WWD : LVMH to Open Dedicated Space for Craftsmanship in Paris

LVMH to Open Dedicated Space for Craftsmanship in Paris
The Maison des Métiers d’Excellence will offer training programs for amateurs and professionals.
PARIS — LVMH Moët Hennessy Louis Vuitton is launching a new house in Paris.

In a move calculated to give it a competitive edge amid a shortage of skilled workers, the world’s largest luxury group said on Tuesday it would open a dedicated space for craftsmanship in the eighth arrondissement, a stone’s throw from the Dior ateliers and Avenue Montaigne, home to the French capital’s most exclusive boutiques.

During a preview visit to the construction site, Chantal Gaemperle, group executive vice president of human resources and synergies at LVMH, said the Maison des Métiers d’Excellence would allow visitors to touch and feel the breadth of the 280 skilled trades represented across its 75 brands, which range from Louis Vuitton to Dom Pérignon, Tiffany & Co. and Sephora.

“You can do Zoom meetings, you can do videos. But having direct contact with makers and apprentices is inspiring,” she said. “The pandemic has fueled people’s need to find meaning and make something that they can understand and touch. There’s a desire to have a concrete impact and be together.”

Spanning 21,500 square feet, the location on Rue Bayard will be open to the public as well as provide a physical home for LVMH’s Institut des Métiers d’Excellence, the vocational training program aimed at promoting, enhancing and ensuring the transmission of know-how in partnership with leading schools.

Since it was founded in 2014, the scheme has trained more than 2,700 people in seven countries, and this year saw a record intake of 700 apprentices, up from 450 in 2022.

While LVMH declined to reveal how much it is investing in the project, the group said it spent 215 million euros on training in 2022. It plans to hire 22,000 specialized craftspeople worldwide by the end of 2025, including 8,000 in France, according to Alexandre Boquel, head of development for LVMH’s Métiers d’Excellence division.

To meet those targets, LVMH has intensified its outreach efforts to counter a dearth of personnel in fields including retail and leather goods.

It hopes that having a physical showcase will help fuel interest in professions that have been handed down from generation to generation, but are not always well known or understood. “We need to find the people and we need to make these jobs attractive, and we believe that this house will contribute to that,” Gaemperle said.

The group is constantly registering new job categories as it acquires brands and identifies niche skills. It recently added to its list the métier of glyptician, or gem sculptor, but lesser-known professions also include shoemaking and eyewear manufacturing, both sectors that need to attract fresh talents, Boquel said.

“This place is a tower of transmission,” he said. “It will be open to all and the promise is that the moment you walk in here, you will learn a physical gesture, whether you’re a novice, a member of the public or a researcher in craftsmanship.”

The main building, dating from 1880, will act as a learning center, with hands-on workshops where visitors, in groups of 10 to 12 people, will don white blouses and learn from LVMH employees some of the techniques used in fashion and leather goods, perfumes and cosmetics, and watches and jewelry.

The academy will also welcome external craftspeople such as feather-makers or straw marquetry experts. Courses can be booked online and will last between one and three hours, Boquel said.

In addition, the building will house a training academy for apprentices and employees, as well as a research library. An annex will be home to a café, store and exhibition space, all themed around craftsmanship.

Construction work is due to begin next year and the center is expected to open at the end of 2025, LVMH announced during the third edition of Show Me Paris, its annual event spotlighting the group’s efforts to attract future generations to careers in the creative, craftsmanship and client-experience fields.

As part of the showcase at Salle Pleyel, which drew 1,400 people, it unveiled a scale model of the project by paper artist Hannah Levesque.

“In terms of the look and feel of this space, we will try not to make it too imposing or majestic, but rather welcoming, because we also want to attract the kind of people who don’t feel comfortable walking into luxury stores, and in particular Gen Z, who love luxury brands but can feel very intimidated,” Boquel said.

The center will also highlight the ways that houses are using technology to spur innovation.

“It’s extremely important to talk about that, because when we talk to young people, they’re always afraid that these are jobs from 200 years ago and they won’t be able to relate. Letting them know that these professions also use digital technology reassures them,” he explained.

Gaemperle said the group is open to applicants of all origins and abilities. For instance, Guerlain has hired five youths with autism at its cosmetics factory in Chartres. “Not only have they met their targets, but they have evolved towards other roles,” she reported.

Meanwhile, the Institut des Métiers d’Excellence is launching a new course called Access Retail to train people with disabilities to become sales advisers, Boquel said.

LVMH had announced in 2017 plans for a center dedicated to artists, live performances and the applied arts, to be located inside the former Musée des Arts et Traditions Populaires in the Bois de Boulogne. Originally set to open in late 2018, it was due to include an academy of fine arts and craftsmanship.

Gaemperle said that project was still moving ahead. “There is a large renovation underway, but we didn’t want to wait,” she said. “We also realized that compared to other institutions who have done this outside of Paris, there is an added attraction [to being in a central location].”

Chanel last year inaugurated Le19M, its hub for its specialty workshops, on the border between Paris and its northern suburb of Aubervilliers. Meanwhile, Hermès in 2013 opened a sprawling facility for craftspeople, creative teams, service personnel and communications staff in the suburb of Pantin.

Boquel expects the Maison des Métiers d’Excellence to benefit from being close to La Galerie de Dior, the French fashion house’s permanent exhibition space, and other major attractions. “Being in central Paris is absolutely key,” he said, adding that he expects between 300 and 350 visitors a day on average.

“I know that the majority of visitors won’t become craftspeople, to be honest. It might be 30 percent, or 20 percent or 15 percent, but it doesn’t matter because first of all, we’ll be happy to have those 15 percent if it can solve our recruitment problems. And secondly, it’s extremely important to help people understand what we do,” Boquel said.

“People want to know what is behind our products, and what are our concerns in terms of the environment, society and human resources. Revealing this to the general public will help to better understand the value chain of high-quality products,” he added.

>>> Procter & Gamble beats by $0.11, beats on revs; reaffirms FY24 EPS guidance,

Procter & Gamble beats by $0.11, beats on revs; reaffirms FY24 EPS guidance, guides FY24 revs in-line
  • Reports Q1 (Sep) earnings of $1.83 per share, $0.11 better than the FactSet Consensus of $1.72; revenues rose 6.1% year/year to $21.87 bln vs the $21.58 bln FactSet Consensus.
  • Co issues guidance for FY24, sees EPS of +6-9% yr/yr to $6.25-6.43 vs. $6.39 FactSet Consensus; sees FY24 revs of +2-4% yr/yr $83.65-85.29 bln vs. $84.88 bln FactSet Consensus.

The Information : OpenAI Dropped Work on New ‘Arrakis’ AI Model in Rare Setback

OpenAI Dropped Work on New ‘Arrakis’ AI Model in Rare Setback

Late last year, around the time ChatGPT became a global sensation, the engineers at OpenAI began working on a new artificial intelligence model, codenamed Arrakis.

Although OpenAI was preparing to boost ChatGPT with a different model, now known as GPT-4, which it had completed earlier in the year, the upcoming Arrakis model would allow the company to run the chatbot less expensively. Success with Arrakis would also help OpenAI show Microsoft how fast it could create successive large language models, which would be valuable as the two firms finished negotiating a $10 billion investment and product deal.

But by the middle of 2023, OpenAI had scrapped the Arrakis launch after the model didn’t run as efficiently as the company expected, according to people with knowledge of the situation.

THE TAKEAWAY
• OpenAI’s Arrakis model underperformed the startup’s expectations
• Arrakis would have allowed the startup to run its AI software more cheaply
• Microsoft had hoped to integrate Arrakis into some of its products

The stumble meant OpenAI had lost precious time and would need to shift its resources toward developing a different model. The failure also disappointed some executives at Microsoft, which paid for the right to use the startup’s technology in its products, according to a Microsoft employee with knowledge of the matter.

The Arrakis setback could pierce OpenAI’s aura of invincibility after it humbled AI pioneer Google and built one of the fastest-growing software businesses in history. It shows how the frontier of AI is riddled with pitfalls that can be hard to predict.

Although the Arrakis problems didn’t slow OpenAI’s business this year, the startup could feel the effects in the coming year as the race to launch new LLMs intensifies. Google, for instance, is nearing the launch of Gemini, a set of AI models it hopes will beat GPT-4 in terms of coding and other capabilities, and the accuracy of responses. OpenAI, for its part, continues to release improvements to its industry-leading model, including the ability to decipher images, and plans to announce a slew of new features in November. LLMs underpin products such as ChatGPT, and some at OpenAI also view them as having the potential to be a kind of operating system, including for personal devices, because of their ability to write code, make sense of images and retrieve files.

Based on the strength of GPT-4, OpenAI’s business has ballooned. The company is generating $1.3 billion in annualized revenue, up from $28 million in revenue for all of last year, on the back of GPT-4, which powers the paid version of ChatGPT. OpenAI is worth around $30 billion on paper after an employee share sale in the second quarter of this year, but the company is trying to boost that valuation considerably as it works on another tender offer for employees.

Sparse AI
OpenAI started working on Arrakis last fall in the hopes of developing a model that would be on par with GPT-4 but could run more efficiently, in part by leveraging a machine-learning concept known as sparsity, the people said. Other AI developers such as Google have also publicly discussed their use of sparsity, which OpenAI successfully incorporated in earlier software. Arrakis would have allowed OpenAI to roll out its technology more widely, as the company had access to a limited number of specialized server chips to power its software, they said.

Around this spring, OpenAI’s researchers began training the model, which involves using advanced computing hardware to help the model process massive amounts of data so that it can learn patterns. The company expected it to be significantly cheaper than the process of training GPT-4, the people said. Early on, however, employees realized that the model was not performing well enough to reap the expected benefits. After staff spent roughly a month trying to fix the issues, OpenAI’s senior leadership decided to pull the plug on training it, the people said.

Despite the setback, OpenAI could still incorporate its work on Arrakis into other models. That includes Gobi, an upcoming model that can generate or analyze text as well as visuals, also known as multimodal.

Arrakis underperformed OpenAI’s expectations after the company attempted to increase the model’s sparsity, meaning it would use only part of the model to generate responses and thus make it cheaper to run, two people said. The reasons why the model worked in early tests but didn’t perform well afterwards couldn’t be learned.

Arrakis—named after a desert planet in the “Dune” series—is a nod to the use of sparsity in the model’s design, one person said. Other OpenAI model codenames, including Gobi and Sahara, which was publicly called GPT-3.5 Turbo, use a similar desert theme to reflect the company’s effort to make them sparse.

“Sparse computation is going to be an important trend in the future,” Google executive Jeff Dean said.

Since the failure of Arrakis, OpenAI researchers pivoted to developing a version of GPT-4 designed specifically to generate responses more quickly, the two people with knowledge said. OpenAI has discussed referring to that updated model as GPT-4 Turbo, which was also the public name OpenAI considered for Arrakis before it failed, one of the people said.

For OpenAI, making its models cheaper and more efficient is a top priority as concerns grow about the technology’s costs and as open-source alternatives proliferate. An OpenAI spokesperson didn’t have a comment.

Microsoft, which uses OpenAI’s GPT models to power AI features in Office 365 apps and other services, had expected Arrakis to boost the performance and lower the cost of those features, said the employee with knowledge of the situation. Bing, the Microsoft search engine that relies on GPT-4 and other models to power a ChatGPT-like chatbot, was hoping to implement the Arrakis model in early 2023, before the model was completely derailed, this person said.

Since then, Microsoft has worked on other LLMs that could be cheaper to run compared to OpenAI’s, The Information has reported.

Bringing Down Costs
Many industry practitioners expect sparse models to bring down AI development costs. At a conference in August, Jeff Dean, Google’s chief scientist and a key contributor to its Gemini AI models, said the industry will move toward sparse models in the coming years. Unlike “denser” models like Llama 2 that power some generative AI apps, sparse models only call upon certain computations within the model, known as parameters, that are needed to complete a task, making the process more cost-efficient.

“Sparse computation is going to be an important trend in the future,” Dean said.

Some AI practitioners say one way to increase sparsity is through a technique known as “mixture of expert models,” in which specific parts of a large model are trained to handle certain tasks—in other words, those sub-models become an expert in those tasks—so that the full model doesn’t need to be triggered. OpenAI incorporated this technique into GPT-4, and Arrakis would have also done so, the people said.

“In general, the larger the number of expert [models] is, the sparser and the more efficient the model is,” said Ion Stoica, a computer science professor at University of California, Berkeley, in an email. The result, however, can lead to less accurate results, he said.

The Information : Sequoia Capital Partner, Other Investors Boycott Web Summit Fo

Sequoia Capital Partner, Other Investors Boycott Web Summit Following CEO’s Israel Comments

High-profile venture capitalists, including Y Combinator’s Garry Tan and Sequoia Capital partner Ravi Gupta, are withdrawing from a major gathering of tech leaders after conference CEO Paddy Cosgrave made comments that appear to refer to Israel’s retaliatory strikes in Hamas-controlled Gaza as “war crimes.”

At least five speakers said they would no longer participate at the November Web Summit conference, which draws tens of thousands of founders and executives to Lisbon every year. Those announcing their withdrawal include Ori Goshen, co-founder of AI21, an Israel-based rival to OpenAI, and Keith Peiris, co-founder of AI startup Tome. The boycott exposes the widening fallout in the business world from terrorist group Hamas’ Oct. 7 attacks in southern Israel, which have forced hundreds of Israeli tech workers to the front lines and prompted Wall Street financiers to publicly criticize academic institutions they back for their positions on the war.

THE TAKEAWAY
•Sequoia’s Gupta, YC’s Tan cancel speaking engagements
•Venture capitalists question Web Summit’s Qatar ties
•Web Summit’s Cosgrave had tweeted about Israel’s retaliation

Cosgrave on Friday expressed shock at the “rhetoric and actions of so many Western leaders & governments,” as Israel prepared to launch a ground invasion of Gaza. “War crimes are war crimes even when committed by allies, and should be called out for what they are,” he wrote on X. Cosgrave also liked posts on X, the app formerly known as Twitter, that referred to the terrorist group’s killing of Israelis a week ago as “self-defence” and that said Israel was committing genocide against Palestinians. Later Monday, Cosgrave removed the liked posts.

Backlash to his comments was swift. On Monday, Y Combinator CEO Tan said on X that he was canceling his appearance at the Web Summit. Gil Dibner, founder of Angular Ventures, a VC firm based in Tel Aviv and London, also canceled his speaking commitment.

Cosgrave also is facing questions about his company’s association with Qatar, a U.S. military ally. Counterterrorism experts say it has also financed Hamas and it has hosted the terror group’s leaders, who operate a bureau in Qatar’s capital of Doha. Qatari officials maintain it only provides humanitarian aid.

Josh Kopelman, a Philadelphia-based partner at First Round Capital, posted a screenshot of a Sept. 5 email from Cosgrave indicating Web Summit had partnered with Qatar for a conference titled “Web Summit Qatar,” planned for February 2024. Web Summit first announced the conference in April, according to a spokesperson for the conference, choosing Doha after receiving bids from several cities across the Middle East.

In the email, Cosgrave noted Qatar is interested in backing venture funds as a limited partner and offered to introduce the First Round partner to Qatari officials. Kopelman, who declined the offer in the published email, did not have further comment, according to a firm representative.

Founders Fund partner Keith Rabois said on X that he would refuse to work with anyone who speaks at the Web Summit event in Qatar. Flexport CEO and Founders Fund Partner Ryan Petersen, who was listed to speak at the Qatar event as of Monday morning, has withdrawn from the event to focus on customer relations at Flexport since returning as chief executive, according to a person familiar with the matter.

The backlash follows Hamas’ killing of 1,400 Israelis, including at a music festival and across numerous towns near Israel’s border with Gaza. Hamas also took nearly 200 Israelis and Americans hostage, including babies and young children. In response, Israel cut off electricity and water in Gaza and launched rocket attacks, leading to the deaths of more than 2,600 Palestinians, according to the Gazan Health Ministry.

The venture investors' responses reflect the intense reaction to views that blame Israel for its role in the conflict. Major Wall Street financiers, including Pershing Capital’s Bill Ackman and Citadel’s Ken Griffin, have criticized the elite universities they fund for not condemning student groups that blamed Israel for attacks carried out by Hamas.

Venture capitalists and startup founders in the U.S. with Palestinian ties privately expressed concern over the deepening humanitarian crisis in Gaza. But some said they were afraid to make those views public out of fear their comments would be misconstrued as supporting Hamas’ attacks, which they strongly condemned. “We feel terrified, in one of the most dangerously risky capital markets in history, to even risk speaking on a politically charged topic,” said a founder of a U.S. healthcare startup with family in Palestine.

A spokesperson for Web Summit said that the conference operator is talking to a number of companies about their attendance in November. In a statement, the spokesperson said that “we are saddened to hear that some Israelis in the tech community will no longer be attending Web Summit” and that they “regret any hurt caused and extend our deepest sympathies to everyone who has lost loved ones.” (The statement didn’t address the budding boycott against Web Summit among non-Israelis.)

“We want to reiterate our devastation for the loss of innocent life in Israel and Gaza. We strongly condemn the horrific attacks by Hamas on Israelis,” the statement said.

Since Cosgrave co-founded Web Summit in 2009 in Dublin, it has become a draw for global startup leaders to hobnob for a week of conference sessions and parties. Last year, it drew 71,000 attendees and featured speakers such as Binance founder and CEO Changpeng Zhao and Queen Rania Al Abdullah of Jordan.

The organization moved its annual flagship event to Lisbon a few years ago, and is planning a conference in Hong Kong. Cosgrave is a majority owner of Web Summit, but the conference has a board of directors, according to a spokesperson.

CrunchBase : Most Active US Investors: Andreessen Horowitz, SOSV Top September L

Most Active US Investors: Andreessen Horowitz, SOSV Top September List

September saw a familiar name top the list of most active U.S. investors as Andreessen Horowitz took the mantle.

However, once again no single investor really dominated the list. Only a16z made more than a dozen investments, and human and planetary health investor SOSV was the only other firm to hit double digits.

The numbers are not that different from September 2022. At that time, the venture market was well into its lull and only about a half-dozen firms announced 10 or more deals apiece.

Let’s take a look at which firms did the most in fall’s first month:

Andreessen Horowitz, 14 deals
Andreessen Horowitz last month posted its biggest investment month since March. After a slow July and August where the noted firm took part in only eight deals total in two months, it jumped back above double digits.
Not surprisingly, some of the rounds the firm took part in were quite large, AI-related raises. Those included participating in the massive $500 million Series I raise for AI-enhanced data analytics provider Databricks, as well as co-leading — along with Nvidia‘s NVentures — Palo Alto, California-based biotech startup Inceptive’s $100 million round. Inceptive aims to use artificial intelligence to discover vaccines and therapeutics.

SOSV, 11 deals
Similar to Andreessen Horowitz, SOSV had its biggest investment month also since March.
However, that’s where the similarities end. SOSV does not lead large rounds the way Andreessen Horowitz does. Instead, most of the rounds SOSV took part in were seed rounds and convertible notes of undisclosed amounts.
That’s not to say the firm doesn’t invest in interesting startups. Its deals include New York-based Calder Biosciences, which is creating next-generation vaccines to protect against infection, and Rantoul, Illinois-based Earnest Agriculture, which creates microbial products for better plant yields.

Khosla Ventures and Gaingels, 8 deals
Khosla Ventures and Vermont-based Gaingels seem to be headed in different directions of late.
The eight deals announced last week were the most deals Menlo Park, California-based Khosla has done with U.S.-based startups since May 2022. However, the firm did announce six deals in July and seven deals in August (and made this list), so it seems to be doing more in the U.S.
Last month, that included taking part in a $52 million round for Oakland, California-based 3D printing construction startup Mighty Buildings.
Gaingels, on the other hand, used to be a regular on this list but has slowed its investment pace of late. After doing between eight and 11 deals a month involving U.S.-based startups, it did only nine total deals in July and August.
However, it quickened its pace a little in September, including taking part in a $10 million Series A for New York-based travel site Point.me.

Alumni Ventures, 7 deals
After leading this list in both July and August, Alumni Ventures — which caters to individual investors who typically don’t have a pathway to the VC market — just made it in September.
While its deal flow dipped slightly, it may have made up for that in terms of deal size.
The firm took part in both EV battery recycling startup Ascend Elements’ $200 million Series C and the $125 million Series B for Enfabrica, which designs networking chips to handle AI workloads.

Also notable:
  • General Catalyst was next on the list with six announced deals.
  • Andreessen Horowitz topped all firms in rounds led or co-led with four deals.
  • SoftBank Group topped the list for rounds led or co-led with the highest dollar amounts for the month, in large part due to leading a $1 billion investment in Pittsburgh-based self-driving, commercial trucking startup Stack AV, as reported by Bloomberg.
  • The top investing incubators and accelerators in September were Techstars with 13 deals and Inclusive Ventures Lab with 12 deals.

>>> US Early premarket gappers

Early premarket gappers
  • Gapping up:
    • VKTX +9%, TALS +8.2%, FND +8.1%, RYTM +5.9%, FULT +4%, CCO +3.4%, VICR +2.2%, WTFC +2%, HWC +1.5%, GBDC +1.4%, CBSH +1.4%, ARDX +1.2%, LBRT +0.9%, SNY +0.8%, MRTX +0.7%, SSRM +0.6%
  • Gapping down:
    • BAER -6.4%, WAFD -6.3%, MIRM -5.9%, UAL -5.9%, BIO -5.6%, RARE -5.1%, GOGO -4.6%, JBHT -4.1%, SGHT -3.2%, IBKR -3.2%, ASML -2.4%, YMAB -1.9%, LECO -1.8%, NVDA -1.6%, AAL -1.4%, OMC -1.4%, ALK -1.3%, DAL -1.2%, TAK -1.1%, PNFP -1.1%, AEO -0.8%, BHP -0.7%

WSJ : Why One Fed Official Is Ready to Stop Raising Rates

Why One Fed Official Is Ready to Stop Raising Rates
‘The workings of the economy cannot be rushed,’ says Philadelphia Fed President Patrick Harker

The Federal Reserve should extend its pause on interest-rate increases because of growing evidence that higher borrowing costs will slow the economy despite recent signs of hiring and spending strength, a top central bank official said.

Philadelphia Fed President Patrick Harker in a Tuesday interview said he thinks the central bank can likely wait until early next year to decide whether rapid rate increases over the past 20 months have done enough to keep inflation heading lower.

“This is a time where we just sit for a little bit. It may be for an extended period; it may not. But let’s see how things evolve over the next few months,” said Harker, who has a vote on interest-rate policy this year.

While recent economic data have been surprisingly brisk, Harker said anecdotal, on-the-ground reports from business “contact after contact after contact is that things seem to be slowing down.”

For example, bankers have reported more business loans are coming due and will need to be renewed at much higher rates. “They’re concerned that some of those businesses and their business models will not be able to survive those higher rates,” said Harker, a former university president.

The Fed most recently raised rates in July to a range between 5.25% and 5.5%, a 22-year high. Several officials have signaled over the past week that they are comfortable holding rates steady at their Oct. 31-Nov. 1 meeting. That would extend a pause in rate rises from their September meeting.

The Fed has also pared its $8 trillion asset portfolio by $1 trillion over the past year as it allows holdings of Treasury and mortgage-backed securities to mature without replacing them. Shrinking those holdings provides an additional form of tightening policy because, when the U.S. Treasury rolls over its debt, it must find a new buyer of the securities.

‘We are doing quite a lot’
Harker highlighted the lagged effects of tighter monetary policy while addressing a national mortgage bankers convention in Philadelphia on Monday. “We did a lot, and we did it very fast…The workings of the economy cannot be rushed,” he said. “By doing nothing, we are doing something. And I think we are doing quite a lot.”

Harker has never dissented at a rate-setting meeting during turns as a voter in 2017, 2020 and this year. On Tuesday, he said the decision to support the July rate increase was a “close call.” He would need to see a “stark turn” in economic data—and in particular, signs that inflation was reaccelerating—to pivot back to favoring rate increases, he said.

A blowout September employment report from the Labor Department earlier this month and a strong retail-sales report from the Commerce Department on Tuesday have extended a run of firmer-than-expected economic figures.

At the same time, measures of underlying inflation have slowed markedly since June. Core prices, which exclude volatile food and energy items, rose at a 3% six-month annualized rate in August, down from 4.8% over the previous six-month period, according to the Commerce Department.

“If inflation were moving up in a sustained way, then I would behave very differently than if I saw just continuing strength in, say, retail sales for another month or so,” Harker said.

Tighter financial conditions
Harker said he took added comfort that the Fed had done enough to slow the economy and bring down inflation because of a recent run-up in long-term bond yields. The 10-year Treasury yield closed Tuesday at a new 16-year high of 4.846%.

Higher borrowing costs traditionally weaken investment and spending, a dynamic that is reinforced when higher rates also weigh on stocks and other asset prices. “Anything that would reduce financial accommodation will, in essence, be doing some of the work of monetary policy, for sure,” Harker said.

Harker said it would be appropriate for the Fed to consider lowering interest rates once inflation is “within a reasonable distance” of the central bank’s 2% target.

“We’re not there yet, but we believe in lags,” he said. “So if we get into the range of, I don’t know, let’s call it 2.5%, [and] we’re continuing to move down, then something like that would at least have me considering whether or not it’s time for rates to start coming down.”

Harker also said he would favor beginning conversations around how and whether the central bank might eventually slow the pace of runoff of its asset portfolio. The central bank is allowing up to $60 billion in Treasury securities to mature every month, which is twice as fast as occurred in late 2018 and early 2019, the last time the central bank was paring its holdings.

After the Covid-19 pandemic spread in March 2020, the Fed purchased trillions of dollars of securities to stabilize financial markets and, later, to provide extra stimulus once interest rates had been lowered to near zero. Officials want to shrink those holdings, which will eventually drain bank deposits known as reserves from financial markets. But they aren’t sure when reserves might fall to levels low enough that banks will compete for them, which could drive up overnight lending rates, something that occurred in 2019.

WSJ : Amazon Introducing Warehouse Overhaul With Robotics to Speed Deliveries

Amazon Introducing Warehouse Overhaul With Robotics to Speed Deliveries
Company to use new AI systems at its fulfillment facilities that will work alongside employees

Amazon AMZN -0.81%decrease; red down pointing triangle.com is introducing an array of new artificial intelligence and robotics capabilities into its warehouse operations that will reduce delivery times and help identify inventory more quickly.

The revamp will change the way Amazon moves products through its fulfillment centers with new AI-equipped sortation machines and robotic arms. It is also set to alter how many of the company’s vast army of workers do their jobs.

Amazon says its new robotics system, named Sequoia after the giant trees native to California’s Sierra Nevada region, is designed for both speed and safety. Humans are meant to work alongside new machines in a way that should reduce injuries, the company says.

It is unclear how the new system will affect Amazon’s head count, and the company declined to provide details about its expectations except to note that it doesn’t see automation and robotics as vehicles for eliminating jobs.

Sequoia enables the company to put up items for sale on its website faster and be able to more easily predict delivery estimates, said David Guerin, the company’s director of robotic storage technology. The new program reduces the time it takes to fulfill an order by up to 25%, the company said, and it can identify and store inventory up to 75% faster. Amazon launched the system this week at one of its warehouses in Houston.

“The faster we can process inventory, the greater the probability that we’re going to be able to deliver when we said we could,” Guerin said. He said Amazon expects the new system to make up a significant portion of the company’s operations in the next three to five years.

Faced with fresh competition in the U.S., Amazon has worked to become faster at delivering its products. The company transformed its operations to a regionally focused model meant to store items closer to customers, The Wall Street Journal previously reported. Executives see a connection between delivery speeds and growth.

In the new structure, vehicles transport products inside tote containers to a new sortation machine equipped with small robotic arms and computer vision. From the sortation machine, the bins are routed to an employee who picks items for delivery. Remaining inventory is consolidated by Sparrow, a robotic arm Amazon unveiled last year.

In the previous system, vehicles moved around Amazon products, but the new sortation machine, tote containers and Sparrow weren’t involved. Previously, employees might have to reach high up on a shelf to pick a heavy item, but now the new system delivers containers around the waist level, with a goal to reduce injuries.

Amazon is among several companies that have chased what is known as the “holy grail” of robotics, or machines as dexterous, quick and adaptable as a human arm and hand. Rivals such as Walmart are changing jobs of moving boxes into roles managing robotic arms.

What Amazon and others have realized is that in order to integrate more robotics, the workflow of warehouses has to be transformed, said Rueben Scriven, research manager at market research firm Interact Analysis. Amazon’s new system, for example, makes sense for its robotic arms because such robots have an easier time identifying objects inside of bins than shelves, which have been a part of previous Amazon systems.

“The key thing Amazon is trying to do is integrate,” Scriven said. “They have the different pieces, and now it’s about, ‘How do we bring them together in a harmonious system?’”

Labor researchers and activists have said Amazon’s desire for faster speeds can put its workers at risk, and some have warned that the introduction of robotics could also heighten employee injuries. The company has long struggled with high turnover among its warehouse employees and repetitive stress injuries.

With new systems such as Sequoia, Amazon says it is trying to improve safety. Tye Brady, chief technologist at Amazon Robotics, said the company’s robotics are meant to eliminate mundane tasks and work alongside its human staff, with both needing each other to work efficiently. Amazon has introduced various robotics into its warehouses over the past decade but maintained large hiring sprees for human workers.

Amazon’s delivery strategy has also centered on opening facilities focused on delivering popular products to customers in less than a day. The company has launched dozens of the “same-day” sites, with plans for more expansion. Guerin, the robotics storage director, said Amazon’s plans for Sequoia include the same-day sites.

Aside from trying to get faster, Amazon also restarted a shipping business that competes with United Parcel Service and FedEx by handling external deliveries, and it has also worked to eliminate packaging throughout its network.

Amazon said it would also start to test a bipedal robot named Digit in its operations. Digit, which is designed by Agility Robotics, can move, grasp and handle items, and will initially be used by the company to pick up and move empty tote containers.

The retailer has one of the nation’s largest workforces, employing hundreds of thousands of employees across its warehouses. It has also increasingly introduced robotics into its operations. The company bought Kiva Systems in 2012 for $775 million, bringing in mobile robots into its facilities that became a staple of its operations.

In 2022 it announced a $1 billion fund for innovation in logistics and supply chain, with Agility Robotics being among the fund’s first recipients. And the same year, it unveiled Sparrow, which can pick up a variety of objects as easily as humans can.

FT : Lloyd’s finds major hack of a payments system could cost $3.5tn

Lloyd’s finds major hack of a payments system could cost $3.5tn
Insurers and policymakers are increasingly worried about the threat to infrastructure from cyber attacks

Lloyd’s of London has warned that a major cyber attack on a global payments system could cost the world economy $3.5tn, as insurers and companies worry about the systemic threat from hackers and whether the risks are insurable.

The Lloyd’s market, which is a hub for cyber insurance alongside traditional sectors such as shipping, said a “hypothetical but plausible cyber attack” would create “widespread disruption” to global business. 

Under the scenario, attacks put malicious code in transactions software that then spreads through tens of thousands of partner networks, allowing hackers to breach defences and siphon funds, and bringing customer payments and bank clearing to a halt.

The five-year economic impact would be felt mostly strongly in the US, with $1.1tn of the loss, followed by China with $470bn and Japan with $200bn according to the scenario, modelled by Lloyd’s in partnership with the Cambridge Centre for Risk Studies.

Lloyd’s chair Bruce Carnegie-Brown said the “global interconnectedness of cyber means it is too substantial a risk for one sector to face alone”. He called for the sharing of “knowledge, expertise and innovative ideas across government, industry and the insurance market to ensure we build society’s resilience against the potential scale of this risk”.

Concern has risen among insurers and policymakers about the threat to economic and national infrastructure from cyber attacks. In December, insurance group Zurich’s chief executive warned that cyber attacks were on their way to becoming “uninsurable”. 

Lloyd’s itself caused controversy when it insisted on an exclusion in standard cyber insurance policies for big state-backed attacks. Banks and other providers of essential services feared this meant that they would not be covered in the event of such an attack, with the identity of hackers and the question of state sponsorship difficult to establish.

Some executives have pushed for a state backstop in the event of a wide-ranging attack or one that affects core infrastructure. Insurers have held discussions with the UK government about whether Pool Re, the UK’s terrorism reinsurance scheme, could be extended to cover major state-backed cyber attacks.

The $3.5tn figure is a weighted average of three scenarios of varying severity. The most extreme of these envisages $16tn of losses over the period, Lloyd’s said.

Cyber insurance is one of the fastest-growing markets as companies look for coverage following a surge in ransomware attacks

Cyber premiums amounted to just over $9bn in premiums last year, according to Lloyd’s, and are predicted to reach as much as $25bn by 2025.

Lloyd’s said that this “still represents a small portion of the potential economic losses that businesses and society face”.