Apple tries to close the AI gap
Heading into Apple’s Worldwide Developers Conference on Monday, big questions loom over the tech giant, from weak sales of its Vision Pro headphones to growing competition in China and regulatory scrutiny on both sides of the Atlantic.
Those aren’t going away, but the focus will be on what Apple CEO Tim Cook reveals about artificial intelligence and whether the company can catch up to its competitors.
Apple has fallen behind its rivals. Share prices of companies considered leaders in AI, such as Nvidia and Microsoft, have soared since OpenAI introduced ChatGPT in November 2022. CEOs of big tech companies have been scrambling to show they are in the race. But Apple has not yet unveiled a new AI offering, out of typical caution, according to The Wall Street Journal.
(The New York Times has sued OpenAI and Microsoft over their use of copyrighted articles related to AI systems.)
Apple tends to keep future product plans under wraps. The rise of AI has put that tactic under pressure; Cook unexpectedly told analysts last month that generative AI offerings were on the cards.
“It was quite fascinating to see Apple, for once, dragged into a conversation that was not on its own terms,” Leo Gebbie, a technology analyst, told The Financial Times.
The focus will be on Siri. Apple has reached a deal with OpenAI to integrate its technology into the iPhone, writes Tripp Mickle of the Times. The goal is to make Apple’s digital assistant capable of performing a broader range of functions and being more conversational.
Apple will emphasize privacy and security. Wait for the company to say Its offerings are more secure because many functions will be processed on the device rather than in a data center, addressing a growing consumer concern that large language models sometimes misuse data.
The company has a history of making profits despite being late to the market.. The iPhone and Apple Music are just two examples. One reason: Its huge user base means that any new technology it releases has huge potential for reach among consumers and developers.
Bloomberg reports that Monday’s announcements could also start a broader push into hardware. And Apple is still in talks with Google to further strengthen its artificial intelligence offering.
Investors have not lost hope. The stock has risen since Cook announced that AI deals were imminent, though not as much as those from Nvidia or Microsoft, indicating it’s too early to write off Apple.
THIS IS WHAT’S HAPPENING
The euro and European stocks sink as the election results become known. Parties linked to President Emmanuel Macron of France and Chancellor Olaf Scholz of Germany fared poorly in a European Parliament vote this weekend, threatening existing climate and immigration policies. The results led Macron to call early legislative elections; Ursula von der Leyen, the president of the European Commission, is fighting for votes to remain in power.
Inflation and the Federal Reserve loom large for investors this week. The central bank is widely expected to leave interest rates unchanged at a meeting of its open markets committee on Wednesday. But Consumer Price Index data will be released ahead of the meeting, giving decision makers new data on inflation. After Friday’s blockbuster jobs report, the big question is: Will the Fed cut rates before Election Day on November 5?
Norway’s sovereign wealth fund plans to vote against Elon Musk’s pay package. The investing giant is the latest institutional shareholder to say it would vote against a move to re-approve the Tesla CEO’s multibillion-dollar compensation deal. Thursday’s vote will be closely watched for what it means for Tesla’s future, especially if Musk refocuses on other parts of his business empire.
Will Smith breaks a bad streak at the box office. “Bad Boys: Ride or Die” grossed more than $56 million in ticket sales domestically during its opening weekend, exceeding expectations. It’s good news for Hollywood, which has been concerned about the weak performance of films like “Furiosa,” which were predicted to be big hits, and for Smith, whose career took a hit after slapping Chris Rock at the Academy Awards. 2022 Academy.
A new twist in the bidding war for an ammunition manufacturer
Vista Outdoor shareholders were scheduled to vote Friday on whether to sell the company’s ammunition business to a Czech company, while a rival bidder, MNC Capital, had tried to stop the deal.
That vote has now been postponed. But Vista remains opposed to MNC’s acquisition efforts and is expected to say it is now weighing other offer for its ammunition division.
Vista will say an unnamed bidder has offered more than $2 billion for the business. known as Kinetic Group and whose brands include Remington and CCI. The company did not offer many details about the new party, other than to say it was a “U.S.-based investment firm” that had previously bid for Kinetic.
Vista will say the new offer was “reasonably expected” to be higher than the $1.96 billion deal it reached with the Czechoslovak Group, and that a deal could be reached with the unnamed bidder by June 13.
Meanwhile, Vista has rejected MNC’s latest acquisition proposal, which recently raised its offer for the entire company to $3 billion. MNC has argued that it not only offers a better deal than CSG, as the Czech company is known, but that it is not subject to the national security review that CSG’s offer is undergoing.
Vista has always disagreed, saying its breakup would create more value for shareholders. It has received support from influential proxy advisory firm Institutional Shareholder Services, which recommended that investors back the deal with CSG.
Shareholders did not seem convinced that the multinational’s offer would be successful: Vista shares closed on Friday at $35.78, below the $39.50 per share offered by the proposal.
Vista delays shareholder vote until July 3 to allow more time to negotiate with the new bidder.
All eyes on the Redstones
This could be a make or break week for the Redstone family. The media dynasty must decide whether to sell its stake in Paramount, the entertainment empire that includes CBS, MTV and the movie studio behind “Top Gun.”
Advisors worked over the weekend on the potential deal with Skydance Media, three people familiar with the matter told DealBook’s Lauren Hirsch and The Times’ Ben Mullin. They requested anonymity to discuss confidential information.
An agreement would be complicated. It would involve two steps: Skydance buying control of National Amusements, which owns the Redstones’ stake in Paramount, and then merging the media conglomerate with Skydance itself. Advisors from Skydance and National Amusements have been working on compensation and the possibility of voting for minority shareholders, mechanisms that would give the Redstones greater legal protection.
As of Sunday night, National Amusements had not scheduled a vote, leaving the other parties in limbo.
The Redstones have other options. A bidding group that includes producer Steven Paul, perhaps best known for his work on the “Baby Geniuses” franchise, and tequila and hair care entrepreneur. John Paul DeJoria is also courting National Amusements.
Those potential buyers would likely receive less regulatory scrutiny than Skydance. But they may not be able to offer the kind of investment capital or technological expertise as Skydance, whose founder is David Ellison, son of Oracle co-founder Larry Ellison.
The football diplomacy of the Chinese electric vehicle giant
The aftershocks of this weekend’s European Parliament elections will likely affect, among other things, Europe’s ambitious climate agenda. On that topic, there will surely be more drama in Brussels. and on the soccer field starting Friday.
That’s when the Euro Cup (formally the UEFA European Championship) begins in Germany. The month-long soccer tournament, which is expected to draw 500 million viewers, has an unlikely sponsor: BYD, the Chinese maker of high-flying electric vehicles whose low-cost models have left many of the car makers European cars in the dust.
The European Union may hit Chinese electric vehicle manufacturers before the first match. Vivienne Walt reports for DealBook. The bloc is expected to rule this week on imposing tariffs on companies subsidized by Beijing, including BYD, to rebalance the mainland’s car market.
It would be the latest example of the West’s tough stance on Chinese electric vehicles. The Biden administration has banned these types of vehicles in the US market, calling them a “security threat.”
And ahead of the EU elections, Luca de Meo, CEO of Groupe Renault, warned that Chinese competitors could sink the European car sector.
Europe cannot afford a trade war. China has threatened to retaliate against high EU tariffs, perhaps on imports of European cars, aviation and pork exports. That would especially hurt German automakers like Volkswagen and BMW, which do big business in China; They are eager to avoid trade barriers, creating a potential divide between European manufacturers that Beijing could try to exploit.
At the same time, the EU wants to boost sales of electric vehicles to meet its 2035 climate goals, a policy that Fabrice Leggeri, a far-right French politician, told France 24 Television last night was a gift to electric vehicle companies. from China.
The EU can start with small sanctions. Analysts suggest the bloc could impose temporary tariffs of around 20 percent on Chinese companies, leaving room for Beijing and Brussels to negotiate later this year, after the newly elected EU Parliament selects a Commission president. European and trade officials.
“The Commission will have to strike a very, very careful balance, to give domestic producers a competitive advantage, to catch up in this innovation game that they have completely missed,” said David Kleimann, trade expert at ODI, a group of experts from Brussels. DealBook said.
A big problem is that China dominates the electric vehicle supply chain. Manufacturers can sell cars for a fraction of Western models and still make a profit. Unless EU tariffs exceed 40 or 50 percent, “there won’t be much difference” in the bottom lines of Chinese EV makers, Kleimann said.
Meanwhile, BYD will soon have a large captive audience. Its logo will be on all televised matches and its electric vehicles will be displayed in host stadiums and fan zones across Europe.
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