Greenlight's David Einhorn unveils his new pick, says it could be a tariff beneficiary
Greenlight Capital's David Einhorn gave a new investment idea on Wednesday at Sohn Investment Conference in New York — Lanxess , a German chemical company. "Today, I'm presenting a company where the management has made excellent strategic decisions, but the stock has suffered due to a lot of bad luck," Einhorn said in a cartoon-littered presentation titled "When bad things happen to good people." The star hedge fund investor noted that Lanxess has shed its highly cyclical commodity businesses and replaced them with more stable, higher quality specialty chemicals. Lanxess was founded in 2004 after Bayer AG spun off its chemicals division and parts of its polymers business. "In theory, this should have led to more stable returns, higher margins and a higher multiple. In practice, the progress was temporarily derailed by a slew unfortunate developments," Einhorn said. "The opportunity today is to realize that the troubles have largely passed and that the company is likely to be on a successful path to realizing the benefits of its transformation." The widely followed investor said Lanxess could be a tariff beneficiary because the company, as a domestic manufacturer, could start to raise prices. Einhorn said almost 30% of its manufacturing capacity is in the United States, while in some areas, such as parts of its advanced industrial intermediate business unit, it is the sole remaining U.S. producer and faces Chinese competition. "We think Lanxess is set for success and will surprise the market," Einhorn said. Einhorn famously presented Lehman Brothers as his short idea at the same conference in 2008 before the collapse of the investment bank.
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CNBC
13 minutes ago
- CNBC
China's biggest public AI drop since DeepSeek, Baidu's Ernie, is about to hit the market
On Monday, Chinese technology giant Baidu plans to make its Ernie generative AI large language model open source, a move by China's tech sector that could be its biggest in the AI race since the emergence of DeepSeek. A Baidu spokesman confirmed the plan and said the open sourcing will be a gradual roll-out. Will it be a shock to the market on the order of DeepSeek? That's a question which divides AI experts. One big change is that Baidu wasn't always on the open source bandwagon. "Baidu has always been very supportive of its proprietary business model and was vocal against open-source, but disruptors like DeepSeek have proven that open-source models can be as competitive and reliable as proprietary ones," Lian Jye Su, chief analyst with technology research and advisory group Omdia, previously told CNBC. Now that Baidu has made the decision to open source, even if it isn't a DeepSeek moment, it is an important one for the global AI race. "This isn't just a China story. Every time a major lab open-sources a powerful model, it raises the bar for the entire industry," said Sean Ren, associate professor of computer science at the University of Southern California and Samsung's AI Researcher of the Year. Ren says Baidu's move puts pressure on closed providers like OpenAI and Anthropic to justify gated APIs and premium pricing. "While most consumers don't care whether a model's code is open-sourced, they do care about lower costs, better performance, and support for their language or region. Those benefits often come from open models, which give developers and researchers more freedom to iterate, customize, and deploy faster," Ren said. Other industry experts view an open source Ernie as potentially being even more disruptive to both U.S. and Chinese competitors when it comes to the price equation. "Baidu just threw a Molotov into the AI world," said Alec Strasmore, founder of AI advisory Epic Loot. "OpenAI, Anthropic, DeepSeek, all these guys who thought they were selling top-notch champagne are about to realize that Baidu will be giving away something just as powerful," Strasmore said, comparing Baidu's move to Costco creating Kirkland. He said the message to all of the world's startups is "stop paying top dollar." "This isn't a competition; it's a declaration of war on pricing," Strasmore said. Baidu said in March that its recent ERNIE X1 model delivers performance on par with DeepSeek's R1 "at only half the price." Baidu's CEO, Robin Li, hinted earlier this year that the roll-out would help developers worldwide in AI development. "Our releases aim to empower developers to build the best applications — without having to worry about model capability, costs, or development tools," Li said in a speech to developers in China in April. In the least, it's one more moment in time when investors have to analyze how cost dynamics in AI model access are changing quickly, and what it means that more applications can be built on top of "these dirt cheap models," Strasmore said. "Baidu is going to be seeding the world with Chinese AI models," he added. Making these AI tools more widely available is a notable development from Baidu, but "the news of Baidu going open source probably lands with a big thud," said Cliff Jurkiewicz, vice president of global strategy at Phenom, an applied AI company for the human resources sector. "Most people in the United States don't even know it's a Chinese tech company," he said. Jurkiewicz compared the broader move to open architecture in AI as the difference between Android and Apple. "When Android first emerged, its standout feature was that it was configurable and customizable. But it was almost too much work in the sense that people just wanted the thing to function correctly," Jurkiewicz said. "Android, out of the box, is plain and vanilla, so it has to be customized, and that's a real challenge," he added. There is no doubt that the open source movement in AI is a threat to the business models of major players in the space. Sam Altman, CEO of OpenAI, wrote in a January Reddit thread about the issue, and in more recent Senate testimony has said an open source rollout may happen this summer. "While OpenAI has open-sourced models in the past, the company has generally favored a proprietary, closed source development approach," Altman said, acknowledging that may need to change. "[I personally think we need to] figure out a different open source strategy," Altman said. "Not everyone at OpenAI shares this view, and it's also not our current highest priority … We will produce better models [going forward], but we will maintain less of a lead than we did in previous years." In the May Senate appearance, Altman said, "We realize that we open AI can do more to help here. So we're going to release an open source model that we believe will be the leading model this summer because we want people to build on the U.S. stack in terms of closed source models. A lot of the world uses our technology and the technology of our colleagues. We think we're in good shape there." More recently, Altman posted that the release would be delayed, but still scheduled for summer. One advantage U.S. players maintain, according to Jurkiewicz, is that the Baidu release will encounter skepticism at the enterprise level, with many questions about security. "On the other hand, the big players — OpenAI's ChatGPT and Microsoft's Co-Pilot — are integrated with everything," Jurkiewicz said. Ren said while open source often conveys a sense of transparency, that doesn't necessarily translate into market trust. "Just because a model's weights are public doesn't mean we know what data it was trained on, whether consent was given, or if those data contributors were credited or compensated," Ren said. As AI becomes more embedded into our daily lives, that lack of accountability becomes a serious issue. "If we don't address it now, we risk scaling systems that quietly extract value from millions of people without consent, credit, or compensation," Ren said. With DeepSeek, some countries banned the AI and there were widespread concerns about consumers downloading the technology. Strasmore said the Chinese links can get dangerous if more products are tied to the Baidu API. "This would be virtually giving China access to every app on every phone. That's one scary component," he said.
Axios
33 minutes ago
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Trump plans to announce TikTok buyer in two weeks
President Trump said Sunday there is a buyer for TikTok, a week after he extended the app's ban deadline for a third time. The big picture: Trump would not say who the buyer is while appearing on Fox News' "Sunday Morning Futures," noting only it is "a group of wealthy people." When pressed by host Maria Bartiromo on who the buyer is, the president said he "will tell you in about two weeks." Zoom out: The popular social media app has been in limbo for months, repeatedly coming up against a deadline to ban it from U.S.-based app stores, only for Trump — who has his own TikTok account — to extend the ban for months at a time. The first extension came on the first day of his second term, followed by another in April when the White House thought a deal to place the app under American ownership was imminent. Instead, China balked at the deal and forced Trump to issue a second extension of the ban. The third extension — enacted on June 19 — was in yet another effort to push a potential deal over the finish line, White House press secretary Karoline Leavitt told the media at a press briefing that day. Between the lines: Trump offered no details Sunday as to what the deal entails or how quickly it would be completed. "I think I'll probably need China [sic] approval," he said. "I think President Xi [Jinping] will probably do it." Flashback: TikTok has been the subject of scrutiny from Congress — and even Trump, during his first presidential term — owing to concerns that its Chinese owner, ByteDance, has access to the personal data of the millions of Americans who use the app.
USA Today
an hour ago
- USA Today
Will TikTok be banned? Trump says there's 'a group of very wealthy people' lined up to buy it
Trump said a TikTok buyer will be announced in two weeks, but the sale still needs permission from Chinese owners. President Donald Trump said his administration has identified a group of buyers for TikTok, and their names will be released in two weeks. Trump made the announcement to Maria Bartiromo in an interview on "Sunday Morning Futures" while talking about potential tariff deals. "We have a buyer for TikTok by the way," Trump said in the interview, which was released June 29. "I think I'll need probably China approval, and I think presidency will probably do it." He said the buyer is "a group of very wealthy people" without providing additional details. Ten days ago, Trump signed a 90-day extension preventing a TikTok sell-or-ban law from going into effect after it was passed by Congress. Lawmakers have said they're worried the company was using the mega-popular video platform to spy on Americans. The latest delay was the third time Trump has moved to keep the law from going into effect using an executive order. Congress approved the ban of the app if was not sold to a non-Chinese company last year, and former President Joe Biden signed it into law. The Supreme Court has since upheld the potential ban's constitutionality, but since returning to office, Trump has directed the Department of Justice not to enforce it. His executive orders have kept the app from going dark.
