Tag Archives: Investment & Company Information

Uber is reportedly exploring an Expedia takeover

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Uber is reportedly exploring the idea of purchasing Expedia, one of the largest travel booking companies in the world, according to the Financial Times. Expedia, which is valued at $20 billion and which reported its highest-ever annual revenue in 2023, will be the company's biggest acquisition, if the deal does indeed push through. The Times says it's very early days, however, and Uber hasn't even made a formal offer for the travel company yet. It's still in the process of studying the implications of acquiring Expedia and has, over the past months, worked with advisers to figure out whether the deal is feasible and how it would be structured. 

The company's CEO, Dara Khosrowshahi, may have to sit out deal discussions, seeing as he used to be CEO of Expedia before he was hired by the ride-hailing service in 2017. He's still in its Board of Directors, as well. It doesn't sound like Khosrowshahi was the one who suggested the potential purchase, though — in its report, the Times said the idea was "broached by a third party."

Uber has had plans to become a wider travel booking platform for a while now. Khosrowshahi said he wanted Uber to be the "Amazon of transportation" from the time he joined the company. Since then, the ride-hailing service has added train, bus and flight bookings in some markets, and it has also made several large acquisitions. It purchased online food delivery service Postmates for $2.65 billion and alcohol delivery service Drizly for $1.1 billion before shutting it down three years later. The company also teamed up with Waymo and Cruise to offer autonomous rides in certain markets. As the Times notes, Uber became profitable for the first time in 2023 due to a renewed demand for rides and food delivery and could be a in a good position to acquire a company as big as Expedia. 

This article originally appeared on Engadget at https://www.engadget.com/big-tech/uber-is-reportedly-exploring-an-expedia-takeover-120038754.html?src=rss

OpenAI rakes in over $6 billion in new funding

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Now that OpenAI is becoming a for-profit company, it’s making a tidy profit in the process. The Wall Street Journal reported that OpenAI has raised $6.6 billion in new funding from investors, nearly doubling its value to $157 billion. The new funding also makes it the largest venture capital deal in history.

The new investors jumped on board after the artificial intelligence startup planned to switch from a charitable non-profit to a for-profit, product-focused company. If OpenAI fails to make the move to for-profit, investors have the right to pull their funding, according to Axios.

The venture-capital firm Thrive Capital founded by Joshua Kushner, the youngest son of convicted-turned-pardoned real estate developer Charles Kushner, led the new round of funding with $1.25 billion. Other investors included SoftBank, Nvidia, Fidelity Management and OpenAI’s previous largest investor Microsoft.

One name that was notably absent from the investor list is Apple. The tech giant was in the process of negotiating a funding deal but apparently the agreement fell apart.

Funding isn’t the only thing that’s growing for OpenAI. Its AI app ChatGPT has attracted 250 million weekly active users, up from the 200 million announced at the end of August, and 11 million paying subscribers. The higher usage rate has OpenAI officials thinking they should raise the subscription price for ChatGPT to $22 a month by the end of the year and $44 a month in the next five years.

This article originally appeared on Engadget at https://www.engadget.com/ai/openai-rakes-in-over-6-billion-in-new-funding-192110908.html?src=rss

DirecTV to acquire rival Dish Network for $1, subject to regulatory approval

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It’s always beautiful when two lonely corporations find one another. DirecTV has reached an agreement to acquire Dish Network, according to reporting by The New York Times. This would create a global behemoth in the satellite TV space.

It would also provide some financial armor for the struggling Dish Network. The company’s in debt to the tune of billions of dollars because, well, satellite TV isn’t exactly a growth industry anymore. Stream, baby, stream. All told, Dish has $2 billion in debt that’s due in November and only $500 million in available cash. That math don’t add up to anything but bankruptcy.

The specifics of the deal are pretty dang convoluted. It’s a multi-step transaction with a few players. First, the private equity firm TPG will acquire a majority stake in DirectTV from AT&T for $7.6 billion. Next, DirecTV will buy Dish Network for just a single dollar. However, it’ll also take on that $2 billion in debt. EchoStar, the parent company of Dish, will hold onto some parts of the business as part of the transaction, including over $30 billion in wireless spectrum investments. DirecTV will get the Sling TV video service as part of the deal.

The acquisition would create a massive pay-TV provider, with a combined total of around 19 million subscribers. As a counterpoint, cable TV leader Comcast has 13.2 million subscribers. Netflix is creeping up on 300 million subscribers, to show the stark contrast between pay-TV and streaming.

The companies say they expect the deal to close in the second half of 2025, though the whole thing is subject to regulatory approval. The Justice Department denied a similar merger back in 2002, but that was when the satellite TV industry was at its peak.

More recently, the federal government side-eyed a potential merger between the two companies in 2020 on the grounds that it would deprive rural customers a viable alternative to Dish and DirecTV when looking to purchase 5G wireless service.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/directv-to-acquire-rival-dish-network-for-1-subject-to-regulatory-approval-152041300.html?src=rss

OpenAI reportedly plans to increase ChatGPT’s price to $44 within five years

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OpenAI is reportedly telling investors that it plans on charging $22 a month to use ChatGPT by the end of the year. The company also plans to aggressively increase the monthly price over the next five years up to $44.

The documents obtained by The New York Times shows that OpenAI took in $300 million in revenue this August, and expects to make $3.7 billion in sales by the end of the year. Various expenses such as salaries, rent and operational costs will cause the company to lose $5 billion this year.

OpenAI is reportedly circulating the documents the NYT reported on as part of a drive to find new investors to prevent or lessen its financial shortfall. Fortunately, OpenAI is raising money on a $150 billion valuation, and a new round of investments could bring in as much as $7 billion.

OpenAI is also reportedly in the midst of switching from a non to for-profit company. The business model allows for the removal of any caps on investor returns so they’ll have more room to negotiate for new investors at possibly higher rates.

This article originally appeared on Engadget at https://www.engadget.com/ai/openai-reportedly-plans-to-increase-chatgpts-price-to-44-within-five-years-225413308.html?src=rss

Intel reportedly rebuffed an offer from ARM to buy its product unit

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Intel's fortunes have declined so rapidly over the past year that chip designer ARM made a "high level inquiry" about buying its crown jewel product unit, Bloomberg reported. However, Intel said the division wasn't for sale and turned down the offer, according to an unnamed insider. 

There are two main units inside Intel, the product group that sells PC, server and networking chips and a chip manufacturing foundry. ARM had no interest in Intel's foundry division, according to Bloomberg's sources. ARM and Intel representatives declined to comment.

Intel's fortunes have been on the wane for years, but the decline over the last 12 months has been especially dramatic. Following a net $1.6 billion loss in Q2 2024, the company announced that it was laying off 15,000 employees as part of a $10 billion cost reduction plan. Last week, the company also revealed plans to transform its ailing foundry business into an independent subsidiary. Intel lost half its market value last year and is now worth $102.3 billion.

ARM sells its processor designs to Qualcomm, Apple and other manufacturers (mostly for mobile phones) but doesn't build any chips itself. Purchasing Intel's product division would completely transform its business model, though that scenario seems highly improbable.

With Intel wounded at the moment, rivals have been circling. Qualcomm also expressed interest in taking over Intel recently, according to a report from last week. Any mergers related to ARM and Qualcomm would be regulatory nightmares, but the fact that the offers exist at all shows Intel's vulnerability.

Intel has other avenues to boost investment. Apollo Global Management (the owner of Yahoo and Engadget) has offered to invest as much as $5 billion in the company, according to a recent Bloomberg report. Intel also plans to sell part of its stake in chip-maker Altera to private equity investors. 

This article originally appeared on Engadget at https://www.engadget.com/computing/intel-reportedly-rebuffed-an-offer-from-arm-to-buy-its-product-unit-120044228.html?src=rss

New report details OpenAI’s plan to switch to for-profit mode

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A major shakeup is in the works at OpenAI. Reuters reported that the artificial intelligence research company is restructuring its business from a non-profit board into a for-profit corporation. The publication also says Sam Altman would be given equity in the new corporation.

OpenAI’s move to for-profit wouldn’t eliminate its non-profit entity entirely. The non-profit would own a stake in the new for-profit venture but it won’t have nearly the power as it did. An OpenAI spokesperson gave a statement that’s identical to the one they gave to Fortune’s initial report about the restructuring. Couldn’t they at least have used OpenAI’s software to word a different statement?

"We remain focused on building AI that benefits everyone, and we’re working with our board to ensure that we’re best positioned to succeed in our mission. The non-profit is core to our mission and will continue to exist.”

The move to for-profit would also provide a big payday for chief executive officer Sam Altman. Reuters says he would receive equity in the company once the restructuring is complete. The for-profit company’s worth could go as high as $150 billion, according to some estimates. The for-profit model would also remove the cap on investors’ returns.

Altman has reportedly been trying to move OpenAI to a more traditional for-profit company for some time. It’s not known exactly when the switch will happen since details of the deal are still going through all of the legal motions.

This article originally appeared on Engadget at https://www.engadget.com/ai/new-report-details-openais-plan-to-switch-to-for-profit-mode-214354224.html?src=rss

New report details OpenAI’s plan to switch to for-profit mode

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A major shakeup is in the works at OpenAI. Reuters reported that the artificial intelligence research company is restructuring its business from a non-profit board into a for-profit corporation. The publication also says Sam Altman would be given equity in the new corporation.

OpenAI’s move to for-profit wouldn’t eliminate its non-profit entity entirely. The non-profit would own a stake in the new for-profit venture but it won’t have nearly the power as it did. An OpenAI spokesperson gave a statement that’s identical to the one they gave to Fortune’s initial report about the restructuring. Couldn’t they at least have used OpenAI’s software to word a different statement?

"We remain focused on building AI that benefits everyone, and we’re working with our board to ensure that we’re best positioned to succeed in our mission. The non-profit is core to our mission and will continue to exist.”

The move to for-profit would also provide a big payday for chief executive officer Sam Altman. Reuters says he would receive equity in the company once the restructuring is complete. The for-profit company’s worth could go as high as $150 billion, according to some estimates. The for-profit model would also remove the cap on investors’ returns.

Altman has reportedly been trying to move OpenAI to a more traditional for-profit company for some time. It’s not known exactly when the switch will happen since details of the deal are still going through all of the legal motions.

This article originally appeared on Engadget at https://www.engadget.com/ai/new-report-details-openais-plan-to-switch-to-for-profit-mode-214354224.html?src=rss

Intel is separating its ailing foundry business from the main company

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Intel is turning its foundry business, which manufactures chips for other companies, into an independent subsidiary. The company has revealed its plan in a note to employees from its CEO Pat Gelsinger, published over a month after Intel disclosed that it's cutting 15 percent of its workforce. Intel is laying off more than 15,000 people as part of its $10 billion cost-reduction plan to regain financial stability following a second-quarter net loss of $1.6 billion. Gelsinger explained in his new memo that turning the foundry into a subsidiary "will unlock important benefits," particularly the ability to evaluate and take external funding directly. 

Gelsinger said that there will be no changes to the foundry's leadership, but the subsidiary will establish its own operating board with independent directors to govern it. According to CNBC, Intel is even considering making the foundry a separate publicly traded company. Intel is in the midst of modernizing its existing fabs and building new ones for its foundry business, which is costing the company billions of dollars, in an effort to catch up to its chipmaking rivals like TSMC and Samsung. The company has reportedly spent around $25 billion a year on its foundry business over the past two years, but that has yet to translate into profit. 

In April, the company revealed in a presentation to investors that the business posted $7 billion in operating losses for 2023, even larger than the $5.2 billion in losses that it incurred the previous year. It had a revenue of $18.9 billion, down 31 percent from its 2022 revenue of $27.49 billion. Gelsinger warned investors at the time that Intel expects its foundry business' operating loss for 2024 to be even bigger and that it doesn't expect to break even until 2027. The foundry's finances aren't the division's only problem: Its next-gen manufacturing process referred to as "18A" reportedly failed crucial tests to prove that it's ready to be used for mass production. 

In addition to announcing that the foundry business will become a subsidiary, Gelsinger also disclosed in the memo that Intel will be selling part of its stake in Altera, another chipmaker that it purchased for $16.7 billion in 2015. 

This article originally appeared on Engadget at https://www.engadget.com/general/intel-is-separating-its-ailing-foundry-business-from-the-main-company-110043046.html?src=rss

Former MoviePass CEO reportedly pleads guilty to securities fraud

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Mitch Lowe, one of two MoviePass leaders indicted by the Justice Department in 2022, has pleaded guilty to securities fraud charges. The former CEO admitted to conspiring to deceive the public and investors about the service’s sustainability. Variety reports that the details of Lowe’s plea agreement haven’t been made public.

Prosecutors claim Lowe knew from the start that the company’s $9.95 “unlimited” plan was a short-term gimmick to attract subscribers and inflate stock. He’s also accused of making false statements in press releases, interviews and SEC filings about MoviePass’ long-term viability.

Those statements included allegedly lying about the company’s ability to become profitable on subscription fees alone and having tech that could generate revenue from customer data. He also claimed MoviePass was profiting from multiple revenue streams despite not having any income beyond subscriptions.

Prosecutors also accused Lowe and Ted Farnsworth, former CEO of MoviePass’ parent company Helios and Matheson, of preventing subscribers from getting what was promised from the “unlimited” subscription. The company settled with the FTC in 2021 over allegations that it intentionally invalidated subscriber passwords to freeze their accounts, blocking their ability to get the movie tickets the service promised. MoviePass and its parent company declared bankruptcy in 2020.

Although no sentencing date has been set, Lowe is free on bond and has a status conference court date scheduled in Miami for March 2025. The 72-year-old former executive faces a maximum of five years in federal prison.

“Mitch is a good man who is looking to move forward with his life,” Lowe’s attorneys, Margot Moss and David Oscar Markus, said in a statement to Variety. “He has accepted responsibility for his actions in this case and will continue to try to make things right.”

Meanwhile, Farnsworth is still in custody. He was initially freed on a $1 million bond that was revoked in August 2023 after the feds accused him of misusing nearly $300,000 in company funds. Farnsworth's former boyfriend, who he met on an escort site, was paid $147,000, and received a Cadillac worth $144,000; after the pair split up, the feds say he falsely accused his ex of stealing the vehicle.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/former-moviepass-ceo-reportedly-pleads-guilty-to-securities-fraud-201131284.html?src=rss

OpenAI is reportedly moving away from its complicated non-profit structure next year

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Sam Altman has told OpenAI staff members during their weekly meeting that the company is changing its rather convoluted non-profit corporate structure next year, according to Fortune. The CEO said OpenAI will move away from being controlled by a non-profit entity and will transition into a more traditional for-profit organization. He didn't delve into the specifics of how the company will achieve that goal and what OpenAI's corporate structure will look like exactly. A spokesperson only told Fortune that it remains "focused on building AI that benefits everyone" and that non-profit is "core to [its] mission and will continue to exist."

OpenAI started as a non-profit organization in 2015 that relied on money from donors. In a page explaining its structure, it said that it only raised $130.5 million in total donations over the years, which it says made it clear that "donations alone would not scale with the cost of computational power and talent required to push [its] core research forward." The then-purely non-profit organization created a for-profit subsidiary in order to solve that problem. As Fortune explains, OpenAI's non-profit entity currently controls its for-profit arm, which in turn controls a holding company that takes investments from companies like Microsoft. 

Under this structure, the profit that can be allocated to investors, including Microsoft, has a cap. Anything OpenAI makes beyond the cap will go to its non-profit division. And the company's revenue is booming, according to a report by The Information published in June. OpenAI reportedly doubled its annualized revenue in the first half of the year, thanks to the subscription version of ChatGPT.

The company's complex structure also allowed OpenAI's non-profit board of directors to oust Altman in 2023, because they "no longer [have] confidence in his ability to continue leading OpenAI." Five days later, however, the board was disbanded and replaced, while Altman was reinstated as CEO. 

This article originally appeared on Engadget at https://www.engadget.com/ai/openai-is-reportedly-moving-away-from-its-complicated-non-profit-structure-next-year-130014948.html?src=rss