TheChek News Flow

The competition ‘is the craziest talent war I’ve ever seen,’ Musk posts on X

Tesla TSLA 1.05%increase; green up pointing triangle is raising compensation for its artificial intelligence engineers in a bid to ward off poaching from the likes of OpenAI, Chief Executive Elon Musk said.

Musk said his electric-vehicle company is boosting pay at a time when OpenAI has been “aggressively recruiting Tesla engineers with massive compensation offers,” in a series of posts on social-media platform X late Wednesday.

The competition for AI engineers “is the craziest talent war I’ve ever seen,” he said.

Musk was responding to a report from news outlet The Information that Tesla machine-learning scientist Ethan Knight had left the automaker to join Musk’s AI startup, xAI.

“Ethan was going to join OpenAI, so it was either xAI or them,” Musk said.

OpenAI didn’t immediately respond to requests for comment.

The recent boom in AI has intensified Silicon Valley’s talent wars, as startups compete with established tech giants in the race to build the next big thing.

Tech companies are serving up million-dollar-a-year compensation packages, accelerated stock-vesting schedules and offers to poach entire engineering teams to draw people with expertise and experience in the kind of generative AI that is powering OpenAI’s ChatGPT and other humanlike bots.

Layoffs are continuing in other areas of tech, as companies reallocate resources to invest more in covering the enormous cost of developing AI technology.

Musk’s comments also come amid tensions with OpenAI Chief Executive Sam Altman. In February, Musk declared war on his former protégé, filing a lawsuit over OpenAI’s pursuit of profit.

In the suit, Musk, who helped found the ChatGPT maker in 2015, claimed OpenAI’s close relationship with Microsoft goes against the company’s original commitment to public, open-source AI, claims that OpenAI denies.

OpenAI has been leading the AI boom, while xAI has been left playing catch-up with the organization Musk’s money helped get off the ground.

Tesla’s AI efforts have so far focused on driverless cars and humanoid robots. In 2022, Musk showed off a prototype of a humanoid robot at a Tesla event, part of his efforts to shape the public perception of the company as more than just an electric-vehicle maker.

The Tesla chief also revealed last summer the car company plans to spend more than $1 billion through the end of 2024 on a supercomputer, dubbed Dojo, that is to help develop driverless-car technology.

Such initiatives have helped underpin Tesla’s lofty market valuation and are a part of the company’s longer-term growth strategy.

In reaction to earnings/guidance:

RGP -3.5% (also names new COO), RPM -1.2%, SPWH -0.6%

Other news:

REPX -16.5% (commences 2.1 mln share offering)

ACHL -15.8% (Provides Interim Phase I/IIa Update on Clonal Neoantigen Reactive T Cells in Advanced NSCLC and Melanoma Including First Patients Dosed with Enhanced Host Conditioning)

AQST -2.3% (files $250 mln mixed shelf securities offering)

SMMT -2% (CFO steps down, COO assumes addiitonal role of CFO)

ICLR -1.3% (CFO to step down, reaffirms guidance)

IRMD -0.8% (files $75 mln common stock offering)

In reaction to earnings/guidance:

LEVI +12.4%, SLP +9.2%, STAA +8.9% (guidance), BB +5.7%, CAG +5.5%, SMG +3.6% (guidance), SMPL +2.8%

Other news:

LUNR +11.2% (selected by NASA to advance capabilities for a lunar terrain vehicle)

MGNX +9.7% (provides Phase 2 TAMARACK study data)

ANGO +6.1% (receives 510(k) clearance for AlphaVac F18 system in treatment of PE)

LAB +4.1% (enters into agreement with BMY for use of the SomaScan Platform)

JAKK +3.2% (stock offering by selling shareholders) TV +3% (reached an agreement with AT&T (T) for the acquisition of its participation in Sky Mexico and changes in the Sky Mexico management team)

OPRA +2.7% (its current Google search commercial agreement has been extended)

NIU +2.4% (reports Q1 sales volume increased 37% yr/yr)

KBR +1.9% (names new CFO)

AMLX +1.9% (announces formal intention to remove RELYVRIO/ALBRIOZA from the market)

PSN +1.8% (awarded a position on multiple award NASA task order contract)

BTBT +1.7% (reports Bitcoin activity for March)

KTB +1.6% (in sympathy with strong LEVI earnings)

EU +1.5% (Provides Q1 ATM sales update; suspends ATM Program)

VLRS +1.3% (March Traffic)

SNY +1.1% (to settle about 5,000 Zantac cancer lawsuits in US, according to Bloomberg)

HHH +1.1% (Scot Sellers to Be named Chairman of the Board of HHH at

* The issuance of the Second Request extends the waiting period under the HSR Act until 30 days after both the Company and Axonics have substantially complied with the Second Request, unless the waiting period is extended voluntarily by the parties or terminated earlier by the FTC.

* The Company and Axonics expect to promptly respond to the Second Request and to continue to work cooperatively with the FTC in its review of the Merger. The Merger is now expected to be completed in the second half of 2024, subject to the expiration or termination of the waiting period under the HSR Act and the satisfaction (or waiver) of other customary closing conditions.

Trian Partners lost its bid for board seats, but profited on its investment

Nelson Peltz may have suffered a bruising defeat in his proxy battle with Disney DIS -3.13%decrease; red down pointing triangle Wednesday, but the sting could be eased by a gain the activist has scored on the investment.

Peltz’s Trian Partners has made around $300 million in profit on its 16-month investment, most of it on paper, according to people familiar with the matter.

The firm invested around $800 million in Disney in 2022, buying much of its stake when shares were around $88 apiece. That isn’t far from the recent bottom in the stock, which closed Wednesday at $118.98.

Trian launched its first proxy fight then backed off early last year, selling about a third of its stake and locking in around $60 million of profit.

This time around, Peltz’s friend Ike Perlmutter, the former Marvel Entertainment chairman and one of Disney’s biggest shareholders, entrusted Trian with the voting rights of his Disney shares.

Trian’s arrangement with Perlmutter gives it a cut—around 10%—of the gain on his shares, the people said, which hasn’t been previously reported. Perlmutter got his big stake when he sold Marvel to Disney for $4 billion in 2009. The stake has risen in value by roughly $850 million, adding another $85 million or so to Trian’s haul.

After subtracting the $25 million Trian expected to spend waging the campaign, the firm’s profit to date comes out to about $300 million.

That is a roughly 40% return on the investment over the period Trian has owned the shares, which is about equal to the S&P 500’s return over the same period.

Trian’s profit isn’t huge compared with its assets under management of around $10 billion, a figure which included more than $2 billion of Perlmutter’s Disney shares. But the Disney investment is helping improve returns at Trian after years of underperformance in its main fund.

Trian had aimed to get two seats on Disney’s board, arguing the company needed to move faster to reinvent itself and find a successor to Chief Executive Bob Iger.

Peltz, speaking at Disney’s annual meeting Wednesday, noted the stock had performed well after Disney launched several initiatives following Trian’s arrival. He said the firm plans to continue monitoring progress.

“We hope that this time will be our last and that shareholders will not be let down like a year ago,” he said.

New entrants and rising returns from trading power and gas drive unexpected increase in earnings, report says

The commodity trading industry made record estimated profits of $104bn last year, a McKinsey report said, even as market volatility decreased and earnings at some of the biggest groups fell.

The surprise increase from 2022, when the fallout from the war in Ukraine pushed up prices and supercharged profits, was driven by a wave of new entrants into the sector — including tech-focused traders and hedge funds — and rising returns from power trading activities, according to a report by consultants McKinsey.

Roland Rechtsteiner, a partner at McKinsey and one of the authors of the widely read annual study, estimated that earnings before interest and tax across the sector reached $104bn in 2024, exceeding the $99bn record set by the industry in 2022 and more than double the $53bn reported in 2021.

The figures reflect the earnings from commodities trading activities across the entire sector, including by independent traders, banks, hedge funds, national energy companies and asset-based businesses such as BP and Shell.

While the biggest independent traders — such as Vitol and Gunvor — have reported, or are expected to report, a decline in profits from record levels set in 2022, other newer entrants have been able to grow year on year as they continued to improve trading strategies and optimise their operations, Rechtsteiner said.

“We had a lot of national energy companies, we had midsized energy companies, we had different players out there that could actually grow their market from 2022 to 2023,” he told the Financial Times.

The McKinsey analysis diverges from that of rival consultant Oliver Wyman, which estimated last month that 2023 gross margin across the sector — the amount made on trades before deducting costs such as tax, salaries and bonuses — had dropped by about 30 per cent year on year, but was still about double historic levels.

Privately held Swiss commodity trader Gunvor this week reported annual net profit of $1.25bn in 2023, its second-biggest ever, but down about 50 per cent from 2022, partly because of a $467mn provision to settle bribery charges. Publicly listed Glencore noted a similar drop in trading profits in February when it reported adjusted Ebit for its marketing division of $3.5bn, down 46 per cent from 2022.

Despite such declines, increased trading by traditional energy producers and the entrance of “data-driven traders” had increased the number of players in the market, boosting liquidity and enlarging the profit pool, Rechsteiner said.

Sector-wide profits from the trading of power and gas increased 47 per cent year on year, according to McKinsey’s estimates, in a sign of how important those commodities will be to the future of the industry.

“Over time, we will see pretty much every commodity trader being focused on power,” Rechsteiner said, adding that this was an input to other activities and the key to the decarbonisation of the global energy system.

Other lower carbon energy products, such as hydrogen and biofuels, depend on gas or power or other commodities for their production or transportation creating new cross-commodity opportunities for trading houses. “That’s just creating an extreme connectivity of different asset classes, which we didn’t have before,” he said.

Despite the growth in new areas, Reichsteiner cautioned that profits from oil trading, although down 19 per cent year on year, remained the biggest single contributor to sector-wide earnings. “The oil trade is going to stay here for a long time,” he said, adding that demand and the need to balance supply and demand around the world remained strong.