fortune--2020-09-22--How Microsoft’s Bethesda deal echoes Disney’s Star Wars and Marvel buys

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While Microsoft may have lost out on TikTok, it’s certainly not skimping on the consolation prize.
On Monday, the tech giant announced plans to acquire ZeniMax Media, the company behind well-regarded game maker Bethesda, for $7.5 billion, marking it among the Microsoft’s largest acquisitions ever. With the deal, Microsoft will own some of the most popular franchises in gaming, including Fallout and The Elder Scrolls.
If you’ve been following the TikTok saga, the ZeniMax tie-up makes sense: It’s a way to diversify Microsoft’s revenue further into the consumer realm, as the Bill Gates-founded company has largely grown in the B2B world with offerings including a cloud business that goes head-to-head against Amazon.
And the ZeniMax buy specifically echoes Disney’s acquisitions of Star Wars maker Lucasfilm in 2012 and superhero franchisee Marvel in 2008. Disney+, the House of Mouse’s subscription-based streaming service, has been an enormous success with over 50 million paid subscribers as of April, despite launching just months prior with many more mature competitors in the field. That was in no small part helped by the company’s deep bench of content, with many consumers signing up to watch the Star Wars spinoff The Mandalorian.
For Microsoft, too, the ZeniMax acquisition is expected to bolster its own subscription gaming service: Xbox Game Pass, which recently surpassed 15 million subscribers. Microsoft, my colleague Jonathan Vanian notes, has been for years “criticized for failing to have as many compelling exclusive titles for its Xbox gaming business as competitors like Nintendo and Sony do for their consoles.”
But with names like The Elder Scrolls V: Skyrim or DOOM, Microsoft can certainly play. Whether it can successfully integrate the business is a different story.
NUMBERS ARE FUN! Yesterday, I wrote about the bizarre discrepancies between the ownership structures that ByteDance and Oracle each claimed to be true of the new TikTok Global. Following news that the U.S. had tentatively agreed to a deal in which Oracle and Walmart would take a combined 20% stake in TikTok Global, ByteDance wrote in a statement that it would actually own 80% of the company. Then Oracle asserted that ByteDance would have no part of the deal.
Which mathematically doesn’t work.
But technically, there’s a way in which both sides are correct—it just involves a lot of gymnastics, and probably doesn’t fulfill the Trump administration’s actual intent.
Here’s how Oracle’s statement that ByteDance “will have no ownership in TikTok Global” maps out, according to a source with knowledge of the matter: Because TikTok is backed by ByteDance investors (such as its employees and founder Zhang Yiming) rather than ByteDance itself, TikTok Global will not be backed by ByteDance at all.
Which also means that, by that logic..TikTok, as it is today, was never ByteDance-owned in the first place. For ByteDance, the 80% figure appears to come from tallying the existing investor base, with the new Oracle-Walmart investment considered the non-ByteDance part of the equation.
In short: The divide involves a lot of semantics and reading between the lines.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- WM Motor, a Chinese electric vehicle startup, raised $1.5 billion in Series D funding. Investors included Baidu and Tencent. Read more.
- Acesso Digital, a Brazilian facial biometrics firm, raised 580 million reais ($107.3 million) in funding. General Atlantic and SoftBank Group led the round.
- ICEYE, a Finish satellite company, raised $87 million in Series C funding. True Ventures led the round and was joined by investors including OTB Ventures.
- Green Monday Holdings, a Hong Kong-based plant-based food company, raised $70 million in funding. TPG’s The Rise Fund and Swire Pacific Limited led the round.
- Immune Regulation, a U.K.-based company focused on immunoinflammatory diseases, raised $40.6 million in Series B funding. Morningside Ventures led the round and was joined by investors including 24Haymarket.
- TrueLayer, a London-based fintech, raised $25 million from existing investors. Investors have included Tencent, Temasek, Northzone and Anthemis. Read more.
- Papa, a Miami-based senior services provider, raised $18 million for its Series B round. Comcast Ventures led the round and was joined by investors including Canaan, Initialized Capital, Sound Ventures, Pivotal Ventures and Magnify Ventures.
- Marco Financial, a Miami-based financial platform aimed at helping small businesses in Latin America finance their trades to the U.S., raised $26 million in debt and equity. Struck Capital led the equity round and was joined by investors including Antler.
- Manticore Games, a San Mateo, Calif.-based gaming company, raised $15 million in funding. Epic Games led the round.
- Ionir, a New York-based storage and data management platform for cloud, raised $11 million in funding. Jerusalem Venture Partners led the round and was joined by investors including C5 Capital.
- Conjure, a New York-based furniture rental service, raised $9 million in seed funding. Investors included Pillar VC, RiverPark Ventures, and CoVenture.
- daring, a Los Angeles-based maker of plant-based chicken, raised $8 million in Series A funding. Maveron led the round and was joined by investors including GoodFriends.
- Jina AI, a Berlin-based open-source neural search startup, raised $5.4 million in pre-Series A funding. GGV Capital led the round and was joined by investors including SAP.io and Yunqi Partners.
- DeepCube, a Tel Aviv-based A.I. company, raised $7 million in Series A funding. Awz Ventures led the round and was joined by investors including Koch Disruptive Technologies and Nima Capital.
- RedTeam, an Orlando-based construction management platform for commercial contractors, raised $5 million in funding from JettyCove.
- Tarfin, a Turkey-based agriculture fintech startup, raised $5 million in Series A funding. Quona Capital led the round and was joined by investors including Elevator Ventures, Syngenta Ventures, Collective Spark Fund, and Wamda Capital.
- Cloud Paper, a Seattle-based maker of tree-free paper products, raised $3 million in seed funding. Greycroft led the round.
- Aqua Membranes, an Albuquerque, N.M.-based developer of a water filtration system, raised $2.1 million in funding. Investors include Clean Energy Ventures and Pentair.
PRIVATE EQUITY
- Carlyle Group agreed to acquire a majority stake in TriNetX, a Cambridge, Mass.-based clinical data company. Financial terms weren't disclosed.
- ABC Financial, backed by Thoma Bravo, acquired Trainerize, a Canada-based platform for on-demand fitness classes. Financial terms weren't disclosed.
- Gridiron Capital invested in AML RightSource, a Cleveland, Oh.-based provider of anti-Money laundering compliance solutions and a Clarion Capital portfolio company. Financial terms weren't disclosed.
- Paya, a portfolio company of GTCR, agreed to acquire The Payment Group, a Dallas-based payment solution to utility and municipal government clients. Financial terms weren't disclosed.
- Auxo Investment Partners acquired Paramount Tube and Euclid Medical. Paramount Tube creates custom tube products for electric motors, transformers, fuses, automotive, single-dosage medications, and pharmaceutical packaging. Euclid Medical designs single- and multi-dose pharmaceutical packing systems. Financial terms weren't disclosed.
BREAKUPS AND BANKRUPTCIES
- Garrett Motion, an auto supplier, filed for Chapter 11 bankruptcy protection. KPS Capital Partners proposed a $2.1 billion bid for the company’s business. Read more.
EXITS
- Quibi, the streaming service founded by former Disney exec Jeffrey Katzenberg, is considering a potential sale or raising more funding, per the Wall Street Journal. Read more.
- Iliad offered to acquire Play, a Polish mobile group, for $4.2 billion. Kenbourne Investments and Tollerton Investments agreed to sell a combined 40% stake in the company. Read more.
- Aaptiv, a New York-based mobile fitness startup backed by Insight Partners and the Amazon Alexa Fund, is exploring a potential sale. Read more.
- Illumina agreed to acquire Grail, a Menlo Park, Calif.-based cancer detection startup it helped found, for $8 billion in cash and stock. Investors included Bill Gates and Jeff Bezos.
- Roche has agreed to acquire Inflazome, a Dublin-based developer of treatments for inflammatory conditions, for €380 million ($447 million). Investors in Inflazome included Forbion, Longitude Capital, Novartis and Fountain Healthcare Partners.
- PagerDuty agreed to acquire Rundeck, a Redwood City, Calif.-based IT incident reporting tool, for about $100 million in cash and stock.
IPOs
- Ant Group, the Chinese fintech giant, is looking to raise at least $35 billion in its IPO, per Bloomberg. Read more.
- UiPath, a New York-based robotics startup, is gearing up for a 2021 IPO that could value it at $15 billion, per Reuters. Read more.
- Bentley Systems, an Exton, Pa.-based provider of software for construction projects, plans to raise $215 million in an IPO of 10.8 million shares priced between $19 to $21. It posted revenue of $736.7 million and a loss of $103.1 million in 2019. Siemens Corp. backs the firm. Read more.
- Prelude Therapeutics, a Wilmington, De.-based biotech developing therapies for cancer, plans to raise $150 million in an IPO of 8.3 million shares priced between $17 to $19. OrbiMed and Baker Brothers back the firm. Read more.
- PMV Pharmaceuticals, a Cranbury, N.J.-based biotech developing therapies for cancer, plans to raise $125 million in an offering of 7.4 million shares priced between $16 to $18. InterWest Venture, OrbiMed Advisors, and Euclidean Capital back the firm. Read more.
- VIA optronics, a Germany-based provider of electronic displays, plans to raise $100 million in an offering of 6.3 million ADSs priced between $15 to $17. Integrated Micro-Electronics backs the firm. Read more.
- Orphazyme, a Danish biotech developing protein therapies for neurodegenerative diseases, plans to raise $100 million in an offering of 7.6 million ADSs priced at $13.13. SunStone Lifescience Ventures backs the firm. Read more.
- Graybug Vision, a Redwood City, Calif.-based biotech developing treatments for ocular diseases, plans to raise $75 million in an offering of 4.7 million shares priced between $15 to $17. Deerfield, Orbimed, and Blackstone Group back the firm. Read more.
SPAC
- Playboy Enterprises is a merger with Traverse Management, a SPAC. Read more.
- Jack Creek Investment Corp., a SPAC seeking a food or consumer business, filed to raise $300 million. Read more.
- Mallard Acquisition, a blank check company seeking an industrials business, filed to raise up to $100 million. Read more.
- Bull Horn Holdings, a SPAC aiming for a sports and entertainment company, plans to raise $75 million. Read more.
F+FS
- Fort Ross Ventures, an investor in the U.S. and Eastern European, raised $27 million of a planned$100 million for the Fort Ross Seed Fund.
PEOPLE
- Redpoint Ventures hired Jacob Effron as a vice president.
- Luminate Capital Partners appointed Andrew Baldwin as a partner.


fortune--2020-09-22--Could “Mindful A.I.” be the key to successful A.I.?

The world ’ s biggest hedge fund is working from tents in the forest during the COVID pandemic

This is the web version of Eye on A.I., Fortune’s weekly newsletter covering artificial intelligence and business. To get it delivered weekly to your in-box, sign up here.
Back in April, when the pandemic was at its peak in many parts of the world, I spoke to Ahmer Inam, the chief A.I. officer at Pactera Edge, a technology consulting firm in Redmond, Washington. At the time, Inam was focused on how the pandemic was wreaking havoc with A.I. models trained from historical data.
Last week, I caught up with Inam again. Lately, he’s been thinking a lot about why A.I. projects so often fail, especially in large organizations. To Inam, the answer to this problem—and to many others surrounding the technology—is something called “Mindful A.I.”
“Being mindful is about being intentional,” Inam says. “Mindful A.I. is about being aware and purposeful about the intention of, and emotions we hope to evoke through, an artificially intelligent experience.”
OK, I admit that when he said that, I thought, it sounds kinda out there, like maybe Inam should lay off the edibles for a week or two—and Mindful A.I. has the ring of a gimmicky catchphrase. But the more Inam explained what he meant, the more I began to think he was on to something. (And just to be clear, Inam did not coin the term Mindful A.I.. Credit should primarily go to Orvetta Sampson, the principal creative director at Microsoft, and De Kai, a professor at the University of California at Berkeley.)
Inam is arguing for a first-principles approach to A.I. He says that too often organizations go wrong because they adopt A.I. for all the wrong reasons: because the C-suite wrongly believes it’s some sort of technological silver bullet that will fix a fundamental problem in the business, or because the company is desperate to cut costs, or because they’ve heard competitors are using A.I. and they are afraid of being left behind. None of these are, in and of themselves, good reasons to adopt the technology, Inam says.
Instead, according to Inam, three fundamental pillars should undergird any use of A.I.
First, it should “human-centric.” That means thinking hard about what human challenge the technology is meant to be solving and also thinking very hard about what the impact of the technology will be, both on those who will use it—for instance, the company’s employees—and those who will be affected by the output of any software, such as customers.
Second, A.I. must be trustworthy. This pillar encompasses ideas like explainability and interpretability—but it goes further, looking at whether all stakeholders in a business are going to believe that the system is arriving at good outputs.
Third, A.I. must be ethical. This means scrutinizing where the data used to train an A.I. system comes from and what biases exist in that data. But it also means thinking hard about how that technology will be used: even a perfect facial recognition algorithm, for instance, might not be ethical if it is going to be used to reinforce a biased policing strategy. “It means being mindful and aware of our own human histories and biases that are intended or unintended,” Inam says.
A mindful approach to A.I. tends to lead businesses away from adopting off-the-shelf solutions and pre-trained A.I. models that many technology providers offer. With pre-trained A.I. models, it’s simply too difficult to get enough insight into critical elements of such systems—exactly what data was used, where it came from, and what biases or ethical issues it might present. Just as important, it can be difficult for a business to find out exactly where and how that A.I. model might fail.
My favorite example of this is IBM’s “Diversity in Faces” dataset. The intention was a good one: Too many public datasets of faces being used to build facial-recognition systems didn’t have enough images of Black or Latino individuals. And too often the annotations found in these systems can reinforce racial and gender stereotypes. In an effort to solve this problem, in January 2019, IBM released an open-source dataset of 1 million human faces that were supposed to be far more diverse and with much less problematic labels.
All sounds good, right? What company wouldn’t want to use this more diverse dataset to train its facial-recognition system? Well, there was just one problem: IBM had created the dataset by scraping images from people’s Flickr accounts without their permission. So users who blindly adopted the new dataset were unwittingly trading one A.I. ethics problem for another.
Another consequence of Inam’s three pillars is that A.I. projects can’t be rushed. Running a human-centric design process and thinking through all the potential issues around trustworthiness and ethics takes time. But the good news, Inam says, is that the resulting system is far more likely to actually meet its goals than one that is sped into production.
To meet all three pillars, Inam says it is essential to involve people with diverse perspectives, both in terms of race, gender and personal backgrounds, but also in terms of roles within the organization. “It has to be interdisciplinary group of people,” he says.
Too often, the teams building A.I. software sorely lack such diversity. Instead, engineering departments are simply told by management to build an A.I. tool that fulfills some business purpose, with little input during the conceptualization and testing phases from other parts of the company. Without diverse teams, it can be hard to figure out what questions to ask—whether on algorithmic bias or legal and regulatory issues—let alone whether you’ve got good answers.
As Inam was speaking, I was reminded of that old adage, “War is too important to be the left to the generals.” Well, it turns out, A.I. is too important to be left to the engineers.
And with that, here’s the rest of this week’s A.I. news.
Jeremy Kahn
@jeremyakahn
jeremy.kahn@fortune.com
***
JOIN US: How the Pandemic is Revealing the Power of A.I.
As companies and governments race to adjust to a world transformed by COVID-19, human-A.I. collaboration is playing an increasingly critical role. Fortune deputy editor Brian O’Keefe will moderate an in-depth discussion exploring the critical role of collaboration during crisis, how ethical human-A.I. collaborations promise a better future, and how rapidly evolving A.I. technologies can accelerate business recovery and safe, responsible community re-openings. Panelists include:
Tatsiana Maskalevich , Director of Data Science, Stitch Fix
, Director of Data Science, Stitch Fix Laura Major , Chief Technology Officer, Motional
, Chief Technology Officer, Motional Dr. Joelle Pineau , Co-managing Director, Facebook A.I. Research; Associate Professor, Computer Science, McGill University
, Co-managing Director, Facebook A.I. Research; Associate Professor, Computer Science, McGill University Lan Guan, Managing Director, Accenture Global Industry Applied Intelligence Network
September 23, 2020 at 11:00 AM – 12:00 PM EDT. REGISTER HERE.
A.I. IN THE NEWS
Portland passes one of the strictest facial-recognition laws yet. The Oregon city has passed perhaps the most stringent restrictions yet for any U.S. city on the use of the controversial technology. Cameras that use facial recognition will not be allowed in any public or private spaces, including retail outlets, banks and train stations. The new regulations came in the form of two separate city ordinances passed in early September, according to a story in Wired.
A tool powered by OpenAI's GPT-3 can write emails. Startup OthersideAI, based in Melville, Long Island, has launched a product powered by OpenAI's GPT-3 software that promises to compose complete emails based on just a few bullet points, the company said last week. It is one of several business applications being powered by the huge language model, which OpenAI unveiled this past summer. The software can compose many paragraphs of coherent text based on the content and style of a small prompt written by a human.
A former chess champion is using DeepMind's AlphaZero to make the game more exciting. Vladimir Kramnik, a former world chess champion, has used AlphaZero, the powerful deep-learning algorithm created by London-based DeepMind, to explore variations on the traditional game of chess, including versions in which pawns can move more squares and in which castling is not allowed. AlphaZero can learn to play a number of turn-based strategy board games—including go, chess, checkers and shogi—at superhuman levels. Kramnik told Wired that playing chess variations against AlphaZero made playing chess exciting for him once again. “After three moves you simply don’t know what to do,” he says. “It's a nice feeling, like you're a child.”
An autonomous ship will sail the Atlantic to commemorate the Mayflower's voyage. The Mayflower Autonomous Ship, a solar-powered, 50-foot-long unmanned trimaran that has been built by marine research charity Promare with help from IBM and the University of Plymouth, was officially launched last week in Plymouth, England, and is now undergoing sea trials. If these tests are successful, the ship, which is designed to be completely autonomous, will sail across the Atlantic next year. The ship was to have made the crossing this year to mark the 400th anniversary of the original Mayflower's journey, but the pandemic delayed the project.
Indy 500 plans A.I. car race next year. Self-driving race cars created by 31 university research teams will line up on the grid of the Indianapolis Motor Speedway next year to compete for more than $1 million in prize money in the first Indy Autonomous Challenge, my Fortune colleague Jonathan Vanian reports. To win, the Dallara IL-15 race cars, modified with sensors and software to allow them to be fully autonomous, will have to complete 20 laps—which equates to a little less than 50 miles in distance—and cross the finish line first in 25 minutes or less.
EYE ON A.I. TALENT
Uber has hired Sukumar Rathnam to be the company's new chief technology officer, The Information reports. Rathnam has been a vice president at Amazon for the past nine years.
Huawei has appointed Li Shi head of its Cloud and AI Business Group in the Middle East, the company announced. Shi, a 15-year veteran of the Chinese tech company, was mostly recently CEO of Huawei's United Arab Emirates business.
EYE ON A.I. RESEARCH
Hardware matters. As Nvidia's deal to buy semiconductor design firm Arm shows, when it comes to A.I., hardware matters.
But too often, A.I. researchers don't pay enough attention to the role hardware plays in fundamental advances in the field, writes Sara Hooker, a researcher at Google Brain. In a paper published on the research repository arxiv.org, Hooker looks back on the history of computing and argues that ideas often win out not because they are necessarily better than other research avenues being pursued, but because they are better suited to the current prevailing hardware paradigm.
She coins the term "hardware lottery" to encapsulate to this idea. Her key datapoint is that all the algorithmic ideas that make deep neural networks work had already been invented by the late 1980s, but that the prevailing computer infrastructure of the time—the central processing unit (CPU)—was poorly suited to running them. Instead, CPUs were very good at following a linear set of instructions, which is one reason symbolic A.I. approaches and expert systems seemed to outperform deep learning approaches at the time. It would take the advent of graphics processing units (GPUs), which could perform many operations in parallel, and some clever tweaking of neural networks to figure out how best to run them on GPUs, to produce a sudden leap in neural networks' performance.
But at least both CPUs and GPUs were more or less general computing architectures. The problem now, Hooker writes, is that the hardware landscape is rapidly fragmenting, with many different kinds of chips being designed for specific purposes. Many of these specialized chips are designed to run existing deep-learning algorithms well, but they may not be suitable for other intelligent systems, such as spiking neural networks or other forms of brain-inspired software. Hooker says that maybe, in the future, A.I. systems will themselves be able to recommend which hardware configuration is best to use.
FORTUNE ON A.I.
What’s your biological age? A new app promises to reveal it—and help you slow the aging process—by Jeremy Kahn
How to make A.I. smarter—by Jonathan Vanian
One country is now paying citizens to exercise with their Apple Watch—by Naomi Xu Elegant
How data helped keep Red Bull’s F1 team on track during the pandemic—Jeremy Kahn
Democracy depends on Washington improving its tech—by Adam Lashinsky
BRAIN FOOD
One of the strange things about A.I. software is that while it often excels at tasks that humans find difficult, it frequently stumbles at those which people find fairly simple.
Take reading a spreadsheet. As my colleague Jonathan Vanian reports in the October issue of Fortune, neural networks, the brain-inspired software technique that undergirds today's most cutting-edge A.I., is really bad at processing tabular data. And for businesses hoping to capitalize on A.I.'s potential, that's a huge problem. As Jonathan writes, most of the data that businesses really care about—from sales forecasts to customer records and requisition orders—is structured data, usually held in tables and spreadsheets.
Peter Bailis, a Stanford professor and CEO of a Silicon Valley startup called Sisu Data that builds analytical tools for businesses, told Jonathan:
"The deep networks that are so cool can really do amazing things for our cars and for understanding sentiment from tweets online, but they don’t help us with understanding things like risk or customer satisfaction if our data is stored in tables.”
Jonathan notes that advances in natural language processing, in particular programs that learn word embeddings, are one method people are using to overcome these limitations. He's got some interesting examples from companies like Genentech, Goldman Sachs and Instacart. Check out his story here.


fortune--2020-09-22--Instagram’s would-be TikTok killer, Reels, struggles to gain traction

Six weeks ago, in an effort to play catch-up to the hugely popular TikTok, Instagram introduced Reels, a service for posting video clips of people dancing on roller skates and making homemade Hot Pockets. But so far, the verdict from users and advertisers is that Reels isn’t much of a threat.
TikTok users complain that Reels’ tools for editing videos are limited and that they don’t let them add as many special effects to their videos, like slow motion. And some of the young Generation Z users said Instagram, the go-to social media service for adolescents just a few years ago, is now mostly where older people hang out.
“My overall impression of…Reels has been somewhat negative,” Michael Levine, an analyst at Pivotal Research, said in a recent note to investors. “I think it’s a copycat that doesn’t have any traction just yet.”
For Instagram and its parent company, Facebook, the stakes are considerable. Reels is their most recent effort to keep up with the latest social media trends and, by extension, retain their ad dominance.
The competitive landscape, however, is uncertain. President Trump threatened to shutter TikTok, owned by a Chinese company, over national security concerns. Since then, after TikTok proposed a deal involving Oracle and Walmart, Trump both tentatively approved the combination and cast doubts on it.
What is clear is that Reels has yet to gain many users, according to mobile app data analytics firm Sensor Tower. If it had, it would likely have been reflected in an increase in the number of downloads of Instagram’s app. But the number of installs by U.S. users of Instagram from Aug. 5 to Sept. 15 totaled 4.7 million, the same number as from June 24 to Aug. 4, according to Sensor Tower.
Influencers, who are paid by brands to promote their products to their thousands of followers, generally agree that Reels lacks some of the bells and whistles of TikTok. Therefore, they don’t spend much time on it, if any.
“Reels is pretty simple and basic,” says a 24-year-old social media influencer from Los Angeles who goes by the name of CJ Operamericano.
An Instagram spokesperson says Reels is working to “improve the experience” for users, though no major updates have rolled out yet. It’s also testing a Reels tab on the home screen of Instagram’s app in some countries, a spokesperson said, which would increase the visibility of Reels to Instagram’s 1 billion users.
Instagram declined to disclose the number of users Reels has. Instead, as proof of the appeal of Reels, it pointed to several high-profile influencers who are using the service to make videos focused on food, beauty, and dance.
But to attract some top influencers to Reels, Instagram is covering the production costs of their videos. Instagram explains that it has a “long history” of trying to bring emerging creators to its service.
Still, several influencers who are now on Reels use it merely to cross-post their videos from TikTok, which doesn’t require much extra effort. They also say it helps them show off their social media portfolio to advertisers, who want to reach TikTokers but don’t use the service.
“A lot of clients find me through [Instagram],” says Operamericano, referring to brands who do deals with her. But “TikTok is my main platform.”
Reels, whether intentionally or by coincidence, debuted at around the same time that President Trump threw TikTok’s future into uncertainty. Since then, TikTok’s owner, ByteDance, proposed spinning out the service and making enterprise software company Oracle TikTok’s “trusted technology provider.” The deal falls short of the sale that Trump had initially demanded, and just two days after offering his approval Trump suggested he may reverse course and ultimately block the deal.
Kara Billington, a 16-year-old TikTok user from Richardson, Texas, says users of Instagram, and therefore Reels, seem to skew a little older, meaning fewer dance challenges. She still uses Instagram, but not Reels. To connect with friends, she typically uses Snapchat; for watching videos, she uses TikTok.
Asked why she doesn’t use Reels, Billington says, “It’s literally another TikTok, and there’s already an app for that so there’s no point.”
Advertisers are also skeptical about Reels. A recent survey by Pivotal Research of 54 large ad agencies and advertisers found that 61% of respondents say Reels isn’t an effective competitor to TikTok. Additionally, half of the respondents were unsure whether Instagram’s ad revenue will increase because of the addition of Reels.
Despite the mostly lukewarm reception, analysts said it’s too soon to discount Reels. They cite Instagram’s legions of users who could potentially be enticed to try Reels.
“Having the power of Instagram to push Reels to users can make the difference between ‘life and death’ for a new social media format,” says Colin Sebastian, an analyst at investment bank Baird Equity Research.
There are reasons for optimism. Interest in Reels spiked when it debuted, based on the number of times users searched for it on Google, according to Sebastian. After slowing for several weeks, it’s now making modest gains again, with searches for Reels increasing 15% during the week of Sept. 9 compared to the previous week. However, searches are still four times lower now than during the week Reels debuted.
Reels has a big opportunity to become a dominant competitor in short-form video. But until it manages to step up its features, hip youngsters will continue dance their way to big money on TikTok.


fortune--2020-09-22--A woolly story about how Allbirds makes its shoes

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
Tempting though it is to comment yet again on the glorious dealmaker-in-chief’s splendid, classy, and genius (in a stable sort of way) handling of the forced maybe/sorta/kinda sale of TikTok, I bring you instead today a story about sheep.
Merino sheep, to be precise, and the wool that is shorn from them in New Zealand that ends up in the comfy sneaker-slippers made by Allbirds. Fortune’s Sheila Marikar went to the end of Earth, back when Americans could do such things, to report on the keen interest the San Francisco company takes in the lives of these sheep.
Without giving away too much of the story, the way the farmers tend to this particular patch of land in New Zealand makes for a net positive in terms of climate-harming emissions. This is important to Allbirds because, as Marikar writes, “Kindness to the planet is one of Allbirds’ biggest selling points.” The company over-indexes on natural materials to make its shoes and then takes care to ensure its customers know about its environmental goodness.
Marikar’s is a good yarn about a company that is doing well by trying to do good. Allbirds is aiming now for the performance running shoe market, where natural fibers aren’t the norm.
Incidentally, an earlier feature in Fortune by the same author featured an unlaunched video service called Quibi. The Wall Street Journal reported Monday that Quibi is considering selling itself. Maybe Quibi’s founder, Hollywood mogul Jeffrey Katzenberg, could see if Donald Trump has some time to make a few calls.
Adam Lashinsky
@adamlashinsky
adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
More power to you. Adam's going to start making jokes about KBerg and the Whit? That's okay because it's Tesla battery day. What will ringmaster Elon Musk have up his sleeve? Lions and tigers and million mile batteries? All will be revealed, online naturally, starting at 4:30 p.m. ET. Ahead of time, Musk is actually downplaying expectations. "What we announce will not reach serious high-volume production until 2022," he tweeted on Monday. Tesla's stock, up 437% previously this year, is down 5% in pre-market trading.
A coin in the hand. A top federal banking regulator, the Office of the Comptroller of the Currency, ruled on Monday that financial institutions can invest their reserves in so-called stablecoins, digital currencies backed on a one-to-one basis by real-world money. That could include the cryptocurrency from Facebook's Libra project. Meanwhile in another part of the city, the Justice Department is inching ever closer to filing an antitrust lawsuit against Google, possibly as soon as next week, the Washington Post reports.
A ding in the universe. One of corporate America's greatest skeptics of working from home, Apple, is easing up after seeing how its employees handled the pandemic so far. Apple will not “return to the way we were because we’ve found that there are some things that actually work really well virtually,” CEO Tim Cook said on Monday at The Atlantic Festival. Only 10% to 15% of Apple workers are back in the office now. Asked how long he'd stay running Apple, Cook answered: "We'll see."
Gummy bear Adele. Brit Nathan Francis Wyatt didn't actually do any hacking but he is the only member to be identified and arrested from the hacking group called The Dark Overlord that ran ransomware schemes in 2016. Finally extradited to the U.S., Wyatt was sentenced to five years in prison and must pay $1.5 million in restitution for helping orchestrate the scheme via accounts he set up on Twitter and PayPal.
Restoring balance to the force. After its bonkers IPO, shares of future database giant Snowflake have come back to Earth a bit. From the first day high of $319 last week, Snowflake stock closed at just under $229 on Monday, leaving the company with a market cap of around $60 billion. Shares of leading streaming platform maker Roku went the other way, gaining 18% on Monday thanks to its weekend deal to carry Comcast's NBCUniversal's Peacock service. Roku shares are now up 41% this year.
FOOD FOR THOUGHT
One reason for Snowflake's bonkers IPO is that companies are struggling with more data than ever before and it's not easy to glean insights. Fortune's own Jonathan Vanian has a deep dive into the world of neural networks and machine learning.
The problem is that researchers are just now beginning to teach neural networks how to consume structured data like the spreadsheets Genentech is building. “The majority of our data is structured data, whether it’s from clinical trials or electronic health records,” says Ryan Copping, global head of analytics for personalized health care data science at Genentech. If computer networks can analyze and make their own realizations about similarities among patient profiles, he says, “then you could start looking at outcomes and thinking about which patients we can target with which therapies. That’s the unmet need.”
ON THE MOVE
Jim Meyer, SiriusXM’s CEO since 2012, is retiring at year end. President of sales, marketing, and operations Jennifer Witz takes over. And AMC Networks CFO Sean Sullivan comes on board as the new CFO, too. Prior CFO David Frear departed "effective immediately"...DISH hired Stephen Stokols, founder and CEO of FreedomPop, to run its newly acquired Boost Mobile unit...Former Spotify VP of growth and marketing Mayur Gupta joined Gannett as chief marketing and strategy officer...Slack hired Nadia Rawlinson, the former chief human resources officer for Live Nation Entertainment, as its new chief people officer...Chip startup SiFive named former Qualcomm SVP Patrick Little as its new CEO. Prior CEO Naveed Sherwani remains as chairman of the board...Amazon VP of product selection and catalog systems Sukumar Rathnam is the new chief technology officer at Uber. Former CTO Thuan Pham left in May.
IN CASE YOU MISSED IT
Why GM may escape from Nikola’s wreckage unharmed By David Z. Morris
Want to know how to WFH better? There’s a class for that By Michal Lev-Ram
What Microsoft gets by buying game publisher Bethesda Softworks in a $7.5 billion deal By Jonathan Vanian
Cord cutting is breaking records during the pandemic By Aaron Pressman
Check out Airbus’s concepts for the world’s first ‘zero-emission commercial aircraft’ By David Meyer
Why online voting will have to wait By Jeff John Roberts
Already down 13%, Big Tech stocks have plenty more room to fall, analysts say By Bernhard Warner
What the best companies for blue- and white-collar work have in common By Brooke Henderson
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
You must watch the new Netflix documentary My Octopus Teacher. It will blow your mind. And make you cry. That is all.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com


fortune--2020-09-22--Want to know how to WFH better? There’s a class for that

Love it or hate it, WFH—short for work from home—is here to stay. So you may as well get better at doing it, right?
That’s the thinking behind a free, just-launched online course from web-based learning service Coursera titled How to Manage a Remote Team. The curriculum was developed by business software maker GitLab to help the countless companies that have sent their workers home during the pandemic, many of which plan to keep some level of remote work in place even after the virus subsides.
GitLab knows a thing or two about remote work. The company employs 1,300 employees in more than 65 countries and does not have a single office. Its cofounder and CEO, Sid Sijbrandij, lives in San Francisco and hails from the Netherlands, and the company was originally founded in Ukraine, the native home of its other cofounder, Dmitriy Zaporozhets.
Having such a distributed workforce impacts everything at Gitlab, from its culture to its product. That’s why the company has a “head of remote,” Darren Murph, who dedicates his time to thinking about how to make remote work, well, work. Because Gitlab makes money by selling software that helps programmers do their jobs without a physical office, it also benefits from spreading its own, WFH brand of gospel. The company’s bible for remote work, a 7,000-page digital tome called the GitLab Team Handbook, is freely available on its website. Now its Coursera course, which is based on this guide, will also be freely available. “This is core to who we are,” Murph says of both the handbook and the new online class. “If we really are helping companies do remote better, it helps our product.”
Murph says the course was created for managers and heads of human resources, but that anyone dealing with the transition to remote work could benefit from the curriculum. Currently, this is a rather large target audience, given the millions of office workers stuck at home because of the pandemic. But Murph expects many companies to stick with some level of WFH past the crisis. What’s more, the fact that so many companies have been forced into remote work doesn’t mean that it has been implemented with much thought. It’s one thing to buy your employees an ergonomic office chair or a second monitor. It’s quite another to restructure how teams collaborate and communicate. This is the hole GitLab and Coursera, the learning platform, hope they can fill.
“What started as a short-term response to this crisis is going to become part of digital transformation more broadly,” says Shravan Goli, chief product officer at Coursera. “We expect this hybrid model to continue post-pandemic for a lot of companies.”
If you’re not sure what “hybrid” means, the new course links to a glossary of WFH terms for you to peruse (my personal favorite: a “digital nomad” is a worker who travels constantly, sometimes without a home base). In all, the remote work curriculum consists of four modules, starting with “remote work best practices” and ending with “culture and values for distributed teams.” Coursera describes the curriculum as a “self-guided experience,” though there are opportunities to network and collaborate with other students via online forums. Completing the entire course takes about 11 hours—yes, quizzes are included.
The series starts with some basic questions: What is remote work? And what are its benefits? According to Gitlab, there are quite a few, starting with the ability to hire talent all over the world, without needing to first invest in office space.
To that end, the GitLab course also comes with many tips and takeaways on how to hire a global workforce that’s not tethered to a particular geographic location. In a video titled “Hiring for a Remote Role,” Jessica Reeder, a GitLab exec who focuses on the company’s remote content, suggests avoiding micromanagers or those who need to be micromanaged. “Look for people who have experience working independently,” Reeder says in one of the course’s brief videos. Another tip? Work with recruiters who have experience placing remote workers.
Many other tactical takeaways are sprinkled throughout the curriculum, along with more high-level, philosophical approaches to making remote work effective. (Hint: Transparency is tantamount.) For example, in order to truly embrace asynchronous work—crucial when teams are not in the same office or time zone—GitLab makes many meetings optional but records and documents everything. This enables employees to view content and conversations at times that are most convenient to them and to stay in the loop. Interestingly, GitLab also encourages multitasking during meetings, a no-no at many companies. “We say it’s okay to look away,” Reeder says in another of the course’s video tutorials. “We empower each person to manage their own attention.”
Culture in general plays a huge role in making WFH work, according to GitLab’s teachings, which take the form of short articles, links, and quizzes, in addition to quite a few videos. To that end, diversity and inclusion are also a key part of the new course. “You need opportunities to see each other, to really get to know each other,” says Candace Byrdsong Williams, the company’s head of diversity, inclusion, and belonging, and another one of the “instructors” in the Coursera course. “You have to take a look at your communication and how you communicate around the globe.” An example: GitLab runs virtual “ask me anything” conversations with underrepresented employee groups. It also has a bot, otherwise known as an automated program, that lives within its Slack messaging software and suggests inclusive word choices—instead of “hey, guys” how about “y’all”?
But the real key to making work from home work is that management needs to buy in to the movement. For example, for companies that pursue the hybrid route—meaning some employees will be in the office and some won’t—you can’t have the entire leadership team in the office, says Murph. The last thing you want is to create a two-tier system in which those in the office are closer to management and those working remotely don’t get as much face time. Indeed, to orchestrate such a transition, especially for larger companies with decades of already established behaviors, it will likely take much more than an 11-hour course.
Speaking of which, Murph says that even simple things like how to select a good, ergonomic chair can’t be assumed. “Some people have no clue what a good workspace looks like,” says the head of remote. GitLab’s course doesn’t have all the answers—no one does. But it’s a start.


fortune--2020-09-22--The women at the center of the fight over the Supreme Court

This is the web version of The Broadsheet, a daily newsletter for and about the world’s most powerful women. Sign up to get it delivered free to your inbox.
Good morning, Broadsheet readers! RBG will be the first woman to lie in state at the Capitol, Quibi considers a sale, and women are playing a central role in the fight over the Supreme Court. Have a thoughtful Tuesday.
– Will justice be served? The death of Justice Ruth Bader Ginsburg and the future of her seat on the Supreme Court continue to dominate the headlines this morning, a state of affairs that’s likely to continue for some time.
Given that the 2020 Presidential election has come down to a contest between two white men, it’s noteworthy that women are playing such essential roles in the battle over the Court—as nominees, as senators, as those most subject to the biggest issues at stake.
President Trump has said he plans to nominate a female judge to fill Justice Ginsburg’s seat. The frontrunner is Amy Coney Barrett. A devout Catholic and an originalist in the mold of Antonin Scalia, whom she once clerked for, Barrett is generally seen as hostile to both abortion rights and the Affordable Care Act. While those bona fides make her a favorite of conservatives, reports the New York Times, some in Trump’s circle worry that nominating her could alienate the female, suburban voters he needs to win a second term. Another possible option? Barbara Lagoa, a Cuban-American federal judge from Miami. She shares Barrett’s conservative Catholic perspective, but could offer the president some help winning over both Florida and Latinx voters.
No matter the nominee, the GOP will need 50 votes to confirm her. This Politico piece looks at the “senators who will decide the Supreme Court fight,” a group that includes—surprise, surprise!—Susan Collins of Maine and Lisa Murkowski of Alaska. Both have said they believe the winner of the November election should choose the next justice. Will they maintain that stance when the pressure is on?
And of course, one big reason the composition of the court matters so much to so many is the future of Roe v. Wade, the landmark decision protecting women’s access to safe and legal abortion. While choice is certainly not just a women’s issue, it is something that galvanizes female voters—one recent poll found that 33% of women believed a candidate’s view on abortion is a “critical issue,” compared to 26% of men.
We already knew that women voters would be a decisive force in the 2020 presidential election. Now we’ll see how their choice at the ballot box is shaped by what happens to a seat once occupied by the woman who said, “Women belong in all places where decisions are being made.”
Kristen Bellstrom
kristen.bellstrom@fortune.com
@kayelbee
Today’s Broadsheet was curated by Emma Hinchliffe.
ALSO IN THE HEADLINES
- Still a trailblazer. Supreme Court Justice Ruth Bader Ginsburg will lie in state at the U.S. Capitol on Friday—and she will be the first woman to do so. Rosa Parks was the first woman to lie in honor, which is a designation for Americans who did not hold office. NBC News
- Quick bites, quick sale? Quibi, the shortform video app led by CEO Meg Whitman, has seen a disappointing debut during the pandemic. Now the startup, which raised $1.75 billion in funding, is reportedly exploring a sale. Quibi declined to comment. Wall Street Journal
- Keeping it 💯. The Root is out with its annual list of the year's 100 most influential African-Americans. At the top? Nikole Hannah-Jones, the journalist behind the 1619 Project, and Maya Moore, the WNBA player who fought for the release from prison of Jonathan Irons, incarcerated for a crime he didn't commit. The Root
- Listen up. The first episode of Kara Swisher's new NYT podcast "Sway" features an interview with House Speaker Nancy Pelosi. "If the election were held today," Pelosi tells Swisher, "we would win it all." New York Times
MOVERS AND SHAKERS: Vogue promoted digital fashion news director Chioma Nnadi to editor of Vogue.com. Harley-Davidson hired Tyson Foods' Gina Goetter as CFO. Karin Ajmani, former president and chief strategy officer at Progyny, joins Caption Health's board of directors. Prudential Financial hired Truist Financial's Susan Somersille Johnson as CMO. Fastly hired PayPal SVP of people Doniel Sutton as chief people officer.
IN CASE YOU MISSED IT
- Insuring Aviva's future. Amanda Blanc took over as CEO of the U.K.'s second-largest insurer, Aviva, this summer. Blanc is now moving quickly to sell off pieces of the business, including units in France, Italy, and Singapore. The company says it is in "the very early stages of developing its strategy for its continental European and Asian businesses." Bloomberg
- In the market. Chief marketing officers across industries joined Fortune Most Powerful Women for a conversation among their peers about how they have pivoted during the coronavirus pandemic. "Let’s look at everything we have planned and ask ourselves: Is this going to be relevant for these customers right now?" Salesforce CMO Stephanie Buscemi recalls asking. "A lot of it wasn't." Fortune
- On-air apology. Ellen DeGeneres returned to TV yesterday, beginning the new season of her daytime talk show after fallout from allegations of misconduct and mistreatment of employees by the show's executive producers and questions about DeGeneres's own behavior behind the scenes. "The truth is, I am that person that you see on TV,” she said. “I am also a lot of other things. Sometimes I get sad, I get mad, I get anxious, I get frustrated, I get impatient. And I am working on all of that. I am a work in progress." Fortune
ON MY RADAR
May every woman find her Marty Ginsburg Vogue
Why I’m giving up my board seat to make room for someone from an underrepresented community Fortune
As school begins, mothers working retail jobs feel extra burden New York Times
Rep. Ilhan Omar is not here to put you at ease New York Times
PARTING WORDS
"We're reacting to what people want now, which is very different from what they wanted six months ago."
-Amy Robach, host of Good Morning America's hard news program GMA3: What You Need to Know


fortune--2020-09-23--Scientists say a gap in COVID vaccine research may keep us from returning to ‘normal’

When the first COVID-19 vaccines reach market, the world will not necessarily return to “normal,” say top infectious disease experts.
In a new article for the Lancet medical journal, two University of Hong Kong researchers caution that even at the conclusion of Phase III clinical trials, important questions will remain about how effective vaccines are in stopping viral transmission of COVID-19.
Gabriel Leung, an infectious disease epidemiologist, and Malik Peiris, a public health virologist, argue that even though multiple vaccine makers have reached Phase III clinical trials at a record pace, scientists are currently studying only part of the equation in gauging how a vaccine may help bring an end to the global pandemic.
Subscribe to The Capsule , a weekly brief monitoring advances in health care and biopharma, delivered free to your inbox.
Currently, they say, vaccines are being evaluated only for how they prevent those receiving the vaccine from developing COVID-19 and not for how a vaccine might be able to reduce viral transmission.
“The impact of these COVID-19 vaccines on infection and thus transmission is not being assessed,” they write. “We cannot assume COVID-19 vaccines, even if shown to be effective in reducing severity of disease, will reduce virus transmission to a comparable degree.”
In other words, vaccine makers may determine whether a vaccine can protect those injected from getting sick, but not necessarily whether the vaccine stops those inoculated from spreading the disease to others. So even if a vaccine reaches market—which could happen as early as the end of this year—there may be little evidence as to how effective the vaccine is at stopping the spread of COVID-19.
Given this hole in the research, policymakers and the general public should calibrate their expectations in terms of how a COVID-19 vaccine rollout will return the world to a pre-pandemic “normal,” Leung and Peiris say.
U.S. public health experts also have recently tried to dampen public expectations about the effectiveness of a potential vaccine.
“I might even go so far as to say that this face mask is more guaranteed to protect me against COVID-19 than when I take a COVID-19 vaccine, because [the vaccine] may be 70% [effective],” Robert Redfield, director of the Centers for Disease Control and Prevention, said in a congressional hearing on Sept. 17.
U.S. President Donald Trump called Redfield’s statement “incorrect,” but other infectious disease experts backed up Redfield’s claim. The Food and Drug Administration requires only that a COVID-19 vaccine is proved to be 50% effective for those injected to be approved.
Despite potential limitations, Leung and Peiris argue that the general public should not be hesitant to get vaccines when they come to market.
“COVID-19 vaccines are needed” to protect vulnerable populations, Leung and Peiris write. But vaccines are “only one tool in the overall public health response to COVID-19 and unlikely to be the ultimate solution that many expect.”


fortune--2020-09-23--There’s an ulterior motive to China’s carbon neutral pledge: cornering the green tech market

At the United Nations General Assembly on Tuesday, Chinese President Xi Jinping declared China would achieve “carbon neutrality before 2060,” after reaching peak carbon emissions “before 2030.”
The targets have yet to be padded out with details, but Xi’s vague goal-setting was heralded as a bold step in advancing international action on climate change—a move forward while the U.S. continues to turn inward.
Even without providing details of the plan, Xi’s announcement asserted China as a global leader in the fight against climate change, signifying that the country is willing to take drastic action to keep global warming to a minimum. But China’s bold moves are likely driven by an ulterior motive—that, as the world’s leading producer of green energy tech, China stands to emerge as a global powerhouse in the post-oil world.
Always have Paris
This year, the U.S. officially will withdraw from the landmark Paris Agreement, inked in 2015 under the leadership of President Xi and President Barack Obama. In his address to the U.N., delivered minutes before Xi’s, President Donald Trump continued to rail against the accord.
Subscribe to The Loop for a weekly brief on the revolutions in energy, technology, and sustainability, delivered free to your inbox.
“China’s carbon emissions are nearly twice what the U.S. has, and it’s rising fast. By contrast, after I withdrew from the one-sided Paris climate accord, last year America reduced its carbon emissions by more than any country in the agreement,” Trump said. His statement is true only because U.S. power stations switched from coal to natural gas—a cheaper fossil fuel. Some energy firms and governments praise natural gas as a cleaner hydrocarbon fuel that will help the world transition to a zero-carbon economy, but it is still a fossil fuel.
With the U.S. removing itself from the global conversation about a greener future, China is set to not only assume the political lead in the worldwide shift to carbon-neutral power, but the market lead too.
“China [is] the biggest energy financier and biggest market, so its decisions play a major role in shaping how the rest of the world progresses with its transition away from the fossil fuels that cause climate change,” said Richard Black, director of the Energy and Climate Intelligence Unit (ECIU).
A developing power
China is the world’s largest producer of solar panels and wind turbines, dominating roughly 70% of the global market for the former. And, while currently third, China is set to surpass the U.S. as the world’s largest producer of power from nuclear energy by 2030, too. With a tighter target for reducing carbon emissions, investment in alternative energy is likely to swell.
Despite its advances in green tech, China, for now, continues to focus overseas investment on fossil fuel. In 2017 China announced a new “green” core tenet to its Belt and Road Initiative (BRI)—Xi’s landmark policy for overseas infrastructure investment. The green track pledged more funds for green energy projects, but BRI financing continues to primarily fund fossil fuels. In 2018, over 40% of BRI funding went to coal alone.
Still, China’s investment in green energy projects is still increasing. In Myanmar, for example, Chinese firms were awarded contracts at 29 out of 30 sites recently put to tender for development as solar power farms. China’s hydroelectric giant, China Three Gorges (CTG), already operates in 47 countries and controls 14 of Brazil’s total 48 hydro-plants.
Safety switch
Undoubtedly, security concerns will present an issue for China’s ascent as a global green-energy powerhouse. In 2016, the U.K. government awarded construction contracts for a nuclear power plant at Hinkley Point, in southwest England, to a state-owned Chinese firm. Security advisers warned it could give China the ability to “shut down Britain’s energy productions at will.” The nuclear plant is still under development; it’s approved but over budget.
China’s other attempts to export its most advanced technology have been halted by national security concerns, too. The U.S. and Australia, for example, have banned Shenzhen-based Huawei Technologies—the undisputed leader in 5G technology—from participating in the rollout of national 5G networks, citing national security concerns. The telecom-equipment maker continues to face scrutiny in the EU, Canada, and other states.
As it happens, Huawei is also a significant player in China’s solar industry; it is the world’s largest manufacturer of inverters, which convert the direct current generated by solar panels into alternating current so that it can be introduced to the grid.
Last year U.S. senators flagged Huawei inverters as a national security concern, too, and requested the Department of Energy ban them from the grid. But the U.S. ban on Huawei as a supplier of telecoms tech revealed one thing: that America has no domestic alternative to champion.


fortune--2020-09-23--To find bargain sports teams, American investors are crossing the Atlantic

Wealthy Americans are placing their bets on European soccer.
Kyle Krause, whose family fortune was built on the Kum & Go convenience store chain in the midwestern U.S., agreed Friday to acquire control of Italy’s Parma. The move came just weeks after billionaire Dan Friedkin, owner of a network of Toyota dealerships, bought rival team Roma in a 591 million-euro ($693 million) deal.
The last 18 months have also seen American takeovers of Italy’s ACF Fiorentina and France’s Toulouse FC. Driving this flurry of deals is a belief that European soccer offers better value than U.S. sports, according to Pacific Media Group co-founder Paul Conway, whose firm owns teams on the continent.
“Investing in American sports is very expensive and at high valuations,” Conway said, noting that professional baseball and basketball teams in the U.S. fetch at least $1 billion.
Another U.S. investor attracted by the European game is Joseph DaGrosa, who’s in talks to purchase English Premier League team Southampton, according to a person with knowledge of the matter. The team’s owner, Chinese businessman Gao Jisheng, is seeking about 200 million pounds ($256 million), said this person, asking not to be identified discussing confidential information.
Gao’s investment vehicle, Lander Holdings Ltd., didn’t respond to an email and phone calls seeking comment. A representative for DaGrosa said he is looking at various teams across different leagues, declining to comment on any specific targets.
Americans now hold major stakes in about one-fifth of the 60 teams playing across the top soccer leagues in the U.K., Italy and France, according to consultancy KPMG. Their presence is made conspicuous by the retreat of Chinese investors, who in recent years bought teams including Aston Villa, Wolverhampton Wanderers and West Bromwich Albion.
“Chinese investment effectively dried up after its government proposed a more inwardly focused sports investment strategy,” said Michael Broughton, an adviser at Acceleration Equity, a fund investing in sports teams. “The vacuum has been principally filled by U.S. investors who see value in European football.”
Platform Model
DaGrosa wants to emulate the model of Abu Dhabi’s City Football Group Ltd., which owns stakes in 10 teams including Manchester City and achieved a valuation of nearly $5 billion following an investment by U.S. private equity firm Silver Lake Partners last year.
“There’s nothing better” than the English Premier League, DaGrosa said in a phone interview earlier this year. “We want to create a football platform that can go public and attract institutional investors and get a multibillion valuation.”
More deals could be on the way. American media entrepreneur Henry Mauriss was earlier this year weighing a bid for England’s Newcastle United F.C., which is back in play following the collapse of its planned takeover by a Saudi-led consortium.
Meanwhile, U.S. buyout firms including Advent International and Bain Capital are competing to invest in Italy’s top league. Bull Horn Holdings Corp., a new blank-check company listing in New York, plans to seek acquisitions in the sports and media industries and has highlighted the relative value offered by European teams.
The coronavirus pandemic has weighed on sports teams, which are losing revenue from empty stadiums and reduced broadcast payments. That hasn’t deterred the new crop of American investors, and may have even encouraged some deals by offering lower valuations.
“We made this acquisition knowing that the pandemic was ongoing,” Krause, the new owner of Parma, said by email. “We can figure out how we can be as successful as possible in spite of it, and plan for the long-term future when we are beyond it.”
RedBird Capital Partners, started by former Goldman Sachs Group Inc. partner Gerry Cardinale, bought a majority stake in French second-division team Toulouse in July. That’s after games were suspended in March due to Covid-19.
“If you believe in sport and care about it, this will be just a moment in time,” said Alec Scheiner, a partner at the $4 billion U.S. investment firm. “I have no doubt that, in time, sport will return to exactly where it was.”


fortune--2020-09-23--Extraordinary stories of business success defy economic downturn

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
There is something surreal about being in the biggest economic downturn since the 1930s, and yet day after day hearing extraordinary stories of business success. To be sure, there have always been companies that do well in downturns. Netflix, Coca-Cola and Auto Zone all thrived in the last one. But that’s nothing like the extraordinary success stories coming out of the current transformative trough.
Yesterday, I spoke to the CEO of Hint Water, Kara Goldin, whose lightly-fruit-flavored water has soared during the pandemic, with ecommerce sales tripling. “It’s crazy,” she told me. Goldin called to promote her new book, Undaunted: Overcoming Doubts + Doubting—an inspiring story of the hurdles she overcame to build her now-iconic business. She started out, by the way, wanting to work at Fortune. Today, all of us at Fortune want to be her!
I also spoke with Vlad Shmunis, CEO of RingCentral, which provides cloud-based telephone, messaging, and video conferencing services. RingCentral made its big bet on the notion that work would become mobile. But “what COVID did is it changed from ‘work from anywhere’ to ‘work from home,’ and from a ‘nice to have’ to a ‘must have’.” The company has posted year over year growth of 30% for the last two quarters, and seen its market value rise by more than 50%. “We expect to be one of the long-term beneficiaries” of the crisis,” Shmunis says.
New research released today by the McKinsey Global Institute provides some additional insight into the extraordinary nature of this moment. CEO Daily got an early look. Some takeaways:
85% of C-suite executives report a significant acceleration of digitization and automation during the pandemic.
83% said they plan to hire more people for health and safety roles.
70% said they expect to use more temporary workers and contractors onsite at their company in the future.
15% of the executives said at least one-tenth of their employees will continue to work remotely two or more days a week after the pandemic passes—double the number of respondents who said that before the virus.
More news below. And be sure to read why Bill Gates thinks a vaccine won’t be the end of the pandemic.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
China carbon
China is aiming to become carbon-neutral by 2060, President Xi Jinping told the U.N. General Assembly. Xi said his country would likely hit peak emissions this decade. The announcement came as a surprise, and an important one at that; China is the world's biggest carbon-dioxide emitter, being responsible for around 28% of all such emissions. Fortune
Tesla plan
Tesla yesterday announced a plan to vertically integrate much of its battery production, "from mining the ore to the complete battery pack." This will apparently cut costs for the company, with batteries being produced more cheaply than they currently are via partners such as LG and Panasonic. Tesla has already bought land in Nevada to test out a new process for mining lithium. Fortune
Apple India
Apple has opened its first online store in India, offering the staples of shopping and tech support. Until now, smartphone buyers in the country were forced to buy iPhones and the rest through third-party retailers, thanks to a now-relaxed law that meant foreign retailers such as Apple could only offer direct sales if they crossed a 30% made-in-India threshold. Fortune
Brexit fallout
JPMorgan is about to become one of the biggest banks in Germany, courtesy of a plan to shift around $230 billion in assets from London to Frankfurt. The migration of assets will reportedly be completed by the end of the year. Financial firms are desperate to maintain ties to service clients across Europe, and the "passporting rights" that allow them to do so from the U.K. seem likely to disappear when Brexit truly kicks in at the end of the year. Bloomberg
AROUND THE WATER COOLER
Facebook Europe
A Facebook lawyer said in a court filing that it was "not clear" how the firm "could continue to provide the Facebook and Instagram services in the EU" if Ireland's privacy regulator forces it to stop transferring users' data to the U.S. (backstory here). Facebook claimed this suggestion was not a threat to withdraw from Europe, but rather a statement of reality. So much for the idea that the likes of Facebook might choose to respond to the U.S.'s lack of privacy safeguards (the reason for the looming suspension) by creating functionally separate European units. Guardian
Amazon tactics
Amazon has been giving its own smart speakers, video doorbells and other devices a head-start on its platform by limiting the ability of competitors to promote their rival products through sponsored-product ads there. "News flash: retailers promote their own products and often don’t sell products of competitors," an Amazon spokesman told the Wall Street Journal, perhaps unwisely given the fact that Amazon is under intense scrutiny by antitrust officials around the world over allegations that it uses its strong market position to stymie rivals. WSJ
Wage subsidies
The U.K.'s pandemic furlough scheme may be drawing to a close, but Chancellor Rishi Sunak is reportedly preparing to shift to a German-style wage-subsidy scheme as its replacement. It seems likely that something will be needed to continue supporting workers, especially as Prime Minister Boris Johnson just announced at least six months of heightened restrictions on activities, and the governor of the Bank of England is warning about the implications of ending the furlough program. Financial Times
Stakeholder capitalism
A new report from Test of Corporate Purpose (the name says it all) and KKS Advisors shows that Business Roundtable members who signed onto the "stakeholder capitalism" shift last year did not outperform their non-signatory counterparts, nor their European counterparts, in the "corporate purpose" stakes during this year's crises. The report particularly lays into Wells Fargo (for clamping down on efforts to turn the bank into a benefit corporation) and Amazon (for allegedly failing to protect workers while making piles of cash during the pandemic.) BlackRock gets a thumbs-up, though. New York Times
This edition of CEO Daily was edited by David Meyer.


fortune--2020-09-23--Investors send markets higher even as COVID concerns grow

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning, Bull Sheeters. Tuesday’s bounce-back in the U.S. is proving infectious, lifting global markets and U.S. futures today. That’s despite worrying COVID case numbers and the renewed tightening of business restrictions to battle the pandemic. Meanwhile, Nike shares just keep doing it. The sportswear giant scored a mega beat yesterday.
Let’s see where investors are putting their money.
Markets update
Asia
The major Asia indexes are mostly clinging to their gains in afternoon trading, with Shanghai up 0.2% .
are mostly clinging to their gains in afternoon trading, with up . In a surprise announcement, China’s Xi Jinping pledged to go carbon neutral before 2060. If the world’s biggest polluter can go go green it would be a “game changer” for the planet, one former diplomat says.
pledged to go before 2060. If the world’s biggest polluter can go go green it would be a “game changer” for the planet, one former diplomat says. Several indicators show China could be on the road to a V-shaped recovery. That is until the latest batch of online retail sales data showed the Chinese consumer pulling back.
Europe
The European bourses were gaining out of the gates with the Europe Stoxx 600 up 0.7% , before climbing further.
were gaining out of the gates with the up , before climbing further. “ Lots of businesses will not survive ,” the U.K.’s hospitality sector is warning after the Boris Johnson government yesterday tightened coronavirus restrictions, including a curb on office workers , amid rising COVID cases.
,” the U.K.’s hospitality sector is warning after the Boris Johnson government yesterday tightened coronavirus restrictions, including a , amid rising COVID cases. In what sounds like a metaphor for Brexit, the U.K. government admitted there could be a traffic jam as big as 7,000 trucks long in Kent, southeast of London, as goods gets caught up in post-Brexit red tape.
U.S.
U.S. futures point to a mixed open. That’s after the S&P 500 broke its four-day losing streak on Tuesday.
point to a mixed open. That’s after the broke its four-day losing streak on Tuesday. On the same day stocks snapped out of their slump, the U.S. hit a grim COVID-19 milestone, topping 200,000 deaths since the start of the outbreak.
milestone, topping since the start of the outbreak. Tesla shares are down nearly 7% in pre-market trading after the company’s much anticipated Battery Day event failed to move investors.
in pre-market trading after the company’s much anticipated Battery Day event failed to move investors. On the opposite end is Nike, up a whopping 13% in pre-market trade after reporting blowout results.
Elsewhere
Gold is losing its luster. It’s down again, trading below $1,900/ounce .
is losing its luster. It’s down again, trading below . The dollar is up.
is up. Crude is flat, with Brent trading around $41.50/barrel.
***
The almighty dollar
I was speaking to a chief investment officer (CIO) yesterday who told me something surprising. He said he’s never fielded so many client calls about a presidential election as he has this year.
“It’s exponentially higher than anything I can remember in over twenty years,” he told me. The call volume is greater than anything he saw during the Bush years or the Obama years.
There’s growing concern, he told me, from both his right-leaning clients and from the left-tilting ones. Among their many concerns, both sides are worried about the fragility of the economic recovery, and what it might mean for their portfolios.
Now that we’re a mere 41 days away from Nov. 3, Election Day jitters are growing. Of course, we’re here to answer many of those questions between now and then. You’ll see more politics-themed analysis from me here in Bull Sheet, and you’ll find it in the pages of Fortune and on Fortune.com as well.
That said, I want to talk about the dollar this morning. It’s been bouncing back in recent weeks, but it’s still down for the year. A strong dollar is one of those metrics that’s become a somewhat reliable gauge for an incumbent’s chances for reelection. This makes some sense. A strong dollar makes exports more pricy, which can hit the bottom line of multinationals. The Fortune 500, as a club, is usually no fan of a strong dollar.
Dollar strength is often seen as a headwind to economic growth, which may be why President Trump continues to rail about it whenever he gets the chance. Or maybe he got a sneak peek at this analysis showing the track record of incumbent presidents in strong-dollar years:
According to LPL Financial, over the past eight presidential election cycles the incumbent party has won seven out of eight times when the dollar has been down going into Election Day.
Now, all of this comes with a big caveat, that past performance doesn’t… yes, you know the rest.
Still, the dollar gauge is one to watch. At the moment, as the chart shows, the U.S. dollar index is hovering a few ticks into the red, but has been gaining ground on rival currencies in recent weeks as equities and gold falter.
The dollar appears to be regaining its familiar position as a safe haven during tumultuous times. It’s not so much dollar strength, but the sagging consumer/investor confidence that comes with it, that should worry politicians.
It’s no wonder the CIOs’ phones won’t stop ringing.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's read
As clear as crude. It's hard to understate how volatile oil prices have been this year. Brent and WTI prices have just about stalled in recent weeks in the low 40s after dipping from a high of $68 (in January) and climbing from below 20 bucks (this spring). Such a vast price range is exceedingly uncommon and it's making it really hard to predict oil prices, which is messing with futures contracts.
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Market candy
Quiz time
Which U.S. state has the lowest unemployment rate?
A) New York
B) Florida
C) Texas
D) Nebraska
The answer is D, Nebraska, where the unemployment rate is now hovering around 4%, back to its pre-pandemic level. But the recovery in the labor market has been extremely uneven. Nevada and New York, two economies highly reliant upon the ravaged hospitality sector, lead the country with double-digit unemployment levels. Fortune's Lance Lambert maps out which states are well on their way to recovery, and which ones are falling behind.


fortune--2020-09-23--Nike rallies after profits show signs of bouncing back from pandemic

Nike Inc. rallied in late trading after the world’s largest sportswear maker returned to profit and posted far better revenue than predicted, a sign it’s swiftly bouncing back from the pandemic slump.
Revenue amounted to $10.6 billion in its fiscal first quarter, Nike said on Tuesday, compared with the $9.11 billion estimate of analysts. The company posted 95 cents a share in earnings, topping the 46-cent projection.
Investors had been looking for evidence that Nike is navigating the coronavirus crisis, and that’s just what the company delivered. It had raised concerns the previous quarter, when falling sales led to a surprise loss and hurt margins. Now its turnaround appears to be solidly in motion, especially in China and via e-commerce.
Chief Executive Officer John Donahoe said “no one can match our pace” of pumping out new products, which has kept up despite disruptions from the health crisis.
“We’re getting stronger in the places that matter most,” the Silicon Valley veteran, who took the reins at Nike in January, said during a conference call. “We can thrive in this environment.”
Though sales didn’t grow — slipping about 1% from the year earlier — Wall Street was bracing for far worse. Nike also improved its margins more than expected, and direct sales rose 12%.
The shares jumped as much as 15% to $134 in after-hours trading. They had been up 15% this year through the close.
Nike expects revenue growth to range from the high single digits to the low double digits this fiscal year, with gross margins staying flat. Executives said full-price sales won’t see sequential improvement until the second half of the year.
The generally upbeat results gave a bump to other activewear companies, including Lululemon Athletica Inc. and Under Armour Inc., which both gained in extended trading.
Nike has stepped up efforts to sell more merchandise directly to consumers — an initiative that has led to job cuts. Relying less on outside retailers stands to benefit the Beaverton, Oregon-based company both during the recovery from Covid-19 and in the long run. Brick-and-mortar stores, especially ones in malls, were some of the hardest hit by the coronavirus.
Chinese Growth
China is further along in its recovery, and sales there reflect that. They were up 6% for the quarter. The country was quicker to come out of lockdowns, and the government is pushing citizens to exercise more — a boon for sportswear.
In North America, where the pandemic response has had varying success state by state, sales fell about 2%. The lack of sporting events has hurt demand for team-related apparel, though leagues such as the NFL have returned with limited crowds or empty stadiums.
Nike still has excess inventory to handle. Levels are up 15% compared with last year, due to temporary store closures and fewer wholesale shipments to retailers.
Foot traffic to shops also remains down as customers have been slow to return to malls and shopping streets — even though almost all of Nike’s stores have reopened globally. The silver lining: Those who do venture to retail outlets are more likely to make a purchase.


fortune--2020-09-23--Fujifilm seeks government approval for a COVID-19 treatment that is said to speed up recovery

Japanese multinational and legendary camera-maker Fujifilm said on Wednesday that it will ask the Japanese government to approve its anti-influenza drug Avigan as a coronavirus treatment after a monthslong clinical trial showed the drug speeds up recovery for COVID-19 patients.
The study found that patients who received Avigan recovered in 11.9 days, compared to 14.7 days for patients in a placebo group. All the patients had mild cases of the illness.
Fujifilm Toyama Chemical, a subsidiary of Fujifilm and the developer of the drug, said it will file for regulatory approval to market the drug as a COVID-19 treatment in Japan as early as October.
“We have confirmed, in Phase III clinical trial of Avigan in Japan, that the administration of Avigan to COVID-19 patients with non-serious pneumonia demonstrates shorter time resolution,” Fujifilm Toyama Chemical said in a statement.
Since the pandemic started, Japan has donated supplies of Avigan, also known by its active ingredient name, favipiravir, to over 80 countries after the drug showed some success in treating mild COVID-19 cases in Japan in February. Former Prime Minister Shinzo Abe began a government push to triple the stockpile of Avigan in April, allocating almost $130 million to do so, even before clinical studies of the drug’s efficacy had produced results.
Abe was a vocal proponent of Avigan as a COVID-19 treatment, telling hospitals to provide it to anyone who wanted it and encouraging patients to ask doctors to give them the homegrown Japanese drug.
There are currently no COVID-19 treatments with global, unconditional regulatory approval. If Japan approves Fujifilm’s marketing of Avigan as a COVID-19 treatment, the drug would join a small number of treatments with partial or conditional approval around the world.
The U.S. Food and Drug Administration, for instance, has granted emergency use authorization—a temporary form of approval—to some experimental COVID-19 treatments, including Gilead’s antiviral drug remdesivir, which has also been approved by health regulators in Japan, the EU, and Australia.
The EU last week approved the use of dexamethasone, a steroid, to treat COVID-19 patients who require oxygen therapy or mechanical ventilation. Japan has approved the use of both dexamethasone and remdesivir as COVID-19 treatments.
Fujifilm hasn’t publicly said how much Avigan will cost per patient in Japan. A generic version of the drug that’s approved for use in India costs around $113 per patient, Reuters reported in July.
Toyama Chemical, which became a Fujifilm subsidiary in 2018, secured government approval for Avigan as an influenza treatment in 2014. Before the pandemic, the Japanese government maintained a stockpile of Avigan in case of an influenza outbreak, but the drug was never available on the market, in part due to animal studies conducted prior to its 2014 regulatory approval that found evidence of birth defects.
The drug has a mechanism that prevents the virus from replicating its genetic material, RNA, inside the host cell, and therefore keeps the virus from propagating. The coronavirus, influenza virus, and Ebola virus are all single-stranded RNA viruses.
During the Ebola outbreak in West Africa that began in 2014, the government of Guinea selected Avigan as part of its treatment for Ebola patients.
In February, Japan’s health minister at the time, Katsunobu Kato, said the health ministry would recommend the use of Avigan to treat COVID-19 patients after early test dosages appeared effective for some patients. At the time, there wasn’t conclusive evidence from clinical studies of Avigan’s effectiveness in treating COVID-19.
The Phase III clinical trial of Avigan that ended on Wednesday began in March, Fujifilm said, and included patients with non-severe cases of COVID-19. Other studies of the drug’s effect on COVID-19 in Japan were impeded by a lack of patients, which prevented researchers from gaining statistically significant results.
Fujifilm said in a Wednesday statement that the results from the Phase III trial—which included 156 patients—were statistically significant, and said the trial found no new safety concerns.
Clinical studies in China, completed in mid-March, also pointed to Avigan’s promise as a COVID-19 treatment. Chinese researchers found that patients treated with Avigan had faster recoveries and better improvement in their lung conditions compared to a control group who didn’t receive the treatment.


fortune--2020-09-23--Apple finally starts selling directly to customers in the world’s fastest-growing smartphone market

On Wednesday, Apple opened its first online store in India, marking the tech giant’s most direct bid yet to grab a foothold in a market where it has long struggled to make headway.
Apple’s India website says it will offer services like online shopping and tech support, localized payment options, and contact-free delivery of Apple products.
The virtual-store opening marks the first time Indian consumers can directly purchase the company’s iPhones, computers, and other products without having to rely on third-party retailers. In 2019, Indian Prime Minister Narendra Modi relaxed rules that required foreign retailers like Apple to meet a 30% made-in-India threshold to sell directly to Indian consumers via online and physical stores. The rule had forced Apple to sell its wares through Indian phone stores and other domestic retail chains.
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At the time of the rollback, Apple praised India’s decision to ease the rules, and in February CEO Tim Cook credited the Trump administration with intervening on Apple’s behalf in the matter.
India is an especially attractive market to technology firms given its rapid adoption of mobile phones. It’s been the world’s fastest-growing smartphone market since 2016, and earlier this year it surpassed the U.S. to become the world’s second largest smartphone market behind China.
The timing of Apple’s direct-to-consumer entry in India comes right before India’s Hindu festival season, which is an especially lucrative time for mobile phone companies. Apple’s timing is also advantageous in that it coincides with India’s feud with China.
An ongoing border dispute has pushed China-India relations to their lowest point in decades. Because of the conflict, India has imposed restrictions and bans on Chinese technology companies, and political support has grown for boycotts of goods made in China, including Chinese devices that compete with the iPhone.
“[India’s] flare-up with China makes India incredibly attractive for Apple,” Abishur Prakash, a technology and geopolitical analyst at consulting firm Center for Innovating the Future, told Fortune earlier this month. “As Indian consumers seek alternatives [to Chinese goods], Apple can offer its lineup of products and services.”
Since 2017, Apple has moved more of its assembly operations from China to India, which helps Apple avoid another Indian regulation that places tariffs on technology imports.
But even with expanded marketing and manufacturing capabilities in India, Apple faces an uphill battle in selling its products to Indian consumers.
The iPhone holds only a 2% market share in a smartphone scene that Chinese firms like Xiaomi, Vivo, and OPPO continue to dominate. Even the cheaper models of Apple’s phones and computers remain prohibitively expensive for the vast majority of Indian consumers.
Apple is hoping that its new online store will boost the company’s performance in the country.
“We’re proud to be expanding in India and want to do all we can to support our customers and their communities,” Deirdre O’Brien, a senior vice president at Apple, said in a statement. “By bringing the Apple Store online to India, we are offering our customers the very best of Apple at this important time.”
The company also says the online store is just the first step in unleashing its powerful brand in India.
In February, Cook said Apple planned to open its first retail store in India in 2021. The company declined to comment on Fortune’s inquiry about the plans and hasn’t publicly indicated whether the pandemic, which is hitting India especially hard, will delay the opening of physical retail outlets.
Cook explained in February that Apple’s future online and physical stores are vital to Apple’s success in India.
“We like to do things our way,” Cook said.


fortune--2020-09-23--Microsoft has a solution for work days that blend into home life: a virtual commute

Millions of employees now commute from their bed to a desk at home. After the initial euphoria of skipping smog-filled traffic jams and cramped train compartments, a new reality has dawned in which the work day blends into the rest of life, like a never-ending video conference call. Microsoft Corp. has a solution for this.
The company’s Teams collaboration software is adding the ability to schedule a “virtual commute.” It won’t start your car or ride the subway for you, but it will remind users about the end of the work day, suggest tasks to help workers wind down and create a little mental space before kids’ homework, dinner, laundry and other obligations come crashing in.
For example, Teams will prompt users to list tasks as completed or add them to tomorrow’s to-do list, while asking workers to rate how their day went and suggesting guided meditation, through an integration with the Headspace app.
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Pandemic-related burnout and difficulty separating work and personal life has become a surprisingly common concern among Microsoft’s corporate customers, according to Chief Marketing Officer Chris Capossela. “The thing we didn’t predict that we’ve learned is now at the top of customers’ mind is really the well-being of their employees,” he said.
Companies initially worried about employees having the right technology to work from home. “Now it’s getting to be much more about ‘hey how do I know if an employee is burned out, how do I know how they are doing — if they are working too hard?’ All of the things around the emotional well-being or the mental health of employees has risen to the top faster in a way that we didn’t really predict,” he added.
Microsoft will also enable its workplace analytics software to help employers spot and support workers who are at risk of burnout. The software looks at things like after-hours collaboration by an entire team and how that compares with similar teams. New features coming next year will let employers run programs that remind team members to avoid undue overtime.
The new features will be announced at Microsoft’s virtual Ignite conference on Tuesday. One more pandemic-era tool from Microsoft: the company’s artificial intelligence software is adding a new Spatial Analysis service that will help clients map and measure physical spaces, which Microsoft said will come in handy for figuring out how to keep customers and workers 6 feet apart.


fortune--2020-09-23--Tesla lays out path to an electric car cheap enough for most people

Tesla’s Battery Day presentation on Tuesday was the year’s most anticipated event for the many Tesla investors and supporters. Tesla CEO Elon Musk and Drew Baglino, the company’s chief of powertrain and energy engineering, presented a sweeping plan not just for upgraded batteries, but for the company’s next chapter.
At its heart, the plan is to vertically integrate a large portion of Tesla’s battery production, “from mining the ore to the complete battery pack,” as Musk put it. That control will allow for design and technology innovations that Musk says will dramatically slash costs for Tesla’s cars. Tesla currently works with partners like LG and Panasonic to produce batteries, and it apparently won’t end those relationships anytime soon. But it will dramatically expand its own battery production capacity, and, executives said, make those batteries for less than its partners do today.
Based on its various innovations, Tesla projects it can reduce the cost of its batteries by more than half within about three years (though Musk and Baglino didn’t reveal much about Tesla’s current production costs). The result, if Tesla’s projections pan out, could fundamentally reshape the economics of car buying sooner than you think.
Here are the three pillars of that plan.
Better batteries
Tesla unveiled a number of innovations to battery assembly and chemistry at the event on Tuesday, some of them already widely expected. Perhaps most significant, a new ‘tabless’ battery construction method reduces battery heat by shortening the distance power travels during charging and discharging. That in turn allows for much larger battery cells – in fact, Tesla introduced an entirely new design called a 4680 cell, and said that larger cells alone increased vehicle range by 16%.
The event also offered some surprises, including one that highlighted the depth of Tesla’s rethinking of the entire battery-making process. The company has developed what Musk and Baglino said is an entirely novel, cheaper way to mine its own lithium – and has bought land in Nevada to put it into practice.
Faster factories
Musk stressed multiple times that developing new technologies is much easier than producing them at scale. The presentation featured new details about Tesla’s already-running pilot battery factory in Fremont, Calif., where the company says it has figured out how to produce batteries seven times faster than the current Gigafactory in Reno.
The key, according to Baglino, is to keep the production line moving constantly, like in bottling plants. Another major contributor to efficiency is a so-called “dry electrode” technique that cuts production space and costs by 90% from a current “wet” method that requires huge drying ovens. In all, Tesla says that within a year, its small pilot facility in Fremont will ramp up to producing 100 Gigawatt-hours of batteries annually, 2/3rds of the roughly 150 GwH made per year by the giant Nevada Gigafactory using current techniques.
The production innovations don’t stop at the battery, though. One of the more surprising and radical reveals of the night was the idea of a “structural battery.” It’s just what it sounds like – a battery built into the body of a car in a way that allows it to dampen stresses to the car’s frame. Letting batteries do double duty would reduce the weight of the car and the number of parts that go into it.
This exemplifies the key element of Tesla’s broader strategy: when you build every component yourself, including the factory, you can make sure everything works together at maximum efficiency.
Cheaper cars
All that efficiency is pointed, Musk explained, towards the same big goal Tesla has pursued since the beginning: producing electric vehicles cheap enough to make gas-burning cars obsolete and, maybe, save the planet.
With the cost reductions announced at Battery Day, Tesla says it has a clear path to producing a fully-electric vehicle that costs about $25,000. Musk said that Tesla will be able to start making that car within about three years.
That could mark a sea change in car buying, because $25,000 is also the U.S. starting price for two extremely popular gas-burning cars: the Honda Accord and Toyota Camry. But battery-powered cars are generally less expensive to fuel and maintain, meaning buying an entry-level Tesla could become cheaper overall, making EVs attractive to many more people.
Of course, Tesla’s tendency to miss aggressive timelines is by now taken for granted: the company has fallen short on projections about the Model 3, the Tesla Semi, and its self-driving technology.
Musk acknowledged that not all of the kinks have been worked out of the planned battery improvements. And Tesla isn’t alone at the front of the pack. Alyssa Altman, an analyst with Publicis Sapient, saw Tesla’s announcement as an attempt to “get out ahead of” a similar announcement expected from General Motors, whose Ultium battery has also been touted for its lower cost, though with fewer specifics so far.
So it remains to be seen whether Musk can come out ahead. Investors, for their part, didn’t seem blown away: Tesla stock was down nearly 7% in after-hours trading, following the event.
That maybe because investors were hoping for announcements of major new products in the near term, but Tesla limited those to two relative footnotes. The new “Plaid” Model S sedan sports package, that goes from 0-60 in under two seconds, will be available in late 2021. Musk also said that the test version of Full Self Driving software, which would let most Teslas drive themselves without human input, will be released in “about a month.” But the technology has been supposedly imminent for years, so we’ll have to wait and see about that, too.