🌌 Project, Stargate.
🌌 Project, Stargate.
Microsoft and OpenAI's $100 billion AI supercomputer...Google in talks to acquire HubSpot; Bob Iger wins shareholder proxy battle; Donald Trump posts $175 million bond; and more.
Good morning fellow enthusiasts 👋,
A warm welcome to the 22 new enthusiasts who joined J. Nicholas this week! We now have 249 subscribers (24.9% to our 1,000 subscriber goal).
Not subscribed yet? Help us reach our goal, learn new things along the way, and join the community by clicking here or by subscribing below.
Before I start, I'd like to give a shout-out to the TLDR Newsletter. TLDR is a daily newsletter that sends quick summaries of the most interesting stories in startups, tech, programming, business, and more to over 1.3 million readers. If this seems interesting to you, be sure to check them out here.
IN THIS ISSUE
🌌 Microsoft’s $100 billion AI supercomputer
🤝 Google in talks to acquire HubSpot
🇺🇸 Donald Trump posts $175 million bond
On this day. On April 5, 1818, Chile's independence movement, led by José de San Martín and Bernardo O'Higgins, won a victory over Spain in the Battle of Maipú, leaving 2,000 Spaniards and 1,000 Chileans dead.
FEATURED STORY
🌌 Project, Stargate.
Microsoft and OpenAI are collaborating on a futuristic AI supercomputer data centre in the U.S. called Stargate, estimated to cost over $100 billion. The centre will span hundreds of acres, is expected to consume up to 5 gigawatts of power, and will be among the world’s largest and most advanced data centres.
The construction is part of a series of installations over six years, expected to be completed by 2028, and is considered to be crucial for OpenAI's advancement, including for ChatGPT-4 and beyond. The project will be divided into five stages, with Stargate anticipated to finally reach its last stage within 5-6 years.
Interestingly, a few days prior to this project coming to light, Microsoft CEO Satya Nadella made this statement about it’s AI partnerships:
“Microsoft was self-sufficient in its artificial-intelligence offerings…we can go and just do what we were doing in partnerships, ourselves.” — Satya Nadella
The name Stargate is based on the 1994 sci-fi film of the same name and is supposed to symbolize a ‘groundbreaking partnership to revolutionize AI.’
Since 2019, Microsoft has made investments in OpenAI totaling as much as $13 billion. However, despite these investments, Microsoft has no ownership of OpenAI and is instead entitled to a 49% share of profits.
At the moment, the project's future is still uncertain pending the release of OpenAI’s next-gen AI model and approval for construction. In the meantime, AI advancements continue to be released and updated, with chatbots like Microsoft’s Copilot, OpenAI’s ChatGPT, and Google’s Gemini leading the way.
Speaking of AI partnerships
👾 Google and Zebra Technologies: Google and Zebra Technologies announced a partnership this week leveraging Zebra’s GenAI model and its capabilities to make it easier for employees to chat on their phones at work, make decisions faster, and make training employees smoother. More details on the model will be announced at Google Cloud Next event next week.
FINANCE1
🤝 Google in talks to acquire HubSpot
Alphabet, Google’s parent company, is reportedly considering making an offer to acquire HubSpot to diversify beyond its advertising business, according to a Reuters exclusive report. While no offer has been officially made, estimates say it could be around $32 billion.
With Google’s $112 billion of cash, the company would not need to borrow for the acquisition and would bring Google 205,000 new customers, an extra $400 million in operating cash flow, and an additional $2.2 billion of annual revenue projected to grow by 25% year-over-year. Following the report, HubSpot’s stock rose by 8%, while Alphabet shares dropped 3%.
💰 Laurentian sells C$2 billion of assets
Laurentian Bank of Canada has struck a deal to sell C$2 billion ($1.5 billion) of assets under management to a subsidiary of iA Financial Group, as a way to “simplify its business after a challenging year.” The Montreal-based bank, also Canada’s ninth-largest, said that the net proceeds from the transaction will not be significant.
As part of the deal, Laurentian Bank’s retail investment-broker division will transfer 16,000 client accounts to iA Financial, along with around 30 financial advisers who are invited to join the iA Private Wealth division. iA Financial, headquartered in Québec City, is one of Canada’s largest insurance and asset-management companies.
BUSINESS
📺 Bob Iger wins shareholder proxy battle
The most expensive proxy fight in history, costing $40 million, has finally ended with Disney shareholders rejecting activist investor Nelson Peltz's attempts to replace 12 seats on the board of directors. Peltz, through his investment firm, owns $3.98 billion of Disney stock, representing 2% of outstanding shares.
The battle began in 2023 when Peltz criticized Disney CEO Bob Iger and the stagnant growth for shareholders during his tenure. Iger got the backing and support of BlackRock, Vanguard, and George Lucas, who together hold an 18% stake in the company, which helped him secure over 60% of the votes.
🛒 Amazon gives up on Just Walk Out
Amazon is abandoning its Just Walk Out technology throughout it’s brick-and-mortar grocery stores, replacing them with ‘Dash Carts,’ a cart that scans customers products as they add them. Just Walk Out will still be used in smaller corner stores and groceries in the UK.
Since acquiring Whole Foods in 2017, Amazon has faced challenges in establishing a presence in the retail sector. With Dash Carts, Amazon aims to streamline the checkout process, provide a simpler alternative, and more importantly, save money compared to their original approach.
POLITICS
🇺🇸 Donald Trump posts $175 million bond
Former President Trump just avoided a $454 million fine in his New York civil fraud case through a $175 million bond, pending appeal. The original fine was related to a lawsuit where Trump was accused of inflating the value of his properties for better loans.
The bond was provided by Knight Insurance Group, and acts as a promise to cover a portion of the judgment if Trump loses the appeal. Trump's largely real estate net worth was the main challenge in securing the full bond, a bond that if he didn’t secure would have caused potential asset seizures.
🇨🇦 Canadian MPs retire from politics
NDP MPs Charlie Angus, Carol Hughes, and Rachel Blaney announced on Thursday that they don't plan on seeking re-election and will instead retire. Angus, the longest-serving of the three, represented Northern Ontario for 20 years and transformed a Liberal stronghold into an NDP constituency. He also ran for NDP leadership in 2017.
Hughes, representing Algoma-Manitoulin-Kapuskasing, faced changes due to redistributions in her riding, which prompted her decision to retire. Finally, Blaney, elected in 2015 and representing North Island-Powell River, decided to retire to focus on family.
Thank you for reading today’s issue of Weekly Brief. If you’d like to support me and my work, consider buying me a coffee ☕️. You can download my PDF on calculating fair value using that same link (it’s free).
Have a great week ahead!
— Jacob
📚 Book of the Week
Note: I don’t recommend books that I haven’t read or that I would never read. The books I recommend are books I have already read or that I will eventually read.
No Rules Rules — Reed Hastings
Book Description:
There has never been a company quite like Netflix. It has led nothing short of a revolution in the entertainment industry, generating billions of dollars in annual revenue while captivating the imaginations of hundreds of millions of people in over 190 countries. But, to reach these great heights, Netflix, which launched in 1998 as an online DVD rental service, has had to reinvent itself repeatedly.
At Netflix, adequate performance is rewarded with a generous severance, and hard work is considered irrelevant. Employees don't aim to please their bosses; instead, they provide candid feedback. The company operates without the need for approval, offering top-of-market compensation. In 'No Rules Rules,' for the first time, Hastings and Erin Meyer, bestselling author of 'The Culture Map' and one of the world’s most influential business thinkers, delve deep into the controversial ideologies at the heart of the Netflix psyche. These ideologies have produced results that are the envy of the business world.
Drawing on hundreds of interviews with current and former Netflix employees from around the globe, as well as never-before-told stories of trial and error from Hastings's own career, 'No Rules Rules' offers a fascinating and untold account of the philosophy behind one of the world’s most innovative, imaginative, and successful companies.
As of Jan 31, 2024, (resulting from my Amazon.ca Associates account being terminated) I do not earn any affiliate commissons from the links below.
Stock data as of market close, cryptocurrency data as of 5:00pm EST. Percentage share price gains mentioned are rounded to nearest whole number.