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BREAKING NEWS
Elon Musk: xAI’s sleight of hand to erase his associates’ Twitter losses
Investors who supported Elon Musk’s takeover of Twitter (renamed X) are recovering their losses thanks to the rise in value of xAI, an artificial intelligence startup that he also created. Elon Musk would have allocated them 25% of xAI’s shares, to compensate for part of the depreciation of Twitter, valued at $9.4 billion after a fall of almost 80% according to Fidelity in less than 2 years.
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Larry Ellison, co-founder of Oracle, had invested a billion dollars in the buyout. Saudi Prince Alwaleed bin Talal and Jack Dorsey, co-founder of Twitter, also maintained their positions, alongside institutions like Fidelity, Sequoia Capital and Andreessen Horowitz. These investors saw their stake reinforced by xAI, which raised $6 billion in May at a valuation of $24 billion, and is preparing to double this value to $50 billion with a new raise of $5 billion.
xAI invests heavily in artificial intelligence models and a supercomputer cluster. Its rapid progression makes it a new pillar of the Musk ecosystem.
It remains to be seen what happens to the banks which lent $13 billion to the company operating the social network and whose operation was described as “worst banking operation since the end of the financial crisis in 2009” by our colleagues at the Wall Street Journal. DFrench banks are highly exposed, BNP PARIBAS with 2 loans for an amount of 1.4 billion dollars and Société Générale for 875 million euros.
Again and again, Elon Musk attacks OpenAI and Microsoft for anti-competitive practices
Elon Musk filed a request for an injunction against OpenAI, Microsoft, and several of their executives, accusing the latter of anti-competitive practices and conflicts of interest. According to the filing with the Northern District Court of California, OpenAI would have dissuaded investors from funding competitors like xAI, and would have benefited from sensitive information obtained through Microsoft. Musk also criticizes OpenAI’s conversion to a commercial entity, accusing the structure of moving away from its original non-profit mission.
OpenAI, supported by Microsoft to the tune of $13 billion, is also reportedly involved in transactions favoring financial partners linked to its directors, notably Sam Altman and Reid Hoffman. Musk alleges a risk of “irreparable harm” if these practices continue. The injunction request seeks to block OpenAI’s transition to a fully for-profit model. OpenAI refutes these accusations, calling Musk’s initiative “baseless.”
Libra: the project supported by META, victim of strictly political arbitration denounces David Marcus.
In June 2019, Meta unveiled Libra (later renamed Diem), a blockchain combined with a stablecoin, intended to transform global payments. Supported by a coalition of 28 companies, the project promised to be a revolution in money transfers on a global scale. However, less than two years later, Libra was abandoned, the victim of an unprecedented political blockage.
Upon its launch, Libra received mixed reactions. In response, Meta and its partners have increased efforts to meet regulators’ requirements. Between testimony before the US Congress and structural changes, every obstacle seemed to be overcome. In 2021, after addressing all concerns — money laundering, consumer protection, reserve management — a limited pilot launch was finally in sight.
But, according to David Marcus, former project manager, authorization never came. During a meeting between Fed Chairman Jay Powell and then-Treasury Secretary Janet Yellen, the latter reportedly called the approval of Libra “political suicide.” Shortly after, the Fed would have dissuaded the partner banks, putting a definitive stop to the project.
According to David Marcus, this decision had no regulatory or legal basis. “Libra was killed politically,” he says on X, denouncing pressure placed on financial institutions to prevent its launch.
Despite this failure, Marcus believes the experience reinforced his vision: building a global financial infrastructure requires a decentralized and unassailable platform, like Bitcoin. Today, he’s pursuing that goal with Lightspark, a company dedicated to innovation on Bitcoin’s Lightning Network. An attempt, according to him, which this time will go to the end.
Meta plans 40,000 km global submarine cable to support its infrastructure
Meta, the parent company of Facebook, Instagram and WhatsApp, plans to build an undersea fiber optic cable of more than 40,000 kilometers around the globe, according to sources confirmed by TechCrunch. This project, estimated at more than $10 billion, would mark a first for Meta, which would be the sole owner and user.
With 10% of fixed internet traffic and 22% of global mobile traffic generated by its platforms, Meta aims to strengthen its infrastructure to meet the expected growth of its activities, notably through its massive investments in artificial intelligence. The cable would follow a “W”-shaped path, connecting the East Coast of the United States to India via South Africa, then returning to the West Coast of the United States via Australia.
Currently in the planning stages, the project is overseen by Santosh Janardhan, Meta’s global head of infrastructure. However, logistical challenges, such as the shortage of specialized vessels to lay submarine cables, could slow down its implementation. Construction in small pieces is envisaged to circumvent these constraints.
Baidu obtains a license to test its robotaxis in Hong Kong
Baidu has received a license to test its Apollo Go robotaxis service in Hong Kong, marking the company’s first known approval for autonomous vehicle trials outside mainland China.
Apollo Go, already in service in several Chinese cities, is positioned as one of the most advanced robotaxis services in the world. Obtaining this license in Hong Kong could pave the way for wider adoption of autonomous vehicles in complex urban environments. Baidu has not yet specified the testing schedule or the targeted areas for this experimental phase.
+ MARKET:
Just Eat Takeaway, European leader in meal delivery, announced its withdrawal from the London Stock Exchange, effective December 27, 2024. This decision aims to reduce the administrative costs and complexity associated with a dual listing, particularly due to low liquidity and trading volumes on the London market.
The company’s shares will continue to be traded on Euronext Amsterdam, its main market. The withdrawal is part of a trend where companies like TUI and Flutter Entertainment have also left the London Stock Exchange, often in search of better post-Brexit valuations.
Just Eat Takeaway recently sold its US subsidiary Grubhub for $650 million, well below the $7.3 billion paid for its acquisition in 2020.
Growth and IPO: Didi, Meituan, Talabat and Zomato in the spotlight
Didi reported a 5% increase in third-quarter revenue to $7.44 billion, with net profit of $128 million, marking its second consecutive quarter of profit. These results come as the company prepares its IPO in Hong Kong.
For his part, Meituana Chinese food delivery giant, recorded a 22.4% increase in revenue over the same period, reaching $12.9 billion. Net profit tripled year-on-year to $1.78 billion, driven by 20.2% growth in its core delivery business, which generated $9.57 billion.
In the Gulf, Delivery Hero is preparing the IPO of Talabat, one of the leaders in food delivery in the United Arab Emirates. The company set its IPO price at the upper end of its range, aiming to raise about $2 billion.
Finally, Zomatoa major player in India, raised $1 billion in its first fundraising since its 2021 IPO, issuing around 336.5 million shares at $3 each.
JARGONATOR:
đź’ˇ TVPI (Total Value to Paid-In) : Ratio representing the total value of a fund, including realized gains and unrealized valuations, in relation to the capital invested by LPs.
đź’° DPI (Distributions to Paid-In) : Ratio which indicates how much a fund has returned in cash or liquid assets to its LPs in relation to the capital invested.
🚀 Dry Powder : Amount of uninvested capital available in a fund, ready to be used for new investments or follow-ups.
