Ubisoft Jumps on Buyout Reports, EU Tariffs on China EVs | Bloomberg Technology

Ubisoft Buyout

• French videogame maker Ubisoft is on track for its biggest one-day jump on record, with Bloomberg reporting that Tencent and the founding family behind Ubisoft are considering a buyout of the company, following a rough time for the company with a recent profit warning and disappointing game releases (1m14s).
• The company has lost half its market value this year, and activist investors are asking for the company to be taken private or sold, with one of the options being a joint take-private come of the company (2m17s).
• Tencent is already an investor in Ubisoft, alongside the Guillemot family, and has been investing in European videogames companies, with Ubisoft being an interesting target due to its popular IPs such as Assassin's Creed and Rayman (3m29s).
• The Guillemot family, who founded Ubisoft almost 40 years ago, are still in control of the company, with Yves Guillemot as the CEO, and have a majority of the voting rights, while Tencent has no veto voting rights (4m44s).
• The Guillemot family made a deal with Tencent in 2022 to protect the company from buyouts, but times have changed recently, and they are now considering a buyout, with Tencent already having invested in the family holding and owning less than half of it (4m53s).

EU Tariffs on Chinese Electric Vehicles and Other News

• The European Union has voted to put tariffs of up to 45% on Chinese electric vehicles, in a separate development (49s).
• Meta has unveiled an AI video generator, as part of its AI push, which has put Mark Zuckerberg in the second richest position (51s).
• The US hiring has topped all estimates, causing people to dial back their rate cut bets on the Federal Reserve, and the Nasdaq is up 0.8% (5m52s).
• The labor market is on fire, but it's essential to remember that it's just one month's release and there are weaknesses in totality, according to CBIZ Chief Investment Anna Rathbun (6m23s).
• Despite some tech job losses, Anna Rathbun still supports tech investments, believing that part of the lost jobs is a correction on over-hiring for AI, and that it's par for the course for innovative industries (6m55s).
• The Challenger data shows that half of all tech layoffs are due to artificial intelligence, and there's a difference between layoffs that are announced and those that are acted upon (7m35s).
• The reaction to the jobs data on social media can be exaggerated, and as a long-term investor, Anna Rathbun is not affected by the short-term excitement (8m16s).
• The jobs data may not affect Anna Rathbun's investment decisions, but it could impact market sentiment for big tech and the opportunity for consolidation, including potential M&A deals (8m51s).
• Reports suggest that companies that have been beaten up from a market cap perspective are being eyed to take private, but this would require rates to come down considerably (9m1s).
• Anna Rathbun believes that the Fed should still cut rates, as the current rate is not healthy for the M&A market, and there's not enough liquidity for all parties involved (9m32s).
• The level of M&A activity, especially in the IPO market, is expected to continue, and the Fed's actions are unlikely to change course despite the latest jobs numbers (9m53s).

Analysis of US Jobs Data and its Market Implications

• The US hiring has topped all estimates, causing people to dial back their rate cut bets on the Federal Reserve, and the Nasdaq is up 0.8% (5m52s).
• The labor market is on fire, but it's essential to remember that it's just one month's release and there are weaknesses in totality, according to CBIZ Chief Investment Anna Rathbun (6m23s).
• Despite some tech job losses, Anna Rathbun still supports tech investments, believing that part of the lost jobs is a correction on over-hiring for AI, and that it's par for the course for innovative industries (6m55s).
• The Challenger data shows that half of all tech layoffs are due to artificial intelligence, and there's a difference between layoffs that are announced and those that are acted upon (7m35s).
• The reaction to the jobs data on social media can be exaggerated, and as a long-term investor, Anna Rathbun is not affected by the short-term excitement (8m16s).
• The jobs data may not affect Anna Rathbun's investment decisions, but it could impact market sentiment for big tech and the opportunity for consolidation, including potential M&A deals (8m51s).
• Reports suggest that companies that have been beaten up from a market cap perspective are being eyed to take private, but this would require rates to come down considerably (9m1s).
• Anna Rathbun believes that the Fed should still cut rates, as the current rate is not healthy for the M&A market, and there's not enough liquidity for all parties involved (9m32s).
• The level of M&A activity, especially in the IPO market, is expected to continue, and the Fed's actions are unlikely to change course despite the latest jobs numbers (9m53s).

Concerns about US Politics and Tech Regulation

• The upcoming presidential election in the United States may impact technology investors, particularly with regards to policy, antitrust, and regulation, with a focus on AI and potential laws that could hinder innovation (10m17s).
• There are concerns about the potential for one-party rule in the US, which could increase the likelihood of regulations being passed that could negatively impact the tech industry (10m50s).

Further Developments on EU Tariffs on Chinese EVs

• The European Union is preparing to impose tariffs of up to 45% on Chinese-made electric vehicles, citing concerns over injurious subsidization (11m14s).
• Rivian has cut its production outlook to 47,000 from 49,000 due to a specific supply chain issue that has become more acute in recent weeks (11m25s).
• The European Union's decision to impose tariffs on Chinese electric vehicles is seen as a positive step for European industrial policy, as it aims to create a business case for local manufacturing in Europe (13m5s).
• However, the vote was not unanimous, with 12 countries abstaining and several, including Germany, voting against the tariffs, leaving room for potential negotiations and ironing out of differences (13m48s).
• Despite the opposition, the fact that the tariffs were approved suggests that there is an agreement behind the scenes to move forward with the tariffs, prioritizing the case for local manufacturing over the risk of retaliation from China (14m11s).
• Research from Transport and Environment suggests that the tariffs alone will not be enough to save the EV industry in Europe, and a refocus on other areas is needed (14m38s).
• The European Union's imposition of tariffs on Chinese electric vehicles (EVs) is seen as a measure that should be accompanied by broader, stronger climate policies to push carmakers to manufacture affordable EVs locally (14m59s).
• The tariffs are expected to have a minor impact on Chinese manufacturers, but the European market is significant, with up to 60% of all global EV exports from China going to Europe (16m0s).
• The EU needs to ramp up short battery manufacturing, charging stations, and make it easier for people to charge their vehicles by improving grid connections (15m11s).
• Local analysts in China believe the tariffs will have a limited impact on Chinese manufacturers, but the EU market is crucial for them, and they may need to manufacture in Europe to maintain their market share (15m46s).

Chinese Market Reaction to Government Stimulus

• The Shanghai CSI 300 index has surged, with investors seeing government stimulus as an opportunity, and some economists are optimistic about the market's prospects (16m51s).
• The Chinese technology sector is seen as independent and has been approached differently by the Chinese government, which has doubled down on supporting the sector in recent years (18m6s).
• The government's efforts to boost sentiment and the economy have led to a wave of buying, with some banks and investors optimistic about the market's prospects, but others are more cautious (17m8s).
• The Chinese government's stimulus measures are expected to be announced after the Golden Week holiday, and the market's reaction will depend on the specifics of the stimulus package (17m48s).

Meta's AI Movie Generator

• Meta is integrating an AI movie generator, similar to OpenAI's SORA, into its apps sometime next year, as part of its relentless focus on AI under Mark Zuckerberg's leadership (19m33s).
• The AI-powered smart glasses and video-generated AI product are part of a steady stream of updates from Meta, which has been talking about AI for a long time and is now showing the results (20m4s).
• The video tech is intended to eventually become a consumer model, with the hope that people will make more videos, edit them, and share them, making the experience more fun and different (20m52s).
• Meta is also partnering with the film industry, getting the video tech into the hands of some filmmakers, with the goal of complementing the industry rather than being seen as a threat (21m5s).
• The company is still figuring out safety elements, such as preventing the misuse of AI-generated images, and has not rolled out the product yet due to these concerns (21m35s).
• The feature allows users to upload a picture of themselves and be inserted into a movie, but raises concerns about fake images and the potential for misuse (21m41s).
• Meta's cautious approach to rolling out the product is seen as a sign of the company growing up and addressing safety concerns (22m3s).

Market Update and Other News

• In other news, the markets are experiencing a bounce back after a selloff on Tuesday, with the Nasdaq slightly performing and the S&P 500 flat (22m34s).
• The EU is voting on tariffs on certain Chinese car makers, which has led to a relief rally for Tesla, which makes some cars in China (23m54s).
• Ubisoft's stock is up 32% in the US and higher in France, potentially due to a private bid from the Guillemot family and reported production cuts (24m3s).
• Robinhood is exploring an entry into the British market as it hunts for growth beyond the United States, with plans to add U.K. stocks and a multi-currency wallet, and offer options on U.S. equities, which are hard to come by in the U.K. market (24m31s)

Robinhood's Expansion into the UK Market

• Robinhood is exploring an entry into the British market as it hunts for growth beyond the United States, with plans to add U.K. stocks and a multi-currency wallet, and offer options on U.S. equities, which are hard to come by in the U.K. market (24m31s)
• The company's first priority is making all its great functionality available to U.K. customers, with margin investing coming in the coming weeks, and a huge demand for options on U.S. equities (24m55s)
• Robinhood is looking to differentiate itself with U.S. offerings, and is considering adding a London Stock Exchange, with a long backlog of things to build and new asset classes likely to come to the U.S., such as futures trading (25m16s)

Global AI Deployment and OpenAI's Internal Changes

• The U.S. is leading the charge in the deployment of artificial intelligence, with a playbook being applied in Asia Pacific, but Europe and China are on a similar trajectory, with the scale being different (26m8s)
• The deployment of AI is not just about the data center hurdle, but also internal struggles, and the start-up Open AI has been roiled, with a concentration of power among its founders (27m4s)
• Open AI has changed over a lot of people, with 11 original founders now down to three, and a lot of staff turnover, with the number of employees more than doubling to about 1700 (27m57s)
• The power residing in fewer hands at Open AI may mean they are able to innovate faster, despite a lot of change internally, and the company is pushing out products one after the other (28m36s)
• Open AI is trying to move towards making more money, becoming a larger company, and more of a corporate technology company, with an internal consolidation of power (29m34s)

OpenAI's Funding Round and Future Plans

• Open AI has closed its latest funding round, with a founder who has a history with the company participating in the round, citing optimism about the impact it can have on society and its potential for long-term growth (30m40s).
• The founder has a fiduciary duty to their limited partners and is a long-term investor, but denies that their participation in the round is due to sensing an upcoming IPO for Open AI (31m16s).
• There have been discussions about possibly changing the structure of Open AI, but no details can be shared, and the company may need to raise more money in the future to support its rapid growth (32m0s).
• Open AI has experienced rapid growth over the past two years, going from almost no revenue to billions, and will likely need to consume capital to support its growth, particularly in areas like data centers (32m31s).
• The founder believes that Open AI's technical team is strong and well-suited for rapid movement, and that the company is producing products at a rapid pace, allowing it to stay ahead of the competition (33m12s).
• The founder has written about the potential for AI to unlock wealth and extend it to nearly 7 or 8 billion people, and believes that Open AI can play a leading role in this process (33m54s).
• The founder is focused on Open AI providing human access to artificial intelligence technology, and believes that the company that wins in AI will lead the way in creating abundance and a more well-off society (34m16s).
• The question of whether Sam Altman should take equity in Open AI is up to him to decide, but the founder believes that he deserves to decide and that it is not his highest priority (35m32s).
• The founder has a positive assessment of Sarah Friar, who prepared a straightforward presentation to educate investors about Open AI's path and business model, and believes that she was successful in getting investors on board (36m8s).
• A presentation by a former CFO was described as crisp and straightforward, showing where the company was at the time and where it expected to be in a year, with the understanding that predictions beyond that time frame are not very predictable (36m25s).
• The goal of being the leading player in the industry was mentioned as a mutual understanding rather than a requirement or commitment, and it's common for investors to have such expectations, especially at the current stage (37m13s).

AI Adoption and Use Cases

• The adoption of new technology, such as AI, is a gradual process, and people adjust to it over time, with some adapting faster than others (38m16s).
• The key to widespread adoption of AI is its usefulness, and as it becomes more useful to more people, it will spread (38m34s).
• A personal example of AI's usefulness was given, where it was used to design a garden, showing its potential in various aspects of life (39m17s).

Toyota's Investment in Joby Aviation

• Toyota has invested $500 million in Joby Aviation, increasing its investment to $894 million, and has been working with the company for seven years, providing engineers and parts, including high-quality motors and battery systems (39m53s).
• The partnership with Toyota aims to make electric vertical takeoff and landing (eVTOL) aircraft accessible to everyone, leveraging Toyota's expertise in making reliable and safe cars (41m1s).
• The chairman of Joby Aviation is excited about the technology and is eager to fly in one of the company's aircraft, with the goal of making it a safe and reliable mode of transportation (41m29s).
• Joby Aviation sees a promising future for the eVTOL industry, with potential certification from the FAA as early as next year, and expects it to have a significant impact on people's lives, similar to cell phones and automobiles (41m58s).
• Toyota is also investing in lithium-ion battery production in Greensboro, North Carolina, and Joby Aviation is considering purchasing batteries from them, given their expertise in hydrogen propulsion and battery technology (42m27s).
• A company is expanding its operations, including hiring and partnering with investors, and is continuing to deliver on its goals day after day, with considerable partners (43m19s).
• The company showcased its product in New York last fall, demonstrating its speed and quietness, which is critical for opening up new takeoff and landing options (43m35s).
• The company is working with the Port Authority to obtain permits at JFK, LaGuardia, and Newark airports to build best-in-class experiences and provide trips upstate New York and throughout the region (43m51s).