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Tag: business figures

  • Meta and Twitter decided to restore Trump’s account. Will other platforms follow suit? | CNN Business

    Meta and Twitter decided to restore Trump’s account. Will other platforms follow suit? | CNN Business


    New York
    CNN
     — 

    Former president Donald Trump could soon make a return to Facebook, Instagram and Twitter, and reach the massive audiences on each, now that the companies behind those platforms have restored access to his accounts.

    But that could just be the start. The decisions by Twitter and now Facebook-parent Meta to bring back Trump could push — or at least provide cover for — a number of other platforms to make similar moves. 

    Facebook and Twitter restricted Trump’s accounts in the aftermath of the January 6 attack. The bans were seen as necessary by tech executives, and indeed many on Capitol Hill, believing Trump could use their platforms to incite further violence.

    Many other platforms followed suit by banning or restricting Trump, including YouTube, Snapchat and game streaming platform Twitch. Shopify, an e-commerce company, removed two stores associated with Trump, and digital payments provider Stripe said it would stop processing payments for Trump’s campaign. In some cases, platforms restricted channels or content that was associated with the then-president, if not directly affiliated — Reddit and Discord, for example, banned pro-Trump groups on their platforms.

    The net effect was that Trump, or at least his accounts, essentially vanished or went silent across the mainstream internet. Trump’s digital exile pushed him to launch his own social media platform, Truth Social. His media company even teased plans to create rivals to other online services, including Stripe. (Trump has not said whether he will resume posting from Twitter, Facebook and Instagram; he is believed to have some form of an exclusivity deal with Truth Social’s parent company to post there.)

    For now, some of these other companies appear to be sticking with their policies. On Wednesday, Snapchat parent Snap indicated that it is not planning to revisit its decision to ban Trump’s account two years ago.

    “In January 2021, Donald Trump’s Snapchat account was terminated for violating our Terms of Service and Community Guidelines,” a Snap spokesperson said in a statement to CNN. “According to our Community Guidelines, if your account is terminated for violating our Terms of Service or the Guidelines, you are not allowed to use Snapchat again.”

    But for other platforms, Meta’s ruling this week could add to the pressure many had already been facing to reconsider their bans after Trump announced he’d seek a third bid for the White House in 2024 and new Twitter owner Elon Musk gave him back his account.

    “Usually these companies do fly in a flock and whoever makes the first movements, other companies do tend to try to, in succession, follow behind because the initial company takes the biggest media hit and then the rest of them don’t suffer the reputational hit of being the first technology company to make a decision,” Joan Donovan, research director of the Shorenstein Center on Media, Politics and Public Policy, told CNN earlier this month.

    A YouTube spokesperson told CNN Wednesday that the company currently had “nothing to share” on whether the company is or plans to consider reversing its suspension. Shopify, Stripe, Discord and Reddit did not immediately respond to requests for comment about the possibility of following Meta and Twitter’s leads and reversing their bans.

    When Musk announced the decision to reinstate Trump’s Twitter account in November, shortly after completing his acquisition of the company, it came with little explanation beyond Musk’s previously stated desire for freer speech on the platform. Musk conducted an informal poll of his followers and more voted in favor of restoring the account than not.

    Meta’s decision, by contrast, could provide a new set of precedents for platforms on how to handle Trump and other world leaders who violate their rules.

    In announcing its decision on Wednesday, Meta laid out “new guardrails” for how it will handle possible rules violations by Trump if he opts to return to Meta’s platforms. In short: yes, Trump can get suspended again, but a permanent ban no longer appears to be on the table.

    “In the event that Mr. Trump posts further violating content, the content will be removed and he will be suspended for between one month and two years, depending on the severity of the violation,” Clegg said. He added that the new, harsher penalties for repeat violations will also apply to other public figures whose accounts are reinstated following suspensions related to civil unrest.

    For content that doesn’t violate its rules but “contributes to the sort of risk that materialized on January 6th, such as content that delegitimizes an upcoming election or is related to QAnon,” Meta may limit distribution of the posts, Clegg said. The company could, for example, remove the reshare button or keep the posts visible on Trump’s page but not in users’ feeds, even for those who follow him, he said. For repeated instances, the company may restrict access to its advertising tools.

    If Trump again posts content that violates Meta’s rules but the company determines “there is a public interest in knowing that Mr. Trump made the statement that outweighs any potential harm,” Meta may similarly restrict the posts’ distribution but leave them visible on Trump’s page.

    The new policy may still require Meta’s leadership to make significant, subjective decisions about what content is potentially harmful public safety at large, but the rules could act as a model for how other platforms could bring back the former president without appearing reckless.

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  • Madison Square Garden CEO doubles down on use of facial recognition tech | CNN Business

    Madison Square Garden CEO doubles down on use of facial recognition tech | CNN Business



    CNN
     — 

    The chief executive of the Madison Square Garden Entertainment Corporation has doubled down on using facial recognition at its venues to bar lawyers suing the group from attending events.

    Speaking to Fox 5 on Thursday, MSG Executive Chairman and CEO James Dolan said Madison Square Garden is a private company and therefore entitled to determine who is allowed to enter its venues for events.

    “At Madison Square Garden, if you’re suing us, we’re just asking of you – please don’t come until you’re done with your argument with us,” he said. “And yes, we’re using facial recognition to enforce that.”

    His comments come after New York Attorney General Letitia James on Wednesday sent a letter to MSG Entertainment requesting information regarding its use of facial recognition technology to prohibit legitimate ticketholders from entering venues. The letter said the attorney general’s office has reviewed reports MSG Entertainment has used facial recognition to identify and deny entry to multiple lawyers affiliated with law firms involved in ongoing litigation with the company. The letter indicates thousands of attorneys from around 90 law firms may have been impacted by the policy, and said the ban includes those holding season tickets.

    The attorney general’s letter raised the concern that banning individuals from accessing venues over ongoing litigation may violate local, state, and federal human rights laws, including laws prohibiting retaliation. The letter also questions whether the facial recognition software used by MSG Entertainment is reliable and what safeguards are in place to avoid bias and discrimination.

    In a press release, James said, “MSG Entertainment cannot fight their legal battles in their own arenas. Madison Square Garden and Radio City Music Hall are world-renowned venues and should treat all patrons who purchased tickets with fairness and respect. Anyone with a ticket to an event should not be concerned that they may be wrongfully denied entry based on their appearance, and we’re urging MSG Entertainment to reverse this policy.”

    MSG Entertainment owns and operates several venues in New York, including Madison Square Garden, Radio City Music Hall, the Hulu Theater, and the Beacon Theatre. Madison Square Garden is the home of the New York Knicks, Rangers, professional boxing, and college basketball teams.

    In a statement Thursday, an MSG spokesperson told CNN, “To be clear, our policy does not unlawfully prohibit anyone from entering our venues and it is not our intent to dissuade attorneys from representing plaintiffs in litigation against us. We are merely excluding a small percentage of lawyers only during active litigation.”

    “Most importantly,” the spokesperson added, “to even suggest anyone is being excluded based on the protected classes identified in state and federal civil rights laws is ludicrous. Our policy has never applied to attorneys representing plaintiffs who allege sexual harassment or employment discrimination.”

    In the Fox 5 interview Thursday, Dolan said when the attorneys suing MSG finish their litigation, they will be welcome back to the venues. “If your next door neighbor sues you, if somebody sues you, right, that’s confrontational. It’s adversarial and it’s fine, people are allowed to sue,” he said. “But at the same time, if you’re being sued, right, you don’t have to welcome the person into your home, right?”

    Dolan defended the use of facial recognition technology, saying it’s useful for security and noting that he believes Madison Square Garden to be one of the safest venues in the country. “Basically, anytime that you go out in public, you’re on camera,” he said. “Believe me, you walk down the street, you’re on camera, you’re on 10 cameras. What facial recognition does is looks at, you know, recognizes your face, and says you know, are you someone who’s on this list.”

    Dolan claimed the State Liquor Authority has threatened MSG’s license over its use of facial recognition technology. The New York State Liquor Authority told CNN it issued a “letter of advice” to MSG, after receiving a complaint in mid-November over attorneys engaged in litigation against the company not being allowed to enter its premises.

    “After receiving a complaint, the State Liquor Authority followed standard procedure and issued a Letter of Advice explaining this business’ obligation to keep their premises open to the public, as required by the Alcoholic Beverage Control Law,” Joshua Heller, a State Liquor Authority spokesperson, told CNN.

    The SLA told CNN an investigation into the matter is “ongoing”.

    During the Fox interview, Dolan apparently threatened to shut down sales of liquor during an unspecified upcoming New York Rangers game, and said he would direct any upset patrons to the liquor authority to complain.

    Dolan also pushed back at the suggestion that he’s being “too sensitive.”

    “The Garden has to defend itself,” Dolan said. “If you sue us, right, you know we’re going to tell you not to come.”

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  • We finally know whom FTX owes money to: Wall Street elite, Big Tech, airlines, and many more | CNN Business

    We finally know whom FTX owes money to: Wall Street elite, Big Tech, airlines, and many more | CNN Business


    New York
    CNN
     — 

    Newly unsealed bankruptcy documents revealed thousands of creditors to whom FTX owes money after the once-mighty crypto exchange collapsed in November.

    Wall Street heavyweights including Goldman Sachs and JPMorgan were named in the creditor list, which includes businesses, charities, individuals and other entities in a 116-page document filed late Wednesday. FTX is now at the center of a massive fraud investigation.

    Also included in the creditors list are media companies, such as the New York Times and Wall Street Journal, commercial airliners, including American, United, Southwest and Spirit, as well as several Big Tech players, including Netflix, Apple and Meta.

    On Thursday, lawyers for FTX filed an additional document advising the court that the list — known as a creditor matrix — is “intended to be very broad” and “includes parties who may appear in the Debtors books and records for any number of reasons.” Being on the list does not “necessarily indicate that the party is a creditor” of FTX or its affiliates, they wrote.

    Goldman Sachs, for one, is named in the creditor matrix but doesn’t appear to be a creditor. In a statement to CNN on Wednesday, the bank said it had not filed a claim against FTX.

    “This type of creditor matrix is prepared by the debtors for the purpose of providing notice to interested parties in a bankruptcy proceeding and is not necessarily evidence of a creditor relationship,” a spokesperson said.

    The document doesn’t disclose the amount or nature of the debt, and names of individual creditors — mostly customers who deposited funds on FTX — remain redacted at FTX’s request. Inclusion on the creditor list doesn’t necessarily mean the parties had an FTX account.

    FTX is believed to have more than a million creditors, the top 50 of whom are collectively owed more than $3 billion.

    The crypto platform was once of the most popular crypto exchanges on the planet, fueled by celebrity endorsements and high-profile partnerships with sports teams. It marketed itself as a beginner-friendly crypto platform, allowing customers to deposit fiat currency and trade it for digital assets. But FTX came unraveled in November as speculation about its balance sheet sparked investor panic. In the midst of a liquidity crisis, the company filed for bankruptcy, leaving customers in limbo.

    Federal prosecutors investigating FTX say that its founder and former CEO, Sam Bankman-Fried, orchestrated a massive fraud by stealing customer funds to cover losses at his hedge fund, Alameda Research. They also accuse him of using stolen money to buy luxury real estate and contribute to US poltical campaigns.

    Bankman-Fried, who was indicted in December and remains under house arrest at his parents’ California home, pleaded not guilty to eight criminal counts earlier this month. He has repeatedly denied committing fraud, and is scheduled to go to trial in October.

    Two of his former business partners have pleaded guilty to fraud and conspiracy charges and are cooperating with prosecutors from the Southern District of New York. Both associates have implicated Bankman-Fried in the alleged crimes.

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  • BuzzFeed’s CEO says AI could usher in a ‘new model for digital media,’ but warns against a ‘dystopian’ path | CNN Business

    BuzzFeed’s CEO says AI could usher in a ‘new model for digital media,’ but warns against a ‘dystopian’ path | CNN Business


    New York
    CNN
     — 

    Over the holidays, while most media executives were perhaps looking to get a reprieve from work, Jonah Peretti was online, fully immersed in experimenting with artificial intelligence.

    The BuzzFeed co-founder and chief executive, who has always raced to test out the latest technologies, was familiar with AI and predictions of how it could one day revolutionize the media industry. In fact, BuzzFeed had dabbled in using it over the years.

    A version of this article first appeared in the “Reliable Sources” newsletter. Sign up for the daily digest chronicling the evolving media landscape here.

    But Peretti, sitting in his California home in late December, started probing how the developing robot writing technology could quickly be infused into the very DNA of BuzzFeed.

    In a phone interview Thursday, Peretti said that as he and a handful of colleagues prototyped how the technology could be used to enhance the site’s hallmark quizzes, interactive articles, and other types of content, he found himself genuinely having fun. “It started to feel like we were all playing,” Peretti recalled.

    That “playful work,” as he described it, soon “led to multiple Google docs full of the implications of the technology and how [BuzzFeed] could build this into our platform and how we could extend it to other formats.”

    Those efforts culminated in Peretti’s formal announcement on Thursday: That BuzzFeed will work with ChatGPT creator OpenAI to assist in the creation of content for its audience and move artificial intelligence into the “core business.”

    Peretti said that he understood people might read the news and conclude that BuzzFeed was, in short, moving to replace humans with robots. But Peretti insisted that is not his vision for the technology, even as he predicted other companies will likely go down that dark path.

    “I think that there are two paths for AI in digital media,” Peretti said. “One path is the obvious path that a lot of people will do — but it’s a depressing path — using the technology for cost savings and spamming out a bunch of SEO articles that are lower quality than what a journalist could do, but a tenth of the cost. That’s one vision, but to me, that’s a depressing vision and a shortsighted vision because in the long run it’s not going to work.”

    “The other path,” Peretti continued, “which is the one that gets me really excited, is the new model for digital media that is more personalized, more creative, more dynamic — where really talented people who work at our company are able to use AI together and entertain and personalize more than you could ever do without AI.”

    Put more simply, Peretti said he envisions artificial intelligence being used to enhance the work of his employees, not replace them.

    The example the company provided is the BuzzFeed quiz. Typically, a human would write the questions and perhaps a dozen responses that would be delivered to the user based on their inputs. But, with AI, the staffer could write the questions and the software could spit out a highly personalized response for the user. In the supplied example, a user would take a quick quiz and the AI would write a short RomCom using the data provided.

    “We don’t have to train the AI to be as good as the BuzzFeed writers because we have the BuzzFeed writers, so they can inject language, ideas, cultural currency and write them into prompts and the format,” Peretti said. “And then the AI pulls it together and creates a new piece of content.”

    Peretti indicated that he had no interest in utilizing artificial intelligence to replace human journalists for authoring news articles, as the technology outlet CNET recently did with disastrous consequences (dozens of the outlet’s stories written by AI were riddled with errors that required correcting.)

    “There’s the CNET path, and then there is the path that BuzzFeed is focused on,” Peretti said. “One is about costs and volume of content, and one is about ability.”

    “Even if there are a lot of bad actors who try to use AI to make content farms, it won’t win in the long run,” Peretti predicted. “I think the content farm model of AI will feel very depressing and dystopian.”

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  • Video: How Elon Musk’s Twitter drama impacts Tesla and how ChatGPT can be useful to students on CNN Nightcap | CNN Business

    Video: How Elon Musk’s Twitter drama impacts Tesla and how ChatGPT can be useful to students on CNN Nightcap | CNN Business

    CNN’s Allison Morrow tells “Nightcap’s” Jon Sarlin that Elon Musk’s Twitter antics are damaging Tesla’s brand. Plus, high school teacher Cherie Shields argues that ChatGPT is an excellent teaching tool and schools are making a mistake if they ban the AI technology. To get the day’s business headlines sent directly to your inbox, sign up for the Nightcap newsletter.

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  • Tesla invests $3.6 billion to expand Nevada complex with two factories | CNN Business

    Tesla invests $3.6 billion to expand Nevada complex with two factories | CNN Business

    Tesla said on Tuesday it would invest more than $3.6 billion to expand its Nevada manufacturing complex with two new factories, including the first facility to mass produce its long-delayed Semi electric truck.

    The other factory will make new battery cells, called 4680, and have the capacity to make enough batteries for 2 million light-duty vehicles annually. Together, the plants will employ about 3,000 people.

    The Elon Musk-led company’s existing complex in the city of Sparks makes lithium-ion batteries, vehicle parts and other products such as Powerwall, a power backup system for consumers.

    Unveiled in 2017, the Semi was initially expected to go into production in 2019 but its first delivery was delayed to December, when Musk handed a vehicle to PepsiCo. The move marked Tesla’s first foray into the trucking business.

    The 18-wheeler truck has a range of 500 miles on a single charge and can carry 81,000 pounds including the cargo. It may qualify for tax credits of $40,000 offered for clean commercial vehicles under the Inflation Reduction Act, which was signed into law in August.

    Tesla Chair Robyn Denholm said in November that Tesla might produce 100 Semis in 2022, but the company did not disclose any figure in its fourth-quarter production report.

    The EV maker aims to produce 50,000 of the trucks in 2024, Musk had said on a post-earnings call in October.

    PepsiCo plans to roll out 100 Semis in 2023. Other customers for the truck include brewer Anheuser-Busch, United Parcel Service and Walmart.

    The Semi will face competition from Daimler’s Freightliner, Volvo and Nikola Corp, which have also rolled out their own battery-powered trucks.

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  • Spotify to cut 6% of its workforce | CNN Business

    Spotify to cut 6% of its workforce | CNN Business


    London
    CNN
     — 

    Spotify

    (SPOT)     said Monday that it will cut 6% of its workforce to reduce costs, joining tech companies including Amazon

    (AMZN)     and Microsoft

    (MSFT)     in slashing headcount as the global economy slows.

    In a letter to employees posted on the company’s website, CEO Daniel Ek took full responsibility for the job cuts, which he called “difficult but necessary.”

    “Like many other leaders, I hoped to sustain the strong tailwinds from the pandemic and believed that our broad global business and lower risk to the impact of a slowdown in ads would insulate us. In hindsight, I was too ambitious in investing ahead of our revenue growth,” he said.

    The Stockholm-headquartered music streaming business had about 9,800 employees globally as of September 30, according to an earnings report.

    The company’s stock, which has nearly halved in value over the past 12 months, gained more than 4% in premarket trading in New York. Spotify’s share price has risen 24% since the start of the year, Refinitiv data shows.

    Over the past few months, major tech companies have swiftly reversed a pandemic hiring spree that saw them add thousands of workers to keep up with a surge in demand from households and businesses for services such as online shopping and videoconferencing.

    The same companies have recently made deep cuts to their workforces, as inflation weighs on consumer spending and rising interest rates squeeze funding. The demand for digital services during the pandemic has also waned as people return to their offline lives.

    Over the past three months, Amazon

    (AMZN)    , Google

    (GOOGL)    , Microsoft

    (MSFT)     and Facebook

    (FB)    -parent Meta have announced plans to cut more than 50,000 employees from their collective ranks.

    The recent cuts in most cases amount to a relatively small percentage of each company’s overall headcount, essentially erasing the last year of gains for some while leaving them with enormous workforces.

    Spotify’s decision to shed about 590 jobs is part of a wider reorganization to improve efficiency and “speed up decision-making,” according to Ek. As part of the changes, engineering and product work will be centralized. Chief content officer Dawn Ostroff had also decided to leave the company, Ek said.

    Spotify reported a loss of €228 million ($248 million) in its most recent financial quarter through September 30, as operating expenses shot up by 65%, according to a company presentation to investors.

    In 2022, operating expenses grew at twice the rate of the company’s revenue, Ek said.

    “That would have been unsustainable long-term in any climate, but with a challenging macro environment, it would be even more difficult to close the gap,” he told employees in Monday’s letter. “As you are well aware, over the last few months we’ve made a considerable effort to rein-in costs, but it simply hasn’t been enough.”

    — Clare Duffy contributed to this report.

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  • There’s actually a presale for Oreo’s newest flavor | CNN Business

    There’s actually a presale for Oreo’s newest flavor | CNN Business


    New York
    CNN
     — 

    In the past, Oreo has partnered with Lady Gaga, Pokémon and Ritz on new limited-time flavors. Now, it’s working with … itself. And Martha Stewart.

    The cookie brand’s latest limited-edition cookie is an Oreo stuffed with Oreos.

    Dubbed “the Most OREO OREO,” the cookie is made with the usual chocolate wafers, filled (to the “Most Stuf” extreme) with a creme that has Oreo bits mixed in, for a meta cookies-n-creme experience. The flavor is available for pre-sale through the Oreo website starting Tuesday, and will hit shelves at major retailers nationwide starting on January 30 for a suggested retail price of $4.99.

    The packages come with a QR code that allows buyers to access online games and chances to win prizes in the so-called Oreoverse — Oreo’s entrée into the metaverse, a virtual space where people interact through avatars. Those with VR headsets can use them to access the Oreoverse. Others can just use their phones or computers.

    For brands, the metaverse promises a whole new way to reach young customers, and Oreo isn’t the only brand trying to market to people using new online spaces.

    Coca-Cola

    (KO)     has paired its high-concept limited-edition flavors like Starlight, Byte and Dreamworld with online experiences including virtual concerts, digital outfits and custom places within video games like Fortnite. Kraft Heinz

    (KHC)     has placed Lunchable logos in Roblox, and Heinz-sponsored rest areas in Call of Duty.

    Oreo sees it as a new way to reach consumers, and for them to interact.

    Martha Stewart with the Most Oreo Oreo.

    “We love to create new opportunities for our fans to connect with each other,” said Julia Rosenbloom, Oreo’s senior brand manager, in a statement announcing the new flavor, noting “we’re so excited to enter the metaverse!”

    To help launch the Oreoverse, Oreo tapped Martha Stewart and Ryan McCallister, her gardener and quarantine buddy. On Monday, Stewart and McCallister will share their Oreoverse experiences on Oreo’s social media channels.

    Stewart also recently partnered with Tito’s Handmade Vodka on a tongue-in-cheek campaign that offers those observing dry January other ways to make use of vodka, llke putting a splash (or two) in a marinara sauce or deodorizing stinky boots.

    — CNN’s Jordan Valinsky contributed to this report.

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  • Former high-level FBI official pleads not guilty in alleged schemes to help sanctioned Russian oligarch | CNN Politics

    Former high-level FBI official pleads not guilty in alleged schemes to help sanctioned Russian oligarch | CNN Politics


    New York
    CNN
     — 

    The former head of counterintelligence for the FBI’s New York field office was charged in two separate indictments Monday for allegedly working with a sanctioned Russian oligarch after he retired and concealing hundreds of thousands of dollars he received from a former employee of an Albanian intelligence agency while he was a top official at the bureau.

    Charles McGonigal, a 22-year veteran of the FBI until he retired in 2018, was arrested Saturday at John F. Kennedy International Airport when returning from international travel, a source familiar with the arrest told CNN. The charges, announced by the US attorney’s offices in the Southern District of New York and Washington, DC, mark a dramatic fall for McGonigal, who has surrendered his passport and is currently prohibited from any international travel.

    He entered a plea of not guilty via his attorney at an arraignment Monday afternoon in New York on charges in connection with violating US sanctions, conspiracy, and money laundering for working in 2021 with Russian oligarch Oleg Deripaska, who was sanctioned for interfering in the 2016 US presidential election.

    Prosecutors allege McGonigal and Sergey Shestakov, a former Russian diplomat who has most recently worked as an interpreter in New York federal courts in Manhattan and Brooklyn, violated US sanctions by digging up dirt on Deripaska’s rival at the time he was already sanctioned.

    In Washington, McGonigal is charged with concealing connections he had with the person who decades earlier worked for an Albanian intelligence agency, including receiving $225,000 in payments. A prosecutor for the US Attorney’s Office for the Southern District of New York indicated that federal prosecutors in Washington, DC, set a remote initial appearance for Wednesday on those charges.

    Prosecutors allege McGonigal, as an employee of the FBI, was required to disclose overseas travel and contacts with foreign nationals, which he failed to do.

    On Monday, Southern District of New York prosecutors told Magistrate Judge Sarah Cave that they had reached a bail package agreement with McGonigal’s attorney. Cave granted the agreed-upon package to release McGonigal on $500,000 personal recognizance bond co-signed by two undisclosed individuals.

    McGonigal must disclose any domestic travel outside of the southern or eastern districts of New York to the court except court appearances in Washington. Defense attorney Seth DuCharme told the court that McGonigal’s work involves international travel and said he might at some point ask for a bail modification.

    Prosecutors allege that during several trips overseas to Albania, Austria, and Germany, McGonigal failed to disclose on US government forms that he met with the prime minister of Albania, a Kosovar politician and others.

    In one meeting, prosecutors allege McGonigal urged the prime minister of Albania to be “careful about awarding oil field drilling licenses in Albania to Russian front companies.” The former employee of Albanian intelligence who paid him $225,000 had a financial interest in the government’s decision about the contracts.

    One of the cash payments – $80,000 – was allegedly given to McGonigal while he sat in a parked car outside of a restaurant in New York City.

    Under McGonigal’s direction, the FBI opened an investigation into a US citizen’s foreign lobbying effort based on information he received from the former employee of Albanian intelligence, according to the indictment. McGonigal never disclosed his financial relationship.

    The charges out of New York allege that he first met the Russian interpreter, Shestakov, in 2018 while at the FBI through a Russian intelligence officer, known to be a diplomat previously for the Ministry of Foreign Affairs for the Soviet Union and Russian Federation.

    After he retired from the FBI in 2018, McGonigal was brought on as a consultant for a New York law firm working on Deripaska’s sanctions, the court filing says. McGonigal traveled to London and Vienna around 2019 to meet with Deripaska and others about getting the Russian oligarch “delisted” from the US sanctions list.

    In 2021, they allegedly removed the law firm from the picture and McGonigal and Shestakov worked directly for Deripaska.

    The former FBI agent and Shestakov attempted to hide their involvement with Deripaska, using shell companies and forged signatures to receive payments from the Russian oligarch.

    In 2021, McGonigal was allegedly working to obtain “dark web” files for Deripaska that he said could reveal “hidden assets valued at more than 500 million us $” and other information that McGonigal believed would be valuable to Deripaska.

    That effort was abruptly halted when the FBI seized their personal electronic devices in November of that year.

    Shestakov faces one count of false statements for attempting to hide his relationship to the former FBI agent during an interview with FBI agents after the search warrant was executed.

    Deripaska, an ally of Putin, was sanctioned by the US in 2018 in response to Russian interference in the 2016 election and was charged with violating US sanctions in September.

    He is one of the most well-known oligarchs in Russia and, and his name came up during the Trump-Russia investigation. He was mentioned dozens of times in special counsel Robert Mueller’s report, which says he is “closely aligned” with Putin.

    This headline and story have been updated with additional developments.

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  • John Reed Fast Facts | CNN

    John Reed Fast Facts | CNN



    CNN
     — 

    Here’s a look at the life of John Reed, former Citigroup CEO.

    Birth date: February 7, 1939

    Birth place: Chicago, Illinois

    Birth name: John Shepard Reed

    Father: name not known publicly – plant manager for Armour & Company

    Mother: name not known publicly

    Marriage: Cynthia “Cindy” (McCarthy) Reed (September 1994-present); Sally (Foreman) Reed (divorced)

    Children: with Sally (Foreman) Reed: Tenley, December 1974; Tefford, July 1971; Timothy, January 1968; Traci, March 1965

    Education: Washington and Jefferson College, B.A., 1960; Massachusetts Institute of Technology, B.S. 1961 (dual degree program); Massachusetts Institute of Technology (MIT), Sloan School of Management, Master of Science, 1965

    Military service: US Army Corps of Engineers, 1962-1964, Lieutenant

    Lived in Buenos Aires from ages 5 to 17 due to his father’s job with Armour & Company.

    After retiring from Citigroup, Reed and his wife founded the John and Cindy Reed Foundation, which focuses on environmental and educational efforts.

    Credited with advancing the adoption of the ATM across the United States.

    Salary as chairman of the New York Stock Exchange, at his request, was $1.

    1965 – Joins Citicorp.

    1975-2003 – Member of Philip Morris/Altria board of directors.

    June 19, 1984 – Reed is named CEO of Citicorp.

    1998 – Citicorp merges with Travelers in a $37 billion deal to become Citigroup Inc.

    November 9, 1999 – Reed testifies before the Permanent Subcommittee on Investigations of the Committee on Governmental Affairs regarding money laundering.

    April 18, 2000 – Retires as co-chairman and co-chief executive of Citigroup Inc.

    September 17, 2003 – New York Stock Exchange Chairman Richard Grasso resigns over criticism of his compensation package.

    September 21, 2003 – Reed is named interim chairman of the New York Stock Exchange.

    2004-2008 – Serves as a member of the Altria Group board of directors.

    April 2005 – Steps down as chairman of the New York Stock Exchange.

    February 4, 2010 – Testifies before the Senate Committee on Banking, Housing and Urban Affairs regarding the financial crisis.

    2010-2014 – Serves as chairman of the board at MIT. Reed remains a life member emeritus of the board of trustees.

    2011-present – Member of CaixaBank’s board of directors.

    February 16, 2016 – Is elected president of the board of Boston Athenaeum, an independent library and museum.

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  • Here are the companies that have laid off employees this year — so far | CNN Business

    Here are the companies that have laid off employees this year — so far | CNN Business


    New York
    CNN
     — 

    Just this week, Alphabet, Google’s parent company, Microsoft

    (MSFT)     and Vox Media announced layoffs that will affect more than 22,000 workers.

    Their moves follow on the heels of job cuts earlier this month at Amazon, Goldman Sachs and Salesforce. More companies are expected to do the same as firms that aggressively hired over the last two years slam on the brakes, and in many cases shift into reverse.

    The cutbacks are in sharp contrast to 2022, which had the second-highest level of job gains on record, with 4.5 million. But last year’s job numbers began falling as the year went on, with December’s job report showing the lowest monthly gains in two years.

    The highest level of hiring occurred in 2021, when 6.7 million jobs were added. But that came on the heels of the first year of the pandemic, when the US effectively shut down and 9.3 million jobs were lost.

    The current layoffs are across multiple industries, from media firms to Wall Street, but so far are hitting Big Tech especially hard.

    That’s a contrast from job losses during the pandemic, which saw consumers’ buying habits shifting toward e-commerce and other online services during lockdown. Tech firms went on a hiring spree.

    But now, workers are returning to their offices and in-person shopping is bouncing back. Add in the increasing likelihood of a recession, higher interest rates and tepid demand due to rising prices, and tech businesses are slashing their costs.

    January has been filled with headlines announcing job cuts at company after company. Here is a list of layoffs this month – so far.

    Google

    (GOOGL)    ’s parent said Friday it is laying off 12,000 workers across product areas and regions, or 6% of its workforce. Alphabet added 50,000 workers over the past two years as the pandemic created greater demand for its services. But recent recession fears has advertisers pulling back from its core digital ad business.

    “Over the past two years we’ve seen periods of dramatic growth,” CEO Sundar Pichai said in an email to employees. “To match and fuel that growth, we hired for a different economic reality than the one we face today.”

    The tech behemoth is laying off 10,000 employees, the company said in a securities filing on Wednesday. Globally, Microsoft has 221,000 full-time employees with 122,000 of them based in the US.

    CEO Satya Nadella said during a talk at Davos that “no one can defy gravity” and that Microsoft could not ignore the weaker global economy.

    “We’re living through times of significant change, and as I meet with customers and partners, a few things are clear,” Nadella wrote in a memo. “First, as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less.”

    The publisher of the news and opinion website Vox, tech website The Verge and New York Magazine, announced Friday that it’s cutting 7% of its staff, or about 130 people.

    “We are experiencing and expect more of the same economic and financial pressures that others in the media and tech industries have encountered,” chief executive Jim Bankoff said in a memo.

    Layoffs are also hitting Wall Street hard. The world’s largest asset manager is eliminating 500 jobs, or less than 3% of its workforce.

    Today’s “unprecedented market environment” is a stark contrast from its attitude over the last three years,, when it increased its staff by about 22%. Its last major round of cutbacks was in 2019.

    The bank will lay off up to 3,200 workers this month amid a slump in global dealmaking activity. More than a third of the cuts are expected to be from the firm’s trading and banking units. Goldman Sachs

    (FADXX)     had almost 50,000 employees at the end of last year’s third quarter.

    The crypto brokerage announced in early January that it’s cutting 950 people – almost one in five employees in its workforce. The move comes just a few months after Coinbase laid off 1,100 people.

    Though Bitcoin had a solid start to the new year, crypto companies were slammed by significant drops in prices of Bitcoin and other cryptocurrencies.

    McDonald’s

    (MCD)    , which thrived during the pandemic, is planning on cutting some of its corporate staff, CEO Chris Kempczinski said this month.

    “We will evaluate roles and staffing levels in parts of the organization and there will be difficult discussions and decisions ahead,” Kempszinski said, outlining a plan to “break down internal barriers, grow more innovative and reduce work that doesn’t align with the company’s priorities.”

    The online personalized subscription clothing retailer said it plans to lay off 20% of its salaried staff.

    “We will be losing many talented team members from across the company and I am truly sorry,” Stitch Fix

    (SFIX)     founder and former CEO Katrina Lake wrote in a blog post.

    As the new year began, Amazon

    (AMZN)     said it plans to lay off more than 18,000 employees. Departments from human resources to the company’s Amazon

    (AMZN)     Stores will be affected.

    “Companies that last a long time go through different phases. They’re not in heavy people expansion mode every year,” CEO Andy Jassy said in a memo to employees.

    Amazon boomed during the pandemic, and hired rapidly over the last few years. But demand has cooled as consumers return to their offline lives and battle high prices. Amazon says it has more than 800,000 employees.

    At The New York Times DealBook summit In November, Jassy said he believes Amazon “made the right decision” regarding its rapid infrastructure build out but said its hiring spree is a “lesson for everyone.”

    Even as he spoke, Amazon warehouse workers who helped organize the company’s first-ever US labor union at a Staten Island facility last year were picketing Jassy’s appearance outside the conference venue.

    “We definitely want to take this opportunity to let him know that the workers are waiting and we are ready to negotiate our first contract,” Amazon Labor Union President Chris Smalls said, calling the protest a “welcoming party” for Jassy.

    Salesforce

    (CRM)     will cut about 10% of its workforce from its more than 70,000 employess and reduce its real estate footprint. In a letter to employees, Salesforce

    (CRM)    ’s chair and co-CEO Marc Benioff admitted to adding too much to the company’s headcount early in the pandemic.

    – CNN’s Clare Duffy, Matt Egan, Oliver Darcy, Julia Horowitz, Catherine Thorbecke, Paul R. La Monica, Nathaniel Meyersohn, Parija Kavilanz, Danielle Wiener-Bronner and Hanna Ziady contributed to this report.

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  • FTC calls on federal court to hold ‘pharma bro’ Martin Shkreli in contempt | CNN Business

    FTC calls on federal court to hold ‘pharma bro’ Martin Shkreli in contempt | CNN Business


    Washington
    CNN
     — 

    The Federal Trade Commission on Friday called for a federal court to hold “Pharma Bro” Martin Shkreli in contempt after Shkreli allegedly flouted a recent FTC investigation into his business dealings and failed to make a $64.6 million payment he owed for his prior wrongdoings.

    The FTC’s contempt motion follows what the agency described as its an unsuccessful attempt to verify whether Shkreli has violated a court order barring him from ever working in the pharmaceutical industry again.

    Brianne Murphy, an attorney for Shkreli, called the issue with the FTC a misunderstanding that “can get resolved relatively quickly once we get additional information and context to them.” Murphy added that Shkreli’s new business does not run afoul of the court order because the new company “is a software company, rather than a drug company.”

    Shkreli was released from federal prison last year after serving a shortened sentence. He was convicted of securities fraud in 2017 for mismanaging two investments funds.

    Shkreli also infamously raised prices for the life-saving medication Daraprim by 4,000% while he was head of Turing Pharmaceuticals. His conduct earned him the title of “most hated man in America” by multiple publications. More recently, he was the subject a 134-page ruling in 2022 by the US District Court for the Southern District of New York that banned him for life from participating in the pharmaceutical industry, as part of a separate FTC antitrust case against him.

    That legally binding order triggered a new investigation into Shkreli’s activities in October, when public reports indicated he had co-founded a new “Web3 drug discovery software platform” known as Druglike, Inc.

    When the FTC emailed Shkreli to get documents from him and to schedule an interview about the matter, Shkreli repeatedly missed deadlines and allegedly slow-walked his responses, according to an FTC court filing Friday.

    “Shkreli has not attempted—much less ‘diligently,’ as Second Circuit law requires—to comply with the Order in a reasonable manner,” the filing said.

    The FTC also said Shkreli had been ordered to make his multimillion-dollar payment — representing a refund of his ill-gotten Daraprim gains — by March 6, 2022. But in fact, the FTC said, “to date he has paid nothing toward the judgment, and has made no efforts to comply with this provision of the Order.”

    As far as his involvement with Druglike, the FTC added: “Shkreli’s noncompliance is also clear and unambiguous: Shkreli has not submitted a supplemental Compliance Report, provided access to relevant documents, or made himself available for an interview.”

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  • Pompeo alleges Haley plotted with Kushner and Ivanka Trump to try to become vice president | CNN Politics

    Pompeo alleges Haley plotted with Kushner and Ivanka Trump to try to become vice president | CNN Politics



    CNN
     — 

    Former Secretary of State Mike Pompeo claims in his upcoming memoir that former UN Ambassador Nikki Haley plotted with former President Donald Trump’s daughter Ivanka and his son-in-law Jared Kushner to try to become Trump’s vice president, according to an excerpt of the book obtained by CNN.

    Pompeo, in his book “Never Give an Inch: Fighting for the America I Love,” takes several shots at potential 2024 Republican rivals, including Haley and former national security adviser John Bolton, as the onetime Kansas congressman and CIA director fuels speculation about his own presidential ambitions.

    Pompeo writes that he was told by John Kelly, Trump’s chief of staff at the time, that Haley had scheduled a meeting with the president to discuss what she claimed was a personal matter and then came to the Oval Office meeting with Kushner and Ivanka Trump, who were serving as White House senior advisers.

    “As best Kelly could tell, they were presenting a possible ‘Haley for vice president’ option. I can’t confirm this, but he was certain he had been played, and he was not happy about it. Clearly, this visit did not reflect a team effort but undermined our work for America,” Pompeo writes in his book.

    CNN has reached out to Kelly for comment on Pompeo’s claim.

    Haley refuted Pompeo’s allegations on Thursday, saying she “never had a conversation with Jared, Ivanka, or the president about the vice presidentship.”

    “Pompeo even says he’s not sure if it’s true,” the former South Carolina governor told Fox News, dismissing the claim as “gossip” and saying “there is no truth to it.”

    “What I’ll tell you is it’s really sad when you’re having to go out there and put lies and gossip to sell a book,” Haley said. “I don’t know why he said it but that’s exactly why I stayed out of DC as much as possible – to get away from the drama and get away from the gossip.

    But a White House source from that time has backed Pompeo’s claim, adding more context by recalling how Kushner and Ivanka Trump were pushing Haley to be secretary of state to succeed Rex Tillerson, who had objected to Kushner getting involved in foreign relations too often and in ways Tillerson disagreed with.

    But the president was not enamored with the idea and went with Pompeo, with whom he got along better and whom he liked more, the source said.

    After that switch, Trump began talking negatively about his vice president, Mike Pence, who he thought was too often trying to convince him to back off controversial statements or actions. Kushner and Ivanka Trump began pushing Haley again, the source said. Kelly tried to talk the president out of it, arguing that Pence had helped win him the support of evangelical Christian voters in 2016. Kelly was surprised, the source said, that Pence lasted through the 2020 election.

    Pompeo, whose book will be published next week, is also scathing in his assessment of Bolton, who has said he may launch a presidential bid to stop Trump from getting a second term in office.

    Pompeo takes issue with Bolton’s 2020 book “The Room Where It Happened: A White House Memoir” and claims the former Trump national security adviser divulged classified information and should be prosecuted.

    “His self-serving stories contained classified information and deeply sensitive details about conversations involving a sitting commander in chief,” Pompeo writes. “That’s the very definition of treason.”

    “John Bolton should be in jail for spilling classified information. I hope I can one day testify at a criminal trial as a witness for the prosecution,” Pompeo writes.

    When Bolton wrote the book, there was significant controversy over security reviews of the book before it was published.

    “My book was fully cleared in the prepublication review process conducted by the cognizant career NSC Senior Director, whose home agency was the National Archives,” Bolton told CNN in response to Pompeo’s claims.

    “Pompeo’s comments tell you more about his character than about my book,” he added.

    Trump remains the only declared candidate in the 2024 presidential election, but several Republicans have signaled they could jump into the race. CNN has reported that President Joe Biden plans to launch his reelection campaign sometime after his State of the Union address, which is scheduled for February 7.

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  • What we learned at Davos: The economy is a mess, but there’s still hope | CNN Business

    What we learned at Davos: The economy is a mess, but there’s still hope | CNN Business

    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    Friday marks the end of the annual World Economic Forum meeting in Davos, Switzerland, an elite gathering of some of the wealthiest people and world leaders.

    The glitzy retreat into the Swiss Alps looks increasingly out of date as the biggest war in Europe since 1945 deepens splits in the world economy. But that doesn’t mean it’s not important.

    The meetings between CEOs, politicians, and global figures at Davos can help set the tone for the year ahead. Here are some of the key talking points from this week.

    It’s a mess: The big stories coming out of Davos this year are full of phrases like “fragmenting global economy,” “economic uncertainty” and “the year of inflation.”

    While many executives and economists are now striking a more optimistic tone, global leaders are still fretting about the economic outlook. That’s not surprising since they’re contending with worrisome uncertainties — Russia’s war in Ukraine is still raging, inflation and interest rates remain elevated, there are looming energy and food crises, supply chain kinks and the debt limit standoff in the United States, not to mention the threat of global recession.

    The meeting began with a new report by the WEF that dubbed this decade the “turbulent 20s” and the “age of the polycrisis.” Business executives, politicians and academics, the report said, are bracing for a gloomy world battered by intersecting crises, as rising volatility and depleted resilience boost the odds of painful simultaneous shocks.

    Gita Gopinath, the number two official at the International Monetary Fund, said in an interview with the Wall Street Journal that the IMF is worried globalization is in retreat. “We’re very concerned about geoeconomic fragmentation,” she said. The issue had come up a lot in meetings with member countries at the conference, she added.

    CEOs and political officials are also worried about the United States hitting its borrowing cap on Thursday, forcing the Treasury Department to start taking “extraordinary measures” to keep the government open.

    If an agreement isn’t reached, markets could plunge (like they did the last time this happened in 2011) and the United States risks having its credit rating downgraded again. The situation is a “mess,” said Peter Orszag, CEO of financial advisory at Lazard.

    JP Morgan CEO Jamie Dimon told CNBC from Davos on Thursday that the reputation of the United States as creditworthy is “sacrosanct.” To even question it, he said, is the wrong thing to do. “That is just a part of the financial structure of the world. This is not something you should be playing games with at all.”

    But it may not be that bad: Many leaders’ economic forecasts actually struck a semi-positive tone, even as they factored in strong headwinds.

    So far, energy supplies have held up in Europe, and the US and China are engaging in diplomatic relations — Treasury Secretary Janet Yellen and Chinese Vice Premier Liu He met in Zurich on Wednesday.

    China’s removal of strict coronavirus restrictions late last year is also expected to unleash a wave of spending that may offset economic weakness in the United States and Europe.

    Climate change was a hot topic: The rich and powerful do love to flock to Davos in their carbon-emitting private jets to discuss climate change. But this year, severe warnings were issued to global leaders.

    The UN Secretary General accused fossil fuel producers and their financial backers of “racing to expand production, knowing full well that their business model is inconsistent with human survival.”

    Speaking at Davos on Wednesday, António Guterres said the commitment to limit global warming to 1.5 degrees above pre-industrial levels is “going up in smoke.”

    “We are flirting with climate disaster. Every week brings a new climate horror story,” he said.

    Swedish activist Greta Thunberg also made her way to Switzerland and delivered a “cease and desist letter” to fossil fuel CEOs — signed by more than 800,000 people.

    The AI revolution is here: Some CEOs at Davos admitted that they’re using the revolutionary new AI bot, ChatGPT, to do their work for them, reports my colleague Julia Horowitz.

    Jeff Maggioncalda, the CEO of online learning provider Coursera, said that he uses the tool to bang out emails.

    “I use it as a writing assistant and as a thought partner,” Maggioncalda told CNN from Davos.

    Christian Lanng, CEO of digital supply chain platform Tradeshift, said he uses the ChatGPT to write emails and claims no one has noticed the difference. He even had it perform some accounting work, a service for which Tradeshift currently employs an expensive professional services firm.

    “I see these technologies acting as a copilot, helping people do more with less,” Microsoft CEO Satya Nadella told an audience in Davos this week.

    There’s a saying on Wall Street that bad news for the economy is actually good news for the stock market and vice versa, reports my colleague Paul R. La Monica.

    That’s because investors often bet that dismal headlines will eventually prompt the Federal Reserve and other central banks to cut interest rates and provide more stimulus that can help boost corporate profits…and stock prices.

    But the debt ceiling debate in Washington is changing all of that.

    Wednesday’s big market sell-off and the continued slide Thursday might represent a turning point for market sentiment. Still, after a promising start to the year, stocks have seemingly taken a turn for the worse. Bad news actually might be bad news.

    “We’ve been snuggled up in expectations of a soft landing for the US economy,” said Kit Juckes, chief global foreign exchange strategist at Societe Generale, in a report Thursday. “Take away the blanket and it feels chilly.”

    Netflix announced Thursday that its founder Reed Hastings is stepping down as co-CEO at the company and will serve as executive chairman. Hastings will be replaced by co-CEOs Ted Sarandos and Greg Peters, reports my colleague Clare Duffy.

    Under Hastings’ leadership, Netflix disrupted legacy movie rental companies like Blockbuster and helped shake up Hollywood by kicking off an arms race investing in original content.

    Last year, however, Netflix saw its stock and reputation take a hit after losing subscribers amid heightened competition from rival streaming services. In response, Netflix introduced a lower-priced, ad-supported tier for the first time in its history.

    Those changes may be paying off. In its earnings report on Thursday, the streamer said it added more than 7.6 million subscribers during the final three months of last year, well above the 4.5 million additions it had projected, for a total of more than 230 million paying subscribers worldwide.

    “Reed Hastings stepping down from his current role raises a lot of questions about Netflix’s future strategy,” Jamie Lumbley, analyst at investment firm Third Bridge, said in a statement. “While the subscriber growth numbers are encouraging, revenue growth is sluggish with the backdrop of a potential recession looming on everyone’s mind.”

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  • The Federal Reserve is testing how climate change could hurt big banks | CNN Business

    The Federal Reserve is testing how climate change could hurt big banks | CNN Business

    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    The largest six banks in the United States have been given until July to show the Federal Reserve what effects disastrous climate change scenarios could have on their bottom lines.

    Noting the risks could be “material,” the Fed said the banks will have to show how their finances fare under a number of climate stress tests, including heat waves, wildfires, floods and droughts, according to details of a new Fed pilot program released on Tuesday.

    “The pilot exercise includes physical risk scenarios with different levels of severity affecting residential and commercial real estate portfolios in the Northeastern United States and directs each bank to consider the impact of additional physical risk shocks for their real estate portfolios in another region of the country,” wrote the Fed.

    The Federal Reserve first announced the pilot program in September, noting that Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo would participate.

    Climate activists said that the project was long overdue (Federal Reserve Chair Jerome Powell has been questioned about it multiple times over the last year), and that other central banks are far ahead of the Fed on climate risk assessments. The Bank of England ran a similar exercise in 2021.

    They also said the proposal lacked any real teeth. In its announcement the Federal Reserve stressed that the exercise “is exploratory in nature and does not have capital consequences.” It also said that it would not publish individual banks’ results.

    San Francisco Federal Reserve President Mary Daly told CNN in October Thursday that this was a learning and exploratory exercise for the Federal Reserve. It would be “incredibly premature to jump to the conclusion that any new policies or programs would come out of it,” she said.

    The other side: Critics of the pilot program have argued that the Federal Reserve was overstepping its boundaries and that they might soon begin to enforce financial penalties.

    “The Fed’s new ‘pilot’ program is the first step toward pressuring banks into limiting loans to and investments in traditional energy companies and other disfavored carbon-emitting sectors,” wrote former Republican Senator Pat Toomey, then a ranking member of the Senate Banking Committee. “The real purpose of this program is to ultimately produce new regulatory requirements.”

    Powell said last week that the central bank would not become a “climate policymaker.”

    “Today, some analysts ask whether incorporating into bank supervision the perceived risks associated with climate change is appropriate, wise, and consistent with our existing mandates,” Powell said last Tuesday. “In my view, the Fed does have narrow, but important, responsibilities regarding climate-related financial risks. These responsibilities are tightly linked to our responsibilities for bank supervision. The public reasonably expects supervisors to require that banks understand, and appropriately manage, their material risks, including the financial risks of climate change.”

    The discovery, movement and use of oil has played an outsized role in shaping geopolitics over the past century and a half. But over the next 50 years, global interaction and wealth are more likely to be influenced by microchips, Intel CEO Pat Gelsinger told CNN Tuesday.

    “Where the technology supply chains are, and where semiconductors are built, is more important for the next five decades,” Gelsinger said in an interview with CNN’s Julia Chatterley at the World Economic Forum in Davos, Switzerland.

    Intel (INTC) is betting those predictions prove true. The company announced in 2021 it would invest $20 billion to build two new US chipmaking facilities, as well as up to $90 billion in new European factories, aimed at reasserting its position as the leader of the semiconductor industry, reports my colleague Clare Duffy.

    Gelsinger said the company’s investment in new manufacturing facilities in the United States, Europe and elsewhere is important not only for the company’s future, but for the “globalization of the most critical resource to the future of the world.”

    “We need this geographically balanced, resilient supply chain,” he said.

    The announcements also came amid concerns about the concentration of manufacturing for chips, in Asia, particularly China and Taiwan, during the Covid-19 pandemic and as geopolitical tensions grew. Issues in the chip supply chain in recent years have caused shortages and shipping delays of everything from desktop computers and iPhones to cars.

    “If we’ve learned one thing from the Covid crisis and this multi-year journey that we’ve been on it’s we need resilience in our supply chains,” Gelsinger said, adding that Intel’s manufacturing investments are aimed at “leveling that playing field so that good investment decisions can be made.”

    The years following the peak of the Covid pandemic have not been good for wealth equality.

    The world’s wealthiest residents have been getting far richer, far faster than everyone else over the past two years, reports my colleague Tami Luhby.

    The fortune of the 1% soared by $26 trillion during that period, while the bottom 99% only saw their net worth rise by $16 trillion, according to Oxfam’s annual inequality report released Sunday.

    And the wealth accumulation of the super-rich accelerated during the pandemic. Looking over the past decade, they netted just half of all the new wealth created, compared to two-thirds during the last few years.

    Meanwhile, many of the less fortunate are struggling. Some 1.7 billion workers live in countries where inflation is outpacing wages. And poverty reduction likely stalled last year after the number of global poor skyrocketed in 2020.

    “While ordinary people are making daily sacrifices on essentials like food, the super-rich have outdone even their wildest dreams,” said Gabriela Bucher, executive director of Oxfam International.

    “Just two years in, this decade is shaping up to be the best yet for billionaires — a roaring ’20s boom for the world’s richest,” she said.

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  • Tesla video promoting self-driving was staged, engineer testifies | CNN Business

    Tesla video promoting self-driving was staged, engineer testifies | CNN Business



    CNN
     — 

    A 2016 video that Tesla

    (TSLA)     (TSLA) used to promote its self-driving technology was staged to show capabilities like stopping at a red light and accelerating at a green light that the system did not have, according to testimony by a senior engineer.

    The video, which remains archived on Tesla’s website, was released in October 2016 and promoted on Twitter by Chief Executive Elon Musk as evidence that “Tesla drives itself.”

    But the Model X was not driving itself with technology Tesla had deployed, Ashok Elluswamy, director of Autopilot software at Tesla, said in the transcript of a July deposition taken as evidence in a lawsuit against Tesla for a 2018 fatal crash involving a former Apple

    (AAPL)     (AAPL) engineer.

    The previously unreported testimony by Elluswamy represents the first time a Tesla employee has confirmed and detailed how the video was produced.

    The video carries a tagline saying: “The person in the driver’s seat is only there for legal reasons. He is not doing anything. The car is driving itself.”

    Elluswamy said Tesla’s Autopilot team set out to engineer and record a “demonstration of the system’s capabilities” at the request of Musk.

    Elluswamy, Musk and Tesla did not respond to a request for comment. However, the company has warned drivers that they must keep their hands on the wheel and maintain control of their vehicles while using Autopilot.

    The Tesla technology is designed to assist with steering, braking, speed and lane changes but its features “do not make the vehicle autonomous,” the company says on its website.

    To create the video, the Tesla used 3D mapping on a predetermined route from a house in Menlo Park, California, to Tesla’s then-headquarters in Palo Alto, he said.

    Drivers intervened to take control in test runs, he said. When trying to show the Model X could park itself with no driver, a test car crashed into a fence in Tesla’s parking lot, he said.

    “The intent of the video was not to accurately portray what was available for customers in 2016. It was to portray what was possible to build into the system,” Elluswamy said, according to a transcript of his testimony seen by Reuters.

    When Tesla released the video, Musk tweeted, “Tesla drives itself (no human input at all) thru urban streets to highway to streets, then finds a parking spot.”

    Tesla faces lawsuits and regulatory scrutiny over its driver assistance systems.

    The U.S. Department of Justice began a criminal investigation into Tesla’s claims that its electric vehicles can drive themselves in 2021, after a number of crashes, some of them fatal, involving Autopilot, Reuters has reported.

    The New York Times reported in 2021 that Tesla engineers had created the 2016 video to promote Autopilot without disclosing that the route had been mapped in advance or that a car had crashed in trying to complete the shoot, citing anonymous sources.

    When asked if the 2016 video showed the performance of the Tesla Autopilot system available in a production car at the time, Elluswamy said, “It does not.”

    Elluswamy was deposed in a lawsuit against Tesla over a 2018 crash in Mountain View, California, that killed Apple engineer Walter Huang.

    Andrew McDevitt, the lawyer who represents Huang’s wife and who questioned Elluswamy’s in July, told Reuters it was “obviously misleading to feature that video without any disclaimer or asterisk.”

    The National Transportation Safety Board concluded in 2020 that Huang’s fatal crash was likely caused by his distraction and the limitations of Autopilot. It said Tesla’s “ineffective monitoring of driver engagement” had contributed to the crash.

    Elluswamy said drivers could “fool the system,” making a Tesla system believe that they were paying attention based on feedback from the steering wheel when they were not. But he said he saw no safety issue with Autopilot if drivers were paying attention.

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  • Ousted Disney CEO Bob Chapek will get $20 million exit pay | CNN Business

    Ousted Disney CEO Bob Chapek will get $20 million exit pay | CNN Business


    New York
    CNN
     — 

    Ousted Disney chief executive Bob Chapek is set to receive a hefty paycheck following his exit.

    The Walt Disney Company said the former CEO, who took over in February 2020 after longtime CEO Bob Iger retired, is eligible to take home a severance pay package worth roughly $20 million, according to a regulatory filing Tuesday. That’s in addition to the $24 million he made last year — his $2.5 million base salary plus millions in stock options and awards. That’s down from the $32.5 million he made in 2021.

    Chapek abruptly exited the company in November after a hectic two-year stint marked by Covid-19 shutdowns, a PR debacle related to Florida’s “Don’t Say Gay” bill and a significant slowdown in demand for streaming services. He was replaced by his predecessor, Iger.

    The proxy filing said that the board determined that Chapek “was no longer the right person to serve in the CEO role,” even though it had voted to extend Chapek’s tenure for three years in June 2022.

    “The significant developments and change in the broader macroeconomic environment over this period informed how the board viewed the appropriate leader in light of the rapidly evolving industry and market dynamics,” the filing said.

    Disney shares, which were trading at about $170 in January 2022, have fallen to about $100 a share.

    Iger has returned to Disney at a tumultuous time. Its streaming business lost $1.5 billion in the fourth quarter, and Disney’s media networks are struggling as cord-cutting accelerates and once-lucrative outlets like ESPN lose household reach.

    Dan Loeb, the activist investor and Third Point CEO, made headlines in August when he suggested “a strong case can be made that the ESPN business should be spun off to shareholders with an appropriate debt load.”

    A Wells Fargo analyst also called on Disney to ditch ESPN in December.

    Disney

    (DIS)     previously revealed that Iger earned a $1 million base salary. However, that compensation comes with an annual bonus of up to $1 million, as well as an annual incentive-based award with a target value of $25 million. That means that Iger has the potential of pulling in around $27 million.

    Last week, Disney named Nike executive chairman Mark Parker as its new board chair, replacing longtime director Susan Arnold, whose term limit is expiring.

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  • Intel CEO: Chip supply chains will shape geopolitics more than oil over the next 50 years | CNN Business

    Intel CEO: Chip supply chains will shape geopolitics more than oil over the next 50 years | CNN Business


    New York
    CNN
     — 

    Global politics will be dominated by the availability, trade and investment in microchips for the next several decades, Intel CEO Pat Gelsinger told CNN Tuesday.

    The location of “oil reserves [has] defined geopolitics for the last five decades,” Gelsinger said in an interview with CNN’s Julia Chatterley at the World Economic Forum in Davos. “Where the technology supply chains are, and where semiconductors are built, is more important for the next 5 decades.”

    Gelsinger said the company’s investment in new manufacturing facilities in the United States, Europe and elsewhere is important not only for the company’s future, but for the “globalization of the most critical resource to the future of the world.”

    “We need this geographically balanced, resilient supply chain,” he said.

    Intel

    (INTC)     said last year it would invest $20 billion to build two new US chipmaking facilities, as well as up to $90 billion in new European factories, aimed at reasserting its position as the leader of the semiconductor industry. The announcements also came amid concerns about the concentration of manufacturing for chips, in Asia, particularly China and Taiwan, during the Covid-19 pandemic and as geopolitical tensions grew. Issues in the chip supply chain in recent years have caused shortages and shipping delays of everything from desktop computers and iPhones to cars.

    “If we’ve learned one thing from the Covid crisis and this multi-year journey that we’ve been on it’s we need resilience in our supply chains,” Gelsinger said, adding that Intel’s manufacturing investments are aimed at “leveling that playing field so that good investment decisions can be made.”

    Gelsinger — who took over as Intel’s chief executive two years ago during a difficult period for the company — acknowledged that the company’s investments in a decades-long strategy are coming during a difficult economic period.

    “It’s a touch economic environment in the near term — Covid and China, Ukraine and energy in Europe, inflation in the US — you look across that and ask, ‘Where’s the good news?’” he said. “But at the same time, we need to make long-term investments, three quarter economic environments cannot dictate five- and six-year capital investment cycles … It’s a challenge to be a CEO these days.”

    A US law passed last year to boost domestic chipmaking should help. The CHIPS and Science Act will invest more than $200 billion to help companies grow US domestic chip-making and research.

    Now, Gelsinger said, Intel and other chipmakers are just waiting for the funds from the law to get dispersed, after President Joe Biden last year directed a steering committee including Commerce Secretary Gina Raimondo to determine how to implement the law and deploy the funds.

    “We expect we’ll see those this year,” Gelsinger said of the CHIPS Act funds. “I’m investing, please show up with the money. Because we’re assuming they’ll help us make these massive investments.”

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  • Opinion: Miami is one step closer to the implosion of its crypto dreams | CNN

    Opinion: Miami is one step closer to the implosion of its crypto dreams | CNN

    Editor’s Note: Jake Cline is a writer and editor in Miami whose work has appeared in The Washington Post, The Atlantic and other national outlets. He was a member of the team that won the 2019 Pulitzer Prize in Public Service for the South Florida Sun Sentinel’s coverage of the mass shooting at Marjory Stoneman Douglas High School. The opinions expressed here are his own. Read more opinion on CNN.



    CNN
     — 

    Thanks in large part to bitcoin evangelism by top officials in Miami, the city has spent the past couple of years in full-blown cryptomania.

    In the vision of Mayor Francis Suarez – the city’s chief cheerleader for digital currency – Miami will one day become the national capital for cryptocurrency.

    Two years ago, Miami published its “Bitcoin White Paper” – a blueprint for its transformation into a 21st century city. Around the same time, prominent crypto figures began relocating to the city, and Miami began hawking its own digital currency, MiamiCoin.

    As the fever quickened, cryptocurrency exchanges began advertising on Miami billboards. Bitcoin ATMs were installed at neighborhood gas stations and convenience stores.

    And perhaps the most visible symbol allowing Miami to flex its crypto bragging rights was the announcement in March of 2021 by Miami-Dade County that it had sold naming rights for its main sports arena – home of the beloved Miami Heat NBA franchise – to FTX, the now bankrupt cryptocurrency exchange founded by disgraced crypto entrepreneur Sam Bankman-Fried.

    That partnership, which is not even two years old, came to an unhappy end last week. On Wednesday, the beleaguered company and Miami’s local government finalized an agreement to terminate the deal and remove the now tarnished FTX logo from the sports venue.

    Over the past few months, as the scale of Bankman-Fried’s alleged fraud became clear, some city elders and the business community scrambled to unwind what many of us had suspected from the start was a simply terrible business deal. Bankman-Fried, who has maintained his innocence, pleaded not guilty to federal fraud charges during a court appearance in New York earlier this month.

    We now know just what a fiasco Miami’s love affair with crypto has been. The financial costs of last year’s crypto crash have been enormous for the many thousands of investors who invested – and then lost funds they could ill afford to forgo.

    But my own reservations were not rooted in certain knowledge that crypto would crumble, although its collapse was far swifter and more spectacular than even most skeptics anticipated.

    My opposition to crypto is based on its deleterious effects on the environment. The fact that Miami, considered “the most vulnerable major coastal city in the world,” would go all in for a currency created by a climate-wrecking technology always seemed to me to be a particular kind of madness.

    Many people don’t understand how a currency that exists largely in the digital space can have real-life destructive impacts on our environment. Bitcoin mining uses vast amounts of resources. As the New Yorker’s Elizabeth Kolbert wrote in an April 2021 article, “bitcoin-mining operations worldwide now use … about the annual electricity consumption of the entire nation of Sweden.”

    Citing data scientist Alex de Vries’ Digiconomist website, Kolbert reported that “a single bitcoin transaction uses the same amount of power that the average American household consumes in a month.” Similar reporting could be found at The New York Times, The Washington Post and CNN.

    Bitcoin mining hardware has ramped up as the cryptocurrency’s popularity has increased. Between January 1, 2016, and June 30, 2018, the mining operations for four major cryptocurrencies released an estimated three to 15 million metric tons of carbon dioxide, according to a study in the research journal Nature Sustainability.

    Even China, the world’s largest polluter, banned bitcoin mining in 2021, citing its high carbon emissions. Now we are in what has been called “crypto winter” after enthusiasm has plummeted for cryptocurrencies worldwide. Nevertheless, the carbon footprint of bitcoin, still the world’s most valuable digital currency, continues to be enormous.

    This past September, a report from the White House Office of Science and Technology Policy found that crypto mining in the United States emits as much greenhouse gas as the nation’s railroads and cautioned that “depending on the energy intensity of the technology used, crypto-assets could hinder broader efforts to achieve net-zero carbon pollution consistent with U.S. climate commitments and goals.”

    But despite all that data, Suarez remains convinced that it’s possible to produce bitcoin in an environmentally friendly way.

    “I’d love to sort of dispel some of the, I think, myths — I call them myths — of [crypto] mining as a not-environmentally-friendly activity,” the mayor said during his Crypto Conference, a live-streamed event held in June 2021.

    And because there are renewable-energy sources in South Florida, his argument goes, crypto miners could eventually be incentivized to stop contributing to the destruction of our planet. He has argued, in effect, that because renewable energy sources exist, miners might just in the future opt to use them. It’s an extraordinarily weak argument. It would be a wonderful outcome, if only we could interest bitcoin miners in abandoning their pursuit of cheap and dirty energy sources.

    But he’s not wrong – it is entirely possible to mine bitcoin responsibly, as bitcoin’s leading competitor, ethereum, proved last year. A decentralized global network used for verifying billions of dollars of cryptocurrency transactions, ethereum in September completed a system-wide transformation known as the Merge.

    Essentially, ethereum moved to a mining process, known as proof of stake, that requires significantly less computing power than bitcoiners’ preferred process, proof of work. In doing so, ethereum appears to have reduced its worldwide energy consumption by more than 99%.

    While some bitcoin miners say they want their industry to go green, the majority resist calls to adopt the proof of stake system over fears it would eat into their profits. Meanwhile, residents of Miami seem torn on environmental matters. According to a survey conducted by Yale University, as well as George Mason University, they believe that local officials, and state officials, including the governor “should do more to address global warming.”

    But Miami voters helped to propel a “red wave” that installed Republican supermajorities in both chambers of the Florida legislature — a body that under GOP control allows fossil-fuel companies to write its bills.

    Residents of Miami-Dade County this past November also voted to reelect Gov. Ron DeSantis, who has said that while he doesn’t consider himself a “climate change denier” he hopes never to be mistaken for a “climate change believer.”

    And despite everything that has happened with the digital currency’s plummeting value, Suarez, who is also president of the United States Conference of Mayors, remains a bitcoin believer.

    Miami-Dade County will once again play host later this year to Bitcoin 2023, the next installment of the annual conference. And Suarez told a Miami TV station that he continues to receive his government salary in bitcoin, as he has since November 2021.

    Some dreams, it would seem, die hard.

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  • Forget inflation, it’s all about earnings | CNN Business

    Forget inflation, it’s all about earnings | CNN Business


    New York
    CNN
     — 

    To everything there is a season and now is the time for earnings.

    Over the past few weeks investors have been squarely focused on inflation and Fed policy, but now market reactions are getting bigger for earnings (especially the misses) and smaller for economic data.

    What’s happening: “We expect earnings to take the center stage going forward,” wrote Bank of America strategists Savita Subramanian and Ohsung Kwon in a note on Friday. They noted that over the last three quarters, S&P 500 reactions to earnings beats and misses have soared higher and have now surpassed the one-day market reaction to both CPI inflation and Fed policy meeting decisions.

    Companies that missed on both sales and earnings-per-share during the last quarter underperformed the S&P 500 by nearly six percentage points on average the next day, the largest reaction to earnings misses on record.

    Shares of Disney sank 13.16% last November — their lowest level in more than two years — when they missed earnings estimates. Meta shares plummeted 24% after showing a drop in third-quarter revenue in October, the company’s second consecutive quarterly revenue decline. And shares of Palantir closed down more than 11% in November after it missed estimates only slightly.

    “We see this as a narrative shift in the market from the Fed and inflation to earnings: reactions to earnings have been increasing, while reactions to inflation data and FOMC meetings have been getting smaller,” wrote Subramanian and Kwon.

    So we can expect some serious volatility over the next few weeks as companies report their fourth quarter corporate earnings.

    Bank of America’s predictive analytics team analyzed earnings transcripts to calculate sentiment scores and found that corporate sentiment remained flat in the third quarter, well off its highs, which points to a potential earnings decline ahead.

    Similarly, companies’ references to of better business conditions (specific usage of the words “better” or “stronger” vs. “worse” or “weaker”) remained well below the historical average, and mentions of optimism dropped to the lowest level since the first quarter of 2020.

    So far, swings have been to the downside. S&P 500 fourth-quarter earnings-per-share estimates have dropped by about 7% since October. Early earnings reports from some of the largest financial institutions point to a bleak quarter.

    Bad news ahead: The estimated earnings decline for the S&P 500 in the fourth quarter of 2022 is -3.9%, according to a FactSet analysis. If that is indeed the actual drop, it will mark the first earnings decline reported by the index since the third quarter of 2020.

    Over the past few weeks, reported FactSet, earnings expectations for the first and second quarters of 2023 switched from year-over-year growth to year-over-year declines.

    The latest: JPMorgan beat estimates for fourth-quarter revenue but also increased the amount of money for expected defaults on loans. The bank added a $2.3 billion provision for credit losses in the quarter, a 49% increase from the third quarter.

    The move was driven by a “modest deterioration in the Firm’s macroeconomic outlook, now reflecting a mild recession in the central case,” said the report. On a subsequent call, JPMorgan CFO Jeremy Barnum told reporters that the bank expects a recession to hit by the fourth-quarter of 2023.

    Bank of America

    (BAC)     also beat earnings expectations but CEO Brian Moynihan said Friday that the bank is preparing for rising unemployment and a recession in 2023. “Our baseline scenario contemplates a mild recession,” he said. The bank added a $1.1 billion provision for credit losses, a sharp change from last year when that number was negative.

    What’s next: Hold on to your hats. During the upcoming week, 26 S&P 500 companies are scheduled to report results for the fourth quarter.

    Apple CEO Tim Cook has responded to angry shareholders by recommending that the company cut his pay this year, reports my colleague Anna Cooban.

    Cook was granted $99.4 million in total compensation last year. The vast majority of his 2022 compensation — about 75% — was tied up in company shares, with half of that dependent on share price performance.

    But shareholders voted against Cook’s pay package after Apple’s stock fell nearly 27% last year. The vote is nonbinding, but the board’s compensation committee said Cook himself requested the reduction.

    “The compensation committee balanced shareholder feedback, Apple’s exceptional performance, and a recommendation from Mr. Cook to adjust his compensation in light of the feedback received,” the company said in its annual proxy statement released Thursday.

    But don’t cry for Tim Cook just yet. This year, the executive’s share award target is $40 million. About $30 million, or three-quarters, of that is linked to share price performance. The tech boss, who has headed up Apple

    (AAPL)     since 2011, is estimated to have a personal wealth of $1.7 billion, according to Forbes.

    The bottom line: Apple’s share price, like other tech companies, plunged last year as coronavirus lockdowns shuttered some of its factories in China. Supply chain bottlenecks and fears that a global economic slowdown would crimp demand also dragged down its stock.

    Angry investors believe that the person at the helm of the company should also see a drop in pay.

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