on their software is up to six times cheaper than using OpenAI’s models.

WSJ : How Did Jim Simons’s Firm Make $100 Billion? He Told His Secrets to Our Re

How Did Jim Simons’s Firm Make $100 Billion? He Told His Secrets to Our Reporter
The huge gains came both from groundbreaking insights and lots of small innovations. Being way out on Long Island didn’t hurt either.

How did Jim Simons do it?

I spent two years researching a book about Simons and his firm, Renaissance Technologies. I had long conversations with Simons—enduring his chain-smoking for hours at a time. I talked to dozens of his executives, researchers and friends. The response to the book was positive, but the question kept coming: What was really behind perhaps the most successful investment firm of all time?

How did Simons and the crew of academics who ran Renaissance’s Medallion Fund produce more than $100 billion in gains and average annual returns of 39% between 1988 and 2018? Those numbers came after the firm’s enormous investor fees. They dwarf the returns of Warren Buffett, George Soros, Stan Druckenmiller, Steve Cohen and most everyone else.

What was his secret?

Simons, who died Friday at age 86, was a pioneering quantitative trader. He and his team relied on artificial intelligence back in the 1980s. But there wasn’t a single algorithm powering Medallion’s gains. Instead, Simons built a series of advantages that put his firm in a dominant position over its competitors.

“People say, ‘What is the secret sauce?’” Simons once said. “It’s a lot of little secrets.”

Here are some of them:

1- Data Dominance—Renaissance began collecting stock, gold and other pricing data in the early 1980s. Some of it goes back to the 1700s. It was “cleaned,” meaning Simons’s team made sure it was accurate, well before others realized this kind of reliable information could power automated trading algorithms. Rivals have data libraries; Renaissance has the Library of Congress.

2- Management Marvel—Simons was a rare breed, a world-class mathematician who could identify, recruit, manage and motivate brilliant and often quirky scientists and mathematicians. “It’s not his genius,” Robert Frey, a former senior executive, told me. “It’s his ability to manage genius.”

3- Top Talent—Because of its track record, deep contacts in academia, and enduring mystique, Renaissance enjoyed a steady pipeline of talent. Most every firm employs Ph.D.s; Renaissance hires the heads of math and science departments of top universities. Its only rival for top talent: giant tech companies.

4 - Rare Recruits—Renaissance rarely hired employees to meet a need or fill an opening. Instead, Simons recruited star mathematicians and scientists and figured they would discover ways to improve his trading system, a unique approach to hiring.

5- Defections Deficit—Medallion’s performance was so good that few staffers were tempted to bolt for competitors. It helped that the firm was way out on Long Island and filled with former academics with limited contacts in the financial world.

6 - Collaborative Culture—Simons built a flat organization, and employees shared projects, made group presentations and worked closely together. There were no silos, which are popular on Wall Street. Even junior employees could view its top-secret trading code. “The most important thing we did is have an open atmosphere,” Simons told an audience at the Massachusetts Institute of Technology in 2010. “Everybody knows what everybody else is doing.”

7 - Pay Practices—Renaissance compensated employees based on Medallion’s results and placed less of an emphasis than rivals on individual or group achievement. The message: Staffers needed to work together to earn bigger bonuses. Simons also shared the wealth with his team. “By Wall Street standards, Jim wasn’t greedy,” says Nick Patterson, a former executive. “So senior guys were mostly very happy and didn’t fight with each other.”

8 - Trading Costs and Impact—Early on, employees developed sophisticated models that told Renaissance how its trading would affect the market. These models were perfected, helping the firm determine when and how to make its moves. Renaissance didn’t trade in a lightning-fast fashion like others and never acquired the raw processing power of some rivals, but that didn’t prove an impediment. “I’m not sure we’re the best at trading,” Simons once told a colleague. “But we’re the best at estimating the cost of our trades.”


9 - Fund Cap—Medallion’s size was limited to $10 billion for many years, even as other hedge funds swelled. That reduced the need to invest in less-promising trades, a mistake that felled rival firms.

10 - Trading Tactics—Simons’s trading system focused on relationships among investments. It discovered patterns in prices, even when they couldn’t be readily explained by fundamentals. And it specialized in “hedged trading,” with minimal exposure to the overall market or other factors. That allowed it to score big profits (and avoid deep pain) in volatile markets.

11 - No Hubris—Simons realized that his models were fallible and that markets change. His team worked to discover new trading “signals,” and he sometimes reduced risk in difficult periods. One of Renaissance’s early rivals, Long-Term Capital Management, collapsed in one of those times. A popular quip at Renaissance: “The only perfect hedge is a Japanese garden.”

12 - Leveraging Up—Simons’s trading system is accurate just over half the time. But because returns were steady and strong, the fund could borrow more money at better terms than most rivals to amplify gains from its best trades.

13 - Limited Competition—The universe of quantitative investors is enormous, but relatively few do the so-called medium frequency trades. That meant holding periods of “moments to months,” according to one staffer. Few rivals had the resources to compete in this corner of the market.

FT : China’s consumer inflation edges upward in signal of slow economic recovery

China’s consumer inflation edges upward in signal of slow economic recovery
Third straight month of price growth points to strengthening consumer demand despite falling factory prices

China’s consumer inflation edged higher in April while factory prices continued to slide, pointing to a continued rocky recovery in the world’s second-largest economy as Beijing battles lagging consumer demand and global trade tensions.

The national consumer price index rose 0.3 per cent year on year in April, official statistics showed on Saturday, ticking up from an 0.1 per cent rise in March, with price increases in areas including energy, education and tourism offsetting falling food costs. 

China’s economy had been beset by flat or falling consumer prices for almost a year, with the country’s 1.4bn consumers widely opting to save instead of spend in the wake of the Covid-19 pandemic.

But a third straight month of consumer inflation in April suggested some stabilisation of domestic demand despite a years long crisis in the important real estate market.

The inflation reading — better than the 0.2 per cent predicted by economists surveyed by Bloomberg — came as President Xi Jinping leans on a manufacturing revival, particularly in high-tech industries, to boost economic growth and offset the property sector slowdown.

The strategy has stoked growing fears among western leaders of cheap Chinese imports flooding their markets, especially as declining prices in the country’s manufacturing sector make Chinese goods cheaper. 

The data from the National Bureau of Statistics on Saturday showed prices in China’s industrial sector in April remained mired in negative territory. The producer price index declined by 2.5 per cent on a year earlier last month, after declining 2.8 per cent in March and 2.7 per cent in February.

Analysts said prices in the all-important manufacturing sector may be a better barometer of the true health of the economy.

“Chinese manufacturers have volume but they don’t have prices,” said Chen Long of Plenum, a Beijing-based research firm. 

“GDP growth in real terms looks pretty decent, but then if you look at nominal GDP growth and corporate profits — they produce a lot, but they don’t make a lot of money because prices are falling,” he added. 

Profits at Chinese companies listed on domestic exchanges were down 5 per cent year on year in the first quarter, excluding the financial industry, he noted.

Data released on Thursday showed the value of China’s exports in dollar terms rose 1.5 per cent year on year in April, but analysts said export growth in volume terms has been closer to 10 per cent or higher in recent months. The trend is driving renewed tensions with China’s most important trading partners, including the EU and the US. 

French leader Emmanuel Macron and European Commission president Ursula von der Leyen earlier this week warned Xi on a visit to the continent that the EU needed to protect itself from cheap Chinese imports. In the US, the Biden administration is planning to raise tariffs on Chinese electric vehicles and other green energy imports next week. 

In response, Xi has brushed off western leaders’ concerns. He told German Chancellor Olaf Scholz last month that China’s exports were helping to ease global inflation, and this week told European leaders that China did not have an overcapacity problem.

>>>Bristol-Myers announces that the Phase 3 CheckMate -73L trial did not meet it

Bristol-Myers announces that the Phase 3 CheckMate -73L trial did not meet its primary endpoint of progression-free survival (PFS) in unresectable, locally advanced stage III non-small cell lung cancer
  • CheckMate -73L evaluated Opdivo (nivolumab) with concurrent chemoradiotherapy followed by Opdivo plus Yervoy(ipilimumab) versus CCRT followed by durvalumab in patients with unresectable stage III NSCLC. The observed adverse events of Opdivo with CCRT followed by Opdivo plus Yervoy were generally consistent with the known profiles of each component in the regimen.
  • The company will complete a full evaluation of the data and work with investigators to share the results with the scientific community.