Tag Archives: Finance

Sam Altman is back on the OpenAI board. We still don’t know why he was fired.

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Sam Altman is back on the board of OpenAI, nearly four months after the CEO was ousted, and quickly reinstated, from the company he founded. Although Altman had returned as the AI company’s top executive in November, a temporary board oversaw his return and the subsequent investigation into his conduct.

That investigation is now complete, according to the company, which added three new members to its board of directors. The additions include: Instacart CEO and former Meta executive Fidji Simo, former Sony executive Nicole Seligman and Dr. Sue Desmond-Hellmann, former CEO of the Bill and Melinda Gates Foundation. Salesforce co-CEO Bret Taylor, economist Larry Summers and OpenAI co-founder Greg Brockman, who served on the temporary three-seat board, will remain in their positions with Taylor continuing as chair.

The announcement caps off a tumultuous several months for the AI company, which was rocked by Altman’s abrupt ouster last fall.

On Friday, OpenAI also published a summary of the findings from WilmerHale, a law firm that the company’s board retained in December 2023 to conduct an independent investigation into the events that led to Altman’s firing. Despite that, however, we’re no closer to finding out exactly why Altman, who rejoined the company as CEO within five days, was fired to begin with.

“WilmerHale [found] that the prior Board’s decision did not arise out of concerns regarding product safety or security, the pace of development, OpenAI’s finances, or its statements to investors, customers, or business partners,” the summary said. “Instead, it was a consequence of a breakdown in the relationship and loss of trust between the prior Board and Mr. Altman.” WilmerHale also concluded that OpenAI’s previous board fired Altman abruptly without giving notice to “key stakeholders”, and without giving Altman an opportunity to respond to its concerns.

To come to this conclusion, the firm reviewed more than 30,000 documents and conducted dozens of interviews with OpenAI staffers including previous board members over the last few months.

This article originally appeared on Engadget at https://www.engadget.com/sam-altman-is-back-on-the-openai-board-we-still-dont-know-why-he-was-fired-002358008.html?src=rss

Sam Altman is back on the OpenAI board. We still don’t know why he was fired.

Posted on by

Sam Altman is back on the board of OpenAI, nearly four months after the CEO was ousted, and quickly reinstated, from the company he founded. Although Altman had returned as the AI company’s top executive in November, a temporary board oversaw his return and the subsequent investigation into his conduct.

That investigation is now complete, according to the company, which added three new members to its board of directors. The additions include: Instacart CEO and former Meta executive Fidji Simo, former Sony executive Nicole Seligman and Dr. Sue Desmond-Hellmann, former CEO of the Bill and Melinda Gates Foundation. Salesforce co-CEO Bret Taylor, economist Larry Summers and OpenAI co-founder Greg Brockman, who served on the temporary three-seat board, will remain in their positions with Taylor continuing as chair.

The announcement caps off a tumultuous several months for the AI company, which was rocked by Altman’s abrupt ouster last fall.

On Friday, OpenAI also published a summary of the findings from WilmerHale, a law firm that the company’s board retained in December 2023 to conduct an independent investigation into the events that led to Altman’s firing. Despite that, however, we’re no closer to finding out exactly why Altman, who rejoined the company as CEO within five days, was fired to begin with.

“WilmerHale [found] that the prior Board’s decision did not arise out of concerns regarding product safety or security, the pace of development, OpenAI’s finances, or its statements to investors, customers, or business partners,” the summary said. “Instead, it was a consequence of a breakdown in the relationship and loss of trust between the prior Board and Mr. Altman.” WilmerHale also concluded that OpenAI’s previous board fired Altman abruptly without giving notice to “key stakeholders”, and without giving Altman an opportunity to respond to its concerns.

To come to this conclusion, the firm reviewed more than 30,000 documents and conducted dozens of interviews with OpenAI staffers including previous board members over the last few months.

This article originally appeared on Engadget at https://www.engadget.com/sam-altman-is-back-on-the-openai-board-we-still-dont-know-why-he-was-fired-002358008.html?src=rss

Rivian is halting construction of its $5 billion Georgia plant to save money

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Rivian generally had a good day yesterday, launching the R2 SUV along with the surprise R3 crossover and dune buggy-esque R3X that were met with general acclaim. Buried in that press release, however, was the news that the automaker is halting production of its $5 billion Georgia plant in order to save money. 

Instead of building the R2 in Georgia as originally planned, the company will start production of the electric SUV at its existing Normal, Illinois plant. "Beyond significantly reducing the amount of capital needed to bring R2 to market, the company believes this approach considerably reduces risk to the launch and associated ramp," the company said. 

The move will also allow Rivian to bring the R2 to market sooner, in the first half of 2026, while saving the company $2.25 billion in capital spending in the short term. That's important since it has been burning through cash of late, according to recent reports.

The Rivian R3 and R3X will eventually be built at the company's Georgia plant
Elliot Ross Studio

Of all the EV startups to come along of late, Rivian has been one of the most promising thanks to significant investments from Amazon, Ford and others. The company's electric R1T pickup and R1S SUV were also widely praised for their attractive designs, healthy range and more. 

Ramping up an automotive startup is no easy feat, though, especially in a market that's been tough on EVs of late — with even stalwart Tesla feeling the pinch. It doesn't help that startup rivals like Fisker are having serious cash flow issues, as it may spook consumers wary of untested EV brands.

Rivian selected Georgia as the site for its second EV factory back in 2021, receiving up to $1.5 billion in state incentives. At the time, the company said it hoped to eventually produce 400,000 electric vehicles there annually. With plant changes, the Normal, Illinois facility will augment capacity to 215,000 units annually across R1T, R1S, EDV, RCV, and R2.

The Georgia location remains in the picture, but Rivian only said it construction would restart later. "Rivian’s Georgia plant remains an extremely important part of its strategy to scale production of R2 and R3," it said in a statement. 

This article originally appeared on Engadget at https://www.engadget.com/rivian-is-halting-construction-of-its-5-billion-georgia-plant-to-save-money-082236810.html?src=rss

Rivian is halting construction of its $5 billion Georgia plant to save money

Posted on by

Rivian generally had a good day yesterday, launching the R2 SUV along with the surprise R3 crossover and dune buggy-esque R3X that were met with general acclaim. Buried in that press release, however, was the news that the automaker is halting production of its $5 billion Georgia plant in order to save money. 

Instead of building the R2 in Georgia as originally planned, the company will start production of the electric SUV at its existing Normal, Illinois plant. "Beyond significantly reducing the amount of capital needed to bring R2 to market, the company believes this approach considerably reduces risk to the launch and associated ramp," the company said. 

The move will also allow Rivian to bring the R2 to market sooner, in the first half of 2026, while saving the company $2.25 billion in capital spending in the short term. That's important since it has been burning through cash of late, according to recent reports.

The Rivian R3 and R3X will eventually be built at the company's Georgia plant
Elliot Ross Studio

Of all the EV startups to come along of late, Rivian has been one of the most promising thanks to significant investments from Amazon, Ford and others. The company's electric R1T pickup and R1S SUV were also widely praised for their attractive designs, healthy range and more. 

Ramping up an automotive startup is no easy feat, though, especially in a market that's been tough on EVs of late — with even stalwart Tesla feeling the pinch. It doesn't help that startup rivals like Fisker are having serious cash flow issues, as it may spook consumers wary of untested EV brands.

Rivian selected Georgia as the site for its second EV factory back in 2021, receiving up to $1.5 billion in state incentives. At the time, the company said it hoped to eventually produce 400,000 electric vehicles there annually. With plant changes, the Normal, Illinois facility will augment capacity to 215,000 units annually across R1T, R1S, EDV, RCV, and R2.

The Georgia location remains in the picture, but Rivian only said it construction would restart later. "Rivian’s Georgia plant remains an extremely important part of its strategy to scale production of R2 and R3," it said in a statement. 

This article originally appeared on Engadget at https://www.engadget.com/rivian-is-halting-construction-of-its-5-billion-georgia-plant-to-save-money-082236810.html?src=rss

Spotify is mad at the French government and taking it out on users

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Spotify said on Thursday it will raise its subscription prices in France in response to a new tax designed to support the nation’s music industry. The company wrote an open letter denouncing the tax, which France’s government passed in late 2023. The streaming service hasn’t yet said how high the price hike will be, other than teasing, “French users will now pay the highest subscriptions across the European Union.” 

France’s CNM tax imposes a levy on music services that earn over 20 million euros ($21.9 million) in the country: Spotify, Apple Music and Deezer. (Apple Music and Deezer have opposed the tax but haven’t announced similar price hikes.) The companies pay the new 1.2 percent charge on all streaming revenue generated in the country. Social media companies licensing music, including TikTok and Facebook, are also subject to the tax. The fees will go to the nation’s Centre National de la Musique (CNM), a public institution supporting and promoting the French music industry.

Spotify’s initial response in December was to pull financial support from French music festivals Francofolies de la Rochelle and Printemps de Bourges. The company threatened to pull its services from Uruguay when a similar tax was announced there but ultimately backed down when the Uruguayan government said streaming services wouldn’t have to cover any costs.

Spotify hasn’t made similar threats to exit France, likely because the country is much more crucial to its bottom line. Instead, it’s waging a public pressure campaign, including the music service painting the tax as an unnecessary government money grab that only partially funds the music industry.

“This tax will generate approximately 15 million euros, when the CNM’s administrative budget (office fees, personnel, capital expenditure, media monitoring or professional training etc.) sits at 20.2 million euros,” the company wrote in the public letter. “Our concern is that possibly less than half of its overall 146.9 million euros budget will find its way toward effectively aiding music.”

Other than listing the CNM’s administrative budget, Spotify didn’t provide any evidence that the fees wouldn’t go toward aiding music.

Spotify’s revenue grew 16 percent year-over-year to €3.7 billion ($4.05 billion) in Q4 2023, in what it described as “a very strong quarter.” Its CEO sold $57.5 million in stock in February, following a $64 million stock sale in October 2023.

“As we have long said, we simply can’t absorb any additional taxes,” Spotify wrote. “Even after making the difficult decision to reduce our artist marketing budget and support of French music festivals — which is an essential vehicle for Spotify to continue to drive hundreds of millions of euros to the music industry — it still continues to impede our ability to operate in France. Accordingly, over the coming weeks and months, we’ll need to make changes to our price plan in France.”

Spotify says French subscribers will learn more about the price hike “in the coming weeks.”

Update, March 7, 2024, 3:08 PM ET: The story has been updated to attribute Spotify’s open letter to the company, not CEO Daniel Ek (as the previous version stated).

This article originally appeared on Engadget at https://www.engadget.com/spotify-is-mad-at-the-french-government-and-taking-it-out-on-users-175910647.html?src=rss

Spotify is mad at the French government and taking it out on users

Posted on by

Spotify said on Thursday it will raise its subscription prices in France in response to a new tax designed to support the nation’s music industry. The company wrote an open letter denouncing the tax, which France’s government passed in late 2023. The streaming service hasn’t yet said how high the price hike will be, other than teasing, “French users will now pay the highest subscriptions across the European Union.” 

France’s CNM tax imposes a levy on music services that earn over 20 million euros ($21.9 million) in the country: Spotify, Apple Music and Deezer. (Apple Music and Deezer have opposed the tax but haven’t announced similar price hikes.) The companies pay the new 1.2 percent charge on all streaming revenue generated in the country. Social media companies licensing music, including TikTok and Facebook, are also subject to the tax. The fees will go to the nation’s Centre National de la Musique (CNM), a public institution supporting and promoting the French music industry.

Spotify’s initial response in December was to pull financial support from French music festivals Francofolies de la Rochelle and Printemps de Bourges. The company threatened to pull its services from Uruguay when a similar tax was announced there but ultimately backed down when the Uruguayan government said streaming services wouldn’t have to cover any costs.

Spotify hasn’t made similar threats to exit France, likely because the country is much more crucial to its bottom line. Instead, it’s waging a public pressure campaign, including the music service painting the tax as an unnecessary government money grab that only partially funds the music industry.

“This tax will generate approximately 15 million euros, when the CNM’s administrative budget (office fees, personnel, capital expenditure, media monitoring or professional training etc.) sits at 20.2 million euros,” the company wrote in the public letter. “Our concern is that possibly less than half of its overall 146.9 million euros budget will find its way toward effectively aiding music.”

Other than listing the CNM’s administrative budget, Spotify didn’t provide any evidence that the fees wouldn’t go toward aiding music.

Spotify’s revenue grew 16 percent year-over-year to €3.7 billion ($4.05 billion) in Q4 2023, in what it described as “a very strong quarter.” Its CEO sold $57.5 million in stock in February, following a $64 million stock sale in October 2023.

“As we have long said, we simply can’t absorb any additional taxes,” Spotify wrote. “Even after making the difficult decision to reduce our artist marketing budget and support of French music festivals — which is an essential vehicle for Spotify to continue to drive hundreds of millions of euros to the music industry — it still continues to impede our ability to operate in France. Accordingly, over the coming weeks and months, we’ll need to make changes to our price plan in France.”

Spotify says French subscribers will learn more about the price hike “in the coming weeks.”

Update, March 7, 2024, 3:08 PM ET: The story has been updated to attribute Spotify’s open letter to the company, not CEO Daniel Ek (as the previous version stated).

This article originally appeared on Engadget at https://www.engadget.com/spotify-is-mad-at-the-french-government-and-taking-it-out-on-users-175910647.html?src=rss

Elon Musk sues OpenAI and Sam Altman for allegedly ditching non-profit mission

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OpenAI co-founder Elon Musk has sued the company, his fellow co-founders, associated businesses and unidentified others. He claims that, by chasing profits, they’re violating OpenAI’s status as a non-profit and its foundational contractual agreements to develop AI “for the benefit of humanity.”

The suit alleges that OpenAI has become a “closed-source de facto subsidiary” of Microsoft, which has invested $13 billion and holds a 49 percent stake. Microsoft uses OpenAI tech to power generative AI tools such as Copilot.

According to the filing, under OpenAI’s current board, it is allegedly developing and refining an artificial general intelligence (AGI) “to maximize profits for Microsoft, rather than for the benefit of humanity. This was a stark betrayal of the Founding Agreement.”

The suit defines AGI as "a machine having intelligence for a wide variety of tasks like a human." Musk argues in the suit that GPT-4, which is purportedly "better at reasoning than average humans," is tantamount to AGI and is "a de facto Microsoft proprietary algorithm."

Musk has long expressed concerns over AGI. He claims the theoretical tech posits "a grave threat to humanity," particularly "in the hands of a closed, for-profit company like Google."

According to the filing, OpenAI CEO Sam Altman and fellow co-founder Greg Brockman persuaded Musk to help them start the non-profit and to fund its early operations in a bid to counter Google's advancements in the AGI space with DeepMind. He noted that their initial agreement called for OpenAI's tech to be "freely available" to the public. Musk claims to have donated $44 million to the non-profit between 2016 and 2020 (he stepped down as an OpenAI board member in 2018). As TechCrunch reports, Musk previously said he was offered a stake in OpenAI's for-profit subsidiary, but rejected it due to "a principled stand."

Muskl, of course, has some skin in the game. Since the public debut of OpenAI's ChatGPT in November 2022, there's been a battle between tech giants to offer the best generative AI tools. Musk joined that rat race when his AI company, xAI, rolled out ChatGPT rival Grok to Premium+ subscribers on his X social network last year.

When Altman swiftly returned to power after OpenAI's board shockingly fired him in November, he's said to have appointed a new group of directors that is less technically minded and more business-focused. Microsoft was appointed as a non-voting observer. “The new board consisted of members with more experience in profit-centric enterprises or politics than in AI ethics and governance,” the lawsuit alleges.

The suit accuses the defendants of breach of contract, breach of fiduciary duty and unfair business practices. Musk is seeking a jury trial and a ruling that forces OpenAI to stick to its original non-profit mission. He also wants it to be banned from monetizing tech it developed as a non-profit for the benefit of OpenAI leadership as well as Microsoft and other partners.

Competition regulators in the US, the UK and European Union are said to be examining OpenAI's partnership with Microsoft. It was reported this week that the Securities and Exchange Commission is investigating whether OpenAI misled investors. Several news organizations have sued OpenAI and Microsoft as well, alleging that ChatGPT repurposes their work "verbatim or nearly verbatim" without attribution, infringing upon their copyright in the process.

In a couple of internal memos seen by Bloomberg, OpenAI said it "categorically disagrees" with the lawsuit Musk has filed. Chief Strategy Officer Jason Kwon denied that OpenAI has become a "de facto subsidiary" of Microsoft and said that Musk's claims "may stem from [his] regrets about not being involved with the company today." Altman also said in another memo that Musk is his hero and that he misses the person he knew who competed with others by building better technology.

Update, March 02, 2023, 1:47AM ET: This story has been updated to include OpenAI's internal memos about the lawsuit.

This article originally appeared on Engadget at https://www.engadget.com/elon-musk-sues-openai-and-sam-altman-for-allegedly-ditching-non-profit-mission-160722736.html?src=rss

Elon Musk sues OpenAI and Sam Altman for allegedly ditching non-profit mission

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OpenAI co-founder Elon Musk has sued the company, his fellow co-founders, associated businesses and unidentified others. He claims that, by chasing profits, they’re violating OpenAI’s status as a non-profit and its foundational contractual agreements to develop AI “for the benefit of humanity.”

The suit alleges that OpenAI has become a “closed-source de facto subsidiary” of Microsoft, which has invested $13 billion and holds a 49 percent stake. Microsoft uses OpenAI tech to power generative AI tools such as Copilot.

According to the filing, under OpenAI’s current board, it is allegedly developing and refining an artificial general intelligence (AGI) “to maximize profits for Microsoft, rather than for the benefit of humanity. This was a stark betrayal of the Founding Agreement.”

The suit defines AGI as "a machine having intelligence for a wide variety of tasks like a human." Musk argues in the suit that GPT-4, which is purportedly "better at reasoning than average humans," is tantamount to AGI and is "a de facto Microsoft proprietary algorithm."

Musk has long expressed concerns over AGI. He claims the theoretical tech posits "a grave threat to humanity," particularly "in the hands of a closed, for-profit company like Google."

According to the filing, OpenAI CEO Sam Altman and fellow co-founder Greg Brockman persuaded Musk to help them start the non-profit and to fund its early operations in a bid to counter Google's advancements in the AGI space with DeepMind. He noted that their initial agreement called for OpenAI's tech to be "freely available" to the public. Musk claims to have donated $44 million to the non-profit between 2016 and 2020 (he stepped down as an OpenAI board member in 2018). As TechCrunch reports, Musk previously said he was offered a stake in OpenAI's for-profit subsidiary, but rejected it due to "a principled stand."

Muskl, of course, has some skin in the game. Since the public debut of OpenAI's ChatGPT in November 2022, there's been a battle between tech giants to offer the best generative AI tools. Musk joined that rat race when his AI company, xAI, rolled out ChatGPT rival Grok to Premium+ subscribers on his X social network last year.

When Altman swiftly returned to power after OpenAI's board shockingly fired him in November, he's said to have appointed a new group of directors that is less technically minded and more business-focused. Microsoft was appointed as a non-voting observer. “The new board consisted of members with more experience in profit-centric enterprises or politics than in AI ethics and governance,” the lawsuit alleges.

The suit accuses the defendants of breach of contract, breach of fiduciary duty and unfair business practices. Musk is seeking a jury trial and a ruling that forces OpenAI to stick to its original non-profit mission. He also wants it to be banned from monetizing tech it developed as a non-profit for the benefit of OpenAI leadership as well as Microsoft and other partners.

Competition regulators in the US, the UK and European Union are said to be examining OpenAI's partnership with Microsoft. It was reported this week that the Securities and Exchange Commission is investigating whether OpenAI misled investors. Several news organizations have sued OpenAI and Microsoft as well, alleging that ChatGPT repurposes their work "verbatim or nearly verbatim" without attribution, infringing upon their copyright in the process.

In a couple of internal memos seen by Bloomberg, OpenAI said it "categorically disagrees" with the lawsuit Musk has filed. Chief Strategy Officer Jason Kwon denied that OpenAI has become a "de facto subsidiary" of Microsoft and said that Musk's claims "may stem from [his] regrets about not being involved with the company today." Altman also said in another memo that Musk is his hero and that he misses the person he knew who competed with others by building better technology.

Update, March 02, 2023, 1:47AM ET: This story has been updated to include OpenAI's internal memos about the lawsuit.

This article originally appeared on Engadget at https://www.engadget.com/elon-musk-sues-openai-and-sam-altman-for-allegedly-ditching-non-profit-mission-160722736.html?src=rss

Fisker halts work on new EV models until it finds more money

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Fisker has announced its future plans alongside preliminary 2023 and Q4 earnings, and it's not looking great for the EV manufacturer. The company plans to lay off 15 percent of its workforce — nearly 200 people — as it shifts from a direct-to-consumer to a Dealer Partner model. The company is halting all investments in upcoming models and will resume only if in partnership with another automaker.

The company's fourth-quarter revenue increased to $200.1 million from $128.3 million in Q3. However, its gross margin was negative 35 percent, and it lost $1.23 per share. Its sole EV on the market, the Ocean SUV, also had 10,193 units produced but 4,929 vehicles delivered.

The automaker first introduced its pivot to a Dealer Partner Model in January and claims it has received interest from 250 dealers across North America and Europe, along with 13 signed agreements. "We are aware that the industry has entered a turbulent, and unpredictable period," Henrik Fisker, chairman and CEO of Fisker, said in a statement. "With that understanding and taking the lessons learned from 2023, we have put a plan in place to streamline the company as we prepare for another difficult year. We have adjusted our outlook for 2024 to be much more conservative than in 2023." The company plans to deliver between 20,000 and 22,000 Ocean models across the world. 

Fisker is currently negotiating with "a large automaker" for an investment and joint production of future EVs. This means that previously announced vehicle production, such as the Alaska EV pickup with humungous cup holders and a designated cowboy hat space, will be on hold indefinitely. Fisker originally planned to start production on the Alaska EV pickup in early 2025. 

This article originally appeared on Engadget at https://www.engadget.com/fisker-halts-work-on-new-ev-models-until-it-finds-more-money-140050091.html?src=rss

Fisker halts work on new EV models until it finds more money

Posted on by

Fisker has announced its future plans alongside preliminary 2023 and Q4 earnings, and it's not looking great for the EV manufacturer. The company plans to lay off 15 percent of its workforce — nearly 200 people — as it shifts from a direct-to-consumer to a Dealer Partner model. The company is halting all investments in upcoming models and will resume only if in partnership with another automaker.

The company's fourth-quarter revenue increased to $200.1 million from $128.3 million in Q3. However, its gross margin was negative 35 percent, and it lost $1.23 per share. Its sole EV on the market, the Ocean SUV, also had 10,193 units produced but 4,929 vehicles delivered.

The automaker first introduced its pivot to a Dealer Partner Model in January and claims it has received interest from 250 dealers across North America and Europe, along with 13 signed agreements. "We are aware that the industry has entered a turbulent, and unpredictable period," Henrik Fisker, chairman and CEO of Fisker, said in a statement. "With that understanding and taking the lessons learned from 2023, we have put a plan in place to streamline the company as we prepare for another difficult year. We have adjusted our outlook for 2024 to be much more conservative than in 2023." The company plans to deliver between 20,000 and 22,000 Ocean models across the world. 

Fisker is currently negotiating with "a large automaker" for an investment and joint production of future EVs. This means that previously announced vehicle production, such as the Alaska EV pickup with humungous cup holders and a designated cowboy hat space, will be on hold indefinitely. Fisker originally planned to start production on the Alaska EV pickup in early 2025. 

This article originally appeared on Engadget at https://www.engadget.com/fisker-halts-work-on-new-ev-models-until-it-finds-more-money-140050091.html?src=rss