Reddit wants AI to pay it's fair share.

We have not discussed ‘economy’ at this scale since 2008. Will it happen? Won’t it happen? There isn’t exactly fear, but it’s the opposite of excitement. Something far away from Ross-Rachel’s will they/ won’t they? For all you GenZers reading, they’re popular TV show characters from the 90s not tik-tokers.

Another bank is officially dead, JP to the rescue. Indeed is infuriating SMB owners. AI might become a $100 trillion market someday so Reddit is asking them to pay up for their data.

Let’s see what we have.

The Big Picture

Post the recent bank runs of Silicon Valley bank and Signature bank, First Republic bank will be acquired by JP Morgan bank. This includes accounting for $92 billion in deposits, $173 billion in loans and $30 billion in securities. As part of the agreement, FDIC will share losses with JP Morgan on First Republic’s loans. First Republic lost $100 billion in deposits in March as depositors moved to JP Morgan and other big banks. First Republic’s shares were halted in Monday morning trading. A senior researcher at Yale Program on Financial Stability identified the differences between the current situation and 2008, where once one bank went down investors would target the next bank. Apparently, the losses in deposits for regional banks apart from Silicon Valley, Signature and First Republic bank were moderate.

Sector Sweep

Technology

• Indeed received a lot of backlash from small business owners as it tested out it’s pay per application vs the existing pay per interested application method. In the new pricing strategy, Indeed would charge for every application after a 72 hour period resulting in unforeseen costs for SMB owners. Previously employers paid for only the applications they wanted to see in detail, as opposed to every application they received.

• ChatGPT and other AI’s were trained on large existing datasets on the internet. Well, now the internet or at least some of it is asking for payback. Reddit, Twitter for example is exploring charging ChatGPT and other AI LLMs such as Bing and Google Bard for the data they use to train language models.

• Free markets still need some regulating, senses Ron De Santis as the board governing the Orlando theme park district just sued Disney. They allege a backroom deal that Disney made to basically control the whole district.

Space

• Starship’s inaugural flight lasted about 4 minutes before the flight had to be terminated, leaving debris at it launch site spread over 385 acres. SpaceX reported that the debris was from the launch pad concrete which was demolished during launch. They’re set to invest $2 billion in the Starship program this year, without any outside investment. Part of it would go to upgrading the launch site.

• Tractor maker Deere is looking for a satellite operator as it looks to connect it’s driverless tractors through wi-fi in Brazil for plowing fields and spraying on weeds. Brazil is a major producer of soybeans, sugar cane, oranges and other agricultural commodities.

Automotive

• GM is laying off several hundred contract employees in it’s recent attempts to cut $2 billion in annual expenses. GM has had a good quarter despite inflationary pressure and interest rate increases.

• Tesla is cutting vehicle prices to scale demand which they believe can be recovered with autonomous technology they are building. Once cars are fully autonomous, the company believes they can charge a premium on the self driving software that comes with purchasing/subscribing a Tesla.

Real Estate

• Another concerning commercial real estate story emerged as Brookfield Asset management, a major Los Angeles office owner has difficulty paying mortgages with increased vacancy and interest rates. Five of it’s office buildings face foreclosure, while two are in default.

Energy

• Exxon and Chevron, made a sum total of $18 billion in profits this quarter although oil and natural gas prices declined. Both the shares rose about 1% this Friday.

• China is looking to scale oil drilling at home, as it navigates the current geopolitical environment. They are also closing deals with country which face sanctions like Russia and Iran. These are steps they are taking to increase their energy security.

Media

• Vice prepares to file for bankruptcy as it’s growth has stagnated in the recent past. Vice was valued at $5.7 billion at it’s peak.

That’s all for today folks. Do keep a lookout for our weekly email about stock deep dives and personal finance strategies this Saturday.

BTW, do tell us how we did. Helps us a lot.

Cheers!

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