Heady Billionaires

Plus: Avatar blows away Top Gun with a little help from China ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

December 16, 2022

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Good morning.

The explosion of FTX has had an impressive fallout radius, but one famously large target is doing his best to stay out of harm’s way.

After being named in a class-action lawsuit alleging FTX purposely defrauded clients and enlisted celebrities to help it to do so, NBA Hall-of-Famer Shaquille O’Neal is moving quickly to distance all 7’ 1” of himself from one of the biggest financial blow-ups of all time. “A lot of people think I’m involved, but I was just a paid spokesperson for a commercial,” O’Neal told CNBC, insisting that he had no involvement in, or understanding of, FTX and took the money in the same way he would any endorsement. In fact, when asked if he believed in crypto as an investment, O’Neal simply stated “No.” You can almost hear an errant free throw clanking off the front of the rim.

Morning Brief

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The US puts the squeeze on Chinese chips.

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The billionaire space race goes cranial.

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‘Avatar’ sequel poised for box office success.

Trade

US Blacklists 36 Chinese Companies

The US and China continue to consciously uncouple.

On Thursday, the US placed three dozen Chinese companies on a trade blacklist, the latest effort to hinder Beijing’s development of advanced chips and technologies for military uses.

Chip on Your Shoulder

In particular, Washington wants to slow down the Middle Kingdom’s production of hypersonic weapons. Those may sound like the type of guns Lex Luthor would use on Superman, but they’re actually really, really fast missiles, capable of traveling roughly five times the speed of sound at 4,000 mph.

The Trump administration heightened trade tensions with China in 2018, and the current White House has kept up the pressure, prompting Chinese President Xi Jinping to respond in kind. Nothing is safe, not even Tiktok. On Wednesday, the Senate voted to ban the Chinese-owned doom scroller of an app on government devices to combat security concerns.

In addition to the black list, 21 businesses are now subject to the “foreign direct product rule,” meaning non-American companies can’t export products that contain a specified amount of US tech to China:

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The US’ biggest target was Yangtze Memory Technologies, China’s largest memory chip producer, which has been accused of violating US export controls by supplying Chinese telecom equipment maker Huawei.

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Also on the receiving end of the hammer were chip companies Cambricon and Shanghai Micro Electronics, state-owned military supplier AVIC Research, and Tiandy — a surveillance software business that allegedly aided in the repression of China’s Uyghur minority and helped Iran obtain US technology.

Sen. Chuck Schumer called YMTC “an immediate threat to national security” and added that the administration needed to act quickly to prevent China “from gaining even an inch of a military or economic advantage.”

Tough on Trade: America’s hardball tactics seem to be working. On Thursday, federal watchdogs were allowed “full access” audits of firms in China for the first time ever. Roughly 200 companies including Alibaba, JD.com, and Baidu had to agree to the audits or risk being delisted from US stock exchanges under provisions of the Public Company Accounting Oversight Board. The US might have won the battle, but the war is far from over.

– Griffin Kelly

Medtech

Bezos and Gates Invest In Synchron

(Photo Credit: Hey Paul Studios/Flickr)

The next billionaire battle royale will really get inside your head.

Brain-computer interface tech startup Synchron announced Thursday it raised $75 million in a new funding round including cash injections from Bezos Expeditions and Gates Frontier, investment vehicles for — you guessed it — Jeff Bezos and Bill Gates. While Synchron is seen by many as a much smaller and less-capitalized rival to Elon Musk’s Neuralink, it’s clearly forging ahead with its own plan.

Not Exactly Brain Surgery

The science of brain-computer interfaces (BCIs) stretches back to the 1960s and now the field is maturing rapidly, with companies jostling to prove their products represent real, viable, and commercial healthcare options for people living with various forms of paralysis. Synchron’s distinguishing feature is that its device can be inserted non-invasively via the jugular vein using a stent as opposed to brain surgery. Clearly, the company took the phrase “go for the jugular” rather literally.

Once inside a person’s brain, the stentrode allows them to interact with computers using just their mind. One recipient of Syncron’s tech, an Australian man with ALS, told Insider he uses it to pay his bills, do his online shopping, and turn the lights on and off in his house. With living proof of its usefulness, Synchron is starting to pull ahead of the competition:

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It implanted the first-ever brain-computer interface into a US patient in July this year. CEO Tom Oxley told Bloomberg it’s got a US-based study with six people underway, two of whom have already had their implants put in.

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Oxley said the next big hurdle the company wants to clear is an FDA pivotal trial, which if successful would mean the tech would be eligible for Medicare and medical insurance.

Brain trust: Bezos and Gates aren’t the first Silicon Valley types to invest in Synchron, Neuralink’s former president Max Hodak invested in the company earlier this year. Reuters reported in August that Musk himself approached Synchron in an effort to strike a deal — but nothing came of it. In another Reuters report this month, sources said Musk was getting frustrated with what he viewed as Neuralink’s slow progress and told employees to imagine they had bombs strapped to their heads as a motivation tactic. Another shout-out for Elon, who continues to write the book on persuasive management style.

– Isobel Asher Hamilton

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Hollywood

Disney Projects Massive Box Office Success for ‘Avatar’ Sequel

In James Cameron’s original Avatar, humans and giant blue aliens warred over the subtly-titled fictional interstellar natural resource unobtanium.

Now, via sequel Avatar: The Way of Water, Cameron and his Disney overlords appear poised to achieve something seemingly just as unobtainable in 2022: massive box office success. On Thursday, the House of Mouse announced stellar opening day returns of nearly $16 million in 15 overseas markets — and is projecting a much-needed massive boost to cap off a lackluster year at the theaters.

Opening Pandora’s Box Office

The Hollywood of 2022 is a world away from Hollywood in 2009, when the original Avatar stomped its way to the top of all-time box office records with a $2.9 billion gross. Yes, Top Gun: Maverick did soar to nearly $1.5 billion at the global box office, good for 11th place all-time, but its status as the only movie in US history to top charts over both Memorial Day and Labor Day weekends is as much a shiny badge pinned to its cool leather bomber jacket as it is an indictment of the rest of the motion picture theater industry.

The total domestic box office gross for 2022 currently stands at just $6.8 billion according to Box Office Mojo. That’s a nontrivial increase from the previous two years but remains way off from Hollywood’s roughly $11.5 billion norm in the latter half of last decade. Still, a late-year charge starting this weekend from Avatar: The Way of Water could help close the gap:

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Opening weekend projections see the sequel scoring up to $175 million in North American theaters, enough to far surpass Maverick’s $126 million and the original’s $77 million domestic debut. But the first Avatar had famously long legs, owning the No. 1 domestic spot for a record seven consecutive weeks en route to a $760 million total North American gross, a phenomenon that might be impossible to replicate in the age of streaming.

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Internationally, the film is expected to reach as much as $350 million worth of ticket sales this weekend, which would bring its overall worldwide gross this weekend to over half a billion dollars.

The Red Carpet: Crucially, The Way of Water scored an increasingly rare release in Chinese theaters, a giant market that Maverick and its unabashedly rah-rah American jingoism was unsurprisingly shut out of. Cameron’s first Avatar entry earned over $260 million in China, and advanced ticket sales have the sequel tracking to earn as much as $100 million in the country this weekend. It’s a sigh of relief for Disney. The budget for the Avatar sequel was apparently so high, Cameron himself admitted the film would need to breach the $2 billion threshold just to turn a profit. For now, it seems Disney is avoiding what could have been the box office equivalent of the dramatic third-act finale of Cameron’s other chart-topping blockbuster: Titanic.

– Brian Boyle

Extra Upside

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Shining golden arches: McDonald’s will power its entire US supply chain with solar energy.

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IP-No: 2022 is the worst year for initial public offerings in the US since 1990.

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Just For Fun

Mile-high highway.

Rude.

Have a great weekend!

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