GM Money Masters, 👋
Legendary investor and fictional character Gordon Gecko once said that Greed is good. CEO and richest man in the world, Elon Musk, has taken that literally. The billionaire is asking for 25% control of Tesla.
Like a phoenix rising from the ashes, Bitcoin miner Core Scientific has returned from bankruptcy and will re-list on Nasdaq.
Meanwhile, China is finding a way to bypass the US restrictions on importing Nvidia chips, and Microsoft wants everyone to have access to AI products as long as they’re willing to pay.
Let’s dive in.
MONEY MASTERY BRIEF
- 🚗 Musk Wants More Control at Tesla
- 💼 Core Scientific to Relist on Nasdaq After Surviving Bankruptcy
- 🚫 Nvidia Chips Remain Hot Commodities in China Despite US Ban
- 🚀 Microsoft Launch AI Products for Individuals and Small Businesses
🤑 Musk Wants More Control at Tesla
Elon Musk isn’t everyone’s favorite CEO, but most agree that he knows how to get things done. But it was till surprising to hear him ask for more money to do his job.
The billionaire said he would need to have 25% control at Tesla (NASDAQ: TSLA) if he is going to build the company to become a leader in Artificial Intelligence.
What got people’s attention was the subtle threat that he might build AI products outside of Tesla if he didn’t get control.
Musk argued that Tesla is more than just a car company; it’s a dozen startups rolled into one, and he deserves more stock compensation for showing up to work and being the brain behind everything.
It’s rare to find a CEO holding his shareholders to ransom; some think this goes against corporate governance principles.
Also, Musk might violate his fiduciary duty to shareholders and hurt Tesla’s value if he starts external AI ventures. Especially given how Tesla looks positioned to take advantage of Artificial Intelligence.
Despite being an EV company, Tesla has ambitious AI goals, with its Dojo supercomputer being at the center of this. Analysts have predicted that this could be a major source of revenue for the company in the future.
Will Tesla investors grant Musk the control he wants by giving him another compensation package? There is no definite answer to that yet.
The billionaire used to own 22% of Tesla stocks before he decided to sell about 9% to finance his acquisition of Twitter. Musk already enjoys much freedom at the helm of Tesla; we wonder if a new comp package could push things too far.
₿ Core Scientific Emerges from the Ashes of Bankruptcy
It’s not every day a company that has filed for bankruptcy finds its way back to the Nasdaq listing. But Bitcoin miner Core Scientific is pulling a Lazarus on everyone after the Southern District of Texas bankruptcy court approved its reorganization plan. The miner will now relist its shares on Nasdaq by the end of this month.
Core Scientific was the major victim of crypto winter among Bitcoin miners. However, it has better fundamentals than other crypto companies. So, it restructured and paid off its debts while offering existing shareholders 60% of the new company equity. The company even raised $55 million in the equity rights offering that closed on January 8.
This is the best time to be a Bitcoin miner. Bitcoin is trading at $43,000 and enjoying more interest than ever from mainstream investors due to the approval of exchange-traded funds.
For Core Scientific, it plans to capitalize on the current good fortunes of the crypto industry and expects to generate $600 million in revenue this year. The company still has 182,000 mining rigs in operation to achieve that. In the long term, Core Scientific wants to increase its miners to 1 million by 2027. Let’s hope it will be more careful with debt on its second coming.
😈 China Has Been Naughty, Still Buying Nvidia Chips
On paper, Chinese customers don’t have access to the powerful Nvidia (NASDAQ: NVDA) chips due to US restrictions. But a new exclusive report from Reuters has confirmed that everything isn’t as it seems.
Despite the ban, the report claimed that military organizations, state-backed AI research institutes, and universities have acquired small batches of high-end Nvidia chips over the past year.
Chinese customers placed tenders for and purchased high-end Nvidia chips such as the A100 and H100, as well as the less powerful A800 and H800, which were initially designed for China before they were banned in October 2023. However, none of the sales are traceable to Nvidia or its accredited suppliers, meaning an underground market has emerged for the chips.
Nvidia recognizes China’s importance, which is why it is modifying its high-end chips to comply with export restrictions. But that is not enough for Chinese customers.
The demand for the original products isn’t surprising because Nvidia GPUs are deemed superior to their competitors for their processing capacities. Before the ban, the chipmaker controlled 90% of the Chinese AI chips market.
While the report highlights how difficult it is for the US to completely prevent China from getting Nvidia chips, it also shows that domestic chipmakers have yet to match Nvidia’s capabilities.
🤖 Microsoft Rides the AI Wave
Do you want investors to be bullish on your company stocks? Launch some AI products. Microsoft (NASDAQ: MSFT) is following that, implementing that strategy like no other company.
The tech giant has launched Copilot Pro to individuals at $20 monthly. This will add AI capabilities to Microsoft apps such as Excel and Word.
While at it, it has also expanded access to the enterprise version of Copilot by removing the 300-person minimum requirement for access to the tool.
This means small businesses can now use the enterprise version. It continues the series of AI offerings from Microsoft since it invested in OpenAI. Presently, there’s no reason to stop. Microsoft has overtaken Apple as the most valuable company in the world thanks to AI.
However, there are still several reasons to be cautious about AI development. Anthropic researchers recently published a study showing that AI models can deceive like humans.
Even worse, once trained to be deceptive, it’s nearly impossible to remove the deceptive behaviors from the AI models, and they can hide the deceptive behavior from their training data while reflecting it in their outputs. This doesn’t mean you should fear AI; it’s another wake-up call for safe and responsible development.
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“I am uncomfortable growing Tesla to be a leader in AI & robotics without having ~25% voting control. Enough to be influential, but not so much that I can’t be overturned. Unless that is the case, I would prefer to build products outside of Tesla. You don’t seem to understand that Tesla is not one startup, but a dozen. Simply look at the delta between what Tesla does and GM.”
234.6 million. That is the total number of global smartphone shipments for Apple in 2023, and it was enough to make it the biggest phone maker this year. It is the first time Samsung hasn’t been number one since 2010. Apple was the only smartphone maker out of the top three to report growth with a 3.7% increase.
Google (NASDAQ: GOOG) has quietly updated the text on the incognito mode for its Chrome browser; this comes weeks after the company opted to settle a lawsuit over illegal tracking users even after they activated Incognito or private browsing. The updated warning is only available in the latest Canary build of the browser for now, and it noted that Incognito won’t change how websites and services used, including Google, collect user data. Full story
Uber (NASDAQ: UBER) will shut down alcohol delivery app Drizly by the end of March. It marks another bad bet for the ride-hailing giant as it paid $1.1 billion to acquire it three years ago. Uber says it will focus on its UberEats offering for all its food and beverage deliveries. Drizzly has been operating as a standalone app even after Uber bought it. Full story
Apple (NASDAQ: AAPL) has planned a permanent fix to its Apple Watch Ultra 2 and Series 9 model, which would involve disabling the technology in dispute. The company will disable the pulse oximetry features on all models of its watches. This will effectively mean Apple Watches don’t violate the Masimo patent dispute, and it’s unlikely to have any major impact on how the watches function. Full story
Vodafone (NASDAQ: VOD) has signed a $1.5 billion 10-year partnership with Microsoft to bring AI and cloud services to the 300 million customers of the British telecommunications giant. Vodafone will invest $1.5 billion into customer-focused AI technologies developed using Microsoft capabilities. Microsoft will also get an equity stake in Vodafone’s Internet of Things platform, which will become standalone by April 2024. Full story
Chip design software maker Synopsis (NASDAQ: SNPS) is paying $35 billion in a cash and stock deal to acquire Ansys. It’s a massive deal that could face some regulatory scrutiny. Ansys (NASDAQ: ANSS) develops simulation software for product design and operation, and its acquisition could allow Synopsis to offer integrated solutions. Full story
Apple has updated its App Store policy to allow US developers to provide links for outside payments. But the tech giant will still charge 27% on the fees instead of the usual 30% for using the Apple payment option. This update comes after the US Supreme Court refused to hear the appeal in the case between Epic Games and Apple. Epic Games founder Tim Sweeney still thinks the 27% is too high and plans to contest what he described as Apple’s bad faith compliance. Full story
EV charging startup Electra has raised $330 million in its Series B funding round. The company that builds EV fast charging stations already has 172 stations in Europe and plans to add another 105 soon. The new funding will expand its charging network, targeting 2,200 charging stations with 15,000 charging points by 2030. Full story
Tesla remains the world’s leading EV maker, although it faces challenges from competitors such as BYD. But more importantly, the company is also gaining market share among automakers in the US. Tesla sold 654,888 vehicles in the US in 2023 and now has 4.2% of the market share, surpassing BMW, Volkswagen, and Subaru.
Elon Musk is one of the most controversial and influential figures in the tech space. He is the man who built Tesla and SpaceX. But his recent statement asking for 25% control of Tesla before he can grow the company into an AI leader has raised more questions about his eccentricities.
Should Tesla shareholders offer him compensation or refuse and see what he’ll do?
Let us know what you think by replying to this email.
Thanks for reading, and may your investments thrive. 🙂
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