Connect with us

Published

on

Former Theranos COO Sunny Balwani sentenced to nearly 13 years

Former Theranos chief operating officer and president Ramesh “Sunny” Balwani was sentenced to nearly 13 years in prison Wednesday for fraud, after the unraveling of the blood-testing juggernaut prompted criminal charges in California federal court against both Balwani and Theranos founder Elizabeth Holmes, who on Nov. 18 was sentenced to more than 11 years in prison.

During the sentencing hearing, attorneys for Balwani attempted to pin the blame on Holmes, telling U.S. District Court Judge Edward J. Davila that “decisions were made by Elizabeth Holmes.”

Davila had set a sentencing range of 11 years plus 3 months to 14 years, but prosecutors today sought a 15-year sentence given his “significant” oversight role at Theranos’ lab business.

The final guideline sentence was 155 months, plus three years of probation. Davila set a Mar. 15, 2023, surrender date.

Sunny Balwani, former president of Theranos Inc., arrives at federal court in San Jose, California, on Wednesday, Dec. 7, 2022.

David Paul Morris | Bloomberg | Getty Images

Balwani and Holmes, former romantic partners, helmed Theranos as the company enjoyed a meteoric rise, attracting backers ranging from the DeVos family to news magnate Rupert Murdoch. It was one of Murdoch’s publications, The Wall Street Journal, that first reported on irregularities with Theranos’ purportedly revolutionary blood-testing machines.

As COO, Balwani managed both the laboratory business and the financial aspects of the company. Theranos was marred with repeated failures during his tenure, including falsified documents and erroneous test results.

“I am responsible for everything at Theranos,” Balwani said in a message to Holmes. Balwani assumed broad responsibility for day-to-day operations at the company.

Theranos claimed the machines required just a few drops of blood to run and could execute more than 1,000 tests. In reality, the Journal reported the company could only process a little over a dozen tests. The Journal’s reporting eventually prompted the company’s dissolution in 2018 and, later, the arrest of Balwani and Holmes on fraud charges.

Balwani’s sentencing in federal court marks the end of the Theranos saga, which enthralled the public and prompted documentary films and novel treatments.

With a star-studded investor list, a captivating founder who drew comparisons to Apple’s Steve Jobs, and a potentially revolutionary technology, the company for a time represented the apex of Silicon Valley ingenuity.

The revelations about Theranos brought about a stunning fall from grace for both Balwani and Holmes, who were in a relationship for much of their tenure at the company. Holmes accused Balwani of abuse in court proceedings, providing text messages and contemporaneous notes from their relationship as evidence.

“Kill the old Elizabeth,” Balwani purportedly told her.

Balwani perpetrated a “decade-long campaign of psychological abuse,” Holmes’ lawyers argued. Balwani is nearly 20 years older than Holmes, who testified that he managed the lab and financial side of the business.

This is a developing story. Please check back for updates.

Continue Reading

Technology

Tesla Robotaxi scores permit to run ride-hailing service in Texas

Published

on

By

Tesla Robotaxi scores permit to run ride-hailing service in Texas

In an aerial view, the Tesla headquarters is seen in Austin, Texas, on July 24, 2025.

Brandon Bell | Getty Images

Tesla has been granted a permit to run a ride-hailing business in Texas, allowing the electric vehicle maker to compete against companies including Uber and Lyft.

Tesla Robotaxi LLC is licensed to operate a “transportation network company” until August 6, 2026, according to a listing on the website of the Texas Department of Licensing and Regulation, or TDLR. The permit was issued this week.

Elon Musk’s EV company has been running a limited ride-hailing service for invited riders in Austin since late June. The select few passengers have mostly been social media influencers and analysts, including many who generate income by posting Tesla fan content on platforms like X and YouTube.

The Austin fleet consists of Model Y vehicles equipped with Tesla’s latest partially automated driving systems. The company has been operating the cars with a valet, or human safety supervisor in the front passenger seat tasked with intervening if there are issues with the ride. The vehicles are also remotely supervised by employees in an operations center.

Musk, who has characterized himself as “pathologically optimistic,” said on Tesla’s earnings call last month that he believes Tesla could serve half of the U.S. population by the end of 2025 with autonomous ride-hailing services.

The Texas permit is the first to enable Tesla to run a “transportation network company.” TDLR said Friday that this kind of permit lets Tesla operate a ride-hailing business anywhere in the state, including with “automated motor vehicles,” and doesn’t require Tesla to keep a human safety driver or valet on board.

Tesla didn’t immediately respond to a request for comment.

As CNBC previously reported, Tesla robotaxis were captured on camera disobeying traffic rules in and around Austin after the company started its pilot program. None of the known incidents have been reported as causing injury or serious property damage, though they have drawn federal scrutiny.

Elon Musk confirms plan for Tesla robotaxis in Austin, Texas next month

In one incident, Tesla content creator Joe Tegtmeyer reported that his robotaxi failed to stop for a train crossing signal and lowering gate-arm, requiring a Tesla employee on board to intervene. The National Highway Traffic Safety Administration has discussed this incident with Tesla, a spokesperson for the regulator told CNBC by email.

Texas has historically been more permissive of autonomous vehicle testing and operations on public roads than have other states.

A new law signed by Texas Republican Gov. Greg Abbott goes into effect this year that will require AV makers to get approval from the state before starting driverless operations. The new law also gives the Texas Department of Motor Vehicles the authority to revoke permits if AV companies and their cars aren’t complying with safety standards.

Tesla’s AV efforts have faced a number of challenges across the country, including federal probes, product liability lawsuits and recalls following injurious or damaging collisions that occurred while drivers were using the company’s Autopilot and FSD (Full Self-Driving) systems.

A jury in a federal court in Miami last week determined that Tesla should hold 33% of the liability for a fatal Autopilot-involved collision.

And the California DMV has sued Tesla, accusing it of false advertising around its driver assistance systems. Tesla owners manuals say the Autopilot and FSD features in their cars are “hands on” systems that require a driver ready to steer or brake at any time. But Tesla and Musk have shared statements through the years saying that a Tesla can “drive itself.”

Since 2016, Musk has been promising that Tesla would soon be able to turn all of its existing EVs into fully autonomous vehicles with a simple, over-the-air software update. In 2019, he said the company would put 1 million robotaxis on the road by 2020, a claim that helped him raise $2 billion at the time from institutional investors.

Those promises never materialized and, in the robotaxi market, Tesla lags way behind competitors like Alphabet’s Waymo in the U.S. and Baidu’s Apollo Go in China.

Tesla shares are down 18% this year, by far the worst performance among tech’s megacaps.

WATCH: What we saw at Tesla’s robotaxi launch in Texas

We went to Texas for Tesla's robotaxi launch. Here's what we saw

Continue Reading

Technology

Trade Desk tanks almost 40% on CFO departure, tariff concerns and competition from Amazon

Published

on

By

Trade Desk tanks almost 40% on CFO departure, tariff concerns and competition from Amazon

Jeff Green, CEO of The Trade Desk.

Scott Mlyn | CNBC

Shares of The Trade Desk plummeted almost 40% on Friday and headed for their worst day on record after the ad-tech company announced the departure of its CFO and analysts expressed concerns about rising competition from Amazon.

The Trade Desk, which went public in 2016, suffered its steepest prior drop in February, when the shares fell 33% on a revenue miss. In its second-quarter earnings report late Thursday, the company beat expectations on earnings and revenue, but the results failed to impress investors.

The Trade Desk, which specializes in providing technology to companies that want to target users across the web, said finance chief Laura Schenkein is leaving the job and being replaced by Alex Kayyal, who has been working as a partner at Lightspeed Ventures.

While some analysts were uneasy about the sudden change in the top finance role, the bigger concern is Amazon’s growing role in the online ad market, as well as the potential impact of President Donald Trump’s tariffs on ad spending.

Amazon has emerged as a significant player in the digital advertising market in recent years, and is now third behind Google and Meta. Last week, Amazon reported a 23% increase in ad revenue for the second quarter to $15.7 billion, which beat estimates.

Read more CNBC Amazon coverage

Amazon’s ad business has largely been tied to its own platforms, with brands paying up so they can get discovered on the sprawling marketplace. However, Amazon’s demand-side platform (DSP), which allows brands to programmatically place ads across a wider swath of internet properties, is gaining more resonance in the market.

“Amazon is now unlocking access to traditionally exclusive ‘premium’ ad inventory across the open internet, validating the strength of its DSP and suggesting The Trade Desk’s value proposition could erode over time,” Wedbush analysts wrote on Friday.

The Wedbush analysts lowered their rating on The Trade Desk to the equivalent of hold from buy, and cited Amazon’s recent ad integration with Disney as a sign of the company’s aggressiveness.

Executives at The Trade Desk were asked about Amazon on the call, and responded by suggesting that the companies don’t really compete, emphasizing that Amazon is conflicted because it will always prioritize its own properties.

Simon: The consumer's never been more in control than they are right now

“A scaled independent DSP like The Trade Desk becomes essential as we help advertisers buy across everything and that we have to do that without conflict or compromise,” CEO Jeff Green said on the call. “It is my understanding that Amazon nearly doubled the supply of Prime Video inventory in the recent months. That creates a number of conflicts.”

For the second quarter, The Trade Desk reported a 19% increase in year-over-year revenue to $694 million, topping the $685 million estimate, according to analysts polled by LSEG. Adjusted earnings per share of 41 cents beat estimates by a penny.

Looking to the third quarter, the Trump administration’s tariffs were also a theme, as the company forecast revenue of at least $717 million, representing growth of 14% at minimum.

“From a macro standpoint, some of the world’s largest brands are absolutely facing pressure and some amount of uncertainty,” Green said. “Some have to respond more than others to tariffs. Many are managing inflation worries and the related pricing that comes with that.”  

With Friday’s slump, The Trade Desk shares are now down 53% for the year, while the S&P 500 is up about 9%. The Trade Desk was added to the S&P 500 in June.

WATCH: Trade Desk shares sink

Trade Desk shares sink on tariff warning

Continue Reading

Technology

Tech is getting a boost from AI ad tools. Some companies are being left behind

Published

on

By

Tech is getting a boost from AI ad tools. Some companies are being left behind

Mark Zuckerberg, CEO of Meta Platforms Inc., arrives for the Meta Connect event in Menlo Park, California, on Sept. 25, 2024.

David Paul Morris | Bloomberg | Getty Images

Artificial intelligence has been a shot in the arm for digital advertising.

Meta and Alphabet both reported sales and earnings that beat Wall Street’s expectations, but the strength in digital ad spend was notable.

Meta CEO Mark Zuckerberg said during the earnings call that AI helped imbue “greater efficiency and gains across our ad system,” thus contributing to the 22% year-over-year increase of second-quarter sales that hit $47.52 billion.

Meta finance chief Susan Li also told analysts during a follow-up earnings call on July 30 that the online ad market appears to have improved since April.

In April, Li noted that Asia-based online retailers pulled back on their digital ad spending amid broader macroeconomic uncertainty due to President Donald Trump‘s tough tariffs and the closing of the de minimis trade loophole.

This quarter, Li said there’s been a noticeable “improvement” with those Asian-based ecommerce firms, which have increased their digital ad spending on the platform along with small, North American-based advertisers.

“We generally expect another quarter of healthy advertising demand,” Li said about the advertising pickup.

Gil Luria, the head of technology research at D.A. Davidson, said that while there is still broader macroeconomic uncertainty, “today, digital advertising in general, is doing well; It is simply an extension of the fact that the consumer is still strong.”

“There’s optimism that consumer spending will hold up and therefore all the downstream markets will hold up,” Luria said.

“I think one of the things that its earnings taught us was that you can spend a lot of money on AI when your core business is doing well, and especially when your core business has been already benefiting from the investments that you’ve made in AI,” Jasmine Enberg, a vice president and principal analyst for eMarketer, said about Meta’s second quarter.

The continued jaw-dropping pace of AI spending also doesn’t seem to be slowing any time soon.

Alphabet added an extra $10 billion to its 2025 forecast for capital expenditures, now pegged at $85 billion, while Meta raised the low end of its capital expenditures for the year to come in between $66 billion and $72 billion instead of $64 billion and $72 billion.

Investors showed no signs of trepidation about Meta and Alphabet’s massive AI spend because those companies’ overall sales continued to rise.

Read more CNBC tech news

Outside of the tech giants, Reddit reported strong second-quarter sales of $500 million, representing a 78% year-over-year increase that helped lift the company’s shares as much as 20%.

“They kind of rose back like a phoenix and had some extraordinary results,” Luria said about Reddit, which saw its shares plummet over 15% in February after it reported weaker-than-expected user numbers due to a Google search algorithm change.

Reddit’s blockbuster quarter contrasted with similar-sized peers like Snap and Pinterest, which both reported lukewarm quarterly earnings this week.

Snap’s second-quarter sales grew only 9% year-over-year and it missed Wall Street’s estimates on global average revenue per user, a metric that refers to how much money the company derives from each user.

Contributing to the miss was a botched update to Snap’s advertising platform that hurt the company’s “topline growth,” Snap CEO Evan Spiegel said in an investor letter.

The Snapchat parent on Wednesday also added Reddit to its list of competitors in its latest 10-Q filing on Wednesday, indicating a potential, burgeoning rivalry.

The head of Snapchat operator Snap, Evan Spiegel, presents the new generation of Spectacles.

Andrej Sokolow | Picture Alliance | Getty Images

Meanwhile, Pinterest shares sank over 10% on Thursday after it reported second-quarter earnings that missed on earnings per share.

Pinterest finance chief Julia Brau Donnelly told analysts during an earnings call that the company is still noticing some tariff-related concerns, “and broader market uncertainty” as it previously indicated in May.

Unlike Meta, Donnelly said that “Asia-based e-commerce retailers pulled back spend in the U.S.,” underscoring how some advertisers gravitate toward bigger online ad platforms amid any signs of global economic uncertainty.

“There’s very little room for mistakes or missteps,” Enberg said about the quarterly earnings reports from smaller tech firms like Snap and Pinterest.

WATCH: Tech growth rates are remaining robust.

Tech growth rates are remaining robust, says Evercore's Mark Mahaney

Continue Reading

Trending