ChatGPT 101 is rolling out across college campuses.
After just one school year impacted by generative AI platforms like ChatGPT, educators are giving up trying to ban the tools so often used (and abused) by students. Instead, a growing number of educators have decided instead to teach best practices when working with our new robot friends/study buddies, according to a report from CNN. For any teachers out there struggling to come up with a large-language model lesson plan and syllabus, we know a tool that just might help, but we’ll leave it up to you to decide what’s best.
Morning Brief
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Everyone’s watching Arm.
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Maybe “jerks” do make the best CEOs.
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China’s rolling boxcars in Macau.
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Tech
SoftBank’s Plans for Arm Revive IPO Interest Among Tech Peers
Silicon Valley is getting that special feeling again. It has that look of IPO love.
SoftBank completed a full takeover of British chipmaker Arm on Friday, with plans to take it public as soon as next month. In the wake of the news, according to a new report from the Financial Times, tech’s largest private players are again mulling their own options to cash in on a potential new wave of IPO fever.
Arm in Arm with Arm
This year’s weak IPO environment has been well-documented — with debuts like Mediterranean lunch chain Cava and direct-to-consumer makeup seller Oddity marking a few of the major highlights. But given Arm’s station in the tech hardware world, its debut could jolt the market by setting a useful benchmark. Its path to even get to the public market has been convoluted, to say the least.
When it acquired the chipmaker for around $32 billion in 2016, SoftBank took the company private following a nearly two-decade-long public market stint. A year later, the Japanese conglomerate sold a quarter of the company to its own Vision Fund — the $100 billion investment vehicle managed by SoftBank and largely backed by Saudi Arabia’s gigantic sovereign wealth fund. Friday’s transaction saw that outlying 25% stake reacquired by SoftBank’s corporate office for $16 billion, roughly double its value from the 2017 sale, in a deal that valued Arm at $64 billion.
With the Saudis cashed out, the road has cleared for SoftBank founder Masayoshi Son to list Arm shares on the Nasdaq, with initial paperwork expected to be filed as soon as Monday, sources toldTheWall Street Journal. The rest of Silicon Valley can’t look away:
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SoftBank is in talks to list Arm at a valuation of $60 billion to $70 billion, sources told Reuters. It would mark the first major VC-backed tech IPO since freemium software provider HashiCorp debuted in November 2021, which concluded a tech IPO hot streak starring the likes of Bumble and Affirm.
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According to the FT, Instacart is seriously considering an IPO before the end of the year, after scrapping plans a year ago. Marketing automation startup Klaviyo could list as soon as September, sources told Reuters, while software company Databricks and digital ID verification platform Socure are flirting with listings as well.
Keeping Score: Arm’s valuation double-up and potential debut provide a much-needed win for SoftBank. Its Vision Fund laid off dozens of workers last year, after being mired in a series of bad bets including WeWork (gulp) and FTX (double gulp). A word to the wise: If your massive investment fund is betting on startups that end up mired in controversy and destined for a prestige TV miniseries, you may be doing something wrong. Once is an oopsies, twice is a trend.
– Brian Boyle
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Finance
Goldman Sachs CEO Still Has the Board and Investors in His Corner
Goldman Sachs has a love-hate relationship with CEO David Solomon, depending on whom you ask.
While recent articles have painted Solomon as a poor leader with an even poorer attitude who’s responsible for middling profits and an exodus of employees, the investment bank’s board and some of its biggest shareholders view him as a competent and transparent boss, according to the Financial Times.
That’s Just ‘Noise’
A recentNew York Magazinearticle titled “Is David Solomon Too Big a Jerk to Run Goldman Sachs?” read like a venting session for embittered employees. The CEO was described as a socially inept bully, pushing his employees to the breaking point while he zooms off on private jets to spin records (his notorious hobby) on the company’s dime. Employees say he’s either yelling or strained from yelling; even his notes on documents are often typed in ALL-CAPS. One of his colleagues told NYMag, “He’s a tough guy with a very short fuse.”
But as long as the profits keep coming, investors don’t really care. In 2019 and 2020, company profit slipped compared to the $10.5 billion Goldman made in 2018, but by 2021, profits shot up to roughly $22 billion. And even though profit is down again — 2022 saw net income drop about 50% — the bank’s board and its top shareholders remain patient, giving Solomon the benefit of the doubt:
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Since Solomon took over as CEO in 2018, roughly 100 partners have left the firm, citing his questionable strategies and attitude. But all the quitting and negative comments to the press hasn’t fazed shareholders. While speaking to the FT, one jokingly compared it to the Sendero Luminoso, erstwhile Peruvian rebels who formed in the late 1960s but whose impact has diminished over time.
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Even obvious failures like the push into retail banking, which was established by former CEO Lloyd Blankfein and pursued by Solomon before cutting back, hasn’t perturbed stockholders. “It was poor execution, but I give him credit for admitting the mistake,” one shareholder said.
I’m an open book: Supportive investors cite Solomon’s transparency. For most of its 154-year history, Goldman Sachs was privately owned, and some of its opaqueness carried over after it went public in 1999. But Solomon implemented the first investor day and scheduled more regular shareholder meetings. One investor told the FT, “It is always better to have transparency, because you would rather trust the numbers than someone’s word.”
–Griffin Kelly
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SPONSORED BY MASTERWORKS
Billionaires Wanted It, But 54,578 Everyday Investors Got It First… And Profited
(Photo credit: Masterworks)
When incredibly rare and valuable assets come up for sale, it’s typically the wealthiest people that end up taking home an amazing investment. But not always…
One platform is taking on the billionaires at their own game, buying up and securitizing some of history’s most prized blue-chip artworks for its investors. In just the last few years, its investors have realized annualized net returns of 17.8%, 21.5%, 35%* and more from these opportunities.
It’s called Masterworks. Their nearly $1 billion collection includes works by greats like Banksy, Picasso, and Basquiat, all of which are collectively owned by everyday investors. When Masterworks sells a painting – like the 15 it’s already sold – investors reap their portion of the net proceeds.
One sector in China’s economy is full of big, risky bets and loving it.
Macau, the gambling mecca of the East, has wrestled the status of the world’s most profitable betting hub away from Las Vegas, The Wall Street Journalreported.
Luck is Turning Around
China’s economy has taken a lot of blows lately. After lifting covid restrictions later than much of the world, its recovery has been delayed. In July, exports dropped 14%, the country’s biggest dip in more than three years. In addition, the property market is in the dumps with few new buyers and many developers defaulting on massive loans. Meanwhile, youth unemployment is so high that China’s National Bureau of Statistics recently stopped collecting the data altogether.
But now that tourism is open for business and people are free to move about the country again, Macau is quickly reclaiming its edge over other major gambling cities like Singapore and Las Vegas:
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The number of Chinese mainlanders who visited Macau in July was 1.9 million, slightly below 2019 levels. But in the first six months of 2023, Macau generated $10 billion in gambling revenue, compared to Vegas’s $7.5 billion.
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High-rollers still aren’t as abundant as they once were, but even low-end gamblers tend to bet more than $1,500 at the tables per hour, the WSJ reported.
Beijing Snake Eyes: It’s not all triple 7s for Macau, though, as the majority of its visitors are from the mainland, Hong Kong, and Taiwan. It doesn’t have much international appeal right now, so it risks relying too heavily on locals and next-door neighbors. The Chinese government also is requiring that casino companies like MGM, Sands, and Wynn cut back their reliance on gambling and instead diversify with hotel offerings, concerts, and other attractions. So Beijing is basically telling casino operators to refocus on tourists — just not their main reason for being there.
–Griffin Kelly
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Extra Upside
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Put it in park: Self-driving carmaker Cruise halves robotaxi fleet at California DMV’s request.
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Sushi kings: grocery chain Kroger led US in all sushi sales last year.
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Wet Coast: Mexico, Southern California slammed by Hurricane Hilary.
