Good thing retailers aren’t penalized for false starts.
While Black Friday, the day after Thanksgiving, typically marks 24 hours of deals, many retailers have kickstarted the pandemonium well in advance. Amazon started its Black Friday and Cyber Monday deals last Friday, ditto Best Buy. Macy’s and Target both started sales on Sunday, while Lowe’s has been running a “Black Friday Every Day” promotion since the start of the month. The good news? You’ll have lots of time to impulsively buy all those half-off air fryers, discounted TVs, and BOGO jeans. The bad news? You’ll have lots of time to impulsively buy all those half-off air fryers, discounted TVs, and BOGO jeans.
Morning Brief
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When the Altman’s away, the Zuck will play.
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That’s the sound of ESG shrinking.
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Make sure you get to the airport on time.
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Tech
Meta Stamps Out its Responsible AI Team
“Quick! While everyone’s looking at OpenAI…”
Meta has disbanded a team in charge of making sure the company develops AI in an ethical way, according to a report on Saturday by The Information. Most of the already-weakened team was reportedly folded into Meta’s generative AI workforce, which is amusing timing given last weekend’s headlines were largely dominated by OpenAI’s board suddenly jettisoning CEO Sam Altman, frantically trying to get him back, then losing him to OpenAI’s biggest investor Microsoft. When better to put all your firepower into building rival products, without having to slow down because you might, say, destroy humanity?
Who Needs Ethics Anyway?
While the report signals the death knell of Meta’s Responsible AI (RAI) team, it was reportedly already on life support. Formed in 2020, RAI had seen its headcount halve by last month, according to a Business Insider report. One source told BI that the team’s focus had shifted away from mitigating potential harm caused by AI to compliance, or “trying to make sure we don’t break any laws or get sued again.” Now that’s responsible.
This phenomenon isn’t restricted to Meta: Earlier this year, following the grim realization that they were no longer financially bulletproof, many Big Tech companies either shrank or cut their AI ethics teams, a revealing moment if ever there was one. For Meta, however, this is very much elective surgery:
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In October, Meta reported its most profitable quarter in two years. Mark Zuckerberg’s “year of efficiency,” during which the company laid off over 21,000 workers, should be drawing to a close soon.
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The RAI shutdown also comes as lawmakers around the world wrestle with how to legislate AI, and without staffers focused on harm (not to mention compliance), it seems like an added risk.
So Wrong It’s Copyright: Not everyone is shrugging off ethics. Stability AI, the company behind generative AI image tool Stable Diffusion, saw an executive depart on Friday over an ethical spat. Ed Newton-Rex, Stability’s now-former head of audio, told the BBC he left because Stability believes it should be able to use copyrighted material in its training data without asking the copyright holder’s permission. Stability is being sued by Getty Images for that exact reason, although Getty also recently announced its own AI image-generating tool and said it would front the legal costs for any user who was sued over an image they made with it. Seems blurry to us.
– Isobel Asher Hamilton
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Markets
ESG Funds Shrink for the First Time Ever
After pouring billions into “climate-sustainable” funds, Wall Street is saying nvm to ESG.
With interest in environmental, social, and governance factors waning among investors, this year’s third quarter marked the first time that more sustainable funds either liquidated or shed their ESG criteria than were added, according to a Wall Street Journal report this past weekend that analyzed Morningstar data. It’s the continuation of a year-spanning trend that’s seen a shrinking world for ESG.
Hostile Environment
ESG’s time of woe didn’t just arrive this fall — nearly three dozen ESG funds have closed or will close by the end of the year, according to the WSJ. Meanwhile, another five will close out of enough ESG investments that they’ll no longer meet the criteria needed to qualify as an ESG fund. Hartford Funds, for instance, will rebrand its core sustainable bond fund, likely selling many of the holdings that allowed it to qualify as an ESG fund. And it’s technically a re-re-brand, given that Hartford slapped the “sustainable” title on it in 2019, which spurred some $100 million in inflows. In this year’s Q3, that became nearly $12 million in outflows.
With many green-energy stocks suffering from higher interest rates and a world still hooked on fossil fuels, exiting has already proven a boon for many funds:
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When Pacific Financial pivoted three mutual funds holding more than $187 million in assets away from ESG — removing “sustainability” from the name of each — the firm saw each fund’s assets under management surge, according to the WSJ.
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Meanwhile, those who stay in the game have suffered. Investors have pulled over $14 billion from ESG funds this year, according to Morningstar, leaving the industry’s total AUM under $300 billion.
You Must Be This Big to Ride: Following last year’s passage of the Inflation Reduction Act, green-focused companies both big and small, public and private, expected a tidal wave of government cash — often sorely needed, given the capital-intensive nature of various green industries. But it’s been more like a trickle, according to another Wall Street Journal report last weekend, with most of it flowing toward bigger-name projects, like Ford Motor’s battery-making joint venture with South Korea’s’ SK On, which has scored a $9.2 billion government commitment, the biggest from the IRA so far.
– Brian Boyle
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Sponsored by RYSE
Best Buy is Betting on This Emerging Home Automation Company
For startups like Ring, Nest, and iRobot, securing large-scale distribution channels were pivotal to company growth and, ultimately, billion-dollar exits.
RYSE just secured distribution in Best Buy, and their product is being rolled out in 100+ outlets across their country. Their patented, mass-market shade automation device has all the makings of a game-changing home automation product for both homeowners and business owners.
Holiday travel has always been a crowd sport, but not like this year.
The Transportation Security Administration is expecting to screen 30 million passengers between this past Sunday and November 28, the agency announced, marking an all-time record for Turkey Day traveling. It may just be safe to assume some stress on the system.
Bumpy Skies
Air travel has surged since the end of the pandemic, and the industry writ large is adapting. Southwest Airlines has invested heavily in winter-weather readiness in a move to prevent the costly domino effects of weather-related delays and cancellations. United, meanwhile, implemented an it’s-so-obvious-we-can’t-believe-it-took-so-long new method of boarding, which has travelers boarding in waves, with window seats going first and aisle seats going last — all in a bid to keep flights on time. Still, a continued shortage of air traffic controllers may erase the airlines’ best efforts.
But while the packed airports and possible delays may make Thanksgiving travel a massive headache, many fliers can at least take solace in what it’s costing them:
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Roundtrip tickets around Thanksgiving this year are averaging just $248, according to flight-tracker Hopper, down from $271 last year and $276 in the Great Before Times of 2019.
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That tracks with the latest inflation report from the US Department of Labor, which notched airfare as down more than 13% in October compared to a year ago.
Planes, Trains, and Automobiles: Of course, air travel is only part of the equation. According to a AAA report published last week, in addition to the 30 million fliers, another 25 million or so Americans will cross at least 50 miles by car, train, or bus to reach their turkey dinners. And who knows — they may even bring an unexpected John Candy-esque guest along with them.
– Brian Boyle
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Extra Upside
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Blocked and muted: Disney, Apple, and others halt advertising on X-née-Twitter.
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