Connect with us

Published

on

Sam Altman, CEO of OpenAI participates in the “Charting the Path Forward: The Future of Artificial Intelligence” at the Asia-Pacific Economic Cooperation (APEC) Leaders’ Week in San Francisco, California, on November 16, 2023.

Andrew Caballero-Reynolds | AFP | Getty Images

OpenAI’s tender offer, which would allow employees to sell shares in the start-up to outside investors, remains on track despite the leadership tumult and board shuffle, two people familiar with the matter told CNBC.

The tender offer will value OpenAI at the same levels as previously reported in October, around $86 billion, and is being led by Josh Kushner’s Thrive Capital, according to the people familiar, who spoke anonymously to discuss private communications freely.

The round and previously reported valuation were jeopardized by Sam Altman’s temporary ouster earlier in November, but his return cleared the way for the tender offer to proceed.

Tender offers do not involve the issuance of new equity. Instead, Thrive and other involved investors will buy existing units belonging largely to employees, giving them liquidity. The $86 billion round is three times OpenAI’s previous fundraise in April, which valued the company at around $28 billion.

Another person familiar told CNBC that the round had been extended to January 5.

The extension of the tender offer comes after a rollercoaster couple of weeks for the company. OpenAI’s nonprofit board argued that Altman “was not consistently candid in his communications with the board” as CEO, and his subsequent departure incited uproar from investors and employees alike, especially after Microsoft CEO Satya Nadella said Altman and OpenAI president Greg Brockman would lead a new AI lab under Microsoft. Employees threatened to walk en masse, signing an open letter and commenting in support of Altman on social media, which led in part to a significant turnover of OpenAI’s board.

On Wednesday, OpenAI announced Altman and Brockman’s official return to their previous roles, along with a new board, including former Salesforce co-CEO Bret Taylor, former Treasury Secretary Larry Summers and Quora CEO Adam D’Angelo.

Microsoft obtained a non-voting board observer position, OpenAI said Wednesday. Nadella had previously told CNBC that new governance would be required at the startup. Microsoft holds a 49% stake in OpenAI.

Not all major backers will receive a director position. Tiger Global will not likely pursue a board seat, a person familiar with the matter said, in line with the firm’s longstanding practice. OpenAI’s other major backers include Founders Fund, Sequoia Capital and, following the completion of the tender offer, Thrive Capital.

The Information and Bloomberg previously reported some details of the tender offer.

Sequoia Capital declined to comment on whether it would be involved in the upcoming tender. Founders Fund will not participate in the tender offer either, a person familiar with the firm said. A spokesperson for Thrive declined to comment beyond saying it remained “committed” to OpenAI.

OpenAI did not immediately respond to CNBC’s request for comment.

— CNBC’s Ari Levy & Jordan Novet contributed to this report.

WATCH: Elon Musk says OpenAI is lying about using copyrighted data

Elon Musk: OpenAI is lying when it says it is not using copyrighted data

Continue Reading

Technology

Amazon sued by DC attorney general for allegedly excluding neighborhoods from Prime delivery

Published

on

By

Amazon sued by DC attorney general for allegedly excluding neighborhoods from Prime delivery

Washington, D.C.’s attorney general sued Amazon on Wednesday, accusing the company of covertly depriving residents in certain ZIP codes in the nation’s capital from access to Prime’s high-speed delivery.

The lawsuit from AG Brian Schwalb alleges that, since 2022, Amazon has “secretly excluded” two “historically underserved” D.C. ZIP codes from its expedited delivery service while charging Prime members living there the full subscription price. Amazon’s Prime membership program costs $139 a year and includes perks like two-day shipping and access to streaming content.

“Amazon is charging tens of thousands of hard-working Ward 7 and 8 residents for an expedited delivery service it promises but does not provide,” Schwalb said in a statement. “While Amazon has every right to make operational changes, it cannot covertly decide that a dollar in one zip code is worth less than a dollar in another.”

Amazon spokesperson Steve Kelly said in a statement it’s “categorically false” that its business practices are “discriminatory or deceptive.”

“We want to be able to deliver as fast as we possibly can to every zip code across the country, however, at the same time we must put the safety of delivery drivers first,” Kelly said in a statement. “In the zip codes in question, there have been specific and targeted acts against drivers delivering Amazon packages. We made the deliberate choice to adjust our operations, including delivery routes and times, for the sole reason of protecting the safety of drivers.”

Kelly said Amazon has offered to work with the AG’s office on efforts “to reduce crime and improve safety in these areas.”

In June 2022, Amazon allegedly stopped using its own delivery trucks to shuttle packages in the ZIP codes 20019 and 20020 based on concerns over driver safety, the suit states. In place of its in-house delivery network, the company relied on outside carriers like UPS and the U.S. Postal Service to make deliveries, according to the complaint, which was filed in D.C. Superior Court.

The decision caused residents in those ZIP codes to experience “significantly longer delivery times than their neighbors in other District ZIP codes, despite paying the exact same membership price for Prime,” the lawsuit says.

Data from the AG shows that before Amazon instituted the change, more than 72% of Prime packages in the two ZIP codes were delivered within two days of checkout. That number dropped to as low as 24% following the move, while two-day delivery rates across the district increased to 74%.

Amazon has faced prior complaints of disparities in its Prime program. In 2016, the company said it would expand access to same-day delivery in cities including Atlanta, Chicago, Dallas and Washington, after a Bloomberg investigation found Black residents were “about half as likely” to be eligible for same-day delivery as white residents.

The ZIP codes in Schwalb’s complaint are in areas with large Black populations, according to 2022 Census data based on its American Community Survey.

The Federal Trade Commission also sued Amazon in June 2023, accusing the company of tricking consumers into signing up for Prime and “sabotaging” their attempts to cancel by employing so-called dark patterns, or deceptive design tactics meant to steer users toward a specific choice. Amazon said the complaint was “false on the facts and the law.” The case is set to go to trial in June 2025.

According to Scwalb’s complaint, Amazon never communicated the delivery exclusion to Prime members in the area. When consumers in the affected ZIP codes complained to Amazon about slower delivery speeds, the company said it was due to circumstances outside its control, the suit says.

The lawsuit accuses Amazon of violating the district’s consumer protection laws. It also asks the court to “put an end to Amazon’s deceptive conduct,” as well as for damages and penalties.

To get packages to customers’ doorsteps, Amazon uses a combination of its own contracted delivery companies, usually distinguishable by Amazon-branded cargo vans, as well as carriers like USPS, UPS and FedEx, and a network of gig workers who make deliveries from their own vehicles as part of its Flex program.

Amazon has rapidly expanded its in-house logistics army in recent years as it looks to speed up deliveries from two days to one day or even a few hours. In July, the company said it recorded its “fastest Prime delivery speeds ever” in the first half of the year, delivering more than 5 billion items within a day.

In relying on its own workforce, Amazon has assumed greater control over its delivery operations.

In his complaint, Schwalb cites an internal company policy that says Amazon may choose to exclude certain areas from being served by its in-house delivery network if a driver experiences “violence, intimidation or harassment.” The company relies on UPS or USPS to deliver packages in excluded areas.

WATCH: Amazon bets on consumers shopping while tuning into Black Friday game

Continue Reading

Technology

Spotify Wrapped is out. Here’s who topped the 2024 streaming charts

Published

on

By

Spotify Wrapped is out. Here's who topped the 2024 streaming charts

This photograph taken in Paris on April 19, 2024, shows a smatphone displaying the US singer-songwriter Taylor Swift’s new album “The Tortured Poets Department” on Spotify. Queen of pop Taylor Swift released her highly anticipated record “The Tortured Poets Department” on April 19, 2024 — the 11th studio album from the megastar who is already having a blockbuster year. 

– | Afp | Getty Images

Spotify Wrapped 2024 is out, giving hundreds of millions of users the ability to see their most-played songs and artists over the course of the year.

The annual report, which allows users to compare their music listening habits with other fans around the world, on Wednesday began rolling out to all users on the streaming platform.

This year, Spotify added additional artificial intelligence features to enhance individual users’ Wrapped experiences, including personalized AI podcasts about users’ music listening histories, a feature powered by Google’s NotebookLM and stemming from an expanded partnership between the two companies.

Last month, Spotify reported earnings that included optimistic profit guidance for the fourth quarter, despite missing analysts’ third-quarter targets for both revenue and earnings per share. The company also said it had about 640 million monthly active users on the platform, which slightly surpassed analyst expectations.

Taylor Swift is Spotify’s Global Top Artist for the second year in a row, dominating the most-streamed global albums chart with “The Tortured Poets Department: The Anthology,” and Sabrina Carpenter’s hit song “Espresso” is the most-streamed song both globally and nationally.

Here are some of this year’s chart-toppers:

Most-streamed songs in the United States

  1. “Espresso” by Sabrina Carpenter
  2. “Not Like Us” by Kendrick Lamar
  3. “A Bar Song (Tipsy)” by Shaboozey
  4. “I Had Some Help (Feat. Morgan Wallen)” by Post Malone
  5. “MILLION DOLLAR BABY” by Tommy Richman

Kendrick Lamar’s “Not Like Us” skyrocketed to second-most-streamed song in the country this year. Drake, Lamar’s opponent in a renewed public rap battle earlier this spring, surged on the most-streamed artists’ list, while Lamar ended up in seventh place on that list.

Most-streamed artists in the United States

  1. Taylor Swift
  2. Drake
  3. Zach Bryan
  4. Morgan Wallen
  5. Kanye West

“The Joe Rogan Experience,” which hosted President-elect Donald Trump in October, took the No. 1 spot for top podcasts worldwide. “Call Her Daddy,” which hosted Vice President Kamala Harris that same month, took second place.

Both appearances represented a distinct shift in presidential campaigning strategies toward non-legacy-media outlets, reaching millions of weekly listeners.

Don’t miss these insights from CNBC PRO

Continue Reading

Technology

Okta shares pop 18% on earnings beat, strong guidance

Published

on

By

Okta shares pop 18% on earnings beat, strong guidance

File photo of Todd McKinnon, chief executive officer of Okta Inc.

Bloomberg | Bloomberg | Getty Images

Shares of Okta popped more than 18% in extended trading Tuesday after the identity management company released third-quarter results that beat analysts’ estimates and offered rosy guidance.

Here’s how the company did:

  • Earnings per share: 67 cents adjusted vs. 58 cents expected by LSEG
  • Revenue: $665 million vs. $650 million expected by LSEG

Okta helps companies manage employees’ access to applications or devices with features such as single sign-on and multifactor authentication. The company swung to profitability, reporting net income of $16 million, or 9 cents per share, during the quarter, compared with a net loss of $81 million, or 49 cents per share, in the same period last year.

Revenue increased 14% from $569 million a year ago, according to a release. The company reported $651 million in subscription revenue for the quarter, beating the $635 million average analyst estimate, according to Street Account.

“Our solid Q3 results were underpinned by continued strong profitability and cash flow,” Okta CEO Todd McKinnon said in a statement. “The focused investments we’ve made in our partner ecosystem, the public sector vertical, and large customers are materializing in our business with each of these areas contributing meaningfully to top-line growth.”

For the fourth quarter, Okta said it expects to report revenue between $667 million and $669 million, topping the $651 million average estimate, according to LSEG. The company expects to report earnings of 73 cents to 74 cents per share for the period, which also exceeded estimates.

Prior to the close, Okta shares were down 10% for the year, while the Nasdaq is up 30% over that stretch.

Okta will host its quarterly call with investors at 5 p.m. ET. 

WATCH: CNBC’s full interview with Okta CEO Todd McKinnon

Watch CNBC's full interview with Okta CEO Todd McKinnon

Continue Reading

Trending