Summary of last week's news: Nvidia stock price has entered correction territory. Gates said don't worry too much about AI power consumption. Oracle warns that banning TikTok will hurt the company's profits. Ali Chairman Joe Tsai sold a stake in the NBA Nets. Tesla China recalls employees who were previously laid off. Volkswagen will invest $5 billion in Rivian. Airbus lowered its full-year commercial aircraft delivery target. Novo Nordisk weight loss pills are approved for sale in China. Nike misses out on the running culture boom. LVMH bosses buy shares of rival Richemont.
1
Nvidia stock price entered correction territory
After the recent sharp sell-off, Nvidia's stock price entered the correction zone on June 24, closing the day with a market value of $2.91 trillion and returning below $3 trillion, falling for the third consecutive trading day. The day closed down 6.68%, the biggest one-day decline since April. Nvidia's market value has evaporated by about $430 billion in three days, setting the largest three-day decline in the market value of a single company in history. Subsequently, Nvidia's stock price rebounded, closing at $3.04 trillion on June 28, back above $3 trillion. However, the market capitalization is still below Microsoft's $3.32 trillion and Apple's $3.23 trillion. In the first half of this year, Nvidia's stock price rose 156%. Related: Nvidia CEO Jensen Huang said at its annual shareholder meeting that the time is ripe for $50 trillion heavy industry to automate the next wave of artificial intelligence, fueled by the company's advanced chips. Huang said AI has permeated many industries, from technology to healthcare. But he also noted that there are more avenues for growth in larger areas of the global economy where AI has not yet been widely adopted.
2. Gates said don't worry too much about AI power consumption
Microsoft co-founder Bill Gates has defended the rapid growth in energy use caused by AI systems, arguing that the technology will eventually offset much of its electricity consumption. He believes that Big Tech's investment in energy-intensive AI systems is driving a boom in clean electricity. Gates urged environmentalists and governments to "not be overly concerned" about the huge amount of electricity needed to run new generative AI systems, and big tech companies like Microsoft are racing to invest tens of billions of dollars in massive new data centers.
Related: Bill Gates, one of the largest investors working to change the way the world uses energy, could make the difference in the fate of a climate startup. Since 2015, Breakthrough Energy, a climate investment firm founded by Gates, has invested $2.2 billion in more than 160 startups and other projects aimed at generating returns for investors and driving emissions reductions. He has also made separate investments outside of Breakthrough Energy.
3. Oracle said that banning TikTok would hurt the company's profits
Oracle Corp, the American software giant, has warned that a ban on TikTok in the United States could hurt the company's profits. The tech company said in a regulatory announcement that a new law that could ban the popular video app would effectively cut off an important source of Oracle's business, which is internet hosting for TikTok. In order to alleviate U.S. data security concerns, TikTok began transmitting U.S. user data through Oracle's cloud infrastructure in 2022. Related: As the U.S. prepares to ban TikTok, companies that provide ad agency services to major brands are developing contingency plans, including seeking to include a break clause in their marketing contracts. Advertising agency executives say the threat of a ban has had a chilling effect on ad spend for some brands. TikTok's Chinese parent company, ByteDance, has been asked to either divest its U.S. operations or face a ban on the app by January.
4. Tsai Chongxin sold part of the shares of the NBA Nets
Alibaba's chairman, Joe Tsai, has sold his stake in the NBA's Brooklyn Nets to the Koch family, who valued the Nets at $5.8 billion for $688 million. Tsai's "cutting love" of part of the Nets' stake may be to invest more energy in Alibaba to cope with the current challenges and fierce competition. In 2018, Tsai Chongxin bought a 49% stake in the Nets, and in September 2019, he bought the remaining 51% of the Nets' shares, becoming the sole controller of the team. Tsai also spent $700 million to take over the Barclays Center, home of the Nets. In the two acquisitions of the team and the home stadium, Tsai invested a total of about $3.05 billion. Related: Alibaba Cloud announced on June 27 that based on a careful assessment and review of the global infrastructure investment layout plan, Alibaba Cloud has decided to shut down data center services in Australia and India while increasing investment in data centers in Southeast Asia, Mexico and other regions. Since December 2023, Alibaba Cloud has released multiple rounds of notifications and technology migration plans to customers in data centers in Australia and India. We recommend that you migrate your services to Alibaba Cloud data centers in Singapore or other regions as soon as possible.
5. Tesla China recalls previously laid off employees
Tesla China has launched a process to recall previously laid off employees, and the recall is expected to exceed 100 people, and the number of recalls may change as the work has just begun. At present, the employees who are scheduled to be recalled originally belong to the charging, sales, after-sales and delivery departments, and if they agree to be recalled, the returning employees need to refund the "3" of the "N+3" redundancy compensation part, and the seniority will be recalculated.
Related: Tesla is recalling thousands of Cybertrucks after a U.S. regulator reported safety issues with some Cybertruck's windshield wipers. The recall is likely to involve more than 11,000 Cybertrucks, and according to the National Highway Traffic Safety Board, the recall is due to an electrical issue with the vehicle's windshield wiper motor, which was caused by excessive electrical stress that caused the wiper motor to stop working.
6. Volkswagen will invest $5 billion in Rivian
U.S. electric vehicle maker Rivian announced a joint venture agreement with Volkswagen. Volkswagen announced that it intends to work with Rivian to create a "next-generation software-defined vehicle (SDV) architecture" for future electric vehicles by both companies. The joint venture will use Rivian's "regional hardware design" and platform as the foundation for future vehicles, as well as leverage Rivian's expertise in automotive electrical architecture. Rivian will license its existing intellectual property to the joint venture. In exchange, Volkswagen will invest $1 billion in Rivian, and by 2026, Volkswagen will invest an additional $4 billion, for a total of $5 billion. Related: To cut costs and be profitable for the first time, Rivian has cut more than 100 steps in the battery manufacturing process, removed 52 pieces of equipment from the body shop, and eliminated more than 500 parts in the design of flagship SUV and pickup models. By restructuring the production process, material costs for vans were reduced by 35 percent, and cost reductions were achieved by a "similar magnitude" to other product lines. After the redesign, the battery modules are integrated. Rivian's vehicles also feature new architectures designed to reduce weight and increase productivity, including a 1.6-mile reduction in wiring harnesses from each vehicle.
7
Airbus lowered its full-year commercial aircraft delivery target
Aircraft maker Airbus lowered its full-year 2024 commercial aircraft delivery target, expecting 770 deliveries by the end of the year, compared with its previous forecast of 800. Demand for Airbus aircraft has reached record levels amid frequent incidents with old rival Boeing, but supply chain issues have left Airbus with a sigh of relief. Airbus chief executive Guillaume Faury said the situation was not getting any better and engine supply was becoming a "significant issue", so the company needed to adjust its performance targets.
Related: Boeing has refuted claims that two NASA astronauts were "stranded" on the International Space Station because the company's Starliner spacecraft had problems with its long-delayed first manned flight. NASA and Boeing decided to postpone the spacecraft's return to the space station again after docking with the International Space Station on June 6 and returning to an unspecified date in July. Boeing insists it is not a failure.
8
Novo Nordisk weight loss pills are approved for sale in China
Wegovy, a drug specific for obesity, has been approved in China, opening the door for maker Novo Nordisk to start selling the drug in China, the world's second-largest economy. The Danish pharmaceutical company said Wegovy "has been approved in China for long-term weight management [in overweight and obese people]". The company did not disclose when the product would be launched, nor declined to provide details about the drug's pricing and how much it would supply to China. In China, interest in similar therapies is on the rise. The company said in March that it would limit the number of launches, initially focusing on Chinese patients who were willing to pay for weekly injections out of pocket.
Related: Novo Nordisk announces $4.1 billion investment to expand the company's manufacturing capacity in the United States. Novo Nordisk plans to build a second bottling and finishing manufacturing plant in Clayton, North Carolina, USA, to enhance its ability to produce semaglutide-related drugs Wegovy and Ozempic. Last year, demand for the two "sister drugs" outstripped supply in many parts of the world, leading to intermittent shortages in the United States, prompting the pharmaceutical giant to invest heavily in manufacturing capacity.
9
Nike misses out on the running culture boom
Nike has missed out on the running culture boom, and the sneaker giant's market share has been stolen by rising stars like Hoka. This led to a decline in Nike's sales in the most recent fiscal quarter and a downward revision of its full-year revenue outlook. There is a running group in Portland, USA, which has grown about three times in size since 2021 to about 80 runners. And that's not even counting representatives from New Balance, Hoka or Asics, who often show up at the group's events, let runners try on new shoes, give them free products, and treat them to a drink after the exercise. And in the road running circle, Nike's absence is noticeable. Nike's stock price plummeted 19.98% at the close of trading on June 28.
Related: The results of the widely publicized investigation into the whistleblowing of an adidas China marketing executive and another marketing executive have left the company. According to the investigation, there was evidence that an employee had left the company in violation of the company's code of conduct in his dealings with local suppliers. Compliance investigations are ongoing. In addition, a senior marketing executive failed to meet the company's leadership expectations for fostering mutual respect and trust, and as a result, the employee left the company.
10LVMH boss buys Richemont shares
Bernard Arnault, the billionaire founder of luxury conglomerate LVMH, bought a stake in his rival Richemont. Headquartered in Switzerland, Richemont owns the high-end jeweller Cartier. The shares were too small to be disclosed in the public register and were Arnault's personal investments. Related: Arnault is one of the richest people in the world. This is one of many other shares held by the family and does not imply any special action against Richemont. But the investment could still reignite speculation about possible acquisitions between large luxury groups.