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POLICY
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House lawmakers push to ban AI app DeepSeek from US government devices
The DeepSeek application arranged on a smartphone in Hong Kong on Jan. 27.
Lam Yik/Bloomberg
A bipartisan duo in the the US House is proposing legislation to ban the Chinese artificial intelligence app DeepSeek from federal devices, similar to the policy already in place for the popular social media platform TikTok. Representatives Josh Gottheimer, Democrat of New Jersey, and Darin LaHood, Republican of Illinois, on Thursday introduced the 'No DeepSeek on Government Devices Act,' which would ban federal employees from using the Chinese AI app on government-owned electronics. They cited the Chinese government's ability to use the app for surveillance and misinformation as reasons to keep it away from federal networks. 'The Chinese Communist Party has made it abundantly clear that it will exploit any tool at its disposal to undermine our national security, spew harmful disinformation, and collect data on Americans,' Gottheimer said in a statement. 'We simply can't risk the CCP infiltrating the devices of our government officials and jeopardizing our national security.' The proposal comes after the Chinese software company in December published an AI model that performed at a competitive level with models developed by American firms like OpenAI, Meta, Alphabet and others. — ASSOCIATED PRESS
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DEALS
Environmental services firm Triumvirate sold in $1.8 billion deal
Triumvirate Environmental has been sold in a deal that values the company at $1.8 billion.
Photo courtesy of Triumvirate
The founder of Triumvirate Environmental has reached a deal to sell a controlling stake to a local private equity firm, valuing the Somerville-based waste disposal business at $1.8 billion. Chief executive John McQuillan will remain in charge at Triumvirate, which specializes in removing waste from life sciences labs and manufacturing plants, under the new ownership of Boston-based Berkshire Partners. McQuillan, in a press release, said the transaction will provide funds to help the company expand into new regions, add new service lines, and enhance its technology. The companies did not disclose how much money Berkshire paid for the controlling stake. 'It was clear Berkshire was the right partner for us given their long history of helping market leaders accelerate growth and their constructive, supportive approach with management teams,' McQuillan said. McQuillan will remain chairman of Triumvirate's board of directors. He'll be joined on the board by Al Kelly, the former chief executive of Visa, and John Ferraro, former global chief operating officer at Ernst & Young. McQuillan founded the company in 1988, and it currently generates around $500 million in revenue a year. As part of the deal, Berkshire is establishing an employee ownership program. Berkshire managing director Mike Ascione said the 1,600 employees at Triumvirate 'already think and act like owners ... and this new program aims to reward them accordingly.' — JON CHESTO
INDUSTRY
Honeywell, one of the few remaining US industrial conglomerates, will split into three companies
A Honeywell facility in Phoenix, Ariz.
Caitlin O'Hara/Bloomberg
Honeywell, one of the last remaining US industrial conglomerates, will split into three independent companies, following in the footsteps of manufacturing giants like General Electric and Alcoa. The company said Thursday that it will separate from its automation and aerospace technologies businesses. Including plans announced earlier to spin off its advanced materials business, Honeywell will consist of three smaller entities in hopes that they will each be more agile. 'The formation of three independent, industry-leading companies builds on the powerful foundation we have created, positioning each to pursue tailored growth strategies, and unlock significant value for shareholders and customers,' Honeywell Chairman and CEO Vimal Kapur said in a statement. Honeywell had said in December that it was considering spinning off its aerospace division. The public announcement arrived about one month after Elliott Investment Management revealed a stake of more than $5 billion in the aerospace, automation and materials company. Elliott had been pushing for the Charlotte, North Carolina, company to separate its automation and aerospace businesses. — ASSOCIATED PRESS
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ARTIFICIAL INTELLIGENCE
OpenAI looks across US for sites to build its Trump-backed Stargate AI data centers
The OpenAI logo on a smartphone arranged in the Brooklyn borough of New York on Jan. 12, 2023.
Gabby Jones/Bloomberg
OpenAI is scouring the US for sites to build a network of huge data centers to power its artificial intelligence technology, expanding beyond a flagship Texas location and looking across 16 states to accelerate the Stargate project championed by President Trump. The maker of ChatGPT put out a request for proposals and began visiting locations in Oregon, Pennsylvania, and Wisconsin this week. Trump touted Stargate, a newly formed joint venture between OpenAI, Oracle, and Softbank, shortly after returning to the White House last month. The partnership said it is investing $100 billion — and eventually up to $500 billion — to build large-scale data centers and the energy generation needed to further AI development. Trump called the project a 'resounding declaration of confidence in America's potential' under his new administration, though the first project in Abilene, Texas, has been under construction for months. — ASSOCIATED PRESS
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BRANDING
Boy Scouts see a small membership uptick after rebrand to Scouting America
Roger Krone, chief executive officer of Scouting America, described the design of the organization's flag in Irving, Texas, on Feb. 5.
LM Otero/Associated Press
A historic rebrand of the Boy Scouts of America has been followed by a small uptick in young people joining what will now be called Scouting America, a welcoming sign as the organization tries to move past scandal and bankruptcy. The group will continue leaning into a broad message of inclusivity as it celebrates its 115th birthday Saturday, President and CEO Roger Krone said. He acknowledged some backlash to the rebrand after it was announced last year but described the overall response as a positive one that generated wider interest. 'The fact that we were going with a more kind of gender-neutral name, a lot of people kind of wanted to know more about it,' Krone said. Although the overall gain in membership was small — about 16,000 new scouts, up less than 2 percent from the prior year — it is still encouraging for the organization after participation plummeted during the COVID-19 pandemic. The organization, which began allowing girls to join its scouting programs in 2018, has just over 1 million members. — ASSOCIATED PRESS
ENTERTAINMENT
Sony bid to take 'Jeopardy!' rights from CBS is halted by court
Cars enter and depart from Sony Pictures Entertainment studio lot in Culver City, Calif., on Dec. 18, 2014.
Damian Dovarganes
Sony Pictures Television's bid to take over distribution rights to 'Jeopardy!' and 'Wheel of Fortune' from CBS was temporarily halted by a California state court. Paramount Global's CBS has long distributed the Sony-made shows to local TV stations. The media division of Sony Group Corp. sued last year, claiming CBS wasn't honoring their contract and has failed to maximize revenue from the programs, the two most-popular TV game shows. 'The court's order has no bearing on, and is not indicative of, the eventual outcome of the ongoing litigation,' Sony said Thursday in a statement, adding the company 'will continue to fight CBS's egregious mishandling of these beloved shows and will take all necessary legal actions to protect our rights.' In its own statement, CBS said: 'We're pleased the court issued a temporary restraining order against Sony's unlawful actions. We will continue to seamlessly distribute 'Wheel of Fortune' and 'Jeopardy!' to our station clients like we have for over 40 years.' — BLOOMBERG NEWS
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Yahoo
13 minutes ago
- Yahoo
Trading Day: AI fatigue, policy intrigue
By Jamie McGeever ORLANDO, Florida (Reuters) -TRADING DAY Making sense of the forces driving global markets By Jamie McGeever, Markets Columnist Gnawing doubts about the frenzy around artificial intelligence weighed on tech shares again on Wednesday, pushing Wall Street into the red as investors cast a nervous eye toward a key speech from Fed Chair Jerome Powell on Friday. More on that below. In my column today, I look ahead to Powell's eighth and final Jackson Hole speech. If market moves following his previous seven are any guide, investors should be in for a bumpy ride. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. 1. Trump calls on Fed Governor Cook to resign 2. Fed's dilemma between AI and housing: Mike Dolan 3. Big investors ditch tech ahead of expected Septemberstocks slump 4. US tech-stock stumble shows vulnerability in AI 5. UK inflation heat puts Bank of England back in thespotlight Today's Key Market Moves * STOCKS: Wall Street in the red, again led by techselloff. Nasdaq sheds 0.7%. China closes at a 10-year high,Europe gains too, but benchmark EM falls. * SHARES/SECTORS: Target slides 6% after firm announcesinsider Michael Fiddelke as new CEO. Intel falls 7% and othertech firms fall on news the government is eyeing stakes inchipmakers. * FX: New Zealand dollar falls 1% after dovish RBNZ ratecut, bucking broader trend of U.S. dollar weakness. * BONDS: U.S. yields down ever so slightly, recoveringafter the Fed minutes. The 20-year auction was mixed. * COMMODITIES: Safety bid lifts gold 1%, oil reboundsaround 1.5% on U.S. inventory drawdown. Today's Talking Points: * Trump interference. Investors are increasingly concerned about the involvement - or interference - from President Donald Trump and his administration in many aspects of the economy, private sector business, and independent policymaking. Trump on Wednesday called for Fed Governor Lisa Cook to resign over mortgage allegations, which could pave the way for another Trump appointee at the Fed inclined to lower interest rates. Commerce Secretary Howard Lutnick, meanwhile, is said to be looking into the government taking equity stakes in Intel and other chipmakers in exchange for grants under the CHIPS Act. This comes on the heels of Trump's recent sideswipe at Goldman Sachs's CEO and chief U.S. economist, criticism of JPMorgan Chase and Bank of America, his firing of a senior statistics official, and months of verbal attacks on Powell for not cutting rates. * Tech fatigue. After leading Wall Street's charge this year to new peaks, U.S. tech shares are now losing steam and dragging broader indexes lower. Whether that's simply rotation and diversification, unease over the megacap concentration, or doubts about the huge AI spend, air is coming out of the tech balloon. The S&P 500 tech sector is down nearly 5% in the last five trading days. But a bit of perspective is required - the sector rallied 60% between April 7 and August 13. * Fed minutes. With just two days to go until Powell's last Jackson Hole speech, investors on Wednesday had the minutes of the Fed's July 29-30 policy meeting to pore over. The minutes appear to show that the two policymakers who dissented against the central bank decision to leave rates unchanged appear not to have been joined by others in voicing support for lowering rates at that meeting. "Almost all participants viewed it as appropriate to maintain the target range for the federal funds rate at 4.25% to 4.50% at this meeting," the minutes read. Maybe the bar to cutting rates is higher than thought? But bear in mind, the weak July payrolls data were released two days after that decision. Jackson Hole speech could pack a punch Financial markets are taking in a collective breath ahead of Powell's eighth and final keynote Jackson Hole speech as Federal Reserve chair. If the moves following his last seven are any guide, investors should buckle up for a bumpy ride. Fed-watchers will be focused squarely on whether Powell signals that he's willing to cut interest rates at the central bank's September 16-17 meeting. His public comments in recent months have been relatively hawkish, but those were all before the release of the weak July employment figures that fired up easing expectations. Rates futures traders are pricing in an 85% probability of a quarter-point cut next month, with another 25 basis points of easing expected by year's end. Powell's words on Friday could provide significant clarity about whether these positions are "in the money" or not. Given that traders are betting so heavily on an imminent move, the "pain trade" will be if Powell holds the line that policymakers need to see more incoming data before resuming the easing cycle put on hold in December. Investors have reason to be cautious. History shows Powell's Jackson Hole speeches tend to move markets a lot, especially the bond market. And even though Powell is often considered a policy dove at heart, his Jackson Hole set-piece speeches have usually pushed yields higher, not lower. WATCH BOND YIELDS In the month following each of Powell's last seven Jackson Hole speeches, the 10-year Treasury yield has risen by an average of 21 bps, according to Reuters calculations. The dollar has risen 1.4% and the S&P 500 has fallen nearly 2%, on average, over the same period. Stretching that out, the S&P 500 has risen an average of 2.3% between the late-August speech and year-end, the dollar has gained 0.4%, while the 10-year yield has climbed 27 basis points on average. But these averages mask some much bigger moves, especially in the month after the central bank jamboree in Wyoming. The stand-out example is 2022, when Powell, in his Monetary Policy and Price Stability speech, invoked former Fed Chair Paul Volcker, warning of the "pain" that households and businesses were likely to face from the tight policy needed to slay inflation. In the following month, the S&P 500 tanked 12%, the dollar rallied 5%, and the 10-year Treasury yield soared 75 bps. Bond yields climbed at least 20 bps in the month following three other Powell Jackson Hole speeches, in 2018, 2021, and 2023, the latter being another where Powell signaled a readiness to keep rates higher for longer. KEY CONSIDERATIONS Inflation today is not as lofty as it was two years ago, but, sitting around 1 percentage point above the Fed's 2% goal, it is higher than Powell would like. Meanwhile, on the other side of the Fed's dual mandate, unemployment remains at a historical low of 4.2%. This year's theme at Jackson Hole is "Labor Markets in Transition: Demographics, Productivity, and Macroeconomic Policy." Powell has stated that the unemployment rate is the best measure of the labor market. But that does not mean today's low unemployment rate will automatically lead to a hawkish speech - history shows that when unemployment starts to rise, it can move quickly, leaving the Fed woefully behind the curve. Markets are probably prepared for some large price swings, whichever way Powell leans. THE LAST TIME It's also likely that Powell will use the platform to defend his tenure, just like his predecessors: Alan Greenspan in 2005, Ben Bernanke in 2012, and Janet Yellen in 2017. Given the unprecedented public pressure Trump has placed on Powell to cut interest rates this year, why would the Fed chair not seize this opportunity to have his say? "He may offer some soft guidance that rates may move lower at a coming meeting. But this is his last speech at Jackson Hole. He may never again have a platform this influential to offer his view of how his history should be written," economists at UBS wrote on Friday. Will he sign off with a bang? Markets are locked and loaded. What could move markets tomorrow? * Australia, Japan, India PMIs (August, flash) * South Korea producer inflation (July) * UK public finances (July) * UK, euro zone PMIs (August, flash) * Canada producer inflation (July) * U.S. weekly jobless claims * U.S. Philly Fed business index (August) * U.S. PMI (August) * U.S. $8 billion auction of 30-year TIPS * U.S. earnings - Walmart * Atlanta Fed President Raphael Bostic speaks Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. (By Jamie McGeever; Editing by Rod Nickel)
Engadget
14 minutes ago
- Engadget
Oracle will reportedly power a giant data center with gas generators
Bloomberg has published a deep dive into operations at Oracle, chronicling the software giant's rise in cloud computing and current push into powering artificial intelligence projects. The publication reported that Oracle has promised to develop tens of billions of dollars in data centers, which have become a hot business. Notably, Oracle landed a deal to back operations at OpenAI, in a partnership that will give the AI company 4.5 gigawatts of computing power . According to Bloomberg , that's enough energy to power "millions of American homes." So far, Oracle has seemed willing to throw money at its AI data center projects, no matter how expensive or irresponsible the needs might be. For instance, a source said the company plans to spend more than $1 billion a year powering a single data center in Texas with gas generators rather than waiting for a utility connection to be built. When completed, this data center is expected to be one of the largest known sites, with computing power of 1.4 gigawatts. In addition to the huge monetary cost, such a project can also have negative human and environmental impact. The Elon Musk-owned xAI is under fire after a supercomputer for its artificial intelligence operations became a primary source of air pollution in Memphis thanks to methane-powered turbines. Other majors, including Google , Microsoft and Meta , have chosen to try nuclear power for their data center projects, which comes with its own potential complications and risks. Purely on the financial side, Oracle's decision to invest so much so quickly meant the company reported its first negative annual cash flow since 1990. Should the current rates of AI investment turn out to be a bubble, it could be very bad news to have many billions of dollars on the line.
Los Angeles Times
14 minutes ago
- Los Angeles Times
Wall Street steadies after Nvidia, Palantir and other AI stars trim their losses
Stock indexes ended mixed on Wednesday after Nvidia, Palantir and other superstar stocks pared most of their steep losses from the morning. The S&P 500 dipped 0.2% after trimming a loss that reached 1.1% earlier in the day and remains near its all-time high set last week. The Dow Jones Industrial Average added 16 points, or less than 0.1%, and the Nasdaq composite fell 0.7%. The day's action centered again around stocks caught up in the mania around artificial-intelligence technology. Nvidia, whose chips are powering much of the world's move into AI, sank as much as 3.9% during the morning and was on track to be the heaviest weight on Wall Street following its 3.5% fall on Tuesday. But it clawed back nearly all of Wednesday's drop and finished with a dip of just 0.1%. As it pared its loss, so did broad market indexes because Nvidia is Wall Street's most influential stock by being its most valuable. Palantir Technologies, another AI darling, fell 1.1% to add to its 9.4% loss from the day before, but it had been down as much as 9.8% Wednesday morning. One possible contributor to the swoon was a study from MIT's Nanda Initiative that warned that most corporations are not yet seeing any measurable return from their generative AI investments, according to Ulrike Hoffmann-Burchardi, global head of equities at UBS Global Wealth Management. But the larger factor may be the simple criticism that prices for such stock simply shot too high, too fast, amid the furor around AI and became too expensive. Nvidia, whose profit report scheduled for next week is one of Wall Street's next major events, had soared 35.5% for the year so far heading into Tuesday. Palantir had surged even more, more than doubling. The tech stocks still have supporters, though, who say AI will bring the next generational revolution in business. Mixed profit reports from big U.S. retailers helped keep the rest of the market in check. TJX, the company behind the TJ Maxx and Marshalls stores, climbed 2.7% after beating analysts' forecasts for profit and revenue. It also raised its forecast for profit over its full fiscal year, while CEO Ernie Herrman said TJX is seeing 'strong demand at each of our U.S. and international businesses' and that its current quarter is off to a strong start. Lowe's added 0.3% after the home-improvement retailer delivered a profit for the latest quarter that topped analysts' expectations. Target, meanwhile, tumbled 6.3%. The struggling retailer said that CEO Brian Cornell plans to step down Feb. 1 and that an insider, 20-year veteran Michael Fiddelke, will replace him. He helped reenergize the company, but it has struggled to turn around weak sales in a more competitive post-COVID retail landscape. Estee Lauder dropped 3.7% after offering a forecast for profit this upcoming fiscal year that fell short of Wall Street's estimates. The beauty company said it expects tariffs to shave roughly $100 million off its upcoming earnings. La-Z-Boy sank 12.1% after the furniture maker's profit and revenue for the spring came up shy of analysts' expectations. All told, the S&P 500 fell 15.59 points to 6,395.78. The Dow Jones Industrial Average added 16.04 to 44,938.31, and the Nasdaq composite fell 142.10 to 21,172.86. The week's biggest news for Wall Street is likely arriving on Friday, when Federal Reserve Chair Jerome Powell will give a highly anticipated speech in Jackson Hole, Wyoming. The hope on Wall Street is that Powell will hint that cuts to interest rates are coming soon. The Fed has kept its main interest rate steady this year, primarily because of the fear of the possibility that President Donald Trump's tariffs could push inflation higher. But a surprisingly weak report on job growth across the country may be superseding that. Treasury yields have come down sharply on expectations for an easing of interest rates, and the yield on the 10-year Treasury fell to 4.29% from 4.30% late Tuesday. Trump has been angrily calling for lower interest rates, often insulting Powell personally while doing so. Trump on Wednesday called on a top official at the Federal Reserve, Lisa Cook, to resign after a member of his administration accused her of committing mortgage fraud. In stock markets abroad, indexes were mixed across Europe and Asia. London's FTSE 100 rose 1.1% despite a report that said inflation in the U.K. rose more than expected through July, in part due to soaring airfares and food prices. Hong Kong's Hang Seng added 0.2%. Shares that trade there of the Chinese toy company Pop Mart International Group soared 12.5% after its CEO said its annual revenue could top $4 billion this year and announced the release of a mini version of its popular Labubu dolls. Choe writes for the Associated Press.
